Freeport-McMoRan 2013 Annual Report Download - page 105

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2013 ANNUAL REPORT | 103
requirements, future prospects and other factors deemed relevant
by the Board.
Accumulated Other Comprehensive Loss. A summary of changes
in the balances of each component of accumulated other
comprehensive loss follows:
On December 20, 2013, the Board declared a regular quarterly
dividend of $0.3125 per share, which was paid on February 3, 2014,
to common shareholders of record at the close of business on
January 15, 2014. The declaration of dividends is at the discretion
of the Board and will depend on FCX’s financial results, cash
Unrealized Deferred Tax
Losses Translation Defined Valuation
on Securities Adjustment Benefit Plans Allowance Total
Balance at January 1, 2011 $ (3) $ 8 $ (269) $ (59) $ (323)
Amounts arising during the period
a,b
(1) (2) (134) (20) (157)
Amounts reclassified
c
— — 15 — 15
Balance at December 31, 2011 (4) 6 (388) (79) (465)
Amounts arising during the period
a,b
— (1) (65) (1) (67)
Amounts reclassified
c
— — 26 — 26
Balance at December 31, 2012 (4) 5 (427) (80) (506)
Amounts arising during the period
a,b
(1) — 67 — 66
Amounts reclassified
c
— 5 30 — 35
Balance at December 31, 2013 $ (5) $ 10 $ (330) $ (80) $ (405)
a. Included net actuarial gains (losses), net of noncontrolling interest, totaling $(215) million for 2011, $(103) million for 2012 and $137 million for 2013. The year 2013 also included $33 million for
prior service costs.
b. Included tax benefits (provision) totaling $81 million for 2011, $39 million for 2012 and $(37) million for 2013.
c. Included amortization primarily related to actuarial losses that were net of taxes of $8 million for 2011, $15 million for 2012 and $17 million for 2013.
Stock Award Plans. FCX currently has awards outstanding under
its stock-based compensation plans. As of December 31, 2013,
only one plan, which was stockholder approved and is discussed
below, has awards available for grant.
The 2006 Stock Incentive Plan (the 2006 Plan) provides for the
issuance of stock options, SARs, restricted stock, RSUs and other
stock-based awards for up to 74 million common shares. FCX’s
stockholders approved amendments to the plan in 2007 primarily
to increase the number of shares available for grants and in 2010
to permit grants to outside directors. As of December 31, 2013,
shares available for grant totaled 24.5 million under the 2006 Plan.
In connection with the PXP and MMR acquisitions, former
PXP and MMR share-based awards were exchanged or settled.
Each unvested PXP and MMR share-based award outstanding
prior to the acquisitions’ announcement on December 5, 2012,
immediately vested at the closing of each transaction, except
for MMR share-based awards held by certain officers. In
accordance with the terms of the respective plans, share-based
awards granted after the acquisitions’ announcement did
not automatically vest upon closing but retain the same terms
and conditions as the original awards, as provided in the
merger agreements.
In connection with the PXP acquisition, former PXP stock-
settled RSUs, cash-settled RSUs and SARs were converted into
1,238,685 FCX stock-settled RSUs, 2,259,708 FCX cash-settled
RSUs, and 2,374,601 FCX SARs. The SARs carry a maximum term
of five years with 1,490,998 vested upon acquisition of PXP and
883,603 that vest ratably over a three-year period. In connection
with the MMR acquisition, former MMR stock options and RSUs
were converted into 7,203,392 FCX stock options and 13,500 FCX
RSUs. The MMR-related stock options carry a maximum term
of 10 years with 6,336,422 stock options vested upon acquisition
of MMR and 866,970 stock options that vest ratably over a
four-year period.
In connection with the restructuring of an executive employment
arrangement, a special retention award of one million RSUs was
granted in December 2013. The RSUs are fully vested and the
related shares of common stock will be delivered to the executive
upon separation of service, along with a cash payment for
accumulated dividends. With respect to stock options previously
granted to this executive, such awards became fully vested.
With respect to performance-based awards previously granted to
this executive, the service requirements are considered to have
been satisfied, and the vesting of any such awards shall continue
to be contingent upon the achievement of all performance
conditions set forth in the award agreements. In connection with
the restructuring, FCX recorded a $37 million charge to selling,
general and administrative expenses in 2013.
Stock-Based Compensation Cost. Compensation cost charged
against earnings for stock-based awards for the years ended
December 31 follows:
2013 2012 2011
Selling, general and administrative expenses $ 14 5 $ 77 $ 90
Production and delivery 28 23 25
Capitalized costs 13 — —
Total stock-based compensation 186 100 115
Less: capitalized costs (13) — —
Tax benefit and noncontrolling interests’ shares (66) (39) (46)
Impact on net income $ 107 $ 61 $ 69