Slide 1: FCX Conference Call 3rd Quarter 2020 Results
FCX Conference Call 3rd Quarter 2020 Results October 22, 2020 fcx.com
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements in which FCX discusses its potential accordance with PT-FI’s special mining license (IUPK) to extend mining rights from 2031 through future performance. Forward-looking statements are all
Slide 3: 3Q 2020 Highlights
3Q 2020 Highlights July ▪ Prioritizing health and safety Key Stats Actual Estimate Copper Sales (mm lbs) 848 790 ▪ Continued strong execution of operating plans Gold Sales (k ozs) 234 220 • Copper & gold sales 6-7% above July estimates • Costs and capital below estimates Unit Net Cash Costs ($/lb) $
Slide 4: Copper – “Metal of the Future”
Copper – “Metal of the Future” By supplying responsibly produced copper, FCX is proud to be a positive contributor to the Current Market world well beyond its operational boundaries Commentary Key to Clean Energy Transition • Copper is critical to the technologies necessary to deliver clean ▪ Chines
Slide 5: Copper Price History Comparisons
Copper Price History Comparisons Price Response in Mid-2000s Copper Price Recovery Copper Price Recovery to Accelerating Demand Following 2008 Global Financial Crisis Following COVID-19 Market Bottom metric tons $/lb metric tons $/lb metric tons $/lb 1,500,000 $4.75 1,500,000 $4.75 1,500,000 $4.75 2
Slide 6: 3Q 2020 Operations Update
3Q 2020 Operations Update Continue to focus on strong execution North America South America Indonesia ▪ Lone Star - Arizona ▪ Cerro Verde - Peru ▪ Grasberg Underground • Project completed on time/under budget • Restoring operations safely • 3Q20 annualized metal sales reached • Commenced production;
Slide 7: Expanding Margins & Cash Flow
Expanding Margins & Cash Flow ▪ Volume Growth (2021e v. 2020e) • Copper 20%+ Annual EBITDA Estimates (1) ($ in billions) • Gold 70%+ >$8 ▪ Declining unit net cash costs >$7 Gold Revenues ~$2.9 bn per annum • 2021e expected to decline by ~20% to at $1,900/oz Gold <$1.20/lb Each $100/oz change = ~$140
Slide 8: Long-Lived Reserve Base
Long-Lived Reserve Base 30+ Year implied reserve life for copper, excluding mineralized material Copper Reserves (1) By Region Consolidated Reserves (1) Mineralized Material (2) As of 12/31/2019 (recoverable) (contained) Copper (bn lbs) 116 133 Indonesia South 31% Gold (mm ozs) 30 55 America 28% Mol
Slide 9: The Freeport Edge
The Freeport Edge Global Industry Trusted World-Class Block Cave Responsible Leader Operator Developer Leader Producer One of the world’s Strong reputation Industry leading Industry leading Long-standing largest publicly and franchise in track record for technical commitment traded copper 4 countrie
Slide 10: Financial Review & Outlook
Financial Review & Outlook 10
Slide 11: Annual Sales Profile
Annual Sales Profile October 2020 Estimate Copper Sales(1) (billion lbs) Gold Sales(2) (million ozs) 5 2 1.6 1.4 4.2 4 3.85 1 0.8 3.18 3 0 2020e 2021e 2022e 2 Molybdenum Sales (million lbs) 100 1 80 80 80 75 50 0 2020e 2021e 2022e 25 (1) Consolidated copper sales include 593 mm lbs in 2020e, 735 mm
Slide 12: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices Cash Flows Expected to Grow Following 2020 Transition Year ($ in bns except copper, gold and molybdenum prices) Sensitivities Average ’21e/’22e EBITDA l ($1,900/oz gold, $8/lb molybdenum) (US$ in mms) $10 EBITDA $8 Copper +/-$0.10/lb $390 $6 Molybdenum +
