Freeport McMorRan

WilliamThomson4/27/2015

FreeportMcMoRan(FCX)

InvestmentThesisRecommendedinvestorsbuyFreeportMcMoRan shareswithatargetpriceof$30;anupsideof44%relativetocurrentpricing. ThemarkethasseverelypenalizedFCXforthe2012/2013mergerwithPlainsExploration(PXP)andMcMoRan Energy(MMR)andthesubsequentfallincommoditypriceshasoccurredinthemiddleofacompanywideinvestmentcycle,exacerbatingthemarketperceptionofthecompanyasoverextended.

Theminingoperationsareworth$18.62ashareinourbearcase(coppertradingat$2.15lbin2015)andincludesallminingandcorporatedebt,minimizingdownside.

Managementshistoryofcapitalallocationdisciplineandeffectivemonetizationofdifficultassetsisbeingignoredbythemarket.AsisthesignificantopportunityembeddedintheOil/NatGas assets.

AtcurrentpricesFCXpresentsinvestorswithacompellingriskrewardprofileasaresultoftheimprovingFCF,worldclassmanagementandhighqualitydevelopedandexploratoryassetsinbothMiningandOil/NatGas.

Atatimewheneveryoneislookingforvalueinenergy,FCXisanopportunitytobuythelargestpubliclytradedcopperminerintheworld(atthevalueoftheminingassets)andsecureanoptiononhighvalueOil/NatGas assets.

2

SharePriceasof: 4/24/2015 $20.82Sharesoutstanding(mm) 1,039EquityMarketCap(mm) $21,632Add:Debt(mm) $20,312Less:Cash(mm) $549Add:MinorityInterest $4,993TotalEnterpriseValue $46,388

52WeekRange 39.32 16.43DividendYield 1.0%AverageDailyVolume(mm) 13.14

2015E 2016E 2017EEV/EBIT 10.1 7.7 6.0P/E 32.3 9.8 6.4P/CFPS 4.3 3.1 2.4

CurrentCapitalization

TradingStatitics

SummaryValuation

NearTermCatalysts Grasberg:ConclusionofContractofWork(COW)negotiationswithGovernmentofIndonesia. SecuringAdditionalFundingforOil/NatGasProjects:JVPartnersforGulfofMexico(GOM)Oil/NatGasprojectswillhelprampupproductionandleadtoselfsustainingOil/NatGasOperationswithgrowingFCFsoonerthancurrentselffundingplan.

PartialCatalyst(goodforincrementalimprovementoffinancials) USDollarAppreciation:Unlikemostminingfirms,FCXderivesnearly50%ofrevenuefromsalestoUScustomers,andassucharemoreinsultedfromthenegativeimpactofarisingUSdollarthanmostminers,a10%strengtheningoftheUSDollarvstheChileanPeso,IndonesianRupiad,AustralianDollar,theEuroorthePeruvianSolequatestoacostbenefitof$145millioninEBITDAor$100millioninoperatingcashflow.FCXprovidesmorethan40%ofdownstreamcopperintheUSmarket.

PartialCatalyst EconomicInstability: FlighttoGoldresultingfromEconomicInstability(every$50increaseinthepriceofgoldadds$100millioninEBITDAand$60millioninoperatingcashflow).

CommodityPrices:Contrarytocurrentsupplysurplusforecasts,copperdemandwilllikelyexceedsupplythisyearduetolowinvestmentandmineclosuresduetoweatherandpolitics

MediumtoLongTermCatalysts OilPrices:AtcurrentpricesFCXisoneofthebestoptionsonoilpriceappreciationavailableinthemarket.FCXistheworldsleadingcopperminertradingatthefairvalueofthecompanysminingassetsbutitalsohassignificantoilassets,whicharecurrentlyvaluedatpenniesonthedollar.

InboardLowerTertiary/Cretaceous:TheInboardLowerTertiary/CretaceousNaturalGas(ILTC)playholdsnaturalgasassetsinexcessof1Tcf.FCXisaleadingplayerindevelopmentofthetrend.ThepotentialofILTCtrendisanexampleofwhyanynegativeimpactoffuturefundingdecisionsfortheOil/NatGasassetswilllikelybeovershadowedbyastutecapitalallocationdecisions.

ContinuedSlowDevelopmentofCopperAssets:Miningfirmshavedelayedbrownfieldinvestmentsandnewminediscoveriesarefewandfarbetween,withonlytwosignificantfindssince1988.TheoutlookforcopperintheLTisoneofconstrainedsupply.

Catalysts

3

RecommendedinvestorsbuyFreeportMcMoRan shareswithaneartermtargetpriceof$30ashareandathreetofiveyearpricetargetrangeof$55to$60ashare.

Reserves:CU 29.0bn lbs,AU 28.2mmozsSales:CU 960mmlbs,AU 1.3mmozs

FCXisthelargestpublicallytradedcopperminerintheworldwithsignificantOil/GasNat,Gold,CobaltandMolybdenumassetsandrecentlyacquiredOil/NatGasassets.

