FCX Conference Call rd 3 Quarter 2023 Results October 19, 2023 ...

Financial Data and Key Metrics Changes - Freeport-McMoRan reported strong operational performance with total production of 1.1 billion pounds of copper and over 500,000 ounces of gold in Q3 2023 [9] - Average copper prices were $3.80 per pound, generating EBITDA of $2.2 billion, with operating cash flows totaling $1.2 billion, exceeding mining capital expenditures of $800 million [10][11] - Unit net cash costs averaged $1.73 per pound, slightly above guidance of $1.61 per pound due to export duties in Indonesia [10][27] Business Line Data and Key Metrics Changes - Copper sales were 8% above estimates, while gold shipments were slightly below estimates due to administrative approval delays in Indonesia [9] - Incremental copper from leach innovation initiatives totaled 46 million pounds, achieving 90% of the initial target of 200 million pounds per annum [16] - At Cerro Verde in Peru, the mill averaged over 430,000 tons per day, setting a new quarterly record [17] Market Data and Key Metrics Changes - The long-term outlook for copper remains strong, driven by rising demand from electrification and limited supplies, despite short-term price impacts from macroeconomic factors [12][15] - Copper inventories on exchanges have risen recently but remain low by historical standards [12] - Growth in copper consumption is noted in the U.S. and China, with significant investments in renewable energy and electric vehicles [13][14] Company Strategy and Development Direction - The company is focusing on brownfield opportunities and extensions of existing operations rather than high-capital greenfield projects [19][24] - Plans include scaling leach initiatives to potentially double incremental copper production to 400 million pounds per annum [20][21] - The company is also exploring expansion opportunities at the Baghdad mine and El Abra in Chile, with a focus on optionality and timing based on market conditions [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for copper prices, despite current geopolitical and macroeconomic challenges [7][15] - The company is committed to maintaining a strong balance sheet and financial flexibility while navigating current market conditions [33] - Management emphasized the importance of prudent capital investment decisions in light of rising costs and uncertain market conditions [46][48] Other Important Information - The smelter project in Indonesia is 84% complete, with commissioning expected by mid-2024 [30] - The company is advancing climate initiatives, including transitioning from coal to LNG for energy needs [31][32] - A new power purchase agreement in Peru aims for 100% renewable energy by 2026 [32] Q&A Session Summary Question: Cost performance in U.S. operations and production impact - Management acknowledged challenges in productivity and rising costs, particularly in labor and component parts, affecting overall performance [36][37] Question: El Abra project potential and investment clarity - Management confirmed that recent clarity around Chilean mining taxes is beneficial, and they are retesting the project's economics in light of current capital costs [41][42][43] Question: Impact of inflation and interest rates on investment expectations - Management indicated that rising costs and interest rates have pushed out expectations for medium to long-term investments, emphasizing a prudent approach to capital allocation [45][46][48] Question: Timeline for export duty resolution in Indonesia - Management stated ongoing discussions with the government regarding export duties and the potential for life extension beyond 2041 [50][51][53] Question: Funding for Indonesian projects and dividends to non-controlling interests - Management clarified that the smelter project is debt financed, while other capital projects are funded through internally generated cash flows at the PT-FI level [55][57]

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Cash and Cash Equivalents - Cash and cash equivalents decreased to $6,683 million in June 2023 from $8,146 million in December 2022[12] - Total cash, cash equivalents, and restricted cash and cash equivalents were $6.936 billion as of June 30, 2023, compared to $8.390 billion as of December 31, 2022[57] - At June 30, 2023, the company had $6.7 billion of consolidated cash and cash equivalents, including $1.1 billion designated for Indonesia smelter projects[208] Revenues and Net Income - Total revenues for the six months ended June 30, 2023, were $11,126 million, compared to $12,019 million in the same period in 2022[18] - Net income attributable to common stockholders for the six months ended June 30, 2023, was $1,006 million, down from $2,367 million in the same period in 2022[18] - Net income per share attributable to common stockholders (diluted) for the six months ended June 30, 2023, was $0.69, compared to $1.61 in the same period in 2022[31] - Total comprehensive income attributable to common stockholders for the six months ended June 30, 2023, was $1,008 million, down from $2,369 million in the same period in 2022[21] - Net income for Q2 2023 was $731 million, a decrease from $1,038 million in Q2 2022, while net income for the first six months of 2023 was $1,780 million, down from $2,942 million in the same period of 2022[34] - FCX's total consolidated revenues for the second quarter of 2023 were $5.737 billion, compared to $5.416 billion in the same period of 2022[83] - Revenues from unaffiliated customers for the first six months of 2023 totaled $11.126 billion, compared to $12.019 billion in the same period of 2022[89] - Net income attributable to common stockholders for the first six months of 2023 was $1.0 billion, compared to $2.4 billion in the same period of 2022[103] - Consolidated revenues for Q2 2023 were $5.7 billion, compared to $5.4 billion in Q2 2022[130][133] - Revenues for the first six months of 2023 were $3.85 billion, consistent with the same period in 2022[173] Capital Expenditures and Investments - Capital expenditures for the six months ended June 30, 2023, totaled $2,365 million, with significant investments in Indonesia mining ($833 million) and Indonesia smelter projects ($780 million)[23] - Capital expenditures for the first six months of 2023 were $2.284 billion, up from $1.586 billion in the same period of 2022[89] - Capital expenditures for 2023 are expected to be $4.8 billion, including $2.0 billion for major mining projects and $1.6 billion for Indonesia smelter projects[114] - Capital expenditures for the Indonesia smelter projects totaled $0.8 billion in the first six months of 2023, with an expected total of $1.6 billion for the year[185] Operating Cash Flows and Debt - Net cash provided by operating activities for the six months ended June 30, 2023, was $2,723 million, compared to $3,312 million in the same period in 2022[23] - FCX's total debt decreased to $9,495 million in June 2023 from $10,620 million in December 2022, with long-term debt at $9,458 million[41] - FCX repurchased $1.3 billion of its senior notes from 2022 through August 3, 2023, resulting in a $5 million gain on debt extinguishments in Q2 2023[43] - Consolidated debt at June 30, 2023 was $9.5 billion, with net debt of $2.8 billion[104] - The fair value of FCX's long-term debt, including the current portion, was $9.129 billion as of June 30, 2023[60] - Net debt, excluding Indonesia smelter projects, totaled $0.9 billion as of June 30, 2023[210] Dividends and Share Repurchases - Dividends declared per share of common stock remained consistent at $0.15 for the three months ended June 30, 2023, and $0.30 for the six months ended June 30, 2023[18] - FCX declared a cash dividend of $0.15 per share on June 21, 2023, consisting of a $0.075 base dividend and a $0.075 variable, performance-based dividend[45] - FCX's share repurchase program has $3.2 billion available for repurchases, with no shares purchased since July 11, 2022[44] - Cash dividends declared at $0.15 per share, including $0.075 base and $0.075 variable dividends, paid on August 1, 2023[210] - Anticipated total dividends for 2023 are $0.60 per share, comprising $0.30 base and $0.30 variable dividends[210] Commodity Prices and Hedging - FCX held copper futures and swap contracts for 88 million pounds at an average price of $3.88 per pound, with maturities through May 2025, to hedge price exposure[47] - Embedded derivatives in provisional sales contracts included 587 million pounds of copper at an average price of $3.90 per pound and 165 thousand ounces of gold at $1,980 per ounce, with maturities through November 2023[49] - Atlantic Copper held net copper forward purchase contracts for 7 million pounds at an average contract price of $3.81 per pound, with maturities through August 2023[51] - Embedded derivatives in provisional sales contracts for copper resulted in a realized and unrealized loss of $169 million for the three months ended June 30, 2023[52] - The fair value of unsettled commodity derivative financial instruments as of June 30, 2023, was $37 million for assets and $110 million for liabilities[53] - FCX's maximum credit exposure associated with derivative transactions was $537 million as of June 30, 2023[55] - LME copper settlement prices in Q2 2023 ranged from $3.59 to $4.12 per pound, averaging $3.84 per pound[120] - London PM gold prices in Q2 2023 ranged from $1,900 to $2,048 per ounce, averaging $1,976 per ounce[125] - Platts Metals Daily Molybdenum Dealer Oxide weekly average price in Q2 2023 ranged from $17.09 to $22.75 per pound, averaging $21.25 per pound[128] - Average realized prices in Q2 2023 were 5% lower for copper, 6% higher for gold, and 25% higher for molybdenum compared to Q2 2022[135] Production and Sales Volumes - Copper production in Q2 2023 was 1,067 million recoverable pounds, with sales of 1,029 million recoverable pounds[132] - Gold production in Q2 2023 was 483 thousand recoverable ounces, with sales of 495 thousand recoverable ounces[132] - North America copper production for Q2 2023 was 354 million pounds, down from 382 million pounds in Q2 2022[159] - North America copper sales for Q2 2023 were 339 million pounds, compared to 389 million pounds in Q2 2022[161] - South America copper production for Q2 2023 was 307 million pounds, up from 286 million pounds in Q2 2022[165] - South America copper sales for Q2 2023 were 304 million pounds, compared to 288 million pounds in Q2 2022[169] - PT-FI's copper production for the first six months of 2023 was 735 million recoverable pounds, down from 788 million pounds in 2022[184] - PT-FI's gold production for the first six months of 2023 was 881 thousand recoverable ounces, slightly down from 885 thousand ounces in 2022[184] - PT-FI's consolidated copper sales for the first six months of 2023 were 584 million pounds, down from 789 million pounds in 2022[185] - PT-FI's consolidated gold sales for the first six months of 2023 were 758 thousand ounces, down from 880 thousand ounces in 2022[186] - Copper sales for the first six months of 2023 were 789 million recoverable pounds, compared to 584 million recoverable pounds in the same period of 2022[190] - Gold sales for the first six months of 2023 were 880 thousand recoverable ounces, compared to 758 thousand recoverable ounces in the same period of 2022[190] - Molybdenum production from the company's mines totaled 15 million pounds for the first six months of 2023, consistent with the same period of 2022[199] Costs and Expenses - FCX's consolidated effective income tax rate increased to 37% for the first six months of 2023, up from 32% in the same period of 2022, due to $142 million in pre-tax, nondeductible charges related to contested tax rulings in Peru[38] - Consolidated production and delivery costs increased to $3.5 billion in Q2 2023, up from $3.0 billion in Q2 2022, primarily due to higher operating rates and maintenance costs[142] - Site production and delivery costs averaged $2.39 per pound of copper in Q2 2023, compared to $2.09 per pound in Q2 2022[143] - Depreciation, depletion, and amortization (DD&A) totaled $547 million in Q2 2023, up from $507 million in Q2 2022[144] - Environmental obligation costs increased to $60 million in Q2 2023, compared to $13 million in Q2 2022, due to net revisions to long-term obligations[145] - Consolidated interest costs (before capitalization) rose to $234 million in Q2 2023, up from $189 million in Q2 2022, driven by contested tax rulings[146] - Capitalized interest increased to $62 million in Q2 2023, compared to $33 million in Q2 2022, due to ongoing development projects[147] - North America unit net cash costs for Q2 2023 were $2.51 per pound, up from $2.26 per pound in Q2 2022[164] - North America unit net cash costs for 2023 are expected to approximate $2.56 per pound[166] - Average unit net cash costs for South America mining were $2.24 per pound of copper in the first six months of 2023, slightly higher than $2.23 in 2022[174] - PT-FI's unit net cash credits were $0.08 per pound of copper for the first six months of 2023, higher than $0.04 per pound in the same period of 2022, driven by higher gold and silver credits and lower export duties[191] - PT-FI's royalties totaled $150 million for the first six months of 2023, compared to $201 million in the same period of 2022, primarily due to lower sales volumes and copper prices[193] - Average unit net cash costs for the Molybdenum mines were $13.95 per pound for the first six months of 2023, higher than $10.75 per pound in the same period of 2022, reflecting higher contract labor and input costs[201] Indonesia Operations and Export Regulations - FCX's economic ownership interest in PT-FI decreased from 81% to 48.76% starting January 1, 2023, resulting in a $35 million net benefit in Q1 2023 due to sales volumes attributed to the previous ownership interest[33] - PT-FI was granted an export license through May 2024 for 1.7 million metric tons of copper concentrate[73] - PT-FI's export duties were eliminated effective March 29, 2023, after smelter construction progress exceeded 50%[73] - The revised regulation assesses export duties for copper concentrates at 7.5% in the second half of 2023 and 10% in 2024 for companies with smelter progress of 70% to 90%[74] - PT-FI estimates construction of the Manyar smelter to be complete in mid-2024[75] - PT-FI paid an administrative fine totaling $57 million in March 2022 related to smelter development delays[75] - PT-FI submitted a third-party verified calculation resulting in a potential administrative fine of $55 million for the period from August 2020 through January 2022[76] - PT-FI has an existing assurance bond totaling $134 million at June 30, 2023, and may be required to make an additional refundable deposit of approximately $250 million[77] - The Indonesia government requires 30% of PT-FI's gross export proceeds to be temporarily deposited into Indonesia banks for a period of 90 days before withdrawal[78] - PT-FI was granted an export license through May 2024 for 1.7 million metric tons of copper concentrate[104] - PT-FI's Kucing Liar deposit is expected to produce over 6 billion pounds of copper and 6 million ounces of gold between 2028 and 2041[183] Financial Policy and Liquidity - The company's financial policy includes a base dividend and a performance-based payout framework, targeting net debt between $3.0 billion and $4.0 billion, excluding net project debt for additional smelting capacity in Indonesia[209] - International cash is primarily used for foreign operations' capital expenditures, operating expenses, and debt repayments[212] - Sufficient liquidity in the U.S. is maintained through cash balances and revolving credit facility availability[212] - Deferred tax liabilities recorded for foreign earnings available for repatriation to the U.S.[212] - Foreign subsidiaries distribute earnings to the U.S. via dividends, subject to withholding taxes and noncontrolling interests' share[212] Other Financial Metrics - Total assets as of June 30, 2023, were $50,907 million, slightly down from $51,093 million as of December 31, 2022[12] - Total inventories increased to $2,214 million in June 2023 from $1,833 million in December 2022, with finished goods inventory rising significantly to $1,643 million from $1,169 million[35] - The fair value of contingent consideration for the sale of the Deepwater GOM oil and gas properties was $51 million as of June 30, 2023[60] - FCX's embedded derivatives in provisional sales/purchase contracts were valued at $37 million as of June 30, 2023, classified within Level 2 of the fair value hierarchy[65] - The fair value of FCX's Level 3 instrument, contingent consideration for the sale of the Deepwater GOM oil and gas properties, decreased by $7 million during the first six months of 2023[68] - The company projects consolidated operating cash flows of $6.4 billion for 2023, exceeding expected consolidated capital expenditures of $4.8 billion[207] - Cash and cash equivalents available to the parent company, excluding Indonesia smelter projects, are summarized at June 30, 2023[211]

FCX Conference Call nd 2 Quarter 2023 Results July 20, 2023 ...

Freeport-McMoRan Inc. (NYSE:FCX) Q2 2023 Earnings Conference Call July 20, 2023 10:00 AM ET Company Participants Kathleen Quirk – President Richard Adkerson – Chairman and Chief Executive Officer Josh Olmsted – President and Chief Operating Officer-Americas Conference Call Participants Alex Hacking – Citi Christopher LaFemina – Jefferies Carlos de Alba – Morgan Stanley Timna Tanners – Wolfe Research Michael Dudas – Vertical Research Partners Brian MacArthur – Raymond James Cleve Rueckert – UBS Operator Ladi ...

Freeport-McMoRan, Inc. Conference Call Summary Company Overview - **Company**: Freeport-McMoRan, Inc. (NYSE: FCX) - **Industry**: Metals and Mining, specifically Copper Key Points and Arguments Copper Market Outlook - Concerns exist regarding a potential downturn in copper prices due to new supply coinciding with a slowing global economy [4] - Freeport maintains a long-term focus on copper, emphasizing the importance of a strong balance sheet to navigate short-term uncertainties [5][6] - The company believes that the market will struggle to meet growing copper demand driven by electrification and artificial intelligence [8][9] M&A Activity - Freeport has been evaluating M&A opportunities but does not prioritize growth through acquisitions, focusing instead on internal resource development [10][11][12] - The company acknowledges the historical challenges of M&A in the industry and prefers to capitalize on its own resource development [13][15] - Freeport is not interested in diversifying into gold or other metals, maintaining a strong focus on copper [16] Future Goals and Production Targets - Freeport aims to increase copper production through leaching operations, targeting 200 million pounds in the near term and 800 million pounds in the medium term [20] - The company is excited about the potential of its leaching stacks, which contain significant copper reserves [25] - Brownfield development projects are underway, including a new concentrator at the Bagdad mine in Arizona [26] Grasberg Mine Operations - The Grasberg mine is transitioning to the world's largest underground mine, with successful operational management despite environmental challenges [30][31] - Freeport has secured a stable relationship with the Indonesian government, which is crucial for the long-term operation of Grasberg [32][38] - The company is exploring the potential for extending operational rights beyond 2041, with ongoing drilling to assess resource availability [33][34] Financial Performance - Freeport reported negative cash costs of $0.15 per pound for the Grasberg mine, indicating strong profitability [18][34] - The company emphasizes the importance of managing costs effectively to leverage higher copper prices in the future [28] Additional Important Insights - Freeport's management is focused on conservative financial reporting and aims to underpromise and overdeliver on expectations [24] - The company has a strong community support framework, which is essential for operational success in the U.S. [27] - The current U.S. tax environment is favorable for Freeport, with a low incremental federal tax rate [27] This summary encapsulates the key insights from the Freeport-McMoRan conference call, highlighting the company's strategic focus on copper, operational challenges, and future growth plans.

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-11307-01 Freeport-McMoRan Inc. (Exact name of registrant as specified in its charter) Delaware 74-2480931 (State or other juris ...

Freeport-McMoRan Inc. (NYSE:FCX) Q1 2023 Earnings Conference Call April 21, 2023 10:00 AM ET Company Participants Kathleen Quirk - President Richard Adkerson - Chairman and Chief Executive Officer Cory Stevens - President, Freeport-McMoRan Mining Services Conference Call Participants Christopher LaFemina - Jefferies Emily Chieng - Goldman Sachs Carlos De Alba - Morgan Stanley Brian MacArthur - Raymond James Timna Tanners - Wolfe Research John Tumazos - John Tumazos Very Independent Research LLC Michael Duda ...

Freeport-McMoRan, Inc. Conference Call Summary Company Overview - Freeport-McMoRan, Inc. is the largest publicly-traded copper producer globally and a significant producer of gold and molybdenum, with operations in North America, South America, and Indonesia [1][2] Key Industry Insights - The copper industry has evolved significantly over the past 40 years, with major changes including the emergence of China as a dominant force in copper demand since 2003 [3][6] - Current trends indicate a strong outlook for copper driven by investments in carbon reduction, electric vehicles, and energy infrastructure, with 70% of copper used in electricity-related applications [7][8] - Freeport is committed to being the foremost copper company globally, leveraging its strong asset base and experienced team [8] Operational Updates - The Grasberg mine in Indonesia faced operational challenges due to severe weather, but all mines and mills are now operational, with limited impact expected for the year [9][12] - Freeport is focused on maximizing internal growth opportunities, particularly in the U.S. and Chile, while navigating political uncertainties in these regions [16][25] M&A Strategy - The company does not have a defined M&A strategy but remains open to opportunities that align with its long-term goals and do not distract from its core operations [14][19] - The outlook for M&A activity in the mining sector is uncertain, but positive long-term copper demand may drive future consolidation [14] Labor Challenges - Freeport is experiencing significant labor challenges in the U.S., with 1,300 job openings affecting operational efficiency. The company is investing in automation to address these issues [32][34] Market Position and Future Outlook - The mining industry faces criticism for potentially slowing down the energy transition, but Freeport maintains that the demand for copper will necessitate increased production [35][37] - The company believes that copper prices will rise significantly due to supply constraints and increasing global demand, positioning Freeport favorably for future growth [29][31] Community Relations - Freeport has developed strong community relationships at its Cerro Verde mine in Peru, which has helped mitigate disruptions from social unrest [25] Technological Innovations - Freeport is exploring leaching technology as a significant opportunity for future growth, particularly in its existing operations [17][38] Conclusion - Freeport-McMoRan is well-positioned to capitalize on the growing demand for copper, with a strong balance sheet, a focus on internal growth, and a commitment to responsible mining practices [31][37]