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Freeport-McMoRan Copper & Gold Inc. Reports Second-Quarter And Six-Month 2012 Results

James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said, "Our second-quarter results reflect our global team's focus on achieving strong operating results in a safe and efficient fashion, and the pursuit of opportunities to grow our production and large resource base. We are on track to increase our annual copper production by more than 25 percent over the next three years through financially attractive brownfield investments. We are positive about the long-term fundamentals of the metals we produce, our geographically diverse portfolio of large-scale operations with long-lived reserves and mineral resources, and the strong track record of our team to execute our plans."

  Three Months Ended Six Months Ended
June 30, June 30,
  2012 2011 2012 2011
Financial Data (in millions, except per share amounts)
Revenues a $ 4,475 $ 5,814 $ 9,080 $ 11,523
Operating income b $ 1,311 c $ 2,757 c $ 3,045 c $ 5,693 c
Net income attributable to common stock $ 710 c $ 1,368 c, d $ 1,474 c, d $ 2,867 c, d
Diluted net income per share of common stock $ 0.74 c $ 1.43 c, d $ 1.55 c, d $ 3.00 c, d
Diluted weighted-average common shares outstanding 953 956 954 956
Operating cash flows $ 1,182 e $ 1,680 e $ 1,983 e $ 4,039 e
Capital expenditures $ 840 $ 527 $ 1,547 $ 1,032
Mining Operating Data
Copper (millions of recoverable pounds)
Production 887 967 1,720 1,917
Sales, excluding purchases 927 1,002 1,754 1,928
Average realized price per pound $ 3.53 $ 4.22 $ 3.61 $ 4.24
Site production and delivery costs per pound f $ 2.01 $ 1.63 $ 1.98 $ 1.62
Unit net cash costs per pound f $ 1.49 $ 0.93 $ 1.38 $ 0.87
Gold (thousands of recoverable ounces)
Production 251 351 503 817
Sales, excluding purchases 266 356 554 836
Average realized price per ounce $ 1,588 $ 1,509 $ 1,639 $ 1,466
Molybdenum (millions of recoverable pounds)
Production 20 22 41 42
Sales, excluding purchases 20 21 41 41
Average realized price per pound $ 15.44 $ 18.16 $ 15.39 $ 18.13

a. Includes the impact of adjustments to provisionally priced sales recognized in prior periods (refer to the "Consolidated Statements of Income" on page IV for further discussion).

b. FCX defers recognizing profits on intercompany sales until final sales to third parties occur (refer to the "Consolidated Statements of Income" on page IV for a summary of net impacts from changes in these deferrals).

c. Includes charges for adjustments to environmental obligations and related litigation reserves totaling $66 million ($53 million to net income or $0.06 per share) for the second quarter and first six months of 2012 and $49 million ($40 million to net income or $0.04 per share) for the second quarter and first six months of 2011.

d. Includes losses on early extinguishment of debt totaling $54 million ($0.06 per share) in second-quarter 2011, $149 million ($0.16 per share) for the first six months of 2012 and $60 million ($0.06 per share) for the first six months of 2011.

e. Includes working capital uses and other tax payments of $54 million for second-quarter 2012, $496 million for second-quarter 2011, $774 million for the first six months of 2012 and $382 million for the first six months of 2011.

f. Reflects per pound weighted-average site production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, excluding net noncash and other costs. For reconciliations of per pound unit costs by operating division to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, "Product Revenues and Production Costs," beginning on page VII, which is available on FCX's website, " ."


Consolidated. Second-quarter 2012 consolidated sales of 927 million pounds of copper and 266 thousand ounces of gold were higher than the April 2012 estimates of 895 million pounds of copper and 235 thousand ounces of gold primarily reflecting higher copper sales volumes in North America and higher gold sales volumes in Indonesia, principally timing related. Second-quarter 2012 consolidated sales were lower than second-quarter 2011 sales of 1.0 billion pounds of copper and 356 thousand ounces of gold primarily reflecting lower ore grades and production rates in Indonesia. Lower copper sales volumes also reflected lower ore grades in South America, partly offset by increased production in North America and Africa.

Operations and productivity at PT Freeport Indonesia have continued to improve following the first-quarter 2012 work interruptions in connection with efforts to resume normal operations. PT Freeport Indonesia's milling rates averaged 179,500 metric tons of ore per day in second-quarter 2012, compared with the first-quarter 2012 average of 114,800 metric tons of ore per day. Mining operations in the Grasberg open pit are approaching normal levels and underground mining operations at the Deep Ore Zone (DOZ) underground mine continue to be ramped up following the 2011 work stoppages. Mining rates at the DOZ underground mine averaged 45,400 metric tons per day in second-quarter 2012 and are expected to reach 80,000 metric tons per day in fourth-quarter 2012.

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