6 |  FREEPORT-McMoRan COPPER & GOLD INC. Financial Highlights and Shareholder Returns  Even  though our production and sales in 2004 were lower than  recent years and lower than our outlook for future years,  we generated strong cash flow following the return to  high-grade portions of the Grasberg mine in the fourth  quarter. We generated operating cash flows totaling more  than $400 million during the fourth quarter of 2004,  resulting in $341.4 million of operating cash flows for the  12 months ended December 31, 2004. Fourth-quarter cash  flows benefited from special items, most significantly the  settlement of insurance claims related to the slippage and debris flow events. Our share of the insur- ance s ettlement totaled $95.0 million, $48.8 million to  net inc ome, and $85.9 million to 2004 operating cash flows.  Ca sh flows in 2005 are expected to be significantly  higher than 2004 and historical averages. Using our projec ted mine plans for 2005 and prices of $1.35 per  pound  of copper and $420 per ounce of gold, we would  genera te operating cash flows in excess of $1.1 billion,  more t han three times 2004 cash flows. Capital expendi- tures t otaled $141.0 million in 2004 and are expected to  total a pproximately $180 million in 2005, including $19  million to expand our DOZ mine and $17 million to advance  our un derground infrastructure project.  We maintained a strong balance sheet in 2004, con- tinuing to reduce debt as in recent years. Total debt at  Decem ber 31, 2004 approximated $1.95 billion, $1.4  billion net of approximately $552 million of cash and  restric ted investments, resulting in a net debt reduction  of $33 0 million from December 31, 2003 and $1.5 billion  since  December 2000. Scheduled 2005 debt maturities total  $78.2  million and we are working to identify additional  opport unities to retire debt in advance of scheduled  Our Board will continue to assess additional finan cial  measures for the benefit of shareholders. During 2004, we purchased 3.4 million shares of our common stock for $99.5 million ($29.39 per sha re  average) under a 20-million-share purchase program  and 23.9 million shares of common stock from our join t  venture partner Rio Tinto plc for $881.9 million (appr oxi- mately $36.85 per share). On December 31, 2004, we had outstanding 179.0 million shares of common stock . As of February 2005, 16.6 million shares remain available for purchase under the share purchase program. The timing of future purchases of common stock is depende nt  upon many factors including the price of the common  shares, the company’s cash flows and financial positio n,  and general economic and market conditions. In October 2004, our Board of Directors authorize d  an increase in the common stock dividend of 25 perce nt,  from an annual rate of $0.80 per share to $1.00 per s hare,  payable quarterly ($0.25 per share). In December 200 4,  the Board of Directors authorized a supplemental com - mon stock dividend of $0.25 per share, which was pa id  on December 29, 2004. In addition, in February 2005,  the  Board of Directors authorized a $0.50 per share suppl e- mental dividend to be paid on March 31, 2005. maturities. Our improved financial flexibility will enab le  us to consider using cash flows for potential addition al  dividends and stock purchases. 00 01 02 03 04 1 2 3 Net Debt in billions of dollars Background photo:  Concentrate loading operations at PT Freeport Indonesia’s port of Amamapare.