01—Abstract
Summary
Summary of the 10-K filed February 22, 2013. Cited figures are marked; the original filing is the authoritative source.
Freeport-McMoRan Inc. (FCX) is a leading global mining company with substantial copper, gold, and molybdenum reserves and production.
As of December 31, 2012, the company reported significant proven and probable reserves across North America, South America, Indonesia, and Africa, highlighting its diversified geographic footprint and resource base. Financially, 2012 saw a decrease in revenues to $18.0 billiona from $20.9 billion in 2011, primarily due to lower copper and gold price realizations and sales volumes. Despite the revenue dip, the company maintained profitability, reporting net income attributable to common stockholders of $3.0 billion ($3.19 per diluted share).
FCX also reported strong operating cash flows of $3.8 billionb, enabling continued investment in major development projects like the Grasberg underground expansion and the Morenci and Cerro Verde expansions. A significant strategic move was the announcement in December 2012 of definitive agreements to acquire Plains Exploration & Production Company (PXP) and McMoRan Exploration Co. (MMR), which were expected to close in the second quarter of 2013.
These acquisitions signaled a strategic shift towards expanding into the oil and gas sector. The company also highlighted its commitment to community development and environmental stewardship across its global operations.
02—Key points
Key Highlights
- Diversified Operations: FCX operates significant mining assets across North America, South America, Indonesia, and Africa, with substantial proven and probable reserves of copper, gold, and molybdenum.
- Financial Performance: In 2012, FCX reported revenues of $18.0 billion and net income attributable to common stockholders of $3.0 billion ($3.19 per diluted share), despite a decrease from 2011 driven by lower commodity prices and sales volumes.
- Strong Operating Cash Flow: The company generated $3.8 billion in operating cash flows in 2012, supporting significant capital expenditures and dividends.
- Major Development Projects: FCX continued investment in key growth projects, including underground development at Grasberg and expansions at Morenci and Cerro Verde, with significant capital allocated for these initiatives.
- Strategic Acquisitions: In late 2012, FCX announced plans to acquire Plains Exploration & Production Company (PXP) and McMoRan Exploration Co. (MMR), signaling an expansion into the oil and gas sector.
- Significant Reserves: As of December 31, 2012, FCX held consolidated recoverable proven and probable reserves totaling 116.5 billion pounds of copper, 32.5 million ounces of gold, and 3.42 billion pounds of molybdenum.
- Community and Environmental Focus: The company emphasized its commitment to community development programs and environmental responsibility across its global operations.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Freeport-McMoRan Inc kept $0.17.
- Revenue$18.01B100.0%
- Cost of revenue−$11.56B64.2%
- Gross profit$6.45B35.8%
- Operating costs−$635.0M3.5%
- Operating income$5.81B32.3%
- Interest, other & tax−$2.77B15.4%
- Net income$3.04B16.9%
Where FY2012 revenue went
$18.01B- Cost of revenue: $11.56B, 64% of revenue
- Net income: $3.04B, 17% of revenue
- Interest, other & tax: $2.77B, 15% of revenue
- SG&A: $431.0M, 2.4% of revenue
- Other operating costs: $204.0M, 1.1% of revenue
Kept 17% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 22, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $18.01B$20.88B | −13.7% |
| Cost of Revenue | $11.56B$10.92B | +5.9% |
| Gross Profit | $6.45B$9.96B | −35.3% |
| SG&A Expenses | $431.00M$415.00M | +3.9% |
| Operating Expenses | $12.20B$11.74B | +3.9% |
| Operating Income | $5.81B$9.14B | −36.4% |
| Net Income | $3.04B$4.56B | −33.3% |
| EPS (Basic) | $3.20$4.81 | −33.5% |
| EPS (Diluted) | $3.19$4.78 | −33.3% |
| Shares Outstanding (Basic) | 949.00M947.00M | +0.2% |
| Shares Outstanding (Diluted) | 954.00M955.00M | −0.1% |
05—Questions
Frequently Asked Questions
What were FCX's primary sources of revenue in 2012?
In 2012, FCX's mining revenues were primarily derived from copper (79 percent), gold (10 percent), and molybdenum (7 percent).
What major strategic initiatives did FCX announce in late 2012?
In December 2012, FCX announced definitive agreements to acquire Plains Exploration & Production Company (PXP) and McMoRan Exploration Co. (MMR). These acquisitions marked a strategic move to expand into the oil and gas sector.
How did FCX's commodity sales volumes change in 2012 compared to 2011?
Consolidated sales volumes in 2012 decreased to 3.65 billion pounds of copper and 1.0 million ounces of gold, compared to 3.70 billion pounds of copper and 1.4 million ounces of gold in 2011. This decrease was primarily attributed to lower sales volumes in Indonesia and South America, partly offset by increased copper production in North America and Africa.
What were FCX's key development projects mentioned in the report?
FCX was advancing major development projects including the development of large-scale underground ore bodies at its Grasberg minerals district in Indonesia, and expansion projects at its Morenci mine in North America and Cerro Verde mine in South America.
06—Continue