Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q3 2008 Earnings Presentation
37 slides from Freeport-mcmoran's earnings presentation, Oct 21, 2008
Slide 1: Freeport-McMoRan Copper & Gold, October 21, 2008
Mei oe FOX : t ¢ 4 LISTED October 21,2008 pSE:
Slide 2: Cautionary Statements: Forward-Looking Statements
FREEPORT-McMoRAn COPPER & GOLD Cautionary Gratencnts ales Forward-Looking Statements This presentation contains forward-looking statements in which we discuss factors we beleve may affect our perfomance in the future. Forward-looking statements are all statements other than historical facts, such as
Slide 3: 3Q08 Highlights
FREeport-McMoRan [V8 Copper £ GoLD 3Q08 Highlights Sales Data 3Q08 lopper Consolidated Volumes (7m Ibs}? 1,016 949 Average Realization (per ib) $3.14 $3.53 @ Gold Consolidated Volumes (0007's ozs) 307 269 Average Realization (per oz) $869 $695 Molybdenum ‘Consolidated Volumes (mm ibs) 19 16 Average
Slide 4: Recent Events
FREEPoRT-McMoRAn CopPeR & Goto we. a Recent Events ? >» Global Market Conditions = Financial Market Turmoil/ Credit Crisis = Economic Weakness in U.S./ Europe = Market Concerns About Slower Growth in China > Sharp Decline in Commodities Prices During September/October > Underlying Fundamentals of Co
Slide 5: Markets
FREeport-McMoRan [V8 Copper £ GoLD Markets 2 . a & LME Copper Price g 2 po g a 2 2 7 g 3 a LME & COMEX Exchange Stocks* Jan $0 Jul$0 Jan60 00 nO MOL Jon-€2 JuL02 n.69 Jud Jan Yuko Sands nO Jul-05 Jan-07 JulO7 an-0e ste “LME and Comex, excluding Shanghai stocks, producer, consumer and merchant stocks
Slide 6: Total Debt (US$ billions)
FREEPORT-McMoRAn COPPER & GOLD (US$ billions) $205 3] $17.6 $15 4 ial a [ay @ $10, i} e $55 $0 At Time of PD Acquisition 9/30/08 in March 2007 (4) Pro Forma year-end 2006 total debt of $1.6 bilon piu $16 blion in acquisition debt é
Slide 7: FCX Debt Maturities 9/30/08
FREEPORT-McMoRAn COPPER & GOLD FCX Debt Maturities 9/30/08 $6,000 (US$ millions) Total Debt & Cash at 9/30/08 $5,000 (US$ billions) Senior Notes Issued in 2007 $6.0 Heritage PD Debt 0.6 $4,006 $4,000 Other Debt 0.6 i Total Debt $7.2 8.375% == Senior Note Consolidated Cash $1.2 pg $3,000 PD $2,514 |
Slide 8: 3Q08 Regional Data
FREeport-McMoRan [V8 Copper £ GoLD 3Q08 Regional Data (per pound of copper} North South . America America. Indonesia Consolidated Unit Cash Costs Site Production & Delivery $2.07 $1.22 $1.76 $1.66 Royalties 0.00 0.00 0.12 0.03 Treatment Charges 0.09 0.09 0.24 0.13 By-product Credits (0.65) (0.15) (0
Slide 9: 3Q08 Copper Impact
FREEPORT-McMoRAn COPPER & GOLD ae 3908 Copper Impact > Spot Price Declined 27% From $3.99/ Ib at Start of Quarter to $2.90/Ib at Quarter-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
Slide 10: 2008 Outlook
FREEPORT-McMoRAn COPPER & GOLD 2008 Outlook >» Sales Outlook: © Copper: 4.0 Billion Ibs. ¢ Gold: 1.2 Million ozs, ¢ Molybdenum: 74 Million Ibs. » Modeled Operating Cash Flows “): ~ $3.5 Billion = 4Q08 Prices Assumptions: $2.15 Copper, $800 Gold and $27 Moly = Net of Working Capital Use in 2008 of ~
Slide 11: Climax Mine Restart
Climax Mine Restart e w$500MM “brownfield” project = Open-pit operation = Construction of new mill with restart by 2010 = Major permits received = Construction activities commenced e Initial annual production ~30mm Ibs e Largest, highest-grade undeveloped moly resource with substantial upside; major
Slide 12: Tenke Fungurume Mine
Tenke Fungurume Mine extona ¢ Initial production target — 2H09; ¢ Engineering, procurement & construction Aggregate annual production of ies continue; concrete work, steel 250MM lbs Cu & 18MM Ibs Co tank erection, structural steel & logistics/ oe infrastructure development + Initial Reserves at 12/3
Slide 13: Development Project Update
FREeport-McMoRan [V8 Copper £ GoLD Development Project Update Democratic Republic of Congo Tailings Storage StocKpie & Heavy Dimp Pocket Duby shop, SAGA Seach = Aci. pate Plant x — : Cobalt: Solution Extraction Sl Precipitation Electrowinning Tenke Fungurume Construction Site, 3Q08
Slide 14: Expansion Opportunities: North America, South America
North America South America e Opportunities for small and large scale expansions e Additional potential as we incorporate drill data and reserve additions e Timing of development depends on market conditions* * incremental expansions at Sjerrita and Bagdad and the restart of the Miami mine have been
Slide 15: A World of Opportunities
FREeport-McMoRan 3. A World of Opportunities Exploration Targets in Major Mineral Districts ~100 déill'tigs operating around the world Safford /Lone Star /Morenct District SW US 41 rigs J Thidonesia } 5 Attica ¢ 14 rigs South Te higs America 20 rigs
Slide 16: Aggregate 2008e Exploration: ~$275 million
FREEPoRT-McMoRan COPPER & GOLD Aggregate 2008e Exploration: ~$275 million North America Lone Star, Morenci & Others Africa Indonesia Tenke Deep Grasberg, Fungurume Kucing Liar, & & Kisanfu other targets outside of Block A Australasia & Other Areas NOTE! curred. 2008e expense is estimated to total $3
Slide 17: Sales Profile 2007 - 2010e
FREEPORT-McMoRAn COPPER & GOLD ee. Sales Profile 2007 - 2010e 2006 2007 2008e 2009e 2010e Pro Pro Forma Forma* Tore TITRE epper sales incl approtimatly 535 ym lei 2006, £97 mm lbs n 2007, 760s isin Z008e, 725 mo fs 2008 200 600 mm fs 9 20108 fer minosty terest; tercuces purchased copper °° 2007 incl
Slide 18: 2008e Quarterly Payable Metal Sales
FREEPORT-McMoRAn COPPER & GOLD 2008e Quarterly Pa yable Metal Sales Copper Sales (million Ibs) 1,250 1,000 51H 750 500 250 1908 2908 3g08 agose ‘Tote? Corsalared copper sles include spprointely 168.00 lbs 4008, 167 9 fs in 2008, Ph sm sin 2008 and 190 sm ban 308 For minosty interes; excludes pursed
Slide 19: 2008e Sales and Unit Production Costs by Region
FREeport-McMoRan [V8 Copper £ GoLD 2008e Sales and Unit Production Costs by Region 2008e Sales by Region North America South America Indonesia 1,425 2.500 1,100 74) 1a on Cu Mo | Au, Cu Au | mm Ibs mim Ibs ais ey, om Ibs a North South (per pound of copper} America America Indonesia Consolidated Unit
Slide 20: Average Annual EBITDA and Operating Cash Flow
Average “Annual E. EBITDA ($750 Gold & $25 Molybdenum) $10) (US$ billions) $8 $6 $4 $2 $0 Cu $2.00/Ib Cu $2.50/Ib Cu $3.00/Ib Average Annual Operating Cash Flow ($750 Gold & $25 Molybdenum) $6) (US$ billions) $4 $2 $0 Cu $2.00/Ib Cu $2.50/Ib Cu $3.00/Ib "ower Bice a noted fr 2008/20 te. On an sonal
Slide 21: Sensitivity to Commodity Prices
FREeport-McMoRan [V8 Copper £ GoLD Sensitivity to Commodity Prices Annual Fin: fal Impact Net Operating EBITDA Income Cash Flow (US$ millions) Copper: -/+ $0.20/Ib $850 $490 $575 Molybdenum: -/+ $2.00/Ib $140 $100 $100 Gold: -/+ $50/ounce $90 $45 $50 ‘Foie Anical BoassiTingact based on estimated ave
Slide 22: Capital Expenditures - Under Review
FREEPoRT-McMoRan COPPER & GOLD Capital Expenditures — Under Review (2) @ Major Projects @All Other (uss billions) $3.0 $2.7 $2.5 $2.0 $1.55 $1.0 $0.5 $0.0 20077 2008e 2009e 2010e (2) 60x currently revising capital budgets in response fo current market conditions (2) Inclides PD expenditures beginnin
Slide 23: Financial Policy
FREEPORT-McMoRAn COPPER & GOLD Finariclal Policy > Committed to Maintaining a Strong Financial Position > Invest in Development Projects with High Rates of Return > Shareholder Returns = Dividends = Share Purchases (23.7 mm Shares Remain Available Under Current Authorization) > Financial Policy Revi
Slide 24: FCX Investment Summary
FREEPORT-McMoRAn COPPER & GOLD FCX Investment Summary > World’s Premier Publicly Traded Copper Company > World’s Largest Molybdenum Producer & Significant Gold Producer >» World Class, Long-lived, Geographically Diverse Operations > Strong Cash Flows and Financial Strength > Attractive Project Pipel
Slide 25: Slides
Slides
Slide 26: Grasberg District Ore Bodies
FREeport-McMoRan [V8 Copper £ GoLD Grasberg District Ore Bodies + At year-end 2007, we arrived at the start of the Grasberg BC terminal + In 2008, we have begun development of Grasberg BC infrastructure December 2007 5.5 km’ from the Portal Grasberg Block Cave “Spur” MLZ wer acce gsan CO COW A Ore B
Slide 27: Grasberg Open Pit
FREEPORT-McMoRAn 2" Coppers GOL Grasberg Open Pit
Slide 28: Small Scale Failure at Grasberg Open Pit
FREeport-McMoRan [V8 Copper £ GoLD Small Scale Failure at Grasberg Open Pit Status Update « Small scale failure of 75,000 mt with no — nimi injuries or property damage Final 7S Design « Normal operations but access to 7S high “ = grade section was restricted « Remediation substantially complete; min
Slide 29: PT-FI Mine Plan
FREEPORT-McMoRAn COPPER & GOLD PT-FI Mine Plan PT-FI’s Share of Metal Sales, 2008e-2012e Copper, billion lbs 2008e — 2012e PT-Fi Share Total: 5.9 billion ibs Annual Average: 1.18 billion ibs 2.1 2.1 1.3 1.1 1.1 1.5 Gold, million ozs 2008e — 2012e PT-Fi Share Total: 7.7 million ozs Annual Average: 1.
Slide 30: 7S is the Primary Ore Pushback in 2008
FREEPORT-McMoRAn COPPER & GOLD 7S is the Primary Ore Pushback in 2008
Slide 31: 7S is the Primary Ore Pushback in 2008
FREEPORT-McMoRAn COPPER & GOLD g Seq » Copper Equivalen 7S is the Primary Ore Pushback in 2008
Slide 32: Copper Equivalent Grade Legend
FREEPORT-McMoRAn COPPER & GOLD 0.25 - 0.99% CuEq 1.01 19% CuEG 19% CuEG uEq
Slide 33: 7S is the Primary Ore Pushback in 2008
FREEPORT-McMoRAn COPPER & GOLD g Seq » Copper Equivalen 7S is the Primary Ore Pushback in 2008 oc
Slide 34: FREEPORT-McMoRAn
FREEPORT-McMoRAn COPPER & GOLD
Slide 35: 8E/8S is the Primary Ore Pushback in 2010
FREEPORT-McMoRAn COPPER & GOLD ¥ g: » Copper Equivalen: 8E/8S is the Primary Ore Pushback in 2010 Grasberg Plan View
Slide 36: CuEq Cross-Section
FREEPORT-McMoRAn COPPER & GOLD 99% CUEq 99% CuEq - 020900 Cura — = 5 >3.00% CuEq * ON is in ore north of this cross-section
Slide 37: CuEq Cross-Section
FREEPORT-McMoRAn COPPER & GOLD 99% CUEq = A 99% CuEq 5 x 99% CUEG — 7 >3.00% CuEq * ON is in ore north of this cross-section
Freeport Mcmoran Copper & Gold — Q3 2008 Earnings Presentation on 6ix