Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q3 2003 Earnings Presentation
24 slides from Freeport-mcmoran's earnings presentation, Oct 16, 2003
Slide 1: Third Quarter 2003 Earnings Conference Call
Freeport-McMoRan Copper & Gold Inc. www.fcx.com. 34 Quarter 2003 Earnings Conference Call James R. Moffett Ghairman of the Board and Ghief Executive Officer Richard C. Adkerson President and Ghief Financial Officer October 16, 2003 MIE TOOT
Slide 2: Freeport-McMoRan Copper & Gold Inc.
Freeport-McMoRan Copper. & Gold Inc. www.fcx.com:
Slide 3: Grasberg Open Pit Material Slippage Overview
Grasberg Open Pit Material Slippage Overview October 2003
Slide 4: Slope Instability in Open Pits
Slope Instability in Open Pits e In general, slope failures are not uncommon in open pits. eA open pit slope failures over the last 15 years range from 0.3 to 7.0 million tonnes with a run-out between 30 and over 200 meters. review of various io ON ARO Slope Instability in Open Pits Tnillion tonnes
Slide 5: Grasberg Open Pit Walls
Grasberg Open Pit Walls Grasberg pit inter-ramp angles range from 38° to 48°, depending on rock-type and geologic conditions, consistent with typical open pit designs. The overall slope angle of the Grasberg pit is about 30°. As the Grasberg is mined and the pit widens, the pit walls will be in more
Slide 6: Plan View
1 kilometer Plan View Ja, aWO}y T ee Depth: 250 to 700 meters y Width: About 2.5 km
Slide 7: Plan View: Ore Phases
1 kilometer Plan View “310U0} T Ore Phases
Slide 8: Grasberg Open Pit Plan View
Grasberg Open Pit Plan View 1 kilometer Overburden &Low Grade Phases
Slide 9: Plan View
1 kilometer Plan View Ja, aWO}y T
Slide 10: Plan View: Run-out
1 kilometer Plan View Ja, aWO}y T Run-out
Slide 11: Plan View: Slide cut off access
Plan View Slide cut off access to 5S & 6S
Slide 12: Grasberg Open Pit Slippage and Run-out Area
Grasberg Open Pit 1 kilometer Se Plan View ga Ja, aWO}y T Slippage/run-out | area is less than 5%6 of total pit , Run-out _- 115,000 sq. meters & page area ,000 sa. meters
Slide 13: Grasberg Open Pit View Looking South
Grasberg Open Pit View Looking South October 9, 2003
Slide 14: Summary Facts
Summary Facts The slippage and run-out area represented less than 5% of the total surface area of the open pit. The sliding material is estimated total at 2.5 million tonnes with an approximate 250 meter run-out distance. The average mining rate in 3Q03 was over 650K t/d (including 170K t/d in ore).
Slide 15: Near-Term Plan
Near-Term Plan e Ensure safety of ongoing recovery efforts by stabilizing the upper section in stages from top to bottom. ¢ Production Plan > Continue mining on overburden phases not impacted by the slide. >» DOZ continues to produce at rates above 40K t/d. > Accelerate planned mill maintenance from
Slide 16: Near-Term Plan: Top to Bottom
‘a rg Open Near-Term Plan o/ fom) top to Bottom ft a € ~ kd)
Slide 17: Continued High Volume, Low Cost Operating Performance
Continued High Volume, Low Cost Operating Performance Operating Cash Flows of $221 Million in 3Q, $505 Million Year-To-Date Significant Balance Sheet Improvements; Year-To-Date Reduction in Debt, Including Change in Cash and | Restricted) Investments Totals $643 Million Cash Position of $529 Million
Slide 18: Financial Summary ($ in millions)
($ in millions, except pricing, per share and cash cost amounts) 34 Quarter 9 Months 2003 2002 2003 2002 Average Pricing 81¢/$388 67¢/$314 77¢/$364 70¢/$307 Revenues $669 $539 $1,803 $1,339 Operating Income $302 $206 $734 $416 Net Income $560) $62 $162 $63 Earnings Per Share $0.33 $0.43 Average Unit
Slide 19: Retired $76 Million of Senior Notes
> Retired $76 Million of Senior Notes, Bringing Total to $310 Million Since Beginning of Year > $311 Million Early Conversion of 81° Convertible Senior Notes Due 2006 « Used Solely Restricted Cash + Annual Eamings and Operating Cash Flow Improvement of Approximately $25 Million > $78 Million Repurch
Slide 20: FCX Debt Maturities — 9/30/03
FCX Debt Maturities — 9/30/03 Model -- Excluding 814% Convertible Notes i (in milons) 1,200 Total Debt excluding Preferreds at 9/30/03" $1,796 Commodity Preferreds ($375 gold) 194 Hrotal = 7,990 Less Cash (529), au Total After Cash* $1,461 assumes conversion 0f 8165 convertible senior pores Sith Sax
Slide 21: Positive Outlook
Positive Outlook Declining Debt and Increasing Shareholder Returns > Long-lived Reserves + 50 Million Payable Ounces of Gold, 40 Billion Payable Pounds of Copper + Fully Developed for Ten-year Remaining Life of Grasberg Pit + Large, Low-cost Undeveloped Underground Reserves > Positive Metals Markets
Slide 22: Strong Cash Flow Generator
res | Strong Cash Flow Generator, | ($n mlions) Copper Sensitivities Gold Sensitivities $000 with $350 Gold with 80¢ Copper $600 $400 $200 $0 $0.75 $0.85 $1.05, $300) $375) #425 $350 BOG NOTE: Annual operating cash Slows are averayes (years 20042 ~ 20a), Vew-to-year actual recs DAY V3) 2s depending
Slide 23: Commodity Price Sensitivities
Commodnt Price Sen: FCX Euroiiae & Cash Hog An “Gold” pon Gold +10¢/Ib Copper $70 (B mpact Per Share (¢/share) (Impact (¢ millions) Note: Assumes average anmial sales of 1.4 bilion lbs, copper and 2.3 million ors, 20K) Be
Slide 24: Board Increased Annual Dividend
> Board Increased Annual Dividend From $0.36/ Share to $0.80/ Share = Quarterly Dividend of $0.20 to be Paid February 2, 2004 = Equivalent to Approximately $136 Million per Annum Based on Current Shares Outstanding » Less Than 50% of Average Annual Free Cash Flow at Current Prices > Board Authorizat
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