Freeport-McMoRan (FCX) 10-Q 11 May 09 2009 Q1 Quarterly report Financial data

Statement of Financial Position

Statement of Financial Position, Classified (Unaudited, USD $)
In Millions	Mar. 31, 2009	Dec. 31, 2008
Cash and Cash Equivalents, at Carrying Value [Abstract]
Cash and Cash Equivalents, at Carrying Value, Total	$644	$872
Accounts Receivable, Net, Current [Abstract]
Accounts Receivable, Net, Current, Total	880	374
Other Receivables	830	838
Inventory, Net [Abstract]
Product Inventories and Materials and Supplies, Net	2,195	2,192
Mill and Leach Stockpiles	571	571
Other Assets, Current	280	386
Assets, Current, Total	5,400	5,233
Property, Plant and Equipment, Net [Abstract]
Property, Plant, Equipment and Development Costs, Net	16,211	16,002
Long Term Mill and Leach Stockpiles	1,147	1,145
Assets Held-in-trust, Noncurrent	139	142
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Intangible Assets, Net (Excluding Goodwill), Total	359	364
Other Assets, Noncurrent	452	467
Assets, Total	23,708	23,353
Accounts Payable and Accrued Liabilities [Abstract]
Accounts Payable and Accrued Liabilities, Total	1,941	2,766
Current Portion of Reclamation and Environmental Obligations	178	162
Accrued Incomes Taxes	442	163
Debt, Current [Abstract]
Debt, Current, Total	87	67
Liabilities, Current, Total	2,648	3,158
Long-term Debt, Noncurrent [Abstract]
Revolving Credit Facility	0	150
Long-term Notes Payable [Abstract]
Senior Long-term Notes	6,883	6,884
Long-term Loans Payable [Abstract]
Long-term Loans Payable, Total	257	250
Long-term Debt, Noncurrent, Total	7,140	7,284
Deferred Tax Liabilities, Noncurrent	2,471	2,339
Reclamation and Environmental Obligations, Less Current Portion.	1,967	1,951
Other Liabilities, Noncurrent	1,400	1,520
Liabilities, Total	15,626	16,252
Stockholders' Equity [Abstract]
5.5% Convertible Perpetual Preferred Stock	832	832
6.75% Mandatory Convertible Preferred Stock	2,875	2,875
Common Stock, Value	53	51
Additional Paid in Capital [Abstract]
Additional Paid in Capital, Total	14,760	13,989
Retained Earnings (Accumulated Deficit) [Abstract]
Retained Earnings (Accumulated Deficit), Total	(8,224)	(8,267)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated Other Comprehensive Income (Loss), Net of Tax, Total	(237)	(305)
Treasury Stock, Value	(3,409)	(3,402)
Stockholders' Equity, Total	6,650	5,773
Stockholders' Equity Attributable to Noncontrolling Interest	1,432	1,328
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	8,082	7,101
Liabilities and Stockholders' Equity, Total	$23,708	$23,353

Statement of Income (Excluding

Statement of Income (Excluding Gross Margin Alternative) (Unaudited, USD $)
In Millions	3 Months Ended Mar. 31, 2009	3 Months Ended Mar. 31, 2008
Revenues [Abstract]
Revenues	$2,602	$5,672
Cost of Revenue [Abstract]
Production and Delivery	1,562	2,721
Depreciation, Depletion and Amortization	232	418
Production Related Impairments or Charges [Abstract]
Inventory Write-down	19	1
Cost of Revenue, Total	1,813	3,140
Selling, General and Administrative Expense [Abstract]
Selling, General and Administrative Expense, Total	62	84
Exploration and Research Expenses	30	52
Restructuring Charges [Abstract]
Restructuring Charges, Total	25	0
Operating Costs and Expenses, Total	1,930	3,276
Operating Income (Loss), Total	672	2,396
Interest and Debt Expense [Abstract]
Interest Expense, Net	(131)	(165)
Losses on Early Extinguishment and Conversion of Debt, Net	0	(6)
Other Nonoperating Income (Expense) [Abstract]
Other Nonoperating Income (Expense), Total	(14)	2
Income before Income Taxes and Equity in Affiliated Companies' Net Earnings	527	2,227
Income Tax Expense (Benefit) [Abstract]
Income Tax (Expense) Benefit	(331)	(729)
Income (Loss) from Equity Method Investments	11	7
Net Income (Loss), Total	207	1,505
Net Income (Loss) Attributable to Noncontrolling Interest in Subsidiaries	(104)	(319)
Preferred Stock Dividends and Other Adjustments [Abstract]
Preferred Stock Dividends	(60)	(64)
Net Income (Loss) Available to Common Stockholders, Basic, Total	$43	$1,122
Earnings Per Share, Basic [Abstract]
Earnings Per Share, Basic, Total	0.11	2.93
Earnings Per Share, Diluted [Abstract]
Earnings Per Share, Diluted, Total	0.11	2.64
Weighted Average Number of Shares Outstanding, Basic	400	383
Weighted Average Number of Diluted Shares Outstanding	401	449
Common Stock, Dividends, Per Share, Declared	0	0.4375

