Freeport-McMoRan 2008 Annual Report Download - page 87

Download and view the complete annual report

Please find page 87 of the 2008 Freeport-McMoRan annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

Notes to Consolidated Financial Statements
2008 Annual Report FREEPORT-McMoRan COPPER & GOLD INC. 85
Plan Information.
FCX uses a measurement date of December 31
for its plans. In some plans, the plan assets exceed the
accumulated benefit obligations, while in the remainder, the
accumulated benefit obligations exceed the plan assets. The
following table presents the projected benefit obligation,
accumulated benefit obligation and fair value of plan assets for
those plans where the accumulated benefit obligations exceed
the plan assets:
December 31, 2008 2007
Projected benefit obligation $ 1,486 $ 230
Accumulated benefit obligation 1,403 259
Fair value of plan assets 968 66
Information as of December 31, 2008 and 2007, on the FCX
(including FMC’s plans; FCX’s SERP, director and excess benefits
plans; and FM Services Company’s plans), PT Freeport Indonesia
and Atlantic Copper plans follows:
FCX PT Freeport Indonesia Atlantic Copper
2008 2007 2008 2007 2008 2007
Change in benefit obligation:
Benefit obligation at beginning of year $ 1,342 $ 50 $ 65 $ 54 $ 87 $ 83
Acquisition of Phelps Dodge – 1,370 – – – –
Service cost 29 24 6 5 – –
Interest cost 80 62 6 5 4 5
Amendments (6) – – – – –
Actuarial (gains) losses 62 (78) (5) 7 1 –
Divestitures – (5) – – – –
Foreign exchange (gain) loss (4) 2 (9) (3) (3) 8
Curtailments
a
(19) – – – – –
Special retirement benefits
a
39 – – – – –
Benefits paid (111) (83) (4) (3) (8) (9)
Benefit obligation at end of year 1,412 1,342 59 65 81 87
Change in plan assets:
Fair value of plan assets at beginning of year 1,442 13 38 30 15 14
Acquisition of Phelps Dodge – 1,374 – – – –
Actual return on plan assets (390) 113 (2) 4 – –
Employer contributions
b
21 24 15 8 12 10
Foreign exchange gain (loss) (3) 1 (6) (1) – –
Benefits paid (111) (83) (3) (3) (8) (9)
Fair value of plan assets at end of year 959 1,442 42 38 19 15
Funded status $ (453) $ 100 $ (17) $ (27) $ (62) $ (72)
Accumulated benefit obligation $ 1,329 $ 1,252 $ 37 $ 39 $ 81 $ 87
Weighted-average assumptions used to determine benefit obligations:
Discount rate
c
6.10% 6.30% 12.00% 10.25% 6.77% 6.77%
Rate of compensation increase
d
4.25% 4.25% 8.00% 8.00% N/A N/A
Balance sheet classification of funded status:
Other assets $ 3 $ 195 $ – $ – $ – $ –
Accounts payable and accrued liabilities (5) (7) – (1) – –
Other liabilities (451) (88) (17) (26) (62) (72)
Total $ (453) $ 100 $ (17) $ (27) $ (62) $ (72)
a. Resulted from revised mine operating plans and reductions in the workforce (see Note 2 for further discussion).
b. Employer contributions for 2009 are expected to approximate $6 million for the FCX plans, $14 million for the PT Freeport Indonesia plan (based on a December 31, 2008, exchange rate
of 10,850 Indonesian rupiah to one U.S. dollar) and $10 million for the Atlantic Copper plan (based on a December 31, 2008, exchange rate of $1.39 per euro).
c. The discount rate shown in 2008 for the FCX plans relates to all plans except the SERP plan. The discount rate shown in 2007 for the FCX plans relates to the FMC plans and the excess
benefit plan. The SERP plan’s discount rate in 2008 and 2007 was 4.00 percent.
d. The rate of compensation increase shown for the FCX plans only relates to the FMC plans.