Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX):
- Net income attributable to
common stock for fourth-quarter 2013 totaled $707 million, $0.68
per share, compared with net income of $743 million, $0.78 per
share, for fourth-quarter 2012. Net income attributable to common
stock for the year 2013 totaled $2.7 billion, $2.64 per share,
compared with $3.0 billion, $3.19 per share, for the year
2012.
- Consolidated sales for
fourth-quarter 2013 totaled 1.14 billion pounds of copper, 512
thousand ounces of gold, 22 million pounds of molybdenum and 16.6
million barrels of oil equivalents (MMBOE), compared with 972
million pounds of copper, 254 thousand ounces of gold and 21
million pounds of molybdenum for fourth-quarter 2012. Consolidated
sales for the year 2013 totaled 4.1 billion pounds of copper, 1.2
million ounces of gold, 93 million pounds of molybdenum, and 38.1
MMBOE (for the seven-month period from June 1, 2013, to December
31, 2013), compared with 3.65 billion pounds of copper, 1.0 million
ounces of gold and 83 million pounds of molybdenum for the year
2012.
- Consolidated sales for the year
2014 are expected to approximate 4.4 billion pounds of copper, 1.7
million ounces of gold, 95 million pounds of molybdenum and 60.7
MMBOE, including 1.0 billion pounds of copper, 325 thousand ounces
of gold, 25 million pounds of molybdenum and 15.3 MMBOE for
first-quarter 2014.
- Average realized prices for
fourth-quarter 2013 were $3.31 per pound for copper (compared with
$3.60 per pound in fourth-quarter 2012), $1,220 per ounce for gold
(compared with $1,681 per ounce in fourth-quarter 2012) and $92.68
per barrel for oil (excluding impacts of unrealized losses on oil
and gas derivative contracts).
- Operating cash flows totaled
$2.3 billion for fourth-quarter 2013 and $6.1 billion (net of $436
million in working capital uses and changes in other tax payments)
for the year 2013, compared with $1.3 billion for fourth-quarter
2012 and $3.8 billion (net of $1.4 billion in working capital uses
and changes in other tax payments) for the year 2012. Based on
current sales volume and cost estimates and assuming average prices
of $3.25 per pound for copper, $1,200 per ounce for gold, $9.50 per
pound for molybdenum and $105 per barrel for Brent crude oil,
operating cash flows are estimated to approximate $9 billion for
the year 2014 (including $0.8 billion of working capital sources
and changes in other tax payments).
- Capital expenditures totaled
$1.7 billion for fourth-quarter 2013 and $5.3 billion for the year
2013, reflecting $2.3 billion for major projects at mining
operations and $1.45 billion for oil and gas operations (for the
seven-month period from June 1, 2013, to December 31, 2013).
Capital expenditures are expected to approximate $7 billion for the
year 2014, including $3 billion for major projects at mining
operations and $3 billion for oil and gas operations.
- At December 31, 2013,
consolidated cash totaled $2.0 billion and consolidated
debt totaled $20.7 billion. During 2013, FCX paid $2.3 billion
in common stock dividends, including $1.0 billion for a
supplemental dividend of $1 per share paid on July 1, 2013.
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported net
income attributable to common stock of $707 million, $0.68 per
share for fourth-quarter 2013 and $2.7 billion, $2.64 per share,
for the year 2013, compared with $743 million, $0.78 per share, for
fourth-quarter 2012 and $3.0 billion, $3.19 per share, for the year
2012. FCX’s net income attributable to common stock for
fourth-quarter 2013 included net charges of $166 million ($0.16 per
share), comprised of $73 million ($0.07 per share) for unrealized
losses on oil and gas derivative contracts and other items
described in the summary financial data below.
James R. Moffett, Chairman of the Board; Richard C. Adkerson,
Vice Chairman, and FCX President and Chief Executive Officer; and
James C. Flores, Vice Chairman, and FM O&G President and Chief
Executive Officer, said, "Our fourth-quarter results reflect strong
operating performance in our global mining and oil and gas
businesses. As we enter 2014, we are positive about our
large and diverse portfolio of assets and resources, which provide
attractive near-term and longer term growth opportunities.
We remain focused on building value for shareholders through
strong operations, investing prudently in our financially
attractive projects, achievement of our debt reduction initiatives
and providing cash returns to shareholders."
SUMMARY FINANCIAL DATA
Three Months Ended Years Ended December 31,
December 31, 2013 2012 2013 a
2012 (in millions, except per share amounts) Revenuesb $
5,885 c $ 4,513 $ 20,921 c $ 18,010 Operating income $ 1,650
c,d,e,f $ 1,358 e,f,g,h $ 5,351 c,d,e,f,g $ 5,814 e,f,g,h Net
income attributable to common stocki $ 707 c,d,e,f,j $ 743 e,f,g,h
$ 2,658 c,d,e,f,g,j,k $ 3,041 e,f,g,h,k,l Diluted net income per
share of common stock $ 0.68 c,d,e,f,j $ 0.78 e,f,g,h $ 2.64
c,d,e,f,g,j,k $ 3.19 e,f,g,h,k,l Diluted weighted-average common
shares outstanding 1,044 954 1,006 954 Operating cash flowsm $
2,337 $ 1,265 $ 6,080 $ 3,774 Capital expenditures $ 1,663 $ 976 $
5,286 $ 3,494 At December 31: Cash and cash equivalents $ 1,985 $
3,705 $ 1,985 $ 3,705 Total debt, including current portion $
20,706 $ 3,527 $ 20,706 $ 3,527
a. Includes the results of
Freeport-McMoRan Oil & Gas (FM O&G) beginning June 1,
2013.
b. Revenues include adjustments to
provisionally priced concentrate and cathode copper sales
recognized in prior periods. For further discussion, refer to the
supplemental schedule, "Derivative Instruments" on page IX, which
is available on FCX's website, "www.fcx.com."
c. Revenues include charges for unrealized
losses on oil and gas derivative contracts totaling $118 million
($73 million to net income attributable to common stock or $0.07
per share) in fourth-quarter 2013 and $312 million ($194 million to
net income attributable to common stock or $0.19 per share) for the
year 2013 (reflecting the seven-month period from June 1, 2013, to
December 31, 2013). For further discussion, refer to the
supplemental schedule, "Derivative Instruments" on page IX, which
is available on FCX's website, "www.fcx.com."
d. The 2013 periods include charges of (i)
$76 million ($49 million to net income attributable to common stock
or $0.05 per share) associated with updated mine plans at Morenci
that resulted in a loss in recoverable copper in leach stockpiles
and (ii) $37 million ($23 million to net income attributable to
common stock or $0.02 per share) for restructuring an executive
employment arrangement.
e. Includes charges associated with new
labor agreements totaling $36 million ($13 million to net income
attributable to common stock or $0.01 per share) at Cerro Verde for
the 2013 periods and $16 million ($8 million to net income
attributable to common stock or $0.01 per share) at Candelaria for
the 2012 periods.
f. Includes net charges (credits) for
adjustments to environmental obligations and related litigation
reserves totaling $33 million ($24 million to net income
attributable to common stock or $0.02 per share) in fourth-quarter
2013, $(42) million ($(24) million to net income attributable to
common stock or $(0.03) per share) in fourth-quarter 2012, $19
million ($17 million to net income attributable to common stock or
$0.02 per share) for the year 2013 and $(62) million ($(40) million
to net income attributable to common stock or $(0.04) per share)
for the year 2012.
g. Includes transaction and related costs
principally associated with the oil and gas acquisitions totaling
$80 million ($50 million to net income attributable to common stock
or $0.05 per share) for the year 2013 and $9 million ($7 million to
net income attributable to common stock or $0.01 per share) for the
fourth-quarter and year 2012.
h. The 2012 periods include a gain of $59
million ($31 million to net income attributable to common stock or
$0.03 per share) for the settlement of the insurance claim for
business interruption and property damage relating to the 2011
incidents affecting PT Freeport Indonesia's concentrate
pipelines.
i. FCX defers recognizing profits on
intercompany sales until final sales to third parties occur. Refer
to the "Consolidated Statements of Income" on page V for a summary
of net impacts from changes in these deferrals.
j. Includes gains associated with FCX's
oil and gas acquisitions, including (i) $16 million to net income
attributable to common stock ($0.01 per share) in fourth-quarter
2013 and $199 million to net income attributable to common stock
($0.20 per share) for the year 2013 associated with net reductions
in FCX's deferred tax liabilities and deferred tax asset valuation
allowances, and (ii) $128 million to net income attributable to
common stock ($0.13 per share) for the year 2013 primarily related
to FCX's preferred stock investment in and the subsequent
acquisition of McMoRan Exploration Co. (MMR).
k. Includes net losses on early
extinguishment of debt totaling $28 million to net income
attributable to common stock ($0.03 per share) for the year 2013
primarily related to the termination of the acquisition bridge loan
facilities, partly offset by a net gain for the redemption of MMR's
11.875% senior notes, and $149 million to net income attributable
to common stock ($0.16 per share) for the year 2012 associated with
the redemption of FCX's remaining 8.375% senior notes.
l. The year 2012 includes a net credit of
$98 million, net of noncontrolling interests, ($0.11 per share)
associated with adjustments to Cerro Verde's deferred income
taxes.
m. Includes net working capital sources
(uses) and changes in other tax payments of $53 million for
fourth-quarter 2013, $122 million for fourth-quarter 2012, $(436)
million for the year 2013 and $(1.4) billion for the year 2012.
For FCX's segment financial results, refer to the supplemental
schedules, "Business Segments," beginning on page X, which are
available on FCX's website, "www.fcx.com."
SUMMARY OPERATING DATA
Three Months Ended Years Ended December 31,
December 31, 2013 2012 2013 a
2012 Copper (millions of recoverable pounds)
Production 1,179 1,005 4,131 3,663 Sales, excluding purchases 1,140
972 4,086 3,648 Average realized price per pound $ 3.31 $ 3.60 $
3.30 $ 3.60 Site production and delivery costs per poundb $ 1.68 $
2.01 $ 1.88 $ 2.00 Unit net cash costs per poundb $ 1.16 $ 1.54 $
1.49 $ 1.48
Gold (thousands of recoverable ounces)
Production 537 251 1,250 958 Sales, excluding purchases 512 254
1,204 1,010 Average realized price per ounce $ 1,220 $ 1,681 $
1,315 $ 1,665
Molybdenum (millions of recoverable pounds)
Production 23 24 94 85 Sales, excluding purchases 22 21 93 83
Average realized price per pound $ 11.00 $ 12.62 $ 11.85 $ 14.26
Oil Equivalents Sales volumes: MMBOE 16.6 38.1 MBOE per day
181 178 Cash operating margin per BOEc: Realized revenues $ 73.58 $
76.87 Less: Cash production costs 17.63 17.14 Cash
operating margin $ 55.95 $ 59.73
a. Reflects the operating results of FM
O&G beginning June 1, 2013.
b. Reflects per pound weighted-average
site production and delivery costs and unit net cash costs (net of
by-product credits) for all copper mines, excluding net noncash and
other costs. For reconciliations of per pound unit costs by
operating division to production and delivery costs applicable to
sales reported in FCX's consolidated financial statements, refer to
the supplemental schedule, "Product Revenues and Production Costs,"
beginning on page XIII, which is available on FCX's website,
"www.fcx.com."
c. Cash operating margin for oil and
gas operations reflects realized revenues less cash production
costs. Realized revenues exclude unrealized gains (losses) on
derivative contracts and cash production costs exclude accretion
and other costs. For reconciliations of realized revenues and cash
production costs per BOE to revenues and production and delivery
costs reported in FCX's consolidated financial statements, refer to
the supplemental schedule, “Product Revenues and Production Costs”
beginning on page XIII, which is available on FCX's website,
“www.fcx.com.”
Consolidated Sales Volumes
Fourth-quarter 2013 consolidated copper sales of 1.14
billion pounds were higher than fourth-quarter 2012 sales of 972
million pounds reflecting improved volumes throughout FCX's global
mining operations. Higher fourth-quarter 2013 sales, compared to
the October 2013 estimate of 1.1 billion pounds, primarily
reflected higher volumes from South America and Indonesia.
Fourth-quarter 2013 consolidated gold sales of 512 thousand
ounces were higher than fourth-quarter 2012 sales of 254 thousand
ounces and the October 2013 estimate of 390 thousand ounces
reflecting higher ore grades and improved operating performance in
Indonesia. Fourth-quarter 2013 consolidated molybdenum sales
of 22 million pounds were higher than fourth-quarter 2012 sales of
21 million pounds and the October 2013 estimate of 21 million
pounds.
Fourth-quarter 2013 sales from oil and gas operations of 16.6
MMBOE, including 11.7 million barrels (MMBbls) of crude oil,
22.9 billion cubic feet (Bcf) of natural gas and 1.1 MMBbls
of natural gas liquids (NGLs), were higher than the October
2013 estimate of 16 MMBOE primarily reflecting higher Eagle Ford
production.
Consolidated sales for the year 2014 are expected to approximate
4.4 billion pounds of copper, 1.7 million ounces of gold, 95
million pounds of molybdenum and 60.7 MMBOE, including 1.0 billion
pounds of copper, 325 thousand ounces of gold, 25 million pounds of
molybdenum and 15.3 MMBOE in first-quarter 2014.
In January 2014, the Indonesian government published regulations
regarding exports of minerals, including copper concentrates. The
regulations provide that holders of contracts of work with existing
processing facilities in Indonesia may continue to export product
through January 12, 2017, but establish new requirements, including
new export duties, for the continued export of copper concentrates.
The regulations conflict with PT Freeport Indonesia's (PT-FI)
Contract of Work (COW) and PT-FI is working with the Indonesian
government to clarify the situation and to defend its rights under
the COW. Refer to Indonesia Mining beginning on page 7 for further
discussion.
FCX’s 2014 copper and gold sales estimates presented above
assume no changes to PT-FI’s planned 2014 concentrate shipments. As
a result of the delay in obtaining administrative approvals for
2014 exports, associated with the new regulations, PT-FI is
implementing near-term changes to its operations to coordinate its
concentrate production with PT Smelting's operating plans. These
changes will result in the deferral of an estimated 40 million
pounds of copper and 80 thousand ounces of gold per month pending
resolution of these matters. FCX will update its 2014 outlook as
export approvals are obtained.
Consolidated Unit Costs
Mining Unit Net Cash Costs. Consolidated average unit net cash
costs (net of by-product credits) for FCX's copper mines of $1.16
per pound of copper in fourth-quarter 2013 were significantly lower
than unit net cash costs of $1.54 per pound in fourth-quarter 2012
and the previous estimate of $1.46 per pound primarily reflecting
higher copper and gold sales volumes and ongoing cost control
efforts. For the year 2013, consolidated unit net cash costs (net
of by-product credits) averaged $1.49 per pound of copper compared
with the year 2012 average of $1.48 per pound.
Assuming average prices of $1,200 per ounce of gold and $9.50
per pound of molybdenum and achievement of current sales volume and
cost estimates, consolidated unit net cash costs (net of by-product
credits) for FCX's copper mining operations are expected to average
$1.45 per pound of copper for the year 2014. Quarterly unit net
cash costs vary with fluctuations in sales volumes and average
realized prices (primarily gold and molybdenum prices). Unit net
cash costs are expected to decline in 2014, compared to the 2013
average, as FCX gains access to higher grade ore in Indonesia. The
impact of price changes on 2014 consolidated unit net cash costs
would approximate $0.02 per pound for each $50 per ounce change in
the average price of gold and $0.02 per pound for each $2 per pound
change in the average price of molybdenum.
Oil and Gas Cash Production Costs per BOE. Cash production costs
for oil and gas operations were $17.63 per BOE in fourth-quarter
2013 and $17.14 per BOE for the seven month period in 2013
following the acquisition date. Based on current sales volume and
cost estimates, cash production costs per BOE are expected to
approximate $20 per BOE for the year 2014.
MINING OPERATIONS
North America Copper Mines. FCX operates seven open-pit
copper mines in North America - Morenci, Bagdad, Safford, Sierrita
and Miami in Arizona, and Chino and Tyrone in New Mexico. All of
the North America mining operations are wholly owned, except for
Morenci. FCX records its 85 percent joint venture interest in
Morenci using the proportionate consolidation method. In addition
to copper, the Sierrita, Bagdad, Morenci and Chino mines also
produce molybdenum concentrates.
Operating and Development Activities. FCX has increased
production from its North America copper mines in recent years and
continues to evaluate a number of opportunities to invest in
additional production capacity following positive exploration
results. Future investments will be undertaken based on the results
of economic and technical feasibility studies and market
conditions.
At Morenci, FCX is expanding mining and milling capacity to
process additional sulfide ores identified through exploratory
drilling. The project is targeting incremental annual production of
approximately 225 million pounds of copper in 2014 (an approximate
40 percent increase from 2013) through an increase in milling rates
from 50,000 metric tons of ore per day to approximately 115,000
metric tons of ore per day. At full rates, Morenci's copper
production is expected to approach 1 billion pounds in 2015
compared with 564 million pounds in 2013. Construction is more than
60 percent complete and the project is on track for completion in
the first half of 2014. At December 31, 2013, approximately
$1.0 billion had been incurred for this project, with approximately
$0.6 billion remaining to be incurred.
Operating Data. Following is summary consolidated operating data
for the North America copper mines for the fourth quarters and
years ended 2013 and 2012:
Three Months Ended Years Ended
December 31, December 31, 2013
2012 2013 2012 Copper (millions
of recoverable pounds) Production 385 358 1,431 1,363 Sales,
excluding purchases 334 321 1,422 1,351 Average realized price per
pound $ 3.31 $ 3.63 $ 3.36 $ 3.64
Molybdenum
(millions of recoverable pounds) Productiona 6 9 32 36
Unit net cash costs per pound of copperb: Site
production and delivery, excluding adjustments $ 1.89 $ 2.00 $ 2.00
$ 1.91 By-product credits (0.20 ) (0.35 ) (0.24 ) (0.36 ) Treatment
charges 0.13 0.13 0.11 0.12 Unit net
cash costs $ 1.82 $ 1.78 $ 1.87 $ 1.67
a. Refer to summary operating data on
page 3 for FCX's consolidated molybdenum sales, which includes
sales of molybdenum produced at the North America copper mines.
b. For a reconciliation of unit net
cash costs per pound to production and delivery costs applicable to
sales reported in FCX's consolidated financial statements, refer to
the supplemental schedule, "Product Revenues and Production Costs,"
beginning on page XIII, which is available on FCX's website,
"www.fcx.com."
North America's consolidated copper sales volumes of 334 million
pounds in fourth-quarter 2013 were higher than fourth-quarter 2012
sales of 321 million pounds primarily reflecting higher ore grades
and recovery rates. Sales from the North America copper mines are
expected to approximate 1.73 billion pounds of copper for the year
2014, compared with 1.42 billion pounds of copper in 2013,
primarily reflecting higher production from Morenci following the
completion of the mill expansion project.
Average unit net cash costs (net of by-product credits) for the
North America copper mines of $1.82 per pound of copper in
fourth-quarter 2013 were higher than unit net cash costs of $1.78
per pound in fourth-quarter 2012, primarily reflecting lower
molybdenum credits, partly offset by higher copper sales volumes.
Average unit net cash costs (net of by-product credits) for the
North America copper mines are expected to approximate $1.76 per
pound of copper for the year 2014, based on current sales volume
and cost estimates and assuming an average molybdenum price of
$9.50 per pound. North America's average unit net cash costs for
2014 would change by approximately $0.04 per pound for each $2 per
pound change in the average price of molybdenum.
South America Mining. FCX operates four copper mines in
South America - Cerro Verde in Peru and El Abra, Candelaria and
Ojos del Salado in Chile. FCX owns a 53.56 percent interest in
Cerro Verde, a 51 percent interest in El Abra, and an 80 percent
interest in the Candelaria and Ojos del Salado mining complex. All
operations in South America are consolidated in FCX's financial
statements. In addition to copper, the Candelaria and Ojos del
Salado mines produce gold and silver, and the Cerro Verde mine
produces molybdenum concentrates.
Development Activities. Construction activities associated with
a large-scale expansion at Cerro Verde are in progress. Engineering
is more than 90 percent complete and construction progress is
advancing on schedule. The project will expand the concentrator
facilities from 120,000 metric tons of ore per day to 360,000
metric tons of ore per day and provide incremental annual
production of approximately 600 million pounds of copper and 15
million pounds of molybdenum beginning in 2016. At
December 31, 2013, approximately $1.5 billion had been
incurred for this project, with approximately $3.1 billion
remaining to be incurred.
FCX continues to evaluate a potential large-scale milling
operation at El Abra to process additional sulfide material and to
achieve higher recoveries. Exploration results in recent years at
El Abra indicate a significant sulfide resource, which could
potentially support a major mill project. Future investments will
be dependent on technical studies, economic factors and global
copper market conditions.
Operating Data. Following is summary consolidated operating data
for the South America mining operations for the fourth quarters and
years ended 2013 and 2012:
Three Months Ended Years Ended
December 31, December 31, 2013
2012 2013 2012
Copper (millions of recoverable pounds) Production 379 349
1,323 1,257 Sales 402 350 1,325 1,245 Average realized price per
pound $ 3.32 $ 3.60 $ 3.30 $ 3.58
Gold (thousands of
recoverable ounces) Production 31 26 101 83 Sales 34 26 102 82
Average realized price per ounce $ 1,238 $ 1,686 $ 1,350 $ 1,673
Molybdenum (millions of recoverable pounds)
Productiona 5 2 13 8
Unit net cash costs per pound of
copperb: Site production and delivery, excluding
adjustments $ 1.42 c $ 1.67 c $ 1.53 c $ 1.60 c By-product credits
(0.30 ) (0.29 ) (0.27 ) (0.26 ) Treatment charges 0.18 0.16
0.17 0.16 Unit net cash costs $ 1.30 $
1.54 $ 1.43 $ 1.50
a. Refer to summary operating data on page
3 for FCX's consolidated molybdenum sales, which includes sales of
molybdenum produced at Cerro Verde.
b. For a reconciliation of unit net
cash costs per pound to production and delivery costs applicable to
sales reported in FCX's consolidated financial statements, refer to
the supplemental schedule, "Product Revenues and Production Costs,"
beginning on page XIII, which is available on FCX's website,
"www.fcx.com."
c. The 2013 periods includes charges
of $36 million ($0.09 per pound of copper for fourth-quarter and
$0.03 per pound for the year) associated with new labor agreements
at Cerro Verde, and the 2012 periods includes charges of $16
million ($0.04 per pound of copper for fourth-quarter and $0.01 per
pound for the year) associated with new labor agreements at
Candelaria.
South America's consolidated copper sales volumes of 402 million
pounds in fourth-quarter 2013 were higher than fourth-quarter 2012
sales of 350 million pounds primarily reflecting higher ore grades
at Candelaria and timing of shipments. Sales from South America
mining are expected to approximate 1.2 billion pounds of copper for
the year 2014, compared with sales of 1.33 billion pounds of copper
in 2013, primarily reflecting lower ore grades at Candelaria and
Cerro Verde.
Average unit net cash costs (net of by-product credits) for
South America mining of $1.30 per pound of copper in fourth-quarter
2013 were lower than unit net cash costs of $1.54 per pound in
fourth-quarter 2012, primarily reflecting higher volumes and lower
energy costs. Average unit net cash costs (net of by-product
credits) for South America mining are expected to approximate $1.61
per pound of copper for the year 2014, based on current sales
volume and cost estimates and assuming average prices of $1,200 per
ounce of gold and $9.50 per pound of molybdenum. Higher average
unit net cash costs in 2014 are primarily related to lower
volumes.
During fourth-quarter 2013, Cerro Verde signed a new four-year
Collective Labor Agreement, which is effective beginning September
1, 2014, upon the expiration of the current agreement.
Indonesia Mining. Through its 90.64 percent owned and
consolidated subsidiary PT-FI, FCX's assets include one of the
world's largest copper and gold deposits at the Grasberg minerals
district in Papua, Indonesia. PT-FI operates a proportionately
consolidated joint venture, which produces copper concentrates that
contain significant quantities of gold and silver.
Development Activities. FCX has several projects in progress in
the Grasberg minerals district related to the development of
large-scale, long-lived, high-grade underground ore bodies. In
aggregate, these underground ore bodies are expected to ramp up
over several years to produce approximately 240,000 metric tons of
ore per day following the transition from the Grasberg open pit,
currently anticipated to occur in 2017. Development of the Grasberg
Block Cave and Deep Mill Level Zone (DMLZ) mines is advancing to
enable DMLZ to commence production in 2015 and the Grasberg Block
Cave mine to commence production in 2017. Over the next five years,
estimated aggregate capital spending on these projects is currently
expected to average $0.9 billion per year ($0.7 billion per year
net to PT-FI).
Regulatory Matters. In January 2014, the Indonesian government
published regulations regarding exports of minerals, including
copper concentrates. The regulations provide that holders of
contracts of work with existing processing facilities in Indonesia
may continue to export product through January 12, 2017, but
establish new requirements for the continued export of copper
concentrates, including the imposition of a new progressive export
duty on copper concentrates in the amount of 25 percent in 2014,
rising to 60 percent by mid-2016.
PT-FI’s COW, which has a primary term through 2021 and allows
for two 10-year extensions through 2041 (subject to approval by the
Indonesian government, which cannot be withheld or delayed
unreasonably), authorizes it to export concentrates and sets forth
the taxes and other fiscal terms applicable to its
operations. The COW states that PT-FI shall not be subject to
taxes, duties or fees subsequently imposed or approved by the
Indonesian government except as expressly provided in the COW.
The January 2014 regulations conflict with PT-FI’s contractual
rights, and FCX and PT-FI are working with the Indonesian
government to clarify the situation and to defend PT-FI's rights
under the COW. PT-FI is also seeking to obtain its administrative
permits for 2014 exports, which are currently pending and have been
delayed as a result of the new regulations.
PT-FI has complied with the Indonesian government’s requirements
on local processing in its COW, which enabled the construction and
commissioning in 1998 of the first copper smelter in Indonesia, PT
Smelting, an affiliate of PT-FI. During 2014, approximately 40
percent of PT-FI’s production is expected to be shipped to PT
Smelting, with the balance of its concentrates expected to be sold
pursuant to long-term contracts with other international
smelters.
PT-FI's 2014 copper and gold sales estimates presented below
assume no changes to planned 2014 concentrate shipments. As a
result of the delay in obtaining its administrative approval for
2014 exports, associated with the new regulations, PT-FI is
implementing near-term changes to its operations to coordinate its
concentrate production with PT Smelting’s operating
plans. These changes will result in the deferral of an
estimated 40 million pounds of copper and 80 thousand ounces of
gold per month pending resolution of these matters. FCX will update
its 2014 outlook as export approvals are obtained.
Operating Data. Following is summary consolidated operating data
for the Indonesia mining operations for the fourth quarters and
years ended 2013 and 2012:
Three Months Ended Years Ended
December 31, December 31, 2013
2012 2013 2012 Copper (millions
of recoverable pounds) Production 304 200 915 695 Sales 292 204 885
716 Average realized price per pound $ 3.33 $ 3.59 $ 3.28 $ 3.58
Gold (thousands of recoverable ounces) Production 502
221 1,142 862 Sales 476 224 1,096 915 Average realized price per
ounce $ 1,219 $ 1,680 $ 1,312 $ 1,664
Unit net cash costs
per pound of coppera: Site production and
delivery, excluding adjustments $ 1.89 $ 2.91 $ 2.46 $ 3.12 Gold
and silver credits (2.04 ) (1.93 ) (1.69 ) (2.22 ) Treatment
charges 0.24 0.22 0.23 0.21 Royalty on metals 0.12 0.13
0.12 0.13 Unit net cash costs $ 0.21 $
1.33 $ 1.12 $ 1.24
a. For a reconciliation of unit
net cash costs per pound to production and delivery costs
applicable to sales reported in FCX's consolidated financial
statements, refer to the supplemental schedule, "Product Revenues
and Production Costs," beginning on page XIII, which is available
on FCX's website, "www.fcx.com."
Indonesia's fourth-quarter 2013 copper sales of 292 million
pounds and gold sales of 476 thousand ounces were significantly
higher than fourth-quarter 2012 copper sales of 204 million pounds
and gold sales of 224 thousand ounces and above October 2013
estimates resulting primarily from higher ore grades and increased
mill rates and recoveries. Results benefited from strong
productivity throughout the open pit and underground mining
operations and milling operations. During fourth-quarter 2013, the
Deep Ore Zone underground mine's rates averaged 59,900 metric tons
of ore per day and are expected to reach 80,000 metric tons of ore
per day by mid-2014.
At the Grasberg mine, the sequencing of mining areas with
varying ore grades causes fluctuations in quarterly and annual
production of copper and gold. Sales from Indonesia mining are
expected to approximate 1.1 billion pounds of copper and 1.6
million ounces of gold for the year 2014, compared with 885 million
pounds of copper and 1.1 million ounces of gold for the year 2013.
Sales from Indonesia mining are expected to increase in 2014
through 2016 as PT-FI gains access to higher grade ore. PT-FI's
estimated sales volumes are subject to change depending on timing
of resolution of export matters as described above.
A significant portion of PT-FI's costs are fixed and unit costs
vary depending on production volumes. Indonesia's unit net cash
costs (including gold and silver credits) of $0.21 per pound of
copper in fourth-quarter 2013 were lower than unit net cash costs
of $1.33 per pound in fourth-quarter 2012 reflecting significantly
higher volumes and lower operating costs.
Unit net cash costs (net of gold and silver credits) for
Indonesia mining are expected to approximate $0.81 per pound of
copper for the year 2014, based on current sales volume and cost
estimates and assuming an average gold price of $1,200 per ounce.
Indonesia mining's projected unit net cash costs would change by
approximately $0.075 per pound for each $50 per ounce change in the
average price of gold. Because of the fixed nature of a large
portion of Indonesia's costs, unit costs vary from quarter to
quarter depending on copper and gold volumes.
Africa Mining. Through its 56 percent owned and
consolidated subsidiary Tenke Fungurume Mining S.A.R.L. (TFM), FCX
operates in the Tenke Fungurume (Tenke) minerals district in the
Katanga province of the Democratic Republic of Congo (DRC). In
addition to copper, the Tenke mine produces cobalt hydroxide.
Operating and Development Activities. TFM completed its second
phase expansion project in early 2013, which included optimizing
the current plant and increasing mine, mill and processing
capacity. The expanded mill facility is performing well, with
throughput rates averaging 14,900 metric tons of ore per day during
2013, compared with original design capacity of 14,000 metric tons
of ore per day, enabling an increase in Tenke's copper production
to over 430 million pounds per year. The addition of a second
sulphuric acid plant is expected to be completed in 2016.
