SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31,June 30, 1994
Commission File Number: 1-9916
FREEPORT-MCMORAN COPPERFreeport-McMoRan Copper & GOLD INC.Gold Inc.
Incorporated in Delaware 74-2480931
(IRS Employer Identification No.)
First Interstate Bank Building, One East First Street, Suite 1600, Reno,
Nevada 89501
Registrant's telephone number, including area code: (702) 688-3000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes /X/ No___[X] No [ ]
On March 31,June 30, 1994, there were issued and outstanding 63,803,313 shares of the
registrant's Class A Common Stock, par value $0.10$.10 per share, and 142,129,602
shares of its Class B Common Stock, par value $0.10$.10 per share.
FREEPORT-McMoRan COPPER & GOLD INC.
TABLE OF CONTENTS
Page
----
Part I. Financial Information
Financial Statements:
Condensed Balance Sheets 3
Statements of Operations 4
Statements of Cash Flow 5
Notes to Financial Statements 6
Remarks 67
Management's Discussion and Analysis
of Financial Condition and
Results of Operations 78
Part II. Other Information 1215
Signature 13
Exhibit Index E-117
FREEPORT-McMoRan COPPER & GOLD INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
FREEPORT-McMoRan COPPER & GOLD INC.
CONDENSED BALANCE SHEETS (Unaudited)
March 31,June 30, December 31,
1994 1993
---------- -----------------------
ASSETS (In Thousands)
Current assets:
Cash and short-term investments $ 37,65121,983 $ 13,798
Accounts receivable:
Customers 99,472109,785 122,527
Other 46,45559,541 66,202
Inventories:
Product 71,362103,895 58,247
Materials and supplies 160,075171,760 153,681
Prepaid expenses and other 15,98622,878 13,787
---------- ----------
Total current assets 431,001489,842 428,242
Property, plant and equipment, net 1,845,1242,040,873 1,646,603
Other assets 46,64851,915 41,808
---------- ----------
Total assets $2,322,773$2,582,630 $2,116,653
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 270,114334,884 $ 238,948
Current portion of long-term debt and
short-term borrowings 59,22966,873 48,791
---------- ----------
Total current liabilities 329,343401,757 287,739
Long-term debt, less current portion 104,045275,193 109,829
Zero coupon exchangeable notes - 102,039
Accrued postretirement benefits and other
liabilities 182,471210,464 188,165
Deferred income taxes 223,384231,307 201,553
Minority interests 57,37856,327 46,781
Mandatory redeemable gold-denominated preferred stock 399,999 232,620
Stockholders' equity 1,026,1531,007,583 947,927
---------- ----------
Total liabilities and stockholders' equity $2,322,773$2,582,630 $2,116,653
========== ==========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31,
---------------------Six Months Ended
June 30, June 30,
-------------------- --------------------
1994 1993 1994 1993
-------- -------- -------- --------
(In Thousands, Except Per Share Amounts)
Revenues $266,153 $133,515$281,452 $215,033 $547,605 $348,548
Cost of sales:
Site production
and delivery 164,801 69,313172,668 167,525 337,469 236,838
Depreciation
and amortization 17,121 12,06318,319 15,636 35,440 27,699
-------- -------- -------- --------
Total cost of sales 181,922 81,376190,987 183,161 372,909 264,537
Exploration expenses 8,020 6,41311,564 9,303 19,584 15,716
Provision for
restructuring charges - 3,41517,380 - 20,795
General and
administrative
expenses 23,080 16,857
-------26,361 23,652 49,441 40,509
-------- -------- -------- --------
Total costs and
expenses 213,022 108,061228,912 233,496 441,934 341,557
-------- -------- -------- --------
Operating income 53,131 25,454(loss) 52,540 (18,463) 105,671 6,991
Interest expense, net - (5,629)(6,308) - (11,937)
Other income
(expense), net (116) 1,131(454) 570 (570) 1,701
-------- -------- -------- --------
Income (loss) before
income taxes and
minority interest 53,015 20,956
Provisioninterests 52,086 (24,201) 105,101 (3,245)
(Provision) benefit for
income taxes (23,142) (10,937)(24,359) 2,311 (47,501) (8,626)
Minority interests (4,009) (1,398)(5,426) 4,293 (9,435) 2,895
-------- -------- -------- --------
Income (loss) before
changes in accounting
principle 25,864 8,62122,301 (17,597) 48,165 (8,976)
Cumulative effect of
changes in accounting
principle net- - - (9,854)
-------- -------- -------- --------
Net income (loss) 25,864 (1,233)22,301 (17,597) 48,165 (18,830)
Preferred dividends (12,305)(12,583) (3,927) (24,888) (7,854)
-------- -------- -------- --------
Net income (loss)
applicable to common
stock $ 13,5599,718 $(21,524) $ (5,160)23,277 $(26,684)
======== ======== ======== ========
Net income (loss) per
share of common stock:
Before changes in
accounting principle $.07 $ .02$.05 $(.11) $.11 $(.09)
Cumulative effect of
changes in accounting
principle - - - (.05)
---- ----- $.07 $(.03)---- -----
$.05 $(.11) $.11 $(.14)
==== ===== ==== =====
Average common shares
outstanding 205,211 195,667205,933 197,550 205,572 196,608
======= ======= ======= =======
Dividends per common
share $.15 $.15 $.30 $.30
==== ==== ==== ====
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF CASH FLOW (Unaudited)
ThreeSix Months Ended
March 31,June 30,
----------------------
1994 1993
-------- --------
(In Thousands)
Cash flow from operating activities:
Net income (loss) $ 25,864 $ (1,233)48,165 $(18,830)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Cumulative effect of changes in accounting
principle - 9,854
Depreciation and amortization 17,121 12,06335,440 27,699
Provision for restructuring and
valuation of assets,charges,
net of payments - 3,41516,652
Deferred income taxes 8,311 5,13116,234 10,737
Amortization of discount on zero coupon
exchangeable notes 352 3,4036,136
Minority interests' share of net income 4,009 1,3989,435 (2,895)
(Increase) decrease in working capital,
net of effect of acquisition:
Accounts receivable 36,796 62,22123,773 26,316
Inventories (18,923) (11,237)(43,563) (3,251)
Prepaid expenses and other (2,198) (1,760)(9,065) (137)
