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Press release from Business Wire

Freeport-McMoRan Copper & Gold Inc. Reports Second-Quarter and Six-Month 2010 Results

Wednesday, July 21, 2010

Freeport-McMoRan Copper & Gold Inc. Reports Second-Quarter and Six-Month 2010 Results08:00 EDT Wednesday, July 21, 2010 PHOENIX (Business Wire) -- Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX):Net income attributable to common stock for second-quarter 2010 was $649 million, $1.40 per share, compared with net income of $588 million, $1.38 per share, for second-quarter 2009. Net income attributable to common stock for the first six months of 2010 was $1.5 billion, $3.40 per share, compared with $631 million, $1.54 per share, for the first six months of 2009. Consolidated sales from mines for second-quarter 2010 totaled 914 million pounds of copper, 298 thousand ounces of gold and 16 million pounds of molybdenum, compared with 1.1 billion pounds of copper, 837 thousand ounces of gold and 16 million pounds of molybdenum for second-quarter 2009. Consolidated sales from mines for the year 2010 are expected to approximate 3.8 billion pounds of copper, 1.8 million ounces of gold and 63 million pounds of molybdenum, including 970 million pounds of copper, 410 thousand ounces of gold and 15 million pounds of molybdenum for third-quarter 2010. Consolidated unit net cash costs (net of by-product credits) averaged $0.97 per pound for second-quarter 2010, compared with $0.43 per pound for second-quarter 2009. Assuming average prices of $1,200 per ounce for gold and $14 per pound for molybdenum for the second half of 2010, consolidated unit net cash costs (net of by-product credits) are estimated to average approximately $0.86 per pound for the year 2010. Quarterly unit net cash costs will vary with fluctuations in sales volumes of copper and by-products. Operating cash flows totaled $1.1 billion for second-quarter 2010 and $2.9 billion for the first six months of 2010. Using estimated 2010 sales volumes and assuming average prices of $3.00 per pound for copper, $1,200 per ounce for gold and $14 per pound for molybdenum for the second half of 2010, operating cash flows for the year 2010 are estimated to exceed $5 billion. Capital expenditures totaled $296 million for second-quarter 2010 and $527 million for the first six months of 2010. FCX currently expects capital expenditures to approximate $1.7 billion for the year 2010, including $0.9 billion for sustaining capital and $0.8 billion for major projects. A number of studies are ongoing, which may result in increased capital spending programs. At June 30, 2010, total debt approximated $4.8 billion and consolidated cash approximated $3.0 billion. During the second quarter of 2010, FCX repaid $1.3 billion in debt, including the April 1st redemption of $1.0 billion of outstanding Senior Floating Rate Notes due 2015. During the second quarter of 2010, FCX's 6¾% Mandatory Convertible Preferred Stock converted into 39 million shares of FCX common stock. FCX's Board of Directors declared a common stock dividend of $0.30 per share payable on August 1, 2010, to holders of record as of July 15, 2010. As previously announced, during the second quarter of 2010, FCX's Board of Directors authorized an increase in the annual cash dividend on its common stock from $0.60 per share to $1.20 per share ($0.30 per share quarterly). Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported second-quarter 2010 net income attributable to common stock of $649 million, $1.40 per share, compared with net income of $588 million, $1.38 per share, for the second quarter of 2009. For the six months ended June 30, 2010, FCX reported net income attributable to common stock of $1.5 billion, $3.40 per share, compared with $631 million, $1.54 per share, in the 2009 six-month period. James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said, “Our second-quarter results reflect continued strong production and cost management throughout our global portfolio of mining operations.During the quarter, we executed our operating plans effectively, strengthened our balance sheet and advanced projects to enhance our future growth options.We remain positive about the outlook for our business based on the fundamentals of global supply and demand.We anticipate generating strong cash flows, which would enable us to invest in future growth and return cash to shareholders.”SUMMARY FINANCIAL AND OPERATING DATA     Three Months   Six MonthsEnded June 30,Ended June 30,   2010   20092010   2009Financial Data (in millions, except per share amounts) Revenuesa $ 3,864 $ 3,684 $ 8,227 $ 6,286 Operating income $ 1,424 $ 1,508 $ 3,472 $ 2,180 Net income $ 832 $ 812 $ 2,047 $ 1,019 Net income attributable to common stockb $ 649 c $ 588 $ 1,546 c $ 631 Diluted net income per share of common stock $ 1.40 c $ 1.38 $ 3.40 c $ 1.54 Diluted weighted-average common shares outstanding 473 471 474 426 Operating cash flowsd $ 1,064 $ 1,154 $ 2,882 $ 896 Capital expenditures $ 296 $ 375 $ 527 $ 894   FCX Operating DataCopper (millions of recoverable pounds) Production 930 1,069 1,859 2,110 Sales, excluding purchased metal 914 1,102 1,874 2,122 Average realized price per pound $ 3.06 $ 2.22 $ 3.13 $ 2.03 Site production and delivery unit costs per pounde $ 1.41 $ 1.04 f $ 1.38 $ 1.05 f Unit net cash costs per pounde $ 0.97 $ 0.43 f $ 0.89 $ 0.54 fGold (thousands of recoverable ounces) Production 316 802 765 1,397 Sales, excluding purchased metal 298 837 776 1,382 Average realized price per ounce $ 1,234 $ 932 $ 1,171 $ 919 Molybdenum (millions of recoverable pounds) Production 17 13 34 27 Sales, excluding purchased metal 16 16 33 26 Average realized price per pound $ 18.18 $ 10.11 $ 16.62 $ 10.65   a.Includes impacts of adjustments to provisionally priced concentrate and cathode sales recognized in prior periods (see discussion on page 10).b.After noncontrolling interests and preferred dividends.c.Includes losses on early extinguishment of debt totaling $42 million to net income attributable to common stock or $0.09 per share in second-quarter 2010 and $65 million to net income attributable to common stock or $0.14 per share in the first six months of 2010.d.Includes working capital sources (uses) of $(173) million in second-quarter 2010, $(31) million in second-quarter 2009, $107 million in the first six months of 2010 and $(926) million in the first six months of 2009.e.Reflects per pound weighted-average site production and delivery unit costs and unit net cash costs, net of by-product credits.For reconciliations of unit costs per pound by operating division to production and delivery costs reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's web site, “www.fcx.com.”f.Excludes results from Tenke Fungurume, where start-up activities were still under way during the 2009 periods.   