Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q4 2008 Earnings Presentation
47 slides from Freeport-mcmoran's earnings presentation, Jan 26, 2009
Slide 1: Freeport-McMoRan Copper & Gold, January 26, 2009
ae “ FCX : 4 - e LISTED / January 26, 2009 ; pSE:
Slide 2: Cautionary Statements Regarding Forward-Looking Statements
FREEPORT-McMoRAn COPPER & GOLD Cautionary. Gratencnts Regarding Forward-Looking Statements This presentation contains Forward-looking statements in which we discuss factors we beleve may affect our performance in the future. Forward-looking statements are all statements other than historical facts,
Slide 3: Markets
FREeport-McMoRan [V8 Copper £ GoLD Markets 000’s Metric Tons punog .Bd s1uaD, Jan9 JuLS9 Jan-G0 Jul00 JanO1 JuL01 Jan-O2 WLG2 JanG3 JulO3 Jan-Of JuLOt Jan-{5 JulO5 Jan95 JulOS JanOF JuWO7 onGG JuLse Jan-09 “UME and! Comex, exciudhg Shanghai stocks, procucer, consumer and merchant stocks. London Gold
Slide 4: Copper Market
FREEPoRT-McMoRan COPPER & GOLD : ne oa Copper Market — Continued Financial Market Turbulence, Credit Issues, and Outlook for Global Economy are Major Force in Price Collapse Anticipation of Surpluses and Slowing Global Demand, Including China LME Copper Stocks Up ~ 225k Metric Tons Since End of Sept
Slide 5: Underlying Fundamentals of Copper Business Remain Positive
FREEPORT-McMoRAn COPPER & GOLD Underlying Fundamentals of Copper Business Remain Positive " Supply Constraints/Shortfalls Reached Record 1.4 Million Metric Tons in 2008 " Absence of New Projects * Current Market Will Further Delay Projects = 60% of Today’s Mines Deplete or Go Underground by 2021 * U
Slide 6: Prior Strategy and Revised Strategy
FREEPORT-McMoRAn COPPER & GOLD Prior Strategy (Since PD acquisition) ¢ Reduce Debt ° Define the potential of our resources ¢ Develop growth and expansion projects ¢ Return excess cash flow to shareholders v v Near-Term Business Strategy Revisions Revised Strategy ¢ Aggressively reduce costs and capi
Slide 7: Summary Impacts
FREEPORT-McMoRAn [V8 Copper £ GoLD Summary Impacts Reduce Volumes in 2009e/ 2010e Compared with October 2008 Estimates ¢ Copper — 9% in 2009e and 17% in 2010e e¢ Molybdenum — 25% in 2009e and 40% in 2010e 26% Reduction in Estimated 2009 Unit Site Production and Delivery Costs Compared with 2008 Redu
Slide 8: 4Q08 Summary
FREeport-McMoRan [V8 Copper £ GoLD 4Q08 Summary Sales Data 4008 4Q07 Copper Consolidated Volumes (mm Ibs? 1,197 878 Average Realization (per ib) $1.55 $3.20 @ Gold Consolidated Volumes (000° ozs) 462 161 Average Realization (per oz) $818 $797 Molybdenum ‘Consolidated Volumes (mm ibs)“ 12 19 Average
Slide 9: Phelps Dodge Transaction
FREEPORT-McMoRAn COPPER & GOLD ad Phelps Do. ge Transaction = Purchased Phelps Dodge in a Different Economic Environment = Significant Changes in Market Conditions in 4Q08 Resulted in Charges to Reduce the Carrying Value of Assets and Goodwill = Phelps Dodge Transaction has been Positive for FCX - G
Slide 10: Impairment Assessment Results
FREEPORT-McMoRAn COPPER & GOLD : ce Impairment Assessment Results = Individual assets are assessed for impairment under applicable accounting requirements using year-end pricing and cost assumptions Amount of Writedown Pre-tax After-tax fin millions) Leach Stockpiles & Other Lower of cost or market
Slide 11: Comparison to Original Purchase Price Allocation Price Assumptions
FREEPORT-McMoRAn COPPER & GOLD Comparison to Original Purchase Price Allocation Price Assumptions Copper Price Molybdenum Price $3.50 7- $30 $3.00 +- : Purchase Price $25 Allocation Pricin Purchase Price $250 7 Allocation Pricing $20 $2.00 +- $15 $1.50 +- Impairment 8 $1.00 7 Pricing* $0.50 7- $5 $0
Slide 12: Cash and Cash Flow, Reserves & Mineralized Material
Cash and Cash Flow Reserves & $ in billions Mineralized Material $7.0 billion Ibs Copper Molybdenum » 79 66 55 at at Cash ired PD O} ct 12/31/06 | 12/31/08 12/31/06 [12/31/08 ‘ash acquire perating : from PD at time Cash Flow Reserves = Miner: ized Reserves of acquisition —_since acquisition Material
Slide 13: Preliminary Consolidated Proven and Probable Reserves
COPPER & GOLD Preliminary Ri - Consolidated Prove. Copper Molybdenum — Gold 12/31/08 billion Ibs billion Ibs million ozs. Copper Reserves Reserves @ 12/31/07 93.2 2.04 41.0 by-<Geeagraphical Reaion Additions/revisions* 128 0.51 03 2Y Geographical Region Production (4.0) (0.07) (1.3) Net change 88 0.
Slide 14: A World of Opportunities: Copper Reserves
FREeport-McMoRan [V8 Copper £ GoLD A World of Opportunities Consolidated Proven & Probable Copper Reserves 102 billiaiibs of Copper Reserves at 12/31/08 +12.8 billion Ibs of net additions North 28.3 America Reserves: 28:3 ‘Additions: 3,9 85% of additions at Sierrita & Bagdad 32-2 South Amiefica Rese
Slide 15: Copper Reserves and Mineralized Material
FREEPORT-McMoRAn COPPER & GOLD Copper Reserves . Minera ized Material Preliminary Estimates as of 1. 2/31 / 08 102 99 COpper price copper price a Reserves Mineralized Material (billion lbs of (billion Ibs of contained copper} recoverable copper} (Incremental to Reserves) (@) Consolidated copper rese
Slide 16: Operating Plan Revisions
FREeport-McMoRan [V8 Copper £ GoLD Operating Plan Revisions Run “Lean ¢ Reviewed operating plans at each Operations” site to develop low-cost operating Sienita scenarios Bagdad oo Cerro Verde ¢ Curtail high-cost copper volumes El Abra Grasberg ¢ Reduce moly volumes in response to market balance Revi
Slide 17: Operating Plans Review
FREEPORT-McMoRAn Opera Plans Review [V8 Copper £ GoLD ¢ Reduce mining & crushed leach rates at Morenci by ~ 50% ¢ Reduce mining & stacking rate at Safford by ~ 50% ¢ Suspend mining/milling at Chino; produce from leach pads ¢ Reduce mining rate at Tyrone by ~ 50% ¢ Defer start-up of Miami mine ¢ Defe
Slide 18: Operating Plans Review: South America & Indonesia
FREEPORT-McMoRAn Operating Plans Review [V8 Copper £ GoLD South America & Tmenesia South America “Indonesia ¢ Reduce costs, capex ¢ Reduce costs, capex ¢ Reduce mining rates in ¢ Grasberg accessing higher Candelaria/ Ojos district grade material in 2009 ¢ Defer incremental expansion ¢ Slow Big Gossa
Slide 19: Operating Plans Review: Molybdenum
FREEPORT-McMoRAn Operating Plans Review [V8 Copper £ GoLD Molybdenum ¢ Reduce Henderson underground mine production by 25% Molybdenum ¢ Curtail moly circuit at Sales Estimates Cerro Verde (million Ibs) 2008 2009e 2010e ¢ Reduce cost/defer capital October 74 80 100 projects, including Climax Current
Slide 20: Sales Profile 2007 - 2010e
FREEPORT-McMoRAn COPPER & GOLD Sales Profile 2007 - 2010e Gold Sales (million ozs, 3 23 22 22 5 2 13 1 4 0 2007 2008 2009e 2010 Pro 4 Forma’ ‘Toe? Consehdared go sales incle spore simately 228 & orn 2007, 134 or in 2008, EEL 07 2005e, and 220 oF 20108 For minosty iteest 3 Molybdenum Sales (million l
Slide 21: Sales Estimates Rollforward
FREEPORT-McMoRAn Sales Estimates Rollforward COPPER & GOLD October 21st v. Current Copper (million Ibs) October Revisions* North America (a) South America (b) Indonesia Total Change Current Molybdenum (million Ibs) October Change (c) Current Gold (000’s ozs) (d) “Includes December 2008 and January 2
Slide 22: 2008 and 2009e Sales by Region
2008 and 2009e Sales by Region 2008 Sales by Region North America South America Indonesia 1,434 tazL ait nw Au 12 cu Mo Cu oa Cu Au | mm bs mmibs oo mm lbs aes 2009e Sales by Region” North America South America Indonesia et 1,300 1,130 5 60 Au cu Mo | cu on Cu Au mmibs orm bs mm lbs —, mm bs oi (4)