ManagementhasgrowntheTangibleBookValuePerShareataCAGRof14.83%forthelast25Years. Currentmanagementhasbeeninplaceformorethanadecade.

CompanyOverviewHighQualityAssetsSpreadAcrossMultipleAttractiveIndustries

FreeportMcMoRan

PTFreeportIndonesia(90.94%)

FCXMining FCXOil&Gas

NorthAmerica

SouthAmerica

GulfofMexico

California

Haynesville/Madden/Other

Africa

Reserves:CU 35.6bn lbs,MO 2.4bn lbsSales:CU 1.9bn lbs,MO 2.4bn ozs

Reserves:CU 31.8bn lbs,MO 0.7bn lbsSales:CU 0.9bn lbs

Sales(MBOEperday):2014 39,2013 39 Reserves(MMBOE):PD 89,PUD 79



Reserves:CU 7.1bn lbs,MO 0.85bn lbsSales:CU 445mmlbs,CO32mmlbs

Reserves Oil(MMBbls) NatGas(Bcf) Total(MMBOE)Total Proved 288 610 390Total Probable 199 278 245

487 888 635

4

FY2014Review NetLossattributabletocommonstocktotaled$1.3billion,$1.26ashare.NormalizedNetIncomeattributableto

commonstocktotaled$2.0billion,$1.96ashare. NormalizedNetIncomeexcludes$1.7billiongoodwillimpairmentandcertainitemsrelatedtothesaleof

Candelaria andOjosdelSaladoCopperMine. NormalizedNetIncomeexcludes$2.3billioninassetwritedownsrelatedtothecarryingvalueofoilandgas

proprieties. Operationalhighlightsinclude:PositiveexplorationresultsandwelltestsforGulfofMexico(GOM)assets,

completedsaleof80%ownershipinterestinCandelaria andOjosDelSaladocopperminefor$1.8billionincashandcompletionofMorenciMillExpansionprojectinMay2014.

FirstQuarter2015Results Netlossattributabletocommonstocktotal$2.5billion,$2.38ashare.NormalizedNetLossattributabletocommon

stocktotaled$60million,$0.06ashare. NormalizedNetLossexcludes$2.4billioninassetwritedownsforreductiontothecarryingvalueofoiland

gasproperties. Operationalhighlightsinclude:10%increaseinthevolumeofcoppersoldvs.1Q2014,initialstartofcommercial

productionatLuciusGOMfacility(25%FMO&Gworkinginterest)andHighlandernaturalgaswell.

CompanyOverviewReviewofFY2014andFirstQuarter2015Results

5

FinancialSummary QtoQ($inmillions,exceptpersharedata) FY2012 FY2013 4Q2014 FY2014 1Q2015 Change LTMRevenue $18,010 $20,921 $5,235 $21,438 $4,153 ($1,082) $20,606NetEarnings/(Loss) 3,041 2,658 (2,851) (1,308) (2,474) 377 (4,262)Earnings/(LossperDilutedShare) 3.20 2.65 (2.74) (1.26) (2.38) 0.36 (4.13)NormalizedEBITfromContinuingOps 5,755 5,468 1,176 4,834 102 (1,074) 3,825CashFlowfromOperations 3,774 6,139 1,118 5,631 717 (401) 5,147CapEx 3,494 5,286 1,805 8,641 1,867 62 8,896

ValuationConsiderations

AnOilProblemWhatifFCXwasjustthelargestpublicallytradedCopperminerintheworld?

FCXistwobusinesses:anexploratoryOil/NatGascompanyandaCopperfocusedminer.

Atthecurrenttime,theOil/NatGas businessandtheperceptionofthebalancesheetasweakareananchoronthestockprice.

AbsenttheOil/NatGas assetsbutincludingallcompanydebt(includingthatassociatedwithOil/Gasoperations)FCXminingassetsareworthanywherefrom$16.51ashareto$49.12ashare.

FCXminingassetswillcontinuetoappreciateinvalueandgeneraterichfutureFCFasmanagementcontinuestoinvestinworldclassassetsaheadofcoppershortageduetodecliningoregradesandlimitednewminescomingonline.

(1)BasedonaDCFModeloftheFCXMiningOperations,seepage31forbasecasemodelandaBullandBearScenariocommodity pricing,seeAppendixA,page37.

(1)

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Copper FCX WTI

IndexLTMCopper,WTIandFCX

FCXDerived71%ofRevenuefromCopperand80%ofNormalizedEBIT

fromMiningin2014

IntheLTMCopperhastradeddown10%while,FCXandWTIhavetradeddown37%and44%,thestocknowcorrelatesbetter

withOilthenCopper

7

AnOilOptionTheinclusionofnewOilandNaturalGasAssetsandthefallinthepriceofOilhasconfusedInvestorsaboutthevalueproposition.

ThemarketiscurrentlyvaluingFCXOil/NatGasassetsatclosetonothing.

