Freeport-mcmoran, Inc. · NYSE:FCX

Freeport-mcmoran — RBC Capital Markets Global Mining & Materials Conference 2013

25 slides from Freeport-mcmoran's conference presentation, Jun 19, 2013

  1. Slide 1: Global Mining & Materials Conference

    EXPANDING RESOURCES Global Mining & Materials Conference Boston, MA Richard C. Adkerson President and CEO June 19, 2013 www.fcx.com

  2. Slide 2: Cautionary Statement Regarding Forward-Looking Statements

    EXPANDING RESOURCES Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements in which FCX discusses its potential future performance. Forward-looking statements are all statements other than statements of historical facts, such as those statemen

  3. Slide 3: FCX – A Premier U.S. Based Natural Resource Company

    EXPANDING RESOURCES FCX – A Premier U.S. Based Natural Resource Company  World’s Largest Publicly Traded Copper Producer  High Quality U.S. Focused Oil & Gas Assets  Strong Margins & Cash Flows  Visible and Predictable Organic Growth  Strong Technical Capabilities  Track Record of Capital Disc

  4. Slide 4: Completion of Oil & Gas Transactions

    EXPANDING RESOURCES Completion of Oil & Gas Transactions Transactions Totaled $19 Billion • PXP Closed May 31, 2013 • MMR Closed June 3, 2013 FCX Financial Profile Pro Forma for O&G Transactions ($ in billions) PF 2012 Revenues $22.7 PF 2012 EBITDA(1) $10.5 PF Net Debt (3/31/13) (2) $16.2 With the a

  5. Slide 5: FCX's Global Footprint

    EXPANDING RESOURCES FCX’s Global Footprint Major Operations & Development Projects North America1 All major mining assets majority-controlled and operated Reserves Cu 38.8 bn lbs Mo 2.7 bn lbs Copper Oil & Gas 688 MMBOE2 Sales Copper/Gold/Silver Cu 1.45 bn lbs Molybdenum Mo 92 mm lbs3 Grasberg (90.6

  6. Slide 6: Geographic & Commodity Diversification

    EXPANDING RESOURCES Geographic & Commodity Diversification Pro Forma EBITDA (1) North Mining America 74% EBITDA Margin: 48% South America Mining: ~ 50% 21% Oil & Gas: ~75% Oil & Gas Africa Indonesia 26% 8% 23% (1) Based on 2013e full year combined results assuming annual pricing of $3.50/lb Cu, $1,5

  7. Slide 7: World's Leading Copper Producers

    EXPANDING RESOURCES World’s Leading Copper Producers Top 10 Copper Producers (2013e) (000 t) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Codelco FCX BHP Billiton Xstrata Southern Rio Tinto Anglo KGHM Antofagasta RAO Norilsk Copper American ____________________ Source: Wood Mackenzie 1Q13.

  8. Slide 8: Freeport-McMoRan Oil & Gas Portfolio

    EXPANDING RESOURCES Freeport-McMoRan Oil & Gas Portfolio  Diverse Asset Base with Scale  Positioned in Attractive U.S. Basins  Hedge Protected Cash Flows  ~90% of Revenues from Oil/Liquids (Brent/LLS Based Pricing)  Attractive Long-term U.S. Natural Gas Position  Visible Growth Profile Oil Bus

  9. Slide 9: Visible Organic Growth

    EXPANDING RESOURCES Visible Organic Growth Mining Oil & Gas  Targeting +5 Billion Pounds  Production Targeted to More than Annual Production by 2015 Double Over Next 5 Years (37% Increase from 2012)  Substantial Production Capacity  Advanced Stage Brownfield from Existing Deepwater Development I

  10. Slide 10: Update on PT Freeport Indonesia

    EXPANDING RESOURCES Update on PT Freeport Indonesia QMS Training Center  Tunnel Collapse in Underground Training (accident location) Grasberg Facility Outside of Mining Area Occurred open pit on May 14th  28 Fatalities; 10 Injuries Grasberg Block Cave Kucing Liar Amole  Temporarily Suspended Mini

  11. Slide 11: History of Underground Operations at PT-FI

    EXPANDING RESOURCES History of Underground Operations at PT-FI  Initial Block Caving Operations Commenced in 1980  Decades of Successful and Safe Underground Mining Operations  Designed to Highest International Standards  Committed to Highest Standards of Safety and Sustainable Development 11

  12. Slide 12: Brownfield Development Projects

    EXPANDING RESOURCES Brownfield Development Projects +1 Billion Pounds per Annum Increase by 2016 Tenke Phase II Expansion Morenci SO2 Furnace Ball Mill  Tenke Phase 2 $0.9 Billion(1)  Morenci ~ $1.4 Billion • Completed on Time and • Construction in Process Within Budget • Startup in 2014 • 50% Inc

  13. Slide 13: Grasberg Underground Development

    EXPANDING RESOURCES Grasberg Underground Development • To date, completed 80 km of development Grasberg open pit in Grasberg BC & 53 km in DMLZ  Tracking start-up schedule Grasberg Block Cave Kucing Liar • DMLZ start-up in 2015 with full production DOZ of 80K t/d in 2021 Big Gossan DMLZ • Grasberg