OPERATIONSConsolidated. Second-quarter 2010 consolidated copper sales of 914 million pounds were higher than the April 2010 estimate of 830 million pounds but lower than the second-quarter 2009 copper sales of 1.1 billion pounds. The variance to the April 2010 estimate primarily reflects favorable production performance in North and South America and Indonesia and the timing of shipments, principally in North America. The variance to the 2009 period primarily reflects the anticipated lower copper ore grades at Grasberg resulting from planned mine sequencing and anticipated lower sales from South America mines, partially offset by higher sales from the Tenke Fungurume mine in Africa. Second-quarter 2010 consolidated gold sales of 298 thousand ounces were higher than the April 2010 estimate of 270 thousand ounces but significantly lower than the second-quarter 2009 gold sales of 837 thousand ounces. The favorable variance to the April 2010 estimate primarily reflects timing of mine sequencing at Grasberg. The variance to the 2009 period primarily reflects anticipated lower gold ore grades at Grasberg resulting from planned mine sequencing. Consolidated molybdenum sales totaled 16 million pounds in each of the second quarter periods. The second-quarter 2010 sales were higher than the April 2010 estimate of 15 million pounds because of improved demand in the chemicals sector. Consolidated unit site production and delivery costs averaged $1.41 per pound of copper in the second quarter of 2010, compared with second-quarter 2009 unit costs of $1.04 per pound. Second-quarter 2010 unit net cash costs, net of by-product credits, averaged $0.97 per pound, compared with $0.43 per pound in the year-ago period. The higher unit net cash costs primarily reflected anticipated lower copper and gold volumes at Grasberg and South America, partly offset by higher by-product gold and molybdenum prices. Assuming average prices of $1,200 per ounce for gold and $14 per pound for molybdenum for the second half of 2010 and using current 2010 sales and costs estimates; consolidated unit net cash costs (net of by-product credits and including Tenke Fungurume) are expected to average approximately $0.86 per pound for the year 2010. Quarterly unit net cash costs will vary with fluctuations in sales volumes. Unit net cash costs for 2010 would change by approximately $0.01 per pound for each $50 per ounce change in the average price of gold for the second half of 2010 and by approximately $0.005 per pound for each $2 per pound change in the average price of molybdenum for the second half of 2010. Development Activities. FCX has significant reserves and future development opportunities within its portfolio of assets. At December 31, 2009, in addition to estimated proven and probable reserves of 104 billion pounds of copper (determined using a long-term average price of $1.60 per pound for copper), FCX identified estimated mineralized material (assessed using a long-term average price of $2.00 per pound for copper) with incremental contained copper of an additional 122 billion pounds. FCX continues to evaluate opportunities to convert this material into reserves, future production volumes and cash flow. FCX is undertaking major development projects, including the development of the El Abra sulfide reserves and the massive underground ore bodies at Grasberg. FCX is also advancing development activities at the Climax primary molybdenum project. In addition, studies are under way to evaluate the potential to more than double the concentrator capacity at the large Cerro Verde mine, a major mill project in the El Abra district, various mill projects to process significant sulfide ore in North America and staged expansion options at Tenke Fungurume. The advancement of these studies will provide flexibility in initiating expansion projects as market conditions warrant, enabling FCX to continue to maintain its position as one of the largest copper producers in the world. North America Copper Mines. FCX operates six open-pit copper mines in North America (Morenci, Sierrita, Bagdad, Safford and Miami in Arizona and Tyrone in New Mexico). By-product molybdenum is produced primarily at Sierrita and Bagdad. All of the North America mining operations are wholly owned, except for Morenci. FCX records its 85 percent joint venture interest in Morenci using the proportionate consolidation method.   Three Months   Six MonthsEnded June 30,Ended June 30,North America Copper Mining Operations2010   20092010   2009   Copper (millions of recoverable pounds) Production 263 272 527 561 Sales, excluding purchased metal 289 281 580 582 Average realized price per pound $ 3.21 $ 2.18 $ 3.27 $ 1.88   Molybdenum (millions of recoverable pounds)a Production 5 7 11 13   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.46 $ 1.24 $ 1.39 $ 1.28 By-product credits, primarily molybdenum (0.38 ) (0.21 ) (0.32 ) (0.19 ) Treatment charges   0.09   0.09   0.08   0.08 Unit net cash costsb $ 1.17 $ 1.12 $ 1.15 $ 1.17   a.Represents by-product production.Sales of by-product molybdenum are reflected in the molybdenum division discussion on page 9.b.For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's web site, “www.fcx.com.”   Second-quarter 2010 consolidated copper sales in North America of 289 million pounds were higher than second-quarter 2009 sales of 281 million pounds. For the year 2010, FCX expects sales from North America copper mines to approximate 1.1 billion pounds of copper, compared with 1.2 billion pounds of copper for 2009. FCX is increasing mining and milling rates at its Morenci mine and is restarting its Miami mine, which are expected to result in higher production in future periods (see “Operating and Development Activities” below). North America unit site production and delivery costs were higher in the second quarter of 2010, compared with the second quarter of 2009, primarily because of higher input costs and increased mining and milling activities at certain mines. Second-quarter 2010 unit net cash costs benefited from higher by-product credits primarily because of higher molybdenum prices. Based on current operating plans, assuming an average molybdenum price of $14 per pound for the second half of 2010 and using current 2010 sales and costs estimates, FCX estimates that average unit net cash costs, including molybdenum credits, for its North America copper mines would approximate $1.24 per pound of copper for the year 2010. Unit net cash costs for 2010 would change by approximately $0.02 per pound for each $2 per pound change in the average price of molybdenum for the second half of 2010. Operating and Development Activities. At Morenci, FCX has commenced a staged ramp up from the current mining rate of 450,000 metric tons of ore per day to 635,000 metric tons per day. In addition, FCX restarted the Morenci mill in March 2010 to process available sulfide material currently being mined. Mill throughput averaged 28,000 metric tons of ore per day during the second quarter of 2010 and is expected to increase to approximately 50,000 metric tons per day by 2011. The increased mining and milling activities are expected to expose additional ore and enable copper production to increase by approximately 125 million pounds annually beginning in 2011. Further increases to Morenci's mining rate are being evaluated. FCX has initiated mining activities at the Miami mine in Arizona to improve efficiencies of ongoing reclamation projects associated with historical mining operations at the site. During an approximate five-year mine life, FCX expects to ramp up production at Miami to approximately 100 million pounds of copper per year by the second half of 2011. FCX is investing $40 million in this project, which is benefiting from the use of existing mining equipment. FCX is advancing plans to construct a sulphur burner at Safford, which will provide a more cost effective source of sulphuric acid used in solution extraction/electrowinning operations and lower transportation costs. This project is expected to be complete during 2011 at a capital investment of approximately $150 million. FCX is evaluating the restart of mining and milling activities at the Chino mine in New Mexico, which