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Press release from Business Wire

Freeport-McMoRan Copper & Gold Inc. Reports Second-Quarter and Six-Month 2011 Results

Thursday, July 21, 2011

Freeport-McMoRan Copper & Gold Inc. Reports Second-Quarter and Six-Month 2011 Results08:00 EDT Thursday, July 21, 2011 PHOENIX (Business Wire) -- Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX): ▪ Net income attributable to common stock for second-quarter 2011 was $1.4 billion, $1.43 per share, compared with net income of $649 million, $0.70 per share, for second-quarter 2010. Net income attributable to common stock for the first six months of 2011 was $2.9 billion, $3.00 per share, compared with $1.5 billion, $1.70 per share, for the first six months of 2010. ▪ Consolidated sales from mines for second-quarter 2011 totaled 1.0 billion pounds of copper, 356 thousand ounces of gold and 21 million pounds of molybdenum, compared with 914 million pounds of copper, 298 thousand ounces of gold and 16 million pounds of molybdenum for second-quarter 2010. ▪ Consolidated sales from mines for the year 2011 are expected to approximate 3.9 billion pounds of copper, 1.6 million ounces of gold and 77 million pounds of molybdenum, including 940 million pounds of copper, 415 thousand ounces of gold and 18 million pounds of molybdenum for third-quarter 2011. ▪ Consolidated unit net cash costs (net of by-product credits) averaged $0.93 per pound of copper for second-quarter 2011, compared with $0.97 per pound for second-quarter 2010. Based on current 2011 sales volume and cost estimates and assuming average prices of $1,500 per ounce for gold and $15 per pound for molybdenum for the second half of 2011, consolidated unit net cash costs (net of by-product credits) are estimated to average $1.01 per pound of copper for the year 2011. ▪ Operating cash flows totaled $1.7 billion for second-quarter 2011 and $4.0 billion for the first six months of 2011, compared with $1.1 billion for second-quarter 2010 and $2.9 billion for the first six months of 2010. Based on current 2011 sales volume and cost estimates and assuming average prices of $4.25 per pound for copper, $1,500 per ounce for gold and $15 per pound for molybdenum for the second half of 2011, operating cash flows are estimated to exceed $8 billion for the year 2011. ▪ Capital expenditures totaled $527 million for second-quarter 2011 and $1.0 billion for the first six months of 2011, compared with $296 million for second-quarter 2010 and $527 million for the first six months of 2010. Capital expenditures are expected to approximate $2.6 billion for the year 2011, including $1.4 billion for major projects and $1.2 billion for sustaining capital. A number of studies are ongoing, which may result in increased capital spending programs. ▪ At June 30, 2011, total debt approximated $3.5 billion and consolidated cash approximated $4.4 billion. During second-quarter 2011, FCX repaid $1.2 billion in debt, including the April 2011 redemption of $1.1 billion in 8.25% Senior Notes. Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported second-quarter 2011 net income attributable to common stock of $1.4 billion, $1.43 per share, compared with $649 million, $0.70 per share, for second-quarter 2010. For the first six months of 2011, FCX reported net income attributable to common stock of $2.9 billion, $3.00 per share, compared with $1.5 billion, $1.70 per share, for the first six months of 2010. James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said, "Our second-quarter results reflect strong operating performance and favorable pricing for our products.FCX's global team continues to execute our operating plans in an impressive fashion, producing significant quantities of copper, gold and molybdenum to meet growing global demand.Our large resource position and successful exploration program provide significant opportunities for growth.We are advancing projects expeditiously to increase our production while generating attractive returns for shareholders.Our strong financial position and cash flow generation provide the financial resources required for investment as well as substantial cash returns for shareholders."             SUMMARY FINANCIALAND OPERATING DATA   Three MonthsSix MonthsEnded June 30,   Ended June 30,   2011   2010   2011   2010   Financial Data (in millions, except per share amounts) Revenuesa $ 5,814 $ 3,864 $ 11,523 $ 8,227 Operating incomeb $ 2,757 $ 1,424 $ 5,693 $ 3,472 Net income attributable to common stock $ 1,368 c $ 649 c $ 2,867 c $ 1,546 c Diluted net income per share of common stock $ 1.43 c $ 0.70 c,d $ 3.00 c $ 1.70 c,d Diluted weighted-average common shares outstanding 956 947 d 956 947 d Operating cash flows $ 1,680 e $ 1,064 e $ 4,039 e $ 2,882 e Capital expenditures $ 527 $ 296 $ 1,032 $ 527   Mining Operating DataCopper (millions of recoverable pounds) Production 967 930 1,917 1,859 Sales, excluding purchases 1,002 914 1,928 1,874 Average realized price per pound $ 4.22 $ 3.06 $ 4.24 $ 3.13 Site production and delivery costs per poundf $ 1.63 $ 1.41 $ 1.62 $ 1.38 Unit net cash costs per poundf $ 0.93 $ 0.97 $ 0.87 $ 0.89 Gold (thousands of recoverable ounces) Production 351 316 817 765 Sales 356 298 836 776 Average realized price per ounce $ 1,509 $ 1,234 $ 1,466 $ 1,171 Molybdenum (millions of recoverable pounds) Production 22 17 42 34 Sales, excluding purchases 21 16 41 33 Average realized price per pound $ 18.16 $ 18.18 $ 18.13 $ 16.62   a.   Includes the impact of adjustments to provisionally priced concentrate and cathode sales recognized in prior periods (refer to discussion on page 9). b. FCX defers recognizing profits on intercompany sales until final sales to third parties occur. Refer to the "Consolidated Statements of Income" on page IV for a summary of net impacts from changes in these deferrals. c. Includes net losses on early extinguishment of debt totaling $54 million ($0.06 per share) in second-quarter 2011, $42 million ($0.05 per share) in second-quarter 2010, $60 million ($0.06 per share) for the first six months of 2011 and $65 million ($0.07 per share) for the first six months of 2010. d. Amounts have been adjusted to reflect the February 1, 2011, two-for-one stock split. e. Includes working capital (uses) sources of $(496) million in second-quarter 2011, $(173) million in second-quarter 2010, $(382) million for the first six months of 2011 and $107 million for the first six months of 2010. f. Reflects per pound weighted-average site production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, excluding net noncash and other costs. For reconciliations of per pound unit costs by operating division 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 website, “www.fcx.com.”   