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Basic Materials Conference – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Feb 22, 2007 · 31 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. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 1
    FCX Cu Freeport- McMoRan Copper Au Gold MORGAN STANLEY Basic Materials Conference Crowne Plaza Times Square Square New New York York City Richard C. Adkerson President & Chief Executive Officer February 22, 2007…
  2. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 2
    Important Information for Investors and Stockholders FCX FCX and and Phelps Phelps Dodge Dodge filed filed aa joint joint proxy proxy statement/prospectus statement/prospectus with with thethe Securities Securities and and…
  3. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 3
    FCXs Grasberg World Class Copper and Gold Mine Long Lived Payable Reserves - Copper 39 Billion lbs - Gold 41 Million ozs High Volume/ Low Cost Production Future Growth Potential from Exploration Continuous Operations Since…
  4. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 4
    Grasberg 5 5
  5. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 5
    2006 Financial Highlights Operating Operating Data Data 4Q06 4Q06 2006 2006 Copper Volumes (mm lbs) 433 1,201 Realization (per lb) 2.88 3.13 Gold Volumes (000s ozs) 508 1,736 (1) Realization (per oz) 628 606 Financial…
  6. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 6
    FCX Operating Cash Flows and Capital Expenditures ( in millions, except realized prices) 2,000 Operating Cash Flows Capital Expenditures 1,750 1,500 1,250 1,000 750 500 250 0 1996 1997 1998 1999 2000 2001 2002…
  7. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 7
    Significant Debt Reduction ( in billions) FCX Ending Net Debt (Cash) (1) 3.0 2.9 2.5 2.0 1.5 1.0 0.5 (0.2) 0.0 2000 2006 (0.5) (1) Debt and commodity preferreds net of cash and restricted investments. Includes 253 million of…
  8. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 8
    FCX FCX Cu Freeport- Freeport- McMoRan McMoRan Copper Au Transforming FCX Gold Acquisition of Phelps Dodge Creating the Worlds Largest Publicly Traded Copper Company FREEPORT-MCMORAN COPPER & GOLD INC. www.fcx.com
  9. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 9
    Transaction Highlights Creates Worlds Premier Publicly Traded Copper Company Leading North American-based Metals and Mining Investment World Class, Long-lived, Geographically Diverse Operations Significant Exploration Potential…
  10. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 10
    Status Report on Pending Acquisition of Phelps Dodge Announced Transaction on November 19, 2006 Positive Market Response - Size, Scale, Diversity Transaction Subject to Regulatory and FCX/PD Shareholder Approval - U.S.…
  11. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 11
    FCXs Grasberg The Right Time 12 12
  12. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 12
    Strong Copper Fundamentals 2,000 400 1,750 350 Cents Per Pound 000s Metric Tons 1,500 300 1,250 LME Copper Price 250 1,000 200 750 150 500 100 250 50 LME & COMEX Exchange Stocks* 0 0 Jan-99 Jul-99 Jan-00 Jul-00…
  13. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 13
    Recent Copper Market Drivers Reasons For Recent Price Decline Positive Outlook Destocking Led to a Decrease Apparent Demand Remains Strong; in Chinese Imports of Refined Restocking Expected to Support Prices Copper in 2H06…
  14. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 14
    FCXs Grasberg The Right Assets Grasberg, Grasberg, Indonesia Indonesia Morenci, Morenci, North North America America Cerro Cerro Verde, Verde, Peru Peru Sierrita, Sierrita, North North America America 15 15
  15. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 15
    Geographically Diverse, Long-Lived Asset Base Major Mine Operations & Development Projects All major assets majority-controlled and operated North North America America11 Grasberg (90.64%) Copper Reserves Reserves Cu 25.2…
  16. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 16
    Pro Forma Reserves and Production 2006E Production by Geography Pro forma Indonesia 35% North America Net 42% Reserves 12/31/05 Consolidated interest Copper (billion lbs) 87.6 75.0 Molybdenum (billion lbs) 2.0 1.9 Gold…
  17. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 17
    Enhanced Diversification 2006 Mining Revenue by Commodity FCX Phelps Dodge Pro Forma FCX Gold Gold Molybdenum 10% 23% 22% Copper 77% + Copper 78% = Molybdenum 12% Copper 78% 2006 Mining Revenue by Geography FCX…
  18. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 18
    Proven Technical Expertise 2006 Copper Production by Method FCX Phelps Dodge Pro Forma FCX Concentrate Concentrate Concentrate 100% 33% 56% + = SX/EW SX/EW 67% 44% Smelting/Refining (1) Pro forma FCX will be a world leader…
  19. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 19
    Additional Development Upside Henderson/Climax (100%) Henderson production capacity increased Morenci (85%) to 40 MM lbs Mo/year from 32MM lbs Mo Grasberg (90.64%) Mill restart and DOZ expansions (50K t/d & 80K t/d) Possible 2009…
  20. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 20
    Significant Exploration Potential Papua, Indonesia Papua, Indonesia Pacific Rights to 2.2 Million Acres Ocean Highly Prospective Exploration Areas Provide Opportunities to Continue to Add to Our Long- Grasberg lived Reserves…
  21. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 21
    Strong Management Track Record Leader in Safety and Environmental Excellence World Class Open Pit and Underground Mining Expertise Established Exploration and Development Expertise Proven Project Management Expertise Global…
  22. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 22
    FCXs Grasberg The Right Company 23 23
  23. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 23
    Premier North American Mining Company Enterprise Value (US billions) 40 37.0 35.9 35 30 28.6 25.0 25 21.9 20.2 20 15 13.8 13.6 10 5 0 Alcoa Pro Forma Barrick Alcan Newmont Goldcorp Cameco Teck Cominco FCX…
  24. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 24
    Worlds Leading Public Copper Company Top 10 Copper Producers (2006E) (1) (000 t) 2,000 Pro forma FCX is poised to take advantage of favorable industry fundamentals 1,800 1,600 1,400 1,200 1,000 800 600 400 200…
  25. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 25
    Combination of FCX and Phelps Dodge 2006 Revenue (US billions) 2006 EBITDA (US billions) 20.0 10.0 17.7 7.8 15.0 11.9 4.7 10.0 5.0 5.8 3.1 5.0 0.0 0.0 FCX Phelps Dodge Combined FCX FCX Phelps Dodge Combined FCX 2006…
  26. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 26
    Pro Forma FCX Growing Sales Profile Copper Sales (billion lbs) Gold Sales (million ozs) 5 3 4.6 4.6 4.5 2.2 4.1 2.0 1.9 1.9 1.9 2 4 3.6 1 3 2006 2007E 2008E 2009E 2010E Pro Forma 2 Molybdenum Sales (million lbs) 100 85…
  27. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 27
    EBITDA and Cash Flow at Various Copper Prices Average Annual EBITDA 2007-2009 (500 Gold & 15 Molybdenum) 12 (US billions) 10 8 6 4 2 0 Cu 1.50/lb Cu 2.00/lb Cu 2.50/lb Cu 3.00/lb Average Annual Operating Cash Flow…
  28. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 28
    Sensitivity to Commodity Prices Annual Annual Financial Financial Impact Impact Change Change Net Net Income Income EPS EPS (in millions) Copper: -/+ 0.20/lb 500 1.50 Molybdenum: -/+ 2.00/lb 80 0.24 Gold: -/+ 50/ounce 50…
  29. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 29
    Significant Debt Reduction Year-End Net Debt at Varying Copper Prices (US billions) 16 14.9 14 12.7 12 10 9.2 8 5.8 6 4 2 0 2007-2009 Average Copper Price 2.00 2.50 3.00 Net Debt/2007-2009 Average EBITDA 2.2x 1.2x 0.6x…
  30. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 30
    Financial Policy FCX is Committed to Maintaining a Strong Financial Position Investment in Future Growth Opportunities With High Rates of Return Aggressive Debt Reduction Using the Substantial Cash Flows Generated From the Combined…
  31. Basic Materials Conference – Freeport-Mcmoran Inc. – slide 31
    Transaction Highlights Creates Worlds Premier Publicly Traded Copper Company Leading North American-based Metals and Mining Investment World Class, Long-lived, Geographically Diverse Operations Significant Exploration Potential…

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