Slide 1: FCX Conference Call to Discuss Revised Operating Plans and 1st Quarter 2020 Results
FCX Conference Call to Discuss Revised Operating Plans in Response to COVID-19 Pandemic and 1st Quarter 2020 Results April 24, 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 technology, including innovation initiatives; industry risks; regulatory changes; political and potential future performance. Forward-looking statements are all
Slide 3: Meeting the Challenge – Current Priorities
Meeting the Challenge – Current Priorities 1. Health & well-being of employees & communities 2. Protecting liquidity & financial strength 3. Aggressive reduction in costs & capital spending 4. Maximizing cash flow in weak market environment 5. Preserving large resources & asset values for the future
Slide 4: Prioritizing the Health & Well-Being of Our Global Team
Prioritizing the Health & Well-Being of Our Global Team Active & Preventive Management Social distancing ▪ Robust health protocols at our operating sites ▪ Testing, screening and tracking ▪ Remote work where applicable Screening employees and visitors ▪ Close monitoring and implementation of global
Slide 5: Supporting Communities Where We Operate
Supporting Communities Where We Operate Providing Monetary and In-kind Contributions of Medical Supplies & Food From surgical masks to face shields to buses to transport healthcare workers, FCX is donating items needed to help ensure healthcare workers near our communities around the world have the
Slide 6: Global Workforce: 68,000+ People
Global Workforce: 68,000+ People 2,000 2019 Copper Production Europe 24,500 North America Indonesia 0.6 bn lbs Peru/ Chile 29,200 1.2 bn lbs Indonesia 12,400 South America United States 1.5 bn lbs 6 NOTE: As of YE 2019
Slide 7: Serving our Customers
Serving our Customers Freeport is a leading supplier of copper to the global economy. Copper is essential in infrastructure, telecommunications, renewable energy, water supply, healthcare, food chain, construction and manufacturing. 7
Slide 8: Copper's Role in Fighting COVID-19
Copper’s Role in Fighting COVID-19 Public Transportation Clinics and Hospitals Schools Public Buildings Hotels and Restaurants • Copper can reduce, neutralize and in certain • Studies show it could play an invaluable role in public cases eliminate, transmission of bacteria, health if used more frequ
Slide 9: Market Conditions Have Changed Rapidly
Market Conditions Have Changed Rapidly Prices at January 23rd Earnings Call vs. Current Revenues Drivers Costs Drivers Rp Copper ($/lb) Gold ($/oz) Brent Crude ($/bbl) Rupiah (/USD) Diesel Represents ~8% of Operating Cost $3.00 $2,000 $90 20,000 ~ $2.85 $1,736 $2.75 $1,750 $70 17,500 $1,55 ~ $62 15,
Slide 10: Protecting Liquidity & Financial Strength
Protecting Liquidity & Financial Strength Prudent Balance Sheet Actions Taken Pre-crisis May 2019 November 2019 August 2019 / February 2020 ▪ Extended Credit Facility ▪ Amended financial ▪ Opportunistic debt refinancing to to April 2024 covenants in Credit Facility extend maturities • $2.5 bn in new
Slide 11: Aggressive Reduction in Costs & Capital Spending
Aggressive Reduction in Costs & Capital Spending Protecting Liquidity & Financial Strength Maximizing cash flows in weak markets Year-end 2020e Consolidated Cash ($ in bns) $1.7 ▪ ~400 mm pound reduction (~15%) in the Americas 2020 estimated copper sales volumes $1.1 ▪ $1.3 bn reduction (~18%) in 20
