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4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Jan 22, 2014 · 40 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 1
    EXPANDING RESOURCES 4th Quarter 2013 Earnings Conference Call January 22, 2014 www.fcx.com
  2. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 2
    EXPANDING RESOURCES 2013 Year in Review 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…
  3. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 3
    EXPANDING RESOURCES Financial Highlights Sales Data 4Q13 2013 Copper Consolidated Volumes (mm lbs) 1,140 4,086 Average Realization (per lb) 3.31 3.30 Site Production & Delivery Unit Costs (per lb) 1.68 1.88 Unit Net Cash Costs…
  4. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 4
    EXPANDING RESOURCES Copper Market Commentary Strong Chinese Cathode and Concentrate Imports - Supported by Consumer Demand and Infrastructure Investment U.S. Demand Steadily Improving - Consumer Confidence Growing - Automotive…
  5. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 5
    EXPANDING RESOURCES Quarterly Mining Operating Summary 4Q13 Unit Production Costs Cash Unit Costs North South (per pound of copper) America America Indonesia Africa Consolidated Site Production & Delivery 1.89 1.42 1.89 1.43 1.68…
  6. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 6
    EXPANDING RESOURCES Preliminary Reserves at 12/31/13 Consolidated Proven & Probable Reserves Copper Gold Molybdenum 12/31/13 billion lbs million ozs billion lbs Copper Reserves Reserves 12/31/12 (1) 116.5 32.5 3.42 by…
  7. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 7
    EXPANDING RESOURCES Copper Reserves & Mineralized Material as of 12/31/13 billion lbs of copper 12/31/13 226 Mineralized Material (b) by Geographical Region Mineralized 115 Material (b) billion lbs North (contained copper)…
  8. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 8
    EXPANDING RESOURCES Portfolio of World Scale Mines Positive Exploration Results Big Mines Get Bigger Mines with Potential Capacity for 1 billion lbs of copper per annum* Morenci Tenke Grasberg Fungurume Cerro Verde El Abra…
  9. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 9
    EXPANDING RESOURCES 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…
  10. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 10
    EXPANDING RESOURCES Grasberg Update Improving productivity & performance metrics % 1H13 4Q13 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 (/lb) 1.95…
  11. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 11
    EXPANDING RESOURCES Brownfield Development Projects 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…
  12. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 12
    EXPANDING RESOURCES Exploration Targets in Major Mineral Districts 2013 2014e 182 mm 120 mm North South America America 22% 21% 18% 23% Other Areas 13% 24% Africa 22% 18% 28% Indonesia 11% Note: FCXs consolidated…
  13. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 13
    EXPANDING RESOURCES Strong Brent & LLS Crude Oil Pricing Over 90% of FCXs 4Q13 O&G Revenues are from Oil/NGLs* 150 Brent and LLS Pricing per Bbl 125 100 75 50 June 13 3Q13 4Q13 2013** Brent Average (/bbl) 103 110…
  14. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 14
    EXPANDING RESOURCES Oil & Gas Operating Assets 4Q 2013 Cash Operating Margin: 0.9 Billion (56/BOE) California Haynesville Haynesville/Other Long Established Oil 2% Significant Gas Resource Production History (5+ Tcfe) Strong…
  15. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 15
    EXPANDING RESOURCES Quarterly Oil & Gas Operating Summary 4Q 2013 Oil & Gas Margins by Region Haynesville/ Operating Margin Eagle Madden/ California Ford Other GOM Consolidated Realized Revenue per BOE 88.96 75.05 22.41 80.67…
  16. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 16
    EXPANDING RESOURCES Preliminary SEC Oil & Gas Proved Reserves 464 MMBOE as of 12/31/13 By Commodity By Category By Region 6:1 Ratio Haynesville/ Other 10% Oil PUD GOM 75% 34% 37% PDP California 53% 40% PDNP Eagle Gas 13%…
  17. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 17
    EXPANDING RESOURCES Lucius Deepwater GOM Development Project Lucius Topside Completion Activities in-progress Subsea Infrastructure Currently Being Installed Topside Facilities on Schedule to be Delivered and Lifted into Place…
  18. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 18
    EXPANDING RESOURCES Deepwater GOM Update Louisiana Marlin (100% WI) 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…
  19. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 19
    EXPANDING RESOURCES Inboard Lower Tertiary/ Cretaceous Activities Inboard Lower Tertiary/ Cretaceous Area Lomond North Lineham Creek England Davy Jones Blackbeard Area Lafitte Industry Leading Position in Emerging…
  20. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 20
    EXPANDING RESOURCES 2014e Outlook Sales Outlook Unit Cost Copper(1): 4.4 Billion lbs. 1.45/lb(3) of Copper Gold(1): 1.7 Million ozs. 20/BOE Molybdenum: 95 Million lbs. Oil Equivalents(2): 60.7 MMBOE (70% Oil) Operating Cash…
  21. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 21
