Freeport-McMoRan 2011 Annual Report Download - page 91

2011 ANNUAL REPORT | 89
January1,2009, FMC contributes enhanced amounts for its eligible
employees hired on or aer January 1, 2007, totaling 4 percent of
each eligible employee’s earnings, regardless of years of service.
However, most eligible FMC employees who were receiving more
than 4 percent of their eligible earnings under the previous
FMC dened contribution plan will continue to receive this higher
percentage of their eligible earnings.
e costs charged to operations for employee savings plans and
dened contribution plans totaled $35 million in 2011, $36 million
in 2010 and $30 million in 2009.
FCX has other employee benet plans, certain of which are related
to FCX’s nancial results, which are recognized in operating costs.
NOTE 11. Stockholders’ Equity and Stock-Based
Compensation
Common Stock. FCX’s authorized shares of capital stock total
1.85 billion shares, consisting of 1.8 billion shares of common stock
and 50 million shares of preferred stock.
In Dece mbe r 2010, FC X ’s B oard of Di rector s declare d a t wo -for-
one split of its common stock in the form of a stock dividend on
issued and outstanding shares. Common shareholders of record at
the close of business on January15, 2011, received one additional
share of common stock for every share they owned as of that date.
e additional shares were issued on February1, 2011, and
increased the number of shares outstanding to approximately
945 millionfrom approximately 472 million. e par value of
FCX’s common stock remains at $0.10 per share. FCX’s common
stock began trading on a post-split basis on February2, 2011.
All references to shares of common stock and per share amounts
have been retroactively adjusted to reect the two-for-one stock
split, unless otherwise noted.
In February 2009, FCX completed a public oering of 53.6 million
shares of FCX common stock at an average price of $14.00 per
share, which generated gross proceeds of $750 million (net proceeds
of approximately $740 million).
In July 2008, FCX’s Board of Directors approved an increase in
the open-market share purchase program for up to 30 million
shares. During 2008, on a pre-split basis, FCX acquired 6.3 million
shares for $500 million ($79.15per share average) and 23.7 million
shares remain available under this program. During September
2008, because of the nancial turmoil and the decline in copper
and molybdenum prices, FCX suspended its purchases of shares
under its open-market share purchase program. e timing of
future purchases of FCX’s common stock is dependent on many
factors, including FCX’s operating results, cash ows and nancial
position; copper, molybdenum and gold prices; the price of FCX’s
common stock; and general economic and market conditions.
In December 2008, FCX’s Board of Directors suspended the cash
dividend on FCX’s common stock; accordingly, there were no
common stock dividends paid in 2009. In October 2009, FCX’s
Board of Directors reinstated a cash dividend on FCX’s common
stock at an annual rate of $0.30 per share beginning in 2010. FCX’s
Board of Directors authorized an increase in the cash dividend on
FCX’s common stock to an annual rate of $0.60 per share in April
2010 and then to an annual rate of $1.00per share in October 2010.
In December 2010, FCX’s Board of Directors declared a
supplemental common stock dividend of $0.50 per share, which
was paid on December 30, 2010, to common shareholders of
record at the close of business on December 20, 2010. In April 2011,
FCX’s Board of Directors declared a supplemental common
stock dividend $0.50 per share, which was paid on June 1, 2011,
to common shareholders of record at the close of business on
May 15, 2011. On December28, 2011, FCX declared a regular
quarterly dividend of $0.25 per share, which was paid on
February 1, 2012, to common shareholders of record at the close
of business on January 13, 2012. e Board of Directors will
continue to review FCX’s nancial policy on an ongoing basis.
Preferred Stock. On March28, 2007, FCX sold 28.75 million
shares of 6¾% Mandatory Convertible Preferred Stock, with
a liquidation preference of $100 per share, for net proceeds of
$2.8 billion. e 6¾% Mandatory Convertible Preferred Stock was
automatically converted on May1,2010, into shares of FCX
common stock. e conversion rate was adjustable upon the
occurrence of certain events, including the payment in any quarter
of common stock dividends exceeding $0.15625 per share, and,
for shares converted on May1,2010, depended on the applicable
average m arket price of FCX’s common st ock over the 20-trading-
day period ending on the third trading day prior to May1,2010.
Holders could elect to convert at any time prior to May1, 2010, at a
conversion rate equal to 2.7432 shares of FCX common stock.
During 2010, a total of 28,749,560 outstanding shares of FCX’s
6¾% Mandatory Convertible Preferred Stock were converted into
78.9 million shares of FCX common stock (conversion rate equal to
2.7432 shares of FCX common stock).
In March 2004, FCX sold 1.1 million shares of 5½% Convertible
Perpetual Preferred Stock for net proceeds of $1.1 billion. e
conversion rate was adjustable upon the occurrence of certain
events, including the payment in any quarter of common stock
dividends exceeding $0.10 per share. As a result of the quarterly
and supplemental common stock dividends paid through
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS