Phelps Dodge Acquisition
What will happen to my shares of Phelps Dodge common stock as a result of the acquisition?
As a result of the acquisition, Phelps Dodge common stock is no longer
publicly traded. Phelps Dodge stockholders are entitled to receive a
combination of 0.67 of a share of Freeport-McMoRan common stock and $88.00
in cash, without interest, for each share of Phelps Dodge common stock. Any
fractional share interest in the stock portion to which you are entitled
will be paid to you in an amount equal to the fractional share interest
multiplied by $60.71, the closing price of FCX common stock on March 16,
2007.
If I received FCX common stock as a result of the
acquisition, what is my new cost basis per share?
For Phelps Dodge shareholders who received FCX common stock as a result of
the transaction, the new cost basis per share is $61.59. This amount is
included as part of the proceeds from the disposition of your Phelps Dodge
stock as a result of the merger and will be reflected as proceeds on Form
1099B. Investors should consult their tax advisors regarding their personal
circumstances.
What if I own my shares through a broker?
If you own Phelps Dodge common shares through a broker, bank or other nominee, information regarding the exchange of those shares will be furnished to you by that entity.
How will I receive cash for shares I own directly?
You will be contacted by Mellon Investor Services, the paying agent, who
will provide instructions and a Letter of Transmittal Form for surrendering
your stock certificates. You will receive Freeport-McMoRan common stock and
cash for your Phelps Dodge shares from the paying agent after you comply
with these instructions and complete the Letter of Transmittal Form.
You must surrender your Phelps Dodge certificates before you can receive the
Freeport-McMoRan stock and cash to which you are entitled. Do not send your
Letter of Transmittal Forms and certificates directly to Freeport-McMoRan
Copper & Gold, as this will only delay your receipt of the cash that you are
entitled to receive.
What if I cannot locate all of my Phelps Dodge common stock
certificates?
Instructions regarding lost, missing or destroyed stock certificates will be provided in the Letter of Transmittal Form being sent by Mellon Investor Services.
Who do I call if I have questions?
Please contact Mellon Investor Services at 1-800-279-1240 or contact the Freeport-McMoRan Copper & Gold Investor Relations Department at 504-582-4000.
What are the tax consequences for former Phelps Dodge stockholders?
The receipt of the merger consideration for holders of Phelps Dodge common shares pursuant to the transaction will be a taxable transaction for U.S. federal income tax purposes. In general, you will recognize capital gain or loss as a result of the transaction equal to the difference, if any, between (1) the sum of the fair market value of the Freeport-McMoRan common stock as of the effective time of the merger and the cash received in the transaction and (2) your adjusted tax basis in the Phelps Dodge common shares exchanged in the merger.
In aggregate Phelps Dodge shareholders realized $129.27 of value per share
based on the fair market value of FCXÕs common stock on the effective date
of the transaction, March 19, 2007. This dollar amount does not include the
any cash payments made in-lieu of fractional shares.
You should read “Material United States Federal Income Tax Considerations of the Transaction” beginning on page 82 of the Joint Proxy Statement/Prospectus dated February 13, 2007, for a more complete discussion of the U.S. federal income tax consequences of the transaction. Tax matters can be complicated, and the tax consequences of the transaction to you will depend on your particular tax situation. You should consult your tax advisor to determine the tax consequences of the transaction to you.
How long will it take Mellon Investor Services to send the cash proceeds of my Phelps Dodge shares?
Mellon Investor Services commenced mailing Transmittal Forms to registered
holders on or about Tuesday, March 20, 2007. They should be received within
7-10 days. Mellon Investor Services will process payments after all
documents required to surrender your former shares of Phelps Dodge have been
properly executed and received by Mellon Investor Services. We urge you to
act promptly, because your Phelps Dodge stock certificates now represent
only the right to receive Freeport-McMoRan common stock and the amount of
cash to which you are entitled, and no interest will accrue or be paid.
Investing in Freeport-McMoRan Copper & Gold Inc.
Frequently Asked Questions
The transfer agent and registrar for Freeport-McMoRan Copper & Gold common stock is Mellon Investor Services. Stockholders who need assistance with their accounts or wish to eliminate duplicate mailings should contact:
Mellon Investor Services, LLC
480 Washington Blvd.
Jersey City, NJ 07310
Website: www.melloninvestor.com
Telephone: 800-953-2493
What is Freeport-McMoRan’s ticker symbol and where is it listed?
Freeport-McMoRan’s common stock is traded on the New York Stock Exchange under the symbol FCX.
How can I change my address or name on my stockholder account? How do I change the registration or transfer my shares?
If you are a Freeport-McMoRan shareholder of record you should contact our transfer agent, Mellon Investor Services as 1-800-953-2493.
What do I do if I lose my stock certificates?
If you are a Freeport-McMoRan shareholder of record you should contact our transfer agent, Mellon Investor Services as 1-800-953-2493.
What is Freeport-McMoRan’s dividend policy?
Freeport-McMoRan’s current regular annual common stock dividend, which is declared by the Board, is $1.75 per share, paid at a quarterly rate of $0.4375 per share. Freeport-McMoRan has a history of returning cash to shareholders through dividends and share purchases, and we are committed to maintaining a strong financial position. A history of past dividends payments can be found on the Investor Relations Dividend Information page.
Does Freeport-McMoRan have a Dividend Reinvestment and Stock Purchase Plan?
No, Freeport-McMoRan does not offer a Dividend Reinvestment or Stock Purchase Plan (DRIP) to its stockholders.
How can I get a copy of the annual report?
On our Web site, you can view the company’s annual reports and request printed copies using the Information Request service.
Where can I get a copy of the proxy statement?
On our Web site, you can view the company’s proxy statement or request printed copies using the Information Request service.
How can I get a copy of the materials filed with the Securities Exchange Commission (SEC)?
These are available through our SEC filings section of the Web site. They are also available over the internet by various service providers. If you require a hard copy, you can contact us through our Information Request page.
How can individual investors listen to your earnings conference call with analysts?
Freeport-McMoRan provides Webcasts of these conference calls to ensure that all investors have timely and equal access to company information. To hear the conference call, log on to the Investor Relations page and follow the instructions. You must have Windows Media Player or QuickTime installed on your computer.
Who is on Freeport-McMoRan’s Board of Directors?
Biographies of Freeport-McMoRan’s directors can be found on the Board of Directors page under People.
Who are the executives of Freeport-McMoRan?
Biographies of Freeport-McMoRan’s executives can be found on the Executive Bios page under People.
How can I be notified when new information about Freeport-McMoRan is available?
You can subscribe to Freeport-McMoRan’s email alert system in the Investor Relations section of this Web site. The system provides notification of press releases.
What are the tax consequences of dividends paid to nonresident alien shareholders?
Freeport-McMoRan has determined that, for quarterly dividends paid in 2007 to nonresident shareholders, 0.65 percent of the dividend amount was subject to federal withholding tax. For quarterly dividends paid in 2008, Freeport-McMoRan Copper & Gold estimates that 0.45 percent of the total dividend amount is subject to federal withholding tax.
Who is the independent accountant for Freeport-McMoRan?
Ernst & Young LLP is our independent public accountant.
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