accounting principles. Other smelting companies present  this measure, although Atlantic Copper’s measure may not  be comparable to similarly titled measures reported by other  companies. The reconciliation below presents reported produc- tion costs for our smelting and refining segment (Atlantic  Copper) and subtracts or adds those costs that do not directly  relate to the process of converting copper concentrates to  cathodes. The adjusted production costs amounts are used to  calculate Atlantic Copper’s cathode cash production cost per  pound of copper (in thousands, except per pound amounts): Atlantic Copper cathode cash production cost per pound of  copper is a measure intended to provide investors with infor- mation about the costs it incurs to produce cathodes at its  smelting operations in Spain. We use this measure for the  same purpose and for monitoring operating performance at  Atlantic Copper’s smelting operations. This information differs  from measures of performance determined in accordance with  generally accepted accounting principles and should not be  considered in isolation or as a substitute for measures of  performance determined in accordance with generally accepted  Atlantic Copper Cathode Cash Production Cost Per Pound Of Copper PT Smelting Cathode Cash Production Cost Per Pound of Copper accepted accounting principles. Other smelting companies  present this measure, although PT Smelting’s measure may  not be comparable to similarly titled measures reported by  other companies. The calculation below presents PT Smelting’s  reported operating costs and subtracts or adds those costs  that do not directly relate to the process of converting  copper concentrates to cathodes. PT Smelting’s operating  costs are then reconciled to PT Freeport Indonesia’s equity  in PT Smelting earnings (losses) reported in FCX’s  consolidated financial statements (in thousands, except per  pound amounts): PT Smelting cathode cash production cost per pound of copper  is a measure intended to provide investors with information  about the costs it incurs to produce cathodes at its smelting  operations in Indonesia. We use this measure for the same  purpose and for monitoring operating performance at PT  Smelting’s smelting operations. This information differs from  measures of performance determined in accordance with  generally accepted accounting principles and should not  be considered in isolation or as a substitute for measures  of performance determined in accordance with generally  a. Includes $27.5 million, $0.06 per pound, for costs related to Atlantic Copper’s major maintenance turnaround.  Years Ended December 31,  2004  2003  2002 Smelting and refining segment production costs reported in FCX’s consolidated financial statements  $ 914,452$^{a}$  $ 892,681  $ 729,789 Less:  Raw material purchase costs   (249,689)   (384,347)   (330,516) Production costs of wire rod and wire   (370,431)  (66,106)  (48,953) Production costs of anodes sold  (3,720)  (13,124)  (10,979) Currency hedging  —  9,625  (1,168) Other (16,771)  (1,459)  (3,496) Credits:  Gold and silver revenues   (133,960)   (326,948)   (250,766) Acid and other by-product revenues  (25,068)  (20,566)  (17,256) Production costs used in calculating cathode cash production cost per pound  $ 114,813  $ 89,756  $ 66,655 Pounds of cathode produced  454,700  544,700  552,200 Cathode cash production cost per pound before hedging $  0.25  $  0.16  $  0.12 2004 ANNUAL REPORT  | 45 Management’s Discussion and Analysis