Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q3 2017 Earnings Presentation
33 slides from Freeport-mcmoran's earnings presentation, Oct 25, 2017
Slide 1: 3Q 2017 Earnings Conference Call
DRIVEN BY VALUE FREEPoRT-MicMoRAN 3" Quarter 2017 Earnings Conference Call October 25, 2017 FCX NYSE
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements Thi statements of or expectati volumes, . and results, dé liquidity, tax rates, the impact of the impact The words “anticipates,” ‘may, “can, ‘plans,” “believes,” ‘estimates, “projects,” “argots, Intends," "ely," wt", ” to be," statem tual th
Slide 3: 3Q17 Highlights
3Q17 Highlights = Strong Results Throughout Global Operations » Notable Productivity Improvements at Grasberg — Mill Averaged 195 kt/d in September = Positive Outlook for Future Results = Continued Execution of Deleveraging Plan $204 $98 Net Debt Sinbes YE2015 9/30/2017 Net Debt/LTM EBITDA 4.6 1.8&
Slide 4: Copper Market Commentary
Copper Market Commentary LME Copper Price er pourdd $325 $3.00 $275 ‘ $250 $225 $200 Positive Demand Globally » Manufacturing Sectors are Performing Well © Chil Exceeding » European Growth Continues » U.S.Demandis Solid Supply Side Issues Remain » Absence of Major New Projects on the Horizon 1E, fro
Slide 5: Electric Vehicle (EV) Revolution - Positive
Electric Vehicle (EV) Revolution - Positive Incremental Demand Driver for Copper = EVs are Copper Intensive - Consume 3-4x More Copper = Strong Potential For EV Market * Rapid Growth Forecasted Over Next Decade ¢ Estimates of Additional Annual Copper Usage: 500kt to Well Over 1MMt by 2025 = Policy G
Slide 6: World Class Copper
World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves 2017e Copper Production Thousandmetrictens © 200 400 600 800 1000 1200 Escondida-1981 Escondida-1981 Oyu Topi -2001, ‘Source: Wood Mackenzie e=estimate DRIVEN BY VALUE FReePont-McMoRAN
Slide 7: FCX Values Beyond Proved & Probable Reserves
FCX Values Beyond Proved & Probable Reserves Preserving Optionality for the Future - Driven by Value US. * Large footprint with substantial undeveloped sulfide resources, + Significant existing infrastructure provides for Brownfield expansions: + District extensions include: Lone Star/Safford Morena
Slide 8: Americas Status Report
Americas Status Report Americas Cash Flow Strong Operating Performance 674 mm lbs of Copper Sold in 3Q17 Cerro Verde Concentrator Averaged 379 kt/d in 3Q17 Continued Solid Cost and CAPEX Management Advancing Studies for Future Growth to Maintain Optionality (Sinmm) $2,331 9-mo 2017 *CX's consolidate
Slide 9: 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 10: Lone Star Oxide Project
Lone Star Oxide Project = Located in Eastern Arizona, ~4 Miles from Safford & ~17 Miles from Morenci = Resource Estimate: ~635MMst of Leach Material at 0.48% Copper Utilizes Existing Infrastructure at Safford = Regulatory Permits Have Been Obtained Low Execution Risk SummaryStatistics » Estimated Pr
Slide 11: Lone Star Sulfide Potential
> a Lone Star Sulfide Potential Leach Pit +0.6% Cu SN 2017 i DrillHole % Copper >=0.00 fi >=0.10 =0.1 20 Potential Extension of Sulfide Orebody DRIVEN BY VALUE FReepont-McMoRAN
Slide 12: El Abra Sulfide Mill Project
EI Abra Sulfide Mill Project = Large Sulfide Resource = Resource Estimate: 2 Billion Tonnes at >0.45% Copper = Advancing Technical Studies * 240 kt/d Concentrator - Similar to Recent Cerro Verde Expansion * Estimated Production: ~750 mm Ibs/year * 6-8 Year Expected Lead Time — 3-4 Years of Feasibili
Slide 13: El Abra Sulfide Potential
EI Abra Sulfide Potential West Cross-Section looking North East _ Significant Intercepts DRIVEN BY VALUE tu Fneeront-McMoRan
Slide 14: Indonesia Update
Indonesia Update August 29, 2017 - Announcement of FI Cash Flow Framework for Agreement with Gol eiien = PT-FITo Convert its Contract of Work toa Special +$416* +$866* License (IUPK), which Will Provide PT-FI with Long- term Operating Rights through 2041 $1,446 = Government of Indonesia To Provide C
Slide 15: Construction Progress
Construction Progress Will Enable Initial Caving, in Late 2018 Expected to Ramp Up to >1 Bn Ibs of Cu & >1 mm Ozs of Au Within 5-6 Yrs* ‘mounts in aggregate eS Conveyor & Service Declines DRIVEN BY VALUE (fa0FReeront-McMoRan
Slide 16: Grasberg Mining District
Grasberg Mining District PT-Fl History of Block Caving Grasberg open pit Grasberg Block Cave GBT block cave mine Depleted % lOZbleckcavemine Doped DOZblock cave mine Operating: + DMILZ Saartep + GrasbergBC In development + Kucing Liar Future development 16 DRIVEN BY VALUE FReepont-McMoRAN
