Edgar Filing: FREEPORT MCMORAN COPPER & GOLD INC

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 24, 2003

FREEPORT-McMoRan COPPER & GOLD INC.

Delaware

1-9916

74-2480931

(State or other

(Commission

(IRS Employer

jurisdiction of

File Number)

Identification

incorporation or

Number)

organization)

1615 Poydras Street

New Orleans, Louisiana 70112

Registrant's telephone number, including area code: (504) 582-4000

Item 5. Other Events and Regulation FD Disclosure.

The following information is being provided by Freeport-McMoRan Copper & Gold Inc. to comply with Securities and Exchange Commission rules, which became effective on March 28, 2003. The new rules require us to reconcile certain financial measures provided in our Annual Report on Form 10-K for the year ended December 31, 2002, to the most directly comparable measures in our audited financial statements. Our reconciliations cover PT Freeport Indonesia’s product revenues and production costs, and cathode cash production costs per pound of copper for Atlantic Copper and PT Smelting for the five years ended December 31, 2002.

PT FREEPORT INDONESIA PRODUCT REVENUES AND PRODUCTION COSTS

Net cash production costs per pound of copper is a measure intended to provide investors with information about the cash generating capacity of our mining operations in Indonesia. This measure is presented by other copper and gold mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

We calculate gross profit per pound of copper under a “by-product” method, while the copper, gold and silver contained within our concentrates are treated as co-products in our financial statements. We use the by-product method in our presentation of gross profit per pound of copper because (1) we believe the market views us as a copper company, (2) we produce and sell one product, concentrates, which contains all three metals and (3) there is no objective basis for specifically assigning our costs to revenues from the copper, gold and silver we produce in concentrates. In the co-product method presentation below, we have allocated costs to the different products based on their relative revenue values for each period presented. Presentations under both methods are presented below along with a reconciliation to amounts reported in FCX’s consolidated financial statements.

Year Ended December 31, 2002
	By-Product			Co-Product Method
(In Thousands)	Method			Copper		Gold		Silver		Total
Revenues	$	1,077,277		$	1,077,277	$	715,940	$	18,408	$	1,811,625

Site production and delivery		547,753			325,720		216,467		5,566		547,753
Gold and silver credits		(734,348	)		-		-		-		-
Treatment charges		278,504			165,611		110,063		2,830		278,504
Royalty on metals		24,532			14,588		9,695		249		24,532
Net cash production costs		116,441			505,919		336,225		8,645		850,789
Depreciation and amortization		218,716			130,059		86,435		2,222		218,716
Total production costs		335,157			635,978		422,660		10,867		1,069,505
Adjustments to prior period sales and for silver hedging		10,421			9,591		-		830		10,421
Gross profit	$	752,541		$	450,890	$	293,280	$	8,371	$	752,541

Pounds of copper sold (000)		1,522,300			1,522,300
Ounces of gold sold							2,293,200
Ounces of silver sold									4,116,100

Gross profit per pound of copper (cents)/ per ounce of gold and silver ($):
Revenues		70.6			70.6		311.97		4.66

Site production and delivery		36.0			21.4		94.40		1.35
Gold and silver credits		(48.2	)		-		-		-
Treatment charges		18.3			10.9		48.00		0.69
Royalty on metals		1.6			1.0		4.23		0.06
Net cash production costs		7.7			33.3		146.63		2.10
Depreciation and amortization		14.4			8.5		37.69		0.54
Total production costs		22.1			41.8		184.32		2.64
Adjustments to prior period sales		0.9			0.8		0.24		0.01
Gross profit per pound/ounce		49.4			29.6		127.89		2.03

Reconciliation to Amounts Reported
(In Thousands)	Revenues			Production and Delivery			Depreciation and Amortization
Totals presented above	$	1,811,625		$	547,753		$	218,716
Less: Treatment charges per above		(278,504	)		N/A			N/A
Royalty per above		(24,532	)		N/A			N/A
Other, primarily noncash costs		N/A			7,117			N/A
Adjustments per above		10,421			N/A			N/A
Mining and exploration segment		1,519,010			554,870			218,716
Smelting and refining segment		768,680			729,789			27,652
Eliminations and other		(377,228	)		(346,197	)		14,078
As reported in FCX consolidated financial statements	$	1,910,462		$	938,462		$	260,446

Year Ended December 31, 2001
	By-Product			Co-Product Method
(In Thousands)	Method			Copper			Gold			Silver			Total
Revenues	$	968,484		$	968,484		$	710,835		$	15,995		$	1,695,314

Site production and delivery		542,699			310,028			227,550			5,121			542,699
Gold and silver credits		(726,830	)		-			-			-			-
Treatment charges		254,485			145,380			106,704			2,401			254,485
Royalty on metals		24,302			13,883			10,190			229			24,302
Net cash production costs		94,656			469,291			344,444			7,751			821,486
Depreciation and amortization		251,835			143,866			105,593			2,376			251,835
Total production costs		346,491			613,157			450,037			10,127			1,073,321
Adjustments to prior period sales and for silver hedging		(2,413	)		(4,528	)		-			2,115			(2,413	)
Gross profit	$	619,580		$	350,799		$	260,798		$	7,983		$	619,580

Pounds of copper sold (000)		1,399,100			1,399,100
Ounces of gold sold								2,644,800
Ounces of silver sold											3,782,600

Gross profit per pound of copper (cents)/ per ounce of gold and silver ($):
Revenues		69.0			69.0			269.24			4.80

Site production and delivery		38.8			22.2			86.04			1.35
Gold and silver credits		(51.9	)		-			-			-
Treatment charges		18.2			10.4			40.34			0.63
Royalty on metals		1.7			1.0			3.85			0.06
Net cash production costs		6.8			33.6			130.23			2.04
Depreciation and amortization		18.0			10.3			39.92			0.63
Total production costs		24.8			43.9			170.15			2.67
Adjustments to prior period sales		0.1			-			(0.48	)		(0.02	)
Gross profit per pound/ounce		44.3			25.1			98.61			2.11

Reconciliation to Amounts Reported
(In Thousands)	Revenues			Production and Delivery			Depreciation and Amortization
Totals presented above	$	1,695,314		$	542,699		$	251,835
Less: Treatment charges per above		(254,485	)		N/A			N/A
Royalty per above		(24,302	)		N/A			N/A
Other, primarily noncash costs		N/A			3,159			N/A
Adjustments per above		(2,413	)		N/A			N/A
Mining and exploration segment		1,414,114			545,858			251,835
Smelting and refining segment		758,282			738,618			27,262
Eliminations and other		(333,530	)		(341,037	)		4,792
As reported in FCX consolidated financial statements	$	1,838,866		$	943,439		$	283,889

Year Ended December 31, 2000
	By-Product			Co-Product Method
(In Thousands)	Method			Copper		Gold		Silver		Total
Revenues	$	1,136,997		$	1,136,997	$	530,920	$	17,030	$	1,684,947

Site production and delivery		595,545			401,872		187,654		6,019		595,545
Gold and silver credits		(547,950	)		-		-		-		-
Treatment charges		254,271			171,581		80,120		2,570		254,271
Royalty on metals		20,162			13,605		6,353		204		20,162
Net cash production costs		322,028			587,058		274,127		8,793		869,978
Depreciation and amortization		250,864			169,282		79,046		2,536		250,864
Total production costs		572,892			756,340		353,173		11,329		1,120,842
Adjustments to prior period sales and for silver hedging		2,585			1,977		-		608		2,585
Gross profit	$	566,690		$	382,634	$	177,747	$	6,309	$	566,690

Pounds of copper sold (000)		1,393,700			1,393,700
Ounces of gold sold							1,921,400
Ounces of silver sold									3,542,300

Gross profit per pound of copper (cents)/ per ounce of gold and silver ($):
Revenues		81.6			81.6		276.06		4.98

Site production and delivery		42.7			28.8		97.67		1.70
Gold and silver credits		(39.3	)		-		-		-
Treatment charges		18.2			12.3		41.70		0.73
Royalty on metals		1.4			1.0		3.31		0.06
Net cash production costs		23.0			42.1		142.68		2.49
Depreciation and amortization		18.0			12.1		41.14		0.72
Total production costs		41.0			54.2		183.82		3.21
Adjustments to prior period sales		0.1			0.1		0.27		0.01
Gross profit per pound/ounce		40.7			27.5		92.51		1.78

Reconciliation to Amounts Reported
(In Thousands)	Revenues			Production and Delivery			Depreciation and Amortization
Totals presented above	$	1,684,947		$	595,545		$	250,864
Less: Treatment charges per above		(254,271	)		N/A			N/A
Royalty per above		(20,162	)		N/A			N/A
Other, primarily noncash costs		N/A			12,562			N/A
Adjustments per above		2,585			N/A			N/A
Mining and exploration segment		1,413,099			608,107			250,864
Smelting and refining segment		768,814			734,083			27,989
Eliminations and other		(313,303	)		(329,228	)		4,703
As reported in FCX consolidated financial statements	$	1,868,610		$	1,012,962		$	283,556

Year Ended December 31, 1999
	By-Product			Co-Product Method
(In Thousands)	Method			Copper			Gold		Silver		Total
Revenues	$	1,079,005		$	1,079,005		$	670,467	$	17,611	$	1,767,083

Site production and delivery		526,127			321,260			199,623		5,244		526,127
Gold and silver credits		(688,078	)		-			-		-		-
Treatment charges		272,843			166,602			103,522		2,719		272,843
Royalty on metals		23,014			14,053			8,732		229		23,014
Net cash production costs		133,906			501,915			311,877		8,192		821,984
Depreciation and amortization		259,372			158,376			98,411		2,585		259,372
Total production costs		393,278			660,291			410,288		10,777		1,081,356
Adjustments to prior period sales and for silver hedging		(8,928	)		(9,483	)		-		555		(8,928	)
Gross profit	$	676,799		$	409,231		$	260,179	$	7,389	$	676,799

Pounds of copper sold (000)		1,441,000			1,441,000
Ounces of gold sold								2,423,900
Ounces of silver sold										3,479,600

Gross profit per pound of copper (cents)/ per ounce of gold and silver ($):
Revenues		74.7			74.7			276.53		5.21

Site production and delivery		36.5			22.3			82.36		1.51
Gold and silver credits		(47.8	)		-			-		-
Treatment charges		18.9			11.6			42.71		0.78
Royalty on metals		1.6			1.0			3.60		0.07
Net cash production costs		9.2			34.9			128.67		2.36
Depreciation and amortization		18.0			11.0			40.60		0.74
Total production costs		27.2			45.9			169.27		3.10
Adjustments to prior period sales		(0.5	)		(0.4	)		0.08		0.01
Gross profit per pound/ounce		47.0			28.4			107.34		2.12

Reconciliation to Amounts Reported
(In Thousands)	Revenues			Production and Delivery			Depreciation and Amortization
Totals presented above	$	1,767,083		$	526,127		$	259,372
Less: Treatment charges per above		(272,843	)		N/A			N/A
Royalty per above		(23,014	)		N/A			N/A
Other, primarily noncash costs		2,513			7,992			N/A
Adjustments per above		(8,928	)		N/A			N/A
Mining and exploration segment		1,464,811			534,119			259,372
Smelting and refining segment		764,466			723,966			29,373
Eliminations and other		(341,949	)		(323,536	)		4,468
As reported in FCX consolidated financial statements	$	1,887,328		$	934,549		$	293,213

Year Ended December 31, 1998
	By-Product			Co-Product Method
(In Thousands)	Method			Copper		Gold			Silver		Total
Revenues	$	1,033,221		$	1,033,221	$	634,852		$	18,116	$	1,686,189

Site production and delivery		456,828			279,924		171,996			4,908		456,828
Gold and silver credits		(652,968	)		-		-			-		-
Treatment charges		333,598			204,414		125,600			3,584		333,598
Royalty on metals		18,800			11,520		7,078			202		18,800
Net cash production costs		156,258			495,858		304,674			8,694		809,226
Depreciation and amortization		241,312			147,865		90,854			2,593		241,312
Total production costs		397,570			643,723		395,528			11,287		1,050,538
Adjustments to prior period sales		17,332			17,332		-			-		17,332
Gross profit	$	652,983		$	406,830	$	239,324		$	6,829	$	652,983

Pounds of copper sold (000)		1,419,500			1,419,500
Ounces of gold sold							2,190,300
Ounces of silver sold										3,412,300

Gross profit per pound of copper (cents)/ per ounce of gold and silver ($):
Revenues		72.8			72.8		290.57			5.29

Site production and delivery		32.2			19.7		78.53			1.44
Gold and silver credits		(46.0	)		-		-			-
Treatment charges		23.5			14.4		57.34			1.05
Royalty on metals		1.3			0.8		3.23			0.06
Net cash production costs		11.0			34.9		139.10			2.55
Depreciation and amortization		17.0			10.4		41.48			0.76
Total production costs		28.0			45.3		180.58			3.31
Adjustments to prior period sales		1.2			1.2		(0.72	)		0.02
Gross profit per pound/ounce		46.0			28.7		109.27			2.00

