Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q3 2005 Earnings Presentation
24 slides from Freeport-mcmoran's earnings presentation, Oct 18, 2005
Slide 1: 3rd Quarter 2005 Earnings Conference Call
Hy FREEPORT-MCMORAN COPPER & GOLD INC. 3 Quarter 2005 Earnings Conference Call J. R. Moffett R. C. Adkerson Chairman of the Board President and Chief Executive Officer KL. Quirk M. J. Johnson j Senior Vice President, Senior Vice President and ’ Chief Financial Officer and Chief Operating Officer Tre
Slide 2: www.fex.com
www.fex.com
Slide 3: 3Q05 Sales Stats — PT-FI Share
>» 3Q05 Sales Stats — PT-FI Share Volumes Realization Copper 346 mm lbs $173 Gold 475,000 ozs. $446 » Operating Cash Flows of $263 Million in 3Q05, $883 Million Year-to-Date > Over $950 Million in Year-to-date Financial Transactions + $566 Million in Debt Reductions * $313 Million in Common Stock Di
Slide 4: 2005 Debt Reductions
v8 Ea 2005 Debt Reductions 3Q05 Transactions > Purchased $150 Million of $500 Million 108% Senior Notes Due 2010 for $166 Million, Including Interest >» Induced Conversion on $188 Million of $575 Million 7% Convertible Senior Notes Due 2011 = Bonds Converted Into 6.1 Million Shares (Reflecting $30.8
Slide 5: Significant Debt Reduction
i F-vi Significant Debt Reduction (G in billions) FCX Ending Net Debt © $3.0 $2.9 3.75x EBITDA $2.5 $2.0 Over 65% Decrease $1.5 $1.0 $1.0 2.0x EBITDA $0.5 q 7% Conv. Notes Convert Price: $30.87 per share $0.0 1 2000 3Q05 (1) Debt and commodity preferreds net of cash and restricted investments. Inclu
Slide 6: Debt maturity profile ($ in millions)
($ in millions) $1,000 _ $800. $600 $400 $360 oom ! 7% | $248 ! conv. | | Notes | $200 10%% } Convert! 67% FCX Senior } price: | [Rete PRE Notes | $30.87 | Ns | per $6 $14 $14 $14 j shore j $0 e 2005 2006 2007 2008 2009 2010 2011 Thereafter [_eauipmenttoans atlantic Copper‘ Serior Notes‘ M@Convertib
Slide 7: Full Year Outlook
1h OEE eal Full Year Outlook » PT-FI Copper and Gold Sales Expected to Total 1.47 Billion Ibs. and 2.8 Million ozs. 1Q-3Q05 4Q05e 2005e Copper (MM Ibs) 988 480 1,468 Gold (MM ozs) 17 1a 2.8 Net Cash Costs (Credits) (per Ib) 20¢ (194) 7g) >» 4Q05 Copper & Gold Sales Expected to be Significantly Highe
Slide 8: Exchange stocks and London gold price
000’s Metric Tons $ per oz. 1,600 1,400 1,200 1,000 00 00 00 5- = 5 LME & COMEX Exchange Stocks* veaME and nd Comex, excluding Shanghai. hat stocks, prochacer, consumer ands merchant stocks. “ * * * 500 London Gold Price al Producer Hedging shoe meements at 400 t vi Sept. 11 _ Attacks on US. 300 | \
Slide 9: Grasberg Open Pit
BOSE 7 5 os Grasberg Open Pit October 2005 As a result of on-going initiatives, mining rates have steadily climbed, averaging 727,000 t/d in 3Q. | Pushback 6S, our high grade pushback, will continue to be the major metal contributor in 4Q05
Slide 10: Set-ups in Pushback South
Set-ups in Pushback 6 South Grasberg Open Pit ” . Bis Larger mining area allows for better productivities in 4Q Traditional Set-ups Tighter Set-ups ™& July 2005 bi 2 2 Segmented mine area impacted productivities in 3Q Activities completed in 3Q enable large-scale production of high-grade ore during
Slide 11: Mining Sequence in 2005
4 XA NP a Mapes BAP Fv Mining Sequence in 2005 Copper Equivalent Cross Section 6S is the Primary Ore Pushback in 2005 Wm 2.00- 2.99% Eq Cu mm >3.00% Eqcu
Slide 12: Mining Sequence in 4Q05
= Mining Sequence in 4Q05 ic Copper Equivalent Cross Section tr fs re PACee oles ¢ Pushback 6S provides about 60% of the ore tonnes with Pushback 6N providing the balance. ¢ Ore from Pushback 6S contains about 85% of the Cu & over 95% of the Au from the Grasberg pit in 2005, End 3Q05 Mm 0.50-0.99% E
Slide 13: Mining Sequence in 2006
: 3 ae pepe hI: ae Fv Mining Sequence in 2006 : Copper Equivalent Cross Section 6N is the Primary Ore Pushback in 2006 mm 0.50-0.99% Eqcu 1.00 - 1.99 % Eqcu Wm 2.00- 2.99% Eq Cu mm >3.00% Eqcu
Slide 14: Mining Sequence in 2007
— Mining Sequence in 2007 Copper Equivalent Cross Section 7S is the Primary Ore Pushback in 2007 mm 0.50-0.99% Eqcu 1.00 - 1.99 % EqCu lm 2.00-2.99% Eqcu mm > 3.00% Eqcu
Slide 15: Mining Sequence in 2008
4 XA NP a Mapes BAP Fv Mining Sequence in 2008 Copper Equivalent Cross Section 7S is the Primary Ore Pushback in 2008 mm 0.50-0.99% Eqcu 1.00 - 1.99 % Eqcu Wm 2.00- 2.99% Eq Cu mm >3.00% Eqcu
Slide 16: Mining Sequence in 2009
: 3 ae pepe hI: ae Fv Mining Sequence in 2009 : Copper Equivalent Cross Section 8S is the Primary Ore Pushback in 2009 mm 0.50-0.99% Eqcu 1.00 1.99 % Eqcu im 2.00-2.99% Eqcu mm >3.00% Eqcu
Slide 17: PT-FI Mine Plan
PT- FI Mine Plan PT-FI’s Share of Metal Sales, 2004-2005e hit a cain | Copper, billion lbs Gold, million ozs 2005e — 2009e PT-Fi Share 2005e — 2009e PT-Fi Share Total: 6.2 billion ibs Total: 10.9 million ozs Annual Average: 1.35 billion ibs Annual Average: 2.2 million ozs 2.8 2.5 1.9 1.8 1.9 1.4 1.4
Slide 18: Capital expenditures 2005-2009
( in millions) i) AC & Other 2005 — 2009 Annual Average ~$185 Million "&PT-FI Gi Big Gossan $200 $200 $180 Esa 6S $175 $160 $165 $160 $70 $50 ce $30 2004 2005e 2006e 2007e 2008e 2009e e = estimate. Amounts are projections; see cautionary statement. “Includes approximately $195 million for PT-FI’s sh
Slide 19: Common Infrastructure
Common Infrastructure Access to Underground: Reserves Cross-Over 3Q05 2Q 2007 Complete tunnel to Grasberg BC Begin mine development & other facilities Grasberg Block Cave “Spur” Kueing Liar Amole Kucing Liar “Spur” During 3Q05, the first cross- over was completed , a tunnel September 2005 COWA which
Slide 20: 2005 Exploration Program
ESO jean) 2005 Exploration Program > Focused on testing extensions of the MLZ & Deep MLZ to the northwest, expansion of the Deep Grasberg, Kucing Liar and Deep Dom A Bm lock A em > Continue to assess the timing of resuming exploration activities outside of the Grasberg mining district 20
Slide 21: Operating cash flow copper and gold sensitivities
( in millions, except copper and gold prices) $1,400 Copper Gold 2005 «472.8 $1,200 2006 «141.9 2007 «i118 ¥ $1,000 Boy) zZ lnneaeee > 3 $800 4 leceeee < 8 g —Pyk-.. o] fesse FB 3600 16 a. 8 = 5 S 4 & s400 || N - 3 $200 r=] a $0 $1.75/$465 $1.00 $1.25 $1.50 $1.75 $350 $400 $450 $500 see $400 $1.25 C
Slide 22: Financial Policy
We =| Financial Policy » Maintain Strong Balance Sheet and Financial Flexibility >» Maintain Regular Quarterly Dividend That Can Be Sustained Within Broad Range of Commodity Prices >» In Periods of High Commodity Prices, Supplement Regular Dividend With Special Dividends/Share Purchases 22
Slide 23: Historical Shareholder Returns
i, Making [Fan Historical Shareholder Returns «= > 21.5 Billion in FCX Open Market Purchases Since 1995 pin-off » 79.8 Million Shares in Open Market Purchases at an Average Price of $18.66 per Share > $1.9 Billion in Common Stock Dividends Since 1988 = $553 Million Since 2003 $3.4 Billion in Total L
Slide 24: Strong Cash Flow Generator
» Strong Cash Flow Generator >» Long-lived Reserves » Unhedged Exposure to Copper & Gold Markets >» Improved Balance Sheet/Enhanced Shareholder Returns > Attractive Valuation 24
Freeport Mcmoran Copper & Gold — Q3 2005 Earnings Presentation on 6ix