Freeport-McMoRan 2005 Annual Report Download - page 81

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฀78฀|฀FREEPORT-McMoRan฀COPPER฀&฀GOLD฀INC.฀฀฀FINANCIAL฀&฀OPERATING฀INFORMATION฀78฀|฀FREEPORT-McMoRan฀COPPER฀&฀GOLD฀INC.฀฀฀FINANCIAL฀&฀OPERATING฀INFORMATION
FCX฀has฀provided฀a฀valuation฀allowance฀equal฀to฀its฀tax฀credit฀
carryforwards฀($831.5฀million฀at฀December฀31,฀2005,฀and฀
$509.6฀million฀at฀December฀31,฀2004)฀as฀these฀would฀only฀be฀
used฀should฀FCX฀be฀required฀to฀pay฀regular฀U.S.฀tax,฀which฀฀฀฀฀฀฀฀
is฀considered฀unlikely฀for฀the฀foreseeable฀future฀and฀because฀
the฀foreign฀tax฀credits฀expire฀after฀10฀years.฀Atlantic฀Copper฀฀฀
is฀subject฀to฀taxation฀in฀Spain฀and฀has฀not฀generated฀
significant฀taxable฀income฀in฀recent฀years.฀FCX฀has฀provided฀a฀
valuation฀allowance฀equal฀to฀the฀future฀tax฀benefits฀resulting฀
from฀Atlantic฀Copper’s฀net฀operating฀losses฀totaling฀฀฀฀฀฀฀฀
$364.4฀million฀at฀December฀31,฀2005,฀and฀$423.8฀million฀at฀
December฀31,฀2004,฀which฀expire฀through฀the฀year฀2019.
฀ PT฀Freeport฀Indonesia’s฀Indonesian฀income฀tax฀returns฀
prior฀to฀2001฀have฀been฀audited฀or฀are฀no฀longer฀subject฀฀฀฀฀฀฀
to฀review฀by฀the฀Indonesian฀tax฀authorities.฀FCX’s฀provision฀
for฀income฀taxes฀consists฀of฀the฀following฀(in฀thousands):
Notes to Consolidated Financial Statements
Note฀8.฀INCOME฀TAXES
The฀components฀of฀FCX’s฀deferred฀taxes฀follow฀(in฀thousands):
December฀31,฀ ฀ 2005฀ 2004
Deferred฀tax฀asset:
฀ Foreign฀tax฀credits฀ ฀ ฀ ฀ ฀ ฀ ฀ $฀ 741,104฀ $฀ 417,853
฀ Atlantic฀Copper฀net฀operating฀loss฀carryforwards฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ 127,544฀ ฀ 148,338
฀ U.S.฀alternative฀minimum฀tax฀credits฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ 90,380฀ ฀ 91,755
฀ Intercompany฀profit฀elimination฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ 84,010฀ ฀ 27,130
฀ Deferred฀compensation฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ 30,101฀ ฀ 6,018
฀ Valuation฀allowance฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ (959,028)฀ ฀(657,946)
฀฀ Total฀deferred฀tax฀asset฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ 114,111฀ ฀ 33,148
Deferred฀tax฀liability:
฀ Property,฀plant,฀equipment฀and฀development฀costs฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ (708,221)฀ ฀(702,586)
฀ Undistributed฀earnings฀in฀PT฀Freeport฀Indonesia฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ (188,931)฀ ฀(172,491)
฀ Deferred฀mining฀costs฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ (99,874)฀ ฀ (77,145)
฀Other฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ (19,471)฀ ฀ (13,342)
฀฀ Total฀deferred฀tax฀liability฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀(1,016,497)฀ ฀(965,564)
Net฀deferred฀tax฀liability฀ ฀ ฀ ฀ ฀ ฀ ฀ $฀ (902,386)฀ $฀(932,416)
฀2005฀ 2004฀ 2003
Current฀income฀taxes:
฀ Indonesian฀ ฀ ฀ ฀ ฀ $฀831,566฀ $฀236,836฀ $฀218,017
฀ United฀States฀and฀other฀ ฀ ฀ ฀ ฀ ฀ 1,923฀ ฀ 7,049฀ ฀ 9,383
฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ 833,489฀ ฀ 243,885฀ ฀ 227,400฀
Deferred฀Indonesian฀income฀taxes฀ ฀ ฀ ฀ ฀ ฀ 81,579฀ ฀ 86,795฀ ฀ 110,653
Provision฀for฀income฀taxes฀per฀income฀statements฀ ฀ ฀ ฀ ฀ ฀ 915,068฀ ฀ 330,680฀ ฀ 338,053฀
Tax฀effect฀of฀cumulative฀effect฀adjustments฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀ —฀ ฀ 6,306
Total฀provision฀for฀income฀taxes฀ ฀ ฀ ฀ ฀ $฀915,068฀ $฀330,680฀ $฀344,359
฀ ฀ ฀ ฀ ฀
฀Options฀Outstanding฀ Options฀Exercisable
฀ ฀ ฀ Weighted฀ Weighted฀ ฀ Weighted
฀ ฀ ฀ Average฀ Average฀฀ ฀ Average
฀ ฀ Number฀of฀ Remaining฀ ฀Option฀ Number฀of฀ Option
Range฀of฀Exercise฀Prices฀ ฀ Options฀ ฀Life฀ ฀Price฀ Options฀ ฀Price
$฀ 9.09฀to฀$11.31฀ ฀ ฀ ฀ 122,625฀ 4.9฀years฀ $฀10.62฀ ฀ 122,625฀ $฀10.62
$฀13.78฀to฀$18.89฀ ฀ ฀ ฀ 1,539,452฀ 6.5฀years฀ ฀15.86฀ ฀ 239,308฀ ฀15.48
$฀26.98฀to฀$39.08฀ ฀ ฀ ฀ 5,501,300฀ 8.5฀years฀ ฀36.69฀ ฀ 166,925฀ ฀32.24
$51.97฀฀ ฀ ฀ ฀ ฀ 3,750฀ 9.9฀years฀ ฀51.97฀ ฀฀ —
฀ ฀ ฀ ฀ ฀ ฀ ฀ 7,167,127฀ ฀ ฀ ฀ ฀ 528,858
Summary฀information฀of฀stock฀options฀outstanding฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀
at฀December฀31,฀2005,฀excluding฀SARs,฀follows: