Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport-McMoRan Copper & Gold — Merrill Lynch Leveraged Finance Conference 2007
30 slides from Freeport-mcmoran's conference presentation, Nov 13, 2007
Slide 1: Leveraged Finance Conference
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Leveraged Finance Conference Kathleen L. Quirk Executive Vice President and Chief Financial Officer Las Vegas, Nevada November 13, 2007 www.fcx.com
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
FREEPORT-M FREEPORT-M FREEPORT-MC FREEPORT-MCCM M MO CM OR OR O R RAN AN COPPER COPPER & COPPER AN COPPER AN & GOLD & & GOLD INC. GOLD GOLD INC. INC. INC. Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements in which we discuss factors we be
Slide 3: FCX Investment Summary
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. FCX Investment Summary ¾ World’s Premier Publicly Traded Copper Company ¾ World Class, Long-lived, Geographically Diverse Operations ¾ Attractive Project Pipeline Supports Growing Production Profile ¾ Significant Exploration
Slide 4: Geographically Diverse, Long-Lived Asset Base
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Geographically Diverse, Long-Lived Asset Base Major Mine Operations & Development Projects All major assets majority-controlled and operated North North America America11 Grasberg (90.64%) Copper Reserves Reserves Cu 24.8 bil
Slide 5: Geographically Diverse, Long-Lived Asset Base
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Geographically Diverse, Long-Lived Asset Base Pro forma Net Consolidated Interest Reserves 12/31/06 (1) Copper (billion lbs) 93.6 77.2 Molybdenum (billion lbs) 2.0 1.8 Gold (million ozs) 42.4 38.3 Average Sales Volumes (2007e
Slide 6: Enhanced Diversification
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Enhanced Diversification Mining Mining Revenue Revenue by by Commodity Commodity Mining Mining Revenue Revenue by by Geography Geography 2006 Pro Forma 2006 Pro Forma Gold 10% Indonesia North America 38% 35% Molybdenum 12% Co
Slide 7: Proven Technical Expertise
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Proven Technical Expertise Copper Copper Production Production by by Method Method FCX is a World Leader ¾ Open Pit Mining SX/EW SX/EW Concentrate Concentrate ¾ SX/EW Production Technology 44% 44% 56% 56% ¾ Block Cave Undergr
Slide 8: 3Q07 Highlights
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. 3Q07 Highlights Sales Data 3Q06 3Q07 Copper Consolidated Volumes (mm lbs) 324 949 (1) Average Realization (per lb) $3.43 $3.53(2) Gold Consolidated Volumes (000’s ozs) 478 269 Realization (per oz) $609 $692 Molybdenum Consoli
Slide 9: Favorable Copper Markets
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Favorable Copper Markets 2,000 400 1,750 350 Cents Per Pound 1,500 300 000’s Metric Tons 1,250 250 1,000 LME Copper Price 200 750 150 500 100 250 50 0 LME & COMEX Exchange Stocks* 0 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 J
Slide 10: Positive Long-term Fundamentals
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Positive Long-term Fundamentals ¾ The Combination of Strong Fundamentals Has Created Extremely Attractive Market Conditions for the Copper Industry ¾ Supply is Unlikely to Increase Meaningfully Absence of Mega-development P
Slide 11: Gold/Molybdenum Markets Overview
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Gold/Molybdenum Markets Overview $900 London Gold Price ($/oz) $800 $700 $600 $500 $400 $300 $200 $100 $0 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 $40 Molybdenum Price* ($/lb) $35 $30 $25 $20 $15 $10 $5
Slide 12: Strong Financial Profile
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Strong Financial Profile Capitalization, Net of Cash ($ in billions) $36.2 $55.0 At Closing of PD Current (2) Acquisition (1) Net Debt $6.3 Net Debt Market $14.2 Cap Market Cap $22.0 $48.7 __________ (1) Based on March 19, 20
Slide 13: 2007 Outlook
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. 2007 Outlook ¾ Pro Forma Sales Outlook (1): • Copper: 3.9 Billion lbs. • Gold: 2.3 Million ozs. • Molybdenum: 68 Million lbs. ¾ Modeled Operating Cash Flows (2): • ~$6.2 Billion for 2007 • ~$1.3 Billion in 4Q07 ¾ Capital Expe
Slide 14: Development Project Update: North America
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Development Project Update North America Morenci Mill Restart & Concentrate Leach Plant • Mill operated at 38K t/d* in 3Q, ramping up to 54K t/d capacity • Concentrate Leach Plant is currently being commissioned Morenci • Add
Slide 15: Development Project Update: Climax Mine Restart
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Development Project Update North America Climax Mine Restart Completing Feasibility Study for the restart of Climax moly mine near Leadville, Co ~$500 million “brownfield” project with open pit operation/construction of n
