Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q4 2013 Earnings Presentation
41 slides from Freeport-mcmoran's earnings presentation, Jan 22, 2014
Slide 1: 4th Quarter 2013 Earnings Conference Call
FREEPORT: McMORAN =VE/COPPER|& GOLD 4 Quarter 2013. Earnings, Gonrerence Gall January 22, 2014
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
FREEPDRT-MICMORAN) EXPANDING RESOURCES COPPER 2 GOLD) CUT OUELY FEMME 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 historic
Slide 3: Focused on Execution
FREEPDRI-MICMORAN) EXPANDING RESOURCES COPPER |& GOLD} ZOUSY Cal KEVIEW, Focused on Execution = Strong Operating Performance Globally * 12% Increase in Copper Sales (Growth in All 4 Regions) * Significant Contribution from O&G Business = Advanced Important Projects for Profitable Future Growth » Sec
Slide 4: Financial Highlights
= FAEEPDRT-MCMORAN) (CoPPER'# GOUD) Financial Highlights, Sales Data 4Q13 2013 Copper Consolidated Volumes (mm Ibs) 1,140 4,086 Average Realization (per Ib) $3.31 $3.30 Site Production & Delivery Unit Costs (per Ib) $1.68 $1.88 Unit Net Cash Costs (per Ib) $1.16 $1.49 Gold Consolidated Volumes (000'
Slide 5: Copper Market Commentary
|RREEPDRT-MCMORAN (CoPPER'# GOUD) Gopper Market Commentary Strong Chinese Cathode and Concentrate Imports - Supported by Consumer Demand and Infrastructure Investment = U.S. Demand Steadily Improving - Consumer Confidence Growing - Automotive and Construction Key Drivers = European Recovery Beginnin
Slide 6: 4Q13 Unit Production Costs and Sales by Region
pepe Mest EXPANDING RESOURCES Me ae see ae Vito GUATLEnY MiG) aratis a, a CPE AUG SUTITEIY) 4Q13 Unit Production Costs Cash Unit Costs North South 5 ; ; (per pound of copper) America America Indonesia __ Africa Consolidated Site Production & Delivery $1.89 $1.42 $1.89 $1.43 $1.68 By-Product Credits
Slide 7: Preliminary Reserves
EXPANDING RESOURCES RIT-MicMoR = C000) [ol ene Prelimiiany Reserve Consolidated) Proven) Copper Gold Molybdenum 12/31/13 billon bs rrilion ozs bilion Ibs Copper Reserves Reserves @ 12/31/12” 116.5 32.5 3.42 by Geographical Region Additions/revisions (1.2) _ (0.07) Production (44) (1.2) (0.09) Net ch
Slide 8: Copper Reserves and Mineralized Material
FREEPDRT-MICMORAN) EXPANDING RESOURCES COPPER 2 GOLD) Gopper ReservescoMineraized Maternal) BS FLY PU AD billion lbs of copper 12/31/13 Mineralized Material () 226 by Geographical Region Mineralized 115 Material ©) billion (contained copper) Ibs at $2.20 Cu price North America 50% Indonesia 19% Rese
Slide 9: Portfolio of World Scale Mines
= FAEEPDRT-MCMORAN) Vs) (COPPER|) GOD) Porttolio of World Scale Mines > A Positive Exploration Results — (Big Mines Get Bigger”. * Morenci ed Grasberg Fungurume ik Cerro Verde x * El Abra * Grasberg currently producing over 1 bin Ibs/annum, Morenci (100%) & Cerro Verde in/development to produce 1 bl
Slide 10: Indonesia Regulatory Matters