Accounts payable and accrued liabilities 18,268 (26,875)22,394 (28,606)
Other (7,979) (8,431)(7,239) (12,139)
-------- --------
Net cash provided by operating activities 81,621 47,94995,926 31,536
-------- --------
Cash flow from investing activities:
Capital expenditures (168,487) (100,947)(323,906) (199,673)
Acquisition of RTM, net of cash acquired (5,756) (1,354)
Other - (358)
-------- --------
Net cash used in investing activities (174,243) (102,301)(329,662) (201,385)
-------- --------
Cash flow from financing activities:
Cash dividends paid:
Common stock (30,833) (29,321)(61,723) (58,834)
Preferred stock (10,333) (3,927)(22,221) (7,854)
Minority interest (6,304) (6,135)interests (12,107) (10,037)
Proceeds from debt 123,922 -309,325 36,768
Repayment of debt (118,453) -(246,105) (157,358)
Net proceeds from sale of gold-denominated
preferredof:
Preferred stock 158,476 -
9 3/4% senior notes 116,276 -
-------- --------
Net cash provided by (used in) financing
activities 116,475
(39,383)241,921 (197,315)
-------- --------
Net increase (decrease) in cash and
short-term investments 23,853 (93,735)8,185 (367,164)
Cash and short-term investments at
beginning of year 13,798 371,842
-------- --------
Cash and short-term investments at
end of period $ 37,651 $278,10721,983 $ 4,678
======== ========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
NOTES TO FINANCIAL STATEMENTS
1. REDEEMABLE PREFERREDPROPOSED DISTRIBUTION BY FTX OF FCX COMMON STOCK
OFFERING
In JanuaryMay 1994, Freeport-McMoRan Inc. (FTX), the parent company of Freeport-
McMoRan Copper & Gold Inc. (FCX), announced that it intends to pursue a plan
to separate its two principal businesses, copper/gold and agricultural
minerals, into two independent financial and operating entities. To
accomplish this plan, FTX would make a pro rata distribution of its common
stock ownership in FCX (which totaled 69.5 percent at June 30, 1994) to the
FTX shareholders. As a result of this distribution, which will require a
series of steps to implement over the next six to twelve months, FTX would no
longer own any interest in FCX. In connection with this restructuring plan,
the existing revolving credit agreement of FTX and P.T. Freeport Indonesia
Company (PT-FI), FCX's principal mining subsidiary, will be replaced with a
new separate facility for both FCX and PT-FI. No debt of FTX or its other
subsidiaries will be assumed by FCX or PT-FI in connection with this plan.
The proposed restructuring is contingent on a number of factors including
changing the voting rights of FCX so that the Class B stockholders elect 80
percent of the FCX directors and the Class A stockholders and preferred
stockholders elect the balance. This change in voting rights will be subject
to approval of the Class A shareholders.
2. REDEEMABLE PREFERRED STOCK OFFERINGS
In January 1994, FCX sold publicly 4.3 million depositary shares representing
215,279 shares of its Gold-Denominated Preferred Stock, Series II. Each
depositary share has a cumulative quarterly cash dividend equal to the value
of 0.0008125 ounces of gold and is subject to mandatory cash redemption in
February 2006 for the value of 0.1 ounces of gold. The net proceeds from this offering($158.5
million) were loaned to P.T. Freeport Indonesia
Company (PT-FI) to fund the ongoing expansion activities andPT-FI for general corporate purposes, including
continued expansion of mining and milling operations. The Gold-Denominated
Preferred Stock, Series II and the Gold-Denominated Preferred Stock,
originally sold in August 1993, are recorded at their offering price and are
being reflected as a hedge of future gold sales for accounting purposes.
2.Based on the June 30, 1994 closing market price, these shares had a market
value of $400.1 million.
In July 1994, FCX sold publicly 4.8 million depositary shares
representing 119,000 shares of its Silver-Denominated Preferred Stock for net
proceeds of approximately $95 million, excluding the over-allotment option.
Each depositary share has a cumulative quarterly cash dividend equal to the
value of 0.04125 ounces of silver. Annually, beginning on August 1, 1999, FCX
will redeem in eight equal installments a portion of the underlying Silver-
Denominated Preferred Stock, such that it will be fully redeemed by August 1,
2006. The net proceeds will be loaned to PT-FI for general corporate purposes,
including continued expansion of mining and milling operations.
3. REDEMPTION OF ZERO COUPON EXCHANGEABLE NOTES
In December 1993, FCX called its Zero Coupon Exchangeable Notes (the Notes)
for redemption in January 1994. During January 1994, Notes with a face amount
of $386.0 million were presented for exchange into 5.8 million shares of Class
A common stock and the remaining Notes were redeemed for $.3 million in cash.
As a result of the issuance by FCX of its Class A common stock, PT-FI issued
shares of its stock to FCX, bringing FCX's direct ownership ofin PT-FI to 81.2881.3
percent at March 31,June 30, 1994.
3. PUBLIC4. DEBT OFFERING
In April 1994, P.T. ALatieF Freeport Finance Company B.V. (AFFC), a wholly
owned subsidiary of FCX, sold publicly $120 million of its 9 3/4% Senior Notes Due
2001 (the 9 3/4% Notes), for2001. Approximately $52 million of the net proceeds of
$116.3 million. The 9 3/4% Notes are guaranteed by FCX. The
proceeds from the sale of the 9 3/4% Notes willexpected to be loaned by AFFC to
PT-FI and then
to P.T. ALatieF Freeport Infrastructure Corporation and one or more Infrastructure Affiliates toaffiliated
infrastructure companies during the third quarter of 1994 for the purchase of
approximately $77 million of infrastructure assets from PT-FI.
4.5. INTEREST COSTS
Interest expense is net ofexcludes capitalized interest which totaled $5.9of $6.9 million and $5.2$6.0
million in the firstsecond quarter of 1994 and 1993, respectively, and $12.8
million and $11.3 million in the first six months of 1994 and 1993,
respectively.
5.PT-FI has an 8.3 percent interest rate exchange agreement entered into in
1991 on $75.6 million of financing at June 30, 1994, reducing $14.3 million
annually through 1999. PT-FI entered into this interest rate exchange
agreement to manage exposure to interest rate changes on a portion of its
floating-rate bank debt. Under this interest swap, PT-FI received an average
interest rate of 3.6 percent and 3.5 percent during the first six months of
1994 and 1993, respectively, based on the London Interbank Offering Rate
(LIBOR), resulting in an additional interest cost of $.9 million and $1.2
million in the second quarter of 1994 and 1993, respectively, and $2.0 million
and $2.4 million in the first six months of 1994 and 1993, respectively.
Based on market conditions at June 30, 1994, unwinding this interest swap
would require an estimated $4.4 million.
6. RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the first threesix months of 1994 and 1993 was
8.07.4 to 1 and 1.5 to 1, respectively.compared with a shortfall of $14.5 million for the 1993 period. For
this calculation, earnings includeare income from continuing operations before income
taxes, minority interests, and fixed charges. Fixed charges includeare interest and
that portion of rent deemed representative of interest.
_______________________-----------------------
Remarks
The information furnished herein should be read in conjunction with FCX's
financial statements contained in its 1993 Annual Report to stockholders and
incorporated by reference in its Annual Report on Form 10-K.
The information furnished herein reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results for the
periods. All such adjustments are, in the opinion of management, of a normal
recurring nature.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS
TheSecond Quarter Six Months
----------------- ---------------
1994 1993 1994 1993 a
------ ------ ------ ------
(In Millions, Except Per Share Amounts)
Revenues $281.5 $215.0 $547.6 $348.5
Operating income (loss) 52.5 (18.5)b 105.7 7.0 b
Net income (loss) applicable
to common stock 9.7 (21.5)b 23.3 (26.7)b,c
Net income (loss) per share .05 (.11)b .11 (.14)b,c
a. Excludes the results of RTM prior to its March 1993 acquisition.
b. Includes charges totaling $33.7 million ($18.6 million to net income or
$.09 per share) and $37.1 million ($20.5 million to net income or $.10
per share) for the second-quarter and six-month periods of 1993,
respectively, for charges related to restructuring the administrative
organization at Freeport-McMoRan Inc. (FTX), the parent company of
Freeport-McMoRan Copper & Gold Inc. (FCX) include, and other related charges.
c. Includes a $9.9 million charge ($.05 per share) for the cumulative
effect of changes in accounting principle.
FCX's operations are primarily conducted through its majority owned
subsidiaries, including P.T. Freeport Indonesia Company (PT-FI) and Rio Tinto Minera,
S.A. (RTM). First-quarter 1993 operating results do not
include RTM, since the acquisition took place at the end of which was acquired in March 1993. FCX's first-quarter 1994 net income applicable to common stock totaled
$13.6 million ($.07 per share) compared with a loss of $5.2 million ($.03 per
share)Results for the 1993 period. Incomesecond quarter
and first six months of 1994 benefited from higher sales volumes and prices
for the 1993 period was negatively
impacted by restructuring charges of $3.4 million ($1.9 million to net income
or $.01 per share) for personnel costs relating to a reduction in staff
engaged in administrative services on behalf of FCX by Freeport-McMoRan Inc.
(FTX), the parent company of FCX. First-quarter 1993 earnings also reflect
the cumulative effect of changes in accounting principle reducing net income
by $9.9 million ($.05 per share).copper and gold. A reconciliation of first-quarter revenues between the periods is
presented below (in millions):
Second Six
Quarter Months
------- ------
Revenues - 1993 $133.5$215.0 $348.5
Increases (decreases):
RTM revenues, 111.9
Eliminationnet of intercompany sales (31.0)eliminations (11.4) 75.7 *
PT-FI sales:
Price realizations:
Copper (9.7)20.3 25.9
Gold 7.75.6 16.0
Volumes:
Copper 15.826.0 42.7
Gold 23.320.2 40.3
Treatment charges 5.0(10.2) (11.3)
Adjustments to prior period
concentrate sales 9.612.1 10.3
Other .13.9 (0.5)
------ ------
Revenues - 1994 $266.2$281.5 $547.6
====== Revenues======
* The 1994 period includes six months of RTM revenues compared to only
three months in the 1993 period.
Contributing to higher revenues in the 1994 periods were negatively impacted by a 7 percent decrease in copperimproved price
realizations partially offset by afor copper (13 percent and 9 percent, respectively) and gold (9
percent and 12 percent, respectively). Second-quarter and six-month copper
sales volumes rose 21 percent and 17 percent, increase in gold
price realizations. Copper sales volumesrespectively, between periods as
increased 13 percent between
periods. Increasedproduction resulting from increased mill throughput was partially
offset by lower grades
which were 9 percent lower.recoveries. Gold sales volumes increased 4346 percent and 45
percent over the 1993 periodperiods, respectively, reflecting the higher production
resulting from increased mill throughput and a 16 percent
increaseimprovements in gold grades. See operating statistics below.grades (19
percent and 17 percent, respectively) partially offset by lower gold
recoveries. The lower recovery rates for copper and gold result from mining a
harder-to-treat ore. Copper and gold grades and recovery rates are expected
to improve in the second half of 1994. Treatment charges declinedincreased primarily
due to a tightening in the concentrate market as the
industry's inventories were reduced for much of 1993higher copper volumes and into 1994 and
because of lower copper prices, as treatmentcertain charges vary to an extent with the
price of copper. Adjustments to prior period concentrate sales for the
current quarter and six-month period resulted in a positive adjustmentadjustments of $2.6$8.7
million and $3.0 million, respectively, primarily caused by favorable copper
pricing adjustments, to the gold content of
prior period sales, compared to the 1993 periodperiods when falling copper prices
resulted in negative adjustments of $3.4 million and $7.3 million,
respectively.
PT-FI OPERATIONS Second Quarter Six Months
-------------------- ------------------
1994 1993 1994 1993
------- ------- ------- -------
Ore milled (metric tons per
day, MTPD) 71,300 56,600 72,300 59,000
Copper grade (%) 1.39 1.40 1.38 1.46
Gold grade (grams per MT) 1.13 .95 1.24 1.06
Recovery rate (%)
Copper 84.0 87.3 83.7 86.7
Gold 73.0 76.7 70.9 74.7
Copper (000s of recoverable pounds)
Production 161,000 133,500 321,500 284,100
Sales 168,800 140,000 324,500 278,100
Average realized price a $7.0 million negative adjustment.
During 1993,$1.02 $.90 $1.00 $.92
Gold (recoverable ounces)
Production 165,700 116,900 356,500 263,700
Sales 185,400 127,200 386,700 267,500
Average realized price $378.00 $347.57 $379.53 $338.18
Gross profit per pound of copper prices dropped to their lowest levels since
1987, reflecting lower demand, particularly in Europe(cents):
Average realized price a 102.2 90.3 99.6 91.6
----- ---- ---- ----
Production costs:
Site production and Japan, caused
by the continuing global recession. Copper prices strengthened beginning
in late 1993, but currently remain below $.90delivery 61.4 53.4 60.4 52.0
Gold and silver credits (42.5) (32.4) (45.6) (32.8)
Treatment charges 24.2 22.0 23.7 23.6
Royalty on metals 2.0 1.3 1.7 1.7
---- ---- ---- ----
Cash production costs 45.1 44.3 40.2 44.5
Depreciation and
amortization 8.0 8.7 8.1 8.7
---- ---- ---- ----
Total production costs 53.1 53.0 48.3 53.2
---- ---- ---- ----
Revenue adjustments b 5.1 (5.9) (0.3) (4.1)
---- ---- ---- ----
Gross profit per pound. PT-FI has in
place apound 54.2 31.4 51.0 34.3
==== ==== ==== ====
a. Excluding amounts recognized under PT-FI's copper price protection
program, that eliminates exposurerealizations for the second-quarter and six-month periods of
1994 and 1993 would have been $.99, $.86, $.98, and $.87, respectively.
Including the adjustments discussed in Note b, realizations for the
second-quarter and six-month periods of 1994 and 1993 would have been
$1.07, $.84, $.99, and $.88, respectively.
b. Reflects adjustments for prior period concentrate sales and amortization
of the cost of the price protection program.
PT-FI's second-quarter mill throughput rate increased 26 percent compared
with the 1993 period as the expansion activities continue toward a level of
115,000 MTPD by year-end 1995. Mill throughput rates are expected to
copper price
declines belowapproximate second quarter levels for the remainder of 1994. PT-FI site
production and delivery costs totaled $103.6 million for the second quarter of
1994, a 40 percent increase over the 1993 period, excluding $10.0 million of
charges in 1993 related to the restructuring. Unit site production and
delivery costs during the second quarter of 1994 increased 15 percent over the
year-ago period, excluding the 1993 charges discussed above, resulting from
lower production per ton mined (because of lower recoveries stemming from
harder-to-treat ore), higher jobsite administrative expenses, and expansion
related activities. Unit site production and delivery costs for the remainder
of 1994 are expected to be lower than in the first six months as a result of
an average $.90anticipated improvement in grades and recoveries. Second-quarter 1994 per
pound for estimated copper sales
priced during 1994. At Marchgold and silver credits increased 31 1994, 174.5 million poundspercent over the 1993 period
because of copper
remained to be contractually priced during future quotational periods.higher gold grades and realizations.
As a result of 1993 reserve additions, PT-FI's 1994 depreciation rate
decreased to 7.5 cents per pound compared with 8.3 cents for 1993.
In June 1994, copper prices rose above $1.10 per pound, primarily due to
strengthening global demand and reduced copper stocks, compared with 1993
prices which had dropped to the lowest levels since 1987. Because of the
recent improvement in prices, PT-FI entered into contracts covering
substantially all of its expected remaining 1994 copper sales resulting in
prices of approximately $1.07 per pound for the second quarter (including a
positive adjustment of 5.1 cents primarily related to price increases on
copper pounds that were not final-priced at March 31, 1994), $1.04 per pound
for the third quarter and $1.05 per pound for the fourth quarter. Included in
the fourth quarter expected price is $27.3 million cash received, which will
be recognized in fourth quarter revenues, from the settlement of certain
contracts originally designed to hedge fourth quarter sales. These contracts
were purchased in March and April of 1994 when copper prices were still below
$.90 per pound and were subsequently sold in June. As a result, PT-FI's
average realized copper price is expected to approximate $1.02 per pound for
1994. These actions by PT-FI provide it assured realizations for its 1994
copper sales that reflect the relatively high recent price of copper. Copper
sales in the first quarter of 1994 averaged $.90 per pound, which exceeded the
then current market price, as a result of PT-FI's previous $.90 per pound
price protection program. Revenues for the second-quarter and six-month
periods of 1994 and 1993 include net amounts recognized under the $.90 per
pound price protection program these pounds are
recorded at an average priceand the contracts referred to above totaling
$3.0 million, $9.4 million, $.4 million, and $6.7 million, respectively. The
impact on earnings totaled $1.7 million, $5.2 million, $.2 million, and $3.7
million, respectively.
In March and April of $.90 per pound.1994, PT-FI recently extended its price protection program,
at a cost of $21.7 million, to cover anticipated copper sales through 1995.
For the first half of 1995, PT-FI's program established a minimum average
selling price of $.875 per pound, with full participation in any price
increase above an average of approximately $.97 per pound. Fourth-
quarter 1994 copper sales, a substantial portion of which will be priced
in the first quarter of 1995, are covered under this program. For the second
half of 1995, PT-FI's program established an average floor price of $.83 per
pound, while allowing full benefit from prices above that amount. As of June
30, 1994, unwinding PT-FI's hedging position would require approximately $50
million. As conditions warrant, PT-FI may modify or extend its existing price
protection program. PT-FI has sales commitments from its purchasersvarious parties for
virtually all of its estimated 1994 and 1995 production which is to be priced at the
then current market price under the terms of the contracts.
PT-FIRTM OPERATIONS FirstSecond Quarter -------------------Six Months
------------------ ------------------
1994 1993 1994 1993 a
------- ------- ------- -------
Smelter operations:
Concentrate treated (MT) 126,400 115,300 244,400 115,300
Anode production (000s of
pounds) 91,900 102,500 175,500 102,500
Cathode production (000s of
pounds) 77,800 76,300 154,100 76,300
Gold operations:
Ore milled (metric tons per day) 73,400 61,300
Copper grade (%) 1.37 1.51(MTPD) 18,600 18,300 18,400 18,300
Gold grade (grams per metric ton) 1.34 1.16
Recovery rate (%)
Copper 83.0 86.1
Gold 69.7 73.7
Copper (000s of recoverable pounds)
Production 160,500 150,600MT) 1.03 1.02 1.03 1.02
Sales 155,700 138,100(recoverable ounces) 43,300 44,500 80,700 44,500
Average realized price a $.90 $.97
Gold (recoverable ounces)
Production 190,800 146,800
Sales 201,300 140,300
Average realized price $381.67 $326.93
Gross profit per poundb $370.21 $336.10 $367.87 $336.10
a. RTM results are from March 30, 1993, the date of copper:
Average realized price 90.0cent 97.4cent
---- ----
Production costs:
Site productionits acquisition.
b. Excluding hedging adjustments primarily related to RTM's gold loans
(9,200 ounces payable quarterly), realizations for the second-quarter and
delivery 59.4 50.2
Gold and silver credits (48.9) (33.3)
Treatment charges 23.1 25.2
Royalty on recoverable metals 1.4 2.2
---- ----
Cash production costs 35.0 44.3
Depreciation and amortization 8.1 8.7
---- ----
Total production costs 43.1 53.0
---- ----
Revenue adjustments b .6 (6.6)
---- ----
Gross profit per pound 47.5cent 37.8cent
==== ====
a. FCX recognized $6.3 million (excluding $1.5 million in amortized
cost) in the first quartersix-month periods of 1994 as a result of the price
protection program discussed above. Excluding amounts recognized
under this program, the realization for the first quarter of 1994and 1993 would have been $.86 per pound.
b. Reflects adjustments primarily$381.62, $359.72,
$382.83, and $359.72, respectively.
For the second-quarter and six-month periods of 1994, RTM contributed
earnings of $1.0 million and $2.7 million, respectively, compared with a loss
of $4.4 million for priorthe period concentratefrom acquisition to June 30, 1993. RTM has a
hedging program for its gold sales (netthat includes gold denominated loans and
forward contracts. As of relatedJune 30, 1994, the unrecognized balance of the gold
denominated loans totaled approximately $5 million. Revenues for the second-
quarter and six-month periods of 1994 and 1993 include amounts recognized
under the price protection
program)hedging program totaling $.5 million, $1.1 million, $1.2 million,
and amortization$1.1 million, respectively. Higher operating rates at RTM's smelter
resulted in a 10 percent increase in the amount of concentrate being treated
during the cost of the price protection
program.
PT-FI's first-quarter mill throughput rate increased 20 percent1994 quarter compared with the 1993 period as the expansion activities continue toward
a levelperiod. RTM has commitments
from most of 115,000 metric tons per day (MTPD) by year-end 1995. PT-FI
site production and delivery costs totaled $92.5 millionits suppliers for the first
quarter1994 treatment charges at rates in excess of
1994, a 33 percent increase over the 1993 period. Unit site
production and delivery costs during the 1994 quarter increased by 18
percent over the year ago period resulting from lower production per ton
mined, the result of lower copper grades and recoveries, higher jobsite
administrative expenses, and expansion related activities. Unit site
production and delivery costs increased 20 percent over the last quarter
when production was 26 percent higher. The lower copper grades alone
accounted for approximately one-halfcurrent spot market rates. About one third of the per unit cost increase over
the year ago period and about two-thirds of the increase over the
previous quarter. For the remainder of 1994, site production and
delivery costscontract terms have been
priced for 1995, when rates are still expected to be lower because of changes in
excess of 50 cents per pound,
butmarket conditions. Cathode refinery operations continued to maintain high
operating rates. RTM's gold operations realized a mill throughput level
slightly above second-quarter 1993 levels; however, second-quarter 1994 gold
sales were lower than the first quarter, as grades and recoveries are
anticipated to increase, particularly in the second half of the year.
First-quarter 1994 per pound gold and silver credits increased 47
percent over the 1993 period because of higher gold grades (16 percent)lower recoveries. Third-
quarter 1994 RTM earnings and realizations (17 percent)potentially future periods are expected to be
negatively impacted by the recent decline in the value of the U.S. dollar and
planned mining of lower grade ore at RTM's gossan mining operations.
EXPLORATION AND OTHER FINANCIAL RESULTS
During the quarter, PT-FI reported results from exploration activities within
its original 24,700 acre Contract Of Work (COW) area (Block A) as well as in
the adjacent 6.5 million acre COW area (Block B) and the 2.5 million acre
exploration permit area (Eastern Mining blocks). Effective January 1,Additional mineralization
was discovered at the Big Gossan, Wanagon and Lembah Tembaga prospects, all
within Block A. Mineralization was also discovered at the Wabu prospect in
Block B and exploratory drilling has now begun at Etna Bay located within the
Eastern Mining Blocks. Exploration expenses, currently budgeted at $44
million for 1994, as a result of recently announced reserve
additions, PT-FI's depreciation rate decreased to 7.5 cents per poundincluding $6 million for RTM, totaled $19.6 million in the
six-month 1994 period compared with 8.3 cents for 1993. Additionally, FCX is amortizing costs$15.7 million in excess of book value ($.9 million for first-quarter 1994 and $.6
million for first-quarter 1993) relating to certain capital stock
transactions with PT-FI.
First-quarter 1994the 1993 period.
FCX's general and administrative expenses were $23.1increased from $40.5 million
compared with $16.9for the six months ended June 30, 1993 to $49.4 million in the 1993 quarter1994 as a result of
additional personnel and administrative effort required to manage the
expanding operations, costs associated with arranging financing for the
expansions at PT-FI and RTM, and the inclusion of RTM results ($3.8for a full six
months in 1994. Also included in the 1993 period were charges of $6.3 million
in general and administrative
expenses) during the current period. In the first quarterprimarily consisting of a write-off of certain deferred charges. The six-
month 1994 FCX
recordedperiod benefited from a $1.9 million reduction to its general and administrative
expenses resulting from a change in the estimateestimated
cost of cost relating to excess office space. The initialspace (originally estimated cost, recorded in the second quarter of
1993 resulted from theas part of restructuring of FTX's administrative organization. Further increases in futureorganization). Future
general and administrative expenses by FCX are anticipated to approximate those in
conjunction with continuing expansionthe second quarter as FCX continues its expansions at PT-FI and RTM.
Exploration expenses, currently budgeted at $41 million for 1994,
including $6 million for RTM, totaled $8.0 million in the first quarter
of 1994 compared with $6.4 million in the 1993 period, as FCX
aggressively explored promising prospects in Irian Jaya and Spain.
FCX's total interest cost (before capitalization) was reduced to $5.9$12.8
million infor the first quarter ofsix-month 1994 period from $10.8$23.2 million in the 1993 period
as a result of (i) a lower interest rate from the restructuring of
PT-FI's credit agreement in June 1993; (ii)due to a reduction in debt using
proceeds from the sale of preferred stock in the second half
of 1993 and the first quarter of 1994;1994 and (iii) conversions of FCX's zero coupon
exchangeable notes, partially offset by $2.7$3.0 million of additional interest
cost from RTM. FCX's preferredRTM (Note 5). Preferred stock dividends totaled $12.3$24.9 million in
the six-month 1994 period and $3.9$7.9 million in 1993.
The Contract of Work (COW)the 1993 period.
PT-FI's COW provides a 35 percent corporate income tax rate for PT-FI and
a 15 percent withholding tax on interest for debt incurred after the signing
of the COW in December 1991 and on dividends paid to FCX by PT-
FI.PT-FI. The
additional withholding required on interest and dividends paid to FCX by PT-FI
is included in the provision for income taxes and totaled $7.1$14.8 million for
the six-month 1994 and $5.1period compared with $10.5 million for 1993
resulting in an effective tax rate of 44 percent in the first quarter of
1994 compared with 52 percent in the 1993 period.
RTM OPERATIONS First Quarter
-------------
1994
-------
Smelter operations (metric tons):
Concentrate treated 118,000
Anode production 37,900
Cathode production 34,600
Gold operations:
Ore milled (MTPD) 18,100
Gold grade (grams per metric ton) 1.04
Sales (recoverable ounces) 37,400
Average realized price $346.33
a. Includes a negative hedging adjustment of $37.91 per ounce.
For the first quarter of 1994, RTM contributed earnings of $1.7
million. RTM's smelter operated at 92 percent of capacity for the first
quarter of 1994, approximately 5 percent below budget, primarily due to
an absorption tower breakdown in March which was repaired within a few
days. Smelter operating rates are forecast to be at 97 percent for the
remainder of 1994. RTM has commitments from most of its suppliers for
1994 treatment charge rates in excess of current spot market rates.
Cathode refinery operations were not affected by this breakdown as there
was sufficient anode inventory on hand to continue to run the tankhouse
at full capacity. RTM's gold operations realized a mill throughput level
slightly above fourth-quarter 1993 levels, although current quarter gold
production was 15 percent below fourth-quarter 1993 primarily due to
lower ore grades and lower gold recovery rates. Gold production for the
remainder of 1994 is expected to remain at current levels.
CAPITAL RESOURCES AND LIQUIDITY
Cash flow from operations increased to $81.6$95.9 million during the first quartersix
months of 1994, compared with $47.9$31.5 million for the 1993 period, reflecting
higher net income a decrease in accounts receivable from collection of fourth-quarter 1993 sales, and an increase in accounts
payable and accrued liabilities related to expansion activities.
First-quarter 1994 cashoperations. Cash flow used in investing activities totaled
$174.2$329.7 million during the first six months of 1994, compared with $201.4
million for the 1993 period, reflecting a $67.5 millionan increase in capital expenditures
for continuedcontinuing plant expansion at PT-FI, the Enhanced Infrastructure Project
(EIP) as discussed below, and $13.7 million of capital expenditures at RTM. Cash
flow provided by financing activities totaled $116.5$241.9 million compared with $39.4a
use of $197.3 million used in financing activities during the 1993 period. Dividend payments in 1994
increased by $8.1$19.3 million because of increased common shares outstanding and
dividends paid on depositary shares issued during the second half of 1993. In1993 and
in January 1994 FCX
received $158.5 million from the sale of depositary shares representing
its Gold-Denominated Preferred Stock, Series II (Note 1)2). In April 1994, a subsidiary of FCX completed a
public offering of 9 3/4% Senior Notes due 2001 which netted(Note 4), for net proceeds of
$116.3 million in proceeds to be used to purchase infrastructure assets from PT-FI as
discussed below and
in Note 3 to the financial statements.
At March 31,below. In July 1994, FCX had $37.7will receive approximately $95 million of cash and short-term
investments, compared with $13.8 million at December 31, 1993. These
funds along with the $425.0 million availability at April 22, 1994 under
the PT-FI credit facility, anticipated cash flow from operations, third-
party financing for RTM's smelter expansion discussed below, the net
proceeds
from the sale of the 9 3/4% Senior Notes, and proceedsdepositary shares representing its Silver-Denominated
Preferred Stock (Note 2).
Through 1995, PT-FI's capital expenditures are expected to exceed cash
flow from the
sale of assets to the EIP joint venture, provide flexibility for dividend
payments and ongoing operational, developmental, and exploratory needs.
Capital expenditures for 1994, netits operations. Upon completion of the anticipated infrastructure
asset sales, are estimated115,000 MTPD expansion by
year-end 1995, PT-FI's annual production is expected to be approximately $380 million.1.1
billion pounds of copper and 1.5 million ounces of gold. Subsequently,
capital expenditures will be determined by the results of exploration
activities and ongoing capital maintenance programs. Remaining capital
expenditures in 1994 and 1995 for the expansion to 115,000 MTPD, the initial
phase of the EIP, and ongoing capital maintenance expenditures are expected to
range from $600 million to $700 million and will be funded by operating cash
flow, sales of existing and to-be-constructed infrastructure assets and other
financing sources. These sources include, but are not limited to, PT-FI's
credit facility (which had $242.0 million availability at July 22, 1994) and
public and private issuances of securities. PT-FI's long-lived, low-cost
reserve base provides its potential access to a broad range of sources of
capital.
The full EIP (currently expected to involve an aggregate cost of as much
asup to
$500 million to $600 million to be completed in stages) includes plans
for commercial,
residential, educational, retail, medical, recreational, environmental and
other infrastructure facilities to be constructed during the next 20 years for
PT-FI operations. The EIP will develop and promote the growth of local and
other third-party activities and enterprises in Irian Jaya through the
creation of certain necessary support facilities. The initial phase of the
EIP is under construction and is scheduled for completion in 1996. Additional
expenditures for EIP assets beyond the initial phase depend on the long-term
growth of PT-FI's operations and would be expected to be funded by third-party
financing sources, which may include debt, equity or asset sales. As
discussed below, certain portions of the EIP and other existing infrastructure
assets are expected to be sold in the near future to provide additional funds
for the expansion to 115,000 MTPD.
During 1993, PT-FI entered intohas a joint venture agreement with P.T. ALatieF Nusakarya
Corporation (ALatieF), an Indonesian investor, which provides for the sale of
certain portions of the to-be-constructed infrastructure assets and certain
existing assets by PT-FI to a joint venture or ventures (the ALatieF Joint
Venture) owned one-third by PT-FI and two-thirds by ALatieF for total
consideration of $270 million. The sale of the first group of assets to the
ALatieF Joint Venture was completed in December 1993 for a price of $90 million. Debt
financing for the remaining sales, which are anticipated for 1994 and later,
was finalized in April 1994 through the public offeringissuance of $120 million of 9 3/4% Senior Notes,
Due 2001, which are guaranteed by FCX (Note 3).FCX. The next sale (approximately $77 million) is
expected to be completed in the third quarter of 1994.
PT-FI has also entered into Letters of Intent to sell: (i) existing and
to-be-constructed power generation and transmission assets and certain other
power-related assets; (ii) certain aircraft, airport and related operations;
and (iii) certain construction equipment, port facilities and related marine,
logistics and related assets to other joint ventures. The sales to these
joint ventures are expected to generate approximately $315 million (net of
equity contributions) over the next two years to be used to fund the EIP and the expansion to
115,000 MTPD. The foregoing lettersyears. These Letters of intentIntent are
not binding and are subject to the execution of definitive agreements,
financing, and certain approvals from the Indonesian Government approvals.Government.
RTM's principal operations currently consist of a copper smelter with an
annual capacity of 150,000 metric tons of metal. In FebruaryJune 1994, RTM obtainedsigned a
commitment for short-term bank financing for upturnkey contract to $45
million, of which $5 million was outstanding at March 31, 1994, to fund
the cost of expansion to 180,000 metric tons of metal per year. FCX
recently announced plans to further expand RTM's copperits smelter to 270,000 metric tons of metal production per
year scheduled for
completion by early 1996. The furthercontract requires payments in both deutsche marks and
pesetas, however RTM has hedging arrangements that fix the cost of the
expansion to 270,000 metric tons
of production and the current expansion to 180,000 metric tons involve
total estimated costs ofprogram at approximately $215 million. Project financing of $270
million, which is nonrecourse to FCX, has been arranged, which will also
provide funds for refinancing RTM's gold and silver loans and working capital
loans. The financing arrangement requires an additional equity contribution
of $30 million, which is expected to be
financed through project financing and RTM's internal cash flows.being sought from third parties. RTM's future cash
flow is dependent on a number of variables including fluctuations in the
exchange rate between the United States dollar and the Spanish peseta (a one
peseta change in the exchange rate has an approximately $1 million impact on
RTM's cash flow and net income), future prices and sales volumes of gold, the
timing
of the completion ofproduction rates at the smelter during the expansion program and during
anticipated major maintenance turnarounds, and the supply/demand for smelter
capacity and its impact on related treatment and refining charges. PT-FI has
a long-term contract with RTM to provide the smelter with a significant
portion of its copper concentrate requirements.
Through 1995, FCX's capital expenditures are expectedPT-FI's COW calls for it to be greater
than cash flow from operations. Upon completion of the previously
announced 115,000 MTPD expansion by year-end 1995, annual production is
expected to approach 1.1 billion pounds of copper and 1.5 million ounces
of gold. Subsequently, capital expenditures will be determined by the
results of FCX's exploration activities and ongoing capital maintenance
programs. Estimated capital expenditures for 1994 and 1995 for the
expansion to 115,000 MTPD, the initial phase of the EIP, ongoing capital
maintenance expenditures, and the expansion of RTM's smelter to 270,000
metric tons of metal per year are expected to range from $1.1 billion to
$1.2 billion and will be funded by operating cash flow, sales of existing
and to-be-constructed infrastructure assets and a wide range of financing
sources FCX believes are available as a result of the future cash flow
from PT-FI's mineral reserve asset base and RTM's smelter operations.
These sources include, but are not limited to, PT-FI's credit facility
and the public and private issuances of securities. The Company's long-
lived, low-cost reserve base provides its potential access to a broad
range of sources of capital.
The COW contains provisions for PT-FI to conduct or cause to be
conducted a feasibility study relating tofor the
construction of a copper smelting facility in Indonesia and for the eventual
construction of such a facility by PT-FI, if it is deemed to be economically
viable by PT-FI and the Government of Indonesia. FCX recently announced that
PT-FI and RTM have now taken the lead role in developing the proposed 150,000
to 200,000 metric tons of metal per year copper smelter in Gresik, Indonesia.
It is contemplated that PT-FI would provide approximately 50 percent of the
annual concentrate feed required byrequirements of the Gresik smelter. Preliminary
engineering on the proposed smelter has been completed and management is
currently reviewing possible alternatives for financing the estimated $650
million to $700 million construction cost. The smelter could be operational
as early as 1998.
Payment of future dividends by FCX will depend on the payment of
dividends by PT-FI, which, in turn, depends on PT-FI's economic resources,
profitability, cash flow, and capital expenditures. It is the policy of PT-FI
to maximize its dividend payments to stockholders, taking into account its
operational cash needs including debt service requirements. FCX currently
pays an annual cash dividend of 60 cents per share to its common shareholders.
Management anticipates that this dividend will continue at this level through
completion of the expansion in 1995, absent significant changes in the prices
of copper (for which PT-FI has instituted a price protection program) and
gold. However, FCX's Board of Directors determines its dividend payment on a
quarterly basis and in its discretion may change or maintain the dividend
payment. In determining dividend policy, the Board of Directors considers
many factors, including current and expected future prices and sales volumes,
future capital expenditure requirements, and the availability and cost of
financing from third parties.
