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Press release from Business Wire

Freeport-McMoRan Copper & Gold Inc. Reports Fourth-Quarter and Year Ended December 31, 2010 Results

Thursday, January 20, 2011

Freeport-McMoRan Copper & Gold Inc. Reports Fourth-Quarter and Year Ended December 31, 2010 Results08:00 EST Thursday, January 20, 2011 PHOENIX (Business Wire) -- Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX): Net income attributable to common stock for fourth-quarter 2010 was $1.5 billion, $3.25 per share, compared to net income of $971 million, $2.15 per share, for fourth-quarter 2009. Net income attributable to common stock for the year 2010 was $4.3 billion, $9.14 per share, compared to $2.5 billion, $5.86 per share, for the year 2009. Consolidated sales from mines for fourth-quarter 2010 totaled 941 million pounds of copper, 590 thousand ounces of gold and 17 million pounds of molybdenum, compared to 989 million pounds of copper, 551 thousand ounces of gold and 16 million pounds of molybdenum for fourth-quarter 2009. Consolidated sales for the year 2010 totaled 3.9 billion pounds of copper, 1.9 million ounces of gold and 67 million pounds of molybdenum, compared to 4.1 billion pounds of copper, 2.6 million ounces of gold and 58 million pounds of molybdenum for the year 2009. Consolidated sales from mines for the year 2011 are expected to approximate 3.85 billion pounds of copper, 1.4 million ounces of gold and 70 million pounds of molybdenum, including 840 million pounds of copper, 325 thousand ounces of gold and 17 million pounds of molybdenum for first-quarter 2011. Consolidated unit net cash costs (net of by-product credits) averaged $0.53 per pound for fourth-quarter 2010, compared to $0.62 per pound for fourth-quarter 2009, and $0.79 per pound for the year 2010, compared to $0.55 per pound for the year 2009. Assuming average prices of $1,350 per ounce for gold and $15 per pound for molybdenum, consolidated unit net cash costs (net of by-product credits) are estimated to average approximately $1.10 per pound for the year 2011. Operating cash flows totaled $2.1 billion for fourth-quarter 2010 and $6.3 billion for the year 2010. These amounts are net of working capital requirements totaling $305 million in the quarter and $834 million for the year. Using estimated sales volumes and cost estimates and assuming average prices of $4.25 per pound for copper, $1,350 per ounce for gold and $15 per pound for molybdenum, operating cash flows for the year 2011 are estimated to approximate $8 billion. Capital expenditures totaled $535 million for fourth-quarter 2010 and $1.4 billion for the year 2010. FCX currently expects capital expenditures to approximate $2.5 billion for the year 2011, including $1.2 billion for sustaining capital and $1.3 billion for major projects. FCX's Board of Directors declared a $1.00 per share supplemental common stock dividend (paid on December 30, 2010) and a two-for-one common stock split (to be effected on February 1, 2011). On December 30, 2010, FCX completed the purchase of $500 million of 5 3/4% Convertible Perpetual Preferred Stock of McMoRan Exploration Co. (NYSE: MMR). At December 31, 2010, total debt approximated $4.8 billion and consolidated cash approximated $3.7 billion. During 2010, FCX repaid $1.6 billion in debt. FCX's preliminary estimate of consolidated recoverable proven and probable reserves as of December 31, 2010, totaled 120.5 billion pounds of copper, 35.5 million ounces of gold and 3.39 billion pounds of molybdenum. Net reserve additions of 20.2 billion pounds of copper and 0.87 billion pounds of molybdenum replaced approximately 500 percent of 2010 copper production and 1,200 percent of 2010 molybdenum production. Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported fourth-quarter 2010 net income attributable to common stock of $1.5 billion, $3.25 per share, compared to net income of $971 million, $2.15 per share, for the fourth quarter of 2009. For the year 2010, FCX reported net income attributable to common stock of $4.3 billion, $9.14 per share, compared to $2.5 billion, $5.86 per share, in the year 2009. James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said, “We are pleased to report record quarterly and annual financial results and substantial reserve additions.We look forward to continued strong operating results across our global operations and to the advancement of our attractive development projects as we grow our production and enhance our asset values.Our strong financial position and positive outlook will enable us to invest in economically attractive growth projects while providing strong cash returns to shareholders.”         SUMMARY FINANCIAL AND OPERATING DATAThree Months EndedYears EndedDecember 31,December 31,   2010     20092010     2009Financial Data (in millions, except per share amounts) Revenuesa $ 5,603 $ 4,610 $ 18,982 $ 15,040 Operating income $ 3,097 $ 2,239 $ 9,068 $ 6,503 Net income $ 1,964 $ 1,312 $ 5,544 $ 3,534 Net income attributable to common stockb $ 1,549 c $ 971 c $ 4,273 c $ 2,527 c Diluted net income per share of common stock $ 3.25 c $ 2.15 c $ 9.14 c $ 5.86 c Diluted weighted-average common shares outstanding 477 473 474 469 Operating cash flows $ 2,055 d $ 1,547 d $ 6,273 d $ 4,397 d Capital expenditures $ 535 $ 449 $ 1,412 $ 1,587   FCX Operating DataCopper (millions of recoverable pounds) Production 1,007 978 3,908 4,103 Sales, excluding purchased metal 941 989 3,896 4,111 Average realized price per pound $ 4.18 $ 3.20 $ 3.59 $ 2.60 Site production and delivery unit costs per pounde $ 1.46 $ 1.25 $ 1.40 $ 1.12 Unit net cash costs per pounde $ 0.53 $ 0.62 $ 0.79 $ 0.55 Gold (thousands of recoverable ounces) Production 629 559 1,886 2,664 Sales, excluding purchased metal 590 551 1,863 2,639 Average realized price per ounce $ 1,398 $ 1,115 $ 1,271 $ 993 Molybdenum (millions of recoverable pounds) Production 19 12 72 54 Sales, excluding purchased metal 17 16 67 58 Average realized price per pound $ 16.60 $ 13.45 $ 16.47 $ 12.36   Note: The share and per share data included in this release do not reflect the stock split, which will be effected on February 1, 2011. See the table on page 13 for information regarding the retroactive effect of the stock split. a. Includes impacts of adjustments to provisionally priced concentrate and cathode sales recognized in prior periods (see discussion on page 11).b.After noncontrolling interests and preferred dividends.During the second quarter of 2010, FCX's 6¾% Mandatory Convertible Preferred Stock converted into 39 million shares of FCX common stock.c.Includes net losses on early extinguishment of debt totaling $4 million or $0.01 per share in fourth-quarter 2010, $15 million or $0.03 per share in fourth-quarter 2009, $71 million or $0.15 per share for the year 2010 and $43 million or $0.09 per share for the year 2009.d.Includes working capital uses of $305 million in fourth-quarter 2010, $323 million in fourth-quarter 2009, $834 million for the year 2010 and $770 million for the year 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. Fourth-quarter 2010 consolidated copper sales of 941 million pounds were higher than the October 2010 estimate of 895 million pounds but lower than the fourth-quarter 2009 copper sales of 989 billion pounds. The variance to the October 2010 estimate primarily reflects favorable production performance in Indonesia, South America and Africa. The variance to the 2009 period primarily reflects anticipated lower sales from North America, partly offset by a higher contribution from Indonesia. Fourth-quarter 2010 consolidated gold sales of 590 thousand ounces approximated the October 2010 estimate of 585 thousand ounces. Fourth-quarter 2009 consolidated gold sales were 551 thousand ounces. Fourth-quarter 2010 consolidated molybdenum sales of 17 million pounds were higher than the October 2010 estimate of 15 million pounds primarily because of stronger demand in the metallurgical sector. The consolidated molybdenum sales for the fourth quarter of 2010 approximated the fourth-quarter 2009 sales of 16 million pounds. Consolidated sales for 2011 are expected to approximate 3.85 billion pounds of copper, 1.4 million ounces of gold and 70 million pounds of molybdenum. Lower copper sales from Indonesia, resulting from mine sequencing to lower grade ores, are expected to be offset by increases in North America and Africa copper sales, compared to 2010. Lower gold sales in 2011 reflect lower ore grades at Grasberg. Copper and gold sales in the second half of 2011 are expected to be higher than in the first half of 2011. As anticipated, consolidated unit site production and delivery costs of $1.46 per pound of copper in the fourth quarter of 2010 were higher than the fourth-quarter 2009 unit costs of $1.25 per pound of copper. Fourth-quarter 2010 unit net cash costs, net of by-product credits, averaged $0.53 per pound of copper, compared to $0.62 per pound of copper in the prior year quarter. The lower unit net cash costs in the 2010 period primarily reflect higher gold and molybdenum by-product credits, partly offset by reduced volumes and increased input costs including materials, labor and energy. Assuming average prices of $1,350 per ounce for gold and $15 per pound for molybdenum and using current 2011 sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) are expected to average approximately $1.10 per pound for the year 2011. Unit net cash costs for 2011 are expected to be higher than 2010, primarily because of the impact of higher unit net cash costs at Grasberg associated with lower copper and gold volumes and higher input costs. Quarterly unit net cash costs will vary with fluctuations in sales volumes. Unit net cash costs for 2011 would change by approximately $0.02 per pound for each $50 per ounce change in the average price of gold and for each $2 per pound change in the average price of molybdenum. 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). Molybdenum is also 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. 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 566,000 metric tons of ore per day in the fourth quarter of 2010. In addition, FCX restarted the Morenci mill in March 2010 to process available sulfide material currently being mined. Mill throughput averaged 42,200 metric tons of ore per day during the fourth quarter of 2010 and is expected to increase to approximately 50,000 metric tons per day in 2011. The increased mining and milling activities are expected to enable copper production to increase by approximately 125 million pounds annually. Further increases to Morenci's mining rate are being evaluated. FCX is also evaluating the potential for a new mill at Morenci, which would involve significant investment. 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. FCX is investing approximately $40 million in this project, which is benefiting from the use of existing mining equipment. FCX has initiated the restart of mining and milling activities at the Chino mine in New Mexico, which were suspended in late 2008. 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 annual production is expected to be 100 million pounds in 2012 and 2013 and 200 million pounds in 2014. FCX is completing the construction of 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 second quarter of 2011 at a capital investment of approximately $150 million. Operating plans and potential expansion opportunities in North America continue to be assessed.         Three Months EndedYears EndedDecember 31,December 31,North America Copper Mining Operations2010     20092010     2009   Copper (millions of recoverable pounds) Production 281 296 1,067 1,147 Sales, excluding purchased metal 238 302 1,085 1,187 Average realized price per pound $ 3.93 $ 3.04 $ 3.42 $ 2.38   Molybdenum (millions of recoverable pounds)a Production 7 5 25 25   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.65 $ 1.22 $ 1.50 $ 1.25 By-product credits, primarily molybdenum (0.44 ) (0.24 ) (0.35 ) (0.23 ) Treatment charges   0.12     0.09     0.09     0.09   Unit net cash costsb $ 1.33   $ 1.07   $ 1.24   $ 1.11     a.Sales of molybdenum produced at the North America copper mines 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.” Fourth-quarter 2010 consolidated copper sales in North America of 238 million pounds were 21 percent lower than fourth-quarter 2009 sales, primarily because of the timing of shipments and slightly lower production. For the year 2011, FCX expects sales from North America copper mines to approximate 1.2 billion pounds of copper, compared to 1.1 billion pounds of copper for 2010. The impact of increased mining and milling rates at Morenci and the restart of Miami and Chino are expected to further increase production in future periods. North America unit site production and delivery costs were higher in the fourth quarter of 2010, compared to the fourth quarter of 2009, primarily because of higher input costs and increased mining and milling activities. Fourth-quarter 2010 unit net cash costs of $1.33 per pound benefited from higher molybdenum by-product credits. Based on current operating plans, assuming an average molybdenum price of $15 per pound and using current 2011 sales volume and cost estimates, FCX estimates that average unit net cash costs, including molybdenum credits, for its North America copper mines would approximate $1.39 per pound of copper for the year 2011. Unit net cash costs for 2011 are projected to be higher than 2010 levels, primarily because of higher mining rates and increases in input costs. Unit net cash costs for 2011 would change by approximately $0.05 per pound for each $2 per pound change in the average price of molybdenum. 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. Operating and Development Activities. FCX is completing 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 80 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. 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 the second quarter of 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. During the fourth quarter of 2010, FCX completed its $50 million project to increase throughput at the existing Cerro Verde concentrator from 108,000 metric tons of ore per day to 120,000 metric tons per day. The expanded rates are expected to result in incremental annual production of approximately 30 million pounds of copper. FCX is completing its evaluation of 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 is being reviewed and the related feasibility study is expected to be completed in the second quarter of 2011.         Three Months EndedYears EndedDecember 31,December 31,South America Mining Operations2010     20092010     2009   Copper (millions of recoverable pounds) Production 347 344 1,354 1,390 Sales 340 354 1,335 1,394 Average realized price per pound $ 4.26 $ 3.27 $ 3.68 $ 2.70   Gold (thousands of recoverable ounces) Production 25 23 93 92 Sales 24 22 93 90 Average realized price per ounce $ 1,394 $ 1,089 $ 1,263 $ 982   Molybdenum (millions of recoverable pounds)a Production 2 1 7 2   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.26 $ 1.20 $ 1.21 $ 1.08 Molybdenum and gold credits (0.27 ) (0.13 ) (0.21 ) (0.11 ) Treatment charges   0.17     0.15     0.15     0.15   Unit net cash costsb $ 1.16   $ 1.22   $ 1.15   $ 1.12     a.Sales of molybdenum produced at the South America copper mines 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 340 million pounds in the fourth quarter of 2010, which were slightly lower than fourth-quarter 2009 sales. For the year 2011, FCX expects South America sales of 1.3 billion pounds of copper and 100 thousand ounces of gold, similar to 2010 sales. South America unit site production and delivery costs for the fourth quarter of 2010 were slightly higher than the year-ago period, principally reflecting higher input costs. Higher gold and molybdenum credits in the fourth quarter of 2010 resulted in lower unit net cash costs than the year-ago period. Using current 2011 sales and cost estimates, FCX estimates that average unit net cash costs, including molybdenum and gold credits, for its South America mining operations would approximate $1.25 per pound of copper for the year 2011. Unit net cash costs for 2011 are projected to be higher than the 2010 levels, primarily because of higher input costs. 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. Operating and 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. 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 scheduled for 2016. In aggregate, these underground ore bodies are expected to ramp up to approximately 240,000 metric tons of ore per day following the anticipated depletion of the Grasberg open pit in 2016. The Deep Ore Zone (DOZ) mine, one of the world's largest underground mines, has been expanded to 80,000 metric tons of ore per day; and the high-grade Big Gossan mine, which began producing in the fourth quarter of 2010, is expected to reach full rates of 7,000 metric tons of ore per day by the end of 2012. A feasibility study for the Deep Mill Level Zone, which is expected to start up as the DOZ depletes, has been completed. 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 Grasberg Block Cave and Deep Mill Level Zone ore bodies is in progress. Estimated aggregate capital spending on these projects in 2010 approximated $288 million ($228 million net to PT-FI). Over the next five years, estimated aggregate capital spending is expected to average approximately $600 million ($470 million net to PT-FI) per year on underground development activities.         Three Months EndedYears EndedDecember 31,December 31,Indonesia Mining Operations2010     20092010     2009   Copper (millions of recoverable pounds) Production 309 274 1,222 1,412 Sales 295 269 1,214 1,400 Average realized price per pound $ 4.34 $ 3.31 $ 3.69 $ 2.65   Gold (thousands of recoverable ounces) Production 601 535 1,786 2,568 Sales 565 528 1,765 2,543 Average realized price per ounce $ 1,399 $ 1,116 $ 1,271 $ 994         Three Months EndedYears EndedDecember 31,December 31,2010     20092010     2009Unit net cash costs (credits) per pound of copper: Site production and delivery, excluding adjustments $ 1.55 $ 1.36 $ 1.53 $ 1.05 Gold and silver credits (2.81 ) (2.39 ) (1.92 ) (1.86 ) Treatment charges 0.19 0.24 0.22 0.22 Royalties   0.16     0.12     0.13     0.10   Unit net cash creditsa $ (0.91 ) $ (0.67 ) $ (0.04 ) $ (0.49 )   a.For a reconciliation of unit net cash 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 fourth quarter of 2010, compared to the fourth quarter of 2009, primarily because of higher ore grades. Gold sales in the fourth quarter of 2010 were also higher than in the fourth quarter of 2009. At the Grasberg mine, the sequencing of 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 to be mining in a lower-grade section of the Grasberg pit during 2011. As a result, Indonesia sales of 1.0 billion pounds of copper and 1.3 million ounces of gold for the year 2011 are expected to be lower than the 2010 sales of 1.2 billion pounds of copper and 1.8 million ounces of gold. Ore grades and copper and gold sales for 2011 are expected to be higher in the second half compared to the first half with approximately 53 percent of copper and 57 percent of gold expected in the second half. Indonesia unit site production and delivery costs were higher in the fourth quarter of 2010, compared to the fourth quarter of 2009, primarily because of higher maintenance, support and input costs, partly offset by the impact of higher volumes. The unit net cash credit of $0.91 per pound in the fourth quarter of 2010 improved from the year-ago quarter net credit of $0.67 principally because of higher gold credits. Projected lower copper and gold volumes for 2011 and the effect of higher input costs are expected to result in a significant increase in Grasberg's unit net cash costs compared to 2010 levels. Assuming an average gold price of $1,350 per ounce and using current 2011 sales and cost estimates, FCX expects PT-FI's average unit net cash costs, including gold and silver credits, to approximate $0.60 per pound for the year 2011. Unit net cash costs for 2011 would change by approximately $0.065 per pound for each $50 per ounce change in the average price of gold. Quarterly unit net cash costs will vary significantly with variations in quarterly metal sales volumes. Unit net cash costs are expected to be higher in the first half of 2011 compared to the second half. Africa Mining. FCX has held 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, which is consolidated in FCX's financial statements. 