___ JEREEPOR I NVICMORAN, | COPPER|® GOUD) Indonesia Regulatory Matters In January 2014, Indonesian Government Published New Regulations Regarding Exports of Minerals, including Copper Concentrates - Allows Exports Through January 2017 - Includes New Progressive Export Duty on Copper Concentrates Re
Slide 11: Grasberg Update
|RREEPDRT-MCMORAN (CoPPER'# GOUD) Grasberg Update Improving productivity & performance metrics 1H13 4913 change = Mill rates (K t/d) 157 205 +31% = Cu grades (%) 0.69 0.87 +26% = Au grades (g/t) 0.53 0.99 +87% = Unit net cash cost ($/Ib) $1.95 $0.21 89% PT-FI Sales 3.0 2013 2013-2016e* hal cu Au 496
Slide 12: Expansion Projects: Tenke, Cerro Verde, Morenci
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 13: Exploration Targets
EXPANDING RESOURCES EXPlOlauon Targets, WADA OT NUNCA DISTICtS, 2013 2014e $182 mm $120 mm North America 18% Africa 18% 28% Indonesia Note: FOX's consolidated share; e = estimate. See Cautionary Statement. 23
Slide 14: Strong Brent & LLS Crude Oil Pricing
FREEPDRI-MICMORAN) COPPER |e GOLD) Strong Brent & 11S Crude Oi Pricing Over 90% of FCX’s 4Q13 O&G Revenues are from Oil/NGLs* Pricing per Bbl Brent Average ($/bbl) LS Average ($/bbl) FM 0&6 Realization ($/bbl before Hedges) Differential to Brent Jan-03 Jan-05 Jan-07 Source: Bloomberg * Excluding the
Slide 15: Oil & Gas Operating Assets
FREEPORT MCMORAN) EXPANDING RESOURCES COPPER £000) Gil & Gas Operating Assets 4Q 2013 Cash Operating Margin: $0.9 Billion ($56/BOE) Long Established Oil 2% + Significant Gas Resource Production History (5+ Tcfe) + Strong Margins and Cash Flows + Preserving Rights for - Brent Based Pricing Potential
Slide 16: 4Q 2013 Oil & Gas Margins by Region
REEPDRT-MICMORAN) EXPANDING RESOURCES COPPER £000) GHETLED YAO BAGAS; Qo rN SULLY 4Q 2013 Oil & Gas Margins by Region, Haynesville/ Operating Margin Eagle Madden/ pe gerd! California Ford Other GOM___ Consolidated Realized Revenue per BOE $88.96 $75.05 $22.41 $80.67 $73.58 Cash Production Costs per
Slide 17: Oil and Gas Proved Reserves
FREEPORT-MICMORAN) EXPANDING RESOURCES COPPER |e GOLD) eM aly SECON SAGAS TTOVERKESEIVES, 464 MMBOE as of 12/31/13 By Commodity 6:1 Ratio By Category By Region Haynesville/ Other California 40% NOTE: The preliminary proved oil and gas reserves presented were determined using the methods prescribed b
Slide 18: Deepwater GOM Development Project: Lucius
FREEPORT-MICMORAN) COPPER ®) GOLD) DGS DEepV/atersGOl7, DEVEIOPMENETTOJECE, Lucius Topside EXPANDING RESOURCES Completion Activities in-progress Subsea Infrastructure Currently Being Installed Topside Facilities on Schedule to be Delivered and Lifted into Place in 1Q14 First Production from 6 Wells
Slide 19: Deepwater GOM Activities
ADRT-MICMORAN) EXPANDING RESOURCES Rie GOUD) Texas + Field Will be Shut-in for Planned - Platform Maintenance and Subsea Holstein (100% WI) Tie-back Upgrades in 3Q14 * Production Facilities Capable of Handling Over 100,000 BOED + Platform Rig Refurbishment Began in 22013; Drilling Activity Underway
Slide 20: Lower Tertiary/Cretaceous Activities
