Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q1 2014 Earnings Presentation
32 slides from Freeport-mcmoran's earnings presentation, Apr 24, 2014
Slide 1: 1st Quarter 2014 Earnings Conference Call
FREEPORT-McMoRaAn STRENGTH IN RESOURCES 1st Quarter 2014 Earnings Conference Call April 24, 2014
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
STRENGTH IN RESOURCES [Esa Freerort-McMoRan 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
Slide 3: Strength in Resources: 2013 Annual Report Highlights
STRENGTH IN RESOURCES [Esa Freerort-McMoRan "Strength in Resources” 2013 Annual Report Highlights Long-Lived, Geographically Diverse Natural Resources Base - Premier Portfolio of Global Mining Assets STRENG TEUN RESCURCES - High-Quality, U.S.-Based Oil & Gas Assets 2013 AnnualReport Strong Margins a
Slide 4: 1Q14 Highlights
[Ea] Freeront-McMoRan STRENGTH IN RESOURCES 1Q14 Highlights = Solid Performance from Mining Operations in the Americas and Africa - Restricted Sales from Indonesia by Government Export Regulations = Meaningful Contribution from O&G Business = Advanced Important Projects for Profitable Future Growth
Slide 5: Financial Highlights
[Esa Freerort-McMoRan Financial Highlights STRENGTH IN RESOURCES $4.6 $0.6 $0.68 $0.8 $0.8 $10.4 ales Data 1914 Consolidated Volumes (mm Ibs) 871 Average Realization (per Ib) $3.14 Site Production & Delivery Unit Costs (per Ib) $1.89 Unit Net Cash Costs (per Ib) $1.54 Consolidated Volumes (000's ozs
Slide 6: No Export Shipments Since Mid-January
[Esa Freerort-McMoRan = No Export Shipments Since Mid-January = Aligning Current Production Levels with PT Smelting Operations — Mill Operating at Half Capacity — 1Q14 Impact: Deferred Sales of 125mm Ibs Copper and 140,000 ozs Gold — Negative Financial Impacts to Both FCX and Government ing DOZ Mine
Slide 7: Long-term Positive Partnership with Indonesia
[Ea] Freeront-McMoRan STRENGTH IN RESOURCES Long-term Positive Partnership with Indonesia = Successful Operations for Over 40 Years = Contributed Over $60 Billion to National GDP in GOI Direct Benefits Total Since 1992 Last 5 Years ; ; (2009 - 2013) 2) = Currently Over 90% of Local GDP, ~40% of Papu
Slide 8: Copper Market Commentary
[Esa Freerort-McMoRan Copper Market Commentary Fundamental Demand in China Remains Healthy - Supported by Consumer and Infrastructure Investment - Scarcity of Scrap and Cathode Exports Creating Tightness in Domestic Market U.S. Demand Improving - Consumer Confidence at a 6-Year High - Automotive and
Slide 9: Quarterly Mining Operating Summary
[Esa Freerort-McMoRan STRENGTH IN RESOURCES Quarterly Mining il Operating Summary Cash Unit Costs North South . . = (per pound of copper) America America __Indonesia__ Africa Consolidated Site Production & Delivery $1.88 $1.50 $3.33” $1.48 $1.89” By-Product Credits (0.22) (0.25) (2.15) (0.66) (0.52)
Slide 10: Brownfield Development Projects
[Esa Freerort-McMoRan STRENGTH IN RESOURCES Brownfield Development Projects . Cerro Verde Mill Expansion Morenci Mill Expansion $4.6 billion $1.6 billion * Commenced constructio! * Construction in advanced stage fing steal evection * Commissioning & start-up expected in 2Q14 Completion expected in 2
Slide 11: Portfolio of World Scale Mines
[Esa Freerort-McMoRan Portfolio of World Scale Mines STRENGTH IN RESOURCES Cerro Verde ¥ * Grasberg capable of producing over 1 bin lbs/annum, Morenci (100%) & Cerro Verde in development to produce 1 bln lbs/annum and El Abra & Tenke have potential to produce 1 bin lbs/annum uw
Slide 12: Strong Brent & LLS Crude Oil Pricing
[Esa Freerort-McMoRan STRENGTH IN RESOURCES Strong Brent & LLS Crude Oil Pricing . Over 90% of FCX’s 1Q14 O&G Revenues are from Oil/NGLs* $150 Brent and LLS Pricing per Bot $125 $100 $75 $50 June ‘13 Brent Average ($/bbl) ‘$103 $25 LLS Average ($/ bbl) $104 FM O&G Realization $97 ($/bbI before Hedge
Slide 13: Oil & Gas Operating Assets
[Esa Freerort-McMoRan STRENGTH IN RESOURCES Oil & Gas Operating Assets 1Q 2014 Cash Operating Margin: $0.9 Billion ($59/BOE) | California Margin Contribution GOM Deepwater - Long Established Oil + Significant Current Produ Production History with Upside * Strong Margins and Cash Flows California + L
Slide 14: Quarterly Oil & Gas Operating Summary
[Esa Freerort-McMoRan Quarterly Oil & Gas STRENGTH IN RESOURCES Operating Summary 1Q 2014 Oil & Gas Margins by Region Haynesville/ Operating Margin Eagle Madden/ pe gerd! California Ford Other GOM Consolidated Realized Revenue per BOE $91.76 $81.78 $30.35 $87.35 $77.22 Cash Production Costs per BOE
Slide 15: 2014 Central GOM Lease Sale
[Esa Freerort-McMoRan 2014 Central GOM Lease Sale = $330 Million in Total High Bids - 20 Blocks - 106,000 Gross Acres Louisiana = Blocks Are Strategic and Complementary to FM O&G’s Existing Acreage Primarily Focused on High- Impact, Drillable Targets in the Mississippi Canyon, Atwater Valley & Green
Slide 16: Deepwater Gulf of Mexico
Freeport-McMoRan Deepwater Gulf of Mexico Before Lease Sale, Deepwater Leasehold ~450,000 Net Acres with Total Net Unrisked Resource Potential of 3.8 Billion BOE* Capacity ~12% Utilization Capacity ~40% Utilization 113,500 BOPD + 60,000 BOPD 142,300 MCFD + 235,000 MCFD Truss SPAR Tension Leg Platfor
Slide 17: Lucius — Deepwater GOM
[Esa Freerort-McMoRan STRENGTH IN RESOURCES Lucius — Deepwater GOM Development Project = World Class Reservoir Quality and Deliverability = Development on Track; Production Anticipated in 2H 2014 = Topside Facilities Lifted into Place in 1Q14 = Subsea Infrastructure Currently Being Installed = 82 MM
Slide 18: Inboard Lower Tertiary/Cretaceous Activities
[Esa Freerort-McMoRan Inboard Lower Tertiary/ Cretaceous Activities Industry Leader in Emerging New Trend Favorable Reservoir Characteristics LOUISIANA a Highlander Judge Digby Field d Discovery Type Log a ey Farthest GateWest = E = = 8 eas Se = = Cs | ss Exploration 3ig Development Assets vA [EI cr
Slide 19: 2014e Outlook
[Esa] Freeront-McMoRan STRENGTH IN RESOURCES 2014e Outlook = Copper”: 4.3 Billion Ibs. = $1.41/Ib” of Copper = Gold: 1.6 Million ozs. = $19/BOE = Molybdenum: 97 Million Ibs. Oil Equivalents”: 64.2 MMBOE (~70% Oil) Operating Cash Flows® ~ Capital Expenditures ~$7.7 Billion (@$3.00/Ib Copper for 2Q —
Slide 20: Sales Profile
[Esa Freerort-McMoRan STRENGTH IN RESOURCES Sales Profile Copper Sales (billion Ibs) 65 2013 2014e 2015e 2016e Tote: Consolidated copper sales inclide 795 mm lbs in 2013, 770 mmibs in 2014e, 850mm bs in 2015e and 1,100 mm bs in 2016e for noncontroling interest; exclides purchased copper. * Cu/Au sal
Slide 21: 2014e Quarterly Sales
[Esa Freerort-McMoRan STRENGTH IN RESOURCES 2014e Quarterly Sales Copper Sales (billion Ibs) * 1,250 5 1,000 750 500 250 1Q14 2Q14e 3Q14e 4Qi4e ‘lot: Consolidated copper sales include approximately 167mm lbs in 1014, 200mm fs in 20142, 203mm lbs in 30142 and 200 mm Bs in 42142 fornoncontroting inter
Slide 22: 2014e Operating Estimates
