Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q4 2007 Earnings Presentation
42 slides from Freeport-mcmoran's earnings presentation, Jan 24, 2008
Slide 1: Fourth Quarter 2007 Earnings Conference Call
FReepont-McMoRan 2" Coppen a Goo 4 Quarter 2007 Earnings Conference Gall James R. Moffett Richard C. Adkerson Timothy R. Snider Kathleen L. Quirk ] January 23, 2008 =——
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements in which we discuss factors we beleve may affect our performance Jn the future. Forward-looking statements are all statements other than historical facts, such as statements regarding proj
Slide 3: 2007 Highlights
FREEPont-McMoRan Copper & GoLp 2007 Highlights = Extraordinary Year; Record Performance = Transformed FCX Into World’s Largest Publicly Traded Copper Company = Successful Integration = Achievement of Debt Reduction Targets Well Ahead of Schedule = Higher Production Profile and Further Expansion Oppo
Slide 4: FCX Revenue, Net Income and Cash Flow Comparison
ISA SIOMNAUON OF F-0X6 FCX Revenue Comparison G it billions) $16.9 $5.8 al 2006 2007 | FCX Net Income Comparison* G in billions) $2.7 $1.4 2006 2007 + From continuing operations FCX Cash Flow Comparison 6 inbittions) $6.2 $1.9 2006 2007 Enterprise Value G it billions) $51.2 $12.1 Y-£ 2006 Y-£ 2007 i
Slide 5: Revenue and Production Mix
', ReEVeENUey PIOGUCHON WVIxe : s/Cul/Au Ivey nm 7 ee 7 _ pe, r. 7s Mining Revenue by Commodity | Copper Production by Method | 2007 Pro Forma 2007 Pro Forma Gold 10% Molybdenum 12% Copper 78%
Slide 6: Operating Data
FREEPonT-McMoRan Copper & Gow Operating Data 4006 Pro Forma 4Q07 Copper Consolidated Volumes (mm ibs) @? 1,031 878 Average Realization (per /b)@ $2.99 $3.12 Net Unit Cash Cost (per /b) $0.71 $1.08 Gold Consolidated Volumes (000’s ozs) 538 161 Average Realization (per oz) $628 $803 Molybdenum Consoli
Slide 7: 4Q07 Copper Price Impact
FREEPonT-McMoRan Copper & GoLp 4007 Goppel linpact » Spot Price Declined From $3.70/ lb at Start of Quarter to $3.01/Ib at Year-end > Approximately Half of Sales in Any Quarter are Provisionally Priced and Subject to Final Pricing = Quarter-end Price is a Major Determinant in Recorded Price > Two Im
Slide 8: 2007 Sales and Unit Costs by Region
IOS ZUU7 SACS ANG Ut FI OUUCH OT GOAE DY REGO) I 2007 Pro Forma 1,332 pis 2.2 4,131 ott) on Cu Mo Cu Au Cu Au mm Ibs rim Ibs mm Ibs sim 25 | om Ibs sim ozs North South (per pound of copper} America America Indonesia Consolidated Cash Unit Costs Site Production & Delivery $1.43 $0.91 $1.19 $1.17 Roya
Slide 9: Reserves at 12/31/07
ary 12/31/07 Copper Molybdenum _— Gold Copper Reserves billion Ibs billion Ibs trillion ozs . . by Geographical Region Reserves @ 12/31/06 93.6 1.95 42.5 — Additions/revisions* 35 0.16 08 Production (9) (0.07) (2.3) Net change (4) 009 (16) Reserves @ 12/31/07 93.2 2.04 41.0 North America * as % of 2
Slide 10: Markets Overview
larKets OVeErview 9 & B 2 5) 5 g : : S 8 a 8 LME & COMEX Exchange Stocks* Jon$0 JulS0 Jan) 00 n.O1 Jul Jand2 M2 on3 Jul09 Jan JulO Sn 85 05 Jan85 JulNG Jan? S07 bn 88 “LME and Gomex, excluding Shanghai stocks, producer, consumer and merchant stocks. state London Gold Price (3/oz) Molybdenum Price® (
Slide 11: 2008 Outlook
FREEPont-McMoRan Copper & GoLp ZOUB,OUTIOOK » Sales Outlook: © Copper: 4.3 Billion Ibs, ¢ Gold: 1.3 Million ozs, ¢ Molybdenum: 75 Million Ibs. >» Modeled Operating Cash Flows ()): ~ $5 Billion for 2008 = Significant Working Capital Requirements in First Half = Funded Settlement of 2007 Copper Collar
Slide 12: Achievement of Debt Reduction Targets
AGHIEVEMCILORSIGHINICAIE DEDERCAUGHOM Ucutlaul Total Debt at 12/31/07 Senior Notes Issued in 2007 $6.0 (US$ billions) Heritage PD Debt 0.8 i aw Other Debt 0.4 $17.6 Total $7.2 $15 + @ $14.2 3g Net of Cash gz s10 4 kc] $5 5 $5.6 Net of Cash $0 At Time of Acquisition 12/31/07 (4) Pro Forma year-end 20
Slide 13: Development Project Update: North America
Develop nent Project Upi th America Safford Mine Development Miami Mine Restart e Major new mine in Arizona ¢ Restart of the Miami mine substantially completed * 100MM Ibs Cu/year by 2010 ¢ SX/EW facility start-up in 4Q07 with 2 7 wool e ~$100MM project, primarily mining first copper production in D
Slide 14: Climax Development Project
Fane Development Project North America . ~$500MM “brownfield” project Open-pit operation Construction of new mill with restart by 2010 Initial annual production ~30mm Ibs moly at ~$3.50/Ib cash costs billion Ibs Mo Production Largest, highest-grade ] (1918-present) undeveloped moly resource with sub
Slide 15: Development Project Update: South America
Development Project Undate 2% evelopment Projec g Soul America AGH: SOE Ss SSS 2S ~$900MM project completed in 4Q06 Operated at capacity during the second half 2007 Adds 430MM lbs/ year aggregate Ramping up moly production in 2008 re Large sulfide mineral deposit underlying current oxide pit Environ
Slide 16: Development Project Update: Indonesia
| “Development Project Update 3% ect Update Z Ce DOZ Expansions - Completed 50K expansion in mid-2007; record production of 59K t*/d in 4Q - Further expansion to 80K Completed 96% of tunneling (Common Infrastructure) required to reach Grasberg Block Cave Big Gossan ¢ Initiate mine development activi
Slide 17: Development Project Update: Democratic Republic of Congo
Development Project Update Democrauc Republic of Gongo ¢ Engineering & procurement activities continue; steel & concrete work proceeding in the leaching/processing area ¢ Capital cost estimate of ~$900MM (aggregate)* ¢ Initial production target — 2009 | Tenke Plant Site e Aggregate annual production
Slide 18: Growth Project Update: Incremental Expansions
FREEPont-McMoRan Copper & GoLp Growth Project Update incremental Expansions e Incremental expansions at Morenci, Sierrita, Bagdad and Cerro Verde = Total capital costs of ~$400MM*; engineering in-progress = Incremental annual metal** of 210MM Ibs copper & 7MM lbs moly = Financially attractive Capita
Slide 19: Copper Reserves & Mineralized Material
Copper R LeServes: & Minera eae y Estimates as 0f 12731707 Incremental at $1.20 at $1.50 copper price copper price Reserves Mineralized (billion lbs of Material) recoverable copper} “(billion Ibs oF contained copper} (@) Consolidated copper reserves using a long-term copper price of $1.20; 77 billon
Slide 20: Exploration Drives the Mine Plan
Exploration Drives the Mine Plan | Oe ath = Cu Au) Aggregate 2008e Exploration: ~$175 million North America Lone Star & Morenci Africa Indonesia Tenke Deep Grasberg, Fungurume Kucing Liar, & & Kisanfu other targets outside of Block A Australasia & Other Areas _,, e = estimate. Pleare see cactionary
Slide 21: Democratic Republic of Congo and Papua, Indonesia Exploration
of Congo » Believed to be largest undeveloped, high ” orate copper/cobalt project in the world today » Less than half of 600-square-mile concession explored; cumulative strike length greater than 80 kilometers Papua, Indonesia » Rights to 2.2 million acres » Highly prospective exploration areas prov
Slide 22: Tenke Fungurume 2008 Exploration Program
Freepont-McMoRAN 50" Copper & GoLp Tenke Fungurume 2008 Explorauon Program e +70 kilometers of diamond drilling with 10 drill rigs e Drill & advance mine development, brownfields & greenfields targets e $20 million Existing drill holes —~“nelres — 5 License boundaries eee Drilling in Dec 2007 ” Prio
Slide 23: Sales Profile 2007-2010
Sales PrOMeZ007 “20108 is Soames — “S/Cul/Au Yt vey 2 5 48 45 4.3 7 7 3.9 3.6 o Bee” AGT aie” fame "amon ae Forma Forma* 3 Note: Consolidated gold sales include approximately 185 & oz in 2006, 228 k o7 in 2007, 135 & oz 2 att a4 _ eo] 69 69 pe i. : i ai a J 3 : ——————E Bie. SG ite” SiR,” Tt Pro Pro
Slide 24: 2008 Quarterly Sales Estimates
1,240 1,145 1,000 220. 885 750 500 250 1Q08e 2g08e 3go8e agose < 44% 56% ‘Fier Conzoliared capper sale ince sppo imately 450 mm lis n 4008, 170 mm sin 200, 485 mm sn 2088 and 185 09 sn 3908 erinostp interes; excludes pa ased copper = estimate, Please see cautionary statement, ou 600 350 1go8e 2q08e
Slide 25: 2008e Sales and Unit Production Costs by Region
20082 Sales and Unit Production GOSIS DY REGIO}7) BLS 1,475 1,200 750 12 o4 rl Cu Mo Cu Au Cu Au mom Ibs im Ibs mom Ibs sim 25 | rom Ibs sim 28 North South (per pound of copper} America America Indonesia Consolidated Cash Unit Costs . = = = Site Production & Delivery $1.50 $1.14 $1.31 $1.32 Royaltie
Slide 26: Operating Cash Flow at Various Copper Prices
EB DAA Gas/i1JOw, i ab VAalIOUs GOPPETEPIICES; (6800 ¢ Gold & $25 $12 (US$ billions) $10 Cu $2.50/Ib Cu $3.00/Ib Cu $3.50/Ib Average Annual Operating Cash Flow 2008e-2009e ($800 Gold & $25 Molybdenum) $8 (US$ billions) $6 $4 $2 $0 Cu $2.50/Ib Cu $3.00/Ib Cu $3.50/Ib ‘ie Pas nied 2008-2009, nso Bai a
Slide 27: Sensitivity to Commodity Prices
SENSILIVILY LO COMIM|OOILY FIICES: , Annual Financial Impact: Net Operating Change EBITDA. Income Cash Flow _ 7 (US$ millions) Copper: -/+ $0.20/Ib $850 $490 $575 Molybdenum: -/+ $2.00/Ib $140 $100 $100 Gold: -/+ $50/ounce $90 $45 $50 ‘Foie Anical BaaasiTingact based on estimated average annual sles
Slide 28: Capital Expenditures
Capital EXpenaitures: ie s{Cul/Au JYt: | Major Projects @All Other (USS billions) $2.5 $2.4 $2.0 $1.5 $1.05 $0.5 $0.0 2007 * 2008e 2009e 2010e "Includes PD expenditures beginning March 20, 2007 ‘Note: Includes capitalzed interest. e = estimate, Please see cautiona'y statement. 28
Slide 29: Average Annual Excess Cash Flow
AVerage Annual EXCESS (cas TFJOW! 7) 20082 20092 scullaw Ie (8 in billions, except copper, gold and molybdenum prices) 55 Prin Ae a 2 Copper Sensitivities with g $800 Gold/$25 Molybdenum 294) A Available for 5 investments/ ¢ $3 4 debi reduction/ 5 shareholder S returns £2 | z : ba qt | : Dipiend of
Slide 30: Financial Policy
FREEPont-McMoRan Copper & GoLp ell Kole >» FCX is Committed to Maintaining a Strong Financial Position » Continuation of Positive Copper Markets is Expected to Provide Substantial Cash Flows = Investments in Projects With Attractive Returns = Opportunistic Debt Reduction * Shareholder Returns » Comm
Slide 31: Reference Slides
Reference Slides
Slide 32: Grasberg District Ore Bodies
D Grasberg District Ore Bodies + At year-end, we arrived at the start of the Grasberg BC terminal Grasberg @ 4a + In 2008, we will begin development of Grasberg BC infrastructure Grasberg Block Cave “Spur” Lower access to Big Gossan initiated (currently at BG terminal) December 2007 5.5 km’ from the
Slide 33: Grasberg Open Pit
Grasberg Open P i 3
Slide 34: PT-FI Mine Plan
PI-Fi Mine Plan PITS Share of Metal Sales, Z005e-2012e Cu. Au YES Copper, billion lbs Gold, million ozs 2008e - 2012e PT-FI Share 2008e - 2012e PT-Fi Share Total: 6.0 billion ibs Total: 7.8 million ozs Annual Average: 1.2 billion ibs Annual Average: 1.6 million ozs 2.1 2.0 1.4 1.3 1.2 1.2 2 1.2 1.2
Slide 35: Mining Sequence in 2008
SY S| WA ~ SN Mining Sequence in 2008 «CC Copper Equivalent Cross Section SeulAu = Cu Au july A B 7S is the Primary Ore Pushback in 2008 Legend: mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq @™™ 2.00 - 2.99% CuEq |) mm >3.00% CuEq 36
Slide 36: Mining Sequence in 2008
SY S| WA ~ SN Mining Sequence in 2008 «CC Copper Equivalent Cross Section SeulAu = Cu Au july A B 7S is the Primary Ore Pushback in 2008 Legend: mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq @™™ 2.00 - 2.99% CuEq |) mm >3.00% CuEq 36
Slide 37: Mining Sequence in 2008
SY S| WA ~ SN Mining Sequence in 2008 «CC Copper Equivalent Cross Section SeulAu = Cu Au july A B 7S is the Primary Ore Pushback in 2008 Legend: mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq @™™ 2.00 - 2.99% CuEq |) mm >3.00% CuEq cr
Slide 38: Mining Sequence in 2008
SY S| WA ~ SN Mining Sequence in 2008 «CC Copper Equivalent Cross Section SeulAu = Cu Au july A B 7S is the Primary Ore Pushback in 2008 Legend: mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq @™™ 2.00 - 2.99% CuEq |) mm >3.00% CuEq 38
Slide 39: Mining Sequence in 2009
SG S| WA ~ Mining Sequence in 2009 = Copper Equivalent Cross Section SeulAu = Cu Au july A B 7S and 8E/8S are the Primary Ore Pushbacks in 2009 Legend: mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq @™™ 2.00 - 2.99% CuEq |) mm >3.00% CuEq 39
Slide 40: Mining Sequence in 2010
Copper & GoLp Mining Sequence in 2010 _ —=«. Copper Equivalent Cross Section Cul Aull = Cu Au july 8E/8S is the Primary Ore Pushback in 2010 Legend: mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq @™™ 2.00 - 2.99% CuEq |) mm >3.00% CuEq 40
Slide 41: Mining Sequence in 2011
Se eS Mining Sequence in 2011 i Copper Equivalent Cross Section Cul Aull A B 8E/8S and 9N are the Primary Ore Pushbacks in 2011 Legend: mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq @™™ 2.00 - 2.99% CuEq |) mm >3.00% CuEq 4 > ON is in ore north of this cross-section
Slide 42: Mining Sequence in 2012
SG a S| WA ~ SN Mining Sequence in 2012 Copper Equivalent Cross Section Cul Au I Cus Au) ON is the Primary Ore Pushbacks in 2012 Legend: mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq @™™ 2.00 - 2.99% CuEq |) mm >3.00% CuEq > ON is in ore north of this cross-section a2
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