Slide 1: FCX Conference Call 4th Quarter 2021 Results
FCX Conference Call 4th Quarter 2021 Results January 26, 2022
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 future performance. Forward-looking statements are all statements other than statements of historical facts, such as plans, projections, or expectation
Slide 3: 2021 Accomplishments
2021 Accomplishments Operational Financial ESG • Effective COVID management • Strong financial results and • Advanced climate initiatives substantial cash flow • Effective supply chain generation • Awarded The Copper Mark management for responsible production • Achieved net debt* target – practices
Slide 4: Strong Execution / Favorable Markets
Strong Execution / Favorable Markets Copper Sales Unit Net Cash Costs (1) Adjusted EBITDA (2) Operating Cash Flows Net Debt (3) ~19% Higher ~9% Lower ~160% Higher ~156% Higher ~$4.7 bn Lower (bns) ($ per lb) ($ bns) ($ bns) ($ bns) $10.9 $7.7 3.8 $1.48 $1.34 3.2 $6.1 $4.2 $3.0 $1.4 2020 2021 2020 20
Slide 5: Copper – Metal of the Future
Copper – Metal of the Future Critical to Global Decarbonization Intensity of Use Is Increasing with Decarbonization More than 65% of the Electric vehicles use Renewable energy Copper consumption world’s copper is used up to four times more technologies use four to associated with electric in applica
Slide 6: Compelling Investment Case for Copper & Freeport
Compelling Investment Case For Copper & Freeport Rising Supply Structural Deficits Demand Scarcity • Global economic recovery • Exceptionally low visible and infrastructure exchange inventories development • Geology • New demand drivers for • Responsible producer of scale clean energy • Permitting -
Slide 7: Long-Lived Reserve Base
Long-Lived Reserve Base Copper Reserves (1) By Region Consolidated Mineral Incremental Reserves (1) Mineral Resources (2) As of 12/31/2021 (recoverable) (contained) Copper (bn lbs) 107 191 Indonesia South 30% Gold (mm ozs) 27 58 America 30% Molybdenum (bn lbs) 3.4 5.9 (1) Preliminary estimate of rec
Slide 8: Growing Margins & Cash Flow
Growing Margins & Cash Flow • Volume growth Annual EBITDA Estimates (1) ($ in billions) 2021 v. 2020 2022e v. 2021 Copper ~19% ~13% Gold ~59% ~16% • Effective cost management ~$16 • Expanding margins ~$12 • Additional embedded growth $10.9 options in portfolio • Laser focused on execution $4.33/lb $
Slide 9: Successful Ramp-up of Grasberg Underground Mines
Successful Ramp-up of Grasberg Underground Mines • 4Q21 annualized metal production reached ramp-up targets • Major accomplishment – establishes Grasberg Complex as world’s largest underground mine 2021-2023e Annual Average Target 100% as % of Targeted Average 2021-2023e >1.5 bn lbs Cu & 1.6 mm ozs
Slide 10: Significant Underground Development
Significant Underground Development Grasberg Block Cave (GBC), DMLZ & Big Gossan, 2004-2021 Underground Development in Grasberg Minerals District Key Accomplishments AB Adits Grasberg Open Pit • Over 350 miles of tunneling Grasberg BC • Over 7 miles of UG Rail (10 trains operating) Kucing Liar 2004
Slide 11: Future Growth Embedded in Existing Asset Base
Future Growth Embedded in Existing Asset Base Provides Increased Leverage to Higher Copper Prices New Leach Bagdad Lone Star El Abra Kucing Liar Technologies Expansion Expansions Expansion Grasberg District Americas Arizona Arizona Chile Indonesia • Focused on initiatives • Double concentrator • Nea
Slide 12: Lone Star Update
Lone Star Update Oxides Sulfides 2P Reserves: 4.9 billion lbs Mineral Potential: ~50 billion lbs (3) 120 (1) • Success of oxide development advances 96 opportunity for scale Low capital 75 intensity • Design to incorporate combined leach and investment concentrate facilities – similar to Morenci in
Slide 13: Advancing New Leach Technologies
Advancing New Leach Technologies Taking Leach to the Next Level • Industry leader with long history of leach production Copper in Leach Stockpiles • Internal and external initiatives to advance sulfide Unrecoverable by leaching technologies and to drive continuous Traditional Leach Methods recovery
Slide 14: World's Premier Publicly Traded Copper Producer
World’s Premier Publicly Traded Copper Producer Portfolio of High-Quality Experienced Management Team Copper / Gold Assets with Embedded Growth Options Industry Leader Difficult to Replicate with Size, Scale and Durability Strong Track Record Copper Supported by Positive and Commitment to Communitie
Slide 15: The Future
THE FUTURE fe =o = aa TT = Le
Slide 16: Financial Review & Outlook
Financial Review & Outlook 16
Slide 17: 4Q 2021 Operations Update
4Q 2021 Operations Update North America South America Indonesia Cu Sales: 364 mm lbs Cu Sales: 286 mm lbs Cu Sales: 370 mm lbs Au Sales: 392 k ozs • Lone Star/Safford • Cerro Verde - Peru • Grasberg Underground o Produced 265 mm lbs in 2021 (exceeded o 4Q21 mill avg: 377k mt/d o 4Q21 annualized meta
Slide 18: Indonesia Downstream Processing Update
Indonesia Downstream Processing Update • PT-FI committed in 2018 IUPK to construct 2 mm tpy in-country 4Q Progress Report Cu concentrate processing capacity by December 2023 o Construction of new greenfield smelter has been delayed by COVID-19 o Project expected to be completed as soon as feasible i
Slide 19: Annual Sales Profile
Annual Sales Profile January 2022 Estimate Copper Sales(1) (billion lbs) Gold Sales(2) (million ozs) 5 2 1.8 1.6 1.6 4.5 4.3 1.4 4.2 4 3.8 1 0.9 3.2 3 0 2020 2021 2022e 2023e 2024e 2 Molybdenum Sales (million lbs) 100 1 80 82 80 80 80 75 50 0 2020 2021 2022e 2023e 2024e 25 (1) Consolidated copper sa
Slide 20: 2022e Quarterly Sales
2022e Quarterly Sales Copper Sales (million lbs) Gold Sales (thousand ozs) 1,200 500 1,125 1,130 400 400 400 1,075 400 380 970 300 1,000 200 100 800 0 1Q22e 2Q22e 3Q22e 4Q22e Note: Consolidated gold sales include 71k ozs in 1Q22e, 75k ozs 600 in 2Q22e, 75k ozs in 3Q22e and 75k ozs in 4Q22e for nonco
Slide 21: Reconciliation of 2021 Unit Net Cash Cost Guidance for 2022e
Reconciliation of 2021 Unit Net Cash Cost Guidance for 2022e ($ and ¢ per pound of copper) 2021 Actual 2022e Guidance Price Realizations Price Assumptions $4.33 Cu / $1,796 Au / $15.56 Mo Impacts $4.50 Cu / $1,800 Au / $19 Mo Energy, Acid, Labor, M&S, higher volumes* Site Production & Delivery $1.93
Slide 22: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices ($ in bns except copper, gold and molybdenum prices) Sensitivities EBITDA l ($1,800/oz gold, $19/lb molybdenum) Average ’23e/’24e (US$ in mms) $20 EBITDA $15 Copper +/-$0.10/lb $430 $10 Molybdenum +/-$1.00/lb $ 80 Gold +/-$50/oz $ 85 $5 Average ’23e/’24e
Slide 23: Consolidated Capital Expenditures
Consolidated Capital Expenditures Excluding Indonesia Smelter Projects CAPEX (1) ($ in bns) $ Net of Scheduled Contributions $3.3 $3.1(2) Planned $2.7 $1.4(3) Planned (3) $1.9 $0.7 Discretionary Discretionary $1.7(2) Major $0.6 $0.7 Projects $1.3 Other $0.6 $1.3 $1.3 2021 2022e 2023e (1) See slide 1
Slide 24: Recent New Discretionary Capital Additions
Recent New Discretionary Capital Additions* Kucing Liar Grasberg Mill Recovery Project • Commenced long-term mine development activities • Installing new copper cleaner circuit • Approximate 10-year development timeframe • Improved copper concentrate grades and metal • Sustain large-scale, low-cost
Slide 25: Solid Balance Sheet and Credit Metrics
Solid Balance Sheet and Credit Metrics Recent Investment Grade $ Net Debt (1) upgrades by Moody’s and Fitch ($ bns) $6.1 (2) $1.4 12/31/2020 12/31/2021 Net Debt / Adjusted EBITDA (3) 1.5x 0.1x (1) Net debt equals consolidated debt less consolidated cash and cash equivalents. (2) Consolidated debt of
Slide 26: Financial Policy
Financial Policy Strategic Objectives Maintain strong Increase cash returns Advance organic growth balance sheet (1) to shareholders opportunities Commenced Performance-Based Payout Framework in November 2021 Base dividend Variable dividend Share repurchase program • Annual rate of $0.30 per share •
Slide 27: Increasing Shareholder Returns
Increasing Shareholder Returns Combination of dividends and repurchases designed to achieve 50% performance-based payout Potential ~$3.3 bn* Cash Returns Timeline FEBRUARY 2021 Share Reinstated common stock Repurchases dividend $2.4 billion JUNE 2021 remains available under Board Achieved net debt t
Slide 28: Executing Clearly Defined Strategy Focused on Copper
Executing Clearly Defined Strategy Focused on Copper Strong cash flow Favorable generation and operational and balance sheet market outlook Responsible Advancing future producer with organic growth proven track record opportunities Successful ramp-up Increasing cash of Grasberg returns to shareholde
Slide 29: Reference Slides
ELECTRIFYING THE FUTURE Reference Slides
Slide 30: Our COVID-19 Response
Our COVID-19 Response Prioritizing the Health & Supporting Serving Well-Being of Our Our Communities Our Customers Workforce Active and preventive Providing monetary and As a leading supplier management, through in-kind contributions of of copper to the global the implementation of medical supplies
Slide 31: Electrifying the Future – 2021 ESG Highlights
• We are committed to respecting the rights of all people Electrifying the Future – 2021 ESG Highlights ✓ Announced 2050 Net Zero aspiration, established new 2030 PT-FI GHG emissions intensity reduction target ✓ Copper Mark awarded at over 50% of our global copper-producing sites, with more to come
Slide 32: The Copper Mark
The Copper Mark Recognition for Responsible Production 〉 Assurance framework developed to demonstrate the copper industry’s responsible production practices and contribution to the United Nations Sustainable Development Goals 〉 Producers participating in The Copper Mark are committed to adhering to
Slide 33: Financial Highlights
Financial Highlights Sales Data 4Q21 2021 Copper Consolidated Volumes (mm lbs) 1,020 3,807 Average Realization (per lb) $ 4.42 $ 4.33 Site Production & Delivery Costs (per lb) (1) $ 1.96 $ 1.93 Unit Net Cash Costs (per lb) $ 1.29 $ 1.34 Gold Consolidated Volumes (000’s ozs) 395 1,360 Average Realiza
Slide 34: 4Q21 Mining Operating Summary
4Q21 Mining Operating Summary Sales From Mines for 4Q21 & 4Q20 by Region North America South America (2) Indonesia (3) 364 370 392 320 286 286 293 260 (1) (1) 19 21 Cu Mo Au mm lbs mm lbs 000 ozs 4Q21 4Q20 4Q21 4Q20 4Q21 4Q20 4Q21 4Q20 4Q21 4Q20 North South 4Q21 Unit Production Costs (per lb of Cu)
Slide 35: 2022e Outlook
2022e Outlook Sales Unit Net Cash Operating Capital Outlook Cost of Copper Cash Flows (2) Expenditures • Copper: 4.3 billion lbs • Site prod. & delivery • ~$8 billion(3) @ $4.50/lb • $3.3 billion (4) (excluding o 2022e: $1.95/lb copper smelter(5)) • Gold: 1.6 million ozs o 1Q22e: $1.99/lb o $2.0 bil
Slide 36: 2021 and 2022e Sales by Region
2021 and 2022e Sales by Region 2021 Sales by Region North America South America Indonesia 1,436 1,316 1,055 82 (1) 1.36 (2) Cu Mo Au mm lbs mm lbs mm ozs 2022e Sales by Region North America South America Indonesia 1,550 1,570 1,180 80 (1) 1.58 (2) Cu Mo Au mm lbs mm lbs mm ozs (1) Includes molybdenu
Slide 37: 2021 and 2022e Unit Production Costs by Region
2021 and 2022e Unit Production Costs by Region North South 2021 Unit Production Costs (per lb of Cu) America America Indonesia Consolidated Cash Unit Costs (2) Site Production & Delivery (1) $2.13 $2.23 (2) $1.49 $1.93 By-product Credits (0.33) (0.32) (1.95) (0.89) Treatment Charges 0.09 0.13 0.24 0
Slide 38: Grasberg - World Class Block Cave Design
Grasberg - World Class Block Cave Design Substantial Infrastructure in Place to Support Large-Scale Production Grasberg Block Cave DMLZ Plan View Ramp-up Schedule Plan View 100 meters Ramp-up Schedule 100 meters (000’s t/d of Ore) (000’s t/d of Ore) N N 130 135 123 69 73 PB3 68 67 PB2N 106 58 1 2 2
Slide 39: PT-FI Mine Plan Metal Sales, 2020 – 2026e
PT-FI Mine Plan Metal Sales, 2020 – 2026e Copper 2022e – 2026e Gold 2022e – 2026e Total: 7.9 billion lbs copper Total: 7.8 million ozs gold Annual Average: ~1.6 billion lbs Annual Average: ~1.6 million ozs 1.8 1.6 1.6 1.65 1.65 1.6 1.5 1.5 1.4 1.4 1.3 1.3 0.8 0.84 Cu Au bn mm lbs ozs 2020 2021 2022e
Slide 40: Indonesia Downstream Processing Activities
Indonesia Downstream Processing Activities New Greenfield Smelter PT Smelting Expansion Precious Metals Refinery (PMR) › 1.7 mm mt of annual concentrate capacity › 30% increase to existing smelter to add 300,000 › To be constructed to process gold and silver mt of annual concentrate capacity from ne
Slide 41: FCX Debt Maturities as of 12/31/21
FCX Debt Maturities as of 12/31/21 (US$ bns) $8 Total Debt & Cash at 12/31/21 FCX Revolver $ - Senior Notes 8.6 Cerro Verde Term Loan 0.3 $6.2 PT-FI Term Loan (1) & Other 0.6 $6 Total Debt $ 9.5 Consolidated Cash and Cash Eq. $ 8.1 Undrawn FCX Credit Facility 3.5 Total Liquidity $ 11.6 $4 4.125%, 4.
Slide 42: 4Q21 Copper Realization & 1Q22e Guidance
4Q21 Copper Realization & 1Q22e Guidance 4Q21 LME Average $4.40/lb Copper Price 3-Mo. Fwd Price for Copper $4.42/lb at the End of December $4.42/lb FCX 4Q21 Consolidated Copper Price Realization (Generally, 50/50 weight of qtrly avg and 3-mo forward price at end of period) FCX 4Q21 Prior Period Reve
Slide 43: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in mm) 4Q21 2021 2020 Net income attributable to common stock $1,106 $4,306 $ 599 Interest expense, net 171 602 598 Income tax provision 626 2,300 944 Depreciation, depletion and amortization 568 1,998 1,528 Metals inventory adjustments 1 16 96 Net gain on sales of
Slide 44: Freeport
FREEPORT FOREMOSTYN COPPER