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Mining industry

Freeport-McMoRan Authorizes Supplemental Dividend

Strategic Insights

— 1 min read

Freeport-McMoRan Copper & Gold Inc. announced that its Board of Directors has authorized a supplemental common stock dividend of $0.50 per share to be paid on March 31, 2006. This payment represents an addition to the company's regular quarterly common stock dividend and is part of a series of supplemental dividends totaling $2.25 per share since the fourth quarter of 2004. The company's strong performance in 2005 enabled it to reduce debt, fund dividends and share purchases, and end the year with a significant cash reserve. The outlook for the company's business remains positive, with strong copper and gold prices potentially leading to additional cash returns to shareholders.

Key Takeaways:

  • Freeport-McMoRan's Board of Directors has authorized a supplemental common stock dividend of $0.50 per share to be paid on March 31, 2006.
  • The supplemental dividend represents an addition to the company's regular quarterly common stock dividend of $0.3125 per share (equivalent to $1.25 per share per annum).
  • Since the fourth quarter of 2004, FCX's Board has authorized five supplemental dividends totaling $2.25 per share.
  • The company's strong performance in 2005 enabled it to reduce debt by $0.7 billion, fund $0.5 billion in common stock dividends and share purchases, and end the year with over $750 million in cash.
  • The potential payment of any future supplemental dividends will be determined by FCX's Board of Directors and will be dependent upon many factors, including cash flows and financial position, copper and gold prices, and general economic and market conditions.
  • Based on approximately 187 million current shares outstanding, the supplemental dividend payment will approximate $94 million.
  • Richard C. Adkerson, President and Chief Executive Officer, stated that the supplemental dividend reflects the company's financial policy of providing additional cash returns to shareholders from available cash flows.

Statistics:

  • The supplemental dividend payment will approximate $94 million based on approximately 187 million current shares outstanding.
  • FCX's Board has authorized a total of five supplemental dividends since the fourth quarter of 2004, totaling $2.25 per share.
  • The company reduced debt by $0.7 billion in 2005 and funded $0.5 billion in common stock dividends and share purchases.
  • FCX's current cash reserve is over $750 million, representing a significant increase from previous years.

Sources:

  • Freeport-McMoRan Copper & Gold Inc. (2006)
  • Securities and Exchange Commission (2004)
  • Company website (www.fcx.com)

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