Notes To Consolidated Financial Statements government, which included entering into the Contract of  Work in 1991 well before the expiration of the 1967 Contract  of Work, PT Freeport Indonesia fully expects that the govern- ment will approve the extensions as long as it continues to  comply with the terms of the Contract of Work. Social and Economic Development Programs.  FCX  has a comprehensive social, employment and human rights  policy to ensure that its operations are conducted in a  manner respecting basic human rights, the laws and regula- tions of the host country, and the culture of the people who  are indigenous to the areas in which FCX operates. In 1996,  PT Freeport Indonesia established the Freeport Partnership  Fund for Community Development, which was previously  called the Freeport Fund for Irian Jaya Development, through  which PT Freeport Indonesia has made available funding and  expertise to support the economic and social development  of the area. PT Freeport Indonesia has committed to provide  one percent of its annual revenue for the development of  the local people through the Freeport Partnership Fund for  Community Development. PT Freeport Indonesia charged  $17.5 million in 2004, $17.4 million in 2003 and $15.2 million  in 2002 to production costs for this commitment. Long-Term Contracts and Operating Leases.  Atlantic Copper has firm contractual commitments with parties other  than PT Freeport Indonesia to purchase concentrate totaling  415,000 metric tons in 2005, 384,000 metric tons in 2006,  275,000 metric tons in 2007 and 160,000 metric tons in 2008  at market prices. As of December 31, 2004, FCX’s aggregate minimum annual  contractual payments, including Rio Tinto’s share, under noncan- celable long-term operating leases which extend to 2030 totaled  $7.6 million in 2005, $6.8 million in 2006, $6.7 million in 2007,  $6.6 million in 2008, $6.0 million in 2009 and $6.2 million  thereafter. Minimum payments under operating leases have not  been reduced by aggregate minimum sublease rentals of $1.1  million due under noncancelable subleases. Total aggregate  rental expense under operating leases amounted to $7.9 million  in 2004, $6.6 million in 2003 and $2.4 million in 2002. Share Purchase Program.  In June 2000, FCX’s Board of  Directors authorized a 20-million-share increase in FCX’s open  market share purchase program, bringing the total shares  approved for purchase under this program to 80 million. From  inception of this program in July 1995 through October 2003,  FCX has purchased a total of 70.7 million shares for $1.24  billion (an average of $17.53 per share). In October 2003,  FCX’s Board of Directors approved a new open market share  purchase program for up to 20 million shares which replaced  the previous program. The timing of future purchases of  common stock is dependent upon many factors including the  74 |  FREEPORT-McMoRan COPPER & GOLD INC. Summarized below are financial instruments whose carrying  amounts are not equal to their fair value and unmatured  derivative financial instruments at December 31, 2004 and  2003 (in thousands). Fair values are based on quoted market  prices and other available market information. FCX and its subsidiaries have entered into derivative  contracts in limited instances to achieve specific objectives.  Currently, these objectives principally relate to managing  risks associated with foreign currency and commodity price  risks. In addition, in response to volatility in the Indonesian  rupiah and Australian dollar currencies, FCX has sought  to manage certain foreign currency risks with PT Freeport  Indonesia’s mining operations. In the past, FCX has also  entered into derivative contracts related to PT Freeport  Indonesia’s exposure to copper and gold prices, but activities in  this regard since 1997 have been limited to establishing fixed  prices for open copper sales under PT Freeport Indonesia’s  concentrate sales contracts. FCX does not enter into deriva- tive contracts for speculative purposes. Note 11.  Financial Instruments  Contingencies For Non-Income Taxes.  Atlantic  Copper and PT Freeport Indonesia accrue and pay certain  non-income taxes and other government charges, such as  value-added, withholding, payroll, local and other taxes  and charges. For certain transactions, issues arise as to the  applicability of these other taxes and charges. Based on  management’s review and prior experience, a reserve for the  estimated liability has been established (see Note 6). price of FCX’s common shares, its cash flow and financial  position, and general economic and market conditions. As  discussed in Note 5, two of FCX’s senior notes and, in certain  circumstances, FCX’s credit facility contain limitations on  common stock purchases. In 2004, FCX purchased 3.4 million  shares of its common stock for $99.5 million ($29.39 per  share average) under its 20-million-share purchase program,  of which 16.6 million shares remain available.