FCX continues to engage in exploration activities and
metallurgical testing to evaluate the potential of the highly
prospective minerals district at Tenke. These analyses are being
incorporated in future plans for potential expansions of production
capacity. Future expansions are subject to a number of factors,
including economic and market conditions, and the business and
investment climate in the DRC.
Operating Data. Following is summary consolidated operating data
for TFM's operations for the fourth quarters and years ended 2013
and 2012:
Three Months Ended Years Ended
December 31, December 31, 2013
2012 2013 2012 Copper (millions
of recoverable pounds) Production 111 98 462 348 Sales 112 97 454
336 Average realized price per pounda $ 3.19 $ 3.50 $ 3.21 $ 3.51
Cobalt (millions of contained pounds) Production 9 6
28 26 Sales 8 6 25 25 Average realized price per pound $ 8.02 $
6.95 $ 8.02 $ 7.83
Unit net cash costs per pound of
copperb: Site production and delivery, excluding
adjustments $ 1.43 $ 1.38 $ 1.43 $ 1.49 Cobalt creditsc (0.36 )
(0.21 ) (0.29 ) (0.33 ) Royalty on metals 0.07 0.07
0.07 0.07 Unit net cash costs $ 1.14 $ 1.24
$ 1.21 $ 1.23
a. Includes point-of-sale
transportation costs as negotiated in customer contracts.
b. For a reconciliation of unit net cash
costs per pound to production and delivery costs applicable to
sales reported in FCX's consolidated financial statements, refer to
the supplemental schedule, "Product Revenues and Production Costs,"
beginning on page XIII, which is available on FCX's website,
"www.fcx.com."
c. Net of cobalt downstream
processing and freight costs.
TFM's copper sales of 112 million pounds in fourth-quarter 2013
were higher than fourth-quarter 2012 copper sales of 97 million
pounds, primarily reflecting increased mining and milling rates and
higher ore grades. TFM's sales are expected to approximate 445
million pounds of copper and 30 million pounds of cobalt for the
year 2014, compared with 454 million pounds of copper and 25
million pounds of cobalt for the year 2013.
During the second half of 2013, TFM experienced power
interruptions, which impacted operating rates. Power availability
improved during the fourth quarter. TFM continues to work with its
power provider and DRC authorities to establish more consistent and
reliable power availability.
TFM's unit net cash costs (net of cobalt credits) of $1.14 per
pound of copper in fourth-quarter 2013 were lower than unit net
cash costs of $1.24 per pound in fourth-quarter 2012 primarily
reflecting higher cobalt credits. Unit net cash costs (net of
cobalt credits) for TFM are expected to approximate $1.28 per pound
of copper for the year 2014, based on current sales volume and cost
estimates and assuming an average cobalt price of $12 per pound.
TFM's projected unit net cash costs for 2014 would change by
approximately $0.08 per pound for each $2 per pound change in the
average price of cobalt.
Molybdenum Mines. FCX has two wholly owned molybdenum
mines in North America - the Henderson underground mine and the
Climax open-pit mine, both in Colorado. The Henderson and Climax
mines produce high-purity, chemical-grade molybdenum concentrates,
which are typically further processed into value-added molybdenum
chemical products.
Operating Data. Following is summary consolidated operating data
for the molybdenum mines for the fourth quarters and years ended
2013 and 2012:
Three Months Ended Years Ended
December 31, December 31, 2013
2012 2013 2012 Molybdenum production
(millions of recoverable pounds)a 12 13 49 41 b Unit net
cash cost per pound of molybdenumc $ 7.36 $ 7.53 $ 7.15 $ 7.07
a. Refer to summary operating data on
page 3 for FCX's consolidated molybdenum sales, which includes
sales of molybdenum produced at the molybdenum mines, and from the
North and South America copper mines.
b. Includes molybdenum production from the
Climax mine since the start of commercial operations in May
2012.
c. Unit net cash costs per pound of
molybdenum for the 2013 periods reflect the results of the
Henderson and Climax mines, and the 2012 periods reflect the
results of only the Henderson mine as startup activities were still
underway for the Climax mine. For a reconciliation of unit net cash
costs per pound to production and delivery costs applicable to
sales reported in FCX's consolidated financial statements, refer to
the supplemental schedule, "Product Revenues and Production Costs,"
beginning on page XIII, which is available on FCX's website,
"www.fcx.com."
Market conditions for molybdenum declined in 2013 resulting from
weak demand in the metallurgical sector and increased supply. FCX
continues to monitor market conditions and adjusts its primary
molybdenum production as market conditions warrant.
Based on current sales volume and cost estimates, unit net cash
costs for the molybdenum mines are expected to average
approximately $7.25 per pound of molybdenum for the year 2014.
Mining Exploration Activities. FCX is actively conducting
exploration activities near its existing mines with a focus on
opportunities to expand reserves and resources to support
development of additional future production capacity in the large
minerals districts where it currently operates. Exploration results
indicate opportunities for significant future reserve additions in
North and South America and in the Tenke Fungurume minerals
district. The drilling data in North America continue to indicate
the potential for significantly expanded sulfide production.
Exploration spending associated with mining operations is
expected to approximate $120 million for the year 2014, compared to
$182 million in 2013.
Preliminary Recoverable Proven and Probable Mineral
Reserves. FCX has significant reserves, resources and future
development opportunities within its portfolio of mining assets.
FCX's preliminary estimated consolidated recoverable proven and
probable reserves from its mines at December 31, 2013, include
111.2 billion pounds of copper, 31.3 million ounces of gold and
3.26 billion pounds of molybdenum, which were determined using
long-term average prices of $2.00 per pound for copper (consistent
with the long-term average copper price used since December 31,
2010), $1,000 per ounce for gold and $10.00 per pound for
molybdenum. The preliminary recoverable proven and probable mining
reserves presented in the table below represent the estimated metal
quantities from which FCX expects to be paid after application of
estimated metallurgical recovery rates and smelter recovery rates,
where applicable. Recoverable reserve volumes are those which FCX
estimates can be economically and legally extracted or produced at
the time of the reserve determination.
Preliminary Recoverable Proven and Probable Mineral
Reserves at December 31, 2013 Copper
Gold Molybdenum (billions of lbs) (millions of
ozs) (billions of lbs) North America 36.2 0.4 2.55 South America
37.0 1.1 0.71 Indonesia 30.0 29.8 — Africa 8.0 — —
Consolidated basisa 111.2 31.3 3.26
Net equity interestb 88.6 28.3
2.93
a. Consolidated reserves represent
estimated metal quantities after reduction for joint venture
partner interests at the Morenci mine in North America and the
Grasberg minerals district in Indonesia. Excluded from the table
above are FCX's consolidated reserves of 0.87 billion pounds for
cobalt in Africa and 308.5 million ounces for silver in Indonesia,
South America and North America.
b. Net equity interest reserves
represent estimated consolidated metal quantities reduced for
noncontrolling interest ownership. Excluded from the table above
are FCX's net equity interest reserves totaling 0.48 billion pounds
for cobalt in Africa and 252.9 million ounces for silver in
Indonesia, South America and North America.
The following table summarizes changes in FCX's estimated
consolidated recoverable proven and probable copper, gold and
molybdenum reserves during 2013:
Copper Gold Molybdenum
(billions of lbs) (millions of ozs) (billions of lbs) Reserves at
December 31, 2012 116.5 32.5 3.42 Net additions/revisions (1.2 ) —
(0.07 ) Production (4.1 ) (1.2 ) (0.09 ) Reserves at December 31,
2013 111.2 31.3 3.26
At December 31, 2013, in addition to preliminary
consolidated recoverable proven and probable reserves, FCX's
preliminary estimated mineralized material (assessed using a
long-term average copper price of $2.20 per pound for copper)
totals 115 billion pounds of incremental contained copper. FCX
continues to pursue opportunities to convert this mineralized
material into reserves, future production volumes and cash
flow.
OIL & GAS OPERATIONS
During second-quarter 2013, FCX consummated acquisitions of
Plains Exploration & Production Company (PXP) and McMoRan
Exploration Co. (MMR), collectively FM O&G, adding an
attractive oil and gas portfolio to its global mining business.
FCX's oil and gas operations provide exposure to energy markets
with positive fundamentals, strong margins and cash flows and a
large resource base with financially attractive exploration and
development investment opportunities. The portfolio of assets
includes significant oil production facilities and growth potential
in the Deepwater Gulf of Mexico (GOM), strong oil production from
the onshore Eagle Ford shale play in Texas, established oil
production facilities onshore and offshore California, large
onshore resources in the Haynesville shale play in Louisiana, and
an industry leading position in the emerging shallow water, Inboard
Lower Tertiary/Cretaceous gas trend on the Shelf of the GOM and
onshore in South Louisiana (previously referred to as the
Ultra-deep trend). More than 90 percent of FCX's oil and gas
revenues are from oil and NGLs.
For the seven month period following the acquisition date, FM
O&G generated operating cash flows of $1.8 billion, which
exceeded its capital expenditures of $1.45 billion.
FM O&G follows the full cost method of accounting whereby
all costs associated with oil and gas acquisition, exploration and
development activities are capitalized. Capitalized costs, along
with estimated future costs to develop proved reserves, are
amortized to expense under the unit-of-production method using
estimates of proved oil and natural gas reserves. The costs of
unproved oil and gas properties are excluded from depletion until
the properties are evaluated, at which time the related costs are
subject to depletion. Under the full cost accounting rules, a
"ceiling test" is conducted each quarter to review the carrying
value of the oil and gas properties for impairment.
Financial and Operating Data. Following is summary financial and
operating data for the oil and gas operations for fourth-quarter
2013 and the seven-month period from June 1, 2013, to
December 31, 2013:
Seven Months From Three Months
Ended June 1, 2013 to December 31, 2013
December 31, 2013 Financial Summary (in millions):
Realized revenuesa $ 1,222 $ 2,927 Less: Cash production costsa 293
653 Cash operating margin $ 929 $ 2,274 Capital expenditures
$ 523 $ 1,451
Sales Volumes: Oil (MMBbls) 11.7 26.6 Natural
gas (Bcf) 22.9 54.2 NGLs (MMBbls) 1.1 2.4 MMBOE 16.6 38.1
Average Realizationsa: Oil (per barrel) $
92.68 $ 98.32 Natural gas (per MMBtu) $ 4.06 $ 3.99 NGLs (per
barrel) $ 40.08 $ 38.20
Cash Operating Margin per
BOEa: Realized revenues $ 73.58 $ 76.87 Less:
Cash production costs 17.63 17.14 Cash operating margin $
55.95 $ 59.73
a. Cash operating margin for FCX's
oil and gas operations reflects realized revenues less cash
production costs. Realized revenues exclude unrealized gains
(losses) on derivative contracts and cash production costs exclude
accretion and other costs. For reconciliations of realized revenues
and cash production costs to revenues and production and delivery
costs reported in FCX's consolidated financial statements, refer to
the supplemental schedule, “Product Revenues and Production Costs,”
beginning on page XIII, which is available on FCX's website,
“www.fcx.com.”
Fourth-quarter 2013 realized revenues for oil and gas operations
totaled $1.2 billion ($73.58 per BOE) and cash production costs
totaled $293 million ($17.63 per BOE). For the seven month period
following the acquisition date, realized revenues for oil and gas
operations totaled $2.9 billion ($76.87 per BOE) and cash
production costs totaled $653 million ($17.14 per BOE).
The fourth-quarter 2013 average realized price for crude oil was
$92.68 per barrel. Excluding the impact of derivative contracts,
the fourth-quarter 2013 average realized price for crude oil was
$94.23 per barrel, or 86 percent of the average Brent crude oil
price of $109.33 per barrel. For the seven month period following
the acquisition date, excluding the impact of derivative contracts,
the average realized price for crude oil of $99.67 per barrel was
92 percent of the average Brent crude oil price of $108.66 per
barrel.
The fourth-quarter 2013 average realized price for natural gas
was $4.06 per million British thermal units (MMBtu), compared to
the New York Mercantile Exchange (NYMEX) gas price for the December
2013 contract of $3.60 per MMBtu. Excluding the impact of
derivative contracts, the fourth-quarter 2013 average realized
price for natural gas was $3.77 per MMBtu.
Following is a summary of average sales volumes per day by
region for oil and gas operations for fourth-quarter 2013 and the
seven-month period from June 1, 2013, to December 31, 2013:
Seven Months From Three Months Ended
June 1, 2013 to December 31, 2013 December 31,
2013 Sales Volumes (MBOE per day): GOMa 73 72 Eagle Ford
48 46 California 39 39 Haynesville/Madden/Other 21 21 Total
oil and gas operations 181 178
a. Includes sales from properties on
the GOM Shelf and in the Deepwater GOM. Production from the GOM
Shelf totaled 12 MBOE per day (17 percent of the GOM total) for
fourth-quarter 2013 and 13 MBOE per day (18 percent of
the GOM total) for the seven-month period from June 1, 2013, to
December 31, 2013.
Fourth-quarter 2013 daily sales volumes averaged 181 MBOE,
including 127 MBbls of crude oil per day, 249 MMcf of natural gas
per day and 11 MBbls of NGLs per day. Fourth-quarter 2013
production volumes were higher than the October 2013 estimate of
175 MBOE per day reflecting higher Eagle Ford production, continued
strong performance in the GOM and stable production from
California.
Sales volumes from oil and gas operations are expected to
average 170 MBOE per day for first-quarter 2014 and 166 MBOE per
day for the year 2014, comprised of approximately 70 percent oil,
24 percent natural gas and 6 percent NGLs. Sales volumes for the
year 2014 include the impacts of planned platform maintenance and
subsea tie-back upgrades on the Marlin facility in the GOM during
third-quarter 2014.
Cash production costs were $17.63 per BOE in fourth-quarter 2013
and $17.14 per BOE for the seven month period following the
acquisition date. Based on current sales volume and cost estimates,
cash production costs are expected to approximate $20 per BOE for
the year 2014, primarily reflecting the impact of lower estimated
volumes.
Exploration, Operating and Development Activities. FCX's
oil and gas business has significant proved, probable and possible
reserves, with financially attractive organic growth opportunities.
The portfolio includes a broad range of relatively low-risk
development opportunities and high-potential exploration prospects.
The business is being managed to reinvest its cash flows in
projects with attractive rates of returns and risk profiles.
Capital expenditures for oil and gas operations approximated
$523 million for fourth-quarter 2013, including $204 million
incurred for Eagle Ford, $136 million for the GOM (principally
Deepwater), $61 million for California and $93 million for the
Inboard Lower Tertiary/Cretaceous gas trend. Capital expenditures
for oil and gas operations, which are expected to be funded by its
operating cash flows, are projected to approximate $3 billion for
the year 2014, including $1.5 billion incurred for the Deepwater
GOM, $0.4 billion for Eagle Ford and $0.3 billion for the Inboard
Lower Tertiary/Cretaceous gas trend.
Gulf of Mexico. Multiple development and exploration
opportunities have been identified in the Deepwater GOM that are
expected to benefit from tie-back opportunities to available
production capacity at the FM O&G operated large-scale
Holstein, Marlin and Horn Mountain deepwater production
platforms.
Holstein, in which FM O&G has a 100 percent working
interest, is located in Green Canyon and has production facilities
capable of producing in excess of 100 MBOE per day. The Holstein
rig refurbishment program was conducted in the second half of 2013
in preparation for drilling activity, which commenced in
first-quarter 2014. Over the 2014 to 2016 period, FM O&G
expects to drill seven sidetrack wells from the Holstein platform
and five subsea tie-back wells from contracted drill ships to
enhance production volumes from the spar. Near-term tie-back
prospects in the Holstein area include Holstein Deep and
Copper.
The Holstein Deep development, in which FM O&G has a 100
percent working interest, is located four miles west of the
Holstein platform. FM O&G acquired the acreage associated with
this development in the 2013 lease sale. Two successful wells had
previously been drilled and encountered approximately 500 net feet
of oil pay in recent years. FM O&G plans to delineate this
prospect during 2014.
The Copper exploration prospect, in which FM O&G has a 100
percent working interest, is located southeast of the Holstein
field in 4,400 feet of water and is a subsea tie-back opportunity
to the Holstein facility. The prospect is a Holstein analog play
with Pliocene objectives and has a proposed total depth of 14,500
feet.
Development of the Lucius field in Keathley Canyon, in which FM
O&G has a 23.33 percent working interest, is progressing with
first production anticipated in the second half of 2014. The
geologic results from the six wells drilled since 2009 confirm a
significant oil resource. Subsea infrastructure is currently being
installed, and topside facilities are more than 90 percent complete
and on schedule to be delivered and lifted into place during
first-quarter 2014. The sanctioned development of Lucius is a
subsea development consisting of a truss spar hull located in 7,200
feet of water with a topside capacity of 80 MBbls of oil per day
and 450 MMcf of gas per day.
During 2014, FM O&G also plans to commence drilling at the
Tara exploration prospect, in which FM O&G has a 100 percent
working interest, located northwest of the Lucius discovery in
Keathley Canyon in 8,700 feet of water. Tara is a Lucius analog
prospect with Pliocene/Miocene objectives and has a proposed total
depth of 23,000 feet.
Eagle Ford. FM O&G has an attractive position in an oil and
NGLs rich section of the Eagle Ford shale play in South Texas.
Production from the field has grown significantly in recent years
and sales averaged 48 MBOE per day in fourth-quarter 2013. As part
of its capital reduction initiatives, FM O&G has reduced
drilling activity at Eagle Ford from eight rigs in mid-2013. At
December 31, 2013, there were three drilling rigs operating,
which FM O&G expects to reduce to two during 2014. At
December 31, 2013, 32 wells have been drilled and are waiting
on completion or connection to pipelines.
California. Development plans are principally focused on
maintaining stable production levels in the long established
producing fields onshore California. Sales averaged 39 MBOE per day
in fourth-quarter 2013, with 96 percent from oil.
Haynesville. FM O&G has rights to a substantial natural gas
resource, located in the Haynesville shale play in north Louisiana.
Drilling activities in recent years have been significantly reduced
to maximize cash flows in a low natural gas price environment and
to benefit from potentially higher future natural gas prices.
Inboard Lower Tertiary/Cretaceous (previously referred to as the
Ultra-deep). FM O&G has an industry leading position in the
emerging Inboard Lower Tertiary/Cretaceous gas trend, located in
the shallow waters of the GOM and onshore South Louisiana. FM
O&G has a significant onshore and offshore lease acreage
position with high-quality prospects and the potential to develop a
significant long-term, low-cost source of natural gas. Data
from eight wells drilled to date indicate the presence of geologic
formations that are analogous to productive formations in the
Deepwater GOM and onshore in the Gulf Coast region. The
near-term focus is on defining the trend onshore. FM O&G
currently is drilling one onshore Inboard Lower Tertiary/Cretaceous
exploration prospect and plans to complete and perform production
tests on three wells in 2014, including one onshore well.
The Lomond North exploratory well in the Highlander area, in
which FM O&G is the operator and has a 72 percent working
interest, located in St. Martin Parish, Louisiana, is currently
drilling and has encountered gas pay in several Wilcox and
Cretaceous aged sands between 24,000 feet and 29,000 feet. The
wireline log and core data obtained from the Wilcox and Cretaceous
sand packages evaluated to date indicate favorable reservoir
characteristics with approximately 150 feet of net pay. FM O&G
will continue drilling the Lomond North well in the Cretaceous to
test deeper prospective targets. FM O&G plans to commence
completion operations in mid-2014 followed by a flow test. FM
O&G has identified multiple exploratory prospects in the
Highlander area where it controls rights to approximately 56,000
gross acres.
In fourth-quarter 2013, FM O&G commenced completion
operations at Davy Jones No. 2, in which FM O&G has a 75
percent working interest, located on South Marsh Island Block 234.
Flow testing is anticipated in the first half of 2014. During 2014,
FM O&G also plans to complete the Blackbeard West No.2 well, in
which FM O&G has a 92 percent working interest, located on Ship
Shoal Block 188. The Lineham Creek exploration well, in which FM
O&G has a 36 percent working interest, located in Cameron
Parish has been suspended while future plans are being
developed.
Preliminary Proved Oil and Gas Reserves. FCX's
preliminary estimated proved oil and gas reserves at December 31,
2013, included 464 MMBOE. The preliminary proved oil and gas
reserves presented in the table below were determined using the
methods prescribed by the U.S. Securities and Exchange Commission,
which require the use of an average price, calculated as the
twelve-month historical average of the first-day-of-the-month West
Texas Intermediate spot oil price of $96.94 per barrel and Henry
Hub spot natural gas price of $3.67 per million British thermal
units, as adjusted for location and quality differentials by area,
and were held constant throughout the lives of the properties
unless prices are defined by contractual arrangements, excluding
escalations based upon future conditions.
Preliminary Proved Oil and Gas Reserves MMBOE
Acquisitions of PXP and MMR 472 Extensions and discoveries 24
Revisions 7 Divestments (1 ) Production (38 ) Balance at December
31, 2013 464
CASH FLOWS, CASH and DEBT
Operating Cash Flows. FCX generated operating cash flows of $2.3
billion in fourth-quarter 2013 (including $53 million of net
working capital sources and changes in other tax payments) and $6.1
billion for the year 2013 (net of $436 million of working capital
uses and changes in other tax payments).
Based on current sales volume and cost estimates and assuming
average prices of $3.25 per pound of copper, $1,200 per ounce of
gold, $9.50 per pound of molybdenum, and $105 per barrel of Brent
crude oil, FCX's consolidated operating cash flows are estimated to
approximate $9 billion for the year 2014 (including $0.8 billion of
working capital sources and changes in other tax payments). The
impact of price changes on operating cash flows would approximate
$370 million for each $0.10 per pound change in the average price
of copper, $85 million for each $50 per ounce change in the average
price of gold, $120 million for each $2 per pound change in the
average price of molybdenum and $125 million for each $5 per barrel
change in the price of Brent crude oil above $100 per barrel.
Capital Expenditures. Capital expenditures totaled $1.7 billion
for fourth-quarter 2013 and $5.3 billion for the year 2013,
including capital expenditures for oil and gas operations totaling
$523 million for the fourth-quarter and $1.45 billion for the
seven-month period from June 1, 2013, to December 31, 2013.
Capital expenditures are currently expected to approximate $7
billion for the year 2014, including $3 billion for major projects
at mining operations and $3 billion for oil and gas operations.
Major projects at mining operations for the year 2014 primarily
include the expansions at Cerro Verde and Morenci and underground
development activities at Grasberg.
During 2013, FCX took steps to reduce or defer capital
expenditures in response to market conditions and debt reduction
objectives. Capital spending plans remain under review and
will be revised as market conditions warrant.
Cash. Following is a summary of cash available to the parent
company, net of noncontrolling interests' share, taxes and other
costs at December 31, 2013 (in billions):
Cash at domestic companies $ 0.4 Cash at international operations
1.6 Total consolidated cash and cash equivalents 2.0 Less:
Noncontrolling interests' share (0.6 ) Cash, net of noncontrolling
interests' share 1.4 Less: Withholding taxes and other (0.1 )
Net cash available $ 1.3
Debt. Following is a summary of total debt and related
weighted-average interest rates at December 31, 2013 (in
billions, except percentages):
Weighted- Average Interest Rate
Acquisition-related debt $ 10.5 a 3.0% Assumed debt of PXP 6.7 6.8%
FCX's previously existing debt 3.5 3.4% $ 20.7 4.2%
a. FCX used the proceeds from the
issuance of $6.5 billion of senior notes and a $4.0 billion bank
term loan to finance the acquisitions of PXP and MMR and repay
certain PXP debt.
FCX is targeting reductions in total debt to $12 billion by
year-end 2016. FCX will continue to review its portfolio of assets
and will consider opportunities to accelerate its deleveraging
plans through potential asset sales, joint venture transactions or
further adjustments to capital spending plans.
At December 31, 2013, FCX had no borrowings outstanding and $46
million of letters of credit issued under its $3.0 billion
revolving credit facility.
FINANCIAL POLICY
FCX has a long-standing tradition of seeking to build
shareholder value through investing in projects with attractive
rates of return and returning cash to shareholders through common
stock dividends and share purchases. FCX paid common stock
dividends of $2.3 billion during 2013, which included $1.0 billion
for a supplemental dividend of $1.00 per share paid on July 1,
2013.
FCX's current annual dividend rate for its common stock is $1.25
per share. On December 20, 2013, FCX's Board of Directors (the
Board) declared a regular quarterly dividend of $0.3125 per share,
which will be paid on February 3, 2014. The declaration of
dividends is at the discretion of the Board and will depend upon
FCX's financial results, cash requirements, future prospects and
other factors deemed relevant by the Board.
FCX intends to continue to maintain a strong financial position,
with a focus on reducing debt while continuing to invest in
attractive growth projects and providing cash returns to
shareholders. The Board will continue to review FCX's financial
policy on an ongoing basis.
WEBCAST INFORMATION
A conference call with securities analysts to discuss FCX's
fourth-quarter 2013 results is scheduled for today at 10:00 a.m.
Eastern Time. The conference call will be broadcast on the Internet
along with slides. Interested parties may listen to the conference
call live and view the slides by accessing “www.fcx.com.” A replay
of the webcast will be available through Friday, February 21,
2014.
-----------------------------------------------------------------------------------------------------------
FCX is a premier U.S.-based natural resource company with an
industry leading global portfolio of mineral assets, significant
oil and gas resources and a growing production profile. FCX is the
world's largest publicly traded copper producer.
FCX's portfolio of assets includes the Grasberg minerals
district in Indonesia, one of the world's largest copper and gold
deposits; significant mining operations in the Americas, including
the large-scale Morenci minerals district in North America and the
Cerro Verde and El Abra operations in South America; the Tenke
Fungurume minerals district in the DRC; and significant oil and
natural gas assets in North America, including reserves in the
Deepwater GOM, onshore and offshore California and in the Eagle
Ford and Haynesville shale plays, and an industry leading position
in the emerging shallow water, Inboard Lower Tertiary/Cretaceous
gas trend on the Shelf of the GOM and onshore in South Louisiana.
Additional information about FCX is available on FCX's website at
"www.fcx.com."
Cautionary Statement and Regulation G Disclosure: This
press release contains forward-looking statements in which FCX
discusses its potential future performance. Forward-looking
statements are all statements other than statements of historical
facts, such as projections or expectations relating to ore grades
and milling rates, production and sales volumes, unit net cash
costs, cash production costs per barrel of oil equivalent (BOE),
operating cash flows, capital expenditures, exploration efforts and
results, development and production activities and costs,
liquidity, tax rates, the impact of copper, gold, molybdenum,
cobalt, oil and gas price changes, the impact of derivative
positions, the impact of deferred intercompany profits on earnings,
reserve estimates, and future dividend payments, debt reduction and
share purchases. The words “anticipates,” “may,” “can,” “plans,”
“believes,” "potential," “estimates,” “expects,” “projects”,
"targets," “intends,” “likely,” “will,” “should,” “to be,” and any
similar expressions are intended to identify those assertions as
forward-looking statements. The declaration of dividends is at the
discretion of FCX's Board and will depend on FCX's financial
results, cash requirements, future prospects, and other factors
deemed relevant by the Board.
This press release also includes forward-looking statements
regarding mineralized material not included in proven and probable
mineral reserves. The mineralized material described in this press
release will not qualify as reserves until comprehensive
engineering studies establish their economic feasibility.
Accordingly, no assurance can be given that the estimated
mineralized material not included in reserves will become proven
and probable reserves.
FCX cautions readers that forward-looking statements are not
guarantees of future performance and its actual results may differ
materially from those anticipated, projected or assumed in the
forward-looking statements. Important factors that can cause FCX's
actual results to differ materially from those anticipated in the
forward-looking statements include commodity prices, mine
sequencing, production rates, industry risks, regulatory changes,
political risks, the outcome of ongoing discussions with the
Indonesian government regarding PT-FI's Contract of Work and the
impact of the January 2014 regulations on PT-FI's exports and
export duties, the potential effects of violence in Indonesia, the
resolution of administrative disputes in the Democratic Republic of
Congo, weather- and climate-related risks, labor relations,
environmental risks, litigation results, currency translation
risks, and other factors described in more detail under the heading
“Risk Factors” in FCX's Annual Report on Form 10-K for the year
ended December 31, 2012, filed with the U.S. Securities and
Exchange Commission (SEC) as updated by FCX's subsequent filings
with the SEC.
Investors are cautioned that many of the assumptions on which
FCX's forward-looking statements are based are likely to change
after its forward-looking statements are made, including for
example commodity prices, which FCX cannot control, and production
volumes and costs, some aspects of which FCX may or may not be able
to control. Further, FCX may make changes to its business plans
that could or will affect its results. FCX cautions investors that
it does not intend to update forward-looking statements more
frequently than quarterly notwithstanding any changes in FCX's
assumptions, changes in business plans, actual experience or other
changes, and FCX undertakes no obligation to update any
forward-looking statements.
This press release also contains certain financial measures such
as unit net cash costs per pound of copper and per pound of
molybdenum, oil and gas realized revenues, cash production costs
and cash operating margin, which are not recognized under generally
accepted accounting principles in the U.S. As required by SEC
Regulation G, reconciliations of these measures to amounts reported
in FCX's consolidated financial statements are in the supplemental
schedules of this press release, which are also available on FCX's
website, “www.fcx.com.”
FREEPORT-McMoRan COPPER & GOLD INC. SELECTED
MINING OPERATING DATA Three Months
Ended December 31, Production Sales
COPPER
(millions of recoverable pounds)
2013 2012 2013 2012 (FCX's net interest in %)
North
America
Morenci (85%)a 153 142 132 127 Bagdad (100%) 59 50 51 46 Safford
(100%) 35 46 32 40 Sierrita (100%) 41 37 38 35 Miami (100%) 18 15
15 14 Chino (100%) 52 45 42 38 Tyrone (100%) 25 22 22 20 Other
(100%) 2 1 2 1 Total North America 385
358 334 321
South
America
Cerro Verde (53.56%) 153 152 169 149 El Abra (51%) 88 89 85 98
Candelaria/Ojos del Salado (80%) 138 108 148
103 Total South America 379 349 402 350
Indonesia
Grasberg (90.64%)b 304 200 292 204
Africa
Tenke Fungurume (56%) 111 98 112 97
Consolidated 1,179 1,005
1,140 972 Less noncontrolling interests 220
197 227 200
Net 959
808 913 772 Consolidated
sales from mines 1,140 972 Purchased copper 41 28 Total
copper sales, including purchases 1,181 1,000 Average
realized price per pound $ 3.31 $ 3.60
GOLD
(thousands of recoverable ounces)
(FCX's net interest in %) North America (100%) 4 4 2 4 South
America (80%) 31 26 34 26 Indonesia (90.64%)b 502 221
476 224
Consolidated 537 251
512 254 Less noncontrolling interests
53 27 52 26
Net 484
224 460 228 Average
realized price per ounce $ 1,220 $ 1,681
MOLYBDENUM
(millions of recoverable pounds)
(FCX's net interest in %) Henderson (100%) 8 8 N/A N/A Climax
(100%) 4 5 N/A N/A North America copper mines (100%)a 6 9 N/A N/A
Cerro Verde (53.56%) 5 2 N/A N/A
Consolidated
23 24 22 21 Less
noncontrolling interests 2 1 2 1
Net
21 23 20 20
Average realized price per pound $ 11.00 $ 12.62
COBALT
(millions of contained pounds)
(FCX's net interest in %)
Consolidated - Tenke Fungurume
(56%)
9 6 8 6 Less
noncontrolling interests 4 2 3 3
Net
5 4 5 3
Average realized price per pound $ 8.02 $ 6.95
a. Amounts are net of Morenci's 15 percent
joint venture partner's interest.
b. Amounts are net of Grasberg's joint
venture partner's interest, which varies in accordance with the
terms of the joint venture agreement.