OPERATIONSConsolidated. Second-quarter 2011 consolidated copper sales of 1.0 billion pounds were higher than the April 2011 estimate of 965 million pounds primarily because of the timing of shipments, principally in North America. Second-quarter 2011 consolidated copper sales were also higher than second-quarter 2010 sales of 914 million pounds reflecting increased production in North America and the timing of shipments in South America and Africa. Second-quarter 2011 consolidated gold sales of 356 thousand ounces were slightly lower than the April 2011 estimate of 365 thousand ounces but higher than second-quarter 2010 sales of 298 thousand ounces. These variances primarily reflect timing of mine sequencing at Grasberg. Second-quarter 2011 consolidated molybdenum sales of 21 million pounds were higher than the April 2011 estimate of 17 million pounds and second-quarter 2010 sales of 16 million pounds primarily reflecting improved demand. Consolidated sales from mines for the year 2011 are expected to approximate 3.9 billion pounds of copper, 1.6 million ounces of gold and 77 million pounds of molybdenum, including 940 million pounds of copper, 415 thousand ounces of gold and 18 million pounds of molybdenum in third-quarter 2011. Consolidated average unit net cash costs (net of by-product credits) of $0.93 per pound of copper in second-quarter 2011 were lower than unit net cash costs of $0.97 per pound in second-quarter 2010 primarily because of higher gold and molybdenum credits in second-quarter 2011, partly offset by higher site production and delivery costs as a result of increased mining and milling activities and higher input costs, including materials, energy and currency exchange rate impacts. Assuming average prices of $1,500 per ounce of gold and $15 per pound of molybdenum for the second half of 2011 and achievement of current 2011 sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) for FCX's copper mining operations are expected to average approximately $1.01 per pound of copper for the year 2011. The impact of price changes on consolidated unit net cash costs would approximate $0.01 per pound for each $50 per ounce change in the average price of gold during the second half of 2011 and $0.01 per pound for each $2 per pound change in the average price of molybdenum during the second half of 2011. Quarterly unit net cash costs vary with fluctuations in sales volumes. North America Copper Mines. FCX operates seven open-pit copper mines in North America - Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Tyrone and Chino in New Mexico. 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. In addition to copper, the Morenci, Bagdad and Sierrita mines also produce molybdenum concentrates. Operating and Development Activities. At Morenci, FCX completed its project to ramp up mining rates to 635,000 metric tons of ore per day and milling rates to approximately 50,000 metric tons per day, resulting in an increase of 125 million pounds of copper per year. FCX is advancing a feasibility study to expand mining and milling capacity at Morenci to process additional sulfide ores identified through positive exploratory drilling over the last few years. This project, which would require significant investment, would increase milling rates to approximately 115,000 metric tons of ore per day and target incremental annual copper production of approximately 225 million pounds within three years, following completion of the feasibility study, expected by year-end 2011. The ramp up of mining activities at the Miami mine continues. FCX expects production at Miami to ramp up to approximately 100 million pounds of copper per year by 2012. During second-quarter 2011, FCX successfully restarted mining and milling activities at the Chino mine. Planned mining and milling rates are expected to be achieved by the end of 2013. Incremental annual copper production is expected to be 100 million pounds in 2012 and 2013 and 200 million pounds in 2014. Costs for the project associated with equipment and mill refurbishment are expected to approximate $150 million. Operating Data. Following is summary consolidated operating data for the North America copper mines for the second quarters and first six months of 2011 and 2010:         Three MonthsSix MonthsEnded June 30,Ended June 30,   2011     20102011     2010Copper (millions of recoverable pounds) Production 313 263 595 527 Sales, excluding purchases 331 289 607 580 Average realized price per pound $ 4.19 $ 3.21 $ 4.28 $ 3.27   Molybdenum (millions of recoverable pounds) Productiona 10 5 17 11   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.78 $ 1.46 $ 1.76 $ 1.39 By-product credits, primarily molybdenum (0.52 ) (0.38 ) (0.50 ) (0.32 ) Treatment charges 0.10   0.09   0.10   0.08   Unit net cash costsb $ 1.36   $ 1.17   $ 1.36   $ 1.15     a.   Reflects molybdenum production from certain of the North America copper mines. Sales of molybdenum are reflected in the Molybdenum division (refer to page 8). 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 website, “www.fcx.com.”   Consolidated copper sales volumes from North America of 331 million pounds in second-quarter 2011 were higher than second-quarter 2010 sales of 289 million pounds primarily reflecting higher production at the Morenci and Miami mines. FCX expects sales from the North America copper mines to approximate 1.2 billion pounds of copper for the year 2011, compared with 1.1 billion pounds of copper in 2010. The restart of the Miami and Chino mines and potential expansion of the Morenci mine are expected to further increase production in future periods. As anticipated, average unit net cash costs (net of by-product credits) for the North America copper mines of $1.36 per pound of copper in second-quarter 2011 were higher than unit net cash costs of $1.17 per pound in second-quarter 2010, primarily reflecting increased mining and milling activities and higher input costs. Higher molybdenum credits partly offset the increased site production and delivery costs. FCX estimates that average unit net cash costs (net of by-product credits) for the North America copper mines would approximate $1.42 per pound of copper for the year 2011, based on current sales volume and cost estimates and assuming an average molybdenum price of $15 per pound for the second half of 2011. North America's average unit net cash costs for 2011 would change by approximately $0.025 per pound for each $2 per pound change in the average price of molybdenum during the second half of 2011. South America Mining. FCX operates four copper mines in South America - Cerro Verde in Peru and El Abra, Candelaria and Ojos del Salado in Chile. FCX owns a 53.56 percent interest in Cerro Verde, a 51 percent interest in El Abra, and 80 percent of the Candelaria and Ojos del Salado mining complexes. All operations in South America are consolidated in FCX's financial statements. South America mining includes open-pit and underground mining. In addition to copper, the Cerro Verde mine produces molybdenum concentrates, and the Candelaria and Ojos del Salado mines produce gold and silver. Operating and Development Activities. During first-quarter 2011, FCX commenced production from El Abra's newly commissioned stacking and leaching facilities to transition from oxide to sulfide ores. Production from the sulfide ore, which is projected to reach design levels in the second half of 2011, is expected to approximate 300 million pounds of copper per year, replacing the currently depleting oxide copper production. The aggregate 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. FCX is also engaged in pre-feasibility studies for a potential large-scale milling operation at El Abra to process additional sulfide material and to achieve higher recoveries. At Cerro Verde, the feasibility study for a large-scale concentrator expansion was completed in second-quarter 2011. The $3.5 billion project would expand the concentrator facilities from 120,000 metric tons of ore per day to 360,000 metric tons of ore per day and provide incremental annual production of approximately 600 million pounds of copper beginning in 2016. FCX expects to file an environmental impact assessment in the second half of 2011. Operating Data. Following is summary consolidated operating data for the South America mining operations for the second quarters and first six months of 2011 and 2010:         Three MonthsSix MonthsEnded June 30,Ended June 30,   2011     20102011     2010Copper (millions of recoverable pounds) Production 327 329 644 651 Sales 331 311 643 618 Average realized price per pound $ 4.24 $ 3.02 $ 4.24 $ 3.07   Gold (thousands of recoverable ounces) Production 24 20 48 39 Sales 25 20 49 39 Average realized price per ounce $ 1,515 $ 1,221 $ 1,467 $ 1,175   Molybdenum (millions of recoverable pounds) Productiona 3 1 6 3   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.26 $ 1.22 $ 1.28 $ 1.21 By-product credits (0.37 ) (0.19 ) (0.37 ) (0.18 ) Treatment charges 0.19   0.11   0.19   0.13   Unit net cash costsb $ 1.08   $ 1.14   $ 1.10   $ 1.16     a.   Reflects molybdenum production from Cerro Verde. Sales of molybdenum are reflected in the Molybdenum division (refer to page 8). 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 website, “www.fcx.com.”   Copper sales from South America mining of 331 million pounds in second-quarter 2011 were higher than second-quarter 2010 sales of 311 million pounds primarily reflecting higher ore grades at Candelaria and timing of shipments at Cerro Verde, partly offset by lower mining rates at El Abra as it transitions from oxide to sulfide ores. FCX expects South America's sales to approximate of 1.3 billion pounds of copper and 100 thousand ounces of gold for the year 2011, similar to 2010 sales of 1.3 billion pounds of copper and 93 thousand ounces of gold. Average unit net cash costs (net of by-product credits) for South America of $1.08 per pound of copper in second-quarter 2011 were lower than unit net cash costs of $1.14 per pound in second-quarter 2010 primarily reflecting higher molybdenum, gold and silver credits, partly offset by higher treatment charges and higher site production and delivery costs, including materials, energy and currency exchange rate impacts. FCX estimates that average unit net cash costs (net of by-product credits) for South America mining would approximate $1.21 per pound of copper for the year 2011, based on current sales volume and cost estimates and assuming average prices of $15 per pound of molybdenum and $1,500 per ounce of gold during the second 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. Operating and Development Activities. FCX has several projects in process in the Grasberg minerals district, primarily related to the development of the large-scale, high-grade underground ore bodies located beneath and nearby the Grasberg open pit. In aggregate, these underground ore bodies are expected to ramp up to approximately 240,000 metric tons of ore per day following the currently anticipated transition from the Grasberg open pit in 2016. The Deep Ore Zone (DOZ) mine, one of the world's largest underground mines, has been expanded to a capacity of 80,000 metric tons of ore per day; and a feasibility study for the Deep Mill Level Zone (DMLZ) has been completed. The high-grade Big Gossan mine, which began producing in fourth-quarter 2010, is expected to 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 Grasberg Block Cave and DMLZ ore bodies is in progress. Over the next five years, estimated aggregate capital spending is expected to average approximately $635 million ($500 million net to PT-FI) per year on underground development activities. Operating Data. Following is summary consolidated operating data for the Indonesia mining operations for the second quarters and first six months of 2011 and 2010:         Three MonthsSix MonthsEnded June 30,Ended June 30,   2011     20102011     2010Copper (millions of recoverable pounds) Production 261 276 545 555 Sales 265 259 543 555 Average realized price per pound $ 4.26 $ 2.95 $ 4.23 $ 3.05   Gold (thousands of recoverable ounces) Production 325 294 766 723 Sales 330 276 784 734 Average realized price per ounce $ 1,509 $ 1,235 $ 1,466 $ 1,171   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.93 $ 1.62 $ 1.88 $ 1.58 Gold and silver credits (2.06 ) (1.41 ) (2.20 ) (1.61 ) Treatment charges 0.18 0.26 0.18 0.24 Royalty on metals 0.17   0.11   0.16   0.11   Unit net cash costsa $ 0.22   $ 0.58   $ 0.02   $ 0.32     a.   