Freeport-McMoRan 2011 Annual Report Download - page 94

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e total grant-date fair value of restricted stock units granted
during the year ended December 31, 2011, was $21 million. e total
intrinsic value of restricted stock units vested was $69 million
during 2011, $50 million during 2010 and $22 million during 2009.
As of December31,2011, FCX had $2 million of total unrecognized
compensation cost related to unvested restricted stock units
expected to be recognized over a weighted-average period of less
than one year.
NOTE 12. Income Taxes
Geographic sources of income before income taxes and equity in
aliated companies’ net earnings for the years ended December31
consist of the following:
2011 2010 2009
United States $ 2,112 $ 1,307 $ 98
Foreign 6,706 7,205 5,718
Total $ 8,818 $ 8,512 $ 5,816
FCX’s provision for income taxes for the years ended December31
consists of the following:
2011 2010 2009
Current income taxes:
Federal $ 394 $ 207 $ 19
State 21 27 7
Foreign 1,948 2,500 2,172
Total current 2,363 2,734 2,198
Deferred income taxes (benefits):
Federal 82 20 (70)
State (19) (10) 79
Foreign 661 239 100
Total deferred 724 249 109
Provision for income taxes $ 3,087 $ 2,983 $ 2,307
92 | FREEPORT-McMoRan COPPER & GOLD INC.
restricted stock unit awards under the annual incentive plan were
revised. Beginning with 2012 grants, the level of restricted stock
units granted will continue to be based on FCX’s consolidated
operating cash ows adjusted for working capital for the preceding
year, but the award will vest aer three years subject to FCX
attaining a ve-year average return on investment (a performance
condition dened in the award agreement) of at least six percent.
e awards will also be subject to a 20 percent reduction if FCX
performs below a group of its peers as dened in the award
agreement. e fair value of the awards is estimated using an
appropriate valuation model. e awards continue to vest aer the
recipients retirement or death; therefore, since all of FCX’s
executive ocers are retirement eligible, FCX charges the cost of
these awards to expense in the year the cash ows are generated as
performance of services is only required in the calendar year
preceding the date of grant.
FCX also granted other restricted stock units that vest over a
period of up to ve years. e plans and award agreements provide
for accelerated vesting of all restricted stock units if there is a
change of control (as dened in the plans) and provide that
participants will receive the following year’s vesting aer retirement
(except for the restricted stock units with ve year vesting that do
not allow acceleration because of retirement). Dividends and
interest on restricted stock units accrue and are paid upon the
award’s vesting.
FCX grants restricted stock units to its directors. e restricted
stock units vest over four years. e fair value of the restricted
stock units is amortized over the four-year vesting period or the
period until the director becomes retirement-eligible, whichever is
shorter. Upon a director’s retirement, all of their unvested
restricted stock units immediately vest. For retirement-eligible
directors, the fair value of restricted stock units is recognized in
earnings on the date of grant.
A summary of outstanding restricted stock units as of
December31,2011, and activity during the year ended
December31,2011, follows:
Weighted-
Average
Number of Remaining Aggregate
Restricted Contractual Intrinsic
Stock Units Term (years) Value
Balance at January 1 2,140,914
Granted 381,636
Vested (1,257,274)
Forfeited —
Balance at December 31 1,265,276 1.4 $ 47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS