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Freeport-McMoRan
Reports Third-Quarter and Nine-Month 2019 Results
 
 
 
Net loss attributable to common stock totaled $131 million, $0.09 per share, in third-quarter 2019. After adjusting for net charges of $123 million, $0.08 per share, third-quarter 2019 adjusted net loss attributable to common stock totaled $8 million, $0.01 per share.
Consolidated sales totaled 795 million pounds of copper, 243 thousand ounces of gold and 22 million pounds of molybdenum in third-quarter 2019. Consolidated production totaled 864 million pounds of copper and 333 thousand ounces of gold in third-quarter 2019.
Full year consolidated sales guidance is similar to prior estimates, with consolidated sales expected to approximate 3.3 billion pounds of copper, 874 thousand ounces of gold and 92 million pounds of molybdenum for the year 2019, including 870 million pounds of copper, 200 thousand ounces of gold and 24 million pounds of molybdenum in fourth-quarter 2019.
Average realized prices in third-quarter 2019 were $2.62 per pound for copper, $1,487 per ounce for gold and $12.89 per pound for molybdenum.
Average unit net cash costs in third-quarter 2019 were $1.59 per pound of copper and are expected to approximate $1.76 per pound of copper for the year 2019.
Operating cash flows totaled $224 million (net of $146 million of working capital uses and timing of other tax payments) in third-quarter 2019 and $1.3 billion (including $135 million of working capital sources and timing of other tax payments) for the first nine months of 2019. Based on current sales volume and cost estimates, and assuming average prices of $2.60 per pound for copper, $1,500 per ounce for gold and $12.00 per pound for molybdenum for fourth-quarter 2019, operating cash flows are expected to approximate $1.6 billion (including $0.2 billion of working capital sources and timing of other tax payments) for the year 2019.
Capital expenditures totaled $0.7 billion (including approximately $0.3 billion for major mining projects) in third-quarter 2019 and $1.9 billion (including approximately $1.1 billion for major mining projects) for the first nine months of 2019. Capital expenditures for the year 2019 are expected to approximate $2.6 billion, including $1.6 billion for major mining projects primarily associated with underground development activities in the Grasberg minerals district in Indonesia and development of the Lone Star copper leach project in Arizona.
The Grasberg underground and Lone Star copper leach development projects are progressing according to plan.
At September 30, 2019, consolidated debt totaled $9.9 billion and consolidated cash totaled $2.2 billion. FCX had no borrowings and $3.5 billion available under its revolving credit facility at
September 30, 2019
.
On September 25, 2019, FCX declared a quarterly cash dividend of $0.05 per share on its common stock, which will be paid on November 1, 2019.


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PHOENIX, AZ, October 23, 2019 - Freeport-McMoRan Inc. (NYSE: FCX) reported net losses attributable to common stock of $131 million ($0.09 per share) in third-quarter 2019 and $172 million ($0.12 per share) for the first nine months of 2019. After adjusting for net charges of $123 million ($0.08 per share), adjusted net loss attributable to common stock totaled $8 million ($0.01 per share) in third-quarter 2019. For additional information, refer to the supplemental schedule, "Adjusted Net (Loss) Income," on page VII, which is available on FCX's website, "fcx.com."

Richard C. Adkerson, President and Chief Executive Officer, said, "Our global team has established strong momentum on our three major initiatives to build value for shareholders. We are effectively executing our plans to establish large-scale production from our significant high-grade, low-cost and long-lived underground ore bodies at Grasberg; advance the Lone Star project in Arizona as a new cornerstone asset in the U.S.; and progress our innovation initiatives to enhance productivity and grow our Americas operations with low capital intensity. These initiatives are expected to significantly enhance our cost position, cash flow and the long-term value of our premier copper portfolio, providing opportunities for increased returns to shareholders. We are pleased with our progress to date and remain focused on successful execution of our plans, which would enable us to increase copper production by 30 percent, gold production by 70 percent, reduce unit net cash costs by 25 percent and more than double operating cash flows in 2021 from 2019 levels.”

SUMMARY FINANCIAL DATA
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions, except per share amounts)
 
Revenuesa,b
$
3,308

 
$
4,908

 
$
10,646

 
$
14,944

 
Operating incomea
$
117

 
$
1,315

 
$
471

 
$
4,438

 
Net (loss) income from continuing operations
$
(139
)
 
$
668

 
$
(138
)
 
$
2,535

 
Net (loss) income attributable to common stockc,d
$
(131
)
 
$
556

 
$
(172
)
 
$
2,117

 
Diluted net (loss) income per share of common stock:
 
 
 
 
 
 
 
 
Continuing operations
$
(0.09
)
 
$
0.38

 
$
(0.12
)
 
$
1.46

 
Discontinued operations

 

 

 
(0.01
)
 
 
$
(0.09
)
 
$
0.38

 
$
(0.12
)
 
$
1.45

 
 
 
 
 
 
 
 
 
 
Diluted weighted-average common shares outstanding
1,452

 
1,458

 
1,451

 
1,458

 
Operating cash flowse
$
224

 
$
1,247

 
$
1,312

 
$
3,925

 
Capital expenditures
$
666

 
$
507

 
$
1,917

 
$
1,391

 
At September 30:
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
2,247

 
$
4,580

 
$
2,247

 
$
4,580

 
Total debt, including current portion
$
9,919

 
$
11,287

 
$
9,919

 
$
11,287

 
 
 
 
 
 
 
 
 
 
a.
For segment financial results, refer to the supplemental schedules, "Business Segments," beginning on page X, which are available on FCX's website, "fcx.com."
b.
Includes (unfavorable) favorable adjustments to prior period provisionally priced concentrate and cathode copper sales totaling $(42) million ($(17) million to net loss attributable to common stock or $(0.01) per share) in third-quarter 2019, $(111) million ($(48) million to net income attributable to common stock or $(0.03) per share) in third-quarter 2018, $58 million ($23 million to net loss attributable to common stock or $0.02 per share) for the first nine months of 2019 and $(70) million ($(31) million to net income attributable to common stock or $(0.02) per share) for the first nine months of 2018. For further discussion, refer to the supplemental schedule, "Derivative Instruments," on page IX, which is available on FCX's website, "fcx.com."
c.
Includes net (charges) gains of $(123) million ($(0.08) per share) in third-quarter 2019, $42 million ($0.03 per share) in third-quarter 2018, $(173) million ($(0.12) per share) for the first nine months of 2019 and $69 million ($0.04 per share) for the first nine months of 2018 that are described in the supplemental schedule, "Adjusted Net (Loss) Income," on page VII, which is available on FCX's website, "fcx.com."
d.
FCX defers recognizing profits on intercompany sales until final sales to third parties occur. For a summary of net impacts from changes in these deferrals, refer to the supplemental schedule, "Deferred Profits," on page IX, which is available on FCX's website, "fcx.com."