AsastandaloneentitythenormalizedearningsfortheOil/NatGasbusinessimplyavaluationof$2.15ashareviaEBITMultipleDCFwith8.0xmultiple,andanetassetvalueof$8.85ashareviaaPerpetuityGrowthDCFwitha2.5%growthrate,bothataconservative$55oilandproductiongrowthassumptions.

TheportfolioofOil/NatGasassetsarerichinpossibilityandlocatedinareasoftheworldinwhichmanagementhassignificantdevelopmentexperience.FCX,withitsvaluableminingassets,offersinvestorsoneofthebestoptionsonfutureOil/NatGaspriceappreciation.

(1)

KeyTakeAway:Ifcommoditypricesremainweakthrough2019,andmanagementpoorlyexecutesOil/NatGasassetdevelopment,FCXhasanintrinsicvaluefloorof$17and$20ashare

8

FY2014A FY2015E FY2016EAnadarko 15.1x Loss 39.9xApache 8.0x Loss 30.0xHess 11.7x Loss 174.8xNobleEnergy 15.4x 46.0x 32.5xOccidental 8.9x 55.9x 27.5xMarathon 8.5x Loss 114.3xFreeportMcMoRan 10.8x 10.1x 7.7x

TEV/EBIT

ComparedtoOil/NatGascompanieswithsimilarreserveprofiles,FCXtradedataslightdiscountin2014andlookstotradeatasignificantdiscountgoingforward.

MiningOperations

MiningOperationalOverview GivenFCXMiningOperations2014EBITof

approximately$3.87bnFCXEVistradingat11.8xtheMiningOperationsLTMEBITvsminingpeerstradingat9.46x,aslightpremiuminadepressedsector.

FCXMiningassetshaveaverageROAof11.7%overthelastfiveyearsvsminingpeerswhohaveaveraged9.4%.

2015miningCapExfocusedonbrownfieldminingprojectsthatoffersuperiorriskadjustedreturns.

KeyRisks:o OperationalRisks Executionrisk

relatedtonewCapExo GeopoliticalRisk Indonesiaandthe

DemocraticRepublicofCongoo CommodityPriceRisk

KeyTakeAway:FCXminingassetsareworldclassandcapableofgeneratingindustryleadingreturns. 10

01,0002,0003,0004,0005,0006,0007,0008,000

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019

MiningEBITbyGeographicSegment

NorthAmerica SouthAmerica Africa Indonesia

70.18%

8.40%

5.91%

1.67% 13.84%

2014MiningRevenuebySource

Copper Gold Molybenum Cobalt Refining&Smelting

MiningCapEx inFocus

KeyTakeAway:MiningCapExisfocusedonincrementalimprovementandexpansionofexistingassets,generatinghigherreturnswithlowerriskandsuperiorFCF.

Managementcontinuestoinvestinhighqualityprojectsregardlessofthecommoditycycle.

MiningCapExisfocusedongeneratinghigherriskadjustedreturnsthroughbrownfieldinvestmentsinmineswithlonglivesandhighoregrades.

MiningCapExFocusedonmineswithsuperiorcoppergradesvs.industryaverageof0.5%forgreenfieldprojects:o CerroVerde $700mn(OreGrade:0.39%)o Grasberg$1.5bn(OreGrade:1.17%)o Tenke $225mn(OreGrade:3.56%)

FocusonefficiencyandcostwillproducestrongFCFgrowthincomingyears,evenatlowercommodityprices.

11

IndustryProductionCostbyOreGrade

(2,000)

(1,000)

0

1,000

2,000

3,000

4,000

5,000

6,000

FY2015P FY2016P FY2017P FY2018P FY2019P

LeveredFCFProjections

BearLFCF BaseLFCF BullLFCF SpotLFCF

Refining15%

Freight5%

Mining80%

FCXanditsMiningPeersFCXhassomeofthelowestallinsustainingcashcostsinthecopperminingindustry.

12

AmongthemajorcopperproducersFCXhassomeofthelowestcostminesandlowestaverageallinsustainingcashcostsintheindustry(under$2/lb).Thisfacthelpsensurecopperproductionprofitabilitycancontinueevenduringacopperpricedecline.

Q12015FCXmaintaineditsindustryleadingcombinationofproductionvolumeandcostminimization,achievinganetcashcostperpoundofcopperof$1.64

Miningaccountsforthemostsignificantcostintheindustry(accountingfor80%ofcosts), whichmakesrecentFCXinvestmentsinimprovedmineproductionandefficiencyathighoregrademinesallthemoreimportant.

CapExinvestmentsinCerroVerde,Morencia,TenkeandGrasbergwilllikelylowerFCXallinsustainingcashcostsfurther.ForwardlookingmanagementguidancefromQ12015isfor$1.53apound.ThelowestcostmineintheFCXPortfolio,Grasbergproducesataround$0.50apound.

AllinSustainingCashCostsbyProducer CostsbySource

RiskstoMiningOperationValueMiningOperationsatFCXareexposedtoseveralimportantrisksbesidescommodityprices.

GrasbergMineRisks Tenke:Currentgovernmentisseekingtoimprovetheattractivenessofminingsectorwithrevisiontoregulationsscheduledforearly2015.Revisionsappearslatedtoimproveregulatoryenvironmentbutmayalsoincreasetaxationandroyalties.

