Freeport-McMoRan Reports Third-Quarter and Nine-Month 2017 Results

Freeport-McMoRan Inc. (NYSE: FCX):

• Net income attributable to common stock totaled $280 million, $0.19 per share, for third-quarter 2017. After adjusting for net charges of $212 million, $0.15 per share, third-quarter 2017 adjusted net income attributable to common stock totaled $492 million, $0.34 per share.
• Consolidated sales totaled 932 million pounds of copper, 355 thousand ounces of gold and 22 million pounds of molybdenum for third-quarter 2017.
• Consolidated sales for the year 2017 are expected to approximate 3.7 billion pounds of copper, 1.6 million ounces of gold and 94 million pounds of molybdenum, including 1.0 billion pounds of copper, 625 thousand ounces of gold and 23 million pounds of molybdenum for fourth-quarter 2017.
• Average realized prices were $2.94 per pound for copper, $1,290 per ounce for gold and $9.22 per pound for molybdenum for third-quarter 2017.
• Average unit net cash costs were $1.21 per pound of copper for third-quarter 2017 and are expected to average $1.19 per pound of copper for the year 2017.
• Operating cash flows totaled $1.2 billion (including $45 million in working capital sources and changes in tax payments) for third-quarter 2017 and $3.0 billion (including $0.4 billion in working capital sources and changes in tax payments) for the first nine months of 2017. Based on current sales volume and cost estimates, and assuming average prices of $3.00 per pound for copper, $1,300 per ounce for gold and $8.00 per pound for molybdenum for fourth-quarter 2017, operating cash flows for the year 2017 are expected to approximate $4.3 billion (including $0.5 billion in working capital sources and changes in tax payments).
• Capital expenditures totaled $308 million (including approximately $200 million for major mining projects) for third-quarter 2017 and $1.0 billion for the first nine months of 2017 (including $0.6 billion for major mining projects). Capital expenditures for the year 2017 are expected to approximate $1.5 billion, including $0.7 billion for underground development activities in the Grasberg minerals district in Indonesia.
• In September 2017, FCX redeemed $543 million of senior notes, resulting in cash interest savings of approximately $35 million per annum.
• At September 30, 2017, consolidated cash totaled $5.0 billion and consolidated debt totaled $14.8 billion, compared with $4.2 billion of consolidated cash and $16.0 billion of consolidated debt at December 31, 2016. FCX had no borrowings and $3.5 billion available under its revolving credit facility at September 30, 2017.

Freeport-McMoRan Inc. (NYSE: FCX) reported net income attributable to common stock of $280 million ($0.19 per share) for third-quarter 2017 and $776 million ($0.53 per share) for the first nine months of 2017, compared with net income attributable to common stock of $217 million ($0.16 per share) for third-quarter 2016 and a net loss attributable to common stock of $4.4 billion ($3.45 per share) for the first nine months of 2016. After adjusting for net charges of $212 million ($0.15 per share) primarily related to accruals for Peruvian government claims associated with disputed royalty matters, adjusted net income attributable to common stock totaled $492 million ($0.34 per share) for third-quarter 2017. Refer to the supplemental schedule, "Adjusted Net Income (Loss)," on page VII, which is available on FCX's website, "fcx.com," for additional information.

Richard C. Adkerson, President and Chief Executive Officer, said, "We are pleased to report strong quarterly results throughout our global operations and a positive outlook for future results. Our focus on cost management combined with free cash flow generation have enabled us to continue to strengthen our balance sheet and successfully execute our strategy. Our shareholders are well positioned to benefit from our highly attractive portfolio of copper assets and improving copper market conditions. We are encouraged by continued progress in our active negotiations with the Indonesian government regarding our long-term operating rights in Indonesia and remain focused on managing our long-term business for the benefit of shareholders."

SUMMARY FINANCIAL DATA

^a. For segment financial results, refer to the supplemental schedules, "Business Segments," beginning on page IX, which are available on FCX's website, "fcx.com."

^b. Includes favorable (unfavorable) adjustments to provisionally priced concentrate and cathode copper sales recognized in prior periods totaling $95 million ($39 million to net income attributable to common stock or $0.03 per share) in third-quarter 2017, $(15) million ($(7) million to net income attributable to common stock or $(0.01) per share) in third-quarter 2016, $81 million ($35 million to net income attributable to common stock or $0.02 per share) for the first nine months of 2017 and $5 million ($2 million to net loss attributable to common stock or less than $0.01 per share) for the first nine months of 2016. For further discussion, refer to the supplemental schedule, "Derivative Instruments," on page IX, which is available on FCX's website, "fcx.com."

^c. Primarily reflects adjustments to the fair value of the potential $120 million in contingent consideration related to the 2016 sale of FCX's interest in TF Holdings Limited (TFHL), which totaled $58 million at September 30, 2017, and will continue to be adjusted through December 31, 2019.

^d. Includes net (charges) gains of $(212) million ($(0.15) per share) in third-quarter 2017, $39 million ($0.03 per share) in third-quarter 2016, $(178) million ($(0.12) per share) for the first nine months of 2017 and $(4.4) billion ($(3.43) per share) for the first nine months of 2016 that are described in the supplemental schedule, "Adjusted Net Income (Loss)," on page VII, which is available on FCX's website, "fcx.com."

^e. FCX defers recognizing profits on intercompany sales until final sales to third parties occur. For a summary of net impacts from changes in these deferrals, refer to the supplemental schedule, "Deferred Profits," on page IX, which is available on FCX's website, "fcx.com."

^f. Includes net working capital sources and changes in tax payments of $45 million in third-quarter 2017, $8 million in third-quarter 2016, $388 million for the first nine months of 2017 and $483 million for the first nine months of 2016.

SUMMARY OPERATING DATA

^a. Excludes the results of the Tenke Fungurume (Tenke) mine, which was sold in November 2016 and is reported as discontinued operations. Copper sales from the Tenke mine totaled 118 million pounds in third-quarter 2016 and 365 million for the first nine months of 2016.

^b. Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs. For reconciliations of per pound unit costs by operating division to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedules, "Product Revenues and Production Costs," beginning on page XII, which are available on FCX's website, "fcx.com."

Consolidated Sales Volumes

Third-quarter 2017 copper sales of 932 million pounds were slightly below the July 2017 estimate of 940 million pounds and 16 percent lower than third-quarter 2016 sales of 1.1 billion pounds. The variance to the year-ago period primarily reflects anticipated lower ore grades in North America and Indonesia and the timing of shipments.

Third-quarter 2017 gold sales of 355 thousand ounces were lower than the July 2017 estimate of 375 thousand ounces, primarily reflecting the timing of shipments. Third-quarter 2017 gold sales were higher than third-quarter 2016 sales of 317 thousand ounces, primarily reflecting anticipated higher ore grades from Indonesia.

Third-quarter 2017 molybdenum sales of 22 million pounds approximated the July 2017 estimate of 22 million pounds and were higher than third-quarter 2016 sales of 16 million pounds.

Sales volumes for the year 2017 are expected to approximate 3.7 billion pounds of copper, 1.6 million ounces of gold and 94 million pounds of molybdenum, including 1.0 billion pounds of copper, 625 thousand ounces of gold and 23 million pounds of molybdenum in fourth-quarter 2017.

Consolidated Unit Costs

Consolidated average unit net cash costs (net of by-product credits) for FCX's copper mines of $1.21 per pound of copper in third-quarter 2017 were higher than unit net cash costs of $1.14 per pound in third-quarter 2016, primarily reflecting lower copper sales volumes.

Assuming average prices of $1,300 per ounce of gold and $8.00 per pound of molybdenum for fourth-quarter 2017 and achievement of current sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) for copper mines are expected to average $1.19 per pound of copper for the year 2017. The impact of price changes for fourth-quarter 2017 on consolidated unit net cash costs would approximate $0.01 per pound for each $50 per ounce change in the average price of gold and $0.005 per pound for each $2 per pound change in the average price of molybdenum. Quarterly unit net cash costs vary with fluctuations in sales volumes and realized prices, primarily for gold and molybdenum.

MINING OPERATIONS

North America Copper Mines. FCX operates seven open-pit copper mines in North America - Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. In addition to copper, molybdenum concentrate, gold and silver are also produced by certain of FCX's North America copper mines.

All of the North America mining operations are wholly owned, except for Morenci. FCX records its 72 percent undivided joint venture interest in Morenci using the proportionate consolidation method.

Operating and Development Activities. FCX has significant undeveloped reserves and resources in North America and a portfolio of potential long-term development projects. Future investments will be undertaken based on the results of economic and technical feasibility studies, and are dependent on market conditions. FCX continues to study opportunities to reduce the capital intensity of its long-term development projects.

Through exploration drilling, FCX has identified a significant resource at its wholly owned Lone Star project located near the Safford operation in eastern Arizona. Initial production from the Lone Star oxide ores could begin in 2021 using existing infrastructure at the adjacent Safford operation. Total estimated capital costs, including mine equipment and pre-production stripping, approximates $850 million. Production from the Lone Star oxide ores would average approximately 200 million pounds of copper per year with an approximate 20-year mine life. The project would also advance the potential for development of a larger-scale district opportunity. FCX has obtained regulatory approvals for this project and is assessing the timing to commence pre-stripping activities. FCX is conducting additional drilling as it continues to evaluate longer term opportunities available from the significant sulfide potential in the Lone Star/Safford minerals district.

Operating Data. Following is summary consolidated operating data for the North America copper mines for the third quarters and first nine months of 2017 and 2016:

^a. Refer to summary operating data on page 3 for FCX's consolidated molybdenum sales, which includes sales of molybdenum produced at the North America copper mines.

^b. For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedules, "Product Revenues and Production Costs," beginning on page XII, which are available on FCX's website, "fcx.com."

North America's consolidated copper sales volumes of 347 million pounds in third-quarter 2017 were lower than third-quarter 2016 sales of 458 million pounds, primarily reflecting anticipated lower ore grades and the timing of shipments. North America copper sales are estimated to approximate 1.5 billion pounds for the year 2017, compared with 1.8 billion pounds in 2016.

Average unit net cash costs (net of by-product credits) for the North America copper mines of $1.61 per pound of copper in third-quarter 2017 were higher than unit net cash costs of $1.37 per pound in third-quarter 2016, primarily reflecting lower sales volumes.

Average unit net cash costs (net of by-product credits) for the North America copper mines are expected to approximate $1.58 per pound of copper for the year 2017, based on achievement of current sales volume and cost estimates and assuming an average molybdenum price of $8.00 per pound for fourth-quarter 2017. North America's average unit net cash costs for the year 2017 would change by approximately $0.007 per pound for each $2 per pound change in the average price of molybdenum.

South America Mining. FCX operates two copper mines in South America - Cerro Verde in Peru (in which FCX owns a 53.56 percent interest) and El Abra in Chile (in which FCX owns a 51 percent interest). These operations are consolidated in FCX's financial statements. In addition to copper, the Cerro Verde mine produces molybdenum concentrate and silver.

Operating and Development Activities. The Cerro Verde expansion project commenced operations in September 2015 and achieved capacity operating rates during first-quarter 2016. Cerro Verde's expanded operations benefit from its large-scale, long-lived reserves and cost efficiencies. The project expanded the concentrator facilities from 120,000 metric tons of ore per day to 360,000 metric tons of ore per day.

FCX continues to evaluate a major expansion at El Abra to process additional sulfide material and to achieve higher recoveries. Exploration results at El Abra indicate a significant sulfide resource, which could potentially support a major mill project similar to facilities recently constructed at Cerro Verde. Future investments will depend on technical studies, which are being advanced, economic factors and market conditions.

Operating Data. Following is summary consolidated operating data for the South America mining operations for the third quarters and first nine months of 2017 and 2016:

^a. Refer to summary operating data on page 3 for FCX's consolidated molybdenum sales, which includes sales of molybdenum produced at Cerro Verde.

^b. For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedules, "Product Revenues and Production Costs," beginning on page XII, which are available on FCX's website, "fcx.com."

South America's consolidated copper sales volumes of 327 million pounds in third-quarter 2017 approximated third-quarter 2016 sales of 323 million pounds. Sales from South America mining are expected to approximate 1.2 billion pounds of copper for the year 2017, compared with 1.3 billion pounds of copper in 2016.

Average unit net cash costs (net of by-product credits) for South America mining of $1.64 per pound of copper in third-quarter 2017 were higher than unit net cash costs of $1.40 per pound in third-quarter 2016, primarily reflecting higher mining, milling and employee costs at Cerro Verde. Average unit net cash costs (net of by-product credits) for South America mining are expected to approximate $1.64 per pound of copper for the year 2017, based on current sales volume and cost estimates and assuming an average price of $8.00 per pound of molybdenum for fourth-quarter 2017.

Cerro Verde Royalty Dispute. In October 2017, the Peruvian Supreme Court issued a ruling in favor of SUNAT, Peru's national tax authority, that the assessments of royalties for the year 2008 on ore processed by the Cerro Verde concentrator were proper under Peruvian law. As reported in FCX’s U.S. Securities and Exchange Commission (SEC) filings, SUNAT has assessed mining royalties on ore processed by the Cerro Verde concentrator for the period December 2006 to September 2011, which Cerro Verde has contested on the basis that its 1998 stability agreement exempts from royalties all minerals extracted from its mining concessions, irrespective of the method used for processing those minerals.

As a result of the unfavorable Peruvian Supreme Court decision on the 2008 royalty matter, Cerro Verde recorded pre-tax charges totaling $357 million ($359 million including net tax charges and $188 million net of noncontrolling interests) in third-quarter 2017 associated with prior assessments and potential royalty and related assessments for December 2006 through the year 2013. Effective January 1, 2014, Cerro Verde entered into a new 15-year stability agreement and has been paying royalties in accordance with the new stability agreement.

Cerro Verde intends to seek a waiver available under Peruvian law of penalties and interest associated with this matter and has not recorded charges for potential unpaid penalties and interest totaling $360 million ($193 million net of noncontrolling interests) at September 30, 2017. Cerro Verde acted in good faith in applying the provisions of its 1998 stability agreement and continues to evaluate alternatives to defend its rights.

Indonesia Mining. Through its 90.64 percent owned and consolidated subsidiary PT-FI, FCX's assets include one of the world's largest copper and gold deposits at the Grasberg minerals district in Papua, Indonesia. PT-FI operates a proportionately consolidated joint venture, which produces copper concentrate that contains significant quantities of gold and silver.

Regulatory Matters. PT-FI continues to actively engage with Indonesian government officials to address regulatory changes that conflict with its contractual rights in a manner that provides long-term stability for PT-FI’s operations and investment plans, and protects value for FCX’s shareholders.

Following the issuance of new regulations in early 2017, which resulted in a temporary suspension of PT-FI’s concentrate exports, PT-FI entered into a Memorandum of Understanding in April 2017 whereby exports were allowed to continue until October 10, 2017, to allow for negotiations for a long-term agreement.

In August 2017, FCX and the Indonesian government reached an understanding on a framework that would resolve PT-FI’s long-term operating rights. This framework, which requires definitive documentation and FCX Board of Directors and partner approvals, includes (i) conversion from the Contract of Work (COW) to a new operating license (IUPK) providing PT-FI with long-term operating rights through 2041, (ii) Indonesian government certainty of fiscal and legal terms during the term of the IUPK, (iii) PT-FI commitment to construct a new smelter in Indonesia within five years of reaching a definitive agreement, and (iv) divestment of 51 percent of PT-FI shares to Indonesian participants at fair market value. The divestment will be structured so that FCX will retain control over operations and governance of PT-FI.

The parties continue to negotiate documentation on a comprehensive agreement for PT-FI’s extended operations and to reach agreement on timing, process and governance matters relating to the divestment. The parties have a mutual objective of completing the required documentation during 2017.

In October 2017, the Indonesian government extended PT-FI’s export rights to December 31, 2017, while negotiations to document a long-term agreement based on the agreed framework continue.

Until a definitive agreement is reached, PT-FI has reserved all rights under its COW, including pursuing arbitration under the dispute resolution provisions.

Operating and Development Activities. PT-FI is currently mining the final phase of the Grasberg open pit, which contains high copper and gold ore grades. PT-FI expects to mine high-grade ore over the next several quarters prior to transitioning to the Grasberg Block Cave underground mine in early 2019.

PT-FI has several projects in the Grasberg minerals district related to the development of its large-scale, long-lived, high-grade underground ore bodies. In aggregate, these underground ore bodies are expected to produce large-scale quantities of copper and gold following the transition from the Grasberg open pit. Assuming a definitive agreement is reached to support PT-FI's long-term investment plans, estimated annual capital spending on these projects would average $1.0 billion per year ($0.8 billion per year net to PT-FI) over the next five years. Considering the long-term nature and size of these projects, actual costs could vary from these estimates. In response to market conditions and Indonesian regulatory uncertainty, timing of these expenditures continues to be reviewed. If PT-FI is unable to reach a definitive agreement with the Indonesian government on its long-term mining rights, FCX intends to reduce or defer investments significantly in its underground development projects and pursue arbitration under its COW.

Operating Data. Following is summary consolidated operating data for the Indonesia mining operations for the third quarters and first nine months of 2017 and 2016:

^a. For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedules, "Product Revenues and Production Costs," beginning on page XII, which are available on FCX's website, "fcx.com."

^b. Excludes fixed costs charged directly to production and delivery costs totaling $9 million ($0.03 per pound of copper) for third-quarter 2017 and $112 million ($0.18 per pound of copper) for first nine months of 2017 associated with workforce reductions.

Indonesia's consolidated copper sales of 258 million pounds in third-quarter 2017 were lower than third-quarter 2016 sales of 332 million pounds, primarily reflecting lower copper ore grades and timing of shipments. Indonesia's consolidated gold sales of 352 thousand ounces in third-quarter 2017 were higher than third-quarter 2016 sales of 307 thousand ounces, reflecting higher gold ore grades, partly offset by timing of shipments between the third and fourth quarters of 2017.

During third-quarter 2017, PT-FI's labor productivity improved significantly following a recovery from disruptions that occurred in the first half of the year. Mining and milling rates improved throughout the quarter, and PT-FI continues to assess opportunities to advance mining of a section of high-grade material during 2018 and 2019 though open-pit mining rather than over time through the Grasberg Block Cave underground mine.

In October 2017, PT-FI and union officials commenced discussions for a new two-year labor agreement. The existing agreement will continue in effect until a new agreement is consummated.

Assuming achieving planned operating rates for fourth-quarter 2017, consolidated sales volumes from Indonesia mining are expected to approximate 1.0 billion pounds of copper and 1.6 million ounces of gold for the year 2017, compared with 1.1 billion pounds of copper and 1.1 million ounces of gold for the year 2016.

A significant portion of PT-FI's costs are fixed and unit costs vary depending on production volumes and other factors. Indonesia's unit net cash costs (including gold and silver credits) of $0.13 per pound of copper in third-quarter 2017 were lower than unit net cash costs of $0.57 per pound in third-quarter 2016, primarily reflecting higher gold and silver credits, partly offset by lower copper sales volumes.

Assuming an average gold price of $1,300 per ounce for fourth-quarter 2017 and achievement of current sales volume and cost estimates, unit net cash costs (net of gold and silver credits) for Indonesia mining are expected to approximate $0.07 per pound of copper for the year 2017. Indonesia mining's unit net cash costs for the year 2017 would change by approximately $0.04 per pound for each $50 per ounce change in the average price of gold. Because of the fixed nature of a large portion of Indonesia's costs, unit costs vary from quarter to quarter depending on copper and gold volumes.

Indonesia mining's projected sales volumes for the year 2017 are dependent on a number of factors, including operational performance, workforce productivity and the timing of shipments.

Molybdenum Mines. FCX has two wholly owned molybdenum mines in North America - the Henderson underground mine and the Climax open-pit mine, both in Colorado. The Henderson and Climax mines produce high-purity, chemical-grade molybdenum concentrate, which is typically further processed into value-added molybdenum chemical products. The majority of molybdenum concentrate produced at the Henderson and Climax mines, as well as from FCX's North America and South America copper mines, is processed at FCX's conversion facilities.

Operating and Development Activities. In response to market conditions, the Henderson molybdenum mine continues to operate at reduced rates. Production from the Molybdenum mines totaled 8 million pounds of molybdenum in third-quarter 2017 and 5 million pounds in third-quarter 2016. Refer to summary operating data on page 3 for FCX's consolidated molybdenum sales, which includes sales of molybdenum produced at the Molybdenum mines, and from FCX's North America and South America copper mines.

Average unit net cash costs for the Molybdenum mines of $7.90 per pound of molybdenum in third-quarter 2017 were lower than average unit net cash costs of $10.28 in third-quarter 2016, primarily reflecting higher volumes. Based on current sales volume and cost estimates, unit net cash costs for the Molybdenum mines are expected to average approximately $7.85 per pound of molybdenum for the year 2017.

For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedules, "Product Revenues and Production Costs," beginning on page XII, which are available on FCX's website, "fcx.com."

Mining Exploration Activities. FCX's mining exploration activities are generally associated with its existing mines, focusing on opportunities to expand reserves and resources to support development of additional future production capacity. Exploration results continue to indicate opportunities for significant future potential reserve additions in North America and South America. Exploration spending is expected to approximate $75 million for the year 2017, compared to $44 million in 2016.

CASH FLOWS, CASH and DEBT

Operating Cash Flows. FCX generated operating cash flows of $1.2 billion (including $45 million in working capital sources and changes in tax payments) in third-quarter 2017 and $3.0 billion (including $0.4 billion in working capital sources and changes in tax payments) for the first nine months of 2017.

Based on current sales volume and cost estimates, and assuming average prices of $3.00 per pound of copper, $1,300 per ounce of gold and $8.00 per pound of molybdenum for fourth-quarter 2017, FCX's consolidated operating cash flows are estimated to approximate $4.3 billion for the year 2017 (including $0.5 billion in working capital sources and tax payments). The impact of price changes during fourth-quarter 2017 on operating cash flows would approximate $80 million for each $0.10 per pound change in the average price of copper, $20 million for each $50 per ounce change in the average price of gold and $15 million for each $2 per pound change in the average price of molybdenum.

Capital Expenditures. Capital expenditures totaled $308 million for third-quarter 2017 (including approximately $200 million for major mining projects) and $1.0 billion for the first nine months of 2017 (including $0.6 billion for major mining projects). Capital expenditures are expected to approximate $1.5 billion for the year 2017, including $0.9 billion for major mining projects, primarily for underground development activities at Grasberg.

As a result of regulatory uncertainty, PT-FI has slowed investments in its underground development projects. If PT-FI is unable to reach a definitive agreement with the Indonesian government on its long-term mining rights, FCX intends to reduce or defer investments significantly in underground development projects and pursue arbitration under its COW.

Cash. Following is a summary of the U.S. and international components of consolidated cash and cash equivalents available to the parent company, net of noncontrolling interests' share, taxes and other costs at September 30, 2017 (in billions):

Debt. Following is a summary of total debt and the related weighted-average interest rates at September 30, 2017 (in billions, except percentages):

In September 2017, FCX redeemed $543 million aggregate principal amount of senior notes, resulting in annual cash interest savings of approximately $35 million. FCX recognized an $11 million gain on early extinguishment of debt in connection with the redemptions.

At September 30, 2017, FCX had no borrowings, $36 million in letters of credit issued and $3.5 billion available under its revolving credit facility.

FINANCIAL POLICY

In December 2015, FCX's common stock dividend was suspended. The declaration of dividends is at the discretion of the Board and will depend upon FCX’s financial results, cash requirements, future prospects and other factors deemed relevant by the Board.

WEBCAST INFORMATION

A conference call with securities analysts to discuss FCX's third-quarter 2017 results is scheduled for today at 10:00 a.m. Eastern Time. The conference call will be broadcast on the Internet along with slides. Interested parties may listen to the conference call live and view the slides by accessing “fcx.com.” A replay of the webcast will be available through Friday, November 24, 2017.

FCX is a leading international mining company with headquarters in Phoenix, Arizona. FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX is the world's largest publicly traded copper producer. FCX’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world's largest copper and gold deposits; and significant mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America. Additional information about FCX is available on FCX's website at "fcx.com."

Cautionary Statement and Regulation G Disclosure: This press release contains forward-looking statements in which FCX discusses its potential future performance. Forward-looking statements are all statements other than statements of historical facts, such as projections or expectations relating to ore grades and milling rates, production and sales volumes, unit net cash costs, operating cash flows, capital expenditures, exploration efforts and results, development and production activities and costs, liquidity, tax rates, the impact of copper, gold and molybdenum price changes, the impact of deferred intercompany profits on earnings, reserve estimates, future dividend payments, and share purchases and sales. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” "targets," “intends,” “likely,” “will,” “should,” “to be,” ”potential" and any similar expressions are intended to identify those assertions as forward-looking statements.

FCX cautions readers that forward-looking statements are not guarantees of future performance and actual results may differ materially from those anticipated, projected or assumed in the forward-looking statements. Important factors that can cause FCX's actual results to differ materially from those anticipated in the forward-looking statements include supply of and demand for, and prices of, copper, gold and molybdenum; mine sequencing; production rates; potential effects of cost and capital expenditure reductions and production curtailments on financial results and cash flow; potential inventory adjustments; potential impairment of long-lived mining assets; the outcome of negotiations with the Indonesian government regarding PT-FI's long-term operating rights; the potential effects of violence in Indonesia generally and in the province of Papua; industry risks; regulatory changes (including adoption of financial assurance regulations as proposed by the U.S. Environmental Protection Agency under CERCLA for the hard rock mining industry); political risks; labor relations; weather- and climate-related risks; environmental risks; litigation results (including the final disposition of the unfavorable Indonesia Tax Court ruling relating to surface water taxes and the outcome of Cerro Verde's royalty dispute with the Peruvian national tax authority); and other factors described in more detail under the heading “Risk Factors” in FCX's Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC as updated by FCX's subsequent filings with the SEC. With respect to FCX's operations in Indonesia, such factors include whether PT-FI will be able to resolve complex regulatory matters in Indonesia and continue to export copper after December 31, 2017.

Investors are cautioned that many of the assumptions upon which FCX's forward-looking statements are based are likely to change after the forward-looking statements are made, including for example commodity prices, which FCX cannot control, and production volumes and costs, some aspects of which FCX may not be able to control. Further, FCX may make changes to its business plans that could affect its results. FCX cautions investors that it does not intend to update forward-looking statements more frequently than quarterly notwithstanding any changes in its assumptions, changes in business plans, actual experience or other changes, and FCX undertakes no obligation to update any forward-looking statements.

This press release also contains certain financial measures such as unit net cash costs per pound of copper and molybdenum, which are not recognized under U.S. generally accepted accounting principles. As required by SEC Regulation G, reconciliations of these measures to amounts reported in FCX's consolidated financial statements are in the supplemental schedules of this press release, which are also available on FCX's website, "fcx.com."

FREEPORT-McMoRan INC.
ADJUSTED NET INCOME (LOSS)

Adjusted net income (loss) is intended to provide investors and others with information about FCX's recurring operating performance. This information differs from net income (loss) attributable to common stock determined in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. FCX's adjusted net income (loss) follows, which may not be comparable to similarly titled measures reported by other companies (in millions, except per share amounts).

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Freeport-McMoRan Inc.
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