PHOENIX--(BUSINESS WIRE)--
Freeport-McMoRan Inc. (NYSE: FCX):
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Net income attributable to common stock totaled $217 million,
$0.16 per share, for third-quarter 2016. After adjusting for net gains
totaling $39 million, $0.03 per share, third-quarter 2016 adjusted net
income attributable to common stock totaled $178 million, $0.13 per
share.
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Consolidated sales (including volumes from Tenke Fungurume
(Tenke), which is being reported as discontinued operations) totaled
1.2 billion pounds of copper, 317 thousand ounces of gold, 16 million
pounds of molybdenum and 12.0 million barrels of oil equivalents
(MMBOE) for third-quarter 2016, compared with 1.0 billion pounds of
copper, 294 thousand ounces of gold, 23 million pounds of molybdenum
and 13.8 MMBOE for third-quarter 2015.
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Consolidated sales for the year 2016 are expected to
approximate 4.8 billion pounds of copper (including 485 million pounds
from Tenke), 1.26 million ounces of gold and 73 million pounds of
molybdenum, including 1.3 billion pounds of copper, 590 thousand
ounces of gold and 21 million pounds of molybdenum for fourth-quarter
2016.
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Average realized prices were $2.18 per pound for copper, $1,327
per ounce for gold and $40.63 per barrel for oil for third-quarter
2016.
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Average unit net cash costs were $1.14 per pound of copper for
mining operations and $15.00 per barrel of oil equivalents (BOE) for
oil and gas operations for third-quarter 2016. Unit net cash costs for
the year 2016 are expected to average $1.20 per pound of copper for
mining operations.
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Operating cash flows totaled $980 million for third-quarter
2016. Based on current sales volume and cost estimates and assuming
average prices of $2.10 per pound for copper, $1,250 per ounce for
gold and $7 per pound for molybdenum for fourth-quarter 2016,
operating cash flows for the year 2016 are expected to approximate
$3.6 billion (including $0.3 billion in working capital sources and
changes in other tax payments).
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Capital expenditures totaled $494 million for third-quarter
2016, consisting of $333 million for mining operations (including $250
million for major projects) and $160 million for oil and gas
operations. Capital expenditures are expected to approximate $2.8
billion for the year 2016, consisting of $1.6 billion for mining
operations (including $1.2 billion for major projects) and $1.2
billion for oil and gas operations.
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At September 30, 2016, consolidated debt totaled $19.0
billion and consolidated cash totaled $1.1 billion. At
September 30, 2016, FCX had no borrowings and $3.5 billion available
under its $3.5 billion revolving credit facility.
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FCX expects to receive $5.2 billion in gross proceeds during
fourth-quarter 2016 in connection with previously announced asset
sale transactions.
-
In July 2016, FCX commenced a registered at-the-market offering of
up to $1.5 billion of common stock. Through October 24, 2016, FCX
has sold 33.5 million shares of its common stock for gross proceeds of
$415 million ($12.39 per share average price).
Freeport-McMoRan Inc. (NYSE: FCX) reported net income attributable to
common stock of $217 million, $0.16 per share, for third-quarter 2016
and net losses attributable to common stock of $4.4 billion, $3.45 per
share, for the first nine months of 2016, $3.8 billion, $3.58 per share,
for third-quarter 2015 and $8.2 billion, $7.77 per share, for the first
nine months of 2015. FCX’s net income attributable to common stock for
third-quarter 2016 includes net gains of $39 million, $0.03 per share,
primarily reflecting net tax credits, partly offset by the impairment of
oil and gas properties. Third-quarter 2015 net loss attributable to
common stock included net charges of $3.7 billion, $3.43 per share,
primarily for the impairment of oil and gas properties. For further
discussion of these amounts and net charges impacting the nine month
periods, refer to the supplemental schedule "Adjusted Net Income
(Loss)," on page IX, which is available on FCX's website, "fcx.com."
Richard C. Adkerson, President and Chief Executive Officer, said,
"Our actions during 2016 position us to achieve our objectives of
restoring our balance sheet strength and focusing our strategy on our
industry leading portfolio of high quality, long-lived copper
assets. Our announced asset sale transactions totaling $6.6 billion
combined with significant free cash flow generation in the coming
quarters will enable us to achieve our debt reduction targets. Our
global team continues to execute our cost and capital management
initiatives during a period of weak copper prices in a manner that
protects the long-term values of our large resources. We remain focused
on completing our announced transactions, executing our operating plans
and building long-term values from our portfolio of low-cost, long-lived
reserves and resources for the benefit of our shareholders."
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SUMMARY FINANCIAL DATA
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2016
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2015
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2016
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2015
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(in millions, except per share amounts)
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Revenuesa,b
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$
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3,877
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$
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3,382
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$
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10,453
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$
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11,091
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Operating income (loss)a
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$
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359
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$
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(3,964
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)
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$
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(3,495
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)
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$
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(9,415
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)
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Net income (loss) from continuing operations
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$
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292
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$
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(3,815
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)
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$
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(4,034
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)
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$
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(8,090
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)
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Net (loss) income from discontinued operationsc
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$
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(6
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)
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$
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25
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$
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(191
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)
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$
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95
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Net income (loss) attributable to common stockd,e
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$
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217
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$
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(3,830
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)
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$
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(4,446
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)
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$
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(8,155
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)
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Diluted net income (loss) per share of common stock:
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Continuing operations
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$
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0.18
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$
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(3.59
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)
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$
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(3.27
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)
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$
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(7.80
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)
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Discontinued operations
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(0.02
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)
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0.01
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(0.18
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)
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0.03
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$
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0.16
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$
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(3.58
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)
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$
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(3.45
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)
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$
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(7.77
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)
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Diluted weighted-average common shares outstanding
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1,351
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1,071
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1,289
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1,050
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Operating cash flowsf
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$
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980
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$
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822
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$
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2,594
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$
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2,608
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Capital expenditures
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$
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494
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$
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1,527
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$
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2,309
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$
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5,055
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At September 30:
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Cash and cash equivalents
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$
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1,108
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$
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233
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$
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1,108
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$
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233
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Total debt, including current portion
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$
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18,982
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$
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20,698
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$
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18,982
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$
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20,698
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a. 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. Includes (unfavorable) favorable adjustments to
provisionally priced concentrate and cathode copper sales
recognized in prior periods totaling $(15) million ($(7) million
to net income attributable to common stock from continuing
operations or $(0.01) per share) in third-quarter 2016, $(117)
million ($(58) million to net loss attributable to common stock
from continuing operations or $(0.05) per share) in third-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 nine months of 2016 and $(100) million ($(48) million to
net loss attributable to common stock from continuing operations
or $(0.05) per share) for the first nine 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. Net income (loss) from discontinued operations
includes charges for (i) allocated interest expense totaling $12
million in third-quarter 2016, $6 million in third-quarter 2015,
$33 million for the first nine months of 2016 and $20 million for
the first nine months of 2015 associated with the portion of the
FCX 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 $(2) million in third-quarter 2016, $(11)
million in third-quarter 2015, $(25) million for the first nine
months of 2016 and $20 million for the first nine months of 2015.
In accordance with accounting guidelines, the first nine 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 Income (Loss),” on page IX,
which is available on FCX’s website, “fcx.com”).
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d. Includes net gains (charges) totaling $39
million ($0.03 per share) in third-quarter 2016, $(3.7) billion
($(3.43) per share) in third-quarter 2015, $(4.4) billion ($(3.43)
per share) for the first nine months of 2016 and $(8.1) billion
($(7.71) per share) for the first nine months of 2015, which are
described in the supplemental schedule, “Adjusted Net Income
(Loss),” on page IX, which is available on FCX’s website,
“fcx.com.”
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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 XI, which is
available on FCX's website, "fcx.com."
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f. Includes net working capital (uses) sources and
changes in other tax payments of $(3) million in third-quarter
2016, $507 million in third-quarter 2015, $463 million for the
first nine months of 2016 and $342 million for the first nine
months of 2015.
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DEBT REDUCTION INITIATIVES
FCX is taking actions to restore its balance sheet strength through a
combination of asset sale transactions, cash flow from operations and
capital market transactions. During 2016, FCX has announced $6.6 billion
in asset sale transactions and has received aggregate cash consideration
of $1.4 billion. The remaining $5.2 billion in gross proceeds is
expected to be received in fourth-quarter 2016 associated with the
pending Tenke and oil and gas transactions. In September 2016, FCX
agreed to sell its Deepwater Gulf of Mexico (GOM) properties for cash
consideration of $2.0 billion and up to $150 million of contingent
payments, and in October 2016, FCX agreed to sell its onshore California
oil and gas properties for cash consideration of $592 million and up to
$150 million of contingent consideration. Following provides a summary
of FCX’s completed and pending asset sales (in billions):
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Cash
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Completed Transactions:
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Consideration
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a
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Morenci (13 percent interest)
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$
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1.00
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Timok exploration project in Serbia
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0.13
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b
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Oil and gas transactions
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0.19
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Other land sales
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0.06
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1.38
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Pending Transactions:
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Tenke
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2.65
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b
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Deepwater GOM
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2.00
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b,c
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Onshore California
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0.59
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b
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5.24
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Total, excluding potential transactions and contingent consideration
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6.62
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Potential Freeport Cobalt/Kinsanfu transactionsd
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0.15
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Contingent considerationb
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0.53
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Total
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$
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7.30
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a. Reflects aggregate cash consideration, before
purchase price adjustments.
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b. Excludes contingent consideration of (i) up to
$107 million associated with the Timok transaction, which is
payable to FCX in stages based upon achievement of defined
development milestones, (ii) up to $120 million for the Tenke
transaction, 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, both for the 24-month period ending
December 31, 2019, (iii) up to $150 million for the Deepwater GOM
transaction payable to FCX as the buyer realizes future cash flows
in connection with FCX's third-party production handling agreement
for the Marlin platform, and (iv) up to $150 million for the
onshore California transaction, consisting of $50 million per year
for 2018, 2019 and 2020, if the price of Brent crude oil averages
$70 per barrel or higher in that calendar year.
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c. In connection with the Deepwater GOM
transaction, FCX Oil & Gas LLC (FM O&G) entered into an agreement
to amend the terms of the Plains Offshore Operations Inc.
preferred stock to provide FM O&G the right to call these
securities for $582 million. FM O&G expects to exercise this
option at the time the Deepwater GOM sale closes.
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d. 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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In July 2016, FCX commenced a registered at-the-market (ATM) offering of
up to $1.5 billion of common stock. Through October 24, 2016, FCX has
sold 33.5 million shares of its common stock for gross proceeds of $415
million ($12.39 per share average price).
FCX continues to aggressively manage production, exploration and
administrative costs and capital spending. With the successful
completion of the Cerro Verde expansion and anticipated access to higher
grade ore from the Grasberg mine in future quarters, FCX expects to
generate substantial cash flows for debt reduction.
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.
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SUMMARY OPERATING DATA
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Three Months Ended
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Nine Months Ended
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September 30,
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September 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)a
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Production
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1,217
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1,003
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3,447
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2,895
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Sales, excluding purchases
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1,231
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|
1,001
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3,465
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|
|
2,925
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Average realized price per pound
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$
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2.18
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$
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2.38
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$
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2.16
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$
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2.54
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Site production and delivery costs per poundb
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$
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1.39
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|
|
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$
|
1.74
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|
|
|
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$
|
1.44
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|
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$
|
1.84
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Unit net cash costs per poundb
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$
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1.14
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|
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$
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1.52
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|
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$
|
1.28
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$
|
1.56
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Gold (thousands of recoverable ounces)
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|
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|
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Production
|
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|
|
308
|
|
|
|
281
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|
|
|
|
658
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|
|
907
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Sales, excluding purchases
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|
|
317
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|
|
294
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|
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|
|
674
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|
|
909
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Average realized price per ounce
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$
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1,327
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$
|
1,117
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$
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1,292
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$
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1,149
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Molybdenum (millions of recoverable pounds)
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Production
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19
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23
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58
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72
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Sales, excluding purchases
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16
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23
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52
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|
69
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Average realized price per pound
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$
|
9.14
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$
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7.91
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$
|
8.36
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$
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9.21
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Oil Equivalents
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Sales volumes
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MMBOE
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12.0
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13.8
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36.6
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39.4
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Thousand BOE (MBOE) per day
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131
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|
|
|
150
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|
|
133
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|
144
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Cash operating margin per BOEc
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Realized revenues
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$
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34.99
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$
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43.00
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d
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$
|
30.50
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$
|
45.57
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d
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Cash production costs
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(15.00
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)
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(18.85
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)
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(15.28
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)
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(19.42
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)
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Cash operating margin
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$
|
19.99
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$
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24.15
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$
|
15.22
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$
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26.15
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a. Includes production and sales volumes from
Tenke, which is reported as discontinued operations. Copper sales
from Tenke totaled 118 million pounds in third-quarter 2016, 113
million pounds in third-quarter 2015, 365 million pounds for the
first nine months of 2016 and 350 million pounds for the first
nine months of 2015. Average realized copper prices (excluding
Tenke) were $2.19 per pound in third-quarter 2016, $2.39 per pound
in third-quarter 2015, $2.17 per pound for the first nine months
of 2016 and $2.54 per pound for the first nine months of 2015.
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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.
Excluding Tenke, mining unit net cash costs averaged $1.14 per
pound in third-quarter 2016, $1.57 per pound in third-quarter
2015, $1.28 per pound for the first nine months of 2016 and $1.61
per pound for the first nine 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.”
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d. Includes realized cash gains on crude oil
derivative contracts of $7.44 per BOE in third-quarter 2015 and
$7.72 per BOE for the first nine months of 2015.
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Consolidated Sales Volumes
Third-quarter 2016 consolidated copper sales (including Tenke) of
1.23 billion pounds were approximately six percent lower than the July
2016 estimate of 1.3 billion pounds principally reflecting lower mining
rates at the Grasberg mine operated by PT Freeport Indonesia (PT-FI),
which affected the timing of access to higher grade ore. Third-quarter
2016 consolidated copper sales were higher than third-quarter 2015 sales
of 1.0 billion pounds, primarily reflecting higher volumes from Cerro
Verde and PT-FI.
Third-quarter 2016 consolidated gold sales of 317 thousand ounces
were lower than the July 2016 estimate of 410 thousand ounces primarily
reflecting lower mining rates which reflected timing of access to higher
grade ore at PT-FI, but were higher than third-quarter 2015 sales of 294
thousand ounces.
Third-quarter 2016 consolidated molybdenum sales of 16 million
pounds were lower than the July 2016 estimate of 20 million pounds and
third-quarter 2015 sales of 23 million pounds, primarily reflecting weak
demand.
Third-quarter 2016 sales from oil and gas operations of 12.0 MMBOE,
including 9.1 million barrels (MMBbls) of crude oil, 13.8 billion
cubic feet (Bcf) of natural gas and 0.6 MMBbls of natural gas
liquids (NGLs), were higher than the July 2016 estimate of 11.4
MMBOE, primarily reflecting higher than anticipated oil sales volumes
from GOM, but were lower than third-quarter 2015 sales of 13.8 MMBOE,
primarily reflecting the July 2016 sale of Haynesville.
Sales volumes for the year 2016 are expected to approximate 4.8 billion
pounds of copper (including 485 million pounds for Tenke), 1.26 million
ounces of gold and 73 million pounds of molybdenum, including 1.3
billion pounds of copper (including 120 million pounds for Tenke), 590
thousand ounces of gold and 21 million pounds of molybdenum for
fourth-quarter 2016. Projected sales volumes are dependent on a number
of factors, including operational performance, shipping schedules and
the timing of completing the pending Tenke transaction.
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 $1.14 per pound of copper in third-quarter 2016 were lower
than unit net cash costs of $1.52 per pound in third-quarter 2015,
primarily reflecting higher copper sales volumes and the impact of
ongoing cost reduction initiatives.
Assuming average prices of $1,250 per ounce of gold and $7 per pound of
molybdenum for fourth-quarter 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 $0.99 per pound of copper in fourth-quarter 2016 and $1.20 per
pound for the year 2016. The impact of price changes for fourth-quarter
2016 on consolidated unit net cash costs would approximate $0.0075 per
pound for each $50 per ounce change in the average price of gold and
$0.004 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 third-quarter 2016 were
lower than cash production costs of $18.85 per BOE in third-quarter
2015, primarily reflecting ongoing cost reduction efforts in California.
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 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
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 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 will 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 third quarters and first
nine months of 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
|
455
|
|
|
|
499
|
|
|
|
1,411
|
|
|
|
1,420
|
|
Sales
|
|
|
|
458
|
|
|
|
483
|
|
|
|
1,425
|
|
|
|
1,441
|
|
Average realized price per pound
|
|
|
|
$
|
2.19
|
|
|
|
$
|
2.42
|
|
|
|
$
|
2.18
|
|
|
|
$
|
2.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molybdenum (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Productiona
|
|
|
|
9
|
|
|
|
9
|
|
|
|
25
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of copperb
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
|
|
$
|
1.44
|
|
|
|
$
|
1.68
|
|
|
|
$
|
1.41
|
|
|
|
$
|
1.76
|
|
By-product credits
|
|
|
|
(0.17
|
)
|
|
|
(0.12
|
)
|
|
|
(0.12
|
)
|
|
|
(0.15
|
)
|
Treatment charges
|
|
|
|
0.10
|
|
|
|
0.12
|
|
|
|
0.11
|
|
|
|
0.12
|
|
Unit net cash costs
|
|
|
|
$
|
1.37
|
|
|
|
$
|
1.68
|
|
|
|
$
|
1.40
|
|
|
|
$
|
1.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 of 458 million pounds
in third-quarter 2016 were less than third-quarter 2015 sales of 483
million pounds, primarily attributable to the May 2016 sale of a portion
of FCX's interest in Morenci. 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 $1.37 per pound of copper in third-quarter 2016
were lower than the unit net cash costs of $1.68 per pound in
third-quarter 2015, primarily reflecting cost reduction initiatives.
Average unit net cash costs (net of by-product credits) for the North
America copper mines are expected to approximate $1.41 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 $7 per
pound for fourth-quarter 2016. North America's average unit net cash
costs would change by approximately $0.005 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
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 third quarters and
first nine months of 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
|
317
|
|
|
|
204
|
|
|
|
986
|
|
|
|
585
|
|
Sales
|
|
|
|
323
|
|
|
|
207
|
|
|
|
973
|
|
|
|
585
|
|
Average realized price per pound
|
|
|
|
$
|
2.19
|
|
|
|
$
|
2.37
|
|
|
|
$
|
2.17
|
|
|
|
$
|
2.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molybdenum (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Productiona
|
|
|
|
5
|
|
|
|
1
|
|
|
|
14
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of copperb
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
|
|
$
|
1.27
|
|
|
|
$
|
1.54
|
|
|
|
$
|
1.23
|
|
|
|
$
|
1.68
|
|
By-product credits
|
|
|
|
(0.12
|
)
|
|
|
(0.04
|
)
|
|
|
(0.10
|
)
|
|
|
(0.05
|
)
|
Treatment charges
|
|
|
|
0.24
|
|
|
|
0.18
|
|
|
|
0.24
|
|
|
|
0.17
|
|
Royalty on metals
|
|
|
|
0.01
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Unit net cash costs
|
|
|
|
$
|
1.40
|
|
|
|
$
|
1.68
|
|
|
|
$
|
1.37
|
|
|
|
$
|
1.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 323 million pounds
in third-quarter 2016 were significantly higher than third-quarter 2015
sales of 207 million pounds, reflecting Cerro Verde's expanded
operations. Sales from South America mining are expected to approximate
1.3 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 $1.40 per pound of copper in third-quarter 2016 were
lower than unit net cash costs of $1.68 per pound in third-quarter 2015,
primarily reflecting higher copper sales volumes and efficiencies
associated with the Cerro Verde expansion and higher by-product credits.
Average unit net cash costs (net of by-product credits) for South
America mining are expected to approximate $1.42 per pound of copper for
the year 2016, based on current sales volume and cost estimates and
assuming average prices of $7 per pound of molybdenum for fourth-quarter
2016.
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 engage with Indonesian
government officials regarding its long-term operating rights under its
Contract of Work (COW), and its rights to export concentrate without
restriction.
PT-FI and the Indonesian government entered into a Memorandum of
Understanding in July 2014, in which subject to concluding an agreement
to extend PT-FI's operations beyond 2021 on acceptable terms, PT-FI
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
also agreed to pay higher royalties and to pay export duties until
certain smelter development milestones were met.
In October 2015, the Indonesian government provided a letter of
assurance to PT-FI indicating that it would revise regulations allowing
it to 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 COW.
In August 2016, PT-FI's export permit was renewed through January 11,
2017. Current regulations published by the Indonesian government
prohibit exports of copper concentrate and anode slimes after January
12, 2017. Indonesian government officials have indicated an intent to
revise this regulation to protect employment and government revenues.
PT-FI is actively engaged with Indonesian government officials on this
matter.
Operating and Development Activities. PT-FI is currently mining
the final phase of the Grasberg open pit, which contains very 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 the first half of 2018.
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. From 2017 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 third quarters and
first nine months of 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
|
321
|
|
|
|
192
|
|
|
|
694
|
|
|
|
551
|
|
Sales
|
|
|
|
332
|
|
|
|
198
|
|
|
|
702
|
|
|
|
549
|
|
Average realized price per pound
|
|
|
|
$
|
2.20
|
|
|
|
$
|
2.35
|
|
|
|
$
|
2.17
|
|
|
|
$
|
2.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold (thousands of recoverable ounces)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
|
301
|
|
|
|
272
|
|
|
|
637
|
|
|
|
887
|
|
Sales
|
|
|
|
307
|
|
|
|
285
|
|
|
|
653
|
|
|
|
891
|
|
Average realized price per ounce
|
|
|
|
$
|
1,327
|
|
|
|
$
|
1,117
|
|
|
|
$
|
1,292
|
|
|
|
$
|
1,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of coppera
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
|
|
$
|
1.37
|
|
|
|
$
|
2.16
|
|
|
|
$
|
1.70
|
|
|
|
$
|
2.39
|
|
Gold and silver credits
|
|
|
|
(1.29
|
)
|
|
|
(1.59
|
)
|
|
|
(1.28
|
)
|
|
|
(1.93
|
)
|
Treatment charges
|
|
|
|
0.27
|
|
|
|
0.31
|
|
|
|
0.29
|
|
|
|
0.31
|
|
Export duties
|
|
|
|
0.10
|
|
|
|
0.17
|
|
|
|
0.09
|
|
|
|
0.16
|
|
Royalty on metals
|
|
|
|
0.12
|
|
|
|
0.13
|
|
|
|
0.12
|
|
|
|
0.16
|
|
Unit net cash costs
|
|
|
|
$
|
0.57
|
|
|
|
$
|
1.18
|
|
|
|
$
|
0.92
|
|
|
|
$
|
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 332 million pounds in
third-quarter 2016 and were higher than third-quarter 2015 sales of 198
million pounds, primarily reflecting higher copper ore grades.
Indonesia's third-quarter 2016 gold sales of 307 thousand ounces were
higher than third-quarter 2015 sales of 285 thousand ounces.
Third-quarter 2016 sales volumes were below previous estimates because
of lower mining rates that affected the timing of access to higher grade
ore and a deferral of production into future periods resulting from
labor productivity issues and a 10-day work stoppage beginning in late
September.
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 1.2 billion pounds of copper and 1.24
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. Ore
grades are expected to further improve in 2017 because of increased
access to higher grade sections of the Grasberg open pit.
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 $0.57 per pound of copper in
third-quarter 2016 were lower than unit net cash costs of $1.18 per
pound in third-quarter 2015, primarily reflecting higher sales volumes,
partly offset by lower by-product credits.
Based on current sales volume and cost estimates, and assuming an
average gold price of $1,250 per ounce for fourth-quarter 2016, unit net
cash costs (net of gold and silver credits) for Indonesia mining are
expected to approximate $0.19 per pound of copper for fourth-quarter
2016 and $0.62 per pound for the year 2016. Indonesia mining's unit net
cash costs for the year 2016 would change by approximately $0.03 per
pound for each $50 per ounce change in the average price of gold for
fourth-quarter 2016. 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
fourth-quarter 2016 and for the year 2017.
Indonesia mining's projected sales volumes are dependent on a number of
factors, including operational performance, the timing of shipments and
approval by the Indonesian government to continue the export of copper
concentrate and anode slimes.
Africa Mining. In May 2016, FCX entered into an agreement to sell
its interest in TF Holdings Limited (TFHL), through which FCX holds an
effective 56 percent interest in the Tenke copper and cobalt mining
concessions in the Southeast region of the DRC. 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.
Operating Data. Following is a summary of operating data for the
Africa mining operations for the third quarters and first nine months of
2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Copper (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
|
124
|
|
|
|
108
|
|
|
|
356
|
|
|
|
339
|
|
Sales
|
|
|
|
118
|
|
|
|
113
|
|
|
|
365
|
|
|
|
350
|
|
Average realized price per pounda
|
|
|
|
$
|
2.07
|
|
|
|
$
|
2.32
|
|
|
|
$
|
2.07
|
|
|
|
$
|
2.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cobalt (millions of contained pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
|
9
|
|
|
|
9
|
|
|
|
28
|
|
|
|
25
|
|
Sales
|
|
|
|
9
|
|
|
|
10
|
|
|
|
29
|
|
|
|
26
|
|
Average realized price per pound
|
|
|
|
$
|
7.83
|
|
|
|
$
|
8.96
|
|
|
|
$
|
7.15
|
|
|
|
$
|
9.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit net cash costs per pound of copperb
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, excluding adjustments
|
|
|
|
$
|
1.57
|
|
|
|
$
|
1.63
|
|
|
|
$
|
1.61
|
|
|
|
$
|
1.58
|
|
Cobalt creditsc
|
|
|
|
(0.46
|
)
|
|
|
(0.53
|
)
|
|
|
(0.39
|
)
|
|
|
(0.47
|
)
|
Royalty on metals
|
|
|
|
0.05
|
|
|
|
0.05
|
|
|
|
0.05
|
|
|
|
0.06
|
|
Unit net cash costs
|
|
|
|
$
|
1.16
|
|
|
|
$
|
1.15
|
|
|
|
$
|
1.27
|
|
|
|
$
|
1.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 income (loss) 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 118 million pounds in third-quarter 2016
were slightly higher than third-quarter 2015 copper sales of 113 million
pounds. Africa mining's sales for 2016 are expected to approximate 485
million pounds of copper and 38 million pounds of cobalt, compared with
467 million pounds of copper and 35 million pounds of cobalt for the
year 2015. Africa mining's projected sales for the year 2016 would be
impacted by the timing of the completion of the sale of FCX's interest
in TFHL.
Africa mining's unit net cash costs (net of cobalt credits) of $1.16 per
pound of copper in third-quarter 2016 were slightly higher than unit net
cash costs of $1.15 per pound of copper in third-quarter 2015. Unit net
cash costs (net of cobalt credits) for Africa mining are expected to
approximate $1.26 per pound of copper for 2016, based on current sales
volume and cost estimates and assuming an average cobalt price of $11
per pound for fourth-quarter of 2016.
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 5 million pounds of
molybdenum in third-quarter 2016 and 13 million pounds in third-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 $10.28 per pound
of molybdenum in third-quarter 2016 were higher than average unit net
cash costs of $6.93 per pound in third-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 $8.50 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 oil production facilities in the Deepwater
GOM and California.
In September 2016, FCX entered into an agreement to sell its Deepwater
GOM properties to Anadarko Petroleum Corporation (Anadarko) for cash
consideration of $2.0 billion (before closing adjustments) and up to
$150 million in contingent payments. The contingent payments would be
received over time as Anadarko realizes future cash flows in connection
with FCX's third-party production handling agreement for the Marlin
platform. The transaction has an effective date of August 1, 2016, and
is expected to close in fourth-quarter 2016, subject to customary
closing conditions. In connection with the sale of the Deepwater GOM
properties, FM O&G entered into an agreement to amend the terms of the
Plains Offshore Operations Inc. preferred stock to provide FM O&G the
right to call these securities for $582 million. FM O&G expects to
exercise this option at the time the Deepwater GOM sale closes.
In October 2016, FCX entered into an agreement to sell its onshore
California oil and gas properties to Sentinel Peak Resources California
LLC for cash consideration of $592 million (before closing adjustments)
and contingent consideration of up to $150 million, consisting of $50
million per year for 2018, 2019 and 2020 if the price of Brent crude oil
averages $70 per barrel or higher in each of these calendar years. The
transaction has an effective date of July 1, 2016, and is expected to
close in fourth-quarter 2016, subject to customary closing conditions.
Impairment of Oil and Gas Properties. FCX follows the full cost
method of accounting for its oil and gas operations, 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 $41.68 per barrel at September 30, 2016, compared with
$43.12 per barrel at June 30, 2016. As a result of the impact of the
reduction in twelve-month historical prices and reserve revisions, net
capitalized costs exceeded the ceiling test limitation under full cost
accounting rules, which resulted in the recognition of a third-quarter
2016 impairment charge of $239 million.
Financial and Operating Data. Following is a summary of financial
and operating data for the U.S. oil and gas operations for the third
quarters and first nine months of 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
|
|
September 30,
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
2016
|
|
|
2015
|
|
Financial Summary (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized revenuesa
|
|
|
|
$
|
421
|
|
|
|
$
|
593
|
|
b
|
|
|
$
|
1,115
|
|
|
|
$
|
1,796
|
|
b
|
Cash production costsa
|
|
|
|
(180
|
)
|
|
|
(260
|
)
|
|
|
|
(558
|
)
|
|
|
(765
|
)
|
|
Cash operating margin
|
|
|
|
$
|
241
|
|
|
|
$
|
333
|
|
|
|
|
$
|
557
|
|
|
|
$
|
1,031
|
|
|
Capital expendituresc
|
|
|
|
$
|
160
|
|
|
|
$
|
635
|
|
|
|
|
$
|
1,028
|
|
|
|
$
|
2,430
|
|
|
Sales Volumes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MMBbls)
|
|
|
|
9.1
|
|
|
|
9.3
|
|
|
|
|
26.1
|
|
|
|
26.3
|
|
|
Natural gas (Bcf)
|
|
|
|
13.8
|
|
|
|
22.8
|
|
|
|
|
52.2
|
|
|
|
68.1
|
|
|
NGLs (MMBbls)
|
|
|
|
0.6
|
|
|
|
0.7
|
|
|
|
|
1.8
|
|
|
|
1.8
|
|
|
MMBOE
|
|
|
|
12.0
|
|
|
|
13.8
|
|
|
|
|
36.6
|
|
|
|
39.4
|
|
|
Average Realized Pricesa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (per barrel)
|
|
|
|
$
|
40.63
|
|
|
|
$
|
55.88
|
|
b
|
|
|
$
|
37.11
|
|
|
|
$
|
59.92
|
|
b
|
Natural gas (per million British thermal units, or MMBtu)
|
|
|
|
$
|
2.84
|
|
|
|
$
|
2.72
|
|
|
|
|
$
|
2.24
|
|
|
|
$
|
2.74
|
|
|
NGLs (per barrel)
|
|
|
|
$
|
17.65
|
|
|
|
$
|
16.68
|
|
|
|
|
$
|
16.85
|
|
|
|
$
|
19.78
|
|
|
Cash Operating Margin per BOEa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized revenues
|
|
|
|
$
|
34.99
|
|
|
|
$
|
43.00
|
|
b
|
|
|
$
|
30.50
|
|
|
|
$
|
45.57
|
|
b
|
Cash production costs
|
|
|
|
(15.00
|
)
|
|
|
(18.85
|
)
|
|
|
|
(15.28
|
)
|
|
|
(19.42
|
)
|
|
Cash operating margin
|
|
|
|
$
|
19.99
|
|
|
|
$
|
24.15
|
|
|
|
|
$
|
15.22
|
|
|
|
$
|
26.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 $103 million ($11.03 per barrel of oil and
$7.44 per BOE) in third-quarter 2015 and $304 million ($11.58 per
barrel of oil and $7.72 per BOE) for the first nine months of 2015.
|
|
c. Excludes international oil and gas expenditures
totaling $37 million in third-quarter 2015, $47 million for the
first nine months of 2016 and $81 million for the first nine
months of 2015, primarily related to the Morocco oil and gas
properties.
|
|
The average realized price for crude oil was $40.63 per barrel in
third-quarter 2016 (86 percent of the average Brent crude oil price of
$46.99 per barrel). The average realized price for natural gas was $2.84
per MMBtu in third-quarter 2016, compared to the New York Mercantile
Exchange natural gas price average of $2.81 per MMBtu for the July
through September 2016 contracts.
Lower realized revenues for oil and gas operations of $34.99 per BOE in
third-quarter 2016, compared to $43.00 per BOE in third-quarter 2015,
primarily reflects the impact of realized cash gains on derivative
contracts of $7.44 per BOE in third-quarter 2015.
Cash production costs for oil and gas operations of $15.00 per BOE in
third-quarter 2016 were lower than cash production costs of $18.85 per
BOE in third-quarter 2015, primarily reflecting ongoing cost reduction
efforts.
Following is a summary of average oil and gas sales volumes per day by
region for the third quarters and first nine months of 2016 and
2015:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
Sales Volumes (MBOE per day)
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GOMa
|
|
|
|
92
|
|
|
|
91
|
|
|
|
87
|
|
|
|
82
|
Californiab
|
|
|
|
33
|
|
|
|
35
|
|
|
|
32
|
|
|
|
37
|
Haynesville/Madden/Otherc
|
|
|
|
6
|
|
|
|
24
|
|
|
|
14
|
|
|
|
25
|
Total oil and gas operations
|
|
|
|
131
|
|
|
|
150
|
|
|
|
133
|
|
|
|
144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. In September 2016, FCX entered into an agreement
to sell its Deepwater GOM properties; this transaction is expected
to close in fourth-quarter 2016.
|
|
b. In October 2016, FCX entered into an agreement
to sell its onshore California properties; this transaction is
expected to close in fourth-quarter 2016.
|
|
c. In July 2016, FCX completed the sale of its
Haynesville shale assets.
|
|
Daily sales volumes averaged 131 MBOE for third-quarter 2016, including
99 thousand barrels (MBbls) of crude oil, 150 million cubic feet (MMcf)
of natural gas and 7 MBbls of NGLs.
Following completion of the Deepwater GOM and onshore California
transactions, FCX’s portfolio of oil and gas assets would include oil
and natural gas production onshore in South Louisiana and on the GOM
Shelf, oil production offshore California and natural gas production
from the Madden area in Central Wyoming. In third-quarter 2016, these
properties produced an average of 7 MBbls of oil and NGLs per day and 74
MMcf of natural gas per day.
Oil and Gas Capital Expenditures. Capital expenditures for oil
and gas operations in third-quarter 2016 totaled $160 million (including
$75 million incurred for GOM and $97 million associated with the change
in capital expenditure accruals).
CASH FLOWS, CASH, DEBT and EQUITY TRANSACTIONS
Operating Cash Flows. FCX generated operating cash flows of $980
million for third-quarter 2016 and $2.6 billion (including $463 million
in working capital sources and changes in other tax payments) for the
first nine months of 2016.
Based on current sales volume and cost estimates and assuming average
prices of $2.10 per pound of copper, $1,250 per ounce of gold, $7 per
pound of molybdenum and $51 per barrel of Brent crude oil for
fourth-quarter 2016, FCX's consolidated operating cash flows are
estimated to approximate $3.6 billion for the year 2016 (including $0.3
billion in working capital sources and other tax payments). The impact
of price changes during fourth-quarter 2016 on operating cash flows
would approximate $150 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, $15 million for each $2 per pound change in
the average price of molybdenum and $28 million for each $5 per barrel
change in the average Brent crude oil price.
Capital Expenditures. Capital expenditures totaled $494 million
for third-quarter 2016, consisting of $333 million for mining operations
(including $250 million for major projects primarily for the development
of underground mines by PT-FI) and $160 million for oil and gas
operations. Capital expenditures for the first nine months of 2016
totaled $2.3 billion, consisting of $1.2 billion for mining operations
(including $0.9 billion for major projects) and $1.1 billion for oil and
gas operations.
Capital expenditures are expected to approximate $2.8 billion for the
year 2016, consisting of $1.6 billion for mining operations (including
$1.2 billion for major projects, primarily for the development of
underground mines by PT-FI and for the Cerro Verde expansion, which was
completed earlier in the year) and $1.2 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 $68 million in
assets held for sale), net of noncontrolling interests' share, taxes and
other costs at September 30, 2016 (in millions):
|
|
|
|
|
|
|
Cash at domestic companies
|
|
|
|
$
|
709
|
|
Cash at international operations
|
|
|
|
399
|
|
Total consolidated cash and cash equivalents
|
|
|
|
1,108
|
|
Noncontrolling interests' share
|
|
|
|
(97
|
)
|
Cash, net of noncontrolling interests' share
|
|
|
|
1,011
|
|
Withholding taxes and other
|
|
|
|
(30
|
)
|
Net cash available
|
|
|
|
$
|
981
|
|
|
|
|
|
|
|
|
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 September 30, 2016 (in billions, except percentages):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
Interest Rate
|
FCX Senior Notes
|
|
|
|
$
|
11.5
|
|
|
|
3.8
|
%
|
FCX Term Loana
|
|
|
|
2.5
|
|
|
|
3.3
|
%
|
FM O&G Senior Notes
|
|
|
|
2.5
|
|
|
|
6.6
|
%
|
Cerro Verde Credit Facility
|
|
|
|
1.6
|
|
|
|
2.7
|
%
|
Other debt
|
|
|
|
0.9
|
|
|
|
4.9
|
%
|
|
|
|
|
$
|
19.0
|
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
a. In accordance with the mandatory prepayment
provision of the amended Term Loan, 50 percent of the proceeds
associated with FCX's pending asset sale transactions must be
applied toward repaying the Term Loan.
|
|
At September 30, 2016, FCX had no borrowings, $43 million in letters of
credit issued and availability of $3.5 billion under its revolving
credit facility.
Equity. In July 2016, FCX commenced a registered ATM offering of
up to $1.5 billion of common stock. Through October 24, 2016, FCX has
sold 33.5 million shares of its common stock for gross proceeds of $415
million ($12.39 per share average price). As of September 30, 2016, FCX
has 1.36 billion common shares outstanding.
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
third-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, November 25, 2016.
-----------------------------------------------------------------------------------------------------------
FCX is a premier U.S.-based natural resources company with an
industry-leading global portfolio of mineral assets. 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, debt reduction initiatives, including FCX's
ability to complete pending asset sales and the anticipated timing
thereof, 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 FCX's Board of Directors (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 Contract of Work (COW), the potential effects of violence in
Indonesia generally and in the province of Papua, the resolution of
administrative disputes in the Democratic Republic of Congo, 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. With respect to FCX's
operations in Indonesia, such factors include whether PT-FI will be able
to continue to export its copper concentrate directly and indirectly
through PT Smelting (PT-FI's 25 percent-owned Indonesian smelting unit)
after the January 12, 2017, effective date of regulations prohibiting
exports of copper concentrate and anode slimes, including whether and
when those regulations may be revised and whether any such revisions
would impose additional conditions on PT-FI. PT-FI's inability to export
copper concentrate itself and through PT Smelting for any extended
period of time would lead to the suspension of all of FCX's production
in Indonesia.
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 September 30,
|
|
|
|
|
Production
|
|
|
Sales
|
|
COPPER (millions of recoverable pounds)
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
|
2015
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morenci (72%)a
|
|
|
202
|
|
|
|
232
|
|
|
|
208
|
|
|
|
|
224
|
|
|
Bagdad (100%)
|
|
|
47
|
|
|
|
53
|
|
|
|
46
|
|
|
|
|
52
|
|
|
Safford (100%)
|
|
|
64
|
|
|
|
57
|
|
|
|
62
|
|
|
|
|
51
|
|
|
Sierrita (100%)
|
|
|
40
|
|
|
|
45
|
|
|
|
40
|
|
|
|
|
46
|
|
|
Miami (100%)
|
|
|
6
|
|
|
|
10
|
|
|
|
5
|
|
|
|
|
10
|
|
|
Chino (100%)
|
|
|
78
|
|
|
|
82
|
|
|
|
78
|
|
|
|
|
79
|
|
|
Tyrone (100%)
|
|
|
17
|
|
|
|
20
|
|
|
|
18
|
|
|
|
|
21
|
|
|
Other (100%)
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
|
|
—
|
|
|
Total North America
|
|
|
455
|
|
|
|
499
|
|
|
|
458
|
|
|
|
|
483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerro Verde (53.56%)
|
|
|
265
|
|
|
|
123
|
|
|
|
272
|
|
|
|
|
128
|
|
|
El Abra (51%)
|
|
|
52
|
|
|
|
81
|
|
|
|
51
|
|
|
|
|
79
|
|
|
Total South America
|
|
|
317
|
|
|
|
204
|
|
|
|
323
|
|
|
|
|
207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indonesia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grasberg (90.64%)b
|
|
|
321
|
|
|
|
192
|
|
|
|
332
|
|
|
|
|
198
|
|
|
Consolidated - continuing operations
|
|
|
1,093
|
|
|
|
895
|
|
|
|
1,113
|
|
c
|
|
|
888
|
|
c
|
Discontinued operations - Tenke Fungurume (Tenke) (56%)
|
|
|
124
|
|
|
|
108
|
|
|
|
118
|
|
|
|
|
113
|
|
|
Total
|
|
|
1,217
|
|
|
|
1,003
|
|
|
|
1,231
|
|
|
|
|
1,001
|
|
|
Less noncontrolling interests
|
|
|
234
|
|
|
|
162
|
|
|
|
235
|
|
|
|
|
167
|
|
|
Net
|
|
|
983
|
|
|
|
841
|
|
|
|
996
|
|
|
|
|
834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
|
|
$
|
2.19
|
|
|
|
|
$
|
2.39
|
|
|
Average realized price per pound (including Tenke)
|
|
|
|
|
|
|
|
|
$
|
2.18
|
|
|
|
|
$
|
2.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GOLD (thousands of recoverable ounces)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America (100%)
|
|
|
7
|
|
|
|
9
|
|
|
|
10
|
|
|
|
|
9
|
|
|
Indonesia (90.64%)b
|
|
|
301
|
|
|
|
272
|
|
|
|
307
|
|
|
|
|
285
|
|
|
Consolidated
|
|
|
308
|
|
|
|
281
|
|
|
|
317
|
|
|
|
|
294
|
|
|
Less noncontrolling interests
|
|
|
28
|
|
|
|
25
|
|
|
|
29
|
|
|
|
|
27
|
|
|
Net
|
|
|
280
|
|
|
|
256
|
|
|
|
288
|
|
|
|
|
267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per ounce
|
|
|
|
|
|
|
|
|
$
|
1,327
|
|
|
|
|
$
|
1,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLYBDENUM (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henderson (100%)
|
|
|
2
|
|
|
|
7
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Climax (100%)
|
|
|
3
|
|
|
|
6
|
|
|
|
N/A
|
|
|
|
N/A
|
|
North America copper mines (100%)a
|
|
|
9
|
|
|
|
9
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Cerro Verde (53.56%)
|
|
|
5
|
|
|
|
1
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Consolidated
|
|
|
19
|
|
|
|
23
|
|
|
|
16
|
|
|
|
|
23
|
|
|
Less noncontrolling interests
|
|
|
2
|
|
|
|
—
|
|
|
|
1
|
|
|
|
|
1
|
|
|
Net
|
|
|
17
|
|
|
|
23
|
|
|
|
15
|
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
|
|
$
|
9.14
|
|
|
|
|
$
|
7.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COBALT (millions of contained pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations - Tenke (56%)
|
|
|
9
|
|
|
|
9
|
|
|
|
9
|
|
|
|
|
10
|
|
|
Less noncontrolling interests
|
|
|
4
|
|
|
|
4
|
|
|
|
4
|
|
|
|
|
4
|
|
|
Net
|
|
|
5
|
|
|
|
5
|
|
|
|
5
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
|
|
$
|
7.83
|
|
|
|
|
$
|
8.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
61 million pounds in third-quarter 2016 and 28 million pounds in
third-quarter 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
|
SELECTED MINING OPERATING DATA (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
Production
|
|
|
Sales
|
|
COPPER (millions of recoverable pounds)
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
|
2015
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morenci (72%)a
|
|
|
658
|
|
|
|
656
|
|
|
|
667
|
|
|
|
|
660
|
|
|
Bagdad (100%)
|
|
|
139
|
|
|
|
157
|
|
|
|
141
|
|
|
|
|
166
|
|
|
Safford (100%)
|
|
|
173
|
|
|
|
136
|
|
|
|
173
|
|
|
|
|
132
|
|
|
Sierrita (100%)
|
|
|
122
|
|
|
|
140
|
|
|
|
123
|
|
|
|
|
146
|
|
|
Miami (100%)
|
|
|
20
|
|
|
|
33
|
|
|
|
21
|
|
|
|
|
35
|
|
|
Chino (100%)
|
|
|
239
|
|
|
|
231
|
|
|
|
239
|
|
|
|
|
232
|
|
|
Tyrone (100%)
|
|
|
56
|
|
|
|
65
|
|
|
|
57
|
|
|
|
|
68
|
|
|
Other (100%)
|
|
|
4
|
|
|
|
2
|
|
|
|
4
|
|
|
|
|
2
|
|
|
Total North America
|
|
|
1,411
|
|
|
|
1,420
|
|
|
|
1,425
|
|
|
|
|
1,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerro Verde (53.56%)
|
|
|
815
|
|
|
|
334
|
|
|
|
798
|
|
|
|
|
335
|
|
|
El Abra (51%)
|
|
|
171
|
|
|
|
251
|
|
|
|
175
|
|
|
|
|
250
|
|
|
Total South America
|
|
|
986
|
|
|
|
585
|
|
|
|
973
|
|
|
|
|
585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indonesia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grasberg (90.64%)b
|
|
|
694
|
|
|
|
551
|
|
|
|
702
|
|
|
|
|
549
|
|
|
Consolidated - continuing operations
|
|
|
3,091
|
|
|
|
2,556
|
|
|
|
3,100
|
|
c
|
|
|
2,575
|
|
c
|
Discontinued operations - Tenke (56%)
|
|
|
356
|
|
|
|
339
|
|
|
|
365
|
|
|
|
|
350
|
|
|
Total
|
|
|
3,447
|
|
|
|
2,895
|
|
|
|
3,465
|
|
|
|
|
2,925
|
|
|
Less noncontrolling interests
|
|
|
684
|
|
|
|
479
|
|
|
|
683
|
|
|
|
|
484
|
|
|
Net
|
|
|
2,763
|
|
|
|
2,416
|
|
|
|
2,782
|
|
|
|
|
2,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
|
|
$
|
2.17
|
|
|
|
|
$
|
2.54
|
|
|
Average realized price per pound (including Tenke)
|
|
|
|
|
|
|
|
|
$
|
2.16
|
|
|
|
|
$
|
2.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GOLD (thousands of recoverable ounces)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America (100%)
|
|
|
21
|
|
|
|
20
|
|
|
|
21
|
|
|
|
|
18
|
|
|
Indonesia (90.64%)b
|
|
|
637
|
|
|
|
887
|
|
|
|
653
|
|
|
|
|
891
|
|
|
Consolidated
|
|
|
658
|
|
|
|
907
|
|
|
|
674
|
|
|
|
|
909
|
|
|
Less noncontrolling interests
|
|
|
59
|
|
|
|
83
|
|
|
|
61
|
|
|
|
|
84
|
|
|
Net
|
|
|
599
|
|
|
|
824
|
|
|
|
613
|
|
|
|
|
825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per ounce
|
|
|
|
|
|
|
|
|
$
|
1,292
|
|
|
|
|
$
|
1,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLYBDENUM (millions of recoverable pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henderson (100%)
|
|
|
7
|
|
|
|
21
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Climax (100%)
|
|
|
12
|
|
|
|
18
|
|
|
|
N/A
|
|
|
|
N/A
|
|
North America copper mines (100%)a
|
|
|
25
|
|
|
|
28
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Cerro Verde (53.56%)
|
|
|
14
|
|
|
|
5
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Consolidated
|
|
|
58
|
|
|
|
72
|
|
|
|
52
|
|
|
|
|
69
|
|
|
Less noncontrolling interests
|
|
|
6
|
|
|
|
2
|
|
|
|
4
|
|
|
|
|
3
|
|
|
Net
|
|
|
52
|
|
|
|
70
|
|
|
|
48
|
|
|
|
|
66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
|
|
$
|
8.36
|
|
|
|
|
$
|
9.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COBALT (millions of contained pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FCX's net interest in %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations - Tenke (56%)
|
|
|
28
|
|
|
|
25
|
|
|
|
29
|
|
|
|
|
26
|
|
|
Less noncontrolling interests
|
|
|
12
|
|
|
|
11
|
|
|
|
13
|
|
|
|
|
11
|
|
|
Net
|
|
|
16
|
|
|
|
14
|
|
|
|
16
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price per pound
|
|
|
|
|
|
|
|
|
$
|
7.15
|
|
|
|
|
$
|
9.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
131 million pounds for the first nine months of 2016 and 92
million pounds for the first nine months of 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
SELECTED MINING OPERATING DATA (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 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)
|
|
|
681,400
|
|
|
|
927,900
|
|
|
|
764,900
|
|
|
|
911,100
|
Average copper ore grade (percent)
|
|
|
0.31
|
|
|
|
0.27
|
|
|
|
0.32
|
|
|
|
0.26
|
Copper production (millions of recoverable pounds)
|
|
|
316
|
|
|
|
300
|
|
|
|
921
|
|
|
|
808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mill Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
|
300,500
|
|
|
|
311,500
|
|
|
|
299,900
|
|
|
|
309,700
|
Average ore grades (percent):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
|
|
|
0.47
|
|
|
|
0.50
|
|
|
|
0.48
|
|
|
|
0.48
|
Molybdenum
|
|
|
0.03
|
|
|
|
0.03
|
|
|
|
0.03
|
|
|
|
0.03
|
Copper recovery rate (percent)
|
|
|
87.8
|
|
|
|
85.6
|
|
|
|
86.3
|
|
|
|
85.6
|
Production (millions of recoverable pounds):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
|
|
|
216
|
|
|
|
240
|
|
|
|
661
|
|
|
|
728
|
Molybdenum
|
|
|
9
|
|
|
|
9
|
|
|
|
25
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100% South America Mining
|
|
|
|
|
|
|
|
|
|
|
|
|
SX/EW Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Leach ore placed in stockpiles (metric tons per day)
|
|
|
163,000
|
|
|
|
192,300
|
|
|
|
158,100
|
|
|
|
220,800
|
Average copper ore grade (percent)
|
|
|
0.41
|
|
|
|
0.46
|
|
|
|
0.41
|
|
|
|
0.43
|
Copper production (millions of recoverable pounds)
|
|
|
78
|
|
|
|
107
|
|
|
|
250
|
|
|
|
330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mill Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
|
355,300
|
|
|
|
131,200
|
|
|
|
348,900
|
|
|
|
122,400
|
Average ore grades:
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper (percent)
|
|
|
0.41
|
|
|
|
0.49
|
|
|
|
0.42
|
|
|
|
0.46
|
Molybdenum (percent)
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
0.02
|
Copper recovery rate (percent)
|
|
|
84.4
|
|
|
|
79.2
|
|
|
|
86.1
|
|
|
|
79.0
|
Production (recoverable):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper (millions of pounds)
|
|
|
239
|
|
|
|
97
|
|
|
|
736
|
|
|
|
255
|
Molybdenum (millions of pounds)
|
|
|
5
|
|
|
|
1
|
|
|
|
14
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100% Indonesia Mining
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)a
|
|
|
|
|
|
|
|
|
|
|
|
|
Grasberg open pit
|
|
|
135,600
|
|
|
|
117,300
|
|
|
|
117,200
|
|
|
|
118,400
|
Deep Ore Zone underground mine
|
|
|
35,100
|
|
|
|
40,400
|
|
|
|
38,700
|
|
|
|
44,000
|
Deep Mill Level Zone (DMLZ) underground mineb
|
|
|
6,000
|
|
|
|
3,800
|
|
|
|
5,000
|
|
|
|
2,700
|
Grasberg Block Cave underground mineb
|
|
|
2,800
|
|
|
|
—
|
|
|
|
2,600
|
|
|
|
—
|
Big Gossan underground mineb
|
|
|
1,000
|
|
|
|
—
|
|
|
|
700
|
|
|
|
—
|
Total
|
|
|
180,500
|
|
|
|
161,500
|
|
|
|
164,200
|
|
|
|
165,100
|
Average ore grades:
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper (percent)
|
|
|
1.02
|
|
|
|
0.68
|
|
|
|
0.86
|
|
|
|
0.65
|
Gold (grams per metric ton)
|
|
|
0.69
|
|
|
|
0.71
|
|
|
|
0.58
|
|
|
|
0.76
|
Recovery rates (percent):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
|
|
|
91.4
|
|
|
|
89.6
|
|
|
|
90.5
|
|
|
|
90.2
|
Gold
|
|
|
82.7
|
|
|
|
81.1
|
|
|
|
81.4
|
|
|
|
83.1
|
Production (recoverable):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper (millions of pounds)
|
|
|
327
|
|
|
|
192
|
|
|
|
736
|
|
|
|
551
|
Gold (thousands of ounces)
|
|
|
300
|
|
|
|
272
|
|
|
|
664
|
|
|
|
887
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100% Africa Mining (Discontinued Operations)
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
|
15,300
|
|
|
|
14,000
|
|
|
|
15,400
|
|
|
|
14,600
|
Average ore grades (percent):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
|
|
|
4.31
|
|
|
|
4.02
|
|
|
|
4.11
|
|
|
|
4.13
|
Cobalt
|
|
|
0.43
|
|
|
|
0.43
|
|
|
|
0.45
|
|
|
|
0.41
|
Copper recovery rate (percent)
|
|
|
93.5
|
|
|
|
94.0
|
|
|
|
93.6
|
|
|
|
94.0
|
Production (millions of pounds):
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper (recoverable)
|
|
|
124
|
|
|
|
108
|
|
|
|
356
|
|
|
|
339
|
Cobalt (contained)
|
|
|
9
|
|
|
|
9
|
|
|
|
28
|
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100% Molybdenum Mines
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
|
16,100
|
|
|
|
36,800
|
|
|
|
17,700
|
|
|
|
37,700
|
Average molybdenum ore grade (percent)
|
|
|
0.19
|
|
|
|
0.20
|
|
|
|
0.21
|
|
|
|
0.20
|
Molybdenum production (millions of recoverable pounds)
|
|
|
5
|
|
|
|
13
|
|
|
|
19
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Big Gossan
underground mine is expected to restart in the first half of 2017
and production from the Grasberg Block Cave underground mine is
expected to commence in 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
SELECTED U.S. OIL AND GAS OPERATING DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
Sales Volumes
|
|
|
|
Sales per Day
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
2015
|
|
Gulf of Mexico (GOM)a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (thousand barrels or MBbls)
|
|
|
6,272
|
|
|
|
|
6,168
|
|
|
|
|
68
|
|
|
|
|
67
|
|
|
Natural gas (million cubic feet or MMcf)
|
|
|
9,922
|
|
|
|
|
9,513
|
|
|
|
|
108
|
|
|
|
|
103
|
|
|
Natural gas liquids (NGLs, in MBbls)
|
|
|
554
|
|
|
|
|
632
|
|
|
|
|
6
|
|
|
|
|
7
|
|
|
Thousand barrels of oil equivalents (MBOE)
|
|
|
8,479
|
|
|
|
|
8,386
|
|
|
|
|
92
|
|
b
|
|
|
91
|
|
b
|
Average realized price per BOEc
|
|
|
$
|
35.70
|
|
|
|
|
$
|
38.99
|
|
|
|
|
|
|
|
|
|
|
Cash production costs per BOEc
|
|
|
$
|
12.77
|
|
|
|
|
$
|
15.96
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
75
|
|
|
|
|
$
|
630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALIFORNIAa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
2,873
|
|
|
|
|
3,073
|
|
|
|
|
31
|
|
|
|
|
33
|
|
|
Natural gas (MMcf)
|
|
|
438
|
|
|
|
|
518
|
|
|
|
|
5
|
|
|
|
|
6
|
|
|
NGLs (MBbls)
|
|
|
38
|
|
|
|
|
44
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
MBOE
|
|
|
2,983
|
|
|
|
|
3,203
|
|
|
|
|
33
|
|
b
|
|
|
35
|
|
b
|
Average realized price per BOEc
|
|
|
$
|
36.72
|
|
|
|
|
$
|
39.84
|
|
|
|
|
|
|
|
|
|
|
Cash production costs per BOEc
|
|
|
$
|
23.75
|
|
|
|
|
$
|
32.82
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
6
|
|
|
|
|
$
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HAYNESVILLE/MADDEN/OTHERd
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
1
|
|
|
|
|
46
|
|
|
|
|
—
|
|
e
|
|
|
1
|
|
|
Natural gas (MMcf)
|
|
|
3,439
|
|
|
|
|
12,788
|
|
|
|
|
37
|
|
|
|
|
139
|
|
|
NGLs (MBbls)
|
|
|
1
|
|
|
|
|
14
|
|
|
|
|
—
|
|
e
|
|
|
—
|
|
e
|
MBOE
|
|
|
576
|
|
|
|
|
2,191
|
|
|
|
|
6
|
|
b
|
|
|
24
|
|
b
|
Average realized price per BOEc
|
|
|
$
|
15.55
|
|
|
|
|
$
|
16.20
|
|
|
|
|
|
|
|
|
|
|
Cash production costs per BOEc
|
|
|
$
|
2.45
|
|
|
|
|
$
|
9.49
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
—
|
|
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL U.S. OIL AND GAS OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
9,146
|
|
|
|
|
9,287
|
|
|
|
|
99
|
|
|
|
|
101
|
|
|
Natural gas (MMcf)
|
|
|
13,799
|
|
|
|
|
22,819
|
|
|
|
|
150
|
|
|
|
|
248
|
|
|
NGLs (MBbls)
|
|
|
593
|
|
|
|
|
690
|
|
|
|
|
7
|
|
|
|
|
8
|
|
|
MBOE
|
|
|
12,038
|
|
|
|
|
13,780
|
|
|
|
|
131
|
|
|
|
|
150
|
|
|
Cash operating margin per BOE:c
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized revenues
|
|
|
$
|
34.99
|
|
|
|
|
$
|
43.00
|
|
f
|
|
|
|
|
|
|
|
|
Less: cash production costs
|
|
|
15.00
|
|
|
|
|
18.85
|
|
|
|
|
|
|
|
|
|
|
Cash operating margin
|
|
|
$
|
19.99
|
|
|
|
|
$
|
24.15
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization per BOE
|
|
|
$
|
18.54
|
|
|
|
|
$
|
32.71
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
160
|
|
g
|
|
|
$
|
635
|
|
g
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. FCX has entered into agreements to sell its
Deepwater GOM and onshore California properties; these
transactions are expected to close in fourth-quarter 2016.
|
|
|
|
b. Production following the completion of the
pending oil and gas transactions would include (i) GOM Shelf,
which totaled 12 MBOE per day for third-quarter 2016 and 15 MBOE
per day for third-quarter 2015, (ii) offshore California, which
totaled 4 MBOE per day for both third quarter 2016 and 2015 and
(iii) the Madden area, which totaled 3 MBOE per day for
third-quarter 2016 and 4 MBOE per day for third-quarter 2015.
|
|
|
|
c. 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.”
|
|
|
|
d. In July 2016, FCX completed the sale of its
Haynesville shale assets.
|
|
|
|
e. Rounds to less than 1 MBbl per day.
|
|
|
|
f. Includes realized cash gains on crude oil
derivative contracts of $7.44 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.
|
|
|
|
g. Consolidated capital expenditures for U.S. oil
and gas operations reflect total spending, which includes changes
in capital expenditure accruals and other adjustments totaling $79
million for third-quarter 2016 and $(16) million for third-quarter
2015 that are not specifically allocated to the above regions.
Excludes international oil and gas capital expenditures totaling
$37 million for third-quarter 2015, primarily related to the
Morocco oil and gas properties.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
SELECTED U.S. OIL AND GAS OPERATING DATA (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
Sales Volumes
|
|
|
|
Sales per Day
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
2015
|
|
GOMa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
17,470
|
|
|
|
|
16,365
|
|
|
|
|
64
|
|
|
|
|
60
|
|
|
Natural gas (MMcf)
|
|
|
28,634
|
|
|
|
|
26,147
|
|
|
|
|
105
|
|
|
|
|
96
|
|
|
NGLs (MBbls)
|
|
|
1,638
|
|
|
|
|
1,633
|
|
|
|
|
6
|
|
|
|
|
6
|
|
|
MBOE
|
|
|
23,880
|
|
|
|
|
22,356
|
|
|
|
|
87
|
|
b
|
|
|
82
|
|
b
|
Average realized price per BOEc
|
|
|
$
|
32.38
|
|
|
|
|
$
|
42.37
|
|
|
|
|
|
|
|
|
|
|
Cash production costs per BOEc
|
|
|
$
|
12.44
|
|
|
|
|
$
|
16.72
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
557
|
|
|
|
|
$
|
2,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALIFORNIAa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
8,546
|
|
|
|
|
9,773
|
|
|
|
|
31
|
|
|
|
|
36
|
|
|
Natural gas (MMcf)
|
|
|
1,323
|
|
|
|
|
1,664
|
|
|
|
|
5
|
|
|
|
|
6
|
|
|
NGLs (MBbls)
|
|
|
104
|
|
|
|
|
128
|
|
|
|
|
—
|
|
d
|
|
|
—
|
|
d
|
MBOE
|
|
|
8,870
|
|
|
|
|
10,178
|
|
|
|
|
32
|
|
b
|
|
|
37
|
|
b
|
Average realized price per BOEc
|
|
|
$
|
33.08
|
|
|
|
|
$
|
42.33
|
|
|
|
|
|
|
|
|
|
|
Cash production costs per BOEc
|
|
|
$
|
25.23
|
|
|
|
|
$
|
30.71
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
22
|
|
|
|
|
$
|
72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HAYNESVILLE/MADDEN/OTHERe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
82
|
|
|
|
|
120
|
|
|
|
|
—
|
|
d
|
|
|
—
|
|
d
|
Natural gas (MMcf)
|
|
|
22,276
|
|
|
|
|
40,309
|
|
|
|
|
81
|
|
|
|
|
148
|
|
|
NGLs (MBbls)
|
|
|
21
|
|
|
|
|
39
|
|
|
|
|
—
|
|
d
|
|
|
—
|
|
d
|
MBOE
|
|
|
3,816
|
|
|
|
|
6,877
|
|
|
|
|
14
|
|
b
|
|
|
25
|
|
b
|
Average realized price per BOEc
|
|
|
$
|
12.69
|
|
|
|
|
$
|
16.52
|
|
|
|
|
|
|
|
|
|
|
Cash production costs per BOEc
|
|
|
$
|
9.88
|
|
|
|
|
$
|
11.48
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
2
|
|
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL U.S. OIL AND GAS OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
26,098
|
|
|
|
|
26,258
|
|
|
|
|
95
|
|
|
|
|
96
|
|
|
Natural gas (MMcf)
|
|
|
52,233
|
|
|
|
|
68,120
|
|
|
|
|
191
|
|
|
|
|
250
|
|
|
NGLs (MBbls)
|
|
|
1,763
|
|
|
|
|
1,800
|
|
|
|
|
6
|
|
|
|
|
6
|
|
|
MBOE
|
|
|
36,566
|
|
|
|
|
39,411
|
|
|
|
|
133
|
|
|
|
|
144
|
|
|
Cash operating margin per BOE:c
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized revenue
|
|
|
$
|
30.50
|
|
|
|
|
$
|
45.57
|
|
f
|
|
|
|
|
|
|
|
|
Less: cash production costs
|
|
|
15.28
|
|
|
|
|
19.42
|
|
|
|
|
|
|
|
|
|
|
Cash operating margin
|
|
|
$
|
15.22
|
|
|
|
|
$
|
26.15
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization per BOE
|
|
|
$
|
19.03
|
|
|
|
|
$
|
37.18
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures (in millions)
|
|
|
$
|
1,028
|
|
g
|
|
|
$
|
2,430
|
|
g
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. FCX has entered into agreements to sell its
Deepwater GOM and onshore California properties; these
transactions are expected to close in fourth-quarter 2016.
|
|
|
|
b. Production following the completion of the
pending oil and gas transactions would include (i) GOM Shelf,
which totaled 13 MBOE per day for the first nine months of 2016
and 14 MBOE per day for the first nine months of 2015, (ii)
offshore California, which totaled 4 MBOE per day for the first
nine months of 2016 and 6 MBOE per day for the first nine months
of 2015 and (iii) the Madden area, which totaled 3 MBOE per day
for the first nine months of 2016 and 4 MBOE per day for the first
nine months of 2015.
|
|
|
|
c. 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.”
|
|
|
|
d. Rounds to less than 1 MBbl per day.
|
|
|
|
e. In July 2016, FCX completed the sale of its
Haynesville shale assets.
|
|
|
|
f. Includes realized cash gains on crude oil
derivative contracts of $7.72 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.
|
|
|
|
g. Consolidated capital expenditures for U.S. oil
and gas operations reflect total spending, which includes changes
in capital expenditure accruals and other adjustments totaling
$447 million for the first nine months of 2016 and $318 million
for the first nine 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 nine
months of 2016 and $81 million for the first nine months of 2015,
primarily related to the Morocco oil and gas properties.
|
|
|
|
|
FREEPORT-McMoRan INC.
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
|
September 30,
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
|
(In millions, except per share amounts)
|
|
Revenuesa
|
|
|
$
|
3,877
|
|
|
|
|
$
|
3,382
|
|
|
|
|
$
|
10,453
|
|
|
|
|
$
|
11,091
|
|
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and deliveryb
|
|
|
2,509
|
|
|
|
|
2,595
|
|
|
|
|
7,957
|
|
|
|
|
7,862
|
|
|
Depreciation, depletion and amortization
|
|
|
643
|
|
|
|
|
823
|
|
|
|
|
1,937
|
|
|
|
|
2,522
|
|
|
Impairment of oil and gas properties
|
|
|
239
|
|
|
|
|
3,652
|
|
|
|
|
4,317
|
|
|
|
|
9,442
|
|
|
Metals inventory adjustments
|
|
|
20
|
|
|
|
|
91
|
|
|
|
|
27
|
|
|
|
|
154
|
|
|
Total cost of sales
|
|
|
3,411
|
|
|
|
|
7,161
|
|
|
|
|
14,238
|
|
|
|
|
19,980
|
|
|
Selling, general and administrative expenses
|
|
|
110
|
|
c
|
|
|
122
|
|
|
|
|
408
|
|
c
|
|
|
421
|
|
|
Mining exploration and research expenses
|
|
|
13
|
|
|
|
|
26
|
|
|
|
|
46
|
|
|
|
|
83
|
|
|
Environmental obligations and shutdown (credits) costs
|
|
|
(3
|
)
|
|
|
|
37
|
|
|
|
|
18
|
|
|
|
|
61
|
|
|
Net gain on sales of assets
|
|
|
(13
|
)
|
|
|
|
—
|
|
|
|
|
(762
|
)
|
|
|
|
(39
|
)
|
|
Total costs and expenses
|
|
|
3,518
|
|
|
|
|
7,346
|
|
|
|
|
13,948
|
|
|
|
|
20,506
|
|
|
Operating income (loss)
|
|
|
359
|
|
|
|
|
(3,964
|
)
|
|
|
|
(3,495
|
)
|
|
|
|
(9,415
|
)
|
|
Interest expense, netd
|
|
|
(187
|
)
|
|
|
|
(157
|
)
|
|
|
|
(574
|
)
|
|
|
|
(438
|
)
|
|
Net gain on early extinguishment of debt
|
|
|
15
|
|
|
|
|
—
|
|
|
|
|
51
|
|
|
|
|
—
|
|
|
Other (expense) income, net
|
|
|
(10
|
)
|
|
|
|
(41
|
)
|
|
|
|
54
|
|
|
|
|
2
|
|
e
|
Income (loss) from continuing operations before income taxes and
equity in affiliated companies' net earnings (losses)
|
|
|
177
|
|
|
|
|
(4,162
|
)
|
|
|
|
(3,964
|
)
|
|
|
|
(9,851
|
)
|
|
Benefit from (provision for) income taxesf
|
|
|
114
|
|
|
|
|
349
|
|
|
|
|
(79
|
)
|
|
|
|
1,762
|
|
|
Equity in affiliated companies' net earnings (losses)
|
|
|
1
|
|
|
|
|
(2
|
)
|
|
|
|
9
|
|
|
|
|
(1
|
)
|
|
Net income (loss) from continuing operations
|
|
|
292
|
|
|
|
|
(3,815
|
)
|
|
|
|
(4,034
|
)
|
|
|
|
(8,090
|
)
|
|
Net (loss) income from discontinued operationsg
|
|
|
(6
|
)
|
|
|
|
25
|
|
|
|
|
(191
|
)
|
|
|
|
95
|
|
|
Net income (loss)
|
|
|
286
|
|
|
|
|
(3,790
|
)
|
|
|
|
(4,225
|
)
|
|
|
|
(7,995
|
)
|
|
Net income attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
(37
|
)
|
|
|
|
(13
|
)
|
|
|
|
(146
|
)
|
|
|
|
(61
|
)
|
|
Discontinued operations
|
|
|
(22
|
)
|
|
|
|
(16
|
)
|
|
|
|
(44
|
)
|
|
|
|
(68
|
)
|
|
Preferred dividends attributable to redeemable noncontrolling
interest
|
|
|
(10
|
)
|
|
|
|
(11
|
)
|
|
|
|
(31
|
)
|
|
|
|
(31
|
)
|
|
Net income (loss) attributable to common stockholdersh
|
|
|
$
|
217
|
|
|
|
|
$
|
(3,830
|
)
|
|
|
|
$
|
(4,446
|
)
|
|
|
|
$
|
(8,155
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) per share attributable to common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.18
|
|
|
|
|
$
|
(3.59
|
)
|
|
|
|
$
|
(3.27
|
)
|
|
|
|
$
|
(7.80
|
)
|
|
Discontinued operations
|
|
|
(0.02
|
)
|
|
|
|
0.01
|
|
|
|
|
(0.18
|
)
|
|
|
|
0.03
|
|
|
|
|
|
$
|
0.16
|
|
|
|
|
$
|
(3.58
|
)
|
|
|
|
$
|
(3.45
|
)
|
|
|
|
$
|
(7.77
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average common shares outstanding
|
|
|
1,346
|
|
|
|
|
1,071
|
|
|
|
|
1,289
|
|
|
|
|
1,050
|
|
|
Diluted weighted-average common shares outstanding
|
|
|
1,351
|
|
|
|
|
1,071
|
|
|
|
|
1,289
|
|
|
|
|
1,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share of common stock
|
|
|
$
|
—
|
|
|
|
|
$
|
0.05
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
0.2605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
Income (Loss)," on Page IX for a summary of these amounts).
|
|
|
|
b. Includes charges (i) at oil and gas operations
associated with drillship settlements/idle rigs, inventory
adjustments, asset impairments and other net charges and (ii) at
mining operations for asset retirement/impairment and
restructuring charges. Refer to the supplemental schedule,
"Adjusted Net Income (Loss)," on page IX for a summary of these
charges.
|
|
|
|
c. Includes net restructuring-related charges at
oil and gas operations. Refer to the supplemental schedule,
"Adjusted Net Income (Loss)," on page IX.
|
|
|
|
d. Consolidated interest expense, excluding
capitalized interest, totaled $211 million in each of third
quarter 2016 and 2015, $647 million for the first nine months of
2016 and $622 million for the first nine 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 Income (Loss)," on page IX.
|
|
|
|
f. Refer to the supplemental schedule, "Income
Taxes," on page X for a summary of FCX's benefit from (provision
for) income taxes.
|
|
|
|
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 TF Holdings
Limited totaling $12 million in third-quarter 2016, $6 million in
third-quarter 2015, $33 million for the first nine months of 2016
and $20 million for the first nine months of 2015 and (ii) income
tax (benefit from) provision for totaling $(2) million in
third-quarter 2016, $(11) million in third-quarter 2015, $(25)
million for the first nine months of 2016 and $20 million for the
first nine months of 2015. In accordance with accounting
guidelines, the first nine months of 2016 also include an
estimated loss on disposal, which will be adjusted through closing
of the transaction (refer to the supplemental schedule, "Adjusted
Net Income (Loss)," on page IX.
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(In millions)
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
1,108
|
|
|
|
$
|
195
|
|
Trade accounts receivable
|
|
|
788
|
|
|
|
660
|
|
Income and other tax receivables
|
|
|
857
|
|
|
|
1,341
|
|
Other accounts receivable
|
|
|
97
|
|
|
|
154
|
|
Inventories:
|
|
|
|
|
|
|
Materials and supplies, net
|
|
|
1,349
|
|
|
|
1,594
|
|
Mill and leach stockpiles
|
|
|
1,312
|
|
|
|
1,539
|
|
Product
|
|
|
1,025
|
|
|
|
1,071
|
|
Other current assets
|
|
|
299
|
|
|
|
164
|
|
Held for sale
|
|
|
4,663
|
|
|
|
744
|
|
Total current assets
|
|
|
11,498
|
|
|
|
7,462
|
|
Property, plant, equipment and mining development costs, net
|
|
|
23,415
|
|
|
|
24,246
|
|
Oil and gas properties, net - full cost method:
|
|
|
|
|
|
|
Subject to amortization, less accumulated amortization and impairment
|
|
|
979
|
|
|
|
2,262
|
|
Not subject to amortization
|
|
|
1,644
|
|
|
|
4,831
|
|
Long-term mill and leach stockpiles
|
|
|
1,723
|
|
|
|
1,663
|
|
Other assets
|
|
|
2,141
|
|
|
|
1,989
|
|
Held for sale
|
|
|
—
|
|
|
|
4,124
|
|
Total assets
|
|
|
$
|
41,400
|
|
|
|
$
|
46,577
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
$
|
2,347
|
|
|
|
$
|
3,255
|
|
Current portion of debt
|
|
|
802
|
|
|
|
649
|
|
Current portion of environmental and asset retirement obligations
|
|
|
357
|
|
|
|
272
|
|
Accrued income taxes
|
|
|
161
|
|
|
|
23
|
|
Held for sale
|
|
|
821
|
|
|
|
108
|
|
Total current liabilities
|
|
|
4,488
|
|
|
|
4,307
|
|
Long-term debt, less current portion
|
|
|
18,180
|
|
|
|
19,779
|
|
Deferred income taxes
|
|
|
3,549
|
|
|
|
3,607
|
|
Environmental and asset retirement obligations, less current portion
|
|
|
3,725
|
|
|
|
3,717
|
|
Other liabilities
|
|
|
1,618
|
|
|
|
1,641
|
|
Held for sale
|
|
|
—
|
|
|
|
718
|
|
Total liabilities
|
|
|
31,560
|
|
|
|
33,769
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
|
774
|
|
|
|
764
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock
|
|
|
149
|
|
|
|
137
|
|
Capital in excess of par value
|
|
|
25,601
|
|
|
|
24,283
|
|
Accumulated deficit
|
|
|
(16,832
|
)
|
|
|
(12,387
|
)
|
Accumulated other comprehensive loss
|
|
|
(476
|
)
|
|
|
(503
|
)
|
Common stock held in treasury
|
|
|
(3,710
|
)
|
|
|
(3,702
|
)
|
Total stockholders' equity
|
|
|
4,732
|
|
|
|
7,828
|
|
Noncontrolling interestsa
|
|
|
4,334
|
|
|
|
4,216
|
|
Total equity
|
|
|
9,066
|
|
|
|
12,044
|
|
Total liabilities and equity
|
|
|
$
|
41,400
|
|
|
|
$
|
46,577
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Includes noncontrolling interests of $1.2 billion at
September 30, 2016, and December 31, 2015, associated with Tenke.
|
|
|
|
|
|
|
|
|
|
|
|
|
FREEPORT-McMoRan INC.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
(In millions)
|
Cash flow from operating activities:
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(4,225
|
)
|
|
|
|
$
|
(7,995
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
2,017
|
|
|
|
|
2,717
|
|
Impairment of oil and gas properties
|
|
|
4,317
|
|
|
|
|
9,442
|
|
Non-cash oil and gas drillship settlements
|
|
|
606
|
|
|
|
|
—
|
|
Other asset impairments, inventory adjustments, restructuring and
other
|
|
|
119
|
|
|
|
|
104
|
|
Metals inventory adjustments
|
|
|
27
|
|
|
|
|
154
|
|
Net gain on sales of assets
|
|
|
(762
|
)
|
|
|
|
(39
|
)
|
Net charges for environmental and asset retirement obligations,
including accretion
|
|
|
149
|
|
|
|
|
174
|
|
Payments for environmental and asset retirement obligations
|
|
|
(190
|
)
|
|
|
|
(135
|
)
|
Net gain on early extinguishment of debt
|
|
|
(51
|
)
|
|
|
|
—
|
|
Deferred income taxes
|
|
|
(22
|
)
|
|
|
|
(1,926
|
)
|
Estimated loss on disposal of discontinued operations
|
|
|
182
|
|
|
|
|
—
|
|
Increase in long-term mill and leach stockpiles
|
|
|
(84
|
)
|
|
|
|
(183
|
)
|
Net gains on crude oil derivative contracts
|
|
|
—
|
|
|
|
|
(87
|
)
|
Other, net
|
|
|
48
|
|
|
|
|
40
|
|
Changes in working capital and other tax payments, excluding amounts
from dispositions:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
257
|
|
|
|
|
990
|
|
Inventories
|
|
|
251
|
|
|
|
|
83
|
|
Other current assets
|
|
|
(120
|
)
|
|
|
|
(13
|
)
|
Accounts payable and accrued liabilities
|
|
|
(80
|
)
|
|
|
|
(150
|
)
|
Accrued income taxes and changes in other tax payments
|
|
|
155
|
|
|
|
|
(568
|
)
|
Net cash provided by operating activities
|
|
|
2,594
|
|
|
|
|
2,608
|
|
|
|
|
|
|
|
|
|
Cash flow from investing activities:
|
|
|
|
|
|
|
|
Capital expenditures:
|
|
|
|
|
|
|
|
North America copper mines
|
|
|
(87
|
)
|
|
|
|
(308
|
)
|
South America
|
|
|
(332
|
)
|
|
|
|
(1,339
|
)
|
Indonesia
|
|
|
(715
|
)
|
|
|
|
(660
|
)
|
Molybdenum mines
|
|
|
(2
|
)
|
|
|
|
(10
|
)
|
U.S. oil and gas operations
|
|
|
(1,028
|
)
|
|
|
|
(2,430
|
)
|
Other
|
|
|
(145
|
)
|
|
|
|
(308
|
)
|
Net proceeds from sale of additional interest in Morenci
|
|
|
996
|
|
|
|
|
—
|
|
Net proceeds from sales of other assets
|
|
|
410
|
|
|
|
|
151
|
|
Other, net
|
|
|
9
|
|
|
|
|
(37
|
)
|
Net cash used in investing activities
|
|
|
(894
|
)
|
|
|
|
(4,941
|
)
|
|
|
|
|
|
|
|
|
Cash flow from financing activities:
|
|
|
|
|
|
|
|
Proceeds from debt
|
|
|
3,463
|
|
|
|
|
6,552
|
|
Repayments of debt
|
|
|
(4,539
|
)
|
|
|
|
(4,693
|
)
|
Net proceeds from sale of common stock
|
|
|
442
|
|
|
|
|
999
|
|
Cash dividends and distributions paid:
|
|
|
|
|
|
|
|
Common stock
|
|
|
(5
|
)
|
|
|
|
(547
|
)
|
Noncontrolling interests
|
|
|
(87
|
)
|
|
|
|
(89
|
)
|
Stock-based awards net payments, including excess tax benefit
|
|
|
(5
|
)
|
|
|
|
(8
|
)
|
Debt financing costs and other, net
|
|
|
(17
|
)
|
|
|
|
(7
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(748
|
)
|
|
|
|
2,207
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
952
|
|
|
|
|
(126
|
)
|
(Increase) decrease in cash and cash equivalents in assets held for
sale
|
|
|
(39
|
)
|
|
|
|
42
|
|
Cash and cash equivalents at beginning of year
|
|
|
195
|
|
|
|
|
317
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
1,108
|
|
|
|
|
$
|
233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 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. 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,
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
|
Pre-tax
|
|
|
After-tax
|
|
|
|
Per Share
|
|
|
|
Pre-tax
|
|
|
After-tax
|
|
|
|
Per Share
|
|
Net income (loss) attributable to common stock
|
|
|
N/A
|
|
|
$
|
217
|
|
|
|
|
$
|
0.16
|
|
|
|
|
N/A
|
|
|
$
|
(3,830
|
)
|
|
|
|
$
|
(3.58
|
)
|
|
Net noncash mark-to-market losses on crude oil derivative contracts
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(74
|
)
|
|
|
$
|
(46
|
)
|
|
|
|
$
|
(0.04
|
)
|
|
Impairment of oil and gas properties
|
|
|
(239
|
)
|
|
|
(239
|
)
|
a
|
|
|
(0.18
|
)
|
|
|
|
(3,652
|
)
|
|
|
(3,481
|
)
|
a
|
|
|
(3.25
|
)
|
|
Other oil and gas net (charges) credits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drillship settlements/idle rig (costs) credits
|
|
|
(19
|
)
|
|
|
(19
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
3
|
|
|
|
2
|
|
|
|
|
—
|
|
|
Inventory adjustments, asset impairments and other net chargesb
|
|
|
(31
|
)
|
|
|
(31
|
)
|
|
|
|
(0.02
|
)
|
|
|
|
(24
|
)
|
|
|
(15
|
)
|
|
|
|
(0.01
|
)
|
|
Net restructuring-related credits
|
|
|
1
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Metals inventory adjustments
|
|
|
(20
|
)
|
|
|
(20
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
(91
|
)
|
|
|
(58
|
)
|
|
|
|
(0.05
|
)
|
|
Mining asset retirement/impairment and restructuring charges
|
|
|
(20
|
)
|
|
|
(20
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
(92
|
)
|
|
|
(56
|
)
|
|
|
|
(0.05
|
)
|
|
Adjustments to environmental obligations and related litigation
reserves
|
|
|
12
|
|
|
|
12
|
|
|
|
|
0.01
|
|
|
|
|
(28
|
)
|
|
|
(18
|
)
|
|
|
|
(0.02
|
)
|
|
Net gain on sales of assets
|
|
|
13
|
|
|
|
13
|
|
|
|
|
0.01
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Net gain on early extinguishment of debt
|
|
|
15
|
|
|
|
15
|
|
|
|
|
0.01
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Net tax creditsc
|
|
|
N/A
|
|
|
332
|
|
|
|
|
0.24
|
|
|
|
|
N/A
|
|
|
—
|
|
|
|
|
—
|
|
|
Estimated loss on disposal of discontinued operations
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
$
|
(293
|
)
|
|
|
$
|
39
|
|
|
|
|
$
|
0.03
|
|
d
|
|
|
$
|
(3,958
|
)
|
|
|
$
|
(3,672
|
)
|
|
|
|
$
|
(3.43
|
)
|
d
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) attributable to common stock
|
|
|
N/A
|
|
|
$
|
178
|
|
|
|
|
$
|
0.13
|
|
|
|
|
N/A
|
|
|
$
|
(158
|
)
|
|
|
|
$
|
(0.15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
|
Pre-tax
|
|
|
After-tax
|
|
|
|
Per Share
|
|
|
|
Pre-tax
|
|
|
After-tax
|
|
|
|
Per Share
|
|
Net loss attributable to common stock
|
|
|
N/A
|
|
|
$
|
(4,446
|
)
|
|
|
|
$
|
(3.45
|
)
|
|
|
|
N/A
|
|
|
$
|
(8,155
|
)
|
|
|
|
$
|
(7.77
|
)
|
|
Net noncash mark-to-market losses on crude oil derivative contracts
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(217
|
)
|
|
|
$
|
(135
|
)
|
|
|
|
$
|
(0.13
|
)
|
|
Impairment of oil and gas properties
|
|
|
(4,317
|
)
|
|
|
(4,317
|
)
|
a
|
|
|
(3.35
|
)
|
|
|
|
(9,442
|
)
|
|
|
(7,855
|
)
|
a
|
|
|
(7.48
|
)
|
|
Other oil and gas net charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drillship settlements/idle rig costs
|
|
|
(823
|
)
|
|
|
(823
|
)
|
|
|
|
(0.64
|
)
|
|
|
|
(13
|
)
|
|
|
(8
|
)
|
|
|
|
(0.01
|
)
|
|
Inventory adjustments, asset impairments and other net chargesb
|
|
|
(119
|
)
|
|
|
(119
|
)
|
|
|
|
(0.09
|
)
|
|
|
|
(46
|
)
|
|
|
(29
|
)
|
|
|
|
(0.03
|
)
|
|
Net restructuring-related charges
|
|
|
(38
|
)
|
|
|
(38
|
)
|
|
|
|
(0.03
|
)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Metals inventory adjustments
|
|
|
(27
|
)
|
|
|
(27
|
)
|
|
|
|
(0.02
|
)
|
|
|
|
(154
|
)
|
|
|
(99
|
)
|
|
|
|
(0.09
|
)
|
|
Mining asset retirement/impairment and restructuring charges
|
|
|
(17
|
)
|
|
|
(17
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
(92
|
)
|
|
|
(56
|
)
|
|
|
|
(0.05
|
)
|
|
Adjustments to environmental obligations and related litigation
reserves
|
|
|
11
|
|
|
|
11
|
|
|
|
|
0.01
|
|
|
|
|
(36
|
)
|
|
|
(23
|
)
|
|
|
|
(0.02
|
)
|
|
Net gain on sales of assets
|
|
|
762
|
|
|
|
757
|
|
|
|
|
0.59
|
|
|
|
|
39
|
|
|
|
25
|
|
|
|
|
0.02
|
|
|
Net gain on early extinguishment of debt
|
|
|
51
|
|
|
|
51
|
|
|
|
|
0.04
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Gain on shareholder derivative litigation settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
92
|
|
|
|
92
|
|
|
|
|
0.09
|
|
|
Net tax creditsc
|
|
|
N/A
|
|
|
290
|
|
|
|
|
0.22
|
|
|
|
|
N/A
|
|
|
—
|
|
|
|
|
—
|
|
|
Estimated loss on disposal of discontinued operations
|
|
|
(182
|
)
|
|
|
(182
|
)
|
|
|
|
(0.14
|
)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
$
|
(4,699
|
)
|
|
|
$
|
(4,414
|
)
|
|
|
|
$
|
(3.43
|
)
|
d
|
|
|
$
|
(9,869
|
)
|
|
|
$
|
(8,088
|
)
|
|
|
|
$
|
(7.71
|
)
|
d
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net loss attributable to common stock
|
|
|
N/A
|
|
|
$
|
(32
|
)
|
|
|
|
$
|
(0.02
|
)
|
|
|
|
N/A
|
|
|
$
|
(67
|
)
|
|
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. As a result of the impairment to oil and gas
properties, FCX recorded tax charges 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. Other net charges for oil and gas operations
include $17 million in the 2016 periods for the termination of the
Morocco well commitment, and $14 million in third-quarter 2015 and
$13 million for the first nine months of 2015 for prior period tax
assessments related to California properties.
|
|
|
|
c. For further discussion of net tax credits
impacting the third quarter and first nine 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/20161025005893/en/
Source: Freeport-McMoRan Inc.