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. 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 expansion opportunities. FCX is planning a second phase of the project, which would include optimizing the current plant and increasing capacity. As part of phase two, a range of near-term expansion options is being considered, which have the potential of adding 100 million to 200 million pounds of copper per annum over the next two to three years. 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, continue to perform above capacity. During the fourth quarter of 2010, mill throughput averaged 11,100 metric tons of ore per day. Tenke Fungurume has procured additional mining equipment, which is enabling additional high-grade material to be mined and processed 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 annual copper production will increase from the initial rate of 250 million pounds to approximately 290 million pounds.         Three Months EndedYears EndedDecember 31,December 31,Africa Mining Operations2010     20092010     2009a   Copper (millions of recoverable pounds) Production 70 64 265 154 Sales 68 64 262 130 Average realized price per poundb $ 4.05 $ 3.12 $ 3.45 $ 2.85   Cobalt (millions of contained pounds) Production 6 N/A c 20 N/A c Sales 7 N/A c 20 N/A c Average realized price per pound $ 10.46 N/A c $ 10.95 N/A c   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.48 N/A c $ 1.40 N/A c Cobalt credits (0.68 )d N/A c (0.58 )d N/A c Royalties   0.09 N/A c   0.08 N/A c Unit net cash costse $ 0.89 N/A c $ 0.90 N/A c   a.Represents 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.” Fourth-quarter 2010 production and sales exceeded the prior-year quarter because of improved operating rates. For the year 2010, copper sales from Tenke Fungurume totaled 262 million pounds, compared to 130 million pounds in 2009. FCX expects Tenke Fungurume sales of approximately 285 million pounds of copper and over 20 million pounds of cobalt for the year 2011, compared to 262 million pounds of copper and 20 million pounds of cobalt for 2010. During the fourth quarter of 2010, Tenke Fungurume's unit site production and delivery costs averaged $1.48 per pound of copper and its unit net cash costs, net of cobalt by-product credits, averaged $0.89 per pound of copper. Assuming an average cobalt price of $14 per pound and using current 2011 sales and cost estimates, average unit net cash costs are expected to approximate $0.85 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 $0.09 per pound of copper. Other Matters. In October 2010, the government of the DRC announced the conclusion of the review of Tenke Fungurume Mining S.A.R.L.'s (TFM) contracts, and confirmed that TFM's existing mining contracts are in good standing and acknowledged the rights and benefits granted under those contracts. In connection with the review, TFM made several commitments that have been reflected in amendments to its mining contracts. After giving effect to the amendments, FCX's effective ownership percentage in the project will be 56.0 percent, compared to a previous ownership interest of 57.75 percent. In December 2010, the addendums to TFM's Amended and Restated Mining Convention and Amended and Restated Shareholders' Agreement were signed by the parties. Presidential decrees approving the agreements and required modifications are expected to be received in the near future. 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 molybdenum from its North and South America copper mines. Operating and Development Activities. Construction activities at the Climax molybdenum mine are continuing, and recent activities include completion of concrete foundations for various equipment installations and commencement of the ball mill shell assembly. FCX plans to advance construction and conduct mine preparation activities during 2011. The timing for start up of mining and milling activities will be dependent on market conditions. 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 $450 million.         Three Months EndedYears EndedDecember 31,December 31,Molybdenum Mining Operations2010     20092010     2009   Molybdenum (millions of recoverable pounds) Productiona 10 6 40 27 Sales, excluding purchased metalb 17 16 67 58 Average realized price per pound $ 16.60 $ 13.45 $ 16.47 $ 12.36   Unit net cash costs per pound of molybdenumc $ 6.36 $ 6.84 d $ 5.90 $ 6.52 d   a.Amounts reflect production at the Henderson molybdenum mine.b.Includes sales of molybdenum produced 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 $1.09 per pound in the 2009 periods that were not included in unit net cash costs in prior years. Consolidated molybdenum sales from mines were slightly higher in the fourth quarter of 2010, compared to the fourth quarter of 2009. Consolidated molybdenum sales of 67 million pounds for the year 2010 were 16 percent higher than the prior year because of improved demand in the chemicals sector. For the year 2011, FCX expects molybdenum sales from its mines to approximate 70 million pounds (includes production of approximately 45 million pounds from the North and South America copper mines), compared to 67 million pounds in 2010 (includes production of 32 million pounds from the North and South America copper mines). The weekly average Metals Week Molybdenum Dealer Oxide price as of January 19, 2011, was $17.13 per pound. Unit net cash costs at the Henderson primary molybdenum mine were lower in the fourth quarter of 2010 compared to the fourth quarter of 2009, primarily because of higher production volumes. Using current 2011 sales estimates, FCX expects average unit net cash costs for its Henderson mine to approximate $7.20 per pound of molybdenum for the year 2011, which are higher than the 2010 level, primarily because of lower volumes. PROVEN AND PROBABLE RESERVES FCX has significant reserves, resources