Freeport-mcmoran, Inc. · NYSE:FCX

Freeport-mcmoran — Freeport-McMoRan Copper & Gold — Deutsche Bank Leveraged Finance Conference 2010

27 slides from Freeport-mcmoran's conference presentation, Oct 6, 2010

  1. Slide 1: Leveraged Finance Conference

    Leveraged Finance Conference Kathleen L. Quirk Executive Vice President & Chief Financial Officer PROVEN PERFORMANCE SHINING FUTURE Phoenix, Arizona www.fcx.com October 6, 2010

  2. Slide 2: Cautionary Statement Regarding Forward-Looking Statements

    Cautionary Statement Regarding Forward-Looking Forward Looking Statements This presentation contains forward-looking statements in which we discuss factors we believe may affect our performance in the future. Forward- looking statements are all statements other than statements of historical facts, s

  3. Slide 3: Proven Performance, Shining Future Investment Highlights

    Proven Performance,, Shining g Future Investment Highlights  Premier Copper, Gold & Molybdenum Producer  Long-Lived Reserves with Growth Options  Flexible Operating Structure  Geographically G hi ll Diverse Di  Strong Financial Position  Experienced Team 3

  4. Slide 4: World's Leading Copper Producers

    World’s Leading g Copper pp Producers Top 10 Copper Producers (2010e) (000 t) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Codelco FCX BHP Billiton Xstrata Anglo Rio Tinto Southern KGHM Polska RAO Norilsk Antofagasta American Copper Miedz ____________________ Source: Brook Hunt 2Q10 Report.

  5. Slide 5: Geographically Diverse

    Geographically g p y Diverse Major Mine Operations & Development Projects All major assets majority-controlled and operated North America1 Copper Reserves Copper/Gold/Silver Cu 27.7 billion lbs Mo 2.1 billion lbs Molybdenum Sales Cobalt Grasberg G b (90.64%) (90 64%) Cu 1.1 billion lbs Reserves Mo 6

  6. Slide 6: Markets

    Markets 2,000 400 1,750 350 1 500 1,500 LME Copper Price 300 0’s Metric Tons s Cents Per Pou 1,250 250 1,000 200 750 150 und 500 100 000 250 50 LME & COMEX Exchange Stocks* 0 0 Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- 99

  7. Slide 7: World Class Copper Discoveries Are Extremely Rare

    World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves 2010e Copper Production Million metric tons Thousand metric tons 0 5 10 15 20 25 0 200 400 600 800 1,000 1,200 Grasberg Complex - 1988 Escondida - 1979 KGHM Polish Copper - 1957 Chuquicamata - 1910 Escondida - 1979 Grasber

  8. Slide 8: Development Projects Update

    Development e e op e t Projects ojects Update North America Morenci Concentrator  Miami Mine Restart  Morenci Mill Restart & Ramp-up  Safford Sulphur Burner South America  El Abra Sulfolix  Cerro Verde Expansion Cerro Verde Concentrator I d Indonesia i – Underground U d dDDevelopment l t Grasbe

  9. Slide 9: Tenke Fungurume

    Tenke Fungurume g  Sold 55MM lbs Cu & 4MM lbs Co in 2Q10  At full rates (initial phase), aggregate annual metal of 250MM lbs Cu & over 18MM lbs Co  Addressing issues in SO2 plant & Co circuit  Mill performing above 8K t/d design capacity  Increasing mining rate to accelerate high-grade material

  10. Slide 10: Climax Restart

    Climax Restart  Assessing timing of start-up  Advancing Ad i certain t i construction t ti activities ti iti tot provide id flexibility  One of the most attractive primary molybdenum development projects in the world – large-scale production capacity, attractive cash costs and future growth optio

  11. Slide 11: Copper Reserves & Mineralized Material

    Copper Reserves & Mineralized Material as of 12/31/09 billion lbs of copper 12/31/09 / / 226 Copper Reserves by Geographical Region Mineralized 122 North Material (b) billion America (contained copper) lbs 26% 104 at $2.00 Cu price South America Indonesia 33% 33% Reserves at $1.60 Cu price 8% Reserv

  12. Slide 12: Current Projects Under Evaluation

    Current Cu e t Projects ojects Under U de Evaluation a uat o North America Tenke Fungurume • Chino Restart • Debottlenecking • Further increases to Morenci • Further oxide expansion mining rate • Sulfide development • Plans for Twin Buttes/ Sierrita district • Climax • Major mill projects for sulfid

  13. Slide 13: FCX Copper Projects

    FCX Copper pp Projects j billion lbs copper annually Replacement New Copper Projects Sources El Abra Sulfolix SA Potential 0.3 Projects 0.75 Tenke 0.25 Grasberg Expansions Underground g 0.5 03 0.3 NA Potential 1.1 NA Restarts Projects 1 4 billion lbs Cu 1.4 1.8 billion lbs Cu Other Opportunities • T

  14. Slide 14: 1H10 Highlights

    1H10 Highlights g g Sales Data 2Q2010 1H2010 Copper Consolidated Volumes (mm ( lb lbs)) 914 1,874 1 874 Average Realization (per lb) $3.06 $3.13 Site Production & Delivery Unit Costs (per lb) $1.41 $1.38 Unit Net Cash Costs (per lb) $0.97 $0.89 Gold Consolidated Volumes (000’s ozs) 298 776 Average R

  15. Slide 15: 2010 Outlook

    2010 Outlook  Sales Outlook: • Copper: 3.8 Billion lbs. • Gold: 1.8 Million ozs. • Molybdenum: 63 Million lbs.  Unit Net Cash Cost (1): • 86¢/lb  Operating Cash Flows (2): • Exceed $ $5 Billion • Assumes $3.00/lb Copper for remaining 6 months • Each 10¢/lb Change in Copper = $150 Million in 2010

  16. Slide 16: Near-Term Sales Profile

    Near-Term Sales Profile Excludes current projects under evaluation Gold Sales (million ozs) Copper Sales (billion lbs) 2 1.8 1.5 1.4 5 1 3.9 39 4.0 4 38 3.8 0 2010e 2011e 2012e 3 ____________________ Note: Consolidated gold sales include approximately 180 k ozs in 2010e, 2010e 150 k ozs in 2011e, 20

  17. Slide 17: 2010e Quarterly Payable Metal Sales

    2010e Quarterly Q y Payable y Metal Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 800 1,250 655 600 478 410 400 298 960 970 955 1,000 914 200 0 750 1Q10 2Q10 3Q10e 4Q10e ____________________ Note: Consolidated gold sales include approximately 47 k ozs in 1Q10, 30 k ozs in 2Q10, 43 k ozs

  18. Slide 18: 2010e Sales and Unit Production Costs by Region

    2010e Sales and Unit Production Costs by Region 2010e Sales by Region North America South America Indonesia Africa 1,305 1,175 1.7 1,070 63(1) 250 20 0.1 Cu Co Mo Au mm lbs mm lbs Cu Cu mm ozs Cu Au mm lbs mm lbs mm lbs mm lbs mm ozs 2010e 2010e 2010e 2010e 2010e 2010e 2010e 2010e (per pound of copp

  19. Slide 19: EBITDA and Cash Flow at Various Copper Prices

    EBITDA and Cash Flow at Various Copper Prices Average EBITDA* ($1,000 Gold & $10 Molybdenum) $10 (US$ billions) $8 $6 $4 $2 $0 Cu $2.50/lb Cu $3.00/lb Cu $3.50/lb Average Operating Cash Flow (excluding Working Capital changes)* ($1,000 Gold & $10 Molybdenum) $8 (US$ billions) $6 $ $4 $2 $0 Cu $2.50/

  20. Slide 20: Sensitivities

    Sensitivities Operating Ch Change EBITDA C h Fl Cash Flow (US$ millions) Copper: -/+ $0.10/lb $375 $260 Molybdenum: -/+ $1.00/lb $55 $45 Gold: -/+ $50/ounce $70 $40 Diesel(1): -/+ 10% $45 $30 Purchased Power(2): -/+ 10% $40 $25 Currencies(3): +/- 10% $120 $70 ____________________ (1) $2.24/gallon ba

  21. Slide 21: Capital Expenditures

    Capital p Expenditures p (1) Excludes current projects under evaluation (US$ billions) Major Projects All Other $3.0 $2.7 $2.5 1.1 11 $2.0 $1.7 $1.7 $1.6 $1.5 06 0.6 0.9 0.9 $1.0 (2) 1.6 ((3)) $0 5 $0.5 10 1.0 0.8(4) 0.8 (5) $0.0 2008 2009 2010e 2011e (1) Capital expenditure estimates will continue

  22. Slide 22: Balance Sheet

    Balance Sheet  Repaid $2.6 bn in Debt Since (US$ billions) YE 2008 (35% Reduction) $20 $17.6 (1)  Significant Liquidity $15  Strong Credit Metrics  No Near-term Maturities Total Debt $10 $7.4 $4.8 $5 $0 At Time of PD Acquisition 12/31/08 6/30/10 in March 2007 Consolidated Cash $3.4 $0.9 $3.0 Net

  23. Slide 23: Capitalization Table

    Capitalization p Table (US$ billions) June 30 30, 2010 Capitalization Amount % Cash and Cash Equivalents $ 3.0 -- Revolver (1) $ 0.0 0.0% Sr. Unsecured Notes Issued in 2007 4.1 9.1% Other Public Debt 0.5 1.1% Other Debt 02 0.2 0 5% 0.5% Total Debt $ 4.8 10.7% Market Value of Existing Equity (2) 40.1

  24. Slide 24: FCX Debt Maturities 6/30/10

    FCX Debt Maturities 6/30/10 / / (US$ millions) $6,000 Total Debt & Cash at 6/30/10 (US$ billions) $5,000 Public Debt $4.6 Other Debt 0.2 Total Debt $4.8 $ $4,000 Consolidated Cash $3.0 $3,597 8.375% $3,000 Senior Notes and PD Senior $2,000 Notes $1,080 $1,000 8.25% Senior $97 $ Notes $5 $5 $1 -0- 0

  25. Slide 25: Recent Agreement to Invest $500 Million in McMoRan Exploration

    Recent Agreement to Invest $500 Million in McMoRan Exploration Exploration*  FCX Tradition of Building Values through Exploration  FCX Attracted to Opportunities to Participate in Early Stage Projects that Have Potential to be World Scale  McMoRan M M R IInvestment t t in i the th Shallow Sh ll W

  26. Slide 26: Financial Policy

    Financial Policy o y  Maintain Strong Balance Sheet & Liquidity Position  Aggressive Cost Management  Invest in Attractive Growth Projects as Economic Conditions Warrant  Opportunistic Debt Repayment  Common Stock Dividend: $1.20/share per annum  Board to Review Financial Policy on an Ongoing

  27. Slide 27: FCX Investment Summary

    FCX Investment Summary y  World World’s s Premier Publicly Traded Copper Company  World World’s s Largest Molybdenum Producer & Significant Gold Producer  Long Long-lived lived Reserves, Geographically Diverse Operations  Flexible Operating p g Structure Can Respond p to Varying y g Market Condi

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