Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q2 2017 Earnings Presentation
27 slides from Freeport-mcmoran's earnings presentation, Jul 25, 2017
Slide 1: 2nd Quarter 2017 Earnings Conference Call
DRIVEN BY VALUE [avd FREEPORT-McMoRan 24 Quarter 2017 Earnings Conference Call July 25, 2017 FCX NYSE
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This production and ‘sales volumes, , liquidity, tax rates, The words “antilpates,” “may "can, plans,’ foleves,” “estimates,” expects,” projets," targets intends," kel," wil” “should, *"tobe.*potenvar"and tual anticipated, cing: and prices of
Slide 3: 2017 Highlights
2017 Highlights » Cost Management ($inmm) * Ongoing Capital Discipline * Improving Ore Gradesin| i +$675 +$1,123 = $9.5 Billion Reduction in Net Debt Since YE2015 $1,829 = Primary Focuses $1,037 » Safe & Efficient Operations » Resolving Long-term Rights in Indonesia * Building Long-term Values in Ou
Slide 4: Copper Market Commentary
Copper Market Commentary LME Copper Price er pourdd $3.00 $175 pays ys sms ys AY ysYt7 $2.13 $2.20 Price Change Since 12/31/15 +27% Since 9/30/16 +24% 2017 +9% Source: Bloomberg = Market in Solid * Chinese Demand Better than Expected in First Half of 2017 * European Demand Healthy * North America St
Slide 5: Americas Status Report
Americas Status Report = Strong Operating Performance ie * = Cerro Verde — Expanded Operations Continue to Americas Free Cash Flow Perform Well (Sinmm) = Lone Star Project Near Safford Operation +$509 . Begin in 2021, Following ~3 Years of Stripping $626 . co geile Use Eee sua Sou one Potential = El
Slide 6: Large Development Project Inventory
Large Development Project Inventory Copper Sulfide Opportunities in Americas (bns of Ibs) Bagdad Bagdad Chino/Cobre - Chino/Cobre El Abra El Abra 437 LoneStar7 Lone Star/Safford Morenci 60 SIemita Morenci Cero Verde - Sierrita Other 2P Reserves Including. Including, @$2.00Cu Mineralized Material* Po
Slide 7: PT-FI Update
PT-FI Update Exports Resumen inApa 2017 PT-FI Free Cash Flow* Experienced High Level of Worker Absenteeism (ohm +$292 $505 * Despite Lower Rates, Higher Ore Grades and Sales from Inventory i] * Increasing Workforce to Restore Normal Operating Rates Evaluating Mine Planning 0) iti Accelerate High Gra
Slide 8: Deep MLZ Update
Deep MLZ Update = InJune, DMLZ Impacted by Mining-Induced Seismic Activity (Not Uncommon in Block Caving) = Conditions at DMLZ (Depth Beneath Surface and Rock Strengths) Differentfrom PT-Fl’s Other Ore Bodies . itial Ramp up to Until the Cave is Sustained = Expect Ramp-up to 80K t/d in 2021, but ata
Slide 9: World Class Design
World Class Design GBC Rail Lines. Rail Car Unloading Station. ie OE | Reserves: 964mm t @ 1.03% Cu & 0.78 g/tAu Fixed Facilities TS, Conveyor & Service Declines DRIVEN BY VALUE FReepont-McMoRAN
Slide 10: PT-FI History of Block Caving
PT-FI History of Block Caving GBT block cave mine Depleted 10Z block cave mine Depleted co} ao a a oo f=) 3 a ¢ DMLZ Startup * Grasberg BC In development Ertsberg East * Kucing Liar (RHEE eTE? 10 DRIVEN BY VALUE tu Fneeront-McMoRan
Slide 11: Financial Benefits to Indonesia
Financial Benefits to Indonesia = Positive Long-term Historical Relationship Financial Benefits Breakdown = 50-Year History of Operations in Indonesia ~$19 Billion =C i $60+ Bnto i DP Since 1992 Gol 62% = Largest Pri p in Papua & Signi FLX, E ic Engine for D in Region 45 = One of the Largest Taxpaye
Slide 12: 2017e Outlook
2017e Outlook = Copper: 3.7 Billion Ibs. = Gold: 1.6 Million ozs. = Molybdenum: 93 Million Ibs. Sales Outlook Unit Cost ® Site Production & Delivery: $1.58/Ib of Copper = After By-product Credits : $1.19/Ib, Including $1.28/Ibfor 3Q17e = ~$3.8 Billion (@ $2.65/lb Copper for 2H17e) Operating (Ca Geel
Slide 13: Copper and Gold Sales
Copper Sales (billion Ibs) Gold Sales (million ozs) 5 4.65 3 4 37 3.85 3 | | | 2 | 20 0 : 93 90 2016 2017e 2018e © 74 ote 2016.67 2017 20 ° 2016 2017e 2018 tate. See Cautionary Statement DRIVEN BY VALUE FReepont-McMoRAN
Slide 14: EBITDA and Cash Flow
