Freeport-McMoRan Copper & Gold Inc. Reports
Strong Fourth-Quarter/Twelve-Months 2002 Results
- Low Net Unit Production Costs
- Significant Operating Cash Flow and Net Debt Reduction
- Additions to Proven and Probable Reserves
HIGHLIGHTS
Fourth-quarter 2002 net income of $64.1 million, $0.41 per share vs. fourth-quarter 2001 net loss of $2.1 million, $0.01 per share
Twelve-months 2002 net income of $127.1 million, $0.87 per share vs. twelve-months 2001 net income of $76.5 million, $0.53 per share
Average unit net cash production costs: $0.03 per pound for fourth quarter and $0.08 per pound for twelve-months 2002
Operating cash flow: $208.5 million for fourth quarter and $512.7 million for twelve-months 2002; Net debt reductions: $147.9 million for fourth quarter and $278.2 million for twelve-months 2002
Additions to aggregate proven and probable reserves for the Grasberg mineral district were 86.6 million metric tons of ore; PT-FI’s reserve additions were 1.5 billion pounds of copper and 0.6 million ounces of gold
Summary Financial Table (a) | Fourth Quarter | Twelve Months | ||
2002 | 2001 | 2002 | 2001 | |
(In thousands, except per share amounts) | ||||
Revenues | $571,044 | $412,282 | $1,910,462 | $1,838,866 |
Operating income | 224,108 | 89,454 | 640,137 | 542,926 |
Net income (loss) applicable to common stock before cumulative effect adjustment (b) | 64,091 | (2,083) | 130,099 | 76,496 |
Net income (loss) applicable to common stock | 64,091 | (2,083) | 127,050 | 76,496 |
Diluted net income per share: | ||||
Before cumulative effect adjustment | .41 | (.01) | .89 | .53 |
Applicable to common stock | .41 | (.01) | .87 | .53 |
Diluted average shares outstanding (c) | 188,390 | 143,974 | 146,418 | 144,938 |
a) 2002 results reflect FCX’s 90.6 percent ownership interest in its Indonesian mining unit, PT Freeport Indonesia (PT-FI), compared with its 85.9 percent ownership interest in 2001.
b) Reflects accounting change for depreciation of mining and milling assets, effective January 1, 2002.
c) Diluted net income per share for the fourth-quarter 2002 reflects assumed conversion of FCX’s 8 1/4% Convertible Senior Notes, resulting in the exclusion of $12.6 million of interest expense and the inclusion of 42.2 million common shares. The convertible notes had no dilutive effect in the twelve-months 2002 period or the 2001 periods.
NEW ORLEANS, LA, January 16, 2003 -- Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported fourth-quarter 2002 net income applicable to common stock of $64.1 million, $0.41 per share, compared with a fourth-quarter 2001 net loss of $2.1 million, $0.01 per share. For the twelve months ended December 31, 2002, FCX reported net income applicable to common stock of $127.1 million, $0.87 per share, including the cumulative effect of an accounting change charge of $3.0 million, $0.02 per share, compared with net income of $76.5 million, $0.53 per share, a year ago.
Mr. James R. Moffett, Chairman and CEO of FCX, said, “Our mining operations continue to achieve outstanding results. We set multiple operating records throughout the year and strengthened our position as a premier mining company. Our results continue to demonstrate that the Grasberg mine is a world-class asset providing real value for our shareholders. Our low-cost, high-volume operations allowed us to generate significant cash flows and reduce net debt in 2002 by nearly $280 million, strengthening our financial position. Our outlook for 2003 is positive as we expect to continue strong operations at our Grasberg mine.”
PT-FI PRODUCTION AND SALES
Fourth Quarter | Twelve Months | ||||||
2002 | 2001 | 2002 | 2001 | ||||
Copper (000s of recoverable pounds): | |||||||
Production | 427,100 | 316,200 | 1,524,200 | 1,393,400 | |||
Sales | 429,800 | 325,300 | 1,522,300 | 1,399,100 | |||
Average realized price per pound | $.70 | $.65 | $.71 | $.69 | |||
Gold (recoverable ounces): | |||||||
Production | 665,300 | 478,700 | 2,296,800 | 2,634,900 | |||
Sales | 678,300 | 500,200 | 2,293,200 | 2,644,800 | |||
Average realized price per ounce | $323 | $277 | $312 | $269 | |||
PT-FI reported improved copper production and sales in the 2002 periods, reflecting the continued mining of higher grade ore which began late in the second quarter of 2002. Copper production and sales volumes for the twelve-month 2002 period were annual records. Fourth-quarter 2002 copper ore grades averaged 1.23 percent, compared with 0.89 percent in the fourth quarter of 2001; twelve-months 2002 copper ore grades averaged 1.14 percent, compared with 1.00 percent in the twelve-months 2001 period.
Gold sales of 2.3 million ounces for 2002 exceeded previous estimates of 2.25 million ounces reflecting higher ore grades and mill recovery rates. In the fourth quarter of 2002, ore milled averaged 1.44 grams per metric ton (g/t), compared with 1.03 g/t in the fourth quarter of 2001. For the twelve-months 2002 period gold production and sales declined from the 2001 period as gold ore grades averaged 1.24 g/t in 2002 compared with 1.41 g/t in 2001.
PT-FI expects its sales for 2003 to approximate 1.4 billion pounds of copper and 2.6 million ounces of gold, reflecting the expectation in 2003 of slightly lower copper ore grades and higher gold ore grades compared with 2002. PT-FI expects its sales for the first quarter of 2003 to approximate 370 million pounds of copper and 580,000 ounces of gold.
At December 31, 2002, FCX’s concentrate sales included 180.3 million pounds of copper, priced at an average of $0.70 per pound, that remain subject to final pricing over the next several months. Each $0.01 change in the price realized from the December 31 price would result in an approximate $0.9 million, $0.006 per share, effect on FCX’s 2003 net income assuming no dilution for its convertible notes. Fourth-quarter 2002 adjustments to concentrate sales recognized in prior quarters decreased revenues by $1.9 million ($1.0 million to net income, $0.005 per share) compared with negligible net adjustments in the fourth quarter of 2001.
CASH PRODUCTION COSTS
Fourth Quarter | Twelve Months | |||||||
2002 | 2001 | 2002 | 2001 | |||||
Per pound of copper: | ||||||||
Site production and delivery | $0.35 | $0.43 | $0.36 | $0.39 | ||||
Gold and silver credits | (0.52 | ) | (0.43 | ) | (0.48 | ) | (0.52 | ) |
Treatment charges and royalties | 0.20 | 0.21 | 0.20 | 0.20 | ||||
Net cash production costs | $0.03 | $0.21 | $0.08 | $0.07 | ||||
PT-FI remains the world’s lowest cost copper producer with average unit net cash production costs, including gold and silver credits, of $0.03 per pound of copper during the fourth quarter of 2002 and $0.08 per pound for the year. Unit production and delivery costs decreased primarily because of improved ore grades. Assuming current gold prices of $350 per ounce and gold sales of 2.6 million ounces for 2003, we expect to establish a new record low for unit net cash production costs of a net credit of $0.07 per pound. Based on our estimate of cash production costs for 2003, unit net costs would change approximately $0.05 per pound for each $25 per ounce change in the price of gold at this level of gold sales.
SMELTER OPERATIONS
As the world's single largest producer and supplier of custom concentrate, FCX’s investment in smelters serves an important role in its concentrate marketing strategy. Approximately one-half of PT-FI’s concentrate production is sold to its affiliated smelters, Atlantic Copper and PT Smelting, and the remainder is sold to other customers. Through downstream integration, FCX assures placement of a significant portion of its concentrate production and operating hedges for treatment and refining charges. While currently low smelter treatment and refining charges adversely affect the operating results of FCX’s smelter operations, they benefit operating results of its mining operations. Taking into account taxes and minority ownership interests, an equivalent change in smelting and refining charge rates substantially offset in FCX’s consolidated operating results.
