10-QPeriod: Q1 FY2009

FREEPORT-MCMORAN INC Quarterly Report for Q1 Ended Mar 31, 2009

Filed May 11, 2009For Securities:FCX

Summary

Freeport-McMoRan Inc. (FCX) reported its first quarter 2009 results, showcasing a significant impact from the sharp decline in copper and molybdenum prices experienced in late 2008. Revenues were down considerably year-over-year, reflecting lower commodity prices. In response to the challenging market conditions, FCX implemented cost-saving measures, including production curtailments at higher-cost operations and workforce reductions, resulting in restructuring charges. The company's liquidity remained a key focus, with efforts to preserve cash. Despite the revenue drop, FCX maintained substantial mining assets and operational capacity, anticipating a long-term recovery in commodity prices. The company raised capital through a public offering of common stock in February 2009 to bolster its financial position.

Financial Highlights

41 data points
Beta

Net Income

$43.00M

EPS (Diluted)

$0.05

Total Assets

$23.71B

Cash & Equivalents

$644.00M

Free Cash Flow

-$258.00M

Financial Statements
Beta
Cost of Revenue$1.81B
SG&A Expenses$62.00M
Operating Expenses$1.93B
Operating Income$672.00M
Net Income$43.00M
EPS (Basic)$0.05
EPS (Diluted)$0.05
Shares Outstanding (Basic)800.00M
Shares Outstanding (Diluted)802.00M

Key Highlights

  • 1Revenues significantly decreased in Q1 2009 compared to Q1 2008, primarily due to a sharp decline in copper and molybdenum prices.
  • 2The company incurred restructuring and other charges totaling $25 million related to revised operating plans, including workforce reductions and production curtailments.
  • 3FCX raised $740 million in net proceeds from a public offering of common stock in February 2009 to strengthen its financial position.
  • 4Consolidated cash and cash equivalents decreased to $644 million from $872 million at the end of 2008.
  • 5Unit net cash costs for copper mining operations decreased year-over-year due to lower operating rates and reduced input costs, despite lower commodity prices.
  • 6The company suspended its common stock dividend in December 2008 to preserve liquidity, with no dividends paid in Q1 2009.
  • 7Construction progressed at the Tenke Fungurume project in the DRC, with the first copper cathode produced in late March 2009.

Frequently Asked Questions

The primary driver of the significant revenue decline in Q1 2009 was the sharp decrease in the market prices of copper and molybdenum, which had fallen substantially in late 2008. This directly impacted the value of FCX's sales.

FCX implemented several measures, including curtailing production at higher-cost North America operations and the Henderson molybdenum mine, deferring capital projects, reducing capital expenditures, implementing aggressive cost controls such as workforce reductions, and suspending the common stock dividend to preserve liquidity.

FCX bolstered its liquidity by completing a public offering of common stock in February 2009, raising $740 million in net proceeds. The company also maintained significant availability under its revolving credit facilities and focused on managing operating cash flows.

FCX projected consolidated sales volumes for 2009 to approximate 3.9 billion pounds of copper, 2.3 million ounces of gold, and 50 million pounds of molybdenum. Unit net cash costs for copper mining operations were expected to decrease in 2009 compared to 2008 due to operational adjustments and lower input costs, assuming commodity prices remain at projected levels.