Statement of Shareholders' Equi

Statement of Shareholders' Equity and Other Comprehensive Income (Unaudited, USD $)
In Millions	5.5% Convertible Perpetual Preferred Stock [Member]	6.75% Mandatory Convertiblel Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Treasury Stock [Member]	Common Stock at Par Value [Member]	Noncontrolling Interest in Subsidiaries [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2008	$832	$2,875		$13,989	($8,267)	($305)	($3,402)	$51	$1,328	$7,101
Shares, Issued, Beginning Balance at Dec. 31, 2008	1	29	505				121
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercised Stock Options, Issued Restricted Stock and Other, Shares			1
Stock-based Compensation Costs				33						33
Treasury Stock, Value, Acquired, Cost Method, Tendered for Taxes Upon Exercise of Options and Restricted Stock							(7)			(7)
Dividends, Preferred Stock					(60)					(60)
Net Income (Loss)					103				104	207
Other Comprehensive Income, Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax						1				1
Amotization of Unrecognized Accounts						5				5
Other Comprehensive Income, Defined Benefit Plans Adjustment, Net of Tax, Period Increase (Decrease) [Abstract]
Other Comprehensive Income, Defined Benefit Plans Adjustment, Net of Tax, Period Increase (Decrease), Total						62				62
Other Comprehensive Income (Loss), Net of Tax, Period Increase (Decrease)						68				68
Comprehensive Income, Net of Tax										275
Stock Issued During Period, Value, New Issues				738				2		740
Stock Issued During Period, Shares, New Issues			27
Shares, Issued, Ending Balance at Mar. 31, 2009	1	29	533				121
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2009	$832	$2,875		$14,760	($8,224)	($237)	($3,409)	$53	$1,432	$8,082

Statement of Cash Flows

Statement of Cash Flows (Unaudited, USD $)
In Millions	3 Months Ended Mar. 31, 2009	3 Months Ended Mar. 31, 2008
Income (Loss) from Continuing Operations [Abstract]
Net Income (Loss)	$207	$1,505
Adjustments for Noncash Items Included in Income (Loss) from Continuing Operations [Abstract]
Depreciation, Depletion and Amortization - as reported in stmt of cash flows	232	418
Share-based Compensation [Abstract]
Share-based Compensation, Total	33	47
Charges for Reclamation and Environmental Liabilities, Including Accretion	67	41
Losses on Early Extinguishment and Conversion of Debt, Net	0	6
Asset Impairment Charges [Abstract]
Write-off of Inventory	19	1
Deferred Income Taxes and Tax Credits [Abstract]
Deferred Income Tax Expense (Benefit)	73	(48)
Increase in Long-term mill and Leach Stockpiles	(3)	(47)
Other Adjustments for Noncash Items Included in Income (Loss) from Continuing Operations	33	48
Increase (Decrease) in Receivables [Abstract]
Increase (Decrease) in Accounts Receivable	(455)	(950)
Increase (Decrease) in Inventories [Abstract]
Increase (Decrease) in Inventories, Total	(35)	(81)
Increase (Decrease) in Other Operating Assets	77	1
Increase (Decrease) in Accounts Payable and Accrued Liabilities [Abstract]
Increase (Decrease) in Accounts Payable and Accrued Liabilities, Total	(731)	(505)
Increase (Decrease) in Accrued Income Taxes Payable	249	216
Settlement of Reclamation and Environmental Liabilities	(24)	(37)
Net Cash Provided by (Used in) Operating Activities, Total	(258)	615
Payments to Acquire Productive Assets [Abstract]
North America Capital Expenditures	(72)	(151)
South America Capital Expenditures	(74)	(63)
Indonesia Capital Expenditures	(55)	(115)
Africa Capital Expenditures	(251)	(143)
Payments to Acquire Other Productive Assets	(67)	(36)
Proceeds from Sale of Productive Assets [Abstract]
Proceeds from Sale of Productive Assets, Total	3	21
Net Cash Provided by (Used in) Investing Activities, Total	(516)	(487)
Proceeds from Issuance or Sale of Equity [Abstract]
Proceeds from Issuance of Common Stock	740	0
Proceeds from (Repayments of) Other Debt [Abstract]
Proceeds from Other Debt	101	473
Repayments of Other Debt	(225)	(118)
Payments of Ordinary Dividends [Abstract]
Payments of Dividends, Common Stock	0	(169)
Payments of Dividends, Preferred Stock and Preference Stock	(60)	(64)
Payments of Dividends, Noncontrolling Interest	0	(49)
Net (Payments) Proceeds from Exercised Stock Options	(7)	(8)
Excess Tax Benefit from Share-based Compensation, Financing Activities	0	12
Proceeds from (Payments for) Other Financing Activities	(3)	0
Net Cash Provided by (Used in) Financing Activities, Total	546	77
Cash and Cash Equivalents, Period Increase (Decrease), Total	(228)	205
Cash and Cash Equivalents, at Carrying Value, Beginning Balance	872	1,626
Cash and Cash Equivalents, at Carrying Value, Ending Balance	$644	$1,831

Document Information

Document Information (Unaudited)
	3 Months Ended Mar. 31, 2009
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-03-31

Entity Information

Entity Information (Unaudited, USD $)
	3 Months Ended Mar. 31, 2009	Apr. 30, 2009	Feb. 17, 2009
Entity Information [Line Items]
Entity Registrant Name	Freeport-McMoRan Copper & Gold Inc.
Entity Central Index Key	0000831259
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$11,400,000,000
Entity Common Stock, Shares Outstanding		411,754,522