UnderstandingPolRisk:PoliticalriskexistsforFCXateverymineitowns,andUSminesarenoexception.Theriskexistsintherelationshipbetweencompanyandgovernment,notthecountryitselfthough.EmergingMarketriskislikelyoverstated,anddevelopedworldrisklikelygoesunrecognized.

OperatingRisks:AllfuturedevelopmentatGrasbergisunderground,andcopperwillbeminedviaBlockCaving.FCXhasoutlinedanaggressivetimelineforrampup(onaverage50%quickerthanmostblockcaveminingtimelines).

PoliticalRisks:Negotiationswithrecentlyelected(July2014)Gov.ofIndonesiaareinprocess,withmanagementpositiveaboutconclusionofdiscussionsthisyear.AccordingtoQ12015callmostmajorpointshavebeenworkedout,suchasnewroyaltiesandtaxes.Afewissuesremaintobefinalized,suchastimelinefordivestitureofbetween10%and20%ofFMIndonesiaintheIndonesianStockMarket,andcontinuationofoperationspost2021.

TheSmelter:AspartofthenegotiationsFCXhasagreedtoexpandcapacityatitsexistingsmelter.Expenseswillnotbeginuntilpost2016period,expectedcost(sharedwithsmelterpartners)of$2billion.

Geopolitical/PoliticalRisk

OperationalRisks Tenke:Powersupplyandqualityofworkforce. CerroVerde:Watersupply.

13

MiningOperationValuationTheimpactofrecentmetalpriceerosioniscompensatedforwithtimelyproductiongrowtharisingfromforwardlookinginvestmentsbymanagementinexistingassets.

PositiveRiskstoValuation FCXiscurrentlytradingatornearthevalueoftheminingbusinessinthebearcase,butat10yearcommoditycyclelow($1.26copper),notevenlowcostFCXassetsareprofitable.

OngoingGeopoliticalRisks. FailuretoproperlyexecuterampupofproductionfromnewCapEx.

Reboundincommodityprices. ConclusionofGrasbergCOW ConclusionofCapExandrampupofnewinvestmentstofullproduction.

Addedincrementalgainsfromnonecoreminingassets:Example CobaltChemicalRefinerypurchasedin2013,Molybdenum,Gold,Silver.

NegativeRiskstoValuation

14

2013A 2014A 2015P 2016P 2017P 2018P 2019PRevenue $18,305 $16,728 $15,872 $19,693 $22,015 $19,455 $22,132EBITMargin 32.3% 26.8% 24.6% 26.7% 27.8% 27.3% 28.2%

EBIT 5,909.2 4,478.8 3,908.4 5,260.5 6,111.4 5,313.8 6,236.0EBITDA 6,334 5,445 5,517 7,058 7,995 6,961 7,952NOPAT 3,841 2,911 2,540 3,419 3,972 3,454 4,053ETR 35% 35% 35% 35% 35% 35% 35%

NetIncome 3,089 2,323 2,151 3,030 3,583 3,065 3,664EPS $2.97 $2.24 $2.07 $2.92 $3.45 $2.95 $3.53

FairValue Bear Base BullTEV/EBITMultiple(NTM) 12.2x 11.8x 11.3x Base SpotEVofSegment 35,637 46,096 64,297 Copper $2.5 $2.7EquityValue 19,235 29,694 47,895 Gold $1,200.0 $1,175.0ValuePerShare $18.51 $28.58 $46.10 Molybdnum $57.0 $57.2

NAVofSegment(DCF@8%) 20,754.2 33,615.3 53,596.3 Cobalt $10.0 $7.7PerShare $19.98 $32.35 $51.58

Mining Operation Financials

OilandNaturalGas

80%of2015Oil/NatGas CapEx directedtothehighestreturnGOMopportunities. FCXassetshaveanestimatedfindinganddevelopmentcostof$26/BOEoverthenext5years. Managementforecaststhatby2025ownedacreagecouldbeproducingasmuchas600MBOE/dayvs.2015E

of143MBOE/day withexpectedallincostsof$46abarrel.

1Q2015Highlights ThreeprojectscommencedproductioninQ12015totaling25MBOEperdaybytheendofMarch. $100millioninnetoilhedgingrealizationsinQ12015. 86%ofremaining2015oilproductionishedged,providingasmuchas$13/bbl ofpremium. CurrentDeepwaterGOMacreagehas145potentialprojectswithIRRsgreaterthan20%atcurrentforward

strippricing.

AnExcellentOptiononOilFCXhasproducingreservesinCaliforniaandHaynesville,premierDeepWaterGOMproducing/exploratoryassets,andpotentiallygamechangingacreageintheInboardLowerTertiary/Cretaceousnaturalgastrend.

