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First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Apr 26, 2016 · 29 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. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 1
    1st Quarter 2016 Earnings Conference Call April 26, 2016
  2. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 2
    Copper Market Commentary Chinese Consumption - Power Grid Orders are Steady with High Wire & Cable Utilization - Automobile and Appliance Production Growth - Construction Remains Subdued - Improved Market Sentiment Western Demand…
  3. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 3
    Long-term Structural Deficit in Copper Generally Expected Supply Demand Shortfall Declines Reasonable 7 Mt in Base Production + Long-term Demand Estimates = SUPPLY GAP by 2025 (with No New Projects) 18% Decline Over 1.7%…
  4. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 4
    Executing in a Weak Commodity Market Supported by Portfolio of High Quality Assets Adjusted Mine Plans Curtailed High Cost Production CAPEX Completion Reductions & of Major Cost Management Execution of Clearly Projects Defined…
  5. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 5
    1Q 2016 Mining Operating Summary 1Q16 Unit Production Costs Cash Unit Costs North South (per pound of copper) America America Indonesia Africa Consolidated Site Production & Delivery 1.40 1.23 2.24 1.64 1.51 By-Product Credits…
  6. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 6
    Asset Sale Transactions To Date in 2016 Date of 2015 Expected Agreement Consideration EBITDA Closing ( in billions) ( in millions) (1) Morenci (13% Interest) 2/15/16 1.0 115 2Q16 (2) Timok Exploration Project 3/3/16 0.3 (16) 2Q16…
  7. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 7
    Premier Portfolio of Long-Lived, Geographically Diverse Global Mining Assets Largest Copper Mine Worlds Largest One of Largest Copper/ High Grade Copper/ in North America Concentrating Facility Gold Reserves in World Cobalt Resource…
  8. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 8
    Cerro Verde Project Execution Completed Construction of Worlds Largest Concentrating Facility Strong Performance on Capital Cost Management and Startup Achieved Full Capacity Operating Rates During 1Q16 Cerro Verde Mill Rate…
  9. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 9
    Significant Copper Resources & Potential billion lbs of copper Future Resource Development Opportunities Indonesia America 99 America Reserves* South Africa North El Abra Major Sulfide Deposit North America Sulfides…
  10. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 10
    Positive Free Cash Flow in Mining Business with Significant Leverage to Recovery ( in billions) 2016e 2015 1Q16 2016e EBITDA CAPEX 6.8 5.7 4.6 3.3 3.3 Major Avg. Cu: Projects 1.8 2.42 2.4 0.8 1.4 Avg. Cu: 0.5 Other 0.9…
  11. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 11
    Oil & Gas Highlights Focused on Managing Costs and Enhancing Asset Values New Organization Structure - Reduce Costs 1Q16* 1Q15 - Align Capital Allocation with Corporate Objectives LOE (/bbl) 15.85 20.26 Significant Capital…
  12. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 12
    Deepwater Gulf of Mexico Focus Areas 1Q 2016 Net Production Rates Louisiana Asset Area MBOE/d Holstein Facility 9 Marlin Facility 30 Horn Mountain Facility Lucius 8 18 Dorado Marlin Other 3 Viosca Knoll Deepwater GOM…
  13. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 13
    2017e Oil & Gas EBITDA at Various Prices and CAPEX ( in billions) 1.8 1.4 1.0 0.6 0.5 35 Brent 45 Brent 55 Brent 65 Brent 2017e CAPEX (excludes 0.5 bn in idle rig costs) NOTE: EBITDA equals operating income plus…
  14. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 14
    2016e Outlook Sales Outlook Unit Cost Copper: 5.0 Billion lbs.(1) 1.05/lb(3) of Copper Gold: 1.85 Million ozs. 15/BOE Molybdenum: 71 Million lbs. Oil Equivalents(2): 54.4 MMBOE (73% Oil) Operating Cash Flows (4) Capital…
  15. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 15