ae ui 4 LEOTAN: EXPANDING RESOURCES LDOal G LOWE VEruary/, Gretaceous ACUVITIES; ¢ Industry Leading Position in Emerging Trend ¢ Lomond North —- Positive Results; Drilling Ahead ° 2014 Production Tests = Davy Jones #2 (75% WI) = Lomond North (72% WI) = Blackbeard West #2 (92% WI) e Extensive Invento
Slide 21: 2014e Outlook
FREEPDRI-MICMORAN) COPPER ®) GOLD) 2014e Outlook, * Copper™: 4.4 Billion Ibs. * $1.45/Ib” of Copper © Gold”: 1.7 Million ozs. * $20/BOE * Molybdenum: 95 Million Ibs. © Oil Equivalents”: 60.7 MMBOE (~70% Oil) Operating Cash Flows” Capital Expenditures + «$9 Billion (@$3.25/lb Copper in 2014) * $7.1 B
Slide 22: Annual Sales Estimates
FREEPDR COPPER SVICMORAN) EXPANDING RESOURCES 2013 2014e 2015e 2016e Wote: Consolidated copper sales inclide 795 mm bbs in 2013, 770 mm bsin 2014e, 850mm bs in 2015e and 1,100 mm bs in 20168 for noncontroling interest; exclides purchased copper. * Cu/Au sales estimates assume no changes to PT-FTS pl
Slide 23: 2014 Quarterly Sales
FREEPORT-MICMORAN) COPPER |= OUD) ZOIFE QUAMLEHY SAIES; EXPANDING RESOURCES (Gold Sales* (thousand ozs) ) 600 565 400 485 soo | 305 | 375 | 1,000 oO. 1Q14e 2Q14e 3Q14e 4Ql4e Note: Consolidated gold sales indude approximately 35k ozs in 10 14e, 45k ozs i aptse, Saori SO cand tk oxen Ota for ronconnel
Slide 24: 2013 and 2014e Sales by Region
FREEPDRI-MICMORAN) COPPER |e GOLD) ZO US an ZOOL: EXPANDING RESOURCES FE SHES DY KEGION) 2013 Sales by Region North America South America Indonesia Africa 1,422 1,325 oases 885 Li |...| rie 454 25 iu we iis, 4) | soe 2014e Sales by Region North America South America Indonesia* Africa 1,725 1,190 95)
Slide 25: 2013 and 2014e Unit Production Costs
= FAEEPDRT-MCMORAN) | COPPER|® GOUD) ZOOS and ZOIae Yule Prodyedon CosS Y7 HIGflO 2013 (per pound of copper) A Ameren [Gomes Alice Gonealidated Cash Unit Costs Site Production & Delivery“ $2.00 $1.53 $2.46 $1.43 $1.88 By-product Credits (0.24) (0.27) (4.69) (0.29) (0.57) Treatment Charges O42 0.17 0
Slide 26: EBITDA and Cash Flow at Various Copper Prices
EXPANDING RESOURCES EBL DA Vad Casi FIOW at Various COPper PIICES, Average ($1,200 Gold, § $20) —_(USsbillions) $15 2015e/2016e $10 Average 35 2014 so 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 & $100 Oil) $15) (US
Slide 27: Sensitivities
FREEPDRT-MICMORAN) EXPANDING RESOURCES COPPER ®) GOLD) Sensinvilies (USS iniilions) 2015e/2016e Operating EBITDA Cash Flow Copper: +/- $0.10/Ib $525 $375 Molybdenum: +/- $1.00/Ib $90 $70 Gold: +/- $50/ounce $100 $60 Oil Sales: + /- $5/bbl © $250 $200 Oil Sales Net of Diesel Costs:%7 +/-$5/bbl $205 $
Slide 28: Capital Expenditures
FREEPDRT-MICMORAN) EXPANDING RESOURCES COPPER ®) GOLD) GapPIta EXPETIGICUTES*e)) {USS billions) $8) 7.3 $7.1 $ $6.6 $6 | $45 +. TOTAL i $27 MINING 3.8 2.6 o ' | | t 2013 2014e 2015e 2016e (1) Gapital expenditure estmates inclide projects in progress. Project spending wil continue to be reviewed and
Slide 29: Balance Sheet Management
