Notes To Consolidated Financial Statements 2004  2003 Carrying  Fair  Carrying  Fair Amount  Value  Amount  Value Commodity contracts: Open contracts in asset position  $  950  $  950  $  —  $  — Open contracts in liability position  (1,806)  (1,806)  (3,374)  (3,374) Embedded derivatives in concentrate sales contracts 16,082  16,082  10,611  10,611 Foreign exchange contracts: $U.S./Indonesian rupiah  2,879  2,879  —  — Long-term debt$^{a}$   (1,951,906)   (2,353,987)   (2,228,330)   (3,277,320) Interest rate swap contracts  (96)  (96)  (1,576)  (1,576) a. Includes redeemable preferred stock classified as debt in accordance with SFAS No. 150 ( see Note 5). FCX follows SFAS No. 133 and changes in the fair value of  unrealized derivative contracts that qualify as hedges are  not reported in current earnings, but are included in other  comprehensive income (see Note 1). A recap of gains (losses)  charged to earnings for redeemable preferred stock redemp- tions, derivative contracts and embedded derivatives follows  (in millions): Certain of PT Freeport Indonesia’s concentrate sales  contracts allow for final pricing in future periods. Under  SFAS No. 133, these pricing terms cause a portion of the  contracts to be considered embedded derivatives, which must  be recorded at fair value. PT Freeport Indonesia adjusts its  revenues for these embedded derivatives to reflect fair value  based on forward prices for the final pricing periods on each  reporting date. Changes in the fair value of these embedded  derivatives are recorded in current period revenues. Atlantic Copper enters into forward copper contracts  designed to hedge its copper price risk whenever its physical  purchases and sales pricing periods do not match. Although  these contracts are intended to hedge against changes in  copper prices, they do not qualify for hedge accounting  treatment under SFAS No. 133 because Atlantic Copper bases  its hedging contracts on its net sales and purchases position,  and contracts to hedge a net position do not qualify for  hedge accounting under SFAS No. 133. At December 31,  2004, Atlantic Copper held forward copper sales contracts for  12.7 million pounds at an average price of $1.40 per pound  through March 2005. Commodity Contracts.  From time to time, PT Freeport  Indonesia has entered into forward and option contracts  to hedge the market risk associated with fluctuations in  the prices of commodities it sells. The primary objective of  these contracts has been to set a minimum price and the  secondary objective is to retain market upside, if available at  a reasonable cost. As of December 31, 2004, FCX had no price  protection contracts relating to its mine production. FCX  has outstanding gold-denominated and silver-denominated  redeemable preferred stock with dividends and redemp- tion amounts determined by commodity prices. FCX elected  to continue its historical accounting for its redeemable  preferred stock indexed to commodities under the provisions  of SFAS No. 133 which allow such instruments issued before  January 1, 1998, to be excluded from those instruments  required to be adjusted for changes in their fair values.  Therefore, FCX’s redeemable preferred stock is recorded at  its original issue value less redemptions, and totaled $192.4  million at December 31, 2004 (see Note 5). 2004 ANNUAL REPORT  | 75 2004  2003  2002 FCX: Silver-Denominated preferred stock  $(1.4)  $ 1.7  $ 0.8 Gold-Denominated preferred stock  —   22.1  — PT Freeport Indonesia: Foreign currency exchange contracts  —  —   11.0 Embedded derivatives in concentrate sales contracts  56.9   38.9  1.0 Atlantic Copper: Foreign currency exchange contracts  —  9.6   (1.2) Forward copper contracts   (5.6)  8.0  0.6 Interest rate contracts   (1.4)   (2.1)   (3.2)