PHOENIX--(BUSINESS WIRE)--
Freeport-McMoRan Inc. (NYSE: FCX):
-
Net income attributable to common stock totaled $280 million,
$0.19 per share, for third-quarter 2017. After adjusting for net
charges of $212 million, $0.15 per share, third-quarter 2017 adjusted
net income attributable to common stock totaled $492 million, $0.34
per share.
-
Consolidated sales totaled 932 million pounds of copper, 355
thousand ounces of gold and 22 million pounds of molybdenum for
third-quarter 2017.
-
Consolidated sales for the year 2017 are expected to
approximate 3.7 billion pounds of copper, 1.6 million ounces of gold
and 94 million pounds of molybdenum, including 1.0 billion pounds of
copper, 625 thousand ounces of gold and 23 million pounds of
molybdenum for fourth-quarter 2017.
-
Average realized prices were $2.94 per pound for copper, $1,290
per ounce for gold and $9.22 per pound for molybdenum for
third-quarter 2017.
-
Average unit net cash costs were $1.21 per pound of copper for
third-quarter 2017 and are expected to average $1.19 per pound of
copper for the year 2017.
-
Operating cash flows totaled $1.2 billion (including $45
million in working capital sources and changes in tax payments) for
third-quarter 2017 and $3.0 billion (including $0.4 billion in working
capital sources and changes in tax payments) for the first nine months
of 2017. Based on current sales volume and cost estimates, and
assuming average prices of $3.00 per pound for copper, $1,300 per
ounce for gold and $8.00 per pound for molybdenum for fourth-quarter
2017, operating cash flows for the year 2017 are expected to
approximate $4.3 billion (including $0.5 billion in working capital
sources and changes in tax payments).
-
Capital expenditures totaled $308 million (including
approximately $200 million for major mining projects) for
third-quarter 2017 and $1.0 billion for the first nine months of 2017
(including $0.6 billion for major mining projects). Capital
expenditures for the year 2017 are expected to approximate $1.5
billion, including $0.7 billion for underground development activities
in the Grasberg minerals district in Indonesia.
-
In September 2017, FCX redeemed $543 million of senior notes,
resulting in cash interest savings of approximately $35 million per
annum.
-
At September 30, 2017, consolidated cash totaled $5.0
billion and consolidated debt totaled $14.8 billion,
compared with $4.2 billion of consolidated cash and $16.0 billion of
consolidated debt at December 31, 2016. FCX had no borrowings and $3.5
billion available under its revolving credit facility at September 30,
2017.
Freeport-McMoRan Inc. (NYSE: FCX) reported net income attributable to
common stock of $280 million ($0.19 per share) for third-quarter 2017
and $776 million ($0.53 per share) for the first nine months of 2017,
compared with net income attributable to common stock of $217 million
($0.16 per share) for third-quarter 2016 and a net loss attributable to
common stock of $4.4 billion ($3.45 per share) for the first nine months
of 2016. After adjusting for net charges of $212 million ($0.15 per
share) primarily related to accruals for Peruvian government claims
associated with disputed royalty matters, adjusted net income
attributable to common stock totaled $492 million ($0.34 per share) for
third-quarter 2017. Refer to the supplemental schedule, "Adjusted Net
Income (Loss)," on page VII, which is available on FCX's website,
"fcx.com," for additional information.
Richard C. Adkerson, President and Chief Executive Officer, said, "We
are pleased to report strong quarterly results throughout our global
operations and a positive outlook for future results. Our focus on cost
management combined with free cash flow generation have enabled us to
continue to strengthen our balance sheet and successfully execute our
strategy. Our shareholders are well positioned to benefit from our
highly attractive portfolio of copper assets and improving copper market
conditions. We are encouraged by continued progress in our active
negotiations with the Indonesian government regarding our long-term
operating rights in Indonesia and remain focused on managing our
long-term business for the benefit of shareholders."
SUMMARY FINANCIAL DATA
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(in millions, except per share amounts)
|
Revenuesa,b
|
|
$
|
4,310
|
|
|
$
|
3,877
|
|
|
$
|
11,362
|
|
|
$
|
10,453
|
|
Operating income (loss)a
|
|
$
|
917
|
|
|
$
|
359
|
|
|
$
|
2,166
|
|
|
$
|
(3,495
|
)
|
Net income (loss) from continuing operations
|
|
$
|
242
|
|
|
$
|
292
|
|
|
$
|
836
|
|
|
$
|
(4,034
|
)
|
Net income (loss) from discontinued operations
|
|
$
|
3
|
|
c
|
$
|
(6
|
)
|
|
$
|
50
|
|
c
|
$
|
(191
|
)
|
Net income (loss) attributable to common stockd,e
|
|
$
|
280
|
|
|
$
|
217
|
|
|
$
|
776
|
|
|
$
|
(4,446
|
)
|
Diluted net income (loss) per share of common stock:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.19
|
|
|
$
|
0.18
|
|
|
$
|
0.50
|
|
|
$
|
(3.27
|
)
|
Discontinued operations
|
|
—
|
|
|
(0.02
|
)
|
|
0.03
|
|
|
(0.18
|
)
|
|
|
$
|
0.19
|
|
|
$
|
0.16
|
|
|
$
|
0.53
|
|
|
$
|
(3.45
|
)
|
Diluted weighted-average common shares outstanding
|
|
1,454
|
|
|
1,351
|
|
|
1,453
|
|
|
1,289
|
|
Operating cash flowsf
|
|
$
|
1,183
|
|
|
$
|
980
|
|
|
$
|
3,012
|
|
|
$
|
2,594
|
|
Capital expenditures
|
|
$
|
308
|
|
|
$
|
494
|
|
|
$
|
1,014
|
|
|
$
|
2,309
|
|
At September 30:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
4,957
|
|
|
$
|
1,086
|
|
|
$
|
4,957
|
|
|
$
|
1,086
|
|
Total debt, including current portion
|
|
$
|
14,782
|
|
|
$
|
18,882
|
|
|
$
|
14,782
|
|
|
$
|
18,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. For segment financial results, refer to the
supplemental schedules, "Business Segments," beginning on page IX, which
are available on FCX's website, "fcx.com."
b. Includes favorable (unfavorable) adjustments to
provisionally priced concentrate and cathode copper sales recognized in
prior periods totaling $95 million ($39 million to net income
attributable to common stock or $0.03 per share) in third-quarter 2017,
$(15) million ($(7) million to net income attributable to common stock
or $(0.01) per share) in third-quarter 2016, $81 million ($35 million to
net income attributable to common stock or $0.02 per share) for the
first nine months of 2017 and $5 million ($2 million to net loss
attributable to common stock or less than $0.01 per share) for the first
nine months of 2016. For further discussion, refer to the supplemental
schedule, "Derivative Instruments," on page IX, which is available on
FCX's website, "fcx.com."
c. Primarily reflects adjustments to the fair value
of the potential $120 million in contingent consideration related to the
2016 sale of FCX's interest in TF Holdings Limited (TFHL), which totaled
$58 million at September 30, 2017, and will continue to be adjusted
through December 31, 2019.
d. Includes net (charges) gains of $(212) million
($(0.15) per share) in third-quarter 2017, $39 million ($0.03 per share)
in third-quarter 2016, $(178) million ($(0.12) per share) for the first
nine months of 2017 and $(4.4) billion ($(3.43) per share) for the first
nine months of 2016 that are described in the supplemental schedule,
"Adjusted Net Income (Loss)," on page VII, which is available on FCX's
website, "fcx.com."
e. 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 IX, which is available on FCX's
website, "fcx.com."
f. Includes net working capital sources and changes
in tax payments of $45 million in third-quarter 2017, $8 million in
third-quarter 2016, $388 million for the first nine months of 2017 and
$483 million for the first nine months of 2016.
SUMMARY OPERATING DATA
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2017
|
|
2016a
|
|
2017
|
|
2016a
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
Production
|
|
996
|
|
|
1,093
|
|
|
2,730
|
|
|
3,091
|
Sales, excluding purchases
|
|
932
|
|
|
1,113
|
|
|
2,683
|
|
|
3,100
|
Average realized price per pound
|
|
$
|
2.94
|
|
|
$
|
2.19
|
|
|
$
|
2.79
|
|
|
$
|
2.17
|
Site production and delivery costs per poundb
|
|
$
|
1.57
|
|
|
$
|
1.37
|
|
|
$
|
1.60
|
|
|
$
|
1.42
|
Unit net cash costs per poundb
|
|
$
|
1.21
|
|
|
$
|
1.14
|
|
|
$
|
1.26
|
|
|
$
|
1.28
|
Gold (thousands of recoverable ounces)
|
|
|
|
|
|
|
|
|
Production
|
|
418
|
|
|
308
|
|
|
1,010
|
|
|
658
|
Sales, excluding purchases
|
|
355
|
|
|
317
|
|
|
969
|
|
|
674
|
Average realized price per ounce
|
|
$
|
1,290
|
|
|
$
|
1,327
|
|
|
$
|
1,261
|
|
|
$
|
1,292
|
Molybdenum (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
Production
|
|
24
|
|
|
19
|
|
|
70
|
|
|
58
|
Sales, excluding purchases
|
|
22
|
|
|
16
|
|
|
71
|
|
|
52
|
Average realized price per pound
|
|
$
|
9.22
|
|
|
$
|
9.14
|
|
|
$
|
9.18
|
|
|
$
|
8.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Excludes the results of the Tenke Fungurume
(Tenke) mine, which was sold in November 2016 and is reported as
discontinued operations. Copper sales from the Tenke mine totaled 118
million pounds in third-quarter 2016 and 365 million for the first nine
months of 2016.
b. Reflects per pound weighted-average production
and delivery costs and unit net cash costs (net of by-product credits)
for all copper mines, before net noncash and other costs. 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 XII, which
are available on FCX's website, "fcx.com."
Consolidated Sales Volumes
Third-quarter 2017 copper sales of 932 million pounds were
slightly below the July 2017 estimate of 940 million pounds and 16
percent lower than third-quarter 2016 sales of 1.1 billion pounds. The
variance to the year-ago period primarily reflects anticipated lower ore
grades in North America and Indonesia and the timing of shipments.
Third-quarter 2017 gold sales of 355 thousand ounces were lower
than the July 2017 estimate of 375 thousand ounces, primarily reflecting
the timing of shipments. Third-quarter 2017 gold sales were higher than
third-quarter 2016 sales of 317 thousand ounces, primarily reflecting
anticipated higher ore grades from Indonesia.
Third-quarter 2017 molybdenum sales of 22 million pounds
approximated the July 2017 estimate of 22 million pounds and were higher
than third-quarter 2016 sales of 16 million pounds.
Sales volumes for the year 2017 are expected to approximate 3.7 billion
pounds of copper, 1.6 million ounces of gold and 94 million pounds of
molybdenum, including 1.0 billion pounds of copper, 625 thousand ounces
of gold and 23 million pounds of molybdenum in fourth-quarter 2017.
Consolidated Unit Costs
Consolidated average unit net cash costs (net of by-product credits) for
FCX's copper mines of $1.21 per pound of copper in third-quarter 2017
were higher than unit net cash costs of $1.14 per pound in third-quarter
2016, primarily reflecting lower copper sales volumes.
Assuming average prices of $1,300 per ounce of gold and $8.00 per pound
of molybdenum for fourth-quarter 2017 and achievement of current sales
volume and cost estimates, consolidated unit net cash costs (net of
by-product credits) for copper mines are expected to average $1.19 per
pound of copper for the year 2017. The impact of price changes for
fourth-quarter 2017 on consolidated unit net cash costs would
approximate $0.01 per pound for each $50 per ounce change in the average
price of gold and $0.005 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.
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, gold 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 72 percent undivided joint venture interest in
Morenci using the proportionate consolidation method.
Operating and Development Activities. FCX has significant
undeveloped reserves and resources in North America and a portfolio of
potential long-term development projects. Future investments will be
undertaken based on the results of economic and technical feasibility
studies, and are dependent on market conditions. FCX continues to study
opportunities to reduce the capital intensity of its long-term
development projects.
Through exploration drilling, FCX has identified a significant resource
at its wholly owned Lone Star project located near the Safford operation
in eastern Arizona. Initial production from the Lone Star oxide ores
could begin in 2021 using existing infrastructure at the adjacent
Safford operation. Total estimated capital costs, including mine
equipment and pre-production stripping, approximates $850 million.
Production from the Lone Star oxide ores would average approximately 200
million pounds of copper per year with an approximate 20-year mine life.
The project would also advance the potential for development of a
larger-scale district opportunity. FCX has obtained regulatory approvals
for this project and is assessing the timing to commence pre-stripping
activities. FCX is conducting additional drilling as it continues to
evaluate longer term opportunities available from the significant
sulfide potential in the Lone Star/Safford minerals district.
Operating Data. Following is summary consolidated operating data
for the North America copper mines for the third quarters and first nine
months of 2017 and 2016:
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
Production
|
|
375
|
|
|
455
|
|
|
1,151
|
|
|
1,411
|
|
Sales, excluding purchases
|
|
347
|
|
|
458
|
|
|
1,130
|
|
|
1,425
|
|
Average realized price per pound
|
|
$
|
2.92
|
|
|
$
|
2.19
|
|
|
$
|
2.74
|
|
|
$
|
2.18
|
|
|
|
|
|
|
|
|
|
|
Molybdenum (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
Productiona
|
|
8
|
|
|
9
|
|
|
25
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of copperb
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
$
|
1.67
|
|
|
$
|
1.44
|
|
|
$
|
1.59
|
|
|
$
|
1.41
|
|
By-product credits
|
|
(0.17
|
)
|
|
(0.17
|
)
|
|
(0.16
|
)
|
|
(0.12
|
)
|
Treatment charges
|
|
0.11
|
|
|
0.10
|
|
|
0.11
|
|
|
0.11
|
|
Unit net cash costs
|
|
$
|
1.61
|
|
|
$
|
1.37
|
|
|
$
|
1.54
|
|
|
$
|
1.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Refer to summary operating data on page 3 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 XII, which
are available on FCX's website, "fcx.com."
North America's consolidated copper sales volumes of 347 million pounds
in third-quarter 2017 were lower than third-quarter 2016 sales of 458
million pounds, primarily reflecting anticipated lower ore grades and
the timing of shipments. North America copper sales are estimated to
approximate 1.5 billion pounds for the year 2017, compared with 1.8
billion pounds in 2016.
Average unit net cash costs (net of by-product credits) for the North
America copper mines of $1.61 per pound of copper in third-quarter 2017
were higher than unit net cash costs of $1.37 per pound in third-quarter
2016, primarily reflecting lower sales volumes.
Average unit net cash costs (net of by-product credits) for the North
America copper mines are expected to approximate $1.58 per pound of
copper for the year 2017, based on achievement of current sales volume
and cost estimates and assuming an average molybdenum price of $8.00 per
pound for fourth-quarter 2017. North America's average unit net cash
costs for the year 2017 would change by approximately $0.007 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. The Cerro Verde expansion
project commenced operations in September 2015 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.
FCX continues to evaluate a major expansion at El Abra to process
additional sulfide material and to achieve higher recoveries.
Exploration results at El Abra indicate a significant sulfide resource,
which could potentially support a major mill project similar to
facilities recently constructed at Cerro Verde. Future investments will
depend on technical studies, which are being advanced, economic factors
and market conditions.
Operating Data. Following is summary consolidated operating data
for the South America mining operations for the third quarters and first
nine months of 2017 and 2016:
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
Production
|
|
328
|
|
|
317
|
|
|
932
|
|
|
986
|
|
Sales
|
|
327
|
|
|
323
|
|
|
923
|
|
|
973
|
|
Average realized price per pound
|
|
$
|
2.95
|
|
|
$
|
2.19
|
|
|
$
|
2.82
|
|
|
$
|
2.17
|
|
|
|
|
|
|
|
|
|
|
Molybdenum (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
Productiona
|
|
8
|
|
|
5
|
|
|
21
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of copperb
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
$
|
1.60
|
|
|
$
|
1.27
|
|
|
$
|
1.55
|
|
|
$
|
1.23
|
|
By-product credits
|
|
(0.19
|
)
|
|
(0.12
|
)
|
|
(0.17
|
)
|
|
(0.10
|
)
|
Treatment charges
|
|
0.22
|
|
|
0.24
|
|
|
0.22
|
|
|
0.24
|
|
Royalty on metals
|
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
—
|
|
Unit net cash costs
|
|
$
|
1.64
|
|
|
$
|
1.40
|
|
|
$
|
1.61
|
|
|
$
|
1.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Refer to summary operating data on page 3 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
XII, which are available on FCX's website, "fcx.com."
South America's consolidated copper sales volumes of 327 million pounds
in third-quarter 2017 approximated third-quarter 2016 sales of 323
million pounds. Sales from South America mining are expected to
approximate 1.2 billion pounds of copper for the year 2017, compared
with 1.3 billion pounds of copper in 2016.
Average unit net cash costs (net of by-product credits) for South
America mining of $1.64 per pound of copper in third-quarter 2017 were
higher than unit net cash costs of $1.40 per pound in third-quarter
2016, primarily reflecting higher mining, milling and employee costs at
Cerro Verde. Average unit net cash costs (net of by-product credits) for
South America mining are expected to approximate $1.64 per pound of
copper for the year 2017, based on current sales volume and cost
estimates and assuming an average price of $8.00 per pound of molybdenum
for fourth-quarter 2017.
Cerro Verde Royalty Dispute. In October 2017, the Peruvian
Supreme Court issued a ruling in favor of SUNAT, Peru's national tax
authority, that the assessments of royalties for the year 2008 on ore
processed by the Cerro Verde concentrator were proper under Peruvian
law. As reported in FCX’s U.S. Securities and Exchange Commission (SEC)
filings, SUNAT has assessed mining royalties on ore processed by the
Cerro Verde concentrator for the period December 2006 to September 2011,
which Cerro Verde has contested on the basis that its 1998 stability
agreement exempts from royalties all minerals extracted from its mining
concessions, irrespective of the method used for processing those
minerals.
As a result of the unfavorable Peruvian Supreme Court decision on the
2008 royalty matter, Cerro Verde recorded pre-tax charges totaling $357
million ($359 million including net tax charges and $188 million net of
noncontrolling interests) in third-quarter 2017 associated with prior
assessments and potential royalty and related assessments for December
2006 through the year 2013. Effective January 1, 2014, Cerro Verde
entered into a new 15-year stability agreement and has been paying
royalties in accordance with the new stability agreement.
Cerro Verde intends to seek a waiver available under Peruvian law of
penalties and interest associated with this matter and has not recorded
charges for potential unpaid penalties and interest totaling $360
million ($193 million net of noncontrolling interests) at September 30,
2017. Cerro Verde acted in good faith in applying the provisions of its
1998 stability agreement and continues to evaluate alternatives to
defend its rights.
Indonesia Mining. Through its 90.64 percent owned and
consolidated subsidiary 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 concentrate that contains significant
quantities of gold and silver.
Regulatory Matters. PT-FI continues to actively engage with
Indonesian government officials to address regulatory changes that
conflict with its contractual rights in a manner that provides long-term
stability for PT-FI’s operations and investment plans, and protects
value for FCX’s shareholders.
Following the issuance of new regulations in early 2017, which resulted
in a temporary suspension of PT-FI’s concentrate exports, PT-FI entered
into a Memorandum of Understanding in April 2017 whereby exports were
allowed to continue until October 10, 2017, to allow for negotiations
for a long-term agreement.
In August 2017, FCX and the Indonesian government reached an
understanding on a framework that would resolve PT-FI’s long-term
operating rights. This framework, which requires definitive
documentation and FCX Board of Directors and partner approvals, includes
(i) conversion from the Contract of Work (COW) to a new operating
license (IUPK) providing PT-FI with long-term operating rights through
2041, (ii) Indonesian government certainty of fiscal and legal terms
during the term of the IUPK, (iii) PT-FI commitment to construct a new
smelter in Indonesia within five years of reaching a definitive
agreement, and (iv) divestment of 51 percent of PT-FI shares to
Indonesian participants at fair market value. The divestment will be
structured so that FCX will retain control over operations and
governance of PT-FI.
The parties continue to negotiate documentation on a comprehensive
agreement for PT-FI’s extended operations and to reach agreement on
timing, process and governance matters relating to the divestment. The
parties have a mutual objective of completing the required documentation
during 2017.
In October 2017, the Indonesian government extended PT-FI’s export
rights to December 31, 2017, while negotiations to document a long-term
agreement based on the agreed framework continue.
Until a definitive agreement is reached, PT-FI has reserved all rights
under its COW, including pursuing arbitration under the dispute
resolution provisions.
Operating and Development Activities. PT-FI is currently mining
the final phase of the Grasberg open pit, which contains high copper and
gold ore grades. PT-FI expects to mine high-grade ore over the next
several quarters prior to transitioning to the Grasberg Block Cave
underground mine in early 2019.
PT-FI has several projects 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. Assuming a definitive agreement
is reached to support PT-FI's long-term investment plans, estimated
annual capital spending on these projects would average $1.0 billion per
year ($0.8 billion per year net to PT-FI) over the next five years.
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, timing of these expenditures
continues to be reviewed. If PT-FI is unable to reach a definitive
agreement with the Indonesian government on its long-term mining rights,
FCX intends to reduce or defer investments significantly in its
underground development projects and pursue arbitration under its COW.
Operating Data. Following is summary consolidated operating data
for the Indonesia mining operations for the third quarters and first
nine months of 2017 and 2016:
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
Production
|
|
293
|
|
|
321
|
|
|
647
|
|
|
694
|
|
Sales
|
|
258
|
|
|
332
|
|
|
630
|
|
|
702
|
|
Average realized price per pound
|
|
$
|
2.95
|
|
|
$
|
2.20
|
|
|
$
|
2.81
|
|
|
$
|
2.17
|
|
|
|
|
|
|
|
|
|
|
Gold (thousands of recoverable ounces)
|
|
|
|
|
|
|
|
|
Production
|
|
412
|
|
|
301
|
|
|
992
|
|
|
637
|
|
Sales
|
|
352
|
|
|
307
|
|
|
956
|
|
|
653
|
|
Average realized price per ounce
|
|
$
|
1,290
|
|
|
$
|
1,327
|
|
|
$
|
1,261
|
|
|
$
|
1,292
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of coppera
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
$
|
1.41
|
|
b
|
$
|
1.37
|
|
|
$
|
1.71
|
|
b
|
$
|
1.70
|
|
Gold and silver credits
|
|
(1.80
|
)
|
|
(1.29
|
)
|
|
(1.98
|
)
|
|
(1.28
|
)
|
Treatment charges
|
|
0.27
|
|
|
0.27
|
|
|
0.27
|
|
|
0.29
|
|
Export duties
|
|
0.08
|
|
|
0.10
|
|
|
0.10
|
|
|
0.09
|
|
Royalty on metals
|
|
0.17
|
|
|
0.12
|
|
|
0.16
|
|
|
0.12
|
|
Unit net cash costs
|
|
$
|
0.13
|
|
|
$
|
0.57
|
|
|
$
|
0.26
|
|
|
$
|
0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
XII, which are available on FCX's website, "fcx.com."
b. Excludes fixed costs charged directly to
production and delivery costs totaling $9 million ($0.03 per pound of
copper) for third-quarter 2017 and $112 million ($0.18 per pound of
copper) for first nine months of 2017 associated with workforce
reductions.
Indonesia's consolidated copper sales of 258 million pounds in
third-quarter 2017 were lower than third-quarter 2016 sales of 332
million pounds, primarily reflecting lower copper ore grades and timing
of shipments. Indonesia's consolidated gold sales of 352 thousand ounces
in third-quarter 2017 were higher than third-quarter 2016 sales of 307
thousand ounces, reflecting higher gold ore grades, partly offset by
timing of shipments between the third and fourth quarters of 2017.
During third-quarter 2017, PT-FI's labor productivity improved
significantly following a recovery from disruptions that occurred in the
first half of the year. Mining and milling rates improved throughout the
quarter, and PT-FI continues to assess opportunities to advance mining
of a section of high-grade material during 2018 and 2019 though open-pit
mining rather than over time through the Grasberg Block Cave underground
mine.
In October 2017, PT-FI and union officials commenced discussions for a
new two-year labor agreement. The existing agreement will continue in
effect until a new agreement is consummated.
Assuming achieving planned operating rates for fourth-quarter 2017,
consolidated sales volumes from Indonesia mining are expected to
approximate 1.0 billion pounds of copper and 1.6 million ounces of gold
for the year 2017, compared with 1.1 billion pounds of copper and 1.1
million ounces of gold for the year 2016.
A significant portion of PT-FI's costs are fixed and unit costs vary
depending on production volumes and other factors. Indonesia's unit net
cash costs (including gold and silver credits) of $0.13 per pound of
copper in third-quarter 2017 were lower than unit net cash costs of
$0.57 per pound in third-quarter 2016, primarily reflecting higher gold
and silver credits, partly offset by lower copper sales volumes.
Assuming an average gold price of $1,300 per ounce for fourth-quarter
2017 and achievement of current sales volume and cost estimates, unit
net cash costs (net of gold and silver credits) for Indonesia mining are
expected to approximate $0.07 per pound of copper for the year 2017.
Indonesia mining's unit net cash costs for the year 2017 would change by
approximately $0.04 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's costs, unit costs vary from quarter to quarter depending on
copper and gold volumes.
Indonesia mining's projected sales volumes for the year 2017 are
dependent on a number of factors, including operational performance,
workforce productivity and the timing of shipments.
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 America and South America copper
mines, is processed at FCX's conversion facilities.
Operating and Development Activities. In response to market
conditions, the Henderson molybdenum mine continues to operate at
reduced rates. Production from the Molybdenum mines totaled 8 million
pounds of molybdenum in third-quarter 2017 and 5 million pounds in
third-quarter 2016. Refer to summary operating data on page 3 for FCX's
consolidated molybdenum sales, which includes sales of molybdenum
produced at the Molybdenum mines, and from FCX's North America and South
America copper mines.
Average unit net cash costs for the Molybdenum mines of $7.90 per pound
of molybdenum in third-quarter 2017 were lower than average unit net
cash costs of $10.28 in third-quarter 2016, primarily reflecting higher
volumes. Based on current sales volume and cost estimates, unit net cash
costs for the Molybdenum mines are expected to average approximately
$7.85 per pound of molybdenum for the year 2017.
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 XII, 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 America and South America. Exploration spending is
expected to approximate $75 million for the year 2017, compared to $44
million in 2016.
CASH FLOWS, CASH and DEBT
Operating Cash Flows. FCX generated operating cash flows of $1.2
billion (including $45 million in working capital sources and changes in
tax payments) in third-quarter 2017 and $3.0 billion (including $0.4
billion in working capital sources and changes in tax payments) for the
first nine months of 2017.
Based on current sales volume and cost estimates, and assuming average
prices of $3.00 per pound of copper, $1,300 per ounce of gold and $8.00
per pound of molybdenum for fourth-quarter 2017, FCX's consolidated
operating cash flows are estimated to approximate $4.3 billion for the
year 2017 (including $0.5 billion in working capital sources and tax
payments). The impact of price changes during fourth-quarter 2017 on
operating cash flows would approximate $80 million for each $0.10 per
pound change in the average price of copper, $20 million for each $50
per ounce change in the average price of gold and $15 million for each
$2 per pound change in the average price of molybdenum.
Capital Expenditures. Capital expenditures totaled $308 million
for third-quarter 2017 (including approximately $200 million for major
mining projects) and $1.0 billion for the first nine months of 2017
(including $0.6 billion for major mining projects). Capital expenditures
are expected to approximate $1.5 billion for the year 2017, including
$0.9 billion for major mining projects, primarily for underground
development activities at Grasberg.
As a result of regulatory uncertainty, PT-FI has slowed investments in
its underground development projects. If PT-FI is unable to reach a
definitive agreement with the Indonesian government on its long-term
mining rights, FCX intends to reduce or defer investments significantly
in underground development projects and pursue arbitration under its COW.
Cash. Following is a summary of the U.S. and international
components of consolidated cash and cash equivalents available to the
parent company, net of noncontrolling interests' share, taxes and other
costs at September 30, 2017 (in billions):
|
|
|
|
|
Cash at domestic companies
|
|
$
|
3.7
|
|
Cash at international operations
|
|
1.3
|
|
Total consolidated cash and cash equivalents
|
|
5.0
|
|
Noncontrolling interests' share
|
|
(0.4
|
)
|
Cash, net of noncontrolling interests' share
|
|
4.6
|
|
Withholding taxes and other
|
|
(0.1
|
)
|
Net cash available
|
|
$
|
4.5
|
|
|
|
|
|
|
Debt. Following is a summary of total debt and the related
weighted-average interest rates at September 30, 2017 (in billions,
except percentages):
|
|
|
|
|
|
|
|
|
Weighted-
|
|
|
|
|
Average
|
|
|
|
|
Interest Rate
|
Senior Notes
|
|
$
|
13.3
|
|
|
4.4
|
%
|
Cerro Verde credit facility
|
|
1.5
|
|
|
3.1
|
%
|
Total debt
|
|
$
|
14.8
|
|
|
4.2
|
%
|
|
|
|
|
|
|
|
In September 2017, FCX redeemed $543 million aggregate principal amount
of senior notes, resulting in annual cash interest savings of
approximately $35 million. FCX recognized an $11 million gain on early
extinguishment of debt in connection with the redemptions.
At September 30, 2017, FCX had no borrowings, $36 million in letters of
credit issued and $3.5 billion available under its revolving credit
facility.
FINANCIAL POLICY
In December 2015, FCX's common stock dividend was suspended. The
declaration of dividends is at the discretion of the Board and will
depend upon FCX’s financial results, cash requirements, future prospects
and other factors deemed relevant by the Board.
WEBCAST INFORMATION
A conference call with securities analysts to discuss FCX's
third-quarter 2017 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, November 24, 2017.
FCX is a leading international mining company with headquarters in
Phoenix, Arizona. FCX operates large, long-lived, geographically diverse
assets with significant proven and probable reserves of copper, gold and
molybdenum. 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; and
significant mining operations in the Americas, including the large-scale
Morenci minerals district in North America and the Cerro Verde operation
in South America. 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, operating cash flows,
capital expenditures, exploration efforts and results, development and
production activities and costs, liquidity, tax rates, the impact of
copper, gold and molybdenum 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.
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 and molybdenum; mine sequencing; production
rates; potential effects of cost and capital expenditure reductions and
production curtailments on financial results and cash flow; potential
inventory adjustments; potential impairment of long-lived mining assets;
the outcome of negotiations with the Indonesian government regarding
PT-FI's long-term operating rights; the potential effects of violence in
Indonesia generally and in the province of Papua; industry risks;
regulatory changes (including adoption of financial assurance
regulations as proposed by the U.S. Environmental Protection Agency
under CERCLA for the hard rock mining industry); political risks; labor
relations; weather- and climate-related risks; environmental risks;
litigation results (including the final disposition of the unfavorable
Indonesia Tax Court ruling relating to surface water taxes and the
outcome of Cerro Verde's royalty dispute with the Peruvian national tax
authority); 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, 2016, filed with the SEC as updated by FCX's subsequent
filings with the SEC. With respect to FCX's operations in Indonesia,
such factors include whether PT-FI will be able to resolve complex
regulatory matters in Indonesia and continue to export copper after
December 31, 2017.
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, 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 OPERATING DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
MINING OPERATIONS:
|
|
Production
|
|
Sales
|
|
COPPER (millions of
recoverable pounds)
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
Morenci (72%)a
|
|
186
|
|
|
202
|
|
|
169
|
|
|
208
|
|
|
Bagdad (100%)
|
|
45
|
|
|
47
|
|
|
41
|
|
|
46
|
|
|
Safford (100%)
|
|
37
|
|
|
64
|
|
|
35
|
|
|
62
|
|
|
Sierrita (100%)
|
|
40
|
|
|
40
|
|
|
37
|
|
|
40
|
|
|
Miami (100%)
|
|
4
|
|
|
6
|
|
|
4
|
|
|
5
|
|
|
Chino (100%)
|
|
48
|
|
|
78
|
|
|
47
|
|
|
78
|
|
|
Tyrone (100%)
|
|
13
|
|
|
17
|
|
|
12
|
|
|
18
|
|
|
Other (100%)
|
|
2
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
Total North America
|
|
375
|
|
|
455
|
|
|
347
|
|
|
458
|
|
|
|
|
|
|
|
|
|
|
|
|
South America
|
|
|
|
|
|
|
|
|
|
Cerro Verde (53.56%)
|
|
284
|
|
|
265
|
|
|
291
|
|
|
272
|
|
|
El Abra (51%)
|
|
44
|
|
|
52
|
|
|
36
|
|
|
51
|
|
|
Total South America
|
|
328
|
|
|
317
|
|
|
327
|
|
|
323
|
|
|
|
|
|
|
|
|
|
|
|
|
Indonesia
|
|
|
|
|
|
|
|
|
|
Grasberg (90.64%)b
|
|
293
|
|
|
321
|
|
|
258
|
|
|
332
|
|
|
Consolidated - continuing operations
|
|
996
|
|
|
1,093
|
|
|
932
|
|
c
|
1,113
|
|
c
|
Discontinued operations - Tenke Fungurume (Tenke) (56%)d
|
|
—
|
|
|
124
|
|
|
—
|
|
|
118
|
|
|
Total
|
|
996
|
|
|
1,217
|
|
|
932
|
|
|
1,231
|
|
|
Less noncontrolling interests
|
|
181
|
|
|
234
|
|
|
177
|
|
|
235
|
|
|
Net
|
|
815
|
|
|
983
|
|
|
755
|
|
|
996
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound (continuing operations)
|
|
|
|
|
|
$
|
2.94
|
|
|
$
|
2.19
|
|
|
|
|
|
|
|
|
|
|
|
|
GOLD (thousands of recoverable
ounces)
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
North America (100%)
|
|
6
|
|
|
7
|
|
|
3
|
|
|
10
|
|
|
Indonesia (90.64%)b
|
|
412
|
|
|
301
|
|
|
352
|
|
|
307
|
|
|
Consolidated
|
|
418
|
|
|
308
|
|
|
355
|
|
|
317
|
|
|
Less noncontrolling interests
|
|
39
|
|
|
28
|
|
|
32
|
|
|
29
|
|
|
Net
|
|
379
|
|
|
280
|
|
|
323
|
|
|
288
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per ounce
|
|
|
|
|
|
$
|
1,290
|
|
|
$
|
1,327
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLYBDENUM (millions of
recoverable pounds)
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
Henderson (100%)
|
|
3
|
|
|
2
|
|
|
N/A
|
|
N/A
|
|
Climax (100%)
|
|
5
|
|
|
3
|
|
|
N/A
|
|
N/A
|
|
North America copper mines (100%)a
|
|
8
|
|
|
9
|
|
|
N/A
|
|
N/A
|
|
Cerro Verde (53.56%)
|
|
8
|
|
|
5
|
|
|
N/A
|
|
N/A
|
|
Consolidated
|
|
24
|
|
|
19
|
|
|
22
|
|
|
16
|
|
|
Less noncontrolling interests
|
|
4
|
|
|
2
|
|
|
3
|
|
|
1
|
|
|
Net
|
|
20
|
|
|
17
|
|
|
19
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
$
|
9.22
|
|
|
$
|
9.14
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. OIL AND GAS OPERATIONS:
|
|
Sales Volumes
|
|
Sales per Day
|
|
Oil (thousand barrels, or MBbls)
|
|
441
|
|
|
9,146
|
|
|
5
|
|
|
99
|
|
|
Natural gas (million cubic feet or MMcf)
|
|
3,069
|
|
|
13,799
|
|
|
33
|
|
|
150
|
|
|
Natural gas liquids (NGLs) (MBbls)
|
|
35
|
|
|
593
|
|
|
—
|
|
|
7
|
|
|
Thousand barrels of oil equivalents (MBOE)
|
|
987
|
|
|
12,038
|
|
|
11
|
|
|
131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Amounts are net of Morenci's undivided
joint venture partners' interest.
|
|
|
|
|
|
|
|
|
|
|
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 75 million pounds in third-quarter 2017 and 61
million pounds in third-quarter 2016.
|
|
|
|
|
|
|
|
|
|
|
d. On November 16, 2016, FCX completed the
sale of its interest in the Tenke mine.
|
|
|
FREEPORT-McMoRan INC.
|
SELECTED OPERATING DATA (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
MINING OPERATIONS:
|
|
Production
|
|
Sales
|
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
Morenci (72%)a
|
|
554
|
|
|
658
|
|
|
537
|
|
|
667
|
|
|
Bagdad (100%)
|
|
128
|
|
|
139
|
|
|
122
|
|
|
141
|
|
|
Safford (100%)
|
|
116
|
|
|
173
|
|
|
120
|
|
|
173
|
|
|
Sierrita (100%)
|
|
121
|
|
|
122
|
|
|
117
|
|
|
123
|
|
|
Miami (100%)
|
|
14
|
|
|
20
|
|
|
14
|
|
|
21
|
|
|
Chino (100%)
|
|
168
|
|
|
239
|
|
|
170
|
|
|
239
|
|
|
Tyrone (100%)
|
|
47
|
|
|
56
|
|
|
47
|
|
|
57
|
|
|
Other (100%)
|
|
3
|
|
|
4
|
|
|
3
|
|
|
4
|
|
|
Total North America
|
|
1,151
|
|
|
1,411
|
|
|
1,130
|
|
|
1,425
|
|
|
|
|
|
|
|
|
|
|
|
|
South America
|
|
|
|
|
|
|
|
|
|
Cerro Verde (53.56%)
|
|
806
|
|
|
815
|
|
|
803
|
|
|
798
|
|
|
El Abra (51%)
|
|
126
|
|
|
171
|
|
|
120
|
|
|
175
|
|
|
Total South America
|
|
932
|
|
|
986
|
|
|
923
|
|
|
973
|
|
|
|
|
|
|
|
|
|
|
|
|
Indonesia
|
|
|
|
|
|
|
|
|
|
Grasberg (90.64%)b
|
|
647
|
|
|
694
|
|
|
630
|
|
|
702
|
|
|
Consolidated - continuing operations
|
|
2,730
|
|
|
3,091
|
|
|
2,683
|
|
c
|
3,100
|
|
c
|
Discontinued operations - Tenke (56%)d
|
|
—
|
|
|
356
|
|
|
—
|
|
|
365
|
|
|
Total
|
|
2,730
|
|
|
3,447
|
|
|
2,683
|
|
|
3,465
|
|
|
Less noncontrolling interests
|
|
497
|
|
|
684
|
|
|
491
|
|
|
683
|
|
|
Net
|
|
2,233
|
|
|
2,763
|
|
|
2,192
|
|
|
2,782
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound (continuing operations)
|
|
|
|
|
|
$
|
2.79
|
|
|
$
|
2.17
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold (thousands of recoverable ounces)
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
North America (100%)
|
|
18
|
|
|
21
|
|
|
13
|
|
|
21
|
|
|
Indonesia (90.64%)b
|
|
992
|
|
|
637
|
|
|
956
|
|
|
653
|
|
|
Consolidated
|
|
1,010
|
|
|
658
|
|
|
969
|
|
|
674
|
|
|
Less noncontrolling interests
|
|
93
|
|
|
59
|
|
|
89
|
|
|
61
|
|
|
Net
|
|
917
|
|
|
599
|
|
|
880
|
|
|
613
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per ounce
|
|
|
|
|
|
$
|
1,261
|
|
|
$
|
1,292
|
|
|
|
|
|
|
|
|
|
|
|
|
Molybdenum (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
Henderson (100%)
|
|
9
|
|
|
7
|
|
|
N/A
|
|
N/A
|
|
Climax (100%)
|
|
15
|
|
|
12
|
|
|
N/A
|
|
N/A
|
|
North America (100%)a
|
|
25
|
|
|
25
|
|
|
N/A
|
|
N/A
|
|
Cerro Verde (53.56%)
|
|
21
|
|
|
14
|
|
|
N/A
|
|
N/A
|
|
Consolidated
|
|
70
|
|
|
58
|
|
|
71
|
|
|
52
|
|
|
Less noncontrolling interests
|
|
10
|
|
|
6
|
|
|
9
|
|
|
4
|
|
|
Net
|
|
60
|
|
|
52
|
|
|
62
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
$
|
9.18
|
|
|
$
|
8.36
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. OIL AND GAS OPERATIONS:
|
|
Sales Volumes
|
|
Sales per Day
|
|
Oil (MBbls)
|
|
1,390
|
|
|
26,098
|
|
|
5
|
|
|
95
|
|
|
Natural gas (MMcf)
|
|
13,349
|
|
|
52,233
|
|
|
49
|
|
|
191
|
|
|
NGLs (MBbls)
|
|
186
|
|
|
1,763
|
|
|
1
|
|
|
6
|
|
|
MBOE
|
|
3,801
|
|
|
36,566
|
|
|
14
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Amounts are net of Morenci's undivided
joint venture partners' interest; effective May 31, 2016, FCX's
undivided interest in Morenci was prospectively reduced from 85
percent to 72 percent. The first nine months of 2016 includes
approximately 60 million pounds of copper from the 13 percent
undivided interest in Morenci that FCX sold in May 2016.
|
|
|
|
|
|
|
|
|
|
|
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 195 million pounds for the first nine months
of 2017 and 131 million pounds for the first nine months of 2016.
|
|
|
|
|
|
|
|
|
|
|
d. On November 16, 2016, FCX completed the
sale of its interest in the Tenke mine.
|
|
|
FREEPORT-McMoRan INC.
|
SELECTED OPERATING DATA (continued)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
100% North America Copper Mines
|
|
|
|
|
|
|
|
|
Solution Extraction/Electrowinning
(SX/EW) Operations
|
|
|
|
|
|
|
|
|
Leach ore placed in stockpiles (metric tons per day)
|
|
655,600
|
|
|
681,400
|
|
|
681,200
|
|
|
764,900
|
Average copper ore grade (percent)
|
|
0.27
|
|
|
0.31
|
|
|
0.28
|
|
|
0.32
|
Copper production (millions of recoverable pounds)
|
|
280
|
|
|
316
|
|
|
839
|
|
|
921
|
|
|
|
|
|
|
|
|
|
Mill Operations
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
297,200
|
|
|
300,500
|
|
|
300,000
|
|
|
299,900
|
Average ore grades (percent):
|
|
|
|
|
|
|
|
|
Copper
|
|
0.38
|
|
|
0.47
|
|
|
0.40
|
|
|
0.48
|
Molybdenum
|
|
0.03
|
|
|
0.03
|
|
|
0.03
|
|
|
0.03
|
Copper recovery rate (percent)
|
|
86.6
|
|
|
87.8
|
|
|
86.6
|
|
|
86.3
|
Production (millions of recoverable pounds):
|
|
|
|
|
|
|
|
|
Copper
|
|
167
|
|
|
216
|
|
|
527
|
|
|
661
|
Molybdenum
|
|
9
|
|
|
10
|
|
|
27
|
|
|
27
|
|
|
|
|
|
|
|
|
|
100% South America Mining
|
|
|
|
|
|
|
|
|
SX/EW Operations
|
|
|
|
|
|
|
|
|
Leach ore placed in stockpiles (metric tons per day)
|
|
180,400
|
|
|
163,000
|
|
|
153,100
|
|
|
158,100
|
Average copper ore grade (percent)
|
|
0.36
|
|
|
0.41
|
|
|
0.37
|
|
|
0.41
|
Copper production (millions of recoverable pounds)
|
|
65
|
|
|
78
|
|
|
190
|
|
|
250
|
|
|
|
|
|
|
|
|
|
Mill Operations
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
379,200
|
|
|
355,300
|
|
|
355,400
|
|
|
348,900
|
Average ore grades (percent):
|
|
|
|
|
|
|
|
|
Copper
|
|
0.44
|
|
|
0.41
|
|
|
0.44
|
|
|
0.42
|
Molybdenum
|
|
0.02
|
|
|
0.02
|
|
|
0.02
|
|
|
0.02
|
Copper recovery rate (percent)
|
|
80.9
|
|
|
84.4
|
|
|
82.7
|
|
|
86.1
|
Production (millions of recoverable pounds):
|
|
|
|
|
|
|
|
|
Copper
|
|
263
|
|
|
239
|
|
|
742
|
|
|
736
|
Molybdenum
|
|
8
|
|
|
5
|
|
|
21
|
|
|
14
|
|
|
|
|
|
|
|
|
|
100% Indonesia Mining
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day):a
|
|
|
|
|
|
|
|
|
Grasberg open pit
|
|
130,500
|
|
|
135,600
|
|
|
91,200
|
|
|
117,200
|
Deep Ore Zone underground mine
|
|
34,500
|
|
|
35,100
|
|
|
29,400
|
|
|
38,700
|
Deep Mill Level Zone (DMLZ) underground mineb
|
|
2,400
|
|
|
6,000
|
|
|
3,100
|
|
|
5,000
|
Grasberg Block Cave underground mineb
|
|
4,200
|
|
|
2,800
|
|
|
3,600
|
|
|
2,600
|
Big Gossan underground mineb
|
|
—
|
|
|
1,000
|
|
|
500
|
|
|
700
|
Total
|
|
171,600
|
|
|
180,500
|
|
|
127,800
|
|
|
164,200
|
Average ore grades:
|
|
|
|
|
|
|
|
|
Copper (percent)
|
|
0.91
|
|
|
1.02
|
|
|
1.00
|
|
|
0.86
|
Gold (grams per metric ton)
|
|
0.98
|
|
|
0.69
|
|
|
1.08
|
|
|
0.58
|
Recovery rates (percent):
|
|
|
|
|
|
|
|
|
Copper
|
|
91.1
|
|
|
91.4
|
|
|
91.6
|
|
|
90.5
|
Gold
|
|
84.7
|
|
|
82.7
|
|
|
84.9
|
|
|
81.4
|
Production (recoverable):
|
|
|
|
|
|
|
|
|
Copper (millions of pounds)
|
|
277
|
|
|
327
|
|
|
670
|
|
|
736
|
Gold (thousands of ounces)
|
|
405
|
|
|
300
|
|
|
993
|
|
|
664
|
|
|
|
|
|
|
|
|
|
100% Molybdenum Mines
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
24,200
|
|
|
16,100
|
|
|
22,600
|
|
|
17,700
|
Average molybdenum ore grade (percent)
|
|
0.18
|
|
|
0.19
|
|
|
0.20
|
|
|
0.21
|
Molybdenum production (millions of recoverable pounds)
|
|
8
|
|
|
5
|
|
|
24
|
|
|
19
|
|
|
|
|
|
|
|
|
|
a. Amounts represent the approximate average
daily throughput processed at PT Freeport Indonesia's (PT-FI) 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
early 2019, and production from the Big Gossan underground mine is
on care-and-maintenance.
|
|
|
FREEPORT-McMoRan INC.
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
(In Millions, Except Per Share Amounts)
|
|
Revenuesa
|
|
$
|
4,310
|
|
|
$
|
3,877
|
|
|
$
|
11,362
|
|
|
$
|
10,453
|
|
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
Production and delivery
|
|
2,802
|
|
b,c
|
2,529
|
|
c
|
7,497
|
|
b,c
|
7,984
|
|
c
|
Depreciation, depletion and amortization
|
|
418
|
|
|
643
|
|
|
1,257
|
|
|
1,937
|
|
|
Impairment of oil and gas properties
|
|
—
|
|
|
239
|
|
|
—
|
|
|
4,317
|
|
|
Total cost of sales
|
|
3,220
|
|
|
3,411
|
|
|
8,754
|
|
|
14,238
|
|
|
Selling, general and administrative expenses
|
|
106
|
|
|
110
|
|
|
366
|
|
c
|
408
|
|
c
|
Mining exploration and research expenses
|
|
27
|
|
|
13
|
|
|
61
|
|
|
46
|
|
|
Environmental obligations and shutdown costs (credits)
|
|
73
|
|
d
|
(3
|
)
|
|
81
|
|
d
|
18
|
|
|
Net gain on sales of assets
|
|
(33
|
)
|
|
(13
|
)
|
|
(66
|
)
|
|
(762
|
)
|
|
Total costs and expenses
|
|
3,393
|
|
|
3,518
|
|
|
9,196
|
|
|
13,948
|
|
|
Operating income (loss)
|
|
917
|
|
|
359
|
|
|
2,166
|
|
|
(3,495
|
)
|
|
Interest expense, nete
|
|
(304
|
)
|
b
|
(187
|
)
|
|
(633
|
)
|
b
|
(574
|
)
|
|
Net gain on exchanges and early extinguishment of debt
|
|
11
|
|
|
15
|
|
|
8
|
|
|
51
|
|
|
Other income (expense), net
|
|
2
|
|
|
(10
|
)
|
|
36
|
|
|
54
|
|
|
Income (loss) from continuing operations before income taxes and
equity in affiliated companies' net earnings
|
|
626
|
|
|
177
|
|
|
1,577
|
|
|
(3,964
|
)
|
|
(Provision for) benefit from income taxesf
|
|
(387
|
)
|
b
|
114
|
|
|
(747
|
)
|
b
|
(79
|
)
|
|
Equity in affiliated companies' net earnings
|
|
3
|
|
|
1
|
|
|
6
|
|
|
9
|
|
|
Net income (loss) from continuing operations
|
|
242
|
|
|
292
|
|
|
836
|
|
|
(4,034
|
)
|
|
Net income (loss) from discontinued operationsg
|
|
3
|
|
|
(6
|
)
|
|
50
|
|
|
(191
|
)
|
|
Net income (loss)
|
|
245
|
|
|
286
|
|
|
886
|
|
|
(4,225
|
)
|
|
Net loss (income) attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
35
|
|
b
|
(37
|
)
|
|
(106
|
)
|
b
|
(146
|
)
|
|
Discontinued operations
|
|
—
|
|
|
(22
|
)
|
|
(4
|
)
|
|
(44
|
)
|
|
Preferred dividends attributable to redeemable noncontrolling
interest
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(31
|
)
|
|
Net income (loss) attributable to FCX common stockh
|
|
$
|
280
|
|
|
$
|
217
|
|
|
$
|
776
|
|
|
$
|
(4,446
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) per share attributable to common
stock:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.19
|
|
|
$
|
0.18
|
|
|
$
|
0.50
|
|
|
$
|
(3.27
|
)
|
|
Discontinued operations
|
|
—
|
|
|
(0.02
|
)
|
|
0.03
|
|
|
(0.18
|
)
|
|
|
|
$
|
0.19
|
|
|
$
|
0.16
|
|
|
$
|
0.53
|
|
|
$
|
(3.45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
1,448
|
|
|
1,346
|
|
|
1,447
|
|
|
1,289
|
|
|
Diluted
|
|
1,454
|
|
|
1,351
|
|
|
1,453
|
|
|
1,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Includes adjustments to provisionally
priced concentrate and cathode copper sales recognized in prior
periods, which are summarized in the supplemental schedule,
"Derivative Instruments," on page IX.
|
|
b. Includes net charges of $188 million
associated with disputed Cerro Verde royalties for prior years,
consisting of $216 million to production and delivery costs, $141
million to interest expense and $2 million to provision for income
taxes, net of $171 million to noncontrolling interests.
|
|
c. Includes other net charges at mining and
oil and gas operations, which are summarized in the supplemental
schedule, “Adjusted Net Income (Loss),” on page VII.
|
|
d. Includes a charge of $59 million
associated with revised cost estimates for the Borough of Carteret
environmental project.
|
|
e. Consolidated interest costs (before
capitalization and excluding interest expense associated with
disputed Cerro Verde royalties) totaled $196 million in
third-quarter 2017, $211 million in third-quarter 2016, $583
million for the first nine months of 2017 and $647 million for the
first nine months of 2016.
|
|
f. Refer to the supplemental schedule,
"Income Taxes," on page VIII for a summary of FCX's provision for
income taxes.
|
|
g. Refer to the supplemental schedule,
“Adjusted Net Income (Loss),” on page VII for a summary of gains
(losses) from discontinued operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
h. FCX defers recognizing profits on
intercompany sales until final sales to third parties occur. Refer
to the supplemental schedule, "Deferred Profits," on page IX for a
summary of net impacts from changes in these deferrals.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
2017
|
|
2016
|
|
|
(In Millions)
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
4,957
|
|
|
$
|
4,245
|
|
Trade accounts receivable
|
|
1,024
|
|
|
1,126
|
|
Income and other tax receivables
|
|
522
|
|
|
879
|
|
Inventories:
|
|
|
|
|
Mill and leach stockpiles
|
|
1,393
|
|
|
1,338
|
|
Materials and supplies, net
|
|
1,276
|
|
|
1,306
|
|
Product
|
|
1,188
|
|
|
998
|
|
Other current assets
|
|
241
|
|
|
199
|
|
Held for sale
|
|
549
|
|
|
344
|
|
Total current assets
|
|
11,150
|
|
|
10,435
|
|
Property, plant, equipment and mine development costs, net
|
|
22,914
|
|
|
23,219
|
|
Oil and gas properties, subject to amortization, less accumulated
amortization and impairments
|
|
20
|
|
|
74
|
|
Long-term mill and leach stockpiles
|
|
1,453
|
|
|
1,633
|
|
Other assets
|
|
1,790
|
|
|
1,956
|
|
Total assets
|
|
$
|
37,327
|
|
|
$
|
37,317
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
2,098
|
|
|
$
|
2,393
|
|
Current portion of debt
|
|
2,215
|
|
|
1,232
|
|
Accrued income taxes
|
|
464
|
|
|
66
|
|
Current portion of environmental and asset retirement obligations
|
|
419
|
|
|
369
|
|
Held for sale
|
|
321
|
|
|
205
|
|
Total current liabilities
|
|
5,517
|
|
|
4,265
|
|
Long-term debt, less current portion
|
|
12,567
|
|
|
14,795
|
|
Deferred income taxes
|
|
3,771
|
|
|
3,768
|
|
Environmental and asset retirement obligations, less current portion
|
|
3,498
|
|
|
3,487
|
|
Other liabilities
|
|
1,744
|
|
|
1,745
|
|
Total liabilities
|
|
27,097
|
|
|
28,060
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Common stock
|
|
158
|
|
|
157
|
|
Capital in excess of par value
|
|
26,743
|
|
|
26,690
|
|
Accumulated deficit
|
|
(15,763
|
)
|
|
(16,540
|
)
|
Accumulated other comprehensive loss
|
|
(443
|
)
|
|
(548
|
)
|
Common stock held in treasury
|
|
(3,722
|
)
|
|
(3,708
|
)
|
Total stockholders' equity
|
|
6,973
|
|
|
6,051
|
|
Noncontrolling interests
|
|
3,257
|
|
|
3,206
|
|
Total equity
|
|
10,230
|
|
|
9,257
|
|
Total liabilities and equity
|
|
$
|
37,327
|
|
|
$
|
37,317
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
September 30,
|
|
|
2017
|
|
2016
|
|
|
(In Millions)
|
Cash flow from operating activities:
|
|
|
|
|
Net income (loss)
|
|
$
|
886
|
|
|
$
|
(4,225
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
Depreciation, depletion and amortization
|
|
1,257
|
|
|
2,017
|
|
Net charges for Cerro Verde royalty dispute
|
|
359
|
|
|
—
|
|
Payments for Cerro Verde royalty dispute
|
|
(32
|
)
|
|
(20
|
)
|
Impairment of oil and gas properties
|
|
—
|
|
|
4,317
|
|
Oil and gas non-cash drillship settlements/idle rig costs and other
adjustments
|
|
(33
|
)
|
|
705
|
|
Net gain on sales of assets
|
|
(66
|
)
|
|
(762
|
)
|
Net charges for environmental and asset retirement obligations,
including accretion
|
|
196
|
|
|
149
|
|
Payments for environmental and asset retirement obligations
|
|
(85
|
)
|
|
(190
|
)
|
Net charges for defined pension and postretirement plans
|
|
95
|
|
|
78
|
|
Pension plan contributions
|
|
(152
|
)
|
|
(44
|
)
|
Net gain on exchanges and early extinguishment of debt
|
|
(8
|
)
|
|
(51
|
)
|
Deferred income taxes
|
|
77
|
|
|
(22
|
)
|
(Gain) loss on disposal of discontinued operations
|
|
(41
|
)
|
|
182
|
|
Decrease (increase) in long-term mill and leach stockpiles
|
|
181
|
|
|
(84
|
)
|
Oil and gas contract settlement payments
|
|
(70
|
)
|
|
—
|
|
Other, net
|
|
60
|
|
|
61
|
|
Changes in working capital and tax payments, excluding amounts from
dispositions:
|
|
|
|
|
Accounts receivable
|
|
420
|
|
|
257
|
|
Inventories
|
|
(314
|
)
|
|
251
|
|
Other current assets
|
|
(17
|
)
|
|
(120
|
)
|
Accounts payable and accrued liabilities
|
|
(100
|
)
|
|
(80
|
)
|
Accrued income taxes and changes in other tax payments
|
|
399
|
|
|
175
|
|
Net cash provided by operating activities
|
|
3,012
|
|
|
2,594
|
|
|
|
|
|
|
Cash flow from investing activities:
|
|
|
|
|
Capital expenditures:
|
|
|
|
|
North America copper mines
|
|
(106
|
)
|
|
(87
|
)
|
South America
|
|
(65
|
)
|
|
(332
|
)
|
Indonesia
|
|
(663
|
)
|
|
(706
|
)
|
Molybdenum mines
|
|
(4
|
)
|
|
(2
|
)
|
Other, including oil and gas operations
|
|
(176
|
)
|
|
(1,182
|
)
|
Net proceeds from the sale of additional interest in Morenci
|
|
—
|
|
|
996
|
|
Net proceeds from sales of other assets
|
|
68
|
|
|
410
|
|
Other, net
|
|
(22
|
)
|
|
9
|
|
Net cash used in investing activities
|
|
(968
|
)
|
|
(894
|
)
|
|
|
|
|
|
Cash flow from financing activities:
|
|
|
|
|
Proceeds from debt
|
|
795
|
|
|
3,463
|
|
Repayments of debt
|
|
(1,991
|
)
|
|
(4,539
|
)
|
Net proceeds from sale of common stock
|
|
—
|
|
|
442
|
|
Cash dividends paid:
|
|
|
|
|
Common stock
|
|
(2
|
)
|
|
(5
|
)
|
Noncontrolling interests
|
|
(67
|
)
|
|
(87
|
)
|
Stock-based awards net payments
|
|
(10
|
)
|
|
(5
|
)
|
Debt financing costs and other, net
|
|
(12
|
)
|
|
(17
|
)
|
Net cash used in financing activities
|
|
(1,287
|
)
|
|
(748
|
)
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
757
|
|
|
952
|
|
Increase in cash and cash equivalents in assets held for sale
|
|
(45
|
)
|
|
(43
|
)
|
Cash and cash equivalents at beginning of year
|
|
4,245
|
|
|
177
|
|
Cash and cash equivalents at end of period
|
|
$
|
4,957
|
|
|
$
|
1,086
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
ADJUSTED NET INCOME (LOSS)
Adjusted net income (loss) is intended to provide investors and others
with information about FCX's recurring operating performance. This
information differs from net income (loss) attributable to common stock
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. FCX's adjusted net income (loss) follows, which may not be
comparable to similarly titled measures reported by other companies (in
millions, except per share amounts).
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
2017
|
|
2016
|
|
|
|
Pre-tax
|
|
After-taxa
|
|
Per Share
|
|
Pre-tax
|
|
After-taxa
|
|
Per Share
|
|
Net income attributable to common stock
|
|
N/A
|
|
$
|
280
|
|
|
$
|
0.19
|
|
|
N/A
|
|
$
|
217
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerro Verde royalty disputeb
|
|
$
|
(357
|
)
|
|
$
|
(188
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
PT-FI net charges for workforce reductions
|
|
(9
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Other net mining credits (charges)
|
|
4
|
|
|
4
|
|
|
—
|
|
|
(40
|
)
|
|
(40
|
)
|
|
(0.02
|
)
|
|
|
Oil and gas idle rig costs/drillship settlements and other net
credits (charges)
|
|
4
|
|
|
4
|
|
|
—
|
|
|
(49
|
)
|
|
(49
|
)
|
|
(0.03
|
)
|
|
|
Impairment of oil and gas properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(239
|
)
|
|
(239
|
)
|
|
(0.18
|
)
|
|
|
Net adjustments to environmental obligations and related litigation
reserves
|
|
(64
|
)
|
|
(64
|
)
|
|
(0.04
|
)
|
|
12
|
|
|
12
|
|
|
0.01
|
|
|
|
Net gain on sales of assets
|
|
33
|
|
|
33
|
|
|
0.02
|
|
|
13
|
|
|
13
|
|
|
0.01
|
|
|
|
Net gain on exchanges and early extinguishment of debt
|
|
11
|
|
|
11
|
|
|
0.01
|
|
|
15
|
|
|
15
|
|
|
0.01
|
|
|
|
Net tax (charges) creditsc
|
|
N/A
|
|
(10
|
)
|
|
(0.01
|
)
|
|
N/A
|
|
332
|
|
|
0.24
|
|
|
|
Gain (loss) on discontinued operations
|
|
3
|
|
d
|
3
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
|
|
|
$
|
(375
|
)
|
|
$
|
(212
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(293
|
)
|
|
$
|
39
|
|
|
$
|
0.03
|
|
|
g
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income attributable to common stock
|
|
N/A
|
|
$
|
492
|
|
|
$
|
0.34
|
|
|
N/A
|
|
$
|
178
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2017
|
|
2016
|
|
|
|
Pre-tax
|
|
After-taxa
|
|
Per Share
|
|
Pre-tax
|
|
After-taxa
|
|
Per Share
|
|
Net income (loss) attributable to common stock
|
|
N/A
|
|
$
|
776
|
|
|
$
|
0.53
|
|
|
N/A
|
|
$
|
(4,446
|
)
|
|
$
|
(3.45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerro Verde royalty disputeb
|
|
$
|
(357
|
)
|
|
$
|
(188
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
PT-FI net charges for workforce reductions
|
|
(117
|
)
|
e
|
(62
|
)
|
|
(0.04
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other net mining charges
|
|
(24
|
)
|
|
(24
|
)
|
|
(0.02
|
)
|
|
(44
|
)
|
|
(44
|
)
|
|
(0.03
|
)
|
|
Oil and gas drillship settlements/idle rig credits (costs)
|
|
24
|
|
|
24
|
|
|
0.02
|
|
|
(823
|
)
|
|
(823
|
)
|
|
(0.64
|
)
|
|
Oil and gas inventory adjustments, asset impairment and other net
charges
|
|
(16
|
)
|
f
|
(16
|
)
|
|
(0.01
|
)
|
|
(157
|
)
|
f
|
(157
|
)
|
|
(0.12
|
)
|
|
Impairment of oil and gas properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,317
|
)
|
|
(4,317
|
)
|
|
(3.35
|
)
|
|
Net adjustments to environmental obligations and related litigation
reserves
|
|
(53
|
)
|
|
(53
|
)
|
|
(0.04
|
)
|
|
11
|
|
|
11
|
|
|
0.01
|
|
|
Net gain on sales of assets
|
|
66
|
|
|
66
|
|
|
0.05
|
|
|
762
|
|
|
757
|
|
|
0.59
|
|
|
Net gain on exchanges and early extinguishment of debt
|
|
8
|
|
|
8
|
|
|
0.01
|
|
|
51
|
|
|
51
|
|
|
0.04
|
|
|
Net tax creditsc
|
|
N/A
|
|
21
|
|
|
0.01
|
|
|
N/A
|
|
290
|
|
|
0.22
|
|
|
Gain (loss) on discontinued operations
|
|
54
|
|
d
|
46
|
|
|
0.03
|
|
|
(182
|
)
|
|
(182
|
)
|
|
(0.14
|
)
|
|
|
|
$
|
(415
|
)
|
|
$
|
(178
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(4,699
|
)
|
|
$
|
(4,414
|
)
|
|
$
|
(3.43
|
)
|
g
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) attributable to common stock
|
|
N/A
|
|
$
|
954
|
|
|
$
|
0.65
|
|
|
N/A
|
|
$
|
(32
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Reflects impact to FCX net income
attributable to common stock (i.e., net of any taxes and
noncontrolling interests).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b. Refer to “Consolidated Statements of
Operations,” on page IV for a summary of these amounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c. Refer to “Income Taxes,” on page VIII, for
further discussion of net tax credits.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d. Primarily reflects adjustments to the
estimated fair value of the potential $120 million in contingent
consideration related to the 2016 sale of FCX’s interest in TFHL,
which totaled $58 million at September 30, 2017, and will continue
to be adjusted through December 31, 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
e. Includes net charges in selling, general
and administrative expenses totaling $5 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
f. Includes net charges in selling, general
and administrative expenses totaling $17 million for the first
nine months of 2017 for contract termination costs and $38 million
for the first nine months of 2016 for restructuring.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
g. Per share amount does not foot down
because of rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171025005576/en/
Source: Freeport-McMoRan Inc.