Atlantic Copper, FCX’s wholly owned Spanish smelting unit, achieved strong operating results in the fourth quarter and for the twelve months of 2002 in terms of throughput and production, achieving an annual record for concentrates processed during 2002. Unit cathode cash production costs totaled $0.14 per pound in the fourth quarter of 2002 and $0.12 per pound for 2002. Atlantic Copper reported an operating loss of $2.9 million for the fourth quarter of 2002, compared with $2.2 million in the 2001 period. For 2002, Atlantic Copper had operating income of $2.6 million compared with an operating loss of $16.0 million for 2001, reflecting the impact of a scheduled 27-day major maintenance turnaround in April 2001. The treatment charges Atlantic receives remained at historically low levels, averaging $0.17 per pound during 2002 and 2001. Changes in the amount of deferred profits on intercompany sales in inventories resulted in additions to FCX’s net income totaling $5.7 million, $0.03 per share, in the fourth quarter of 2002, compared with $7.2 million, $0.05 per share, in the fourth quarter of 2001.
FCX recognized a $4.8 million, $0.03 per share, non-cash charge in the fourth quarter of 2002 as a result of the stronger euro on Atlantic Copper’s net euro-denominated liabilities, compared with a $2.5 million, $0.02 per share, non-cash gain in the fourth quarter of 2001. For 2002, FCX recognized an $11.9 million, $0.08 per share, non-cash charge, compared with a $2.4 million, $0.02 per share, non-cash gain for 2001. The exchange rate effects of Atlantic Copper’s operating cost euro hedges are reported as a component of shareholders’ equity, not net income, until realized. These hedges resulted in positive adjustments to stockholders’ equity totaling $3.8 million, $0.02 per share, in the fourth quarter of 2002 and $14.0 million, $0.10 per share, for 2002. For 2001, the hedges resulted in negative adjustments to stockholders’ equity totaling $2.2 million, $0.01 per share, in the fourth quarter and $10.1 million, $0.07 per share, for 2001.
PT Smelting, PT-FI’s 25 percent-owned Indonesian smelting unit also achieved strong operating results in 2002. PT Smelting’s copper cathode cash production costs per pound totaled $0.10 per pound in the fourth quarter 2002 and $0.14 per pound for the twelve months, which included the impact of the scheduled 28-day maintenance turnaround in May 2002.
CASH FLOW AND DEBT REPAYMENTS
Fourth Quarter | Twelve Months | |||||||
(in millions) | 2002 | 2001 | 2002 | 2001 | ||||
Operating cash flow | $208.5 | $33.9 | $512.7 | $509.0 | ||||
Capital expenditures | 42.3 | 48.2 | 188.0 | 167.0 | ||||
Net debt (reductions) additions | (147.9 | ) | 39.4 | (a) | (278.2 | ) | (258.0 | ) (a) |
(a) Excludes assumption of $253.4 million Nusamba loan FCX recorded at December 31, 2001, which increased its ownership in PT-FI to 90.6 percent from 85.9 percent.
FCX’s strong operating cash flows during the fourth quarter of 2002 resulted in FCX reducing net debt by $148 million. Net debt and mandatorily redeemable preferred stock totaled $2,377 million at December 31, 2002, compared with $2,655 million at December 31, 2001. FCX estimates capital expenditures for 2003 will total approximately $160 million, including $40 million related to the completion of the expansion of the Deep Ore Zone underground mine to 35,000 metric tons of ore per day and the completion of the Grasberg mine overburden handling system. At current copper and gold prices of $0.75 per pound and $350 per ounce, respectively, FCX projects that its 2003 operating cash flows would approximate $575 million and its reductions of net debt and mandatorily redeemable preferred stock would approximate $350 million. Each $0.10 change in copper prices would have an approximate $70 million impact on these estimates and each $25 change in gold prices would have an a pproximate $30 million impact.
RESERVE ADDITIONS
Aggregate Reserves | PT-FI’s Share | |||||||
Copper (billions of lbs) | Gold (millions of ounces) | Copper (billions of lbs) | Gold (millions of ounces) | |||||
Reserves at December 31, 2001 | 52.5 | 64.5 | 39.4 | 50.2 | ||||
Net additions/revisions | 2.6 | 1.0 | 1.5 | 0.6 | ||||
Production | (1.8 | ) | (2.9 | ) | (1.5 | ) | (2.3 | ) |
Reserves at December 31, 2002 | 53.3 | 62.6 | 39.4 | 48.5 | ||||
During 2002, additions to the aggregate proven and probable reserves at the Grasberg mining complex totaled approximately 86.6 million metric tons of ore representing aggregate increases of 2.6 billion recoverable pounds of copper and 1.0 million ounces of gold. Year-end aggregate proven and probable recoverable reserves, net of 2002 production, were 2.6 billion metric tons of ore averaging 1.12 percent copper, 1.02 grams per metric ton gold and 3.73 grams per metric ton silver. Estimated recoverable reserves were assessed using a copper price of $0.85 per pound and a gold price of $270 per ounce. If metal prices in the reserve calculations were adjusted to the approximate average London spot market prices for the past three years, i.e., copper prices adjusted from $0.85 per pound to $0.75 per pound and gold prices adjusted from $270 per ounce to $285 per ounce, there would be no change in proven and probable reserves.
Pursuant to joint venture arrangements between PT-FI and Rio Tinto, Rio Tinto has a 40 percent interest in future production from reserves above those reported at December 31, 1994. Net of Rio Tinto’s share, PT-FI’s share of proven and probable reserves at December 31, 2002 was 39.4 billion pounds of copper, 48.5 million ounces of gold and 110.9 million ounces of silver. FCX has a 90.6 percent equity interest in PT-FI’s share of proven and probable reserves.
BOARD OF DIRECTORS. Steven J. Green has resigned as a director of FCX because of time commitments to other endeavors. Mr. Moffett commented, "We appreciate Mr. Green’s contributions to FCX during his tenure on our Board, and wish him the best."
FCX explores for, develops, mines and processes ore containing copper, gold and silver in Indonesia, and smelts and refines copper concentrates in Spain and Indonesia.
Cautionary Statement. This press release contains forward-looking statements in which we discuss factors we believe may affect our performance in the future. Forward-looking statements are all statements other than historical facts, such as statements regarding estimated anticipated sales volumes, projected unit production costs, estimated operating cash flows, projected debt reductions, capital expenditures and the impact of copper and gold price changes. Additionally, important factors that might cause future results to differ from these projections include industry risks, commodity prices, Indonesian political risks, weather related and currency translation risks and other factors described in FCX's Annual Report on Form 10-K for the year ended December 31, 2001 filed with the Securities and Exchange Commission.
A copy of this press release is available on our web site at “www.fcx.com.” A conference call with securities analysts about fourth-quarter 2002 results is scheduled for today at 10:00 a.m. EDT. 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 call will be available through Friday, February 14, 2003.
FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED OPERATING DATA
(Page 1 of 2)
Fourth Quarter | Twelve Months | ||||||||||||
2002 | 2001 | 2002 | 2001 | ||||||||||
PT Freeport Indonesia, Net of Rio Tinto’s Interest | |||||||||||||
Copper (recoverable) | |||||||||||||
Production (000s of pounds) | 427,100 | 316,200 | 1,524,200 | 1,393,400 | |||||||||
Production (metric tons) | 193,800 | 143,400 | 691,400 | 632,000 | |||||||||
Sales (000s of pounds) | 429,800 | 325,300 | 1,522,300 | 1,399,100 | |||||||||
Sales (metric tons) | 194,900 | 147,600 | 690,500 | 634,600 | |||||||||
Average realized price per pound | $.70 | $.65 | $.71 | $.69 | |||||||||
Gold (recoverable) | |||||||||||||
Production (ounces) | 665,300 | 478,700 | 2,296,800 | 2,634,900 | |||||||||
Sales (ounces) | 678,300 | 500,200 | 2,293,200 | 2,644,800 | |||||||||
Average realized price per ounce | $323.49 | $276.55 | $311.97 | $269.24 | |||||||||
Silver (recoverable) | |||||||||||||
Production (ounces) | 1,120,700 | 761,800 | 4,121,100 | 3,771,500 | |||||||||
Sales (ounces) | 1,124,100 | 783,700 | 4,116,100 | 3,782,600 | |||||||||
Average realized price per ounce | $4.42 | $4.17 | $4.66 | $4.80 | |||||||||
PT Freeport Indonesia, Gross Profit per Pound of Copper (cents): | |||||||||||||
Average realized price | 70.5 | 65.2 | 70.6 | 69.0 | |||||||||
Production costs: | |||||||||||||
Site production and delivery | 34.8 | a | 43.4 | a | 36.0 | a | 38.8 | a | |||||
Gold and silver credits | (52.1 | ) | (42.7 | ) | (48.2 | ) | (51.9 | ) | |||||
Treatment charges | 18.3 | 18.5 | 18.3 | 18.2 | |||||||||
Royalty on metals | 1.9 | 1.3 | 1.6 | 1.7 | |||||||||
Cash production costs | 2.9 | 20.5 | 7.7 | 6.8 | |||||||||
Depreciation and amortization | 13.3 | 18.0 | 14.4 | 18.0 | |||||||||
Total production costs | 16.2 | 38.5 | 22.1 | 24.8 | |||||||||
Adjustments, primarily for copper pricing on prior period open sales | 2.3 | 0.9 | 0.9 | 0.1 | |||||||||
Gross profit per pound of copper | 56.6 | 27.6 | 49.4 | 44.3 | |||||||||
a.
Net of deferred mining costs totaling $6.9 million or 1.6 cents per pound in the fourth quarter of 2002, $3.3 million or 1.0 cents per pound in the fourth quarter of 2001, $30.6 million or 2.0 cents per pound in the twelve-months 2002 period and $29.4 million or 2.1 cents per pound in the twelve-months 2001 period.
FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED OPERATING DATA
(Page 2 of 2)
Fourth Quarter | Twelve Months | |||||||||||
2002 | 2001 | 2002 | 2001 | |||||||||
PT Freeport Indonesia, 100% Operating Statistics | ||||||||||||
Ore milled (metric tons per day) | 239,100 | 236,700 | 235,600 | 237,800 | ||||||||
Average ore grade | ||||||||||||
Copper (percent) | 1.23 | .89 | 1.14 | 1.00 | ||||||||
Gold (grams per metric ton) | 1.44 | 1.03 | 1.24 | 1.41 | ||||||||
Gold (ounce per metric ton) | .046 | 0.33 | .040 | .045 | ||||||||
Silver (grams per metric ton) | 4.05 | 2.99 | 3.60 | 3.20 | ||||||||
Silver (ounce per metric ton) | .130 | .096 | .116 | .103 | ||||||||
Recovery rates (percent) | ||||||||||||
Copper | 89.9 | 86.3 | 88.5 | 86.9 | ||||||||
Gold | 89.3 | 91.6 | 88.4 | 89.5 | ||||||||
Silver | 63.8 | 54.5 | 61.3 | 59.0 | ||||||||
Copper (recoverable) | ||||||||||||
Production (000s of pounds) | 514,000 | 357,000 | 1,839,000 | 1,594,200 | ||||||||
Production (metric tons) | 233,100 | 161,900 | 834,200 | 723,100 | ||||||||
Sales (000s of pounds) | 517,300 | 367,300 | 1,836,800 | 1,600,900 | ||||||||
Sales (metric tons) | 234,600 | 166,600 | 833,200 | 726,200 | ||||||||
Gold (recoverable ounces) | ||||||||||||
Production | 885,700 | 671,900 | 2,938,800 | 3,488,100 | ||||||||
Sales | 901,900 | 699,600 | 2,934,000 | 3,498,300 | ||||||||
Silver (recoverable ounces) | ||||||||||||
