Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q4 2020 Earnings Presentation
39 slides from Freeport-mcmoran's earnings presentation, Feb 26, 2021
Slide 1: FCX Conference Call 4th Quarter 2020 Results
Click to edit Master title style FCX Conference Call 4th Quarter 2020 Results January 26, 2021 fcx.com
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Click to edit Master title style 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 p
Slide 3: 2020 Highlights – Strong Execution
2020 Highlights Click – Strong to edit Master titleExecution style Freeport Team Demonstrated Strong Resilience in Managing the Uncertain Business Environment COVID-19 OPERATIONAL FINANCIAL ▪ Effective global response ▪ Strong execution of operating plans ▪ Strong cash flow generation to COVID-19 pa
Slide 4: Met the Challenge: 2020 versus January 2020 guidance
Seasoned Click to&edit Motivated Team Master titleMet the Challenge style Excellent performance in a year of challenge - comparison to January 2020 guidance Unit Net Cash Costs Adjusted EBITDA Operating Cash Flow CAPEX Net Debt(2) ~15% Lower ~27% Higher ~25% Higher ~29% Lower ~ $2.7 Bn Lower ($ per
Slide 5: ESG Achievements – 2020 Highlights
ESG Achievements Click – 2020 to edit Master title Highlights style ✓ Copper Mark awarded at Cerro ✓ Wildlife Habitat Council re-certified Verde, El Abra, Atlantic Copper PT-FI biodiversity programs at the (first in their respective countries) Gold Tier & Miami ✓ Reached more than 100K women ✓ Ranke
Slide 6: Copper Market Accelerating
Copper Click Accelerating to edit Master title style Market metric tons 2,000,000 $/lb 3.80 Commentary 1,800,000 27% below 2011 high 3.60 ▪ Favorable fundamentals 1,600,000 3.40 ▪ Chinese demand exceptionally strong 1,400,000 Copper Price 3.20 1,200,000 3.00 ▪ Stimulus and pandemic recovery to suppo
Slide 7: Copper – The Metal for the Future
Copper – “The” Click to Metal for edit Master titlethe Future style Copper Expected to Benefit from Acceleration in Decarbonization Initiatives Copper Utilization Copper Consumption EV/Renewable Demand Key to Global Associated with EV/ Expected to Approximate Renewables Expected to Size of US Refine
Slide 8: Grasberg Underground Ramp-up Accelerating
Click to Grasberg edit MasterRamp-up Underground title style Accelerating as % of Targeted Average 2021e-2023e 2021e-2023e Annual Average 100% 1.55 bn lbs Cu & 1.6 mm ozs Au Quarterly Production Annualized 75% 50% 25% 0% 4Q19 4Q20 4Q21e 2022e Note: Includes production from Grasberg Block Cave, DMLZ,
Slide 9: Indonesian Smelter Update
Indonesian Smelter Click to edit Update Master title style Various Options Being Evaluated Gresik ▪ PT-FI committed in 2018 IUPK to construct new smelter by December 2023 • Development commenced for 1.7 mm metric ton per annum greenfield copper concentrate smelter near Gresik in East Java • Project
Slide 10: 2021 Priorities – Charging Ahead
2021 Priorities Click – “Charging to edit Master title styleAhead” Responsibly. Reliably. Relentlessly. sponsibly. Reliably. Relentlessly. Ongoing cost Continue Deliver on Initiate new Advance and capital momentum of Environmental, financial policy evaluations for management; underground Social and
Slide 11: Expanding Margins & Cash Flow
Expanding Margins Click to edit & Cash Master Flow title style ▪ Volume Growth (2021e v. 2020) Annual EBITDA Estimates (1) ($ in billions) • Copper ~20% >$11 • Gold +50% >$10 Gold Revenues ~$3.2 bn per annum ▪ Declining unit net cash costs at $1,850/oz Gold • 2021e expected to decline by ~16% Each $
Slide 12: Long-Lived Reserve Base
Long-Lived Reserve Click to edit MasterBase title style 30+ year implied reserve life for copper, excluding mineralized material Copper Reserves (1) By Region Consolidated Reserves (1) Mineralized Material (2) As of 12/31/2020 (recoverable) (contained) Copper (bn lbs) 113 120 Indonesia South 29% Gol
Slide 13: Optionality in Project Pipeline
Optionality in Project Click to edit MasterPipeline title style Disciplined approach to new investments Lone Star El Abra Atlantic Copper Grasberg Minerals District Grasberg Kucing Liar NORTH AMERICA SOUTH AMERICA INDONESIA ▪ Bagdad Expansion ▪ El Abra Mill Project - Chile ▪ Kucing Liar – Grasberg D
Slide 14: The Freeport Edge
Click The to editEdge Freeport Master title style Global Industry Trusted World-Class Block Cave Responsible Leader Operator Developer Leader Producer One of the world’s Strong reputation Industry leading Industry leading Long-standing largest publicly and franchise in track record for technical com
Slide 15: Financial Review & Outlook
Click to edit Master title style Financial Review & Outlook
Slide 16: 4Q 2020 Operations Update
4QClick 2020 Operations Update to edit Master title style Continue to focus on strong execution NORTH AMERICA SOUTH AMERICA INDONESIA Cu Sales: 320 mm lbs Cu Sales: 260 mm lbs Cu Sales: 286 mm lbs Au Sales: 293 k ozs ▪ Lone Star - Arizona ▪ Cerro Verde - Peru ▪ Grasberg Underground • Production cont
Slide 17: 2021e Outlook
2021e ClickOutlook to edit Master title style Sales Unit Net Cash Operating Capital Outlook Cost of Copper Cash Flows (2) Expenditures ▪ Copper: 3.8 billion lbs ▪ Site prod. & delivery ▪ ~$5.5 billion @ ▪ $2.3 billion (3) • 2021e: $1.78/lb $3.50/lb copper for ▪ Gold: 1.3 million ozs • $1.4 billion f
Slide 18: Annual Sales Profile
Annual Click Sales to editProfile Master title style January 2021 estimate Copper Sales(1) (billion lbs) Gold Sales(2) (million ozs) 5 2 1.8 1.6 4.4 4.3 1.3 4 3.8 1 0.9 3.2 3 0 2020 2021e 2022e 2023e 2 Molybdenum Sales (million lbs) 100 85 1 80 80 80 75 50 0 2020 2021e 2022e 2023e 25 (1) Consolidate
Slide 19: 2021e Quarterly Sales
2021e ClickQuarterly Sales title style to edit Master Copper Sales (millions lbs) Gold Sales (thousand ozs) 1,250 400 360 380 310 300 275 1,025 1,015 200 1,000 955 100 825 0 750 1Q21e 2Q21e 3Q21e 4Q21e Note: Consolidated gold sales include approximately 52k ozs in 1Q21e, 58k ozs in 2Q21e, 67k ozs in
Slide 20: Cash Flow and EBITDA at Various Copper Prices
Clickand EBITDA to edit CashMaster Flow attitle style Various Copper Prices ($ in bns except copper, gold and molybdenum prices) Sensitivities Average ’22e/’23e EBITDA l ($1,850/oz gold, $9/lb molybdenum) (US$ in mms) $15 EBITDA $12 Copper +/-$0.10/lb $425 $9 Molybdenum +/-$1.00/lb $ 45 $6 Gold +/-$
Slide 21: Consolidated Capital Expenditures
Consolidated Click to editCapital MasterExpenditures title style Estimates excluding potential Indonesian smelter CAPEX (1) ($ in bns) $ Net of Scheduled Contributions $2.3 $2.0 (2) $2.0 (2) $2.1 $1.8 $1.8(2) Major Projects (3) $1.0(3) $1.2(3) $1.4 Other $0.8 $0.9 $1.0 2020 2021e 2022e (1) See page
Slide 22: Strong Financial Position & Liquidity
Strong ClickFinancial Position to edit Master title&style Liquidity (US$ bns) $ Net Debt* Liquidity $7.8 Liquidity Position as of 12/31/20 $6.1 Consolidated Cash $3.7 Undrawn Credit Facility $3.5 Total Liquidity $7.2 12/31/2019 12/31/2020 1.5x 2020 EBITDA < 1.0x 2021e EBITDA** * Net debt equals cons
Slide 23: Financial Policy
Financial Click toPolicy edit Master title style ▪ Strong financial position and outlook for substantial cash PRIORITIES flow generation ▪ Board to review resumption of common stock dividends in 2021 Balance Sheet Organic Strength ▪ Priorities include further debt reduction, shareholder returns Grow
Slide 24: World's Premier Publicly Traded Copper Producer
World’s ClickPremier to editPublicly MasterTraded Copper Producer title style Portfolio of High-Quality Experienced Management Team Copper / Gold Assets Difficult to Replicate Industry Leader with Size, Scale and Durability Strong Track Record and Commitment to Communities / Copper Supported by Posi
Slide 25: Reference Slides
Click to edit Master title style Reference Slides
Slide 26: Our COVID-19 Response
Our COVID-19 Click to edit Response Master title style Prioritizing the Health & Supporting Serving Well-Being of Our Our Communities Our Customers Workforce Active & preventive Providing monetary and As a leading supplier management, through in-kind contributions of of copper to the global the impl
Slide 27: Responsible Value Chains