____________________--------------------
The results of operations reported and summarized above are not necessarily
indicative of future operating results.
FREEPORT-McMoRan COPPER & GOLD INC.
PART II. OTHER INFORMATIONOther Information
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
(a) The annual meeting of the security holders (the "Annual
Meeting") of the registrant, for which proxies were solicited pursuant to
Regulation 14A under the Securities Exchange Act of 1934, was held on May 5,
1994. Matters voted upon were (i) the election of directors (there was no
solicitation in opposition to management's nominees, all of whom were
elected); (ii) the ratification of the appointment of independent auditors;
(iii) the amendment of the Certificate of Incorporation of the registrant to
increase the number of authorized shares of Special Stock; and (iv) the
amendment of the Certificate of Incorporation of the registrant to increase
the number of authorized shares of Preferred Stock.
(c) The first matter voted upon at the Annual Meeting was the
election of Leland O. Erdahl, Ronald Grossman, Rene L. Latiolais, George A.
Mealey, James R. Moffett, Wolfgang F. Siegel, Elwin E. Smith and Eiji Umene as
directors, each to serve for one year and until his successor is elected and
qualified. The numbers of votes cast for or withheld from each nominee were
as follows:
FOR WITHHELD
---- --------
Mr. Erdahl 190,740,041 639,179
Mr. Grossman 190,736,191 643,029
Mr. Latiolais 190,737,291 641,929
Mr. Mealey 190,741,668 637,552
Mr. Moffett 190,728,692 650,528
Mr. Siegel 190,606,994 772,226
Mr. Smith 190,733,218 646,002
Mr. Umene 190,596,194 783,026
The second matter voted upon at the Annual Meeting was the
ratification of the appointment of Arthur Andersen & Co. to act as the
independent auditor of the registrant for 1994. The numbers of votes cast for
or against and the number of abstentions as to such matter were as follows:
FOR AGAINST ABSTENTIONS
--- ------- -----------
190,754,849 146,838 477,533
The third matter voted upon at the Annual Meeting was the
amendment of the Certificate of Incorporation to increase the number of
authorized shares of Special Stock. The number of votes cast for or against,
the number of abstentions and the number of broker non-votes as to such matter
by holders of shares of the Class A and Class B Common Stock of the
registrant, voting together as a single class, were as follows:
FOR AGAINST ABSTENTIONS BROKER NON-VOTES
--- --------- ----------- ----------------
175,881,361 5,040,393 590,067 9,867,399
The number of votes cast for or against, the number of abstentions and the
number of shares of broker non-votes as to such matter by holders of shares of
the Class A Common Stock and Special Preference Stock of the Registrant,
voting together as a single class, were as follows:
FOR AGAINST ABSTENTIONS BROKER NON-VOTES
--- ---------- ----------- ----------------
48,016,535 7,451,761 10,313,923 9,867,399
The Special Preference Stock is traded publicly through depositary shares
listed on the New York Stock Exchange ("NYSE"), each depositary share
representing 2 16/17 shares of Special Preference Stock.
The fourth matter voted upon at the Annual Meeting was the
amendment of the Certificate of Incorporation to increase the number of
authorized shares of Preferred Stock. The number of votes cast for or
against, the number of abstentions and the number of broker non-votes as to
such matter by holders of shares of the Class A and Class B Common Stock of
the registrant, voting together as a single class, were as follows:
FOR AGAINST ABSTENTIONS BROKER NON-VOTES
--- ------- ----------- ----------------
171,758,402 9,072,788 680,631 9,867,399
The number of votes cast for or against, the number of abstentions and the
number of shares of broker non-votes as to such matter by holders of shares of
the Preferred Stock of the Registrant were as follows:
FOR AGAINST ABSTENTIONS BROKER NON-VOTES
--- ------- ----------- ----------------
616,714 158,759 439,806 0
On the record date of the Annual Meeting, the Preferred Stock was comprised of
three series. The Step-Up Convertible Preferred Stock, the Gold-Denominated
Preferred Stock and the Gold-Denominated Preferred Stock, Series II, are
traded publicly through depositary shares listed on the NYSE, each depositary
share representing 0.05 shares of the Preferred Stock.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) The exhibits to this report are listed inNot applicable
(b) No reports on Form 8-K were filed by the Exhibit
Index appearing on page E-1 hereof.
(b) Duringregistrant during
the quarter for which this report is filed, the
registrant filed three Current Reports on Form 8-K, dated January 7, 1994
(reporting information under Item 5 and Item 7 and including the
following financial statements: Consolidating Condensed Balance Sheet,
Consolidating Statement of Operations and Consolidating Statement of Cash
Flow); January 12, 1994 (reporting information under Item 5 and Item 7);
and March 2, 1994 (reporting information under Item 5 and Item 7
including the following financial statements: Balance Sheets, Statements
of Income, Statements of Cash Flow and Statements of Stockholders'
Equity).filed.
FREEPORT-McMoRan COPPER & GOLD INC.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FREEPORT-McMoRan COPPER & GOLD INC.
By: /s/ Stephen M. Jones
-------------------------------
Stephen M. Jones
Vice President and
ChiefJohn T. Eads
--------------------------------
John T. Eads
Controller - Financial OfficerReporting
Date: April 26,August 5, 1994
FREEPORT-McMoRan COPPER & GOLD INC.
EXHIBIT INDEX
Sequentially
Numbered
Number Description Page
------ ----------- ------------
4.1 Certificate of Designations of Gold-Denominated
Preferred Stock, Series II of FCX dated
January 19, 1994.
4.2 Deposit Agreement dated as of January 15, 1994
among FCX, Mellon Securities Trust Company,
as Depositary, and holders of depositary
receipts issued thereunder.
4.3 Form of Depositary Receipt. Incorporated by reference
to Exhibit 4.1 to the Application for Registration on
Form 8-A of FCX dated January 10, 1994.
4.4 U.S. Underwriting Agreement dated January 13, 1994.
4.5 International Underwriting Agreement dated
January 13, 1994.