-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vju2JcTVUifg5HJ3+A99k2pu01hiKUheLx22KDBCJ+cb/em1HWFR7ZOdyhyNVOwB cOY8vBPGWR2jurR7yGNBVA== 0000831259-96-000004.txt : 19960429 0000831259-96-000004.hdr.sgml : 19960429 ACCESSION NUMBER: 0000831259-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960426 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FREEPORT MCMORAN COPPER & GOLD INC CENTRAL INDEX KEY: 0000831259 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 742480931 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09916 FILM NUMBER: 96551653 BUSINESS ADDRESS: STREET 1: 1615 POYDRAS STREET CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045824000 FORMER COMPANY: FORMER CONFORMED NAME: FREEPORT MCMORAN COPPER COMPANY INC DATE OF NAME CHANGE: 19910114 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended March 31, 1996 Commission File Number: 1-9916 Freeport-McMoRan Copper & Gold Inc. Incorporated in Delaware 74-2480931 (IRS Employer Identification No.) 1615 Poydras Street, New Orleans, Louisiana 70112 Registrant's telephone number, including area code: (504)582-4000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- On March 31, 1996, there were issued and outstanding 76,576,881 shares of the registrant's Class A Common Stock, par value $0.10 per share, and 118,302,930 shares of its Class B Common Stock, par value $0.10 per share. FREEPORT-McMoRan COPPER & GOLD INC. TABLE OF CONTENTS Page Part I. Financial Information Financial Statements: Condensed Balance Sheets 3 Statements of Income 4 Statements of Cash Flow 5 Notes to Financial Statements 6 Remarks 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information 13 Signature 14 Exhibit Index E-1 FREEPORT-McMoRan COPPER & GOLD INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements. FREEPORT-McMoRan COPPER & GOLD INC. CONDENSED BALANCE SHEETS (Unaudited) March 31, December 31, 1996 1995 ---------- ---------- ASSETS (In Thousands) Current assets: Cash and short-term investments $ 19,761 $ 26,883 Accounts receivable 264,158 256,121 Inventories 393,818 354,728 Prepaid expenses and other 8,239 15,542 ---------- ---------- Total current assets 685,976 653,274 Property, plant and equipment, net 2,862,621 2,845,625 Other assets 90,647 82,847 ---------- ---------- Total assets $3,639,244 $3,581,746 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 343,654 $ 351,485 Current portion of long-term debt and short-term borrowings 109,070 86,943 Accrued income taxes 29,484 88,357 ---------- ---------- Total current liabilities 482,208 526,785 Long-term debt, less current portion 1,328,338 1,080,289 Accrued postretirement benefits and other liabilities 190,093 186,342 Deferred income taxes 315,471 305,490 Minority interests 100,542 101,159 Mandatory redeemable preferred stock 500,007 500,007 Stockholders' equity 722,585 881,674 ---------- ---------- Total liabilities and stockholders' equity $3,639,244 $3,581,746 ========== ========== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan COPPER & GOLD INC. STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, ------------------------ 1996 1995 ---------- ---------- (In Thousands, Except Per Share Amounts) Revenues $ 388,392 $ 408,806 Cost of sales: Production and delivery 204,842 225,489 Depreciation and amortization 35,161 21,897 ---------- ---------- Total cost of sales 240,003 247,386 Exploration expenses - 7,956 General and administrative expenses 42,846 31,563 ---------- ---------- Total costs and expenses 282,849 286,905 ---------- ---------- Operating income 105,543 121,901 Interest expense, net (23,530) - Other income (expense), net 907 (718) ---------- ---------- Income before income taxes and minority interests 82,920 121,183 Provision for income taxes (38,621) (51,395) Minority interests in net income of consolidated subsidiaries (8,163) (12,392) ---------- ---------- Net income 36,136 57,396 Preferred dividends (13,686) (13,403) ---------- ---------- Net income applicable to common stock $ 22,450 $ 43,993 ========== ========== Net income per primary and fully diluted share of common stock $.11 $.21 ==== ==== Average common shares outstanding 198,530 205,953 ======= ======= Dividends paid per common share $.225 $.15 ===== ==== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan COPPER & GOLD INC. STATEMENTS OF CASH FLOW (Unaudited) Three Months Ended March 31, --------------------------- 1996 1995 ---------- ---------- (In Thousands) Cash flow from operating activities: Net income $ 36,136 $ 57,396 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 35,161 21,897 Deferred income taxes 9,981 13,852 Recognition of unearned income - (36,207) Minority interests' share of net income 8,163 12,392 Other 10,636 (2,088) (Increase) decrease in working capital: Accounts receivable 1,117 26,930 Inventories (21,574) 1,567 Prepaid expenses and other 7,303 (1,307) Accounts payable and accrued liabilities 5,210 (31,965) Accrued income taxes (60,123) 21,166 ---------- ---------- (Increase) decrease in working capital (68,067) 16,391 ---------- ---------- Net cash provided by operating activities 32,010 83,633 ---------- ---------- Cash flow from investing activities: Capital expenditures: PT-FI (68,902) (137,695) RTM (26,234) (31,257) Investment in Gresik smelter (5,010) - ---------- ---------- Net cash used in investing activities (100,146) (168,952) ---------- ---------- Cash flow from financing activities: Proceeds from debt, net 272,468 27,216 Net proceeds from infrastructure financing - 98,481 Purchase of FCX common shares (146,737) - Cash dividends paid: Common stock (44,509) (30,893) Preferred stock (12,700) (12,576) Minority interests (8,780) (7,675) Other 1,272 822 ---------- ---------- Net cash provided by financing activities 61,014 75,375 ---------- ---------- Net decrease in cash and short-term investments (7,122) (9,944) Cash and short-term investments at beginning of year 26,883 44,252 ---------- ---------- Cash and short-term investments at end of period $ 19,761 $ 34,308 ========== ========== The accompanying notes are an integral part of these financial statements. FREEPORT-McMoRan COPPER & GOLD INC. NOTES TO FINANCIAL STATEMENTS 1. INTEREST COSTS Interest expense excludes capitalized interest of $9.3 million and $17.8 million in the first quarter of 1996 and 1995, respectively. 2. RATIO OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges for the first three months of 1996 and 1995 was 3.2 to 1 and 6.6 to 1, respectively. For this calculation, earnings consist of income from continuing operations before income taxes, minority interests and fixed charges. Fixed charges include interest and that portion of rent deemed representative of interest. 3. RECLASSIFICATIONS Certain prior year amounts have been reclassified to conform to the 1996 presentation. ---------------------- Remarks The information furnished herein should be read in conjunction with FCX's financial statements contained in its 1995 Annual Report to stockholders and incorporated by reference in its Annual Report on Form 10-K. The information furnished herein reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the periods. All such adjustments are, in the opinion of management, of a normal recurring nature. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. OVERVIEW Freeport-McMoRan Copper & Gold Inc. (FCX) operates through its majority-owned subsidiaries: P.T. Freeport Indonesia Company (PT-FI), P.T. IRJA Eastern Minerals Corporation (Eastern Mining) and Rio Tinto Minera, S.A. (RTM). PT-FI's operations involve mineral exploration and development, mining and milling of ore containing copper, gold and silver in Irian Jaya, Indonesia and the marketing of concentrates containing these metals worldwide. PT-FI also has a 25 percent interest in a joint venture to construct and operate a copper smelter and refinery in Indonesia. Eastern Mining conducts mineral exploration activities in Irian Jaya. RTM is engaged in the smelting and refining of copper concentrates in Spain. Summary comparative results for the quarter follow (in millions, except per share amounts): First Quarter ------------------------ 1996 1995 ---------- ---------- Revenues $ 388.4 $ 408.8 Operating income 105.5a 121.9 Net income applicable to common stock 22.5a 44.0 Net income per common share .11a .21 Operating income (loss) by subsidiary: PT-FI $ 104.0 $ 130.1 RTM (4.2) (2.6) Eastern Mining - (3.2) Intercompany eliminations and other b 5.7 (2.4) ---------- ---------- $ 105.5 $ 121.9 ========== ========== a. Includes charges totaling $18.7 million ($10.1 million to net income or $0.05 per share) consisting of $12.7 million for costs of stock appreciation rights caused by the increase in FCX's common stock price during the period, $3.0 million ($2.3 million to production cost and $0.7 million to general and administrative expenses) for an early retirement program and $3.0 million for costs related to a civil disturbance (discussed below) during the period. b. Profit on PT-FI sales to RTM is not reflected in FCX's consolidated results until completion of the smelting and refining process. The increased level of PT-FI concentrate sales to RTM resulting from the expanded smelter capacity may cause fluctuations in FCX's consolidated quarterly earnings depending on the timing of the shipments and prices. FCX's first-quarter 1996 operating results were strong despite lower copper realizations, lower ore grades as anticipated and an approximate three day shutdown of its mine and mill caused by a civil disturbance (discussed later). FCX's first-quarter 1996 revenues were lower than first-quarter 1995 because of lower PT-FI copper realizations and increased intercompany sales to RTM. RTM's revenues increased because of its expansion. Cost of sales was affected by the increased intercompany sales, costs related to the civil disturbance, an early retirement program and higher depreciation. Exploration