Building Business
Acumen
Acumen Learning
PROVEN PERFORMANCE
SHINING FUTURE
www.fcx.com
Important Questions
How much do you know about
Freeport McMoRan Corporation’s
Key Success Measures?
(or Key Performance Indicators (KPIs))
Let’s find out!
Pop Quiz
For fiscal year:
2010
1 - How much Cash was on hand?
$______
2 - How much Cash was generated by Operating Activities?
$______
3 - What was our Total Revenues?
$______
4 - What was our Operating Margin?
______%
5 - What was our Net Margin?
______%
6 – What is our Copper Reserves (billion lbs.)?
______
7 – What is our total equity ratio?
______%
8 - How much did Total Revenue change YOY?
_______%
9 - How much did Net Income change YOY?
_______%
10 - How much did Earnings Per Share (EPS) change YOY?
_______%
11- What was FCX’s Total recordable incident rate (TRIR)?
_______
Learning Objectives
 Understand the 11 key performance measures that are
important to Freeport McMoRan and the Executive Team.
 List and describe the five business drivers all successful
businesses must focus on.
 Teach specific components of Freeport McMoRan
financial statements.
 Better articulate company performance & strategy.
 Create a personal action plan that can positively impact
personal performance and company results.
Acumen Means?
3
~Wayne Gretzky~
“The Great One”
When asked by a reporter,
“What makes you so great?”
Wayne responded by saying;
“I don’t skate to where the puck is.”
“I skate to where the puck…
is going to be.”
(Hockey Acumen!)
Acumen Means?
…the ability to make good business decisions in a timely manner with an
understanding of how the decision should impact the business.
3
Business can be tough!
 Only 5-10% of business start-ups survive past 5 years.
 16% of CEOs lose their job every year.
Booz Allen Hamilton 5th annual Study
 70% of merger and acquisition activity do not live
up to expectation.
Wall Street Journal 2007
Why do businesses fail?
6
Business Acumen:
Every business must focus
on five business drivers.
 If they do, they will be
successful.
 If they don’t, they’ll fail.
Let’s Start a Business!
4
Cash is King!
“Cash is a company’s oxygen supply.”
-Ram Charan
“Cash is more important than your mother."
Al Shugart Former Seagate CEO
What happens to a company who runs low on cash?
Cash & Cash Flow
Sources of Cash
• Earn it
Pro: No Cost
• Sell Assets
Pro: Immediate -Con: Reduces Assets
•Cash from Operation
•Cash from Investing
• Borrow it
-Con: Time
Pro: Immediate -Con: Cost (Interest)
•Cash from Financing
9
Cash
Can a company have too much Cash?
1)More attractive in a buy-out.
2)Low return.
3)Shareholders don’t like it.
4)May make poor decisions.
9
How much cash should you have?
Companies ought to keep just enough cash
to cover their interest, expenses and
capital expenditures; plus they should hold
a little bit more in case of emergencies.
Investopedia
Definition: Cash
DEFINITION
What is required to grow and maintain
the business.
MEASURES
Cash
Cash – the bills and coins in the register,
petty cash, and cash in the bank. Also
includes cash equivalents, like CD’s and
other highly liquid investments, that
easily convert into cash within 90 days.
Cash Flow – The cash generation from
core business activities calculated from
the difference between the cash that
flows into and out of the business in a
given period of time (month, quarter,
annual)
8
Cash
Freeport McMoRan
Corporation
(In Millions)
Freeport
McMoRanFCX
Freeport
McMoRanFCX
Freeport
McMoRanFCX
Freeport
McMoRanFCX
2010
2009
2008
2007
$18,982
$15,040
$17,796
$16,939
Cash and Equivalents
$3,738
$2,656
$872
$1,626
Cash from Operating Activities
$6,273
$4,397
$3,370
$6,225
Business Measures and Metrics
Revenues
Cash
Cash and Equivalents announced July 21, 2011 = 4.4 Billion.
