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3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Oct 21, 2008 · 36 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. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 1
    3rd Quarter 2008 Earnings Conference Call October 21, 2008 www.fcx.com
  2. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 2
    3Q08 Highlights Sales Data 3Q08 3Q07 Copper (1) Consolidated Volumes (mm lbs) 1,016 949 Average Realization (per lb) 3.14 3.53 (2) Gold Consolidated Volumes (000s ozs) 307 269 Average Realization (per oz) 869 695 Molybdenum (1)…
  3. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 3
    Recent Events Global Market Conditions Financial Market Turmoil/Credit Crisis Economic Weakness in U.S./Europe Market Concerns About Slower Growth in China Sharp Decline in Commodities Prices During September/October Underlying…
  4. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 4
    Markets 2,000 400 1,750 350 1,500 300 000s Metric Tons Cents Per Pound LME Copper Price 250 1,250 1,000 200 750 150 500 100 250 50 LME & COMEX Exchange Stocks* 0 0 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02…
  5. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 5
    Achievement of Significant Debt Reduction (US billions) 20 (1) 17.6 15 Total Debt 10 7.2 5 0 At Time of PD Acquisition 9/30/08 in March 2007 (1) Pro Forma year-end 2006 total debt of 1.6 billion plus 16 billion in…
  6. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 6
    FCX Debt Maturities 9/30/08 6,000 (US millions) Total Debt & Cash at 9/30/08 5,000 (US billions) Senior Notes Issued in 2007 6.0 Heritage PD Debt 0.6 4,006 4,000 Other Debt 0.6 Total Debt 7.2 8.375% Senior Notes Consolidated…
  7. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 7
    3Q08 Regional Data (per pound of copper) North South America America Indonesia Consolidated Unit Cash Costs Site Production & Delivery 2.07 1.22 1.76 1.66 Royalties(1) 0.00 0.00 0.12 0.03 Treatment Charges 0.09 0.09 0.24 0.13…
  8. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 8
    3Q08 Copper Impact Spot Price Declined 27% From 3.99/lb at Start of Quarter to 2.90/lb at Quarter-end Approximately Half of Sales in Any Quarter are Provisionally Priced and Subject to Final Pricing Quarter-end Price is a Major…
  9. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 9
    2008 Outlook Sales Outlook: Copper: 4.0 Billion lbs. Gold: 1.2 Million ozs. Molybdenum: 74 Million lbs. Modeled Operating Cash Flows (1): 3.5 Billion 4Q08 Prices Assumptions: 2.15 Copper, 800 Gold and 27 Moly Net of Working…
  10. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 10
    Development Project Update North America - Molybdenum Climax Mine Restart New Mill Facilities 500MM brownfield project Open-pit operation Construction of new mill with restart by 2010 Major permits received Construction…
  11. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 11
    Development Project Update Democratic Republic of Congo Tenke Fungurume Mine Development Initial production target 2H09; Engineering, procurement & construction Aggregate annual production of activities continue; concrete work,…
  12. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 12
    Development Project Update Democratic Republic of Congo Dump Pocket Tailings Storage Solution Extraction Stockpile & Heavy Dump Pocket Duty Shop SAG Mill Leach Acid & CCD Plant Solution Cobalt Extraction Precipitation…
  13. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 13
    Other Projects North America South America Opportunities for small and large El Abra scale expansions Large sulfide mineral deposit Additional potential as we underlying current oxide pit incorporate drill data and reserve New leach…
  14. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 14
    A World of Opportunities Exploration Targets in Major Mineral Districts 100 drill rigs operating around the world Safford/Lone Star/Morenci Cerro Verde Tenke Fungurume/Africa Grasberg/Indonesia District 25 rigs 11 rigs 18 rigs 14…
  15. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 15
    Exploration Drives the Mine Plan Aggregate 2008e Exploration: 275 million North America Lone Star, South America Morenci & Others 10% 42% Africa Indonesia Tenke 27% Deep Grasberg, Fungurume Kucing Liar, & 17% & Kisanfu other…
  16. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 16
    Sales Profile 2007 - 2010e Gold Sales (million ozs) Copper Sales (billion lbs) 3 2.3 2.2 2.2 1.9 5 2 4.6 1.2 4.3 1 3.9 4.0 4 3.6 0 2006 2007 2008e 2009e 2010e Pro Pro Forma Forma* ____________________ 3 Note: Consolidated gold…
  17. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 17
    2008e Quarterly Payable Metal Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 500 1,250 395 1,165 375 307 280 265 1,016 250 1,000 911 942 125 0 1Q08 2Q08 3Q08 4Q08e 750 ____________________ Note: Consolidated…
  18. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 18
