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2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Jul 23, 2013 · 42 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. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 1
    EXPANDING RESOURCES 2nd Quarter 2013 Earnings Conference Call July 23, 2013 www.fcx.com
  2. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 2
    EXPANDING RESOURCES 2Q13 Highlights Completed Oil & Gas Acquisitions - Results Reflect One Month Beginning in June - Strong Margins and Cash Flows Strong Operating Performance in Americas and Africa Copper and Gold Volumes…
  3. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 3
    EXPANDING RESOURCES Annual Shareholder Meeting Annual Meeting Held on July 16, 2013: Election of Our 15 Director Nominees Ratification of Appointment of Ernst & Young as Independent Auditor Advisory Vote on Say on Pay Did Not…
  4. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 4
    EXPANDING RESOURCES Recent Performance Performance Since 12/4/2012 12/31/2012 Commodities Copper (13%) (12%) Gold (22%) (20%) Molybdenum (19%) (21%) Nickel (20%) (18%) Aluminum (14%) (12%) Iron Ore +12% (10%) Met Coal…
  5. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 5
    EXPANDING RESOURCES World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves 2013e Copper Production Million metric tons Thousand metric tons 0 5 10 15 20 25 30 0 200 400 600 800 1000 1200 1979 Escondida -…
  6. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 6
    EXPANDING RESOURCES Office of the Chairman James R. Moffett Richard C. Adkerson James C. Flores Chairman of the Board Vice Chairman, Vice Chairman, President and CEO President and CEO of Oil & Gas Business 7
  7. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 7
    EXPANDING RESOURCES Financial Highlights Sales Data 2Q13 2Q12 Copper Consolidated Volumes (mm lbs) 951 927 Average Realization (per lb) 3.17 3.53 Site Production & Delivery Unit Costs (per lb) 2.11 2.01 Unit Net Cash Costs (per…
  8. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 8
    EXPANDING RESOURCES Quarterly Mining Operating Summary 2Q13 Unit Production Costs (per pound of copper) North South America America Indonesia (1) Africa Consolidated Cash Unit Costs Site Production & Delivery 2.09 1.62 3.55 1.47…
  9. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 9
    EXPANDING RESOURCES Quarterly Oil & Gas Operating Summary June 2013 Oil & Gas Margins by Region Haynesville/ Eagle Madden/ California Ford Other GOM Consolidated Operating Margin Realized Revenue per BOE 94.48 76.94 23.77 78.07…
  10. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 10
    EXPANDING RESOURCES Copper Market Commentary China Remains Important Demand Driver - Slower Growth but on Larger Base Continued Improvement in U.S. Demand - Automotive Continues to Show Strength - Housing Sector Recovery…
  11. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 11
    EXPANDING RESOURCES Cost Reductions/Deferrals 2013e-2014e - 1.9 billion Capital Cost Reductions/Deferrals 1.4 billion Key Reductions/Deferrals El Abra Sulfolix leach pad to 2019 South America Miami smelter expansion (timing)…
  12. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 12
    EXPANDING RESOURCES Asset Sales Initiated Plans to Divest Conventional Oil and Gas GOM Shelf Properties Expected in 4Q 2013 Broad Set of Assets Provides Many Alternatives for Actions to Further Enhance Flexibility and Value…
  13. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 13
    EXPANDING RESOURCES Brownfield Development Projects Tenke Fungurume Cerro Verde Morenci Phase II Expansion Mill Expansion Mill Expansion 0.9 billion* 4.4 billion 1.6 billion Completed on time & within budget Commenced construction…
  14. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 14
    Update on EXPANDING RESOURCES PT Freeport Indonesia May 14th Tunnel collapse in Training QMS Training Center Grasberg (accident location) Facility open pit 28 Fatalities & 10 Injuries Sudden ground failure in long-standing…
  15. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 15
    EXPANDING RESOURCES Update on Grasberg Unusually low metal production in 2012 & 2013 compared with historical levels Low ore grades Suspension of operations in 2Q13 Sequencing/timing of access of higher grade ore in Open Pit…
  16. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 16
    EXPANDING RESOURCES Exploration Targets in Major Mineral Districts 2013e 2014e 185 mm 130 mm North South 18% America 19% America 20% 23% Other 20% Areas 13% 24% Africa 16% 28% Indonesia 19% Note: FCXs consolidated…
  17. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 17
    EXPANDING RESOURCES Oil & Gas Development Activities California Eagle Ford Deepwater Haynesville Long Established Oil Large Oil/Liquids Lucius Development Significant Gas Production History Rich Resource On Time & Budget -…
  18. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 18
    EXPANDING RESOURCES Oil & Gas Exploration Activities Lomond North Phobos Phobos Deepwater Deepwater GOM GOM Louisiana Discovery Announced in April 2013 Lineham Creek England Reviewing Data to Determine Future Plans Davy…
  19. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 19
    EXPANDING RESOURCES 2013 Outlook Sales Outlook: Copper: 4.1 Billion lbs. Gold: 1.1 Million ozs. Molybdenum: 92 Million lbs. Oil Equivalents(1): 35 MMBOE (65% Oil) Unit Cost (2): 1.58/lb of Copper in 2013e 19/BOE Operating…
  20. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 20
    EXPANDING RESOURCES Production Profile Gold Sales (million ozs) Copper Sales (billion lbs) 2 1.8 1.7 5.0+ 1.1 5 4.5 1 4.1 4 0 2013e ____________________ 2014e 2015e Note: Consolidated gold sales include approximately…
  21. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 21
    EXPANDING RESOURCES 2013e Operating Estimates 2013e Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated (3) Cash Unit Costs (1) Site Production & Delivery (2) 2.00 1.53 2.76 1.43…
  22. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 22
    EXPANDING RESOURCES EBITDA and Cash Flow at Various Copper Prices Average EBITDA (1,300 Gold, 10 Molybdenum & 100 Oil) 24 (US billions) 18 40% 2016e Increase 12 6 2014e/2015e Average 0 Cu 3.00/lb Cu 3.50/lb Cu…
  23. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 23
    EXPANDING RESOURCES Sensitivities (US millions) 2014e/2015e Operating Change EBITDA Cash Flow Copper: -/+ 0.10/lb 470 330 Molybdenum: -/+ 1.00/lb 80 65 Gold: -/+ 50/ounce 75 45 Oil Sales:(1) + 10/bbl 405 340 - 10/bbl (2)…
  24. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 24
    EXPANDING RESOURCES Capital Expenditures (1) (US billions) 8 6.5 6.7 6 5.5 Oil & Gas 2.7 2.9 1.5 (2) 4 Major Projects 2.3 (3) TOTAL 2.7 2.7 2 MINING 3.8 3.8 Other 4.0 (2) Mining 1.7 1.1 1.1 0 2013e 2014e 2015e (1)…
  25. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 25
    EXPANDING RESOURCES Committed to Balance Sheet Management Strong Track Record Reduce Debt to 12 Billion 6/30/2013 Balances within 3 year period ( in bns) Strong Cash Flows and 20.5 Capital Discipline 17.2 Large Resource Base…
  26. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 26
    EXPANDING RESOURCES Financial Policy Maintain Strong Balance Sheet & Liquidity Position Achieve Targeted Debt Reductions Over Next 3 Years Invest in Projects with Strong Financial Returns/Capital Discipline Anticipate…
  27. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 27
    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…
  28. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 28
    EXPANDING RESOURCES EXPANDING RESOURCES Reference Slides
  29. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 29
    EXPANDING RESOURCES 2013e Quarterly Payable Metal Sales Gold Sales (thousand ozs) 400 400 330 Copper Sales (million lbs) 300 214 173 1,250 200 1,130 100 1,060 0 1,000 954 951 1Q13 ____________________ 2Q13 3Q13e 4Q13e…
  30. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 30
    EXPANDING RESOURCES 2nd Half 2013e Oil & Gas Operating Estimates Madden & Operating Cost: 1.35/Mcfe California Haynesville Pricing: NYMEX Operating Cost: 30/bbl Pricing: Brent Based Gulf of Mexico Shelf/ Deepwater Operating…
  31. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 31
    EXPANDING RESOURCES Oil & Natural Gas Hedging Positions Oil Indexed to Brent 2H13 2014 2015 Puts Collars 25k bbls/d 5k bbls/d Unhedged Swaps 75k bbls/d 30k bbls/d 100 floor 90 floor 90 floor 95 floor 28% 40k bbls/d 80 limit…
  32. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 32
    EXPANDING RESOURCES Capitalization Table (US billions) June 30, 2013 Capitalization Amount % Rates Cash and Cash Equivalents (1) 3.3 -- FCX Revolver 0.0 0% 0.0% FCX Senior Notes & Term Loan 13.5 27% 3.0% FMC Senior Notes 0.4 1%…
  33. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 33
    EXPANDING RESOURCES PT-FI Mine Plan PT-FIs Share of Metal Sales, 2013e-2021e 2013e 2017e PT-FI Share Total: 5.7 billion lbs copper Copper, billion lbs Annual Average: 1.14 billion lbs Gold, million ozs 2013e 2017e PT-FI Share…
  34. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 34
    EXPANDING RESOURCES Grasberg Open Pit 9N 8E 9S N 35
  35. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 35
    EXPANDING RESOURCES Mining Sequence in 2013 Copper Equivalent Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2013 9S 1Q13 9N 1Q13 End 2012 Grasberg Plan View B Legend: LEGEND 0.25 0.50-0.99% 0.99…
  36. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 36
    EXPANDING RESOURCES Mining Sequence in 2013 Copper Equivalent Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2013 9S 1Q13 9N 1Q13 2Q13 End 2Q13 2012 Grasberg Plan View B Legend: LEGEND 0.25 0.50-0.99%…
  37. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 37
    EXPANDING RESOURCES Mining Sequence in 2013 Copper Equivalent Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2013 9S 1Q13 9N 1Q13 2Q13 3Q13 3Q13 End 2Q13 2012 Grasberg Plan View B Legend: LEGEND 0.25…
  38. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 38
    EXPANDING RESOURCES Mining Sequence in 2013 Copper Equivalent Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2013 9S 1Q13 9N 1Q13 2Q13 3Q13 3Q13 End 2Q13 2012 Grasberg Plan View 4Q13 4Q13 B Legend:…
  39. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 39
    EXPANDING RESOURCES Mining Sequence in 2014 Copper Equivalent Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2014 9S 9N End 2013 Grasberg Plan View B Legend: LEGEND 0.25 0.50-0.99% 0.99 %CuEq Eq Cu…
  40. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 40
    EXPANDING RESOURCES Mining Sequence in 2015 Copper Equivalent Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2015 9S 9S End 9N 2014 Grasberg Plan View B Legend: LEGEND 0.25 0.50-0.99% 0.99 %CuEq Eq Cu…
  41. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 41
    EXPANDING RESOURCES Mining Sequence in 2016 Copper Equivalent Cross Section A B 9S is the Primary Ore Pushback in 2016 End 2015 9S Grasberg Plan View B Legend: LEGEND 0.25 0.50-0.99% 1.00 0.99 %CuEq 1.00-1.99% Eq…
  42. 2nd Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 42
    EXPANDING RESOURCES PT Freeport Indonesia Life-of-Mine Production Sequencing 258mm mt Grasberg Open Pit 0.90% Cu & 0.98 g/t Au 176mm mt DOZ 0.57% Cu & 0.71 g/t Au 54mm mt Big Gossan 2.26% Cu & 0.97 g/t Au 517mm mt Deep MLZ…

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