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e.
Net of working capital (uses) sources and timing of other tax payments of $(146) million in third-quarter 2019, $59 million in third-quarter 2018, $135 million for the first nine months of 2019 and $(154) million for the first nine months of 2018.
SUMMARY OPERATING DATA
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
2019
 
2018
 
2019
 
2018
 
Copper (millions of recoverable pounds)
 
 
 
 
 
 
 
 
 
Production
 
864

 
1,006

 
2,420

 
2,972

 
Sales, excluding purchases
 
795

 
1,044

 
2,386

 
3,026

 
Average realized price per pound
 
$
2.62

 
$
2.80

 
$
2.71

 
$
2.96

 
Site production and delivery costs per pounda
 
$
2.05

 
$
1.73

b 
$
2.16

 
$
1.70

b 
Unit net cash costs per pounda
 
$
1.59

 
$
0.93

b 
$
1.76

 
$
0.95

b 
Gold (thousands of recoverable ounces)
 
 
 
 
 
 
 
 
 
Production
 
333

 
760

 
659

 
2,105

 
Sales, excluding purchases
 
243

 
837

 
674

 
2,123

 
Average realized price per ounce
 
$
1,487

 
$
1,191

 
$
1,380

 
$
1,249

 
Molybdenum (millions of recoverable pounds)
 
 
 
 
 
 
 
 
 
Production
 
21

 
23

 
69

 
69

 
Sales, excluding purchases
 
22

 
22

 
68

 
70

 
Average realized price per pound
 
$
12.89

 
$
12.40

 
$
12.92

 
$
12.41

 
a.
Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs. For reconciliations of per pound unit costs by operating division to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedules, "Product Revenues and Production Costs," beginning on page XIII, which are available on FCX's website, "fcx.com."
b.
Includes charges totaling $0.07 per pound of copper in third-quarter 2018 and $0.02 per pound of copper for the first nine months of 2018 associated with for Cerro Verde's three-year collective labor agreement (CLA). Refer to the supplemental schedule, "Adjusted Net (Loss) Income," on page VII, which is available on FCX's website, "fcx.com," for additional information.
Consolidated Sales Volumes
Third-quarter 2019 copper sales of 795 million pounds were four percent lower than the July 2019 estimate of 830 million pounds of copper, primarily because of lower production from Cerro Verde and timing of shipments, partly offset by higher production and sales from North America. Third-quarter 2019 gold sales of 243 thousand ounces were six percent higher than the July 2019 estimate of 230 thousand ounces of gold.
Third-quarter 2019 copper and gold sales were lower than third-quarter 2018 sales primarily reflecting anticipated lower mill rates and ore grades as PT Freeport Indonesia (PT-FI) transitions mining from the open pit to underground. Third-quarter 2019 copper sales were also lower in South America, reflecting the timing of shipments and lower grades and recovery rates at Cerro Verde, offset by higher copper sales in North America, primarily related to higher mining and milling rates.
Third-quarter 2019 molybdenum sales of 22 million pounds were lower than the July 2019 estimate of 25 million pounds and approximated third-quarter 2018 sales of 22 million pounds.
Consolidated sales volumes for the year 2019 are expected to approximate 3.3 billion pounds of copper, 874 thousand ounces of gold and 92 million pounds of molybdenum, including 870 million pounds of copper, 200 thousand ounces of gold and 24 million pounds of molybdenum in fourth-quarter 2019. As PT-FI transitions mining from the open pit to underground, metal production is currently expected to improve significantly by 2021.


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Consolidated Unit Net Cash Costs
Consolidated average unit net cash costs (net of by-product credits) for FCX's copper mines of $1.59 per pound of copper in third-quarter 2019, were slightly improved from the July 2019 estimate of $1.63 per pound. As anticipated, consolidated average unit net cash costs were higher than the third-quarter 2018 average of $0.93 per pound, primarily reflecting lower sales volumes as PT-FI transitions mining from the open pit to underground.
Assuming average prices of $1,500 per ounce of gold and $12.00 per pound of molybdenum for fourth-quarter 2019 and achievement of current sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) for copper mines are expected to average $1.76 per pound of copper for the year 2019, (including $1.76 per pound of copper in fourth-quarter 2019). The impact of price changes during fourth-quarter 2019 on consolidated unit net cash costs for the year 2019 would approximate $0.005 per pound for each $50 per ounce change in the average price of gold and $0.005 per pound for each $2 per pound change in the average price of molybdenum. Quarterly unit net cash costs vary with fluctuations in sales volumes and realized prices, primarily for gold and molybdenum. FCX expects consolidated unit net cash costs to decline by 2021, following a ramp-up period at PT-FI.
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, certain of FCX's North America copper mines produce molybdenum concentrate, gold and silver. All of the North America mining operations are wholly owned, except for Morenci. FCX records its 72 percent undivided joint venture interest in Morenci using the proportionate consolidation method.
Operating and Development Activities. FCX has significant undeveloped reserves and resources in North America and a portfolio of potential long-term development projects. Future investments will be undertaken based on the results of economic and technical feasibility studies, and are dependent on market conditions. FCX continues to pursue projects to enhance productivity through innovative technologies and to identify opportunities to reduce the capital intensity of its potential long-term development projects. Early results from innovation initiatives have been positive, and FCX expects to incorporate these enhancements into its future mine plans in 2020.
Through exploration drilling, FCX has identified a significant resource at its wholly owned Lone Star copper leach project located near the Safford operation in eastern Arizona. An initial project to develop the Lone Star leachable ores commenced in 2018, with first production expected by the end of 2020. Initial production from the Lone Star leachable ores is expected to average approximately 200 million pounds of copper per year, with the potential for future expansion options. Total capital costs for the initial project, including mine equipment and pre-production stripping, are expected to approximate $850 million and will benefit from the utilization of existing infrastructure at the adjacent Safford operation. As of September 30, 2019, approximately $575 million has been incurred for this project, which is on schedule and within budget. The project also advances exposure to a significant sulfide resource. FCX expects to incorporate positive drilling and ongoing results in its future development plans.