Slide 12: Expanding Margins & Cash Flow – 2021 and Beyond
Expanding Margins & Cash Flow – 2021 and Beyond Rising Copper & Gold Sales & Declining Unit Costs Annual EBITDA Estimates (1) ($ in billions) Copper & Gold Sensitivities Assuming $9 Molybdenum $6.5 3.9 $6.0 26% 3.1 $4.5 $4.0 $1.55 1.4 $2.1 ~ $1.20 0.8 75% 23% Cu Au bn mm lbs ozs $/lb $2.30/lb Cu(2)
Slide 13: Management Success & Experience Navigating Prior Crises
Management Success & Experience in Successfully Navigating Prior Crises FCX Stock Price ▪ Repaid $10 bn in debt within 9 months of $60 2008/ acquisition ▪ Aggressive actions to reduce capital & costs 2009 $12 ▪ Debt free by 2011 Financial crisis 18 YE 2008 YE 2010 months after Phelps Dodge Transacti
Slide 14: Operations Update
Operations Update Cerro Verde ▪ Peruvian government declared national emergency in effort to contain outbreak of COVID-19 on March 16 • Order has been extended; currently through May 10 ▪ During April, concentrator has operated at 1/3 of planned rates in-line with government order ▪ Subject to gover
Slide 15: Project Update: Lone Star Leach Project
Project Update Lone Star Leach Project in Arizona Nearing Completion April 2020 Building value in new U.S. cornerstone asset ▪ Low-risk development in established mining district; wholly owned ▪ Located 8 miles north of Safford; 18 miles southwest of Morenci ▪ $850 mm project ▪ Remaining investment:
Slide 16: Project Update: Grasberg Transition on Track
Project Update Grasberg Transition on Track Drawbelling Ore Extraction (000 t/d) Deep MLZ (DMLZ) & DMLZ GBC DMLZ 40 40 37 37 30 Grasberg Block 30 Forecast 30 25 24 25 18 20 Cave (GBC) 20 17 20 15 12 13 averaged 37,500 t/d 10 4 10 10 10 10 7 in 1Q20: slightly 0 1Q 4Q 1Q20 Qtr Avg Qtr Avg 0 1Q 4Q * 1Q
Slide 17: Project Update: Indonesian Smelter
Project Update Indonesian Smelter PT-FI has • Land Preparation advanced multiple • Engineering project activities • Commercial & financing negotiations • Gresik area has been declared a “Red Zone” Experiencing • International contractor dislocation delays • PT-FI in discussions with Indonesian assoc
Slide 18: Copper Market Commentary
Copper Market Commentary Short-Term Long-Term Considerations Considerations Copper Consumption By Region (1) ▪ Supply/demand fundamentals remain positive China United States Europe Rest of World 51% 8% 15% 26% ▪ Important role for copper in global economy ▪ Uncertain near-term demand outlook ▪ Coppe
Slide 19: International Copper Association: Copper Essential for Our Future
° national Copper Association Copper: ESSENTIAL FOR OUR FUTURE Minerals and metals form the backbone of the modern ‘world. No matter where you may call home, you can find ‘copper and materials everywhere you look in your community. Healthcare workers, transportation providers, educators and delivery
Slide 20: Preserving Asset Values for the Future
Preserving Asset Values for the Future Long-Lived Reserve Base Copper Reserves (1) By Region Consolidated Reserves (1) Mineralized Material (2) As of 12/31/2019 (recoverable) (contained) 30+ Year implied reserve life for copper, excluding mineralized Copper (bn lbs) 116 133 material Gold (mm ozs) 30
Slide 21: World's Premier Publicly Traded Copper Producer