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 website, “www.fcx.com.”   At the Grasberg mine, the sequencing of mining areas with varying ore grades causes fluctuations in the timing of ore production resulting in varying quarterly and annual sales of copper and gold. Copper sales from Indonesia of 265 million pounds in second-quarter 2011 were slightly above second-quarter 2010 sales of 259 million pounds. Gold sales of 330 thousand ounces in second-quarter 2011 were higher than second-quarter 2010 sales of 276 thousand ounces. During July 2011, PT-FI union workers commenced an eight-day labor strike, which led to a temporary suspension of mining, milling and concentrate shipments. On July 11, 2011, PT-FI reached an agreement with the union to end the strike and operations have resumed. PT-FI estimates the aggregate impact on 2011 production to approximate 35 million pounds of copper and 60 thousand ounces of gold. PT-FI has commenced negotiations with the union for its bi-annual renewal of the collective labor agreement, which is scheduled for renewal in October 2011. FCX expects sales from Indonesia to approximate 1.0 billion pounds of copper and 1.45 million ounces of gold for the year 2011, compared with 1.2 billion pounds of copper and 1.8 million ounces of gold for the year 2010. Because of the fixed nature of a large portion of Indonesia's costs, unit costs vary from quarter to quarter depending on volumes of copper and gold sold during the period. Unit net cash costs (net of gold and silver credits) for Indonesia of $0.22 per pound of copper in second-quarter 2011 were lower than unit net cash costs of $0.58 per pound in second-quarter 2010 as higher gold credits more than offset increases in site production and delivery costs. FCX estimates Indonesia's average unit net cash costs (net of gold and silver credits) would approximate $0.28 per pound of copper for the year 2011, based on current sales volume and cost estimates and assuming an average gold price of $1,500 per ounce during the second half 2011. Indonesia's unit net cash costs for 2011 would change by approximately $0.04 per pound for each $50 per ounce change in the average price of gold during the second half of 2011. Africa Mining. FCX currently holds an effective 57.75 percent interest in the Tenke Fungurume (Tenke) copper and cobalt mining concessions in the Katanga province of the Democratic Republic of Congo (DRC), which is consolidated in FCX's financial statements. FCX's interest in Tenke will be reduced to 56 percent after receiving the required government approval of the modifications to Tenke Fungurume Mining's bylaws that reflect the agreement with the DRC government. In addition to copper, the Tenke mine produces cobalt hydroxide. Operating and Development Activities. The milling facilities at Tenke, which were designed to produce at a capacity rate of 8,000 metric tons of ore per day, have performed above capacity, with throughput averaging 9,700 metric tons of ore per day in second-quarter 2011 and 10,200 metric tons of ore per day for the first six months of 2011. Mining rates have been increased to enable additional copper production from the initial project capacity of 250 million pounds per year to approximately 290 million pounds per year. FCX is planning a second phase of the project, which would include optimizing the current plant and increasing capacity. As part of the second phase, FCX is completing studies to expand the mill rate to 14,000 metric tons of ore per day and to construct related processing facilities that would target the addition of approximately 150 million pounds of copper per year in an approximate two-year timeframe. FCX expects production volumes from the project to expand significantly over time. FCX continues to engage in drilling activities, exploration analyses and metallurgical testing to evaluate the potential of the highly prospective minerals district at Tenke. These analyses are being incorporated in future plans to evaluate opportunities for expansion. Operating Data. Following is summary consolidated operating data for the Africa mining operations for the second quarters and first six months of 2011 and 2010:     Three MonthsSix MonthsEnded June 30,Ended June 30,   2011   20102011   2010Copper (millions of recoverable pounds) Production 66 62 133 126 Sales 75 55 135 121 Average realized price per pounda $ 4.08 $ 2.96 $ 4.11 $ 3.12   Cobalt (millions of contained pounds) Production 6 4 12 9 Sales 7 4 13 7 Average realized price per pound $ 11.16 $ 12.37 $ 11.02 $ 11.91   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.62 $ 1.27 $ 1.57 $ 1.32 Cobalt creditsb (0.77 ) (0.54 ) (0.76 ) (0.46 ) Royalty on metals 0.09   0.06   0.10   0.07   Unit net cash costsc $ 0.94   0.79   $ 0.91   $ 0.93     a.   Includes adjustments for point-of-sale transportation costs as negotiated in customer contracts. b. Net of cobalt downstream processing and freight costs. c. For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX's website, “www.fcx.com.”   