Freeport-McMoRan 2009 Annual Report Download - page 94

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
92 -9,,769;4J4V9HU*677,9.63+05*
  (UU\HS9LWVY[
EHKRQRUHGXQWLOWKHLUH[SLUDWLRQ+RZHYHUWKHUHJXODWLRQVDWWHPSWWR
DSSO\FHUWDLQSURYLVLRQVRIWKHQHZODZWRDQ\H[WHQVLRQSHULRGVRI
FRQWUDFWVRIZRUNHYHQWKRXJK37 )UHHSRUW,QGRQHVLDҋV&RQWUDFWRI
:RUNSURYLGHVIRUWZR\HDUH[WHQVLRQSHULRGVXQGHUWKHH[LVWLQJ
WHUPVRILWV&RQWUDFWRI:RUN
Africa. )&;LVHQWLWOHGWRPLQHLQWKH'5& XQGHUWKH´$PHQGHGDQG
5HVWDWHG0LQLQJ&RQYHQWLRQµEHWZHHQ7HQNH)XQJXUXPH0LQLQJ
6$5/DQGWKH*RYHUQPHQWRIWKH'5&7KHRULJLQDO0LQLQJ
&RQYHQWLRQZDVHQWHUHGLQWRLQDQGZDVUHSODFHGZLWKWKH
$PHQGHGDQG5HVWDWHG0LQLQJ&RQYHQWLRQLQ7KHFXUUHQW
$PHQGHGDQG5HVWDWHG0LQLQJ&RQYHQWLRQZLOOUHPDLQLQHIIHFWIRUDV
ORQJDVWKH7HQNH)XQJXUXPHFRQFHVVLRQLVH[SORLWDEOH7KHUR\DOW\
UDWHSD\DEOHE\7HQNH)XQJXUXPH0LQLQJ6$5/XQGHUWKH
$PHQGHGDQG5HVWDWHG0LQLQJ&RQYHQWLRQLVSHUFHQWRIQHW
UHYHQXH7KHVH PLQLQJUR\DOWLHVWRWDOHGPLOOLRQLQ
,Q)HEUXDU\WKH0LQLVWU\RI0LQHV*RYHUQPHQWRIWKH'5&
VHQWDOHWWHUVHHNLQJFRPPHQWRQSURSRVHGPDWHULDOPRGLÀFDWLRQVWR
WKHPLQLQJFRQWUDFWVIRUWKH7HQNH)XQJXUXPHFRQFHVVLRQLQFOXGLQJ
WKHDPRXQWRIWUDQVIHUSD\PHQWVSD\DEOHWRWKHJRYHUQPHQWWKH
JRYHUQPHQWҋVSHUFHQWDJHRZQHUVKLSDQGLQYROYHPHQWLQWKH
PDQDJHPHQW RIWKHPLQHUHJXODUL]DWLRQRIFHUWDLQPDWWHUVXQGHU
&RQJROHVHODZDQGWKHLPSOHPHQWDWLRQRIVRFLDOSODQV)&;
UHVSRQGHGWRWKLVOHWWHULQGLFDWLQJWKDWLWVPLQLQJFRQWUDFWVZHUH
QHJRWLDWHGWUDQVSDUHQWO\DQGDSSURYHGE\WKH*RYHUQPHQWRIWKH
'5&IROORZLQJH[WHQGHGQHJRWLDWLRQVDQG)&;EHOLHYHVWKH\DUHIDLU
DQGHTXLWDEOHFRPSO\ZLWK&RQJROHVHODZDQGDUHHQIRUFHDEOH
ZLWKRXWPRGLÀFDWLRQV)&;LVFRQWLQXLQJWRZRUNFRRSHUDWLYHO\ZLWK
WKH'5&JRYHUQPHQWWRUHVROYHWKHVHPDWWHUVEXWFDQQRWSUHGLFWWKH
WLPLQJRUWKHRXWFRPHRIWKLVSURFHVV7KHFRQWUDFWUHYLHZ SURFHVV
KDVQRWDIIHFWHG)&;ҋVGHYHORSPHQWVFKHGXOHDQG)&;LVFRQWLQXLQJ
WRRSHUDWHSXUVXDQWWRWKHWHUPVRILWVFRQWUDFW
Community Development Programs. )&;KDVDGRSWHGSROLFLHV
WKDWJRYHUQLWVZRUNLQJUHODWLRQVKLSVZLWKWKHFRPPXQLWLHVZKHUHLW
RSHUDWHVWKDWDUHGHVLJQHGWRJXLGHLWVSUDFWLFHVDQGSURJUDPVLQD
PDQQHUWKDWUHVSHFWVEDVLFKXPDQULJKWVDQGWKHFXOWXUHRIWKHORFDO
SHRSOHLPSDFWHGE\)&;ҋVRSHUDWLRQV)&;FRQWLQXHVWRPDNH
VLJQLÀFDQWH[SHQGLWXUHVRQFRPPXQLW\GHYHORSPHQWHGXFDWLRQ
WUDLQLQJDQGFXOWXUDOSURJUDPV
,Q37 )UHHSRUW,QGRQHVLDHVWDEOLVKHGWKH)UHHSRUW
3DUWQHUVKLS)XQGIRU&RPPXQLW\'HYHORSPHQWIRUPHUO\WKH)UHHSRUW
)XQGIRU,ULDQ-D\D'HYHORSPHQWWKURXJKZKLFK37)UHHSRUW,QGRQHVLD
KDVPDGHDYDLODEOHIXQGLQJDQGWHFKQLFDODVVLVWDQFHWRVXSSRUWWKH
HFRQRPLFKHDOWKHGXFDWLRQDQGVRFLDOGHYHORSPHQWRIWKHDUHD
37 )UHHSRUW,QGRQHVLDKDVFRPPLWWHGWKURXJKWRSURYLGHRQH
SHUFHQWRILWVDQQXDOUHYHQXHIRUWKHGHYHORSPHQWRIWKHORFDOSHRSOH
LQLWVDUHDRIRSHUDWLRQVWKURXJKWKH)UHHSRUW3DUWQHUVKLS)XQGIRU
&RPPXQLW\'HYHORSPHQW37 )UHHSRUW,QGRQHVLDFKDUJHGPLOOLRQ
LQPLOOLRQLQDQGPLOOLRQLQWRFRVWRIVDOHV
IRUWKLVFRPPLWPHQW
IXOO\H[SHFWVWKDWWKHJRYHUQPHQWZLOODSSURYHWKHH[WHQVLRQVDVORQJ
DVLWFRQWLQXHVWRFRPSO\ZLWKWKHWHUPVRIWKH&RQWUDFWRI:RUN
,Q-XO\)&;UHFHLYHGDUHTXHVWIURPWKH,QGRQHVLDQ
'HSDUWPHQWRI(QHUJ\DQG0LQHUDO5HVRXUFHVWKDWLWRIIHUWRVHOO
VKDUHVLQ37 ,QGRFRSSHU,QYHVWDPDWR,QGRQHVLDQQDWLRQDOVDWIDLU
PDUNHWYDOXH,QUHVSRQVHWRWKLVUHTXHVWDQGLQYLHZRIWKHSRWHQWLDO
EHQHÀWVRIKDYLQJDGGLWLRQDO,QGRQHVLDQRZQHUVKLSLQWKHRSHUDWLRQV
)&;DJUHHGDWWKHWLPHWRFRQVLGHUDSRWHQWLDOVDOHRIDQLQWHUHVWLQ
37 ,QGRFRSSHU,QYHVWDPDDWIDLUPDUNHWYDOXH1HLWKHULWV&RQWUDFWRI
:RUNQRU,QGRQHVLDQODZUHTXLUHV)&;WRGLYHVWDQ\SRUWLRQRILWV
RZQHUVKLSLQ37 )UHHSRUW,QGRQHVLDRU37 ,QGRFRSSHU,QYHVWDPD,Q
0D\ )&; VLJQHGD0HPRUDQGXPRI8QGHUVWDQGLQJZLWKWKH
3DSXDSURYLQFLDOJRYHUQPHQWWKH3URYLQFHZKHUHE\WKHSDUWLHV
DJUHHGWRZRUNFRRSHUDWLYHO\WRGHWHUPLQHWKHIHDVLELOLW\RIDQ