World’s Premier Publicly Trader Copper Producer Portfolio of High Experienced Management Team Quality Copper Assets Difficult to Replicate Industry Leader with Size, Scale and Durability Strong Track Record & Commitment to Communities and Copper Supported by Positive Environmental Responsibility Lon
Slide 22: Strong, Resilient and Up To The Challenge! Team Freeport
Strong, Resilient and Up To The Challenge! TEAM FREEPORT 22 22
Slide 23: Financial Review & Outlook
Financial Review & Outlook FREEPORT FOREMOST IN COPPER
Slide 24: Summary of Operating Plan Changes
Summary of Operating Plan Changes North America Seven open-pit copper mines South America Two open-pit copper mines Indonesia Grasberg underground Cu/Au mines Revised mine plans: Revised Cerro Verde mine plans: Revised mine plans incorporate: North America ▪ Lower cost mining configuration ▪ Lower c
Slide 25: Actions Enhance Outlook For Cash Generation and Liquidity
Actions Enhance Outlook For Cash Generation and Maintenance Of Strong Liquidity At Low Prices APRIL 2020 JANUARY 2020 ESTIMATES ESTIMATES Based on $2.30/lb of Cu Based on $2.85/lb of Cu Total 1Q20 Remainder Total Total Percent Consolidated Financial Data ($ in bns) Actuals 2020e 2020e 2020e Change O
Slide 26: Sales Profile
Sales Profile April 2020 Estimate Copper Sales (1) (billion lbs) Gold Sales (2) (million ozs) Molybdenum Sales (million lbs) 5 2 100 4.2 1.6 85 3.9 80 80 4 1.4 3.1 75 3 1 0.8 50 2 25 1 0 0 0 2020e 2021e 2022e 2020e 2021e 2022e 2020e 2021e 2022e Roll Forward of Estimated Copper Sales (bns) 2020e 2021
Slide 27: Declining Unit Net Cash Costs
Declining Unit Net Cash Costs 1Q20 Unit Net Cash Costs ($ per lb of Cu) N.A. S.A. Indonesia Consolidated Site Production & Delivery (1) $2.15 $2.00(2) $2.68 $2.19 By-product Credits (0.22) (0.17) (1.85) (0.49) Treatment Charges 0.11 0.16 0.30 0.17 Royalties & Export Duties - 0.01 0.18 0.03 Annual Un
Slide 28: EBITDA and Cash Flow at Various Copper Prices
(1) EBITDA and Cash Flow at Various Copper Prices Cash Flows Expected to Grow Following 2020 Transition Year ($ in bns except copper, gold and molybdenum prices) Sensitivities EBITDA l ($1,600/oz gold, $9/lb molybdenum) Average ’21e/’22e (US$ in mms) $8 EBITDA $6 Copper +/-$0.10/lb $385 Molybdenum +
Slide 29: Consolidated Capital Expenditures
Consolidated Capital Expenditures ($ in bns) Net of Scheduled Contributions $2.3 Roll Forward of 2020e projected CAPEX $2.0 $2.1(1) January Estimate $2.8 $1.9(1) Major North America (0.3) Mining South America (0.2) Projects $1.3(2) Indonesia (0.2) Other (0.1) $1.3(2) Other Net change ($0.8) Mining A
Slide 30: Financial Policy
Financial Policy ▪ Near-term focus prioritizes liquidity and balance sheet strength while preserving large long- lived mineral resources ▪ In March 2020, announced suspension of May quarterly cash dividend of 5¢/share in response to global pandemic and uncertain business environment • Under current
Slide 31: Freeport – Foremost in Copper
FREEPORT FOREMOST IN COPPER
Slide 32: Reference Slides
Reference Slides FREEPORT FOREMOST IN COPPER
Slide 33: Financial Highlights
Financial Highlights Sales Data 1Q20 1Q19 Copper Consolidated Volumes (mm lbs) 729 784 Average Realization (per lb) $2.43 $2.90 Site Production & Delivery Costs (per lb) $2.19 $2.17 Unit Net Cash Costs (per lb) $1.90 $1.78 Gold Consolidated Volumes (000’s ozs) 144 242 Average Realization (per oz) $1
Slide 34: 1Q20 Mining Operating Summary
1Q20 Mining Operating Summary Sales From Mines for 1Q20 & 1Q19 by Region North America South America (2) Indonesia (3) 355 320 290 247 (1) 22 (1) 174 235 21 127 139 Cu Mo Au mm lbs mm lbs 000 ozs 1Q20 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 1Q19 North South 1Q20 Unit Production Costs (per lb of Cu)
Slide 35: 2020e Outlook
2020e Outlook ▪ Copper: 3.1 billion lbs Sales ▪ Gold: 0.8 million ozs. Outlook ▪ Molybdenum: 80 million lbs Unit Cost ▪ Site production & delivery 2020e: $1.90/lb (2Q20e: $1.95/lb) of Copper ▪ After by-product credits 2020e: $1.55/lb(1) (2Q20e: $1.63/lb) Operating ▪ ~$1.8 billion @ $2.30/lb copper f
Slide 36: 2020e Quarterly Sales
2020e Quarterly Sales Copper Sales (million lbs) Gold Sales (thousand ozs) 1,000 300 271 875 200 200 165 795 144 750 729 100 690 0 1Q20 2Q20e 3Q20e 4Q20e Note: Consolidated gold sales include approximately 26k ozs in 1Q20, 31k ozs 500 in 2Q20e, 37k ozs in 3Q20e and 51k ozs in 4Q20e for noncontrollin
Slide 37: Sensitivities
Sensitivities (US$ in mms, except copper, gold and molybdenum prices) 2020e Change (2Q20e - 4Q20e) EBITDA Operating Cash Flow Copper +/- $0.10/lb $250 $215 Molybdenum +/- $1.00/lb $50 $50 Gold +/- $50/ounce $35 $25 Currencies(1) +/- 10% $125 $95 Diesel +/- 10% $15 $12 2021e-2022e Avg. Change Copper
Slide 38: 2020e Unit Net Cash Costs
2020e Unit Net Cash Costs North South 2020e Unit Net Cash Costs (1) (per lb of Cu) America America Indonesia Consolidated Site Production & Delivery (2) $1.90 $1.91 $1.85 $1.90 By-product Credits (0.21) (0.14) (1.70) (0.55) Treatment Charges 0.08 0.15 0.26 0.14 Royalties & Export Duties - 0.00 0.24
Slide 39: PT-FI Mine Plan
PT-FI Mine Plan Metal Sales, 2020e - 2024e Copper 2020e – 2024e Gold 2020e – 2024e Total: 7.0 billion lbs copper Total: 7.3 million ozs gold Annual Average: 1.4 billion lbs Annual Average: 1.5 million ozs 1.8 1.7 1.7 1.6 1.6 1.6 1.4 1.4 0.74 0.8 Cu Au bn mm lbs ozs 2020e 2021e 2022e 2023e 2024e Tran
Slide 40: World Class Block Cave Design
World Class Block Cave Design Substantial Infrastructure in Place to Support Large-Scale Production Grasberg Block Cave DMLZ Ramp-up Schedule Ramp-up Schedule (2) (000’s t/d of Ore) (000’s t/d of Ore) 130 129 80 75 69 102 59 66 29 33 9 10 3 Cave Fronts 2 Cave Fronts 5 Production Blocks, 2019 2020e 2
Slide 41: FCX Debt Maturities as of 3/31/20
FCX Debt Maturities as of 3/31/20 Pro Forma for April Redemption(1) (US$ bns) $8 Total Debt & Cash at 3/31/20 Pro Forma FCX Revolver $ - Senior Notes 9.0 Cerro Verde Credit Facility 0.8 $6 Other 0.1 Total Debt $ 9.9 $5.5 Consolidated Cash $ 1.4 Undrawn Credit Facility 3.5 Total Liquidity $ 4.9 $4 4.
Slide 42: 1Q20 Copper Realization & 2Q20e Guidance
1Q20 Copper Realization & 2Q20e Guidance 1Q20 LME Average $2.56/lb Copper Price 3-Mo. Fwd Price for Copper $2.24/lb at the End of March $2.43/lb(1) FCX 1Q20 Consolidated Copper Price Realization (Generally, 50/50 weight of qtrly avg and 3-mo forward price at end of period) FCX 1Q20 Prior Period Open
Slide 43: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in mm) 12 mos ended 1Q20 3/31/2020 Net loss attributable to common stock $(491) $(763) Interest expense, net 127 601 Income tax (benefit) provision (60) 345 Depreciation, depletion and amortization 341 1,406 Metals inventory adjustments 222 344 Net loss (gain) on sa
Slide 44: Freeport – Foremost in Copper
FREEPORT FOREMOST IN COPPER