    2008e Sales and Unit Production Costs by Region 2008e Sales by Region North America South America Indonesia 1,425 1,500 1,100 74 (1) 1.1 0.1 Cu Mo Cu Au Cu Au mm lbs mm lbs mm lbs mm ozs mm lbs mm ozs 2008e 2007e 2008e…
  19. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 19
    EBITDA and Cash Flow at Various Copper Prices Average Annual EBITDA (750 Gold & 25 Molybdenum) 10 (US billions) 8 6 4 2 0 Cu 2.00/lb Cu 2.50/lb Cu 3.00/lb Average Annual Operating Cash Flow (750 Gold & 25 Molybdenum) 6 (US…
  20. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 20
    Sensitivity to Commodity Prices Annual Annual Financial Financial Impact Impact Net Net Operating Operating Change Change EBITDA EBITDA Income Income Cash Cash Flow Flow (US millions) Copper: -/+ 0.20/lb 850 490 575…
  21. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 21
    Capital Expenditures Under Review (1) Major Projects All Other (US billions) 3.0 2.7 2.5 2.3 1.1 2.0 1.8 0.9 1.5 1.3 1.0 1.0 1.6 0.9 1.4 0.5 0.8 0.4 0.0 2007 (2) 2008e 2009e 2010e (1) FCX currently revising capital…
  22. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 22
    Financial Policy Committed to Maintaining a Strong Financial Position Invest in Development Projects with High Rates of Return Shareholder Returns Dividends Share Purchases (23.7 mm Shares Remain Available Under Current…
  23. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 23
    FCX Investment Summary Worlds Premier Publicly Traded Copper Company Worlds Largest Molybdenum Producer & Significant Gold Producer World Class, Long-lived, Geographically Diverse Operations Strong Cash Flows and Financial…
  24. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 24
    Reference Slides 25
  25. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 25
    Grasberg District Ore Bodies At year-end 2007, we arrived at the start of the Grasberg BC terminal Grasberg In 2008, we have begun development of Grasberg UG Grasberg BC infrastructure Pit December 2007 5.5 km* from the Portal…
  26. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 26
    Grasberg Open Pit 9N 8N 8E 7S 9S 8S N 27
  27. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 27
    Small Scale Failure at Grasberg Open Pit Status Update Small scale failure of 75,000 mt with no injuries or property damage Final 7S Design A Normal operations but access to 7S high grade section was restricted 7S Remediation…
  28. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 28
    PT-FI Mine Plan PT-FIs Share of Metal Sales, 2008e-2012e Copper, billion lbs Gold, million ozs 2008e 2012e PT-FI Share 2008e 2012e PT-FI Share Total: 5.9 billion lbs Total: 7.7 million ozs Annual Average: 1.18 billion lbs Annual…
  29. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 29
    Mining Sequence in 2008 Copper Equivalent Cross Section A B 7S is the Primary Ore Pushback in 2008 8E 7S Grasberg Plan View B End 1Q08 2007 A Legend: 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00 1.99% CuEq…
  30. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 30
    Mining Sequence in 2008 Copper Equivalent Cross Section A B 7S is the Primary Ore Pushback in 2008 8E 7S Grasberg Plan View B End 2007 2Q08 A Legend: 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00 1.99% CuEq…
  31. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 31
    Mining Sequence in 2008 Copper Equivalent Cross Section A B 7S is the Primary Ore Pushback in 2008 8E 7S Grasberg Plan View B End 2007 3Q08 A Legend: 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00 1.99%…
  32. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 32
    Mining Sequence in 2008 Copper Equivalent Cross Section A B 7S is the Primary Ore Pushback in 2008 8E Grasberg Plan View 7S B End 2007 4Q08 A Legend: 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00 1.99%…
  33. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 33
    Mining Sequence in 2009 Copper Equivalent Cross Section A B 7S and 8E are the Primary Ore Pushbacks in 2009 8E Grasberg Plan View 7S B End 2008 A 2009 Legend: 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00…
  34. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 34
    Mining Sequence in 2010 Copper Equivalent Cross Section A B 8E/8S is the Primary Ore Pushback in 2010 9S Grasberg Plan View End B 2009 8E A 2010 Legend: 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00 1.99%…
  35. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 35
    Mining Sequence in 2011 Copper Equivalent Cross Section A B 8E and 9N are the Primary Ore Pushbacks in 2011 9S 9N* Grasberg Plan View End 2010 B 8E A Legend: 2011 0.25 - 0.99 0.50 0.99% 1.00 - 1.99 1.99% CuEq % Eq…
  36. 3rd Quarter 2008 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 36
    Mining Sequence in 2012 Copper Equivalent Cross Section A B 9N is the Primary Ore Pushback in 2012 9S 9N* Grasberg Plan View B End 2011 A Legend: 2012 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00 1.99%…

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