The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Business Wire

Freeport-McMoRan Copper & Gold Inc. Reports Third-Quarter and Nine-Month 2010 Results

Thursday, October 21, 2010

Freeport-McMoRan Copper & Gold Inc. Reports Third-Quarter and Nine-Month 2010 Results08:00 EDT Thursday, October 21, 2010 PHOENIX (Business Wire) -- Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX): Net income attributable to common stock for third-quarter 2010 was $1.2 billion, $2.49 per share, compared with net income of $925 million, $2.07 per share, for third-quarter 2009. Net income attributable to common stock for the first nine months of 2010 was $2.7 billion, $5.88 per share, compared with $1.6 billion, $3.70 per share, for the first nine months of 2009. Consolidated sales from mines for third-quarter 2010 totaled 1.1 billion pounds of copper, 497 thousand ounces of gold and 17 million pounds of molybdenum, compared with 1.0 billion pounds of copper, 706 thousand ounces of gold and 16 million pounds of molybdenum for third-quarter 2009. Consolidated sales from mines for the year 2010 are expected to approximate 3.85 billion pounds of copper, 1.9 million ounces of gold and 65 million pounds of molybdenum, including 895 million pounds of copper, 585 thousand ounces of gold and 15 million pounds of molybdenum for fourth-quarter 2010. Consolidated unit net cash costs (net of by-product credits) averaged $0.82 per pound for third-quarter 2010, compared with $0.50 per pound for third-quarter 2009. Assuming average prices of $1,300 per ounce for gold and $15 per pound for molybdenum for the fourth quarter of 2010, consolidated unit net cash costs (net of by-product credits) are estimated to average approximately $0.83 per pound for the year 2010. Operating cash flows totaled $1.3 billion for third-quarter 2010 and $4.2 billion for the first nine months of 2010. These amounts are net of working capital requirements totaling $636 million in the quarter and $529 million in the nine-month period. Using current 2010 sales volume and cost estimates and assuming average prices of $3.75 per pound for copper, $1,300 per ounce for gold and $15 per pound for molybdenum for the fourth quarter of 2010, operating cash flows for the year 2010 are estimated to approximate $6.0 billion. Capital expenditures totaled $350 million for third-quarter 2010 and $877 million for the first nine months of 2010. FCX currently expects capital expenditures to approximate $1.6 billion for the year 2010, including $0.9 billion for sustaining capital and $0.7 billion for major projects. A number of studies for expansions of existing operations are ongoing, which are expected to result in increased capital spending programs. At September 30, 2010, total debt approximated $4.8 billion and consolidated cash approximated $3.7 billion. Debt repayments totaled $1.6 billion for the first nine months of 2010. In September 2010, FCX agreed to invest $500 million in 5 3/4% Convertible Perpetual Preferred Stock of McMoRan Exploration Co. (NYSE: MMR). Closing of the transaction is expected by year-end 2010. FCX's Board of Directors authorized an increase in the common stock dividend from an annual rate of $1.20 per share to $2.00 per share ($0.50 per share quarterly). The first quarterly dividend of $0.50 per share is expected to be paid on February 1, 2011. Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported third-quarter 2010 net income attributable to common stock of $1.2 billion, $2.49 per share, compared with net income of $925 million, $2.07 per share, for the third quarter of 2009. For the nine months ended September 30, 2010, FCX reported net income attributable to common stock of $2.7 billion, $5.88 per share, compared with $1.6 billion, $3.70 per share, in the 2009 nine-month period. James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said, “Our excellent third-quarter results reflect strong production and cost performance and positive pricing of our key commodities – copper, gold and molybdenum.We continue to advance our future growth and expansion plans and are taking steps to increase near-term copper production in response to improved physical markets.We are highly positive about the long-term outlook for our business and are well positioned with our world-scale portfolio of assets, financial strength, market leadership position and project pipeline to continue to generate strong returns for the benefit of shareholders.Today's announced significant increase in our common stock dividend reflects the company's positive performance and favorable outlook for our business.”       SUMMARY FINANCIAL AND OPERATING DATA   Three MonthsNine MonthsEnded September 30,Ended September 30,   2010   200920102009Financial Data (in millions, except per share amounts) Revenuesa $ 5,152 $ 4,144 $ 13,379 $ 10,430 Operating income $ 2,499 $ 2,084 $ 5,971 $ 4,264 Net income $ 1,533 $ 1,203 $ 3,580 $ 2,222 Net income attributable to common stockb $ 1,178 $ 925 c $ 2,724 c $ 1,556 c Diluted net income per share of common stock $ 2.49 $ 2.07 c $ 5.88 c $ 3.70 c Diluted weighted-average common shares outstanding 474 472 474 428 Operating cash flowsd $ 1,336 $ 1,954 $ 4,218 $ 2,850 Capital expenditures $ 350 $ 244 $ 877 $ 1,138   FCX Operating DataCopper (millions of recoverable pounds) Production 1,042 1,015 2,901 3,125 Sales, excluding purchased metal 1,081 1,000 2,955 3,122 Average realized price per pound $ 3.50 $ 2.75 $ 3.33 $ 2.35 Site production and delivery unit costs per pounde $ 1.38 $ 1.15 $ 1.38 $ 1.08 Unit net cash costs per pounde $ 0.82 $ 0.50 $ 0.87 $ 0.53 Gold (thousands of recoverable ounces) Production 492 708 1,257 2,105 Sales, excluding purchased metal 497 706 1,273 2,088 Average realized price per ounce $ 1,266 $ 987 $ 1,204 $ 944 Molybdenum (millions of recoverable pounds) Production 19 15 53 42 Sales, excluding purchased metal 17 16 50 42 Average realized price per pound $ 16.06 $ 13.95 $ 16.43 $ 11.93   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. During the second quarter of 2010, FCX‘s 6 3/4% Mandatory Convertible Preferred Stock converted into 39 million shares of FCX common stock and the final payment of related dividends was made. c. Includes losses on early extinguishment of debt totaling $67 million to net income attributable to common stock or $0.14 per share in the first nine months of 2010, and $28 million to net income attributable to common stock for the 2009 periods or $0.06 per share in third-quarter 2009 and $0.07 per share in the first nine months of 2009. d. Includes working capital (uses) sources of $(636) million in third-quarter 2010, $479 million in third-quarter 2009, $(529) million in the first nine months of 2010 and $(447) million in the first nine 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 all copper mines. The 2009 periods exclude the results of Africa as start-up activities were still under way. 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.”   OPERATIONSConsolidated. Third-quarter 2010 consolidated copper sales of 1.1 billion pounds were higher than the July 2010 estimate of 970 million pounds and the third-quarter 2009 copper sales of 1.0 billion pounds. The variance to the July 2010 estimate primarily reflects favorable production performance in Indonesia and the timing of shipments. The variance to the 2009 period primarily reflects higher copper ore grades and mill throughput in South America, higher share of Grasberg volumes and a higher contribution from the Tenke Fungurume mine in Africa, partially offset by lower ore grades in North America. Third-quarter 2010 consolidated gold sales of 497 thousand ounces were higher than the July 2010 estimate of 410 thousand ounces but significantly lower than the third-quarter 2009 gold sales of 706 thousand ounces. The variance to the July 2010 estimate primarily reflects favorable production performance at Grasberg. The variance to the 2009 period primarily reflects lower gold ore grades at Grasberg resulting from planned mine sequencing. Third-quarter 2010 consolidated molybdenum sales of 17 million pounds were higher than the July 2010 estimate of 15 million pounds and the third-quarter 2009 molybdenum sales of 16 million pounds because of improved demand in the chemicals sector. As anticipated, consolidated unit site production and delivery costs of $1.38 per pound of copper in the third quarter of 2010 were higher than the third-quarter 2009 unit costs of $1.15 per pound. Third-quarter 2010 unit net cash costs, net of by-product credits, averaged $0.82 per pound, compared with $0.50 per pound in the year-ago period. The higher unit net cash costs in the 2010 period primarily reflect increased input costs (including materials, labor and energy) and lower by-product gold credits. Assuming average prices of $1,300 per ounce for gold and $15 per pound for molybdenum for the fourth quarter of 2010 and using current 2010 sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) are expected to average approximately $0.83 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 $0.008 per pound for each $50 per ounce change in the average price of gold for the fourth quarter of 2010 and by approximately $0.003 per pound for each $2 per pound change in the average price of molybdenum for the fourth quarter of 2010. Development Activities. FCX has significant reserves, resources 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 is aggressively pursuing opportunities to convert this mineralized material into reserves, future production volumes and cash flow. FCX is increasing near-term production at several of its mines and 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 expand significantly the concentrator capacity at its large Cerro Verde mine, a major mill project in the El Abra district, mill projects to process significant sulfide ore in North America and staged expansion options at Tenke Fungurume. The advancement of these studies is designed to position FCX to invest in production growth within its existing portfolio of assets. North America Copper Mines. FCX operates seven open-pit copper mines in North America (Morenci, Sierrita, Bagdad, Safford and Miami in Arizona and Tyrone and Chino 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 MonthsNine MonthsEnded September 30,Ended September 30,North America Copper Mining Operations2010200920102009   Copper (millions of recoverable pounds) Production 259 290 786 851 Sales, excluding purchased metal 267 303 847 885 Average realized price per pound $ 3.32 $ 2.69 $ 3.28 $ 2.15   Molybdenum (millions of recoverable pounds)a Production 7 7 18 20   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.62 $ 1.22 $ 1.46 $ 1.26 By-product credits, primarily molybdenum (0.36 ) (0.29 ) (0.33 ) (0.23 ) Treatment charges   0.10   0.08   0.09   0.09 Unit net cash costsb $ 1.36 $ 1.01 $ 1.22 $ 1.12   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.”   Third-quarter 2010 consolidated copper sales in North America of 267 million pounds were 12 percent lower than third-quarter 2009 sales, primarily because of anticipated lower ore grades at Safford and lower mill throughput because of unscheduled crusher maintenance at Bagdad. 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 and Chino mines, 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 third quarter of 2010, compared with the third quarter of 2009, primarily because of higher input costs and increased mining and milling activities at certain mines. Third-quarter 2010 unit net cash costs benefited from higher molybdenum by-product credits. Based on current operating plans, assuming an average molybdenum price of $15 per pound for the fourth quarter of 2010 and using current 2010 sales volume and cost estimates, FCX estimates that average unit net cash costs, including molybdenum credits, for its North America copper mines would approximate $1.25 per pound of copper for the year 2010. Unit net cash costs for 2010 would change by approximately $0.01 per pound for each $2 per pound change in the average price of molybdenum for the fourth quarter of 2010. Operating and Development Activities. At Morenci, FCX has commenced a staged ramp up from the 2009 mining rate of 450,000 metric tons of ore per day to 635,000 metric tons per day. The mining rate averaged over 480,000 metric tons of ore per day in the third quarter of 2010. In addition, FCX restarted the Morenci mill in March 2010 to process available sulfide material currently being mined. Mill throughput averaged 31,000 metric tons of ore per day during the third quarter of 2010 and is expected to increase to approximately 50,000 metric tons per day by 2011. The increased mining and milling activities will 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 limited 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 late 2011. FCX is investing approximately $40 million in this project, which is benefiting from the use of existing mining equipment. FCX is initiating a 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 ramp up of mining and milling activities will significantly increase production at Chino, which is currently producing small amounts of copper from existing leach stockpiles. Planned mining and milling rates are expected to be achieved by the end of 2013. Costs for the project for equipment and mill refurbishment are expected to approximate $150 million. Incremental production of 100 million pounds per annum is expected in 2012 and 2013 and 200 million pounds in 2014. 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 significantly using higher prices. FCX is constructing 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 completed in the first half of 2011 at a capital investment of approximately $150 million. Operating plans at the other North America sites are continuing to be assessed. 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 MonthsNine MonthsEnded September 30,Ended September 30,South America Mining Operations2010200920102009   Copper (millions of recoverable pounds) Production 356 340 1,007 1,046 Sales 377 327 995 1,040 Average realized price per pound $ 3.55 $ 2.79 $ 3.36 $ 2.43   Gold (thousands of recoverable ounces) Production 29 22 68 69 Sales 30 20 69 68 Average realized price per ounce $ 1,265 $ 976 $ 1,211 $ 935   Molybdenum (millions of recoverable pounds)a Production 2 - 5 1   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.16 $ 1.14 $ 1.19 $ 1.05 Molybdenum and gold credits (0.21 ) (0.10 ) (0.19 ) (0.11 ) Treatment charges   0.18   0.15   0.15   0.15 Unit net cash costsb $ 1.13 $ 1.19 $ 1.15 $ 1.09   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 377 million pounds in the third quarter of 2010, 15 percent higher than third-quarter 2009 sales, primarily reflecting higher ore grades and mill throughput at Candelaria and timing of shipments at Cerro Verde, partly offset by anticipated lower ore grades at El Abra. 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 copper 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 similar to the year-ago period as higher volumes partly offset higher input costs and the impact of higher copper prices on profit sharing plans. In addition, higher gold and molybdenum credits in the third quarter of 2010 resulted in lower unit net cash costs than the year-ago period. 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 $1.16 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. Construction activities for the initial phase of the project are approximately 55 percent complete. Production from the sulfide ore, which is projected to ramp up to approximately 300 million pounds of copper per year, is expected to replace the currently depleting oxide copper production beginning in 2011. The capital investment for this project is expected to total $725 million through 2015, including $565 million for the initial phase of the project expected to be completed in 2011. In addition, FCX is engaged in studies for a potential large-scale milling operation to process additional sulfide material and to achieve higher recoveries. FCX is completing a project to increase 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. Large reserve additions in recent years have provided opportunities to expand significantly the existing facility's capacity. A range of expansion options are being considered and the related 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 MonthsNine MonthsEnded September 30,Ended September 30,Indonesia Mining Operations2010200920102009   Copper (millions of recoverable pounds) Production 358 331 913 1,138 Sales 364 330 919 1,131 Average realized price per pound $ 3.60 $ 2.77 $ 3.36 $ 2.41   Gold (thousands of recoverable ounces) Production 462 685 1,185 2,033 Sales 466 683 1,200 2,015 Average realized price per ounce $ 1,266 $ 988 $ 1,204 $ 944   Unit net cash costs (credits) per pound of copper: Site production and delivery, excluding adjustments $ 1.43 $ 1.10 $ 1.52 $ 0.98 Gold and silver credits (1.67 ) (2.10 ) (1.63 ) (1.74 ) Treatment charges 0.22 0.24 0.23 0.22 Royalties   0.12   0.12   0.12   0.10 Unit net cash costs (credits)a $ 0.10 $ (0.64 ) $ 0.24 $ (0.44 )   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.”   