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2004 ANNUAL REPORT |฀43
฀By-Product฀ Co-Product฀Method฀
Year฀Ended฀December฀31,฀2003฀ Method฀ Copper฀ Gold฀ Silver฀ Total
(In฀Thousands)฀
Revenues,฀after฀adjustments฀shown฀below฀ $฀1,062,042฀ $฀1,062,042฀ $฀ 884,666฀ $฀ 19,613฀ $฀1,966,321
Site฀production฀and฀delivery,฀before฀reclamation,฀noncash฀and฀
฀ nonrecurring฀costs฀shown฀below฀ ฀ 617,219฀ ฀ 333,370฀ ฀ 277,693฀ ฀ 6,156฀ ฀ 617,219
Gold฀and฀silver฀credits฀ ฀ (904,279)฀ ฀ —฀ ฀ —฀ ฀ —฀ ฀ —
Treatment฀charges฀ ฀ 231,856฀ ฀ 125,229฀ ฀ 104,314฀ ฀ 2,313฀ ฀ 231,856
Royalty฀on฀metals฀ ฀ 26,472฀ ฀ 14,298฀ ฀ 11,910฀ ฀ 264฀ ฀ 26,472
฀ Net฀cash฀production฀costs฀(credits)฀ ฀ (28,732)฀ ฀ 472,897฀ ฀ 393,917฀ ฀ 8,733฀ ฀ 875,547
Depreciation฀and฀amortization฀ ฀ 190,450฀ ฀ 102,865฀ ฀ 85,685฀ ฀ 1,900฀ ฀ 190,450
Reclamation,฀noncash฀and฀nonrecurring฀costs฀ ฀ 15,954฀ ฀ 8,617฀ ฀ 7,178฀ ฀ 159฀ ฀ 15,954
฀ Total฀production฀costs฀ ฀ 177,672฀ ฀ 584,379฀ ฀ 486,780฀ ฀ 10,792฀ ฀1,081,951
Adjustments,฀primarily฀for฀copper฀pricing฀on฀prior฀period฀open฀sales฀
฀ and฀gold/silver฀hedging฀ ฀ 36,587฀ ฀ 12,755฀ ฀ 22,110฀ ฀ 1,722฀ ฀ 36,587
Gross฀profit,฀before฀intercompany฀profit฀eliminations฀ $฀ 920,957฀ $฀ 490,418฀ $฀ 419,996฀ $฀ 10,543฀ $฀ 920,957
Pounds฀of฀copper฀sold฀(000s)฀ ฀1,295,600฀ ฀1,295,600
Ounces฀of฀gold฀sold฀ ฀ ฀ ฀ ฀ ฀2,469,800
Ounces฀of฀silver฀sold฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀4,126,700฀
Gross฀profit฀per฀pound฀of฀copper฀(cents)/per฀ounce฀of฀gold฀and฀
฀ silver฀($),฀before฀intercompany฀profit฀eliminations:
Revenues,฀after฀adjustments฀shown฀below฀ ฀ 81.9฀ ฀ 81.9฀ ฀ 366.60฀ ฀ 5.15
฀ ฀
Site฀production฀and฀delivery,฀before฀reclamation,฀noncash฀and฀
฀ nonrecurring฀costs฀shown฀below฀ ฀ 47.6฀ ฀ 25.7฀ ฀ 112.44฀ ฀ 1.49
Gold฀and฀silver฀credits฀ ฀ (69.8)฀ ฀ —฀ ฀ —฀ ฀ —
Treatment฀charges฀ ฀ 17.9฀ ฀ 9.7฀ ฀ 42.24฀ ฀ 0.56
Royalty฀on฀metals฀ ฀ 2.0฀ ฀ 1.1฀ ฀ 4.82฀ ฀ 0.06
฀ Net฀cash฀production฀costs฀(credits)฀ ฀ (2.3)฀ ฀ 36.5฀ ฀ 159.50฀ ฀ 2.11
Depreciation฀and฀amortization฀ ฀ 14.7฀ ฀ 7.9฀ ฀ 34.69฀ ฀ 0.46
Reclamation,฀noncash฀and฀nonrecurring฀costs฀ ฀ 1.2฀ ฀ 0.7฀ ฀ 2.91฀ ฀ 0.04
฀ Total฀production฀costs฀ ฀ 13.6฀ ฀ 45.1฀ ฀ 197.10฀ ฀ 2.61
Adjustments,฀primarily฀for฀copper฀pricing฀on฀prior฀period฀open฀sales฀
฀ and฀gold/silver฀hedging฀ ฀ 2.8฀ ฀ 1.1฀ ฀ 0.55฀ ฀ 0.01
Gross฀profit฀per฀pound/ounce,฀before฀intercompany฀profit฀eliminations฀ ฀ 71.1฀ ฀ 37.9฀ ฀ 170.05฀ ฀ 2.55
Reconciliation to Amounts Reported
฀ ฀ Production฀ Depreciation฀and฀ ฀
฀ Revenues฀ and฀Delivery฀ Amortization
(In฀Thousands)฀
Totals฀presented฀above฀ $฀1,966,321฀ $฀ 617,219฀ $฀ 190,450
Reclamation,฀noncash฀and฀nonrecurring฀costs฀per฀above฀ ฀ N/A฀ ฀ 15,954฀ ฀ N/A
Less:฀Treatment฀charges฀per฀above฀ ฀ (231,856)฀ ฀ N/A฀ ฀ N/A
฀ ฀ Royalty฀per฀above฀ ฀ (26,472)฀ ฀ N/A฀ ฀ N/A
฀ ฀ Reclamation฀costs฀incurred฀ ฀ N/A฀ ฀ (1,222)฀ ฀ N/A
Adjustments,฀primarily฀for฀copper฀pricing฀on฀prior฀period฀open฀
฀ sales฀and฀hedging฀per฀above฀ ฀ 36,587฀ ฀ N/A฀ ฀ N/A
Mining฀and฀exploration฀segment฀ ฀1,744,580฀ ฀ 631,951฀ ฀ 190,450
Smelting฀and฀refining฀segment฀ ฀ 910,417฀ ฀ 892,681฀ ฀ 28,464
Eliminations฀and฀other฀ ฀ (442,832)฀ ฀ (453,306)฀ ฀ 11,889
As฀reported฀in฀FCX’s฀consolidated฀financial฀statements฀ $฀2,212,165฀ $฀1,071,326฀ $฀ 230,803
Management’s Discussion and Analysis