Copper sales from Africa of 75 million pounds in second-quarter 2011 were higher than second-quarter 2010 copper sales of 55 million pounds, primarily reflecting the timing of shipments. FCX expects Africa's sales to approximate 275 million pounds of copper and over 20 million pounds of cobalt for the year 2011, compared with 262 million pounds of copper and 20 million pounds of cobalt for the year 2010. Unit net cash costs (net of cobalt credits) for Africa of $0.94 per pound of copper were higher than unit net cash costs of $0.79 per pound in second-quarter 2010, primarily reflecting increased mining and milling activity and higher input costs. Higher cobalt credits partly offset the increased production and delivery costs. FCX estimates Africa's average unit net cash costs would approximate $0.97 per pound of copper for the year 2011, based on current sales volume and cost estimates and assuming an average cobalt price of $14 per pound for the second half of 2011. Africa's 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 cobalt during the second half of 2011. Molybdenum. FCX is the world's largest producer of molybdenum. FCX conducts molybdenum mining operations at its wholly owned Henderson underground mine in Colorado, is developing the Climax molybdenum mine and sells molybdenum produced from its North and South America copper mines. Development Activities. Construction activities at the Climax molybdenum mine are approximately 75 percent complete. Construction is expected to be complete in early 2012, and FCX plans to commence production during 2012. Production from the Climax molybdenum mine is expected to ramp up to a rate of 20 million pounds per year during 2013 and, depending on market conditions, may be increased to 30 million pounds per year. FCX intends to operate its Climax and Henderson molybdenum mines in a flexible manner to meet market requirements. FCX believes that Climax 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. Estimated remaining costs for the initial phase of the project approximate $250 million. Operating Data. Following is summary consolidated operating data for the Molybdenum operations for the second quarters and first six months of 2011 and 2010:         Three MonthsSix MonthsEnded June 30,Ended June 30,   2011     20102011     2010Molybdenum (millions of recoverable pounds) Productiona 9 11 19 20 Sales, excluding purchasesb 21 16 41 33 Average realized price per pound $ 18.16 $ 18.18 $ 18.13 $ 16.62   Unit net cash cost per pound of molybdenumc $ 6.21 $ 5.73 $ 6.17 $ 5.65   a.   Reflects 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 website, “www.fcx.com.”   Consolidated molybdenum sales of 21 million pounds were higher than the April 2011 estimate of 17 million pounds and second-quarter 2010 sales of 16 million pounds primarily reflecting improved demand. For the year 2011, FCX expects molybdenum sales to approximate 77 million pounds (including production of approximately 45 million pounds from the North and South America copper mines), compared with 67 million pounds in 2010 (including production of 32 million pounds from the North and South America copper mines). Unit net cash costs at the Henderson mine of $6.21 per pound of molybdenum in second-quarter 2011 were higher than unit net cash costs of $5.73 per pound in second-quarter 2010, primarily reflecting higher input costs, including labor and materials. Based on current sales volume and cost estimates, FCX expects average unit net cash costs for the Henderson mine would approximate $7.00 per pound of molybdenum for the year 2011. 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 minerals districts where it currently operates. Favorable exploration results indicate opportunities for significant future potential reserve additions in North and South America and in the Tenke Fungurume minerals district. The drilling data in North America continue to indicate the potential for expanded sulfide production. Exploration spending for the year 2011 is expected to approximate $250 million, compared with $113 million in 2010. Exploration activities will continue to focus primarily on the potential for future reserve additions in FCX's existing minerals districts. PROVISIONAL PRICING AND OTHER For the first six months of 2011, 56 percent of FCX's mined copper was sold in concentrate, 22 percent as rod from North America operations and 22 percent as cathode. Under the long-established structure of sales agreements prevalent in the industry, substantially all of FCX's copper concentrate and cathode sales are provisionally priced at the time of shipment. The provisional prices are finalized in a contractually specified future month (generally one to four months from the shipment date) primarily based on quoted London Metal Exchange (LME) monthly average spot 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. LME spot copper prices averaged $4.14 per pound during second-quarter 2011, compared to FCX's recorded average price of $4.22 per pound. At March 31, 2011, FCX had provisionally priced copper sales at its copper mining operations totaling 464 million pounds (net of intercompany sales and noncontrolling interests) recorded at an average of $4.27 per pound. Lower prices during second-quarter 2011 resulted in adjustments to these provisionally priced copper sales and decreased second-quarter 2011 consolidated revenues by $47 million ($23 million to net income attributable to common stock or $0.02 per share), compared with adjustments to the March 31, 2010, provisionally priced copper sales that decreased second-quarter 2010 consolidated revenues by $169 million ($72 million to net income attributable to common stock or $0.08 per share). Adjustments to the December 31, 2010, provisionally priced copper sales resulted in a decrease to consolidated revenues of $12 million ($5 million to net income attributable to common stock or $0.01 per share) for the first six months of 2011, compared with adjustments to the December 31, 2009, provisionally priced copper sales that resulted in a decrease to consolidated revenues of $23 million ($9 million to net income attributable to common stock or $0.01 per share) for the first six months of 2010. At June 30, 2011, FCX had provisionally priced copper sales at its copper mining operations totaling 435 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $4.27 per pound, subject to final pricing over the next several months. FCX estimates that each $0.05 change in the price realized from the June 30, 2011, provisional price recorded would have an approximate $14 million effect on its 2011 net income attributable to common stock. The LME spot copper price on July 20, 2011, was $4.43 per pound. FCX defers recognizing profits on its sales from its Indonesia and South America mining operations to Atlantic Copper and on 25 percent of Indonesia's mining 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 its Indonesia and South America concentrate inventories at Atlantic Copper and PT Smelting to be recognized in future periods' net income attributable to common stock totaled $218 million at June 30, 2011. 