DFTXLVLWLRQE\WKH3URYLQFHRIWKH37 ,QGRFRSSHU,QYHVWDPDVKDUHVDW
PDUNHWYDOXH
7KHFRSSHUUR\DOW\UDWHSD\DEOHE\37 )UHHSRUW,QGRQHVLDXQGHULWV
&RQWUDFWRI:RUNYDULHVIURPSHUFHQWRIFRSSHUQHWUHYHQXHDWD
FRSSHUSULFHRIRUOHVVSHUSRXQGWRSHUFHQWDWDFRSSHU
SULFHRIRUPRUHSHUSRXQG7KH&RQWUDFWRI:RUNUR\DOW\UDWH
IRUJROGDQGVLOYHUVDOHVLVSHUFHQW
$ ODUJHSDUWRIWKHPLQHUDOUR\DOWLHVXQGHU*RYHUQPHQWRI
,QGRQHVLDUHJXODWLRQVLVGHVLJQDWHGWRWKHSURYLQFHVIURPZKLFKWKH
PLQHUDOVDUHH[WUDFWHG,QFRQQHFWLRQZLWKLWVIRXUWKFRQFHQWUDWRU
PLOOH[SDQVLRQFRPSOHWHGLQ37 )UHHSRUW,QGRQHVLDDJUHHGWR
SD\WKH*RYHUQPHQWRI,QGRQHVLDDGGLWLRQDOUR\DOWLHVUR\DOWLHVQRW
UHTXLUHGE\WKH&RQWUDFWRI:RUNWRSURYLGHIXUWKHUVXSSRUWWRWKH
ORFDOJRYHUQPHQWVDQGWKHSHRSOHRIWKH,QGRQHVLDQSURYLQFHRI
3DSXD7KHDGGLWLRQDOUR\DOWLHVDUHSDLGRQSURGXFWLRQH[FHHGLQJ
VSHFLÀHGDQQXDODPRXQWVRIFRSSHUJROGDQGVLOYHUH[SHFWHGWREH
JHQHUDWHGZKHQ37 )UHHSRUW,QGRQHVLDҋVPLOOLQJIDFLOLWLHVRSHUDWH
DERYHPHWULFWRQVRIRUHSHUGD\7KHDGGLWLRQDOUR\DOW\IRU
FRSSHUHTXDOVWKH&RQWUDFWRI:RUNUR\DOW\UDWHDQGIRUJROGDQG
VLOYHUHTXDOVWZLFHWKH&RQWUDFWRI:RUNUR\DOW\UDWHV7KHUHIRUH
37 )UHHSRUW,QGRQHVLDҋVUR\DOW\UDWHRQFRSSHUQHWUHYHQXHVIURP
SURGXFWLRQDERYHWKHDJUHHGOHYHOVLVGRXEOHWKH&RQWUDFWRI:RUN
UR\DOW\UDWHDQGWKHUR\DOW\UDWHVRQJROGDQGVLOYHUVDOHVIURP
SURGXFWLRQDERYHWKHDJUHHGOHYHOVDUHWULSOHWKH&RQWUDFWRI:RUN
UR\DOW\UDWHV
7KHFRPELQHGUR\DOWLHVLQFOXGLQJWKH DGGLWLRQDOUR\DOWLHVWKDW
EHFDPHHIIHFWLYH-DQXDU\WRWDOHGPLOOLRQLQ
PLOOLRQLQDQGPLOOLRQLQ
,QWKH*RYHUQPHQWRI,QGRQHVLDHQDFWHGDQHZPLQLQJODZ
ZKLFKZLOORSHUDWHXQGHUDOLFHQVLQJV\VWHPDVRSSRVHGWRWKH
FRQWUDFWRIZRUNV\VWHPWKDWDSSOLHVWR37 )UHHSRUW,QGRQHVLD,Q
WKH*RYHUQPHQWRI,QGRQHVLDSURPXOJDWHGUHJXODWLRQVXQGHU
WKHPLQLQJODZDQGFHUWDLQSURYLVLRQVDGGUHVVH[LVWLQJFRQWUDFWV
RIZRUN7KHUHJXODWLRQVSURYLGHWKDWFRQWUDFWVRIZRUNZLOOFRQWLQXHWR