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Management’s Discussion and Analysis
54 FREEPORT-McMoRan COPPER & GOLD INC. 2008 Annual Report
By-Product Co-Product Method
Year Ended December 31, 2007
a
Method Copper Other
b
Total
(In millions)
Revenues, excluding adjustments primarily for pricing on prior period open sales $ 4,550 $ 4,550 $ 140 $ 4,690
Site production and delivery, before net noncash and nonrecurring costs $ 1,268 $ 1,224 $ 58 $ 1,282
By-product credits (126) – – –
Treatment charges 282 279 3 282
Net cash costs $ 1,424 $ 1,503 $ 61 $ 1,564
Reconciliation to Pro Forma Revenues and Production and Delivery Costs
Production
and
Revenues Delivery
(In millions)
Totals presented above $ 4,690 $ 1,282
Net noncash and nonrecurring costs N/A 3
Less: Treatment charges per above (282) N/A
Revenue adjustments, primarily for pricing on prior period open sales 25 N/A
Purchased metal 218 218
Purchase accounting adjustments 9 169
Eliminations and other (222) (207)
Combined South America copper mines 4,438 1,465
Combined North America copper mines 5,046 2,595
Indonesia mining 4,808 1,388
Combined Africa mining – 8
Combined Molybdenum 2,193 1,593
Combined Rod & Refining 6,437 6,411
Atlantic Copper Smelting & Refining 2,388 2,329
Eliminations and other (6,077) (5,979)
As reported in FCX’s pro forma consolidated financial results
c
$ 19,233 $ 9,810
a. Reflects our historical data beginning March 20, 2007, combined with Phelps Dodge pre-acquisition data through March 19, 2007. As the pre-acquisition data represent the results
under Phelps Dodge management, such data is not necessarily indicative of what past results would have been under FCX management or of future operating results.
b. Includes molybdenum, gold and silver product revenues and production costs.
c. Refer to Note 18 for summary of unaudited pro forma financial information for year ended December 31, 2007.
Combined Product Revenues and Production Costs
For comparative purposes, the following tables summarize net
cash costs for the South America copper mines for the year ended
December 31, 2007, which reflects our historical data beginning
March 20, 2007, combined with Phelps Dodge pre-acquisition
data through March 19, 2007, and for the year ended December 31,
2006, which reflects Phelps Dodge pre-acquisition data. As the
pre-acquisition data represents the results of the South America
copper mines under Phelps Dodge management, such data is
not necessarily indicative of what past results would have been
under FCX management or of future operating results.
Presentations shown below have been reconciled to the revenues
and production and delivery costs included in our pro forma
consolidated financial results for the year ended December 31,
2007, and as reported in Phelps Dodge’s Form 10-K for the year
ended December 31, 2006.