Freeport-McMoRan 2012 Annual Report Download - page 112

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
2012
Revenues $ 4,605 $ 4,475 $ 4,417 $ 4,513 $ 18,010
Operating income 1,734 1,311 1,411 1,358
a,b
5,814
a,b
Net income 1,001 894 1,140
c
945 3,980
c
Net income attributable to noncontrolling interests 237 184 316
c
202 939
c
Net income attributable to FCX common stockholders 764
d
710 824
c
743
a,b
3,041
a,b,c,d
Basic net income per share attributable to FCX common stockholders 0.81 0.75 0.87 0.78 3.20
Diluted net income per share attributable to FCX common stockholders 0.80
d
0.74 0.86
c
0.78
a,b
3.19
a,b,c,d
2011
Revenues $ 5,709 $ 5,814 $ 5,195 $ 4,162 $ 20,880
Operating income 2,936 2,757 2,150 1,297
e
9,140
e
Net income 1,861 1,726 1,294 866 5,747
Net income attributable to noncontrolling interests 362 358 241 226 1,187
Net income attributable to FCX common stockholders 1,499
f
1,368
f
1,053
g
640
e
4,560
e,f,g
Basic net income per share attributable to FCX common stockholders 1.58 1.44 1.11 0.67 4.81
Diluted net income per share attributable to FCX common stockholders 1.57
f
1.43
f
1.10
g
0.67
e
4.78
e,f,g
a. Included a gain of $59 million ($31 million to net income attributable to FCX common stockholders or $0.03 per share) in the fourth quarter and for the year for the settlement of the insurance claim
for business interruption and property damage relating to the 2011 incidents affecting PT Freeport Indonesia
’ s concentrate pipelines. Refer to Note 13 for further discussion.
b. Included a charge of $16 million ($8 million to net income attributable to FCX common stockholders or $0.01 per share) in the fourth quarter and for the year associated with labor agreements at
Candelaria. Also included charges of $9 million ($7 million to net income attributable to FCX common stockholders or $0.01 per share) for costs associated with the PXP and MMR transactions.
c. Included a net tax benefit of $208 million ($108 million attributable to noncontrolling interests and $100 million to net income attributable to FCX common stockholders or $0.11 per share) in the
third quarter and $205 million ($107 million attributable to noncontrolling interests and $98 million to net income attributable to FCX common stockholders or $0.11 per share) for the year
associated with adjustments to Cerro Verde
’ s deferred income taxes. Refer to Note 12 for further discussion.
d. Included losses on early extinguishment of debt totaling $149 million ($0.16 per share) in the first quarter and for the year. Refer to Note 9 for further discussion.
e. Included charges totaling $116 million ($50 million to net income attributable to common stock or $0.05 per share) in the fourth quarter and for the year primarily associated with bonuses for new
labor agreements and other employee costs at PT Freeport Indonesia, Cerro Verde and El Abra.
f. Included losses on early extinguishment of debt totaling $6 million ($0.01 per share) in the first quarter, $54 million ($0.06 per share) in the second quarter and $60 million ($0.06 per share) for the
year. Refer to Note 9 for further discussion.
g. Included additional taxes of $50 million ($0.05 per share) in the third quarter and $49 million ($0.05 per share) for the year associated with Cerro Verde
’ s election to pay a special mining burden
during the remaining term of its current stability agreement. Refer to Note 12 for further discussion.
NOTE 20. SUBSEQUENT EVENTS
On January 21, 2013, FCX, through a newly formed joint venture,
entered into a definitive agreement with OM Group, Inc. to acquire
a large-scale cobalt refinery located in Kokkola, Finland, and
the related sales and marketing business. The acquisition would
provide direct end-market access for the cobalt hydroxide
production at Tenke. FCX will be the operator of the joint venture
with an effective 56 percent ownership interest, with the
remaining effective ownership interests held by its partners in TFM,
including 24 percent by Lundin Mining Corporation and 20 percent
by La Générale des Carrières et des Mines (Gécamines). Under
the terms of the agreement, initial consideration of $325 million
(subject to working capital adjustments) will be paid at closing,
with the potential for additional consideration of up to $110 million
over a period of three years, contingent upon the achievement
of revenue-based performance targets. The acquisition is subject
to customary closing conditions, including required regulatory
approvals, and is expected to close in second-quarter 2013.
On February 14, 2013, FCX entered into an agreement for a bank
term loan (the Term Loan) in connection with the proposed
acquisitions of PXP and MMR. No amounts are currently available
to FCX under the Term Loan. The Term Loan will be drawn at the
closing of the acquisitions and will provide for an aggregate
principal amount of up to $4.0 billion that may be used to fund the
cash portion of the merger consideration for both transactions, to
refinance certain of PXP’s and MMR’s outstanding debt, or for
general corporate purposes.
The Term Loan will mature in annual amounts equal to
10 percent in the second year, 15 percent in the third year and
20 percent in the fourth year of the aggregate principal amount,
and the remainder will mature five years from the date of the
first borrowing. The Term Loan will bear interest determined by
reference to FCX’s credit ratings (currently LIBOR plus 1.50
percent). In connection with the completion of the Term Loan,
FCX’s interim financing commitments associated with the
proposed acquisitions of PXP and MMR were reduced from
$9.5 billion to $5.5 billion. FCX is pursuing permanent financing
for an additional $5.5 billion to replace the remaining interim
financing commitments.
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