and future development opportunities within its portfolio of assets. Since the merger with Phelps Dodge in 2007, FCX has added 42.9 billion pounds of proven and probable copper reserves, including 20.2 billion pounds during 2010, and 1.72 billion pounds of proven and probable molybdenum reserves, including 0.87 billion pounds in 2010, based on preliminary 2010 reserve estimates. FCX's preliminary estimated consolidated recoverable proven and probable reserves at December 31, 2010, include 120.5 billion pounds of copper, 35.5 million ounces of gold and 3.39 billion pounds of molybdenum. Estimated recoverable reserves at December 31, 2010, were determined using long-term average prices of $2.00 per pound for copper, $750 per ounce for gold and $10.00 per pound for molybdenum, compared to using $1.60 per pound for copper, $550 per ounce for gold and $8.00 per pound for molybdenum for the proven and probable reserve estimates at December 31, 2009. Net additions to recoverable copper reserves totaled approximately 20.2 billion pounds, including additions of 15.7 billion pounds at the North America mines and 4.8 billion pounds in South America. The reserve additions reflect positive exploration results and the effect of higher reserve price assumptions. The increases in reserves replaced approximately 500 percent of FCX's 2010 copper production and 1,200 percent of FCX's 2010 molybdenum production.     Preliminary Recoverable Proven and Probable ReservesaDecember 31, 2010Copper     Gold     Molybdenum (billions of lbs) (millions of ozs) (billions of lbs) North America 42.2 0.4 2.75 South America 37.5 1.4 0.64 Indonesia 32.7 33.7 - Africa 8.1 - - Consolidated basisb 120.5 35.5 3.39   Net equity interestc 98.0 32.0 3.10   a.Preliminary recoverable proven and probable reserves are estimated metal quantities from which FCX expects to be paid after application of estimated metallurgical recovery rates and smelter recovery rates, where applicable.Recoverable reserves are that part of a mineral deposit, which FCX estimates can be economically and legally extracted or produced at the time of the reserve determination.b.Consolidated basis represents estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg mining complex in Indonesia.Excluded from the table above are FCX's estimated recoverable proven and probable reserves for cobalt and silver totaling 0.75 billion pounds of cobalt at Tenke Fungurume and 325.0 million ounces of silver.c.Net equity interest represents estimated consolidated basis metal quantities further reduced for noncontrolling interests.Excluded from the table above are FCX's estimated recoverable proven and probable reserves for cobalt and silver totaling 0.43 billion pounds of cobalt at Tenke Fungurume and 270.0 million ounces of silver.     Preliminary Consolidated Reserves RollforwardCopper     Gold     Molybdenum (billions of lbs) (millions of ozs) (billions of lbs) Reserves at December 31, 2009 104.2 37.2 2.59 Net additions/revisions 20.2 0.2 0.87 Production (3.9 ) (1.9 ) (0.07 ) Reserves at December 31, 2010 120.5   35.5   3.39     At December 31, 2010, in addition to the preliminary estimated proven and probable reserves, FCX identified preliminary estimated mineralized material (assessed using a long-term average price of $2.20 per pound for copper) with incremental contained copper of 110 billion pounds. FCX continues to pursue aggressively opportunities to convert this mineralized material into reserves, future production volumes and cash flow. 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. Favorable exploration results indicate opportunities for significant future potential reserve additions in the Americas and in the Tenke Fungurume district. The drilling data in North America continue to indicate the potential for expanded sulfide production. Exploration spending in 2011 is being increased significantly to an estimated $200 million, compared to $113 million in 2010. 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 year 2010, 52 percent of FCX's mined copper was sold in concentrate, 26 percent as cathode and 22 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 September 30, 2010, 390 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 $3.63 per pound. Higher prices during the fourth quarter of 2010 resulted in favorable adjustments to these provisionally priced copper sales and increased fourth-quarter 2010 consolidated revenues by $186 million ($79 million to net income attributable to common stock or $0.16 per share). Favorable adjustments to the September 30, 2009, provisionally priced copper sales increased fourth-quarter 2009 consolidated revenues by $140 million ($63 million to net income attributable to common stock or $0.13 per share). Unfavorable adjustments to the December 31, 2009, provisionally priced copper sales decreased 2010 consolidated revenues by $24 million ($10 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 2009 consolidated revenues by $132 million ($61 million to net income attributable to common stock or $0.13 per share). LME copper prices averaged $3.92 per pound during the fourth quarter of 2010, compared to FCX's recorded average price of $4.18 per pound. At December 31, 2010, FCX had copper sales of 417 million pounds of copper at its copper mining operations (net of intercompany sales and noncontrolling interests) priced at an average of $4.36 per pound, subject to final pricing over the next several months. Each $0.05 change from the December 31, 2010, average price for provisionally priced copper sales would have an approximate $13 million effect on FCX's 2011 net income attributable to common stock. The LME closing settlement price for copper on January 19, 2011, was $4.44 per pound. CASH FLOWS, CASH, DEBT and EQUITY Operating cash flows totaled $2.1 billion for the fourth quarter of 2010, net of $305 million of working capital requirements, and $6.3 billion for the year 2010, net of $834 million of working capital requirements. Cash used in investing activities totaled $1.0 billion for the fourth quarter of 2010 and $1.9 billion for the year 2010, which included capital expenditures of $535 million for the fourth quarter and $1.4 billion for the year and the purchase of $500 million of MMR's 5¾% Convertible Perpetual Preferred Stock. At December 31, 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 $3.1 billion as shown below (in billions):     December 31,2010 Cash at domestic companies $ 1.9 a Cash at international operations   1.8 Total consolidated cash 3.7 Less: Noncontrolling interests' share   (0.4 ) Cash, net of noncontrolling interests' share 3.3 Withholding taxes and other   (0.2 ) Net cash$3.1   a.Includes cash at FCX's parent and North America mining operations. At December 31, 2010, FCX had $4.8 billion in debt, with no borrowings and $43 million of letters of credit issued under its revolving credit facilities resulting in total availability of approximately $1.5 billion. Since January 1, 2009, FCX 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 $167 million based on current interest rates. FCX's debt maturities through 2013 are indicated in the table below (in millions).           2011 $ 95 2012 1 2013         1 Total 2011 – 2013 $       97   FCX has $1.1 billion in debt, which is redeemable prior to April 2011, and $3.0 billion in debt, which is redeemable prior to April 2012, at make-whole redemption prices and afterwards at stated redemption prices. OUTLOOK Projected consolidated sales volumes for 2011 approximate 3.85 billion pounds of copper, 1.4 million ounces of gold and 70 million pounds of molybdenum, including 840 million pounds of copper, 325 thousand ounces of gold and 17 million pounds of molybdenum in the first quarter of 2011. Using 2011 sales volume and cost estimates and assuming average prices of $4.25 per pound of copper, $1,350 per ounce of gold and $15 per pound of molybdenum, FCX's consolidated operating cash flows are estimated to approximate $8 billion in 2011. The impact of price changes on FCX's 2011 operating cash flows would approximate $150 million for each $0.05 per pound change in the average price of copper, $55 million for each $50 per ounce change in the average price of gold and $80 million for each $2 per pound change in the average price of molybdenum. FCX's capital expenditures are currently estimated to approximate $2.5 billion for 2011. Capital expenditures for major projects in 2011 are expected to approximate $1.3 billion, which primarily includes underground development activities at Grasberg, construction activities at the Climax molybdenum mine and completion of the initial phase of the sulfide ore project at El Abra. In addition, FCX is considering additional investments at several of its sites. 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 investing in projects with attractive rates of return and returning cash to shareholders through common stock dividends and share purchases. In October 2010, FCX's Board of Directors authorized an increase in the annual cash dividend on its common stock from $1.20 per share to $2.00 per share, which would be paid as regular quarterly cash dividends of $0.50 per share if declared by the Board. In December 2010, FCX's Board of Directors declared a supplemental common stock dividend of $1.00 per share that was paid on December 30, 2010. The supplemental dividend totaling $472 million was in addition to FCX's regular quarterly common stock dividend. In December 2010, FCX's Board of Directors also declared a two-for-one split of its common stock to be effected on February 1, 2011. Shareholders will receive one additional share of common stock for each share of common stock held. The additional shares will be issued on February 1, 2011, and will increase the number of shares outstanding to approximately 945 million from approximately 472 million. The regular quarterly cash dividend of $0.50 per share is also payable on February 1, 2011, on pre-split shares. FCX will begin trading on the NYSE at its post-split price on February 2, 2011. After taking the stock split into account, the annual dividend rate is expected to be $1.00 per share ($0.25 per share quarterly). 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. Net income per share and weighted-average common shares outstanding, giving retroactive effect to the stock split, for the periods ended December 31 were as follows:         Three Months EndedYears EndedDecember 31,December 31,   2010     20092010     2009Pre-stock split (as reported) Basic net income per share attributable to FCX common shareholders $ 3.29 $ 2.26 $ 9.34 $ 6.10 Basic weighted-average common shares outstanding 471 430 458 414   Diluted net income per share attributable to FCX common shareholders $ 3.25 $ 2.15 $ 9.14 $ 5.86 Diluted weighted-average common shares outstanding 477 473 474 469     Post-stock split Basic net income per share attributable to FCX common shareholders $ 1.64 $ 1.13 $ 4.67 $ 3.05 Basic weighted-average common shares outstanding 943 860 915 829   Diluted net income per share attributable to FCX common shareholders $ 1.63 $ 1.08 $ 4.57 $ 2.93 Diluted weighted-average common shares outstanding 953 946 949 938   WEBCAST INFORMATION A conference call with securities analysts to discuss FCX's fourth-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, February 18, 2011. 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 commodity prices, projected capital expenditures, projected exploration efforts and results, projected mine production and development plans, liquidity, other financial commitments and tax rates, 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 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, documentation of the outcome 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. Investors are cautioned that many of the assumptions on which our forward-looking statements are based are likely to change after our forward-looking statements are made, including for example commodity prices, which we cannot control, and production volumes and costs, some aspects of which we may or may not be able to control. Further, we may make changes to our business plans that could or will affect our results. We caution investors that we do not intend to update our forward-looking statements notwithstanding any changes in our assumptions, changes in our business plans, our actual experience, or other changes, and we undertake no obligation to update any forward-looking statements more frequently than quarterly.This press release also contains certain financial measures such as unit net cash costs (credits) 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.”             FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA         Three Months Ended December 31, Production Sales COPPER (millions of recoverable pounds) 2010 2009 2010 2009 MINED COPPER (FCX's net interest in %) North America Morenci (85%) 116 a 105 a 98 a 110 a Bagdad (100%) 55 56 45 59 Safford (100%) 35 53 30 51 Sierrita (100%) 36 45 32 45 Tyrone (100%) 21 22 18 22 Chino (100%) 9 9 8 10 Miami (100%) 8 4 6 4 Other (100%) 1 2   1   1 Total North America 281 296   238   302   South America Cerro Verde (53.56%) 172 165 169 169 Candelaria/Ojos del Salado (80%) 99 88 94 91 El Abra (51%) 76 91   77   94 Total South America 347 344   340   354   Indonesia Grasberg (90.64%) 309 b 274 b   295 b   269 b   Africa Tenke Fungurume (57.75%) 70 64   68   64   Consolidated1,007978   941   989 Less noncontrolling interests 195 191   192   196 Net812787   749   793   Consolidated sales from mines 941 989 Purchased copper   39   28 Total consolidated sales   980   1,017   Average realized price per pound $ 4.18 $ 3.20   GOLD (thousands of recoverable ounces) MINED GOLD (FCX's net interest in %) North America (100%) 3 1 1 1 South America (80%) 25 23 24 22 Indonesia (90.64%) 601 b 535 b   565 b   528 bConsolidated629559   590   551 Less noncontrolling interests 62 54   58   53 Net567505   532   498   Consolidated sales from mines 590 551 Purchased gold   -   1 Total consolidated sales   590   552   Average realized price per ounce $ 1,398 $ 1,115   MOLYBDENUM (millions of recoverable pounds) MINED MOLYBDENUM (FCX's net interest in %) Henderson (100%) 10 6 N/A N/A North America (100%) 7 5 N/A N/A Cerro Verde (53.56%) 2 1   N/A   N/A Consolidated1912   17   16 Less noncontrolling interests 1 -   1   - Net1812   16   16   Consolidated sales from mines 17 16 Purchased molybdenum   -   2 Total consolidated sales   17   18   Average realized price per pound $ 16.60 $ 13.45   COBALT (millions of contained pounds) MINED COBALT (FCX's net interest in %) Consolidated – Tenke Fungurume (57.75%) 6 N/A c   7 N/A c Less noncontrolling interests 2 N/A c   3 N/A cNet4 N/A c   4 N/A c   Total consolidated sales   7 N/A c   Average realized price per pound $ 10.46 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 fourth-quarter 2009 as start-up activities were still under way.               FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA (continued)     Years Ended December 31, Production Sales COPPER (millions of recoverable pounds) 2010   2009 2010   2009 MINED COPPER (FCX's net interest in %) North America Morenci (85%) 437 a 428 a 434 a 459 a Bagdad (100%) 203 225 206 225 Safford (100%) 143 184 155 176 Sierrita (100%) 147 170 152 172 Tyrone (100%) 82 86 83 85 Chino (100%) 34 36 35 52 Miami (100%) 18 16 17 16 Other (100%) 3 2   3   2 Total North America 1,067 1,147   1,085   1,187   South America Cerro Verde (53.56%) 668 662 654 667 Candelaria/Ojos del Salado (80%) 366 370 366 366 El Abra (51%) 320 358   315   361 Total South America 1,354 1,390   1,335   1,394   Indonesia Grasberg (90.64%) 1,222 b 1,412 b   1,214 b   1,400 b   Africa Tenke Fungurume (57.75%) 265 154 c   262   130 c   Consolidated3,9084,103   3,896   4,111 Less noncontrolling interests 766 754   756   746 Net3,1423,349   3,140   3,365   Consolidated sales from mines 3,896 4,111 Purchased copper   182   166 Total consolidated sales   4,078   4,277   Average realized price per pound $ 3.59 $ 2.60   GOLD (thousands of recoverable ounces) MINED GOLD (FCX's net interest in %) North America (100%) 7 4 5 6 South America (80%) 93 92 93 90 Indonesia (90.64%) 1,786 b 2,568 b   1,765 b   2,543 bConsolidated1,8862,664   1,863   2,639 Less noncontrolling interests 186 258   184   256 Net1,7002,406   1,679   2,383   Consolidated sales from mines 1,863 2,639 Purchased gold   1   1 Total consolidated sales   1,864   2,640   Average realized price per ounce $ 1,271 $ 993   MOLYBDENUM (millions of recoverable pounds) MINED MOLYBDENUM (FCX's net interest in %) Henderson (100%) 40 27 N/A N/A North America (100%) 25 25 N/A N/A Cerro Verde (53.56%) 7 2   N/A   N/A Consolidated7254   67   58 Less noncontrolling interests 3 1   3   1 Net6953   64   57   Consolidated sales from mines 67 58 Purchased molybdenum   2   6 Total consolidated sales   69   64   Average realized price per pound $ 16.47 $ 12.36   COBALT (millions of contained pounds) MINED COBALT (FCX's net interest in %) Consolidated – Tenke Fungurume (57.75%) 20 N/A d   20 N/A d Less noncontrolling interests 8 N/A d   8 N/A dNet12 N/A d   12 N/A d   Total consolidated sales   20 N/A d   Average realized price per pound $ 10.95 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 results since March 2009. d. Information has not been included for 2009 as start-up activities were still under way.               FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA (continued)         Three Months Ended Years Ended December 31, December 31, 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) 692,700 616,700 648,800 589,400 Average copper ore grade (percent) 0.23 0.27 0.24 0.29 Copper production (millions of recoverable pounds) 183 220 746 859   Mill Operations Ore milled (metric tons per day) 208,500 162,200 189,200 169,900 Average ore grades (percent): Copper 0.35 0.34 0.32 0.33 Molybdenum 0.03 0.02 0.03 0.02 Copper recovery rate (percent) 82.6 86.8 83.0 86.0 Production (millions of recoverable pounds): Copper 118 94 398 364 Molybdenum 7 5 25 25   100% South America Mining Operating DataSX/EW Operations Leach ore placed in stockpiles (metric tons per day) 289,800 270,500 268,800 258,200 Average copper ore grade (percent) 0.38 0.44 0.41 0.45 Copper production (millions of recoverable pounds) 119 145 504 565   Mill Operations Ore milled (metric tons per day) 193,800 182,200 188,800 181,300 Average ore grades (percent): Copper 0.67 0.64 0.65 0.66 Molybdenum 0.02 0.02 0.02 0.02 Copper recovery rate (percent) 90.2 87.3 90.0 88.9 Production (millions of recoverable pounds): Copper 228 199 850 825 Molybdenum 2 1 7 2   100% Indonesia Mining Operating Data Ore milled (metric tons per day) 234,300 236,800 230,200 238,300 Average ore grades: Copper (percent) 0.88 0.82 0.85 0.98 Gold (grams per metric ton) 1.17 1.23 0.90 1.30 Recovery rates (percent): Copper 88.9 90.6 88.9 90.6 Gold 84.1 84.2 81.7 83.7 Production (recoverable): Copper (millions of pounds) 355 343 1,330 1,641 Gold (thousands of ounces) 666 717 1,964 2,984   100% Africa Mining Operating Data Ore milled (metric tons per day) 11,100 7,800 10,300 7,300 a Average ore grades (percent): Copper 3.40 4.17 3.51 3.69 a Cobalt 0.40 N/A b 0.40 N/A b Copper recovery rate (percent) 92.6 94.7 91.4 92.1 a Production (millions of pounds) Copper (recoverable) 70 64 265 154 a Cobalt (contained) 6 N/A b 20 N/A b   100% North America Primary Molybdenum Mine Operating DataHenderson Molybdenum Mine Operations Ore milled (metric tons per day) 22,800 14,900 22,900 14,900 Average molybdenum ore grade (percent) 0.24 0.24 0.25 0.25 Molybdenum production (millions of recoverable pounds) 10 6 40 27   a. Represents 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 Years Ended December 31, December 31, 2010 2009 2010 2009 (In Millions, Except Per Share Amounts) Revenues $ 5,603 a $ 4,610 a $ 18,982 a $ 15,040 a Cost of sales: Production and delivery 2,115 1,930 8,354 7,016 Depreciation, depletion and amortization 248 274 1,036 1,014 Lower of cost or market inventory adjustments   -   -   -   19 b Total cost of sales 2,363 2,204 9,390 8,049 Selling, general and administrative expenses 104 96 381 321 Exploration and research expenses 39 17 143 90 Restructuring and other charges   -   54 c   -   77 c Total costs and expenses   2,506   2,371   9,914   8,537 Operating income 3,097 2,239 9,068 6,503 Interest expense, net (92 )d (135 )d (462 )d (586 )d Losses on early extinguishment of debt (4 ) (17 ) (81 ) (48 ) Other expense, net   (15 )   (29 )   (13 )   (53 ) Income before income taxes and equity in affiliated companies' net earnings 2,986 2,058 8,512 5,816 Provision for income taxes (1,027 ) (750 ) (2,983 ) (2,307 ) Equity in affiliated companies' net earnings   5   4   15   25 Net income 1,964 1,312 5,544 3,534 Net income attributable to noncontrolling interests (415 ) (293 ) (1,208 ) (785 ) Preferred dividends   - e   (48 )   (63 )e   (222 ) Net income attributable to FCX common stockholders $ 1,549 $ 971 $ 4,273 $ 2,527   Net income per share attributable to FCX common stockholders: f Basic $ 3.29 $ 2.26 $ 9.34 $ 6.10 Diluted $ 3.25 $ 2.15 $ 9.14 $ 5.86   Weighted-average common shares outstanding: f Basic   471   430   458   414 Diluted   477   473   474   469   Dividends declared per share of common stock f $ 1.50 $ 0.15 $ 2.25 $ 0.15   a.  Includes positive (negative) adjustments to provisionally priced copper sales recognized in the prior periods totaling $186 million in fourth-quarter 2010, $140 million in fourth-quarter 2009, $(24) million in the year 2010 and $132 million in the year 2009. b.  Relates to molybdenum inventories. c.  Includes a charge of $54 million in the 2009 periods for a loss contingency, which subsequently resulted in partial settlement of a lawsuit. d.  Consolidated interest expense (before capitalization) totaled $119 million in fourth-quarter 2010, $144 million in fourth-quarter 2009, $528 million in the year 2010 and $664 million in the year 2009.  Lower interest expense in the 2010 periods primarily reflects the impact of debt repayments during 2009 and 2010. e.  During the second quarter of 2010, FCX's 6¾% Mandatory Convertible Preferred Stock converted into 39 million shares of FCX common stock. f.  Does not reflect the two-for-one stock split to be effected on February 1, 2011.               FREEPORT-McMoRan COPPER & GOLD INC.CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)     December 31, December 31, 2010 2009 (In Millions) ASSETS Current assets: Cash and cash equivalents $ 3,738 $ 2,656 Trade accounts receivable 2,132 1,517 Income tax receivables 123 139 Other accounts receivable 170 147 Inventories: Product 1,409 1,110 Materials and supplies, net 1,169 1,093 Mill and leach stockpiles 856 667 Other current assets   254 104 Total current assets 9,851 7,433 Property, plant, equipment and development costs, net 16,785 16,195 Long-term mill and leach stockpiles 1,425 1,321 Intangible assets, net 328 347 Other assets   997   700 Total assets $ 29,386 $ 25,996   LIABILITIES AND EQUITY Current liabilities: Accounts payable and accrued liabilities $ 2,441 $ 2,038 Accrued income taxes 648 474 Dividends payable 240 99 Current portion of reclamation and environmental obligations 207 214 Rio Tinto share of joint venture cash flows 132 161 Current portion of debt   95   16 Total current liabilities 3,763 3,002 Long-term debt, less current portion 4,660 a 6,330 Deferred income taxes 2,873 2,503 Reclamation and environmental obligations, less current portion 2,071 1,981 Other liabilities   1,459   1,423 Total liabilities 14,826 15,239 Equity: FCX stockholders' equity: 6¾% Mandatory Convertible Preferred Stock - b 2,875 Common stock c 59 b 55 Capital in excess of par value c 18,799 b 15,680 Accumulated deficit (2,590 ) (5,805 ) Accumulated other comprehensive loss (323 ) (273 ) Common stock held in treasury   (3,441 )   (3,413 ) Total FCX stockholders' equity 12,504 9,119 Noncontrolling interests   2,056   1,638 Total equity   14,560   10,757 Total liabilities and equity $ 29,386 $ 25,996   a.  During 2010, FCX purchased in the open market $565 million of its Senior Notes for $621 million.  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. c.  Does not reflect the two-for-one stock split to be effected on February 1, 2011.               FREEPORT-McMoRan COPPER & GOLD INC.CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)   Years Ended December 31, 2010   2009 (In Millions) Cash flow from operating activities: Net income $ 5,544 $ 3,534 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 1,036 1,014 Lower of cost or market inventory adjustments - 19 Stock-based compensation 121 102 Charges for reclamation and environmental obligations, including accretion 167 191 Payments of reclamation and environmental obligations (196 ) (104 ) Losses on early extinguishment of debt 81 48 Deferred income taxes 286 135 Increase in long-term mill and leach stockpiles (103 ) (96 ) Changes in other assets and liabilities 79 201 Amortization of intangible assets/liabilities and other, net 92 123 (Increases) decreases in working capital: Accounts receivable (680 ) (962 ) Inventories (593 ) (159 ) Other current assets (24 ) 87 Accounts payable and accrued liabilities 331 (438 ) Accrued income and other taxes   132   702 Net cash provided by operating activities   6,273   4,397   Cash flow from investing activities: Capital expenditures: North America copper mines (233 ) (345 ) South America (470 ) (164 ) Indonesia (436 ) (266 ) Africa (100 ) (659 ) Other (173 ) (153 ) Investment in McMoRan Exploration Co. (500 ) - Proceeds from sales of assets 20 25 Other, net   23   (39 ) Net cash used in investing activities   (1,869 )   (1,601 )   Cash flow from financing activities: Net proceeds from sale of common stock - 740 Proceeds from debt 70 330 Repayments of debt (1,724 ) (1,380 ) Cash dividends and distributions paid: Common stock (885 ) - Preferred stock (95 ) (229 ) Noncontrolling interests (816 ) (535 ) Contributions from noncontrolling interests 28 57 Net proceeds from stock-based awards 81 6 Excess tax benefit from stock-based awards 19 3 Other, net   -   (4 ) Net cash used in financing activities   (3,322 )   (1,012 )   Net increase in cash and cash equivalents 1,082 1,784 Cash and cash equivalents at beginning of year   2,656   872 Cash and cash equivalents at end of year $ 3,738 $ 2,656 Freeport-McMoRan Copper & Gold Inc.Financial Contacts:Kathleen L. Quirk, 602-366-8016orDavid P. Joint, 504-582-4203orMedia Contact:Eric E. Kinneberg, 602-366-7994