Phelps Dodge Increases Shareholder Capital Return Program

Phelps Dodge Corp. has 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 per common share, or approximately $400 million, payable on June 2nd, 2006, to common shareholders of record at the close of business on May 16th, 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 2nd, 2006, to common shareholders of record at the close of business on May 16th, 2006.