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 FCX generated operating cash flows of $1.7 billion for second-quarter 2011 and $4.0 billion for the first six months of 2011. These amounts are net of working capital uses of $496 million for the second quarter and $382 million for the six-month period. Based on current 2011 sales volume and cost estimates and assuming average prices of $4.25 per pound of copper, $1,500 per ounce of gold and $15 per pound of molybdenum for the second half of 2011, FCX's consolidated operating cash flows are estimated to exceed $8 billion for the year 2011. The impact of price changes on operating cash flows would approximate $80 million for each $0.05 per pound change in the average price of copper during the second half of 2011, $35 million for each $50 per ounce change in the average price of gold during the second half of 2011 and $40 million for each $2 per pound change in the average price of molybdenum during the second half of 2011. Capital expenditures, including capitalized interest, totaled $527 million for second-quarter 2011 and $1.0 billion for the first six months of 2011. FCX's capital expenditures are currently estimated to approximate $2.6 billion for the year 2011, including $1.4 billion for major projects and $1.2 billion for sustaining capital. Major projects for 2011 primarily include 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. FCX is also 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. CASH AND DEBT At June 30, 2011, FCX had consolidated cash of $4.4 billion. Net of noncontrolling interests' share, taxes and other costs, cash available to the parent company totaled $3.4 billion as shown below (in billions):     June 30,2011 Cash at domestic companiesa $ 1.5 Cash at international operations 2.9   Total consolidated cash and cash equivalents 4.4 Less: Noncontrolling interests' share (0.8 ) Cash, net of noncontrolling interests' share 3.6 Less: Withholding taxes and other (0.2 ) Net cash available$3.4     a.  Includes cash at FCX's parent company and North America operations.   At June 30, 2011, FCX had $3.5 billion in debt. FCX had no borrowings and $43 million of letters of credit issued under its revolving credit facility resulting in total availability of approximately $1.5 billion at June 30, 2011. Since January 1, 2009, FCX has repaid $3.8 billion in debt resulting in estimated annual interest savings of approximately $270 million based on current interest rates. FCX does not have significant debt maturities in the near term (a total of $5 million through 2016); however, FCX may consider opportunities to prepay debt in advance of scheduled maturities. FCX has $3.0 billion in debt that is redeemable in whole or in part, at its option, at make-whole redemption prices prior to April 2012, and afterwards at stated redemption prices. 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. On June 1, 2011, FCX paid a supplemental common stock dividend of $0.50 per share, which is in addition to FCX's current annual common stock dividend of $1.00 per share ($0.25 per share quarterly). FCX has paid common stock dividends of $949 million for the first six months of 2011, which includes $474 million for the supplemental dividend paid on June 1, 2011. FCX intends to continue to maintain a strong financial position, invest aggressively in attractive growth projects and provide cash returns to shareholders. The Board will continue to review FCX's financial policy on an ongoing basis. WEBCAST INFORMATION A conference call with securities analysts to discuss FCX's second-quarter 2011 results is scheduled for today at 10:00 a.m. Eastern Time. The conference call will be broadcast on the Internet along with slides. Interested parties may listen to the conference call live and view the slides by accessing “www.fcx.com.” A replay of the webcast will be available through Friday, August 19, 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 minerals district, 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 website 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, exploration efforts and results, mine production and development plans, liquidity, other financial commitments and tax rates, the impact of copper, gold, molybdenum and cobalt price changes, 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 of dividends is at the discretion of FCX's Board of Directors (the Board) and will depend on FCX's financial results, cash requirements, future prospects, and other factors deemed relevant by the Board.FCX cautions readers that forward-looking 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, the resolution of administrative disputes in the Democratic Republic of Congo, weather-related risks, labor relations, including the resolution of labor negotiations in Indonesia, 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, 2010, filed with the U.S. Securities and Exchange Commission (SEC) as updated by our subsequent filings 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 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 website, “www.fcx.com.”   FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA                 Three Months Ended June 30, Production Sales COPPER(millions of recoverable pounds) 2011 2010 2011 2010 (FCX's net interest in %)North America Morenci (85%)a 135 114 142 118 Bagdad (100%) 48 49 54 55 Safford (100%) 37 32 38 41 Sierrita (100%) 45 37 46 41 Miami (100%) 15 3 15 3 Tyrone (100%) 18 20 22 22 Chino (100%) 14 8 13 9 Other (100%) 1 — 1 — Total North America 313 263 331 289   South America Cerro Verde (53.56%) 170 166 173 150 El Abra (51%) 66 83 60 84 Candelaria/Ojos del Salado (80%) 91 80 98 77 Total South America 327 329 331 311   Indonesia Grasberg (90.64%)b 261 276 265 259   Africa Tenke Fungurume (57.75%) 66 62 75 55   Consolidated9679301,002914 Less noncontrolling interests 181 186 186 173 Net786744816741   Consolidated sales from mines 1,002 914 Purchased copper 57 44 Total copper sales, including purchases1,059958   Average realized price per pound $   4.22 $   3.06   GOLD (thousands of recoverable ounces)(FCX's net interest in %) North America (100%) 2 2 1 2 South