Slide 23: Unit Production Costs by Region
FREeport-McMoRan [V8 Copper £ GoLD Unit Production Costs by Region (per pound of copper} Unit Cash Costs Royalties! Treatment Charges By-product Credits 2008 and 2009e North South America America Indonesia Consolidated ee ee ee Site Production & Delivery” $1.88 $1.13 $1.59 $1.51 - - 0.10 0.03 0.09 0
Slide 24: Materials and Manpower Costs
FREEPoRT-McMoRan CopPER & GOLD Materials Manpower North sur Ba America Zoe Indonesia Other 19% South je Consolidated America Note: e = estimate. See Cautionary Statement. 24
Slide 25: Exploration
FREeport-McMoRan [V8 Copper £ GoLD Exploration 2008 2009e $248 million $75 million North ndonesia africa 13% 29% eae Activities focused on ’ incorporating significant data Australasia obtained in 2008 into our & Other Areas future plans Note: FCX' consolidated share; @ = ate, See Cautionary Statemen
Slide 26: EBITDA and Cash Flow at Various Copper Prices
FREEPoRT-McMoRan COPPER & GOLD EBITDA and Cash Flow at Various. Copper Prices 2009e & ‘204 (Oe Average Annual EBITDA ($800 Gold & $9 Molybdenum) $57 (US$ billions) $4 3 $2 $1 $0 Cu $1.25/Ib Cu$1.50/Ib Cu $1.75/Ib 2009e & 2010e Average Annual Operating Cash Flow (excluding Working Capital)* ($800 Gol
Slide 27: Sensitivities (2009e & 10e Avg.)
FREeport-McMoRan [V8 Copper £ GoLD Sensitivities (2009e & 2010e Avg.) Operating Change EBITDA Cash Flow (US$ millions} Copper: -/+ $0.10/Ib $375 $260 Molybdenum: -/+ $1.00/Ib $55 $50 Gold: -/+ $50/ounce $100 $60 Diesel ©: -/+ 10% $25 $15 Purchased Power ®): -/+ 10% $35 $20 Currencies ©: +/- 10% $115
Slide 28: Capital Expenditures
FREEPoRT-McMoRan COPPER & GOLD @ Major Projects All Other (uss billions) $3.0 $2.5 $2.0 $1.55 $1.0 $0.5 $0.04 2008 2009e 2010e (4) Capital expenditure estimates will continue to be reviewed and revised subject to market conditions (B)ncludes Tenke development and Grasberg underground development (3)
Slide 29: Tenke Fungurume Process Flow
FREeport-McMoRan =v" Coppen & GOLD A Heavy Duty Shop B Dump Pocket + C Stockpile (SAG mill) = E Leach & CcD (counter current decantation) F Cobalt Precipitation G PLs Ponds H Solvent Extraction I Electrowinning J Sulphuric Acid Plant
Slide 30: Tenke Fungurume Development Project Update
FREEPORT-McMoRAn > e Tenke Fungurume COPPER & GOLD Development Project Update ¢ Construction activities being advanced ¢ Initial production target -- 2HO9; Aggregate annual production of 250MM Ibs Cu & 18MM Ibs Co ¢ $1.75 billion in aggregate capital costs « Includes substantial amounts to support l
Slide 31: Development in Indonesia
FREEPoRT-McMoRan COPPER & GOLD nt in Indonesia ¢ In 2008, completed significant underground development " Big Gossan Mine = Initiated development of infrastructure for the Grasberg Block Cave Grasberg ¢ In 2009, continue ; Block Cave development of the = Grasberg Block Cave amole 2,900 meley hf Comm
