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1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Apr 18, 2013 · 44 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.

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  1. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 1
    EXPANDING RESOURCES 1st Quarter 2013 Earnings Conference Call April 18, 2013 www.fcx.com
  2. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 2
    EXPANDING RESOURCES Additional Information About the Pending Transactions and Where to Find It PXP Transaction In connection with the pending transaction, FCX has filed with the SEC a registration statement on Form S-4/A that includes…
  3. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 3
    EXPANDING RESOURCES Expanding Resources 2012 Annual Report Highlights Established, Long-Lived Reserves Geographically Diverse AR Growing Production/Cash Flow COVER Profile Asset Base to Expand Through Pending Acquisition of…
  4. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 4
    EXPANDING RESOURCES 1Q13 Highlights Strong Operating Performance Globally Productivity Improvements at Grasberg Advanced Brownfield Development Projects - Completed Second Phase Expansion at Tenke - Advancing Morenci Mill…
  5. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 5
    EXPANDING RESOURCES Financial Highlights Sales Data 1Q13 1Q12 Copper Consolidated Volumes (mm lbs) 954 827 Average Realization (per lb) 3.51 3.82 Site Production & Delivery Unit Costs (per lb) 1.94 1.96 Unit Net Cash Costs (per…
  6. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 6
    EXPANDING RESOURCES Quarterly Operating Highlights 1Q13 Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated Cash Unit Costs Site Production & Delivery (1) 1.99 1.62 2.61 1.39 1.94…
  7. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 7
    EXPANDING RESOURCES Copper Market Commentary China Remains Important Demand Driver - Expect Continued Infrastructure Development and Commodity Intensity - Slower Growth on Larger Base - Growing Copper Concentrate Imports/Lower…
  8. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 8
    EXPANDING RESOURCES Highly Attractive Brownfield Copper Development Projects Expansion Projects in Progress North America* Mill Expansions (t/d) Incr. Cu (mm lbs/yr) Capital* Achieve ( blns) Full Rates Morenci Expansion Cerro…
  9. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 9
    EXPANDING RESOURCES Volume Growth with Brownfield Projects in Progress Copper (billion lbs per year) 2015e-2020e v. 2012 5.0+ +15%+ 4.4 SA +20% NA 3.65 Africa Indonesia Indonesia Africa Brownfield Projects South America…
  10. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 10
    EXPANDING RESOURCES Brownfield Development Morenci Mill Expansion Key Project Metrics Ball Mill Expand mill to 115K t/d Increase mining rate to 900K st/d (from 700K st/d) Capital costs: 1.4 billion Incremental Production: 225mm…
  11. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 11
    EXPANDING RESOURCES Brownfield Development Cerro Verde Mill Expansion Key Project Metrics Expand mill from 120K t/d to 360K t/d Increase mining rate from 320K t/d to 850K t/d Capital costs: 4.4 billion Incremental Production:…
  12. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 12
    EXPANDING RESOURCES Brownfield Development Tenke Fungurume Expansion Key Project Metrics Expand mill to 14K t/d Increase mining rate from 60K t/d to 150K t/d Add tankhouse capacity Capital costs: 850 million* Tenke Phase II…
  13. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 13
    EXPANDING RESOURCES Cobalt Chemical Refinery Acquisition Acquisition completed in 1Q13 Enhances market position as worlds largest producer of cobalt Initial purchase consideration of 355mm, including 34mm of Kokkola Refinery…
  14. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 14
    EXPANDING RESOURCES Grasberg Underground Development To date, completed 80 km of development Grasberg open pit in Grasberg BC & 53 km in DMLZ Tracking start-up schedule Grasberg Block Cave Current activities include work on…
  15. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 15
    EXPANDING RESOURCES 2013 Outlook* Sales Outlook: Copper: 4.3 Billion lbs. Gold: 1.4 Million ozs. Molybdenum: 92 Million lbs. Unit Net Cash Cost (1): 1.45/lb in 2013e Operating Cash Flows (2): 5.5 Billion (3.25/lb Copper)…
  16. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 16
    EXPANDING RESOURCES Growing Production Profile Copper Sales (billion lbs) 5.0+ Gold Sales (million ozs) 5 2 1.8 1.8 4.5 4.3 1.4 1.0 4 1 3.65 3 0 2012 2013e 2014e 2015e ____________________ Note: Consolidated gold sales…
  17. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 17
    EXPANDING RESOURCES 2013e Quarterly Payable Metal Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 600 1,225 500 1,250 1,115 365 400 295 1,015 214 1,000 954 200 0 1Q13 2Q13e 3Q13e 4Q13e 750 ____________________…
  18. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 18
    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) 2.03 1.57 2.32 1.41…
  19. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 19
    EXPANDING RESOURCES EBITDA and Cash Flow at Various Copper Prices Average EBITDA* (1,500 Gold & 12 Molybdenum) 18 (US billions) 15 12 50% 9 2015e/2016e Increase Average 6 2013e/2014e 3 Average 0 Cu 3.00/lb Cu 3.50/lb Cu…
  20. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 20
    EXPANDING RESOURCES Sensitivities Operating Change EBITDA Cash Flow (US millions) Copper: -/+ 0.10/lb 405 275 Molybdenum: -/+ 1.00/lb 80 65 Gold: -/+ 50/ounce 75 45 Diesel(1): -/+ 10% 100 75 Purchased Power(2): -/+ 10% 50…
  21. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 21
    EXPANDING RESOURCES Exploration Targets in Major Mineral Districts 235 million in 2013e North America South 20% America 23% Other Areas 11% Africa Indonesia 20% 26% Note: FCXs consolidated share; e = estimate. See…
  22. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 22
    EXPANDING RESOURCES Capital Expenditures (1) (2) Major Mining Projects Other Mining (US billions) 5 4.4 4.4 4 1.4 1.8 3.2 3 1.0 2 3.0 2.6 1 2.2 0 2013e 2014e 2015e (1) Estimates include projects in progress;…
  23. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 23
    EXPANDING RESOURCES Pending Oil & Gas Transactions Completed Low Cost Debt Financing in 1Q13 Expect to Close Transactions in 2Q13 High Quality U.S. Focused Assets - Strong Margins & Hedge Protected Cash Flows - Attractive…
  24. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 24
    EXPANDING RESOURCES High Quality U.S. Oil & Gas Portfolio (1) Proved & Probable Reserves Natural Gas 688 MMBOE (81% Oil/Liquids) Oil Other 3% Haynesville 5% Madden GOM Shelf 8% California California 41% Deepwater GOM…
  25. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 25
    EXPANDING RESOURCES FCX Pro forma (1) EBITDA, Cash Flows & Capital Expenditures EBITDA Operating Cash Flow* CAPEX 25 20 45% 15 Increase 2015/ billions 2016 45% Avg. 2015/ Increase 10 2016 Avg. O&G 2013/ 40%…
  26. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 26
    EXPANDING RESOURCES Significant Debt Reduction Year-End Net Debt at Varying Copper Prices (US billions) 20 16.0 15 10 7.7 5 2.0 0 (3.5) -5 12/31/12 13-16 Avg. Copper Price 3.00 3.50 4.00 Pro Forma (1) Net…
  27. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 27
    EXPANDING RESOURCES Financial Policy Maintain Strong Balance Sheet & Liquidity Position Reduce Debt Incurred for Pending Acquisitions Using Projected Substantial Cash Flows Generated from Combined Business Invest in Projects…
  28. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 28
    EXPANDING RESOURCES Long Track Record of Generating Value for Shareholders Exploration & History of Prudent Capital Solid Financial Allocation & Opportunistic Development Performance Acquisitions Grasberg Discovery & Financial…
  29. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 29
    EXPANDING RESOURCES Combined Company Highlights Creates A Premier U.S. Based Natural Resources Producer Worlds Largest Publicly Traded Copper Producer Significant Producer of Oil, Gold & Molybdenum Significant Long-term…
  30. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 30
    EXPANDING RESOURCES EXPANDING RESOURCES Reference Slides
  31. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 31
    EXPANDING RESOURCES Update on Grasberg Unusually low metal production in 2012 compared with historical levels Lower grades in Grasberg open pit DOZ ramp-up: panel repairs more extensive expect 80K t/d by year- end 2013; current…
  32. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 32
    EXPANDING RESOURCES PT-FI Mine Plan PT-FIs Share of Metal Sales, 2013e-2021e 2013e 2017e PT-FI Share Total: 5.9 billion lbs copper Copper, billion lbs Annual Average: 1.18 billion lbs Gold, million ozs 2013e 2017e PT-FI Share…
  33. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 33
    EXPANDING RESOURCES Grasberg Open Pit 9N 8E 9S N 34
  34. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 34
    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…
  35. 1st 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 2Q13 2Q13 End 2012 Grasberg Plan View B Legend: LEGEND 0.25 0.50-0.99%…
  36. 1st 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 2Q13 3Q13 End 3Q13 2012 Grasberg Plan View B Legend: LEGEND 0.25…
  37. 1st 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 2Q13 3Q13 End 3Q13 2012 Grasberg Plan View 4Q13 4Q13 B Legend:…
  38. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 38
    EXPANDING RESOURCES Mining Sequence in 2014 Copper Equivalent Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2014 9S End 2013 9N Grasberg Plan View B 2014 Legend: LEGEND 0.25 0.50-0.99% 0.99 %CuEq Eq…
  39. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 39
    EXPANDING RESOURCES Mining Sequence in 2015 Copper Equivalent Cross Section A B 9S is the Primary Ore Pushback in 2015 9S End Grasberg Plan View 2014 2015 B Legend: LEGEND 0.25 0.50-0.99% 0.99 %CuEq Eq Cu 1.00-1.99%…
  40. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 40
    EXPANDING RESOURCES Mining Sequence in 2016 Copper Equivalent Cross Section A B 9S is the Primary Ore Pushback in 2016 End 2015 Grasberg Plan View 9S B Legend: LEGEND 0.25 0.50-0.99% 0.99 %CuEq Eq Cu 2016…
  41. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 41
    EXPANDING RESOURCES Enhanced Geographic & Commodity Diversification 2013e EBITDA (1) Existing Pro forma (2) South North America North America America 29% 48% South 29% America 21% Indonesia 11% 31% 8% Indonesia Africa 23%…
  42. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 42
    EXPANDING RESOURCES 2013e Oil & Gas Operating Estimates Rocky Mtns. & Operating Cost: 1.65/Mcfe California Haynesville Pricing: NYMEX Operating Cost: 27/bbl Pricing: Brent Based Gulf of Mexico Shelf/ Deepwater Operating Cost:…
  43. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 43
    EXPANDING RESOURCES Oil & Natural Gas Hedging Positions Oil Indexed to Brent 2013 2014 2015 Puts Collars 25k bbls/d 5k bbls/d 75k bbls/d 30k bbls/d Swaps 90 floor 95 floor 100 floor 90 floor 40k bbls/d 80 limit 70 limit 70…
  44. 1st Quarter 2013 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 44
    EXPANDING RESOURCES Energy A Significant Component of Mining Cost Site Operating Costs by Category Components of Energy (Consolidated) (Total of 1.6 Billion) Purchased Materials Power Manpower 32% 6,800 GWh 29% Diesel 35%…

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