Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q1 2018 Earnings Presentation
27 slides from Freeport-mcmoran's earnings presentation, Apr 24, 2018
Slide 1: 1st Quarter 2018 Earnings Conference Call
POWERED BY COPPER 1st Quarter 2018 Earnings Conference Call April 24, 2018
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
POWERED Cautionary Statement BY. COPPER Regarding Forward-Looking Statements idity, tax rates, and sales. The words “anticipates, “may,” “can,” ‘plans, “believes,” “estimates,” “expects,” “projects,” “targets,” “intends,” “likely,” ‘wil,” “should, ‘to be, “potential” ance disputes and the outcome o
Slide 3: Well-Placed to Benefit from Industry-Leading Position in Copper
| = Well-Placed to Benefit from Industry-Leading Position in Copper = = Long-Lived, Geographically Diverse Reserves | and Resources = Strong Cash Flows Underpinned by Large-Scale Production Capacity and Ongoing Cost Management = Attractive Inventory of Potential New Low-Risk Development Projects Lar
Slide 4: Financial Policy
POWERED BY COPPER Financial Policy = Significant Deleveraging Over Last Two Years Balanced Approach = Positive Market to Enable Further Debt Reduction & Enhanced Returns to Shareholders Additional Disciplined Approach to Investing in — Attractive Growth Projects Cash Returns to Va Shareholders = Boa
Slide 5: 1Q18 Highlights – Productivity, Cost and Capital Discipline
POWERED: BY COPPER 1Q18 Highlights — P ivity, Cost and Capital Discipline = Unit Net Cash Costs: $0.98/Ib 29% Below 1Q17 = Cash Flows Exceeded CAPEX by ~$1 bn $0.4 = Repaid $2.0 bn in debt YTD, Including $0.45 bn in April Operating Ey Cash Flow CAPEX' = Advancing Development Copper Sales: 993 mm Ibs
Slide 6: Copper Market Commentary
POWERED: BY COPPER Copper Market Commentary = = Real Demand Growing in Key Regions » Positive Momentum Continues in China » U.S. and Europe Healthy - Autos and Construction * Cathode Consumption Increasing with Tighter Scrap Availability = Supply Constraints Continue + Absence of Major Projects in t
Slide 7: Indonesia Update
POWERED: BY COPPER Indonesia Update = = Parties Have Agreed to a Framework for Long-Term Resolution 51% Divestment @ FMV; Development of New Smelter Extension of Long-Term Mining Rights with Fiscal and Legal Certainty = 15 Quarter Milestones = Open Items + Significant Progress on Fiscal » Agreement
Slide 8: Grasberg Block Cave Development Update
| Reserves | YE 2017 = 963mmt @ 1.01% Cu & 0.72 gitAu Completed to Date v +226 km of Development Mine Access v Service Shaft v Initial Fans & Vent Infrastructure v Batch Plant Near-Term Objectives = 22km of Developmentremaining in 2018 Complete Rail & Ore Flow Systems in 2H18 First Tonne of Ore to M
Slide 9: Deep MLZ Commissioning
POWERED: BY COPPER Deep MLZ Commissioning = = Reviewing DMLZ Mine Plan in Resp to a Conti tion of Mining-induced Seismic Activity Over Last Several Months = Slowing Ramp-up Schedule to Assess Alternatives to Manage Rock Stress in Cave = This is Not Expected to Affect Longer Term Mine Plans or Ultima
Slide 10: Lone Star Oxide Development Project
Lone Star Oxide Development Project == = 12/31/2017 Reserve: 4.4 bn lbs of Copper = $850 mm Project; Utilizes Existing Infrastructure at Safford = Commenced Pre-stripping Activities in 1Q18 = Provides Exposure to Large Sulfide Deposit (60+ bn Ibs Contained Copper) = Low Execution Risk = First Copper
Slide 11: Lone Star drill hole intercepts
Drill Hole | intercept (m) |% Copper 1915-224 305 0 818-281 1s15-242 621 0.83 Sa ea 1917-257 1213 0.47 L$18-279 1817-259 1048 0.44 LS15-242 17-264 18 0.60 1817-265 1202 0.63 1817-266 3 0.56 LS17-265 117-267 1479 0.45 1817-268 77 0.45 1918-279 576 0.51 LS17-266 18-281 43 1.22 LS17-267 ee ri Ls15-224
Slide 12: Large footprint with substantial undeveloped sulfide resources
U.S. ~~" Large footprint with substantial: undeveloped sulfide resources - Significant existing infrastructure vides for Brownfield expansions + Distfigt extensions include * Bagdad + ChinalGobre * Lone Sfag/Safford jorenci * Sierrita South America * El Abra mill project to develop large sulfide res
Slide 13: 2018 Outlook
Sales Outlook Copper: 3.8 Billion Ibs. Gold: 2.4 Million ozs. Molybdenum: 95 Million Ibs. Unit Cost of Copper 2 Site Production & Delivery: $1.70/Ib After By-product Credits: $1.01/Ib, Including $0.97/Ib for 2Q18e Operating Cash Flows ?) ~$5.6 Billion (@ $3.15/Ib Copper for 2Q18e — 4Q18e) Each 10¢/I
Slide 14: Sales Profile
POWs RED BY COPPER Sales Profile CopperSales 0) “Gold Sales _ (million ozs) i 4.0 24 1.6 1.45 37 3.8 3 3 2017 2018e 2019e ——-2020e- 2 5 2021e AVG ) Note: Consolidated gold sales include 144k ozs in 2017, 230k ozs in 2018e, 60k > ‘28102018, 135k 028 for 20200-20216 avg for noncontollng interest = 1 .
Slide 15: Operating Cash Flows and Copper Price Scenarios
Drirac pe » Price pe (USS billions) Ne tet -Tu1e).W ($1,300/0z Gold, $12/Ib Molybdenum) $9 $6 $8 Average $0 2019e-2021e Cu $3.00/Ib Cu $3.25/Ib Cu $3.50/Ib PN orl aes liebe nga Excludes Working Capital Changes ($1,300/oz Gold, $12/lb Molybdenum) $6 $4 82 Average $0 2019e-2021e Cu $3.00/Ib Cu $3.25/I
Slide 16: Capital Expenditures
Capital Expenditures (USS billions) $2.3 2017 2018e 2019e * Major ‘tr vee seponT-McMORAN
Slide 17: Strong Execution of Deleveraging Plan
POWERED Strong Execution of Deleveraging Plan & : Net Debt* at Varying Copper Prices (USS billions) $25.0 $20.4 $20.0 $15.0 $11.8 $10.0 $7.9 $6.1 $5.5 $5.0 st $0.0 [] ai YE2015 YE2016 1018 $3.00 $3.25 $3.50 Adjusted EBITDA 4.6x 2.4x 41x 0.8x 0.7x 0.5x YE 2018e * Net debtequals gross debtlessconsoaet
Slide 18: Slide 18
Slide 19: Financial Highlights
POWERED: BY COPPER Financial Highlights — 1a18 Copper Consolidated Volumes a Ibs) 993 809 Average Realization (per Ib) $3.11 $2.67 Site Production & Delivery Costs (per Ib) $1.67 $1.60 Unit Net Cash Costs (per Ib) $0.98 $1.39 Gold Consolidated Volumes (000’s ozs) 610 182 Average Realization (per oz)
Slide 20: 1Q 2018 Mining Operating Summary
POWERED BY COPPER 1Q 2018 Mining Operating Summary & | 1018 Unit Production Costs SROs ae Cash Unit Costs (Credits) Site Production & Delivery, excluding adjustments $1.84 $1.78 $1.36 $1.67 By-Product Credits (0.20) (0.25) (2.59) (0.98) Treatment Charges 0.10 0.20 5 0.17 Royalties & Export Duties :
Slide 21: 2018e Operating Estimates
2018e Operating Estimates POWERED BY COPPER North South 2018e Unit Production Costs [Gzatizen) Anodes Ancien Indonesia Cash Unit Costs () Site Production & Delivery (2) $1.85 $1.69 $1.52 $1.70 By-product Credits (0.25) (0.25) (2.73) (0.99) Treatment Charges 0.11 0.19 0.25 0.18 Royalties & Export Dut
Slide 22: 2018e Quarterly Sales
POWERED BY Ci COPPER 2018e Quarterly Sales | CopperSales | (million Ibs) GoldSales _ (thousand ozs) 1,200 750 700 690 610 500 30 993 970 990 4 900 | 875 250 | | ol 1018 2018e 3Q18e 4Q18e 600 | ‘Note: Consokdated gold sales include approxmately S% o2sin 1018, 65k ozs 1 20i8e, 65¢0rsin S018eand 0k ozs
Slide 23: PT-FI Mine Plan
PT-FI Mine Plan By COPPER _PT-FI’s Share of Metal Sales, 2017-2022e PAE eey.ty YL Total: 5.4 billion Ibs copper 2018e-—2022e PircmaAguuneetos PT-FIShare Annual Average: 1.1 billion Ibs PT-Fl Share Annual Average: 1.5 million ozs || Copper, billion Ibs EH Gold, million ozs 1.54 as 16 1.6 1.3 12 1.0 1
Slide 24: Grasberg Mining District
POWERED: BY COPPER Grasberg Mining District = PT-Fl History of Block Caving Grasberg open pit Grasberg Block Cave GBT block cave mine Depleted i 10Z black cave mine Depew. DOZblock cave mine Operating + GrasbergBC Indewelopment + Kucing Liar Future development
Slide 25: 2019e - 2021e Sensitivities
POWERED: BY COPPER 2019e - 2021e Sensitivities = (USS millions) Operating EBITDA Cash Flow Copper: +/- $0.10/Ib $360 $280 Molybdenum: +/- $1.00/Ib $80 $75 Gold: +/- $50/ounce $55 $30 Currencies: +/- 10% $175 $125 mus. Each +10% equals ating cos 13072018. € = estimate, [Ec] Freepont-MicMoRan
Slide 26: FCX Debt Maturities as of 3/31/18
POWERED COPPER FCX Debt Maturities as of 3/31/18 (USS billions) Pro forma for Redemption of FCX 6.750% and FMOG 6.875% Senior Notes in April 2018 $8 Total Debt & Cash [EIREMAE Actual PF Call ‘CX Revolver $= $- 96 | | MiSenior Notes 10.4 99 Cerro Verde Credit Facility 12 12 Total Debt S46 STE] Consol
Slide 27: Adjusted EBITDA Reconciliation
POWERED BY COPPER Adjusted EBITDA Reconciliation (in millions) 12-mos Ended 19 2018 3131118 Net income Attributable to Common Stock — Continuing Operations $ 703 $2,265 Interest expense, net 151 785 Income tax provision 506 4,215 Depreciation, depletion and amortization 451 1,776 Loss (gain) on earl