2014Sales 56.8MMBOE ProvedReserves:ByRegionandCommodity(6:1Ratio)

GoM47%

California25%

EagleFord15%

Other13%

Oil71%

NGLs3%

Gas26%

GoM43%

California39%

Haynesville/Other18%

16

GulfofMexicoAssetsFCXhasseveralprojectsnearingproduction,includingseveraltiebackopportunitieswhichoffershorterdevelopmentcyclesandhigherIRRthangreenfieldfinds. TheUSGOMremainsoneofthemostattractiveplacestobeintheupstreamworld,withanestimated5BN

BOEdiscoveredinthelastfewyears.43%ofFCXProvedReservesareintheGOM. DespitetechnologicalchallengesassociatedwithDeepwaterGOM,theampleaccesstounderutilizedexisting

infrastructure(bothpipelinesandrigs)andlowtaxtakehelpscompensateforrelativelyhighdevelopmentcosts.

In201580%ofFCXOil/NatGas CapEx isdirectedtowardsthehighestreturnGOMopportunities. FocusondevelopmentofCopper,HolsteinDeep,Dorado,KOQVandKingtiebackopportunities,allofwhich

requirelowerCapEx investments,shorterdevelopmentcycles,andofferfastermonetizationofresourcesthangreenfielddevelopmentsastheyleverageexistinginfrastructure.

Expected1st productionfromHolsteinDeepandCoppertiebacksin2016. GOMtiebackoffermuchhigherreturns(43%averageIRR)thanlargergreenfield(25%IRR)projectsas

theyleverageexistinginfrastructure. FCXGOMAcreageincludes145potentialprojectswithIRRsgreaterthan20%atcurrentfuturesstrip

pricing.17

Source:CreditSuisse,"USGulfofMexico:AllYouNeedtoKnowabouttheGOM"

29.50%25.50% 23.00% 22.60% 21.00% 18.80%

15.70% 15.40% 14.30%

0%

10%

20%

30%

40%

Brazil GOM Other Angola Nigeria Norway Russia CanadianOilSands

AustralianLNG

WeightedProjectIRRbyRegion

DeepwaterGOMProjects

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UtilizationCapacity(BOPD)

Capacity(MCFD)

RegionFirst

ProductionDevelopmentPlan EstimatedReserves

Operator/WorkingInterest

Marlin 40% 60,000 235,000 MississippiCanyon 2000FMO&GOperated

with100%WI

HornMtn 12% 75,000 72,000 MississippiCanyon 2002FMO&GOperated

with100%WI

Holstein 12% 113,500 142,300 GreenCanyon 2004 7Wells(20142016)Opportuntiesforupto75MBOEperdayby2020

FMO&GOperatedwith100%WI

Lucius 80,000 450,000 KeathleyCanyon 4Q20146WellDevelopment

Program295MMBOE

FMO&G25.1%WIAnadarkoOperated

PowerNap MississippiCanyon PositiveDrillingResults 54MMBOEFMO&G50%WIShellOperated

Vito MississippiCanyon 300MMBOEFMO&G50%WIShellOperated

Heidelberg 80,000 GreenCanyon 2016 6WellInitialProgram 300MMBOEFMO&G12.5%WIAnadarkoOperated

Copper GreenCanyon 2016 1WellBeingDrilled 35MMBOEFMO&GOperated

with100%WI

HolsteinDeep GreenCanyon 2016 9ProposedWellsFMO&GOperated

with100%WI

Dorado MarlinTieback MississippiCanyon1stProduction

AchievedinMarchFMO&GOperated

with100%WI

KOQVHornMtnTieback

MississippiCanyonDevelopmentDrilling

2H2015FMO&GOperated

with100%WI

King MarlinTieback MississippiCanyonCompletionOperations

UnderwayFMO&GOperated

with100%WI

DeepSleepShellPreparingtostart

drillingFMO&G50.0%WIShell

Operated

InboardLowerTertiary/Cretaceous

HighlanderSouthLouisiana 2015

1stProductionAchievedinQ12015

FMO&G72.0%WI

FarthestGateWestDrillingCommenced

Oct2014Source:CompanyFilings,CreditSuisseEstimates,BankofAmericaEstimates

OperatingAssets

DevelopmentAssets

TiebackOpportunities

InboardLowerTertiary/CretaceousIndustryleadingpositioninthedevelopingnaturalgasplay.

19

FCXbegancommercialproductionatitsHighlanderdiscoverylocatedonshoreinSouthLouisianaintheInboardLowerTertiary/Cretaceoustrendinthe1st Qtr 2015.Theproductiontestindicatedaflowrateofapproximately75MMcf/d.

UltraDeepWells(whichrunasdeepat30,000feet)aresignificanttechnologicalchallengeswithreservoirtemperaturesexceeding440degreesandbottomholepressureashighas27,000PSI(4xthepressureittakestolaunchthespaceshuttle).

TheUltraDeepInboardLowerTertiary/CretaceoustrendliesbelowthesaltweldthatcutsthroughtheGulfCoastsedimentlayers.ThusfarmostGOMOil/NatGas hasbeenfoundinreservesabovethesaltweld.

ThetrendintheLowerTertiary/Cretaceouslayerarepartofthesamegeologicalstructuresthathavebeensoprofitableforoilcompaniesexceptthattheyhavebeenisolatedandbisectedbythesaltweld.

JamesMoffett,ChairmanoftheBoardofFCXbelievesthatthatInboardLowerTertiary/Cretaceoustrendholdsreservesinexcessof1TcfofNaturalGas.ThepotentialoftheLowerTertiary/CretaceousacreagethatFCXhastitletoisnotyetrepresentedonthebalancesheetasreserves.

TheFundingQuestion

20

FCXOilandNatGas assetsofferthepotentialofrichrewardsforthecompanyandinvestorsregardlessofadditionalfunding,butadditionalfundingwillhelprampupproductionquicker. ThefocusontiebackopportunitiesintheGOMandonsustainingproductioninallotheroilfieldswill

generatecashflowtohelpdevelopprojectsinthelongterm,atthemomentFCXissearchingforadditionaloutsidefunding(JVpartners)whichcanrampupthespeedatwhichassetsaredeveloped.

Existing,validatedGOMacreageisproducing130,000to140,000MBOE/Day,withoutadditionalfundingmanagementprojectsthatnumbercouldreach173MBOE/Dayby2017,withadditionalfundingthatnumbercouldbe217MBOE/Dayby2017.

$2.8

$2.8

$2.9

$2.9

$3.0

0

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200

2015e 2016e 2017e

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E

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P

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CurrentProductionandCapExPlan

Production(MBOE/Day) CapEx($inBil)

$0.0

$1.0

$2.0

$3.0

$4.0

0

50

100

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250

2015e 2016e 2017e

C

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WithAdditionalFunding

Production(MBOE/Day) CapEx($inBil)

$0.0$0.5$1.0$1.5$2.0$2.5$3.0$3.5

2015e 2016e 2017e

AditionalFundingEBITDA($inbil)

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

2015e 2016e 2017e

CurrentFundingEBITDA($inbil)

(1)

(1)SeeAppendixB:PossiblePEPartners.

KeyTakeAway:Buyagreatcopperminerandgetagreatoptiononreboundingoilprices.

Oil/NatGasoperationsdonotlooktoreachpositiveleveredFCFuntil2018underBaseCaseCommoditypricingandconservativeproductiongrowthassumptions.InbasecaseOil/NatGasoperationslooktotradeatasignificantdiscounttoNetAssetValuecalculatedviaDCFwithadiscountrateof8%.

Oil/NatGas OperationValuationThedeclineinthepriceofoilhasnegativelyimpactedneartermvalueofFCXassets,buthedgeswillhelpblunt2015impact.Longtermpotentialisveryreal,andsellingatadiscount.

PositiveSurprisestoValuation Continuederosioninthepriceofoil. FallinOilDemand. Failuretofindadditionalfundingwillslowdevelopment.

Reboundinoilprices. SecuringJVPartnersforadditionalfunding. SignificantreservesnotyetaddedtoBalancesheet.

NegativeRiskstoValuation

21

2013A 2014A 2015P 2016P 2017P 2018P 2019PRevenue $2,616 $4,710 $3,017 $3,061 $3,694 $4,834 $4,908EBITMargin 69.3% 69.3% 69.3% 69.3% 69.3% 69.3% 69.3%

EBIT 450 975 572 580 700 916 930EBITDA 1,814 3,266 2,092 2,122 2,562 3,352 3,403NOPAT 293 634 372 377 455 595 605ETR 35% 35% 35% 35% 35% 35% 35%

NetIncome 112 393 201 206 284 425 434EPS $0.11 $0.38 $0.19 $0.20 $0.27 $0.41 $0.42

FairValue Bear Base BullTEV/EBITMultiple(NTM) 1.8x 5.0x 8.1x Base SpotEVofSegment 1,733 4,845 7,880 WTI $55.0 $57.2EquityValue 835 2,277 5,312 NatGas $3.3 $2.6ValuePerShare $0.80 $2.19 $5.11

NAVofSegment(DCF@8%) (531.6) 9,174.6 19,765.2PerShare ($0.51) $8.83 $19.02

Oil/NatGasFinancials

CapitalStructure

AmpleLiquiditytoAddressNearTermChallenges:FCXhas$5.3billioninuntappedcreditlinesandimprovingcashflow.

ActiveResponsebyManagementtoMarketConditions:ManagementhasactivelyrespondedtoshiftsincommoditypricesbystrategicallyprioritizingMiningCapExtoincreasevolumeandreducecost,andfocusedOil/NatGasCapExonprojectswithneartermreturns.CapExreductionsof$1.2and$1.7billionin2015and2016.

LeveragePastExperience:FCXmanagementhasbeguntoexplore3rd partydevelopmentfundingarrangementswhichithasemployedsuccessfullyinthepastinbothminingandOil/NatGas.FCXmanagementalwayslookstoinvestinqualityprojectsregardlessofcommoditycycleandcurrentprofitability.

Challenges,ButNoProblemsManagementfocusedonstrengtheningbalancesheetwithoutimperilinglongtermvalue.

