Freeport-McMoRan 2010 Annual Report Download - page 84

FREEPORT-McMoRan COPPER & GOLD INC. 2010 Annual Report
82
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Information on the FCX (including FMC’s plans; and FCX’s
SERP, director and excess benefits plans), PT Freeport Indonesia
and Atlantic Copper plans as of December 31 follows:
PT Freeport
FCX Indonesia Atlantic Copper
2010 2009 2010 2009 2010 2009
Change in benefit obligation:
Benefit obligation at beginning of year
$ 1,472 $ 1,412 $ 80 $ 59 $ 79 $ 81
Service cost
26 26 8 5 — —
Interest cost
82 85 8 7 3 4
Actuarial losses (gains)
104 64 41 4 — —
Foreign exchange losses (gains)
(1) 1 4 10 (4) 2
Curtailments
a
— (5) — — — —
Special retirement benefits
a
— (3) — — — —
Benefits paid
(85) (108) (6) (5) (7) (8)
Benefit obligation at end of year
1,598 1,472 135 80 71 79
Change in plan assets:
Fair value of plan assets at beginning of year
1,067 959 78 42 21 19
Actual return on plan assets
126 209 13 13 — —
Employer contributions
b
5 6 8 19 9 10
Foreign exchange gains (losses)
(1) 1 4 9 — —
Benefits paid
(85) (108) (6) (5) (7) (8)
Fair value of plan assets at end of year
1,112 1,067 97 78 23 21
Funded status
$ (486) $ (405) $ (38) $ (2) $ (48) $ (58)
Accumulated benefit obligation
$ 1,517 $ 1,378 $ 68 $ 48 $ 71 $ 79
Weighted-average assumptions used to determine benefit obligations:
Discount rate
c
5.40% 5.80% 8.50% 10.50% 6.77% 6.77%
Rate of compensation increase
d
3.75% 4.25% 8.00% 8.00% N/A N/A
Balance sheet classification of funded status:
Other assets
$ 6 $ 5 $ — $ — $ — $ —
Accounts payable and accrued liabilities
(4) (4) — — — —
Other liabilities
(488) (406) (38) (2) (48) (58)
Total
$ (486) $ (405) $ (38) $ (2) $ (48) $ (58)
a. Resulted from revised mine operating plans and reductions in the workforce (refer to Note 17 for further discussion).
b. Employer contributions for 2011 are expected to approximate $40 million for the FCX plans, $8 million for the PT Freeport Indonesia plan (based on a December 31, 2010, exchange rate of
8,990 Indonesian rupiah to one U.S. dollar) and $10 million for the Atlantic Copper plan (based on a December 31, 2010, exchange rate of $1.34 per euro).
c. The discount rate shown in 2010 and 2009 for the FCX plans relates to all plans except the SERP plan. The SERP plan’s discount rate in 2010 and 2009 was 4.00 percent.
d. The rate of compensation increase shown for the FCX plans only relates to the FMC plans.
The weighted-average assumptions used to determine net periodic
benefit cost and the components of net periodic benefit cost
for FCX’s pension plans (FMC’s plans; and FCX’s SERP, director and
excess benefits plans) for the years ended December 31 follow:
2010 2009 2008
Weighted-average assumptions:
Discount rate:
FCX SERP
4.00% 4.00% 4.00%
FMC plans
5.80% 6.10% 6.30%
Expected return on plan assets
a
8.50% 8.50% 8.50%
Rate of compensation increase
a
4.25% 4.25% 4.25%
Service cost
$ 26 $ 26 $ 29
Interest cost
82 85 80
Expected return on plan assets
(87) (73) (118)
Amortization of prior service cost
(1) — 4
Amortization of net actuarial losses
22 26 —
Curtailments
b
— (1) —
Special retirement benefits
b
— (3) 39
Net periodic benefit cost
$ 42 $ 60 $ 34
a. The assumptions shown only relate to the FMC plans.
b. Resulted from revised mine operating plans and reductions in the workforce (refer to
Note 17 for further discussion).