Production | 1,482,400 | 910,400 | 4,922,900 | 4,264,300 | ||||||||
Sales | 1,487,100 | 934,100 | 4,916,000 | 4,280,400 | ||||||||
Atlantic Copper | ||||||||||||
Concentrates and scrap treated (metric tons) | 257,700 | 250,200 | 1,016,700 | 891,100 | ||||||||
Anodes | ||||||||||||
Production (000s of pounds) | 170,300 | 169,400 | 657,000 | 617,300 | ||||||||
Production (metric tons) | 77,200 | 76,800 | 298,000 | 280,000 | ||||||||
Sales (000s of pounds) | 28,100 | 27,700 | 101,200 | 87,500 | ||||||||
Sales (metric tons) | 12,700 | 12,600 | 45,900 | 39,700 | ||||||||
Cathodes | ||||||||||||
Production (000s of pounds) | 140,100 | 141,800 | 552,200 | 518,700 | ||||||||
Production (metric tons) | 63,500 | 64,300 | 250,500 | 235,300 | ||||||||
Sales, including wire rod and wire (000s of pounds) | 143,200 | 147,100 | 556,500 | 549,800 | ||||||||
Sales, including wire rod and wire (metric tons) | 65,000 | 66,700 | 252,400 | 249,400 | ||||||||
Gold sales in anodes and slimes (ounces) | 248,500 | 267,200 | 813,900 | 831,300 | ||||||||
Cathode cash production cost per pound before hedging | $.14 | $.11 | $.12 | $.14 | ||||||||
PT Smelting, 25%-owned by PT Freeport Indonesia | ||||||||||||
Concentrate treated (metric tons) | 219,100 | 182,700 | 719,600 | 702,900 | ||||||||
Anodes | ||||||||||||
Production (000s of pounds) | 148,100 | 122,600 | 465,700 | 479,400 | ||||||||
Production (metric tons) | 67,200 | 55,600 | 211,200 | 217,500 | ||||||||
Sales (000s of pounds) | 17,900 | 2,600 | 33,000 | 10,100 | ||||||||
Sales (metric tons) | 8,100 | 1,200 | 15,000 | 4,600 | ||||||||
Cathodes | ||||||||||||
Production (000s of pounds) | 122,400 | 119,100 | 424,100 | 468,400 | ||||||||
Production (metric tons) | 55,500 | 54,000 | 192,400 | 212,500 | ||||||||
Sales (000s of pounds) | 124,900 | 121,200 | 424,100 | 468,800 | ||||||||
Sales (metric tons) | 56,700 | 55,000 | 192,400 | 212,600 | ||||||||
Cathode cash production cost per pound | $.10 | $.13 | $.14 | $.12 | ||||||||
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended | Years Ended | |||||||||||
December 31, | December 31, | |||||||||||
2002 | 2001 | 2002 | 2001 | |||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||||
Revenues | $ | 571,044 | a | $ | 412,282 | a | $ | 1,910,462 | a | $ | 1,838,866 | a |
Cost of sales: | ||||||||||||
Production and delivery | 259,190 | 239,748 | 938,462 | 943,439 | ||||||||
Depreciation and amortization | 68,010 | 66,441 | 260,446 | 283,889 | ||||||||
Total cost of sales | 327,200 | 306,189 | 1,198,908 | 1,227,328 | ||||||||
Exploration expenses | 650 | 2,730 | 3,112 | 9,190 | ||||||||
General and administrative expenses | 19,086 | 13,909 | 68,305 | 59,422 | ||||||||
Total costs and expenses | 346,936 | 322,828 | 1,270,325 | 1,295,940 | ||||||||
Operating income | 224,108 | 89,454 | 640,137 | 542,926 | ||||||||
Equity in PT Smelting earnings (losses) | 1,042 | (1,521 | ) | (4,181 | ) | (5,137 | ) | |||||
Interest expense, net | (42,047 | ) | (43,650 | ) | (171,209 | ) | (173,595 | ) | ||||
Other expense, net | (6,597 | )b | (623 | )b | (15,085 | )b | (5,418 | )b | ||||
Income before income taxes and minority interests | 176,506 | 43,660 | 449,662 | 358,776 | ||||||||
Provision for income taxes | (89,530 | ) | (29,671 | ) | (245,518 | ) | (202,979 | ) | ||||
Minority interests in net income of consolidated subsidiaries |
| (13,378 | ) | (6,917 | ) | (36,441 | ) | (42,772 | ) | |||
Net income before cumulative effect of accounting change | 73,598 | 7,072 | 167,703 | 113,025 | ||||||||