were suspended in late 2008 in response to global economic conditions. The preliminary economics of the project appear attractive and would increase copper production by approximately 150 to 200 million pounds per year. At December 31, 2009, Chino's reserves, excluding metal in stockpiles, totaled 1.1 billion pounds of copper (determined using a long-term average price of $1.60 per pound for copper) and reserves would increase with higher prices. Operating plans at the other North America sites are being assessed and adjustments will be made based on market conditions. South America Mining. FCX operates four copper mines in South America – Cerro Verde in Peru and Candelaria, Ojos del Salado and El Abra in Chile. FCX owns a 53.56 percent interest in Cerro Verde, an open-pit mine currently producing both electrowon copper cathodes and copper concentrates. FCX owns 80 percent of the Candelaria and Ojos del Salado mining complexes, which include the Candelaria open-pit and underground mines and the Ojos del Salado underground mines. These mines use common processing facilities to produce copper concentrates. FCX owns a 51 percent interest in El Abra, an open-pit mine producing electrowon copper cathodes. All operations in South America are consolidated in FCX's financial statements.   Three Months   Six MonthsEnded June 30,Ended June 30,South America Mining Operations2010   20092010   2009   Copper (millions of recoverable pounds) Production 329 358 651 706 Sales 311 363 618 713 Average realized price per pound $ 3.02 $ 2.22 $ 3.07 $ 2.10   Gold (thousands of recoverable ounces) Production 20 24 39 47 Sales 20 25 39 48 Average realized price per ounce $ 1,221 $ 928 $ 1,175 $ 915   Molybdenum (millions of recoverable pounds)a Production 1 - 3 1   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.22 $ 1.00 $ 1.21 $ 1.00 Molybdenum and gold credits (0.19 ) (0.10 ) (0.18 ) (0.11 ) Treatment charges   0.11   0.15   0.13   0.15 Unit net cash costsb $ 1.14 $ 1.05 $ 1.16 $ 1.04   a.Represents by-product production.Sales of by-product molybdenum are reflected in the molybdenum division discussion on page 9.b.For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's web site, “www.fcx.com.”   Consolidated copper sales in South America totaled 311 million pounds in the second quarter of 2010, 14 percent lower than second-quarter 2009 sales, primarily reflecting lower ore grades at Candelaria and timing of shipments at Cerro Verde. For the year 2010, FCX expects South America sales of 1.3 billion pounds of copper and 100 thousand ounces of gold, compared with 1.4 billion pounds of copper and 90 thousand ounces of gold for 2009. Projected sales volumes for 2010 are lower than 2009 primarily because of the impacts of anticipated lower ore grades, principally at El Abra in connection with the depletion of the oxide ore resource and the transition to the sulfide deposit. South America unit site production and delivery costs were higher in the second quarter of 2010, compared with the second quarter of 2009, primarily because of lower sales volumes. Partly offsetting these higher unit costs were higher molybdenum credits and lower treatment charges. Using current 2010 sales and costs estimates, FCX estimates that average unit net cash costs, including molybdenum and gold credits, for its South America mining operations would approximate $1.18 per pound of copper for the year 2010. Operating and Development Activities. FCX is engaged in construction activities associated with the development of a large sulfide deposit at El Abra to extend its mine life by over 10 years. Production from the sulfide ore, which will ramp up to approximately 300 million pounds of copper per year, is expected to begin in 2012 and will replace the currently depleting oxide copper production. The capital investment for this project is expected to total $725 million through 2015, including $535 million for the initial phase of the project expected to be completed in 2012. In addition, FCX has initiated studies for a potential milling operation to process additional sulfide material and to achieve higher recoveries. FCX is completing a project to optimize throughput at the existing Cerro Verde concentrator. The project, which is expected to be completed by the end of 2010, is expected to increase mill throughput from 108,000 metric tons of ore per day to 120,000 metric tons per day resulting in incremental annual production of approximately 30 million pounds of copper. The capital investment for this project is expected to total approximately $50 million. In addition, FCX is evaluating a large scale concentrator expansion at Cerro Verde. Reserve additions in recent years have provided opportunities potentially to more than double the existing facility's capacity. A feasibility study is expected to be completed in the first half of 2011. Indonesia Mining. Through its 90.64 percent owned and wholly consolidated subsidiary PT Freeport Indonesia (PT-FI), FCX operates the world's largest copper and gold mine in terms of reserves at its Grasberg operations in Papua, Indonesia.   Three Months   Six MonthsEnded June 30,Ended June 30,Indonesia Mining Operations2010   20092010   2009   Copper (millions of recoverable pounds) Production 276 403 555 807 Sales 259 432 555 801 Average realized price per pound $ 2.95 $ 2.24 $ 3.05 $ 2.06   Gold (thousands of recoverable ounces) Production 294 778 723 1,348 Sales 276 811 734 1,332 Average realized price per ounce $ 1,235 $ 932 $ 1,171 $ 919   Unit net cash costs (credits) per pound of copper: Site production and delivery, excluding adjustments $ 1.62 $ 0.93 $ 1.58 $ 0.92 Gold and silver credits (1.41 ) (1.80 ) (1.61 ) (1.58 ) Treatment charges 0.26 0.22 0.24 0.21 Royalties   0.11   0.12   0.11   0.09 Unit net cash costs (credits)a $ 0.58 $ (0.53 ) $ 0.32 $ (0.36 )   a.For a reconciliation of unit net cash costs (credits) per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's web site, “www.fcx.com.”   As expected, Indonesia reported lower copper and gold sales in the second quarter of 2010, compared to the second quarter of 2009, as a result of sequencing of mining in a lower ore-grade section of the Grasberg open pit. At the Grasberg mine, the sequencing in mining areas with varying ore grades causes fluctuations in the timing of ore production resulting in fluctuations in quarterly and annual sales of copper and gold. PT-FI has revised its mine plans to incorporate precautionary remedial activities and geotechnical considerations affecting a relatively high-grade section of the Grasberg open pit previously scheduled to be mined in 2010 and 2011. The impact of these mine plan changes results in the deferral of approximately 130 million pounds of copper and 270,000 ounces of gold, net to PT-FI's interest, from the 2010 to 2014 period to the 2015 to 2016 period. The revised plans, which are subject to ongoing review and optimization, reflect timing differences and do not result in significant changes to reserves or ultimate production from the open pit. FCX expects Indonesia sales of 1.2 billion pounds of copper and 1.7 million ounces of gold for the year 2010, compared with 1.4 billion pounds of copper and 2.5 million ounces of gold for 2009. Anticipated changes in ore grades throughout the year are expected to result in significant variability in quarterly volumes. Mine sequencing at Grasberg is expected to result in higher copper and gold grades beginning in the fourth quarter of 2010. Indonesia unit site production and delivery costs were higher in the second quarter of 2010, compared with the second quarter of 2009, primarily because of anticipated lower copper volumes for the 2010 period. Unit site production and delivery costs will vary with fluctuations in production volumes because of the primarily fixed nature of PT-FI's cost structure. Gold credits were lower in the second quarter of 2010 because of lower gold volumes, which also resulted in higher unit net cash costs in the second quarter of 2010. Assuming an average gold price of $1,200 per ounce for the second half of 2010 and using current 2010 sales and costs estimates, FCX expects PT-FI's average unit net cash costs, including gold and silver credits, to approximate $0.14 per pound for the year 2010. Unit net cash costs for 2010 would change by approximately $0.04 per pound for each $50 per ounce change in the average price of gold for the second half of 2010. Quarterly unit net cash costs will vary significantly with variations in quarterly metal sales volumes. Africa Mining. FCX holds an effective 57.75 percent interest in the Tenke Fungurume copper and cobalt mining concessions in the Katanga province of the Democratic Republic of Congo (DRC) and is the operator of the project. Construction activities on the approximately $2 billion initial project were completed in 2009. Production of copper cathode commenced in March 2009 and achieved targeted rates in September 2009. The cobalt plant and sulphuric acid plant were commissioned in the third quarter of 2009. Tenke Fungurume continues to address start-up and quality issues in the cobalt circuit and expects to implement corrective actions over the next several quarters. Based on the 10-year average of current design operations, Tenke Fungurume expects to produce 250 million pounds of copper and 18 million pounds of cobalt per year. Higher grades of cobalt in the initial years are expected to result in higher than life-of-mine average annual cobalt production volumes.   Three Months   Six MonthsEnded June 30,Ended June 30,Africa Mining Operations2010   20092010   2009   Copper (millions of recoverable pounds) Production 62 36 126 36 Sales 55 26 121 26 Average realized price per pound $ 2.96 $ 2.20 $ 3.12 $ 2.20   Cobalt (millions of contained pounds) Production 4 N/A a 9 N/A a Sales 4 N/A a 7 N/A a Average realized price per pound $ 12.74 N/A a $ 11.91 N/A a   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.27 N/A a $ 1.32 N/A a Cobalt credits (0.54 )b N/A a (0.46 )b N/A a Royalties   0.06 N/A a   0.07 N/A a Unit net cash costsc $ 0.79 N/A a $ 0.93 N/A a   a.Information has not been included for the 2009 periods as start-up activities were still under way.b. Net of cobalt downstream processing and freight costs.c.For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's web site, “www.fcx.com.”   FCX expects Tenke Fungurume sales of approximately 250 million pounds of copper and 20 million pounds of cobalt for the year 2010, compared with 130 million pounds of copper and 3 million pounds of cobalt for 2009. During the second quarter of 2010, Tenke Fungurume's unit site production and delivery costs averaged $1.27 per pound of copper and its unit net cash costs, net of cobalt by-product credits, averaged $0.79 per pound of copper. FCX has recently updated its cost forecast for Tenke Fungurume to incorporate revised modeling for estimated sulphuric acid consumption, increased input costs and actual cost history, and increased government fees and administrative costs associated with the complex nature of the operating environment in the DRC. Assuming an average cobalt price of $12 per pound for the second half of 2010 and the year 2011, average unit net cash costs are expected to approximate $0.93 per pound of copper for the year 2010 and $0.80 per pound of copper for the year 2011. Each $2 per pound change in the average price of cobalt would impact unit net cash costs by approximately $0.10 per pound of copper. Operating and Development Activities. FCX continues to engage in drilling activities, exploration analyses and metallurgical testing to evaluate the potential of the highly prospective district at Tenke Fungurume and expects its ore reserves to increase significantly over time. These analyses are being incorporated in future plans to evaluate opportunities for expansion. FCX is completing studies to evaluate a second phase of the project, which would include optimizing the current plant and increasing capacity. A range of expansion options are being considered. The milling facilities, which were designed to produce at a capacity rate of 8,000 metric tons of ore per day, have been performing above capacity in recent months. Tenke Fungurume is procuring additional mining equipment, which will enable additional high-grade material to be mined and processed. Based on these enhancements to the mine plan and an expected mill throughput rate of 10,000 metric tons of ore per day, FCX estimates copper production will increase from the current level of 250 million pounds per annum to a rate approximating 290 million pounds per annum during 2011. Other Matters. FCX is continuing to work with the DRC government to resolve the ongoing contract review and a number of administrative disputes. FCX believes its contract is fair and equitable, complies with Congolese law and is enforceable without modification. Molybdenum. FCX is the world's largest producer of molybdenum. FCX conducts molybdenum mining operations at its wholly owned Henderson underground mine in Colorado and sells by-product molybdenum from its North and South America copper mines.   Three Months   Six MonthsEnded June 30,Ended June 30,Molybdenum Mining Operations2010   20092010   2009   Molybdenum (millions of recoverable pounds) Productiona 11 6 20 13 Sales, excluding purchased metalb 16 16 33 26 Average realized price per pound $ 18.18 $ 10.11 $ 16.62 $ 10.65   Unit net cash costs per pound of molybdenumc $ 5.73 $ 7.09 d $ 5.65 $ 6.87 d   a.Amounts reflect production at the Henderson molybdenum mine.b.Includes sales of molybdenum produced as a by-product at the North and South America copper mines.c.For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's web site, “www.fcx.com.”d.Includes freight and downstream conversion costs totaling $1.10 per pound in the second quarter of 2009 and $1.09 per pound in the 2009 six-month period that were not included in unit net cash costs in prior years.   