Responsible Value Click to edit Chains Master title style Dedicated to delivering responsibly produced copper to markets around the world ▪ Focused on advancing responsibility in our value chains by: 1) managing risks in our own supply chain; The Copper Mark is a new assurance framework 2) managing
Slide 28: Financial Highlights
Financial Click toHighlights edit Master title style Sales Data 4Q20 2020 Copper Consolidated Volumes (mm lbs) 866 3,202 Average Realization (per lb) $3.40 $2.95 (1) Site Production & Delivery Costs (per lb) $1.78 $1.88 Unit Net Cash Costs (per lb) $1.28 $1.48 Gold Consolidated Volumes (000’s ozs) 2
Slide 29: 4Q20 Mining Operating Summary
4Q20 Mining Click to editOperating Summary Master title style Sales From Mines for 4Q20 & 4Q19 by Region North America South America (2) Indonesia (3) 358 345 320 286 260 314 293 (1) 203 (1) 22 21 Cu Mo Au mm lbs mm lbs 000 ozs 4Q20 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 4Q19 North South 4Q20 Unit
Slide 30: 2020 and 2021e Sales by Region
2020 and Click to2021e Sales by edit Master titleRegion style 2020 Sales by Region North America South America Indonesia 1,422 976 80 (1) 804 0.86 (2) Cu Mo Au mm lbs mm lbs mm ozs 2021e Sales by Region North America South America Indonesia 1,465 1,320 1,035 (1) 85 1.3 (2) Cu Mo Au mm lbs mm lbs mm
Slide 31: 2020 and 2021e Unit Production Costs by Region
2020 and Click to2021e edit Master title style Unit Production Costs by Region North South 2020 Unit Production Costs (per lb of Cu) America America Indonesia Consolidated Cash Unit Costs Site Production & Delivery (1) $1.90 $1.86 $1.88 $1.88 (2) By-product Credits (0.19) (0.17) (2.03) (0.64) Treatm
Slide 32: Grasberg – World Class Block Cave Design
Click to- edit Grasberg WorldMaster Class title Block style Cave Design Substantial Infrastructure in Place to Support Large-Scale Production Grasberg Block Cave DMLZ Plan View Ramp-up Schedule Plan View 100 meters Ramp-up Schedule (2) 100 meters (000’s t/d of Ore) (000’s t/d of Ore) 127 129 130 N 7
Slide 33: Project Update: Grasberg Transition Remains on Track
Project Click Update to edit Master title style Grasberg Transition Remains on Track Deep MLZ (DMLZ) & Drawbelling Ore Extraction (000 t/d) DMLZ GBC41 DMLZ Grasberg Block 40 40 37 34 34 60 47 Forecast Cave (GBC) 30 30 24 25 40 39 20 20 averaged 84,900 t/d 10 12 12 15 15 15 10 15 28 10 10 20 4 in 4Q2
Slide 34: PT-FI Underground Metal Production Rates
PT-FI Underground Click Metal to edit Master titleRamp-up style Production Rates Achieved ~68% of Annualized Metal Target of 1.55 bn lbs of Copper and 1.6 mm ozs of Gold per Annum in 4Q 2020 Copper (million lbs) Gold (thousand ozs) 266 271 236 222 189 181 152 140 1Q20 2Q20 3Q20 4Q20 1Q20 2Q20 3Q20 4
Slide 35: PT-FI Mine Plan Metal Sales 2020–2025e
PT-FI Mine Click PlanMaster title style to edit Metal Sales, 2020 – 2025e Copper 2021e – 2025e Gold 2021e – 2025e Total: 7.7 billion lbs copper Total: 8.0 million ozs gold Annual Average: 1.54 billion lbs Annual Average: 1.6 million ozs 1.8 1.7 1.7 1.6 1.6 1.6 1.6 1.5 1.32 1.3 0.8 0.84 Cu Au bn mm l
Slide 36: FCX Debt Maturities as of 12/31/20
FCX Debt Click to Maturities edit Masterastitle of 12/31/20 style (US$ bns) $8 Total Debt & Cash at 12/31/20 FCX Revolver $ - $6.9 Senior Notes 9.1 Cerro Verde Credit Facility 0.5 $6 Other 0.1 Total Debt $ 9.7 Consolidated Cash $ 3.7 Undrawn Credit Facility 3.5 Total Liquidity $ 7.2 $4 5.00%, 4.125%
Slide 37: 4Q20 Copper Realization & 1Q21e Guidance
Click 4Q20 to edit Copper Master title Realization style Guidance & 1Q21e 4Q20 LME Average $3.25/lb Copper Price 3-Mo. Fwd Price for Copper $3.52/lb at the End of December $3.40/lb(1) FCX 4Q20 Consolidated Copper Price Realization (Generally, 50/50 weight of qtrly avg and 3-mo forward price at end o
Slide 38: Adjusted EBITDA Reconciliation
Adjusted Click toEBITDA Reconciliation edit Master title style ($ in mm) 4Q20 YE 2020 Net income attributable to common stock $708 $599 Interest expense, net 236 598 Income tax provision 611 944 Depreciation, depletion and amortization 435 1,528 Metals inventory adjustments 4 96 Net gain on sales of
Slide 39: Click to edit Master title style
Click to edit Master title style