Freeport-McMoRan 2011 Annual Report Download - page 50

48 | FREEPORT-McMoRan COPPER & GOLD INC.
Since January 1, 2009, we have repaid approximately $3.8 billion
of our outstanding debt resulting in estimated annual interest
savings of $260 million based on current interest rates.
In February 2012, we sold $3.0 billion in senior notes in three
tranches and announced our intent to redeem the remaining
$3.0 billion of our 8.375% Senior Notes (refer to Note 20 for
further discussion). We estimate annual interest savings associated
with the renancing to approximate $160 million.
On March 30, 2011, we entered into a new senior unsecured
revolving credit facility, which replaced the revolving credit
facilities that were scheduled to expire on March 19, 2012. is
revolving credit facility is available until March 30, 2016, in an
aggregate principal amount of $1.5 billion, with $500 million
available to PT Freeport Indonesia. At December31,2011, we had
no borrowings and $44 million of letters of credit issued under the
facilities, resulting in availability of approximately $1.5 billion
($956 million of which could be used for additional letters of credit).
e revolving credit facility contains covenants that are typical
for investment-grade companies, including limitations on liens and
subsidiary debt. e credit facility also includes nancial ratios
governing maximum total leverage and minimum interest coverage.
In February 2009, we completed a public oering of 53.6 million
shares of our common stock at an average price of $14.00 per share,
which generated gross proceeds of $750 million (net proceeds
of approximately $740 million aer fees and expenses), which were
used for general corporate purposes.
We have an open-market share purchase program for up to
30 million shares, of which 23.7 million shares remain available.
ere have been no purchases since 2008. e timing of future
purchases of our common stock is dependent on many factors,
including our operating results; cash ows and nancial position;
copper, gold and molybdenum prices; the price of our common
shares; and general economic and market conditions.
Dividends. Common stock dividends paid totaled $1.4 billion in
2011 and $885 million in 2010. ere were no common stock
dividends paid in 2009.
Aer suspending dividends in late 2008, the Board reinstated a
cash dividend on our common stock in October 2009 at an annual
rate of $0.30 per share ($0.075 per share quarterly). e Board
authorized increases in the annual cash dividend to an annual rate
of $0.60 per share ($0.15 per share quarterly) in April 2010 and
$1.00 per share ($0.25 per share quarterly) in October 2010. e
Board also authorized supplemental common stock dividends of
$0.50 per share paid in December 2010 and June 2011.
In February 2012, the Board authorized an increase in the
cash dividend on our common stock to an annual rate of $1.25 per
share ($0.3125 per share quarterly). Dividends are paid quarterly as
declared by the Board with the initial quarterly dividend of
$0.3125 per share expected to be paid in May 2012. e declaration
of dividends is at the discretion of the Board and will depend upon
our nancial results, cash requirements, future prospects and
other factors deemed relevant by the Board. e Board will
continue to review our nancial policy on an ongoing basis. Based
on outstanding common shares of 948 million at December 31,
2011, and the current dividend rate, our estimated regular common
stock dividend for 2012 approximates $1.1 billion.
During 2010, our 6¾% Mandatory Convertible Preferred Stock
converted into 78.9 million shares of our common stock, and in
2009, we redeemed our 5½% Convertible Perpetual Preferred Stock
in exchange for 35.8 million shares of our common stock (refer
to Note 11 for further discussion). As a result of these transactions,
we no longer have requirements to pay preferred stock dividends.
Preferred stock dividends paid totaled $95 million in 2010
representing dividends on our 6¾% Mandatory Convertible
Preferred Stock and $229 million in 2009 representing dividends
on our 5½% Convertible Perpetual Preferred Stock and 6¾%
Mandatory Convertible Preferred Stock.
Cash dividends and distributions paid to noncontrolling
interests totaled $391 million in 2011, $816 million in 2010 and
$535 million in 2009, reecting dividends and distributions paid
to the noncontrolling interest owners of PT Freeport Indonesia
and our South America mines.
CONTRACTUAL OBLIGATIONS
We have contractual and other long-term obligations, including
debt maturities, which we expect to fund with available cash,
projected operating cash ows, availability under our revolving
credit facilities or future nancing transactions, if necessary. A
summary of these various obligations at December31,2011, follows
(in millions):
MANAGEMENT’S DISCUSSION AND ANALYSIS