= Balance sneer Committed to y Management, EXPANDING RESOURCES Strong Track Record Debt Targeted at $12 Billion by YE 2016 Anticipate Continuing Current Common Stock Dividend Rate: $1.25/Share per Annum Large Resource Base with Strong Cash Flows and Capital Discipline Review of Divestitures Ongoing
Slide 30: A Strong & Focused Organization
FAEEPDRT-MCMORAN) (CoPPER'# GOUD) 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 = Prioritize Hi
Slide 31: Reference
FREEPORT MCMORAN, EXPANDING RESOURCES COPPER|=’GoUD) Reference SITES
Slide 32: 2014e Oil & Gas Operating Estimates
FREEPDRT-MICMORAN) EXPANDING RESOURCES COPPER 2 GOLD) - ZOE OT aGas: Oper auinG ESuUIMALES) Madden & Haynesville an Operating Cost: $1.95/Mcfe California Pricing: NYMEX Operating Cost: $34/bbl Pricing: Brent Based Gulf of Mexico Shelf/ Deepwater \ J} operating Cost: $18/bbI Pricing: LLS/NYMEX 014e O
Slide 33: Oil and Natural Gas Hedging Positions
k--va} FREEPORT-MICMORAN) EXPANDING RESOURCES COPPER |e GOLD) OM SoNattdl GaS EdGING rOSTUONS, Oil Hedges Indexed to Brent 2014 2015 Puts 75k Bbis/d 30k Bbls/d $90 floor $95 floor $70 limit = $75 limit $5.74 ADP $6.09 ADP Unhedged, 34% 5k Bbls/d Puts eee oe es eae imi 390 floor $7.11 ADP, $70 fimit
Slide 34: PT-FI Share of Metal Sales 2014e-2021e
k--va} FREEPORT-MICMORAN) EXPANDING RESOURCES COPPER ® GOLD) PAT ATU Aah Pierlsohare Or Metdl odles 2014.20 21e- 2014e — 2018e PT-FI Share Total: 5.7 billion lbs copper copper, billion Ibs Annual Average: 1.14 billion Ibs a Copper, Gold, million ozs 2014e — 2018e PT-FI Share 3.0 Total: 7.9 million o
Slide 35: Grasberg Open Pit
Slide 36: Mining Sequence in 2014
FREEPORT MICMORAN) vs COPPER GOLD) ware _ =XPANI Mining Sequence in 2014 Copper EquiValent Gross, Secuion, 9Nand 9S are the Primary Ore Pushbacks in 2014 2914 3Q14 LEGEND 0.25 - 0.99% CuEq lM 1.00 - 1.99% CuEq fat 2.99% CuEq 00% CuEq
Slide 37: Mining Sequence in 2015
FREEPORT MICMORAN) COPPER ® GOLD ZULUY Mining Sequence in 2015 Copper Equivalent Gross Secuion 981s the Primary Ore Pushbackin 2015; Grasberg Plan View LEGEND
Slide 38: Mining Sequence in 2016
FREEPORT MICMORAN) COPPER ® GOLD 2ULUY Mining Sequence in 2016 Copper Equivalent Gross Secuion 981s the Primary Ore Pushbackin 2016; Grasberg Plan View LEGEND
Slide 39: Mining Sequence in 2017
FREEPORT MICMORAN) XP, | COPPER GOUD! NDING RESOURCE Mining Sequence in 2017 Copper EquiValent Gross, Secuion, 9581s the Primary Ore Pushbackin 2017 Grasberg Plan View LEGEND
Slide 40: Grasberg Minerals District Life-of-Mine Production Sequencing
FREEPORT-MICMORAN) EXPANDING RESOURCES COPPER & GOLD r} hy eya L 7 = e;> FIDTSCEPOlCAnGOnesia (GIaSDELG MMMELASISUICE, Life-of-Mine Production Sequencing* ee Grasberg m Strom iit : - BIGCOSA) 775% 00 0.97 0/tAU eee apen pis Si 7am mt a Deep MEZ 0.84% Cu & 0.70 G/tAU a 999mm me Grasberg UG 4.01% Gis
Slide 41: Consolidated Site Operating Costs by Category
Consolidated! Site) Operating Costs by Category EXPANDING RESOURCES Materials 33% Manpower 31% 6% Energy Wer 2013 Note: e = estimate. See Cautionary Statement. 2014e aL
Freeport Mcmoran Copper & Gold — Q4 2013 Earnings Presentation on 6ix