Freeport-McMoRan 2004 Annual Report Download - page 65

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Notes To Consolidated Financial Statements
Note 4. Property, Plant, Equipment and
Development Costs, Net
The฀components฀of฀net฀property,฀plant,฀equipment฀and฀
development฀costs฀follow฀(in฀thousands):
December฀31,฀ ฀ 2004฀ 2003฀฀฀฀฀
Development฀and฀other฀ ฀ ฀ $฀฀1,495,854฀ $฀1,445,879
Buildings฀and฀infrastructure฀ ฀ ฀ ฀1,440,873฀ ฀1,425,223
Machinery฀and฀equipment฀ ฀ ฀ ฀2,200,844฀ ฀2,141,878
Mobile฀equipment฀ ฀ ฀ ฀ 758,073฀ ฀ 699,038
Construction฀in฀progress฀ ฀ ฀ ฀ 72,525฀ ฀ 144,160
฀ Property,฀plant,฀equipment฀and฀development฀costs฀ ฀ ฀ ฀5,968,169฀ ฀5,856,178
Accumulated฀depreciation฀and฀amortization฀ ฀ ฀ ฀(2,768,877)฀ ฀(2,594,481)
฀ Property,฀plant,฀equipment฀and฀development฀costs,฀net฀ ฀ ฀฀ $฀3,199,292฀ $฀3,261,697
Development฀and฀other฀includes฀costs฀related฀to฀investments฀in฀
consolidated฀subsidiaries.฀These฀costs฀consist฀of฀$69.5฀million฀
related฀to฀FCX’s฀purchase฀in฀December฀1992฀of฀49฀percent฀of฀
the฀capital฀stock฀of฀PT฀Indocopper฀Investama,฀$34.5฀million฀
related฀to฀PT฀Freeport฀Indonesia’s฀issuance฀of฀its฀shares฀to฀FCX฀
in฀1993฀and฀1994฀to฀settle฀a฀convertible฀loan฀due฀to฀FCX฀and฀
$268.4฀million฀related฀to฀FCX’s฀acquisition฀of฀the฀remaining฀
51฀percent฀of฀the฀capital฀stock฀of฀PT฀Indocopper฀Investama฀in฀
February฀2002.฀These฀costs฀relate฀to฀the฀value฀of฀the฀proven฀
and฀probable฀reserves฀FCX฀acquired฀and฀are฀amortized฀using฀
the฀unit-of-production฀method฀based฀on฀estimated฀recoverable฀
proven฀and฀probable฀copper฀reserves.฀Additionally,฀other฀costs฀
include฀$20.8฀million฀related฀to฀FCX’s฀acquisition฀of฀Atlantic฀
Copper฀in฀1993฀and฀relate฀to฀its฀smelter฀assets.฀These฀costs฀
are฀amortized฀using฀the฀straight-line฀method฀based฀on฀the฀
estimated฀life฀of฀Atlantic฀Copper’s฀smelter฀assets.฀
Note 5. Long-Term Debt
December฀31,฀ ฀ 2004฀ 2003
(In฀Thousands)
Notes฀Payable:
฀ Puncakjaya฀Power฀bank฀debt,฀average฀rate฀3.2%฀in฀2004฀and฀3.0%฀in฀2003฀ ฀ ฀ $฀ 187,009฀ $฀ 235,491
฀ Equipment฀loans฀and฀capital฀leases,฀average฀rate฀4.4%฀in฀2004฀and฀4.2%฀in฀2003฀ ฀ ฀ ฀ 72,545฀ ฀ 110,313
฀ Atlantic฀Copper฀facility,฀average฀rate฀3.6%฀in฀2004฀and฀3.5%฀in฀2003฀ ฀ ฀ ฀ 4,381฀ ฀ 132,972
฀ Atlantic฀Copper฀working฀capital฀revolver,฀average฀rate฀3.7%฀in฀2003฀ ฀ ฀ ฀ —฀ ฀ 55,000
฀ Atlantic฀Copper฀deferral฀loan,฀average฀rate฀4.0%฀in฀2003฀ ฀ ฀ ฀ —฀ ฀ 30,000
฀ Other฀notes฀payable฀and฀short-term฀borrowings฀฀ ฀ ฀ ฀ 9,254฀ ฀ 21,027
฀ FCX฀and฀PT฀Freeport฀Indonesia฀credit฀facility฀ ฀ ฀ ฀ —฀ ฀ —
Senior฀Notes:
฀ 7%฀Convertible฀Senior฀Notes฀due฀2011฀ ฀ ฀ ฀ 575,000฀ ฀ 575,000
฀ 10฀1
/8%฀Senior฀Notes฀due฀2010฀฀฀ ฀ ฀ ฀ 500,000฀ ฀ 500,000฀฀
฀ 6฀7
/8%฀Senior฀Notes฀due฀2014฀฀฀ ฀ ฀ ฀ 340,295฀฀฀ ฀ —฀฀
฀ 7.50%฀Senior฀Notes฀due฀2006฀ ฀ ฀฀฀ ฀ 66,516฀฀฀ ฀ 66,516฀฀
฀ 7.20%฀Senior฀Notes฀due฀2026฀฀฀ ฀ ฀ ฀ 4,525฀฀฀ ฀ 4,525฀฀
฀ 8฀1
/4%฀Convertible฀Senior฀Notes฀฀ ฀ ฀ ฀ ฀—฀ ฀ 292,604฀฀
Redeemable฀Preferred฀Stock:
฀ Gold-Denominated฀Preferred฀Stock,฀Series฀II฀ ฀ ฀ ฀ 167,379฀ ฀ 167,379
฀ Silver-Denominated฀Preferred฀Stock฀ ฀ ฀ ฀ 25,002฀ ฀ 37,503
Total฀debt฀ ฀ ฀ ฀1,951,906฀ ฀2,228,330
Less฀current฀portion฀of฀long-term฀debt฀and฀short-term฀borrowings฀ ฀ ฀ ฀ 78,214฀ ฀ 152,396
฀ Long-term฀debt,฀less฀current฀portion฀ ฀ ฀฀ $฀1,873,692฀ $฀2,075,934
2004 ANNUAL REPORT |฀63