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Press release from Business Wire

Freeport-McMoRan Copper & Gold Inc. Reports Third-Quarter and Nine-Month 2012 Results

Monday, October 22, 2012

Freeport-McMoRan Copper & Gold Inc. Reports Third-Quarter and Nine-Month 2012 Results08:00 EDT Monday, October 22, 2012 PHOENIX (Business Wire) -- Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX): Net income attributable to common stock for third-quarter 2012 was $824 million, $0.86 per share, compared with net income of $1.1 billion, $1.10 per share, for third-quarter 2011. Net income attributable to common stock for the first nine months of 2012 was $2.3 billion, $2.41 per share, compared with $3.9 billion, $4.10 per share, for the first nine months of 2011. Consolidated sales from mines for third-quarter 2012 totaled 922 million pounds of copper, 202 thousand ounces of gold and 21 million pounds of molybdenum, compared with 947 million pounds of copper, 409 thousand ounces of gold and 19 million pounds of molybdenum for third-quarter 2011. Consolidated sales from mines for the year 2012 are expected to approximate 3.6 billion pounds of copper, 1.0 million ounces of gold and 82 million pounds of molybdenum, including 930 million pounds of copper, 255 thousand ounces of gold and 20 million pounds of molybdenum for fourth-quarter 2012. Consolidated sales from mines for the year 2013 are expected to total 4.3 billion pounds of copper, 1.4 million ounces of gold and 90 million pounds of molybdenum. Consolidated unit net cash costs (net of by-product credits) averaged $1.62 per pound of copper for third-quarter 2012, compared with $0.80 per pound for third-quarter 2011. Based on current 2012 sales volume and cost estimates and assuming average prices of $1,700 per ounce for gold and $11 per pound for molybdenum for fourth-quarter 2012, consolidated unit net cash costs (net of by-product credits) are estimated to average approximately $1.50 per pound of copper for the year 2012. Operating cash flows totaled $526 millionfor third-quarter 2012 (net of $765 million in working capital uses and other tax payments) and $2.5 billion (net of $1.5 billion in working capital uses and other tax payments) for the first nine months of 2012, compared with $1.8 billion for third-quarter 2011 (including $256 million of working capital sources and other tax payments) and $5.9 billion (net of $126 million in working capital uses and other tax payments) for the first nine months of 2011. Based on current 2012 sales volume and cost estimates and assuming average prices of $3.70 per pound for copper, $1,700 per ounce for gold and $11 per pound for molybdenum for fourth-quarter 2012, operating cash flows are estimated to approximate $4.0 billion for the year 2012 (net of an estimated $1.4 billion in working capital uses and other tax payments). Capital expenditures totaled $971 million for third-quarter 2012 and $2.5 billion for the first nine months of 2012, compared with $717 million for third-quarter 2011 and $1.7 billion for the first nine months of 2011. Capital expenditures are expected to approximate $3.6 billion for the year 2012, including $2.2 billion for major projects and $1.4 billion for sustaining capital. At September 30, 2012, consolidated cash totaled $3.7 billionand total debt totaled $3.5 billion. Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported third-quarter 2012 net income attributable to common stock of $824 million, $0.86 per share, compared with $1.1 billion, $1.10 per share, for third-quarter 2011. Third-quarter 2012 net income included net credits for adjustments to Cerro Verde's deferred income taxes and to FCX's environmental obligations and related litigation reserves totaling $168 million ($0.18 per share), compared with net charges totaling $73 million ($0.07 per share) for third-quarter 2011. For the first nine months of 2012, FCX reported net income attributable to common stock of $2.3 billion, $2.41 per share, compared with $3.9 billion, $4.10 per share, for the first nine months of 2011. James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said, "Our global team continues to focus on execution of our plans to achieve efficient and safe production, effective cost management, investment in financially attractive projects and identification of additional reserves and resources. Our third quarter results reflect production growth in North America and Africa, offset by anticipated lower ore grades in Indonesia. As we look forward, we are on track to achieve meaningful increases in our production of copper as we return to higher grade ores at Grasberg and through the execution of brownfield expansions in the Americas and Africa, expected to add one billion pounds of copper annually over the next three years. We are positive about the long-term fundamentals of the metals we produce, our geographically diverse portfolio of large-scale operations with long-lived reserves and mineral resources and the strong track record of our team to execute our plans."SUMMARY FINANCIAL AND OPERATING DATA   Three Months Ended     Nine Months Ended   September 30,September 30,   2012     20112012     2011Financial Data (in millions, except per share amounts) Revenuesa $ 4,417 $ 5,195 $ 13,497 $ 16,718 Operating income $ 1,411 c $ 2,150 c $ 4,456 c $ 7,843 c Net income attributable to common stockb $ 824 c,d $ 1,053 c,d $ 2,298 c,d,e $ 3,920 c,d,e Diluted net income per share of common stock $ 0.86 c,d $ 1.10 c,d $ 2.41 c,d,e $ 4.10 c,d,e Diluted weighted-average common shares outstanding 953 955 953 955 Operating cash flows $ 526 f $ 1,835 f $ 2,509 f $ 5,874 f Capital expenditures $ 971 $ 717 $ 2,518 $ 1,749   Mining Operating DataCopper (millions of recoverable pounds) Production 938 951 2,658 2,868 Sales, excluding purchases 922 947 2,676 2,875 Average realized price per pound $ 3.64 $ 3.60 $ 3.63 $ 3.94 Site production and delivery costs per poundg $ 2.03 $ 1.71 $ 2.00 $ 1.65 Unit net cash costs per poundg $ 1.62 $ 0.80 $ 1.46 $ 0.84 Gold (thousands of recoverable ounces) Production 204 385 707 1,202 Sales, excluding purchases 202 409 756 1,245 Average realized price per ounce $ 1,728 $ 1,693 $ 1,666 $ 1,565 Molybdenum (millions of recoverable pounds) Production 20 23 61 65 Sales, excluding purchases 21 19 62 60 Average realized price per pound $ 13.62 $ 16.34 $ 14.79 $ 17.57   a. Includes the impact of adjustments to provisionally priced sales recognized in prior periods (refer to the "Consolidated Statements of Income" on page IV for further discussion).