Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q1 2019 Earnings Presentation
29 slides from Freeport-mcmoran's earnings presentation, Apr 25, 2019
Slide 1: 1st Quarter 2019 Earnings Conference Call
| FREEPORT-McMoRaAn 1st Quarter 2019 Earnings Conference Call April 25, 2019 \ 4 PROVEN ASSETS. FUNDAMENTAL VALUE. fex.com
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement rn Regarding Forward-Looking Statements wannenar aia 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 projections or ex
Slide 3: Proven Assets. Fundamental Value.
ava) “Proven Assets. Fundamental Value.” vinnie = Leading Global Copper Producer " Safe and Environmentally Responsible Operator = Geographically Diverse, Long-lived Asset Base = Portfolio Difficult to Replicate = Significant Productive Capacity = Large Footprint of Organic Growth Options = Proven T
Slide 4: 2019 Priorities to Build Shareholder Value
2019 Priorities to Build men Shareholder Value FUNRAMENTAL VALUE = Ramp-up Production from our Large-Scale Underground Assets at Grasberg = Continued Focus on Productivity and Cost Management = Advance Lone Star Development and Long-term Expansion Opportunities = Define Future Growth Options from ou
Slide 5: 1Q 2019 Operations Update
ron 1Q 2019 Operations Update FUNDAMENTAL VALUE North America = Maintaining Focus on = Cerro Verde Mill Continues = Completing Final Productivity and Cost to Perform Well Phases of Grasberg Management + Debottlenecking Continues Open Pit » Advanced Analytics = Underground Ramp-u * El Abra Weather Ev
Slide 6: Initial Pilot at Bagdad — Cross-Functional Team
¢ Initial Pilot at Bagdad — Cross-Functional Team ¥ Metallurgists v Information Technology vY Operators v Dispatchers Y Process Control VY Mine Planners Y Big Data Team « Developed Data-driven Model to Optimize Operations in Concentrating * Initial Results ¥ +12% Increase in Mill Throughput Equivale
Slide 7: Lone Star
Lone Star ren _ a PROVEN ASSETS. Potential for Another Morenci FUNDAMENTAL VALUE. Leachable Development Provides Exposure to Major Asset 42/31/2018 Potential Initial Initial Production: Reserves! 7 (Leach & Mill) Leach Project YE 2020 5.6 bn Ibs of Copper 50-70 bn ibs $850 mm Project ~200 mm Ibs/yea
Slide 8: Cerro Verde Operations Update
Cerro Verde ave) ‘ PROVEN ASSETS. Operations Update FUNDAMENTAL VALUE. - Expanded CV2 Mill Facility eee Processing 15% More Ore “aoe EES v. Original Design “oe Ts * Reviewing Opportunities to Process Additional Ore 1Q16 2Q16 3Q16 3Q18 4Q18 1Q19 8
Slide 9: PT-FI Underground Transition
PT-Fl Underground Transition Advancing According to Plan PROVEN ASSETS. FUNDAMENTAL VALUE. DMLZ Update Ramp-up to 80,000 t/d by 2022 = YE 2018 Reserves: 432mmt @ 0.92% Cu & 0.76 git Au = Results from Ongoing Hydraulic Fracturing to Manage Seismicity and Pre-condition Cave Have Been Effective = 3 Hyd
Slide 10: PT-FI Underground Ramp-up
PT-Fl Underground Ramp-up PROVEN ASSETS. Contribution by Deposit FUNDAMENTAL VALUE. Grasbergopenpit m™—DOZ smmBig Gossan DMLZ gma Grasberg BC Ore Milled 215 (000’s t/d) 162 80K tid 114 100 59K tid arktid 2019e 2020e 2021e 2022e 2023e Cu(bn ibs) 0.63 0.75 14 17 17 Au(mm ozs) 0.83 0.82 15 18 18 Note:
Slide 11: Copper Market — Compelling Fundamentals
an Copper Market — Compelling Fundamentals — unpuewu viue ~ Demand Expected to Grow > Project Pipeline Thin ~ Estimated Supply Gap (million metric tonnes) (million metric tonnes/annum) (million metric tonnes/annum) 33 ~4.75 Emerging Markets Mature 60 Probable 34 Probable Markets (0.4)% Projects Proj
Slide 12: 2019e Outlook
Fon 2019e Outlook FUNDAMENTAL Au = Copper: 3.3 Billion Ibs. = Gold: 0.8 Million ozs. = Molybdenum: 94 Million Ibs. Sales Outlook Unit Gost = Site Production & Delivery 2019e: $2.09/Ib (2Q19e: $2.07/Ib) of Copper. = After By-product Credits 2019e: $1.75/Ib™ (2Q19e: $1.67/Ib) Operating = ~$2.3 Billion
Slide 13: Sales Profile
ava) Sales Profile FUNDAMENTAL VALUE. | CopperSales | (billion Ibs) (million ozs) 5 2.4 2 4 1 0.8 ci 85 , : Ei 2018 2019e Li 2021e Note: Consolidated gold sales include 223k ozs in 2018, 154k ozs in 2019e, 2 155k ozs in 2020e and 285k ozs in 2021e for noncontrolling interest. | Molybdenum Sales | =|
Slide 14: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow mr i H PROVEN ASSETS. at Various Copper Prices FUNDAMENTAL VALUE (USS billions) EBITDA ($1,300/0z Gold, $13/lb Molybdenum) $10 $8 $6 $4 Tr $2 a $0 2020e ’21el'22e Cu $3.00/Ib Cu $3.25/Ib Cu $3.50/Ib Operating Cash Flow Excludes Working Capital Changes ($1,300/o0z Gold, $13/Ib Mo
Slide 15: Capital Expenditures
(USS billions) --- Net of Scheduled Contributions $2.5 $2.42 $2.42 $1.20 Major Mining Projects $0.8 Other Mining 2018 2019e 2020e (1) Major mining projects include CAPEX associated with Grasberg underground development ($0.9 bn per year in 2019e and 2020e) and Lone Star ($0.4 bnin 2019e and $0.2 bn
Slide 16: Financial Policy
Financial Policy FUNDAMENTAL VALUE = Maintain Balance Sheet Strength = Disciplined Approach to Investing in Attractive Growth Projects = Quarterly Cash Dividend Policy on Common Stock: 5¢/Share = Positive Market to Enable Enhanced Returns to Shareholders = Board Reviews Financial Policy on Ongoing B
Slide 17: Summary
PROVEN ASSETS. Summa ry FUNDAMENTAL VALUE. = FCX is Well Positioned = High-Quality Assets = Well Managed = Focused on Execution WORLD’S PREMIER PUBLICLY TRADED ox r us D COPPER PRODUCER NYSE. f Freeront-McMoRan 47
Slide 18: Reference Slides
Reference Slides PROVEN ASSETS. FUNDAMENTAL VALUE. _ FReepont-McMoRan
Slide 19: Financial Highlights
Financial Highlights FUNDAMENTAL A Sales Data 1Q19 1Q18 Copper Consolidated Volumes (mm Ibs) 784 993 Average Realization (per /b) $2.90 $3.11 Site Production & Delivery Costs (per /b) $2.17 $1.67 Unit Net Cash Costs (per /b) $1.78 $0.98 Gold Consolidated Volumes (000’s ozs) 242 610 Average Realizati
Slide 20: 1Q19 Mining Operating Summary
Pon 1Q19 Mining Operating Summary FUNDAMENTAL VALUE - : North South 1Q19 Unit Production Costs [(girigen) America America Indonesia Consolidated Cash Unit Costs Site Production & Delivery, excluding adjustments $2.06 $1.73 $3.10 $2.17 By-product Credits (0.26) (0.34) (1.81) (0.63) Treatment Charges
Slide 21: 2019e Operating Estimates
Pon 2019e Operating Estimates FUNDAMENTAL AL : z North South 2019e Unit Production Costs [(aeugeO my ine America Indonesia Consolidated Cash Unit Costs () Site Production & Delivery (2) $2.07 $1.75 $2.81 $2.09 By-product Credits (0.27) (0.29) (1.75) (0.56) Treatment Charges 0.11 0.19 0.26 0.17 Royal
Slide 22: 2021e Consolidated Unit Net Cash Cost
2021e Consolidated Unit Net Cash Cost FUNBAMENTAL VALUE Sales felis Roll Fonsi Consolidated Unit Net Cash (encerlee} {mms OF ozs) Cost Roll Forward ($/Ib) 2019e 3.3 0.8 2019e $ 1.75 Americas 0.1 - Americas - Indonesia _0.8 _0.7 Indonesia (0.45) 2021e 4.2 1.5 2021e $ 1.30 Pro Forma with Indonesia @ 3
Slide 23: 2019e Quarterly Sales
mr 2019e Quarterly Sales FUNDAMENTAL ALU | CopperSales | (million Ibs) a ="|[5) (thousand ozs) 900 300 900 835 832 784 200 [| 100 600 0 1019 3Q19e Ll ton ty wromeermeastensn 2 et 300 Molybdenum Sales (Uris) 25 23 20 15 0 10 1019 2Q19e 3Q19e 4Q19e 5 cream w 0 ai 165mm ts! nioise onm bsin Soiseand "30
Slide 24: PT-FI Mine Plan
PT-FI Mine Plan ron PROVEN ASSETS. Metal Sales, 2019e-2023e FUNDAMENTAL VALUE. | Copper | 2019e-—2023e zx wi 2019e-—2023e Total: 6.2 billion Ibs copper Total: 6.8 million ozs gold Annual Average: 1.24 billion Ibs Annual Average: 1.35 million ozs 1.7 2023e Note: Amounts are projections. Timing of ann
Slide 25: Grasberg Block Cave — Key Milestones
Grasberg Block Cave — Key Milestones jinn ue GBC Service Shaft 355 meters = 963mm t @ 0.96% Cu & 0.72 g/t Au Completed to Date v +254 km of Development v Mine Access, Service Shaft, Initial Fans & Vent Infrastructure v Initial Rail Haulage System; Over 5 km of Rail v Crusher #1 & Conveyors to Surfac
Slide 26: Sensitivities
Sensitivities FUNBAMENTAL VALUE (US$ millions) Operating 2020e Change EBITDA Cash Flow Copper: +/- $0.10/Ib $330 $265 Molybdenum: +/- $1.00/Ib $80 $70 Gold: +/- $50/ounce $40 $20 Currencies: +/- 10% $195 $135 | 2021e-2022e Avg. Change | Change Copper: +/- $0.10/Ib $425 $335 Molybdenum: +/- $1.00/Ib
Slide 27: FCX Debt Maturities as of 3/31/19
Po FCX Debt Maturities as of 3/31/19 FUNDAMENTAL VALUE (US$ billions) Total Debt & Cash [igi FCX Revolver $ - ll Senior Notes 9.0 1 Cerro Verde Credit Facility 08 $6 4 | Ml Other Debt 01 Total Debt 9.9 Consolidated Cash $ 28 CVNon 4.55% Sr. Notes Sr. Notes 2019 2020 2021 2022 2023 2024 Thereafter 4%
Slide 28: Adjusted EBITDA Reconciliation
Fon Adjusted EBITDA Reconciliation FUNDAMENTAL AL (in millions) 412 mos ended 1Q19 3/31/19 Net Income Attributable to Common Stock — Continuing Operations $ 30 $1,944 Interest expense, net 146 940 Income tax provision 105 590 Depreciation, depletion and amortization 347 1,650 Cobalt inventory adjust
Slide 29: 1Q19 Copper Realization & 2Q19 Guidance
=<, = va | 4 } oT ee a i NAQ Risigdainnn __ PROVEN ASSETS 1Q19 Copper Realization & 2Q19 Guidance = juypine ive 1Q19 LME Average Copper Price $2.82/Ib 3-Mo. Fwd Price for Copper $2.94/Ib at the End of March : $2.90/Ib* (Generally, 50/50 Weight of Qtrly Avg and 3-mo Forward Priceat End of Period) FCX