Freeport-McMoRan 2011 Annual Report Download - page 111

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2011 ANNUAL REPORT | 109
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
molybdenum. is segment also includes FCX’s wholly owned
Climax molybdenum mine in Colorado, for which construction
activities are substantially complete and is planned to commence
production during 2012.
In addition, at times this segment roasts and/or processes
material on a toll basis. Toll arrangements require the tolling
customer to deliver appropriate molybdenum-bearing material to
FCX’s facilities for processing into a product that is returned to the
customer, who pays FCX for processing its material into the
specied products.
Rod & Refining. e Rod & Rening segment consists of copper
conversion facilities located in North America, and includes a
renery, three rod mills and a specialty copper products facility.
ese operations process copper produced at FCX’s North America
copper mines and purchased copper into copper cathode, rod and
custom copper shapes. At times these operations rene copper and
produce copper rod and shapes for customers on a toll basis. Toll
arrangements require the tolling customer to deliver appropriate
copper-bearing material to FCX’s facilities for processing into a
product that is returned to the customer, who pays FCX for
processing its material into the specied products.
Atlantic Copper Smelting & Refining. Atlantic Copper, FCX’s
wholly owned smelting unit in Spain, smelts and renes copper
concentrates and markets rened copper and precious metals
in slimes. During 2011, Atlantic Copper purchased 17 percent of
its concentrate requirements from PT Freeport Indonesia and
30 percent from the South America mines at market prices.
Intersegment sales. Intersegment sales between FCX’s operations
are based on similar arms-length transactions with third parties
at the time of the sale. Intersegment sales may not be reective of
the actual prices ultimately realized because of a variety of factors,
including additional processing, timing of sales to unaliated
customers and transportation premiums.
Allocations. FCX allocates certain operating costs, expenses and
capital expenditures to the operating divisions and individual
segments. However, not all costs and expenses applicable to a mine
or operation are allocated. U.S. federal and state income taxes are
recorded and managed at the corporate level, whereas foreign
income taxes are recorded and managed at the applicable country.
In addition, most exploration and research activities are managed
at the corporate level, and those costs along with some selling,
general and administrative costs are not allocated to the operating
division or segments. Accordingly, the following segment
information reects management determinations that may not be
indicative of what the actual nancial performance of each operating
division or segment would be if it was an independent entity.
Product Revenue
FCX revenues attributable to the products it produced for the years
ended December 31 follow:
2011 2010 2009
Refined copper products $ 10,297 $ 9,203 $ 6,563
Copper in concentrates
a
5,938 5,674 4,763
Gold 2,429 2,370 2,591
Molybdenum 1,348 1,143 792
Other 868 592 331
Total $ 20,880 $ 18,982 $ 15,040
a. Amounts are net of treatment and refining charges totaling $362 million for 2011,
$413 million for 2010 and $429 million for 2009.
Geographic Area
Information concerning nancial data by geographic area follows:
Years Ended December 31, 2011 2010 2009
Revenues:
a
United States $ 7,176 $ 5,295 $ 4,890
Japan 2,501 3,428 3,093
Indonesia 2,266 2,266 1,937
Spain 1,643 1,483 986
Switzerland 1,219 1,063 379
China 942 795 496
India 878 690 566
Chile 741 759 563
Korea 561 745 475
Other 2,953 2,458 1,655
Total $ 20,880 $ 18,982 $ 15,040
a. Revenues are attributed to countries based on the location of the customer.
December 31, 2011 2010 2009
Long-lived assets:
a
United States $ 7,899 $ 7,101 $ 6,499
Indonesia 4,469 3,475 3,298
Democratic Republic of Congo 3,497 3,220 3,207
Peru 3,265 3,203 3,240
Chile 2,242 1,892 1,519
Spain 257 266 277
Other 68 48 50
Total $ 21,697 $ 19,205 $ 18,090
a. Long-lived assets exclude deferred tax assets and intangible assets.
Major Customers
Sales to PT Smelting totaled $2.3 billion in 2011 and 2010 (11 percent
and 12 percent, respectively, of FCX’s consolidated revenues)
and $1.9 billion (13 percent of FCX’s consolidated revenues) in 2009.
Refer to Note 2 for further discussion of FCX’s investment in
PT Smelting.