Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q3 2013 Earnings Presentation
34 slides from Freeport-mcmoran's earnings presentation, Oct 22, 2013
Slide 1: Third Quarter 2013 Earnings Conference Call
FREEPORT: McMORAN =VE/COPPER|& GOLD 3 Quarter, 2015 Earnings, Gonrerence Gall October 22) 2013,
Slide 2: Cautionary Statement
FREEPDRT-MICMORAN) EXPANDING RESOURCES COPPER 2 GOLD) Galli Onar yj Statenjent REGa GING H.Ol Wald 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
Slide 3: Third Quarter Highlights: Focused on Execution
FREEPDR} AORAN) EXPANDING RESOURCES COLSTIGHIGHES, Focused on Execution = Strong Margins and Cash Flow - Solid Operating Performance from Global Mining Business - Improved Grasberg Results - Significant Contribution from O&G Business = Advanced Important Projects for Profitable Future Growth - Moren
Slide 4: Financial Highlights
FREEPORT-MICMORAN) COPPER ®) GOLD) Finacial FIGHignits, Sales Data 3Q12 Oi Consolidated Volumes (mm Ibs) 1,041 922 Average Realization (per Ib) $3.28 $3.64 Site Production & Delivery Unit Costs (per Ib) $1.85 $2.03 Unit Net Cash Costs (per Ib) $1.46 $1.62 Consolidated Volumes (000's ozs) 305 202 Ave
Slide 5: Copper Market Commentary
___ JEREEPOR I NVICMORAN, | COPPER|® GOUD) Gopper. Market Gommentary China Remains Important Demand Driver Large Consumption Base Growing at a Sustainable Rate = Continued Improvement in U.S. Demand Automotive Production and Sales Back to Pre-crisis Levels Improving Construction Activity = European
Slide 6: Operating Summary: Mining
Basie ib suviL _. EXPANDING RESOURCES GALEN IInING) OPE auig Suniiialy: 3Q13 Unit Production Costs. (per pound of copper) North South . America America’ Indonesia _Africa Consolidated Cash Unit Costs Site Production & Delivery $2.00 $1.49 $2.30 $1.43 $1.85 By-Product Credits (0.24) (0.22) (1.65) (0.
Slide 7: Operating Summary: Oil & Gas Margins by Region
FREEPORT MOMORAN, EXPANDING RESOURCES CoPPEnis GOLD) “oO OQyrertany O 4 G5 Ope abiig Suminiay: 3Q 2013 Oil & Gas Margins by Region Haynesville/ Eagle Madden/ California Ford Other GOM Consolidated Operating Margi Realized Revenue per BOE $98.75 $83.47 $22.08 $89.05 $80.93 Cash Production Costs per B
Slide 8: Grasberg Update
FREEPORT-M fi EXPANDING RESOURCES COPPER} Grasberg Update: ¢ Improving productivity & performance metrics 1H13 3013 change = Mill rates (K t/d) 157 198 +26% = Cu grades (%) 0.69 0.74 47% = Au grades (g/t) 0.53 0.65 +23% = Unit net cash cost ($/Ib) $1.95 $0.99 -49% = 3.0 PI-FT Sales 50136 2013e-2016e
Slide 9: Major Mining Expansion Projects
EXPANDING RESOURCES Tenke Fungurume Cerro Verde Morenci Phase II Expansion Mill Expansion Mill Expansion $0.9 billion* $4.6 billion $1.6 billion + Completed on time & within budget + Commenced construction in 1Q13 + Construction in advanced stage + Incremental 150 mm lbs of copper + Completion expec
Slide 10: Exploration Expenditures
EXPANDING RESOURCES XPIOLauon NalrgGecs, Ww Maj a OL SMMC al DISHIGCES, 2013e 2014e $185 mm $130 mm 16% Indonesia Note: FCX's consolidated share; e = estimate. See Cautionary Statement. 10
Slide 11: Strong Brent & LLS Crude Oil Pricing
|FREEPDRS-MICMORAN, vs (COBRER'® GOLD Strong Brent & LLS Grude Oil Pricing ~~. Over 90% of FCX’s 3Q13 O&G Revenues are from Oil/NGLs* $150 and Pricing per Bb/ $125 $100 $75 $50 $25 $0 Source: Bloomberg
Slide 12: Oil & Gas Operating Assets
