to net income or $0.02 per share) charge associated with the  amended FCX and PT Freeport Indonesia credit facility (see  “Capital Resources and Liquidity – Financing Activities”) and  interest income of $5.9 million in 2004, $8.9 million in 2003  and $4.8 million in 2002. PT Freeport Indonesia’s Contract of Work provides for a 35  percent corporate income tax rate. PT Indocopper Investama  pays a 30 percent corporate income tax on dividends it  receives from its 9.36 percent ownership in PT Freeport  Indonesia. In addition, the tax treaty between Indonesia and  the United States provides for a withholding tax rate of 10  percent on dividends and interest that PT Freeport Indonesia  and PT Indocopper Investama pay to their parent company,  FCX. We also incurred a U.S. alternative minimum tax at a  rate of two percent based primarily on consolidated income,  net of smelting and refining results. As a result of the  enactment of the American Jobs Creation Act of 2004, the 90  percent limitation on the use of foreign tax credits to offset  the U.S. federal alternative minimum tax liability has been  repealed effective January 1, 2005. Based on current projec- tions, we expect that the removal of this limitation will  significantly reduce our U.S. federal taxes beginning in 2005.  Our U.S. federal alternative minimum tax liability totaled  $8.2 million in 2004, $9.3 million in 2003 and $8.2 million in  2002. We currently record no income taxes at Atlantic Copper,  which is subject to taxation in Spain, because it has not  generated significant taxable income in recent years and has  substantial tax loss carryforwards for which we have provided  no financial statement benefit. We receive no consolidated  tax benefit from these losses because they cannot be used to  offset PT Freeport Indonesia’s profits in Indonesia. Parent company costs consist primarily of interest, depre- ciation and amortization, and general and administrative  expenses. We receive minimal tax benefit from these costs,  including interest expense, primarily because our parent  company generates no taxable income from U.S. sources. As  a result, our provision for income taxes as a percentage of  our consolidated income before income taxes and minority  interests will vary as PT Freeport Indonesia’s income changes  absent changes in Atlantic Copper and parent company costs.  The provision for income taxes as a percentage of consoli- dated income before income taxes and minority interests  totaled 58 percent for 2004 and 2003 and 55 percent for 2002.  Summaries of the approximate significant components of the  calculation of our consolidated provision for income taxes are  shown below (in thousands, except percentages). Years Ended December 31,  2004  2003  2002 Mining and exploration segment operating income$^{a}$  $832,112  $850,253  $692,634 Mining and exploration segment interest expense, net   (22,209)   (44,861)   (71,424) Intercompany operating profit (deferred) recognized  (24,683)  13,828   (28,807) Income before taxes   785,220   819,220   592,403 Indonesian corporate income tax rate (35%) plus U.S. alternative minimum tax rate (2%)  37%  37%  37% Corporate income taxes   290,531   303,111   219,189 Approximate PT Freeport Indonesia net income   494,689   516,109   373,214 Withholding tax on FCX’s equity share  9.064%  9.064%  9.064% Withholding taxes  44,839  46,780  33,828 Other, net  (4,690)   (11,838)  (7,499) FCX consolidated provision for income taxes  $330,680  $338,053  $245,518 FCX consolidated effective tax rate  58%  58%  55% a. Excludes charges for FCX stock option exercises, which are eliminated in consolidation, totaling $87.3 million in 2004, $57.8 million in 2003 and $5.5 million in 2002. We have two operating segments: “mining and exploration”  and “smelting and refining.” The mining and exploration  segment consists of our Indonesian activities including  PT Freeport Indonesia’s copper and gold mining operations,  Puncakjaya Power’s power generating operations (after  eliminations with PT Freeport Indonesia) and our Indonesian  exploration activities, including those of Eastern Minerals.  The smelting and refining segment includes Atlantic Copper’s  operations in Spain and PT Freeport Indonesia’s equity  investment in PT Smelting. Summary comparative operating  income (loss) data by segment follow (in millions): 2004 ANNUAL REPORT  | 27 Management’s Discussion and Analysis