FCX’s consolidated operating cash flows are estimated to exceed $8 Billion
for the year 2011 (page 10 of Q2 press release)
9
Cash
Benchmarks
(In Millions)
Freeport
McMoRanFCX
BHP
BillitonJune 30,
Newmont
Mining
Corp
Rio TintoRIO
Southern
Copper
Corp-SCCO
2010
2010
2010
2010
2010
Revenues
Cash
Cash and Equivalents
$18,982
$52,798
$9,540
$60,323
$5,150
$3,738
$12,456
$4,056
$9,948
$2,193
Cash as % of Revenue
19.69%
23.59%
42.52%
16.49%
42.58%
Cash from Operating Activities
$6,273
$17,920
$3,167
$23,530
$1,921
Business Measures and Metrics
9
5 Business Drivers & Financial
Statements
Cash
Growth
People
Assets
Statement
of Cash
Flows
Profit
Balance
Sheet
Income
Statement
5 Business Drivers & Financial
Statements
Cash
Growth
People
Assets
Statement
of Cash
Flows
Profit
Freeport McMoRan Financial Statements
The Annually Reported Financial Statements
• Statement of Cash Flows
•Statement of Income (P&L)
• Balance Sheet
1.
What is the basic equation for each statement?
2.
What is the purpose of the statement?
3.
What are the key numbers and how are they trending?
4.
How can you impact each statement?
Statement of Cash Flow
Equation:
Purpose:
Cash Management
Cash from operations + Cash from investing
+ Cash from financing = Net Change in Cash
?
Net Change in Cash 
Started Year 
Ended Year 
?
120
Definition: Profit
DEFINITION
What is left over after you have
subtracted expenses. Can be
expressed in dollars ($) or percent (%).
MEASURES
Profit
Operating Margin – Reflects earnings
before interest and taxes.
Net Profit / Net Profit Margin – Profit
after all expenses have been subtracted
from sales.
Earnings Per Share (EPS)– Profit
allocated to each outstanding share
of Common stock.
10
Every business must earn a return that is
greater than the cost of using other
people’s money.
-Ram Charan
No Margin, No Mission.
-Stephen R. Covey
Two ways to impact PROFIT
Sales (Revenues)
$100
- Production & Delivery
$ 44
- Depreciation, Depletion, & Amort.
$
5
- Selling, General, & Admin. (SG&A)
$
2
- Exploration & Research
$
1
= Operating Margin
$ 48
-Interest & Other Expense
$ 3
-Taxes
$ 16
= Net Income
$ 29
-N.I. attrib. to Noncontrolling interest/Div.
$
= Net Income Attrib. FCX Com. Sto
$ 23
100%
48%
29%
6
23%
Freeport McMoRan Averages for FY 2010.
Driving Profit
High and Low Profit Margins
S&P Average TTM:
11%
Who has much higher profit margins?
Coca Cola
Microsoft
Google
Apple
33%
30%
29%
21%
Why the high margins?
Driving Profit
High and Low Profit Margins
S&P Average TTM:
11%
Who has lower profit margins?
ExxonMobil
Wal-Mart
Costco
8%
3.8%
1.7%
Why the low margins?
Profit
Freeport McMoRan
Corporation
(In Millions)
Freeport
McMoRanFCX
Freeport
McMoRanFCX
Freeport
McMoRanFCX
Freeport
McMoRanFCX
2010
2009
2008
2007
Revenues
$18,982
$15,040
$17,796
$16,939
Net Income
$4,273
$2,527
$(11,341)
$2,769
Operating Margin
47.8%
43.2%
-71.4%
38.7%
Net Margin
22.5%
16.8%
-63.7%
16.3%
Unit Cash Cost Copper (per lbs.)
EPS
$0.79
$0.55
$1.16
$1.31
$4.57
$2.93
$(14.86)
$3.75
Business Measures and Metrics
Profit
11
Earnings Call, July 21,2011
Profit
Freeport McMoRan
Corporation
(In Millions)
Freeport
McMoRanFCX
Freeport
McMoRanFCX
Freeport
McMoRanFCX
Freeport
McMoRanFCX
2010
2009
2008
2007
Revenues
$18,982
$15,040
$17,796
$16,939
Net Income
$4,273
$2,527
$(11,341)
$2,769
Operating Margin
47.8%
43.2%
-71.4%
38.7%
Net Margin
22.5%
16.8%
-63.7%
16.3%
Unit Cash Cost Copper (per lbs.)
EPS
$0.79
$0.55
$1.16
$1.31
$4.57
$2.93
$(14.86)
$3.75
Business Measures and Metrics
Profit
Unit net cash cost anticipated to be $1.01 in 2011. The increase is due
to the impact of higher unit net cash costs at Grasberg associated with
lower copper and gold volumes and higher input costs of labor,
materials and energy.
11
Global Metals and Mining Con, February 28, 2011, presentation by Richard Adkerson
Q1 Earnings Call, April 20, 2011
Q2 Earnings Call, July 21, 2011
Profit
Benchmarks
(In Millions)
Business Measures and Metrics
Revenues
Net Income
Profit
Operating Margin
Net Margin
Unit Cash Cost Copper (per lbs.)
Freeport
McMoRanFCX
BHP
BillitonJune 30,
Newmont
Mining
Corp
Rio TintoRIO
Southern
Copper
Corp-SCCO
2010
$18,982
$4,273
2010
$52,798
$12,722
2010
$9,540
$2,277
2010
$60,323
$14,324
2010
$5,150
$1,563
47.8%
22.5%
$0.79
37.9%
24.1%
NA
41.9%
23.9%
$1.02
32.6%
23.7%
NA
50.6%
30.4%
$0.17
S&P 500 Averages:
Net Margin = 11%
11
Profit In Action
United Parcel Services (UPS) – Avoiding left-hand turns
-92,000 trucks worldwide
-Saved over 28,541,472 miles
-Saved 3 million gallons of fuel
-Reduced insurance premiums
-Reduced maintenance frequency
and costs
11
Freeport McMoRan Financial Statements
The Annually Reported Financial Statements
• Statement of Cash Flows
•Statement of Income (P&L)
• Balance Sheet
1.
What is the basic equation for each statement?
2.
What is the purpose of the statement?
3.
What are the key numbers and how are they trending?
4.
How can you impact each statement?
Equation:
Indicates:
P&L
Revenues
– Expenses
= Income
Profitability
SG&A:
(Revenue = Sales)
= Top Line
26%
19%
2%
Gross margin = 51%
COGS
(SG&A)
16%
19%
59%
16%
= EBIT
Operating margin = 48%
• Salaries
•Sales commissions
•Benefits/Severance
• Rental Expense
• Bad debt charges
• Merger integration costs
• Professional services:
Attorney fees, Accounting
Operating Margin
Total Revenue:
18,982
Operating Expense: 9,914
= 9,068
÷ 18,982
= 47.76%
Net Profit Margin
Net Income:
4,273
Total Revenue:
18,982
÷
= 22.5%
= Bottom Line
Net profit
margin = 23%
69%
S&P 500 Ave. = 11%
Impairment Charges
 During fourth-quarter 2008, we evaluated the carrying
values of our long-lived assets, including goodwill
associated with the acquisition of Phelps Dodge, for
impairment.
 These evaluations resulted in the recognition of
impairment charges of $10.9 billion associated with
long-lived assets and $6.0 billion associated with
goodwill.
Refer to Notes 2 and 7 and “Critical Accounting Estimates – Asset Impairments” for further
discussion of these impairment charges (pg. 65, 2008 10-K)
= Net income / Diluted # of shares
Statement of Income (P&L)
Increase revenue by 100K
100K
44K
5K
49K
49K
51K
51K
18K
33K
7K
26K
Statement of Income (P&L)
Lower costs by 100K
100K
100K
100K
100K
100K
35K
65K
22K
43K
Which is better?
Raising Revenues $100M = $26
-orCutting Costs by $100M
= $43
What are the implications of
each action?