expenses were lower because of the May 1995 agreement with The RTZ Corporation PLC (RTZ) under which RTZ would pay for the next $100 million of exploration costs. General and administrative expenses were higher in 1996 because of costs of stock appreciation rights and the early retirement program. Net income applicable to common stock for 1996 was reduced by higher interest expense. FCX's effective tax rate increased in 1996 and minority interests in net income was lower because of lower net income at PT-FI. RESULTS OF OPERATIONS PT-FI Financial Results. PT-FI's first-quarter 1996 revenues compared with first-quarter 1995 benefitted from higher sales volumes offset by a 10 percent decline in copper realizations and higher treatment charges. Treatment charges increased because of higher rates negotiated with customers based on market conditions at the end of 1995. Despite higher sales volumes, royalties were only slightly higher because of the lower copper prices. First-quarter 1996 PT-FI revenues also include a $7.9 million downward adjustment on the open copper sales at December 31, 1995. A reconciliation of FCX revenues between the periods follows (in millions): Revenues -1995 $ 408.8 Increases (decreases): PT-FI revenues: Sales volumes: Copper $ 36.1 Gold 11.3 Price realizations: Copper (26.5) Gold 5.3 Treatment charges, royalties and other (24.2) ---------- PT-FI revenues 2.0 RTM revenues 23.7 Intercompany sales eliminations (46.1) ---------- Revenues -1996 $ 388.4 ========== PT-FI cash production costs increased from $106.2 million in the first quarter of 1995 to $131.4 million in the first quarter of 1996 because of higher production levels coupled with charges of $3.0 million for a civil disturbance and $2.3 million for an early retirement program. Even with the nonrecurring charges, first-quarter 1996 cash production costs for PT-FI were below the fourth-quarter 1995 level of $135.0 million because of PT-FI's continuing focus on maximizing efficiencies from its expanded facilities. A March 1996 civil disturbance, in which area tribespeople engaged in acts of vandalism to PT-FI property, resulted in an approximate three day closure of the mine and mill as a precautionary measure. Full production was promptly restored after the Government of Indonesia (GOI) increased the military presence in the area. Concentrate shipments to customers were not interrupted. PT-FI and the GOI have launched a comprehensive economic and social development plan for the area in a series of open meetings with the local indigenous leaders. The plan, which represents the culmination of many months of effort including extensive interviews with local indigenous people, had actually been completed several days prior to the civil disturbance. PT-FI has dedicated one percent of its revenues over the next ten years to fund the plan which will include establishing a job skill and vocational training center and the continued enhancement of direct benefits to those tribes whose original tribal lands have been impacted by PT-FI's operations. FCX believes that its historical commitment to the area, improved dialogue with the indigenous population and increased military presence should serve to avoid future disruptions of the mine and mill operations. PT-FI Operating Results. First Quarter ------------------------ 1996 1995 ---------- ---------- Ore milled (MTPD) 125,900 85,000 Copper grade (%) 1.23 1.37 Gold grade (grams per MT) 1.28 1.45 Recovery rate (%) Copper 81.2 81.8 Gold 70.8 72.6 Copper (000s of recoverable pounds) Production 242,900 182,900 Sales 225,000 196,300 Average realized price $1.14 $1.26a Sales-net of intercompany effect 170,300 177,700 Gold (recoverable ounces) Production 320,100 249,500 Sales 301,100 271,000 Average realized price $392.73 $374.99 Sales-net of intercompany effect 228,700 246,400 Gross profit per pound of copper (cents): Average realized price 113.9 125.7a ----- ----- Production costs: Site production and delivery 58.7b 63.5 Gold and silver credits (53.1) (53.0) Treatment charges 23.2 19.5 Royalty on metals 4.1 4.4 ----- ----- Cash production costs 32.9 34.4 Depreciation and amortization 13.0 8.1 ----- ----- Total production costs 45.9 42.5 ----- ---- Revenue adjustments c (5.0) (1.4) ----- ---- Gross profit per pound of copper 63.0 81.8 ===== ==== a. Amount was $1.33 before hedging adjustments. b. Includes $3.0 million (1.3 cents per pound) for costs related to the civil disturbance and $2.3 million (1.0 cent per pound) for an early retirement program. c. Reflects adjustments for prior period concentrate sales and amortization of the price protection program cost. Throughput levels for the first quarter of 1996 were only slightly below fourth-quarter 1995 levels of 126,800 MTPD despite the approximate three day mine/mill shutdown. Throughput was also 48 percent higher than the 1995 first quarter which was prior to completion of the 118,000 MTPD expansion. Cash production costs