Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q4 2004 Earnings Presentation
30 slides from Freeport-mcmoran's earnings presentation, Jan 19, 2005
Slide 1: 4th Quarter/Year-end 2004 Earnings Conference Call
iin FREEPORT-MCMORAN COPPER & GOLD INC. 4th Quarter/ Year-end 2004 Earnings Conference Call James R, Moffett Chairman of the Board Richard C, Adkerson President and Chief Executive Officer January 18, 2005 www.fex.com
Slide 2: Cautionary Statement
FREEPORT-MCMORAN COPPER & GOLD INC. wee ee tc Hila Cautionary Statement THB preBEr BHO COnIaIn TOrWard DD RHO statements In Which We Uisciss factors We beleve may affectour performance in the future, Forwara-looking statements are al) statements other than historica) facts, such 28 statements regard
Slide 3: Stable platform: location of December 2004 Sumatran earthquake
bids Feel Stable platform ae ae os Australia ‘OF / Location of December 2004 Sumatran Eartha Tes Source: US, Geological Survey; Earthquake Hazard Program
Slide 4: Tectonic Setting of the Indonesian Seas
Tectonic Setting of the Indonesian Seas Tsunami Hazard Map Source: U.S, Geological Survey; Earthquake Hazard Program H= High M= Medium L t H \ H nT ao M wa \ SA nsw M ~. Ms H \\ wie» M Australia ic) M Tsunami Hazard Map of Australia
Slide 5: 4Q 2004 Highlights
Sold 419 Million Lbs. Copper — Avg. Price of $1.43/Ib. Sold 618,100 Ozs. Gold — Avg. Price of $433/ oz. Average Milling Rate Approximated 230K MTPD Unit Net Cash Costs of $0.17/ Ib. $213 Million of Net Income, Including $65 Million of Special Items + Insurance Gain: FCX Share $95 Million ($49 Millio
Slide 6: 2004 Highlights
2004 Highlights Achieved Plan to Return to Normal Operations and Ramp-up to High Grade in 4Q Resolved Insurance Claim Related to 2003 Slippage Events Reserve Additions Replaced 200% of Copper Production and 100% of Gold Production = Estimated Recoverable Reserves at 12/31/04 of 40.7 Billion Pounds o
Slide 7: South Wall, January 2005
South Wall, January 2005
Slide 8: Grasberg Open Pit Key Accomplishments in 2004
F=va Grasberg Open Pit THE STRENGTH Key Accomplishments in 2004 SFOUR METAS: > Re-established Safe Access to High-Grade Areas > Completed Accelerated Waste Stripping of 30 Million Tonnes on South Wall > Completed Resloping/Removing Debris > Installed Additional Monitoring Systems > Completed Drill P
Slide 9: Copper Reserves plus Production
2 Fig 7 |Copper © (billion tbs) eserves plus Production* Total Reserves PI-Fi's Share Kucing Liar * 100% Production since discovery of Grasberg in 1988 td 7 Re Big Gossan Block A COW Ore Bodies Plan View
Slide 10: Reserves
= Reserves Aggregate & Net to PT-FI 2004 Reserve Roll Forward Aggregate PT-Fl’s Share Cu Au Cu Au billion Ibs million ozs: billion Ibs: million ozs: Reserves @ 12/31/03 54.4 60.4 39.7 46.6 Additions/changes* 3.2 24 Production (4.1) (4.5) Net Change 21 0.9 Reserves @ 12/31/04 6.5 1.3 46.6 * as % of p
Slide 11: Geologic Resources, Grasberg District
Geologic Resources * _ THE STRENGTH Grasberg District OF OUR METALS Aggregate PT-FI's Share Contained Contained Metric cu Au cu Au Tons Cu Au = (billion (million (billion (million (million) (®) (g/t) pounds) ounces) pounds) ounces) Measured & Indicated 1,996 0.53 041 23.5 264 14.1 158 Inferred 501 0
Slide 12: Positive Outlook
THE STRENGTH =v Positive Outlook OF OUR METALS > PT-FI Copper and Gold Sales Expected to Total 1.5 Billion Ibs. and 2.9 Million ozs. in 2005 2004 2005e % Change Copper (MM Ibs) 992 1,500 51% Gold (M ozs) 1,443 2,900 101% Net Cash Costs (per Ib) 40¢ Og (100%) > At Prices of $1.35 Copper and $420 Gold
Slide 13: LME Copper Price and Exchange Stocks
Fam LME & COMEX Exchange Stocks* FOURMETNS LME Copper Price 46 9 120 6 2 g 2 1 & 3 g = + 80 Fy s Ley 40 0 LME & COMEX Exchange Stocks* » 1992 1993 1994 1995 1996 1997 1998 1999 5 2000 4 2001 4 2002 4 2003 4 "ME and Comex, excluding Shanghal stocks, producer, consumer and merchant stocks. 13
Slide 14: THE STRENGT!
THE STRENGT! OF OUR METALS g 8 Ben a 5 1S) 5 3 8 8 ba | 500 = cd So ng a——2% = Oo Ee = a 4 a> ac 29 ow Zy| °R = 2 s Bs, 68 aE mio a) of vs so - es E< . c= vo q [--] gf” mt} ° ct S < ° 8 2 + g 8 3 R 8 8 & "20 Jad $ 0-990 +0-dag, O-UNL +0-42W €0-990 €0-des €0-unc €0-4eEW 20-990 Zo-des zo-unl ZO-4eW 10
Slide 15: PT-FI Mine Plan
PT-FI Mine Plan = PT-FI’s Share of Metal Sales, 2004-2009e THE STRENGTH OF OUR METALS: Copper, billion lbs 2005e — 2009e PT-Fi Share Total: 6.8 billion ibs Annual Average: 1.36 billion ibs Gold, milfion ozs 2005e — 2009e PT-Fi Share Total: 11.0 million ozs Annual Average: 2.2 million ozs 2.9 2.5 1.9
Slide 16: Mining Sequence in 2005-2009
Mining Sequence in 2005-2009 spn Copper Equivalent Cross Section OF OUR METALS Legend: ME 0.50 -0.99 % EqCu 1.00 - 1.99 % EqCu ME 2.00 - 2.99 % EqCu Mm > 3.00 % EqCu
Slide 17: 2005 Outlook
2005 Outlook Quarterly Payable Metal Sales THE STRENGTH OF OUR METALS: Pounds in millions 500 400 300 y i=} 3 100 PT-FI's share of Copper LS billion pounds 1Q05 2Q05 3Q05 Estimate 4Q05 Ounces in thousands 1000 800 600 400 200 PI-FIs share of Gold 2.9 million ounces 930 Estimate 810 640 520 — 4 — | |
Slide 18: Average Net Unit Cash Costs at Various Gold Prices
’ : THE STRENGTH at Various Gold Prices SOUR MEIAIS Fava 2005 Average Net Unit Cash Costs {¢ per payable pound) 13¢ 8¢ 3¢ -1¢__ -6¢ $350 $375 $400 $425 $450 NOTE: Based on copper and gold sales of 1.5 billion ibs and 2.9 million ozs for 2005. Quarterly unit costs will vary Significantly with quarter
Slide 19: Unit Production Costs
Unit Production Costs OF OUR METALS (per pound of copper) 2004 2005e Cash Unit Costs Site Production & Delivery, 77¢ 55¢ After Adjustments Royalties @ 5 6 Treatment Charges @ 20 21 Gold/Silver Credits (62) (82) Net Cash Unit Costs 40¢ -0-¢ DD&A Rate 17¢ 14¢ (1) Estimate based on 1.5 billion pounds o
Slide 20: Strong Cash Flow Generator — Operating Cash Flow
: Strong Cash Flow Generator — Operating Cash Flow 14. srpeneta Model Results — 2005e — 2007e Annual Averages OF OUR METALS ( in milfions, except copper and gold prices) $1,000 ) Copper Sensitivities Gold Sensitivities with $400 Gold with $1,25 Copper $800 3 38 ‘= $600 8 2 $400 = 2 ° $200 $0 $1.00 $
Slide 21: Commodity Price Sensitivities
> Commodity Price Sensitivities FCX Earnings & Cash Flow Annual Impacts +$25/o0z ha Gold au $36 +10¢/Ib Copper $75 Impact Per Share* (¢/share) (2) impact ( millions) *EPS based on 179 milfion basic shares outstanding. Note: Assumes projected 2005 annual sales of 1.5 billion Ibs, copper and 2.9 milti
Slide 22: Capital Expenditures
( in millions) @ AC & Other 2005 — 2009 Average Annual: ~$145 Million 'WPT-FI $150 $160 $130 $130 $150 Be eo $130 2004 2005e 2006e 2007e 2008e 2009e e = estimate. Amounts are projections; see cautionary statement “Includes $37 million for PT-FI to increase 202 output to 50,000 metric TPD on sustaine
Slide 23: Capital Expenditures by Project
(i in millions) Common Infrastructure DOZ 50K Expansion Capital Sustaining* DOZ Capital* Atlantic Copper & Other e = estimate. Amounts are projections; see cautionary statement + Includes a total of $20 million in Sustaining and D02Z for carry-forward projects from 2004. 23
Slide 24: DOZ Expansion to 50,000 t/d
DOZ Expansion to 50,000 t/d Project Overview DOZ outperforming expectations. Additional infrastructure & development required to sustain rates above 35K t/d. Expansion is financially attractive » 27% IRR at 85¢ copper & $270 gold » 46% IRR at $1.25 copper & $400 gold Expansion Capital totals $62MM i
Slide 25: Common Infrastructure
Common Infrastructure Access to Underground Reserves COW A Ore Bodies Plan View A [ee Den a N December 2004 Big Gossan “Spur” Bi Progress continues on the Common Infrastructure Infrastructure for access and Fortale development of our underground (Ridge Camp) reserves in the future.
Slide 26: Big Gossan Development Studies
Big Gossan Development Studies ‘onus « Aggregate Reserves Grasberg Block A COW y 33 million tonnes Underground Ore Bodi 2.8% Cu & 1.0 g/t Au she terra y Recoverable Metal _Grasberg 4§ 1.7 billion Ibs copper Reet 0.8 million ozs gold e Feasibility study to be Kucing Liar completed in 1Q05 y Open stop
Slide 27: 2005e — 2007e Average Annual Cash Flow After Capital Expenditures
2005e — 2007e Average Annual Cash Flow After Capital Expenditures ( in milfions, except copper and gold prices) $800 Copper Sensitivities Gold Sensitivities with $400 Gold with $1.25 Copper Available for $600 debt reduction/ shareholder returns 2) $400 $200 Cu care i. Lame VIVIGENG Tia aA UY feitare
Slide 28: Debt Maturities
Esa Debt Maturities THE STRENGTH OF OUR\METALS (in millions) Total Debt@ 12/31/04 Less Cash @ 12/31/04 Total After, Casth $1,952 (6552) $1,400 $50 © Commodity preferred maturity is based on book value. $510 10%% $48 7%, Conv. Notes Convert price: $30.87 per share Thereafter Preferred
Slide 29: Financial Policy
Financial Policy Maintain Strong Balance Sheet and Financial Flexibility + Reduced Gross Debt by $276 Million and Net Debt by $330 Million in 2004 Continue to Reduce Debt Where Practical Establish Sustainable Regular Quarterly Common Dividend + Initiated Dividend in February 2003 at $0.36/Share + In
Slide 30: The Strength of Our Metals
THE STRENGTH OF OUR METALS: » Strong Cash Flow Generator >» Long-lived Reserves » Unhedged Exposure to Copper & Gold Markets >» Improved Balance Sheet/Enhanced Shareholder Returns » Attractive Valuation 30
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