Freeport-McMoRan 2005 Annual Report Download - page 73

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฀70฀|฀FREEPORT-McMoRan฀COPPER฀&฀GOLD฀INC.฀฀฀FINANCIAL฀&฀OPERATING฀INFORMATION฀70฀|฀FREEPORT-McMoRan฀COPPER฀&฀GOLD฀INC.฀฀฀FINANCIAL฀&฀OPERATING฀INFORMATION
Outstanding฀stock฀options฀with฀exercise฀prices฀greater฀than฀
the฀average฀market฀price฀of฀FCX’s฀common฀stock฀during฀the฀
year฀are฀excluded฀from฀the฀computation฀of฀diluted฀net฀income฀
per฀share฀of฀common฀stock.฀FCX’s฀convertible฀instruments฀
(see฀Notes฀5฀and฀7)฀are฀also฀excluded฀when฀including฀the฀
conversion฀of฀these฀instruments฀increases฀reported฀diluted฀net฀
income฀per฀share.฀A฀recap฀of฀the฀excluded฀amounts฀follows฀(in฀
thousands,฀except฀exercise฀prices):
Notes to Consolidated Financial Statements
฀2005฀ 2004฀ 2003
Net฀income฀before฀preferred฀dividends฀and฀cumulative฀effect฀of฀changes฀in฀accounting฀principles฀ $฀ 995,127฀ $฀202,267฀ $฀197,253
Preferred฀dividends฀ ฀ ฀ ฀ ฀ ฀ (60,500)฀ ฀(45,491)฀ ฀(27,441)
Net฀income฀before฀cumulative฀effect
฀ ฀ ฀ ฀ ฀ ฀ 934,627฀ ฀156,776฀ ฀169,812
Cumulative฀effect฀of฀changes฀in฀accounting฀principles฀฀ ฀ ฀ ฀ ฀ —฀ ฀ —฀ ฀(15,593)
Net฀income฀applicable฀to฀common฀stock฀ ฀ ฀ ฀ ฀ ฀ 934,627฀ ฀156,776฀ ฀154,219
Plus฀income฀impact฀of฀assumed฀conversion฀of:
฀ 5฀1
/2%฀Convertible฀Perpetual฀Preferred฀Stock฀ ฀ ฀ ฀ ฀ ฀ 60,500฀ ฀ —฀ ฀ —
฀ 7%฀Convertible฀Senior฀Notes฀ ฀ ฀ ฀ ฀ ฀ 35,128฀ ฀ —฀ ฀ —
Diluted฀net฀income฀applicable฀to฀common฀stock฀ ฀ ฀ ฀ ฀ $฀1,030,255฀ $฀156,776฀ $฀154,219
Weighted฀average฀common฀shares฀outstanding฀ ฀ ฀ ฀ ฀ ฀ 180,270฀ ฀182,272฀ ฀155,805
Add:
฀ Shares฀issuable฀upon฀conversion฀of:
฀ ฀ 5฀1
/2%฀Convertible฀Perpetual฀Preferred฀Stock฀(see฀Note฀7)฀ ฀ ฀ ฀ ฀ 21,196฀ ฀ —฀ ฀ —
฀ ฀ 7%฀Convertible฀Senior฀Notes฀(see฀Note฀5)฀ ฀ ฀ ฀ ฀ ฀ 16,784฀ ฀ —฀ ฀ —
฀ ฀ Dilutive฀stock฀options฀(see฀Note฀7)฀ ฀ ฀ ฀ ฀ ฀ 1,741฀ ฀ 2,197฀ ฀ 3,094
฀ ฀ Restricted฀stock฀(see฀Note฀7)฀ ฀ ฀ ฀ ฀ ฀ 479฀ ฀ 454฀ ฀ 203
Weighted฀average฀common฀shares฀outstanding฀for฀purposes฀of฀calculating฀diluted฀
฀ net฀income฀per฀share฀ ฀ ฀ ฀ ฀ ฀ 220,470฀ ฀184,923฀ ฀159,102
Diluted฀net฀income฀per฀share฀of฀common฀stock:
฀ Before฀cumulative฀effect฀ ฀ ฀ ฀ ฀ $฀ 4.67฀ $฀ 0.85฀ $฀ 1.07
฀ Cumulative฀effect฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀ —฀ ฀ (0.10)
฀ Net฀income฀per฀share฀of฀common฀stock฀ ฀ ฀ ฀ ฀ $฀ 4.67฀ $฀ 0.85฀ $฀ 0.97
฀2005฀ 2004฀ 2003
Weighted฀average฀outstanding฀options฀ ฀ ฀ ฀ ฀ ฀1,367฀ ฀ —฀ ฀ 1,718
Weighted฀average฀exercise฀price฀ ฀ ฀ ฀ ฀ $฀36.99฀ ฀ —฀ $฀ 30.37
Dividends฀on฀5฀1
/2%฀Convertible฀Perpetual฀Preferred฀Stocka฀ ฀ ฀ ฀ ฀ —฀ $฀45,491฀ ฀ N/A
Weighted฀average฀shares฀issuable฀upon฀conversiona฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀15,632฀ ฀ N/A
Interest฀on฀7%฀Convertible฀Senior฀Notesb฀ ฀ ฀ ฀ ฀ ฀ —฀ $฀41,430c฀ $฀36,873c
Weighted฀average฀shares฀issuable฀upon฀conversionb฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀18,625฀ ฀16,463
Interest฀on฀8฀1
/4%฀Convertible฀Senior฀Notes฀ ฀ ฀ ฀ ฀ ฀ N/A฀ $฀ 3,829c,d฀ $฀39,902c,d
Weighted฀average฀shares฀issuable฀upon฀conversion฀ ฀ ฀ ฀ ฀ ฀ N/A฀ ฀ 3,073d฀ ฀33,992d
Dividends฀on฀Step-Up฀Convertible฀Preferred฀Stock฀ ฀ ฀ ฀ ฀ ฀ N/A฀ ฀ N/A฀ $฀20,532e
Weighted฀average฀shares฀issuable฀upon฀conversion฀ ฀ ฀ ฀ ฀ ฀ N/A฀ ฀ N/A฀ ฀11,424e
a.฀ FCX’s฀5
฀1
/2%
฀Convertible฀Perpetual฀Preferred฀Stock฀was฀issued฀on฀March฀30,฀2004฀(see฀Note฀7).
b.฀ FCX’s฀7%฀Convertible฀Senior฀Notes฀were฀issued฀on฀February฀11,฀2003฀(see฀Note฀5).
c.฀ Amounts฀are฀net฀of฀the฀effective฀U.S.฀federal฀alternative฀minimum฀tax฀rate฀of฀two฀percent.
d.฀ 51.5฀percent฀of฀FCX’s฀8
฀1
/4%฀
Convertible฀Senior฀Notes฀converted฀to฀FCX฀common฀stock฀in฀August฀2003.฀In฀January฀2004,฀approximately฀37฀percent฀converted฀฀
to฀FCX฀common฀stock฀and฀the฀remaining฀notes฀converted฀to฀FCX฀common฀stock฀in฀July฀2004฀(see฀Note฀5).
e.฀ FCX’s฀Step-Up฀Convertible฀Preferred฀Stock฀was฀redeemed฀in฀December฀2003฀(see฀Note฀7).
฀Earnings฀Per฀Share.฀FCX’s฀basic฀net฀income฀per฀share฀
of฀common฀stock฀was฀calculated฀by฀dividing฀net฀income฀
applicable฀to฀common฀stock฀by฀the฀weighted-average฀number฀
of฀common฀shares฀outstanding฀during฀the฀year.฀The฀following฀
is฀a฀reconciliation฀of฀net฀income฀and฀weighted-average฀common฀
shares฀outstanding฀for฀purposes฀of฀calculating฀diluted฀net฀
income฀per฀share฀(in฀thousands,฀except฀per฀share฀amounts):