per pound increased to 32.9 cents from the fourth-quarter 1995 total of 14.9 cents because of lower grade ore, lower gold and silver credits, higher treatment charges, the civil disturbance charges and the early retirement program. Unit costs were below first-quarter 1995 levels. PT-FI's copper royalty rate varies from 1.5 percent to 3.5 percent (currently the rate is 3.5 percent) depending on the price of copper, and the gold and silver royalty rate is 1 percent. PT-FI's depreciation rate of 13 cents per pound in 1996 reflects depreciation for the expanded operations and the first phase of an enhanced infrastructure program (EIP). The EIP is designed to provide the infrastructure needed for PT-FI's operations, to enhance the living conditions of PT-FI's employees, and to develop and promote the growth of local and third party activities and enterprises in Irian Jaya. The 118,000 MTPD expansion was not completed until the second quarter of 1995 and the first phase of the EIP will be completed in 1996. The first-quarter 1995 rate of 8.1 cents per pound did not include these costs. PT-FI Outlook. PT-FI has commitments from various parties, including RTM, to purchase virtually all of its expected 1996 production at market prices. Sales for 1996 are estimated to total approximately 1.1 billion pounds of copper and 1.65 million ounces of gold. Strong 1996 estimated gold sales reflect the expectation of producing greater than mine life gold grades during the year. Second-quarter 1996 sales are projected to be approximately 265 million pounds of copper and 430,000 ounces of gold. PT-FI established a price protection program to protect operating cash flow from the impact of potentially significant declines in copper prices while providing for full participation in higher prices. For the remainder of 1996 and into the second quarter of 1997, the program provides a $.90 per pound floor price with full participation in prices above that amount. This was established through put option contracts on 1.2 billion pounds of copper sales at an average cost of less than $0.02 per pound. Management's intention is to provide a floor price for its future copper sales through put option contracts, when attainable at an acceptable cost. As conditions warrant, PT-FI may modify or extend its existing program. FCX's revenues include net increases of $0.8 million in the 1996 quarter and net reductions of $12.2 million in the 1995 quarter related to PT-FI's copper price protection program. At March 31, 1996, PT-FI copper sales totaling 269.1 million pounds remained to be contractually priced and are subject to changes in world copper prices. These copper sales are recorded at an average price of $1.14 per pound. Adjustments to the pricing on these pounds will be reflected in future revenues. RTM Results. First Quarter -------------------- 1996 1995 -------- -------- Revenues (in millions) $161.7 $138.0 Concentrate treated (MT) 164,700 118,400 Anode production (000s of pounds) 108,800 83,900 Cathode production (000s of pounds) 102,300 75,400 RTM reported higher revenues and cost of sales in the first quarter of 1996 because of increases in production from its newly expanded facilities. RTM began benefiting from higher treatment and refining rates in March 1996 ($0.26 per pound in March 1996 compared with $0.23 per pound in first-quarter 1996 and $0.24 per pound in first-quarter 1995). Higher treatment charges, which negatively affect PT-FI, benefit RTM. RTM has completed the expansion of its smelter capacity to 270,000 metric tons of metal per year and expects to reach this level of production by mid-1996. Once RTM achieves its expanded annual production levels, the effects of changes in treatment charges on PT-FI and RTM will largely offset in FCX's consolidated financial results, taking into account income tax and minority interests. Operating losses totaled $4.2 million in 1996 and $2.6 million in 1995, but RTM expects efficiencies associated with the expansion and the higher treatment and refining rates to have a positive effect on results for the remainder of 1996. A portion of RTM's operating costs are paid for with Spanish pesetas and certain assets and liabilities are payable in Spanish pesetas. During 1996, a one peseta change in the U.S. dollar and Spanish peseta exchange rate will result in an approximate $2 million change in FCX's net income. First-quarter 1996 other income includes currency translation gains totaling $3.3 million on RTM's net peseta liability position. RTM is in the process of implementing a currency hedging program to reduce its operating cost exposure to changes in the U.S. dollar and Spanish peseta exchange rate. Other Financial Results. FCX reported $8.0 million of exploration costs in the first quarter of 1995 while all first-quarter 1996 exploration costs ($9.3 million) are expected to be reimbursed by RTZ. FCX's general and administrative expenses were $42.8 million for the first