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Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Oct 22, 2015 · 37 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 1
    3rd Quarter 2015 Earnings Conference Call October 22, 2015
  2. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 2
    3Q15 Highlights Prudently Managing Short-Term Risk/ Positioning for Long-Term Success Aggressive Cost & Capital Expenditure Management in Weak and Uncertain Market Environment Enhanced Outlook for Free Cash Flow Generation…
  3. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 3
    Copper Market Commentary Copper Averaged 2.39 per Pound in 3Q 2015 - Trading Range: 2.21* - 2.62 Chinas Demand Remains Significant - Copper Consumption Still Increasing The U.S. and Europe are Recovering Slowly - Autos Remain…
  4. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 4
    Highlights of Cost Reductions and Copper & Molybdenum Curtailments 1.6 Billion (29%) Reduction in 2016e Consolidated CAPEX Mining Oil & Gas Mine by Mine Review to Optimize Cash 1.8 Billion Reduction (31%) of Flow with Low Prices…
  5. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 5
    Revised Mine Operating Plans Announced in August 2015 50% reduction in rates at Tyrone Suspension of mining at Miami Mine Reduced mining at other NA operations Plan 50% reduction in stacking rates at El Abra Changes 35% reduction…
  6. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 6
    Positioned for Margin & Free Cash Flow Growth Growing Copper Declining Unit Net Consolidated Declining Sales Profile Cash Cost Profile Operating Cash Flow CAPEX Profile (billions of lbs) ( per lb) ( in billions) ( in billions) 27%…
  7. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 7
    Strong Project Execution Tenke Fungurume Morenci Cerro Verde Phase II Expansion Mill Expansion Mill Expansion Achieved Full Rates in Achieved Full Rates in Achieved First Copper 1Q13 2Q15 in September 2015 Incremental Copper:…
  8. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 8
    Cerro Verde Mill Expansion Worlds Largest Concentrating Facility 9
  9. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 9
    Cerro Verde Mill Expansion Status as of October 22 Adding 240K t/d Concentrating Facility Primary Secondary Tertiary Crushing Crushing Crushing Grinding Flotation Number 2 8 8 6 6 Rows of Units Crushers MP 1250s HPGRs Ball Mills…
  10. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 10
    Grasberg BC & DMLZ Underground Mine Development Completed development of access to DMLZ First Production underground ore bodies Production commenced from DMLZ in 3Q15 & expect start-up of Grasberg BC in 2018 Key development…
  11. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 11
    Indonesian Matters Government Currently Developing Economic Stimulus Measures - Includes Revisions to Mining Regulations to Promote Economic and Employment Growth Government Assured PT-FI that it Will Approve Extension of…
  12. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 12
    Portfolio of World Scale Mines Positive Exploration Results Big Mines Get Bigger Mines with Potential Capacity for 1 billion lbs of copper per annum* Morenci Grasberg Tenke Cerro Verde Fungurume El Abra * Grasberg & Morenci…
  13. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 13
    Board Review of Strategic Alternatives for Oil and Gas Business Achieve Self-Funding of Business Objectives Pursue Alternatives to Enhance Value to FCX Shareholders High-Quality Asset Base Attractive Inventory of Low Risk…
  14. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 14
    FM O&G 3Q 2015 Highlights 3Q15 Sales 13.8 MMBOE 3Q15 EBITDA: 0.3 Billion; Trailing 12 Months: 1.3 Billion GOM 61% Positive Drilling Results in Deepwater GOM De-risk Business Plan California - Horn Mountain Deep 23% Other - King…
  15. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 15
    Deepwater GOM Infrastructure with Excess Capacity Total Processing Capacity of 250 MBbl of Oil/day Holstein Marlin Horn Mountain 100% Owned 100% Owned 100% Owned 3Q15 Sales: 11 MBOE/d 3Q15 Sales: 30 MBOE/d 3Q15 Sales: 9 MBOE/d…
  16. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 16
    Deepwater Gulf of Mexico Focus Areas Louisiana Dorado Marlin Viosca Knoll Horn Mountain King Horn Mississippi Mountain Canyon Vito KO/QV Power Nap Green Canyon Holstein Deep East Breaks Garden Banks Holstein Atwater…
  17. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 17
    Deepwater GOM Production Pipeline From Strategic Focus Areas Drilled 13 Successful 100% Owned Wells Since 2014; 3 Placed on Production; Others to Support Near-term Growth Projected Startup 2015 2016 2017 Marlin (MC Area) Horn Mtn.…
  18. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 18
    2015e Outlook Sales Outlook Unit Cost Copper: 4.1 Billion lbs. 1.52/lb(2) of Copper Gold: 1.2 Million ozs. 19/BOE Molybdenum: 90 Million lbs. Oil Equivalents(1): 52.7 MMBOE (67% Oil) Operating Cash Flows (3) Capital…
  19. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 19