FREEPORT-McMoRan COPPER & GOLD INC. SELECTED
MINING OPERATING DATA (continued) Years
Ended December 31, Production Sales
COPPER
(millions of recoverable pounds)
2013 2012 2013 2012 (FCX's net interest in %)
North
America
Morenci (85%)a 564 537 561 532 Bagdad (100%) 216 197 212 196
Safford (100%) 146 175 151 175 Sierrita (100%) 171 157 170 162
Miami (100%) 61 66 60 68 Chino (100%) 171 144 168 132 Tyrone (100%)
96 83 94 82 Other (100%) 6 4 6 4 Total North
America 1,431 1,363 1,422 1,351
South
America
Cerro Verde (53.56%) 558 595 560 589 El Abra (51%) 343 338 341 338
Candelaria/Ojos del Salado (80%) 422 324 424
318 Total South America 1,323 1,257 1,325
1,245
Indonesia
Grasberg (90.64%)b 915 695 885 716
Africa
Tenke Fungurume (56%) 462 348 454 336
Consolidated 4,131 3,663
4,086 3,648 Less noncontrolling interests 801
723 795 717
Net 3,330
2,940 3,291 2,931
Consolidated sales from mines 4,086 3,648 Purchased copper 223
125 Total copper sales, including purchases 4,309
3,773 Average realized price per pound $ 3.30 $ 3.60
GOLD
(thousands of recoverable ounces)
(FCX's net interest in %) North America (100%) 7 13 6 13 South
America (80%) 101 83 102 82 Indonesia (90.64%)b 1,142 862
1,096 915
Consolidated 1,250
958 1,204 1,010 Less
noncontrolling interests 127 98 123 102
Net 1,123 860 1,081
908 Average realized price per ounce $ 1,315 $
1,665
MOLYBDENUM
(millions of recoverable pounds)
(FCX's net interest in %) Henderson (100%) 30 34 N/A N/A Climax
(100%) 19 7 c N/A N/A North America (100%)a 32 36 N/A N/A Cerro
Verde (53.56%) 13 8 N/A N/A
Consolidated
94 85 93 83 Less
noncontrolling interests 6 4 5 4
Net
88 81 88 79
Average realized price per pound $ 11.85 $ 14.26
COBALT
(millions of contained pounds)
(FCX's net interest in %)
Consolidated - Tenke Fungurume
(56%)
28 26 25 25
Less noncontrolling interests 12 11 11 11
Net 16 15 14
14 Average realized price per pound $ 8.02 $ 7.83
a. Amounts are net of Morenci's 15 percent
joint venture partner's interest.
b. Amounts are net of Grasberg's joint
venture partner's interest, which varies in accordance with the
terms of the joint venture agreement.
c. Includes results from the Climax mine
since the start of commercial operations in May 2012.
FREEPORT-McMoRan COPPER & GOLD INC. SELECTED
MINING OPERATING DATA (continued)
Three Months Ended Years Ended December 31, December
31, 2013 2012 2013 2012
100% North America Copper
Mines
Solution
Extraction/Electrowinning (SX/EW) Operations
Leach ore placed in stockpiles (metric tons per day) 968,300
1,090,600 1,003,500 998,600 Average copper ore grade (percent) 0.24
0.21 0.22 0.22 Copper production (millions of recoverable pounds)
238 227 889 866
Mill
Operations
Ore milled (metric tons per day) 247,100 251,100 246,500 239,600
Average ore grades (percent): Copper 0.42 0.38 0.39 0.37 Molybdenum
0.02 0.03 0.03 0.03 Copper recovery rate (percent) 87.7 84.7 85.3
83.9 Production (millions of recoverable pounds): Copper 173 156
642 592 Molybdenum 6 9 32 36
100% South America
Mining
SX/EW
Operations
Leach ore placed in stockpiles (metric tons per day) 269,000
229,900 274,600 229,300 Average copper ore grade (percent) 0.51
0.57 0.50 0.55 Copper production (millions of recoverable pounds)
119 111 448 457
Mill
Operations
Ore milled (metric tons per day) 197,500 195,500 192,600 191,400
Average ore grades: Copper (percent) 0.73 0.68 0.65 0.60 Gold
(grams per metric ton) 0.12 0.12 0.12 0.10 Molybdenum (percent)
0.03 0.02 0.02 0.02 Copper recovery rate (percent) 92.4 91.4 90.9
90.1 Production (recoverable): Copper (millions of pounds) 260 238
875 800 Gold (thousands of ounces) 31 26 101 83 Molybdenum
(millions of pounds) 5 2 13 8
100% Indonesia Mining
Ore milled (metric tons per day):a Grasberg open pit 142,400
125,200 127,700 118,800 DOZ underground mine 59,900 51,200 49,400
44,600 Big Gossan underground mine 2,500 2,100 2,100
1,600 Total 204,800 178,500 179,200
165,000 Average ore grades: Copper (percent) 0.87 0.66 0.76 0.62
Gold (grams per metric ton) 0.99 0.59 0.69 0.59 Recovery rates
(percent): Copper 91.8 88.9 90.0 88.7 Gold 85.3 75.9 80.0 82.7
Production (recoverable): Copper (millions of pounds) 317 200 928
695 Gold (thousands of ounces) 502 221 1,142 862
100%
Africa Mining Ore milled (metric tons per day) 15,300 13,300
14,900 13,000 Average ore grades (percent): Copper 3.94 3.81 4.22
3.62 Cobalt 0.42 0.35 0.37 0.37 Copper recovery rate (percent) 90.6
94.8 91.4 92.4 Production (millions of pounds): Copper
(recoverable) 111 98 462 348 Cobalt (contained) 9 6 28 26
100% Molybdenum Minesb Ore milled (metric tons per
day) 33,300 19,900 35,700 20,800 Average molybdenum ore grade
(percent) 0.19 0.22 0.19 0.23 Molybdenum production (millions of
recoverable pounds) 12 8 49 34
a. Amounts represent the approximate
average daily throughput processed at PT Freeport Indonesia's mill
facilities from each producing mine.
b. The 2013 periods reflect the results of
the Henderson and Climax mines; the 2012 periods reflect the
results of only the Henderson mine, as startup activities were
still underway for the Climax mine.
FREEPORT-McMoRan COPPER & GOLD INC. SELECTED
OIL AND GAS OPERATING DATA Seven Months From Three
Months Ended June 1, 2013 to December 31, 2013 December 31,
2013
Sales Volumes(in MMBbls, Bcfand
MMBOE)a
Sales per Day(in MBbls, MMcfand MBOE)a
Sales Volumes(in MMBbls, Bcfand
MMBOE)a
Sales per Day(in MBbls, MMcfand MBOE)a
FCX CONSOLIDATED OIL AND GAS OPERATIONS Oil (barrels) 11.7
127 26.6 124 Natural gas (cubic feet) 22.9 249 54.2 254 Natural gas
liquids (NGLs, in barrels) 1.1 11 2.4 11 Barrels of oil equivalents
(BOE) 16.6 181 38.1 178 Cash operating margin per BOEb: Realized
revenue $ 73.58 $ 76.87 Less: Cash production costs 17.63
17.14 Cash operating margin $ 55.95 $ 59.73 Depreciation,
depletion and amortization per BOE $ 38.06 c $ 35.81 Capital
expenditures (in millions)d $ 523 $ 1,451
GULF OF MEXICO
(GOM)e Oil (barrels) 5.0 55 11.3 53 Natural gas (cubic
feet) 7.2 77 17.3 81 NGLs (barrels) 0.5 5 1.1 5 BOE 6.7 73 15.3 72
Average realized price per BOEb $ 80.67 $ 84.00 Cash production
costs per BOEb $ 13.84 $ 13.94 Capital expenditures (in millions)d
$ 229 $ 589
EAGLE FORD Oil (barrels) 3.2 35 7.2 34
Natural gas (cubic feet) 4.0 44 8.8 42 NGLs (barrels) 0.6 6 1.3 6
BOE 4.4 48 9.9 46 Average realized price per BOEb $ 75.05 $ 78.87
Cash production costs per BOEb $ 11.42 $ 11.97 Capital expenditures
(in millions)d $ 204 $ 503
CALIFORNIA Oil (barrels)
3.5 37 8.0 37 Natural gas (cubic feet) 0.5 6 1.3 6 BOE 3.6 39 8.3
39 Average realized price per BOEb $ 88.96 $ 93.95 Cash production
costs per BOEb $ 34.87 $ 32.33 Capital expenditures (in millions)d
$ 61 $ 171
HAYNESVILLE/MADDEN/OTHER Oil (barrels) — f
— f 0.1 — f Natural gas (cubic feet) 11.2 122 26.8 125 BOE 1.9 21
4.6 21 Average realized price per BOEb $ 22.41 $ 22.47 Cash
production costs per BOEb $ 12.98 $ 11.46 Capital expenditures (in
millions)d $ 22 $ 53
a. MMBbls = million barrels; MBbls =
thousand barrels; Bcf = billion cubic feet; MMcf = million cubic
feet; MMBOE = million BOE; MBOE = thousand BOE
b. Cash operating margin for FCX's
oil and gas operations reflects realized revenues less cash
production costs. Realized revenues exclude unrealized gains
(losses) on derivative contracts and cash production costs exclude
accretion and other costs. In addition, derivative instruments for
FCX's oil and gas operations are managed on a consolidated basis;
accordingly, the average realized price per BOE by region does not
reflect adjustments for derivative contracts. For reconciliations
of average realized price and cash production costs per BOE to
revenues and production and delivery costs reported in FCX's
consolidated financial statements, refer to the supplemental
schedule, “Product Revenues and Production Costs,” beginning on
page XIII, which is available on FCX's website, “www.fcx.com.”
c. The increase in the fourth-quarter
2013 depreciation, depletion and amortization per BOE primarily
resulted from (i) additional Deepwater GOM future development costs
and (ii) the transfer of unevaluated property costs (which include
fair value increases from purchase accounting) into costs subject
to depletion.
d. Consolidated capital
expenditures for oil and gas operations reflect total spending and
include net adjustments totaling $7 million in fourth-quarter 2013
and $135 million for the seven-month period from June 1, 2013, to
December 31, 2013, which are not specifically allocated to the
regions; capital expenditures by region reflect amounts incurred
for the respective periods.
e. Includes properties on the
Shelf and in the Deepwater GOM.
f. Rounds to less than 1 MBbl per
day.