DRT MICMORAN) =) G00) Oi & Gas Operating Assets EXPANDING RESOURCES 3Q 2013 Cash Operating Margin: * Long Established Oil Production History * Strong Margins and Cash Flows * Brent Based Pricing * Activities Focused on Maintaining Stable Production Eagle Ford * Large Oil/Liquids Rich Resource * Flex
Slide 13: Lucius - Deepwater GOM Development Project
FREEPORT MCMORAN) EXPANDING RESOURCES COPPER|& GOLD) Lucis —Deepy/ater, GOl7 DEVElOPIMECNG TL OJECE Lucius Topside 1 6 Wells have been Drilled Geologic Results Confirmed Significant Oil Resource Truss Spar Hull Anchored in Place First Production Expected in 2H 2014 Processing Capacity - 80,000 BOPD
Slide 14: Large Scale Infrastructure and Subsea Tieback Opportunities
¥.. Large Scale Infrastructure at __ Marlin, Horn Mountain and *: Holstein Provides Attractive ‘ ‘Subsea Tieback Opportunities to Drive Future Growth EXPANDING RESOURCES tun FMO&G Wor-Op Fil ORG Subsea Tieback Exploration Prospect
Slide 15: Ultra-Deep Activities
FREEPORT-MICMORAN) EXPANDING RESOURCES COPPER |e GOLD) UOltra-Deep ACaVites, Gaya) Lomond North | eet Louisiana * ° Industry Leading Position in Emerging Trend © Lomond North (72% WI) -— Exploratory Well Drilling Onshore South La. = Drilling Below 26,800’ Towards PTD of 30,000’ ° 2014 Production Tes
Slide 16: 2013 Outlook
FAEEPDRT-MCMORAN) (CoPPER'# GOUD) 2013 OutlooK. Sales Outlook: ° Copper: 4.1 Billion Ibs. © Gold: 1.1 Million ozs. e Molybdenum: 92 Million Ibs. © Oil Equivalents”: 37.5 MMBOE (~70% Oil) Unit Cost: © $1.58/Ib of Copper in 2013e ° $17/BOE Operating Cash Flows: «© ~$6 Billion (@$3.25/Ib Copper in 4Q13
Slide 17: Production Outlook
e--val FREEPDRIMICMORAN) COPPER |e GOLD) Prodiuedon Holle Gold Sales (million ozs) Copper Sales (billion Ibs) 2 17 17 5.0+ 8 | ; 4a 44 41 P 41] oe = = d 2013e 2014e 2015e 3 2 1 oO 2013e 2014e 2015e Includes Projects Currently Under Way* “Te CTE oe cn nce oposite 70 mn 208,70 Bin 20 ad abe mm Be 20s
Slide 18: 2013e Operating Estimates
FREEPORT MCMORAN) EXPANDING RESOURCES COPPER & GOUD) 2013€ Operaung ESUMAtes 2013e Unit Production Costs North South (per pound of copper) America America Indonesia Africa. Consolidated © Cash Unit Costs Site Production & Delivery 2 $2.00 $1.56 $2.70 $1.45 $1.94 By-product Credits (0.24) (0.27) (1.5
Slide 19: EBITDA and Cash Flow at Various Copper Prices
EXPANDING RESOURCES EBL DA Vad Casi FIOW at Various COPper PIICES, Average ($1,300 Gold, § $24 (USsbillions) /bdenum & $100 Oil) " | +40% J rea $12 2016e Increase $6 so Cu $3.00/Ib Cu $3.50/Ib Cu $4.00/Ib Average Operating Cash Flow (excluding Working Capital changes) ($1,300 Gold, $10 Molybdenum &
Slide 20: Sensitivities
FREEPORT MCMORAN) EXPANDING RESOURCES COPPER|& GOLD) Lf aes as Sensrivities (US$ millions) 2014e/2015e Operating EBITDA Cash Flow Copper: +/- $0.10/Ib $465 $325 Molybdenum: +/- $1.00/Ib $80 $65 Gold: +/- $50/ounce $75 $45 Oil Sales: + $10/bbI $405 $340 - $10/bbl 2 ($380) ($325) Oil Sales Net of Dies
Slide 21: Capital Expenditures
FREEPDRT-MICMORAN) EXPANDING RESOURCES COPPER ®) GOLD) Gapital EXPenGiest”) (US$ billions) $8 4 $6.7 $6.7 $6 4 $44 TOTAL $2 4 MINING 3.8 4.0 $0 + 2013e 2014e 2015e (2) Capital expenditure estmates inclide projects in progress. Project spending will continue to be reviewed and revised subject to mark
Slide 22: Balance Sheet Management
EXPANDING RESOURCES Commies Go Balance Sieet Management, Strong Track Record = Debt Targeted at $12 Billion 9/30/2013 Balances Within 3-year Period (3 in bns) = Anticipate Continuing Current $20.4 Common Stock Dividend Rate: $18.2 $1.25/Share per Annum = Large Resource Base with Strong Cash Flows an
Slide 23: Summary
EXPANDING RESOURCES Gouo) 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 HS&E and Other Inherent Risks Return Driven Growth | Prioritiz
Slide 24: Reference Sites
FREEPORT MCMORAN, EXPANDING RESOURCES COPPER|=’GoUD) Reference SITES
Slide 25: 2013 Quarterly Metal Sales
FREEPDRI-MICMORAN) COPPER |e GOLD) 20135 Quartenly Paya ye, Metal Sales, Gold Sales (thousand ozs) 400 Copper Sales (million Ibs) 300 1,250 200: 1,120 100. 1041 § . - o 1,000 954 951 i J rr 750 500 250 o 1Q13 2Q13 3Q13 4Q13e ‘Tioter Consoidated copper sales include approximately 182mm Bs in 1013, 18
Slide 26: Oil & Gas Operating Estimates
Pelcroe fp enionaw: EXPANDING RESOURCES HY FEF AUN 3 ON 4 G25 Oper aungiesumates; Operating Cost: $1.65/Mcfe California Pricing: NYMEX Haynesville Operating Cost: $30/bbl Pricing: Brent Based Gulf of Mexico Shelf/ Deepwater \ J} operating Cost: $14/bbI Pricing: LLS/NYMEX Operating Cost: $13/bbl Pric
Slide 27: Oil & Natural Gas Hedging Positions
FREEPORT MICMORAN : Eee MUO AN EXPANDING RESOURCES Oi& Natural Gas Hedging Positions Oil Hedges Indexed to Brent 4Q13 2014 2015 Collars sue 25k Bbis/d Waa OC) Onhedged 75k Bbls/d 30k Bbls/d Swaps: $100 floor $90 floor $00 fl ‘$95 floor 28% EARS $120CeIn9 STAND s6.09 ADP A0KBbIs/d _ $80 limit $70 lim
Slide 28: PT-FI Share of Metal Sales
k--va} FREEPORT-MICMORAN) EXPANDING RESOURCES COPPER & GOLD) PIT ATUne Pai share Of Metal Sales; 20LSEa2Z02Z1E Fro > 2013e — 2017e PT-FI Share Total: 5.7 billion lbs copper copper, billion Ibs Annual Average: 1.14 billion Ibs a Copper, Gold, million ozs 2013e — 2017e PT-FI Share 3.0 Total: 8.1 milli
Slide 29: Grasberg Open Pit
[Reiger MeMraN |COPPER @)G0) Grasberg Open Pit
Slide 30: Mining Sequence in 2013
Eee ’ Mining Sequence in 2013 ee ‘Copper equivalent. Gross Secuion og 9Nand 9S are the Pamary Ore Pushbacks in 2013; 3Q13 4Q13 LEGEND * 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq fl 2.99% CuEq .00% CuEq
Slide 31: Mining Sequence in 2014
FREEPORT MeMORAN) XPANI ‘COPPER 2 GOLD Mining Sequence in 2014 Copper EquiValent Gross, Secuion, 9Nand 9S are the Primary Ore Pushbacks in 2014 Grasberg Plan View LEGEND ME 0.25 - 0.99% CuEq lM 1.00 - 1.99% CuEq fat 2.99% CuEq
Slide 32: Mining Sequence in 2015
FREEPORT MeMORAN) XPANI ‘COPPER 2 GOLD Mining Sequence in 201 Copper EquiValent Gross, Secuion, 9Nand 9S are the Primary Ore Pushbacks in 2015; Grasberg Plan View LEGEND ME 0.25 - 0.99% CuEq lM 1.00 - 1.99% CuEq fat 2.99% CuEq 00% CuEq
Slide 33: Mining Sequence in 2016
FREEPORT MeMORAN) XPANDING RESOURCES | COPPER|® GOUD) - Mining Sequence in 201 $ Copper EquiValent Gross, Secuion, : 9S 1s the Primary Ore Pushbackin 2016; Grasberg Plan View
Slide 34: PT-FI Life of Mine Production Sequencing
MICMORAN) EXPANDING RESOURCES meee . » J PITSECECPOLtINGOnesia, Life [Of SUME TLOGUCUOM SEGUENCING, . | 258mm int BigGossan 4.750 Cu & 0.97 g/t Au 7 517mm mt Deep MLZ 0.84% Cu & 0.70.g/t Au 999mm mt 1.01% Cu & 0.78 g/t Au i i 420 E Kucing Liar Onin COW Term, including extensions F 7 7 7 + i 7 + 7 +
Freeport Mcmoran Copper & Gold — Q3 2013 Earnings Presentation on 6ix