FCX

The company is operating in mining of natural resources at entire part of the world. The company manages resources such as Gold, Copper, molybdenum, cobalt, oil and gas. It also has smelting plant in several areas in North America and Indonesia.

The key driver of the revenue based on its annual report of 2013 is refined copper with 35.7 % of total revenue. The second and third are copper in concentrate and Gold as the following data:

Segment	2012	2013
Refined Copper Product	53.9	35.7
Copper in concentrate	25.5	33.7
Gold	9.7	7.9
Molybdenum	6.6	5.3
Oil	0	11
Other	4.4	6.4

Revenue by Location	2011	2012	2013
US	34.4	34.9	45.0
Japan	12.0	12.1	10.2
Indonesia	10.9	11.4	7.9

The copper in concentrate seems increase in its contribution to revenue from 25.5 % in to 33.7 %. Mean while the refined copper product is decline from 53.9 % of total revenue in to 35.7 % of total revenue.  Based on Bloomberg copper commodities decrease 12 % in 2013 compared to 2012 year on year  and this decline causes the decrease in copper demand especially for refined copper product.

FCX has the world biggest gold and copper deposit in the Grasberg mineral district (according to annual report) in Papua, Indonesia. By location, Indonesia contributes 8 % of total revenue for FCX in 2013. It is the third largest revenue of the company. The biggest contribution by area is at united stated of America.

CAGR of revenue in period of 2009 – 2013 is at 8 %, inversely to CAGR of net income, which is at -0.7 %. Cost sales and operating expense seems as a big challenge for the company for getting profit. Depreciation and amortization is almost double in 2013 compared to 2012. In 2013, the company invests in oil and gas exploration segment to expand its portfolio and it might have been a diversification strategy for anticipating the unsteady circumstances of oil and gas price. 

	Copper	Gold	Molybdenum
Mineral reserve	(billion pounds)	(million ounces)	(billion pounds)
North America	36.2	0.4	2.6
South America	37.0	1.1	0.7
Indonesia	30.0	29.8	0.0
Africa	8.0	0.0	0.0

Forecast

Ratio & Item	2012	2013	2014	2015	2016
Net Profit margin	22.1	16.4	6.0	9.2	11.9
Asset Turn Over	50.8	33.0	34.2	34.8	35.2
ROA	11.2	5.4	2.0	3.2	4.2
Financial Leverage	202.0	303.2	296.9	285.4	270.7
ROE	22.7	16.4	6.0	9.2	11.3
Net sales	18,010.0	20,921.0	22,594.7	24,402.3	26,354.4
Capex	-	29,199.0	1,046.1	1,129.7	1,220.1
Free Cash Flow	-	-8,278	21,548.6	23,272.5	25,134.3

Compound annual growth rate of net sales in period of 2009 – 2013 is at 8.6 %, so I took 8 % growth in the next three years. For capital expenditure, I use assumption that the company allocates 5% of its revenue. Capital expenditure is financed with long term debt and equity. I made assumption the operating cycles in the next three years are fixed, same with the last year.

In 2013, the company allocated their fund in oil and Gas segment that is why the company spends a lot of money in its capital expenditure for completing the acquisition as the long term debt raised in 2013.  

The location of oil and gas assets consist of deep water Gulf of Mexico, eagle ford in Texas, California, Haynesville, central Wyoming and etc. the majority of oil and gas proved reserve is at California, second is at gulf of Mexico.