Slide 17: 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 18: 2017e Outlook
2017e Outlook = Copper: 3.7 Billion Ibs. = Gold: 1.6 Million ozs. ™ Molybdenum: 94 Million Ibs. Sales Outlook Unit Cost ™ Site Production & Delivery: $1.59/Ib of Copper = After By-product Credits : $1.19/Ib, Including $0.98/Ib for 4Q17e = ~$4.3 Billion (@ $3.00/lb Copper for 4Q17e) Operating (Gis Ge
Slide 19: Copper and Gold Sales
Copper Sales (billion Ibs) Gold Sales (million ozs) 5 4.65 3.7 3-8 3.7 2016 2017e 20182 20192 - 2021 AVG* ntrolling interest. 2016 2017e Note: interest; excludes purchased copper. * Assumes continued exports from Indonesia after 12/31/17. Because of Underground yr BV o per and 1.0 mmozs of gold. Exc
Slide 20: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices (SS titers) $9 $6 $3 20: $0 Cu $3.00/b Cu $3.25/1b Cu $3.50/b ($1,300/oz Gold, $8.00/Ib Molybdenum) ~ $6 aa $2 2018e/2019e $0 Cu $3.00/b Cu $3.25/b Cu$3.50/b above = estimate. See Cautionary Statement. DRIVEN BY VALUE FReepont-MicMoRAN
Slide 21: Capital Expenditures
Capital Expenditures (USS billions) 6 A Resolution’ofind Matters and Excludes Potential Lone Star Project $2.0 $18 : r 2016 2017e 2018e 2019e A e= estimate. See Cautionary Statement. 24 DRIVEN BY VALUE FREEPoRT-McMoRAn
Slide 22: Strong Execution of Deleveraging Plan
Strong Execution of Deleveraging Plan Net Debt at Varying Copper Prices Excludes Potential Lone Star Project $15.0 $10.0 S28 YE2015 YE2016 9/30/2017 $3.00 $3.00 $3.25 $3.50 Net Debt/EBITDA L& 0.8x 0.6x 0.5x YE 2017e e= estimate. See Cautionary Statement. DRIVEN BY VALUE \Frerpont-McMoRan
Slide 23: Industry-Leading Copper Position
=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 24: Reference Slides
Reference Slides DRIVEN BY VALUE (row FReeront-McMoRan
Slide 25: Financial Highlights
Financial Highlights Sales Data Copper Consolidated Volumes (mm Ibs) Average shares (per Ib) Site Production wey Costs (per Ib) Unit Net Cash Had ait Ib) Gold Consolidated Volumes (O00's ozs) Average Realization (per 02) Molybdenum Consolidated Volumes (mm Ibs) Average Realization (per Ib) Financial
Slide 26: Cerro Verde Royalty Dispute
Cerro Verde Royalty Dispute err Peruvian Tax Authority for Periods Beginning! December 2006 on Basis that They Were Exempt Under 1998 Stability Agreement = In October 2017, the Peruvian Supreme Court Issued a Ruling on the 2008 Assessments that was Adverse to Cerro Verde’s Position = Asa Result of t
Slide 27: 3Q 2017 Mining
3Q 2017 Mining Operating Summary 3Q17 Unit Production Costs Cash Unit Costs North South Jof copper) ‘America America Indonesia Site Production & Delivery $1.67 $1. $141 $1.57 Credits (0.17) (0.19) (1.80) (0.63) Treatment Charges 011 0.22 0.27 0.20 Royal & Duties = 0.01 0.25 0.07 Unit Net Cash Costs
Slide 28: 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. $158 $155 $1.59 By-product Credits (0.16) (017) (2.03) (0.67) Treatment Charges 011 0.27 0.19 Royalties & Duties - 0.01 5 0. U
Slide 29: Copper Sales (million lbs)
Copper Sales (million Ibs) 1,200 1917 2017 3Q17 DRIVEN BY VALUE Gold Sales (thousand ozs) 4Q17e FReepont-MicMoRAN
Slide 30: Sensitivities (US$ millions)
Sensitivities (US$ millions) 2018e/2019e Operating Change EBITDA Cash Flow Copper: +/- $0.10/Ib $350 $270 Molybdenum: +/- $1.00/Ib $65 $55 Gold: +/- $50/ounce $80 $45 Currencies: ” +/- 10% $145 $100 13 $1.19 Euro, 3.21 Peruvian Nuevo Sol base case assumption. Each olla, dollar 710% equals a 2 benefi
Slide 31: PT-FI Mine Plan
PT-FI Mine Plan PT-FI’s Share of Metal Sales, 2017e-2022e 2017e - 2022ePT-Fl Share Total: 6.2 billion |bs copper Annual Average: 1.0 billion bs 2017 - 2022ePT-FI Share Total: 9-1 million ozs gold Annual Average: 1.5 million ozs 24 16 a2 } Hl i 2017e 2018e BB copper, bition ts Gord, mitiion ozs 2021e
Slide 32: FCX Debt Maturities as of 9/30/17
FCX Debt Maturities as of 9/30/17 (US$ billions) Total Debt & Cash at 9/30/17 $28 $28 $3.0 In poe etek 2017, Redeemed $543 mmin Senior Notes Interest: ings A with $35 mm perannum DRIVEN BY VALUE FReepont-McMoRAN
Slide 33: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (in milions) 12 Months Ended 392017 9/30/2017 ‘$277 $1,043 Interest expense, net 304 814 Income tax provision 387 1,039 Dexeoston ce letion and amortization aig 1,850 (Gain) L exchanges and early extinguishment of debt ce) Net ain) toss on sles of esses, (33) 47 Accret