Freeport-McMoRan 2010 Annual Report Download - page 64

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MANAGEMENT’S DISCUSSION AND ANALYSIS
FREEPORT-McMoRan COPPER & GOLD INC. 2010 Annual Report
62
Reconciliation to Amounts Reported (continued)
Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)
Year Ended December 31, 2008
Totals presented above $ 1,209 $ 216 $ 172
Treatment charges per above (27) N/A N/A
Net noncash and other costs per above N/A 7 N/A
Henderson mine 1,182 223 172
Other molybdenum operations and eliminations
c
1,306 1,406
d
20
Molybdenum 2,488 1,629 192
North America copper mines 5,265 3,708 770
South America mining 4,166 1,854 511
Indonesia mining 3,412 1,792 222
Africa mining — 16 6
Rod & Refining 5,557 5,527 8
Atlantic Copper Smelting & Refining 2,341 2,276 35
Corporate, other & eliminations (5,433) (5,604) 38
As reported in FCX’s consolidated financial statements $ 17,796 $ 11,198
e
$ 1,782
a. Revenues and costs were adjusted to include freight and downstream conversion costs in net cash costs; gross profit was not affected by these adjustments.
b. Gross profit reflects sales of Henderson products based on volumes produced at market-based pricing. On a consolidated basis, the Molybdenum division includes profits on sales as they
are made to third parties and realizations based on actual contract terms. As a result, the actual gross profit realized will differ from the amounts reported in this table.
c. Primarily includes amounts associated with the molybdenum sales company, which includes sales of molybdenum produced at our North and South America copper mines.
d. Includes LCM molybdenum inventory adjustments of $19 million in 2009 and $100 million in 2008.
e. Includes LCM inventory adjustments of $782 million.
CAUTIONARY STATEMENT
Our discussion and analysis contains forward-looking statements in
which we discuss factors we believe may affect our future
performance. Forward-looking statements are all statements other
than statements of historical facts, such as those statements
regarding projected ore grades and milling rates, projected production
and sales volumes, projected unit net cash costs, projected
operating cash flows, projected commodity prices, projected capital
expenditures, projected exploration efforts and results, projected
mine production and development plans, the impact of deferred
intercompany profits on earnings, liquidity, other financial
commitments and tax rates, the impact of copper, gold, molybdenum
and cobalt price changes, reserve estimates, potential prepayments
of debt, future dividend payments and potential share purchases.
The words “anticipates,” “may,” “can,” “plans,” “believes,”
“estimates,” “expects,” “projects,” “intends,” “likely,” “will,” “should,”
“to be,” and any similar expressions are intended to identify those
assertions as forward-looking statements. The declaration of
dividends is at the discretion of our Board of Directors and will
depend on our financial results, cash requirements, future prospects
and other factors deemed relevant by the Board.
In making any forward-looking statements, we believe that
the expectations are based on reasonable assumptions. We caution
readers that those statements are not guarantees of future
performance and our actual results may differ materially from those
anticipated, projected or assumed in the forward-looking
statements. Important factors that can cause our actual results to
differ materially from those anticipated in the forward-looking
statements include commodity prices, mine sequencing, production
rates, industry risks, regulatory changes, political risks, the
potential effects of violence in Indonesia, documentation of the
outcome of the contract review process and resolution of
administrative disputes in the Democratic Republic of Congo, risks
related to the investment in McMoRan Exploration Co., weather-
related risks, labor relations, environmental risks, litigation results,
currency translation risks and other factors described in more
detail under the heading “Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2010, filed with the SEC.
Investors are cautioned that many of the assumptions on which
our forward-looking statements are based are likely to change after
our forward-looking statements are made, including for example
commodity prices, which we cannot control, and production volumes
and costs, some aspects of which we may or may not be able to
control. Further, we may make changes to our business plans that
could or will affect our results. We caution investors that we do not
intend to update our forward-looking statements notwithstanding
any changes in our assumptions, changes in our business plans,
our actual experience, or other changes, and we undertake no
obligation to update any forward-looking statements more frequently
than quarterly.