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 (credits) charges for adjustments to environmental obligations and related litigation reserves totaling $(85) million ($(68) million to net income attributable to common stockholders or $(0.07) per share) for third quarter 2012, $29 million ($23 million to net income attributable to common stockholders or $0.02 per share) for third-quarter 2011, $(19) million ($(16) million to net income attributable to common stockholders or $(0.02) per share) for the first nine months of 2012 and $78 million ($63 million to net income attributable to common stockholders or $0.07 per share) for the first nine months of 2011.d. The 2012 periods include a net credit of $100 million, net of noncontrolling interests ($0.11 per share) associated with adjustments to Cerro Verde's deferred income taxes. The 2011 periods include a charge of $50 million, net of noncontrolling interests ($0.05 per share) for additional taxes associated with Cerro Verde's election to pay a special mining burden during the remaining term of its current stability agreement. For further discussion refer to the supplemental schedule, "Provision for Income Taxes," on page XXVI, which is available on FCX's website, "www.fcx.com."e. Includes losses on early extinguishment of debt totaling $149 million ($0.16 per share) for the first nine months of 2012 and $60 million ($0.06 per share) for the first nine months of 2011.f. Includes working capital (uses) sources and other tax payments of $(765) million for third-quarter 2012, $256 million for third-quarter 2011, $(1.5) billion for the first nine months of 2012 and $(126) million for the first nine months of 2011.g. 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. Third-quarter 2012 consolidated copper sales of 922 million pounds were higher than the July 2012 estimate of 885 million pounds primarily reflecting higher production from North America and Africa and the timing of sales in South America. Third-quarter 2012 consolidated gold sales of 202 thousand ounces were lower than the July 2012 estimate of 225 thousand ounces primarily because of changes to mine plans at the Grasberg mine in Indonesia, which delayed access to higher grade material, and a slower than expected ramp-up at the Deep Ore Zone (DOZ) underground mine. Third-quarter 2012 consolidated copper and gold sales were lower than third-quarter 2011 sales of 947 million pounds of copper and 409 thousand ounces of gold primarily reflecting lower ore grades in Indonesia, partly offset by increased sales in North America and Africa. Third-quarter 2012 consolidated molybdenum sales of 21 million pounds were higher than the July 2012 estimate of 20 million pounds and third-quarter 2011 sales of 19 million pounds. Consolidated sales from mines for the year 2012 are expected to approximate 3.6 billion pounds of copper, 1.0 million ounces of gold and 82 million pounds of molybdenum, including 930 million pounds of copper, 255 thousand ounces of gold and 20 million pounds of molybdenum for fourth-quarter 2012. Expected gold sales for 2012 are approximately 50,000 ounces less than the July 2012 estimates because of lower gold production at Grasberg. As anticipated, consolidated average unit net cash costs (net of by-product credits) of $1.62 per pound of copper in third-quarter 2012 were higher than unit net cash costs of $0.80 per pound in third-quarter 2011 primarily because of lower volumes in Indonesia (Indonesia unit net cash costs were $1.65 per pound in third-quarter 2012, compared with a net credit of $0.48 per pound in third-quarter 2011), lower by-product credits and higher mining costs. Quarterly unit net cash costs will vary with fluctuations in sales volumes and average realized prices for gold and molybdenum. Assuming average prices of $1,700 per ounce of gold and $11 per pound of molybdenum for fourth-quarter 2012 and achievement of current 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 $1.50 per pound of copper for the year 2012. The impact of price changes for fourth-quarter 2012 on consolidated unit net cash costs would approximate $0.004 per pound for each $50 per ounce change in the average price of gold and $0.004 per pound for each $2 per pound change in the average price of molybdenum. Assuming consistent commodity price assumptions, unit net cash costs for 2013 are expected to be lower than 2012 because of projected increased copper and gold volumes at Grasberg. 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, certain of FCX's North America copper mines (Sierrita, Bagdad, Morenci and Chino) also produce molybdenum concentrates. Operating and Development Activities. FCX has completed projects to increase production at its North America copper mines, including restarting certain mining and milling operations and increasing mining rates at Morenci and Chino. Ramp up activities at Chino are continuing, with annual production of approximately 250 million pounds of copper targeted in 2014. FCX continues to evaluate a number of opportunities to invest in additional production capacity at several of its North America copper mines. Exploration results in recent years indicate the potential for significant additional sulfide development in North America. At Morenci, FCX is engaged in a project to expand mining and milling capacity to process additional sulfide ores identified through exploratory drilling. The approximate $1.4 billion project is targeting incremental annual production of approximately 225 million pounds of copper in 2014 through an increase in milling rates from the current level of 50,000 metric tons of ore per day to approximately 115,000 metric tons of ore per day and mining rates from the current level of 700,000 short tons per day to 900,000 short tons per day. FCX has received material permits and has commenced engineering and initial construction, and procurement activities are in progress. Operating Data. Following is summary consolidated operating data for the North America copper mines for the third quarters and first nine months of 2012 and 2011:   Three Months Ended     Nine Months EndedSeptember 30,September 30,   2012     20112012     2011Copper (millions of recoverable pounds) Production 337 322 1,005 917 Sales, excluding purchases 331 307 1,030 914 Average realized price per pound $ 3.58 $ 4.05 $ 3.66 $ 4.19   Molybdenum (millions of recoverable pounds) Productiona 8 10 27 27   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.97 $ 1.86 $ 1.88 $ 1.80 By-product credits, primarily molybdenumb (0.32 ) (0.55 ) (0.37 ) (0.52 ) Treatment charges   0.12     0.11     0.12     0.10   Unit net cash costsc $ 1.77   $ 1.42   $ 1.63   $ 1.38     a. Reflects molybdenum production from certain of the North America copper mines. Sales of molybdenum are reflected in the Molybdenum division (refer to page 9).b. Molybdenum credits reflect volumes produced at market-based pricing and also include tolling revenues at Sierrita.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 copper sales volumes from North America of 331 million pounds in third-quarter 2012 were higher than third-quarter 2011 sales of 307 million pounds primarily reflecting increased production at the Chino mine. FCX expects sales from the North America copper mines to approximate 1.3 billion pounds of copper for the year 2012, compared with 1.2 billion pounds of copper in 2011. Average unit net cash costs (net of by-product credits) for the North America copper mines of $1.77 per pound of copper in third-quarter 2012 were higher than unit net cash costs of $1.42 per pound in third-quarter 2011 reflecting lower molybdenum credits and increased mining rates, partly offset by higher copper volumes. FCX estimates that average unit net cash costs (net of by-product credits) for the North America copper mines would approximate $1.67 per pound of copper for the year 2012, based on current sales volume and cost estimates and assuming an average molybdenum price of $11 per pound for fourth-quarter 2012. North America's average unit net cash costs for 2012 would change by approximately $0.01 per pound for each $2 per pound change in the average price of molybdenum for fourth-quarter 2012. 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 an 80 percent interest in both 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 2011, FCX commenced production from El Abra's sulfide ores. Production from the sulfide ore is expected to approximate 300 million pounds of copper per year, replacing the currently depleting oxide copper production. At Cerro Verde, FCX is engaged in a large-scale concentrator expansion. The approximate $4.4 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 and 15 million pounds of molybdenum beginning in 2016. An environmental impact assessment was filed in fourth-quarter 2011. Permitting is in an advanced stage and engineering and procurement of long-lead items is in progress. FCX expects to commence construction in 2013. 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. Exploration results at El Abra indicate the potential for a significant sulfide resource. Operating Data. Following is summary consolidated operating data for the South America mining operations for the third quarters and first nine months of 2012 and 2011:   Three Months Ended     Nine Months EndedSeptember 30,September 30,   2012     20112012     2011Copper (millions of recoverable pounds) Production 311 325 908 969 Sales 308 322 895 965 Average realized price per pound $ 3.68 $ 3.45 $ 3.63 $ 3.82   Gold (thousands of recoverable ounces) Production 20 25 57 73 Sales 21 23 56 72 Average realized price per ounce $ 1,736 $ 1,664 $ 1,678 $ 1,556   Molybdenum (millions of recoverable pounds) Productiona 2 2 6 8   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.63 $ 1.38 $ 1.58 $ 1.31 By-product credits (0.25 ) (0.36 ) (0.26 ) (0.36 ) Treatment charges   0.17     0.13     0.16     0.17   Unit net cash costsb $ 1.55   $ 1.15   $ 1.48   $ 1.12     a. Reflects molybdenum production from Cerro Verde. Sales of molybdenum are reflected in the Molybdenum division (refer to 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 website, "www.fcx.com." Copper sales from South America mining of 308 million pounds in third-quarter 2012 were lower than third-quarter 2011 sales of 322 million pounds, primarily reflecting lower ore grades at Candelaria and timing of shipments. FCX expects South America's sales to approximate 1.2 billion pounds of copper and 95 thousand ounces of gold for the year 2012, compared with 2011 sales of 1.3 billion pounds of copper and 101 thousand ounces of gold. Average unit net cash costs (net of by-product credits) for South America of $1.55 per pound of copper in third-quarter 2012 were higher than unit net cash costs of $1.15 per pound in third-quarter 2011, primarily reflecting higher mining and input costs, including energy, lower by-product credits and the timing of profit sharing. FCX estimates that average unit net cash costs (net of by-product credits) for South America mining would approximate $1.50 per pound of copper for the year 2012, based on current sales volume and cost estimates and assuming average prices of $1,700 per ounce of gold and $11 per pound of molybdenum for fourth-quarter 2012. Indonesia Mining. Through its 90.64 percent owned and wholly consolidated subsidiary PT Freeport Indonesia, FCX operates the world's largest copper and gold mine in terms of reserves at its Grasberg operations in Papua, Indonesia. PT Freeport Indonesia produces copper concentrates, which contain significant quantities of gold and also silver. Operating and Development Activities. FCX has several projects in progress 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 over several years to approximately 240,000 metric tons of ore per day following the currently anticipated transition from the Grasberg open pit in 2016. Substantial progress is being achieved to establish underground mine development and infrastructure required for large-scale underground operations. Development of both the Grasberg Block Cave and Deep Mill Level Zone is advancing. Access to these underground ore bodies is complete. Over the next five years, estimated aggregate capital spending on these projects is currently expected to average $700 million per year ($550 million per year net to PT Freeport Indonesia). The high-grade Big Gossan underground mine, which began producing in fourth-quarter 2010, averaged 1,900 metric tons of ore per day in third-quarter 2012. Full rates of 7,000 metric tons of ore per day are expected in 2014. Operating Data. Following is summary consolidated operating data for the Indonesia mining operations for the third quarters and first nine months of 2012 and 2011:   Three Months Ended     Nine Months EndedSeptember 30,September 30,   2012     20112012     2011Copper (millions of recoverable pounds) Production 199 233 495 778 Sales 195 253 512 796 Average realized price per pound $ 3.72 $ 3.29 $ 3.64 $ 3.82   Gold (thousands of recoverable ounces) Production 182 357 641 1,123 Sales 178 384 691 1,168 Average realized price per ounce $ 1,728 $ 1,695 $ 1,665 $ 1,565   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 2.96 $ 1.98 $ 3.20 $ 1.91 Gold and silver credits (1.66 ) (2.80 ) (2.34 ) (2.39 ) Treatment charges 0.22 0.18 0.21 0.18 Royalty on metals   0.13     0.16     0.13     0.16   Unit net cash costs (credits)a $ 1.65   $ (0.48 ) $ 1.20   $ (0.14 )   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." Indonesia's third-quarter 2012 copper sales of 195 million pounds and gold sales of 178 thousand ounces were lower than third-quarter 2011 copper sales of 253 million pounds and gold sales of 384 thousand ounces, primarily reflecting anticipated lower ore grades. Third-quarter 2012 sales volumes for copper were similar to the July estimates, but gold volumes were approximately 10 percent below the July estimates because of changes to mine plans that delayed access to higher grade material, and a slower than expected ramp-up at the DOZ underground mine. The DOZ mine averaged 48,300 metric tons of ore per day in third-quarter 2012 and is expected to ramp up to 80,000 metric tons of ore per day in 2013. The slower than anticipated ramp-up reflects more extensive repairs required following the 2011 suspension of operations. At the Grasberg mine, the sequencing of mining areas with varying ore grades also causes fluctuations in the timing of ore production resulting in varying quarterly and annual sales of copper and gold. FCX expects sales from Indonesia to approximate 0.7 billion pounds of copper and 0.9 million ounces of gold for the year 2012, compared with 846 million pounds of copper and 1.3 million ounces of gold for the year 2011. Indonesia's current sales estimates for 2012 are approximately 40 million pounds of copper and 45,000 ounces of gold lower than the July estimates because of mine plan changes in the Grasberg open pit, which delayed access to higher grade material, and a slower ramp-up of the DOZ mine. FCX expects sales from Indonesia to increase in the second half of 2013 as PT Freeport Indonesia gains access to higher ore grades. Indonesia's unit net cash costs (including gold and silver credits) of $1.65 per pound of copper in third-quarter 2012 were significantly higher than unit net cash credits of $0.48 per pound in third-quarter 2011 primarily reflecting lower sales volumes. 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, as well as average realized gold prices during the period. FCX estimates Indonesia's average unit net cash costs (net of gold and silver credits) would approximate $1.34 per pound of copper for the year 2012, based on current sales volume and cost estimates and assuming an average gold price of $1,700 per ounce for fourth-quarter 2012. Indonesia's unit net cash costs for 2012 would change by approximately $0.02 per pound for each $50 per ounce change in the average price of gold for fourth-quarter 2012. Assuming consistent commodity price assumptions, Indonesia's unit net cash costs for future periods are expected to be lower than 2012, as PT Freeport Indonesia accesses higher grade ore beginning in the second half of 2013. Africa Mining. Through its 56 percent owned and wholly consolidated subsidiary Tenke Fungurume Mining S.A.R.L (TFM), FCX operates the Tenke Fungurume (Tenke) mine in the Katanga province of the Democratic Republic of Congo (DRC). In addition to copper, the Tenke mine produces cobalt hydroxide. Operating and Development Activities. FCX is nearing completion of a second phase of the project, which includes optimizing the current plant and increasing capacity. FCX is expanding the mill rate to 14,000 metric tons of ore per day and is completing construction of the related processing facilities that target the addition of approximately 150 million pounds of copper per year in 2013. The approximate $850 million project includes mill upgrades, additional mining equipment, a new tankhouse and a sulphuric acid plant expansion. Construction activities are progressing well and are expected to be substantially complete by year-end 2012. The addition of a second sulphuric acid plant is expected to be completed in 2015. During third-quarter 2012, Tenke achieved record mining, milling and copper production rates. Improved performance and the second phase expansion are expected to enable copper production to exceed 400 million pounds for the year 2013, compared with initial design capacity of 250 million pounds per year. 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. Future expansions are subject to a number of factors, including economic and market conditions, and the business and investment climate in the DRC. Operating Data. Following is summary consolidated operating data for the Africa mining operations for the third quarters and first nine months of 2012 and 2011:   Three Months Ended     Nine Months EndedSeptember 30,September 30,   2012     20112012     2011Copper (millions of recoverable pounds) Production 91 71 250 204 Sales 88 65 239 200 Average realized price per pounda $ 3.55 $ 3.46 $ 3.54 $ 3.89   Cobalt (millions of contained pounds) Production 8 6 20 18 Sales 8 6 19 19 Average realized price per pound $ 8.24 $ 10.05 $ 8.36 $ 10.71   Unit net cash costs per pound of copper: Site production and delivery, excluding adjustments $ 1.63 $ 1.55 $ 1.54 $ 1.57 Cobalt creditsb (0.48 ) (0.51 ) (0.39 ) (0.68 ) Royalty on metals   0.08     0.08     0.08     0.09   Unit net cash costsc $ 1.23   $ 1.12   $ 1.23   $ 0.98     a. Includes 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 88 million pounds in third-quarter 2012 were higher than third-quarter 2011 copper sales of 65 million pounds primarily reflecting higher mining and milling rates principally related to the ramp-up of the second phase expansion. FCX expects Africa's sales to approximate 330 million pounds of copper and 25 million pounds of cobalt for the year 2012, compared with 283 million pounds of copper and 25 million pounds of cobalt for the year 2011. Africa's unit net cash costs (net of cobalt credits) of $1.23 per pound of copper in third-quarter 2012 were higher than unit net cash costs of $1.12 per pound in third-quarter 2011, primarily reflecting higher mining and input costs, including sulphuric acid and energy. FCX estimates Africa's average unit net cash costs would approximate $1.25 per pound of copper for the year 2012, based on current sales volume and cost estimates and assuming an average cobalt price of $12 per pound for fourth-quarter 2012. Africa's unit net cash costs for 2012 would change by approximately $0.025 per pound for each $2 per pound change in the average price of cobalt for fourth-quarter 2012. Molybdenum. FCX is the world's largest producer of molybdenum. FCX conducts molybdenum mining operations at its wholly owned Henderson underground mine and Climax open-pit mine in Colorado, and also sells molybdenum produced from its North and South America copper mines. Operating and Development Activities. The newly commissioned Climax molybdenum mine, which includes a new 25,000 metric ton per day mill facility, began commercial production in May 2012. Depending on market conditions, production from Climax may ramp up to a rate of 20 million pounds of molybdenum per year during 2013, with potential to produce 30 million pounds of molybdenum per year. FCX intends to operate the Climax and Henderson mines in a flexible manner to meet market requirements. FCX believes that Climax is one of the most attractive primary molybdenum mines in the world, with large-scale production capacity, attractive cash costs and future growth options. Operating Data. Following is summary consolidated operating data for the Molybdenum operations for the third quarters and first nine months of 2012 and 2011:   Three Months Ended     Nine Months EndedSeptember 30,September 30,   2012   20112012   2011Molybdenum (millions of recoverable pounds) Production 10 a 11 28 a 30 Sales, excluding purchasesb 21 19 62 60 Average realized price per pound $ 13.62 $ 16.34 $ 14.79 $ 17.57   Henderson's unit net cash cost per pound of molybdenumc $ 7.11 $ 6.24 $ 6.94 $ 6.19   a. Molybdenum production from the Climax mine totaled 1 million pounds in third-quarter 2012 and 2 million pounds for the first nine months of 2012, reflecting production since the start of commercial operations in May 2012 (the 2011 periods reflect only production from the Henderson molybdenum mine).b. Includes sales of molybdenum produced at the North and South America copper mines.c. Reflects unit net cash costs for the Henderson molybdenum mine, excluding net noncash and other costs. 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 in third-quarter 2012 were higher than third-quarter 2011 sales of 19 million pounds. For the year 2012, FCX expects molybdenum sales to approximate 82 million pounds (including production of approximately 43 million pounds from the North and South America copper mines), compared with 79 million pounds in 2011 (including production of 45 million pounds from the North and South America copper mines). Unit net cash costs at the Henderson mine of $7.11 per pound of molybdenum in third-quarter 2012 were higher than unit net cash costs of $6.24 per pound in third-quarter 2011 primarily reflecting lower volumes. Based on current sales volume and cost estimates, FCX expects average unit net cash costs for the Henderson mine to approximate $7.00 per pound of molybdenum for the year 2012. EXPLORATION ACTIVITIES FCX is actively 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. 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 2012 is expected to approximate $255 million, compared to $221 million in 2011. 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 nine months of 2012, 45 percent of FCX's mined copper was sold in concentrate, 28 percent as cathode and 27 percent as rod from North America operations. Under the long-established structure of sales agreements prevalent in the industry, copper contained in concentrates and cathodes is 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 monthly average spot copper prices on the London Metal Exchange (LME). 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 $3.50 per pound during third-quarter 2012, compared to FCX's average realized price of $3.64 per pound. At June 30, 2012, FCX had provisionally priced copper sales at its copper mining operations, primarily South America and Indonesia, totaling 329 million pounds (net of intercompany sales and noncontrolling interests) recorded at an average price of $3.49 per pound. Adjustments to these provisionally priced copper sales favorably impacted third-quarter 2012 consolidated revenues by $24 million ($12 million to net income attributable to common stock or $0.01 per share), compared with adjustments to the June 30, 2011, provisionally priced copper sales that unfavorably impacted third-quarter 2011 consolidated revenues by $213 million ($100 million to net income attributable to common stock or $0.11 per share). Adjustments to the December 31, 2011, provisionally priced copper sales favorably impacted consolidated revenues by $101 million ($43 million to net income attributable to common stock or $0.05 per share) for the first nine months of 2012, compared with adjustments to the December 31, 2010, provisionally priced copper sales that unfavorably impacted consolidated revenues by $12 million ($5 million to net income attributable to common stock or $0.01 per share) for the first nine months of 2011. At September 30, 2012, FCX had provisionally priced copper sales at its copper mining operations, primarily South America and Indonesia, totaling 325 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $3.72 per pound, subject to final pricing over the next several months. FCX estimates that each $0.05 change in the price realized from the September 30, 2012, provisional price recorded would have an approximate $23 million effect on its 2012 consolidated revenues ($11 million to net income attributable to common stock). The LME spot copper price closed at $3.68 per pound on October 19, 2012. FCX defers recognizing profits on sales from its mining operations to Atlantic Copper and on 25 percent of Indonesia mining's sales to PT Smelting (PT Freeport Indonesia's 25 percent-owned Indonesian smelting unit) until final sales to third parties occur. FCX's net deferred profits on its inventories at Atlantic Copper and PT Smelting to be recognized in future periods' net income attributable to common stock totaled $105 million at September 30, 2012. Refer to the "Consolidated Statements of Income" on page IV for a summary of net impacts from changes in these deferrals. 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 $526 million for third-quarter 2012 and $2.5 billion for the first nine months of 2012. These amounts were net of working capital uses and other tax payments of $765 million for the third quarter and $1.5 billion for the nine-month period. Based on current sales volume and cost estimates and assuming average prices of $3.70 per pound of copper, $1,700 per ounce of gold and $11 per pound of molybdenum for fourth-quarter 2012, FCX's consolidated operating cash flows are estimated to approximate $4.0 billion for the year 2012 (net of an estimated $1.4 billion in working capital uses and other tax payments). The impact of price changes for fourth-quarter 2012 on operating cash flows would approximate $80 million for each $0.10 per pound change in the average price of copper, $20 million for each $100 per ounce change in the average price of gold and $10 million for each $2 per pound change in the average price of molybdenum. Capital expenditures, including capitalized interest, totaled $971 million for third-quarter 2012 and $2.5 billion for the first nine months of 2012. FCX's capital expenditures are currently estimated to approximate $3.6 billion for the year 2012 (including $2.2 billion for major projects and $1.4 billion for sustaining capital). Major projects for 2012 primarily include underground development activities at Grasberg and the expansion projects at Tenke, Cerro Verde and Morenci. 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 September 30, 2012, FCX had consolidated cash of $3.7 billion. Net of noncontrolling interests' share, taxes and other costs, cash available to the parent company totaled $2.7 billion as shown below (in billions):   September 30,2012 Cash at domestic companiesa $ 1.2 Cash at international operations 2.5   Total consolidated cash and cash equivalents 3.7 Less: Noncontrolling interests' share (0.8 ) Cash, net of noncontrolling interests' share 2.9 Less: Withholding taxes and other (0.2 ) Net cash available$2.7     a.Includes cash at FCX's parent company and North America operations. At September 30, 2012, FCX had $3.5 billion in debt. FCX had no borrowings and $44 million of letters of credit issued under its revolving credit facility, resulting in total availability of approximately $1.5 billion at September 30, 2012. Annual interest cost savings associated with debt repayments since January 1, 2009, including the first-quarter 2012 refinancing, approximates $415 million per year (based on current interest rates). 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. FCX paid common stock dividends of $832 million during the first nine months of 2012. FCX's current annual dividend rate for its common stock is $1.25 per share. On September 26, 2012, FCX's Board of Directors (the Board) declared a regular quarterly dividend of $0.3125 per share, which will be paid on November 1, 2012. 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 third-quarter 2012 results is scheduled for today at 10:00 a.m. Eastern Time. The conference call will be broadcast on the Internet along with slides. Interested parties may listen to the conference call live and view the slides by accessing "www.fcx.com." A replay of the webcast will be available through Friday, November 16, 2012. 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. FCX's portfolio of assets includes the Grasberg minerals district in Indonesia, the world's largest copper and gold mine in terms of recoverable reserves; significant mining operations in the Americas, including the large-scale Morenci minerals district 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, the impact of deferred intercompany profits on earnings, liquidity, other financial commitments and tax rates, the impact of copper, gold, molybdenum and cobalt price changes, 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 outcome of ongoing discussions with the Indonesian government, the potential effects of violence in Indonesia, the resolution of administrative disputes in the Democratic Republic of Congo, weather- and climate-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, 2011, filed with the U.S. Securities and Exchange Commission (SEC) as updated by FCX's subsequent filings with the SEC.Investors are cautioned that many of the assumptions on which FCX's forward-looking statements are based are likely to change after its forward-looking statements are made, including for example commodity prices, which FCX cannot control, and production volumes and costs, some aspects of which FCX may or may not be able to control. Further, FCX may make changes to its business plans that could or will affect its results. FCX cautions investors that it does not intend to update forward-looking statements more frequently than quarterly notwithstanding any changes in assumptions, changes in business plans, actual experience or other changes, and FCX undertakes no obligation to update any forward-looking statements.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 September 30, Production Sales COPPER (millions of recoverable pounds) 2012 2011 2012 2011 (FCX's net interest in %)North America Morenci (85%)a 136 134 132 129 Bagdad (100%) 51 48 49 48 Safford (100%) 37 36 40 34 Sierrita (100%) 38 46 38 44 Miami (100%) 14 17 15 15 Tyrone (100%) 21 19 21 19 Chino (100%) 39 22 35 18 Other (100%) 1   —   1   — Total North America 337   322   331   307   South America Cerro Verde (53.56%) 153 157 155 161 El Abra (51%) 85 72 74 73 Candelaria/Ojos del Salado (80%) 73   96   79   88 Total South America 311   325   308   322   Indonesia Grasberg (90.64%)b 199   233   195   253   Africa Tenke Fungurume (56%)c 91   71   88   65   Consolidated938   951   922   947 Less noncontrolling interests 186   180   181   179 Net752   771   741   768   Consolidated sales from mines 922 947 Purchased copper 45   51 Total copper sales, including purchases967   998   Average realized price per pound $ 3.64 $ 3.60   GOLD (thousands of recoverable ounces) (FCX's net interest in %) North America (100%) 2 3 3 2 South America (80%) 20 25 21 23 Indonesia (90.64%)b 182   357   178   384 Consolidated204   385   202   409 Less noncontrolling interests 21   38   21   41 Net183   347   181   368   Consolidated sales from mines 202 409 Purchased gold 1   1 Total gold sales, including purchases203   410   Average realized price per ounce $ 1,728 $ 1,693   MOLYBDENUM (millions of recoverable pounds) (FCX's net interest in %) Henderson (100%) 9 11 N/A N/A Climax (100%) 1 — N/A N/A North America (100%)a 8 10 N/A N/A Cerro Verde (53.56%) 2   2   N/A   N/A Consolidated20   23   21   19 Less noncontrolling interests 1   1   1   1 Net19   22   20   18   Consolidated sales from mines 21 19 Purchased molybdenum —   — Total molybdenum sales, including purchases21   19   Average realized price per pound $ 13.62 $ 16.34   COBALT (millions of contained pounds) (FCX's net interest in %)Consolidated - Tenke Fungurume (56%)c8   6   8   6 Less noncontrolling interests 4   3   3   2 Net4   3   5   4   Average realized price per pound $ 8.24 $ 10.05   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.c. Effective March 26, 2012, FCX's interest in Tenke Fungurume was prospectively reduced from 57.75 percent to 56 percent.   FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA (continued)   Nine Months Ended September 30, Production Sales COPPER (millions of recoverable pounds) 2012 2011 2012 2011 (FCX's net interest in %)North America Morenci (85%)a 395 391 405 389 Bagdad (100%) 147 145 150 152 Safford (100%) 129 101 135 102 Sierrita (100%) 120 131 127 129 Miami (100%) 51 46 54 40 Tyrone (100%) 61 56 62 60 Chino (100%) 99 45 94 40 Other (100%) 3   2   3   2 Total North America 1,005   917   1,030   914   South America Cerro Verde (53.56%) 443 502 440 503 El Abra (51%) 249 186 240 183 Candelaria/Ojos del Salado (80%) 216   281   215   279 Total South America 908   969   895   965   Indonesia Grasberg (90.64%)b 495   778   512   796   Africa Tenke Fungurume (56%)c 250   204   239   200   Consolidated2,658   2,868   2,676   2,875 Less noncontrolling interests 526   540   517   538 Net2,132   2,328   2,159   2,337   Consolidated sales from mines 2,676 2,875 Purchased copper 97   185 Total copper sales, including purchases2,773   3,060   Average realized price per pound $ 3.63 $ 3.94   GOLD (thousands of recoverable ounces) (FCX's net interest in %) North America (100%) 9 6 9 5 South America (80%) 57 73 56 72 Indonesia (90.64%)b 641   1,123   691   1,168 Consolidated707   1,202   756   1,245 Less noncontrolling interests 71   119   76   124 Net636   1,083   680   1,121   Consolidated sales from mines 756 1,245 Purchased gold 2   1 Total gold sales, including purchases758   1,246   Average realized price per ounce $ 1,666 $ 1,565   MOLYBDENUM (millions of recoverable pounds) (FCX's net interest in %) Henderson (100%) 26 30 N/A N/A Climax (100%)d 2 — N/A N/A North America (100%)a 27 27 N/A N/A Cerro Verde (53.56%) 6   8   N/A   N/A Consolidated61   65   62   60 Less noncontrolling interests 3   4   3   3 Net58   61   59   57   Consolidated sales from mines 62 60 Purchased molybdenum —   — Total molybdenum sales, including purchases62   60   Average realized price per pound $ 14.79 $ 17.57   COBALT (millions of contained pounds) (FCX's net interest in %)Consolidated - Tenke Fungurume (56%)c20   18   19   19 Less noncontrolling interests 9   8   8   8 Net11   10   11   11   Average realized price per pound $ 8.36 $ 10.71   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.c. Effective March 26, 2012, FCX's interest in Tenke Fungurume was prospectively reduced from 57.75 percent to 56 percent.d. Includes results from the Climax molybdenum mine since the start of commercial operations in May 2012.   FREEPORT-McMoRan COPPER & GOLD INC.SELECTED OPERATING DATA (continued)               Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 100% North America Copper MinesSolution Extraction/Electrowinning (SX/EW) Operations Leach ore placed in stockpiles (metric tons per day) 922,100 872,200 967,700 841,700 Average copper ore grade (percent) 0.22 0.25 0.22 0.25 Copper production (millions of recoverable pounds) 211 199 639 582   Mill Operations Ore milled (metric tons per day) 242,700 225,800 235,700 220,100 Average ore grades (percent): Copper 0.37 0.38 0.37 0.37 Molybdenum 0.03 0.03 0.03 0.03 Copper recovery rate (percent) 85.4 84.5 83.5 83.5 Production (millions of recoverable pounds): Copper 150 146 436 404 Molybdenum 8 10 27 27   100% South America MiningSX/EW Operations Leach ore placed in stockpiles (metric tons per day) 248,100 244,100 229,100 249,500 Average copper ore grade (percent) 0.55 0.54 0.55 0.48 Copper production (millions of recoverable pounds) 115 111 346 314   Mill Operations Ore milled (metric tons per day) 191,400 185,700 190,000 192,300 Average ore grades: Copper (percent) 0.59 0.66 0.58 0.66 Gold (grams per metric ton) 0.09 0.12 0.09 0.12 Molybdenum (percent) 0.02 0.02 0.02 0.02 Copper recovery rate (percent) 90.7 89.1 89.5 90.0 Production (recoverable): Copper (millions of pounds) 196 214 562 655 Gold (thousands of ounces) 20 25 57 73 Molybdenum (millions of pounds) 2 2 6 8   100% Indonesia Mining Ore milled (metric tons per day) 186,700 152,200 160,400 197,900 Average ore grades: Copper (percent) 0.63 0.90 0.61 0.80 Gold (grams per metric ton) 0.46 1.14 0.60 0.92 Recovery rates (percent): Copper 87.7 89.8 88.6 88.2 Gold 71.4 82.4 76.7 81.3 Production (recoverable): Copper (millions of pounds) 199 237 495 803 Gold (thousands of ounces) 182 408 641 1,261   100% Africa Mining Ore milled (metric tons per day) 13,600 12,000 12,900 10,800 Average ore grades (percent): Copper 3.60 3.21 3.56 3.42 Cobalt 0.38 0.41 0.37 0.40 Copper recovery rate (percent) 92.9 91.4 91.6 92.0 Production (millions of pounds): Copper (recoverable) 91 71 250 204 Cobalt (contained) 8 6 20 18   100% Henderson Molybdenum Mine Ore milled (metric tons per day) 21,400 24,500 21,100 23,300 Average molybdenum ore grade (percent) 0.23 0.24 0.23 0.24 Molybdenum production (millions of recoverable pounds) 9 11 26 30   FREEPORT-McMoRan COPPER & GOLD INC.CONSOLIDATED STATEMENTS OF INCOME (Unaudited)               Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 (In Millions, Except Per Share Amounts) Revenuesa $ 4,417 $ 5,195 $ 13,497 $ 16,718 Cost of sales: Production and delivery 2,592 2,570 7,642 7,504 Depreciation, depletion and amortization   298     257     856     756   Total cost of sales 2,890 2,827 8,498 8,260 Selling, general and administrative expenses 110 102 311 323 Exploration and research expenses 79 78 214 194 Environmental obligations and shutdown costsb   (73 )   38     18     98   Total costs and expenses   3,006     3,045     9,041     8,875   Operating income 1,411 2,150 4,456 7,843 Interest expense, netc (42 ) (78 ) (148 ) (250 ) Losses on early extinguishment of debt — — (168 ) (68 ) Other (expense) income, net   (15 )   28     23     40   Income before income taxes and equity in affiliated companies' net earnings 1,354 2,100 4,163 7,565 Provision for income taxesd (215 ) (808 ) (1,128 ) (2,698 ) Equity in affiliated companies' net earnings   1     2     —     14   Net income 1,140 1,294 3,035 4,881 Net income attributable to noncontrolling interestsd   (316 )   (241 )   (737 )   (961 ) Net income attributable to FCX common stockholdersa,b,d,e $ 824   $ 1,053   $ 2,298   $ 3,920     Net income per share attributable to FCX common stockholders: Basic $ 0.87   $ 1.11   $ 2.42   $ 4.14   Diluted $ 0.86   $ 1.10   $ 2.41   $ 4.10     Weighted-average common shares outstanding: Basic   949     948     949     947   Diluted   953     955     953     955     Dividends declared per share of common stock $ 0.3125   $ 0.25   $ 0.9375   $ 1.25     a. Includes favorable (unfavorable) adjustments to provisionally priced copper sales recognized in the prior periods totaling $24 million ($12 million to net income attributable to common stockholders) in third-quarter 2012, $(213) million ($(100) million to net income attributable to common stockholders) in third-quarter 2011, $101 million ($43 million to net income attributable to common stockholders) for the first nine months of 2012 and $(12) million ($(5) million to net income attributable to common stockholders) for the first nine months of 2011.b. Includes net (credits) charges for adjustments to environmental obligations and related litigation reserves totaling $(85) million ($(68) million to net income attributable to common stockholders) for third quarter 2012, $29 million ($23 million to net income attributable to common stockholders) for third-quarter 2011, $(19) million ($(16) million to net income attributable to common stockholders) for the first nine months of 2012 and $78 million ($63 million to net income attributable to common stockholders) for the first nine months of 2011.c. Consolidated interest expense, excluding capitalized interest, totaled $56 million in third-quarter 2012, $105 million in third-quarter 2011, $210 million for the first nine months of 2012 and $325 million for the first nine months of 2011. Lower interest expense primarily reflects the impact of the first-quarter 2012 refinancing transaction.d. The 2012 periods include a net tax credit of $208 million ($108 million attributable to noncontrolling interests and $100 million to net income attributable to common stockholders) associated with adjustments to Cerro Verde's deferred income taxes. The 2011 periods include a tax charge of $57 million ($7 million attributable to noncontrolling interests and $50 million to net income attributable to common stockholders) for additional taxes associated with Cerro Verde's election to pay a special mining burden during the remaining term of its current stability agreement. For further discussion refer to the supplemental schedule, "Provision for Income Taxes," on page XXVI, which is available on FCX's website, "www.fcx.com."e. 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 (reductions) additions to net income attributable to common stockholders of $(34) million, $(0.04) per share, in third-quarter 2012, $99 million, $0.10 per share, in third-quarter 2011, $(69) million, $(0.07) per share, for the first nine months of 2012 and $116 million, $0.12 per share, for the first nine months of 2011.FREEPORT-McMoRan COPPER & GOLD INC.CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)         September 30, December 31, 2012 2011 (In Millions) ASSETS Current assets: Cash and cash equivalents $ 3,727 $ 4,822 Trade accounts receivable 1,424 892 Other accounts receivable 242 250 Inventories: Mill and leach stockpiles 1,595 1,289 Materials and supplies, net 1,465 1,354 Product 1,374 1,226 Other current assets   353     214   Total current assets 10,180 10,047 Property, plant, equipment and development costs, net 20,294 18,449 Long-term mill and leach stockpiles 1,871 1,686 Long-term receivables 1,004 675 Intangible assets, net 321 325 Other assets   847     888   Total assets $ 34,517   $ 32,070     LIABILITIES AND EQUITY Current liabilities: Accounts payable and accrued liabilities $ 2,531 $ 2,297 Dividends payable 299 240 Current portion of reclamation and environmental obligations 259 236 Accrued income taxes 59 163 Current portion of debt   2     4   Total current liabilities 3,150 2,940 Deferred income taxes 3,378 3,255 Reclamation and environmental obligations, less current portion 2,194 2,138 Long-term debt, less current portion 3,521 3,533 Other liabilities   1,531     1,651   Total liabilities 13,774 13,517 Equity: FCX stockholders' equity: Common stock 107 107 Capital in excess of par value 19,094 19,007 Retained earnings 1,953 546 Accumulated other comprehensive loss (439 ) (465 ) Common stock held in treasury   (3,576 )   (3,553 ) Total FCX stockholders' equity 17,139 15,642 Noncontrolling interests   3,604     2,911   Total equity   20,743     18,553   Total liabilities and equity $ 34,517   $ 32,070     FREEPORT-McMoRan COPPER & GOLD INC.CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)       Nine Months Ended September 30, 2012 2011 (In Millions) Cash flow from operating activities: Net income $ 3,035 $ 4,881 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 856 756 Stock-based compensation 77 92 Pension plan contributions (114 ) (29 ) Net charges for reclamation and environmental obligations, including accretion 64 144 Payments of reclamation and environmental obligations (148 ) (131 ) Losses on early extinguishment of debt 168 68 Deferred income taxes 223 419 Increase in long-term mill and leach stockpiles (184 ) (174 ) Other, net 71 (26 ) (Increases) decreases in working capital and other tax payments: Accounts receivable (603 ) 1,034 Inventories (581 ) (266 ) Other current assets (33 ) (152 ) Accounts payable and accrued liabilities 78 (101 ) Accrued income taxes and other tax payments   (400 )   (641 ) Net cash provided by operating activities   2,509     5,874     Cash flow from investing activities: Capital expenditures: North America copper mines (569 ) (342 ) South America (659 ) (431 ) Indonesia (624 ) (463 ) Africa (428 ) (89 ) Molybdenum (197 ) (317 ) Other (41 ) (107 ) Other, net   (19 )   24   Net cash used in investing activities   (2,537 )   (1,725 )   Cash flow from financing activities: Proceeds from debt 3,023 37 Repayments of debt (3,179 ) (1,303 ) Cash dividends paid: Common stock (832 ) (1,186 ) Noncontrolling interests (76 ) (350 ) Contributions from noncontrolling interests 15 27 Net (payments for) proceeds from stock-based awards (3 ) 2 Excess tax benefit from stock-based awards 7 23 Other, net   (22 )   (9 ) Net cash used in financing activities   (1,067 )   (2,759 )   Net (decrease) increase in cash and cash equivalents (1,095 ) 1,390 Cash and cash equivalents at beginning of year   4,822     3,738   Cash and cash equivalents at end of period $ 3,727   $ 5,128   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