23

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019

ForwardLookingFCXLiquidityMap

DebtMaturities Interest Dividends CapEx Exploration/DrillingCosts CFO CFO+Cash CFO+Cash+UndrawnRevolvers

ManagementTrackRecord

KeyManagement

25

JamesMoffettisChairmenofFCX,PresidentofPRFreeportIndonesiaandleadsexplorationprogramsforFCX.Hehasworkedforthecompanyinsomecapacitysince1964.HeservedastheChairmanofMcMoRanExplorationfrom1984to2007andwasthedrivingforcebehindthedevelopmentofGrasbergmineinIndonesia.Between1984and2003Mr.MoffettwastheChairmanandCEOofFCX.WhenaskedtocommentonMr.MoffettstrackrecordintheE&PbusinesslegendaryoilinvestorT.BoonePickenscommentedthat:Youjudgeatrapperbyhispelts,andoldJimBobsgotalotofpelts.

RichardAdkersonhasservedasCEOofFCXsince2003andhasworkedwiththecompanyinvariousrolesofincreasingresponsibilitysince1980.Mr.AdkersonandMr.Moffetthavealonghistorytogetherthatdatesbacktothe1970s.Mr.AdkersonservedasPresidentofFCXunderMr.MoffettduringhistenorasCEO.Mr.AdkersonhasalsoservedinvariousseniormanagementpositionswithPTFreeportIndonesiaandoversawthemergerofFCXwithPhelpsDodge,creatingthelargestpublicallytradedcoppercompanyintheworld.

JamesFloresistheViceChairmanoftheBoardandPresident/CEOofFreeportMcMoRanOilandGas.PriortojoiningFCX,Mr.FloreswastheCEOofPlainsExplorationandProductionsincethecompanysinception.HehasworkedinOilandGasforover25yearsservingastheCEOoffourdifferentpublicallytradedoilandgasE&Psduringhiscareer.

FollowingthemergerwithPlainsExplorationandMcMoRanExploration,managementreworkedcorporategovernanceandcompensationincentivestobetteraligninterestswiththoseofshareholders.Highlightsinclude:o Additionoffournewindependentdirectorstotheboard.o Compensationcommitteestaffedwithindependentdirectorsonly.o Basesalaryofthreekeydirectorsreducedto$1.25millionwithtotalAnnualIncentivecappedat$7.5million.o Additionalcompensationinexcessofbasesalarydrivenbyoperatingcashflownetofworkingcap(50%),copperand

oilequivalentproductionvolumes(25%)withtheremaindertiedtoSafetyandEnvironmentalvariables. KeycompensationdriversalignreasonablywellwithoperatingaccomplishmentsnecessaryforLTgrowthinshareholder

value.

20

10

0

10

20

30

40

6000

4000

2000

0

2000

4000

6000

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12000

CapEx UnleveredFCF NetDebt TBVPerShare ROA

AnEnviableTrackRecord

KeyTakeAway:FCXhastheresourcestomanagebalancesheetconcernsinacommoditydowncycleandahistoryofbuildingassetsthroughcommoditycycletroughstotake

advantageofcyclepeaks.

Duringtheperiodfrom1990to2000FCXfocusedonthedevelopmentoftwoworldclassassetsGrasbergandtheMainPasssulfuroilgasdeposit.Duringtheperiodmanagementdevelopedbothprojectsdespiteunrivaledtechnicalchallenges,depressedcopperprices(averaging$0.92perlb)andacapitalstructurethatwas53%debt.

From2000to2006FCXmanagementnavigatedcopperpricevolatility($1.25to$4.62),theendofSuhartoregimeinIndonesia,andclosureofMainPass.FCXpaiddowndebtandpositionedthemselvestosuccessfullybuyPhelpsDodgein2007,whichquicklyprovedasmartinvestment.

ManagementTrackRecord

FocusonGrasbergandMainPass BenefitsofLTCapExFocusAccrue

CyclerepeatedwithpurchaseofPhelpsDodge

26

FCXCaseStudy Althoughmostinvestorsdontknowit,FCXwasoriginallyaspinofffromFreeportMcMoRanInc,asFreeportMcMoRan CopperandGoldinordertoseparateminingassetsfromsulfur&fertilizerbusinessesandtosecureadditionalcapitaltodevelopGrasbarg andMainPassprojects.

ThespinoffwastheideaofcurrentChairmenoftheBoardJamesMoffett,andremained73%controlledbyFreeportMcMoRanInc.(liketheproposedFMOilandGasspinoff).

ThespinoffwasmajoritycontrolledbyFreeportMcMoRanInc.untilitbecamemoresuccessfulthantheparentandwasfullyspunoffin1995.

In2014FreeportMcMoRanCopperandGoldcompletedthetransition,takingthenameofitsformerparent,FreeportMcMoRanInc.

M&AHistory

27

ThepurchaseofPlainsEnergywaswidelycriticized(withscepticsclaimingvictoryinthewakeofthe1stQtr2015statementofapossiblepartialIPOofapercentageofFMO&G)buthindsightisalways20/20.