Consolidated molybdenum sales from the Henderson mine and by-product mines totaled 16 million pounds in each of the second quarter periods. Molybdenum markets were significantly affected beginning in the fourth quarter of 2008 by the downturn in global economic conditions, resulting in FCX's operating its Henderson mine at reduced rates throughout 2009. Improved market conditions have resulted in an increase in Henderson rates to approximately 90 percent capacity. For the year 2010, FCX expects molybdenum sales from its mines to approximate 63 million pounds (includes by-product production of approximately 30 million pounds from the North and South America copper mines), compared with 58 million pounds in 2009 (includes by-product production of 27 million pounds from the North and South America copper mines). The weekly average Metals Week Molybdenum Dealer Oxide price as of July 20, 2010, was $13.88 per pound. Unit net cash costs at the Henderson primary molybdenum mine were lower in the second quarter of 2010, compared with the second quarter of 2009, primarily because of higher volumes. Using current 2010 sales estimates, FCX expects average unit net cash costs for its Henderson mine to approximate $6.25 per pound of molybdenum for the year 2010. Operating and Development Activities. FCX is monitoring market conditions to determine the timing for restarting construction of the Climax molybdenum project, which was suspended in the fourth quarter of 2008. FCX believes that this project is one of the most attractive primary molybdenum development projects in the world, with large scale production capacity, attractive cash costs and future growth options. The Climax mine would have an initial annual design capacity of 30 million pounds with significant expansion options. FCX has continued to advance the project to prepare for resumption of construction activities as market conditions improve. As of June 30, 2010, the estimated remaining costs for the project approximate $500 million. FCX is investing $60 million to advance certain construction activities during the next several months to provide flexibility in start-up timing options. EXPLORATION ACTIVITIES FCX is conducting exploration activities near its existing mines with a focus on opportunities to expand reserves that will support the development of additional future production capacity in the large mineral districts where it currently operates. Significantly expanded drilling activities in recent years have been successful in generating meaningful reserve additions and in identifying potential additional mineral resources adjacent to existing ore bodies. Results indicate opportunities for significant future potential reserve additions at Morenci, Sierrita and Bagdad in North America; Cerro Verde and El Abra in South America and in the Tenke Fungurume district. Exploration spending in 2010 is estimated to approximate $120 million, compared with $72 million in 2009. Exploration activities will continue to focus primarily on the potential in FCX's existing mineral districts. PROVISIONAL PRICING AND OTHER For the first six months of 2010, approximately 47 percent of FCX's mined copper was sold in concentrate, 27 percent as cathode and 26 percent as rod from North America operations. Under the long-established structure of sales agreements prevalent in the industry, substantially all of FCX's concentrate and cathode sales are provisionally priced at the time of shipment. The provisional prices are finalized in a contractually specified future period generally one to four months from the shipment date, primarily based on quoted London Metal Exchange (LME) prices. Because a significant portion of FCX's concentrate and cathode sales in any quarterly period usually remain subject to final pricing, the quarter-end forward price is a major determinant of recorded revenues and the average recorded copper price for the period. At March 31, 2010, 372 million pounds of copper sales at FCX's copper mining operations (net of intercompany sales and noncontrolling interests) were provisionally priced at an average of $3.53 per pound. Unfavorable adjustments to the March 31, 2010, provisionally priced copper sales decreased second-quarter 2010 consolidated revenues by $169 million ($72 million to net income attributable to common stock or $0.15 per share), and favorable adjustments to the March 31, 2009, provisionally priced copper sales increased second-quarter 2009 consolidated revenues by $43 million ($13 million to net income attributable to common stock or $0.03 per share). Unfavorable adjustments to the December 31, 2009, provisionally priced copper sales decreased consolidated revenues in the first six months of 2010 by $23 million ($9 million to net income attributable to common stock or $0.02 per share), and favorable adjustments to the December 31, 2008, provisionally priced copper sales increased consolidated revenues in the first six months of 2009 by $132 million ($62 million to net income attributable to common stock or $0.15 per share). LME copper prices averaged $3.18 per pound during the second quarter of 2010, compared with FCX's recorded average price of $3.06 per pound. At June 30, 2010, FCX had copper sales of 364 million pounds of copper at its copper mining operations (net of intercompany sales and noncontrolling interests) priced at an average of $2.95 per pound, subject to final pricing over the next several months. Each $0.05 change from the June 30, 2010, average price for provisionally priced copper sales would have an approximate $12 million effect on FCX's 2010 net income attributable to common stock. The LME closing settlement price for copper on July 20, 2010, was $2.96 per pound. FCX defers recognizing profits on its PT-FI and South America sales to Atlantic Copper and on 25 percent of PT-FI's sales to PT Smelting, PT-FI's 25 percent-owned Indonesian smelting unit, until final sales to third parties occur. FCX's net deferred profits on PT-FI and South America concentrate inventories at Atlantic Copper and PT Smelting to be recognized in future periods' net income attributable to common stock totaled $137 million at December 31, 2009, $157 million at March 31, 2010, and $93 million at June 30, 2010. Changes in FCX's net deferrals attributable to variability in intercompany volumes resulted in additions to net income attributable to common stock totaling $20 million, $0.04 per share, in the second quarter of 2010 and reductions of $28 million, $0.06 per share, in the first six months of 2010. For the 2009 periods, changes in FCX's net deferrals attributable to variability in intercompany volumes resulted in additions to net income attributable to common stock totaling $13 million, $0.03 per share, for the second quarter and reductions of $3 million, $0.01 per share, for the first six months of 2009. Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices will result in variability in FCX's net deferred profits and quarterly earnings. CASH FLOWS, CASH, DEBT and EQUITY Operating cash flows totaled $1.1 billion for the second quarter of 2010, net of $173 million of working capital requirements, and $2.9 billion for the first six months of 2010, including $107 million from working capital sources. Capital expenditures totaled $296 million for the second quarter of 2010 and $527 million for the first six months of 2010. At June 30, 2010, FCX had consolidated cash of $3.0 billion. Net of noncontrolling interests' share, taxes and other costs, cash available to parent company totaled $2.2 billion as shown below (in billions): June 30,2010 Cash at domestic companies $ 1.0 a Cash at international operations   2.0 Total consolidated cash 3.0 Less: Noncontrolling interests' share   (0.6 ) Cash, net of noncontrolling interests' share 2.4 Withholding taxes and other   (0.2 ) Net cash$2.2   a.Includes cash at FCX's parent and North America mining operations.   At June 30, 2010, FCX had $4.8 billion in debt. FCX had no borrowings and $42 million of letters of credit issued under its revolving credit facilities, resulting in total availability of approximately $1.5 billion at June 30, 2010. During the second quarter of 2010, FCX reduced debt by $1.3 billion, including the April 1st redemption of $1.0 billion of outstanding Senior Floating Rate Notes due 2015 and repayment of $278 million of its senior debt through open-market purchases at a cost of $302 million. From January 1, 2009, through June 30, 2010, FCX has repaid approximately $2.6 billion in debt (approximately 35 percent of outstanding debt on January 1, 2009), resulting in estimated annual interest savings of approximately $172 million. FCX's debt maturities through 2012 are indicated in the table below (in millions). 2010           $ 5 2011 97 2012   5 Total 2010 – 2012 $ 107   At June 30, 2010, FCX had 470 million common shares outstanding. In the second quarter of 2010, FCX's 6¾% Mandatory Convertible Preferred Stock converted into 39 million shares of FCX common stock (conversion rate equal to 1.3716 shares of FCX common stock). OUTLOOK Projected sales volumes for 2010 approximate 3.8 billion pounds of copper, 1.8 million ounces of gold and 63 million pounds of molybdenum, including 970 million pounds of copper, 410 thousand ounces of gold and 15 million pounds of molybdenum in the third quarter of 2010. Mining sequencing at Grasberg is resulting in significant fluctuations in quarterly sales of copper and gold during 2010. Using current 2010 sales estimates and assuming average prices of $3.00 per pound of copper, $1,200 per ounce of gold and $14 per pound of molybdenum for the second half of 2010, FCX's consolidated operating cash flows are estimated to exceed $5 billion in 2010. The impact of price changes in the second half of 2010 on FCX's 2010 operating cash flows would approximate $150 million for each $0.10 per pound change for copper, $30 million for each $50 per ounce change for gold and $25 million for each $2 per pound change for molybdenum. FCX's capital expenditures are currently estimated to approximate $1.7 billion for 2010. Capital expenditures for major projects in 2010 are expected to approximate $0.8 billion, which primarily includes underground development activities at Grasberg, the sulfide ore project at El Abra and investments in a new sulphur burner facility at Safford. Capital spending plans will continue to be reviewed and adjusted in response to changes in market conditions and other factors. FINANCIAL POLICY FCX has a long-standing tradition of seeking to build shareholder value through pursuing development projects with high rates of return and returning cash to shareholders through common stock dividends and share purchases. In April 2010, FCX's Board of Directors authorized an increase in the cash dividend on common stock from an annual rate of $0.60 per share to $1.20 per share ($0.30 per share quarterly). The first quarterly dividend of $0.30 per share was declared on June 24, 2010, and is payable on August 1, 2010. There are 23.7 million shares remaining under FCX's 30 million share open-market share purchase program. The Board will continue to review FCX's financial policy on an ongoing basis. ------------------------------------------------------- FCX is a leading international mining company with headquarters in Phoenix, Arizona. FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX has a dynamic portfolio of operating, expansion and growth projects in the copper industry and is the world's largest producer of molybdenum. The company's portfolio of assets includes the Grasberg mining complex, the world's largest copper and gold mine in terms of recoverable reserves, significant mining operations in the Americas, including the large scale Morenci and Safford minerals districts in North America and the Cerro Verde and El Abra operations in South America, and the Tenke Fungurume minerals district in the DRC. Additional information about FCX is available on FCX's web site at “www.fcx.com.” Cautionary Statement and Regulation G Disclosure:This press release contains forward-looking statements in which FCX discusses its performance in the future.Forward-looking statements are all statements other than statements of historical facts, such as those statements regarding projected ore grades and milling rates, projected production and sales volumes, projected unit net cash costs, projected operating cash flows, projected capital expenditures, the impact of copper, gold, molybdenum and cobalt price changes, reserve estimates, potential prepayments of debt, future dividend payments and potential share purchases.The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,” “will,” “should,” “to be,” and any similar expressions and/or statements that are not historical facts, in each case as they relate to FCX or its management, are intended to identify those assertions as forward-looking statements.The declaration and payment of dividends is at the discretion of FCX's Board of Directors and will depend on FCX's financial results, cash requirements, future prospects, and other factors deemed relevant by the Board.This press release also includes forward-looking statements regarding mineralized material not included in reserves.The mineralized material described in this press release will not qualify as reserves until comprehensive engineering studies establish their economic feasibility.Accordingly, no assurance can be given that the estimated mineralized material not included in reserves will become proven and probable reserves.In making any forward-looking statements, the person making them believes that the expectations are based on reasonable assumptions.FCX cautions readers that those statements are not guarantees of future performance and its actual results may differ materially from those anticipated, projected or assumed in the forward-looking statements.Important factors that can cause FCX's actual results to differ materially from those anticipated in the forward-looking statements include commodity prices, mine sequencing, production rates, industry risks, regulatory changes, political risks, the potential effects of violence in Indonesia, potential outcomes of the contract review process and resolution of administrative disputes in the Democratic Republic of Congo, weather-related risks, labor relations, environmental risks, litigation results, currency translation risks and other factors described in more detail under the heading “Risk Factors” in FCX's Annual Report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission (SEC).Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on FCX's results of operations or financial condition.FCX cautions readers that it assumes no obligation to update the forward-looking statements in this press release and does not intend to update the forward-looking statements more frequently than quarterly.This press release also contains certain financial measures such as unit net cash costs per pound of copper and per pound of molybdenum.As required by SEC Regulation G, reconciliations of these measures to amounts reported in FCX's consolidated financial statements are in the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's web site, “www.fcx.com.”A copy of this release is available on FCX's web site, “www.fcx.com.”A conference call with securities analysts about second-quarter 2010 results is scheduled for today at 10:00 a.m. Eastern Time.The conference call will be broadcast on the Internet along with slides.Interested parties may listen to the conference call live and view the slides by accessing “www.fcx.com.” A replay of the webcast will be available through Friday, August 20, 2010.             FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA   Three Months Ended June 30, Production   Sales COPPER (millions of recoverable pounds) 2010   2009 2010   2009 MINED COPPER (FCX's net interest in %) North America Morenci (85%) 114 a 103 a 118 a 111 a Bagdad (100%) 49 55 55 54 Safford (100%) 32 36 41 38 Sierrita (100%) 37 43 41 41 Tyrone (100%) 20 21 22 20 Chino (100%) 8 10 9 13 Miami (100%) 3 4 3 4 Other (100%) -   -     -     -   Total North America 263   272     289     281     South America Cerro Verde (53.56%) 166 169 150 174 Candelaria/Ojos del Salado (80%) 80 98 77 99 El Abra (51%) 83   91     84     90   Total South America 329   358     311     363     Indonesia Grasberg (90.64%) 276 b 403 b   259 b   432 b   Africa Tenke Fungurume (57.75%) 62   36     55     26     Consolidated930   1,069     914     1,102     Less noncontrolling interests 186   196     173     196   Net744   873     741     906     Consolidated sales from mines 914 1,102 Purchased copper   44     51 Total consolidated sales   958     1,153   Average realized price per pound $ 3.06 $ 2.22   GOLD (thousands of recoverable ounces) MINED GOLD (FCX's net interest in %) North America (100%) 2 - 2 1 South America (80%) 20 24 20 25 Indonesia (90.64%) 294 b 778 b   276 b   811 bConsolidated316   802     298     837     Less noncontrolling interests 31   77     30     81   Net285   725     268     756     Total consolidated sales   298     837   Average realized price per ounce $ 1,234 $ 932   MOLYBDENUM (millions of recoverable pounds) MINED MOLYBDENUM (FCX's net interest in %) Henderson (100%) 11 6 N/A N/A By-product – North America (100%) 5 7 N/A N/A By-product – Cerro Verde (53.56%) 1   -     N/A     N/A   Consolidated17   13     16     16     Less noncontrolling interests - c - c   - c   - cNet17   13     16     16     Consolidated sales from mines 16 16 Purchased molybdenum   1     2 Total consolidated sales   17     18   Average realized price per pound $ 18.18 $ 10.11   COBALT (millions of contained pounds) MINED COBALT (FCX's net interest in %) Tenke Fungurume (57.75%) 4   N/A d   4   N/A dConsolidated4   N/A d   4   N/A d   Less noncontrolling interests 2   N/A d   2   N/A dNet2   N/A d   2   N/A d   Total consolidated sales   4   N/A d   Average realized price per pound $ 12.74 N/A d   a. Net of Morenci's joint venture partner's 15 percent interest. b. Net of Grasberg's joint venture partner's interest, which varies in accordance with the terms of the joint venture agreement. c. Amount rounds to less than 1 million. d. Information has not been included for second-quarter 2009 as start-up activities were still under way.           FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA (continued)   Six Months Ended June 30, Production   Sales COPPER (millions of recoverable pounds) 2010   2009 2010   2009 MINED COPPER (FCX's net interest in %) North America Morenci (85%) 212 a 216 a 225 a 235 a Bagdad (100%) 101 110 112 107 Safford (100%) 79 83 92 79 Sierrita (100%) 72 84 81 83 Tyrone (100%) 40 42 44 40 Chino (100%) 16 18 18 30 Miami (100%) 6 8 7 8 Other (100%) 1   -     1     -   Total North America 527   561     580     582     South America Cerro Verde (53.56%) 331 336 306 341 Candelaria/Ojos del Salado (80%) 152 194 151 195 El Abra (51%) 168   176     161     177   Total South America 651   706     618     713     Indonesia Grasberg (90.64%) 555 b 807 b   555 b   801 b   Africa Tenke Fungurume (57.75%) 126   36     121     26     Consolidated1,859   2,110     1,874     2,122     Less noncontrolling interests 372   372     354     370   Net1,487   1,738     1,520     1,752     Consolidated sales from mines 1,874 2,122 Purchased copper   65     91   Total consolidated sales   1,939     2,213     Average realized price per pound $ 3.13 $ 2.03   GOLD (thousands of recoverable ounces) MINED GOLD (FCX's net interest in %) North America (100%) 3 2 3 2 South America (80%) 39 47 39 48 Indonesia (90.64%) 723 b 1,348 b   734 b   1,332 bConsolidated765   1,397     776     1,382     Less noncontrolling interests 75   135     77     134   Net690   1,262     699     1,248     Total consolidated sales   776     1,382     Average realized price per ounce $ 1,171 $ 919   MOLYBDENUM (millions of recoverable pounds) MINED MOLYBDENUM (FCX's net interest in %) Henderson (100%) 20 13 N/A N/A By-product – North America (100%) 11 13 N/A N/A By-product – Cerro Verde (53.56%) 3   1     N/A     N/A   Consolidated34   27     33     26     Less noncontrolling interests 1   1     1     1   Net33   26     32     25     Consolidated sales from mines 33 26 Purchased molybdenum   2     3   Total consolidated sales   35     29     Average realized price per pound $ 16.62 $ 10.65   COBALT (millions of contained pounds) MINED COBALT (FCX's net interest in %) Tenke Fungurume (57.75%) 9   N/A c   7   N/A cConsolidated9   N/A c   7   N/A c   Less noncontrolling interests 4   N/A c   3   N/A cNet5   N/A c   4   N/A c   Total consolidated sales   7   N/A c   Average realized price per pound $ 11.91 N/A c   a. Net of Morenci's joint venture partner's 15 percent interest. b. Net of Grasberg's joint venture partner's interest, which varies in accordance with the terms of the joint venture agreement. c. Information has not been included for the 2009 six-month period as start-up activities were still under way.           FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA (continued)         Three Months Ended Six Months Ended June 30, June 30, 2010 2009 2010 2009 100% North America Copper Mining Operating DataSolution Extraction/Electrowinning (SX/EW) Operations Leach ore placed in stockpiles (metric tons per day) 646,100 553,700 624,100 611,200 Average copper ore grade (percent) 0.25 0.31 0.25 0.30 Copper production (millions of recoverable pounds) 182 201 384 423   Mill Operations Ore milled (metric tons per day) 195,300 170,600 179,200 175,700 Average ore grades (percent): Copper 0.32 0.31 0.31 0.33 Molybdenum 0.02 0.03 0.02 0.03 Copper recovery rate (percent) 81.4 84.8 83.3 85.3 Production (millions of recoverable pounds): Copper 100 89 180 177 Molybdenum (by-product) 5 7 11 13   100% South America Mining Operating DataSX/EW Operations Leach ore placed in stockpiles (metric tons per day) 247,400 260,200 251,600 255,400 Average copper ore grade (percent) 0.42 0.44 0.43 0.45 Copper production (millions of recoverable pounds) 130 141 263 278   Mill Operations Ore milled (metric tons per day) 187,100 186,300 183,600 184,400 Average ore grades (percent): Copper 0.62 0.67 0.62 0.68 Molybdenum 0.02 0.02 0.02 0.02 Copper recovery rate (percent) 89.9 90.2 89.5 89.6 Production (millions of recoverable pounds): Copper 199 217 388 428 Molybdenum 1 - 3 1   100% Indonesia Mining Operating Data Ore milled (metric tons per day) 223,400 237,700 228,700 237,600 Average ore grades: Copper (percent) 0.81 1.10 0.79 1.11 Gold (grams per metric ton) 0.63 1.51 0.75 1.32 Recovery rates (percent): Copper 89.1 90.6 88.7 90.6 Gold 78.2 83.6 78.7 82.9 Production (recoverable): Copper (millions of pounds) 305 457 613 913 Gold (thousands of ounces) 319 849 785 1,468   100% Africa Mining Operating Data Ore milled (metric tons per day) 8,800 6,800 9,200 6,300 a Average ore grades (percent): Copper 3.87 3.45 3.78 3.21 a Cobalt 0.35 N/A b 0.40 N/A b Copper recovery rate (percent) 90.7 92.1 91.2 92.1 a Production (millions of pounds) Copper (recoverable) 62 36 126 36 a Cobalt (contained) 4 N/A b 9 N/A b   100% North America Primary Molybdenum Mine Operating DataHenderson Molybdenum Mine Operations Ore milled (metric tons per day) 22,800 11,700 23,000 13,400 Average molybdenum ore grade (percent) 0.25 0.27 0.24 0.25 Molybdenum production (millions of recoverable pounds) 11 6 20 13   a.  Represents year-to-date results since March 2009. b.  Information has not been included for the 2009 periods as start-up activities were still under way.           