Energy & Natural Resources: Metals & Mining

[Pages:26]July 20, 2016

Lucas N. Pipes 703.312.1855 lpipes@ Derek Hernandez 703.312.1825 dhernandez@

Energy & Natural Resources: Metals & Mining

Important disclosures can be found on pages 23 - 26 of this report.

Industry Update

Metals' Shine Faces Earnings Test; FBR 2Q Earnings Preview

Summary and Recommendation

With this report, we share our thoughts into 2Q earnings and update our base and precious metals price deck. We believe that Stillwater Mining Company is well positioned into results as conservative expectations could be lifted on continued cost improvements as well as positive progress reports on Blitz and the company's non-operating assets, which we believe are often overlooked. We also provide detailed thoughts into earnings on Market Perform-rated Freeport McMoRan, Teck Resources, and Newmont Mining Corporation. Although we expect a modest 2Q beat for Freeport, we are cautious on the name into earnings as many investors are increasingly concerned about the pace of progress in the negotiations with the Indonesian government, and are looking for further direction. Following Teck Resources' strong stock performance, investors have been pushing back on valuation, and we see the need for the company to post strong results to maintain its momentum. The company does have room to surprise, following 1Q operational met coal costs below the company's guided range for the year, potentially supporting lower cost guidance on a strong quarter.

Key Points

Stillwater Mining favorite name in metals coverage. We believe that Stillwater Mining remains a highly attractive mining investment into 2Q results for a number of reasons. First, we believe that the company set its cost targets sufficiently low to be able to exceed guidance and maybe improve its full-year outlook. Second, in our opinion, the company is still not fully reflecting the value of its Blitz development project. Thirdly, the company has stated that it is evaluating all alternatives to realize value from its Altar copper-gold exploration project, which was acquired for $405 million in 2011, but is now often overlooked by investors. In all, we continue to see upside to Stillwater and raised our price target to $17 from $13.

Freeport investors look to Indonesia for further de-risking. Freeport has moved swiftly in addressing its balance sheet overhang, from its ATM offerings, to selling assets, to issuing equity in exchange for its idle rig costs and debt. With Freeport's relative exposure to Indonesia increasing due to its asset sales, many investors are now focusing on the regulatory outlook there for further direction on the company's long-term value. While no single quarterly update may be expected to lay these concerns to bed, we believe that investors are hoping for some clues on the outlook for the smelter development and divestment process. While we expect a slight 2Q beat for Freeport, we are concerned that these broader focus points could dominate investor sentiment.

Can Teck fundamentals keep up with valuation? Shares of Teck Resources have continued to outperform on stronger met coal and zinc prices. While we share a positive view on both of these key commodities for Teck, we estimate that the stock currently bakes in long-term prices above spot levels. In our opinion, the company needs to post strong results to maintain its momentum and show that fundamentals are improving in line with valuation. We believe the bar is set relatively high for Teck this earnings season. The company has room to surprise following 1Q operational met coal costs below the company's guided range for the year, potentially supporting lower cost guidance on a strong quarter.

Base and precious metals price deck updated: Across the board, we expect recent uplifts in precious metals, zinc and met coal to support higher valuations while maintaining our expectation of challenges due to oversupply in copper over the next few years through 2018. Our estimates are most elevated by the recent jump in precious metals pricing, with the smallest impact to more copper-levered and PGM-levered names.

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Price Target and Estimate Changes

$ in thousands except per share data

Company

Ticker Price As of

Stock Rating1

Name

7/18/2016

Old

New

Stillwater Mining Company SWC

$13.32

OP

OP

Freeport McMoRan Inc.

FCX

$13.14

MP

MP

Teck Resources Ltd.

TCK.B

C$ 18.59

MP

MP

Newmont Mining Corp

NEM

$41.63

MP

MP

Southern Copper Company

SCCO

$26.45

OP

OP

Royal Gold, Inc.

RGLD

$81.48

MP

MP

Hecla Mining Company

HL

$6.23

MP

MP

Pan American Silver Corp.

PAAS

$19.07

MP

MP

(1) OP: Outperform; MP: Market Perform; UP: Underperform; * TCK.B is in CAD

Source: Company reports and FBR Research

Price Target

Old

New

13

17

9

11

15

16

31

39

33

33

71

78

4

5

16

19

FY16 EBITDA

Old

New

70

81

5,820

6,017

1,611

1,844

2,652

3,142

2,009

2,058

264

268

143

197

107

184

FY17 EBITDA

Old

New

126

137

6,602

6,764

2,065

2,158

3,264

3,655

2,334

2,386

317

356

178

237

144

221

New FBR Metals & Mining Price Deck

2013A

2014A

2015A

Base Metals Prices Copper Zinc Molybdenum * ($/lb)

3.32

3.13

2.51

0.86

0.98

0.88

10.13

11.69

6.93

Precious Metals Prices Gold Silver Platinum Palladium * ($/tr oz)

1,363 23.89 1,487

726

1,264 19.10 1,385

803

1,162 15.76 1,060

690

Energy Prices Henry Hub Natural Gas ($/Mcfe) WTI Crude Brent Crude *($/bbl)

3.73 98.02 108.74

4.27 94.47 99.66

2.70 50.63 54.89

1Q16A

2.12 0.76 5.45

1,180 14.90

915 525

2.40 33.50 35.20

2Q16E

2.15 0.87 5.40

1,260 16.75 1,025

575

2.42 39.00 41.00

3Q16E

2.20 0.98 5.55

1,350 20.00 1,100

610

2.55 43.00 43.50

4Q16E

2.10 1.00 5.85

1,325 19.50 1,075

625

2.85 45.00 46.00

2016E

2.14 0.90 5.56

1,279 17.79 1,029

584

2.56 40.13 41.43

2017E

2.25 1.03 6.25

1,288 18.88 1,050

675

3.00 48.50 50.50

2018E

2.45 1.05 6.50

1,250 18.50 1,100

725

3.20 53.00 55.00

Source: Bloomberg and FBR Research

LT Price

2.55 1.15 8.00

1,300 19.00 1,200

775

3.50 65.00 68.00

Previous FBR Metals & Mining Price Deck

2014A

2015A

1Q16A

Base Metals Prices Copper Zinc Molybdenum * ($/lb)

3.13

2.51

2.12

0.98

0.88

0.76

11.69

6.93

5.45

Precious Metals Prices Gold Silver Platinum Palladium * ($/tr oz)

1,264 19.10 1,385

803

1,162 15.76 1,060

690

1,180 14.90

915 525

Energy Prices Henry Hub Natural Gas ($/Mcfe) WTI Crude Brent Crude *($/bbl)

4.27 94.47 99.66

2.70 50.63 54.89

2.40 33.50 35.20

2Q16E

2.15 0.81 5.40

1,200 15.50

960 565

2.42 39.00 41.00

3Q16E

2.20 0.82 5.55

1,200 15.25

985 600

2.55 43.00 43.50

4Q16E

2.10 0.84 5.85

1,200 15.50 1,000

620

2.85 45.00 46.00

2016E

2.14 0.81 5.56

1,195 15.29

965 578

2.56 40.13 41.43

2017E

2.25 0.95 6.25

1,225 16.00 1,050

650

3.00 48.50 50.50

2018E

2.45 1.00 6.50

1,240 16.50 1,075

725

3.20 53.00 55.00

Source: Bloomberg and FBR Research

LT Price

2.55 1.10 8.00

1,250 18.00 1,200

775

3.50 65.00 68.00

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2Q16 Earnings Preview: Stillwater Mining

We expect Stillwater Mining to report an in-line quarter, though our focus will remain on its evolving cost guidance, stable production, and project development. Following sequential quarters well below the company's current 2016 cost guidance range, we expect a third strong quarter may incite the company to reduce cost guidance for the year. We believe the company has indicated its general optimism for further cost reductions, while maintaining a conservative guidance. Ultimately, 2Q's realized AISC will be key to the company's confidence to materially lower guidance, which should in turn signal the company's pace towards its "medium-term goal" of AISC in the mid-$500/oz level.

We currently model costs over the year above Stillwater's prior two quarters and in line with the company's current guidance. We believe this to be a conservative estimate, especially as over 2016 quarterly volumes are expected to rise above 1Q levels, potentially providing leverage through fixed cost absorption. We expect investors will view stable and rising production favorably, especially in conjunction with company statements regarding cost reductions, generally.

Additional updates and further detail of Stillwater's Blitz project may also serve as a positive catalyst for the company. While Stillwater has broadly outlined the project, many questions remain, particularly on the guided ramp up of the operation as well as ultimate cost levels. Furthermore, we would expect additional commentary on the company's Altar or Marathon projects to be viewed positively by investors in today's more constructive market conditions. As a reminder, the projects were originally acquired for $405 million and $173 million, respectively, and while impaired since then, we believe that higher gold prices and improved business condition in Argentina (Altar project) could bode well for realizing some of this value. Stillwater Mining will report 2Q16 earnings before market open on July 29th, with an earnings call at noon that day.

2Q16 Estimates-- Stillwater Mining (SWC)

EBITDA Consensus EBITDA EPS Consensus EPS Stillwater Mine:

Palladium produced Platinum produced East Boulder Mine: Palladium produced Platinum produced Consolidated: Total Mine Production sales Total PGM Recycling sales Average Mined Price Average Recycled Price Total cash costs - net of credits All-In Sustaining Costs - Mined

Units ($M) ($M) ($) ($)

(k oz.) (k oz.)

(k oz.) (k oz.)

(k oz.) (k oz.) ($/oz.) ($/oz.) ($/oz.) ($/oz.)

QoQ Q1 Actual Q2 Est.

Q2 Comments

9

20 Expect In-line vs. Consensus

18 Higher QoQ

(0.08)

(0.01) Expect In-line vs. Consensus

- Higher QoQ

62

67 Stronger production QoQ

19

20 Stronger production QoQ

34

34 Flat QoQ

10

10 Flat QoQ

132

132 Flat on full year guide

63

100 Higher on full year guide

612

680 Higher spot price QoQ

700

791 Higher spot price QoQ

447

438 Roughly flat QoQ

610

638 Higher on full year guide

Source: Company reports and FBR Research

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Valuation: Stillwater Mining

We are raising our price target to $17 from $13 on our PGM pricing outlook, increased volume and lower cost expectations for the Blitz project, and an initial value consideration for Altar and Marathon. Our $17 price target represents an implied 14.1x 2017 estimated EV/EBITDA multiple. We base our price target on our conservative PGM price expectation, as well as the company's realization of a significantly lower cost profile, per guidance. Our price target reflects our long-term price and demand forecasts and estimated terminal EBITDA growth of 1.5%, as we expect steady global demand for PGMs.

Valuation--Stillwater Mining (SWC)

2014A

2015A

2016E

2017E

2018E Terminal

Total ounces produced; mined (oz.)

518

521

532

531

543

625

Average realized price ($/oz.)

934

770

685

762

812

875

Cash cost after credits ($/oz.)

537

495

439

413

401

390

Mine production sales ($ M)

536

416

380

423

460

PGM recycling sales ($ M)

402

310

299

350

371

Mine gross margin (%)

37.9%

29.3%

30.0%

39.7%

44.6%

PRGM recycling gross margin (%)

2.5%

3.0%

3.7%

3.7%

3.6%

Other

(29)

(48)

(50)

(48)

(48)

(49)

EBITDA ($ M)

176

95

81

137

175

254

Capex

(120)

(107)

(100)

(110)

(85)

(85)

Cash taxes

(21)

(5)

(0)

(15)

(29)

(59)

Noncontrolling interests

(1)

(12)

(2)

(2)

(2)

(2)

Working capital and other

27

9

(5)

2

(5)

0

Cash flow (unlevered)

61

(21)

(26)

12

55

108

Cash interest expense

(7)

(6)

(6)

(6)

(6)

Other

6

5

3

5

5

Cash flow (levered)

60

(22)

(29)

11

54

Common dividends and/or buybacks

0

0

0

0

1

Other

(66)

(110)

39

0

(1)

Cash flow (net)

(6)

(133)

10

11

54

Valuation Total enterprise value Non-core assets Less: net debt (end of 2016E) Equity value # shares Per share value

1,934 289 (118)

2,105 121

$17.43

Source: Company reports and FBR Research

Mining DCF summary statistics WACC Terminal EBITDA growth Terminal year Terminal EV multiple Implied 2017 EV/EBITDA multiple

6.1% 1.5% 2019 7.6 14.1

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Income Statement--Stillwater Mining (SWC)

$ in thousands except per share data

Mine Production PGM Recycling Other Total revenues

Mine Production - Costs of metals sold PGM Recycling - Costs of metals sold Other Total costs of metals sold (excl DD&A) DDA Mine Production DDA PGM Recycling Total depletion, depreciation and amortization Total costs of revenues

General and administrative Exploration (Gain) loss on disposal of PP&E Research and development Marketing Losses on trade receivable and inventory purchases Loss on long-term investments Impairment of PP&E and non-producing mineral properties Other Total costs and expenses Operating income (loss)

EBITDA

Other Interest income Interest expense Foreign currency transaction (loss) gain, net Income before income tax benefit

Income tax (provision) benefit Tax rate

Net income (loss) Net loss attributable to noncontrolling interest Net income attributable to common stockholders Other comprehensive income, net of tax Net unrealized gains (losses) on investments available-for-sale Comprehensive income (loss) attributable to common stockholders Comprehensive loss attributable to noncontrolling interest Total comprehensive income (loss)

Basic earnings (loss) per share attributable to common stockholders Diluted earnings (loss) per share attributable to common stockholders

Basic Diluted

Source: Company reports and FBR Research

2014

2015A 1Q16A

2Q16E

3Q16E

4Q16E

2016E

2017E

2018E

536,010 401,684

5,925 943,619

415,774 310,156

400 726,330

85,802 47,736

100 133,638

93,781 80,615

100 174,496

99,767 85,315

100 185,182

100,587 85,375 100

186,062

379,937 299,041

400 679,378

422,570 349,760

400 772,730

460,379 371,360

400 832,139

332,633 391,481

5,357 729,471

66,387 1,019

67,406 796,877

293,956 300,710

594,666

64,200 949

65,149 659,815

67,443 46,044

113,487

17,069 191

17,260 130,747

66,185 77,533

143,718

17,000 260

17,260 160,978

66,185 82,139

148,324

17,000 260

17,260 165,584

66,185 82,198

148,383

17,000 260

17,260 165,643

265,998 287,913

553,911

68,069 971

69,040 622,951

254,840 336,885

591,725

68,000 1,040

69,040 660,765

254,960 358,053

613,013

68,000 1,040

69,040 682,053

34,833 2,768 (337) 31 622 125 550 9,983

845,452 98,167

34,032 3,591 (216) (528)

46,772 1,658

745,124 (18,794)

8,297 2,848

(1) -

141,891 (8,253)

8,900 2,200

172,078 2,418

176,106

94,785

9,007

19,678

8,900 2,200

176,684 8,499

25,759

8,900 2,200

176,743 9,320

26,580

34,997 9,448 (1) -

667,395 11,983

36,000 8,000 -

704,765 67,965

81,023 137,005

36,000 8,000 -

726,053 106,086

175,126

905 3,551 (22,718) 5,237 85,142

20 2,956 (20,187)

(63) (36,068)

42 710 (4,182) 1,192 (10,491)

50 800 (5,196)

(1,928)

50 800 (7,196)

2,153

50 800 (7,196)

2,974

192 3,110 (23,770) 1,192 (7,293)

200 3,200 (27,784)

43,581

200 3,200 (27,784)

81,702

(16,259) 19.1%

12,333 34.2%

561 5.3%

675

(753) (1,041)

(558) (15,253) (28,596)

35%

35%

35%

-7.7%

35.0%

35.0%

68,883 (1,414) 70,297

(23,735) (11,808) (11,927)

(9,930) -

(9,930)

(1,253) (500) (753)

1,399 (500)

1,899

1,933 (500)

2,433

(7,851) (1,500) (6,351)

28,327 (2,000) 30,327

53,106 (2,000) 55,106

11 70,308 (1,414) 68,894

(214) (12,141) (11,808) (23,949)

347 (9,583)

(9,583)

(753) (500) (1,253)

1,899

(500) 1,399

2,433

(500) 1,933

347 (6,004) (1,500) (7,504)

30,327 (2,000) 28,327

55,106 (2,000) 53,106

0.59

0.29

(0.08)

(0.01)

0.02

0.02

(0.05)

0.25

0.46

0.55

0.27

(0.08)

(0.01)

0.01

0.02

(0.06)

0.23

0.44

119,951 156,219

120,807 138,940

121,071 121,071

121,071 121,071

121,071 121,071

121,071 121,071

121,071 121,071

121,071 121,071

121,071 121,071

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2Q16 Earnings Preview: Freeport McMoRan Inc.

We expect Freeport McMoRan Inc. to realize a slight beat against consensus on higher pricing quarter over quarter for the company's O&G and precious metals by-products. Our estimates remain in line with the company's quarterly sales guidance. We believe that investors will be primarily focused on an update on (1) the regulatory developments in Indonesia, (2) the current status and goals of the asset sale program, and (3) the outlook for its O&G platform.

With Freeport's relative exposure to Indonesia increasing due to its asset sales, many investors are now focusing on the regulatory outlook there for further direction on the company's long-term value. While no single quarterly update may be expected to lay these concerns to bed, we believe that investors are hoping for some clues on the outlook for the smelter development and divestment process. We would anticipate some commentary around the future of the company's smelter agreement with the Indonesian government, especially following the recent announcement by Newmont to divest its Indonesian assets. Investors are concerned that regulatory uncertainty could negatively impact the operational outlook for the year.

We also hope to hear more about the company's updated view of asset sales and balance sheet management. In our opinion, with the recovery in commodity and credit markets, investors are looking to Freeport for addressing lingering leverage concerns without further divestments of Tier 1 assets. While the company has unquestionably pulled forward value through asset sales earlier this year, especially at a time of extremely low investor confidence, we believe that further monetization considerations beyond O&G and PT-FI (for regulatory reasons) would be received warily.

Lastly, we believe that investors will be focused on Freeport's ongoing O&G platform retrenchment, as segment pricing has recovered from early-2016 lows. We believe investors' focus will continue to be on the segment's cash flow outlook as well as its strategic considerations. Freeport McMoRan will report 2Q16 earnings before market open on July 26th, with an earnings call at 10am that day.

2Q16 Estimates--Freeport McMoRan Inc. (FCX)

(by-product method) EBITDA Consensus EBITDA EPS Consensus EPS Total Copper Sales Total Copper Realized Prices Total Copper Cash Costs Total Copper Margin O&G Sales O&G Realized Price O&G Costs O&G Margin

Units ($mm) ($mm) ($) ($) (mm lbs) ($/lbs) ($/lbs) ($/lbs) (MMBOE) ($/BOE) ($/BOE) ($/BOE)

QoQ Q1 Actual Q2 Est.

Q2 Comments

873

1,078 Expect Beat vs. Consensus

1,005 Higher QoQ, on pricing

0.16

0.05 Expect Beat vs. Consensus

(0.01) Lower QoQ, Possibly Incl. Rig Costs

1,123

1,150 In-line with copper sales guide

2.17

2.16 Roughly flat QoQ

1.39

1.25 In-line with copper segment guide

0.77

0.91

12.1

13.5 In-line with O&G sales guide

23.79

30.53 Brent and natural gas prices higher

15.85

15.69 Lower costs per company guide

7.94

14.84

Source: Company reports and FBR Research

Valuation

We are increasing our target price to $10 from $9 previously on increasing by-product pricing, especially for precious metals. Our $10 price target, represents an implied 4.8x 2017E EV/EBITDA multiple for the company's mining segment and a 4.1x 2017E EV/EBITDA multiple for its O&G segment. We believe FCX is fairly valued at current levels. Our price target reflects our more optimistic long-term assumptions.

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Valuation--Freeport McMoRan Inc. (FCX)

Mining EBITDA as % of Total Oil & Gas EBITDA as % of Total

2014A 65% 35%

2015A 86% 14%

2016E 79% 21%

2017E 80% 20%

2018E 86% 14%

Terminal

Copper sales (M lbs) Average realized copper price ($/lb) Unit gross copper cash costs ($/lb) By-product credits ($/lb) Unit net cash cost ($/lb) Other ($ M) Mining EBITDA Mining capex Cash taxes NCI Working capital, other Mining cash flow (un-levered) Interest Other Mining cash flow (levered)

3,886 3.09 2.13 (0.62) 1.51 (513)

5,856 (4,010) (1,200)

(424) 123 345 (408) (352) (415)

4,070 2.48 2.05 (0.52) 1.53 (656)

3,257 (3,298)

(838) (120) 791 (209) (557)

77 (689)

5,013 2.15 1.58 (0.58) 1.00 (215)

5,491 (1,806) (1,277)

(359) 97

2,146 (522) 264

1,888

4,688 2.26 1.71 (0.81) 0.90 (187)

6,149 (1,710) (1,692)

(518) (193) 2,036 (488) 161 1,709

4,348 2.46 1.69 (0.42) 1.27 (199)

4,972 (1,978) (1,446)

(562) (94) 892

(521) 172 543

4,627 2.49 1.71 (0.50) 1.21 (350)

5,583 (2,550)

(612) (436)

0 1,984

Total Oil & Gas sales volumes (MMboe) Avg. realized price per Boe (before hedges) Hedging impact ($/bbl) Avg. cash cost per Boe ($/bbl) Other costs (incl. SG&A; $/bbl) Oil and gas EBITDA Oil and gas capex Cash taxes Working capital and other Oil and gas cash flow (un-levered) Interest Other Oil and gas cash flow (levered)

57 73.98 (2.15) 20.07

5.31 2,638 (3,205)

109 (42) (500) (221) (190) (911)

53 35.81

7.70 18.57 12.75

642 (2,948)

172 92

(2,041) (88) 12

(2,117)

54 30.73

0.00 15.48

7.28 435 (1,497) 406 (25) (681) (135)

68 (748)

54 37.78

0.00 14.89

7.31 838 (500) 122 (70) 390 (120)

40 310

43 41.46

0.00 14.76

7.91 801 (880)

49 (30) (60) (87) 29 (118)

48 50.50

0.00 14.12

6.00 1,445 (1,070)

(76) 0

300

Other and eliminations ($ M) Consolidated EBITDA Capex Cash taxes NCI Working capital, other Cash Flow (un-levered) Interest Dividends Other Cash Flow

(65) 8,429 (7,215) (1,091)

(424) 81

(219) (629) (1,305) (542) (2,696)

449 4,348 (6,246)

(666) (120) 883 (1,801) (645) (605) 2,089 (962)

(194) 6,017 (3,303)

(871) (359)

72 1,556

(656) (4)

332 1,228

(206) 6,764 (2,210) (1,569)

(518) (264) 2,202 (608)

0 201 1,795

(178) 5,579 (2,858) (1,397)

(562) (125) 637 (608)

0 201 230

Oil & Gas NAV Summary Statistics GOM EV California EV Haynesville-Madden-Other EV O&G EV NAV

1,745 518 46

2,309

Total Enterprise Value less: net debt (end of 2016E) Equity Value # shares Per Share Value

32,662 (19,062) 13,600

1,291 $10.53

Source: Company reports and FBR Research

DCF Summary Statistics WACC Implied Terminal EBITDA Growth Terminal Year Mining Terminal EV Multiple Mining 2017 EV/EBITDA Multiple Mining EV

O&G Terminal EV Multiple O&G 2017 EV/EBITDA Multiple O&G EV

7.5% 1.5% 2018 5.3 4.8 29,779

2.4 4.1 3,458

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Income Statement--Freeport McMoRan Inc. (FCX)

$ in millions except per share data

Revenues Cost of Sales:

Production and delivery Depreciation, depletion and amortization Total cost of sales Selling, general and administrative expenses Exploration and research expenses Environmental obligations and shutdown costs Other (impairment, insurance settlement, etc) Total cost and expenses EBITDA Operating income (EBIT) Interest expense, net Gain (loss) on early extinguishment of debt Gain on investment in McMoRan Exploration Co. Other income (expense), net EBT Income tax provision Tax Rate

Equity in affiliated companies' net earnings Net Income

Net income attributable to NCI Net Income, attributable to FCX

2014A 21,502

11,895 3,859

15,754 621 150 113

4,769 21,406

8,429 95

(629) 15 -

143 (376) (324) -86%

5 (695) (582) (1,277)

2015A 15,878

11,883 3,496

15,379 569 127 78

13,105 29,258

4,348 (13,380)

(645) 6

(14,019) 1,935 14%

(3) (12,088)

(147) (12,234)

1Q16A 3,527

2,725 722

3,447 140 19 10

3,787 7,403

873 (3,876)

(200) 38

(4,038) (70) -2%

7 (4,101)

(83) (4,184)

2Q16E 3,940

2,689 713

3,402 122 32 19 -

3,575 1,078

365 (152)

-

2 215 (75) 35%

(2) 138 (74)

63

3Q16E 4,613

2,637 818

3,455 122 32 19 -

3,628 1,803

984 (152)

-

2 834 (292) 35%

(2) 540 (129) 411

4Q16E 4,976

2,539 857

3,397 122 32 19 -

3,570 2,264 1,406

(152) 2

1,256 (440) 35%

(2) 815 (138) 677

Weighted-average common shares outstanding Basic Diluted

1,039 1,043

1,082 1,082

1,251 1,251

1,275 1,275

1,319 1,319

1,319 1,319

Net income attributable to FCX shareholders Basic EPS (GAAP) Diluted EPS (GAAP)

(1.23)

(11.31)

(3.34)

0.05

0.31

0.51

(1.22)

(11.31)

(3.34)

0.05

0.31

0.51

Dividends declared per share of common stock

1.25

0.37

-

-

-

-

Recurring Net Income Net income GAAP Non-recurring items Tax impact of non-recurring Net income Non-GAAP EPS

(1,277) (12,234)

(4,184)

63

411

677

4,769

13,105

3,787

-

-

-

(1,449)

(967)

594

2,043

(96)

197

63

411

677

1.96

(0.09)

0.16

0.05

0.31

0.51

Source: Company reports and FBR Research

2016E 17,056

10,591 3,110

13,701 506 115 66

3,787 18,176

6,017 (1,119)

(656) 44

(1,732) (877) 51% 1

(2,608) (424)

(3,032)

1,291 1,291

(2.35) (2.35)

-

(3,032) 3,787

594 1,348

1.03

2017E 18,231

10,765 3,064

13,828 521 116 66 -

14,531 6,764 3,700 (608) 8 3,100 (1,023) 33% (8) 2,069 (518) 1,551

1,319 1,319

1.18 1.18

-

1,551 -

1,551 1.18

2018E 16,828

10,546 2,648

13,194 521 116 66 -

13,897 5,579 2,931 (608) 8 2,331 (769) 33% (8) 1,554 (562) 992

1,319 1,319

0.75 0.75

-

992 992 0.75

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