Freeport-McMoRan, Inc. · NYSE:FCX
Freeport-McMoRan — Q4 2016 Earnings Presentation
38 slides from Freeport-McMoRan's earnings presentation, Jan 25, 2017
Slide 1: 4th Quarter 2016 Earnings Conference Call
= FREEPORT-McMoRAN 4th Quarter 2016 Earnings Conference Call FCX January 25, 2017 NYSE. fex.com
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Hl Frecpont-McMoRan * ETTLE Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looting statements in which FCX discusses its poten fiture performance, Forward-looking statements ar ol statements other than statements of historical facts, such as projections
Slide 3: 2016 Highlights
METTLE 2016 Highlights Strong Execution — "Proving our Mettle” | Operational | | Financial | | Strategic | = Successful Execution Nor rar = Refocused Business on of $4.6 Bn Cerro Verde Leading Position in Global Expansion Project $20.1 Copper Industry = Strong Cost and Capital Management ~ 19% Reduc
Slide 4: Completed $6.6 Billion in Asset Sale Transactions in 2016
HH Freeport-McMoRan Completed $6.6 Billion in Asset Sale Transactions in 2016 ggregate Cash C i apt aS Canstiessa (Sin ‘illons) Morenci (13% Interest) $1.00 n/a Timok Exploration Project 0.13 $0.11” Other Sales 0.25 n/a Completed in 4Q16 Tenke Fungurume 2.65 0.12” Oil & Gas Transactions 2.59 0.307 T
Slide 5: Effective Cost & Capital Management
Hl Frcepont-McMoRAN METTLE Effective Cost & Capital Management Declining Site Production & Delivery Unit Costs for Copper | ED CZIALT EEE (Sin bns) Nam Decline $6.4* $1.78 $1.53 $1.44 Net Unit Cash Costs (after by-product) $/\b 2015 2016 2015 2016
Slide 6: Copper Market Commentary
HE Freeport-McMoRan METTLE Copper Market Commentary LME Copper Price | cia J . p 1 Market Si perpen Supported by Fundamentals $3.00 $2.69 . < $275 1/24/17 = Global Economic Conditions Improving $2.50 55 = Supply Growth is Challenged $2.00 = New Supplies Required >$3/lb Copper Price $1.75 12/31/15 3/
Slide 7: World's Leading Copper Producers
HE Frecpont-McMoRan METTLE World’s Leading Copper Producers Top 10 Copper Producers (2016e) (000 t) EE GueNcorE dé SEED occu avoneasta Oy nue bhpoiiton ti IRST QUANTUM Source: 0: 1” 7
Slide 8: World-Class Copper Portfolio
HE Freeport-McMoRan World-Class Copper Portfolio Long-term Value in High-Quality Asset Base Cu Reserves: elu 4 a iis Ga Reserves: 29.5 bn Ibs Cu Reserves: 26.9 bn Ibs Mo Reserves: lo Reserves: 0.64 bn Au Reserves: 25,8mm 07s pie Hats ss ta Ibs Mineralized Mat.: 19 bn Ibs lied Lif ied Life: 40 Implie
Slide 9: Cerro Verde
HE Freeport-McMoRan METTLE Cerro Verde Sa + Exp ‘ion Ci do i in September 2015 » Achieved Capacity Operating Rates in 1Q16 ded Op rt from: ~ Large-scale, Long-lived Reserves — Cost Efficiencies (Unit Net Cash Cost Decline 19% YoY) Mill Rate Copper Sales (kt/d) (mms Ibs) 353 1,105 152 501 544 2014 20
Slide 10: FCX Reserves / Mineralized Material / Potential
HH Freeport-McMoRan FCX Reserves/ Mineralized Material / Potential as of 12/31/16 2P Reserves“) Mineralized Material * 87 Billion Lbs 102 Billion Lbs 156 Billion Lbs (1) Preimnary (2) Preimnary estate of consoldated contained copper resources using a long-term copper price of $2.20/b and excludes Ks
Slide 11: Large Development Project Inventory
Large Development Project Inventory Copper Sulfide Opportunities - Bagdad - Chino - El Abra - Lone Star/ Safford - Morenci - Sierrita Future development subject to market conditions
Slide 12: Grasberg Operations Update
HE Freeport-McMoRan METTLE Grasberg Operations Update Mining Rates (kt/d) Continue be d by Lower ductivit 3Q16 4Qié 4Qi6é Actual Forecast Actual* * Inchides 10-day work stoppage in 4Q 2016 Revised Plans Incorporate Timing of Open Pit Production from 2017 to 2018 Grasberg Block Cave Start-up Adjusted
Slide 13: Indonesia — Historical Dates
Hil Frecport-McMoRan METTLE Indonesia — Historical Dates FCX Signs COW, Providing Legal & Fiscal Certainty Through 2041, Multi-billion Dollar Investment Campaign Begins FCX Formed Strategic Partnership with Rio Tinto to Advance Development FCX Completed Construction of Gresik, Indonesia’s First ee e
Slide 14: PT-FI's Contract of Work
PT-FI’s Contract of Work Dated December 1991 METTLE Extension — Article 31 ™...this Agreement shall have an initial term of 30 years from the date of the signing of this Agreement; provided that the Company shall be entitled to apply for two successive ten year extensions of such term, subject to Go
Slide 15: PT-FI's Contract of Work (continued)
Hl Frcepont-McMoRAN METTLE PT-FI’s Contract of Work Dated December 1991 (continued Divestment — Article 24 "If after the signing of this agreement then eieciie k laws and regulations or Government policies or actions impose less divestit than set forth herein, such less b tite quit shall b be applic
Slide 16: October 7, 2015 Assurance
HE Freeport-McMoRan METTLE October 7, 2015 Assurance = Government Assured PT-FI that it Will Approve Extension of Operations Beyond 2021 with Legal & Fiscal Certainty “Regarding PT-FI’s proposal of contract extension, GoI warrants PT-FI would be able to submit the proposal of contract extension nn o
Slide 17: Indonesian Regulatory Matters
fl Frecpont-McMoRan METTLE Indonesian Regulatory Matters = Government of Indonesia Issued New Mining Regulations on January 12, 2017 - Allows Continuation of Exports, Subject to Conditions, Including Conversion of COW to Special Operating License (IUPK) PT-FI Advised Government of Willingness | to C
Slide 18: 2017e Outlook
HE Freeport-McMoRan 2017e Outlook* = Copper: 4.1 Billion Ibs. * Gold: 2.2 Million ozs. METTLE Sales Outlook = Molybdenum: 92 Million Ibs. Unit Cost = Site Production & Delivery: $1.50/Ib of Copper = After By-product Credits: $1.06/Ib Operating = ~$4.3 Billion (@$2.50/Ib Copper in 2017e) SEI = Each 1
Slide 19: Sales Profile
HE Freeport-McMoRan Sales Profile Copper Sales (billion Ibs) ) Gold Sales (million ozs, 5 4.65 <== 4.1 3 39 4 Ay 3 2016 2017e* 2018e 2 Note: Consoldated gold sales include 99k ozs in 2016, 202k 02s in 2017e and 200k ozs in 2018e for noncontraling nterest. 1 Molybdenum Sales (million lbs, 90 0 * | 10
Slide 20: EBITDA and Cash Flow at Various Copper Prices
HH Freeport-McMoRan METTLE EBITDA and Cash Flow at Various Copper Prices A ($1,200/0z Gold, $7/Ib Molybdenum)* $8 5 a is) Cu $2.50/Ib Cu $2.75/Ib Cu $3.00/Ib ing Cash Flow ding Working Capital changes) ($1,200/o0z Gold, $7/Ib Molybdenum)* $6 5 (USS billions) $4 | $25 2017e/2018e $0 Cu $2.50/Ib Cu $2
Slide 21: Sensitivities
METTLE Sensitivities (US$ millions) 42 2017e/20 ie perating Change EBITDA Gash Flow == Copper: +/- $0.10/Ib $415 $320 Molybdenum: +/- $1.00/Ib $55 $50 Gold: +/- $50/ounce $105 $60 Currencies: +/- 10% $145 $100 (1) U.S. Dolar Exchange Rate 0. Eu equates to a cost benefit of noted amounts. NOTE: EBITO
Slide 22: Capital Expenditures
HE Freeport-McMoRan MET TLE Capital Expenditures (US$ billions) $2.8 Future Spending Dependent on Improvement in Market Conditions Oil & Gas 1.2 $1.8 $1.8 Major Mining Projects 2016 2017e 2018e Note: Inclides capitalzed interest. e= estimate, See Cautionary Statement.
