Freeport-McMoRan 2009 Annual Report Download - page 22

Download and view the complete annual report

Please find page 22 of the 2009 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 108

  • 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

7KHIROORZLQJWDEOHVXPPDUL]HVFKDQJHVLQRXUHVWLPDWHG
FRQVROLGDWHGUHFRYHUDEOHSURYHQDQGSUREDEOHFRSSHUJROGDQG
PRO\EGHQXPUHVHUYHVGXULQJDQG
CopperGoldMolybdenum
  IPSSPVU TPSSPVU IPSSPVU
  WV\UKZ V\UJLZ WV\UKZ
&RQVROLGDWHGUHVHUYHVDW
'HFHPEHU     
1HWDGGLWLRQVUHYLVLRQV     
3URGXFWLRQ     
&RQVROLGDWHGUHVHUYHVDW
'HFHPEHU 102.0 40.0 2.48
1HWDGGLWLRQVUHYLVLRQV 6.3 (0.1) 0.16
3URGXFWLRQ (4.1) (2.7) (0.05)
&RQVROLGDWHGUHVHUYHVDW
'HFHPEHU 104.2 37.2 2.59
1HWDGGLWLRQVWRUHFRYHUDEOHSURYHQDQGSUREDEOHFRSSHUUHVHUYHV
GXULQJLQFOXGHGDGGLWLRQVRIELOOLRQSRXQGVDWWKH&HUUR
9HUGHPLQHLQ6RXWK$PHULFDELOOLRQSRXQGVDWRXU1RUWK$PHULFD
FRSSHUPLQHVDQGELOOLRQSRXQGVDWWKH7HQNH)XQJXUXPHPLQH
SDUWLDOO\RIIVHWE\UHYLVLRQVDWRWKHUPLQHV1HWDGGLWLRQVIRU
UHSODFHGRYHUSHUFHQWRIRXUFRSSHUSURGXFWLRQ1HW
DGGLWLRQVWRUHFRYHUDEOHFRSSHUUHVHUYHVGXULQJLQFOXGHDGGLWLRQV
RIELOOLRQSRXQGVDWRXU1RUWK$PHULFDFRSSHUPLQHVELOOLRQ
SRXQGVDWRXU&HUUR9HUGHPLQHLQ6RXWK$PHULFDDQG ELOOLRQ
SRXQGVDWWKH7HQNH)XQJXUXPHPLQHSDUWLDOO\RIIVHWE\UHYLVLRQVDW
RWKHUPLQHV1HWDGGLWLRQVIRUUHSODFHGDSSUR[LPDWHO\
SHUFHQWRIFXUUHQW\HDUFRSSHUSURGXFWLRQ1HWDGGLWLRQVWRUHFRYHUDEOH
FRSSHUUHVHUYHVUHÁHFWDQDO\VLVRIH[SORUDWRU\GDWDJDLQHGWKURXJK
FRUHGULOOLQJXQGHUWDNHQLQDQGDVZHOODVH[SORUDWLRQ
DFWLYLWLHVGXULQJ5HIHUWR1RWHIRUIXUWKHULQIRUPDWLRQ
UHJDUGLQJHVWLPDWHGUHFRYHUDEOHSURYHQDQGSUREDEOHUHVHUYHV
$VGLVFXVVHGLQ1RWHZHGHSUHFLDWHRXUOLIHRIPLQHPLQLQJDQG
PLOOLQJDVVHWVDQGYDOXHVDVVLJQHGWRSURYHQDQGSUREDEOHUHVHUYHV
XVLQJWKHXQLWRISURGXFWLRQ823PHWKRGEDVHGRQRXUHVWLPDWHG
UHFRYHUDEOHSURYHQDQGSUREDEOHUHVHUYHVDQGDOVRKDYHRWKHU