America (80%) 24 20 25 20 Indonesia (90.64%)b 325 294 330 276 Consolidated351316356298 Less noncontrolling interests 35 31 36 30 Net316285320268   Average realized price per ounce $ 1,509 $ 1,234   MOLYBDENUM (millions of recoverable pounds)(FCX's net interest in %) Henderson (100%) 9 11 N/A N/A North America (100%) 10 5 N/A N/A Cerro Verde (53.56%) 3 1 N/A N/A Consolidated22172116 Less noncontrolling interests 2 — 1 — Net20172016   Consolidated sales from mines 21 16 Purchased molybdenum — 1 Total molybdenum sales, including purchases2117   Average realized price per pound $ 18.16 $ 18.18   COBALT (millions of contained pounds)(FCX's net interest in %)Consolidated - Tenke Fungurume (57.75%) 6474 Less noncontrolling interests 2 2 3 2 Net4242   Average realized price per pound $ 11.16 $ 12.37   a. Amounts are net of Morenci's 15 percent joint venture partner's interest.b. Amounts are net of Grasberg's joint venture partner's interest, which varies in accordance with the terms of the joint venture agreement.   FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA (continued)                 Six Months Ended June 30, Production Sales COPPER (millions of recoverable pounds) 2011 2010 2011 2010 (FCX's net interest in %)North America Morenci (85%)a 257 212 260 225 Bagdad (100%) 97 101 104 112 Safford (100%) 65 79 68 92 Sierrita (100%) 85 72 85 81 Miami (100%) 29 6 25 7 Tyrone (100%) 37 40 41 44 Chino (100%) 23 16 22 18 Other (100%) 2 1 2 1 Total North America 595 527 607 580   South America Cerro Verde (53.56%) 345 331 342 306 El Abra (51%) 114 168 110 161 Candelaria/Ojos del Salado (80%) 185 152 191 151 Total South America 644 651 643 618   Indonesia Grasberg (90.64%)b 545 555 543 555   Africa Tenke Fungurume (57.75%) 133 126 135 121   Consolidated1,9171,8591,9281,874 Less noncontrolling interests 360 372 359 354 Net1,5571,4871,5691,520   Consolidated sales from mines 1,928 1,874 Purchased copper 134 65 Total copper sales, including purchases2,0621,939   Average realized price per pound $   4.24 $   3.13   GOLD (thousands of recoverable ounces) (FCX's net interest in %) North America (100%) 3 3 3 3 South America (80%) 48 39 49 39 Indonesia (90.64%)b 766 723 784 734 Consolidated817765836776 Less noncontrolling interests 81 75 83 77 Net736690753699   Average realized price per ounce $ 1,466 $ 1,171   MOLYBDENUM (millions of recoverable pounds) (FCX's net interest in %) Henderson (100%) 19 20 N/A N/A North America (100%) 17 11 N/A N/A Cerro Verde (53.56%) 6 3 N/A N/A Consolidated42344133 Less noncontrolling interests 3 1 2 1 Net39333932   Consolidated sales from mines 41 33 Purchased molybdenum — 2 Total molybdenum sales, including purchases4135   Average realized price per pound $ 18.13 $ 16.62   COBALT (millions of contained pounds) (FCX's net interest in %)Consolidated - Tenke Fungurume (57.75%) 129137 Less noncontrolling interests 5 4 6 3 Net7574   Average realized price per pound $ 11.02 $ 11.91   a. Amounts are net of Morenci's 15 percent joint venture partner's interest.b. Amounts are net of Grasberg's joint venture partner's interest, which varies in accordance with the terms of the joint venture agreement.   FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA (continued)                 Three Months Ended Six Months Ended June 30, June 30, 2011 2010 2011 2010 100% North America Copper MinesSolution Extraction/Electrowinning (SX/EW) Operations Leach ore placed in stockpiles (metric tons per day) 847,500 646,100 829,700 624,100 Average copper ore grade (percent) 0.24 0.25 0.24 0.25 Copper production (millions of recoverable pounds) 201 182 383 384   Mill Operations Ore milled (metric tons per day) 221,100 195,300 217,300 179,200 Average ore grades (percent): Copper 0.38 0.32 0.37 0.31 Molybdenum 0.03 0.02 0.03 0.02 Copper recovery rate (percent) 84.3 81.4 83.2 83.3 Production (millions of recoverable pounds): Copper 136 100 258 180 Molybdenum 10 5 17 11   100% South America MiningSX/EW Operations Leach ore placed in stockpiles (metric tons per day) 241,200 247,400 251,600 251,600 Average copper ore grade (percent) 0.47 0.42 0.43 0.43 Copper production (millions of recoverable pounds) 113 130 203 263   Mill Operations Ore milled (metric tons per day) 197,600 187,100 194,700 183,600 Average ore grades: Copper (percent) 0.62 0.62 0.65 0.62 Gold (grams per metric ton) 0.11 0.09 0.11 0.09 Molybdenum (percent) 0.02 0.02 0.02 0.02 Copper recovery rate (percent) 89.3 89.9 90.4 89.5 Production (recoverable): Copper (millions of pounds) 214 199 441 388 Gold (thousands of ounces) 24 20 48 39 Molybdenum (millions of pounds) 3 1 6 3   100% Indonesia Mining Ore milled (metric tons per day) 220,000 223,400 221,100 228,700 Average ore grades: Copper (percent) 0.77 0.81 0.77 0.79 Gold (grams per metric ton) 0.79 0.63 0.84 0.75 Recovery rates (percent): Copper 87.7 89.1 87.5 88.7 Gold 79.5 78.2 80.8 78.7 Production (recoverable): Copper (millions of pounds) 282 305 566 613 Gold (thousands of ounces) 394 319 853 785   100% Africa Mining Ore milled (metric tons per day) 9,700 8,800 10,200 9,200 Average ore grades (percent): Copper 3.67 3.87 3.54 3.78 Cobalt 0.41 0.35 0.40 0.40 Copper recovery rate (percent) 92.9 90.7 92.3 91.2 Production (millions of pounds): Copper (recoverable) 66 62 133 126 Cobalt (contained) 6 4 12 9   100% Henderson Molybdenum Mine Ore milled (metric tons per day) 22,000 22,800 22,700 23,000 Average molybdenum ore grade (percent) 0.24 0.25 0.24 0.24 Molybdenum production (millions of recoverable pounds) 9 11 19 20   FREEPORT-McMoRan COPPER & GOLD INC.CONSOLIDATED STATEMENTS OF INCOME (Unaudited)           Three Months Ended Six Months Ended June 30, June 30, 2011 2010 2011 2010 (In Millions, Except Per Share Amounts) Revenues $ 5,814 a $ 3,864 a $ 11,523 a $ 8,227 a Cost of sales: Production and delivery 2,557 2,052 4,934 3,968 Depreciation, depletion and amortization 267   249   499   520   Total cost of sales 2,824 2,301 5,433 4,488 Selling, general and administrative expenses 107 101 221 196 Exploration and research expenses 66 38 116 69 Environmental obligations and shutdown costs 60   —   60   2   Total costs and expenses 3,057   2,440   5,830   4,755   Operating income 2,757 b 1,424 b 5,693 b 3,472 b Interest expense, net (74 ) c (122 ) c (172 ) c (267 ) c Losses on early