Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q2 2007 Earnings Presentation
36 slides from Freeport-mcmoran's earnings presentation, Jul 26, 2007
Slide 1: 2nd Quarter 2007 Earnings Conference Call
[svi FREEPORT-McMoRan COPPER & GOLD INC. 2"¢ Quarter. 2007 é Earnings Conference Gall | ||P < \ \ BS j : WTS 7 SS a Ka Ss y, James R. Moffett Richard C. Adkerson > LOS Chairman of the Board Chief Executive Officer he es Timothy R. Snider Kathleen L. Quirk ] President and Chief Executive Vice Preside
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
ORT-McMoRan CO GOLD INC. Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements in which we discuss factors we beleve may affect our performance Jn the future. Forward-looking statements are all statements other than historical facts, such as
Slide 3: 2007 Highlights
ORT-MchoRan COP OLD INC. ZOO7 THGHIGHTES: 2006 Copper a Consolidated Volumes (mm tbs) 220 Average Realization (per ib) $3.33 Gold Consolidated Volumes (0200's ozs) 278 Realization (per az) $614 Molybdenum Consolidated Volumes (mm tbs) N/A Realization (per ib) N/A r rieteD F yi " b Financial Results
Slide 4: Accounting Impacts of Acquisition
FREEPORT-McMoRau COPPER & GOLD INC, em nay FM Ghase) ue ACCOUNTING AVOGALTONK eu. av th ($ in billions) ; i Step-up in Assets Breakdown Historical Book Value Inventories & Step-up in Assets Stockpiles Deferred Tax on Step-up Goodwill Purchase Price Purchase Accounting Impacts @) in millions) 1907 29
Slide 5: 2Q07 Operating Highlights
FREEPORT-McMoRau COPPER & GOLD INC, 2Q07 Operating Highlights Operating Data 2Q06 Pro Forma 2Q07 Copper Consolidated Volumes (mm /bs) @? 843 1,010 Average Realization (per ib)@ $2.44 $3.33 Net Unit Cash Cost (per /b) $0.74 $0.53 Gold Consolidated Volumes (000°s ozs) 311i 913 Realization (per az) $61
Slide 6: 2Q07 Unit Production Costs
FREEPORT-McMoRau COPPER & GOLD INC, 2ZQ07 Unit PrOdUGHONMGOSES: (per pound of copper} North South Cash Unit Costs mecha, amen eesonecle peonienlidated, Site Production & Delivery “ $1.46 $0.82 $1.14 $1.13 Royalties 0.00 0.00 0.14 0.05 Treatment Charges 0.09 0.21 0.33 0.21 By-product Credits (0.74) (
Slide 7: Markets Overview
000’s Metric Tons $800 $700 $600 $500 $400 $300 $200 $100 80 ) ORT-MichioRan COPE lg GOLD INC. MarKkeus OVEIVIEW, Lu an A punog .Bd s1uaD, LME & COMEX Exchange Stocks* Jon Jul00 Jan JO fon-O2 Jul-02 Jang “UME and! Comex, excluding Shanghai stocks, producer, consumer and merchant stocks. London Gold
Slide 8: 2007 Outlook
FREEPORT-McMoRau COPPER & GOLD INC, 2007 Outlook. » Pro Forma Sales Outlook “): « Copper: 3.9 Billion Ibs. ¢ Gold: 2.1 Million ozs. ¢ Molybdenum: 68 Million Ibs. » Modeled Operating Cash Flows 2%): « $64 Billion for 2007 ° $3.2+ Billion in 2HO7 > Capital Expenditures: ~ $1.8 Billion for 2007 > Year-
Slide 9: Modeled Year-end Total Debt
ORT-MchoRan CO OLD INC. 5 Modeled Year-end fotar Debt (US$ billions) $20 $17.6 $15 3 $14.2 E gio Net of Cash $9.8 2 $5 wh $6.5 Net of Cash Net of Cash $0 - At Time of Acquisition 6/30/07 @ 12/31/07e @ (4) Bro Forma year-end 2006 total debt of $1.8 bion piu $16 blion in acquisition debt (2) Includes
Slide 10: North America Development Projects
> Mill is ramping up and expected to reach 54,000 t/d* capacity in 3Q07 ¢ Start-up of Concentrate Leach Plant expected in 3Q07 > Adds 115MM lbs Cu/year aggregate and enhances cost profile ¢ ~ $250MM project ¢ Major new mine in Arizona Engineering and procurement complete with construction well advan
Slide 11: South America Development Projects
GOLD INC. PORT-McMoRan COF evelopment Project Soul America Cerro Verde Mill Expansio ~$900MM project completed in 4Q06 Rates ramped up in 2Q; reached capacity of 108K t/d in June Full rates expected in 2HO7 Adds 430MM lbs/ year aggregate re Large sulfide mineral deposit underlying current oxide pit
