Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q3 2006 Earnings Presentation
30 slides from Freeport-mcmoran's earnings presentation, Oct 17, 2006
Slide 1: 3rd Quarter 2006 Earnings Conference Call
3™ Quarter 2006 Earnings Conference Call James R. Moffett Richard C. Adkerson Chairman of the Board President and Chief Executive Officer Kathleen L. Quirk Mark J. Johnson Senior Vice President, Senior Vice President and Chief Financial Officer Chief Operating Officer October 17, 2006 i=] FREEPORT-M
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements in which we discuss factors we believe may affect our performance in the future, Forwarclooking statements are all statements other than historical facts, such as statements regarding projected ore grades and milling rates, p
Slide 3: 3rd Quarter Highlights
3? Quarter Highlights Operating Data 3Q06: O-nonth 2006. Copper Volumes (1m /bs) 324 769 Realization (per ib) $3.43 $3.38 Gold Volumes (000% ozs} 478 1,229 Realization (ver oz) $609 $597) Financial Results (in millions, except-per-share amounts) Net Income $3512 $970®) Diluted Earnings Per Share $1.
Slide 4: Positive Markets
Positive Markets LME Copper Price LME & COMEX Exchange Stocks* Jan-99 Jul Jan-O0 Jul00 Jan-o1 ul-01 Jan-O2 Jul02 Jan-03 Jul03 Jan 04 Julo4 Jan u-05 “LME and Comex, excluding Shanghai stocks, producer, consumer and merchant stocks. London Gold Price punog .Bd s1uaD, Jan-96 —Jul-06 Producer Hedging An
Slide 5: 2006 Financial Transactions
| 2006 Financial Transactions = Common Dividends — $559 Million ($2.94/Share) = Share Purchases — $100 Million ($49.94/Share) = Debt Reduction — $481 Million e Net Debt at 9/30/06 = $76 Million Total Debt Reduction and Shareholder Returns = $1.1 Billion
Slide 6: Financial Transactions Since 12/31/02
inl Financial Transactions Since 12/31/02* ($ in millions) $1,714 Financial Transactions Total $3.2 Billion Supplemental 56% $3.75 /share Regular. 44% 7.8 Million Shares $3:06/Share @ $36.05 Debt Reductions Common Dividends Open Market Share Purchases * Through 2006 6
Slide 7: Significant Debt Reduction
a Significant Debt Reduction (8 in billions). FCX Ending Net Debt © $3.0 5 $2.9 $0.08 $0.0 T ——————————— 1 2000 3Q06 (1) Debt and commodity preferreds net of cash and restricted investments. Includes $253 million of debt guaranteed in 2000 which was subsequently assumed and repaid. 7
Slide 8: Full Year Outlook
Full Year Outlook = Sales of 1.2 Billion Ibs. Copper, 1.7 Million ozs. of Gold = Continuation of Strong Cash Flows = At Prices of $3.25/lb. Copper and $575/o0z. Gold in 4Q06, Full Year Operating Cash Flows Would Approximate $1.7 Billion (Over $600 Million in 4Q Operating Cash Flows) - Year-end Cash
Slide 9: 3Q06 Grasberg Pit Operations
Le accelerated UninGmeax << 3Q06 Grasberg Pit Operations >
Slide 10: 2006 Outlook
2006 Outlook Quarterly Payable Metal Sales PT-FI's share of Copper PT-FI's share of Gold 1.2 billion pounds 17 million ounces 500 625 415 400 500+ 472 478 470 3 ® £ 2 5 2 300 $375 = = © Ss = = 278 4 8 3 200 ¢ 250 5 & 6 100 125 — + 72% -——> || 28% C) 0 1906 2006 3Q06 4Q06 1Q06 2Q06 3Q06 4Q06. Actual
Slide 11: Unit Production Costs
Unit Production Costs (per pound of copper) 1H06 3Q06 2006e” Cash Unit Costs Site Production & Delivery $1.23 $1.10 $1.03 Royalties 0.09 0.11 0.11 Treatment Charges 0.43 0.44 0.41 Gold/Silver Credits 1.07 0.95 0.85 Net Cash Unit Costs $0.68 $0.70 $0.70 (1) Estimate based on 2006 volumes of 1.2 billi
Slide 12: Grasberg Mine
Grasberg Mine Rs Ai Ye |+ Pushbacks 6N & 6E will provide the majority of the metal in 2006 and 2007. \ Nu: Pushback 75 will provide the majority of the metal in 2008. 7 WIA, OS : SNR 2. Ser ov we
Slide 13: Mining Sequence in 2006
-) Mining Sequence in 2006 i Copper Equivalent Cross Section A PT-FI mined out 6S in 1006 and 6N continues as the primary ore pushback in the balance of 2006 Leaend: mm 0.50-0.99% Eqcu 4 mm 2.00-2.99% Eqcu mm > 3.00% Eqcu
Slide 14: Mining Sequence in 2007
= Mining Sequence in 2007 i Copper Equivalent Cross Section Following mine-out of a relatively small amount of high-grade ore from 6N in 2007, 7S will be the Primary Ore Pushback == J 4 “Revised mine plan results in a deferral of a relatively small amount of high-grade ore from 6N with significant m
Slide 15: Mining Sequence in 2008
P44) Mining Sequence in 2008 i Copper Equivalent Cross Section 7S is the Primary Ore Pushback in 2008 Legend: mm 0.50-0.99% Eqcu 1.00 - 1.99 % Eqcu mm 2.00-2.99% Eqcu mm > 3.00% Eqcu
Slide 16: Mining Sequence in 2009
-4) Mining Sequence in 2009 i Copper Equivalent Cross Section Leaend: mm 0.50-0.99% Eqcu 1.00 - 1.99 % Eqcu mm 2.00-2.99% Eqcu mm > 3.00% Eqcu
Slide 17: Mining Sequence in 2010
a Mining Sequence in 2010 i Copper Equivalent Cross Section 8E is the Primary Ore Pushback in 2010 Leaend: mm 0.50-0.99% Eqcu 1.00 - 1.99 % Eqcu mm 2.00-2.99% Eqcu mm > 3.00% Eqcu
Slide 18: PT-FI Mine Plan
PT-FI Mine Plan PT-FI’s Share of Metal Sales, 2006e-2010e Copper, billion lbs Gold, milfion ozs 2006e - 2010e PT-Fi Share 2006¢ - 2010e PT-Fi Share Total: 6.2 billion ibs Total: 9.3 million ozs Annual Average: 1.24 billion ibs Annual Average: 1.9 million ozs 2.1 1.9 7 1.8 1.8 1.4 12 1.3 1.2 11 E 200
Slide 19: FCX Operating Cash Flows at Varying Copper & Gold Prices
FCX Operating Cash Flows (Annual Avg. 2007e-2010e at Varying Copper & Gold Prices ( in millions, except copper and gold prices) $2,000 @ $1500 . 2 a 2 > iz % < F AY $1,000 So F 2 3 a ¢ 1 a oO © $500 Ss o oS a $0 $1.50 $2.00 $2.50 $3.00 $400 $500 $600 $700 $500 $2.0 Copper Sensitivities Gold Sensitiv
Slide 20: FCX Capital Expenditures
FCX Capital Expenditures (Gin millions) [y Long-term 2006e — 2010e Annual Average ~ $215 Million Projects* $250 $250 215 $ $200 $170 $143 $120 $120 iia od $80 2005 2006e 2007e 2008e 2009e 2010e e = estimate. Amounts are projections; see cautionary statement. “Includes PT-FI's share of capital expend
Slide 21: FCX Debt Maturities
FCX Debt Maturities (B in millions) $1,000 September:3072006: Total DebE $ 775 Less Cash 1699. $800 Total/Atter Cash $76 $600 $400 $282 10%8% $200 Senior 67% Notes Senior Notes. $59 $55 Callable $14 ————_ 14 14 1907 ,\ = $ $ a 2006 2007 2008 2009 2010 2011 Thereafter Equipment Loans Atlantic Copper
Slide 22: Development Projects
| Development Projects = DOZ Expansions = Common Infrastructure = On-going Mill Optimization - High Pressure Grinding Rolls = Big Gossan 2
Slide 23: DOZ Underground Mine
Lea a DOZ Underground Mine Production Profile (000’s t/d) original 1998 Feasibility (25K) Actual/Projected « Consistently operated Potential 80K Expansion . eottal saereanto in excess of nameplate eee . 50K Expansion under way capacity ($62MM capital, aggregate) 35K Expansion (completed 1903) « Expa
Slide 24: Common Infrastructure
Common Infrastructure Access to Underground Reserves 2H 2007 Complete tunnel to Grasberg BC Begin mine development & other facilities Grasberg Block Cave “Spur” Kucing “spur” Lower access to Sept 2006 q COWA 6 km* from the Portal (initiated Grasberg BC spur re ( ca Ore Bodies Plan development) Infra
Slide 25: Underground Experience
nal Experience und Rec (operating) Ertsberg East wv fo) S S ix Future The GBT block cave mine, operating in the 1980s, peaked at 30,000 t/d. After a 10 year life beginning in the 1990’s, the IOZ was depleted after producing almost 30% more Cu & Au than initial reserve estimates. The DOZ, one of the
Slide 26: Longer Range Mine Plan Studies
i Longer Range Mine Plan Studies Analyzing long range mine plans to assess the optimal design of the Grasberg pit, which may affect the timing of the Grasberg underground block cave. Incorporating latest geological model, geotechnical studies, costs and other economic factors into our analysis. Prev
Slide 27: Financial Policy
| Financtal Policy " Maintain Strong Balance Sheet and Financial Flexibility " Maintain Regular Quarterly Dividend That Can Be Sustained Within Broad Range of Commodity Prices " In Periods of High Commodity Prices, Supplement Regular Dividend With Special Dividends/Share Purchases 2
Slide 28: Average Annual Cash Flows at $3.00/$600
[7 Average Annual Cash Flows at $3.00/$600 (8 in billions). $1.47 Billion Excess Cash Flow* $0.5 Minority Distribution Operating Cash Flow Sources Uses “Before Common Dividends, Share Purchases, Debt Prepayment (Regular Common Dividend approximates $246 million per annum} NOTE: Based on 2007-2010 co
Slide 29: Historical Shareholder Returns
Historical Shareholder Returns = $1.6 Billion in FCX Open Market Purchases Since 1995 Spin-off - §2 Million Shares in Open Market Purchases at an Average Price of $19.42 per Share Since Inception = $2.6 Billion in Common Stock Dividends Since 1988 - $1.25 Billion Since 2003 $4.2 Billion in Total Lon
Slide 30: Strong Cash Flow Generator
Strong Cash Flow Generator Long-lived Reserves Unhedged Exposure to Copper & Gold Markets Strong Balance Sheet/Enhanced Shareholder Returns Attractive Valuation 30
Freeport Mcmoran Copper & Gold — Q3 2006 Earnings Presentation on 6ix