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News Release Details

FCX Reports Second-Quarter and Six-Month 2011 Results

July 21, 2011

PHOENIX--(BUSINESS WIRE)--Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX):

  • Net income attributable to common stock for second-quarter 2011 was $1.4 billion, $1.43 per share, compared with net income of $649 million, $0.70 per share, for second-quarter 2010. Net income attributable to common stock for the first six months of 2011 was $2.9 billion, $3.00 per share, compared with $1.5 billion, $1.70 per share, for the first six months of 2010.
  • Consolidated sales from mines for second-quarter 2011 totaled 1.0 billion pounds of copper, 356 thousand ounces of gold and 21 million pounds of molybdenum, compared with 914 million pounds of copper, 298 thousand ounces of gold and 16 million pounds of molybdenum for second-quarter 2010.
  • Consolidated sales from mines for the year 2011 are expected to approximate 3.9 billion pounds of copper, 1.6 million ounces of gold and 77 million pounds of molybdenum, including 940 million pounds of copper, 415 thousand ounces of gold and 18 million pounds of molybdenum for third-quarter 2011.
  • Consolidated unit net cash costs (net of by-product credits) averaged $0.93 per pound of copper for second-quarter 2011, compared with $0.97 per pound for second-quarter 2010. Based on current 2011 sales volume and cost estimates and assuming average prices of $1,500 per ounce for gold and $15 per pound for molybdenum for the second half of 2011, consolidated unit net cash costs (net of by-product credits) are estimated to average $1.01 per pound of copper for the year 2011.
  • Operating cash flows totaled $1.7 billion for second-quarter 2011 and $4.0 billion for the first six months of 2011, compared with $1.1 billion for second-quarter 2010 and $2.9 billion for the first six months of 2010. Based on current 2011 sales volume and cost estimates and assuming average prices of $4.25 per pound for copper, $1,500 per ounce for gold and $15 per pound for molybdenum for the second half of 2011, operating cash flows are estimated to exceed $8 billion for the year 2011.
  • Capital expenditures totaled $527 million for second-quarter 2011 and $1.0 billion for the first six months of 2011, compared with $296 million for second-quarter 2010 and $527 million for the first six months of 2010. Capital expenditures are expected to approximate $2.6 billion for the year 2011, including $1.4 billion for major projects and $1.2 billion for sustaining capital. A number of studies are ongoing, which may result in increased capital spending programs.
  • At June 30, 2011, total debt approximated $3.5 billion and consolidated cash approximated $4.4 billion. During second-quarter 2011, FCX repaid $1.2 billion in debt, including the April 2011 redemption of $1.1 billion in 8.25% Senior Notes.

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported second-quarter 2011 net income attributable to common stock of $1.4 billion, $1.43 per share, compared with $649 million, $0.70 per share, for second-quarter 2010. For the first six months of 2011, FCX reported net income attributable to common stock of $2.9 billion, $3.00 per share, compared with $1.5 billion, $1.70 per share, for the first six months of 2010.

James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said, "Our second-quarter results reflect strong operating performance and favorable pricing for our products. FCX's global team continues to execute our operating plans in an impressive fashion, producing significant quantities of copper, gold and molybdenum to meet growing global demand. Our large resource position and successful exploration program provide significant opportunities for growth. We are advancing projects expeditiously to increase our production while generating attractive returns for shareholders. Our strong financial position and cash flow generation provide the financial resources required for investment as well as substantial cash returns for shareholders."














SUMMARY FINANCIAL AND OPERATING DATA


















Three Months


Six Months




Ended June 30,


Ended June 30,




2011

2010


2011

2010

Financial Data (in millions, except per share amounts)

















Revenuesa




$ 5,814


$ 3,864


$ 11,523


$ 8,227

Operating incomeb




$ 2,757


$ 1,424


$ 5,693


$ 3,472

Net income attributable to common stock


$ 1,368

c


$ 649

c


$ 2,867

c


$ 1,546

c

Diluted net income per share of common stock


$ 1.43

c


$ 0.70

c,d


$ 3.00

c


$ 1.70

c,d

Diluted weighted-average common shares outstanding


956


947

d


956


947

d

Operating cash flows


$ 1,680

e


$ 1,064

e


$ 4,039

e


$ 2,882

e

Capital expenditures


$ 527


$ 296


$ 1,032


$ 527




















Mining Operating Data

















Copper (millions of recoverable pounds)

















Production


967


930


1,917


1,859

Sales, excluding purchases


1,002


914


1,928


1,874

Average realized price per pound


$ 4.22


$ 3.06


$ 4.24


$ 3.13

Site production and delivery costs per poundf


$ 1.63


$ 1.41


$ 1.62


$ 1.38

Unit net cash costs per poundf


$ 0.93


$ 0.97


$ 0.87


$ 0.89

Gold (thousands of recoverable ounces)

















Production


351


316


817


765

Sales


356


298


836


776

Average realized price per ounce


$ 1,509


$ 1,234


$ 1,466


$ 1,171

Molybdenum (millions of recoverable pounds)

















Production


22


17


42


34

Sales, excluding purchases


21


16


41


33

Average realized price per pound


$ 18.16


$ 18.18


$ 18.13


$ 16.62
























a.


Includes the impact of adjustments to provisionally priced concentrate and cathode sales recognized in prior periods (refer to discussion on page 9).

b.


FCX defers recognizing profits on intercompany sales until final sales to third parties occur. Refer to the "Consolidated Statements of Income" on page IV for a summary of net impacts from changes in these deferrals.

c.


Includes net losses on early extinguishment of debt totaling $54 million ($0.06 per share) in second-quarter 2011, $42 million ($0.05 per share) in second-quarter 2010, $60 million ($0.06 per share) for the first six months of 2011 and $65 million ($0.07 per share) for the first six months of 2010.

d.


Amounts have been adjusted to reflect the February 1, 2011, two-for-one stock split.

e.


Includes working capital (uses) sources of $(496) million in second-quarter 2011, $(173) million in second-quarter 2010, $(382) million for the first six months of 2011 and $107 million for the first six months of 2010.

f.


Reflects per pound weighted-average site production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, excluding net noncash and other costs. For reconciliations of per pound unit costs by operating division to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's website, “www.fcx.com.”