EBITDA and Cash Flow at Various Copper Prices 10¢ change in copper = $360 mm $1 changein moly= $50 mm (uss titers) $50 change in gold=$115mm $8 $6 $4 $2 2018e $0 Cu $2.50/ib Cu $2.75/b Cu $3.00/b ($1,250/oz Gold, $7.50/lb Molybdenum)* (USS tations) 10¢ change in copper= $280 mm $1 change in moly=$45
Slide 15: Capital Expenditures
Capital Expenditures (USS billions) Future Spending Dependent on $2.8 Impr in Market Conditions and Continued Grasberg Underground Development $1.9 2016 2017e 2018e ‘Note: includes capitalized interest e= estimate. See Cautionary Statement. DRIVEN BY VALUE FReepont-McMoRAN
Slide 16: Cerro Verde Credit Facility Amended & Extended
Cerro Verde Credit Facility Amended & Extended = Amended in June 2017 = LoanAmount Increased from $1.3 Bn to $1.5 Bn = Extended Final Maturity from March 2019 to June 2022 = AllOther Terms, Including Interest Rates, Remain the Same = Increases Financial Flexibility & Reduces 2018 and 2019 Maturities
Slide 17: Restoring Balance Sheet Strength
Restoring Balance Sheet Strength Year-End 2017e Net Debt at Varying Copper Prices (USS billions) $20.0 $15.0 $10.0 $0. YE2015 YE2016 6/30/2017 $2.50 $2.75 $3.00 Net Debt/2017e EBITDA 21x 18 1.5x YE 2017e 50) Eeirt e estimate. See Cautionary Statement. DRIVEN BY VALUE FReepont-McMoRAN
Slide 18: Freeport-McMoRan Investment Highlights
=v FREEPORT-McMoRAN Industry-Leading ExperiencedTeam Longiived, Financially Copper Position of Operators & Geographically Strong Developers Diverse Portfolio Executing Clearly Defined Strategy DRIVEN BY VALUE FREEPonT-McMoRAN
Slide 19: Reference Slides
Reference Slides DRIVEN BY VALUE (row FReeront-McMoRan
Slide 20: Financial Highlights
Financial Highlights Sales Data Copper Consolidated Volumes (mm Ibs) Average shares (per Ib) Site Production Delvery Costs (per Ib) Unit Net Cash Hats (per Ib) Gold Consolidated Volumes (O00's ozs) Average Realization (per 02) Molybdenum Consolidated Volumes (mm Ibs) Average Realization (per Ib) Fin
Slide 21: 2Q 2017 Mining Operating Summary
2Q 2017 Mining Operating Summary 2Q17 Unit Production Costs Cash Unit Costs North South jof copper) ‘America America Indonesia Site Production & Delivery $1.59 $1.55 $180 $1.64 Credits (0.16) (013) (2.21) (0.70) Treatment Charges 0.10 0.22 0.26 0.18 Royalties & Duties 001 0.28 0.08 Unit Net Cash Cos
Slide 22: 2017e Operating Estimates
2017e Operating Estimates 2017e Unit Production Costs (per pound of copper) North South America America Indonesia Consolidated Cash Unit Costs Site Production & Delivery $1.59 $157 156 $1.58 By-product Credits (0.16) (0.14) (1.96) (0.65) Treatment Charges 011 0.26 0.19 Royalties & Duties - 0.01 027
Slide 23: Copper Sales and Gold Sales
Copper Sales (million Ibs) Gold Sales (thousand ozs) 1,200 1017. 2Q17_—s-3Q47e = 4QITe mm bs in 4g 1917 2017 3Q17e 4Q17e 23 DRIVEN BY VALUE FReepont-McMoRAN
Slide 24: Sensitivities (US$ millions)
Sensitivities (US$ millions) Operating Cash Flow Copper: ” +/- $0.10/Ib $360 $280 Molybdenum: ® +/- $1.00/Ib $50 $45 Gold: ® +/- $50/ounce $115 $65 Currencies: ® +/- 10% $140 $100 oy $1.13 Euro, N Each f noted amounts. NOTE: = estimate. See Cautionary Statement. DRIVEN BY VALUE FReEpont-McMoRAn
Slide 25: PT-FI Mine Plan
PT-Fl Mine Plan PT-Fl’s Share of Metal Sales, 2017e-2022e 2017e- 2022ePT-Fl Share Total: 6.2 billion Ibs copper ” Copper, billion Ibs Annual Average: 1.Obillion Ibs Bh copper, bi {0 Gold, mition ozs 2017¢- 2022ePT-FI Share Total: 9.0 million ozs gold Annual Average: 1.5 million ozs 16 45 a2 ; Hii ii
Slide 26: FCX Debt Maturities as of 6/30/17
FCX Debt Maturities as of 6/30/17 (US$ billions) Total Debt & Cash at 6/30/17 DRIVEN BY VALUE FReepont-McMoRAN
Slide 27: Adjusted EBITDA Reconciliation
impairment and molyedenum inventory adjustments ($9 mionfr 2927 and $80 Adjusted EBITDA Reconciliation (in mations) 12 Months Ended 292017 6/30/2017 $1,011 Interest ape, net 162 697 Income tax provi 186 538 Depreciation, depletion and amortization 450 2.075 for other (10) 113 Loss on exchanges and e