extinguishment of debt (61 ) (50 ) (68 ) (77 ) Other income, net 2   9   12   21   Income before income taxes and equity in affiliated companies' net earnings 2,624 1,261 5,465 3,149 Provision for income taxes (906 ) (433 ) (1,890 ) (1,111 ) Equity in affiliated companies' net earnings 8   4   12   9   Net income 1,726 832 3,587 2,047 Net income attributable to noncontrolling interests (358 ) (168 ) (720 ) (438 ) Preferred dividends —   d (15 ) —   d (63 ) Net income attributable to FCX common stockholders $ 1,368   a,b $ 649   a,b $ 2,867   a,b $ 1,546   a,b   Net income per share attributable to FCX common stockholders: Basic $ 1.44   $ 0.71   e $ 3.03   $ 1.74   e Diluted $ 1.43   $ 0.70   e $ 3.00   $ 1.70   e   Weighted-average common shares outstanding: Basic 947   915   e 947   888   e Diluted 956   947   e 956   947   e   Dividends declared per share of common stock $ 0.75   $ 0.15   e $ 1.00   $ 0.225   e   a. Includes unfavorable adjustments to provisionally priced copper sales recognized in prior periods totaling $47 million ($23 million to net income attributable to common stockholders) in second-quarter 2011, $169 million ($72 million to net income attributable to common stockholders) in second-quarter 2010, $12 million ($5 million to net income attributable to common stockholders) for the first six months of 2011 and $23 million ($9 million to net income attributable to common stockholders) for the first six months of 2010.   b. FCX defers recognizing profits on intercompany sales until final sales to third parties occur. Changes in these deferrals attributable to variability in intercompany volumes resulted in net additions of $7 million ($14 million to net income attributable to common stockholders) in second-quarter 2011, $28 million ($20 million to net income attributable to common stockholders) in second-quarter 2010 and $1 million (a net reduction of $1 million to net income attributable to common stockholders) for the first six months of 2011, and a net reduction of $65 million ($28 million to net income attributable to common stockholders) for the first six months of 2010.   c. Consolidated interest expense, excluding capitalized interest, totaled $97 million in second-quarter 2011, $132 million in second-quarter 2010, $220 million for the first six months of 2011 and $283 million for the first six months of 2010. Lower interest expense in the 2011 periods primarily reflects the impact of debt repayments during 2010 and the first six months of 2011.   d. During 2010, FCX's 6 3/4% Mandatorily Convertible Preferred Stock automatically converted into shares of FCX common stock; as a result, FCX no longer has requirements to pay preferred dividends.   e. Amounts have been adjusted to reflect the February 1, 2011, two-for-one stock split.     FREEPORT-McMoRan COPPER & GOLD INC.CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)         June 30, December 31, 2011 2010 (In Millions) ASSETS Current assets: Cash and cash equivalents $ 4,378 $ 3,738 Trade accounts receivable 1,533 2,132 Other accounts receivable 252 293 Inventories: Product 1,399 1,409 Materials and supplies, net 1,277 1,169 Mill and leach stockpiles 1,072 856 Other current assets 262   254   Total current assets 10,173 9,851 Property, plant, equipment and development costs, net 17,500 16,785 Long-term mill and leach stockpiles 1,523 1,425 Intangible assets, net 323 328 Other assets 1,060   997   Total assets $ 30,579   $ 29,386     LIABILITIES AND EQUITY Current liabilities: Accounts payable and accrued liabilities $ 2,343 $ 2,441 Accrued income taxes 258 648 Dividends payable 239 240 Current portion of reclamation and environmental obligations 191 207 Rio Tinto's share of joint venture cash flows 70 132 Current portion of debt 5   95   Total current liabilities 3,106 3,763 Long-term debt, less current portion 3,537 4,660 Deferred income taxes 3,265 2,873 Reclamation and environmental obligations, less current portion 2,123 2,071 Other liabilities 1,446   1,459   Total liabilities 13,477 14,826 Equity: FCX stockholders' equity: Common stock 107 107 Capital in excess of par value 18,942 18,751 Accumulated deficit (672 ) (2,590 ) Accumulated other comprehensive loss (316 ) (323 ) Common stock held in treasury (3,553 ) (3,441 ) Total FCX stockholders' equity 14,508 12,504 Noncontrolling interests 2,594   2,056   Total equity 17,102   14,560   Total liabilities and equity $ 30,579   $ 29,386     FREEPORT-McMoRan COPPER & GOLD INC.CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)     Six Months Ended June 30, 2011     2010 (In Millions) Cash flow from operating activities: Net income $ 3,587 $ 2,047 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 499 520 Stock-based compensation 69 75 Charges for reclamation and environmental obligations, including accretion 79 75 Payments of reclamation and environmental obligations (88 ) (97 ) Losses on early extinguishment of debt 68 77 Deferred income taxes 337 107 Increase in long-term mill and leach stockpiles (98 ) (31 ) Other, net (32 ) 2 (Increases) decreases in working capital: Accounts receivable 577 502 Inventories (346 ) (39 ) Other current assets — (9 ) Accounts payable and accrued liabilities (184 ) (161 ) Accrued income and other taxes (429 ) (186 ) Net cash provided by operating activities 4,039   2,882     Cash flow from investing activities: Capital expenditures: North America copper mines (204 ) (81 ) South America (257 ) (154 ) Indonesia (301 ) (195 ) Africa (40 ) (50 ) Molybdenum (162 ) (12 ) Other (68 ) (35 ) Other, net 19   8   Net cash used in investing activities (1,013 ) (519 )   Cash flow from financing activities: Proceeds from debt 23 35 Repayments of debt (1,288 ) (1,655 ) Cash dividends and distributions paid: Common stock (949 ) (130 ) Preferred stock — (95 ) Noncontrolling interests (195 ) (145 ) Contributions from noncontrolling interests 13 15 Net payments for stock-based awards (3 ) (6 ) Excess tax benefit from stock-based awards 22 4 Other, net (9 ) —   Net cash used in financing activities (2,386 ) (1,977 )   Net increase in cash and cash equivalents 640 386 Cash and cash equivalents at beginning of year 3,738   2,656   Cash and cash equivalents at end of period $ 4,378   $ 3,042   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