Notes to Financial Statement

Notes to Financial Statement (Unaudited, USD $)
In Millions	3 Months Ended Mar. 31, 2009	3 Months Ended Mar. 31, 2008
Notes to Financial Statement [Abstract]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	1. GENERAL INFORMATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required by generally accepted accounting principles (GAAP) in the United States (U.S.). Therefore, this information should be read in conjunction with Freeport-McMoRan Copper Gold Inc.s (FCX) consolidated financial statements and notes contained in its 2008 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 interim periods reported. All such adjustments are, in the opinion of management, of a normal recurring nature. Operating results for the three-month period ended March 31, 2009, are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. FCX changed Phelps Dodge Corporations (Phelps Dodge) legal name to Freeport-McMoRan Corporation (FMC) in 2008.
Restructuring and Related Activities Disclosure [Text Block]	2. RESTRUCTURING AND OTHER CHARGES During the fourth quarter of 2008, there was a dramatic decline in copper and molybdenum prices. After averaging $3.05 per pound in 2006, $3.23 per pound in 2007 and $3.61 per pound for the first nine months of 2008, London Metal Exchange (LME) spot copper prices declined to a four-year low of $1.26 per pound in December 2008, averaged $1.78 per pound in the fourth quarter of 2008 and closed at $1.32 per pound on December 31, 2008. Additionally, while molybdenum markets have been strong in recent years with prices averaging approximately $25 per pound in 2006, $30 per pound in 2007 and $33 per pound for the first nine months of 2008, molybdenum prices declined significantly to a four-year low of $8.75 per pound in November 2008, averaged approximately $16 per pound in the fourth quarter of 2008 and closed at $9.50 per pound on December 31, 2008. While FCXs long-term strategy of developing its resources to their full potential remains in place, the decline in copper and molybdenum prices in the fourth quarter of 2008 and the deterioration of the economic and credit environment have limited FCXs ability to invest in growth projects and required FCX to make adjustments to its near-term operating plans. FCX responded to the sudden downturn and uncertain near-term outlook by revising its near-term strategy to protect liquidity while preserving its mineral resources and growth options for the longer term. Accordingly, operating plans were revised in the fourth quarter of 2008 and January 2009 to reflect: (i)curtailment of copper production at higher-cost North America operations and of molybdenum production at the Henderson molybdenum mine; (ii)capital cost reductions; (iii)aggressive cost control, including workforce reductions, reduced equipment purchases that were planned to support expansion projects, a reduction in material and supplies inventory and reductions in exploration, research and administrative costs; and (iv)suspension of FCXs annual common stock dividend. Charges recognized in first-quarter 2009 in connection with FCXs revised operating plans in the fourth quarter of 2008 and January 2009 include restructuring charges of $34 million ($31 million to net income applicable to common stock or $0.07 per diluted share) for contract termination costs, other project cancellation costs, employee severance and benefit costs; partially offset by pension and postretirement gains of $9 million ($9 million to net incomeapplicable to common stock or $0.02 per diluted share) for special retirement benefits and curtailments. The restructuring charge reflects workforce reductions (approximately 3,000 employees related to fourth-quarter 2008 revised operating plans and approximately 1,500 employees related to January 2009 revised operating plans) and other charges that reflect an approximate 50 percent total reduction in mining and crushed-leach rates at the Morenci mine in Arizona, an approximate 50 percent reduction in mining and stacking rates at the Safford mine in Arizona, an approximate 50 percent reduction in the mining rate at the Tyrone mine in New Mexico, suspension of mining and milling
Pension and Other Postretirement Benefits Disclosure [Text Block]	3. PENSION AND POSTRETIREMENT BENEFITS During the first quarter of 2009, FCX remeasured its plan assets and benefit obligations for the FMC Retirement Plan and the FMC Retiree Medical Plan as a result of employee reductions caused by FCXs revised operating plans. Information as of and for the three months ended March 31, 2009, on the FMC Retirement Plan and the FMC Retiree Medical Plan follows (in millions): FMC FMC Retirement Retiree Plan Medical Plan Change in benefit obligation: Benefit obligation at beginning of period $ 1,289 $ 222 Service cost 6 Interest cost 19 3 Actuarial gains (165 ) (9 ) Special retirement benefits and curtailmentsa (9 ) (3 ) Benefits paid, net of employee contributions and Medicare Part D subsidy (retiree medical plan) (29 ) (6 ) Benefit obligation at end of period 1,111 207 Change in plan assets: Fair value of plan assets at beginning of period 924 Actual return on plan