Cumulative effect of accounting change, net | - | - | (3,049 | ) | - | |||||||
Net income | 73,598 | 7,072 | 164,654 | 113,025 | ||||||||
Preferred dividends | (9,507 | ) | (9,155 | ) | (37,604 | ) | (36,529 | ) | ||||
Net income (loss) applicable to common stock | $ | 64,091 | $ | (2,083 | ) | $ | 127,050 | $ | 76,496 | |||
Net income (loss) per share of common stock: | ||||||||||||
Basic: | ||||||||||||
Before accounting change | $.44 | $(.01 | ) | $.90 | $.53 | |||||||
Cumulative effect of accounting change | - | - | (.02 | ) | - | |||||||
Net income (loss) per share of common stock | $.44 | $(.01 | ) | $.88 | $.53 | |||||||
Diluted: | ||||||||||||
Before accounting change | $.41 | c | $(.01 | ) | $.89 | $.53 | ||||||
Cumulative effect of accounting change | - | - | (.02 | ) | - | |||||||
Net income (loss) per share of common stock | $.41 | c | $(.01 | ) | $.87 | $.53 | ||||||
Average common shares outstanding: | ||||||||||||
Basic | 144,897 | 143,974 | 144,649 | 143,952 | ||||||||
Diluted | 188,390 | c | 143,974 | 146,418 | 144,938 | |||||||
Includes adjustments to prior period concentrate sales totaling $(1.9) million in the 2002 quarter, $0.1 million in the 2001 quarter, $5.4 million for the year ended December 31, 2002 and $(2.8) million for the year ended December 31, 2001.b.
Includes net benefits (charges) totaling $(4.8) million in the 2002 quarter, $2.5 million in the 2001 quarter, $(11.9) million for the year ended December 31, 2002 and $2.4 million for the year ended December 31, 2001 associated with the impact of movements in the US $/euro exchange rate on Atlantic Copper’s non-operating euro-denominated liabilities.c.
Diluted net income per share for the fourth quarter of 2002 is based on dilution from the assumed conversion of FCX’s 8 ¼% Convertible Senior Notes, resulting in the exclusion of $12.6 million of interest expense, after taxes, related to the notes and the inclusion of 42.2 million common shares.
FREEPORT-McMoRan COPPER & GOLD INC.
CONDENSED BALANCE SHEETS (Unaudited)
December 31, | |||||||||
2002 | 2001 | ||||||||
(In Thousands) | |||||||||
ASSETS | |||||||||
Current Assets: | |||||||||
Cash and cash equivalents | $ | 7,836 | $ | 7,587 | |||||
Restricted investments | 49,809 | 49,809 | |||||||
Accounts receivable | 190,509 | 118,611 | |||||||
Inventories | 387,247 | 369,188 | |||||||
Prepaid expenses and other | 2,579 | 3,075 | |||||||
Total current assets | 637,980 | 548,270 | |||||||
Property, plant, equipment and development costs, net | 3,320,561 | 3,409,687 | |||||||
Deferred mining costs | 78,235 | 47,590 | |||||||
Restricted investments and cash | 58,137 | 92,079 | |||||||
Investment in PT Smelting | 44,619 | 57,194 | |||||||
Other assets | 52,661 | 57,109 | |||||||
Total assets | $ | 4,192,193 | $ | 4,211,929 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable and accrued liabilities | $ | 262,310 | $ | 307,526 | |||||
Current portion of long-term debt and short-term | 327,112 | 205,420 | |||||||
Accrued income taxes | 81,319 | 17,019 | |||||||
Rio Tinto share of joint venture cash flows | 51,297 | 33,646 | |||||||
Unearned customer receipts | 36,754 | 33,422 | |||||||
Accrued interest payable | 29,081 | 31,394 | |||||||
Total current liabilities | 787,873 | 628,427 | |||||||
Long-term debt, less current portion: | |||||||||
FCX and PT Freeport Indonesia credit facilities | 279,000 | 222,000 | |||||||
Nusamba loan | - | 253,371 | |||||||
Convertible senior notes | 603,750 | 603,750 | |||||||
Infrastructure asset financings | 310,674 | 355,970 | |||||||