Slide 12: Indonesia Development Projects
RI-MCMoRan COF GOLD INC. Development Projec dnidonesia DOZ Expansions - Completed 50K Expansion in mid-2007; averaged 51K t/d in June - Further expansion to 80K Completed 80% of tunneling (Common Infrastructure) required to reach Grasberg Block Cave Initiate mine development activities at Grasberg B
Slide 13: Democratic Republic of Congo Development Project
PORT-McMoRan CO LD INC. evelopment Project Democrauc Republic of Gongo lity Study completed > Construction activities are ramping up and excavation completed for crushing, mill, lime, acid plant and workshop facilities » Completed agreement for electric Plant Site Earthworks power $650MM capital cos
Slide 14: Copper Reserves & Mineralized Material
ORT-McMoRan COF GOLD INC. Copper Reserves & Minecralizea Material \ Cu An TA Reserves* Mineralized Material** (billion Ibs of recoverable copper) (billion Ibs of contained copper) A 146 94 $2.00 “an Potential for additional 94 bilign tbs: 69 to 146 billion Ibs Consolidated copper reserves; 77.2 bili
Slide 15: Exploration Opportunities
RI-McMORan COPE GOLDING. > Rights to 2.2 » Highly prospective exploration areas provide opportunities to continue to add to our long-lived reserves Tenke Fungurume, Dem Republic of Congo » Believed to be largest undeveloped, high grade copper/cobalt project in the world today » Less than half of 600
Slide 16: Aggregate 2007e Exploration
i Cus Au iMor Aggregate 2007e Exploration: ~$125 million Exploration Drives the Mine Plan North America Lone Star & Morenci Africa Tenke Indonesia Fungurume Deep Grasberg, & Kisanfu Kucing Liar, & other targets outside of Block A e = estimate. Pleare see cactionary statement Australasia & Other Area
Slide 17: Pro Forma Sales Volumes
& OD Uy S Rt (1 N S eS L is SS XS ‘G °Q = Le > = 24 5 . a 19 4.4 4.4 1 7 3.9 3.6 a 2006 20076 2008 20096 Pro Pro ai Forma Forma* “Nove Cosa got cls ine gprosinaely 05 & ox h 2005, 215 korn 2007, 160k oF fn 200ee an 105 kos in c0058 emo ret 2 100 a 0 20 68 6 = 1 60 | 40 ” J o oO 2006 20076 2008 20096
Slide 18: Quarterly Sales Estimates
4,200 1,026 1,010 508 925 900 600 200 a 1907 2Q07 ‘3Q07E 4Q07E Pro Forma* ‘ter Consldated copper sales inch aporosimatey 154 mm fs in 1007, 164. len 2007, S7O-mm sin 20078 and 175 03 ben 3Q07e Rrminosty teres; excludes passed copper ** 4007 inkudes pre-scquistion sales oF 505 avn fs oF copper, 22 &
Slide 19: Pro Forma 2007e Sales and Unit Production Costs by Region
FREEPORT -McMoRan COPPER & GOLD INC. Por ona 2O0/ewalesanid Ont | eae P/OGUCHOIN GOSIS BY REGION) ullAullYt 2007e Pro Forma Sales by Region North America South America Indonesia 1,420 1,325 ——/ 4115 68 on Cu Mo Cu Au Cu Au mom Ibs | nmi mom Ibs sim oz¢ | mom Ibs sim 28 North South (per pound of copp
Slide 20: EBITDA and Operating Cash Flow at Various Prices
OLD INC. EBIIDAVaniG Gasii1JOW, i ab VAalsOus: 22d ell PICS: +/CullAu IY (8500 Gold & $15 $12) (US$ billions) $10 denim) Cu $2.00/Ib Cu $2.50/Ib Cu $3.00/Ib Average Annual Operating Cash Flow 2007-2009 ($500 Gold & $15 Molybdenum) $6 $5 $4 $3 $2 $1 $0 (US$ billions) Cu $2.00/Ib Cu $2.50/Ib Cu $3.00/
Slide 21: Sensitivity to Commodity Prices
ORT-McMoRan COF GOLD INC. SEMSILIVILY LO COMMMOULY TICES trey.) Annual Financial Impa Net Change EBITDA Income "3 “(US$ millions) Copper: -/+ $0.20/Ib $800 $425 $500 Molybdenum: -/+ $2.00/Ib $100 $70 $80 Gold: -/+ $50/ounce $90 $45 $50 Wiotez Annual fnancialimpact based on estimatec annual sales For
Slide 22: Capital Expenditures
TMcMoRan Cl OLD INC. Capital EXpenainires: act (uss billions) $2.5 | Major Projects @ All Other $2.0 $1.8 $1.5 $1.05 $0.5 $0.04 2007e* 2008e 2009e "Includes PD expenditures beginning March 20, 2007 ‘Note: Includes capitalzed interest. e = estimate, Please see cautiona'y statement. 22
