Freeport-mcmoran, Inc. · NYSE:FCX

Freeport-mcmoran — Freeport-McMoRan Copper & Gold — Macquarie Global Metals & Mining Conference 2012

27 slides from Freeport-mcmoran's conference presentation, Dec 11, 2012

  1. Slide 1: Global Metals & Mining Conference 2012

    Global Metals & Mining Conference 2012 Kathleen L. Quirk Executive Vice President & CFO December 11, 2012 www.fcx.com CONNECTING THE FUTURE®

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

    Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements concerning the proposed transaction, its financial and business impact, management’s beliefs and objectives with respect thereto, and management’s current expectations for future operatin

  3. Slide 3: Additional Information about the Proposed Transactions and Where to Find It

    Additional Information about the Proposed Transactions and Where to Find It PXP Transaction In connection with the proposed transaction, FCX intends to file with the SEC a registration statement on Form S-4 that will include a proxy statement of PXP that also constitutes a prospectus of FCX. FCX and

  4. Slide 4: FCX Overview

    FCX Overview  Global Leader in Production of Copper, Gold and Molybdenum  Well Situated to Meet Growing Demand for Metals  Geographically Diverse  Long-Lived Reserves  Growing Production Profile  Strong Financial Position  Environmentally Responsible  Experienced Team 4

  5. Slide 5: FCX Acquisition of PXP & MMR

    FCX Acquisition of PXP & MMR  Creates A Premier U.S. Based Natural Resource Company  Adds High Quality U.S. Oil & Gas Assets to World-Class Mining Portfolio  Asset Quality Consistent with Characteristics Sought in Mining Business Large, Long Life, Low Cost, Expandable  Enhances Exploration Lever

  6. Slide 6: Benefits of the Transactions

    Benefits of the Transactions  High Quality U.S. Resource Base Provides Exposure to Energy Market with Attractive Fundamentals - ~85% of Acquired Revenues from Oil (1) - Favorable Entry Point to Source of Low Cost, Long-term Gas Supply  Significant Exploration Upside  Strong Margins and Cash Flows

  7. Slide 7: Enhanced Commodity Exposure to Long-term Global Growth Trends

    Enhanced Commodity Exposure to Long-term Global Growth Trends  Emerging Market Growth and Urbanization Will Continue to Drive Commodity Demand  Global Energy Consumption Expected to Grow by >30% by 2035 (1)  Global Refined Copper Consumption Expected to Grow by ~60% by 2025 (2) WTI Oil Price v. C

  8. Slide 8: Phelps Dodge Case Study

    Phelps Dodge Case Study  Highly Successful Rapid Delevering Transformational Transaction ($ in bns)  Asset & Geographic $20 Diversification $17.6  Significant Reserve Additions $15 • +46 billion lbs Cu*  Developed World-Class Copper $10 Portfolio $7.2 • Recognized Industry Leader $5 $3.5 • Stron

  9. Slide 9: FCX's Global Footprint

    FCX’s Global Footprint Major Operations & Development Projects North America1 All major mining assets majority-controlled and operated Reserves Cu 40.6 bn lbs Mo 2.71 bn lbs Oil & Gas 575 mm bbls2 Copper Sales Copper/Gold/Silver Cu 1.45 bn lbs Molybdenum Mo 90 mm lbs3 Oil & Gas 175 MBOE/d Cobalt Gra

  10. Slide 10: High Quality U.S. Oil & Gas Portfolio

    High Quality U.S. Oil & Gas Portfolio Proved Reserves (1) Natural Gas 575 MMBOE Oil Other 5% Madden Haynesville California 22% California 6% GOM 38% Shelf Deepwater GOM 4% 25% Haynesville Eagle Ford Eagle Ford 2013e Production by Region 175 MBOE/d 2013e Production Mix Other GOM 3% Shelf 11% Gas Deep

  11. Slide 11: Oil & Gas Reserves & Resources

    Oil & Gas Reserves & Resources (MMBOE) PXP(1) MMR(2) Total % Oil/Liquids Proved Reserves 538 37 575 64% Probable Reserves 337 11 348 44% Possible Reserves 646 12 658 29% Total 1,521 60 1,581 45% Near-term Resource Potential 1,353 4,981 6,334 Total Potential ~3,800 ~50 Tcfe 3Q12 Daily Production Rate

  12. Slide 12: Enhanced Exploration Leverage with Multiple Near-term Catalysts

    Enhanced Exploration Leverage with Multiple Near-term Catalysts Deepwater GOM Shallow Water Ultra-Deep Onshore U.S.  Near-term Net Potential  3 Wells Drilling  Eagle Ford – 71 MMBOE of 995 MMBOE  Recent Positive Results on  Haynesville – ~1 Tcfe • Phobos (~300 MMBOE) Lineham Creek Onshore  Cal

  13. Slide 13: Combined Reserves and Resources

    Combined Reserves and Resources (billion lbs of copper) (million barrels of oil equivalents) ~7,900 235 115 Mineralized Near-term billion Material (b) Potential: ~6,300 lbs (contained copper) 120 at $2.20 Cu price 923 Possible: 658 Reserves Probable: 348 at $2.00 Cu price Proved: 575 Reserves (a) Re