Assets (Read from guide book p. 12)
Balancing…
Asset
Strength
&
i.e. cash, inventory
and ratings
Asset
Utilization
Definition: Assets
Assets
DEFINITION
What we have and how well we use
what we have.
MEASURES
Copper Reserves (Billion Lbs.)— total
estimated proven and probable copper
reserves remaining
Equity Ratio— indicates what
proportion of equity and debt the
company is using to finance its assets
12
Example of Profits and Assets
“In 1912, the Model T for the first time cost less than the prevailing
average annual wage in the United States.”
“Ignoring conventional wisdom, Henry Ford continually sacrificed
margins to increase sales. In fact, profits per car did fall as he slashed
prices from $220 in 1909 to $99 in 1914.”
“But Sales Exploded!”
“Ford demonstrated that a strategic, systematic
lowering of prices could boost profits, as net
income rose from…
$3 million in 1909 to $25 million in 1914.”
~Daniel Gross, Forbes Greatest Business Stories
13
Assets
Freeport McMoRan
Corporation
(In Millions)
Business Measures and Metrics
Freeport
McMoRan-FCX
Freeport
Freeport
Freeport
McMoRan-FCX McMoRan-FCX McMoRan-FCX
2010
2009
2008
2007
Revenues
$18,982
$15,040
$17,796
$16,939
Net Income
$4,273
$2,527
$(11,341)
$2,769
Copper Reserves (Billion lbs)
120.50
104.20
102.00
93.20
Equity Ratio
49.5%
41.4%
30.4%
44.8%
Assets
Equity Ratio =
Total Equity
= $14,560 = 49.5%
Total Assets
$29,386
Bought Phelps Dodge
13
Global Metals and Mining Conference, February
28, 2011, presentation by Richard Adkerson
Assets
Benchmarks
(In Millions)
Business Measures and Metrics
Freeport
BHP Billiton- Newmont Rio TintoMcMoRan-FCX June 30, Mining Corp
RIO
Southern
Copper
Corp-SCCO
2010
2010
2010
2010
2010
Revenues
$18,982
$52,798
$9,540
$60,323
$5,150
Net Income
$4,273
$12,722
$2,277
$14,324
$1,563
Copper Reserves (Billion lbs)
120.50
58.41
9.42
36.76
131.58
Equity Ratio
49.5%
55.5%
61.2%
58.1%
48.2%
Assets
13
Class Discussion (notes on page 13)
 Best practices currently employed by companies,
including ours, to improve asset strength and
utilization:





Increase revenues.
Lower costs.
Getting more done with fewer employees.
Reducing inventory levels to increase inventory turnover.
Spending only on capital (equipment) upgrades that will
provide a return.
Freeport McMoRan Financial Statements
The Annually Reported Financial Statements
• Statement of Income (P&L)
• Balance Sheet
• Statement of Cash Flows
1.
What is the basic equation for each statement?
2.
What is the purpose of the statement?
3.
What are the key numbers and how are they trending?
4.
How can you impact each statement?
Indicates:
Equation:
Financial (asset)
Strength
Assets = Liabilities + Equity
Most Liquid
Snapshot in time
Becomes Cash < 1 year
Least Liquid
Due First
Current
Ratio =
2.6
Due in < 1 year
Due Last
Equity Position: 50%
Balance
Balance Sheet
Do we have a strong
Balance Sheet?
Good cash,
current ratio
and equity ratio
Q2 Earnings Call, July 21, 2011
Definition: Growth
DEFINITION
The ability to increase year over year,
quarter over quarter, and/or month
over month.
“In today’s business world, no growth means
lagging behind in a world that grows every
day…”
Growth
“Investors expect it, employees are
energized by it, customers are generally
attracted to it and executives are measured
by it.”
MEASURES
Revenue Growth
Net Income Growth
EPS Growth-Earnings per share
increase
14
Business in Rapid Decline…
• Best & brightest leave first.
• Productivity goes down.
• Morale goes down.
• Costs are cut, which limits ability to grow,
company becomes less profitable.
Studies Show:
It usually takes 4 or 5 years for the
company to recover.
15
Business in Rapid Growth…
• Attracts/Retains the best & brightest!
• Productivity goes up = more profit = more
cash = more ability to grow!
• Morale is high.
• You have the ability to grow in your
career!
Growth gets more time & attention than
any of the 5 elements in a public company.
15
Growth
Freeport McMoRan
Corporation
(In Millions)
Freeport
Freeport
Freeport
Freeport
Business Measures and Metrics McMoRan-FCX McMoRan-FCX McMoRan-FCX McMoRan-FCX
2010
2009
2008
2007
Revenues
$18,982
$15,040
$17,796
$16,939
Net Income
$4,273
$2,527
$(11,341)
$2,769
Revenue Growth
26.2%
-15.5%
5.1%
193.0%
Net Income Growth
69.1%
122.3%
-509.6%
98.4%
EPS Growth
Recorded Reserve Growth
Copper
56.0%
119.7%
-496.3%
11.8%
15.6%
2.2%
9.4%
72.2%
Growth
15
Q2 Earnings Call, July 21, 2011
Q1 Earnings Call, July 21, 2011
Sales grew because metal prices increased
even though volumes were down.
Sales volumes 2010 and estimated for 2011
Growth
Benchmarks
(In Millions)
Freeport
McMoRanFCX
BHP
BillitonJune 30,
Newmont
Mining
Corp
Rio TintoRIO
Southern
Copper
Corp-SCCO
2010
2010
2010
2010
2010
Revenues
$18,982
$52,798
$9,540
$60,323
$5,150
Net Income
$4,273
$12,722
$2,277
$14,324
$1,563
Revenue Growth
26.2%
5.2%
23.8%
37.0%
37.9%
Net Income Growth
69.1%
116.5%
75.6%
194.0%
67.2%
EPS Growth
56.0%
117.1%
71.1%
164.0%
67.9%
Recorded Reserve Growth Copper
15.6%
-2.2%
3.3%
6.1%
7.8%
Business Measures and Metrics
Growth
15
How can you personally impact
Growth?
 At your table, discuss how you individually impact
Growth.
 Capture your ideas on page 15 in the participant
guide.
 Be prepared to share one of your ideas with the class.
15
Definition: People
DEFINITION
-The External Customer, Vendor/Reseller, or Internal Customer that has
the ability to impact the success of the
business..
-Employees
MEASURES
People
Total Recordable Incident Rate (TRIR)is a measure for the total number of
incidents per 200,000 hours worked.
16
People
What is more important than meeting customer
expectations?
Exceeding?
Anticipating Customer Needs &
Expectations!
“If I would have asked my customer what they wanted, they would have
said a faster horse!”
~Henry Ford
17
Failing to Anticipate customer needs/expectation!
What companies have failed to anticipate customer
expectations? What were the results?
• GM/Ford
– Unprepared for recession and required government bailout
money. Ford secured line of credit prior and retained full
ownership.
• Kodak – decided to move to digital product line.
Polaroid did not and is no
longer a serious competitor.
• IBM
– In 1943, the CEO said the customer need for their product was
approximately 5 computers for the entire world.
• Sony– Did not move to a digital music player and lost a significant market
share to innovative companies like Apple and Motorola.
17
People
Freeport McMoRan
Corporation
(In Millions)
Business Measures and Metrics
Freeport
Freeport
Freeport
Freeport
McMoRan-FCX McMoRan-FCX McMoRan-FCX McMoRan-FCX
2010
2009
2008
2007
Revenues
$18,982
$15,040
$17,796
$16,939
Net Income
$4,273
$2,527
$(11,341)
$2,769
0.65
0.74
1.25
1.18
People
Total Recordable Incident Rate
(TRIR-(Per 200K Man Hours
Worked)
Mine Safety & Health Admin TRIR Average:
2010= 2.53 2009= 2.61 2008= 3.14 2007= 3.30
17
People
Benchmarks
(In Millions)
Business Measures and Metrics
Freeport
BHP
Newmont
McMoRan- Billiton-June Mining
FCX
30,
Corp
Rio TintoRIO
Southern
Copper
Corp-SCCO
2010
2010
2010
2010
2010
Revenues
$18,982
$52,798
$9,540
$60,323
$5,150
Net Income
$4,273
$12,722
$2,277
$14,324
$1,563
0.65
1.06
.91
0.51
People
Total Recordable Incident Rate (Per
200K Man Hours Worked)
17
What are your best practices in anticipating
CUSTOMERS needs?
(Capture ideas on page 17)
 Know your business and how you impact results!
 Develop formal processes for listening to customers, both
internal and external.
 A quarterly meeting with your boss…ask, how am I doing?
What could I do to improve?
Business Drivers
(Page 18)
Cash
-On hand
-Generation
Growth
-Top Line
-Bottom Line
People
-Customers
-Employees
Assets
-Strength
-Utilization
Profit
-Revenue
-Expenses
1
3,738
2
3
9,068
18,982
4
5
6
7
8
9
10
11
47.77
3,738
6,273
18,982
9,068
4,273
18,982
47.77
18,982
22.51
120.50
14,560
18,982
29,386
15,040
4,273
2,527
4.57
2.93
49.55
26.21
69.09
55.97
.65
Freeport McMoRan
Corporation’
Key Success Measures
1½
SCORING:
Right answer =
1 point
Somewhat close =
½ point
Missed it by a ways = 0 point
0
(within: $2B, $2, 2%)
35
5 Business Driver Review
(Pages 8-17)
Cash
-On hand
-Generation
Growth
-Top Line
-Bottom Line
People
-Customers
-Employees
Assets
-Strength
-Utilization
Profit
-Revenue
-Expenses
Review and Teaching (page 30)
1) Assign one of the business drivers to
each person at your table.
2) Take a few minutes to answer the questions
below:

How would you describe this business driver?

Why is it important to our organization?

How is it measured?

How can I impact this business driver in my role?
3) Review with your group the answers you
found.
When you think of a company
rich in Cash,
who comes to mind?
(Page 20)
Demystifying the Annual Report
(page 21)
What is the Purpose of the Annual Report?
 General Communication
 Marketing
 Compliance
Getting to Know Your Company
Which of the 5 “drivers” does your CEO &
Chairman emphasize? Why? As table groups, grade Mr.
Moffett’s and Mr. Adkerson’s top 2 focus areas.
What other key initiatives are also being talked
about?
Was this a good year or bad year? How can you
tell?
Finding our performance
around the 5 Business Drivers
Cash
-On hand
-Generation
Growth
-Top Line
-Bottom Line
People
-Customers
-Employees
Assets
-Strength
-Utilization
Profit
-Revenue
-Expenses
External Factors (page 40)
How does the situation affect:
People
Cash
Growth
Profit
Assets
Heads Up!
Google And Reuters
Competitor Reports
BHP Billiton
Newmont Mining
Rio Tinto
Southern Cooper
Keep your friends close,
and your enemies closer.
--Lao Tzu
Finding Competitors Performance Around:
Cash
-On hand
-Generation
Growth
-Top Line
-Bottom Line
People
-Customers
-Employees
Assets
-Strength
-Utilization
Profit
-Revenue
-Expenses
Getting to Know a Company (pages 36)
Use these sources:
1) CEO letter
2) Financial analysis (fill out the NTF)
3) Recent quarterly earnings release
4) One year stock performance
To answer these questions on page 36:
 Was this a good year or bad year? How can you tell?
 Which of the 5 business drivers are most important to
them? Why?
 What does this company do that you were not aware of?
Banks,
Insur. Co’s
Over leveraged.
Did not
understand subprime risk.
FNMA &
FHLMC
Over leveraged
with implied
government
backing.
U.S.
Government
Pushing more
loans. Little
over-sight.
Federal
Reserve
Aggressive rate
cuts after 9/11 to
spur spending.
What does
Credit
thisCrisis
mean
for FCX?
Rating
Agencies
Did not rate subprime loan risk
well.
Who is involved?
Mortgage
Companies
Aggressive Subprime lending.
Home
Builders
increase supply
of homes to
meet demand.
Home
Buyers
Buying more
home than they
can afford.
The Role of the Stock Market
1) What role does the stock market play?
2) Who cares about your stock price and why?
a. Investors
b. Analysts
Analyst Recommendations
September 19, 2011
The Role of the Stock Market
1) What role does the stock market play?
2) Who cares about your stock price and why?
a. Investors
b. Analysts
c. Your CEO
d. Employees
3) What are the benefits of a higher stock price?
6 Benefits of a Higher Stock Price:
(Page 41)
1) Treasury stock is worth more.
2) Secondary offering brings more cash.
3) Better credit ratings = more access to cash at a cheaper
rate.
4) More acquisition power.
5) Can attract talented people.
6) More expensive in a buy-out.
Market Cap = shares outstanding X stock price
Element
Market Cap.
FCX
BHP
38 Billion
166 Billion
NEM
RIO
SCCO
33 Billion 106 Billion 26 Billion
The P/E Ratio-FCX
(Page 42, 43)
Price (of one share of stock)
Earnings Per Share (for last 12 months)
Price
EPS
$ 40.22
$ 5.86
= 6.86 P/E ratio
P/E Ratios
Element
P/E Ratio
FCX
BHP
NEM
RIO
SCCO
7
9
14
7
13
“The P/E ratio tells you what people who have a dispassionate
view of your company think of its future ability to make money.
It reveals how much of their money they are willing to bet on
your success in the quarters and years to come.” Ram Charan
Freeport McMoRan Stock Chart
Boosting Stock Price
In December 2010, our Board of
Directors authorized a $0.50 per
share supplemental common stock
dividend paid on December 30,
2010, and a two-for-one common
stock split effected on February 1,
2011
(Page 68 10-K)
Freeport McMoRan and S&P 500
Freeport McMoRan and Benchmark Companies
CEO Urgency Continuum
(Page 49)
URGENT
CASH
NEAR TERM
PROFIT
ASSETS
LONG TERM
GROWTH
PEOPLE
Retaining Content over Time
Content Retention
Review
Apply
Teach
15%
Time
52
Review and Action Plan
(Page 52 & 53)
 What new insights did you gain
(today) as a result of attending?
 How will this material impact your
daily activities?
Action Plan: List 1-2 Actions You Will
Commit to do.
Changing Behavior
*Based on a 1993 Brigham Young University Study
When a Person Says …
Chances of the idea being
incorporated into their life is...
“That’s a good idea”…
10%
“I’ll do it!” and commits...
25%
Says when they’ll do it…
40%
Plans how to do it…
50%
Commits to another…
60%
Sets a future specific
appointment with the
person they committed to...
Good
Management
Technique!
95%
Accountability Conversations
Find a Partner now and:
1. Set up a specific date and time in 30 days to report your
progress on your action plan.
2. Exchange emails
3. Exchange phone numbers
4. Decide who will initiate the call
5. Determine a back-up plan
6. Transfer this information to your
planner or PDA now.
53
Post Course Action Items:
1. 7 days:
Teach one of the principals learned in class today,
to someone in your department.
2. 7 days:
Discuss your action items with your manager in the
next 7 days.
3. 30 days: Read the first 90 pages of:
“What The CEO Wants You to Know“
4. 30 days: Get with your class partner and give an account of
your progress on your action item(s).
Start now:

Build and practice your new business acumen skills.

When making decisions, determine how the outcome will impact Cash, Profit,
Assets, Growth, People…
Where to Find Information
(page 55)
* nasdaq.com
* finance.google.com
* reuters.com
* hoovers.com
* yahoo.com
* smartmoney.com
Glossary: page 58
Learning Objectives
 Understand the 11 key performance measures that are
important to Freeport McMoRan and the Executive Team.
 List and describe the five business drivers all successful
businesses must focus on.
 Teach specific components of Freeport McMoRan
financial statements.
 Better articulate company performance & strategy.
 Create a personal action plan that can positively impact
personal performance and company results.