Freeport-mcmoran, Inc. · NYSE:FCX

Freeport-mcmoran — Freeport-McMoRan Copper & Gold — Goldman Sachs Basic Materials Conference 2007

26 slides from Freeport-mcmoran's conference presentation, May 15, 2007

  1. Slide 1: Basic Materials Conference

    FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Basic Materials Conference Kathleen L. Quirk Executive Vice President and Chief Financial Officer May 15, 2007 www.fcx.com

  2. 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 document contains certain forward-looking statements about FCX. When used in this

  3. Slide 3: Phelps Dodge Acquisition -- Transaction Highlights

    FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Phelps Dodge Acquisition -- Transaction Highlights ¾ Created World’s Premier Publicly Traded Copper Company ¾ World Class, Long-lived, Geographically Diverse Operations ¾ Attractive Project Pipeline Supports Growing Productio

  4. Slide 4: World's Leading Public Copper Company

    FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. World’s Leading Public Copper Company Top 10 Copper Producers (2007E) (000 t) 2,000 Pro forma FCX is poised to take advantage of favorable industry fundamentals 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Codelco Pro Form

  5. 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 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

  6. Slide 6: 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 (2007-

  7. Slide 7: 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

  8. Slide 8: 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

  9. Slide 9: Highly Successful Deal Execution

    FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Highly Successful Deal Execution Cash/Stock Mix of $26 Billion Consideration for Acquisition Pro Forma for At Closing Equity Issuances Stock 30% Cash Stock Cash 47% 53% 70% Total Debt (in billions) $17.6 $12.0 Shares: Basic 3

  10. Slide 10: 1Q07 Highlights

    FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. 1Q07 Highlights (includes (includes PD PD results results beginning beginning March March 20, 20, 2007) 2007) Financial Financial Results Results 1Q06 1Q06 1Q07 1Q07 (in millions, except per share amounts) Revenues $1,086 $2,

  11. Slide 11: 1Q07 Pro Forma Operating Highlights

    FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. 1Q07 Pro Forma Operating Highlights (full quarter results, includes PD prior to March 20, 2007) Operating Data 1Q06 1Q07 Copper Consolidated Volumes (mm lbs) (1) 834 1,026 Average Realization (per lb) (2) $1.84 $2.85 Net Unit

  12. Slide 12: Markets Overview

    FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Markets Overview 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 Jan-02 Ju

  13. 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: 1.9 Million ozs. • Molybdenum: 70 Million lbs. ¾ Operating Cash Flows (2): • $5.3+ Billion for 2007 • $4.6+ Billion in Last 3 Quarters ¾ Capital E

  14. 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 Morenci Morenci Mill Concentrate Leach Plant • Completed Mill Tie-ins in 1Q07 X • Start-up of Concentrate Leach Plant Expected in 3Q07 •

  15. Slide 15: 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 Cerro Verde Mill Expansion Grinding & Flotation • ~$900MM Project Completed in 4Q06 • Working Through Start-up Issues • Ramping Up in 2Q • Full Rates Expected in 2H

  16. Slide 16: Development Project Update: Indonesia

    FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Development Project Update Indonesia ¾DOZ Expansions • Complete 50K Expansion in mid-2007 • Further Expansion to 80K ¾Completed 73% of Common Infrastructure Tunnels ¾Initiate Mine Development Activities at Grasberg Block Cave

  17. Slide 17: 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 • Final Feasibility Study Completed in 4Q06 • Construction Activities Include a Camp, Access Roads, and Initial Roadworks • Completed En

  18. Slide 18: 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

  19. Slide 19: 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 2.1 5 1.9 1.9 2 1.6 4.6 4.4 1 4 3.9 3.6 0 2006 2007E 2008E 2009E Pro Pro Forma Forma* 3 ____________________ Note: Consolidated gold sales incl

  20. Slide 20: 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 1,500 1,800 1,300 1,100 70 100 Cu Mo Cu Au Cu Au mm lbs mm lbs mm lbs 000’s ozs mm lbs 000’s ozs

  21. Slide 21: 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 2007-2009 ($500 Gold & $15 Molybdenum) $12 (US$ billions) $10 $8 $6 $4 $2 $0 Cu $2.00/lb Cu $2.50/lb Cu $3.00/lb Average Annual Operating Cash Flow 2007-2009

  22. Slide 22: 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 $800 $425 $500 Moly

  23. Slide 23: 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 $2.0 $1.6 $1.5 $1.2 0.8 $1.0 $0.9 0.6 0.6 $0.5 0.8 0.6 0.3 $0.0 2007E 2008E 2009E * Includes PD expenditures beginning March 20, 2007 23

  24. Slide 24: FCX Debt Maturities 3/31/07

    FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. FCX Debt Maturities 3/31/07 (US$ millions) $8,000 Transactions Subsequent to March 31, 2007 $7,000 ƒ Called Remaining $272 Million 10⅛% Senior Notes $6,488 $6,000 ƒ Prepaid Additional $500 Million in Term Debt $5,000 $4,749 N

  25. Slide 25: Significant Debt Reduction

    FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Significant Debt Reduction Year-End Net Debt at Varying Copper Prices (US$ billions) $8.9 $9 $8 $7.2 $7 $6 $5 $3.9 $4 $3 $2 $1 $0.7 $0 ’07-’09 Avg. Copper Price 3/31/07 $2.00 $2.50 $3.00 Net Debt/’07-’09 Avg. EBITDA 1.3x 0.5x

  26. Slide 26: 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 ƒ Debt Reduction Top Priority ¾ Continuation of Positive Copper Markets is Expected to Provide Substantial Cash Flows ¾ Consideration of Asset Sal

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