Consolidated Statements of Stockholders’ Equity The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 2004 ANNUAL REPORT  | 53 Years Ended December 31,  2004  2003  2002 (In Thousands) Convertible perpetual preferred stock: Balance at beginning of year  $ —  $  —  $  — Sale of 1,100 shares to the public  1,100,000  —  — Balance at end of year representing 1,100 shares in 2004  1,100,000  —  — Step-up convertible preferred stock: Balance at beginning of year representing 14,000 shares in 2003 and 2002  —  349,990  349,990 Conversions to Class B common stock and redemptions  —  (349,990)  — Balance at end of year representing 14,000 shares in 2002  —  —  349,990 Class A common stock: Balance at beginning of year representing 97,146 shares in 2002  —  —  9,715 Issued restricted stock representing 141 shares in 2002  —  —  14 Conversion to Class B common stock  —  —  (9,729) Balance at end of year  —  —  — Class B common stock: Balance at beginning of year representing 260,001 shares in 2004, 220,083 shares  in 2003 and 121,745 shares in 2002  26,000  22,008  12,174 Step-up convertible preferred stock conversions  —  1,146  — 8  1 /4% convertible senior notes conversions  2,046  2,176  — Class A common stock conversion  —  —  9,729 Exercised stock options, issued restricted stock and other representing 4,501 shares  in 2004, 6,703 shares in 2003 and 1,051 shares in 2002  450  670  105 Balance at end of year representing 284,964 shares in 2004, 260,001 shares  in 2003 and 220,083 shares in 2002  28,496  26,000  22,008 Capital in excess of par value of common stock: Balance at beginning of year  1,468,426  687,828  660,329 Step-up convertible preferred stock conversions  —  341,885  — 8  1 /4% convertible senior notes conversions 286,689  303,782  — Issuance costs of convertible perpetual preferred stock (33,000)  —  — Exercised stock options and other stock option amounts  83,648  105,577  14,220 Restricted stock grants  7,486  1,380  1,250 Reclass of redeemable preferred stock issuance costs to other assets  —  26,631  — Tax benefit for stock option exercises  39,567  1,343  12,029 Balance at end of year  1,852,816  1,468,426  687,828 Retained earnings:  Balance at beginning of year  646,933  534,447  407,397 Net income  202,267  181,660  164,654 Dividends on common stock  (199,029)  (41,733)  — Dividends on preferred stock  (45,491)  (27,441)  (37,604) Balance at end of year  604,680  646,933  534,447 Accumulated other comprehensive income (loss): Balance at beginning of year  8,668  10,963  (1,184) Other comprehensive income (loss), net of taxes: Change in unrealized derivatives’ fair value  1,226  5,195  13,615 Reclass to earnings of net realized derivatives losses (gains) 1,448  (7,490)  (1,468) Balance at end of year  11,342  8,668  10,963 Common stock held in treasury:  Balance at beginning of year representing 76,634 shares in 2004, 75,173 shares  in 2003 and 74,915 shares in 2002   (1,374,043)   (1,338,410)   (1,333,977) Tender of 2,024 shares in 2004, 1,461 shares in 2003 and 257 shares in  2002 to FCX for exercised stock options and restricted stock  (78,297)  (35,633)  (4,433) Shares purchased representing 27,316 shares in 2004  (981,345)  —  — Balance at end of year representing 105,974 shares in 2004, 76,634 shares in  2003 and 75,173 shares in 2002   (2,433,685)   (1,374,043)   (1,338,410) Total stockholders’ equity  $ 1,163,649  $  775,984  $  266,826