Freeport-McMoRan 2003 Annual Report Download - page 61

2003 Annual Report FREEPORT-McMoRan COPPER & GOLD INC. 59
Notes Payable. As discussed in Note 2, FCX acquired
the 85.7 percent ownership interest in PJP owned by
affiliates of Duke Energy Corporation in July 2003. At
December 31, 2003, PT Freeport Indonesia had infra-
structure asset financing obligations to PJP totaling
$295.5 million. As a result of FCX’s acquisition of PJP,
it is now consolidating PJP and FCX’s consolidated bal-
ance sheet no longer reflects PT Freeport Indonesia’s
infrastructure asset financing obligation to PJP,but
instead reflects the $235.5 million of outstanding PJP
bank debt at December 31, 2003. PJP’s bank debt is
secured by the power-related assets operated by PJP.
Atlantic Copper has a variable-rate project loan (the
Atlantic Copper facility). As of December 31, 2003,
the variable-rate project loan, nonrecourse to FCX,
consisted of an $83.0 million term loan being repaid
with variable quarterly installments through December
2007 ($2.5 million per quarter in 2004) and a $65.0
million working capital revolver ($50.0 million out-
standing at December 31, 2003) that matures
December 2007. The Atlantic Copper facility requires
certain hedging arrangements, restricts other borrow-
ings and specifies certain minimum coverage
ratios. Atlantic Copper’s lenders agreed to waive the
requirements to hedge a portion of its anticipated
euro-denominated operating costs and interest costs
through March 2004. Borrowings under the Atlantic
Copper facility are secured by 100 percent of Atlantic
Copper’s capital stock, its smelter and refinery assets,
and certain receivables and inventory.
FCX and PT Freeport Indonesia have vendor-
financed equipment loans secured by certain PT
Freeport Indonesia assets. The FCX loan had a
$19.3 million balance at December 31, 2003, and at
December 31, 2002. PT Freeport Indonesia has
three equipment loans with this vendor ($43.4
million outstanding at December 31, 2003, and
$48.3 million at December 31, 2002) and entered
into capital leases with that vendor totaling $26.8
million in 2003 and $20.8 million in 2002 ($47.6
million outstanding at December 31, 2003).
Interest rates on all of the equipment loans and
the leases are variable.
Atlantic Copper has a variable-rate $55.0 million
working capital revolving credit facility ($55.0 mil-
lion outstanding at December 31, 2003) that is
secured by certain shipments of copper concentrate.
Twenty percent of amounts borrowed under the
facility are required to be deposited in a restricted
cash account. Restricted cash totaled $11.0 million
at December 31, 2003. This facility matures in
March 2004.
Atlantic Copper has $30.0 million outstanding
as of December 31, 2003, under a deferral loan
with the same security as the Atlantic Copper facil-
ity. Interest is variable and the loan matures
January 2008.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. LONG-TERM DEBT
December 31, 2003 2002
(In Thousands)
Notes Payable:
PJP bank debt, average rate 3.0% $235,491 $—
Atlantic Copper facility, average rate 3.5% in 2003 and 4.3% in 2002 132,972 167,919
Equipment loans and capital leases, average rate 4.2% in 2003 and 5.9% in 2002 110,313 88,426
Atlantic Copper working capital revolver, average rate 3.7% in 2003 and 2.6% in 2002 55,000 55,000
Atlantic Copper deferral loan, average rate 4.0% in 2003 and 5.0% in 2002 30,000 30,000
Other notes payable and short-term borrowings 17,542 7,880
FCX and PT Freeport Indonesia credit facilities, average rate 5.5% in 2002 — 279,000
Infrastructure asset financings, average rate 9.6% in 2003 and 9.2% in 2002 3,485 356,415
Senior Notes:
7% Convertible Senior Notes due 2011 575,000 —
10
1
/ 8 % Senior Notes due 2010 500,000 —
8
1
/ 4 % Convertible Senior Notes due 2006 292,604 603,750
7.50% Senior Notes due 2006 66,516 200,000
7.20% Senior Notes due 2026 4,525 250,000
Redeemable Preferred Stock:
Gold-Denominated Preferred Stock, Series II
167,379 —
Silver-Denominated Preferred Stock 37,503 —
Total debt 2,228,330 2,038,390
Less current portion of long-term debt and short-term borrowings 152,396 77,112
Long-term debt, less current portion $2,075,934 $1,961,278