Indonesia reported higher copper sales in the third quarter of 2010, compared to the third quarter of 2009, primarily because of higher sharing under joint venture arrangements. Indonesia gold sales for the third quarter of 2010 were lower than third-quarter 2009 sales, primarily as a result of sequencing of mining in 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. FCX expects Indonesia sales of 1.2 billion pounds of copper and 1.8 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. The lower copper and gold sales from Indonesia in 2010, compared to 2009, reflect the mining of lower grade material in 2010. Indonesia unit site production and delivery costs were higher in the third quarter of 2010, compared with the third quarter of 2009, primarily because of higher input costs (including materials, labor and energy), higher maintenance and support costs and higher cost sharing under joint venture cost sharing arrangements, partly offset by the impact of higher volumes. Unit net cash costs of $0.10 per pound in the third quarter of 2010 were higher than the year-ago quarter of a net credit of $0.64 per pound because of higher site costs and lower gold volumes. Assuming an average gold price of $1,300 per ounce for the fourth quarter 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 $0.05 per pound for the year 2010. Unit net cash costs for 2010 would change by approximately $0.02 per pound for each $50 per ounce change in the average price of gold for the fourth quarter of 2010. Quarterly unit net cash costs will vary significantly with variations in quarterly metal sales volumes. Development Activities. FCX has several attractive development projects in the Grasberg minerals district, primarily related to the development of the large-scale, high-grade underground ore bodies located beneath and adjacent to the Grasberg open pit. In aggregate, these ore bodies are expected to ramp up to approximately 240,000 metric tons of ore per day following depletion of the Grasberg open pit. The world-scale Deep Ore Zone underground mine has been expanded to 80,000 metric tons of ore per day and the development of the high-grade Big Gossan mine is expected to begin production in 2011 and reach full rates of 7,000 metric tons of ore per day by the end of 2012. Substantial progress has been made in developing infrastructure and underground workings that will enable access to the underground ore bodies. Development of the terminal infrastructure and mine access for the massive Grasberg Block Cave and Deep Mill Level Zone ore bodies has commenced. Estimated aggregate capital spending on these projects in 2010 approximates $350 million ($275 million net to PT-FI). Over the next several years, estimated aggregate capital spending will average approximately $500 million ($400 million net to PT-FI) per year on underground development activities. PT-FI continues to evaluate economic studies and mine plans to determine the optimal transition from the Grasberg open pit to the Grasberg Block Cave, which is currently planned for 2016. 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 will be implementing 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 MonthsNine MonthsEnded September 30,Ended September 30,Africa Mining Operations2010200920102009a   Copper (millions of recoverable pounds) Production 69 54 195 90 Sales 73 40 194 66 Average realized price per poundb $ 3.36 $ 2.76 $ 3.22 $ 2.57   Cobalt (millions of contained pounds) Production 5 N/A c 14 N/A c Sales 6 N/A c 13 N/A c Average realized price per pound $ 11.93 N/A c $ 11.51 N/A c   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.44 N/A c $ 1.37 N/A c Cobalt credits (0.65 )d N/A c (0.54 )d N/A c Royalties   0.07 N/A c   0.07 N/A c Unit net cash costse $ 0.86 N/A c $ 0.90 N/A c   a. Represents year-to-date results since March 2009. b. Includes adjustments for point-of-sale transportation costs as negotiated in customer contracts. c. Information has not been included for the 2009 periods as start-up activities were still under way. d. Net of cobalt downstream processing and freight costs. e. 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 third quarter of 2010, Tenke Fungurume's unit site production and delivery costs averaged $1.44 per pound of copper and its unit net cash costs, net of cobalt by-product credits, averaged $0.86 per pound of copper. Assuming an average cobalt price of $12 per pound for the fourth quarter of 2010, average unit net cash costs are expected to approximate $0.93 per pound of copper for the year 2010. Each $2 per pound change in the average price of cobalt would impact unit net cash costs by approximately $0.04 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. 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. FCX expects production volumes from the project to be expanded significantly over time. 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. During the third quarter of 2010, mill throughput averaged 11,800 metric tons of ore per day. Tenke Fungurume is procuring additional mining equipment, which will enable additional high-grade material to be mined and processed beginning in 2011. 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 has achieved significant progress in discussions with the DRC government to resolve the contract review. FCX continues to operate pursuant to its existing contracts, which comply with Congolese law and provide significant benefits to the DRC government. 