assets (57 ) Employer contributions 6 Benefits paid, net of employee contributions (29 ) (6 ) Fair value of plan assets at end of period 838 Funded status $ (273 ) $ (207 ) Discount rate assumption 7.30 % 6.90 % a. Resulted from reductions in the workforce caused by the revised mine operating plans (see Note 2 for further discussion). Following is a reconciliation of the benefit obligation, fair value of plan assets and funded status as of December 31, 2008, for FCXs pension plans (as reported in FCXs 2008 Annual Report on Form 10-K) to the FMC Retirement Plan beginning balances shown above (in millions): Fair Value Benefit of Plan Funded Obligation Assets Status FCXs pension plans as reported $ 1,412 $ 959 $ (453 ) Less: FMC plans other than the FMC Retirement Plan, and FCXs SERP, director and excess benefit plans (123 ) (35 ) 88 FMC Retirement Plan $ 1,289 $ 924 $ (365 ) Following is a reconciliation of the benefit obligation, fair value of plan assets and funded status as of December 31, 2008, for FCXs postretirement medical and life insurance benefit plans (as reported in FCXs 2008 Annual Report on Form 10-K) to the FMC Retiree Medical Plan beginning balances shown above (in millions): Fair Value Benefit of Plan Funded Obligation Assets Status FCXs postretirement medical and life insurance benefit plans as reported $ 257 $ $ (257 ) Less: FCXs medical and life insurance benefit plans other than the FMC Retiree Me
Earnings Per Share, Policy [Text Block]	4. EARNINGS PER SHARE FCXs basic net income per share of common stock was calculated by dividing net income applicable to common stock by the weighted-average shares of common stock outstanding during the period. The following is a reconciliation of net income and weighted-average shares of common stock outstanding for purposes of calculating diluted net income per share for the three months ended March 31, 2009 and 2008 (in millions, except per share amounts): Three Months Ended March 31, 2009 2008 Net income $ 207 $ 1,505 Net income attributable to noncontrolling interests in subsidiaries (104 ) (319 ) Preferred dividends (60 ) (64 ) Net income applicable to common stock 43 1,122 Plus income impact of assumed conversion of: 6% Mandatory Convertible Preferred Stock 49 5% Convertible Perpetual Preferred Stock 15 Diluted net income applicable to common stock $ 43 $ 1,186 Weighted-average shares of common stock outstanding: 400 383 Add stock issuable upon conversion, exercise or vesting of: 6% Mandatory Convertible Preferred Stocka b 39 5% Convertible Perpetual Preferred Stock b 23 Dilutive stock options 2 Restricted stock 1 2 Weighted-average shares of common stock outstanding for purposes of calculating diluted net income per share 401 449 Diluted net income per share of common stock attributable to FCX stockholders $ 0.11 $ 2.64 a. Preferred stock will automatically convert on May 1, 2010, into between approximately 39 million and 47 million shares of FCX common stock at a conversion rate that will be determined based on FCXs common stock price. Prior to May 1, 2010, holders may convert at a conversion rate of 1.3654 or approximately 39 million shares. b. Potential additional shares of common stock of approximately 39 million shares for the 6% Mandatory Convertible Preferred Stock and 18 million shares for the 5% Convertible Perpetual Preferred Stock were excluded for the three months ended March 31, 2009, because they were anti-dilutive. FCXs convertible instruments are excluded from the computation of diluted net income per share of common stock when including the conversion of these instruments results in an anti-dilutive effect on earnings per share (see footnote b above). The quarterly dilution threshold for the 5% Convertible Perpetual Preferred Stock is $0.64 per share and for the 6% Mandatory Convertible Preferred Stock is $1.24 per
Inventory Disclosure [Text Block]	5. INVENTORIES, AND MILL AND LEACH STOCKPILES The components of inventories follow (in millions): March 31, December 31, 2009 2008 Mining Operations: Raw materials $ 1 $ 1 Work-in-process 145 128 Finished goodsa 700 703 Atlantic Copper: Raw materials (concentrates) 134 164 Work-in-process 132 71 Finished goods 5 1 Total product inventories 1,117 1,068 Total materials and supplies, netb 1,078 1,124 Total inventories $ 2,195 $ 2,192 a. Primarily includes copper concentrates, anodes, cathodes and rod, and molybdenum. b. Materials and supplies inventory is net of obsolescence reserves totaling $21 million at March 31, 2009, and $22 million at December 31, 2008. The following summarizes mill and leach stockpiles (in millions): March 31, December 31, 2009 2008 Current: Mill stockpiles $ 22 $ 10 Leach stockpiles 549 561 Total current mill and leach stockpiles $ 571 $ 571 Long-terma: Mill stockpiles $ 333 $ 340 Leach stockpiles 814 805 Total long-term mill and leach stockpiles $ 1,147 $ 1,145 a. Metals in stockpiles not expected to be recovered within the next 12 months. FCX recorded charges for lower of cost or market (LCM) molybdenum inventory adjustments of $19 million ($19 million to net income applicable to common stock or $0.05 per diluted share) in first-quarter 2009 resulting from lower molybdenum prices.