    EXPANDING RESOURCES Production Profile Copper Sales (billion lbs)* Gold Sales (million ozs)* 3 6 3.0 2 5.7 1.7* 1 1.2 1.4 5.0 0 2013 2014e 2015e 2016e ____________________ 4 4.4 Note: Consolidated gold sales include 123k ozs…
  22. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 22
    EXPANDING RESOURCES 2014e Quarterly Sales Copper Sales* (million lbs) Gold Sales* (thousand ozs) 600 565 1,250 400 485 375 200 325 1,135 1,135 1,160 1,000 0 1,000 1Q14e ____________________ 2Q14e 3Q14e 4Q14e Note:…
  23. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 23
    EXPANDING RESOURCES 2013 and 2014e Sales by Region 2013 Sales by Region North America South America Indonesia Africa 1,422 1,325 93(1) 885 1.1 108(2) 454 25 Cu Mo Cu Au Cu Au Cu Co 000s ozs mm lbs mm lbs mm lbs mm lbs mm ozs…
  24. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 24
    EXPANDING RESOURCES 2013 and 2014e Unit Production Costs by Region 2013 (per pound of copper) North South America America Indonesia Africa Consolidated Cash Unit Costs Site Production & Delivery (1) 2.00 1.53 2.46 1.43 1.88…
  25. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 25
    EXPANDING RESOURCES EBITDA and Cash Flow at Various Copper Prices Average EBITDA (1,200 Gold, 10 Molybdenum & 100 Oil) 20 (US billions) 15 2015e/2016e 10 Average 5 2014e 0 Cu 3.00/lb Cu 3.50/lb Cu 4.00/lb Average…
  26. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 26
    EXPANDING RESOURCES Sensitivities (US millions) 2015e/2016e Operating Change EBITDA Cash Flow Copper: +/- 0.10/lb 525 375 Molybdenum: +/- 1.00/lb 90 70 Gold: +/- 50/ounce 100 60 Oil Sales: +/- 5/bbl (1) 250 200 Oil Sales…
  27. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 27
    EXPANDING RESOURCES Capital Expenditures (1) (US billions) 8 7.1 7.3 6.6 6 5.3 3.5 3.0 Oil & Gas 1.5 (2) 4.0 4 Major Projects 2.3 (3) TOTAL 3.1(3) 2.6 2 MINING 4.1 3.8 1.4 Other 3.8 2.6 Mining 1.5 1.0 1.2 1.2 0…
  28. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 28
    EXPANDING RESOURCES Committed to Balance Sheet Management Strong Track Record Debt Targeted at 12 Billion by 12/31/2013 Balances YE 2016 ( in bns) Anticipate Continuing Current 20.1 Common Stock Dividend Rate: 18.1 1.25/Share…
  29. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 29
    EXPANDING RESOURCES 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…
  30. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 30
    EXPANDING RESOURCES EXPANDING RESOURCES Reference Slides
  31. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 31
    EXPANDING RESOURCES 2014e Oil & Gas Operating Estimates Madden & Operating Cost: 1.95/Mcfe California Haynesville Pricing: NYMEX Operating Cost: 34/bbl Pricing: Brent Based Gulf of Mexico Shelf/ Deepwater Operating Cost:…
  32. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 32
    EXPANDING RESOURCES Oil & Natural Gas Hedging Positions Oil Hedges Indexed to Brent 2014 2015 Puts 75k Bbls/d 30k Bbls/d Unhedged 90 floor 95 floor 70 limit 75 limit 34% 5.74 ADP 6.09 ADP 5k Bbls/d Puts 100 floor 84k…
  33. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 33
    EXPANDING RESOURCES PT-FI Mine Plan PT-FIs Share of Metal Sales, 2014e-2021e* 2014e 2018e PT-FI Share Total: 5.7 billion lbs copper Copper, billion lbs Annual Average: 1.14 billion lbs Gold, million ozs 2014e 2018e PT-FI Share…
  34. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 34
    EXPANDING RESOURCES Grasberg Open Pit 9S 9N N 35
  35. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 35
    EXPANDING RESOURCES Mining Sequence in 2014 Copper Equivalent Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2014 9S 1Q14 2Q14 1Q14 9N Grasberg Plan View 3Q14 B 4Q14 End 2013 2Q14 Legend: LEGEND 0.25…
  36. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 36
    EXPANDING RESOURCES Mining Sequence in 2015 Copper Equivalent Cross Section A B 9S is the Primary Ore Pushback in 2015 9S 9S Grasberg Plan View B 9N End 2014 Legend: LEGEND 0.25 0.50-0.99% 0.99 %CuEq Eq Cu 1.00…
  37. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 37
    EXPANDING RESOURCES Mining Sequence in 2016 Copper Equivalent Cross Section A B 9S is the Primary Ore Pushback in 2016 9S Grasberg Plan View 9S B End 2015 Legend: LEGEND 0.25 0.50-0.99% 0.99 %CuEq Eq Cu 1.00…
  38. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 38
    EXPANDING RESOURCES Mining Sequence in 2017 Copper Equivalent Cross Section A B 9S is the Primary Ore Pushback in 2017 Grasberg Plan View B 9S End 2016 Legend: LEGEND 0.25 0.50-0.99% 0.99 %CuEq Eq Cu 1.00 1.00-1.99%…
  39. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 39
    EXPANDING RESOURCES PT Freeport Indonesia Grasberg Minerals District Life-of-Mine Production Sequencing* Plan View 258mm mt Grasberg Open Pit 0.90% Cu & 0.98 g/t Au 176mm mt Grasberg & DOZ 0.57% Cu & 0.71 g/t Au Kucing Liar…
  40. 4th Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 40
    EXPANDING RESOURCES Site Operating Costs by Category Consolidated Materials 33% 33% Manpower 30% 31% Other 10% 10% 6% 5% Energy Acid 22% 20% 2013 2014e Note: e = estimate. See Cautionary Statement. 41

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