PHOENIX--(BUSINESS WIRE)--
Freeport-McMoRan Inc. (NYSE: FCX):
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Net loss attributable to common stock totaled $479 million,
$0.38 per share, for second-quarter 2016. After adjusting for net
charges totaling $452 million, $0.36 per share, second-quarter 2016
adjusted net loss attributable to common stock totaled $27 million,
$0.02 per share.
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Consolidated sales (including volumes from Tenke Fungurume
(Tenke), which is being reported as a discontinued operation) totaled
1.1 billion pounds of copper, 156 thousand ounces of gold, 19 million
pounds of molybdenum and 12.4 million barrels of oil equivalents
(MMBOE) for second-quarter 2016, compared with 964 million pounds of
copper, 352 thousand ounces of gold, 23 million pounds of molybdenum
and 13.1 MMBOE for second-quarter 2015.
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Consolidated sales for the year 2016 (including volumes from
Tenke through the anticipated closing date) are expected to
approximate 5.0 billion pounds of copper, 1.7 million ounces of gold,
76 million pounds of molybdenum and 47.4 MMBOE, including 1.3 billion
pounds of copper, 410 thousand ounces of gold, 20 million pounds of
molybdenum and 11.4 MMBOE for third-quarter 2016.
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Average realized prices were $2.18 per pound of copper, $1,292
per ounce for gold and $41.10 per barrel for oil for second-quarter
2016.
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Average unit net cash costs were $1.33 per pound of copper for
mining operations and $15.00 per barrel of oil equivalents (BOE) for
oil and gas operations for second-quarter 2016. Unit net cash costs
for the year 2016 are expected to average $1.06 per pound of copper
for mining operations (including Tenke) and $15.50 per BOE for oil and
gas operations.
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Operating cash flows totaled $874 million (including
$278 million in working capital sources and changes in other tax
payments) for second-quarter 2016. Based on current sales volume and
cost estimates and assuming average prices of $2.25 per pound for
copper, $1,300 per ounce for gold, $6 per pound for molybdenum and $48
per barrel for Brent crude oil for the second half of 2016, operating
cash flows for the year 2016 are expected to approximate $4.5 billion
(including $0.7 billion in working capital sources and changes in
other tax payments).
-
Capital expenditures totaled $833 million for second-quarter
2016, consisting of $441 million for mining operations (including $350
million for major projects) and $392 million for oil and gas
operations. Capital expenditures are expected to approximate $3.1
billion for the year 2016, consisting of $1.7 billion for mining
operations (including $1.3 billion for major projects) and $1.4
billion for oil and gas operations.
-
During second-quarter 2016, FCX completed previously announced
asset sales for aggregate cash consideration of $1.3 billion,
including the $1.0 billion sale of an additional 13 percent undivided
interest in Morenci. In May 2016, FCX entered into a definitive
agreement to sell its interest in TF Holdings Limited for $2.65
billion in cash and contingent consideration of up to $120 million. In
accordance with accounting guidelines, the results of Tenke are
reported as discontinued operations for all periods presented.
-
During second-quarter 2016, FCX entered into agreements to terminate
FM O&G's three drilling rig contracts for a total of $755
million and potential contingent consideration depending on future oil
prices. The settlements result in aggregate savings of approximately
$350 million, compared to the previously contracted commitments.
-
Through July 25, 2016, FCX exchanged $369 million in senior notes
for approximately 28 million shares of its common stock in a series of
privately negotiated transactions, including $268 million exchanged
during second-quarter 2016.
-
At June 30, 2016, consolidated debt totaled $19.3 billion
and consolidated cash totaled $352 million. At June 30,
2016, FCX had no borrowings and $3.5 billion available under its $3.5
billion revolving credit facility.
Freeport-McMoRan Inc. (NYSE: FCX) reported net losses attributable to
common stock of $479 million, $0.38 per share, for second-quarter 2016
and $4.7 billion, $3.70 per share, for the first six months of 2016,
compared with $1.85 billion, $1.78 per share, for second-quarter 2015
and $4.3 billion, $4.16 per share, for the first six months of 2015.
FCX’s net losses attributable to common stock include net charges
totaling $452 million, $0.36 per share, for second-quarter 2016 and $4.4
billion, $3.53 per share, for the first six months of 2016, primarily
for impairment of oil and gas properties and drillship settlements/idle
rig costs, partly offset by net gains on the sales of assets.
Second-quarter 2015 included net charges of $2.0 billion, $1.92 per
share, and the first six months of 2015 included net charges of $4.4
billion, $4.24 per share, primarily for the impairment of oil and gas
properties. For further discussion of these net charges refer to the
supplemental schedule "Adjusted Net (Loss) Income," on page IX, which is
available on FCX's website, "fcx.com."
Richard C. Adkerson, President and Chief Executive Officer, said, "We
are pleased to report significant progress toward our immediate
objective of strengthening FCX’s balance sheet and enhancing shareholder
value in a challenging market environment. Our global team continues to
execute on our strategy to constrain costs and capital spending in a
manner that protects the long-term values of our large resources. Our
announced asset sale transactions totaling over $4 billion year-to-date
demonstrate the attractiveness of our high-quality asset base. We are
focused on executing our operating plans, which position us for
significant free cash flow generation in the balance of 2016 and 2017,
and on building long-term values from our portfolio of low-cost,
long-lived reserves and resources for the benefit of our shareholders."
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SUMMARY FINANCIAL DATA
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2016
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2015
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2016
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2015
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(in millions, except per share amounts)
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Revenuesa,b
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$
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3,334
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|
|
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$
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3,938
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|
|
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$
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6,576
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|
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$
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7,709
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Operating income (loss)a
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$
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18
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$
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(2,421
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)
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$
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(3,854
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)
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$
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(5,451
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)
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Net loss from continuing operations
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$
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(229
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)
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$
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(1,828
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)
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$
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(4,326
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)
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$
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(4,275
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)
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Net (loss) income from discontinued operationsc
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$
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(181
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)
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$
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29
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$
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(185
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)
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$
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70
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Net loss attributable to common stockd,e
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$
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(479
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)
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$
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(1,851
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)
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$
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(4,663
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)
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$
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(4,325
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)
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Diluted net (loss) income per share of common stock:
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Continuing operations
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$
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(0.23
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)
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$
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(1.78
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)
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$
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(3.54
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)
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$
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(4.18
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)
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Discontinued operations
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(0.15
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)
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—
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(0.16
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)
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0.02
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$
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(0.38
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)
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$
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(1.78
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)
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$
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(3.70
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)
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$
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(4.16
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)
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Diluted weighted-average common shares outstanding
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1,269
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1,040
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1,260
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1,040
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Operating cash flowsf
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$
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874
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$
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1,069
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$
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1,614
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$
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1,786
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Capital expenditures
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$
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833
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$
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1,661
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$
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1,815
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$
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3,528
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At June 30:
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Cash and cash equivalents
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$
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352
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$
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318
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$
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352
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|
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$
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318
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Total debt, including current portion
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$
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19,319
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$
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20,902
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|
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$
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19,319
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|
|
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$
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20,902
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|
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|
|
|
|
|
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a.
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For segment financial results, refer to the supplemental
schedules, "Business Segments," beginning on page XII, which are
available on FCX's website, "fcx.com."
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b.
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Includes (unfavorable) favorable adjustments to provisionally
priced concentrate and cathode copper sales recognized in prior
periods totaling $(28) million ($(15) million to net loss
attributable to common stock from continuing operations or $(0.01)
per share) in second-quarter 2016, $(22) million ($(11) million to
net loss attributable to common stock from continuing operations
or $(0.01) per share) in second-quarter 2015, $5 million ($2
million to net loss attributable to common stock from continuing
operations or less than $0.01 per share) for the first six months
of 2016 and $(99) million ($(47) million to net loss attributable
to common stock from continuing operations or $(0.04) per share)
for the first six months of 2015. For further discussion, refer to
the supplemental schedule, "Derivative Instruments," on page XI,
which is available on FCX's website, "fcx.com."
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c.
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Net (loss) income from discontinued operations includes charges
for (i) allocated interest expense totaling $11 million in
second-quarter 2016, $7 million in second-quarter 2015, $21
million for the first six months of 2016 and $14 million for the
first six months of 2015 associated with the portion of the term
loan that is required to be repaid as a result of the sale of
FCX's interest in Tenke and (ii) income tax (benefit) provision
totaling $(16) million in second-quarter 2016, $12 million in
second-quarter 2015, $(23) million for the first six months of
2016 and $31 million for the first six months of 2015. In
accordance with accounting guidelines, the second quarter and
first six months of 2016 are also net of an estimated loss on
disposal, which will be adjusted through closing of the
transaction (refer to the supplemental schedule, “Adjusted Net
(Loss) Income,” on page IX, which is available on FCX’s website,
“fcx.com”).
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d.
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Includes net charges totaling $452 million ($0.36 per share) in
second-quarter 2016, $2.0 billion ($1.92 per share) in
second-quarter 2015, $4.4 billion ($3.53 per share) for the first
six months of 2016 and $4.4 billion ($4.24 per share) for the
first six months of 2015, which are described in the supplemental
schedule, “Adjusted Net (Loss) Income,” on page IX, which is
available on FCX’s website, “fcx.com.”
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e.
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FCX defers recognizing profits on intercompany sales until
final sales to third parties occur. For a summary of net impacts
from changes in these deferrals, refer to the supplemental
schedule, "Deferred Profits," on page XI, which is available on
FCX's website, "fcx.com."
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f.
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Includes net working capital sources (uses) and changes in
other tax payments of $278 million in second-quarter 2016, $(104)
million in second-quarter 2015, $466 million for the first six
months of 2016 and $(190) million for the first six months of 2015.
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DEBT REDUCTION INITIATIVES
FCX previously announced plans to reduce debt and restore its balance
sheet strength through a combination of asset sale transactions, cash
flow from operations and potential capital market transactions. To date,
FCX has announced over $4 billion in transactions and has received
aggregate cash consideration of $1.4 billion, including $87 million in
July 2016. The $2.65 billion Tenke Fungurume (Tenke) transaction is
expected to close in fourth-quarter 2016. In addition, FCX continues to
aggressively manage production, exploration and administrative costs and
capital spending.
During second-quarter 2016, FCX restructured its oil and gas business to
reduce costs and align capital allocation for the business with FCX’s
corporate debt reduction initiatives. During the quarter, FCX terminated
contracts for Freeport-McMoRan Oil & Gas LLC’s (FM O&G) deepwater
drillships, and settled aggregate commitments totaling $1.1 billion for
$755 million, of which $540 million was funded with shares of FCX common
stock. In addition to the drillship contract savings of approximately
$350 million, FCX has identified annual operating and administrative
cost savings in excess of $150 million in connection with restructuring
efforts.
During 2016, FCX has retired $369 million of its senior notes through a
series of privately negotiated exchanges for 28 million shares of its
common stock (including $268 million during second-quarter 2016, which
resulted in a $39 million gain on early extinguishment of debt). These
transactions will reduce annual interest expense by $17 million. FCX
will continue to evaluate opportunities for transactions, which may
include open-market purchases of its debt, debt for debt exchanges, and
privately negotiated exchanges of its debt for equity or equity-linked
securities. FCX may also issue additional debt or convertible securities
to repay or refinance existing debt. The completion and amount of these
transactions, if any, are subject to a number of factors, including
market conditions, FCX's financial position and its ability to complete
such transactions on economically attractive terms.
With the successful completion of the Cerro Verde expansion and access
to higher grade ore from the Grasberg mine in future quarters, FCX
expects to generate substantial cash flows over the next 18 months for
debt reduction.
As part of its plan to reduce outstanding indebtedness, FCX intends to
commence, subject to market conditions, a registered at-the-market
offering of up to $1.5 billion of common stock and use the proceeds to
retire outstanding indebtedness. FCX believes the proceeds of this
offering, together with previously announced asset sale transactions and
anticipated cash flow from operations, will enable it to achieve its
near-term debt reduction objectives.
While additional asset sales may be considered, FCX remains focused on
retaining a high-quality portfolio of long-lived copper assets
positioned to generate value as market conditions improve. In addition
to debt reduction plans, FCX is pursuing opportunities to create
additional value through mine designs that would increase copper
reserves, reduce costs and provide opportunities to enhance net present
values, and continues to advance studies for future development of its
copper resources, the timing of which will be dependent on market
conditions.
Following provides a summary of FCX’s completed and pending asset sales
(in billions):
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Closing or Expected
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Cash
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Closing Date
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Consideration
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a
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Morenci (13 percent interest)
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Second-quarter 2016
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$
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1.00
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Timok exploration project in Serbia
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Second-quarter 2016
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0.13
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b
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Oil and gas royalty interests
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Second-quarter 2016
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0.10
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Other land sales
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Second-quarter 2016
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0.06
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Haynesville shale assets
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Third-quarter 2016
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0.09
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Tenke
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Fourth-quarter 2016
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2.65
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c
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Total, excluding potential transactions and contingent consideration
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4.03
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Potential Freeport Cobalt/Kinsanfu transactionsd
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0.15
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Contingent considerationb,c
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0.23
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Total
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$
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4.41
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a.
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Reflects aggregate cash consideration.
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b.
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Excludes contingent consideration of up to $107 million payable
to FCX in stages based upon achievement of defined development
milestones.
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c.
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Excludes contingent consideration of up to $120 million,
consisting of $60 million if the average copper price exceeds
$3.50 per pound and $60 million if the average cobalt price
exceeds $20 per pound, for the 24-month period ending December 31,
2019.
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d.
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FCX has agreed to negotiate exclusively with China Molybdenum
Co., Ltd. (CMOC) until December 31, 2016, to enter into a
definitive agreement to sell its interests in Freeport Cobalt for
$100 million and the Kinsanfu exploration project in the
Democratic Republic of Congo (DRC) for $50 million in separate
transactions.
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SUMMARY OPERATING DATA
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|
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2016
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2015
|
|
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2016
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2015
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|
Copper (millions of recoverable pounds)
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|
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Productiona
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|
1,133
|
|
|
|
977
|
|
|
|
2,230
|
|
|
|
1,892
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|
|
Sales, excluding purchasesa
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|
|
1,111
|
|
|
|
964
|
|
|
|
2,234
|
|
|
|
1,924
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|
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Average realized price per pounda
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|
$
|
2.18
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|
|
|
$
|
2.71
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|
|
|
$
|
2.16
|
|
|
|
$
|
2.70
|
|
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Site production and delivery costs per poundb
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|
|
$
|
1.43
|
|
|
|
$
|
1.85
|
|
|
|
$
|
1.47
|
|
|
|
$
|
1.89
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|
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Unit net cash costs per poundb
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|
|
$
|
1.33
|
|
|
|
$
|
1.50
|
|
|
|
$
|
1.35
|
|
|
|
$
|
1.57
|
|
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Gold (thousands of recoverable ounces)
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|
|
|
|
|
|
|
|
|
|
|
|
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Production
|
|
|
166
|
|
|
|
367
|
|
|
|
350
|
|
|
|
626
|
|
|
Sales, excluding purchases
|
|
|
156
|
|
|
|
352
|
|
|
|
357
|
|
|
|
615
|
|
|
Average realized price per ounce
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|
|
$
|
1,292
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|
|
|
$
|
1,174
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|
|
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$
|
1,259
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|
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$
|
1,183
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Molybdenum (millions of recoverable pounds)
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|
|
|
|
|
|
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Production
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|
19
|
|
|
|
25
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|
|
|
39
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|
|
49
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Sales, excluding purchases
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19
|
|
|
|
23
|
|
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|
36
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|
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|
46
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Average realized price per pound
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$
|
8.34
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|
|
|
$
|
9.51
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|
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$
|
7.99
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|
|
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$
|
9.84
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Oil Equivalents
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|
|
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Sales volumes
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|
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|
|
|
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MMBOE
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|
12.4
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13.1
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24.5
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|
|
25.6
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Thousand BOE (MBOE) per day
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|
|
136
|
|
|
|
144
|
|
|
135
|
|
|
|
142
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Cash operating margin per BOEc
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|
|
|
|
|
|
|
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Realized revenues
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$
|
32.70
|
|
|
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$
|
50.04
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d
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$
|
28.29
|
|
|
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$
|
46.95
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d
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Cash production costs
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(15.00
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|
|
|
(19.04
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)
|
|
|
(15.42
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)
|
|
|
(19.62
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)
|
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Cash operating margin
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$
|
17.70
|
|
|
|
$
|
31.00
|
|
|
|
$
|
12.87
|
|
|
|
$
|
27.33
|
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a.
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Includes production and sales volumes from the Tenke mine,
which is reported as a discontinued operation. Copper sales
volumes from the Tenke mine totaled 124 million pounds in
second-quarter 2016, 104 million pounds in second-quarter 2015,
247 million pounds for the first six months of 2016 and 237
million pounds for the first six months of 2015. For realized
copper prices (excluding Tenke), refer to the supplemental
schedules, "Selected Mining Operating Data," beginning on page I,
which are available on FCX's website, "fcx.com."
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b.
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Reflects per pound weighted-average production and delivery
costs and unit net cash costs (net of by-product credits) for all
copper mines (including Tenke), before net noncash and other
costs. Excluding the Tenke mine, mining unit net cash costs
averaged $1.33 per pound in second-quarter 2016, $1.56 per pound
in second-quarter 2015, $1.36 per pound for the first six months
of 2016 and $1.63 per pound for the first six months of 2015. For
reconciliations of per pound unit costs by operating division to
production and delivery costs applicable to sales reported in
FCX's consolidated financial statements, refer to the supplemental
schedules, "Product Revenues and Production Costs," beginning on
page XV, which are available on FCX's website, "fcx.com."
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c.
|
|
Cash operating margin for oil and gas operations reflects
realized revenues less cash production costs. Cash production
costs exclude accretion and other costs. For reconciliations of
realized revenues and cash production costs per BOE to revenues
and production and delivery costs reported in FCX's consolidated
financial statements, refer to the supplemental schedules,
“Product Revenues and Production Costs,” beginning on page XV,
which are available on FCX's website, “fcx.com.”
|
d.
|
|
Includes realized cash gains on crude oil derivative contracts
of $7.73 per BOE in second-quarter 2015 and $7.87 per BOE for the
first six months of 2015. FCX currently does not have oil and gas
derivative contracts in place for 2016 or future years.
|
|
|
|
Consolidated Sales Volumes
Second-quarter 2016 consolidated copper sales (including Tenke)
totaled 1.1 billion pounds, approximately 5 percent below the April 2016
estimate because of lower sales from Indonesia, and were higher than
second-quarter 2015 sales of 964 million pounds, primarily reflecting
higher volumes from Cerro Verde.
Second-quarter 2016 consolidated gold sales of 156 thousand
ounces were lower than the April 2016 estimate of 195 thousand ounces
primarily reflecting lower mining rates in Indonesia, and were lower
than second-quarter 2015 sales of 352 thousand ounces, primarily
reflecting lower ore grades and lower mining and milling rates.
Second-quarter 2016 consolidated molybdenum sales of 19 million
pounds approximated the April 2016 estimate and were lower than
second-quarter 2015 sales of 23 million pounds, primarily reflecting
market-driven curtailed production volumes from the primary molybdenum
mines.
Second-quarter 2016 sales from oil and gas operations of 12.4 MMBOE,
including 8.65 million barrels (MMBbls) of crude oil, 18.8
billion cubic feet (Bcf) of natural gas and 0.6 MMBbls of natural
gas liquids (NGLs), were lower than the April 2016 estimate of 13.5
MMBOE, primarily reflecting lower than anticipated well performance and
start-up delays at new wells, and were lower than second-quarter 2015
sales of 13.1 MMBOE, primarily reflecting lower natural gas volumes from
Haynesville.
Sales volumes for the year 2016 are expected to approximate 5.0 billion
pounds of copper (including 440 million pounds for Tenke through the
anticipated closing date), 1.7 million ounces of gold, 76 million pounds
of molybdenum and 47.4 MMBOE, including 1.3 billion pounds of copper
(including 115 million pounds for Tenke), 410 thousand ounces of gold,
20 million pounds of molybdenum and 11.4 MMBOE for third-quarter 2016.
Anticipated higher grades from the Grasberg mine are expected to result
in approximately 30 percent of 2016 copper sales and 55 percent of 2016
gold sales to occur in fourth-quarter 2016.
Consolidated Unit Costs
Mining Unit Net Cash Costs. Consolidated average unit net cash
costs (net of by-product credits) for FCX's copper mines (including
Tenke) of $1.33 per pound of copper in second-quarter 2016 were lower
than unit net cash costs of $1.50 per pound in second-quarter 2015,
primarily reflecting higher copper sales volumes and the impact of
ongoing cost reduction initiatives, partly offset by lower gold and
silver credits.
Assuming average prices of $1,300 per ounce of gold and $6 per pound of
molybdenum for the second half of 2016 and achievement of current sales
volume and cost estimates, consolidated unit net cash costs (net of
by-product credits) for copper mines (including Tenke) are expected to
average $1.06 per pound of copper for the year 2016. The impact of price
changes for the second half of 2016 on consolidated unit net cash costs
would approximate $0.015 per pound for each $50 per ounce change in the
average price of gold and $0.01 per pound for each $2 per pound change
in the average price of molybdenum. Quarterly unit net cash costs vary
with fluctuations in sales volumes and realized prices primarily for
gold and molybdenum.
Oil and Gas Cash Production Costs per BOE. Cash production costs
for oil and gas operations of $15.00 per BOE in second-quarter 2016 were
lower than cash production costs of $19.04 per BOE in second-quarter
2015, primarily reflecting higher production from Gulf of Mexico (GOM)
wells and ongoing cost reduction efforts.
Based on current sales volume and cost estimates, cash production costs
are expected to approximate $15.50 per BOE for the year 2016.
MINING OPERATIONS
North America Copper Mines. FCX operates seven open-pit copper
mines in North America - Morenci, Bagdad, Safford, Sierrita and Miami in
Arizona, and Chino and Tyrone in New Mexico. In addition to copper,
molybdenum concentrate and silver are also produced by certain of FCX's
North America copper mines.
All of the North America mining operations are wholly owned, except for
Morenci. FCX records its undivided joint venture interest in Morenci
using the proportionate consolidation method. On May 31, 2016, FCX
completed the sale of an additional 13 percent undivided interest in
Morenci for $1.0 billion in cash. As a result of the transaction, FCX's
undivided interest in Morenci was prospectively reduced from 85 percent
to 72 percent.
Operating and Development Activities. FCX has significant
undeveloped reserves and resources in North America and a portfolio of
long-term development projects. In the near term, FCX is deferring
development of new projects as a result of current market conditions.
Future investments will be undertaken based on the results of economic
and technical feasibility studies, and market conditions.
During 2015, FCX's revised plans for its North America copper mines to
incorporate reductions in mining rates to reduce operating and capital
costs. In addition, FCX curtailed operations at the Miami and Tyrone
mines and is operating its Sierrita mine at reduced rates. The revised
plans at each of the operations incorporate the impacts of lower energy,
acid and other consumables, reduced labor costs and a significant
reduction in capital spending plans. These operating plans continue to
be reviewed and additional adjustments will be made as market conditions
warrant.
Operating Data. Following is a summary of consolidated operating
data for the North America copper mines for the second quarters and
first six months of 2016 and 2015:
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
469
|
|
|
|
469
|
|
|
|
956
|
|
|
|
921
|
|
Sales
|
|
|
464
|
|
|
|
486
|
|
|
|
967
|
|
|
|
958
|
|
Average realized price per pound
|
|
|
$
|
2.18
|
|
|
|
$
|
2.77
|
|
|
|
$
|
2.17
|
|
|
|
$
|
2.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molybdenum (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
Productiona
|
|
|
8
|
|
|
|
10
|
|
|
|
16
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of copperb
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
|
$
|
1.40
|
|
|
|
$
|
1.78
|
|
|
|
$
|
1.40
|
|
|
|
$
|
1.79
|
|
By-product credits
|
|
|
(0.11
|
)
|
|
|
(0.16
|
)
|
|
|
(0.10
|
)
|
|
|
(0.17
|
)
|
Treatment charges
|
|
|
0.11
|
|
|
|
0.12
|
|
|
|
0.11
|
|
|
|
0.13
|
|
Unit net cash costs
|
|
|
$
|
1.40
|
|
|
|
$
|
1.74
|
|
|
|
$
|
1.41
|
|
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
|
Refer to summary operating data on page 4 for FCX's
consolidated molybdenum sales, which includes sales of molybdenum
produced at the North America copper mines.
|
b.
|
|
For a reconciliation of unit net cash costs per pound to
production and delivery costs applicable to sales reported in
FCX's consolidated financial statements, refer to the supplemental
schedules, "Product Revenues and Production Costs," beginning on
page XV, which are available on FCX's website, "fcx.com."
|
|
|
|
North America's consolidated copper sales volumes totaling 464 million
pounds in second-quarter 2016 were lower than 486 million pounds in
second-quarter 2015 primarily because of timing of sales in the 2015
period. North America copper sales are estimated to approximate 1.8
billion pounds for the year 2016, compared with 2.0 billion pounds in
2015.
Average unit net cash costs (net of by-product credits) for the North
America copper mines of $1.40 per pound of copper in second-quarter 2016
were lower than the unit net cash costs of $1.74 per pound in
second-quarter 2015, primarily reflecting cost reduction initiatives and
lower energy and other input costs.
Average unit net cash costs (net of by-product credits) for the North
America copper mines are expected to approximate $1.42 per pound of
copper for the year 2016, based on achievement of current sales volume
and cost estimates and assuming an average molybdenum price of $6 per
pound for the second half of 2016. North America's average unit net cash
costs would change by approximately $0.012 per pound for each $2 per
pound change in the average price of molybdenum.
South America Mining. FCX operates two copper mines in South
America - Cerro Verde in Peru (in which FCX owns a 53.56 percent
interest) and El Abra in Chile (in which FCX owns a 51 percent
interest). These operations are consolidated in FCX's financial
statements. In addition to copper, the Cerro Verde mine produces
molybdenum concentrate and silver.
Operating and Development Activities. In September 2015, the
Cerro Verde expansion project commenced operations, and achieved
capacity operating rates during first-quarter 2016. Cerro Verde's
expanded operations benefit from its large-scale, long-lived reserves
and cost efficiencies. The project expanded the concentrator facilities
from 120,000 metric tons of ore per day to 360,000 metric tons of ore
per day and is on track to provide incremental annual production of
approximately 600 million pounds of copper and 15 million pounds of
molybdenum.
During 2015, FCX revised plans for its South America copper mines,
principally to reflect adjustments to the mine plan at El Abra to reduce
mining and stacking rates by approximately 50 percent to achieve lower
operating and labor costs, defer capital expenditures and extend the
life of the existing operations.
FCX continues to evaluate a potential large-scale milling operation at
El Abra to process additional sulfide material and to achieve higher
recoveries. Exploration results in recent years at El Abra indicate a
significant sulfide resource, which could potentially support a major
mill project. Future investments will depend on technical studies,
economic factors and global copper market conditions.
Operating Data. Following is a summary of consolidated operating
data for the South America mining operations for the second quarters and
first six months of 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
334
|
|
|
|
188
|
|
|
|
669
|
|
|
|
381
|
|
Sales
|
|
|
327
|
|
|
|
178
|
|
|
|
650
|
|
|
|
378
|
|
Average realized price per pound
|
|
|
$
|
2.19
|
|
|
|
$
|
2.69
|
|
|
|
$
|
2.18
|
|
|
|
$
|
2.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molybdenum (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
Productiona
|
|
|
4
|
|
|
|
2
|
|
|
|
9
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of copperb
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
|
$
|
1.20
|
|
|
|
$
|
1.77
|
|
|
|
$
|
1.22
|
|
|
|
$
|
1.76
|
|
By-product credits
|
|
|
(0.12
|
)
|
|
|
(0.04
|
)
|
|
|
(0.10
|
)
|
|
|
(0.06
|
)
|
Treatment charges
|
|
|
0.23
|
|
|
|
0.17
|
|
|
|
0.23
|
|
|
|
0.17
|
|
Royalty on metals
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
|
|
—
|
|
Unit net cash costs
|
|
|
$
|
1.31
|
|
|
|
$
|
1.90
|
|
|
|
$
|
1.36
|
|
|
|
$
|
1.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
|
Refer to summary operating data on page 4 for FCX's
consolidated molybdenum sales, which includes sales of molybdenum
produced at Cerro Verde.
|
b.
|
|
For a reconciliation of unit net cash costs per pound to
production and delivery costs applicable to sales reported in
FCX's consolidated financial statements, refer to the supplemental
schedules, "Product Revenues and Production Costs," beginning on
page XV, which are available on FCX's website, "fcx.com."
|
|
|
|
South America's consolidated copper sales volumes of 327 million pounds
in second-quarter 2016 were significantly higher than second-quarter
2015 sales of 178 million pounds, primarily reflecting Cerro Verde's
expanded operations. Sales from South America mining are expected to
approximate 1.36 billion pounds of copper for the year 2016, compared
with 871 million pounds of copper in 2015.
Average unit net cash costs (net of by-product credits) for South
America mining of $1.31 per pound of copper in second-quarter 2016 were
significantly lower than unit net cash costs of $1.90 per pound in
second-quarter 2015, primarily reflecting higher copper sales volumes
and economies of scale associated with the Cerro Verde expansion.
Average unit net cash costs (net of by-product credits) for South
America mining are expected to approximate $1.40 per pound of copper for
the year 2016, based on current sales volume and cost estimates and
assuming average prices of $6 per pound of molybdenum for the second
half of 2016.
Indonesia Mining. Through its 90.64 percent owned and
consolidated subsidiary PT Freeport Indonesia (PT-FI), FCX's assets
include one of the world's largest copper and gold deposits at the
Grasberg minerals district in Papua, Indonesia. PT-FI operates a
proportionately consolidated joint venture, which produces copper
concentrates that contain significant quantities of gold and silver.
Regulatory Matters. In October 2015, the Indonesian government
provided a letter of assurance to PT-FI indicating that it will approve
the extension of operations beyond 2021, and provide the same rights and
the same level of legal and fiscal certainty provided under its current
Contract of Work (COW). PT-FI continues to engage in discussions with
the Indonesian government to obtain extension of its long-term rights
available under the COW.
In connection with its COW negotiations and subject to concluding an
agreement to extend PT-FI's operations beyond 2021 on acceptable terms,
PT-FI has agreed to construct new smelter capacity in Indonesia and to
divest an additional 20.64 percent interest in PT-FI at fair market
value.
PT-FI is required to apply for renewal of export permits at six-month
intervals. In February 2016, PT-FI's export permit was renewed through
August 8, 2016. PT-FI has applied for an extension of this permit. The
Indonesian government continues to impose a 5.0 percent export duty
while it reviews PT-FI's smelter plans.
Operating and Development Activities. PT-FI's revised operating
plans incorporate improved operational efficiencies, reductions in input
costs, supplies and contractor costs, foreign exchange impacts and an
approximate 20 percent deferral of capital expenditures that had been
planned for 2016.
PT-FI has several projects in progress in the Grasberg minerals district
related to the development of its large-scale, long-lived, high-grade
underground ore bodies. In aggregate, these underground ore bodies are
expected to produce large-scale quantities of copper and gold following
the transition from the Grasberg open pit, currently anticipated to
occur in early 2018. From 2016 to 2020, estimated aggregate capital
spending on these projects is currently expected to average $1.0 billion
per year ($0.8 billion per year net to PT-FI). Considering the long-term
nature and size of these projects, actual costs could vary from these
estimates. In response to market conditions and Indonesian regulatory
uncertainty, the timing of these expenditures continues to be reviewed.
Operating Data. Following is a summary of consolidated operating
data for the Indonesia mining operations for the second quarters and
first six months of 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
208
|
|
|
|
205
|
|
|
|
373
|
|
|
|
359
|
|
Sales
|
|
|
196
|
|
|
|
196
|
|
|
|
370
|
|
|
|
351
|
|
Average realized price per pound
|
|
|
$
|
2.20
|
|
|
|
$
|
2.61
|
|
|
|
$
|
2.17
|
|
|
|
$
|
2.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold (thousands of recoverable ounces)
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
158
|
|
|
|
360
|
|
|
|
336
|
|
|
|
615
|
|
Sales
|
|
|
151
|
|
|
|
346
|
|
|
|
346
|
|
|
|
606
|
|
Average realized price per ounce
|
|
|
$
|
1,292
|
|
|
|
$
|
1,173
|
|
|
|
$
|
1,260
|
|
|
|
$
|
1,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of coppera
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
|
$
|
1.77
|
|
|
|
$
|
2.26
|
|
|
|
$
|
1.99
|
|
|
|
$
|
2.51
|
|
Gold and silver credits
|
|
|
(1.05
|
)
|
|
|
(2.13
|
)
|
|
|
(1.27
|
)
|
|
|
(2.11
|
)
|
Treatment charges
|
|
|
0.29
|
|
|
|
0.32
|
|
|
|
0.30
|
|
|
|
0.31
|
|
Export duties
|
|
|
0.08
|
|
|
|
0.18
|
|
|
|
0.08
|
|
|
|
0.16
|
|
Royalty on metals
|
|
|
0.11
|
|
|
|
0.18
|
|
|
|
0.12
|
|
|
|
0.17
|
|
Unit net cash costs
|
|
|
$
|
1.20
|
|
|
|
$
|
0.81
|
|
|
|
$
|
1.22
|
|
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
|
For a reconciliation of unit net cash costs per pound to
production and delivery costs applicable to sales reported in
FCX's consolidated financial statements, refer to the supplemental
schedules, "Product Revenues and Production Costs," beginning on
page XV, which are available on FCX's website, "fcx.com."
|
|
|
|
Indonesia's consolidated copper sales totaled 196 million pounds in both
the second quarters of 2016 and 2015 as higher copper ore grades in the
2016 period were offset by lower mining and milling rates. Indonesia's
second-quarter 2016 gold sales of 151 thousand ounces were lower than
second-quarter 2015 sales of 346 thousand ounces, primarily reflecting
lower gold ore grades and lower mining and milling rates.
During second-quarter 2016, PT-FI completed repairs to its large-scale
concentrating facility, which required 23 days of downtime to repair one
of the milling circuits. PT-FI’s second-quarter 2016 production was also
impacted by lower than expected mining rates and productivity in the
Grasberg open pit, which affects the timing of metal production.
Productivity in the Grasberg open pit has improved in July.
At the Grasberg mine, the sequencing of mining areas with varying ore
grades causes fluctuations in quarterly and annual production of copper
and gold. Consolidated sales volumes from Indonesia mining operations
are expected to approximate 1.3 billion pounds of copper and 1.7 million
ounces of gold for the year 2016, compared with 744 million pounds of
copper and 1.2 million ounces of gold for the year 2015. PT-FI expects
ore grades to improve significantly, with approximately 40 percent of
its 2016 copper sales and 55 percent of its 2016 gold sales anticipated
in fourth-quarter 2016.
A significant portion of PT-FI's costs are fixed and unit costs vary
depending on volumes and other factors. Indonesia's unit net cash costs
(including gold and silver credits) of $1.20 per pound of copper in
second-quarter 2016 were higher than unit net cash costs of $0.81 per
pound in second-quarter 2015, primarily reflecting lower gold credits,
partly offset by lower royalties, export duties and energy costs.
Based on current sales volume and cost estimates, and assuming an
average gold price of $1,300 per ounce for the second half of 2016, unit
net cash costs (net of gold and silver credits) for Indonesia mining are
expected to approximate $0.12 per pound of copper for the year 2016 and
$0.43 per pound for third-quarter 2016. Indonesia mining's unit net cash
costs for the year 2016 would change by approximately $0.05 per pound
for each $50 per ounce change in the average price of gold. Because of
the fixed nature of a large portion of Indonesia mining's costs, unit
costs vary from quarter to quarter depending on copper and gold volumes.
Anticipated higher ore grades from the Grasberg mine are expected to
result in lower unit net cash costs in the second half of 2016.
Africa Mining. Africa mining includes the Tenke Fungurume Mining
S.A. (TFM) minerals district, in which FCX holds an effective 56 percent
interest in the Tenke copper and cobalt mining concessions in the
Southeast region of the DRC. In May 2016, FCX entered into a definitive
agreement to sell its interest in TF Holdings Limited. As a result and
in accordance with accounting guidelines, the operating results of
Africa mining have been separately reported as discontinued operations
in FCX’s consolidated statements of operations for all periods
presented. The transaction is expected to close in fourth-quarter 2016,
subject to regulatory approvals, CMOC shareholder approval and other
customary closing conditions.
Operating and Development Activities. Revised plans at Tenke
incorporate a 50 percent reduction in capital spending for 2016 and
various initiatives to reduce operating, administrative and exploration
costs. TFM successfully commissioned a sulphuric acid plant in
first-quarter 2016, which will reduce requirements for third-party acid
purchases.
Operating Data. Following is a summary of operating data for the
Africa mining operations for the second quarters and first six months of
2016 and 2015:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
122
|
|
|
|
115
|
|
|
|
232
|
|
|
|
231
|
|
Sales
|
|
|
124
|
|
|
|
104
|
|
|
|
247
|
|
|
|
237
|
|
Average realized price per pounda
|
|
|
$
|
2.07
|
|
|
|
$
|
2.63
|
|
|
|
$
|
2.08
|
|
|
|
$
|
2.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cobalt (millions of contained pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
10
|
|
|
|
9
|
|
|
|
19
|
|
|
|
16
|
|
Sales
|
|
|
10
|
|
|
|
8
|
|
|
|
20
|
|
|
|
16
|
|
Average realized price per pound
|
|
|
$
|
6.58
|
|
|
|
$
|
9.27
|
|
|
|
$
|
6.52
|
|
|
|
$
|
9.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of copperb
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
|
$
|
1.62
|
|
|
|
$
|
1.54
|
|
|
|
$
|
1.63
|
|
|
|
$
|
1.56
|
|
Cobalt creditsc
|
|
|
(0.33
|
)
|
|
|
(0.53
|
)
|
|
|
(0.35
|
)
|
|
|
(0.44
|
)
|
Royalty on metals
|
|
|
0.05
|
|
|
|
0.06
|
|
|
|
0.05
|
|
|
|
0.06
|
|
Unit net cash costs
|
|
|
$
|
1.34
|
|
|
|
$
|
1.07
|
|
|
|
$
|
1.33
|
|
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
|
Includes point-of-sale transportation costs as negotiated in
customer contracts.
|
b.
|
|
For a reconciliation of unit net cash costs per pound to
production and delivery costs applicable to sales reported in net
(loss) income from discontinued operations in FCX's consolidated
financial statements, refer to the supplemental schedules,
"Product Revenues and Production Costs," beginning on page XV,
which are available on FCX's website, "fcx.com."
|
c.
|
|
Net of cobalt downstream processing and freight costs.
|
|
|
|
Africa mining's copper sales of 124 million pounds in second-quarter
2016 were higher than second-quarter 2015 copper sales of 104 million
pounds, primarily reflecting higher mining rates and timing of sales in
the 2015 period. Africa mining's sales for 2016 (through the anticipated
closing date) are expected to approximate 440 million pounds of copper
and 35 million pounds of cobalt, compared with 467 million pounds of
copper and 35 million pounds of cobalt for the year 2015.
Africa mining's unit net cash costs (net of cobalt credits) of $1.34 per
pound of copper in second-quarter 2016 were higher than unit net cash
costs of $1.07 per pound of copper in second-quarter 2015, primarily
reflecting lower cobalt credits. Unit net cash costs (net of cobalt
credits) for Africa mining are expected to approximate $1.28 per pound
of copper for the year 2016, based on current sales volume and cost
estimates and assuming an average cobalt price of $11 per pound for the
second half of 2016. Africa mining's unit net cash costs for the year
2016 would change by approximately $0.045 per pound for each $2 per
pound change in the average price of cobalt.
Molybdenum Mines. FCX has two wholly owned molybdenum mines in
North America - the Henderson underground mine and the Climax open-pit
mine, both in Colorado. The Henderson and Climax mines produce
high-purity, chemical-grade molybdenum concentrate, which is typically
further processed into value-added molybdenum chemical products. The
majority of molybdenum concentrate produced at the Henderson and Climax
mines, as well as from FCX's North and South America copper mines, is
processed at FCX's conversion facilities.
Operating and Development Activities. In response to market
conditions, the revised plans for the Henderson molybdenum mine
incorporate lower operating rates, resulting in an approximate 65
percent reduction in Henderson's annual production volumes. FCX also
adjusted production plans at its by-product mines, including reduced
production at its Sierrita mine. Additionally, FCX incorporated changes
in the commercial pricing structure for its chemicals products to
promote continuation of chemical-grade production.
Production from the Molybdenum mines totaled 7 million pounds of
molybdenum in second-quarter 2016 and 13 million pounds in
second-quarter 2015. Refer to summary operating data on page 4 for FCX's
consolidated molybdenum sales, which includes sales of molybdenum
produced at the Molybdenum mines, and from FCX's North and South America
copper mines.
Average unit net cash costs for the Molybdenum mines of $7.80 per pound
of molybdenum in second-quarter 2016 were higher than average unit net
cash costs of $7.19 per pound in second-quarter 2015, primarily
reflecting lower volumes. Based on current sales volume and cost
estimates, unit net cash costs for the Molybdenum mines are expected to
average approximately $8.60 per pound of molybdenum for the year 2016.
For a reconciliation of unit net cash costs per pound to production and
delivery costs applicable to sales reported in FCX's consolidated
financial statements, refer to the supplemental schedules, "Product
Revenues and Production Costs," beginning on page XV, which are
available on FCX's website, "fcx.com."
Mining Exploration Activities. FCX's mining exploration
activities are generally associated with its existing mines focusing on
opportunities to expand reserves and resources to support development of
additional future production capacity. Exploration results continue to
indicate opportunities for significant future potential reserve
additions in North and South America. Exploration spending continues to
be constrained by market conditions and is expected to approximate $45
million for the year 2016.
OIL AND GAS OPERATIONS
Through its wholly owned oil and gas subsidiary, FM O&G, FCX's principal
oil and gas assets include significant oil production facilities and
growth potential in the Deepwater GOM and established oil production
facilities in California. For the first six months of 2016,
approximately 90 percent of FCX's oil and gas revenues were from oil and
NGLs.
During second-quarter 2016, FM O&G completed the sale of certain oil and
gas royalty interests for cash consideration of $102 million (before
closing adjustments), and in July 2016, completed the sale of its
Haynesville shale assets in North Louisiana for cash consideration of
$87 million (before closing adjustments). Under full cost accounting
rules, the proceeds from these transactions are recorded as a reduction
of capitalized oil and gas properties, with no gain or loss recognition.
Impairment of Oil and Gas Properties. FM O&G follows the full
cost method of accounting, whereby all costs associated with oil and gas
property acquisition, exploration and development activities are
capitalized and amortized to expense under the unit-of-production method
on a country-by-country basis using estimates of proved oil and gas
reserves relating to each country where such activities are conducted.
The costs of unproved oil and gas properties are excluded from
amortization until the properties are evaluated.
Under full cost accounting rules, a "ceiling test" is conducted each
quarter to review the carrying value of oil and gas properties for
impairment. The U.S. Securities and Exchange Commission (SEC) requires
the twelve-month average of the first-day-of-the-month historical
reference oil price be used in determining the ceiling test limitation.
Using West Texas Intermediate (WTI) as the reference oil price, the
average price was $43.12 per barrel at June 30, 2016, compared with
$46.26 per barrel at March 31, 2016. As a result of the impact of the
reduction in twelve-month historical prices, net capitalized costs
exceeded the ceiling test limitation under full cost accounting rules,
which resulted in the recognition of a second-quarter 2016 impairment
charge of $291 million.
If the twelve-month historical average price remains below the June 30,
2016, twelve-month average of $43.12 per barrel, the ceiling test
limitation will decrease, potentially resulting in additional ceiling
test impairments of FCX's oil and gas properties. The WTI spot oil price
was $43.13 per barrel at July 25, 2016. In addition to a decline in the
trailing twelve-month average oil and gas prices, other factors that
could result in future impairment of FCX's oil and gas properties
include costs transferred from unevaluated properties to the full cost
pool without corresponding proved oil and gas reserve additions,
negative reserve revisions and the capitalization of future exploration
and development costs. At June 30, 2016, carrying costs for unevaluated
properties excluded from amortization totaled $1.7 billion. These costs
will be transferred into the full cost pool as the properties are
evaluated and proved reserves are established or if impairment is
determined. If these activities do not result in additions to discounted
future net cash flows from proved oil and gas reserves at least equal to
the related costs transferred (net of related tax effects), additional
ceiling test impairments may occur.
Financial and Operating Data. Following is a summary of financial
and operating data for the U.S. oil and gas operations for the second
quarters and first six months of 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Financial Summary (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized revenuesa
|
|
|
$
|
405
|
|
|
|
$
|
656
|
|
b
|
|
$
|
694
|
|
|
|
$
|
1,203
|
|
|
Cash production costsa
|
|
|
(186
|
)
|
|
|
(249
|
)
|
|
|
(378
|
)
|
|
|
(503
|
)
|
|
Cash operating margin
|
|
|
$
|
219
|
|
|
|
$
|
407
|
|
|
|
$
|
316
|
|
|
|
$
|
700
|
|
|
Capital expendituresc
|
|
|
$
|
388
|
|
|
|
$
|
777
|
|
|
|
$
|
868
|
|
|
|
$
|
1,795
|
|
|
Sales Volumes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MMBbls)
|
|
|
8.7
|
|
|
|
8.6
|
|
|
|
17.0
|
|
|
|
17.0
|
|
|
Natural gas (Bcf)
|
|
|
18.8
|
|
|
|
23.5
|
|
|
|
38.4
|
|
|
|
45.3
|
|
|
NGLs (MMBbls)
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
1.2
|
|
|
|
1.1
|
|
|
MMBOE
|
|
|
12.4
|
|
|
|
13.1
|
|
|
|
24.5
|
|
|
|
25.6
|
|
|
Average Realized Pricesa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (per barrel)
|
|
|
$
|
41.10
|
|
|
|
$
|
67.61
|
|
b
|
|
$
|
35.21
|
|
|
|
$
|
62.13
|
|
b
|
Natural gas (per million British thermal units, or MMBtu)
|
|
|
$
|
2.04
|
|
|
|
$
|
2.66
|
|
|
|
$
|
2.02
|
|
|
|
$
|
2.75
|
|
|
NGLs (per barrel)
|
|
|
$
|
18.00
|
|
|
|
$
|
20.50
|
|
|
|
$
|
16.44
|
|
|
|
$
|
21.71
|
|
|
Cash Operating Margin per BOEa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized revenues
|
|
|
$
|
32.70
|
|
|
|
$
|
50.04
|
|
b
|
|
$
|
28.29
|
|
|
|
$
|
46.95
|
|
b
|
Cash production costs
|
|
|
(15.00
|
)
|
|
|
(19.04
|
)
|
|
|
(15.42
|
)
|
|
|
(19.62
|
)
|
|
Cash operating margin
|
|
|
$
|
17.70
|
|
|
|
$
|
31.00
|
|
|
|
$
|
12.87
|
|
|
|
$
|
27.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
|
Cash operating margin for oil and gas operations reflects
realized revenues less cash production costs. Cash production
costs exclude accretion and other costs. For reconciliations of
realized revenues (including average realized prices for oil,
natural gas and NGLs) and cash production costs to revenues and
production and delivery costs reported in FCX's consolidated
financial statements, refer to the supplemental schedules,
“Product Revenues and Production Costs,” beginning on page XV,
which are available on FCX's website, “fcx.com.”
|
b.
|
|
Includes realized cash gains on crude oil derivative contracts
of $101 million ($11.79 per barrel of oil and $7.73 per BOE) in
second-quarter 2015 and $201 million ($11.88 per barrel of oil and
$7.87 per BOE) for the first six months of 2015. FCX currently
does not have oil and gas derivative contracts in place for 2016
or future years.
|
c.
|
|
Excludes international oil and gas expenditures totaling $4
million in second-quarter 2016, $29 million in second-quarter
2015, $47 million for the first six months of 2016 and $44 million
for the first six months of 2015, primarily related to the
Morocco oil and gas properties.
|
|
|
|
FM O&G's average realized price for crude oil was $41.10 per barrel in
second-quarter 2016 (87 percent of the average Brent crude oil price of
$47.03 per barrel). FM O&G's average realized price for natural gas was
$2.04 per MMBtu in second-quarter 2016, compared to the New York
Mercantile Exchange natural gas price average of $1.95 per MMBtu for the
April through June 2016 contracts.
Lower realized revenues for oil and gas operations of $32.70 per BOE in
second-quarter 2016, compared to $50.04 per BOE in second-quarter 2015,
primarily reflects lower oil prices and the impact of realized cash
gains on derivative contracts of $7.73 per BOE in second-quarter 2015.
Cash production costs for oil and gas operations of $15.00 per BOE in
second-quarter 2016 were lower than cash production costs of $19.04 per
BOE in second-quarter 2015, primarily reflecting higher production from
GOM wells and ongoing cost reduction efforts.
Following is a summary of average oil and gas sales volumes per day by
region for the second quarters and first six months of 2016 and
2015:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
Sales Volumes (MBOE per day)
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GOMa
|
|
|
88
|
|
|
|
80
|
|
|
|
85
|
|
|
|
77
|
California
|
|
|
32
|
|
|
|
38
|
|
|
|
32
|
|
|
|
39
|
Haynesville/Madden/Otherb
|
|
|
16
|
|
|
|
26
|
|
|
|
18
|
|
|
|
26
|
Total oil and gas operations
|
|
|
136
|
|
|
|
144
|
|
|
|
135
|
|
|
|
142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
|
Includes sales from properties on the GOM Shelf and in the
Deepwater GOM, and the Inboard Lower Tertiary/Cretaceous natural
gas trend.
|
b.
|
|
In July 2016, FM O&G completed the sale of the Haynesville
shale assets.
|
|
|
|
Daily sales volumes averaged 136 MBOE for second-quarter 2016, including
95 thousand barrels (MBbls) of crude oil, 207 million cubic feet (MMcf)
of natural gas and 6 MBbls of NGLs. Since year-end 2015, FM O&G has
commenced production from six 100-percent-owned Deepwater GOM wells. Oil
and gas sales volumes are expected to average 130 MBOE per day for the
year 2016, comprised of 73 percent oil, 5 percent natural gas and 22
percent NGLs. These estimates are below the April 2016 estimates of 149
MBOE per day, reflecting revised estimates for three Holstein Deep wells
that commenced production in second-quarter 2016, the sale of the
Haynesville shale assets and production constraints following a fire at
a third-party natural gas processing plant.
In late June 2016, a fire at a third-party natural gas processing plant
in Pascagoula, Mississippi resulted in the shutdown of the plant and the
pipeline that transports gas supply from several offshore platforms,
including FM O&G’s Horn Mountain and Marlin facilities (representing
approximately 45 percent of FM O&G's GOM BOE production). As a result,
production has been temporarily constrained and FM O&G is currently
accessing an alternative pipeline as an interim solution. FM O&G is
working with third parties on alternative routes to resume normal
production and does not expect long-term impacts from this event.
Based on current sales volume and cost estimates, cash production costs
are expected to approximate $15.50 per BOE for the year 2016.
Oil and Gas Exploration, Operating and Development Activities. In
second-quarter 2016, FM O&G remained focused on managing costs and
enhancing asset values in response to the current market environment. FM
O&G achieved a number of important operational milestones during the
quarter, including the commencement of production from five
100-percent-owned Deepwater GOM tieback wells, including three at
Holstein Deep and two in the Horn Mountain area. At Lucius and
Heidelberg, the operator drilled development wells with favorable
results that we believe will further benefit future oil production.
During second-quarter 2016, FCX negotiated the termination and
settlement of FM O&G's drilling rig contracts with Noble Drilling (U.S.)
LLC (Noble) and Rowan Companies plc (Rowan). As a result of the
settlements, FM O&G was released from a total of $1.1 billion in payment
obligations under its three drilling rig contracts. In aggregate,
reductions in previously contracted commitments for deepwater drillships
approximate $350 million. During second-quarter 2016, FCX issued 48
million shares of its common stock (representing a value of $540
million) and paid $85 million cash in connection with the settlements.
FCX will fund the remaining $130 million in cash during third-quarter
2016. FCX also agreed to provide contingent payments of up to $105
million, depending on the average price of crude oil over the 12-month
period ending June 30, 2017. A net charge of $0.6 billion was recorded
in second-quarter 2016 associated with the termination of these
contracts.
Assuming an average oil price of $49 per barrel, combined with these
actions, operating cash flows from the oil and gas business are expected
to exceed its capital expenditures in the second half of 2016 and 2017.
Since commencing development activities in 2014 at its three
100-percent-owned production platforms in the Deepwater GOM, FM O&G has
drilled 14 wells in producing fields with positive results; 10 of these
wells have been brought on production, including five wells during
second-quarter 2016.
Oil and Gas Capital Expenditures. Capital expenditures for oil
and gas operations in second-quarter 2016 totaled $388 million in the
U.S. (including $205 million incurred for GOM and approximately $150
million associated with the change in capital expenditure accruals) and
$4 million associated with international oil and gas properties.
Capital expenditures for oil and gas operations for the year 2016 are
estimated to total $1.4 billion, with approximately 90 percent of the
capital budget expected to be directed to the GOM.
Deepwater GOM. FM O&G operates and owns 100-percent working
interests in the Holstein, Marlin and Horn Mountain deepwater production
platforms, which in total have processing capacity of 250 MBbls of oil
per day. In addition, FM O&G has interests in the Lucius, Heidelberg,
Ram Powell and Hoover producing oil fields and the Atwater Valley
undeveloped area.
During second-quarter 2016, production from six wells in the Lucius
field in the Keathley Canyon area averaged 20 MBOE per day, net
to FM O&G’s 25-percent working interest. The field has performed well
since initial production commenced in first-quarter 2015. In
second-quarter 2016, the operator completed the seventh well in the
field. Approximately 80 percent of FM O&G’s working interest is held
through its consolidated subsidiary Plains Offshore Operations Inc.
(POI). Third parties hold a preferred interest in POI and are entitled
to a liquidation preference and to receive preferred distributions.
In January 2016, first oil production commenced from three initial
subsea wells in the Heidelberg oil field in the Green Canyon
area. Heidelberg is a subsea oil development consisting of five subsea
wells tied back to a truss spar hull located in 5,300 feet of water. In
second-quarter 2016, the operator commenced drilling a fourth well in
the field, and in July 2016, logging results confirmed oil pay with
similar characteristics to a good offset producing well. The fifth and
final well of the initial development phase commenced drilling in
third-quarter 2016. Heidelberg field was discovered in February 2009,
and the subsequent development project was sanctioned in early 2013. FM
O&G has a 12.5 percent working interest in Heidelberg.
At the 100-percent-owned Holstein Deep, three wells commenced
production in second-quarter 2016 and are currently producing at a gross
rate of approximately 9 MBOE per day. The rates are below previous
estimates, reflecting lower than expected crude oil quality and lower
permeability. The Holstein Deep development is located in Green Canyon
Block 643, west of the 100-percent-owned Holstein platform in 3,890 feet
of water, with production facilities capable of processing 113 MBbls of
oil per day.
FM O&G’s 100-percent-owned Horn Mountain field is located in
the Mississippi Canyon area and has production facilities capable
of processing 75 MBbls of oil per day. The Quebec/Victory and Kilo/Oscar
wells commenced production in second-quarter 2016. To enhance
recovery of remaining oil in place, future development plans will target
subsea tieback from multiple stacked sands in the area.
FM O&G’s well inventory also includes the Horn Mountain Deep
discovery well, where successful drilling results in 2015 indicated the
presence of sand sections deeper than known pay sections in the field.
These positive results and geophysical data support the existence of
Middle Miocene reservoir potential for additional development
opportunities in the Horn Mountain Deep area, including five
100-percent-owned exploration prospects with significant future
potential. FM O&G controls rights to over 55,000 acres associated with
these prospects.
FM O&G’s 100-percent-owned Marlin Hub is located in the
Mississippi Canyon area and has production facilities capable of
processing 60 MBbls of oil per day. FM O&G has drilled five successful
tieback opportunities in the area since 2014. The King D-12 and Dorado
wells commenced production in 2015, and the King D-13 well commenced
production in first-quarter 2016.
CASH FLOWS, CASH and DEBT TRANSACTIONS
Operating Cash Flows. FCX generated operating cash flows of $874
million (including $278 million in working capital sources and changes
in other tax payments) for second-quarter 2016 and $1.6 billion
(including $466 million in working capital sources and changes in other
tax payments) for the first six months of 2016.
Based on current sales volume and cost estimates and assuming average
prices of $2.25 per pound of copper, $1,300 per ounce of gold, $6 per
pound of molybdenum and $48 per barrel of Brent crude oil for the second
half of 2016, FCX's consolidated operating cash flows are estimated to
approximate $4.5 billion for the year 2016 (including $0.7 billion in
working capital sources and other tax payments). The impact of price
changes for the second half of 2016 on operating cash flows would
approximate $260 million for each $0.10 per pound change in the average
price of copper, $40 million for each $50 per ounce change in the
average price of gold, $35 million for each $2 per pound change in the
average price of molybdenum and $55 million for each $5 per barrel
change in the average Brent crude oil price.
Capital Expenditures. Capital expenditures totaled $833 million
for second-quarter 2016, consisting of $441 million for mining
operations (including $350 million for major projects) and $392 million
for oil and gas operations. Capital expenditures for the first six
months of 2016 totaled $1.8 billion, consisting of $900 million for
mining operations (including $0.7 billion for major projects) and $915
million for oil and gas operations.
Capital expenditures are expected to approximate $3.1 billion for the
year 2016, consisting of $1.7 billion for mining operations (including
$1.3 billion for major projects, primarily for underground development
activities at Grasberg and remaining costs for the Cerro Verde
expansion) and $1.4 billion for oil and gas operations.
Cash. Following is a summary of the U.S. and international
components of consolidated cash and cash equivalents available to the
parent company (excluding cash and cash equivalents of $78 million in
assets held for sale), net of noncontrolling interests' share, taxes and
other costs at June 30, 2016 (in millions):
|
|
|
|
|
|
Cash at domestic companies
|
|
|
$
|
20
|
|
Cash at international operations
|
|
|
332
|
|
Total consolidated cash and cash equivalents
|
|
|
352
|
|
Noncontrolling interests' share
|
|
|
(102
|
)
|
Cash, net of noncontrolling interests' share
|
|
|
250
|
|
Withholding taxes and other
|
|
|
(23
|
)
|
Net cash available
|
|
|
$
|
227
|
|
|
|
|
|
|
|
Debt. FCX continues to focus on cost and capital management and
cash flow generation from its operations and is taking actions to reduce
debt through asset sales, available cash flows and other transactions.
Following is a summary of total debt and the related weighted-average
interest rates at June 30, 2016 (in billions, except percentages):
|
|
|
|
|
|
|
Weighted-
|
|
|
|
Average
|
|
|
|
Interest Rate
|
FCX Senior Notes
|
$
|
11.6
|
|
|
3.8%
|
FCX Term Loan
|
2.5
|
|
a
|
3.2%
|
FM O&G Senior Notes
|
2.5
|
|
|
6.6%
|
Cerro Verde Credit Facility
|
1.8
|
|
|
2.8%
|
Other debt
|
0.9
|
|
|
4.7%
|
|
$
|
19.3
|
|
|
4.0%
|
|
|
|
|
|
|
a.
|
|
In accordance with the mandatory prepayment provision of the
amended Term Loan, 50 percent of the proceeds associated with the
Tenke sale must be applied toward repaying the Term Loan.
|
|
|
|
At June 30, 2016, FCX had $40 million in letters of credit issued and
availability of $3.5 billion under its $3.5 billion revolving credit
facility.
Through July 25, 2016, FCX exchanged $369 million in senior notes
(including exchanges totaling $268 million in second-quarter 2016)
maturing in 2022, 2023, 2034 and 2043 for 28 million shares of FCX
common stock in a series of privately negotiated transactions at a cost
of $311 million. FCX has approximately 1.33 billion common shares
outstanding, which includes shares issued through July 25, 2016, in
connection with the settlement of these privately negotiated
transactions.
FINANCIAL POLICY
FCX intends to continue to seek to strengthen its financial position,
with a focus on significant debt reduction. In December 2015, FCX's
common stock dividend was suspended. FCX's Board of Directors will
continue to review its financial policy on an ongoing basis.
WEBCAST INFORMATION
A conference call with securities analysts to discuss FCX's
second-quarter 2016 results is scheduled for today at 10:00 a.m. Eastern
Time. The conference call will be broadcast on the Internet along with
slides. Interested parties may listen to the conference call live and
view the slides by accessing "fcx.com." A replay of the webcast will be
available through Friday, August 26, 2016.
------------------------------------------------------------------------------
FCX is a premier U.S.-based natural resources company with an
industry-leading global portfolio of mineral assets and significant oil
and gas resources. FCX is the world's largest publicly traded copper
producer.
FCX's portfolio of assets includes the Grasberg minerals district in
Indonesia, one of the world's largest copper and gold deposits;
significant mining operations in the Americas, including the large-scale
Morenci minerals district in North America and the Cerro Verde operation
in South America; the Tenke Fungurume minerals district in the DRC; and
significant U.S. oil and natural gas assets, principally in the
Deepwater GOM and in California. Additional information about FCX is
available on FCX's website at "fcx.com."
Cautionary Statement and Regulation G Disclosure: This
press release 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 expectations relating to ore grades and milling rates,
production and sales volumes, unit net cash costs, cash production costs
per BOE, operating cash flows, capital expenditures, debt reduction
initiatives, including FCX's ability to complete pending asset sales and
to sell additional assets, exploration efforts and results, development
and production activities and costs, liquidity, tax rates, the impact of
copper, gold, molybdenum, cobalt, crude oil and natural gas price
changes, the impact of deferred intercompany profits on earnings,
reserve estimates, future dividend payments, and share purchases and
sales. The words “anticipates,” “may,” “can,” “plans,” “believes,”
“estimates,” “expects,” “projects,” "targets," “intends,” “likely,”
“will,” “should,” “to be,” ”potential" and any similar expressions are
intended to identify those assertions as forward-looking statements.
Under its term loan and revolving credit facility, as amended, FCX is
not permitted to pay dividends on common stock on or prior to March 31,
2017. The declaration of dividends is at the discretion of the Board,
subject to restrictions under FCX's credit agreements, and will depend
on FCX's financial results, cash requirements, future prospects, and
other factors deemed relevant by the Board.
FCX cautions readers that forward-looking statements are not
guarantees of future performance and actual results may differ
materially from those anticipated, projected or assumed in the
forward-looking statements. Important factors that can cause FCX's
actual results to differ materially from those anticipated in the
forward-looking statements include supply of and demand for, and prices
of, copper, gold, molybdenum, cobalt, crude oil and natural gas, mine
sequencing, production rates, drilling results, potential effects of
cost and capital expenditure reductions and production curtailments on
financial results and cash flow, the outcome of FCX's debt reduction
initiatives, FCX's ability to secure regulatory approvals, satisfy
closing conditions and consummate pending asset sales, potential
additional oil and gas property impairment charges, potential inventory
adjustments, potential impairment of long-lived mining assets, the
outcome of ongoing discussions with the Indonesian government regarding
PT-FI's COW, PT-FI's ability to obtain renewal of its export license
after August 8, 2016, the potential effects of violence in Indonesia
generally and in the province of Papua, the resolution of administrative
disputes in the DRC, industry risks, regulatory changes, political
risks, labor relations, weather- and climate-related risks,
environmental risks, litigation results and other factors described in
more detail under the heading “Risk Factors” in FCX's Annual Report on
Form 10-K for the year ended December 31, 2015, filed with the U.S.
Securities and Exchange Commission (SEC) as updated by FCX's subsequent
filings with the SEC.
Investors are cautioned that many of the assumptions upon which FCX's
forward-looking statements are based are likely to change after the
forward-looking statements are made, including for example commodity
prices, which FCX cannot control, and production volumes and costs, some
aspects of which FCX may not be able to control. Further, FCX may make
changes to its business plans that could affect its results. FCX
cautions investors that it does not intend to update forward-looking
statements more frequently than quarterly notwithstanding any changes in
its assumptions, changes in business plans, actual experience or other
changes, and FCX undertakes no obligation to update any forward-looking
statements.
This press release also contains certain financial measures such as
unit net cash costs per pound of copper and molybdenum, oil and gas
realized revenues, cash production costs and cash operating margin,
which are not recognized under U.S. generally accepted accounting
principles. As required by SEC Regulation G, reconciliations of these
measures to amounts reported in FCX's consolidated financial statements
are in the supplemental schedules of this press release, which are also
available on FCX's website, "fcx.com."
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
SELECTED MINING OPERATING DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
Production
|
|
Sales
|
|
COPPER (millions of recoverable pounds)
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
|
Morenci (72%)a
|
|
|
224
|
|
|
219
|
|
|
221
|
|
|
225
|
|
|
Bagdad (100%)
|
|
|
44
|
|
|
51
|
|
|
45
|
|
|
56
|
|
|
Safford (100%)
|
|
|
53
|
|
|
39
|
|
|
52
|
|
|
40
|
|
|
Sierrita (100%)
|
|
|
41
|
|
|
48
|
|
|
40
|
|
|
51
|
|
|
Miami (100%)
|
|
|
6
|
|
|
12
|
|
|
7
|
|
|
12
|
|
|
Chino (100%)
|
|
|
80
|
|
|
76
|
|
|
78
|
|
|
78
|
|
|
Tyrone (100%)
|
|
|
19
|
|
|
23
|
|
|
19
|
|
|
23
|
|
|
Other (100%)
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
Total North America
|
|
|
469
|
|
|
469
|
|
|
464
|
|
|
486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America
|
|
|
|
|
|
|
|
|
|
|
Cerro Verde (53.56%)
|
|
|
278
|
|
|
104
|
|
|
270
|
|
|
97
|
|
|
El Abra (51%)
|
|
|
56
|
|
|
84
|
|
|
57
|
|
|
81
|
|
|
Total South America
|
|
|
334
|
|
|
188
|
|
|
327
|
|
|
178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indonesia
|
|
|
|
|
|
|
|
|
|
|
Grasberg (90.64%)b
|
|
|
208
|
|
|
205
|
|
|
196
|
|
|
196
|
|
|
Consolidated - continuing operations
|
|
|
1,011
|
|
|
862
|
|
|
987
|
|
c
|
860
|
|
c
|
Discontinued operation - Tenke Fungurume (Tenke) (56%)
|
|
|
122
|
|
|
115
|
|
|
124
|
|
|
104
|
|
|
Total
|
|
|
1,133
|
|
|
977
|
|
|
1,111
|
|
|
964
|
|
|
Less noncontrolling interests
|
|
|
229
|
|
|
160
|
|
|
226
|
|
|
149
|
|
|
Net
|
|
|
904
|
|
|
817
|
|
|
885
|
|
|
815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
$
|
2.19
|
|
|
$
|
2.72
|
|
|
Average realized price per pound (including Tenke)
|
|
|
|
|
|
|
$
|
2.18
|
|
|
$
|
2.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GOLD (thousands of recoverable
ounces)
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
North America (100%)
|
|
|
8
|
|
|
7
|
|
|
5
|
|
|
6
|
|
|
Indonesia (90.64%)b
|
|
|
158
|
|
|
360
|
|
|
151
|
|
|
346
|
|
|
Consolidated
|
|
|
166
|
|
|
367
|
|
|
156
|
|
|
352
|
|
|
Less noncontrolling interests
|
|
|
14
|
|
|
34
|
|
|
14
|
|
|
33
|
|
|
Net
|
|
|
152
|
|
|
333
|
|
|
142
|
|
|
319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per ounce
|
|
|
|
|
|
|
$
|
1,292
|
|
|
$
|
1,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLYBDENUM (millions of
recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
Henderson (100%)
|
|
|
3
|
|
|
7
|
|
|
N/A
|
|
N/A
|
|
Climax (100%)
|
|
|
4
|
|
|
6
|
|
|
N/A
|
|
N/A
|
|
North America copper mines (100%)a
|
|
|
8
|
|
|
10
|
|
|
N/A
|
|
N/A
|
|
Cerro Verde (53.56%)
|
|
|
4
|
|
|
2
|
|
|
N/A
|
|
N/A
|
|
Consolidated
|
|
|
19
|
|
|
25
|
|
|
19
|
|
|
23
|
|
|
Less noncontrolling interests
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
Net
|
|
|
17
|
|
|
24
|
|
|
17
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
$
|
8.34
|
|
|
$
|
9.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COBALT (millions of contained
pounds)
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
Discontinued operation - Tenke (56%)
|
|
|
10
|
|
|
9
|
|
|
10
|
|
|
8
|
|
|
Less noncontrolling interests
|
|
|
4
|
|
|
4
|
|
|
5
|
|
|
4
|
|
|
Net
|
|
|
6
|
|
|
5
|
|
|
5
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
$
|
6.58
|
|
|
$
|
9.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Amounts are net of Morenci's undivided
joint venture partner's interest; effective May 31, 2016, FCX's
undivided interest in Morenci was prospectively reduced from 85
percent to 72 percent.
|
|
|
|
b. Amounts are net of Grasberg's joint
venture partner's interest, which varies in accordance with the
terms of the joint venture agreement.
|
|
|
|
c. Consolidated sales volumes exclude
purchased copper of 43 million pounds in second-quarter 2016 and
24 million pounds in second-quarter 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
|
SELECTED MINING OPERATING DATA (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
Production
|
|
|
Sales
|
|
COPPER (millions of recoverable pounds)
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morenci (72%)a
|
|
|
456
|
|
|
|
424
|
|
|
|
459
|
|
|
|
436
|
|
|
Bagdad (100%)
|
|
|
92
|
|
|
|
104
|
|
|
|
95
|
|
|
|
114
|
|
|
Safford (100%)
|
|
|
109
|
|
|
|
79
|
|
|
|
111
|
|
|
|
81
|
|
|
Sierrita (100%)
|
|
|
82
|
|
|
|
95
|
|
|
|
83
|
|
|
|
100
|
|
|
Miami (100%)
|
|
|
14
|
|
|
|
23
|
|
|
|
16
|
|
|
|
25
|
|
|
Chino (100%)
|
|
|
161
|
|
|
|
149
|
|
|
|
161
|
|
|
|
153
|
|
|
Tyrone (100%)
|
|
|
39
|
|
|
|
45
|
|
|
|
39
|
|
|
|
47
|
|
|
Other (100%)
|
|
|
3
|
|
|
|
2
|
|
|
|
3
|
|
|
|
2
|
|
|
Total North America
|
|
|
956
|
|
|
|
921
|
|
|
|
967
|
|
|
|
958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerro Verde (53.56%)
|
|
|
550
|
|
|
|
211
|
|
|
|
526
|
|
|
|
207
|
|
|
El Abra (51%)
|
|
|
119
|
|
|
|
170
|
|
|
|
124
|
|
|
|
171
|
|
|
Total South America
|
|
|
669
|
|
|
|
381
|
|
|
|
650
|
|
|
|
378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indonesia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grasberg (90.64%)b
|
|
|
373
|
|
|
|
359
|
|
|
|
370
|
|
|
|
351
|
|
|
Consolidated - continuing operations
|
|
|
1,998
|
|
|
|
1,661
|
|
|
|
1,987
|
|
c
|
|
1,687
|
|
c
|
Discontinued operation - Tenke (56%)
|
|
|
232
|
|
|
|
231
|
|
|
|
247
|
|
|
|
237
|
|
|
Total
|
|
|
2,230
|
|
|
|
1,892
|
|
|
|
2,234
|
|
|
|
1,924
|
|
|
Less noncontrolling interests
|
|
|
450
|
|
|
|
317
|
|
|
|
448
|
|
|
|
317
|
|
|
Net
|
|
|
1,780
|
|
|
|
1,575
|
|
|
|
1,786
|
|
|
|
1,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
|
|
$
|
2.17
|
|
|
|
$
|
2.71
|
|
|
Average realized price per pound (including Tenke)
|
|
|
|
|
|
|
|
|
$
|
2.16
|
|
|
|
$
|
2.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GOLD (thousands of recoverable
ounces)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America (100%)
|
|
|
14
|
|
|
|
11
|
|
|
|
11
|
|
|
|
9
|
|
|
Indonesia (90.64%)b
|
|
|
336
|
|
|
|
615
|
|
|
|
346
|
|
|
|
606
|
|
|
Consolidated
|
|
|
350
|
|
|
|
626
|
|
|
|
357
|
|
|
|
615
|
|
|
Less noncontrolling interests
|
|
|
31
|
|
|
|
58
|
|
|
|
32
|
|
|
|
57
|
|
|
Net
|
|
|
319
|
|
|
|
568
|
|
|
|
325
|
|
|
|
558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per ounce
|
|
|
|
|
|
|
|
|
$
|
1,259
|
|
|
|
$
|
1,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLYBDENUM (millions of
recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henderson (100%)
|
|
|
5
|
|
|
|
14
|
|
|
|
N/A
|
|
|
N/A
|
|
Climax (100%)
|
|
|
9
|
|
|
|
12
|
|
|
|
N/A
|
|
|
N/A
|
|
North America copper mines (100%)a
|
|
|
16
|
|
|
|
19
|
|
|
|
N/A
|
|
|
N/A
|
|
Cerro Verde (53.56%)
|
|
|
9
|
|
|
|
4
|
|
|
|
N/A
|
|
|
N/A
|
|
Consolidated
|
|
|
39
|
|
|
|
49
|
|
|
|
36
|
|
|
|
46
|
|
|
Less noncontrolling interests
|
|
|
4
|
|
|
|
2
|
|
|
|
3
|
|
|
|
2
|
|
|
Net
|
|
|
35
|
|
|
|
47
|
|
|
|
33
|
|
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
|
|
$
|
7.99
|
|
|
|
$
|
9.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COBALT (millions of contained
pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operation - Tenke (56%)
|
|
|
19
|
|
|
|
16
|
|
|
|
20
|
|
|
|
16
|
|
|
Less noncontrolling interests
|
|
|
8
|
|
|
|
7
|
|
|
|
9
|
|
|
|
7
|
|
|
Net
|
|
|
11
|
|
|
|
9
|
|
|
|
11
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
|
|
$
|
6.52
|
|
|
|
$
|
9.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Amounts are net of Morenci's undivided
joint venture partner's interest; effective May 31, 2016, FCX's
undivided interest in Morenci was prospectively reduced from 85
percent to 72 percent.
|
|
|
|
b. Amounts are net of Grasberg's joint
venture partner's interest, which varies in accordance with the
terms of the joint venture agreement.
|
|
|
|
c. Consolidated sales volumes exclude
purchased copper of 70 million pounds for the first six months of
2016 and 64 million pounds for the first six months of 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
SELECTED MINING OPERATING DATA (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
100% North America Copper Mines
|
|
|
|
|
|
|
|
|
|
|
|
|
Solution Extraction/Electrowinning
(SX/EW) Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Leach ore placed in stockpiles (metric tons per day)
|
|
|
780,700
|
|
|
|
890,000
|
|
|
|
807,100
|
|
|
|
902,500
|
Average copper ore grade (percent)
|
|
|
0.33
|
|
|
|
0.26
|
|
|
|
0.32
|
|
|
|
0.25
|
Copper production (millions of recoverable pounds)
|
|
|
303
|
|
|
|
261
|
|
|
|
605
|
|
|
|
508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mill Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
|
300,400
|
|
|
|
316,000
|
|
|
|
299,500
|
|
|
|
308,800
|
Average ore grades (percent):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
|
|
|
0.48
|
|
|
|
0.47
|
|
|
|
0.49
|
|
|
|
0.48
|
Molybdenum
|
|
|
0.03
|
|
|
|
0.03
|
|
|
|
0.03
|
|
|
|
0.03
|
Copper recovery rate (percent)
|
|
|
86.6
|
|
|
|
85.8
|
|
|
|
85.6
|
|
|
|
85.6
|
Production (millions of recoverable pounds):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
|
|
|
219
|
|
|
|
247
|
|
|
|
445
|
|
|
|
488
|
Molybdenum
|
|
|
8
|
|
|
|
10
|
|
|
|
16
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100% South America Mining
|
|
|
|
|
|
|
|
|
|
|
|
|
SX/EW Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Leach ore placed in stockpiles (metric tons per day)
|
|
|
170,400
|
|
|
|
237,000
|
|
|
|
155,500
|
|
|
|
235,300
|
Average copper ore grade (percent)
|
|
|
0.39
|
|
|
|
0.41
|
|
|
|
0.40
|
|
|
|
0.41
|
Copper production (millions of recoverable pounds)
|
|
|
82
|
|
|
|
109
|
|
|
|
172
|
|
|
|
223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mill Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
|
352,000
|
|
|
|
116,500
|
|
|
|
345,700
|
|
|
|
117,900
|
Average ore grades:
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper (percent)
|
|
|
0.42
|
|
|
|
0.46
|
|
|
|
0.43
|
|
|
|
0.45
|
Molybdenum (percent)
|
|
|
0.02
|
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
0.02
|
Copper recovery rate (percent)
|
|
|
88.0
|
|
|
|
78.2
|
|
|
|
87.1
|
|
|
|
78.9
|
Production (recoverable):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper (millions of pounds)
|
|
|
252
|
|
|
|
79
|
|
|
|
497
|
|
|
|
158
|
Molybdenum (millions of pounds)
|
|
|
4
|
|
|
|
2
|
|
|
|
9
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100% Indonesia Mining
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)a
|
|
|
|
|
|
|
|
|
|
|
|
|
Grasberg open pit
|
|
|
110,200
|
|
|
|
134,200
|
|
|
|
108,000
|
|
|
|
121,200
|
Deep Ore Zone underground mine
|
|
|
36,700
|
|
|
|
42,700
|
|
|
|
40,500
|
|
|
|
45,800
|
Deep Mill Level Zone (DMLZ) underground mineb
|
|
|
4,900
|
|
|
|
—
|
|
|
|
4,500
|
|
|
|
—
|
Grasberg Block Cave underground mineb
|
|
|
2,600
|
|
|
|
—
|
|
|
|
2,400
|
|
|
|
—
|
Big Gossan underground mineb
|
|
|
1,000
|
|
|
|
—
|
|
|
|
600
|
|
|
|
—
|
Total
|
|
|
155,400
|
|
|
|
176,900
|
|
|
|
156,000
|
|
|
|
167,000
|
Average ore grades:
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper (percent)
|
|
|
0.84
|
|
|
|
0.67
|
|
|
|
0.77
|
|
|
|
0.63
|
Gold (grams per metric ton)
|
|
|
0.48
|
|
|
|
0.86
|
|
|
|
0.50
|
|
|
|
0.78
|
Recovery rates (percent):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
|
|
|
90.4
|
|
|
|
90.6
|
|
|
|
89.9
|
|
|
|
90.6
|
Gold
|
|
|
80.0
|
|
|
|
83.5
|
|
|
|
80.3
|
|
|
|
83.9
|
Production (recoverable):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper (millions of pounds)
|
|
|
226
|
|
|
|
205
|
|
|
|
409
|
|
|
|
359
|
Gold (thousands of ounces)
|
|
|
174
|
|
|
|
360
|
|
|
|
364
|
|
|
|
615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100% Africa Mining (Discontinued Operation)
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
|
15,900
|
|
|
|
15,300
|
|
|
|
15,500
|
|
|
|
14,900
|
Average ore grades (percent):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
|
|
|
4.05
|
|
|
|
4.02
|
|
|
|
4.01
|
|
|
|
4.18
|
Cobalt
|
|
|
0.43
|
|
|
|
0.44
|
|
|
|
0.46
|
|
|
|
0.40
|
Copper recovery rate (percent)
|
|
|
94.5
|
|
|
|
93.9
|
|
|
|
93.7
|
|
|
|
93.9
|
Production (millions of pounds):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper (recoverable)
|
|
|
122
|
|
|
|
115
|
|
|
|
232
|
|
|
|
231
|
Cobalt (contained)
|
|
|
10
|
|
|
|
9
|
|
|
|
19
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100% Molybdenum Mines
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
|
18,600
|
|
|
|
35,900
|
|
|
|
18,500
|
|
|
|
38,200
|
Average molybdenum ore grade (percent)
|
|
|
0.19
|
|
|
|
0.20
|
|
|
|
0.21
|
|
|
|
0.19
|
Molybdenum production (millions of recoverable pounds)
|
|
|
7
|
|
|
|
13
|
|
|
|
14
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Amounts represent the approximate average
daily throughput processed at PT-FI's mill facilities from each
producing mine and from development activities that result in
metal production.
|
b. Targeted production rates once the DMLZ
underground mine reaches full capacity are expected to approximate
80,000 metric tons of ore per day in 2021; production from the
Grasberg Block Cave underground mine is expected to commence in
2018 and production from the Big Gossan underground mine is
expected to restart in the first half of 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
SELECTED U.S. OIL AND GAS OPERATING DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
Sales Volumes
|
|
|
Sales per Day
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Gulf of Mexico (GOM)a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (thousand barrels or MBbls)
|
|
|
5,825
|
|
|
|
5,234
|
|
|
|
64
|
|
|
|
58
|
|
|
Natural gas (million cubic feet or MMcf)
|
|
|
9,814
|
|
|
|
9,279
|
|
|
|
108
|
|
|
|
102
|
|
|
Natural gas liquids (NGLs, in MBbls)
|
|
|
559
|
|
|
|
529
|
|
|
|
6
|
|
|
|
5
|
|
|
Thousand barrels of oil equivalents (MBOE)
|
|
|
8,019
|
|
|
|
7,309
|
|
|
|
88
|
|
|
|
80
|
|
|
Average realized price per BOEb
|
|
|
$
|
35.02
|
|
|
|
$
|
47.82
|
|
|
|
|
|
|
|
|
Cash production costs per BOEb
|
|
|
$
|
12.43
|
|
|
|
$
|
16.98
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
205
|
|
|
|
$
|
676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALIFORNIA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
2,792
|
|
|
|
3,326
|
|
|
|
31
|
|
|
|
37
|
|
|
Natural gas (MMcf)
|
|
|
405
|
|
|
|
562
|
|
|
|
5
|
|
|
|
6
|
|
|
NGLs (MBbls)
|
|
|
30
|
|
|
|
42
|
|
|
|
—
|
|
c
|
|
—
|
|
c
|
MBOE
|
|
|
2,890
|
|
|
|
3,462
|
|
|
|
32
|
|
|
|
38
|
|
|
Average realized price per BOEb
|
|
|
$
|
36.70
|
|
|
|
$
|
48.30
|
|
|
|
|
|
|
|
|
Cash production costs per BOEb
|
|
|
$
|
23.62
|
|
|
|
$
|
27.13
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
7
|
|
|
|
$
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HAYNESVILLE/MADDEN/OTHERd
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
37
|
|
|
|
39
|
|
|
|
—
|
|
c
|
|
—
|
|
c
|
Natural gas (MMcf)
|
|
|
8,576
|
|
|
|
13,693
|
|
|
|
94
|
|
|
|
151
|
|
|
NGLs (MBbls)
|
|
|
7
|
|
|
|
15
|
|
|
|
—
|
|
c
|
|
—
|
|
c
|
MBOE
|
|
|
1,473
|
|
|
|
2,336
|
|
|
|
16
|
|
|
|
26
|
|
|
Average realized price per BOEb
|
|
|
$
|
12.09
|
|
|
|
$
|
16.15
|
|
|
|
|
|
|
|
|
Cash production costs per BOEb
|
|
|
$
|
12.07
|
|
|
|
$
|
13.55
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
2
|
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL U.S. OIL AND GAS OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
8,654
|
|
|
|
8,599
|
|
|
|
95
|
|
|
|
95
|
|
|
Natural gas (MMcf)
|
|
|
18,795
|
|
|
|
23,534
|
|
|
|
207
|
|
|
|
259
|
|
|
NGLs (MBbls)
|
|
|
596
|
|
|
|
586
|
|
|
|
6
|
|
|
|
5
|
|
|
MBOE
|
|
|
12,382
|
|
|
|
13,107
|
|
|
|
136
|
|
|
|
144
|
|
|
Cash operating margin per BOE:b
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized revenues
|
|
|
$
|
32.70
|
|
|
|
$
|
50.04
|
|
e
|
|
|
|
|
|
|
Less: cash production costs
|
|
|
15.00
|
|
|
|
19.04
|
|
|
|
|
|
|
|
|
Cash operating margin
|
|
|
$
|
17.70
|
|
|
|
$
|
31.00
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization per BOE
|
|
|
$
|
17.61
|
|
|
|
$
|
36.99
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
388
|
|
f
|
|
$
|
777
|
|
f
|
|
|
|
|
|
|
|
|
|
a.
|
|
Reflects properties in the Deepwater GOM and on the Shelf,
including the Inboard Lower Tertiary/Cretaceous natural gas trend.
|
b.
|
|
Cash operating margin for oil and gas operations reflects
realized revenues less cash production costs. For reconciliations
of average realized price and cash production costs per BOE to
revenues and production and delivery costs reported in FCX's
consolidated financial statements, refer to the supplemental
schedules, “Product Revenues and Production Costs,” beginning on
page XV, which are available on FCX's website, “fcx.com.”
|
c.
|
|
Rounds to less than 1 MBbl per day.
|
d.
|
|
In July 2016, FM O&G completed the sale of the Haynesville shale
assets.
|
e.
|
|
Includes realized cash gains on crude oil derivative contracts
of $7.73 per BOE. These contracts were managed on a consolidated
basis; accordingly, the average realized price per BOE by region
did not reflect adjustments for crude oil derivative contracts. FM
O&G currently does not have oil and gas derivative contracts in
place for 2016 or future years.
|
f.
|
|
Consolidated capital expenditures for U.S. oil and gas
operations reflect total spending, which includes changes in
capital expenditure accruals and other adjustments totaling $174
million for second-quarter 2016 and $71 million for second-quarter
2015 that are not specifically allocated to the above regions.
Excludes international oil and gas capital expenditures totaling
$4 million in second-quarter 2016 and $29 million for
second-quarter 2015, primarily related to the Morocco oil and gas
properties.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
SELECTED U.S. OIL AND GAS OPERATING DATA (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
Sales Volumes
|
|
|
Sales per Day
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
GOMa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
11,198
|
|
|
|
10,197
|
|
|
|
62
|
|
|
|
56
|
|
|
Natural gas (MMcf)
|
|
|
18,712
|
|
|
|
16,634
|
|
|
|
103
|
|
|
|
92
|
|
|
NGLs (MBbls)
|
|
|
1,084
|
|
|
|
1,001
|
|
|
|
6
|
|
|
|
6
|
|
|
MBOE
|
|
|
15,401
|
|
|
|
13,970
|
|
|
|
85
|
|
|
|
77
|
|
|
Average realized price per BOEb
|
|
|
$
|
30.55
|
|
|
|
$
|
44.40
|
|
|
|
|
|
|
|
|
Cash production costs per BOEb
|
|
|
$
|
12.26
|
|
|
|
$
|
17.17
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
482
|
|
|
|
$
|
1,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALIFORNIA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
5,673
|
|
|
|
6,700
|
|
|
|
31
|
|
|
|
37
|
|
|
Natural gas (MMcf)
|
|
|
885
|
|
|
|
1,146
|
|
|
|
5
|
|
|
|
6
|
|
|
NGLs (MBbls)
|
|
|
66
|
|
|
|
84
|
|
|
|
—
|
|
c
|
|
—
|
|
c
|
MBOE
|
|
|
5,887
|
|
|
|
6,975
|
|
|
|
32
|
|
|
|
39
|
|
|
Average realized price per BOEb
|
|
|
$
|
31.24
|
|
|
|
$
|
43.49
|
|
|
|
|
|
|
|
|
Cash production costs per BOEb
|
|
|
$
|
25.98
|
|
|
|
$
|
29.43
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
16
|
|
|
|
$
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HAYNESVILLE/MADDEN/OTHERd
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
81
|
|
|
|
74
|
|
|
|
—
|
|
c
|
|
1
|
|
|
Natural gas (MMcf)
|
|
|
18,837
|
|
|
|
27,521
|
|
|
|
103
|
|
|
|
152
|
|
|
NGLs (MBbls)
|
|
|
20
|
|
|
|
25
|
|
|
|
—
|
|
c
|
|
—
|
|
c
|
MBOE
|
|
|
3,240
|
|
|
|
4,686
|
|
|
|
18
|
|
|
|
26
|
|
|
Average realized price per BOEb
|
|
|
$
|
12.18
|
|
|
|
$
|
16.66
|
|
|
|
|
|
|
|
|
Cash production costs per BOEb
|
|
|
$
|
11.21
|
|
|
|
$
|
12.42
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
2
|
|
|
|
$
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL U.S. OIL AND GAS OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
16,952
|
|
|
|
16,971
|
|
|
|
93
|
|
|
|
94
|
|
|
Natural gas (MMcf)
|
|
|
38,434
|
|
|
|
45,301
|
|
|
|
211
|
|
|
|
250
|
|
|
NGLs (MBbls)
|
|
|
1,170
|
|
|
|
1,110
|
|
|
|
6
|
|
|
|
6
|
|
|
MBOE
|
|
|
24,528
|
|
|
|
25,631
|
|
|
|
135
|
|
|
|
142
|
|
|
Cash operating margin per BOE:b
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized revenue
|
|
|
$
|
28.29
|
|
|
|
$
|
46.95
|
|
e
|
|
|
|
|
|
|
Less: cash production costs
|
|
|
15.42
|
|
|
|
19.62
|
|
|
|
|
|
|
|
|
Cash operating margin
|
|
|
$
|
12.87
|
|
|
|
$
|
27.33
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization per BOE
|
|
|
$
|
19.27
|
|
|
|
$
|
39.59
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
868
|
|
f
|
|
$
|
1,795
|
|
f
|
|
|
|
|
|
|
|
|
|
a.
|
|
Reflects properties in the Deepwater GOM and on the Shelf,
including the Inboard Lower Tertiary/Cretaceous natural gas trend.
|
b.
|
|
Cash operating margin for oil and gas operations reflects
realized revenues less cash production costs. For reconciliations
of average realized price and cash production costs per BOE to
revenues and production and delivery costs reported in FCX's
consolidated financial statements, refer to the supplemental
schedules, “Product Revenues and Production Costs,” beginning on
page XV, which are available on FCX's website, “fcx.com.”
|
c.
|
|
Rounds to less than 1 MBbl per day.
|
d.
|
|
In July 2016, FM O&G completed the sale of the Haynesville
shale assets.
|
e.
|
|
Includes realized cash gains on crude oil derivative contracts
of $7.87 per BOE. These contracts were managed on a consolidated
basis; accordingly, the average realized price per BOE by region
did not reflect adjustments for crude oil derivative contracts. FM
O&G currently does not have oil and gas derivative contracts in
place for 2016 or future years.
|
f.
|
|
Consolidated capital expenditures for U.S. oil and gas
operations reflect total spending, which includes changes in
capital expenditure accruals and other adjustments totaling $368
million for the first six months of 2016 and $334 million for the
first six months of 2015 that are not specifically allocated to
the above regions. Excludes international oil and gas capital
expenditures totaling $47 million for the first six months of 2016
and $44 million for the first six months of 2015, primarily
related to the Morocco oil and gas properties.
|
|
|
|
|
FREEPORT-McMoRan INC.
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
(In millions, except per share amounts)
|
|
Revenuesa
|
|
|
$
|
3,334
|
|
|
|
$
|
3,938
|
|
|
|
$
|
6,576
|
|
|
|
$
|
7,709
|
|
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and deliveryb
|
|
|
2,956
|
|
|
|
2,651
|
|
|
|
5,455
|
|
|
|
5,330
|
|
|
Depreciation, depletion and amortization
|
|
|
632
|
|
|
|
833
|
|
|
|
1,294
|
|
|
|
1,699
|
|
|
Impairment of oil and gas properties
|
|
|
291
|
|
|
|
2,686
|
|
|
|
4,078
|
|
|
|
5,790
|
|
|
Total cost of sales
|
|
|
3,879
|
|
|
|
6,170
|
|
|
|
10,827
|
|
|
|
12,819
|
|
|
Selling, general and administrative expenses
|
|
|
160
|
|
c
|
|
148
|
|
|
|
298
|
|
c
|
|
299
|
|
|
Mining exploration and research expenses
|
|
|
15
|
|
|
|
30
|
|
|
|
33
|
|
|
|
57
|
|
|
Environmental obligations and shutdown costs
|
|
|
11
|
|
|
|
11
|
|
|
|
21
|
|
|
|
24
|
|
|
Net gain on sales of assets
|
|
|
(749
|
)
|
|
|
—
|
|
|
|
(749
|
)
|
|
|
(39
|
)
|
|
Total costs and expenses
|
|
|
3,316
|
|
|
|
6,359
|
|
|
|
10,430
|
|
|
|
13,160
|
|
|
Operating income (loss)
|
|
|
18
|
|
|
|
(2,421
|
)
|
|
|
(3,854
|
)
|
|
|
(5,451
|
)
|
|
Interest expense, netd
|
|
|
(196
|
)
|
|
|
(142
|
)
|
|
|
(387
|
)
|
|
|
(281
|
)
|
|
Net gain on early extinguishment of debt
|
|
|
39
|
|
|
|
—
|
|
|
|
36
|
|
|
|
—
|
|
|
Other income, net
|
|
|
25
|
|
|
|
36
|
|
e
|
|
64
|
|
|
|
43
|
|
e
|
Loss from continuing operations before income taxes and equity in
affiliated companies' net earnings
|
|
|
(114
|
)
|
|
|
(2,527
|
)
|
|
|
(4,141
|
)
|
|
|
(5,689
|
)
|
|
(Provision for) benefit from income taxesf
|
|
|
(116
|
)
|
|
|
699
|
|
|
|
(193
|
)
|
|
|
1,413
|
|
|
Equity in affiliated companies' net earnings
|
|
|
1
|
|
|
|
—
|
|
|
|
8
|
|
|
|
1
|
|
|
Net loss from continuing operations
|
|
|
(229
|
)
|
|
|
(1,828
|
)
|
|
|
(4,326
|
)
|
|
|
(4,275
|
)
|
|
Net (loss) income from discontinued operationsg
|
|
|
(181
|
)
|
|
|
29
|
|
|
|
(185
|
)
|
|
|
70
|
|
|
Net loss
|
|
|
(410
|
)
|
|
|
(1,799
|
)
|
|
|
(4,511
|
)
|
|
|
(4,205
|
)
|
|
Net income attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
(47
|
)
|
|
|
(16
|
)
|
|
|
(109
|
)
|
|
|
(48
|
)
|
|
Discontinued operations
|
|
|
(12
|
)
|
|
|
(26
|
)
|
|
|
(22
|
)
|
|
|
(52
|
)
|
|
Preferred dividends attributable to redeemable noncontrolling
interest
|
|
|
(10
|
)
|
|
|
(10
|
)
|
|
|
(21
|
)
|
|
|
(20
|
)
|
|
Net loss attributable to common stockholdersh
|
|
|
$
|
(479
|
)
|
|
|
$
|
(1,851
|
)
|
|
|
$
|
(4,663
|
)
|
|
|
$
|
(4,325
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net (loss) income per share attributable to common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
(0.23
|
)
|
|
|
$
|
(1.78
|
)
|
|
|
$
|
(3.54
|
)
|
|
|
$
|
(4.18
|
)
|
|
Discontinued operations
|
|
|
(0.15
|
)
|
|
|
—
|
|
|
|
(0.16
|
)
|
|
|
0.02
|
|
|
|
|
|
$
|
(0.38
|
)
|
|
|
$
|
(1.78
|
)
|
|
|
$
|
(3.70
|
)
|
|
|
$
|
(4.16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted-average common shares outstanding
|
|
|
1,269
|
|
|
|
1,040
|
|
|
|
1,260
|
|
|
|
1,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share of common stock
|
|
|
$
|
—
|
|
|
|
$
|
0.1605
|
|
|
|
$
|
—
|
|
|
|
$
|
0.2105
|
|
|
|
|
|
a.
|
|
Revenues include favorable (unfavorable) adjustments to
provisionally priced concentrate and cathode copper sales
recognized in prior periods (refer to the supplemental schedule,
"Derivative Instruments," on page XI for a summary of these
amounts). Revenues for the 2015 periods also include net noncash
mark-to-market losses associated with crude oil derivative
contracts (refer to the supplemental schedule, "Adjusted Net
(Loss) Income," on Page IX for a summary of these amounts).
|
b.
|
|
Refer to the supplemental schedule, "Adjusted Net (Loss)
Income," on page IX for a summary of amounts included in
production and delivery costs for net charges at (i) oil and gas
operations primarily associated with drillship contract
settlements/idle rig costs and inventory write downs and (ii)
mining operations for adjustments to inventories.
|
c.
|
|
Includes net restructuring charges at oil and gas operations.
Refer to the supplemental schedule, "Adjusted Net (Loss) Income,"
on page IX.
|
d.
|
|
Consolidated interest expense, excluding capitalized interest,
totaled $218 million in second-quarter 2016, $208 million in
second-quarter 2015, $436 million for the first six months of 2016
and $411 million for the first six months of 2015.
|
e.
|
|
Includes a gain for the proceeds received from insurance
carriers and other third parties related to a shareholder
derivative litigation settlement. Refer to the supplemental
schedule, "Adjusted Net (Loss) Income," on page IX.
|
f.
|
|
Refer to the supplemental schedule, "Income Taxes," on page X
for a summary of income taxes from continuing operations.
|
g.
|
|
Net of charges for (i) allocated interest expense associated
with FCX's term loan that is required to be repaid as a result of
the sale of FCX's interest in Tenke Fungurume (Tenke) totaling $11
million in second-quarter 2016, $7 million in second-quarter 2015,
$21 million for the first six months of 2016 and $14 million for
the first six months of 2015 and (ii) income tax (benefit)
provision totaling $(16) million in second-quarter 2016, $12
million in second-quarter 2015, $(23) million for the first six
months of 2016 and $31 million for the first six months of 2015.
In accordance with accounting guidelines, the second quarter and
first six months of 2016 are also net of $177 million for the
estimated loss on disposal, which will be adjusted through closing
of the transaction.
|
h.
|
|
FCX defers recognizing profits on intercompany sales until
final sales to third parties occur. Refer to the supplemental
schedule, "Deferred Profits," on page XI for a summary of net
impacts from changes in these deferrals.
|
|
|
|
|
FREEPORT-McMoRan INC.
|
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(In millions)
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
352
|
|
|
|
$
|
195
|
|
Trade accounts receivable
|
|
|
694
|
|
|
|
660
|
|
Income and other tax receivables
|
|
|
916
|
|
|
|
1,341
|
|
Other accounts receivable
|
|
|
102
|
|
|
|
154
|
|
Inventories:
|
|
|
|
|
|
|
Mill and leach stockpiles
|
|
|
1,348
|
|
|
|
1,539
|
|
Materials and supplies, net
|
|
|
1,338
|
|
|
|
1,594
|
|
Product
|
|
|
1,058
|
|
|
|
1,071
|
|
Other current assets
|
|
|
226
|
|
|
|
164
|
|
Held for sale
|
|
|
4,666
|
|
|
|
744
|
|
Total current assets
|
|
|
10,700
|
|
|
|
7,462
|
|
Property, plant, equipment and mining development costs, net
|
|
|
23,609
|
|
|
|
24,248
|
|
Oil and gas properties, net - full cost method:
|
|
|
|
|
|
|
Subject to amortization, less accumulated amortization and impairment
|
|
|
1,381
|
|
|
|
2,262
|
|
Not subject to amortization
|
|
|
1,656
|
|
|
|
4,831
|
|
Long-term mill and leach stockpiles
|
|
|
1,742
|
|
|
|
1,663
|
|
Other assets
|
|
|
2,208
|
|
|
|
2,001
|
|
Held for sale
|
|
|
—
|
|
|
|
4,110
|
|
Total assets
|
|
|
$
|
41,296
|
|
|
|
$
|
46,577
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
$
|
2,569
|
|
|
|
$
|
3,255
|
|
Current portion of debt
|
|
|
770
|
|
|
|
649
|
|
Current portion of environmental and asset retirement obligations
|
|
|
322
|
|
|
|
272
|
|
Accrued income taxes
|
|
|
55
|
|
|
|
23
|
|
Held for sale
|
|
|
824
|
|
|
|
108
|
|
Total current liabilities
|
|
|
4,540
|
|
|
|
4,307
|
|
Long-term debt, less current portion
|
|
|
18,549
|
|
|
|
19,779
|
|
Deferred income taxes
|
|
|
3,758
|
|
|
|
3,607
|
|
Environmental and asset retirement obligations, less current portion
|
|
|
3,697
|
|
|
|
3,717
|
|
Other liabilities
|
|
|
1,662
|
|
|
|
1,641
|
|
Held for sale
|
|
|
—
|
|
|
|
718
|
|
Total liabilities
|
|
|
32,206
|
|
|
|
33,769
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
|
771
|
|
|
|
764
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock
|
|
|
145
|
|
|
|
137
|
|
Capital in excess of par value
|
|
|
25,105
|
|
|
|
24,283
|
|
Accumulated deficit
|
|
|
(17,049
|
)
|
|
|
(12,387
|
)
|
Accumulated other comprehensive loss
|
|
|
(488
|
)
|
|
|
(503
|
)
|
Common stock held in treasury
|
|
|
(3,710
|
)
|
|
|
(3,702
|
)
|
Total stockholders' equity
|
|
|
4,003
|
|
|
|
7,828
|
|
Noncontrolling interestsa
|
|
|
4,316
|
|
|
|
4,216
|
|
Total equity
|
|
|
8,319
|
|
|
|
12,044
|
|
Total liabilities and equity
|
|
|
$
|
41,296
|
|
|
|
$
|
46,577
|
|
|
a.
|
|
Includes noncontrolling interests of $1.2 billion at June
30, 2016, and December 31, 2015, associated with Tenke.
|
|
|
|
|
FREEPORT-McMoRan INC.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(In millions)
|
Cash flow from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(4,511
|
)
|
|
|
$
|
(4,205
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
1,374
|
|
|
|
1,829
|
|
Impairment of oil and gas properties
|
|
|
4,078
|
|
|
|
5,790
|
|
Non-cash oil and gas drillship settlements/idle rig costs
|
|
|
612
|
|
|
|
—
|
|
Oil and gas inventory adjustments and write downs
|
|
|
82
|
|
|
|
23
|
|
Mining inventory adjustments
|
|
|
7
|
|
|
|
63
|
|
Net gain on sales of assets
|
|
|
(749
|
)
|
|
|
(39
|
)
|
Net charges for environmental and asset retirement obligations,
including accretion
|
|
|
107
|
|
|
|
109
|
|
Payments for environmental and asset retirement obligations
|
|
|
(116
|
)
|
|
|
(81
|
)
|
Net gain on early extinguishment of debt
|
|
|
(36
|
)
|
|
|
—
|
|
Deferred income taxes
|
|
|
169
|
|
|
|
(1,432
|
)
|
Estimated loss on disposal of discontinued operations
|
|
|
177
|
|
|
|
—
|
|
Increase in long-term mill and leach stockpiles
|
|
|
(99
|
)
|
|
|
(104
|
)
|
Net gains on crude oil derivative contracts
|
|
|
—
|
|
|
|
(58
|
)
|
Other, net
|
|
|
53
|
|
|
|
81
|
|
Changes in working capital and other tax payments, excluding amounts
from dispositions:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
259
|
|
|
|
493
|
|
Inventories
|
|
|
190
|
|
|
|
8
|
|
Other current assets
|
|
|
(53
|
)
|
|
|
(1
|
)
|
Accounts payable and accrued liabilities
|
|
|
44
|
|
|
|
(205
|
)
|
Accrued income taxes and changes in other tax payments
|
|
|
26
|
|
|
|
(485
|
)
|
Net cash provided by operating activities
|
|
|
1,614
|
|
|
|
1,786
|
|
|
|
|
|
|
|
|
Cash flow from investing activities:
|
|
|
|
|
|
|
Capital expenditures:
|
|
|
|
|
|
|
North America copper mines
|
|
|
(76
|
)
|
|
|
(214
|
)
|
South America
|
|
|
(293
|
)
|
|
|
(902
|
)
|
Indonesia
|
|
|
(459
|
)
|
|
|
(438
|
)
|
Molybdenum mines
|
|
|
(1
|
)
|
|
|
(7
|
)
|
U.S. oil and gas operations
|
|
|
(868
|
)
|
|
|
(1,795
|
)
|
Other
|
|
|
(118
|
)
|
|
|
(172
|
)
|
Net proceeds from sale of additional interest in Morenci
|
|
|
996
|
|
|
|
—
|
|
Net proceeds from sale of other assets
|
|
|
290
|
|
|
|
150
|
|
Other, net
|
|
|
(6
|
)
|
|
|
(14
|
)
|
Net cash used in investing activities
|
|
|
(535
|
)
|
|
|
(3,392
|
)
|
|
|
|
|
|
|
|
Cash flow from financing activities:
|
|
|
|
|
|
|
Proceeds from debt
|
|
|
2,811
|
|
|
|
4,422
|
|
Repayments of debt
|
|
|
(3,649
|
)
|
|
|
(2,360
|
)
|
Net proceeds from sale of common stock
|
|
|
32
|
|
|
|
—
|
|
Cash dividends and distributions paid:
|
|
|
|
|
|
|
Common stock
|
|
|
(5
|
)
|
|
|
(380
|
)
|
Noncontrolling interests
|
|
|
(39
|
)
|
|
|
(60
|
)
|
Stock-based awards net payments, including excess tax benefit
|
|
|
(5
|
)
|
|
|
(7
|
)
|
Debt financing costs and other, net
|
|
|
(18
|
)
|
|
|
(7
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(873
|
)
|
|
|
1,608
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
206
|
|
|
|
2
|
|
Increase in cash and cash equivalents in assets held for sale
|
|
|
(49
|
)
|
|
|
(1
|
)
|
Cash and cash equivalents at beginning of year
|
|
|
195
|
|
|
|
317
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
352
|
|
|
|
$
|
318
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
ADJUSTED NET (LOSS) INCOME
Adjusted net (loss) income is intended to provide investors and others
with information about FCX's recurring operating performance. This
information differs from net loss attributable to common stockholders
determined in accordance with U.S. generally accepted accounting
principles (GAAP) and should not be considered in isolation or as a
substitute for measures of performance determined in accordance with
U.S. GAAP. Adjusted net (loss) income may not be comparable to similarly
titled measures reported by other companies.
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
Pre-tax
|
|
|
After-tax
|
|
|
Per Share
|
|
|
Pre-tax
|
|
|
After-tax
|
|
|
Per Share
|
Net loss attributable to common stockholders
|
|
|
N/A
|
|
|
$
|
(479
|
)
|
|
|
$
|
(0.38
|
)
|
|
|
N/A
|
|
|
$
|
(1,851
|
)
|
|
|
$
|
(1.78
|
)
|
Net noncash mark-to-market losses on crude oil derivative contracts
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
(95
|
)
|
|
|
$
|
(59
|
)
|
|
|
$
|
(0.06
|
)
|
Impairment of oil and gas properties
|
|
|
(291
|
)
|
|
|
(291
|
)
|
a
|
|
(0.23
|
)
|
|
|
(2,686
|
)
|
|
|
(1,975
|
)
|
a
|
|
(1.90
|
)
|
Other net charges for oil and gas operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drillship settlements/idle rig costs
|
|
|
(639
|
)
|
|
|
(639
|
)
|
|
|
(0.50
|
)
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
—
|
|
Inventory write downs
|
|
|
(53
|
)
|
|
|
(53
|
)
|
|
|
(0.04
|
)
|
|
|
(19
|
)
|
|
|
(12
|
)
|
|
|
(0.01
|
)
|
Restructuring charges
|
|
|
(37
|
)
|
|
|
(37
|
)
|
|
|
(0.03
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Mining inventory adjustments
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
—
|
|
|
|
(59
|
)
|
|
|
(38
|
)
|
|
|
(0.04
|
)
|
Net gain on sales of assetsb
|
|
|
749
|
|
|
|
744
|
|
|
|
0.59
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net gain on early extinguishment of debt
|
|
|
39
|
|
|
|
39
|
|
|
|
0.03
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Gain on shareholder derivative litigation settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
92
|
|
|
|
92
|
|
|
|
0.09
|
|
Net tax chargesc
|
|
|
N/A
|
|
|
(36
|
)
|
|
|
(0.03
|
)
|
|
|
N/A
|
|
|
—
|
|
|
|
—
|
|
Estimated loss on discontinued operations
|
|
|
(177
|
)
|
|
|
(177
|
)
|
|
|
(0.14
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
$
|
(411
|
)
|
|
|
$
|
(452
|
)
|
|
|
$
|
(0.36
|
)
|
d
|
|
$
|
(2,770
|
)
|
|
|
$
|
(1,994
|
)
|
|
|
$
|
(1.92
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net (loss) income attributable to common stockholders
|
|
|
N/A
|
|
|
$
|
(27
|
)
|
|
|
$
|
(0.02
|
)
|
|
|
N/A
|
|
|
$
|
143
|
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
Pre-tax
|
|
|
After-tax
|
|
|
Per Share
|
|
|
Pre-tax
|
|
|
After-tax
|
|
|
Per Share
|
Net loss attributable to common stockholders
|
|
|
N/A
|
|
|
$
|
(4,663
|
)
|
|
|
$
|
(3.70
|
)
|
|
|
N/A
|
|
|
$
|
(4,325
|
)
|
|
|
$
|
(4.16
|
)
|
Net noncash mark-to-market losses on crude oil derivative contracts
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
(143
|
)
|
|
|
$
|
(89
|
)
|
|
|
$
|
(0.09
|
)
|
Impairment of oil and gas properties
|
|
|
(4,078
|
)
|
|
|
(4,078
|
)
|
a
|
|
(3.24
|
)
|
|
|
(5,790
|
)
|
|
|
(4,374
|
)
|
a
|
|
(4.20
|
)
|
Other net charges for oil and gas operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drillship settlements/idle rig costs
|
|
|
(804
|
)
|
|
|
(804
|
)
|
|
|
(0.64
|
)
|
|
|
(16
|
)
|
|
|
(10
|
)
|
|
|
(0.01
|
)
|
Inventory write downs
|
|
|
(88
|
)
|
|
|
(88
|
)
|
|
|
(0.07
|
)
|
|
|
(23
|
)
|
|
|
(14
|
)
|
|
|
(0.01
|
)
|
Restructuring charges
|
|
|
(39
|
)
|
|
|
(39
|
)
|
|
|
(0.03
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Mining inventory adjustments
|
|
|
(7
|
)
|
|
|
(7
|
)
|
|
|
(0.01
|
)
|
|
|
(63
|
)
|
|
|
(41
|
)
|
|
|
(0.04
|
)
|
Net gain on sales of assetsb
|
|
|
749
|
|
|
|
744
|
|
|
|
0.59
|
|
|
|
39
|
|
|
|
25
|
|
|
|
0.02
|
|
Net gain on early extinguishment of debt
|
|
|
36
|
|
|
|
36
|
|
|
|
0.03
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Gain on shareholder derivative litigation settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
92
|
|
|
|
92
|
|
|
|
0.09
|
|
Net tax chargesc
|
|
|
N/A
|
|
|
(36
|
)
|
|
|
(0.03
|
)
|
|
|
N/A
|
|
|
—
|
|
|
|
—
|
|
Estimated loss on discontinued operations
|
|
|
(177
|
)
|
|
|
(177
|
)
|
|
|
(0.14
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
$
|
(4,408
|
)
|
|
|
$
|
(4,449
|
)
|
|
|
$
|
(3.53
|
)
|
d
|
|
$
|
(5,904
|
)
|
|
|
$
|
(4,411
|
)
|
|
|
$
|
(4.24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net (loss) income attributable to common stockholders
|
|
|
N/A
|
|
|
$
|
(214
|
)
|
|
|
$
|
(0.17
|
)
|
|
|
N/A
|
|
|
$
|
86
|
|
|
|
$
|
0.08
|
|
|
|
|
a.
|
|
As a result of the impairment to oil and gas properties, FCX
recorded tax charges of $108 million in second-quarter 2016, $305
million in second-quarter 2015, $1.5 billion for the first six
months of 2016 and $763 million for the first six months of 2015
to establish a valuation allowance against deferred tax assets
that will not generate a future benefit. These tax charges have
been reflected in the above after-tax impacts for the impairment
of oil and gas properties.
|
b.
|
|
Net gain on sales of assets primarily reflects the sales of a
13 percent undivided interest in the Morenci unincorporated joint
venture and an interest in the Timok exploration project in Serbia
for the second quarter and first six months of 2016, and the sale
of FCX's one-third interest in the Luna Energy power facility in
New Mexico for the first six months of 2015.
|
c.
|
|
For further discussion of net tax charges impacting the second
quarter and first six months of 2016, refer to "Income Taxes," on
page X.
|
d.
|
|
Per share amounts do not foot down because of rounding.
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160726005812/en/
Source: Freeport-McMoRan Inc.