Freeport-McMoRan 2011 Annual Report Download - page 83

2011 ANNUAL REPORT | 81
e components of other assets follow:
December 31, 2011 2010
Cost-method investments:
McMoRan Exploration Co. (MMR)
a
$ 475 $ 500
Other 2 3
Equity-method investments:
PT Smelting
b
125 11
Other 47 43
Trust assets
c,d
152 140
Debt issue costs 40 58
Available-for-sale securities 9 28
Other 38 14
Total other assets $ 888 $ 797
a. In December 2010, FCX purchased 500,000 shares of MMR’s 5¾% Convertible Perpetual
Preferred Stock (the Preferred Stock) for an aggregate purchase price of $500 million.
The Preferred Stock is initially convertible into 62.5 shares of MMR common stock per
share of Preferred Stock (an aggregate of 31.25 million shares of MMR common stock), at
an initial conversion price of $16 per share of MMR common stock. Dividends received
are recorded as a return of investment because of MMR’s reported losses. Several of
FCX’s directors and executive officers also serve as directors or executive officers of MMR.
b. Amounts are reduced by unrecognized profits on sales from PT Freeport Indonesia to
PT Smelting totaling $2 million at December 31, 2011, and $113 million at December 31, 2010.
c. Includes $151 million in 2011 and $137 million in 2010 of legally restricted funds for
AROs at the Chino, Tyrone and Cobre mines (refer to Note 13 for further discussion).
d. The current portion, which is included in other current assets, totaled $8 million at
December 31, 2010, and none at December 31, 2011.
NOTE 7. Accounts Payable and Accrued Liabilities
Additional information regarding accounts payable and accrued
liabilities follows:
December 31, 2011 2010
Accounts payable $ 1,353 $ 1,272
Salaries, wages and other compensation 257 244
Pension, postretirement, postemployment and
other employee benefits
a
180 156
Current deferred tax liability 103 61
Other accrued taxes 92 152
Accrued interest
b
69 92
Deferred revenue 69 180
Community development programs 19 148
Other 110 136
Total accounts payable and accrued liabilities $ 2, 25 2 $ 2, 441
a. Refer to Note 8 for long-term portion and Note 10 for further discussion.
b. Third-party interest paid, net of capitalized interest, was $284 million in 2011, $421 million
in 2010 and $504 million in 2009.
NOTE 8. Other Liabilities
Additional information regarding other liabilities follows:
December 31, 2011 2010
Pension, postretirement, postemployment and
other employment benefits
a
$ 1,277 $ 1,074
Reserve for uncertain tax benefits 128 133
Insurance claim reserve 50 58
Atlantic Copper contractual obligation to
insurance company (refer to Note 10) 39 48
Other 157 146
Total other liabilities $ 1,651 $ 1,459
a. Refer to Note 7 for short-term portion and Note 10 for further discussion.
NOTE 9. Debt
e components of debt follow:
December 31, 2011 2010
Revolving Credit Facility $ — $ —
Senior Notes:
8.375% Senior Notes due 2017 3,011 3,011
8.25% Senior Notes due 2015 — 1,079
91/2% Senior Notes due 2031 131 175
61/8% Senior Notes due 2034 115 115
71/8% Debentures due 2027 115 115
83/4% Senior Notes due 2011 — 85
Other (including equipment capital leases and
short-term borrowings) 165 175
Total debt 3,537 4,755
Less current portion of debt (4) (95)
Long-term debt $ 3,533 $ 4, 6 60
Revolving Credit Facility. FCX entered into a new senior unsecured
revolving credit facility on March 30, 2011, which replaced the
existing revolving credit facilities that were scheduled to mature on
March19,2012. FCX recognized a loss on early extinguishment of
debt totaling $7 million ($6 million to net income attributable to
FCX common stockholders or $0.01 per diluted share) during 2011
associated with these transactions. e new 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, FCX had no borrowings and
$44 million of letters of credit issued under the revolving credit
facility, resulting in availability of approximately $1.5 billion,
of which $956 million could be used for additional letters of credit.
Interest on the revolving credit facility is generally based on the
London Interbank Oered Rate (LIBOR) plus 1.75 percent, subject
to an increase or decrease in the interest rate margin based on the
credit ratings assigned to FCX’s senior unsecured debt by Standard
& Poor’s Rating Services and Moody’s Investors Service.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS