Freeport-McMoRan 2012 Annual Report Download - page 80

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
outstanding for purposes of calculating diluted net income per
share for the years ended December 31 follows:
2012 2011 2010
Net income $ 3,980 $ 5,747 $ 5,544
Net income attributable to noncontrolling interests
(939) (1,187) (1,208)
Preferred dividends
— — (63)
Net income attributable to FCX common stockholders
3,041 4,560 4,273
Plus income impact of assumed conversion of
6¾% Mandatory Convertible Preferred Stock
a
— — 63
Diluted net income attributable to FCX common stockholders
$ 3,041 $ 4,560 $ 4,336
Weighted-average shares of common stock outstanding
949 947 915
Add shares issuable upon conversion, exercise or vesting of (refer to Note 11):
6¾% Mandatory Convertible Preferred Stock
a
— — 26
Dilutive stock options
4
b
7
b
6
Restricted stock units
1 1 2
Weighted-average shares of common stock outstanding for purposes of calculating
diluted net income per share
954 955 949
Diluted net income per share attributable to FCX common stockholders
$ 3.19 $ 4.78 $ 4.57
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. Excluded shares of common stock associated with outstanding stock options with exercise prices less than the average market price of FCX’s common stock that were anti-dilutive based on
the treasury stock method of approximately one million for the year ended December 31, 2012, and two million for the year ended December 31, 2011.
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. Excluded amounts were 17 million stock options
with a weighted-average exercise price of $44.73 per option in
2012; 4 million stock options with a weighted-average exercise
price of $53.91 per option in 2011; and 10 million stock options with
a weighted-average exercise price of $38.56 per option in 2010.
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. This ASU clarifies the FASB’s
intent on current guidance, modifies and changes certain guidance
and principles, and expands disclosures concerning Level 3 fair
value measurements in the fair value hierarchy (including
quantitative information about significant 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 financial
position, but whose fair value is required to be disclosed. FCX
adopted this guidance effective January 1, 2012.
In June 2011, FASB issued an ASU in connection with guidance
on the presentation of comprehensive income. The objective of
this ASU is to improve the comparability, consistency and
transparency of financial reporting and to increase the
prominence of items reported in other comprehensive income.
This 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. This 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.
FCX adopted this ASU and presented total comprehensive
income in a separate statement for all periods reported in these
financial statements. Additionally, in December 2011, FASB
deferred the effective date in this ASU for presenting
reclassification adjustments for each component of accumulated
other comprehensive income in both net income and other
comprehensive income on the face of the financial statements.
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 minerals district in the DRC, and copper
and molybdenum conversion facilities. At December 31, 2012,
FMC’s operating copper mines in North America were Morenci,
Bagdad, Safford, Sierrita and Miami located in Arizona, and
Tyrone and Chino located in New Mexico. FCX has an 85 percent
interest in Morenci (refer to “Joint Ventures — Sumitomo”)
and owns 100 percent of the other North America copper mines.
In addition to copper, certain of FMC’s North America copper
mines also produce molybdenum concentrates. FMC also owns
100 percent of the Henderson and Climax molybdenum mines
located in Colorado. At December 31, 2012, operating copper
mines in South America were Cerro Verde (53.56 percent owned)
located in Peru, and El Abra (51 percent owned), Candelaria
(80 percent owned) and Ojos del Salado (80 percent owned)
located in Chile. In addition to copper, certain of FMC’s South
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