Slide 23: Restoring Balance Sheet Strength
Hl Frcepont-McMoRAN METTLE Restoring Balance Sheet Strength £23 Year-End 2017e Net Debt at Varying Copper Prices (uss billions) 20.1 12/31/2015 12/31/2016 $2.50 $2.75 $3.00 Net Debt/2017e EBITDA 17x 13x 1.0x YE 2017e e= estimate. See Cautionary Statement. 23
Slide 24: Committed to Balance Sheet Management
IE Frecpont-McMoRan METTLE Committed to Balance Sheet Management — Strong Track Record (US$ billions) Manageable Near-Term Debt Maturity Schedule © FCX Debt Structure bas 12/31/15 12/31/16 $4 $3.5 bn Revolver $- $- Bank Term Loan 3.0 - $3 Sr. Notes 14.8 14.4 Cerro Verde Non-Recourse Credit Facility
Slide 25: Positive Long-term Outlook
ft Freepont-McMoRan wiETTLE Positive Long-term Outlook % [Et Freeront-McMoRan Industry Leading, \-SPEVEDCED) Ay Lay lied |) Z| Copper Position, | Siong Developers) DIVETSE’ Portfolio _ ) Executing i) Glearly Defined Strateg gy |
Slide 26: Reference Slides
Hl Frcepont-McMoRAN METTLE Reference Slides
Slide 27: Financial Highlights
Financial Highlights Sales Data 16 2016 opper (1) Consolidated Volumes (mm Ibs) 1,186 4,651 Average Realization (per Ib) $2.47 $2.27 Site Production & Delivery Costs (per Ib) $1.44 $1.44 Unit Net Cash Costs (per Ib) $1.20 $1.26 If Consolidated Volumes (000's ozs) 405 1,079 Average Realization (per 0
Slide 28: 4Q 2016 Mining Operating Summary
HE Freeport-McMoRan TLE 4Q 2016 Mining MET Operating Summary 4016 Unit Production Costs Cash Unit Costs North South (4) _ Consolidated (per pound of copper) America America _Indonesia__ Africa Including Africa Site Production & Delivery $1.46 $1.35 $1.50 $1.42 $1.44 By-Product Credits (0.13) (0.10)
Slide 29: 2016 Operating Summary
2016 Operating Summary (per pound of copper) South Consolidated America Indonesia _ Africa Including Africa Site Production & Delivery — $1.42 $1.26 $1.63 $1.58 $1.44 By-product Credits (0.12) (0.10) (4.30) (0.39) (0.41) Treatment Charges 0.44 0.24 0.28 - 0.18 Royalties & Export Duties - 0.04 0.22 0
Slide 30: 2017e Operating Estimates
METTLE 2017e Operating Estimates 2017e Unit Production Costs (per pound of copper) North South a America America Indonesia Consolidated 5 1: —_—_=€/"*"" am EOE Site Production & Delivery 2 $1.58 $1.50 $1.42 $1.50 By-product Credits (0.14) (0.41) (1.97) (0.72) Treatment Charges 0.44 0.22 0.26 0.19 Ro
Slide 31: 2017e Quarterly Sales
HE Freeport-McMoRan 2017e Quarterly Sales METTLE Copper Sales (million Ibs) ) 1,200 oun 900 i 600 300 1Q17e 2Q17e 3Q17e 4Qi7e Note: Cnslistedeoge seromatey im be 17, Isr beh pore 198 ‘175mm bs in plead 2 = estimate, See Cautonary Statement. Gold Sales (thousand ozs) ) 1Q17e 2Q17e 3Q17e 4Qi7e ‘Note:
