Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q4 2005 Earnings Presentation
28 slides from Freeport-mcmoran's earnings presentation, Jan 17, 2006
Slide 1: 4Q/Year-end 2005 Earnings Conference Call
Hy FREEPORT-MCMORAN COPPER & GOLD INC. 4% Qtr/Year-end 2005 Earnings Conference Call J. R. Moffett R. C. Adkerson Chairman of the Board President and Chief Executive Officer KL. Quirk M. J. Johnson Senior Vice President, Senior Vice President and Chief Financial Officer Chief Operating Officer www.f
Slide 2: www.fex.com
www.fex.com
Slide 3: 2005 Highlights
eemeeess aseetees RG 005 Highlights E eet = aaa > Multiple Operating and Financial Records > Sales Stats — PT-FI Share 4Q05 2005 Volumes Realization Volumes Realization Copper 468 mm Ibs $2,02/1b 146 bi ibs $L85/lb Gold Limm ozs $494foz 2,8 mm ozs $456foz > Operating Cash Flows of $670 million in 4Q
Slide 4: Record Metal Production
| Record Metal Production a aeeeeiectieemineli | Quarterly Record Aggregate Metal 555 million Ibs of copper 1,36 million ozs of gold Production Records were 6% and 24% higher than the previous records for copper In 4Q, larger mining areas in Pushback 6S and gold, respectively allowed for better prod
Slide 5: Kucing Liar
Kucing Liar aa Big Gossan Block A COW Ore Bodies Plan View Copper Gold (Billion Lbs) (Million Ozs) «+ 1973 40.3 a 43.9, Grasberg Grasberg Discovery %®7) Discovery (1988) 20 (1988); 10 . 0 + d sea 193 2005 1973. 1983 1993 al ayes * 100% production since the discovery of Grasberg in 1998 2005 5
Slide 6: Reserves
Reserves Aggregate & Net to PT- FI 2005 Reserve Rolf Forward Aggregate PT-Fl’s Share Cu Au Cu Au billion Ibs million ozs: billion Ibs: million ozs: Reserves @ 12/31/04 56.2 61.0 40.5 46.5 Additions/changes* 21 0.4 1.3 0.2 Production (1,7) (3.4) (1.5) (2.8) Net Change 0.4 (3.0) (0.2) (2.6) Reserves @
Slide 7: FCX Operating Cash Flows and Capital Expenditures
= $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 "FCX Operating Cash Flows and ‘axine Capital Expenditures Graal ($ in millions) OF Operating Cash Flows. —— Capital Expenditures 1996 1997 i998 1s99 2000 2001 2002 2003 2004 2005 $1.02/ 94¢/ 73¢/ 75¢/ 82¢/ 69¢/ 71¢/ 82¢/ $1.37/ $1.85/ $391 $346 «$
Slide 8: London Gold Price
$s 5 S| a London Gold Price eph 11. Attacks on U. 3 x a = N s 8 q 8 e282 § 8k B e@se2eee9¢898 BB888888 S28 8838 & BOSERBBAD BRRZR 3355 “20 sad $ antid saddog a1 =
Slide 9: Grasberg Open Pit
fk OEMS aM a SEA OG HEE: | Grasberg Open Pit Lore ¢ In 2005, Pushback 6S was our Primary source of high-grade ore. ¢ Pushbacks 6N & 6E will provide the majority of the ore from the Grasberg in 2006.
Slide 10: Updated Mine Plans, 2006-2010
Updated Mine Plans, 2006-201 Status Overview he EH, 0 , « Updated plans incorporate 2005 Grasberg Pit results & revised Grasberg mining Year-end 2005 rate estimates Plan View « Asa result of lower-than-targeted mining rates, high-grade ore from “6 North” previously expected to be mined in late 2006
Slide 11: Mining Sequence in 2006
ws BS oasis et Mining Sequence in 200 6N provides 75% of the copper & 50% of the gold from the Grasherg Pit in 2006 * Previous r] Deferred from late 2006 to early 2007 Legend: 5.6 million t @ 3.8% CuEq mm 0.50 -0.99 % Eqcu (aggregate payable metal of 200MM Ibs Cu & 0.5MM ozs of Au) 1.00 - 1.99 % Eq
Slide 12: Mining Sequence in 2007
=— Mining Sequence in 2007 Copper Equivalent Cross Section 6N & 75 are the Primary Ore Pushbacks in 2007 isang Legend: mm 0.50-0.99% Eqcu
Slide 13: Mining Sequence in 2008
— Mining Sequence in 2008 Copper Equivalent Cross Section 7S is the Primary Ore Pushback in 2008 Legend: mm 0.50-0.99% Eqcu
Slide 14: Mining Sequence in 2009
— Mining Sequence in 2009 Copper Equivalent Cross Section 8S is the Primary Ore Pushback in 2009 Legend: mm 0.50-0.99% Eqcu
Slide 15: Mining Sequence in 2010
— Mining Sequence in 201 0 Copper Equivalent Cross Section 8N is the Primary Ore Pushback in 2010 Legend: mm 0.50-0.99% Eqcu
Slide 16: PT-FI Mine Plan
PT- FI Mine Plan PT-FI’s Share of Metal Sales, 2004-2010e si iti mma Copper, billion lbs Gold, million ozs 2006e — 2010 PT-Fi Share 2006e — 2010 PT-Fi Share Total: 6.8 billion ibs Total: 9.6 million ozs Annual Average: 1.3 billion ibs Annual Average: 1.9 million ozs 2.4 2.0 1.9 1.7 : 1.5 1.6 us 1.2
Slide 17: 2006 Outlook
cee" "2006 Outlook Quarterly Payable Metal S. Sales sentra PT-FI's share of Copper PT-FI's share of Gold 4.3 billion pounds 4.7 million ounces 600 500 600 400 450. 2 = 375 375 2 300 g 340 = = = ‘© 300 g wo 3 200 g a 8 150 100 — i | HY, oO oO 1Q06 2Q06 3Q06 4Q06 1Q06 2Q06 3Q06 4Q06 Estimate Estimate
Slide 18: Cash Unit Costs
(per pound of copper) 9 mos. 4 Qtr. 1 2005 2005 2005 2006e Cash Unit Costs Site Production & Delivery 67¢ 62¢ 65¢ 86¢q Royalties 6 10 7 6? Treatment Charges 23 27 24 32 Gold/Silver Credits (76) 119 (89) (73) Net Cash Unit Costs 20¢ (20¢) 7¢ 51¢ (1) Estimate based on 1.3 billion pounds of copper and
Slide 19: Capital Expenditures
X Capital Expenditures ( in millions) i) AC & Other 2006 — 2010 Annual Average ~ $200 Million wf ptr $250 @ Long-term a | Project 215 $230 bd a osiss $190 — | $170 $170 $175 =| | $160 153 $1is $90 ‘75 $85 $85 2005 2006e 2007e 2008e 2009e 2010e e = estimate. Amounts are projections; see cautionary st
Slide 20: Common Infrastructure
“Common Infrastructure Access to Underground: Reserves Pree ere ae ™ One of our three-boom jumbo drills works on the face of the adit, The adits advance about 7 meters a day per heading. 2Q 2007 eeethy cracberg ¥ Complete dunnel to Grasberg BC December 2005 2.5 km in each tumel completed Portals (Ri
Slide 21: 2006 Exploration Program
donk < Fi 2006 Exploration P. > Block A Focus: = Extensions of the Deep Grasberg and Kucing Liar Mine Complex = Northwest Extension of the DOZ and ESZ Mine Complex = Resource Potential Below the Previously Mined Ertsberg Deposit * Other Block A Exploration N Targets a : > Continue to Assess the Timi
Slide 22: Significant Debt Reduction
i $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Significant Debt Reduction (G in billions) FCX Ending Net Debt © 2 $2.9 3.75x EBITDA | Over 80% Decrease $0.5 _ O.2x EBITDA 7% Conv. Notes Convert Price: $30.87;per share 2000 2005 (1) Debt and commodity preferreds net of cash and restricted investments. Includes
Slide 23: Debt Maturities
$1000 (GB inmiliions) $800 $600 $400 $327 $294 aa 0 $253 ey | Notes [ $200 FCX 10%8% | \ 6%8% ae Senior | Convert | Senior Notes. lees Notes. ieee ; $14 $14 $14 Ea ms 4 2006 2007 2008 2009 2010 2011 Thereafter CEquipmentLoans Atlantic Copper_—s™Serior Notes @Gonvertible Notes __ ™@ Commodity Preferr
Slide 24: FCX Operating Cash Flows at Varying Copper & Gold Prices
| FCX Operating Cash Flows (Annuat Avg. 2006-2008e ) Maki at Varying Copper & Gold Prices ( in millions, except copper and gold prices) $1,400 Copper Gold 2006 13 17 $1,200 2007 1.2 2.0 2008 1.5 2.4 gsi00 | a & | —. (iis..-cig > = < . po Eo 8 $800 o : g 2 $600 o rs a 7 1 & $400 S i=) $200 N $0 $1.25
Slide 25: Commodity Price Sensitivities
a | Commodity Price Sensitivities the FER, Earrings, & Cash Flow Annual Impacts rsa +$25/o0z Gold +10¢/Ib Copper $21 $65 Impact Per Share* (¢/share) (2) impact ( millions) * EPS based on 187 million basic shares outstanding. Note: Assumes projected 2006 annual sales of 1.3 billion Ibs, copper and 1.
Slide 26: Financial Policy
= Financial 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 26
Slide 27: Historical Shareholder Returns
Lh [Fan Historical Shareholder Returns «= SAT ee Oy Gs hy. Making » $1.5 Billion in FCX Open Market Purchases Since 1995 Spin-off = 80 Million Shares in Open Market Purchases at an Average Price of $18.66 per Share > $2.0 Billion in Common Stock Dividends Since 1988 = $693 Million Since 2003 $3.5 Bi
Slide 28: Strong Cash Flow Generator
> > > > > Strong Cash Flow Generator Long-lived Reserves Unhedged Exposure to Copper & Gold Markets Improved Balance Sheet/Enhanced Shareholder Returns Attractive Valuation 28
Freeport Mcmoran Copper & Gold — Q4 2005 Earnings Presentation on 6ix