Reconciliation to Amounts Reported
(In Thousands)	Revenues			Production and Delivery			Depreciation and Amortization
Totals presented above	$	1,686,189		$	456,828		$	241,312
Less: Treatment charges per above		(333,598	)		N/A			N/A
Royalty per above		(18,800	)		N/A			N/A
Other, primarily noncash costs		N/A			4,416			N/A
Adjustments per above		17,332			N/A			N/A
Mining and exploration segment		1,351,123			461,244			241,312
Smelting and refining segment		753,957			667,904			31,711
Eliminations and other		(347,948	)		(329,821	)		4,384
As reported in FCX consolidated financial statements	$	1,757,132		$	799,327		$	277,407

CATHODE CASH PRODUCTION COST PER POUND OF COPPER

Cathode cash production cost per pound of copper is a measure intended to provide investors with information about the costs associated with our smelting operations in Spain and with our 25 percent-owned smelting operations in Indonesia. Other smelting companies present this measure, although our measure may not be comparable to similarly titled measures reported by other companies.

ATLANTIC COPPER. Below is a reconciliation of our smelting and refining segment production costs reported in FCX’s consolidated financial statements to the production costs used to calculate our cathode cash production cost per pound of copper for Atlantic Copper (in thousands, except per pound amounts):

	Years Ended December 31,
	2002			2001			2000			1999			1998
Smelting and refining segment production costs reported in FCX’s consolidated financial statements	$	729,789		$	738,618		$	734,083		$	723,966		$	667,904
Less:
Raw material purchase costs		(330,516	)		(355,241	)		(424,798	)		(361,036	)		(332,645	)
Production costs of wire rod and wire		(48,953	)		(52,738	)		(29,766	)		(21,693	)		(32,163	)
Production costs of anodes sold		(9,264	)		(10,522	)		(6,450	)		(8,426	)		(9,501	)
Currency hedging		(1,168	)		(3,016	)		(16,441	)		(14,959	)		2,928
Other		(5,211	)		(5,295	)		(2,202	)		(5,097	)		(3,937	)
Add:
Gold and silver revenues		(250,766	)		(227,820	)		(175,858	)		(226,528	)		(204,799	)
Acid and other by-product revenues		(17,256	)		(13,301	)		(13,966	)		(16,016	)		(16,671	)
Production costs used in calculating cathode cash production cost per pound	$	66,655		$	70,685		$	64,602		$	70,211		$	71,116

Pounds of cathode produced		552,200			518,700			567,900			556,600			544,800

Cathode cash production cost per pound before hedging		$0.12			$0.14			$0.11			$0.13			$0.13

PT SMELTING. Below is a reconciliation of the production costs used to calculate PT Smelting’s cathode cash production cost per pound of copper to our equity in PT Smelting earnings (losses) reported in FCX’s consolidated financial statements (in thousands, except per pound amounts):

	Years Ended December 31,
	2002			2001			2000			1999 (1)
Production costs – PT Smelting (100%)	$	64,108		$	59,943		$	49,544		$	34,966
Add: Gold and silver refining charges		4,263			5,724			3,029			1,892
Less: Acid and other by-product revenues		(5,275	)		(7,915	)		(5,713	)		(3,330	)
Production cost of anodes sold		(4,148	)		(680	)		(3,042	)		(909	)
Production costs during start-up		-			-			-			(11,491	)(2)
Production cost used in calculating cathode cash production cost	$	58,948		$	57,072		$	43,818		$	21,128

Cathode production		424,100			468,400			349,200			182,200	(2)

Cathode cash production cost per pound	$	0.14		$	0.12		$	0.13		$	0.12

Reconciliation to Amounts Reported
Production costs per above	$	(64,108	)	$	(59,943	)	$	(49,544	)	$	(34,966	)
Other costs		(517,438	)		(599,502	)		(485,985	)		(302,193	)
Revenue and other income		565,788			639,862			482,123			296,863
PT Smelting net income (loss)		(15,758	)		(19,583	)		(53,406	)		(40,296	)

PT Freeport Indonesia’s 25% equity interest		(3,940	)		(4,896	)		(13,352	)		(10,074	)
Amortization of excess investment cost		(241	)		(241	)		(241	)		-
Equity in PT Smelting earnings (losses) per FCX consolidated financial statements	$	(4,181	)	$	(5,137	)	$	(13,593	)	$	(10,074	)

(1)

Operations began in the fourth quarter of 1998 and amounts were insignificant for 1998.

(2)

Excludes 17.9 million pounds of cathodes produced during the start-up period from January through April 1999.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FREEPORT-McMoRan COPPER & GOLD INC.

By: \s\ C. Donald Whitmire, Jr.

----------------------------------------

C. Donald Whitmire, Jr.

Vice President and Controller -

Financial Reporting

(authorized signatory and

Principal Accounting Officer)

Date: April 24, 2003