Slide 23: Debt Maturities Pro Forma 6/30/07
FREEPORT-McMoRau COPPER & GOLD INC, Debt Maturities Pro Folia 6/80/07 ern (US$ miltions) $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 2007 2008 2009 2010 2011 2012 2013 2014 Thereafter [ Ucredit Facilities Public Debt All Other Debt "In July 2007, POX established a new $2.45 billon Term Loan
Slide 24: Significant Debt Reduction
ORT-McMoRan CO} an oP at 7 LZ LZ f g CANT VEU KeEGUGH rs SIGMINICATE DEVE REDUCHOT Sarr (uss billions) $9 $8.9 $8 $7 $6 $5 $4 $3.8 $3 $2 $1 60 — 3/31/07 G7-"09 Avg. Copper Price $2.00 $2.50 $3.00 Net Debt/’07-’09 Avg. EBITDA 1.2% 0.5% 0.1x Pro Forma YE 2009 "Note Resuls ood TAO? actual with pices as
Slide 25: Financial Policy
FREEPORT-McMoRau COPPER & GOLD INC, Financial. : PONGY, » FCX is Committed to Maintaining a Strong Financial Position » Continuation of Positive Copper Markets is Expected to Provide Substantial Cash Flows = Investments in Projects With Attractive Returns = Debt Reduction * Shareholder Returns » Com
Slide 26: Slide 26
Slide 27: Grasberg Open Pit
La ¥ L, * i. Grasverg Open PIt i July 2007 s/cul{Au Ii TMcMoRan Cl GOLD INC. Ee
Slide 28: PT-FI Mine Plan
LEP ORT_McMoRan| COPI OLD INC PT-FI Mime Pian PITS Share of Metal Sales, Z007e- 20112 2.0 Copper, billion lbs 2007e - 20141e PT-Fi Share Total: 6.1 billion ibs Annual Average: 1.22 billion ibs 1.1 1.8 1.6 1.3 1.1 Gold, million ozs f Veatiau iMor 2007e — 2011e PT-Fi Share Total: 9.0 million ozs Annua
Slide 29: Mining Sequence in 2007
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in| 2007 i Copper Equivalent Cross Section “Cul Aw Iu: A B Following a mine-out of the high-grade section of GN in 1H07, 7S is the Primary Ore Pushback in 2007 ;;2 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% Cu
Slide 30: Mining Sequence in 2007
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2007 i Copper Equivalent Cross Section “Cul Aw Iu: A B Following a mine-out of the high-grade section of GN in 1H07, 7S is the Primary Ore Pushback in 2007 ;;2 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuE
Slide 31: Mining Sequence in 2007
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2007 i Copper Equivalent Cross Section sCullAul lV A B Following a mine-out of 6N in 1H07, 7S is the Primary Ore Pushback in 2007 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq J aL
Slide 32: Mining Sequence in 2007
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2007 i Copper Equivalent Cross Section /culAu Iv A B Following a mine-out of 6N in 1H07, Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq Ey
Slide 33: Mining Sequence in 2008
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2008 i Copper Equivalent Cross Section Shr MiMo! A B 7S is the Primary Ore Pushback in 2008 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq J 3
Slide 34: Mining Sequence in 2009
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2009 i Copper Equivalent Cross Section Shr MiMo! A B 7S and 8E are the Primary Ore Pushbacks in 2009 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq J a4
Slide 35: Mining Sequence in 2010
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2010 i Copper Equivalent Cross Section Shr MiMo! A B 8E is the Primary Ore Pushback in 2010 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq J 5
Slide 36: Mining Sequence in 2011
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2017 i Copper Equivalent Cross Section Shr MiMo! A 5 - 0.99% CuEG .00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq * ON is in ore north of this cross-section. Me ag eS" : J 36
Freeport Mcmoran Copper & Gold — Q2 2007 Earnings Presentation on 6ix