Slide 32: Total Debt (US$ 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 12/31/08 in March 2007 (4) Pro Forma year-end 2006 total debt of $1.6 bilon piu $16 blion in acquisition debt om
Slide 33: FCX Debt Maturities 12/31/08
FREEPORT-McMoRAn COPPER & GOLD $6,000 $5,000 $4,000 $8,000 $2,000 $1,000 FCX Debt Maturities 12/31/08 (US$ millions) Total Debt & Cash at 12/31/08 (US$ billions) Senior Notes Issued in 2007 $6.0 Heritage PD Debt 0.6 $4,010 Other Debt 0.8 i Total Debt $7.4 8.375% — Senior Note Consolidated Cash $0.9
Slide 34: Financial Policy
FREeport-McMoRan [V8 Copper £ GoLD Finariclal Policy « Maintain Strong Balance Sheet & Liquidity Position = Aggressive Cost Management " Capital Investments Will be Limited in Current Market Environment « Near-Term Focus Will be on Protecting Liquidity While Preserving Large Mineral Resources and Gr
Slide 35: 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 = Long-lived Reserves, Geographically Diverse Operations « Flexible Operating Structure Can Respond to Varying Market Conditions "
Slide 36: Slides
Slides
Slide 37: Copper & Gold: Grasberg Open Pit
FREEPORT-McMoRAn "Copper & Gown Grasberg Open Pit
Slide 38: PT-FI Mine Plan
FREEPORT-McMoRAn COPPER & GOLD PT-FI Mine Plan PT-FI’s Share of Metal Sales, 2009e-201. 3e Copper, billion lbs Gold, million ozs 2009e - 2013e PT-Fi Share | 2009e - 2013e PT-Fi Share Total: 6.1 billion ibs Total: 8.8 million ozs Annual Average: 1.2 billion lbs Annual Average: 1.8 million ozs 2.2 2.1
Slide 39: Grasberg Plan View
FREEPORT-McMoRAn COPPER & GOLD Grasberg Plan View
Slide 40: Copper Equivalent Plan View
FREEPORT-McMoRAn COPPER & GOLD ¥ g: » Copper Equivalen:
Slide 41: Grasberg Sequence
FREEPORT-McMoRAn COPPER & GOLD g Seq » Copper Equivalen
Slide 42: Copper Equivalent Plan View
FREEPORT-McMoRAn COPPER & GOLD ¥ g: » Copper Equivalen:
Slide 43: 8E is the Primary Ore Pushback in 2010
FREEPORT-McMoRAn COPPER & GOLD g Seq » Copper Equivalen 8E is the Primary Ore Pushback in 2010 Grasberg Plan View
Slide 44: 8E and 9N are the Primary Ore Pushbacks in 2011
FREEPORT-McMoRAn COPPER & GOLD 8E and 9N are the Primary Ore Pushbacks in 2011 BB 99% CUEq 99% CuEq 99% CUEG >3.00% CuEq > ON is in ore north of this cross-section
Slide 45: 99% CUEq
FREEPORT-McMoRAn COPPER & GOLD 99% CUEq 99% CuEq 99% CUEG >3.00% CuEq > ON is in ore north of this cross-section
Slide 46: Grasberg Plan View
FREEPORT-McMoRAn COPPER & GOLD ¥ g: » Copper Equivalen: {— Grasberg Plan View
Slide 47: 2009e Quarterly Payable Metal Sales
FREEPORT-McMoRAn COPPER & GOLD 2009e Quarterly Pa yable Metal Sales Gold Sales (thousand ozs} Copper Sales (million Ibs) 600 575 600 1,250 500 228 450 300 1,000 150 0 68 1g09e 2g09e agave agose ‘Tove GonsoRaTsT sae ile spor simately 50k in 1005, 60 & on 29050, 80. orn 3008e and 55 born 4003 for ivor
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