Phelps Dodge Corp. Completes High Performance Conductor Sale

Phelps Dodge Corp. announced today it has completed the sale of Phelps Dodge High Performance Conductors of SC & GA, Inc. to International Wire Group. Under the agreement, announced March 7th, 2006, IWG purchased HPC’s manufacturing operations in Inman, S.C., & Trenton, Ga. The transaction doesn't include a Phelps Dodge facility at Elizabeth, N.J., that will become a unit of the Phelps Dodge Smelting, Refining & Rod Group. IWG purchased the stock of HPC, including certain copper inventory, for approx. $49 million in cash. This figure includes a base purchase price of approx. $47 million & a working capital adjustment estimated at closing to be approx. $2 million. Phelps Dodge also will receive a contingent payment of up to $3 million based on HPC’s 2006 results.

Phelps Dodge estimates special, net after-tax losses of approximately $6 million associated with this transaction, which will be recognized in the 2006 first quarter & consist of a loss on disposal of approximately $3 million & transaction & employee-related costs of approximately $3 million.