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CONSOLIDATED฀STATEMENTS฀OF฀CASH฀FLOWS
Years฀Ended฀December฀31,฀ ฀ 2006฀ 2005฀ 2004
(In฀Thousands)
Cash฀flow฀from฀operating฀activities:
฀ Net฀income฀ ฀ ฀ ฀ ฀ $฀1,456,509฀ $฀ 995,127฀ $฀ 202,267
฀ ฀ Adjustments฀to฀reconcile฀net฀income฀to฀net฀cash฀provided฀by฀operating฀activities:
฀ ฀ ฀ Depreciation฀and฀amortization฀ ฀ ฀ ฀ ฀ ฀ 227,571฀ ฀ 251,512฀ ฀ 206,408
฀ ฀ ฀ Minority฀interests’฀share฀of฀net฀income฀ ฀ ฀ ฀ ฀ ฀ 168,187฀ ฀ 126,743฀ ฀ 41,437
฀ ฀ ฀ Deferred฀income฀taxes฀ ฀ ฀ ฀ ฀ ฀ 15,743฀ ฀ (32,347)฀ ฀ 76,253
฀ ฀ ฀ Noncash฀stock-based฀compensation฀ ฀ ฀ ฀ ฀ ฀ 55,443฀ ฀ 21,168฀ ฀ 5,342
฀ ฀ ฀ Long-term฀compensation฀and฀postretirement฀benefits฀ ฀ ฀ ฀ ฀ ฀ 29,103฀ ฀ 7,819฀ ฀ (1,155)
฀ ฀ ฀ Losses฀on฀early฀extinguishment฀and฀conversion฀of฀debt฀฀ ฀ ฀ ฀ ฀ 32,049฀ ฀ 52,210฀ ฀ 14,011
฀ ฀ ฀ Gains฀on฀sales฀of฀assets฀ ฀ ฀ ฀ ฀ ฀ (30,635)฀ ฀ (6,631)฀ ฀ (28,756)
฀ ฀ ฀ Equity฀in฀PT฀Smelting฀earnings฀ ฀ ฀ ฀ ฀ ฀ (6,490)฀ ฀ (9,302)฀ ฀ (2,045)
฀ ฀ ฀ Increase฀in฀deferred฀mining฀costs฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀ (64,940)฀ ฀ (77,780)
฀ ฀ ฀ Amortization฀of฀deferred฀financing฀costs฀ ฀ ฀ ฀ ฀ ฀ 4,968฀ ฀ 7,596฀ ฀ 8,501
฀ ฀ ฀ Elimination฀of฀profit฀on฀PT฀Freeport฀Indonesia฀sales฀to฀PT฀Smelting฀ ฀ ฀ ฀ ฀ 2,962฀ ฀ 23,565฀ ฀ 13,798
฀ ฀ ฀ Provision฀for฀inventory฀obsolescence฀ ฀ ฀ ฀ ฀ ฀ 6,000฀ ฀ 6,000฀ ฀ 4,916
฀ ฀ ฀ Other฀ ฀ ฀ ฀ ฀ ฀ 18,922฀ ฀ (4,823)฀ ฀ 8,862
฀ ฀ (Increases)฀decreases฀in฀working฀capital:
฀ ฀ ฀ Accounts฀receivable฀ ฀ ฀ ฀ ฀ ฀ 196,523฀ ฀ (252,934)฀ ฀ (235,756)
฀ ฀ ฀ Inventories฀ ฀ ฀ ฀ ฀ ฀ (146,188)฀ ฀ (108,225)฀ ฀ (91,744)
฀ ฀ ฀ Prepaid฀expenses฀and฀other฀ ฀ ฀ ฀ ฀ ฀ (27,025)฀ ฀ (45)฀ ฀ 34,304
฀ ฀ ฀ Accounts฀payable฀and฀accrued฀liabilities฀ ฀ ฀ ฀ ฀ ฀ 71,034฀ ฀ 216,331฀ ฀ 97,781
฀ ฀ ฀ Rio฀Tinto฀share฀of฀joint฀venture฀cash฀flows฀ ฀ ฀ ฀ ฀ ฀ (56,365)฀ ฀ 66,133฀ ฀ 17,793
฀ ฀ ฀ Accrued฀income฀taxes฀ ฀ ฀ ฀ ฀ ฀ (151,887)฀ ฀ 257,588฀ ฀ 46,918
฀ ฀ (Increase)฀decrease฀in฀working฀capital฀ ฀ ฀ ฀ ฀ ฀ (113,908)฀ ฀ 178,848฀ ฀ (130,704)
฀ ฀ ฀ Net฀cash฀provided฀by฀operating฀activities฀ ฀ ฀ ฀ ฀ ฀ 1,866,424฀ ฀1,552,545฀ ฀ 341,355
Cash฀flow฀from฀investing฀activities:
฀ PT฀Freeport฀Indonesia฀capital฀expenditures฀ ฀ ฀ ฀ ฀ ฀ (233,730)฀ ฀ (129,190)฀ ฀ (119,207)
