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Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Apr 4, 2007 · 33 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. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 1
    FCX FCX Cu Freeport- Freeport- McMoRan McMoRan Copper Au Gold Prudential Equity Group, LLC Metals & Mining Conference Richard C. Adkerson Chief Executive Officer April 4, 2007 FREEPORT-MCMORAN COPPER & GOLD INC. www.fcx.com
  2. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 2
    Transaction Overview 3
  3. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 3
    Phelps Dodge Acquisition -- Transaction Highlights Created Worlds Premier Publicly Traded Copper Company Leading North American-based Metals and Mining Investment World Class, Long-lived, Geographically Diverse Operations…
  4. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 4
    Phelps Dodge Acquisition Completed March 19, 2007 Largest Acquisition in Metals and Mining History Highly Successful Debt and Equity Transactions Large & Liquid Securities: 30 Billion Equity Market Capitalization 12…
  5. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 5
    Business Overview 6
  6. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 6
    Worlds Leading Public Copper Company Top 10 Copper Producers (2007E) (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 0…
  7. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 7
    Premier North American Mining Company Enterprise Value (US billions) 40 38.8 37.2 35 30 26.1 25.0 25 20.9 20 18.2 16.3 15 11.9 10 5 0 Pro Forma Alcoa Barrick Alcan Newmont Goldcorp Cameco Teck Cominco FCX…
  8. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 8
    Combination of FCX and Phelps Dodge 2006 Revenue (US billions) 2006 Adjusted 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…
  9. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 9
    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…
  10. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 10
    Strong Management Track Record Leader in Safety and Environmental Excellence World Class Open Pit and Underground Mining Expertise Global Leader in Mining and Processing Technologies Established Exploration and Development…
  11. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 11
    FCXs Grasberg The Right Time 12 12
  12. Prudential Equity Group LLC Metals & Mining 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. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 13
    Positive Long-Term Fundamentals The Combination of Strong Fundamentals Has Created Extremely Attractive Market Conditions for the Copper Industry Supply is Unlikely to Increase Meaningfully Absence of Mega-development Projects in…
  14. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 14
    World Class Discoveries Are Extremely Rare Recoverable Copper Reserves 2007E Copper Production Million metric tons 0 5 10 15 20 25 30 Thousands metric tons 0 200 400 600 800 1,0 0 0 1,2 0 0 1,4 0 0 1,6 0 0 Grasberg Complex - 1988…
  15. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 15
    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 16 16
  16. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 16
    Geographically Diverse, Long-Lived Asset Base 2006 Copper Production by Geography Pro forma Indonesia 35% North America Net 42% Reserves 12/31/06 Consolidated interest Copper (billion lbs) 93.6 77.2 Molybdenum (billion lbs)…
  17. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 17
    North America 10 Mines in North America Major Projects North America(1) Morenci (85%) Reserves Mill Restart and Concentrate Leach Project 210 Million Aggregate Capital Cost Cu 24.8 billion lbs In Operation Mid-2007 Mo 1.7…
  18. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 18
    South America Peru Peru Cerro Verde (53.6%) (1) Major Projects Reserves Major Project With Conventional Concentrator Cu 8.3 billion lbs Mo 0.1 billion lbs Aggregate 850MM Project Completed in 4Q06 Cu Production 380 million lbs…
  19. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 19
    Indonesia Grasberg Grasberg (90.64%) (1) Development Projects Reserves DOZ Expansions (50K t/d & 80K t/d) Cu 35.2 billion lbs Au 37.2 million ozs Big Gossan Development Ag 116 million ozs Common Infrastructure Project…
  20. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 20
    Africa Democratic Republic of Congo Development Projects Tenke Fungurume (1) (57.75%) Feasibility Study Approved 4Q06 Reserves Oxide Leach Operation Cu 2.6 billion lbs Co 0.3 billion lbs 650MM Capital Cost Aggregate Production…
  21. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 21
    Significant Exploration Potential Papua, Indonesia Papua, Indonesia Rights to 2.2 Million Acres Pacific Ocean Highly Prospective Exploration Areas Provide Opportunities to Continue to Add to our Long- Grasberg lived Reserves…
  22. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 22
    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…
  23. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 23
    The Right Company 24 24
  24. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 24
    Pro Forma FCX Growing Sales Profile Copper Sales (billion lbs) Gold Sales (million ozs) 5 3 4.7 2.2 4.4 1.9 1.9 2 1.6 4.0 4 3.6 1 0 3 2006 2007E 2008E 2009E Pro Forma 2 Molybdenum Sales (million lbs) 100 77 80 75 80…
  25. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 25
    Adjusted EBITDA and Cash Flow at Various Copper Prices Average Annual Adjusted 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…
  26. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 26
    Sensitivity to Commodity Prices Annual Annual Financial Financial Impact Impact Change Change Adjusted Adjusted Operating Operating EBITDA EBITDA Cash Cash Flow Flow (US millions) Copper: -/+ 0.20/lb 800 500 Molybdenum:…
  27. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 27
    Pro Forma Capital Expenditures (US billions) 2.5 Major Projects All Other 2.0 1.9 1.5 0.9 1.2 1.0 0.9 0.6 0.6 0.5 1.0 0.6 0.3 0.0 2007E 2008E 2009E 28
  28. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 28
    Recent Financings & Pro Forma Debt ( in billions, except share amounts) Before Equity Offerings Pro Forma Avg. Rate Term Debt 10.0 4.4 (1) 7.1 % Unsecured Notes 6.0 6.0 8.4 % Existing Debt 1.6 1.6 7.8 % 17.6 12.0 7.8 % Less…
  29. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 29
    Capitalization Table (US billions) December December 31, 31, 2006 2006 Pro Pro Forma Forma Capitalization Capitalization Amount % Cash, Cash Equivalents and Restricted Investments 3.4 -- New Revolver (1) 0.0 0.0% New Sr.…
  30. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 30
    FCX Pro Forma Debt Maturities (US millions) 8,000 7,000 6,462 6,000 5,000 4,748 4,000 3,000 2,000 1,000 141 308 39 62 144 25 25 0 2007 2008 2009 2010 2011 2012 2013 2014 Thereafter Credit Facilities Public Debt All…
  31. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 31
    Significant Debt Reduction Year-End Net Debt at Varying Copper Prices (US billions) 16 14.9 14 12 10 9.3 8 7.3 6 4 3.6 2 0 -0.1 -2 Pro Forma Pro Forma 07-09 Avg. Copper Price 2.00 2.50 3.00 YE 2006 YE 2006 Net…
  32. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 32
    Financial Policy FCX is Committed to Maintaining a Strong Financial Position Debt Reduction Top Priority Continuation of Positive Copper Markets is Expected to Provide Substantial Cash Flows Consideration of Asset Sales FCX…
  33. Prudential Equity Group LLC Metals & Mining Conference – Freeport-Mcmoran Inc. – slide 33
    Adjusted EBITDA Reconciliation (US millions) Pro Forma, Year Ended December 31, 2006 Income from continuing operations applicable to common stock 2,991.2 Interest expense, net 1,179.8 Provision for income taxes 1,934.9 Depreciation,…

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