Freeport-McMoRan 2011 Annual Report Download - page 87

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2011 ANNUAL REPORT | 85
PT Freeport
FCX Indonesia Atlantic Copper
2011 2010 2011 2010 2011 2010
Change in benefit obligation:
Benefit obligation at beginning of year $ 1,598 $ 1,472 $ 135 $ 80 $ 71 $ 79
Service cost
24 26 13 8 — —
Interest cost
83 82 11 8 3 3
Actuarial losses
172 104 55 41 — —
Foreign exchange losses (gains) (1) (1) (1) 4 (1) (4)
Benefits paid
(85) (85) (7) (6) (8) (7)
Benefit obligation at end of year 1,791 1,598 206 135 65 71
Change in plan assets:
Fair value of plan assets at beginning of year 1,112 1,067 97 78 23 21
Actual return on plan assets 88 126 9 13 — —
Employer contributions
a
26 5 9 8 11 9
Foreign exchange gains (losses) — (1) (1) 4 — —
Benefits paid
(85) (85) (7) (6) (8) (7)
Fair value of plan assets at end of year 1,141 1,112 107 97 26 23
Funded status $ (650) $ (486) $ (99) $ (38) $ (39) $ (48)
Accumulated benefit obligation $ 1,701 $ 1,517 $ 115 $ 68 $ 65 $ 71
Weighted-average assumptions used to determine benefit obligations:
Discount rate
b
4.60% 5.40% 7.00% 8.50% 6.77% 6.77%
Rate of compensation increase
c
3.75% 3.75% 8.00% 8.00% NA NA
Balance sheet classification of funded status:
Other assets $ 6 $ 6 $ — $ — $ — $ —
Accounts payable and accrued liabilities (4) (4) — — — —
Other liabilities (652) (488) (99) (38) (39) (48)
Total $ (650) $ (486) $ (99) $ (38) $ (39) $ (48)
a. Employer contributions for 2012 are expected to approximate $97 million for the FCX plans, $14 million for the PT Freeport Indonesia plan (based on a December 31, 2011, exchange rate of
9,060 Indonesian rupiah to one U.S. dollar) and $9 million for the Atlantic Copper plan (based on a December 31, 2011, exchange rate of $1.29 per euro).
b. The discount rate shown in 2011 and 2010 for the FCX plans relates to all plans except the SERP plan. The SERP plan’s discount rate in 2011 and 2010 was 4.00 percent.
c. The rate of compensation increase shown for the FCX plans only relates to the FMC plans. The rate of compensation increase shown for the PT Freeport Indonesia plan relates to the years after
2012. For the PT Freeport Indonesia plan, the rate of compensation increase for 2012 ranges from 10 percent to 13 percent.
e weighted-average assumptions used to determine net periodic
benet cost and the components of net periodic benet cost for
FCX’s pension plans (FMC’s plans; and FCX’s SERP, director and
excess benets plans) for the years ended December31 follow:
2011 2010 2009
Weighted-average assumptions:
Discount rate:
FCX SERP 4.00% 4.00% 4.00%
FMC plans 5.40% 5.80% 6.10%
Expected return on plan assets
a
8.00% 8.50% 8.50%
Rate of compensation increase
a
3.75% 4.25% 4.25%
Service cost $ 24 $ 26 $ 26
Interest cost 83 82 85
Expected return on plan assets (86) (87) (73)
Amortization of prior service cost (1) (1) —
Amortization of net actuarial losses 19 22 26
Curtailments and special retirement benefits — — (4)
Net periodic benefit cost $ 39 $ 42 $ 60
a. The assumptions shown only relate to the FMC plans.
e weighted-average assumptions used to determine net periodic
benet cost and the components of net periodic benet cost for
PT Freeport Indonesia’s and Atlantic Copper’s pension plans for
the years ended December31 follow:
PT Freeport Indonesia
2011 2010 2009
Weighted-average assumptions:
Discount rate 8.50% 10.50% 12.00%
Expected return on plan assets 9.25% 8.25% 10.00%
Rate of compensation increase 8.00% 8.00% 8.00%
Service cost $ 13 $ 8 $ 5
Interest cost 11 8 7
Expected return on plan assets (9) (7) (5)
Amortization of prior service cost 1 1 1
Amortization of net actuarial loss 3 — 1
Net periodic benefit cost $ 19 $ 10 $ 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Atlantic Cooper
2011 2010 2009
Weighted-average assumption:
Discount rate 6.77% 6.77% 6.77%
Interest cost $ 3 $ 3 $ 4
Amortization of net actuarial loss 1 1 1
Net periodic benefit cost $ 4 $ 4 $ 5