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Operating Data. Following is summary consolidated operating data for the North America copper mines:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
2019
 
2018
 
2019
 
2018
 
Copper (millions of recoverable pounds)
 
 
 
 
 
 
 
 
 
Production
 
390

 
349

 
1,096

 
1,051

 
Sales, excluding purchases
 
395

 
350

 
1,084

 
1,095

 
Average realized price per pound
 
$
2.65

 
$
2.77

 
$
2.74

 
$
3.02

 
 
 
 
 
 
 
 
 
 
 
Molybdenum (millions of recoverable pounds)
 
 
 
 
 
 
 
 
 
Productiona
 
8

 
8

 
24

 
23

 
 
 
 
 
 
 
 
 
 
 
Unit net cash costs per pound of copperb
 
 
 
 
 
 
 
 
 
Site production and delivery, excluding adjustments
 
$
2.03

 
$
1.98

 
$
2.05

 
$
1.92

 
By-product credits
 
(0.22
)
 
(0.26
)
 
(0.25
)
 
(0.23
)
 
Treatment charges
 
0.11

 
0.10

 
0.11

 
0.10

 
Unit net cash costs
 
$
1.92

 
$
1.82

 
$
1.91

 
$
1.79

 
 
 
 
 
 
 
 
 
 
 
a.
Refer to summary operating data on page 3 for FCX's consolidated molybdenum sales, which includes sales of molybdenum produced at the North America copper mines.
b.
For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedules, "Product Revenues and Production Costs," beginning on page XIII, which are available on FCX's website, "fcx.com."
North America's consolidated copper sales volumes of 395 million pounds in third-quarter 2019 were higher than third-quarter 2018 copper sales volumes of 350 million pounds, primarily reflecting higher leach production and higher mining and milling rates. North America copper sales are estimated to approximate 1.45 billion pounds for the year 2019.
Average unit net cash costs (net of by-product credits) for the North America copper mines of $1.92 per pound of copper in third-quarter 2019 were higher than third-quarter 2018 unit net cash costs of $1.82 per pound, primarily reflecting higher mining and milling rates.
Average unit net cash costs (net of by-product credits) for the North America copper mines are expected to approximate $1.90 per pound of copper for the year 2019, based on achievement of current sales volume and cost estimates and assuming an average molybdenum price of $12.00 per pound for fourth-quarter 2019. The impact of price changes during fourth-quarter 2019 on North America's average unit net cash costs for the year 2019 would approximate $0.01 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. Cerro Verde's expanded operations benefit from its large-scale, long-lived reserves and cost efficiencies and have continued to perform well. Debottlenecking projects and additional initiatives to enhance operating rates continue to be advanced.
FCX continues to evaluate a large-scale expansion at El Abra to process additional sulfide material and to achieve higher recoveries. El Abra's large sulfide resource could potentially support a major mill project similar to facilities constructed at Cerro Verde. Technical and economic studies continue to be advanced to determine the optimal scope and timing for the project.
    


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Operating Data. Following is summary consolidated operating data for South America mining:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
2019
 
2018
 
2019
 
2018
 
Copper (millions of recoverable pounds)
 
 
 
 
 
 
 
 
 
Production
 
283

 
325

 
863

 
931

 
Sales
 
261

 
326

 
838

 
928

 
Average realized price per pound
 
$
2.61

 
$
2.80

 
$
2.67

 
$
2.93

 
 
 
 
 
 
 
 
 
 
 
Molybdenum (millions of recoverable pounds)
 
 
 
 
 
 
 
 
 
Productiona
 
6

 
7

 
21

 
20

 
 
 
 
 
 
 
 
 
 
 
Unit net cash costs per pound of copperb
 
 
 
 
 
 
 
 
 
Site production and delivery, excluding adjustments
 
$
1.89

 
$
1.84

c 
$
1.84

 
$
1.80

c 
By-product credits
 
(0.26
)
 
(0.23
)
 
(0.29
)
 
(0.24
)
 
Treatment charges
 
0.17

 
0.20

 
0.18

 
0.20

 
Royalty on metals
 
0.01

 

 
0.01

 

 
Unit net cash costs
 
$
1.81

 
$
1.81

 
$
1.74

 
$
1.76

 
 
 
 
 
 
 
 
 
 
 
a.
Refer to summary operating data on page 3 for FCX's consolidated molybdenum sales, which includes sales of        molybdenum produced at Cerro Verde.
b.
For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedules, "Product Revenues and Production Costs," beginning on page XIII, which are available on FCX's website, "fcx.com."
c.
Includes charges totaling $0.21 per pound of copper in third-quarter 2018 and $0.07 per pound of copper for the first nine months of 2018 associated with Cerro Verde's three-year CLA.
South America's consolidated copper sales volumes of 261 million pounds in third-quarter 2019 were lower than third-quarter 2018 copper sales volumes of 326 million pounds reflecting lower ore grades and recovery rates at Cerro Verde and the timing of shipments. Third-quarter 2019 production and sales were impacted by protests in Peru associated with an unaffiliated copper development project that blocked access to the shipping ports and main transportation routes, mill maintenance activities and mine sequencing changes at Cerro Verde that delayed access to higher grade material. Sales from South America mining are expected to approximate 1.2 billion pounds of copper for the year 2019.
Average unit net cash costs (net of by-product credits) for South America mining were $1.81 per pound of copper in both third-quarter 2019 and 2018. Excluding third-quarter 2018 charges for Cerro Verde's three-year CLA, average unit net cash costs (net of by-product credits) for South America were higher in third-quarter 2019, primarily reflecting lower copper sales volumes.
Average unit net cash costs (net of by-product credits) for South America mining are expected to approximate $1.73 per pound of copper for the year 2019, based on current sales volume and cost estimates and assuming an average price of $12.00 per pound of molybdenum for fourth-quarter 2019.
In September 2019, El Abra and its two workers' unions signed new CLAs, which expire on April 30, 2023.



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Indonesia Mining. PT-FI's assets include one of the world's largest copper and gold deposits at the Grasberg minerals district in Papua, Indonesia. PT-FI produces copper concentrate that contains significant quantities of gold and silver. FCX has a 48.76 percent ownership interest in PT-FI and manages its mining operations. PT-FI is consolidated in FCX's financial statements. As a result of the December 2018 transaction regarding PT-FI's long-term mining rights and share ownership, FCX’s economic interest in PT-FI is expected to approximate 81 percent through 2022.
Operating and Development Activities. PT-FI continues to mine the final stages of the Grasberg open pit and currently expects to complete mining in the open pit in fourth-quarter 2019, subject to geotechnical conditions.
PT-FI has commenced production from its significant underground ore bodies and continues to achieve important milestones to produce large-scale quantities of copper and gold following the transition from the Grasberg open pit. PT-FI's estimated annual capital spending on underground mine development projects is expected to average $0.8 billion per year for the four-year period 2019 through 2022, net of scheduled contributions from PT Indonesia Asahan Aluminium (Persero) (PT Inalum). In accordance with applicable accounting guidance, aggregate costs (before scheduled contributions from PT Inalum), which are expected to average $0.95 billion per year for the four-year period 2019 through 2022, will be reflected as an investing activity in FCX's cash flow statement, and contributions from PT Inalum will be reflected as a financing activity. Considering the long-term nature and size of these projects, actual costs could vary from these estimates.
Grasberg Block Cave. PT-FI has commenced extraction of ore from the Grasberg Block Cave underground mine, which is the same ore body historically mined from the surface in the Grasberg open pit. Undercutting, drawbell construction and ore extraction activities in the Grasberg Block Cave underground mine continue to meet or exceed expectations. Ore extraction from the Grasberg Block Cave underground mine averaged 10,600 metric tons of ore per day in third-quarter 2019 and is expected to ramp up to 16,000 metric tons of ore per day by the end of 2019. Monitoring data on cave propagation in the Grasberg Block Cave underground mine is providing confidence in growing production rates over time. As existing drawpoints mature and additional drawpoints are added, cave expansion is expected to accelerate production rates from an average of 30,000 metric tons of ore per day in 2020 to 130,000 metric tons of ore per day in 2023 from five production blocks spanning 335,000 square meters.
Deep Mill Level Zone (DMLZ). The DMLZ underground mine, located east of the Grasberg ore body and below the Deep Ore Zone (DOZ) underground mine, has continued its ramp up of production. Hydraulic fracturing operations have been effective in managing rock stresses and pre-conditioning the cave following mining-induced seismic activity experienced in 2017 and 2018. Ore extraction continues to exceed expectations, averaging 9,800 metric tons of ore per day in third-quarter 2019. During third-quarter 2019, PT-FI elected to temporarily slow undercutting rates in one of the DMLZ production blocks until the desired cave shape was achieved. Undercutting re-commenced in September 2019. Ore extraction is expected to ramp up to 11,000 metric tons of ore per day by the end of 2019. Ongoing hydraulic fracturing operations combined with continued undercutting and drawbell openings in the two production blocks are expected to expand the cave, supporting higher production rates that are expected to average 28,000 metric tons of ore per day in 2020 and 80,000 metric tons of ore per day in 2022 from three production blocks. 
Results to date from the Grasberg Block Cave and DMLZ underground mine are positive and in line with long-term plans to reach full production rates. Because of the nature of block caving, estimates of timing of future production from PT-FI's underground ore bodies will continue to be reviewed and may be modified as additional information becomes available.  
Indonesian Smelter. In connection with the extension of PT-FI's mining rights from 2031 to 2041, PT-FI committed to construct a new smelter in Indonesia by December 21, 2023. A site for the new smelter has been selected and ground preparation is in progress. Engineering and front-end engineering and design for the selected process technology are ongoing, with construction of the smelter expected to begin in 2020. The preliminary capital cost estimate for the project approximates $3 billion, and PT-FI is pursuing financing and commercial arrangements for this project. The economics of PT-FI’s share of the new smelter will be shared by PT-FI’s shareholders according to their respective share ownership percentages.


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Operating Data. Following is summary consolidated operating data for Indonesia mining:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
2019
 
2018
 
2019
 
2018
 
Copper (millions of recoverable pounds)
 
 
 
 
 
 
 
 
 
Production
 
191

 
332

 
461

 
990

 
Sales
 
139

 
368

 
464

 
1,003

 
Average realized price per pound
 
$
2.59

 
$
2.81

 
$
2.70

 
$
2.93

 
 
 
 
 
 
 
 
 
 
 
Gold (thousands of recoverable ounces)
 
 
 
 
 
 
 
 
 
Production
 
329

 
754

 
645

 
2,089

 
Sales
 
239

 
831

 
659

 
2,105

 
Average realized price per ounce
 
$
1,487

 
$
1,191

 
$
1,380

 
$
1,248

 
 
 
 
 
 
 
 
 
 
 
Unit net cash costs (credits) per pound of coppera
 
 
 
 
 
 
 
 
 
Site production and delivery, excluding adjustments
 
$
2.44

 
$
1.40

 
$
3.00

 
$
1.36

 
Gold and silver credits
 
(2.64
)
 
(2.72
)
 
(2.02
)
 
(2.69
)
 
Treatment charges
 
0.25

 
0.26

 
0.27

 
0.26

 
Export duties
 
0.05

 
0.14

 
0.07

 
0.15

 
Royalty on metals
 
0.17

 
0.20

 
0.15

 
0.21

 
Unit net cash costs (credits)
 
$
0.27

 
$
(0.72
)
 
$
1.47

 
$
(0.71
)
 
 
 
 
 
 
 
 
 
 
 
a.
For a reconciliation of unit net cash costs (credits) 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 XIII, which are available on FCX's website, "fcx.com."
PT-FI's consolidated sales of 139 million pounds of copper and 239 thousand ounces of gold in third-quarter 2019 were lower than third-quarter 2018 consolidated sales of 368 million pounds of copper and 831 thousand ounces of gold, reflecting anticipated lower mill rates and ore grades as it transitions mining from the open pit to underground and timing of shipments.
On September 12, 2019, PT-FI received approval from the Indonesian government to increase its export quota from approximately 180,000 dry metric tons (DMT) of concentrate to approximately 680,000 DMT for the current export period, which expires March 8, 2020.
Consolidated sales volumes from PT-FI are expected to approximate 0.6 billion pounds of copper and 860 thousand ounces of gold in 2019. PT-FI will continue to monitor geotechnical conditions to determine the extent of mining in the Grasberg open pit. As PT-FI transitions mining from the open pit to underground, metal production is currently expected to improve significantly by 2021.
Because of the fixed nature of a large portion of PT-FI's costs, unit net cash costs can vary significantly from quarter to quarter depending on copper and gold volumes. PT-FI's unit net cash costs (including gold and silver credits) of $0.27 per pound of copper in third-quarter 2019, compared with unit net cash credits of $0.72 per pound in third-quarter 2018, primarily reflected lower copper and gold volumes.     
Assuming an average gold price of $1,500 per ounce for fourth-quarter 2019 and achievement of current sales volume and cost estimates, unit net cash costs (including gold and silver credits) for PT-FI are expected to approximate $1.53 per pound of copper for the year 2019 (including $1.61 per pound of copper for fourth-quarter 2019). The impact of price changes during fourth-quarter 2019 on PT-FI's average unit net cash costs for the year 2019 would approximate $0.03 per pound for each $50 per ounce change in the average price of gold.
PT-FI's projected sales volumes and unit net cash costs for the year 2019 are dependent on a number of factors, including operational performance, mine sequencing changes and timing of shipments.
PT-FI and union officials commenced discussions for a new two-year labor agreement. The existing agreement, which expired in September 2019, will continue in effect until a new agreement is consummated.



Freeport-McMoRan
 
        8


fcx2019headera01.jpg

Molybdenum Mines. FCX has two wholly owned molybdenum mines in Colorado - the Henderson underground mine and the Climax open-pit mine. 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 the molybdenum concentrate produced at the Henderson and Climax mines, as well as from FCX's North America and South America copper mines, is processed at FCX's conversion facilities.
Operating and Development Activities. Production from the Molybdenum mines totaled 7 million pounds of molybdenum in third-quarter 2019 and 8 million pounds in third-quarter 2018. Refer to summary operating data on page 3 for FCX's consolidated molybdenum sales and average realized prices, which includes sales of molybdenum produced at the Molybdenum mines and from FCX's North America and South America copper mines.
Unit net cash costs for the Molybdenum mines of $11.64 per pound of molybdenum in third-quarter 2019 were higher than third-quarter 2018 unit net cash costs of $9.02 per pound, primarily reflecting lower volumes. Based on current sales volume and cost estimates, average unit net cash costs for the Molybdenum mines are expected to approximate $10.50 per pound of molybdenum for the year 2019.
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 XIII, 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. A drilling program to further delineate the Lone Star resource continues to indicate significant additional mineralization in this district, with higher ore grades than FCX's other North America copper mines. Exploration results continue to indicate opportunities for significant future potential reserve additions in North America and South America. Exploration spending is expected to approximate $80 million for the year 2019.
CASH FLOWS, CASH and DEBT
Operating Cash Flows. FCX generated operating cash flows of $224 million (net of $146 million of working capital uses and timing of other tax payments) in third-quarter 2019 and $1.3 billion (including $135 million of working capital sources and timing of other tax payments) for the first nine months of 2019.
Based on current sales volume and cost estimates, and assuming average prices of $2.60 per pound of copper, $1,500 per ounce of gold and $12.00 per pound of molybdenum for fourth-quarter 2019, FCX's consolidated operating cash flows are estimated to approximate $1.6 billion (including $0.2 billion of working capital sources and changes in timing of other tax payments) for the year 2019. The impact of price changes during fourth-quarter 2019 on operating cash flows would approximate $90 million for each $0.10 per pound change in the average price of copper, $10 million for each $50 per ounce change in the average price of gold and $15 million for each $2 per pound change in the average price of molybdenum.
Capital Expenditures. Capital expenditures totaled $0.7 billion in third-quarter 2019 (including approximately $0.3 billion for major mining projects) and $1.9 billion for the first nine months of 2019 (including approximately $1.1 billion for major mining projects).
Capital expenditures are expected to approximate $2.6 billion for the year 2019, including $1.6 billion for major mining projects primarily associated with underground development activities in the Grasberg minerals district and development of the Lone Star copper leach project, and exclude estimates associated with the new smelter in Indonesia. A large portion of the capital expenditures relate to projects that are expected to add significant production and cash flow in future periods, enabling FCX to generate operating cash flows exceeding capital expenditures in future years. FCX has cash on hand and the financial flexibility to fund these expenditures and will continue to be disciplined in deploying capital.
    


Freeport-McMoRan
 
        9


fcx2019headera01.jpg

Cash. Following is a summary of the U.S. and international components of consolidated cash and cash equivalents available to the parent company, net of noncontrolling interests' share, taxes and other costs at September 30, 2019 (in billions):
Cash at domestic companies
$
1.3

 
Cash at international operations
0.9

 
Total consolidated cash and cash equivalents
2.2

 
Noncontrolling interests' share
(0.3
)
 
Cash, net of noncontrolling interests' share
$
1.9

 
Withholding taxes

a 
Net cash available
$
1.9

 
 
 
 
a.
Rounds to less than $0.1 billion.
Debt. At September 30, 2019, FCX's consolidated debt totaled $9.9 billion, with a related weighted-average interest rate of 4.6 percent. FCX had no borrowings, $13 million in letters of credit issued and $3.5 billion available under its revolving credit facility at September 30, 2019.
On August 15, 2019, FCX completed the sale of $1.2 billion of senior notes, consisting of $600 million aggregate principal amount of 5.00% Senior Notes due 2027 and $600 million aggregate principal amount of 5.25% Senior Notes due 2029. FCX used the net proceeds from the senior notes offering to fund its previously announced make-whole redemption of all of its outstanding 6.875% Senior Notes due 2023, and the concurrent tender offers to purchase a portion of its 4.00% Senior Notes due 2021 and its 3.55% Senior Notes due 2022. As a result of the redemption and tender offers, FCX recorded a third-quarter 2019 loss on early extinguishment of debt totaling $21 million. The new financing and related redemption and tender offers resulted in a slight reduction in FCX's weighted-average interest rate on its senior notes from 4.7 percent to 4.6 percent and extended the weighted-average maturity from approximately 9 years to approximately 10 years.

FINANCIAL POLICY
On September 25, 2019, FCX declared a quarterly cash dividend of $0.05 per share on its common stock, which will be paid on November 1, 2019, to shareholders of record as of October 15, 2019. The declaration of dividends is at the discretion of the Board of Directors (Board) and will depend upon FCX’s financial results, cash requirements, future prospects and other factors deemed relevant by the Board.

WEBCAST INFORMATION
A conference call with securities analysts to discuss FCX's third-quarter 2019 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 22, 2019.
-----------------------------------------------------------------------------------------------------------
FCX is a leading international mining company with headquarters in Phoenix, Arizona. FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX is one of the world's largest publicly traded copper producers.
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 North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru. Additional information about FCX is available on FCX's website at "fcx.com."