  14. Slide 14: Growing Production Profile

    EXPANDING RESOURCES Growing Production Profile Gold Sales (million ozs) Copper Sales (billion lbs) 2 1.8 1.8 5.0+ 5 1.4 4.5 1.0 Under 4.3 1 Review (1) 4 Under 3.65 Review (1) 0 2012 ____________________ 2013e 2014e 2015e Note: Consolidated gold sales include approximately 102k ozs in 2012, 140k ozs

  15. Slide 15: FCX Pro Forma EBITDA, Cash Flows & Capital Expenditures

    EXPANDING RESOURCES FCX Pro forma (1) EBITDA, Cash Flows & Capital Expenditures $25 EBITDA (2) Operating Cash Flow (2)* CAPEX (3) $20 ~45% $15 Increase 2015e/ $ billions 2016e ~45% Avg. 2015e/ Increase $10 2016e Avg. O&G 2013e/ 40% $5 2013e/ 35% 2014e 52% Avg. 2014e Avg. Mining 60% 65% 48% $0 $3.00

  16. Slide 16: Significant Debt Reduction

    EXPANDING RESOURCES Significant Debt Reduction Year-End Net Debt at Varying Copper Prices (US$ billions) $20 Target: $12 Billion $16.2 $15 $10 $7.7 $5 $2.0 $0 ($3.5) -$5 3/31/13 ’13-’16 Avg. Copper Price $3.00 $3.50 $4.00 Pro Forma (1) Net Debt/’13-’16 Avg. EBITDA 0.6x 0.1x N/A Pro Forma YE 2016e (2

  17. Slide 17: Financial Policy

    EXPANDING RESOURCES Financial Policy  Maintain Strong Balance Sheet & Liquidity Position • Achieve Targeted Debt Reductions Over Next 3 Years  Invest in Projects with Strong Financial Returns/Capital Discipline  Anticipate Continuing Current Common Stock Dividend Rate: $1.25/Share per Annum  Boa

  18. Slide 18: Long Track Record of Generating Value for Shareholders

    EXPANDING RESOURCES Long Track Record of Generating Value for Shareholders History of Prudent Capital Exploration & Solid Financial Allocation & Opportunistic Development Performance Acquisitions  Grasberg Discovery &  Financial Discipline  Achieving Production Development  Successful Phelps Dod

  19. Slide 19: Reference Slides

    EXPANDING RESOURCES EXPANDING RESOURCES Reference Slides 19

  20. Slide 20: 2013e Operating Estimates – Mining

    EXPANDING RESOURCES 2013e Operating Estimates – Mining 2013e Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated Cash Unit Costs (1) (Under Review(3)) Site Production & Delivery (2) $2.03 $1.57 $2.32 $1.41 $1.89 By-product Credits (0.24) (0.29) (1.66

  21. Slide 21: 2013e Operating Estimates – Oil & Gas

    EXPANDING RESOURCES 2013e Operating Estimates – Oil & Gas Rocky Mtns. & Operating Cost: $1.65/Mcfe California Haynesville Pricing: NYMEX Operating Cost: $27/bbl Pricing: Brent Based Gulf of Mexico Shelf/ Deepwater Operating Cost: $15/bbl Eagle Ford Pricing: LLS Operating Cost: $10/bbl Pricing: LLS/N

  22. Slide 22: Oil & Gas Cash Flows – Targeted to be Self-funding

    EXPANDING RESOURCES Oil & Gas Cash Flows – Targeted to be Self-funding Operating Cash Flow CAPEX* (US$ billions) $4.0 $3.0 $2.0 $1.0 $0.0 2013e 2014e 2015e NOTE: Assumes pricing of $100/bbl Brent crude for oil and $4.50/MMbtu for natural gas * Capital spending plans are currently under review for op

  23. Slide 23: Oil & Natural Gas Hedging Positions

    EXPANDING RESOURCES Oil & Natural Gas Hedging Positions Oil Indexed to Brent 2013 2014 2015 Puts Collars 25k bbls/d 5k bbls/d 75k bbls/d 30k bbls/d Swaps $90 floor $95 floor $100 floor $90 floor 40k bbls/d $80 limit $70 limit $70 limit $75 limit Unhedged @ $109.23 $124 Ceiling $126 Ceiling $5.74 ADP

  24. Slide 24: Sensitivities

    EXPANDING RESOURCES Sensitivities Operating Change EBITDA Cash Flow (US$ millions) Copper: -/+ $0.10/lb $405 $275 Molybdenum: -/+ $1.00/lb $80 $65 Gold: -/+ $50/ounce $75 $45 Diesel(1): -/+ 10% $100 $75 Purchased Power(2): -/+ 10% $50 $35 Currencies(3): +/- 10% $175 $130 (1) $3.80/gallon base case a

  25. Slide 25: Pro Forma Capitalization Table

    EXPANDING RESOURCES Pro Forma Capitalization Table (US$ billions) Pro Forma March 31, 2013 Capitalization Amount % Rates Cash and Cash Equivalents (1) $ 4.6 -- Revolver (2) $ 0.0 0% FCX Senior Notes & Term Loan 13.5 25% 3.0% FMC Senior Notes 0.4 1% 7.7% FM Oil & Gas Senior Notes 6.7 13% 7.1% Other S

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