    Sales Profile Copper Sales (billion lbs) Gold Sales (million ozs) 3 6 2 2.5 1.9 5.2 1 1.25 1.2 4.8 0 2014 2015e 2016e 2017e 4 4.1 Note: Consolidated gold sales include 123k ozs in 2014, 110k ozs in 2015e, 3.9 175k ozs in 2016e…
  20. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 20
    2015e Operating Estimates 2015e Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated Cash Unit Costs (1) Site Production & Delivery (2) 1.71 1.59 2.34 1.60 1.79 By-product Credits…
  21. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 21
    EBITDA and Cash Flow at Various Copper Prices Average EBITDA (1,200 Gold, 6 Molybdenum & 56 Oil) 12 (US billions) 9 6 2016e/2017e 3 Average 0 Cu 2.25/lb Cu 2.75/lb Cu 3.25/lb Average Operating Cash Flow (excluding…
  22. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 22
    Sensitivities (US millions) 2016e/2017e Operating Change EBITDA Cash Flow Copper: +/- 0.10/lb 475 330 Molybdenum: +/- 1.00/lb 40 32 Gold: +/- 50/ounce 105 65 Oil Sales: +/- 5/bbl(1) 215 170 Oil Sales Net of Diesel…
  23. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 23
    Capital Expenditures (1) (US billions) 8 7.2 6.3 6 Oil & Gas 3.2 2.8 4.0 4.0 4 Major Projects TOTAL 2.0 2.0 2.5 (2) 2 2.9 MINING 3.5 4.0 1.4 1.0 Other Mining 2.0 2.0 1.1 1.0 0.6 1.0 0 2014 2015e 2016e 2017e (1)…
  24. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 24
    At-the-Market (ATM) Equity Programs Announced 2 Billion in ATM Equity Programs During 3Q15 Further Step to Strengthen Balance Sheet and Liquidity Raised Gross Proceeds of 1.2 Billion Through the Sale of 114.8 Million Shares of…
  25. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 25
    Committed to Balance Sheet Management Strong Track Record Large Resource Base with Strong Cash Flows and Capital Discipline Net Debt as of 9/30/2015 ( in bns) Aggressive Actions to Protect Balance Sheet 20.4 Increasing Volumes &…
  26. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 26
    Positioned to Build Long-Term Value for Shareholders Established Long-lived Reserves Large-Scale Current Production Base Significant Portfolio of Undeveloped Resources Global Organization of Highly Qualified Dedicated Workers…
  27. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 27
    Reference Slides
  28. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 28
    Financial Highlights Sales Data 3Q15 YTD Copper Consolidated Volumes (mm lbs) 1,001 2,925 Average Realized Prices (per lb) 2.38 2.54 Site Production & Delivery Costs (per lb) 1.74 1.84 Unit Net Cash Costs (per lb) 1.52 1.56 Gold…
  29. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 29
    3Q 2015 Mining Operating Summary 3Q15 Unit Production Costs Cash Unit Costs North South (per pound of copper) America America Indonesia Africa Consolidated Site Production & Delivery 1.68 1.54 2.16 1.63 1.74 By-Product Credits…
  30. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 30
    2015e Quarterly Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 400 1,200 300 352 310 294 200 263 1,130 100 1,000 960 964 1,001 0 1Q15 2Q15 3Q15 4Q15e Note: Consolidated gold sales include approximately 24k ozs in…
  31. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 31
    PT-FI Mine Plan PT-FIs Share of Metal Sales, 2015e-2022e 2015e 2019e PT-FI Share Total: 5.7 billion lbs copper Copper, billion lbs Annual Average: 1.14 billion lbs Gold, million ozs 2015e 2019e PT-FI Share Total: 7.7 million ozs…
  32. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 32
    PT Freeport Indonesia Grasberg Minerals District Life-of-Mine Production Sequencing* Plan View Grasberg Open Pit 179mm mt (includes stockpiled ore) 0.96% Cu & 1.06 g/t Au 146mm mt Grasberg & DOZ 0.54% Cu & 0.69 g/t Au Kucing…
  33. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 33
    Significant Copper Resources & Potential billion lbs of copper Future Resource Indonesia 104 Development Opportunities America America Reserves* South Africa North El Abra Mineralized North America Sulfides…
  34. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 34
    Quarterly Oil & Gas Operating Summary 3Q 2015 Oil & Gas Margins by Region Haynesville/ Operating Margin per BOE Madden/ California Other GOM Consolidated Realized Revenue 39.84 16.20 38.99 43.00 Cash Production Costs 32.82 9.49…
  35. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 35
    2015e Oil & Gas Operating Estimates Madden & Operating Cost: 2.05/Mcfe California Haynesville Pricing: NYMEX Operating Cost: 31/bbl Gulf of Mexico Operating Cost: 16/bbl Pricing: HLS/NYMEX 2015e Oil & Gas Sales by Region…
  36. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 36
    Adjusted EBITDA Reconciliation (in millions) 12-Month 3Q 2015 Trailing Net loss attributable to common stock (3,830) (11,007) Interest expense, net 163 605 Income tax benefit (360) (2,452) Depreciation, depletion and amortization 888…
  37. Q3 2015 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 37
    O&G Adjusted EBITDA Reconciliation (in millions) 12 Month 3Q 2015 Trailing Net loss before income taxes (3,969) (15,340) Interest expense, net 51 169 Depreciation, depletion and amortization 451 2,021 Impairment of oil and gas…

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