Summary
Freeport-McMoRan Inc.'s (FCX) 2008 Form 10-K highlights a challenging year marked by significant commodity price declines, particularly for copper and molybdenum, in the latter half of the year. These market shifts necessitated substantial asset impairment charges totaling $17 billion, including goodwill and long-lived assets, leading to a net loss of $11.3 billion for the year. Despite the challenging market conditions, the company generated substantial revenues of $17.8 billion, largely driven by copper sales, which constituted approximately 76% of mining revenues. In response to the downturn, FCX implemented cost-saving measures, including production curtailments at several North American operations and its Henderson molybdenum mine, deferral of most development projects, and reduced capital spending. The company also suspended its common stock dividend. Looking ahead to 2009, FCX projected lower copper and molybdenum sales volumes but anticipated higher gold sales, with production expected to be impacted by reduced rates at North American mines and the start-up of the Tenke Fungurume project in the DRC. The company ended 2008 with $872 million in consolidated cash, and in February 2009, it completed a stock offering that raised approximately $740 million to bolster its liquidity.
Financial Highlights
44 data points| Cost of Revenue | $12.98B |
| SG&A Expenses | $269.00M |
| Operating Expenses | $30.51B |
| Operating Income | -$12.71B |
| Net Income | -$11.34B |
| EPS (Basic) | $-14.86 |
| EPS (Diluted) | $-14.86 |
| Shares Outstanding (Basic) | 763.00M |
| Shares Outstanding (Diluted) | 763.00M |
Key Highlights
- 1Significant commodity price declines in H2 2008 led to substantial asset impairment charges of $17 billion (including $10.9 billion for long-lived assets and $6.0 billion for goodwill), resulting in a net loss of $11.3 billion for the year.
- 2Revenues for 2008 totaled $17.8 billion, driven primarily by copper (76% of mining revenues), followed by molybdenum (14%) and gold (7%).
- 3The company implemented significant cost-reduction measures, including production curtailments at several North American copper mines and the Henderson molybdenum mine, and deferred most project development activities.
- 4FCX suspended its common stock dividend in December 2008 due to weak market conditions.
- 5Projected 2009 copper sales volumes are lower due to production curtailments, while gold sales are expected to increase due to mining higher-grade sections at Grasberg.
- 6The Tenke Fungurume copper and cobalt project in the DRC is expected to commence production in the second half of 2009.
- 7Consolidated cash and cash equivalents stood at $872 million at year-end 2008, with approximately $1.3 billion in availability under revolving credit facilities.