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
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
==== ====
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000831259
<NAME> FREEPORT-MCMORAN COPPER & GOLD INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 19,761
<SECURITIES> 0
<RECEIVABLES> 145,053
<ALLOWANCES> 0
<INVENTORY> 393,818
<CURRENT-ASSETS> 685,976
<PP&E> 3,616,874
<DEPRECIATION> 754,253
<TOTAL-ASSETS> 3,639,244
<CURRENT-LIABILITIES> 482,208
<BONDS> 1,328,338
500,007
573,887
<COMMON> 20,804
<OTHER-SE> 127,894
<TOTAL-LIABILITY-AND-EQUITY> 3,639,244
<SALES> 388,392
<TOTAL-REVENUES> 388,392
<CGS> 240,003
<TOTAL-COSTS> 240,003
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 23,530
<INCOME-PRETAX> 82,920
<INCOME-TAX> 38,621
<INCOME-CONTINUING> 36,136
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<EXTRAORDINARY> 0
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<NET-INCOME> 36,136
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