  14. Slide 14: Highly Attractive Brownfield Copper Development Projects

    Highly Attractive Brownfield Copper Development Projects Expansion Projects in Progress North America* Mill Expansions (t/d) Incr. Cu (mm lbs/yr) Capital* Achieve ($ blns) Full Rates • Morenci Expansion Cerro Verde (360K) 600 $4.4 2016 (225 mm lbs Cu) under way • Potential sulfide expansions Morenci

  15. Slide 15: Diverse Production Profile with Strong Growth

    Diverse Production Profile with Strong Growth Gold Sales (million ozs) Copper Sales (billion lbs) 2 1.8 1.8 5.0+ 1.4 5 1.0 4.5 1 4.3 4 0 3.6 2012e 2013e 2014e 2015e ____________________ Note: Consolidated gold sales include approximately 105k ozs in 2012e, 140k ozs in 2013e, 180k ozs in 2014e and 17

  16. Slide 16: FCX Pro Forma EBITDA, Cash Flows & Capital Expenditures

    FCX Pro forma EBITDA, Cash Flows & Capital Expenditures EBITDA Operating Cash Flow* CAPEX $25 $20 ~45% $15 Increase 2015/ $ billions 2016 ~45% Avg. 2015/ Increase $10 2016 Avg. O&G 2013/ 40% $5 2013/ 35% 2014 52% 2014 Avg. Avg. Mining 60% 65% 48% $0 $3.00 $3.50 $4.00 $3.00 $3.50 $4.00 2013e 2014e 20

  17. Slide 17: Focused and Disciplined Capital Allocation Philosophy

    Focused and Disciplined Capital Allocation Philosophy Maintain Strong Balance Sheet & Credit Profile Ensure Establish Short, Allocate Capital to Focus on Potential Medium and Long Low Cost, Long-lived, Largest is Well Term Potential for Expandable Assets Resources Understood Primary Assets Technical

  18. Slide 18: Capital Expenditures

    Capital Expenditures (1) (2) Major Mining Projects Other Mining Oil & Gas (US$ billions) $8 $7.3 $7.1 $6.3 $6 2.5 2.9 3.3 $4 1.6 1.4 1.0 $2 3.0 3.0 (2) 2.0 $0 2013e 2014e 2015e (1) Capital expenditure estimates include projects in progress. Project spending will continue to be reviewed and revised s

  19. Slide 19: Oil & Gas Cash Flows – Targeted to be Self-funding

    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 e= estimate. See Cautionary Statement. 19

  20. Slide 20: Significant Debt Reduction

    Significant Debt Reduction Year-End Net Debt at Varying Copper Prices (US$ billions) $20 $16.3 $15 $10 $7.7 $5 $2.0 $0 ($3.5) -$5 ’13-’16 Avg. Copper Price $3.00 $3.50 $4.00 9/30/12 Net Debt/’13-’16 Avg. EBITDA 0.6x 0.1x N/A Pro Forma Pro Forma YE 2016e Note: Sensitivity assumes $12 Molybdenum, $1,5

  21. Slide 21: Financial Policy

    Financial Policy  Maintain Strong Balance Sheet & Liquidity Position  Reduce Debt Incurred in Acquisitions Using Substantial Cash Flows Generated from Combined Business  Invest in Projects with Strong Financial Returns/Capital Discipline  Anticipate Continuing Current Common Stock Dividend Rate:

  22. Slide 22: Combined Company Highlights

    Combined Company Highlights  Creates A Premier U.S. Based Natural Resources Producer  World’s Largest Publicly Traded Copper Producer  Significant Producer of Oil, Gold & Molybdenum  Significant Long-term Natural Gas Resources  Strong Margins & Cash Flows  High Quality, Long-lived and Geograph

  23. Slide 23: Appendix

    Appendix

  24. Slide 24: Transaction Summary

    Transaction Summary PXP MMR (1) Price  FCX to acquire PXP for: 0.6531 shares of FCX common stock and $25.00 in cash,  FCX to acquire MMR for: $14.75 cash plus 1.15 Ultra-Deep Royalty Trust equivalent to total consideration of $50.00 Units per MMR share per PXP share based on FCX closing price on D

  25. Slide 25: Sensitivities (US$ millions)

    Sensitivities (US$ millions) 2013e/2014e Operating Change EBITDA Cash Flow Copper: -/+ $0.10/lb $405 $275 Molybdenum: -/+ $1.00/lb $80 $65 Gold: -/+ $50/ounce $75 $45 Oil Sales:(1) + $10/bbl (2) $340 $265 - $10/bbl (3) ($275) ($280) Oil Sales Net of Diesel Costs:(1,4) + $10/bbl $260 $205 - $10/bbl (

  26. Slide 26: Oil & Natural Gas Hedging Positions

    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 $6.09 ADP 43% Puts

  27. Slide 27: FCX Pro Forma Debt Maturities 9/30/12

    FCX Pro Forma Debt Maturities 9/30/12 (US$ millions) $12,000 Pro Forma Total Debt & Cash at 9/30/12 New FCX Debt (US$ billions) FCX Sr. Notes $10,600 New Term Loans $4.0 MMR Sr. Notes New FCX $10,000 New Notes 5.5 PXP Sr. Notes Sr. Notes Public Debt 10.3 Other Debt Other Debt 0.2 $8,000 Total Debt $

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