Atlantic Copper debt | 233,642 | 198,089 | |||||||
Senior notes | 200,000 | 450,000 | |||||||
Equipment and other loans | 84,212 | 50,000 | |||||||
Total long-term debt, less current portion | 1,711,278 | 2,133,180 | |||||||
Accrued postretirement benefits and other liabilities | 140,016 | 119,404 | |||||||
Deferred income taxes | 706,510 | 671,015 | |||||||
Minority interests | 129,687 | 92,955 | |||||||
Redeemable preferred stock | 450,003 | 462,504 | |||||||
Stockholders' equity | 266,826 | 104,444 | |||||||
Total liabilities and stockholders' equity | $ | 4,192,193 | $ | 4,211,929 | |||||
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF CASH FLOWS (Unaudited)
Years Ended December 31, | ||||||||
2002 | 2001 | |||||||
(In Thousands) | ||||||||
Cash flow from operating activities: | ||||||||
Net income | $ | 164,654 | $ | 113,025 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 260,446 | 283,889 | ||||||
Cumulative effect of accounting change | 3,049 | - | ||||||
Deferred income taxes | 51,476 | 67,086 | ||||||
Equity in PT Smelting losses | 4,181 | 5,137 | ||||||
Minority interests' share of net income | 36,441 | 42,772 | ||||||
Change in deferred mining costs | (30,645 | ) | (29,444 | ) | ||||
Amortization of deferred financing costs | 12,029 | 5,371 | ||||||
Currency translation loss (gain) | 11,892 | (2,395 | ) | |||||
Elimination (recognition) of profit on PT-Freeport Indonesia sales to PT Smelting | 8,393 | (6,177 | ) | |||||
Provision for inventory obsolescence | 6,000 | 6,000 | ||||||
Other | 2,935 | 1,224 | ||||||
(Increases) decreases in working capital: | ||||||||
Accounts receivable | (70,389 | ) | 31,750 | |||||
Inventories | (23,793 | ) | 20,844 | |||||
Prepaid expenses and other | 671 | 8,355 | ||||||
Accounts payable and accrued liabilities | (33 | ) | (5,289 | ) | ||||
Rio Tinto share of joint venture cash flows | 9,894 | (37,743 | ) | |||||
Accrued income taxes | 65,531 | 4,578 | ||||||
(Increase) decrease in working capital | (18,119 | ) | 22,495 | |||||
Net cash provided by operating activities | 512,732 | 508,983 | ||||||
Cash flow from investing activities: | ||||||||
Purchase of restricted investments | - | (139,762 | ) | |||||
PT Freeport Indonesia capital expenditures | (182,896 | ) | (156,373 | ) | ||||
Atlantic Copper capital expenditures | (5,108 | ) | (10,599 | ) | ||||
Sale of restricted investments to fund interest costs | 47,938 | - | ||||||
Increase in Atlantic Copper restricted cash | (11,000 | ) | - | |||||
Other | 2,773 | 5,930 | ||||||
Net cash used in investing activities | (148,293 | ) | (300,804 | ) | ||||
Cash flow from financing activities: | ||||||||
Proceeds from sale of convertible senior notes | - | 582,619 | ||||||
Proceeds from other debt | 295,498 | 112,953 | ||||||
Repayments of debt | (617,123 | ) | (821,218 | ) | ||||
Partial redemption of preferred stock | (11,671 | ) | (10,386 | ) | ||||
Cash dividends paid: | ||||||||
Preferred stock | (37,294 | ) | (36,612 | ) | ||||
Minority interests | - | (6,786 | ) | |||||
Proceeds from exercised stock options | 7,777 | 597 | ||||||
Amended bank credit facilities fees and other | (1,377 | ) | (20,743 | ) | ||||
Loans to Nusamba | - | (5,548 | ) | |||||
Purchases of FCX common shares | - | (3,436 | ) | |||||
Net cash used in financing activities | (364,190 | ) | (208,560 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 249 | (381 | ) | |||||
Cash and cash equivalents at beginning of year | 7,587 | 7,968 | ||||||
Cash and cash equivalents at end of year | $ | 7,836 | $ | 7,587 | ||||