Slide 16: Development Project Update: South America
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Development Project Update South America Cerro Verde Sulfide Mill Expansion • ~$900MM project completed in 4Q06 • Operated at capacity during the third quarter Cerro Verde Mill Expansion • Adds 430MM lbs/year aggregate El Abr
Slide 17: Development Project Update: Indonesia
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Development Project Update Indonesia Common Infrastructure Underground Mine Development Drilling • DOZ Expansions - Completed 50K Expansion in mid-2007; record production of 56K t/d in 3Q - Further expansion to 80K • Complete
Slide 18: Development Project Update: Democratic Republic of Congo
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Development Project Update Democratic Republic of Congo Tenke Fungurume Mine Development Plant Site & Mine Shops • Engineering – 55% complete & Equipment procurement – about 70% complete Test Site • Construction – 15% complet
Slide 19: Copper Reserves & Mineralized Material
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Copper Reserves & Mineralized Material Reserves* Mineralized Material** (billion lbs of recoverable copper) (billion lbs of contained copper) Sensitivity to Copper Price 146 107 94 69 $1.20 $1.50 $2.00 Potential for additiona
Slide 20: Significant Exploration Potential
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Significant Exploration Potential Papua, Indonesia ¾ Rights to 2.2 million acres Pacific Ocean ¾ Highly prospective exploration areas provide opportunities to continue to Banda Grasberg add to our long-lived reserves Sea Papu
Slide 21: Sales Profile 2007e - 2009e
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Sales Profile 2007e - 2009e Gold Sales (million ozs) Copper Sales (billion lbs) 3 2.3 2.1 5 1.9 2 4.5 1.4 4.4 1 4 3.9 3.6 0 2006 2007E 2008E 2009E Pro Pro Forma Forma* 3 ____________________ Note: Consolidated gold sales incl
Slide 22: Pro Forma 2007e Sales and Unit Production Costs by Region
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Pro Forma 2007e Sales and Unit Production Costs by Region 2007e Pro Forma Sales by Region North America South America Indonesia 1,405 2.1 1,340 1,115 68 0.1 Cu Mo Cu Au Cu Au mm lbs mm lbs mm lbs mm ozs mm lbs mm ozs 2007e 1Q
Slide 23: EBITDA and Cash Flow at Various Copper Prices
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. EBITDA and Cash Flow at Various Copper Prices Average Annual EBITDA 2008e-2009e ($700 Gold & $20 Molybdenum) $12 (US$ billions) $10 $8 $6 $4 $2 $0 Cu $2.50/lb Cu $3.00/lb Cu $3.50/lb Average Annual Operating Cash Flow 2008e-2
Slide 24: Sensitivity to Commodity Prices
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Sensitivity to Commodity Prices Annual Annual Financial Financial Impact Impact Net Net Operating Operating Change Change EBITDA EBITDA Income Income Cash Cash Flow Flow (US$ millions) Copper: -/+ $0.20/lb $850 $490 $575 Moly
Slide 25: Capital Expenditures
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Capital Expenditures (US$ billions) $2.5 Major Projects All Other $1.9 $2.0 $2.0 $1.5 1.0 1.1 $1.2 $1.0 0.8 $0.5 0.9 0.9 0.4 $0.0 2007e * 2008e 2009e * Includes PD expenditures beginning March 20, 2007 Note: Includes capitali
Slide 26: Capitalization Table
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Capitalization Table (US$ billions) September September 30, 30, 2007 2007 Capitalization Capitalization Amount % Cash and Cash Equivalents $ 2.4 -- Revolver (1) $ 0.0 0.0% Sr. Secured Term Loan A 1.5 2.6% New Sr. Unsecured No
Slide 27: Financing Activities Since Completion of Acquisition
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Financing Activities Since Completion of Acquisition ¾ Sold $5.76 Billion in Equity/Equity-Linked Securities ¾ Repaid $8.45 Billion in Term Loans ¾ Repaid $332 Million in Senior Notes (FCX 10⅛% & 7⅜% Cyprus Notes) ¾ Refinance
Slide 28: Debt Maturities at 9/30/07
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Debt Maturities at 9/30/07 (US$ millions) $8,000 $7,000 $6,493 $6,000 $5,000 New $4,000 Senior Notes and $3,000 PD Senior Notes $2,000 $1,362 $1,000 $341 $381 $25 $45 $48 $21 $15 $0 2007 2008 2009 2010 2011 2012 2013 2014 The
Slide 29: Op. Cash Flow After CAPEX & MI Distributions
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Average Annual Excess Cash Flow (1) (1) 2008e – 2009e ($ in billions, except copper, gold and molybdenum prices) $5 Copper Sensitivities with $700 Gold/$20 Molybdenum Op. Cash Flow After CAPEX & MI Distributions $4 Available
Slide 30: Financial Policy
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Financial Policy ¾ FCX is Committed to Maintaining a Strong Financial Position ¾ Continuation of Positive Copper Markets is Expected to Provide Substantial Cash Flows Investments in Projects With Attractive Returns Debt R
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