Freeport-McMoRan 2013 Annual Report Download - page 41

MANAGEMENT’S DISCUSSION AND ANALYSIS
2013 ANNUAL REPORT | 39
c. Includes adjustments to provisionally priced concentrate and cathode sales recognized in prior periods totaling $(26) million ($(12) million to net income attributable to common stockholders
or $(0.01) per share) for the year 2013, $101 million ($43 million to net income attributable to common stockholders or $0.05 per share) for the year 2012 and $(12) million ($(5) million to net
income attributable to common stockholders or $(0.01) per share) for the year 2011. Refer to “Revenues” for further discussion.
d. Includes charges for net unrealized and noncash realized losses on crude oil and natural gas derivative contracts totaling $312 million ($194 million to net income attributable to common
stockholders or $0.19 per share) for the seven-month period from June 1, 2013, to December 31, 2013.
e. Includes net charges (credits) for adjustments to environmental obligations and related litigation reserves totaling $19 million ($17 million to net income attributable to common stockholders
or $0.02 per share) in 2013, $(62) million ($(40) million to net income attributable to common stockholders or $(0.04) per share) in 2012 and $107 million ($86 million to net income attributable to
common stockholders or $0.09 per share) in 2011.
f. Includes transaction and related costs principally associated with the oil and gas acquisitions totaling $80 million ($50 million to net income attributable to common stockholders or $0.05 per
share) in 2013 and $9 million ($7 million to net income attributable to common stockholders or $0.01 per share) in 2012.
g. Includes charges associated with new labor agreements totaling $36 million ($13 million to net income attributable to common stockholders or $0.01 per share) at Cerro Verde in 2013, $16
million ($8 million to net income attributable to common stockholders or $0.01 per share) at Candelaria in 2012 and $116 million ($50 million to net income attributable to common stockholders
or $0.05 per share) at PT-FI, Cerro Verde and El Abra in 2011.
h. The year 2013 includes charges of (i) $76 million ($49 million to net income attributable to common stockholders or $0.05 per share) associated with updated mine plans at Morenci that resulted
in a loss of recoverable copper in leach stockpiles and (ii) $37 million ($23 million to net income attributable to common stockholders or $0.02 per share) for restructuring an executive
employment arrangement. The year 2012 includes a gain of $59 million ($31 million to net income attributable to common stockholders or $0.03 per share) for the settlement of the insurance
claim for business interruption and property damage relating to the 2011 incidents affecting PT-FI’s concentrate pipelines.
i. The year 2013 includes gains associated with our oil and gas acquisitions, including (i) $128 million ($0.13 per share) primarily related to FCX
’ s preferred stock investment in and the subsequent
acquisition of MMR, and (ii) a tax benefit of $199 million ($0.20 per share) associated with net reductions in FCX
’ s deferred tax liabilities and deferred tax asset valuation allowances. Refer to
Note 11 and "Provision for Income Taxes" below for further discussion.
j. Includes net losses on early extinguishment of debt totaling $28 million ($0.03 per share) in 2013, $149 million ($0.16 per share) in 2012 and $60 million ($0.06 per share) in 2011. Refer to Note 8
for further discussion.
k. The year 2012 includes a tax benefit of $98 million, net of noncontrolling interests, ($0.11 per share) associated with adjustments to Cerro Verde
’ s deferred income taxes. The year 2011
includes a tax charge of $49 million, net of noncontrolling interests, ($0.05 per share) for additional taxes associated with Cerro Verde
’ s election to pay a special mining burden during the
remaining term of its 1998 stability agreement. Refer to Note 11 and “Provision for Income Taxes
” below for further discussion.
l. We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations — Smelting & Refining
” for a summary of net impacts from changes in
these deferrals.
m. Includes net working capital uses and changes in other tax payments of $377 million for the year 2013, $1.4 billion for the year 2012 and $461 million for the year 2011.
Years Ended December 31, 2013
a
2012 2011
SUMMARY OPERATING DATA
Copper (recoverable)
Production (millions of pounds) 4,131 3,663 3,691
Sales, excluding purchases (millions of pounds) 4,086 3,648 3,698
Average realized price per pound $ 3.30 $ 3.60 $ 3.86
Site production and delivery costs per pound
b
$ 1.88 $ 2.00 $ 1.72
Unit net cash costs per pound
b
$ 1.49 $ 1.48 $ 1.01
Gold (recoverable)
Production (thousands of ounces) 1,250 958 1,383
Sales, excluding purchases (thousands of ounces) 1,204 1,010 1,378
Average realized price per ounce $ 1,315 $ 1,665 $ 1,583
Molybdenum (recoverable)
Production (millions of pounds) 94 85 83
Sales, excluding purchases (millions of pounds) 93 83 79
Average realized price per pound $ 11.85 $ 14.26 $ 16.98
Oil Equivalents
Sales volumes:
MMBOE 38.1 — —
Thousand BOE (MBOE) per day 178 — —
Cash operating margin per BOE:
c
Realized revenues $76.87 — —
Cash production costs 17.14 — —
Cash operating margin $59.73 — —
a. Includes the results of FM O&G beginning June 1, 2013.
b. Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, excluding net noncash and other costs. For
reconciliations of the per pound unit costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues
and Production Costs.”
c. Cash operating margin for our oil and gas operations reflects realized revenues less cash production costs. Realized revenues exclude net unrealized and noncash realized losses on derivative
contracts and cash production costs exclude accretion and other costs. For reconciliations of realized revenues and cash production costs per BOE to revenues and production and delivery costs
reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.”