Slide 13: Consolidated Capital Expenditures
Consolidated Capital Expenditures ($ in bns) $ Net of Scheduled Contributions $2.2 $2.0 $2.0 $1.9 (1) $2.0(1) $1.8(1) Major Projects $1.0(2) $1.3(2) $1.4(2) Other $0.7 $0.8 $1.0 2020e 2021e 2022e (1) Net of scheduled contributions from PT Inalum for expansion capital spending that will be reflected
Slide 14: Strong Financial Position & Liquidity
Strong Financial Position & Liquidity (US$ bns) $ Net Debt* Liquidity $7.6 Liquidity Position as of 9/30/20 $4.5 Consolidated Cash $2.4 Undrawn Credit Facility $3.5 Total Liquidity $5.9 9/30/2020 YE 2021e 2.0x 2020e EBITDA** < 1.0x 2021e EBITDA** 1.1x 2021e EBITDA** * Net debt equals consolidated de
Slide 15: Financial Policy
Financial Policy PRIORITIES ▪ Prioritize liquidity and balance sheet strength during 2020 ▪ Board to review future dividends on an ongoing basis Balance Sheet Organic Strength ▪ Continued strong execution and performance would enable Growth resumption of dividends during 2021 ▪ Ongoing review of org
Slide 16: World’s Premier Publicly Traded Copper Producer
World’s Premier Publicly Traded Copper Producer Portfolio of High Quality Experienced Management Team Copper / Gold Assets Difficult to Replicate Industry Leader with Size, Scale and Durability Strong Track Record and Commitment to Communities / Copper Supported by Positive Environmental Responsibil
Slide 17: Reference Slides
Reference Slides FREEPORT
Slide 18: Our COVID-19 Response
Our COVID-19 Response Prioritizing the Health & Supporting Our Communities Serving Our Customers Well-Being of Our Workforce Active & preventive management, Providing monetary and in-kind As a leading supplier of copper to through the implementation of global contributions of medical supplies & the
Slide 19: Responsible Value Chains
Responsible Value Chains Dedicated to delivering responsibly produced copper to markets around the world ▪ Focused on advancing responsibility in our value chains by: 1) managing risks in our own supply chain; The Copper Mark is a new assurance framework developed to demonstrate the copper industry’
Slide 20: Financial Highlights
Financial Highlights Sales Data 3Q20 3Q19 Copper Consolidated Volumes (mm lbs) 848 795 Average Realization (per lb) $3.01 $2.62 (1) Site Production & Delivery Costs (per lb) $1.77 $2.05 Unit Net Cash Costs (per lb) $1.32 $1.59 Gold Consolidated Volumes (000’s ozs) 234 243 Average Realization (per oz
Slide 21: 3Q20 Mining Operating Summary
3Q20 Mining Operating Summary Sales From Mines for 3Q20 & 3Q19 by Region North America South America (2) Indonesia (3) 379 395 250 261 (1) 219 230 239 20 (1) 22 139 Cu Mo Au mm lbs mm lbs 000 ozs 3Q20 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 3Q19 North South 3Q20 Unit Production Costs (per lb of Cu)
Slide 22: 2020e Outlook
2020e Outlook ▪ Copper: 3.18 billion lbs Sales ▪ Gold: 0.8 million ozs Outlook ▪ Molybdenum: 80 million lbs Unit Net Cash ▪ Site production & delivery 2020e: $1.88/lb (4Q20e: $1.78/lb) Cost of Copper ▪ After by-product credits 2020e(1) : $1.49/lb (4Q20e: $1.32/lb) Operating ▪ ~$2.9 billion @ $3.00/l
Slide 23: 2020e Quarterly Sales
2020e Quarterly Sales Copper Sales (millions lbs) Gold Sales (thousand ozs) 1,000 300 270 234 848 184 840 200 144 729 759 750 100 0 1Q20 2Q20 3Q20 4Q20e Note: Consolidated gold sales include approximately 26k ozs in 1Q20, 34k ozs 500 in 2Q20, 43k ozs in 3Q20 and 50k ozs in 4Q20e for noncontrolling i
Slide 24: Sensitivities
Sensitivities (US$ in mms, except copper, gold and molybdenum prices) 2020e Change (4Q20e) EBITDA Copper +/- $0.10/lb $120 Molybdenum +/- $1.00/lb $10 Gold +/- $50/ounce $20 Currencies(1) +/- 10% $45 Diesel +/- 10% $ 7 2021e-2022e Avg. Change EBITDA Operating Cash Flow Copper +/- $0.10/lb $390 $300
Slide 25: 2020e Operational Data
2020e Operational Data 2020e Sales by Region North America South America Indonesia 1,435 950 790 80 (1) (2) 0.8 Cu Mo Au mm lbs mm lbs mm ozs North South 2020e Unit Net Cash Costs (3) (per lb of Cu) America America Indonesia Consolidated Site Production & Delivery, excl. adjs.(4) $1.91 $1.87 $1.85 $
Slide 26: Grasberg Underground Ramp-up Accelerating
Grasberg Underground Ramp-up Accelerating 2021e-2023e Annual Average as % of Targeted Average 2021e-2023e as % of Targeted Average 2021e-2023e 100% Quarterly Production Annualized 1.55 bn lbs Cu & 1.6 mm ozs Au Quarterly Production Annualized 75% 50% 25% 0% 2Q19 4Q19 2Q20 3Q20 4Q20e 2Q21e 4Q21e 2022
Slide 27: Grasberg - World Class Block Cave Design
Grasberg - World Class Block Cave Design Substantial Infrastructure in Place to Support Large-Scale Production Grasberg Block Cave DMLZ Plan View Ramp-up Schedule Plan View 100 m eters Ramp-up Schedule (2) 100 m eters (000’s t/d of Ore) (000’s t/d of Ore) 128 129 N 77 N 73 72 PB3 101 62 PB2N 2 PB1S
Slide 28: Project Update: Grasberg Transition Remains on Track
Project Update Grasberg Transition Remains on Track Drawbelling Ore Extraction (000 t/d) Deep MLZ (DMLZ) & DMLZ GBC41 DMLZ 40 40 37 34 36 45 40 Grasberg Block 30 Forecast 30 25 24 28 29 30 Cave (GBC) 20 12 12 14 15 17 20 10 10 15 averaged 59,900 t/d 10 4 10 15 7 0 0 in 3Q20: 9% above 1Q 4Q 1Q 2Q 3Q
Slide 29: PT-FI Mine Plan
PT-FI Mine Plan Metal Sales, 2020e - 2024e Copper 2020e – 2024e Gold 2020e – 2024e Total: 7.1 billion lbs copper Total: 7.3 million ozs gold Annual Average: 1.4 billion lbs Annual Average: 1.5 million ozs 1.8 1.7 1.7 1.6 1.6 1.6 1.4 1.4 0.79 0.82 Cu Au bn mm lbs ozs 2020e 2021e 2022e 2023e 2024e Tra
Slide 30: FCX Debt Maturities as of 9/30/20
FCX Debt Maturities as of 9/30/20 (US$ bns) $8 Total Debt & Cash at 9/30/20 FCX Revolver $ - $6.9 Senior Notes 9.1 Cerro Verde Credit Facility 0.8 $6 Other 0.1 Total Debt $ 10.0 Consolidated Cash $ 2.4 Undrawn Credit Facility 3.5 Total Liquidity $ 5.9 $4 5.00%, 4.125%, 4.375%, 5.25%, 4.25%, $2 4.625
Slide 31: 3Q20 Copper Realization & 4Q20e Guidance
3Q20 Copper Realization & 4Q20e Guidance 3Q20 LME Average $2.96/lb Copper Price 3-Mo. Fwd Price for Copper $3.03/lb at the End of September $3.01/lb(1) FCX 3Q20 Consolidated Copper Price Realization (Generally, 50/50 weight of qtrly avg and 3-mo forward price at end of period) FCX 3Q20 Prior Period
Slide 32: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 12 mos ended ($ in mm) 3Q20 9/30/2020 Net income (loss) attributable to common stock $329 $(101) Interest expense, net 120 581 Income tax provision 297 662 Depreciation, depletion and amortization 394 1,484 Metals inventory adjustments 9 171 Net loss (gain) on sales of
Slide 33: FREEPORT
FREEPORT FOREMOST IN COPPER