DVVHWVWKDWDUHGHSUHFLDWHGRQDVWUDLJKWOLQHEDVLVRYHUWKHLU
HVWLPDWHGXVHIXOOLYHV%HFDXVHWKHHFRQRPLFDVVXPSWLRQVXVHGWR
HVWLPDWHUHVHUYHVFKDQJHIURPSHULRGWRSHULRGDQGDGGLWLRQDO
JHRORJLFDOGDWDLVJHQHUDWHGGXULQJWKHFRXUVHRIRSHUDWLRQV
HVWLPDWHVRIUHVHUYHVPD\FKDQJHZKLFKFRXOGKDYHDVLJQLÀFDQW
LPSDFWRQRXUUHVXOWVRIRSHUDWLRQVLQFOXGLQJFKDQJHVWRSURVSHFWLYH
GHSUHFLDWLRQUDWHVDQGDVVHWFDUU\LQJYDOXHV%DVHGRQSURMHFWHG
FRSSHUVDOHVYROXPHVIRUUHIHUWR´2YHUYLHZDQG2XWORRNµLI
HVWLPDWHGFRSSHUUHVHUYHVDWRXUPLQHVZHUHSHUFHQWKLJKHUDW
'HFHPEHUZHHVWLPDWHWKDWRXUDQQXDOGHSUHFLDWLRQ
GHSOHWLRQDQGDPRUWL]DWLRQH[SHQVHIRUZRXOGGHFUHDVHE\
PLOOLRQPLOOLRQWRQHWLQFRPH DWWULEXWDEOHWR)&;FRPPRQ
VWRFNKROGHUVDQGDSHUFHQWGHFUHDVHLQFRSSHUUHVHUYHVZRXOG
LQFUHDVHGHSUHFLDWLRQGHSOHWLRQ DQGDPRUWL]DWLRQH[SHQVHE\
PLOOLRQPLOOLRQWRQHWLQFRPHDWWULEXWDEOHWR)&;FRPPRQ
VWRFNKROGHUV:HSHUIRUPDQQXDODVVHVVPHQWVRIRXUH[LVWLQJDVVHWV
LQFRQQHFWLRQ ZLWKWKHUHYLHZRIPLQH RSHUDWLQJDQGGHYHORSPHQW
SODQV,ILWLVGHWHUPLQHGWKDWDVVLJQHGDVVHWOLYHVGRQRWUHÁHFWWKH
H[SHFWHGUHPDLQLQJSHULRGRIEHQHÀWDQ\FKDQJHFRXOGDIIHFW
SURVSHFWLYHGHSUHFLDWLRQUDWHV
$W'HFHPEHURXU ORQJOLYHGDVVHWVLQFOXGHDPRXQWV
DVVLJQHGWRSURYHQDQGSUREDEOHUHVHUYHVWRWDOLQJELOOLRQ
$VGLVFXVVHGLQ1RWHZHUHYLHZDQGHYDOXDWHRXUORQJOLYHGDVVHWV
IRULPSDLUPHQWZKHQHYHQWVRUFKDQJHVLQFLUFXPVWDQFHVLQGLFDWH
WKDWWKHUHODWHGFDUU\LQJDPRXQWRIVXFKDVVHWVPD\QRWEH
UHFRYHUDEOHDQGFKDQJHVWRRXUHVWLPDWHVRIUHFRYHUDEOHSURYHQ
DQGSUREDEOHUHVHUYHVFRXOGKDYHDQLPSDFWRQRXUDVVHVVPHQWRI
DVVHWUHFRYHUDELOLW\
Impairment of Assets. :HHYDOXDWHRXUORQJOLYHGDVVHWVWREH
KHOGDQGXVHGIRULPSDLUPHQWZKHQHYHQWVRUFKDQJHVLQ
FLUFXPVWDQFHVLQGLFDWHWKDWWKHUHODWHGFDUU\LQJDPRXQWRIVXFKDVVHWV
PD\QRW EHUHFRYHUDEOH,QHYDOXDWLQJRXUORQJOLYHGDVVHWVIRU
UHFRYHUDELOLW\HVWLPDWHVRIDIWHUWD[XQGLVFRXQWHGIXWXUHFDVKÁRZVRI