FREEPORT-McMoRan COPPER & GOLD INC.CONSOLIDATED STATEMENTS OF INCOME (Unaudited)         Three Months Ended Six Months Ended June 30, June 30, 2010 2009 2010 2009 (In Millions, Except Per Share Amounts) Revenues $ 3,864 a $ 3,684 a $ 8,227 a $ 6,286 a Cost of sales: Production and delivery 2,052 1,809 3,970 3,371 Depreciation, depletion and amortization 249 256 520 488 Lower of cost or market inventory adjustments   -     -     -     19 b Total cost of sales 2,301 2,065 4,490 3,878 Selling, general and administrative expenses 101 89 196 151 Exploration and research expenses 38 24 69 54 Restructuring and other charges   -     (2 )   -     23 c Total costs and expenses   2,440     2,176     4,755     4,106   Operating income 1,424 1,508 3,472 2,180 Interest expense, net (122 )d (158 )d (267 )d (289 )d Losses on early extinguishment of debt (50 ) - (77 ) - Other income (expense), net   9     (3 )   21     (17 ) Income before income taxes and equity in affiliated companies' net earnings 1,261 1,347 3,149 1,874 Provision for income taxes (433 ) (542 ) (1,111 ) (873 ) Equity in affiliated companies' net earnings   4     7     9     18   Net income 832 812 2,047 1,019 Net income attributable to noncontrolling interests (168 ) (164 ) (438 ) (268 ) Preferred dividends   (15 )   (60 )   (63 )   (120 ) Net income attributable to FCX common stockholders $ 649   $ 588   $ 1,546   $ 631     Net income per share attributable to FCX common stockholders: Basic $ 1.42   $ 1.43   $ 3.48   $ 1.56   Diluted $ 1.40   $ 1.38   $ 3.40   $ 1.54 e   Weighted-average common shares outstanding: Basic   458     412     444     406   Diluted   473     471     474     426 e   Dividends declared per share of common stock $ 0.30   $ -   $ 0.45   $ -     a.  Includes (negative) positive adjustments to provisionally priced copper sales recognized in the prior periods totaling $(169) million in second-quarter 2010, $43 million in second-quarter 2009, $(23) million in the 2010 six-month period and $132 million in the 2009 six-month period. b.  Relates to molybdenum inventories. c.  Relates to contract cancellation costs and staff reductions primarily at the Morenci mine, partially offset by gains related to pension and postretirement special benefits and curtailments. d.  Consolidated interest expense (before capitalization) totaled $132 million in second-quarter 2010, $172 million in second-quarter 2009, $283 million in the 2010 six-month period and $348 million in the 2009 six-month period.  Lower interest expense in the 2010 periods primarily reflects the impact of debt repayments during 2009 and the first half of 2010.  Capitalized interest totaled $10 million in second-quarter 2010, $14 million in second-quarter 2009, $16 million in the 2010 six-month period and $59 million in the 2009 six-month period. Lower capitalized interest in the 2010 periods primarily reflects the completion of development activities for the initial project at the Tenke Fungurume mine. e.  Preferred dividends of $97 million and additional shares of common stock of approximately 39 million shares for the 6¾% Mandatory Convertible Preferred Stock were excluded for the 2009 six-month period because they were anti-dilutive.           FREEPORT-McMoRan COPPER & GOLD INC.CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)     June 30, December 31, 2010 2009 (In Millions) ASSETS Current assets: Cash and cash equivalents $ 3,042 $ 2,656 Trade accounts receivable 1,009 1,517 Other accounts receivable 235 286 Inventories: Product 1,031 1,110 Materials and supplies, net 1,097 1,093 Mill and leach stockpiles 768 667 Other current assets   111   104   Total current assets 7,293 7,433 Property, plant, equipment and development costs, net 16,272 16,195 Long-term mill and leach stockpiles 1,353 1,321 Intangible assets, net 333 347 Other assets   728     700   Total assets $ 25,979   $ 25,996     LIABILITIES AND EQUITY Current liabilities: Accounts payable and accrued liabilities $ 2,065 $ 2,038 Dividends payable, including dividends payable to noncontrolling interests 329 99 Accrued income taxes 240 474 Current portion of reclamation and environmental obligations 198 214 Current portion of long-term debt and short-term borrowings 101 16 Rio Tinto share of joint venture cash flows   50     161   Total current liabilities 2,983 3,002 Long-term debt, less current portion 4,684 a 6,330 Deferred income taxes 2,612 2,503 Reclamation and environmental obligations, less current portion 2,005 1,981 Other liabilities   1,402     1,423   Total liabilities 13,686 15,239 Equity: FCX stockholders' equity: 6¾% Mandatory Convertible Preferred Stock - b 2,875 Common stock 59 b 55 Capital in excess of par value 18,639 b 15,680 Accumulated deficit (4,466 ) (5,805 ) Accumulated other comprehensive loss (268 ) (273 ) Common stock held in treasury   (3,432 )   (3,413 ) Total FCX stockholders' equity 10,532 9,119 Noncontrolling interests   1,761     1,638   Total equity   12,293     10,757   Total liabilities and equity $ 25,979   $ 25,996     a.  During the first six months of 2010, FCX purchased in the open market $218 million of its 8.25% Senior Notes due 2015 for $237 million (an average purchase price of 108.4 percent) and $329 million of its 8.375% Senior Notes due 2017 for $358 million (an average purchase price of 108.5 percent).  In addition, FCX redeemed all of its $1.0 billion of outstanding Senior Floating Rate Notes due 2015 for 101 percent of the principal amount together with accrued and unpaid interest. b.  During the second quarter of 2010, FCX's 6¾% Mandatory Convertible Preferred Stock converted into 39 million shares of FCX common stock.           FREEPORT-McMoRan COPPER & GOLD INC.CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)   Six Months Ended June 30, 2010   2009 (In Millions) Cash flow from operating activities: Net income $ 2,047 $ 1,019 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 520 488 Lower of cost or market inventory adjustments - 19 Stock-based compensation 75 57 Charges for reclamation and environmental obligations, including accretion 75 112 Payments of reclamation and environmental obligations (97 ) (47 ) Losses on early extinguishment of debt 77 - Deferred income taxes 107 61 Intercompany profit on PT Freeport Indonesia sales to PT Smelting (29 ) 37 Increase in long-term mill and leach stockpiles (31 ) (31 ) Changes in other assets and liabilities 5 71 Other, net 26 36 (Increases) decreases in working capital: Accounts receivable 502 (803 ) Inventories, and mill and leach stockpiles (39 ) 53 Other current assets (9 ) 105 Accounts payable and accrued liabilities (161 ) (675 ) Accrued income and other taxes   (186 )   394   Net cash provided by operating activities   2,882     896     Cash flow from investing activities: Capital expenditures: North America copper mines (81 ) (100 ) South America (154 ) (111 ) Indonesia (195 ) (128 ) Africa (50 ) (458 ) Other (47 ) (97 ) Proceeds from the sale of assets and other, net   8     (1 ) Net cash used in investing activities   (519 )   (895 )   Cash flow from financing activities: Net proceeds from sale of common stock - 740 Proceeds from debt 35 155 Repayments of debt (1,655 ) (285 ) Cash dividends and distributions paid: Common stock (130 ) - Preferred stock (95 ) (120 ) Noncontrolling interests (145 ) (63 ) Contributions from noncontrolling interests 15 29 Net payments for stock-based awards (6 ) (7 ) Excess tax benefit from stock-based awards 4 - Other   -     (3 ) Net cash (used in) provided by financing activities   (1,977 )   446     Net increase in cash and cash equivalents 386 447 Cash and cash equivalents at beginning of year   2,656     872   Cash and cash equivalents at end of period $ 3,042   $ 1,319