Income Tax Disclosure [Text Block]	6. INCOME TAXES FCXs first-quarter 2009 income tax provision resulted from taxes on international operations ($330 million) and U.S. operations ($1 million). FCXs effective tax rate for 2009 is expected to be highly sensitive to changes in commodity prices and the mix of income between U.S. and international operations. Taxes provided on income generated from FCXs South America and Indonesia operations are recorded at the applicable statutory rates. However, at certain commodity prices, FCX does not record a tax benefit for losses generated in the U.S., and these losses cannot be used to offset income generated from international operations. These factors have caused FCXs consolidated effective tax rate of 63 percent to be substantially higher than the U.S. federal statutory rate of 35 percent. FCXs first-quarter 2008 income tax provision resulted from taxes on international operations ($579 million) and U.S. operations ($150 million). The difference between FCXs consolidated effective income tax rate of approximately 33 percent for first-quarter 2008 and the U.S. federal statutory rate of 35 percent primarily was attributable to a U.S. benefit for percentage depletion, partially offset by withholding taxes and incremental U.S. income tax accrued on foreign earnings.
Interest Costs, Capitalized	$45	$22
Derivative Financial Instruments and Fair Value Measurements [Text Block]	8. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT Derivative Financial Instruments.FCX and its subsidiaries do not purchase, hold or sell derivative financial instruments unless there is an existing asset or obligation or if FCX anticipates a future activity that is likely to occur and will result in exposure to market risks. FCX does not enter into any derivative financial instruments for speculative purposes. FCX and its subsidiaries have entered into derivative financial instruments in limited instances to achieve specific objectives. These objectives principally relate to managing risks associated with commodity price, foreign currency and interest rate risks. The fair values of FCXs derivative financial instruments are based on widely published market prices. Summarized below are unrealized gains/losses on derivative financial instruments that are designated and qualify as fair value hedge transactions under Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, for the three months ended March 31, 2009, along with the unrealized gains (losses) on the related hedged item (in millions): Derivative Hedged Item Commodity contracts: Copper futures and swap contractsa $ 5 $ (5 ) a. Gains (losses) on derivative financial instruments as well as the offsetting gains (losses) on the hedged items (unrecognized firm commitments) are recorded in revenues. Additionally, FCX realized gains of $3 million during first-quarter 2009 from matured derivative financial instruments that qualify for hedge accounting. Summarized below are the realized and unrealized gains recognized in income before income taxes and equity in affiliated companies net earnings for derivative financial instruments, including embedded derivatives, which do not qualifyfor hedgeaccounting under SFAS No. 133, as amended, for the three months ended March 31, 2009 (in millions): Commodity contracts: Embedded derivatives in provisional sales contractsa $ 313 Embedded derivatives in provisional purchase contractsb 1 Copper forward contractsb 4 Copper futures and swap contractsa 32 a. Amounts recorded in revenues. b. Amounts recorded in cost of sales as production and delivery costs. Summarized below are the fair values of unsettled derivative financial instruments recorded on the consolidated balance sheet at March 31, 2009 (in millions): Derivatives designated as hedging instruments under SFAS No. 133, as amended Commodity contracts: Copper futures and swap contracts: Asset positiona $ 5 Derivatives not designated as hedging instruments under SFAS No. 133, as amended Commodity contracts: Embedded derivatives in provisional sales/purchases contracts:b Asset position $ 220 Liability position (10 ) Coppe
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	9. NEW ACCOUNTING STANDARDS Noncontrolling Interests in Consolidated Financial Statements. In December 2007, FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51, which clarifies that noncontrolling interests (minority interests) are to be treated as a separate component of equity and any changes in the ownership interest (in which control is retained) are to be accounted for as capital transactions. However, a change in ownership of a consolidated subsidiary that results in a loss of control is considered a significant event that triggers gain or loss recognition, with the establishment of a new fair value basis in any remaining ownership interests. SFAS No. 160 also provides additional disclosure requirements for each reporting period. SFAS No. 160 applies to fiscal years beginning on or after December 15, 2008, with early adoption prohibited. This statement is required to be adopted prospectively, except for the following provisions, which are to be applied retrospectively: (i) the reclassification of noncontrolling interests to equity in the consolidated balance sheets and (ii) the adjustment to consolidated net income to include net income attributable to both the controlling and noncontrolling interests. FCX adopted SFAS No. 160 effective January 1, 2009. Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion. In May 2008, FASB issued FSP No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), which changes the accounting treatment for convertible debt securities that the issuer may settle fully or partially in cash. FSP No. APB 14-1 requires bifurcation of convertible debt instruments into a debt component that is initially recorded at fair value and an equity component that represents the difference between the initial proceeds from issuance of the instrument and the fair value allocated to the debt component. The debt component is subsequently accreted (as a component of interest expense) to par value over its expected life. FSP No. APB 14-1 is effective for fiscal years and interim periods beginning after December 15, 2008, and must be retrospectively applied to all prior periods presented, even if an instrument has matured, converted, or otherwise been extinguished as of the FSPs effective date. FSP No. APB 14-1 did not have an impact on FCXs financial reporting. Employers Disclosures about Postretirement Benefit Plan Assets. In December 2008, FASB issued FSP No. FAS 132(R)-1, Employers Disclosures about Postretirement Benefit Plan Assets, which provides enhanced guidance on an employers disclosures about plan assets of a defined benefit pension or other postretirement plan. FSP FAS 132(R)-1 revises disclosure requirements on pension and postretirement plan assets from those required in the original SFAS No. 132 after the FASB decided disclosures about fair value measurements for postretirement plan assets were not within the scope of SFAS No. 157. The disclosures about plan assets required by FSP FAS 132(R)-1 are effective for fiscal y
Segment Reporting Disclosure [Text Block]	10. BUSINESS SEGMENTS FCX has organized its operations into five primary divisions North America copper mines, South America copper mines, Indonesia mining, Africa mining and Molybdenum operations. Notwithstanding this structure, FCX internally reports information on a mine-by-mine basis. Therefore, in accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, FCX concluded that its operating segments include individual mines. Operating segments that meet certain SFAS No. 131 thresholds are reportable segments. In accordance with this guidance, beginning in first-quarter 2009, Sierrita is no longer a reportable segment. In third-quarter 2008, FCX revised its presentation of the operating divisions to better reflect managements view of the consolidated FCX operations. Accordingly, FCX has revised its segment disclosures for the three months ended March 31, 2008, to conform with the current period presentation. Further discussion of the reportable segments included in FCXs primary operating divisions, as well as FCXs other reportable segments Rod Refining and Atlantic Copper Smelting Refining follows. North America Copper Mines.FCX has five operating copper mines in North America Morenci, Sierrita, Bagdad and Safford in Arizona and Tyrone in New Mexico. The North America copper mines include open-pit mining, sulfide ore concentrating, leaching, and solution extraction and electrowinning (SX/EW) operations. A majority of the copper produced at the North America copper mines is cast into copper rod by FCXs Rod Refining operations. The North America mines division includes the Morenci copper mine as a reportable segment. Morenci. The Morenci open-pit mine, located in southeastern Arizona, primarily produces copper cathodes. FCX owns an 85 percent undivided interest in Morenci through an unincorporated joint venture. Other Mines. Other mines include FCXs other operating southwestern U.S. copper mines Sierrita, Bagdad, Safford and Tyrone. In addition to copper, the Sierrita and Bagdad mines produce molybdenum concentrates as a by-product. Other mines also include FCXs southwestern U.S. copper mines that are currently on care-and-maintenance status. South America Copper Mines.FCX has four operating copper mines in South America Cerro Verde in Peru, and Candelaria, Ojos del Salado and El Abra in Chile. These operations include open-pit and underground mining, sulfide ore concentrating, leaching and SX/EW operations. The South America mines division includes the Cerro Verde copper mine as a reportable segment. Cerro Verde. The Cerro Verde open-pit copper mine, located near Arequipa, Peru, produces copper cathodes and copper concentrates. In addition to copper, the Cerro Verde mine produces molybdenum concentrates as a by-product. FCX owns a 53.56 percent interest in Cerro Verde. Other Mines. Other mines include FCXs Chilean copper mines Candelaria, Ojos del Salado and El Abra which include open-pit and underground mining, sulfide ore concentrating, leaching and SX/EW operations. In addition to copper, the Candelaria and Ojos del Salado mines produce gold and silver as b