Freeport-McMoRan
 
        10


fcx2019headera01.jpg

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 plans, projections or expectations relating to ore grades and milling rates; production and sales volumes; unit net cash costs; operating cash flows; capital expenditures; FCX's expectations regarding its share of PT-FI's net (loss) income and future cash flows through 2022; PT-FI's development, financing, construction and completion of a new smelter in Indonesia; PT-FI's compliance with environmental standards under the framework established by Indonesia's Ministry of Environment and Forestry; exploration efforts and results; development and production activities, rates and costs; liquidity; tax rates; export quotas and duties; the impact of copper, gold and molybdenum price changes; the impact of deferred intercompany profits on earnings; reserve estimates; and future dividend payments, 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. The declaration of dividends is at the discretion of the Board 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, expected, 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, but are not limited to, supply of and demand for, and prices of, copper, gold and molybdenum; mine sequencing; changes in mine plans; production rates; timing of shipments; results of feasibility studies; potential inventory adjustments; potential impairment of long-lived mining assets; the potential effects of violence in Indonesia generally and in the province of Papua; the Indonesian government's extension of PT-FI's export license after March 8, 2020; risks associated with underground mining; satisfaction of requirements in accordance with PT-FI's special mining license (IUPK) to extend mining rights from 2031 through 2041; industry risks; regulatory changes; political and social risks; labor relations; weather- and climate-related risks; environmental risks; litigation results; cybersecurity incidents; 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, 2018, filed with the U.S. Securities and Exchange Commission (SEC).
Investors are cautioned that many of the assumptions upon which FCX's forward-looking statements are based are likely to change after the forward-looking statements are made, including for example commodity prices, which FCX cannot control, and production volumes and costs, some aspects of which FCX may not be able to control. Further, FCX may make changes to its business plans that could affect its results. FCX cautions investors that it does not intend to update forward-looking statements more frequently than quarterly notwithstanding any changes in its assumptions, changes in business plans, actual experience or other changes, and FCX undertakes no obligation to update any forward-looking statements.
This press release also contains certain financial measures such as adjusted net (loss) income and unit net cash costs (credits) per pound of copper and molybdenum, which are not recognized under U.S. generally accepted accounting principles. As required by SEC Regulation G, reconciliations of these measures to amounts reported in FCX's consolidated financial statements are in the supplemental schedules of this press release, which are also available on FCX's website, "fcx.com."




Freeport-McMoRan
 
        11



Freeport-McMoRan Inc.
SELECTED OPERATING DATA
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
2019
 
2018
 
2019
 
2018
 
MINING OPERATIONS:
Production
 
Sales
 
COPPER (millions of recoverable pounds)
 
 
 
 
(FCX's net interest in %)
 
 
 
 
North America
 
 
 
 
 
 
 
 
Morenci (72%)a
200

 
170

 
199

 
174

 
Bagdad (100%)
58

 
45

 
59

 
47

 
Safford (100%)
28

 
32

 
29

 
31

 
Sierrita (100%)
42

 
36

 
43

 
36

 
Miami (100%)
4

 
4

 
4

 
3

 
Chino (100%)
46

 
46

 
48

 
45

 
Tyrone (100%)
12

 
15

 
13

 
14

 
Other (100%)

 
1

 

 

 
Total North America
390

 
349

 
395

 
350

 
 
 
 
 
 
 
 
 
 
South America
 
 
 
 
 
 
 
 
Cerro Verde (53.56%)
234

 
275

 
217

 
280

 
El Abra (51%)
49

 
50

 
44

 
46

 
Total South America
283

 
325

 
261

 
326

 
 
 
 
 
 
 
 
 
 
Indonesia
 
 
 
 
 
 
 
 
Grasberg (48.76%)b
191

 
332

 
139

 
368

 
Total
864

 
1,006

 
795

c 
1,044

c 
Less noncontrolling interests
168

 
183

 
149

 
186

 
Net
696

 
823

 
646

 
858

 
 
 
 
 
 
 
 
 
 
Average realized price per pound
 
 
 
 
$
2.62

 
$
2.80

 
 
 
 
 
 
 
 
 
 
GOLD (thousands of recoverable ounces)
 
 
 
 
 
 
 
 
(FCX's net interest in %)
 
 
 
 
 
 
 
 
North America (100%)
4

 
6

 
4

 
6

 
Indonesia (48.76%)b
329

 
754

 
239

 
831

 
Consolidated
333

 
760

 
243

 
837

 
Less noncontrolling interests
61

 
70

 
45

 
77

 
Net
272

 
690

 
198

 
760

 
 
 
 
 
 
 
 
 
 
Average realized price per ounce
 
 
 
 
$
1,487

 
$
1,191

 
 
 
 
 
 
 
 
 
 
MOLYBDENUM (millions of recoverable pounds)
 
 
 
 
 
 
 
 
(FCX's net interest in %)
 
 
 
 
 
 
 
 
Henderson (100%)
2

 
3

 
N/A

 
N/A

 
Climax (100%)
5

 
5

 
N/A

 
N/A

 
North America copper mines (100%)a
8

 
8

 
N/A

 
N/A

 
Cerro Verde (53.56%)
6

 
7

 
N/A

 
N/A

 
Consolidated
21

 
23

 
22

 
22

 
Less noncontrolling interests
3

 
3

 
3

 
2

 
Net
18

 
20

 
19

 
20

 
 
 
 
 
 
 
 
 
 
Average realized price per pound
 
 
 
 
$
12.89

 
$
12.40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
a. Amounts are net of Morenci's undivided joint venture partners' interests.
 
 
 
 
 
 
 
 
 
b. Effective December 21, 2018, FCX's share ownership in PT Freeport Indonesia (PT-FI) is 48.76 percent. FCX’s economic interest in PT-FI is expected to approximate 81 percent through 2022 and 48.76 percent thereafter.
 
 
 
 
 
 
 
 
 
c. Consolidated sales volumes exclude purchased copper of 79 million pounds in third-quarter 2019 and 93 million pounds in third-quarter 2018.
 
 
 
 
 
 
 
 
 


I


Freeport-McMoRan Inc.
SELECTED OPERATING DATA (continued)
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
2019
 
2018
 
MINING OPERATIONS:
Production
 
Sales
 
Copper (millions of recoverable pounds)
 
 
 
 
(FCX's net interest in %)
 
 
 
 
 
 
 
 
North America
 
 
 
 
 
 
 
 
Morenci (72%)a
548

 
521

 
536

 
544

 
Bagdad (100%)
170

 
142

 
168

 
146

 
Safford (100%)
84

 
94

 
85

 
99

 
Sierrita (100%)
117

 
113

 
116

 
118

 
Miami (100%)
11

 
12

 
11

 
12

 
Chino (100%)
129

 
126

 
130

 
133

 
Tyrone (100%)
37

 
41

 
38

 
42

 
Other (100%)

 
2

 

 
1

 
Total North America
1,096

 
1,051

 
1,084

 
1,095

 
 
 
 
 
 
 
 
 
 
South America
 
 
 
 
 
 
 
 
Cerro Verde (53.56%)
734

 
780

 
713

 
780

 
El Abra (51%)
129

 
151

 
125

 
148

 
Total South America
863

 
931

 
838

 
928

 
 
 
 
 
 
 
 
 
 
Indonesia
 
 
 
 
 
 
 
 
Grasberg (48.76%)b
461

 
990

 
464

 
1,003

 
Total
2,420

 
2,972

 
2,386

c 
3,026

c 
Less noncontrolling interests
490

 
529

 
480

 
528

 
Net
1,930

 
2,443

 
1,906

 
2,498

 
 
 
 
 
 
 
 
 
 
Average realized price per pound
 
 
 
 
$
2.71

 
$
2.96

 
 
 
 
 
 
 
 
 
 
Gold (thousands of recoverable ounces)
 
 
 
 
 
 
 
 
(FCX's net interest in %)
 
 
 
 
 
 
 
 
North America (100%)
14

 
16

 
15

 
18

 
Indonesia (48.76%)b
645

 
2,089

 
659

 
2,105

 
Consolidated
659

 
2,105

 
674

 
2,123

 
Less noncontrolling interests
121

 
195

 
124

 
197

 
Net
538

 
1,910

 
550

 
1,926

 
 
 
 
 
 
 
 
 
 
Average realized price per ounce
 
 
 
 
$
1,380

 
$
1,249

 
 
 
 
 
 
 
 
 
 
Molybdenum (millions of recoverable pounds)
 
 
 
 
 
 
 
 
(FCX's net interest in %)
 
 
 
 
 
 
 
 
Henderson (100%)
10

 
10

 
N/A

 
N/A

 
Climax (100%)
14

 
16

 
N/A

 
N/A

 
North America (100%)a
24

 
23

 
N/A

 
N/A

 
Cerro Verde (53.56%)
21

 
20

 
N/A

 
N/A

 
Consolidated
69

 
69

 
68

 
70

 
Less noncontrolling interests
10

 
9

 
10

 
9

 
Net
59

 
60

 
58

 
61

 
 
 
 
 
 
 
 
 
 
Average realized price per pound
 
 
 
 
$
12.92

 
$
12.41

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
a. Amounts are net of Morenci's undivided joint venture partners' interests.
 
 
 
 
 
 
 
 
 
b. Effective December 21, 2018, FCX's share ownership in PT-FI is 48.76 percent. FCX’s economic interest in PT-FI is expected to approximate 81 percent through 2022 and 48.76 percent thereafter.
 
 
 
 
 
 
 
 
 
c. Consolidated sales volumes exclude purchased copper of 310 million pounds for the first nine months of 2019 and 257 million pounds for the first nine months of 2018.
 
 
 
 
 
 
 
 
 




II


Freeport-McMoRan Inc.
SELECTED OPERATING DATA (continued)
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
2019
 
2018
 
100% North America Copper Mines
 
 
 
 
 
 
 
 
Leach Operations
 
 
 
 
 
 
 
 
Leach ore placed in stockpiles (metric tons per day)
756,900

 
657,600

 
753,400

 
673,800

 
Average copper ore grade (percent)
0.24

 
0.22

 
0.23

 
0.25

 
Copper production (millions of recoverable pounds)
270

 
242

 
741

 
723

 
 
 
 
 
 
 
 
 
 
Mill Operations
 
 
 
 
 
 
 
 
Ore milled (metric tons per day)
337,700

 
297,800

 
324,600

 
297,900

 
Average ore grades (percent):
 
 
 
 
 
 
 
 
Copper
0.33

 
0.34

 
0.34

 
0.35

 
Molybdenum
0.02

 
0.03

 
0.02

 
0.02

 
Copper recovery rate (percent)
88.5

 
87.4

 
87.9

 
88.1

 
Production (millions of recoverable pounds):
 
 
 
 
 
 
 
 
Copper
198

 
173

 
569

 
531

 
Molybdenum
8

 
8

 
25

 
24

 
 
 
 
 
 
 
 
 
 
100% South America Mining
 
 
 
 
 
 
 
 
Leach Operations
 
 
 
 
 
 
 
 
Leach ore placed in stockpiles (metric tons per day)
257,300

 
194,400

 
205,300

 
203,100

 
Average copper ore grade (percent)
0.36

 
0.34

 
0.36

 
0.32

 
Copper production (millions of recoverable pounds)
70

 
72

 
192

 
214

 
 
 
 
 
 
 
 
 
 
Mill Operations
 
 
 
 
 
 
 
 
Ore milled (metric tons per day)
381,200

 
383,900

 
391,800

 
384,800

 
Average ore grades (percent):
 
 
 
 
 
 
 
 
Copper
0.35

 
0.39

 
0.36

 
0.39

 
Molybdenum
0.02

 
0.02

 
0.02

 
0.01

 
Copper recovery rate (percent)
81.5

 
86.1

 
83.5

 
83.2

 
Production (millions of recoverable pounds):
 
 
 
 
 
 
 
 
Copper
213

 
253

 
671

 
717

 
Molybdenum
6

 
7

 
21

 
20

 
 
 
 
 
 
 
 
 
 
100% Indonesia Mining
 
 
 
 
 
 
 
 
Ore extracted and milled (metric tons per day):
 
 
 
 
 
 
 
 
Grasberg open pita
70,000

 
149,500

 
75,500

 
141,100

 
Deep Ore Zone underground mineb
24,500

 
31,000

 
25,300

 
33,200

 
Deep Mill Level Zone underground mineb
9,800

 
2,500

 
8,100

 
2,600

 
Grasberg Block Cave underground mineb
10,600

 
3,700

 
7,700

 
3,800

 
Big Gossan underground mineb
7,000

 
3,900

 
6,000

 
3,400

 
Total
121,900

 
190,600

 
122,600

 
184,100

 
Average ore grades:
 
 
 
 
 
 
 
 
Copper (percent)
0.92

 
1.00

 
0.77

 
1.06

 
Gold (grams per metric ton)
1.23

 
1.77

 
0.85

 
1.73

 
Recovery rates (percent):
 
 
 
 
 
 
 
 
Copper
89.4

 
92.4

 
87.6

 
92.4

 
Gold
75.6

 
85.7

 
73.5

 
85.5

 
Production (recoverable):
 
 
 
 
 
 
 
 
Copper (millions of pounds)
191

 
337

 
461

 
1,030

 
Gold (thousands of ounces)
329

 
817

 
645

 
2,306

 
 
 
 
 
 
 
 
 
 
100% Molybdenum Mines
 
 
 
 
 
 
 
 
Ore milled (metric tons per day)
36,100

 
29,400

 
33,000

 
27,100

 
Average molybdenum ore grade (percent)
0.12

 
0.17

 
0.14

 
0.18

 
Molybdenum production (millions of recoverable pounds)
7

 
8

 
24

 
26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
a. Includes ore from related stockpiles.
 