FREEPORT-McMoRan COPPER & GOLD INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three
Months Ended Years Ended December 31, December 31, 2013 2012 2013
2012 (In Millions, Except Per Share Amounts) Revenues $ 5,885 a,b $
4,513 a $ 20,921 a,b $ 18,010 a Cost of sales: Production and
delivery 2,936 c 2,740 c 11,840 c 10,382 c Depreciation, depletion
and amortization 1,019 323 2,797 1,179
Total cost of sales 3,955 3,063 14,637 11,561 Selling, general and
administrative expenses 200 d 120 e 657 d,e 431 e Mining
exploration and research expenses 37 71 210 285 Environmental
obligations and shutdown costs 43 (40 ) 66 (22 ) Gain on insurance
settlement — (59 ) — (59 ) Total costs and expenses
4,235 3,155 15,570 12,196 Operating
income 1,650 1,358 5,351 5,814 Interest expense, net (167 ) f (38 )
f (518 ) f (186 ) f Gain (loss) on early extinguishment of debt 10
— (35 ) (168 ) Gain on investment in MMR — — 128 g — Other
(expense) income, net (26 ) 4 (13 ) 27 Income before
income taxes and equity in affiliated companies' net earnings 1,467
1,324 4,913 5,487 Provision for income taxes (508 ) g (382 ) (1,475
) g (1,510 ) h Equity in affiliated companies' net earnings —
3 3 3 Net income 959 945 3,441 3,980
Net income attributable to noncontrolling interests (252 ) (202 )
(783 ) (939 ) h Net income attributable to FCX common stock $ 707
i $ 743 i $ 2,658 i $ 3,041 i
Net income per share attributable to FCX common stock: Basic $ 0.68
$ 0.78 $ 2.65 $ 3.20 Diluted $ 0.68
$ 0.78 $ 2.64 $ 3.19
Weighted-average common shares outstanding: Basic 1,038 949
1,002 949 Diluted 1,044 954
1,006 954 Dividends declared per share of
common stock $ 0.3125 $ 0.3125 $ 2.25 $ 1.25
a. Includes (unfavorable)
favorable adjustments to provisionally priced copper sales
recognized in prior periods totaling $(21) million ($(9) million to
net income attributable to common stock) in fourth-quarter 2013,
$(73) million ($(31) million to net income attributable to common
stock) in fourth-quarter 2012, $(26) million ($(12) million to net
income attributable to common stock) for the year 2013 and $101
million ($43 million to net income attributable to common stock)
for the year 2012. For further discussion, refer to the
supplemental schedule, "Derivative Instruments" on page IX.
b. Includes charges for unrealized
losses on oil and gas derivative contracts totaling $118 million
($73 million to net income attributable to common stock) in
fourth-quarter 2013 and $312 million ($194 million to net income
attributable to common stock) for the year 2013 (reflecting the
seven-month period from June 1, 2013, to December 31, 2013). For
further discussion, refer to the supplemental schedule, "Derivative
Instruments" on page IX.
c. The 2013 periods include charges of $76
million ($49 million to net income attributable to common stock)
associated with updated mine plans at Morenci that resulted in a
loss in recoverable copper in leach stockpiles and $36 million ($13
million to net income attributable to common stock) for the new
labor agreement at Cerro Verde. The 2012 periods include charges of
$16 million ($8 million to net income attributable to common stock)
associated with the new labor agreement at Candelaria.
d. The 2013 periods include a charge
of $37 million ($23 million to net income attributable to common
stock) for restructuring an executive employment arrangement.
e. Includes charges for transaction
and related costs principally associated with oil and gas
acquisitions totaling $80 million ($50 million to net income
attributable to common stock) for the year 2013 and $9 million ($7
million million to net income attributable to common stock) for the
fourth quarter and year 2012.
f. Consolidated interest expense,
excluding capitalized interest, totaled $227 million in
fourth-quarter 2013, $57 million in fourth-quarter 2012, $692
million for the year 2013 and $267 million for the year 2012.
g. Includes gains associated with
FCX's oil and gas acquisitions, including (i) $16 million to net
income attributable to common stock in fourth-quarter 2013 and $199
million to net income attributable to common stock for the year
2013 associated with net reductions in FCX's deferred tax
liabilities and deferred tax asset valuation allowances, and (ii)
$128 million to net income attributable to common stock for the
year 2013 primarily related to FCX's preferred stock investment in
and the subsequent acquisition of MMR.
h. The year 2012 includes a net
credit of $205 million ($107 million attributable to noncontrolling
interests and $98 million to net income attributable to common
stock) associated with adjustments to Cerro Verde's deferred income
taxes.
i. FCX defers recognizing profits on
intercompany sales until final sales to third parties occur.
Changes in these deferrals attributable to variability in
intercompany volumes resulted in net reductions to net income
attributable to common stock of $46 million in fourth-quarter 2013,
$10 million in fourth-quarter 2012, $17 million for the year 2013
and $80 million for the year 2012. For further discussion, refer to
the supplemental schedule, "Deferred Profits" on page X.
FREEPORT-McMoRan COPPER & GOLD INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) December
31, December 31, 2013 2012 (In Millions) ASSETS Current assets:
Cash and cash equivalents $ 1,985 $ 3,705 Trade accounts receivable
1,728 927 Other accounts receivable 820 702 Inventories: Materials
and supplies, net 1,730 1,504 Mill and leach stockpiles 1,705 1,672
Product 1,583 1,400 Other current assets 444 387
Total current assets 9,995 10,297 Property, plant, equipment and
development costs, net 47,401 20,999 Long-term mill and leach
stockpiles 2,386 1,955 Goodwill 1,916 — Other assets 1,812
2,189 Total assets $ 63,510 $ 35,440
LIABILITIES AND EQUITY Current liabilities: Accounts payable and
accrued liabilities $ 3,708 $ 2,708 Dividends payable 333 299
Current portion of reclamation and environmental obligations 236
241 Accrued income taxes 221 93 Current portion of debt 312
2 Total current liabilities 4,810 3,343 Long-term debt, less
current portion 20,394 3,525 Deferred income taxes 7,410 3,490
Reclamation and environmental obligations, less current portion
3,259 2,127 Other liabilities 1,690 1,644 Total
liabilities 37,563 14,129 Redeemable noncontrolling interest
716 — Equity: FCX stockholders' equity: Common stock 117 107
Capital in excess of par value 22,161 19,119 Retained earnings
2,742 2,399 Accumulated other comprehensive loss (405 ) (506 )
Common stock held in treasury (3,681 ) (3,576 ) Total FCX
stockholders' equity 20,934 17,543 Noncontrolling interests 4,297
3,768 Total equity 25,231 21,311 Total
liabilities and equity $ 63,510 $ 35,440
FREEPORT-McMoRan COPPER & GOLD INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited) Years Ended
December 31, 2013 2012 (In Millions) Cash flow from
operating activities: Net income $ 3,441 $ 3,980 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization 2,797 1,179 Net losses on
oil and gas derivative contracts 334 — Gain on investment in MMR
(128 ) — Stock-based compensation 173 100 Pension plans
contributions (71 ) (140 ) Net charges for reclamation and
environmental obligations, including accretion 164 22 Payments of
reclamation and environmental obligations (237 ) (246 ) Losses on
early extinguishment of debt 35 168 Deferred income taxes 277 269
Increase in long-term mill and leach stockpiles (431 ) (269 )
Other, net 162 128 (Increases) decreases in working capital and
other tax payments, excluding amounts from acquisitions: Accounts
receivable (10 ) (365 ) Inventories (288 ) (729 ) Other current
assets 26 (76 ) Accounts payable and accrued liabilities (359 ) 209
Accrued income taxes and other tax payments 195 (456 ) Net
cash provided by operating activities 6,080 3,774
Cash flow from investing activities: Capital expenditures:
North America copper mines (1,066 ) (825 ) South America (1,145 )
(931 ) Indonesia (1,030 ) (843 ) Africa (205 ) (539 ) Molybdenum
mines (164 ) (245 ) U.S. oil and gas operations (1,436 ) — Other
(240 ) (111 ) Acquisition of PXP, net of cash acquired (3,465 ) —
Acquisition of MMR, net of cash acquired (1,628 ) — Acquisition of
cobalt chemical business, net of cash acquired (348 ) — Other, net
(181 ) 31 Net cash used in investing activities (10,908 )
(3,463 ) Cash flow from financing activities: Proceeds from
debt 11,501 3,029 Repayments of debt (5,417 ) (3,186 ) Redemption
of MMR preferred stock (228 ) — Cash dividends and distributions
paid: Common stock (2,281 ) (1,129 ) Noncontrolling interests (256
) (113 ) Debt financing costs (113 ) (51 ) Net payments for
stock-based awards (97 ) (1 ) Other, net (1 ) 23 Net cash
provided by (used in) financing activities 3,108 (1,428 )
Net decrease in cash and cash equivalents (1,720 ) (1,117 )
Cash and cash equivalents at beginning of year 3,705 4,822
Cash and cash equivalents at end of year $ 1,985 $
3,705
Freeport-McMoRan Copper & Gold Inc.Financial
Contacts:Kathleen L. Quirk, 602-366-8016orDavid P. Joint,
504-582-4203orMedia Contact:Eric E. Kinneberg, 602-366-7994
Freeport McMoRan (NYSE:FCX)
Historical Stock Chart
Von Sep 2024 bis Okt 2024
Freeport McMoRan (NYSE:FCX)
Historical Stock Chart
Von Okt 2023 bis Okt 2024