    Sales Profile CopperCopper Sales (billion Sales lbs) (billion lbs) Gold Sales (million ozs) 6 3 2 2.5 1.85 1 1.25 5.0 0 4.6 2015 2016e 2017e 4 4.1 Note: Consolidated gold sales include 115k ozs in 2015, 170k ozs in 2016e and…
  16. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 16
    EBITDA and Cash Flow at Various Copper Prices Average EBITDA (1,200 Gold, 6 Molybdenum & 47 Oil)* 9 (US billions) 6 3 2016e/2017e Average 0 Cu 2.00/lb Cu 2.25/lb Cu 2.50/lb Average Operating Cash Flow (excluding Working…
  17. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 17
    Capital Expenditures (US billions) 6.35 Future Spending Dependent on Improvement in Market Conditions Oil & Gas 3.0 3.3 Major Mining 1.5 (1) 2.2 Projects TOTAL MINING 0.5 (1) 2.4 3.3 1.4 0.8 Other 1.8 1.7 Mining…
  18. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 18
    Committed to Balance Sheet Management Strong Track Record (US billions) Manageable Near-Term Debt Maturity Schedule 2 FCX Debt Structure as of 3/31/16 (US billions) 1.6 Cerro Verde Revolver 0.5 Non-Recourse Loan Bank Term…
  19. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 19
    Financial Highlights Sales Data 1Q16 1Q15 Copper Consolidated Volumes (mm lbs) 1,123 960 Average Realization (per lb) 2.17 2.72 Site Production & Delivery Costs (per lb) 1.51 1.93 Unit Net Cash Costs (per lb) 1.38 1.64 Gold…
  20. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 20
    Sale of 13% Interest in Morenci Announced Definitive Agreement on February 15, 2016 Sumitomo Metal Mining (SMM) to Acquire 13% of Morenci Mine Unincorporated JV Morenci Ownership Current Post-closing FCX 85% 72% Sumitomo* 15%…
  21. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 21
    Sale of Interest in Timok Copper-Gold Project Located in Serbia Consideration to FCX Includes: - 135 mm Payable at Closing - Up to 20 mm to be Spent by Purchaser in Connection with Agreed Exploration and Study Work on the Lower Zone…
  22. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 22
    2016e Operating Estimates 2016e Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated Cash Unit Costs (1) Site Production & Delivery (2) 1.41 1.26 1.21 1.62 1.33 By-product Credits…
  23. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 23
    2016e Quarterly Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 1000 1,500 750 950 500 1,405 250 505 1,335 201 195 0 1Q16 2Q16e 3Q16e 4Q16e 1,123 1,150 Note: Consolidated gold sales include approximately 18k ozs in…
  24. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 24
    PT-FI Mine Plan PT-FIs Share of Metal Sales, 2016e-2022e 2016e 2020e PT-FI Share Total: 5.9 billion lbs copper Copper, billion lbs Annual Average: 1.18 billion lbs Gold, million ozs 2016e 2020e PT-FI Share Total: 7.85 million ozs…
  25. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 25
    Sensitivities (US millions) 2016e Operating Change EBITDA Cash Flow Copper: +/- 0.10/lb 425 340 Molybdenum: +/- 1.00/lb 28 22 Gold: +/- 50/ounce 75 45 Oil Sales: +/- 5/bbl(1) 150 120 Oil Sales Net of Diesel Costs:(1,2) +/-…
  26. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 26
    Sensitivities (US millions) 2017e Operating Change EBITDA Cash Flow Copper: +/- 0.10/lb 435 350 Molybdenum: +/- 1.00/lb 35 28 Gold: +/- 50/ounce 125 75 Oil Sales: +/- 5/bbl(1) 200 160 Oil Sales Net of Diesel Costs:(1,2) +/-…
  27. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 27
    2016e Oil & Gas Operating Estimates Madden & Operating Cost: 1.90/Mcfe California Haynesville Pricing: NYMEX Operating Cost: 29/bbl Gulf of Mexico Operating Cost: 11/bbl Pricing: HLS/NYMEX 2016e Oil & Gas Sales by Region…
  28. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 28
    Adjusted EBITDA Reconciliation (in millions) 12 Months 1Q 2016 Ended 3/31/2016 Net loss attributable to common stock (4,184) (13,946) Interest expense, net 200 699 Income tax provision (benefit) 70 (1,170) Depreciation, depletion and…
  29. First Quarter 2016 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 29
    FCX Debt Maturities as of 3/31/16 Pro Forma for Morenci Transaction 10 (US billions) PF Total Debt & Cash at 3/31/16 (US billions) FCX Revolver & Term Loan 2.5 8 FCX & FMC Sr. Notes 12.3 FM O&G Senior Notes 2.5 Other 2.5 Total…

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