Freeport-McMoRan 2011 Annual Report Download - page 79

2011 ANNUAL REPORT | 77
2011 2010 2009
Net income $ 5,747 $ 5,544 $ 3,534
Net income attributable to noncontrolling interests (1,187) (1,208) (785)
Preferred dividends — (63) (222)
Net income attributable to FCX common stockholders 4,560 4,273 2,527
Plus income impact of assumed conversion of:
6¾% Mandatory Convertible Preferred Stock
a
— 63 194
5½% Convertible Perpetual Preferred Stock
b
— — 28
Diluted net income attributable to FCX common stockholders $ 4,560 $ 4,336 $ 2,749
Weighted-average shares of common stock outstanding 947 915 829
Add stock issuable upon conversion, exercise or vesting of (refer to Note 11):
6¾% Mandatory Convertible Preferred Stock
a
— 26 79
5½% Convertible Perpetual Preferred Stock
b
— — 25
Dilutive stock options 7
c
6 3
Restricted stock units 1 2 2
Weighted-average shares of common stock outstanding for purposes of calculating
diluted net income per share 955 949 938
Diluted net income per share attributable to FCX common stockholders $ 4.78 $ 4.57 $ 2.93
a. All outstanding 6¾% Mandatory Convertible Preferred Stock automatically converted on May 1, 2010, into FCX common stock at a conversion rate of 2.7432 shares of FCX common stock.
b. In September 2009, FCX redeemed the remaining outstanding shares of its 5½% Convertible Perpetual Preferred Stock.
c. Potential additional shares of common stock that were anti-dilutive totaled approximately 2 million.
Outstanding stock options with exercise prices greater than the
average market price of FCX’s common stock during the year
are excluded from the computation of diluted net income per share
of common stock. Approximately 4 million stock options with a
weighted-average exercise price of $53.91 were excluded in 2011;
approximately 10 million stock options with a weighted-average
exercise price of $38.56 were excluded in 2010; and approximately
13 million stock options with a weighted-average exercise price of
$36.27 were excluded in 2009.
New Accounting Standards. In May 2011, the Financial Accounting
Standards Board (FASB) issued an Accounting Standards Update
(ASU) in connection with guidance for fair value measurements
and disclosures. is ASU claries the FASB’s intent on current
guidance, modies and changes certain guidance and principles,
and expands disclosures concerning Level3 fair value
measurements in the fair value hierarchy (including quantitative
information about signicant unobservable inputs within Level 3
of the fair value hierarchy). In addition, this ASU requires
disclosure of the fair value hierarchy for assets and liabilities not
measured at fair value in the statement of nancial position, but
whose fair value is required to be disclosed. is ASU is
eective for interim and annual reporting periods beginning aer
December 15, 2011, and early application is not permitted.
In June 2011, FASB issued an ASU in connection with guidance
on the presentation of comprehensive income. e objective
of this ASU is to improve the comparability, consistency and
transparency of nancial reporting and to increase the prominence
of items reported in other comprehensive income. is ASU
requires an entity to present the components of net income and
other comprehensive income and total comprehensive income
(includes net income) either in a single continuous statement of
comprehensive income or in two separate but consecutive
statements. is ASU eliminates the option to present the components
of other comprehensive income as part of the statement of equity,
but does not change the items that must be reported in other
comprehensive income. is ASU is eective for interim and
annual reporting periods beginning aer December 15, 2011, and
early adoption is permitted. FCX has determined it will present
comprehensive income as a separate statement beginning in the
rst quarter of 2012. In December 2011, FASB deferred the
eective date for the requirement in this ASU for presenting
reclassication adjustments for each component of accumulated
other comprehensive income in both net income and other
comprehensive income on the face of the nancial statements.
Reclassifications. For comparative purposes, the prior year
balance sheet amounts for work-in-process product inventories was
reclassied to current mill and leach stockpiles to conform with
the current year presentation.
NOTE 2. Ownership in Subsidiaries, Joint Ventures and
Investment in PT Smelting
Ownership in Subsidiaries. FMC is a fully integrated producer of
copper and molybdenum, with mines in North America,
South America and the Tenke Fungurume minerals district in
the DRC, and copper and molybdenum conversion facilities.
At December31,2011, FMC’s operating copper mines in North
America were Morenci, Sierrita, Bagdad, Saord and Miami
located in Arizona, and Tyrone and Chino located in New Mexico.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS