Freeport-McMoRan Announces Program for Increased Cash Returns to Shareholders
November 01 2021 - 5:58PM
Business Wire
- New $3.0 billion share repurchase authorization
- Addition of variable cash dividend on common stock
- Actions achieve objective of performance-based payout
framework
Freeport-McMoRan Inc. (NYSE: FCX) announced today that its Board
of Directors (“Board”) has approved a new share repurchase program
authorizing repurchases of up to $3.0 billion of FCX common
stock.
The Board also approved the addition of a variable cash dividend
on common stock for 2022 at an expected annual rate of $0.30 per
share. The combined annual rate of the base dividend and the
variable dividend is expected to total $0.60 per share. The Board
intends to declare quarterly dividends for 2022 of $0.15 per share
(including the $0.075 variable component), with the initial
quarterly dividend expected to be paid on February 1, 2022. Based
on current shares outstanding totaling 1.47 billion, the total
common stock dividend (base and variable) expected to be paid
approximates $0.9 billion per annum.
As previously reported on February 2, 2021, the Board adopted a
financial policy for the allocation of cash flows aligned with
FCX’s strategic objectives of maintaining a strong balance sheet
and increasing cash returns to shareholders while advancing
opportunities for future growth. The combined base dividend,
variable dividend and share repurchases are designed to achieve the
objectives of this performance-based payout framework.
Richard C. Adkerson, Chairman and Chief Executive Officer,
said: “With the recent achievement of our net debt target, strong
execution of operating plans and favorable market conditions for
our products, we are pleased to commence implementation of our
performance-based payout framework. These actions allow us to
return a designated portion of our cash flow to shareholders
efficiently while maintaining a strong balance sheet and providing
substantial resources and capacity for investments in our long-term
future.”
Cash returns to shareholders will be administered in accordance
with the previously announced performance-based payout framework
whereby up to 50 percent of cash flows generated after planned
capital spending and distributions to noncontrolling interests
would be allocated to shareholder returns and the balance to debt
reduction and investments in value enhancing growth projects. FCX’s
payout framework is designed to maintain its net debt at a level
not to exceed the range of $3.0 billion to $4.0 billion (excluding
project debt for additional smelting capacity in Indonesia). The
Board will review the structure and the amount of performance-based
payouts at least annually.
The timing and amount of any share repurchases will be at the
discretion of management and will depend on a variety of factors.
The share repurchase program may be modified, increased, suspended
or terminated at any time at the Board’s discretion. The
declaration and payment of dividends (base or variable) is also at
the discretion of the Board and will depend on FCX's financial
results, cash requirements, business prospects, global economic
conditions and other factors deemed relevant by the Board.
FREEPORT: Foremost in Copper
FCX is a leading international mining company with headquarters
in Phoenix, Arizona. FCX operates large, long-lived, geographically
diverse assets with significant proven and probable reserves of
copper, gold and molybdenum. FCX is one of the world’s largest
publicly traded copper producers.
FCX’s portfolio of assets includes the Grasberg minerals
district in Indonesia, one of the world’s largest copper and gold
deposits; and significant mining operations in North America and
South America, including the large-scale Morenci minerals district
in Arizona and the Cerro Verde operation in Peru.
By supplying responsibly produced copper, FCX is proud to be a
positive contributor to the world well beyond its operational
boundaries. Additional information about FCX is available on FCX's
website at fcx.com.
Cautionary Statement Regarding Forward-Looking
Statements: This press release contains forward-looking
statements, which are all statements other than statements of
historical facts, such as statements regarding FCX’s expectations,
the execution of any share repurchases under the share repurchase
program and timing and payment of dividends (base or variable) and
FCX’s descriptions of objectives, strategies, plans, goals or
targets, including those related to FCX’s financial policy, net
debt level and future allocation of cash flows. FCX cautions
readers that forward-looking statements are not guarantees of
future performance and actual results may differ materially from
those anticipated, expected, 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, but are not limited to, changes
in FCX’s cash requirements, financial position, financing plans or
investment plans; changes in general market, economic, tax,
regulatory or industry conditions 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, 2020, filed with the
U.S. Securities and Exchange Commission (SEC). The timing and
amount of any share repurchases will be at the discretion of
management and will depend on a variety of factors including, but
not limited to, FCX’s operating performance, cash flow and
financial position, the market price of the shares and general
economic and market conditions. The share repurchase program may be
modified, increased, suspended or terminated at any time at the
Board’s discretion. The declaration and payment of dividends (base
or variable) is also at the discretion of the Board and will depend
on FCX's financial results, cash requirements, business prospects,
global economic conditions and other factors deemed relevant by the
Board.
This press release also contains the financial measure net debt,
which is not recognized under U.S. generally accepted accounting
principles. Net debt, as defined by FCX, equals consolidated debt
less consolidated cash. FCX’s payout framework is designed to
maintain its net debt at a level not to exceed the range of $3.0
billion to $4.0 billion (excluding project debt for additional
smelting capacity in Indonesia).
Investors are cautioned that many of the assumptions on which
FCX's forward-looking statements are based are likely to change
after the date the 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 not be
able to control. Further, FCX may make changes to its business
plans that could affect its results. FCX cautions investors that it
undertakes no obligation to update forward-looking statements,
which speak only as of the date made, notwithstanding any changes
in its assumptions, changes in business plans, actual experience or
other changes.
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Financial Contacts: Kathleen L. Quirk (602) 366-8016 David P.
Joint (504) 582-4203 Media Contact: Linda S. Hayes (602)
366-7824
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