quarter of 1996 compared with $31.6 million in the 1995 period. First-quarter 1996 general and administrative expenses include charges of $12.7 million for costs of stock appreciation rights caused by the increase in FCX's common stock price and $0.7 million for an early retirement program. FCX's total interest cost (before capitalization) rose to $32.9 million for the 1996 period from $17.8 million in the 1995 period because of an increase in debt levels associated with the expansions and the share purchase program. Because of the significant expansion projects at PT-FI and RTM, all interest was capitalized during the first quarter of 1995. Interest expense is expected to be higher throughout 1996 because of the higher debt levels and completion of the expansions. FCX's effective tax rate was 47 percent for the first quarter of 1996 and 42 percent for the first quarter of 1995. PT-FI's Contract of Work (COW) provides a 35 percent income tax rate and a 15 percent withholding on dividends paid to FCX by PT-FI and on interest for debt incurred after the signing of the COW. PT-FI increased its quarterly dividend beginning in the fourth quarter of 1995, increasing the withholding and FCX's effective tax rate. No income tax benefit is recorded for the losses at RTM, which is subject to taxation in Spain, because it has not generated taxable income in recent years. CAPITAL RESOURCES AND LIQUIDITY Net cash provided by operating activities declined to $32.0 million for the first quarter of 1996, compared with $83.6 million for the 1995 period, primarily because of lower net income and working capital changes. Cash flow used in investing activities reflects a decrease in PT-FI capital expenditures associated with the completion of the expansion in 1995. RTM expenditures reflect the smelter expansion which is now complete. Cash flow provided by financing activities totaled $61.0 million in 1996 compared with $75.4 million in 1995. Increases in debt during 1996 provided funds for stock purchases, capital expenditures and dividends. Operating Activities. Lower copper realizations resulted in lower net income and operating cash flow in the 1996 period compared with the 1995 period. The increase in depreciation and amortization primarily reflects the higher rate for the completed PT-FI expansion and first phase of the EIP. Accounts receivable include $40.1 million for exploration costs since May 1995 that RTZ will reimburse once all GOI approvals are received which is expected in the second quarter. Product inventories increased primarily because of the timing of concentrate shipments and RTM's expansion. The decrease in accrued income taxes reflects the March 1996 payment on PT-FI's 1995 income tax liability. In 1995 RTM sold its mining operations, pursuant to which RTM will make cash payments to the purchasers totaling approximately $14.5 million through July 1997 in exchange for their assumption of certain RTM liabilities. Investing Activities. FCX's capital expenditures have declined compared to the 1995 period because of the completion of PT-FI's expansion and the near completion of the first phase of its EIP. FCX's cash expenditures for capital in 1996 will include approximately $60 million for costs incurred in 1995. PT-FI's capital expenditures for the remainder of 1996 are expected to approximate $150 million primarily for EIP assets and mine and mill sustaining capital. PT-FI also expects to incur additional expenditures for the increased military presence following the civil disturbance although the amounts are not determinable at this time. Capital expenditures will be funded by operating cash flow, FCX's and PT-FI's bank credit facilities ($240 million available at April 19, 1996) and other financing sources. Additionally, pursuant to their joint venture arrangements, FCX and RTZ have commenced a detailed feasibility study to expand FCX's mine and mill facilities to approximately 190,000 MTPD. The FCX/RTZ joint venture has initiated engineering on major long-lead-time component equipment to enable rapid construction for the expansion and begun the process of seeking approvals from the GOI, which had previously approved expansion to 160,000 MTPD. The expansion is expected to be completed by late 1998. Pursuant to the joint venture arrangements, RTZ is expected to provide up to $750 million for the expansion. With RTM's investment in the smelter expansion and upon satisfying certain conditions, RTM expects to receive more than $50 million of grants from the Spanish government. RTM had received $32.2 million of these grants through March 31, 1996 including $16.4 million in the first quarter of 1996. RTM's capital expenditures for the remainder of 1996, net of grant receipts, are expected to approximate $50 million including approximately $30 million for costs incurred in 1995. In January 1996, PT-FI concluded a joint venture agreement with Mitsubishi Materials Corporation (Mitsubishi) and