OPERATIONS

Consolidated. Second-quarter 2011 consolidated copper sales of 1.0 billion pounds were higher than the April 2011 estimate of 965 million pounds primarily because of the timing of shipments, principally in North America. Second-quarter 2011 consolidated copper sales were also higher than second-quarter 2010 sales of 914 million pounds reflecting increased production in North America and the timing of shipments in South America and Africa.

Second-quarter 2011 consolidated gold sales of 356 thousand ounces were slightly lower than the April 2011 estimate of 365 thousand ounces but higher than second-quarter 2010 sales of 298 thousand ounces. These variances primarily reflect timing of mine sequencing at Grasberg.

Second-quarter 2011 consolidated molybdenum sales of 21 million pounds were higher than the April 2011 estimate of 17 million pounds and second-quarter 2010 sales of 16 million pounds primarily reflecting improved demand.

Consolidated sales from mines for the year 2011 are expected to approximate 3.9 billion pounds of copper, 1.6 million ounces of gold and 77 million pounds of molybdenum, including 940 million pounds of copper, 415 thousand ounces of gold and 18 million pounds of molybdenum in third-quarter 2011.

Consolidated average unit net cash costs (net of by-product credits) of $0.93 per pound of copper in second-quarter 2011 were lower than unit net cash costs of $0.97 per pound in second-quarter 2010 primarily because of higher gold and molybdenum credits in second-quarter 2011, partly offset by higher site production and delivery costs as a result of increased mining and milling activities and higher input costs, including materials, energy and currency exchange rate impacts.

Assuming average prices of $1,500 per ounce of gold and $15 per pound of molybdenum for the second half of 2011 and achievement of current 2011 sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) for FCX's copper mining operations are expected to average approximately $1.01 per pound of copper for the year 2011. The impact of price changes on consolidated unit net cash costs would approximate $0.01 per pound for each $50 per ounce change in the average price of gold during the second half of 2011 and $0.01 per pound for each $2 per pound change in the average price of molybdenum during the second half of 2011. Quarterly unit net cash costs vary with fluctuations in sales volumes.

North America Copper Mines. FCX operates seven open-pit copper mines in North America - Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Tyrone and Chino in New Mexico. All of the North America mining operations are wholly owned, except for Morenci. FCX records its 85 percent joint venture interest in Morenci using the proportionate consolidation method. In addition to copper, the Morenci, Bagdad and Sierrita mines also produce molybdenum concentrates.

Operating and Development Activities. At Morenci, FCX completed its project to ramp up mining rates to 635,000 metric tons of ore per day and milling rates to approximately 50,000 metric tons per day, resulting in an increase of 125 million pounds of copper per year.

FCX is advancing a feasibility study to expand mining and milling capacity at Morenci to process additional sulfide ores identified through positive exploratory drilling over the last few years. This project, which would require significant investment, would increase milling rates to approximately 115,000 metric tons of ore per day and target incremental annual copper production of approximately 225 million pounds within three years, following completion of the feasibility study, expected by year-end 2011.

The ramp up of mining activities at the Miami mine continues. FCX expects production at Miami to ramp up to approximately 100 million pounds of copper per year by 2012.

During second-quarter 2011, FCX successfully restarted mining and milling activities at the Chino mine. Planned mining and milling rates are expected to be achieved by the end of 2013. Incremental annual copper production is expected to be 100 million pounds in 2012 and 2013 and 200 million pounds in 2014. Costs for the project associated with equipment and mill refurbishment are expected to approximate $150 million.

Operating Data. Following is summary consolidated operating data for the North America copper mines for the second quarters and first six months of 2011 and 2010:











Three Months

Six Months



Ended June 30,

Ended June 30,



2011

2010

2011

2010
Copper (millions of recoverable pounds)











Production

313


263


595


527
Sales, excluding purchases

331


289


607


580
Average realized price per pound

$ 4.19


$ 3.21


$ 4.28


$ 3.27













Molybdenum (millions of recoverable pounds)











Productiona



10


5


17


11













Unit net cash costs per pound of copper:











Site production and delivery, excluding adjustments

$ 1.78


$ 1.46


$ 1.76


$ 1.39
By-product credits, primarily molybdenum

(0.52)


(0.38)


(0.50)


(0.32)
Treatment charges

0.10


0.09


0.10


0.08

Unit net cash costsb



$ 1.36


$ 1.17


$ 1.36


$ 1.15





















a.


Reflects molybdenum production from certain of the North America copper mines. Sales of molybdenum are reflected in the Molybdenum division (refer to page 8).

b.


For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's website, “www.fcx.com.”




Consolidated copper sales volumes from North America of 331 million pounds in second-quarter 2011 were higher than second-quarter 2010 sales of 289 million pounds primarily reflecting higher production at the Morenci and Miami mines.

FCX expects sales from the North America copper mines to approximate 1.2 billion pounds of copper for the year 2011, compared with 1.1 billion pounds of copper in 2010. The restart of the Miami and Chino mines and potential expansion of the Morenci mine are expected to further increase production in future periods.

As anticipated, average unit net cash costs (net of by-product credits) for the North America copper mines of $1.36 per pound of copper in second-quarter 2011 were higher than unit net cash costs of $1.17 per pound in second-quarter 2010, primarily reflecting increased mining and milling activities and higher input costs. Higher molybdenum credits partly offset the increased site production and delivery costs.

FCX estimates that average unit net cash costs (net of by-product credits) for the North America copper mines would approximate $1.42 per pound of copper for the year 2011, based on current sales volume and cost estimates and assuming an average molybdenum price of $15 per pound for the second half of 2011. North America's average unit net cash costs for 2011 would change by approximately $0.025 per pound for each $2 per pound change in the average price of molybdenum during the second half of 2011.

South America Mining. FCX operates four copper mines in South America - Cerro Verde in Peru and El Abra, Candelaria and Ojos del Salado in Chile. FCX owns a 53.56 percent interest in Cerro Verde, a 51 percent interest in El Abra, and 80 percent of the Candelaria and Ojos del Salado mining complexes. All operations in South America are consolidated in FCX's financial statements. South America mining includes open-pit and underground mining. In addition to copper, the Cerro Verde mine produces molybdenum concentrates, and the Candelaria and Ojos del Salado mines produce gold and silver.

Operating and Development Activities. During first-quarter 2011, FCX commenced production from El Abra's newly commissioned stacking and leaching facilities to transition from oxide to sulfide ores. Production from the sulfide ore, which is projected to reach design levels in the second half of 2011, is expected to approximate 300 million pounds of copper per year, replacing the currently depleting oxide copper production. The aggregate capital investment for this project is expected to total $725 million through 2015, including $565 million for the initial phase of the project expected to be completed in 2011.

FCX is also engaged in pre-feasibility studies for a potential large-scale milling operation at El Abra to process additional sulfide material and to achieve higher recoveries.

At Cerro Verde, the feasibility study for a large-scale concentrator expansion was completed in second-quarter 2011. The $3.5 billion project would expand the concentrator facilities from 120,000 metric tons of ore per day to 360,000 metric tons of ore per day and provide incremental annual production of approximately 600 million pounds of copper beginning in 2016. FCX expects to file an environmental impact assessment in the second half of 2011.

Operating Data. Following is summary consolidated operating data for the South America mining operations for the second quarters and first six months of 2011 and 2010:











Three Months

Six Months



Ended June 30,

Ended June 30,



2011

2010

2011

2010
Copper (millions of recoverable pounds)











Production

327


329


644


651
Sales

331


311


643


618
Average realized price per pound

$ 4.24


$ 3.02


$ 4.24


$ 3.07













Gold (thousands of recoverable ounces)











Production

24


20


48


39
Sales

25


20


49


39
Average realized price per ounce

$ 1,515


$ 1,221


$ 1,467


$ 1,175













Molybdenum (millions of recoverable pounds)











Productiona



3


1


6


3













Unit net cash costs per pound of copper:











Site production and delivery, excluding adjustments

$ 1.26


$ 1.22


$ 1.28


$ 1.21
By-product credits

(0.37)


(0.19)


(0.37)


(0.18)
Treatment charges

0.19


0.11


0.19


0.13

Unit net cash costsb



$ 1.08


$ 1.14


$ 1.10


$ 1.16





















a.


Reflects molybdenum production from Cerro Verde. Sales of molybdenum are reflected in the Molybdenum division (refer to page 8).

b.


For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's website, “www.fcx.com.”




Copper sales from South America mining of 331 million pounds in second-quarter 2011 were higher than second-quarter 2010 sales of 311 million pounds primarily reflecting higher ore grades at Candelaria and timing of shipments at Cerro Verde, partly offset by lower mining rates at El Abra as it transitions from oxide to sulfide ores.

FCX expects South America's sales to approximate of 1.3 billion pounds of copper and 100 thousand ounces of gold for the year 2011, similar to 2010 sales of 1.3 billion pounds of copper and 93 thousand ounces of gold.

Average unit net cash costs (net of by-product credits) for South America of $1.08 per pound of copper in second-quarter 2011 were lower than unit net cash costs of $1.14 per pound in second-quarter 2010 primarily reflecting higher molybdenum, gold and silver credits, partly offset by higher treatment charges and higher site production and delivery costs, including materials, energy and currency exchange rate impacts.

FCX estimates that average unit net cash costs (net of by-product credits) for South America mining would approximate $1.21 per pound of copper for the year 2011, based on current sales volume and cost estimates and assuming average prices of $15 per pound of molybdenum and $1,500 per ounce of gold during the second half of 2011.

Indonesia Mining. Through its 90.64 percent owned and wholly consolidated subsidiary PT Freeport Indonesia (PT-FI), FCX operates the world's largest copper and gold mine in terms of reserves at its Grasberg operations in Papua, Indonesia.

Operating and Development Activities. FCX has several projects in process in the Grasberg minerals district, primarily related to the development of the large-scale, high-grade underground ore bodies located beneath and nearby the Grasberg open pit. In aggregate, these underground ore bodies are expected to ramp up to approximately 240,000 metric tons of ore per day following the currently anticipated transition from the Grasberg open pit in 2016.

The Deep Ore Zone (DOZ) mine, one of the world's largest underground mines, has been expanded to a capacity of 80,000 metric tons of ore per day; and a feasibility study for the Deep Mill Level Zone (DMLZ) has been completed. The high-grade Big Gossan mine, which began producing in fourth-quarter 2010, is expected to reach full rates of 7,000 metric tons of ore per day by the end of 2012. Substantial progress has been made in developing infrastructure and underground workings that will enable access to the underground ore bodies. Development of the terminal infrastructure and mine access for the Grasberg Block Cave and DMLZ ore bodies is in progress. Over the next five years, estimated aggregate capital spending is expected to average approximately $635 million ($500 million net to PT-FI) per year on underground development activities.

Operating Data. Following is summary consolidated operating data for the Indonesia mining operations for the second quarters and first six months of 2011 and 2010:











Three Months

Six Months



Ended June 30,

Ended June 30,



2011

2010

2011

2010
Copper (millions of recoverable pounds)











Production

261


276


545


555
Sales

265


259


543


555
Average realized price per pound

$ 4.26


$ 2.95


$ 4.23


$ 3.05













Gold (thousands of recoverable ounces)











Production

325


294


766


723
Sales

330


276


784


734
Average realized price per ounce

$ 1,509


$ 1,235


$ 1,466


$ 1,171













Unit net cash costs per pound of copper:











Site production and delivery, excluding adjustments

$ 1.93


$ 1.62


$ 1.88


$ 1.58
Gold and silver credits

(2.06)


(1.41)


(2.20)


(1.61)
Treatment charges

0.18


0.26


0.18


0.24
Royalty on metals

0.17


0.11


0.16


0.11

Unit net cash costsa



$ 0.22


$ 0.58


$ 0.02


$ 0.32





















a.


For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's website, “www.fcx.com.”




At the Grasberg mine, the sequencing of mining areas with varying ore grades causes fluctuations in the timing of ore production resulting in varying quarterly and annual sales of copper and gold. Copper sales from Indonesia of 265 million pounds in second-quarter 2011 were slightly above second-quarter 2010 sales of 259 million pounds. Gold sales of 330 thousand ounces in second-quarter 2011 were higher than second-quarter 2010 sales of 276 thousand ounces.

During July 2011, PT-FI union workers commenced an eight-day labor strike, which led to a temporary suspension of mining, milling and concentrate shipments. On July 11, 2011, PT-FI reached an agreement with the union to end the strike and operations have resumed. PT-FI estimates the aggregate impact on 2011 production to approximate 35 million pounds of copper and 60 thousand ounces of gold. PT-FI has commenced negotiations with the union for its bi-annual renewal of the collective labor agreement, which is scheduled for renewal in October 2011.

FCX expects sales from Indonesia to approximate 1.0 billion pounds of copper and 1.45 million ounces of gold for the year 2011, compared with 1.2 billion pounds of copper and 1.8 million ounces of gold for the year 2010.

Because of the fixed nature of a large portion of Indonesia's costs, unit costs vary from quarter to quarter depending on volumes of copper and gold sold during the period. Unit net cash costs (net of gold and silver credits) for Indonesia of $0.22 per pound of copper in second-quarter 2011 were lower than unit net cash costs of $0.58 per pound in second-quarter 2010 as higher gold credits more than offset increases in site production and delivery costs.

FCX estimates Indonesia's average unit net cash costs (net of gold and silver credits) would approximate $0.28 per pound of copper for the year 2011, based on current sales volume and cost estimates and assuming an average gold price of $1,500 per ounce during the second half 2011. Indonesia's unit net cash costs for 2011 would change by approximately $0.04 per pound for each $50 per ounce change in the average price of gold during the second half of 2011.

Africa Mining. FCX currently holds an effective 57.75 percent interest in the Tenke Fungurume (Tenke) copper and cobalt mining concessions in the Katanga province of the Democratic Republic of Congo (DRC), which is consolidated in FCX's financial statements. FCX's interest in Tenke will be reduced to 56 percent after receiving the required government approval of the modifications to Tenke Fungurume Mining's bylaws that reflect the agreement with the DRC government. In addition to copper, the Tenke mine produces cobalt hydroxide.

Operating and Development Activities. The milling facilities at Tenke, which were designed to produce at a capacity rate of 8,000 metric tons of ore per day, have performed above capacity, with throughput averaging 9,700 metric tons of ore per day in second-quarter 2011 and 10,200 metric tons of ore per day for the first six months of 2011. Mining rates have been increased to enable additional copper production from the initial project capacity of 250 million pounds per year to approximately 290 million pounds per year.

FCX is planning a second phase of the project, which would include optimizing the current plant and increasing capacity. As part of the second phase, FCX is completing studies to expand the mill rate to 14,000 metric tons of ore per day and to construct related processing facilities that would target the addition of approximately 150 million pounds of copper per year in an approximate two-year timeframe. FCX expects production volumes from the project to expand significantly over time.

FCX continues to engage in drilling activities, exploration analyses and metallurgical testing to evaluate the potential of the highly prospective minerals district at Tenke. These analyses are being incorporated in future plans to evaluate opportunities for expansion.

Operating Data. Following is summary consolidated operating data for the Africa mining operations for the second quarters and first six months of 2011 and 2010:








Three Months
Six Months


Ended June 30,
Ended June 30,


2011
2010
2011
2010
Copper (millions of recoverable pounds)







Production
66

62

133

126
Sales
75

55

135

121

Average realized price per pounda


$ 4.08

$ 2.96

$ 4.11

$ 3.12









Cobalt (millions of contained pounds)







Production
6

4

12

9
Sales
7

4

13

7
Average realized price per pound
$ 11.16

$ 12.37

$ 11.02

$ 11.91









Unit net cash costs per pound of copper:







Site production and delivery, excluding adjustments
$ 1.62

$ 1.27

$ 1.57

$ 1.32

Cobalt creditsb


(0.77)

(0.54)

(0.76)

(0.46)
Royalty on metals
0.09

0.06

0.10

0.07

Unit net cash costsc


$ 0.94

0.79

$ 0.91

$ 0.93
















a.


Includes adjustments for point-of-sale transportation costs as negotiated in customer contracts.

b.


Net of cobalt downstream processing and freight costs.

c.


For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's website, “www.fcx.com.”




Copper sales from Africa of 75 million pounds in second-quarter 2011 were higher than second-quarter 2010 copper sales of 55 million pounds, primarily reflecting the timing of shipments.

FCX expects Africa's sales to approximate 275 million pounds of copper and over 20 million pounds of cobalt for the year 2011, compared with 262 million pounds of copper and 20 million pounds of cobalt for the year 2010.

Unit net cash costs (net of cobalt credits) for Africa of $0.94 per pound of copper were higher than unit net cash costs of $0.79 per pound in second-quarter 2010, primarily reflecting increased mining and milling activity and higher input costs. Higher cobalt credits partly offset the increased production and delivery costs.

FCX estimates Africa's average unit net cash costs would approximate $0.97 per pound of copper for the year 2011, based on current sales volume and cost estimates and assuming an average cobalt price of $14 per pound for the second half of 2011. Africa's unit net cash costs for 2011 would change by approximately $0.05 per pound for each $2 per pound change in the average price of cobalt during the second half of 2011.

Molybdenum. FCX is the world's largest producer of molybdenum. FCX conducts molybdenum mining operations at its wholly owned Henderson underground mine in Colorado, is developing the Climax molybdenum mine and sells molybdenum produced from its North and South America copper mines.

Development Activities. Construction activities at the Climax molybdenum mine are approximately 75 percent complete. Construction is expected to be complete in early 2012, and FCX plans to commence production during 2012. Production from the Climax molybdenum mine is expected to ramp up to a rate of 20 million pounds per year during 2013 and, depending on market conditions, may be increased to 30 million pounds per year. FCX intends to operate its Climax and Henderson molybdenum mines in a flexible manner to meet market requirements. FCX believes that Climax is one of the most attractive primary molybdenum development projects in the world, with large-scale production capacity, attractive cash costs and future growth options. Estimated remaining costs for the initial phase of the project approximate $250 million.

Operating Data. Following is summary consolidated operating data for the Molybdenum operations for the second quarters and first six months of 2011 and 2010:











Three Months

Six Months



Ended June 30,

Ended June 30,



2011

2010

2011

2010
Molybdenum (millions of recoverable pounds)











Productiona



9


11


19


20

Sales, excluding purchasesb



21


16


41


33
Average realized price per pound

$ 18.16


$ 18.18


$ 18.13


$ 16.62













Unit net cash cost per pound of molybdenumc



$ 6.21


$ 5.73


$ 6.17


$ 5.65




















a.


Reflects production at the Henderson molybdenum mine.

b.


Includes sales of molybdenum produced at the North and South America copper mines.

c.


For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's website, “www.fcx.com.”




Consolidated molybdenum sales of 21 million pounds were higher than the April 2011 estimate of 17 million pounds and second-quarter 2010 sales of 16 million pounds primarily reflecting improved demand.

For the year 2011, FCX expects molybdenum sales to approximate 77 million pounds (including production of approximately 45 million pounds from the North and South America copper mines), compared with 67 million pounds in 2010 (including production of 32 million pounds from the North and South America copper mines).

Unit net cash costs at the Henderson mine of $6.21 per pound of molybdenum in second-quarter 2011 were higher than unit net cash costs of $5.73 per pound in second-quarter 2010, primarily reflecting higher input costs, including labor and materials.

Based on current sales volume and cost estimates, FCX expects average unit net cash costs for the Henderson mine would approximate $7.00 per pound of molybdenum for the year 2011.

EXPLORATION ACTIVITIES

FCX is conducting exploration activities near its existing mines with a focus on opportunities to expand reserves that will support the development of additional future production capacity in the large minerals districts where it currently operates. Favorable exploration results indicate opportunities for significant future potential reserve additions in North and South America and in the Tenke Fungurume minerals district. The drilling data in North America continue to indicate the potential for expanded sulfide production.

Exploration spending for the year 2011 is expected to approximate $250 million, compared with $113 million in 2010. Exploration activities will continue to focus primarily on the potential for future reserve additions in FCX's existing minerals districts.

PROVISIONAL PRICING AND OTHER

For the first six months of 2011, 56 percent of FCX's mined copper was sold in concentrate, 22 percent as rod from North America operations and 22 percent as cathode. Under the long-established structure of sales agreements prevalent in the industry, substantially all of FCX's copper concentrate and cathode sales are provisionally priced at the time of shipment. The provisional prices are finalized in a contractually specified future month (generally one to four months from the shipment date) primarily based on quoted London Metal Exchange (LME) monthly average spot prices. Because a significant portion of FCX's concentrate and cathode sales in any quarterly period usually remain subject to final pricing, the quarter-end forward price is a major determinant of recorded revenues and the average recorded copper price for the period. LME spot copper prices averaged $4.14 per pound during second-quarter 2011, compared to FCX's recorded average price of $4.22 per pound.

At March 31, 2011, FCX had provisionally priced copper sales at its copper mining operations totaling 464 million pounds (net of intercompany sales and noncontrolling interests) recorded at an average of $4.27 per pound. Lower prices during second-quarter 2011 resulted in adjustments to these provisionally priced copper sales and decreased second-quarter 2011 consolidated revenues by $47 million ($23 million to net income attributable to common stock or $0.02 per share), compared with adjustments to the March 31, 2010, provisionally priced copper sales that decreased second-quarter 2010 consolidated revenues by $169 million ($72 million to net income attributable to common stock or $0.08 per share). Adjustments to the December 31, 2010, provisionally priced copper sales resulted in a decrease to consolidated revenues of $12 million ($5 million to net income attributable to common stock or $0.01 per share) for the first six months of 2011, compared with adjustments to the December 31, 2009, provisionally priced copper sales that resulted in a decrease to consolidated revenues of $23 million ($9 million to net income attributable to common stock or $0.01 per share) for the first six months of 2010.

At June 30, 2011, FCX had provisionally priced copper sales at its copper mining operations totaling 435 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $4.27 per pound, subject to final pricing over the next several months. FCX estimates that each $0.05 change in the price realized from the June 30, 2011, provisional price recorded would have an approximate $14 million effect on its 2011 net income attributable to common stock. The LME spot copper price on July 20, 2011, was $4.43 per pound.

FCX defers recognizing profits on its sales from its Indonesia and South America mining operations to Atlantic Copper and on 25 percent of Indonesia's mining sales to PT Smelting (PT-FI's 25 percent-owned Indonesian smelting unit) until final sales to third parties occur. FCX's net deferred profits on its Indonesia and South America concentrate inventories at Atlantic Copper and PT Smelting to be recognized in future periods' net income attributable to common stock totaled $218 million at June 30, 2011. Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices will result in variability in FCX's net deferred profits and quarterly earnings.

CASH FLOWS

FCX generated operating cash flows of $1.7 billion for second-quarter 2011 and $4.0 billion for the first six months of 2011. These amounts are net of working capital uses of $496 million for the second quarter and $382 million for the six-month period.

Based on current 2011 sales volume and cost estimates and assuming average prices of $4.25 per pound of copper, $1,500 per ounce of gold and $15 per pound of molybdenum for the second half of 2011, FCX's consolidated operating cash flows are estimated to exceed $8 billion for the year 2011. The impact of price changes on operating cash flows would approximate $80 million for each $0.05 per pound change in the average price of copper during the second half of 2011, $35 million for each $50 per ounce change in the average price of gold during the second half of 2011 and $40 million for each $2 per pound change in the average price of molybdenum during the second half of 2011.

Capital expenditures, including capitalized interest, totaled $527 million for second-quarter 2011 and $1.0 billion for the first six months of 2011. FCX's capital expenditures are currently estimated to approximate $2.6 billion for the year 2011, including $1.4 billion for major projects and $1.2 billion for sustaining capital. Major projects for 2011 primarily include underground development activities at Grasberg, construction activities at the Climax molybdenum mine and completion of the initial phase of the sulfide ore project at El Abra. FCX is also considering additional investments at several of its sites. Capital spending plans will continue to be reviewed and adjusted in response to changes in market conditions and other factors.

CASH AND DEBT

At June 30, 2011, FCX had consolidated cash of $4.4 billion. Net of noncontrolling interests' share, taxes and other costs, cash available to the parent company totaled $3.4 billion as shown below (in billions):








June 30,



2011

Cash at domestic companiesa



$ 1.5
Cash at international operations

2.9
Total consolidated cash and cash equivalents

4.4
Less: Noncontrolling interests' share

(0.8)
Cash, net of noncontrolling interests' share

3.6
Less: Withholding taxes and other

(0.2)
Net cash available

$ 3.4






a.Includes cash at FCX's parent company and North America operations.







At June 30, 2011, FCX had $3.5 billion in debt. FCX had no borrowings and $43 million of letters of credit issued under its revolving credit facility resulting in total availability of approximately $1.5 billion at June 30, 2011. Since January 1, 2009, FCX has repaid $3.8 billion in debt resulting in estimated annual interest savings of approximately $270 million based on current interest rates.

FCX does not have significant debt maturities in the near term (a total of $5 million through 2016); however, FCX may consider opportunities to prepay debt in advance of scheduled maturities. FCX has $3.0 billion in debt that is redeemable in whole or in part, at its option, at make-whole redemption prices prior to April 2012, and afterwards at stated redemption prices.

FINANCIAL POLICY

FCX has a long-standing tradition of seeking to build shareholder value through investing in projects with attractive rates of return and returning cash to shareholders through common stock dividends and share purchases. On June 1, 2011, FCX paid a supplemental common stock dividend of $0.50 per share, which is in addition to FCX's current annual common stock dividend of $1.00 per share ($0.25 per share quarterly). FCX has paid common stock dividends of $949 million for the first six months of 2011, which includes $474 million for the supplemental dividend paid on June 1, 2011. FCX intends to continue to maintain a strong financial position, invest aggressively in attractive growth projects and provide cash returns to shareholders. The Board will continue to review FCX's financial policy on an ongoing basis.

WEBCAST INFORMATION

A conference call with securities analysts to discuss FCX's second-quarter 2011 results is scheduled for today at 10:00 a.m. Eastern Time. The conference call will be broadcast on the Internet along with slides. Interested parties may listen to the conference call live and view the slides by accessing “www.fcx.com.” A replay of the webcast will be available through Friday, August 19, 2011.

FCX is a leading international mining company with headquarters in Phoenix, Arizona. FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX has a dynamic portfolio of operating, expansion and growth projects in the copper industry and is the world's largest producer of molybdenum.

The company's portfolio of assets includes the Grasberg minerals district, the world's largest copper and gold mine in terms of recoverable reserves; significant mining operations in the Americas, including the large-scale Morenci and Safford minerals districts in North America and the Cerro Verde and El Abra operations in South America; and the Tenke Fungurume minerals district in the DRC. Additional information about FCX is available on FCX's website at “www.fcx.com.”

Cautionary Statement and Regulation G Disclosure: This press release contains forward-looking statements in which FCX discusses its potential future performance. Forward-looking statements are all statements other than statements of historical facts, such as those statements regarding projected ore grades and milling rates, projected production and sales volumes, projected unit net cash costs, projected operating cash flows, projected capital expenditures, exploration efforts and results, mine production and development plans, liquidity, other financial commitments and tax rates, the impact of copper, gold, molybdenum and cobalt price changes, potential prepayments of debt, future dividend payments and potential share purchases. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,” “will,” “should,” “to be,” and any similar expressions are intended to identify those assertions as forward-looking statements. The declaration of dividends is at the discretion of FCX's Board of Directors (the Board) and will depend on FCX's financial results, cash requirements, future prospects, and other factors deemed relevant by the Board.

FCX cautions readers that forward-looking statements are not guarantees of future performance and its actual results may differ materially from those anticipated, projected or assumed in the forward-looking statements. Important factors that can cause FCX's actual results to differ materially from those anticipated in the forward-looking statements include commodity prices, mine sequencing, production rates, industry risks, regulatory changes, political risks, the potential effects of violence in Indonesia, the resolution of administrative disputes in the Democratic Republic of Congo, weather-related risks, labor relations, including the resolution of labor negotiations in Indonesia, environmental risks, litigation results, currency translation risks and other factors described in more detail under the heading “Risk Factors” in FCX's Annual Report on Form 10-K for the year ended December 31, 2010, filed with the U.S. Securities and Exchange Commission (SEC) as updated by our subsequent filings with the SEC.

Investors are cautioned that many of the assumptions on which our forward-looking statements are based are likely to change after our forward-looking statements are made, including for example commodity prices, which we cannot control, and production volumes and costs, some aspects of which we may or may not be able to control. Further, we may make changes to our business plans that could or will affect our results. We caution investors that we do not intend to update our forward-looking statements notwithstanding any changes in our assumptions, changes in our business plans, our actual experience, or other changes, and we undertake no obligation to update any forward-looking statements more frequently than quarterly.

This press release also contains certain financial measures such as unit net cash costs per pound of copper and per pound of molybdenum. As required by SEC Regulation G, reconciliations of these measures to amounts reported in FCX's consolidated financial statements are in the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's website, “www.fcx.com.”



FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED OPERATING DATA

















Three Months Ended June 30,



Production

Sales

COPPER (millions of recoverable pounds)



2011

2010

2011

2010
(FCX's net interest in %)












North America














Morenci (85%)a



135

114

142

118
Bagdad (100%)

48

49

54

55
Safford (100%)

37

32

38

41
Sierrita (100%)

45

37

46

41
Miami (100%)

15

3

15

3
Tyrone (100%)

18

20

22

22
Chino (100%)

14

8

13

9
Other (100%)

1



1




Total North America

313

263

331

289














South America














Cerro Verde (53.56%)

170

166

173

150
El Abra (51%)

66

83

60

84
Candelaria/Ojos del Salado (80%)

91

80

98

77
Total South America

327

329

331

311














Indonesia














Grasberg (90.64%)b

261

276

265

259














Africa














Tenke Fungurume (57.75%)

66

62

75

55














Consolidated

967

930

1,002

914
Less noncontrolling interests

181

186

186

173
Net

786

744

816

741














Consolidated sales from mines







1,002

914
Purchased copper







57

44
Total copper sales, including purchases







1,059

958














Average realized price per pound







$
4.22

$
3.06














GOLD (thousands of recoverable ounces)














(FCX's net interest in %)












North America (100%)

2

2

1

2
South America (80%)

24

20

25

20

Indonesia (90.64%)b



325

294

330

276
Consolidated

351

316

356

298
Less noncontrolling interests

35

31

36

30
Net

316

285

320

268














Average realized price per ounce







$
1,509

$
1,234














MOLYBDENUM (millions of recoverable pounds)














(FCX's net interest in %)












Henderson (100%)

9

11

N/A

N/A
North America (100%)

10

5

N/A

N/A
Cerro Verde (53.56%)

3

1

N/A

N/A
Consolidated

22

17

21

16
Less noncontrolling interests

2



1


Net

20

17

20

16














Consolidated sales from mines







21

16
Purchased molybdenum









1
Total molybdenum sales, including purchases







21

17














Average realized price per pound







$
18.16

$
18.18














COBALT (millions of contained pounds)














(FCX's net interest in %)












Consolidated - Tenke Fungurume (57.75%)

6

4

7

4
Less noncontrolling interests

2

2

3

2
Net

4

2

4

2














Average realized price per pound







$
11.16

$
12.37














a. Amounts are net of Morenci's 15 percent joint venture partner's interest.


b. Amounts are net of Grasberg's joint venture partner's interest, which varies in accordance with the terms of the joint venture agreement.




FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED OPERATING DATA (continued)

















Six Months Ended June 30,



Production

Sales

COPPER (millions of recoverable pounds)



2011

2010

2011

2010
(FCX's net interest in %)












North America














Morenci (85%)a



257

212

260

225
Bagdad (100%)

97

101

104

112
Safford (100%)

65

79

68

92
Sierrita (100%)

85

72

85

81
Miami (100%)

29

6

25

7
Tyrone (100%)

37

40

41

44
Chino (100%)

23

16

22

18
Other (100%)

2

1

2

1
Total North America

595

527

607

580














South America














Cerro Verde (53.56%)

345

331

342

306
El Abra (51%)

114

168

110

161
Candelaria/Ojos del Salado (80%)

185

152

191

151
Total South America

644

651

643

618















Indonesia














Grasberg (90.64%)b



545

555

543

555














Africa














Tenke Fungurume (57.75%)

133

126

135

121














Consolidated

1,917

1,859

1,928

1,874
Less noncontrolling interests

360

372

359

354
Net

1,557

1,487

1,569

1,520














Consolidated sales from mines







1,928

1,874
Purchased copper







134

65
Total copper sales, including purchases







2,062

1,939














Average realized price per pound







$
4.24

$
3.13














GOLD (thousands of recoverable ounces)














(FCX's net interest in %)












North America (100%)

3

3

3

3
South America (80%)

48

39

49

39

Indonesia (90.64%)b



766

723

784

734
Consolidated

817

765

836

776
Less noncontrolling interests

81

75

83

77
Net

736

690

753

699














Average realized price per ounce







$
1,466

$
1,171














MOLYBDENUM (millions of recoverable pounds)














(FCX's net interest in %)












Henderson (100%)

19

20

N/A

N/A
North America (100%)

17

11

N/A

N/A
Cerro Verde (53.56%)

6

3

N/A

N/A
Consolidated

42

34

41

33
Less noncontrolling interests

3

1

2

1
Net

39

33

39

32














Consolidated sales from mines







41

33
Purchased molybdenum









2
Total molybdenum sales, including purchases







41

35














Average realized price per pound







$
18.13

$
16.62














COBALT (millions of contained pounds)












(FCX's net interest in %)












Consolidated - Tenke Fungurume (57.75%)

12

9

13

7
Less noncontrolling interests

5

4

6

3
Net

7

5

7

4














Average realized price per pound







$
11.02

$
11.91














a. Amounts are net of Morenci's 15 percent joint venture partner's interest.


b. Amounts are net of Grasberg's joint venture partner's interest, which varies in accordance with the terms of the joint venture agreement.



FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED OPERATING DATA (continued)
















Three Months Ended

Six Months Ended



June 30,

June 30,



2011

2010

2011

2010
100% North America Copper Mines











Solution Extraction/Electrowinning (SX/EW) Operations













Leach ore placed in stockpiles (metric tons per day)

847,500

646,100

829,700

624,100
Average copper ore grade (percent)

0.24

0.25

0.24

0.25
Copper production (millions of recoverable pounds)

201

182

383

384













Mill Operations













Ore milled (metric tons per day)

221,100

195,300

217,300

179,200
Average ore grades (percent):











Copper

0.38

0.32

0.37

0.31
Molybdenum

0.03

0.02

0.03

0.02
Copper recovery rate (percent)

84.3

81.4

83.2

83.3
Production (millions of recoverable pounds):











Copper

136

100

258

180
Molybdenum

10

5

17

11













100% South America Mining











SX/EW Operations













Leach ore placed in stockpiles (metric tons per day)

241,200

247,400

251,600

251,600
Average copper ore grade (percent)

0.47

0.42

0.43

0.43
Copper production (millions of recoverable pounds)

113

130

203

263













Mill Operations













Ore milled (metric tons per day)

197,600

187,100

194,700

183,600
Average ore grades:











Copper (percent)

0.62

0.62

0.65

0.62
Gold (grams per metric ton)

0.11

0.09

0.11

0.09
Molybdenum (percent)

0.02

0.02

0.02

0.02
Copper recovery rate (percent)

89.3

89.9

90.4

89.5
Production (recoverable):











Copper (millions of pounds)

214

199

441

388
Gold (thousands of ounces)

24

20

48

39
Molybdenum (millions of pounds)

3

1

6

3













100% Indonesia Mining











Ore milled (metric tons per day)

220,000

223,400

221,100

228,700
Average ore grades:











Copper (percent)

0.77

0.81

0.77

0.79
Gold (grams per metric ton)

0.79

0.63

0.84

0.75
Recovery rates (percent):











Copper

87.7

89.1

87.5

88.7
Gold

79.5

78.2

80.8

78.7
Production (recoverable):











Copper (millions of pounds)

282

305

566

613
Gold (thousands of ounces)

394

319

853

785













100% Africa Mining











Ore milled (metric tons per day)

9,700

8,800

10,200

9,200
Average ore grades (percent):











Copper

3.67

3.87

3.54

3.78
Cobalt

0.41

0.35

0.40

0.40
Copper recovery rate (percent)

92.9

90.7

92.3

91.2
Production (millions of pounds):











Copper (recoverable)

66

62

133

126
Cobalt (contained)

6

4

12

9













100% Henderson Molybdenum Mine











Ore milled (metric tons per day)

22,000

22,800

22,700

23,000
Average molybdenum ore grade (percent)

0.24

0.25

0.24

0.24
Molybdenum production (millions of recoverable pounds)

9

11

19

20

FREEPORT-McMoRan COPPER & GOLD INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

















Three Months Ended

Six Months Ended



June 30,

June 30,



2011

2010

2011

2010



(In Millions, Except Per Share Amounts)
Revenues

$ 5,814

a


$ 3,864

a


$ 11,523

a


$ 8,227

a

Cost of sales:












Production and delivery

2,557


2,052


4,934


3,968

Depreciation, depletion and amortization

267


249


499


520

Total cost of sales

2,824


2,301


5,433


4,488

Selling, general and administrative expenses

107


101


221


196

Exploration and research expenses

66


38


116


69

Environmental obligations and shutdown costs

60





60


2

Total costs and expenses

3,057


2,440


5,830


4,755

Operating income

2,757

b


1,424

b


5,693

b


3,472

b

Interest expense, net

(74)

c


(122)

c


(172)

c


(267)

c

Losses on early extinguishment of debt

(61)


(50)


(68)


(77)

Other income, net

2


9


12


21

Income before income taxes and equity in affiliated companies' net earnings



2,624


1,261


5,465


3,149

Provision for income taxes

(906)


(433)


(1,890) )

(1,111)

Equity in affiliated companies' net earnings

8


4


12


9

Net income

1,726


832


3,587


2,047

Net income attributable to noncontrolling interests

(358)


(168)


(720)


(438)

Preferred dividends


d


(15)



d


(63)

Net income attributable to FCX common stockholders

$ 1,368

a,b


$ 649

a,b


$ 2,867

a,b


$ 1,546

a,b















Net income per share attributable to FCX common stockholders:












Basic

$ 1.44


$ 0.71

e


$ 3.03


$ 1.74

e

Diluted

$ 1.43


$ 0.70

e


$ 3.00


$ 1.70

e















Weighted-average common shares outstanding:












Basic

947


915

e


947


888

e

Diluted

956


947

e


956


947

e















Dividends declared per share of common stock

$ 0.75


$ 0.15

e


$ 1.00


$ 0.225

e




a.


Includes unfavorable adjustments to provisionally priced copper sales recognized in prior periods totaling $47 million ($23 million to net income attributable to common stockholders) in second-quarter 2011, $169 million ($72 million to net income attributable to common stockholders) in second-quarter 2010, $12 million ($5 million to net income attributable to common stockholders) for the first six months of 2011 and $23 million ($9 million to net income attributable to common stockholders) for the first six months of 2010.



b.


FCX defers recognizing profits on intercompany sales until final sales to third parties occur. Changes in these deferrals attributable to variability in intercompany volumes resulted in net additions of $7 million ($14 million to net income attributable to common stockholders) in second-quarter 2011, $28 million ($20 million to net income attributable to common stockholders) in second-quarter 2010 and $1 million (a net reduction of $1 million to net income attributable to common stockholders) for the first six months of 2011, and a net reduction of $65 million ($28 million to net income attributable to common stockholders) for the first six months of 2010.



c.


Consolidated interest expense, excluding capitalized interest, totaled $97 million in second-quarter 2011, $132 million in second-quarter 2010, $220 million for the first six months of 2011 and $283 million for the first six months of 2010. Lower interest expense in the 2011 periods primarily reflects the impact of debt repayments during 2010 and the first six months of 2011.



d.


During 2010, FCX's 6 3/4% Mandatorily Convertible Preferred Stock automatically converted into shares of FCX common stock; as a result, FCX no longer has requirements to pay preferred dividends.



e.


Amounts have been adjusted to reflect the February 1, 2011, two-for-one stock split.




FREEPORT-McMoRan COPPER & GOLD INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)










June 30,

December 31,



2011

2010



(In Millions)
ASSETS





Current assets:





Cash and cash equivalents

$ 4,378


$ 3,738
Trade accounts receivable

1,533


2,132
Other accounts receivable

252


293
Inventories:





Product

1,399


1,409
Materials and supplies, net

1,277


1,169
Mill and leach stockpiles

1,072


856
Other current assets

262


254
Total current assets

10,173


9,851
Property, plant, equipment and development costs, net

17,500


16,785
Long-term mill and leach stockpiles

1,523


1,425
Intangible assets, net

323


328
Other assets

1,060


997
Total assets

$ 30,579


$ 29,386







LIABILITIES AND EQUITY





Current liabilities:





Accounts payable and accrued liabilities

$ 2,343


$ 2,441
Accrued income taxes

258


648
Dividends payable

239


240
Current portion of reclamation and environmental obligations

191


207
Rio Tinto's share of joint venture cash flows

70


132
Current portion of debt

5


95
Total current liabilities

3,106


3,763
Long-term debt, less current portion

3,537


4,660
Deferred income taxes

3,265


2,873
Reclamation and environmental obligations, less current portion

2,123


2,071
Other liabilities

1,446


1,459
Total liabilities

13,477


14,826
Equity:





FCX stockholders' equity:





Common stock

107


107
Capital in excess of par value

18,942


18,751
Accumulated deficit

(672)


(2,590)
Accumulated other comprehensive loss

(316)


(323)
Common stock held in treasury

(3,553)


(3,441)
Total FCX stockholders' equity

14,508


12,504
Noncontrolling interests

2,594


2,056
Total equity

17,102


14,560
Total liabilities and equity

$ 30,579


$ 29,386

FREEPORT-McMoRan COPPER & GOLD INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)







Six Months Ended June 30,



2011

2010



(In Millions)
Cash flow from operating activities:





Net income

$ 3,587


$ 2,047
Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation, depletion and amortization

499


520
Stock-based compensation

69


75
Charges for reclamation and environmental obligations, including accretion

79


75
Payments of reclamation and environmental obligations

(88)


(97)
Losses on early extinguishment of debt

68


77
Deferred income taxes

337


107
Increase in long-term mill and leach stockpiles

(98)


(31)
Other, net

(32)


2
(Increases) decreases in working capital:





Accounts receivable

577


502
Inventories

(346)


(39)
Other current assets




(9)
Accounts payable and accrued liabilities

(184)


(161)
Accrued income and other taxes

(429)


(186)
Net cash provided by operating activities

4,039


2,882







Cash flow from investing activities:





Capital expenditures:





North America copper mines

(204)


(81)
South America

(257)


(154)
Indonesia

(301)


(195)
Africa

(40)


(50)
Molybdenum

(162)


(12)
Other

(68)


(35)
Other, net

19


8
Net cash used in investing activities

(1,013)


(519)







Cash flow from financing activities:





Proceeds from debt

23


35
Repayments of debt

(1,288)


(1,655)
Cash dividends and distributions paid:





Common stock

(949)


(130)
Preferred stock




(95)
Noncontrolling interests

(195)


(145)
Contributions from noncontrolling interests

13


15
Net payments for stock-based awards

(3)


(6)
Excess tax benefit from stock-based awards

22


4
Other, net

(9)


Net cash used in financing activities

(2,386)


(1,977)







Net increase in cash and cash equivalents

640


386
Cash and cash equivalents at beginning of year

3,738


2,656
Cash and cash equivalents at end of period

$ 4,378


$ 3,042

Contacts

Freeport-McMoRan Copper & Gold Inc.
Financial Contacts:
Kathleen L. Quirk, 602-366-8016
or
David P. Joint, 504-582-4203
or
Media Contact:
Eric E. Kinneberg, 602-366-7994