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## Management’s Discussion and Analysis 

interest on these notes. We recorded charges totaling $24.7 million ($24.2 million to net income or $0.15 per share) related to these conversions. 

In October 2003, FCX and PT Freeport Indonesia entered into an amended revolving credit facility that provides a commitment of $195 million and matures in September 2006. We recorded charges totaling $5.6 million ($3.7 million to net income or $0.02 per share) in 2003 to accelerate amortization of deferred financing costs related to the prior credit facility. 

In December 2003, we called for redemption the depositary shares representing our 7% Step-Up Convertible Preferred Stock. Of the 14.0 million depositary shares outstanding 

at the time of the call, 13.8 million depositary shares were converted into 11.5 million shares of FCX common stock. The remaining shares were redeemed for approximately $7 million cash. 

As a result of the transactions discussed above, we had net cash borrowings (repayments) of debt, including preferred stock redemptions, of $(31.2) million in 2004, $31.7 million in 2003 and $(333.3) million in 2002. 

Debt Maturities.  Below is a summary (in millions) of our total debt maturities based on loan balances as of December 31, 2004, and original issue amounts for mandatorily redeemable preferred stock. 

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a. Conversion price is $30.87 per share. 

b. Represents additional amounts due above the original issue amounts based on the price of silver and gold, respectively, totaling $3.7 million in 2005 and 2006 for our Silver- Denominated Preferred Stock and $21.2 million in February 2006 for our Gold-Denominated Preferred Stock, Series II. We calculated these amounts using the December 31, 2004, London A.M. gold fixing price for one ounce of gold ($438.00) and the London silver fixing price for one ounce of silver ($6.82) in the London bullion market (which determine the preferred stock redemption amounts). 

## Other Contractual Obligations 

In addition to our debt and redeemable preferred stock maturities shown above, we have other contractual obligations and commitments, which we expect to fund with projected operating cash flows, available credit facilities or future financing transactions, if necessary. These obligations and commitments include PT Freeport Indonesia’s commitments to provide one percent of its annual revenue for development of the local people in our area of operations through the Freeport Partnership Fund for Community Development and to contribute amounts to a cash fund designed to accumulate at least $100 million by the end of our Indonesian mining activ- ities to pay for mine closure and reclamation. Atlantic Copper has a mostly unfunded contractual obligation denominated in euros to supplement amounts paid to retired employees. In August 2002, Atlantic Copper complied with Spanish legisla- tion by agreeing to fund 7.2 million euros annually for 15 years, beginning August 2002, to an approved insurance 

company for an estimated 72 million euro contractual obli- gation to the retired employees. Atlantic Copper had $69.8 million recorded as of December 31, 2004, for this obligation and is amortizing the unaccrued balance of approximately $7.9 million over the remaining 12-year funding period. Atlantic Copper has firm contractual commitments with third parties to purchase concentrates at market prices. We have various noncancelable operating leases and open purchase orders at December 31, 2004. A summary of these various obligations follows (in millions, except concentrates): 