Fluor Daniel Asia, Inc. (Fluor) for a 200,000 metric tons of metal per year copper smelter/refinery complex in Gresik, Indonesia. The estimated aggregate project cost, before working capital requirements, is approximately $600 million. Effective April 1, 1996, Fluor was replaced by Chiyoda Corporation as general contractor on the project and Fluor's 10 percent interest in the joint venture was assumed in equal parts by Mitsubishi and PT-FI increasing PT-FI's ownership interest from 20 percent to 25 percent. In April 1996, the joint venture expects to receive a commitment letter from a group of commercial banks for a $300 million non-recourse term loan and a $110 million working capital facility. Construction is expected to be completed by mid-1998. Upon completion of the Gresik smelter, FCX anticipates that approximately two-thirds of PT-FI's annual concentrate production at current throughput rates will be sold to RTM and the Gresik smelter at market prices. Financing Activities. Net proceeds from debt totaled $272.5 million in the first quarter of 1996 while the 1995 period included $27.2 million of net proceeds from debt and $98.5 million of proceeds from infrastructure financing. In September 1995, FCX announced an open market share purchase program for up to a total of 20 million shares of its Class A and Class B common shares representing approximately 10 percent of its shares outstanding. During the first-quarter of 1996, FCX acquired 5 million of its shares for $146.7 million (an average of $29.20 per share) under its share purchase program. Through March 31, 1996, FCX purchased 9.3 million shares under this program. The timing of purchases is dependent upon many factors, including the price of common shares, the Company's business and financial position, and general economic and market conditions. The increase in cash dividends paid on common stock results from the increase in the regular quarterly dividend to $.225 per share. ENVIRONMENTAL REPORT/POLITICAL RISK INSURANCE As previously reported, an independent environmental audit by Dames & Moore, an international environmental consulting firm, has endorsed the tailings management program of PT-FI's mining operations. Among other things, the audit concluded that tailings from PT-FI's mining operations are non-toxic, that PT-FI's mining operations do not pose any significant risk to Irian Jaya's biodiversity and that PT-FI is in full compliance in all material respects with Indonesia's recently modernized environmental laws. The audit included 33 recommendations, 24 of which have already been implemented or are in the process of being implemented and nine are under study. Furthermore, arbitration between FCX and the Overseas Private Investment Corporation (OPIC) has ended in a settlement agreement. OPIC will reinstate the $100 million FCX political risk insurance until December 31, 1996 and FCX has agreed to create a trust fund to finance significant environmental remediation initiatives. FCX will make annual contributions to the trust fund beginning immediately, accumulating to a total of $100 million at the end of the life of the mine. -------------------- The results of operations reported and summarized above are not necessarily indicative of future operating results. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) The exhibits to this report are listed in the Exhibit Index appearing on Page E-1 hereof. (b) No reports on Form 8-K were filed by the registrant during the quarter for which this report is filed. SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FREEPORT-McMoRan COPPER & GOLD INC. By: /s/ Richard C. Adkerson ----------------------- Richard C. Adkerson Executive Vice President and Chief Financial Officer (authorized signatory and Principal Accounting Officer) Date: April 26, 1996 EXHIBIT INDEX Sequentially Numbered Number Description Page - ------ ------------ ---------- 11.1 Computation of Net Income per Common and Common Equivalent Share 27.1 Financial Data Schedule EX-11 2 EXHIBIT 11.1 FREEPORT-McMoRan COPPER & GOLD INC. COMPUTATION OF NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE Three Months Ended March 31, ------------------------ 1996 1995 ---------- ---------- (In Thousands, Except Per Share Amounts) Primary: Net income applicable to common stock $ 22,450 $ 43,993 ========== ========== Average common shares outstanding 196,438 205,953 Common stock equivalents: Stock options 2,092 - ---------- ---------- Common and common equivalent shares 198,530 205,953 ========== ========== Net income per common and common equivalent share $.11 $.21 ==== ==== EX-27 3
5 0000831259 FREEPORT-MCMORAN COPPER & GOLD INC. 1,000 3-MOS DEC-31-1996 MAR-31-1996 19,761 0 145,053 0 393,818 685,976 3,616,874 754,253 3,639,244 482,208 1,328,338 500,007 573,887 20,804 127,894 3,639,244 388,392 388,392 240,003 240,003 0 0 23,530 82,920 38,621 36,136 0 0 0 36,136 .11 .11
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