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 MonthsNine MonthsEnded September 30,Ended September 30,Molybdenum Mining Operations2010   20092010   2009   Molybdenum (millions of recoverable pounds) Productiona 10 8 30 21 Sales, excluding purchased metalb 17 16 50 42 Average realized price per pound $ 16.06 $ 13.95 $ 16.43 $ 11.93   Unit net cash costs per pound of molybdenumc $ 5.94 $ 5.75 d $ 5.75 $ 6.42 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 $1.07 per pound in the third quarter of 2009 and $1.09 per pound in the 2009 nine-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 were higher in the third quarter of 2010, compared to the third quarter of 2009, because of improved demand in the chemicals sector. Molybdenum markets weakened significantly beginning in the fourth quarter of 2008 because of the downturn in global economic conditions, resulting in FCX operating its Henderson mine at reduced rates throughout 2009. Subsequent improved market conditions have resulted in an increase in Henderson rates to approximately 90 percent of its capacity. For the year 2010, FCX expects molybdenum sales from its mines to approximate 65 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 October 20, 2010, was $15.10 per pound. Unit net cash costs at the Henderson primary molybdenum mine were similar in the third quarter of 2010 to the third quarter of 2009. Using current 2010 sales estimates, FCX expects average unit net cash costs for its Henderson mine to approximate $6.00 per pound of molybdenum for the year 2010. Operating and Development Activities. Construction activities at the Climax molybdenum mine are continuing. Current achievements at Climax include mobilization of key personnel and contractors, completion of concrete foundations for various equipment installations and preparation for winter construction activities. FCX plans to continue to advance the construction and will monitor market conditions to determine the timing for start up of mining and milling activities. 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. Estimated remaining costs for the project approximate $500 million. 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. The drilling data in North America continues to indicate opportunities for large additions to sulfide mineralization. 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 for future reserve additions in FCX's existing mineral districts. PROVISIONAL PRICING AND OTHER For the first nine months of 2010, approximately 51 percent of FCX's mined copper was sold in concentrate, 26 percent as cathode and 23 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 June 30, 2010, 364 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 $2.95 per pound. Higher prices during the third quarter of 2010 resulted in favorable adjustments to these provisionally priced copper sales and increased third-quarter 2010 consolidated revenues by $191 million ($85 million to net income attributable to common stock or $0.18 per share). Favorable adjustments to the June 30, 2009, provisionally priced copper sales increased third-quarter 2009 consolidated revenues by $237 million ($116 million to net income attributable to common stock or $0.25 per share). Unfavorable adjustments to the December 31, 2009, provisionally priced copper sales decreased consolidated revenues in the first nine 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 nine months of 2009 by $132 million ($61 million to net income attributable to common stock or $0.14 per share). LME copper prices averaged $3.29 per pound during the third quarter of 2010, compared with FCX's recorded average price of $3.50 per pound. At September 30, 2010, FCX had copper sales of 390 million pounds of copper at its copper mining operations (net of intercompany sales and noncontrolling interests) priced at an average of $3.63 per pound, subject to final pricing over the next several months. Each $0.05 change from the September 30, 2010, average price for provisionally priced copper sales would have an approximate $13 million effect on FCX's 2010 net income attributable to common stock. The LME closing settlement price for copper on October 20, 2010, was $3.74 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 $93 million at June 30, 2010, and $199 million at September 30, 2010. Changes in FCX's net deferrals attributable to variability in intercompany volumes resulted in reductions to net income attributable to common stock totaling $38 million, $0.08 per share, in the third quarter of 2010 and $66 million, $0.14 per share, in the first nine months of 2010. For the 2009 periods, changes in FCX's net deferrals attributable to variability in intercompany volumes resulted in reductions to net income attributable to common stock totaling $5 million, $0.01 per share, for the third quarter and $8 million, $0.02 per share, for the first nine 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 $1.3 billion for the third quarter of 2010, net of $636 million of working capital requirements, and $4.2 billion for the first nine months of 2010, net of $529 million of working capital requirements. Capital expenditures totaled $350 million for the third quarter of 2010 and $877 million for the first nine months of 2010. At September 30, 2010, FCX had consolidated cash of $3.7 billion. Net of noncontrolling interests' share, taxes and other costs, cash available to the parent company totaled $2.9 billion as shown below (in billions):   September 30,2010 Cash at domestic companies $ 1.4 a Cash at international operations   2.3 Total consolidated cash 3.7 Less: Noncontrolling interests' share   (0.6 ) Cash, net of noncontrolling interests' share 3.1 Withholding taxes and other   (0.2 ) Net cash$2.9   a. Includes cash at FCX's parent and North America mining operations.   At September 30, 2010, FCX had $4.8 billion in debt, with no borrowings and $42 million of letters of credit issued under its revolving credit facilities resulting in total availability of approximately $1.5 billion. From January 1, 2009, through September 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 $163 million based on current interest rates. FCX's debt maturities through 2012 are indicated in the table below (in millions). 2010     $ 2 2011 96 2012   1 Total 2010 – 2012 $ 99 At September 30, 2010, FCX had 471 million common shares outstanding. OUTLOOK Projected sales volumes for 2010 approximate 3.85 billion pounds of copper, 1.9 million ounces of gold and 65 million pounds of molybdenum, including 895 million pounds of copper, 585 thousand ounces of gold and 15 million pounds of molybdenum in the fourth quarter of 2010. Using current 2010 sales volume and cost estimates and assuming average prices of $3.75 per pound of copper, $1,300 per ounce of gold and $15 per pound of molybdenum for the fourth quarter of 2010, FCX's consolidated operating cash flows are estimated to approximate $6.0 billion in 2010. The impact of price changes in the fourth quarter of 2010 on FCX's 2010 operating cash flows would approximate $60 million for each $0.10 per pound change in the average price of copper, $10 million for each $50 per ounce change in the average price of gold and $8 million for each $2 per pound change in the average price of molybdenum. FCX's capital expenditures are currently estimated to approximate $1.6 billion for 2010. Capital expenditures for major projects in 2010 are expected to approximate $0.7 billion, which primarily includes the sulfide ore project at El Abra, underground development activities at Grasberg, construction activities at the Climax molybdenum mine 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. Agreement to Invest in McMoRan Exploration Co. In September 2010, FCX announced an agreement to invest $500 million in 5 3/4% Convertible Perpetual Preferred Stock of McMoRan Exploration Co. (NYSE: MMR) in connection with MMR's proposed oil and gas property acquisition from Plains Exploration & Production Company (NYSE: PXP). The preferred stock is convertible into MMR common stock at an initial conversion price of $16 per share. MMR is engaged in exploration, development and production of oil and natural gas in the shallow waters of the Gulf of Mexico Shelf. MMR is currently undertaking a major capital program to fund recent success and additional exploration. FCX's investment will allow it to participate in MMR's highly prospective North American exploration and development activities, which have the potential to generate significant value. The closing of the transaction is expected by year-end 2010 and is conditioned on the concurrent completion of MMR's proposed oil and gas property acquisition from PXP, MMR shareholder approval of the issuance of the securities to FCX and other customary closing conditions. For more information, see FCX's Form 8-K filed with the Securities and Exchange Commission (SEC) on September 23, 2010. FINANCIAL POLICY FCX has a long-standing tradition of seeking to build shareholder value through investing in projects with high rates of return and returning cash to shareholders through common stock dividends and share purchases. FCX's Board of Directors authorized an increase in the cash dividend on common stock from an annual rate of $1.20 per share to $2.00 per share ($0.50 per share quarterly). The first quarterly dividend of $0.50 per share is expected to be paid on February 1, 2011. FCX intends to continue to maintain a strong financial position, invest aggressively in attractive growth projects and provide strong cash returns to shareholders. 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 potential future performance.Forward-looking statements are all statements other than statements of historical facts, such as those statements regarding projected ore grades and milling rates, projected production and sales volumes, projected unit net cash costs, projected operating cash flows, projected capital expenditures, the impact of copper, gold, molybdenum and cobalt price changes, reserve estimates, anticipated closing of the investment in MMR, potential prepayments of debt, future dividend payments and potential share purchases.The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,” “will,” “should,” “to be,” and any similar expressions are intended to identify those assertions as forward-looking statements.The declaration 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, risks related to the investment in MMR, 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 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 third-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, November 19, 2010.   FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA           Three Months Ended September 30, Production Sales COPPER (millions of recoverable pounds) 2010 2009 2010 2009 MINED COPPER (FCX's net interest in %) North America Morenci (85%) 109 a 107 a 111 a 114 a Bagdad (100%) 47 59 49 59 Safford (100%) 29 48 33 46 Sierrita (100%) 39 41 39 44 Tyrone (100%) 21 22 21 23 Chino (100%) 9 9 9 12 Miami (100%) 4 4 4 4 Other (100%) 1 -   1   1 Total North America 259 290   267   303   South America Cerro Verde (53.56%) 165 161 179 157 Candelaria/Ojos del Salado (80%) 115 88 121 80 El Abra (51%) 76 91   77   90 Total South America 356 340   377   327   Indonesia Grasberg (90.64%) 358 b 331 b   364 b   330 b   Africa Tenke Fungurume (57.75%) 69 54   73   40   Consolidated1,0421,015   1,081   1,000 Less noncontrolling interests 199 191   210   180 Net843824   871   820   Consolidated sales from mines 1,081 1,000 Purchased copper   78   47 Total consolidated sales   1,159   1,047   Average realized price per pound $ 3.50 $ 2.75   GOLD(thousands of recoverable ounces) MINED GOLD (FCX's net interest in %) North America (100%) 1 1 1 3 South America (80%) 29 22 30 20 Indonesia (90.64%) 462 b 685 b   466 b   683 bConsolidated492708   497   706 Less noncontrolling interests 49 69   49   69 Net443639   448   637   Consolidated sales from mines 497 706 Purchased gold   1   - Total consolidated sales   498   706   Average realized price per ounce $ 1,266 $ 987   MOLYBDENUM (millions of recoverable pounds) MINED MOLYBDENUM (FCX's net interest in %) Henderson (100%) 10 8 N/A N/A By-product – North America (100%) 7 7 N/A N/A By-product – Cerro Verde (53.56%) 2 -   N/A   N/A Consolidated1915   17   16 Less noncontrolling interests 1 -   1   - Net1815   16   16   Consolidated sales from mines 17 16 Purchased molybdenum   -   1 Total consolidated sales   17   17   Average realized price per pound $ 16.06 $ 13.95   COBALT (millions of contained pounds) MINED COBALT (FCX's net interest in %) Consolidated – Tenke Fungurume (57.75%) 5 N/A c   6 N/A c Less noncontrolling interests 2 N/A c   2 N/A cNet3 N/A c   4 N/A c   Total consolidated sales   6 N/A c   Average realized price per pound $ 11.93 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 third-quarter 2009 as start-up activities were still under way.     FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA (continued)     Nine Months Ended September 30, Production   Sales COPPER (millions of recoverable pounds) 2010   2009 2010   2009 MINED COPPER (FCX's net interest in %) North America Morenci (85%) 321 a 323 a 336 a 349 a Bagdad (100%) 148 169 161 166 Safford (100%) 108 131 125 125 Sierrita (100%) 111 125 120 127 Tyrone (100%) 61 64 65 63 Chino (100%) 25 27 27 42 Miami (100%) 10 12 11 12 Other (100%) 2 -   2   1 Total North America 786 851   847   885   South America Cerro Verde (53.56%) 496 497 485 498 Candelaria/Ojos del Salado (80%) 267 282 272 275 El Abra (51%) 244 267   238   267 Total South America 1,007 1,046   995   1,040   Indonesia Grasberg (90.64%) 913 b 1,138 b   919 b   1,131 b   Africa Tenke Fungurume (57.75%) 195 90 c   194   66 c   Consolidated2,9013,125   2,955   3,122 Less noncontrolling interests 571 563   564   550 Net2,3302,562   2,391   2,572   Consolidated sales from mines 2,955 3,122 Purchased copper   143   138 Total consolidated sales   3,098   3,260   Average realized price per pound $ 3.33 $ 2.35   GOLD (thousands of recoverable ounces) MINED GOLD (FCX's net interest in %) North America (100%) 4 3 4 5 South America (80%) 68 69 69 68 Indonesia (90.64%) 1,185 b 2,033 b   1,200 b   2,015 bConsolidated1,2572,105   1,273   2,088 Less noncontrolling interests 124 204   126   203 Net1,1331,901   1,147   1,885   Consolidated sales from mines 1,273 2,088 Purchased gold   1   - Total consolidated sales   1,274   2,088   Average realized price per ounce $ 1,204 $ 944   MOLYBDENUM (millions of recoverable pounds) MINED MOLYBDENUM (FCX's net interest in %) Henderson (100%) 30 21 N/A N/A By-product – North America (100%) 18 20 N/A N/A By-product – Cerro Verde (53.56%) 5 1   N/A   N/A Consolidated5342   50   42 Less noncontrolling interests 2 1   2   1 Net5141   48   41   Consolidated sales from mines 50 42 Purchased molybdenum   2   4 Total consolidated sales   52   46   Average realized price per pound $ 16.43 $ 11.93   COBALT (millions of contained pounds) MINED COBALT (FCX's net interest in %) Consolidated – Tenke Fungurume (57.75%) 14 N/A d   13 N/A d Less noncontrolling interests 6 N/A d   5 N/A dNet8 N/A d   8 N/A d   Total consolidated sales   13 N/A d   Average realized price per pound $ 11.51 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. Represents year-to-date results since March 2009. d. Information has not been included for the 2009 nine-month period as start-up activities were still under way.     FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA (continued)         Three Months Ended Nine Months Ended September 30, September 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) 653,400 519,200 634,000 580,200 Average copper ore grade (percent) 0.22 0.30 0.24 0.30 Copper production (millions of recoverable pounds) 179 216 563 639   Mill Operations Ore milled (metric tons per day) 190,500 166,300 183,000 172,500 Average ore grades (percent): Copper 0.32 0.32 0.31 0.33 Molybdenum 0.03 0.03 0.02 0.03 Copper recovery rate (percent) 82.6 86.8 83.0 85.7 Production (millions of recoverable pounds): Copper 100 93 280 270 Molybdenum (by-product) 7 7 18 20   100% South America Mining Operating DataSX/EW Operations Leach ore placed in stockpiles (metric tons per day) 281,000 251,500 261,500 254,100 Average copper ore grade (percent) 0.39 0.46 0.42 0.45 Copper production (millions of recoverable pounds) 122 142 385 420   Mill Operations Ore milled (metric tons per day) 193,800 174,200 187,100 181,000 Average ore grades (percent): Copper 0.69 0.66 0.64 0.67 Molybdenum 0.02 0.02 0.02 0.02 Copper recovery rate (percent) 90.7 89.0 90.0 89.4 Production (millions of recoverable pounds): Copper 234 198 622 626 Molybdenum 2 - 5 1   100% Indonesia Mining Operating Data Ore milled (metric tons per day) 228,900 241,200 228,800 238,800 Average ore grades: Copper (percent) 0.92 0.90 0.84 1.04 Gold (grams per metric ton) 0.92 1.33 0.81 1.32 Recovery rates (percent): Copper 89.1 90.7 88.8 90.7 Gold 83.6 84.7 80.6 83.5 Production (recoverable): Copper (millions of pounds) 362 385 975 1,298 Gold (thousands of ounces) 513 799 1,298 2,267   100% Africa Mining Operating Data Ore milled (metric tons per day) 11,800 7,900 10,100 7,100 a Average ore grades (percent): Copper 3.20 3.66 3.55 3.44 a Cobalt 0.39 N/A b 0.40 N/A b Copper recovery rate (percent) 90.5 89.3 91.0 90.5 a Production (millions of pounds) Copper (recoverable) 69 54 195 90 a Cobalt (contained) 5 N/A b 14 N/A b   100% North America Primary Molybdenum Mine Operating DataHenderson Molybdenum Mine Operations Ore milled (metric tons per day) 23,000 17,600 23,000 14,800 Average molybdenum ore grade (percent) 0.25 0.26 0.25 0.26 Molybdenum production (millions of recoverable pounds) 10 8 30 21   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 Nine Months Ended September 30, September 30, 2010 2009 2010 2009 (In Millions, Except Per Share Amounts) Revenues $ 5,152 a $ 4,144 a $ 13,379 a $ 10,430 a Cost of sales: Production and delivery 2,269 1,715 6,239 5,086 Depreciation, depletion and amortization 268 252 788 740 Lower of cost or market inventory adjustments   -   -   -   19 b Total cost of sales 2,537 1,967 7,027 5,845 Selling, general and administrative expenses 81 74 277 225 Exploration and research expenses 35 19 104 73 Restructuring and other charges   -   -   -   23 c Total costs and expenses   2,653   2,060   7,408   6,166 Operating income 2,499 2,084 5,971 4,264 Interest expense, net (103 )d (162 )d (370 )d (451 )d Losses on early extinguishment of debt - (31 ) (77 ) (31 ) Other income (expense), net   (19 )   (7 )   2   (24 ) Income before income taxes and equity in affiliated companies' net earnings 2,377 1,884 5,526 3,758 Provision for income taxes (845 ) (684 ) (1,956 ) (1,557 ) Equity in affiliated companies' net earnings   1   3   10   21 Net income 1,533 1,203 3,580 2,222 Net income attributable to noncontrolling interests (355 ) (224 ) (793 ) (492 ) Preferred dividends   - e   (54 )   (63 )e   (174 ) Net income attributable to FCX common stockholders $ 1,178 $ 925 $ 2,724 $ 1,556   Net income per share attributable to FCX common stockholders: Basic $ 2.50 $ 2.23 $ 6.01 $ 3.80 Diluted $ 2.49 $ 2.07 $ 5.88 $ 3.70 f   Weighted-average common shares outstanding: Basic   471   416   453   409 Diluted   474   472   474   428 f   Dividends declared per share of common stock $ 0.30 $ - $ 0.75 $ -   a. Includes positive (negative) adjustments to provisionally priced copper sales recognized in the prior periods totaling $191 million in third-quarter 2010, $237 million in third-quarter 2009, $(23) million in the 2010 nine-month period and $132 million in the 2009 nine-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 $126 million in third-quarter 2010, $172 million in third-quarter 2009, $409 million in the 2010 nine-month period and $520 million in the 2009 nine-month period. Lower interest expense in the 2010 periods primarily reflects the impact of debt repayments during 2009 and the first nine months of 2010. e. During the second quarter of 2010, FCX's 6 3/4% Mandatory Convertible Preferred Stock converted into 39 million shares of FCX common stock. f. Preferred dividends of $146 million and additional shares of common stock of approximately 39 million shares for the 6 3/4% Mandatory Convertible Preferred Stock were excluded for the 2009 nine-month period because they were anti-dilutive.     FREEPORT-McMoRan COPPER & GOLD INC.CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)     September 30, December 31, 2010 2009 (In Millions) ASSETS Current assets: Cash and cash equivalents $ 3,720 $ 2,656 Trade accounts receivable 1,860 1,517 Other accounts receivable 255 286 Inventories: Product 1,127 1,110 Materials and supplies, net 1,108 1,093 Mill and leach stockpiles 800 667 Other current assets   208 104 Total current assets 9,078 7,433 Property, plant, equipment and development costs, net 16,461 16,195 Long-term mill and leach stockpiles 1,395 1,321 Intangible assets, net 330 347 Other assets   687   700 Total assets $ 27,951 $ 25,996   LIABILITIES AND EQUITY   Current liabilities: Accounts payable and accrued liabilities $ 2,404 $ 2,038 Accrued income taxes 356 474 Current portion of reclamation and environmental obligations 193 214 Dividends payable 143 99 Current portion of long-term debt and short-term borrowings 98 16 Rio Tinto share of joint venture cash flows   78   161 Total current liabilities 3,272 3,002 Long-term debt, less current portion 4,681 a 6,330 Deferred income taxes 2,846 2,503 Reclamation and environmental obligations, less current portion 2,045 1,981 Other liabilities   1,386   1,423 Total liabilities 14,230 15,239 Equity: FCX stockholders' equity: 6 3/4% Mandatory Convertible Preferred Stock - b 2,875 Common stock 59 b 55 Capital in excess of par value 18,662 b 15,680 Accumulated deficit (3,429 ) (5,805 ) Accumulated other comprehensive loss (263 ) (273 ) Common stock held in treasury   (3,433 )   (3,413 ) Total FCX stockholders' equity 11,596 9,119 Noncontrolling interests   2,125   1,638 Total equity   13,721   10,757 Total liabilities and equity $ 27,951 $ 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 6 3/4% Mandatory Convertible Preferred Stock converted into 39 million shares of FCX common stock.     FREEPORT-McMoRan COPPER & GOLD INC.CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)   Nine Months Ended September 30, 2010   2009 (In Millions) Cash flow from operating activities: Net income $ 3,580 $ 2,222 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 788 740 Lower of cost or market inventory adjustments - 19 Stock-based compensation 93 75 Charges for reclamation and environmental obligations, including accretion 117 150 Payments of reclamation and environmental obligations (139 ) (76 ) Losses on early extinguishment of debt 77 31 Deferred income taxes 252 (32 ) Intercompany profit on PT Freeport Indonesia sales to PT Smelting 3 47 Increase in long-term mill and leach stockpiles (73 ) (68 ) Changes in other assets and liabilities 16 136 Other, net 33 53 (Increases) decreases in working capital: Accounts receivable (391 ) (754 ) Inventories, and mill and leach stockpiles (189 ) (176 ) Other current assets (13 ) 88 Accounts payable and accrued liabilities 156 (518 ) Accrued income and other taxes   (92 )   913 Net cash provided by operating activities   4,218   2,850   Cash flow from investing activities: Capital expenditures: North America copper mines (140 ) (121 ) South America (283 ) (129 ) Indonesia (311 ) (186 ) Africa (59 ) (577 ) Other (84 ) (125 ) Proceeds from the sale of assets and other, net   20   (8 ) Net cash used in investing activities   (857 )   (1,146 )   Cash flow from financing activities: Net proceeds from sale of common stock - 740 Proceeds from debt 52 307 Repayments of debt (1,678 ) (1,066 ) Cash dividends and distributions paid: Common stock (272 ) - Preferred stock (95 ) (181 ) Noncontrolling interests (330 ) (149 ) Contributions from noncontrolling interests 24 54 Net payments for stock-based awards (3 ) (9 ) Excess tax benefit from stock-based awards 5 2 Other   -   (5 ) Net cash used in financing activities   (2,297 )   (307 )   Net increase in cash and cash equivalents 1,064 1,397 Cash and cash equivalents at beginning of year   2,656   872 Cash and cash equivalents at end of period $ 3,720 $ 2,269