฀ Atlantic฀Copper฀and฀other฀capital฀expenditures฀ ฀ ฀ ฀ ฀ ฀ (16,810)฀ ฀ (13,796)฀ ฀ (21,792)
฀ Sales฀of฀assets฀ ฀ ฀ ฀ ฀ ฀ 33,563฀ ฀ 6,631฀ ฀ 39,885
฀ Investment฀in฀PT฀Smelting฀ ฀ ฀ ฀ ฀ ฀ (1,945)฀ ฀ —฀ ฀ (1,375)
฀ Phelps฀Dodge฀acquisition฀costs฀ ฀ ฀ ฀ ฀ ฀ (4,576)฀ ฀ —฀ ฀ —
฀ Proceeds฀from฀insurance฀settlement฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀ 2,016฀ ฀ 6,261
฀ Sale฀of฀restricted฀investments฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀ —฀ ฀ 21,804
฀ Decrease฀in฀Atlantic฀Copper฀restricted฀cash฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀ —฀ ฀ 11,000
฀ Other฀฀ ฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀ —฀ ฀ (548)
฀ ฀ Net฀cash฀used฀in฀investing฀activities฀ ฀ ฀ ฀ ฀ ฀ (223,498)฀ ฀ (134,339)฀ ฀ (63,972)
Cash฀flow฀from฀financing฀activities:
฀ Net฀proceeds฀from฀sales฀of฀senior฀notes฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀ —฀ ฀ 344,354
฀ Proceeds฀from฀other฀debt฀ ฀ ฀ ฀ ฀ ฀ 102,862฀ ฀ 66,058฀ ฀ 96,122
฀ Repayments฀of฀debt฀and฀redemption฀of฀preferred฀stock฀ ฀ ฀ ฀ ฀ ฀ (394,054)฀ ฀ (559,286)฀ ฀ (471,644)
฀ Net฀proceeds฀from฀sale฀of฀convertible฀perpetual฀preferred฀stock฀ ฀ ฀ ฀ ฀ —฀ ฀ —฀ ฀ 1,067,000
฀ Purchase฀of฀FCX฀common฀shares฀from฀Rio฀Tinto฀ ฀ ฀ ฀ ฀ ฀ —฀ ฀ —฀ ฀ (881,868)
฀ Purchases฀of฀other฀FCX฀common฀shares฀ ฀ ฀ ฀ ฀ ฀ (99,783)฀ ฀ (80,227)฀ ฀ (99,477)
฀ Cash฀dividends฀paid:
฀ ฀ Common฀stock฀ ฀ ฀ ฀ ฀ ฀ (915,775)฀ ฀ (452,510)฀ ฀ (198,782)
฀ ฀ Preferred฀stock฀ ฀ ฀ ฀ ฀ ฀ (60,500)฀ ฀ (60,501)฀ ฀ (35,470)
฀ ฀ Minority฀interests฀ ฀ ฀ ฀ ฀ ฀ (161,152)฀ ฀ (124,636)฀ ฀ (11,447)
฀ Net฀proceeds฀from฀exercised฀stock฀options฀ ฀ ฀ ฀ ฀ ฀ 15,280฀ ฀ 5,081฀ ฀ 3,196
฀ Excess฀tax฀benefit฀from฀exercised฀stock฀options฀ ฀ ฀ ฀ ฀ ฀ 20,819฀ ฀ —฀ ฀ —
฀ Bank฀credit฀facilities฀fees฀and฀other฀ ฀ ฀ ฀ ฀ ฀ (6,758)฀ ฀ (36)฀ ฀ (1,569)
฀ ฀ Net฀cash฀used฀in฀financing฀activities฀ ฀ ฀ ฀ ฀ ฀(1,499,061)฀ ฀(1,206,057)฀ ฀ (189,585)
Net฀increase฀in฀cash฀and฀cash฀equivalents฀ ฀ ฀ ฀ ฀ ฀ 143,865฀ ฀ 212,149฀ ฀ 87,798
Cash฀and฀cash฀equivalents฀at฀beginning฀of฀year฀ ฀ ฀ ฀ ฀ ฀ 763,599฀ ฀ 551,450฀ ฀ 463,652
Cash฀and฀cash฀equivalents฀at฀end฀of฀year฀ ฀ ฀ ฀ ฀ $฀ 907,464฀ $฀ 763,599฀ $฀ 551,450
 
Interest฀paid฀ ฀ ฀ ฀ ฀ $฀ 80,352฀ $฀ 139,824฀ $฀ 143,958
Income฀taxes฀paid฀ ฀ ฀ ฀ ฀ ฀$฀1,288,400฀ $฀ 670,240฀ $฀ 178,379

56 FREEPORT-McMoRan฀COPPER฀&฀GOLD฀INC.฀฀2006฀Annual฀Report