Slide 32: Preliminary Reserves at 12/31/16
HE Frecpont-McMoRan METTLE Preliminary Reserves at 12/31/16 Consolidated Proven & Probable Reserves r Gold bilion Ibs bilion Ibs milion ozs Reserves @12/31/15" 99.5 3.05 27.4 12/31/16 Divestitures’ (8.6) (0.02) - Copper Reserves Aditenefresions 05 - 0.4 by Geographical Region Producti (4.6) (0.08) (
Slide 33: Grasberg Minerals District
Grasberg Minerals District METTLE Reserves* Grasberg (as of December 31,2016) _DMLZ Block Cave Tonnes (mm) 439 964 ‘ Copper Grade (%) 0.9 1.03 % Grasberg Gold Grade (g/t) 0.75 0.78 yi Copper (bn Ibs) 7.6 18.5 Hl Gold (mm ozs) 8.4 15.7 Start-up Year 2015 2018 Target (Kt/d) 80 140-160 Ramp-up (years)
Slide 34: PT-FI Mine Plan
PT-FI Mine Plan PT-FI’s Share of Metal Sales, 2017e-2022e —— 2017e — 2021e PT-FI Share Total: 5.7 billion Ibs copper ie Annual Average: 1.15 billion Ibs — Copper, billion Ibs Gold, million ozs 2017 — 2021¢ PT-FI Share Total: 8.2 million ozs gold Annual Average: 1.63 million ozs 14 1.4 145 gg, 28. td
Slide 35: FCX Debt Maturities as of 12/31/16
HE Freeport-McMoRan METTLE FCX Debt Maturities as of 12/31/16* $8 (US$ billions) 1 FCX Revolver $- I Senior Notes 14.4 Il Cerro Verde ($1.4) & Other 1.6 Total Debt Consolidated Cash $4.2 2017* 2018 2019* 2020 2021 2022 2023 2024 Thereafter See Cautionary Statement.
Slide 36: Adjusted EBITDA Reconciliation
HH Freeport-McMoRan METTLE Adjusted EBITDA Reconciliation in millions) 4Q 2016 yID 2016 $313 $(3,898) Hone open» fea 181 755 \come tax, 292 EAI Doe deplete in and amortization 593 2,530 oli and gas properties : 4,317 one scttemeae rig costs and contract termination 103 924 ewe inventory adjustments
Slide 37: Adjusted EBITDA - Discontinued Operations Reconciliation
HE Freeport-McMoRan Adjusted EBITDA - Discontinued Operations Reconciliation METTLE (in millions) AQ 2016 YTD 2016 Net Loss Attributable to Common Stock from Discontinued Operations $(21) $(256) Reversal of eliminations and adjustments ‘) 38 214 Allocated interest expense @) 6 39 Income tax provisio
Slide 38: Adjusted EBITDA - Oil & Gas Reconciliation
Adjusted EBITDA - Oil & Gas Reconciliation (in millions) 4Q 2016 YTD 2016 Net Loss Attributable to Common Stock (80) 5,967) nse, net rt 369 Depredation, depletion and amortization 173 869 Impairment of oil and gas properties - 4,17 orp seheoasi rig and contracttermination costs 103 2 Net loss on sal