STRENGTH IN RESOURCES [Esa Freerort-McMoRan 2014e Operating Estimates 2014e Unit Production Costs North South (per pound of copper) - America America Indonesia® Africa Consolidated Cash Unit Costs Site Production & Delivery) $1.84 $1.61 $2.46 $1.54 $1.88 By-product Credits (0.21) (0.24) (2.13) (0.39
Slide 23: EBITDA and Cash Flow at Various Copper Prices
[Esa Freerort-McMoRan STRENGTH IN RESOURCES EBITDA and Cash Flow at Various Copper Prices $20 = (Ussbilions) $15 - $10 $5 2015e/2016e Mae Se en ay $0 | Cu $3.00/Ib Cu $3.50/Ib Cu $4.00/Ib Average Operating Cash Flow (excluding Working Capital changes) ($1,200 Gold, $10 Molybdenum & $105 Oil) $15 ) —
Slide 24: Sensitivities (US$ millions)
STRENGTH IN RESOURCES [Esa Freerort-McMoRan Sensitivities (US$ millions) 2015e/2016e Opel EBITDA Cash Flow, Copper: +/- $0.10/Ib $525 $375 Molybdenum: +/- $1.00/Ib $90 $70 Gold: +/- $50/ounce $100 $60 Oil Sales: + /- $5/bbl © $245 $200 Oil Sales Net of Diesel Costs:%7 +/-$5/bbl $200 $165 Natural Gas
Slide 25: Capital Expenditures
[Esa Freerort-McMoRan Capital Expenditures {USS billions) oa $7.1 $6 > $45 $25 Other Mining 1:0 2014e 2015e 2016e $0 (1) Gapital expenditure estmates inclide projects in progress. Project spending wil continue to be reviewed and revised subject to market conditions. (2) Primarily inchides Cerro Verd
Slide 26: Committed to Balance Sheet Management
[Esa Freerort-McMoRan STRENGTH IN RESOURCES Committed to Balance Sheet Management Strong Track Record = Debt Targeted at $12 Billion by 3/31/2014 Balances YE 2016 (Gin bns) = Anticipate Continuing Current Common Stock Dividend: $1.25/Share per Annum = Large Resource Base with Strong Cash Flows and C
Slide 27: Summary
[Esa Freerort-McMoRan Summary ‘ A Strong & Focused Organization Maximize Total Shareholder Returns Strong Management of the Base Operational Excellence Achieve Production Targets Effective Cost and Capital Management Manage HSE and Other Inherent Risks Return Driven Growth Prioritize Highest Value O
Slide 28: Reference Slides
FREEPORT-McMoRaAn STRENGTH IN RESOURCES Reference Slides
Slide 29: 2014e Oil & Gas Operating Estimates
[Esa Freerort-McMoRan STRENGTH IN RESOURCES 2014e Oil & Gas ify Operating Estimates Operating Cost: $2/Mcfe California Pricing: NYMEX Operating Cost: $34/bbl Pricing: Brent Based Gulf of Mexico Operating Cost: $14/bbl Pricing: LLS Operating Cost: $16/bbl Pricing: HLS/NYMEX 014e Oil & Gas Sales by Re
Slide 30: Oil & Natural Gas Hedging Positions
[Esa Freerort-McMoRan STRENGTH IN RESOURCES eae) Oil & Natural Gas Hedging Positions \ a" Oil Hedges Indexed to Brent 2Q0-4Q 2014 r 75K Bbis/d 30k Bbis/d $90 floor $95 floor $70lmit § — $75 timit $574 ADP $6,09 ADP 5k Bbis/d $100 floor $80 limit. 2015 Puts: 84k Bbis/d $90 floor $70 limit. $7.11 ADP
Slide 31: PT-FI Mine Plan
FREeporT-McMoRaNn STRENGTH IN RESOURCES PT-FI Mine Plan PT-FI’s Share of Metal Sales, 2014e-2021e* 2014e — 2018e PT-FI Share Total: 5.6 billion Ibs copper EE Copper, billion Ibs Annual Average: 1.12 billion Ibs | Gold, million ozs 2014e — 2018e PT-FI Share 3.0 Total: 8.1 million ozs gold “ Annual Av
Slide 32: PT Freeport Indonesia Grasberg Minerals District
STRENGTH IN RESOURCES [Esa Freerort-McMoRan PT Freeport Indonesia Grasberg Minerals District Life-of-Mine Production Sequencing* y 4 FOE KUCIIGLILS 7 75 Cae HOTTA COW Term, including extensions 2014 2016 2018 2020 2022 2024 2026 2028 203 2032 2034 203% 2038 2040 2042 Big Gossan Spur ya N Portals (at
Freeport Mcmoran Copper & Gold — Q1 2014 Earnings Presentation on 6ix