PHOENIX, April 5 /PRNewswire-FirstCall/ -- Phelps Dodge Corp. (NYSE: PD) today announced that its board of directors has approved an increase in the company's shareholder capital return program to $2 billion from $1.5 billion. Phelps Dodge already has returned approximately $900 million of the $2 billion to shareholders through special dividends since announcing the program in October 2005. As part of the program, the board declared a special dividend of $2.00 per common share, or approximately $400 million, payable on June 2, 2006, to common shareholders of record at the close of business on May 16, 2006. Approximately $700 million under the program remains to be returned to shareholders by the end of 2006, either through special dividends, share repurchases or a combination of the two. The board also increased the quarterly common stock dividend to 20 cents per share from 18.75 cents per share. This equates to an annual dividend of 80 cents per share per year. The dividend is payable on June 2, 2006, to common shareholders of record at the close of business on May 16, 2006. "Copper and molybdenum market fundamentals remain excellent, and we continue to generate strong cash flow and report solid earnings despite some volatility in our reported earnings resulting from the accounting treatment of our copper price-protection programs," said J. Steven Whisler, chairman and chief executive officer. "As we have consistently and publicly stated, we continue to consider additional initiatives to reward shareholders as our expected results are actually achieved, and this increase in our shareholder capital return program is further evidence of our commitment." Both the quarterly dividend and the special dividend should be treated as dividend income and not as a "return of capital" for income tax purposes. The date on which a buyer of shares will not be entitled to the dividend (the "ex-dividend date") for both cash dividends is May 12, 2006. Phelps Dodge Corp. is one of the world's leading producers of copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company employs 13,500 people worldwide.
SOURCE Phelps Dodge Corp.