01—Abstract
Summary
Summary of the 10-K filed February 15, 2022. Cited figures are marked; the original filing is the authoritative source.
Freeport-McMoRan Inc. (FCX) demonstrated strong operational and financial performance in 2021, driven by a significant increase in copper and gold sales volumes, up 19%a and 59% respectively, compared to 2020.
The company benefited from favorable commodity prices, particularly for copper, which averaged $4.23b per pound on the LME. The successful ramp-up of underground mining operations at the Grasberg minerals district in Indonesia was a key highlight, achieving projected annualized levels in the fourth quarter. Additionally, the Lone Star copper leach project in Arizona exceeded its initial design capacity.
FCX maintains a strong balance sheet with $8.1 billionc in cash and cash equivalents at year-end 2021, leading to a net debt reduction of $4.7 billion. The company also reinstated its common stock dividend, initiating a base dividend of $0.30 per share and announcing a variable dividend of $0.30 per share for 2022, alongside a $3.0 billion share repurchase program. Looking ahead, FCX anticipates continued growth in production and sales volumes for 2022, supported by positive long-term fundamentals for copper and strategic growth initiatives.
02—Key points
Key Highlights
- Achieved a 19% increase in copper sales volumes and a 59% increase in gold sales volumes in 2021 compared to 2020.
- Successfully ramped up underground mining at the Grasberg minerals district in Indonesia, reaching projected annualized production levels.
- The Lone Star copper leach project at the Safford mine exceeded its initial design capacity, producing approximately 235 million pounds of copper in 2021.
- Maintained a strong financial position with $8.1 billion in cash and cash equivalents at year-end 2021, significantly reducing net debt by $4.7 billion.
- Reinstated common stock dividends, announcing a combined base and variable dividend of $0.60 per share for 2022, and initiated a $3.0 billion share repurchase program.
- Anticipates continued growth in copper and gold production and sales volumes for 2022, supported by positive long-term commodity fundamentals.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Freeport-McMoRan Inc kept $0.19.
- Revenue$22.84B100.0%
- Cost of revenue−$14.03B61.4%
- Gross profit$8.81B38.6%
- Operating costs−$449.0M2.0%
- Operating income$8.37B36.6%
- Interest, other & tax−$4.06B17.8%
- Net income$4.31B18.8%
Where FY2021 revenue went
$22.84B- Cost of revenue: $14.03B, 61% of revenue
- Net income: $4.31B, 19% of revenue
- Interest, other & tax: $4.06B, 18% of revenue
- SG&A: $383.0M, 1.7% of revenue
Kept 19% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 15, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $22.84B$14.20B | +60.9% |
| Cost of Revenue | $14.03B$11.65B | +20.4% |
| Gross Profit | $8.81B$2.54B | +246.6% |
| SG&A Expenses | $383.00M$370.00M | +3.5% |
| Operating Expenses | $14.48B$11.76B | +23.1% |
| Operating Income | $8.37B$2.44B | +243.3% |
| Net Income | $4.31B$599.00M | +618.9% |
| EPS (Basic) | $2.93$0.41 | +614.6% |
| EPS (Diluted) | $2.90$0.41 | +607.3% |
| Shares Outstanding (Basic) | 1.47B1.45B | +0.9% |
| Shares Outstanding (Diluted) | 1.48B1.46B | +1.4% |
05—Questions
Frequently Asked Questions
What were the key drivers of Freeport-McMoRan's performance in 2021?
The company's strong performance in 2021 was driven by a substantial increase in copper and gold sales volumes, favorable commodity prices (particularly for copper), and the successful ramp-up of underground mining operations at the Grasberg minerals district in Indonesia. The Lone Star copper leach project also exceeded expectations.
How did Freeport-McMoRan's financial position strengthen in 2021?
Freeport-McMoRan significantly improved its financial position by ending 2021 with $8.1 billion in cash and cash equivalents, which allowed for a $4.7 billion reduction in net debt. This strong balance sheet supported the reinstatement of dividends and a new share repurchase program.
What is Freeport-McMoRan's outlook for 2022?
The company expects continued growth in production and sales volumes for copper and gold in 2022. This positive outlook is supported by favorable long-term fundamentals for copper, driven by demand for clean energy technologies and infrastructure development, and ongoing strategic growth initiatives.
What are the company's plans for returning capital to shareholders?
Freeport-McMoRan has reinstated its common stock dividend, with a combined base and variable dividend of $0.60 per share expected for 2022. Additionally, the company has authorized a $3.0 billion share repurchase program, reflecting its commitment to returning value to shareholders while maintaining a strong financial position.
06—Continue