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4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Jan 23, 2000 · 41 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. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 1
    F REEPORT-M FREEPORT -MCCM MOOR AN C RAN COPPER &G OPPER & GOLD OLD 4th Quarter 2007 Earnings Conference Call James R. Moffett Richard C. Adkerson Timothy R. Snider Kathleen L. Quirk www.fcx.com January 23, 2008
  2. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 2
    2007 Highlights Extraordinary Year; Record Performance Transformed FCX Into Worlds Largest Publicly Traded Copper Company Successful Integration Achievement of Debt Reduction Targets Well Ahead of Schedule Higher Production…
  3. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 3
    Transformation of FCX FCX Revenue Comparison FCX Net Income Comparison* ( in billions) ( in billions) 16.9 2.7 1.4 5.8 2006 2007 2006 2007 * From continuing operations FCX Cash Flow Comparison Enterprise Value ( in…
  4. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 4
    Revenue / Production Mix Mining Revenue by Commodity Copper Production by Method 2007 Pro Forma 2007 Pro Forma Gold 10% SX/EW SX/EW Concentrate Concentrate Molybdenum 35% 35% 65% 65% 12% Copper 78% 5
  5. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 5
    Quarterly Operating Highlights Operating Data 4Q06 Pro Forma 4Q07 Copper Consolidated Volumes (mm lbs) (1) 1,031 878 Average Realization (per lb) (2) 2.99 3.12 Net Unit Cash Cost (per lb) 0.71 1.08 Gold Consolidated Volumes (000s…
  6. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 6
    4Q07 Copper Impact Spot Price Declined From 3.70/lb at Start of Quarter to 3.01/lb at Year-end Approximately Half of Sales in Any Quarter are Provisionally Priced and Subject to Final Pricing Quarter-end Price is a Major…
  7. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 7
    Pro Forma 2007 Sales and Unit Production Costs by Region 2007 Pro Forma Sales by Region North America South America Indonesia 1,399 2.2 1,332 1,131 69(1) 0.1 Cu Mo Cu Au Cu Au mm lbs mm lbs mm lbs mm ozs mm lbs mm ozs 1Q07…
  8. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 8
    Preliminary Reserves at 12/31/07 Consolidated Proven & Probable Reserves 12/31/07 Copper Molybdenum Gold Copper Reserves billion lbs billion lbs million ozs by Geographical Region Reserves 12/31/06 93.6 1.95 42.5…
  9. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 9
    Markets Overview 2,000 400 1,750 350 Cents Per Pound 1,500 300 000s Metric Tons 1,250 250 1,000 LME Copper Price 200 750 150 500 100 250 50 0 LME & COMEX Exchange Stocks* 0 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01…
  10. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 10
    2008 Outlook Sales Outlook: Copper: 4.3 Billion lbs. Gold: 1.3 Million ozs. Molybdenum: 75 Million lbs. Modeled Operating Cash Flows (1): 5 Billion for 2008 Significant Working Capital Requirements in First Half Funded…
  11. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 11
    Achievement of Significant Debt Reduction Total Debt at 12/31/07 Senior Notes Issued in 2007 6.0 (US billions) Heritage PD Debt 0.8 20 Other Debt 0.4 (1) 17.6 Total 7.2 15 14.2 Total Debt Net of Cash 10 7.2 5 5.6…
  12. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 12
    Development Project Update North America Safford Mine Development Miami Mine Restart Major new mine in Arizona Restart of the Miami mine substantially completed 100MM lbs Cu/year by 2010 SX/EW facility start-up in 4Q07 with 100MM…
  13. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 13
    Development Project Update North America Climax Mine Restart 500MM brownfield project Primary Open-pit operation crusher Construction of new mill with Covered ore stockpile Pebble crusher restart by 2010 SAG & Initial…
  14. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 14
    Development Project Update South America Cerro Verde Cerro Verde Sulfide Mill Expansion Mill Expansion 900MM project completed in 4Q06 Operated at capacity during the second half 2007 Adds 430MM lbs/year aggregate Ramping up…
  15. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 15
    Development Project Update Indonesia Underground Mine Development DOZ Expansions - Completed 50K expansion in mid-2007; record production of 59K t*/d in 4Q - Further expansion to 80K Completed 96% of tunneling (Common…
  16. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 16
    Development Project Update Democratic Republic of Congo Tenke Fungurume Mine Development Engineering & procurement activities continue; steel & concrete work proceeding in the leaching/processing area Capital cost estimate of…
  17. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 17
    Growth Project Update Incremental Expansions Incremental expansions at Morenci, Sierrita, Bagdad and Cerro Verde Total capital costs of 400MM*; engineering in-progress Incremental annual metal** of 210MM lbs copper & 7MM lbs moly…
  18. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 18
    Copper Reserves & Mineralized Material Preliminary Estimates as of 12/31/07 93 100 Incremental at 1.20 at 1.50 copper price copper price Reserves (a) Mineralized (billion lbs of Material (b) recoverable copper) (billion lbs…
  19. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 19
    Exploration Drives the Mine Plan Aggregate 2008e Exploration: 175 million North America Lone Star South America & Morenci 37% 14% Africa Indonesia Tenke 22% Deep Grasberg, 21% Fungurume Kucing Liar, & & Kisanfu other targets…
  20. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 20
    Significant Exploration Potential Tenke Fungurume, Tenke Fungurume Democratic Republic of Congo Believed to be largest undeveloped, high grade copper/cobalt project in the world today Less than half of 600-square-mile concession…
  21. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 21
    Tenke Fungurume 2008 Exploration Program +70 kilometers of diamond drilling with 10 drill rigs Drill & advance mine development, brownfields & greenfields targets 20 million N Existing drill holes License boundaries…
  22. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 22
    Sales Profile 2007 - 2010e Gold Sales (million ozs) Copper Sales (billion lbs) 3 2.3 2.2 2.1 1.9 5 4.8 2 1.3 4.5 4.3 1 4 3.9 3.6 0 2006 2007 2008e 2009e 2010e Pro Pro Forma Forma* ____________________ 3 Note: Consolidated…
  23. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 23
    2008e Quarterly Payable Metal Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 1,240 1,250 750 Grasberg currently Grasberg currently mining mining in in lower grade lower grade section. section. 600 1,145 500 350…
  24. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 24
    2008e Sales and Unit Production Costs by Region 2008e Sales by Region North America South America Indonesia 1,575 1,475 1,200 75 (1) 1.2 0.1 Cu Mo Cu Au Cu Au mm lbs mm lbs mm lbs mm ozs mm lbs mm ozs 1Q07 2 0 0 7e 2008e…
  25. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 25
    EBITDA and Cash Flow at Various Copper Prices Average Annual EBITDA 2008e-2009e (800 Gold & 25 Molybdenum) 12 (US billions) 10 8 6 4 2 0 Cu 2.50/lb Cu 3.00/lb Cu 3.50/lb Average Annual Operating Cash Flow 2008e-2009e (800…
  26. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 26
    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…
  27. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 27
    Capital Expenditures Major Projects All Other (US billions) 2.5 2.4 2.0 1.8 1.8 1.1 1.5 1.0 0.9 1.2 1.0 0.8 1.3 0.5 0.9 0.8 0.4 0.0 2007 * 2008e 2009e 2010e * Includes PD expenditures beginning March 20, 2007 Note:…
  28. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 28
    Average Annual Excess Cash Flow (1) (1) 2008e 2009e ( in billions, except copper, gold and molybdenum prices) 5 Copper Sensitivities with 800 Gold/25 Molybdenum Op. Cash Flow After CAPEX & MI Distributions 4 Available for…
  29. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 29
    Financial Policy FCX is Committed to Maintaining a Strong Financial Position Continuation of Positive Copper Markets is Expected to Provide Substantial Cash Flows Investments in Projects With Attractive Returns Opportunistic Debt…
  30. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 30
    Reference Slides 31
  31. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 31
    Grasberg District Ore Bodies At year-end, we arrived at the start of the Grasberg BC terminal Grasberg In 2008, we will begin development of Grasberg UG Grasberg BC infrastructure Pit Grasberg Block Cave Spur Elev…
  32. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 32
    Grasberg Open Pit 9N 8N 8E 6N 7S 8S N 33
  33. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 33
    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: 6.0 billion lbs Total: 7.8 million ozs Annual Average: 1.2 billion lbs Annual…
  34. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 34
    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 1Q08 A Legend: 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00 1.99% CuEq %…
  35. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 35
    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 %…
  36. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 36
    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% CuEq %…
  37. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 37
    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 A 4Q08 Legend: 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00 1.99% CuEq…
  38. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 38
    Mining Sequence in 2009 Copper Equivalent Cross Section A B 7S and 8E/8S are the Primary Ore Pushbacks in 2009 8E Grasberg Plan View B End 7S 2008 A 2009 Legend: 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00…
  39. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 39
    Mining Sequence in 2010 Copper Equivalent Cross Section A B 8E/8S is the Primary Ore Pushback in 2010 9N Grasberg Plan View B 8E End 8E/8S 2009 A Legend: 2010 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00 1.99%…
  40. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 40
    Mining Sequence in 2011 Copper Equivalent Cross Section A B 8E/8S and 9N are the Primary Ore Pushbacks in 2011 9N* Grasberg Plan View End B 2010 8E/8S A Legend: 0.25 - 0.99 0.99% CuEq 2011 0.50 % Eq Cu 1.00 - 1.99…
  41. 4th Quarter 2007 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 41
    Mining Sequence in 2012 Copper Equivalent Cross Section A B 9N is the Primary Ore Pushbacks in 2012 9N* Grasberg Plan View B End 2011 2012 A Legend: 0.25 - 0.99 0.50 0.99% CuEq % Eq Cu 1.00 - 1.99 1.00 1.99% CuEq %…

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