RXULQGLYLGXDOPLQLQJRSHUDWLRQVDUHXVHGZLWKLPSDLUPHQWORVVHV
PHDVXUHGE\UHIHUHQFHWRIDLUYDOXH$VTXRWHGPDUNHWSULFHVDUH
XQDYDLODEOHIRURXULQGLYLGXDOPLQLQJRSHUDWLRQVIDLUYDOXHLV
GHWHUPLQHGWKURXJKWKHXVHRIGLVFRXQWHGHVWLPDWHGIXWXUHFDVKÁRZV
7KHHVWLPDWHGFDVKÁRZVXVHGWRDVVHVVUHFRYHUDELOLW\RIRXUORQJ
OLYHGDVVHWVDQGPHDVXUHIDLUYDOXHRIRXUPLQLQJRSHUDWLRQVDUH
GHULYHGIURPFXUUHQWEXVLQHVVSODQVZKLFKDUHGHYHORSHGXVLQJQHDU
WHUPSULFHIRUHFDVWVUHÁHFWLYHRIWKHFXUUHQWSULFHHQYLURQPHQWDQG
PDQDJHPHQWҋVSURMHFWLRQVIRUORQJWHUPDYHUDJHPHWDOSULFHV,Q
DGGLWLRQWRQHDUDQGORQJWHUPPHWDOSULFHDVVXPSWLRQVRWKHUNH\
HVWLPDWHVLQFOXGHFRPPRGLW\EDVHGDQGRWKHULQSXWFRVWVSURYHQDQG
SUREDEOHUHVHUYHVLQFOXGLQJDQ\FRVWVWRGHYHORSWKHUHVHUYHVDQGWKH
WLPLQJRISURGXFLQJWKHUHVHUYHVDQGWKHXVHRIDSSURSULDWHHVFDODWLRQ
DQGGLVFRXQWUDWHV
%HFDXVHWKHFDVKÁRZVXVHGWRDVVHVVUHFRYHUDELOLW\RIRXUORQJ
OLYHGDVVHWVDQGPHDVXUHIDLUYDOXHRIRXUPLQLQJRSHUDWLRQVUHTXLUH
XVWRPDNHVHYHUDOHVWLPDWHVDQGDVVXPSWLRQVWKDWDUHVXEMHFWWRULVN
DQGXQFHUWDLQW\FKDQJHVLQWKHVHHVWLPDWHVDQGDVVXPSWLRQVFRXOG
UHVXOWLQWKHLPSDLUPHQWRIRXUORQJOLYHGDVVHWVYDOXHV(YHQWVWKDW
FRXOGUHVXOWLQLPSDLUPHQWRIRXUORQJOLYHGDVVHWVLQFOXGHEXWDUHQRW
OLPLWHGWRLGHFUHDVHVLQIXWXUHPHWDOSULFHVLLGHFUHDVHVLQ
HVWLPDWHGUHFRYHUDEOHSURYHQDQGSUREDEOHUHVHUYHVDQGLLLDQ\
HYHQWWKDWPLJKWRWKHUZLVHKDYHDPDWHULDODGYHUVHHIIHFWRQPLQH
VLWHSURGXFWLRQOHYHOVRUFRVWV
'XULQJIRXUWKTXDUWHUZHFRQFOXGHG WKDWWKHWKHQFXUUHQW
HFRQRPLFHQYLURQPHQWDQGVLJQLÀFDQWGHFOLQHVLQFRSSHUDQG
PRO\EGHQXPSULFHVUHSUHVHQWHGVLJQLÀFDQWDGYHUVHFKDQJHVLQRXU
EXVLQHVVDQGWKHUHIRUHHYDOXDWHGRXUORQJOLYHGDVVHWVIRU
LPSDLUPHQW3URMHFWHGPHWDOSULFHVUHSUHVHQWHGWKHPRVWVLJQLÀFDQW
DVVXPSWLRQXVHGLQWKHFDVKÁRZHVWLPDWHVWRDVVHVVUHFRYHUDELOLW\
DQGPHDVXUHIDLUYDOXHRIRXULQGLYLGXDOPLQLQJRSHUDWLRQV$WWKH
MANAGEMENTS DISCUSSION AND ANALYSIS
20-9,,769;4J4V9HU*677,9.63+05*
 (UU\HS9LWVY[