 
 
 
 
 
 
 
 
b. Reflects ore extracted, including ore from development activities that result in metal production.
 
 
 
 
 
 
 
 
 
 


III



Freeport-McMoRan Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(In Millions, Except Per Share Amounts)
 
Revenuesa
$
3,308

 
$
4,908

 
$
10,646

 
$
14,944

 
Cost of sales:
 
 
 
 
 
 
 
 
Production and deliveryb
2,665

 
3,069

 
8,584

 
8,790

 
Depreciation, depletion and amortization
322

 
458

 
1,021

 
1,351

 
Metals inventory adjustments
41

 

 
100

 
2

 
Total cost of sales
3,028

 
3,527

 
9,705

 
10,143

 
Selling, general and administrative expenses
106

 
101

 
315

 
341

 
Mining exploration and research expenses
25

 
27

 
83

 
72

 
Environmental obligations and shutdown costs
20

 
8

 
85

 
76

 
Net loss (gain) on sales of assets
12

 
(70
)
 
(13
)
 
(126
)
 
Total costs and expenses
3,191

 
3,593

 
10,175

 
10,506

 
Operating income
117

 
1,315

 
471

 
4,438

 
Interest expense, netc
(123
)
 
(143
)
 
(401
)
 
(436
)
 
Net (loss) gain on early extinguishment of debt
(21
)
 

 
(27
)
 
8

 
Other income, net
33

 
14

 
52

 
63

d 
Income from continuing operations before income taxes and equity in affiliated companies' net earnings
6

 
1,186

 
95

 
4,073

 
Provision for income taxese
(150
)
 
(522
)
 
(240
)
 
(1,543
)
 
Equity in affiliated companies' net earnings
5

 
4

 
7

 
5

 
Net (loss) income from continuing operations
(139
)
 
668

 
(138
)
 
2,535

 
Net gain (loss) from discontinued operations
1

 
(4
)
 
2

 
(19
)
 
Net (loss) income
(138
)
 
664

 
(136
)
 
2,516

 
Net loss (income) attributable to noncontrolling interestsf
7

 
(108
)
 
(36
)
 
(399
)
 
Net (loss) income attributable to common stockholdersg
$
(131
)
 
$
556

 
$
(172
)
 
$
2,117

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted net (loss) income per share attributable to common stock:
 
 
 
 
 
 
 
 
Continuing operations
$
(0.09
)
 
$
0.38

 
$
(0.12
)
 
$
1.46

 
Discontinued operations

 

 

 
(0.01
)
 
 
$
(0.09
)
 
$
0.38

 
$
(0.12
)
 
$
1.45

 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding:
 
 
 
 
 
 
 
 
Basic
1,452

 
1,450

 
1,451

 
1,449

 
Diluted
1,452

 
1,458

 
1,451

 
1,458

 
 
 
 
 
 
 
 
 
 
Dividends declared per share of common stock
$
0.05

 
$
0.05

 
$
0.15

 
$
0.15

 
 
 
 
 
 
 
 
 
 
a.
Includes adjustments to provisionally priced concentrate and cathode sales. For a summary of adjustments to provisionally priced copper sales, refer to the supplemental schedule, "Derivative Instruments," on page IX.
b.
Includes PT-FI charges, an environmental-related litigation reserve and other net (charges) credits, which are summarized in the supplemental schedule, "Adjusted Net (Loss) Income," on page VII.
c.
Consolidated interest costs (before capitalization) totaled $163 million in third-quarter 2019, $167 million in third-quarter 2018, $508 million for the first nine months of 2019 and $508 million for the first nine months of 2018.
d.
Includes interest received with the refund of PT-FI's prior years' tax receivables. Refer to the supplemental schedule, "Adjusted Net (Loss) Income," on page VII.
e.
For a summary of FCX's provision for income taxes, refer to the supplemental schedule, "Income Taxes," on page VIII.
f.
Includes noncontrolling interest impacts associated with tax charges to record deferred taxes for historical balances in accordance with tax accounting guidance. Refer to the supplemental schedule, "Income Taxes," on page VIII.
g.
FCX defers recognizing profits on intercompany sales until final sales to third parties occur. For a summary of net impacts from changes in these deferrals, refer to the supplemental schedule, "Deferred Profits," on page IX.

IV



Freeport-McMoRan Inc.
CONSOLIDATED BALANCE SHEETS (Unaudited)
 
 
 
 
 
 
September 30, 2019
 
December 31, 2018
 
 
(In Millions)
 
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
$
2,247

 
$
4,217

 
Trade accounts receivable
731

 
829

 
Income and other tax receivables
269

 
493

 
Inventories:
 
 
 
 
Materials and supplies, net
1,619

 
1,528

 
Mill and leach stockpiles
1,302

 
1,453

 
Product
1,513

 
1,778

 
Other current assets
669

 
422

 
Total current assets
8,350

 
10,720

 
Property, plant, equipment and mine development costs, net
29,330

 
28,010

 
Long-term mill and leach stockpiles
1,300

 
1,314

 
Other assets
2,085

 
2,172

 
Total assets
$
41,065

 
$
42,216

 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable and accrued liabilities
$
2,725

 
$
2,625

 
Current portion of environmental and asset retirement obligations
488

 
449

 
Dividends payable
73

 
73

 
Accrued income taxes
70

 
165

 
Current portion of debt
4

 
17

 
Total current liabilities
3,360

 
3,329

 
Long-term debt, less current portion
9,915

 
11,124

 
Deferred income taxes
4,292

 
4,032

 
Environmental and asset retirement obligations, less current portion
3,558

 
3,609

 
Other liabilities
2,302

 
2,230

 
Total liabilities
23,427

 
24,324

 
 
 
 
 
 
Equity:
 
 
 
 
Stockholders' equity:
 
 
 
 
Common stock
158

 
158

 
Capital in excess of par value
25,880

 
26,013

 
Accumulated deficit