Anyfocusontherightorwrongofthemergerismisplaced,themoneyhasbeenspentandthecostissunk,allthatmattersisthepathforwardandhowFCXmanagementintendstomonetizetheassetsforthebenefitofshareholdersinthefuture,whichhistorysuggeststheyarecapableof.

Successfulmanagementdoesnotalwaysmaketherightdecisions,buttheyalwaysmaketheirdecisionright.

CaseStudy:1988FCXCaseStudyPhelpsDodgeCaseStudy $26billionacquisitionin2007 Transformationaltransaction,bothassetandgeographicdiversification

Reserveadditions:+46billionlbs Cu Effectivelymanagedthrough2008/2009Economiccrisis

ValuationOverview(USDMM)CashOfferperShare 126.46PremiumPerShareOffer(1Day) 33.1%Premium(30Days) 28.0%ImpliedEquityValue 25,604.2NetDebt -3,164.5ImpliedEnterpriseValue 23,867.0LTMEBITDA 3,922.5ImpliedEV/EBITDA 6.1xNetIncome 1,882.5ImpliedEquityValue/NetInc 13.6xTotalDebt/EBITDA 0.2xNetDebt/EBITDA -0.8x

$0

$1

$2

$3

$4

$0

$5

$10

$15

$20

AtTimeofPDAcquisistioninMarch2007

Dec07 12/31/2012

RapidDeleveraging($inbns)

Debt ConsolidatedCash

CommodityPrices

BearArgument:IncreasedproductionisilladvisedasChina(theworldslargestcopperconsumer)shiftstoaconsumerdriveneconomy,threateningdemand.Paincurrentlyfeltbyironoreminersisjustaroundthecornerforcopperproducers.

Counter:Thecomparisondemonstratesalackofunderstandingofthedifferencesbetweenminingcopperandironore.Copperismorecomplicatedthanironore(by2018morecopperwillbeminedfromundergroundminesthanopenpit)butrequiresmorevolumethangoldordiamonds.

Counter:Supplyisconstrainedinthelongterm(evenwithdecreasedChinademand)bythetimenecessarytobringacomplexmineonlineandbythelackofeconomicdiscoveriesofuntappedresources.Onlytwonewsignificantcopperdiscoverieshavebeenmadebytheminingindustrysincethe1988FCXdiscoveryofGrasberginIndonesia.

Counter:Thesupplysituationintheshorttermismoreconstrainedthanbelieved,asminers(forexampleAngloAmericanandTeckResources)haveannouncedpostponementofinvestmentsneededtoincreaseproductionatexistingmines.Thousandsoftonsof2015productionhavealsobeenlostduetofloodsintheAtacamaDesertinChileearlierthisyear.

FCXManagementThinkingonCopper

KeyTakeAway:Ifcopperdemandgrowsat2.5%ayearoverthenexttenyears,theindustrywillneedtoexpandby10millionmetrictons,orbyover50%ofitsglobalinstalledcapacitytomeetthatrateandaccountfordepletionatagingmines.

ProductionVolume

TechnicalMiningComplication

Gold Diamonds

IronOre Coal Copper

HighlyTechnicalMining InfrastructureChallenge

HighVolumesLowVolumes

(1)Source:Bloomberg FreeportBetsCoppersNoOilWithGrowthtoGrabTopSpot

(1)

FCXwillcontinuetoclosetheproductiongapbetweenitselfandthelargestcopperminerintheworld(Codelco)asaresultofcontinuedexpansionofexistingmines.

29

CommodityPrices/FCXSensitivities

30

FCXSensitivity CommodityMarketDrivers Positive(+),Negative()orUnknownRisk(?)toCommodityPrice

DemandgrowthinChina(?):Chinademandhasbeenmixed,economicslowdowncouldleadtodecreaseddemand,butincreasedfocusonpowersectorcouldfillthegap.Additionally,Chinareexportsfinishedproductswithcopper.

GlobalDemand(USandEUMarketsstillimportant

():ThusfarEUrecoveryhasbeenweakandUSrecoveryismixedwithsignificantquestionsaboutthefalloutofexperimentalfiscalpolicybycentralbanks

ChinahasbeendestockingCopperthroughmostof2014,restockingsuppliesmayliftimports

(+):StrongrestockingthroughthesupplychainaccordingtoWallStreetBanks

MineSupplyvs.GlobalDemand (+):Longtermsupplydeficitandslowstartto2015production

EmergingMarket(EM)Demand (+):EMDemand,especiallyChinaandIndiaremainsstrongConcernsoverassetpricesandequitymarketcorrection

(+):Globalconcernsaboutthenatureofeconomicrecoveriespost2008remain.Hotmarketsstokefearsaboutcorrection.

InterestRates (?):ExperimentalFiscalPolicy.Whoknowshowitends?

SteelProduction():DemandforMolyisheavilytiedtosteel,demandfromsteelproducingcountrieslikleylowerin2015.

MineSupply(?):Increasedsecondarysupplyfromcopperminesinrecentyearswithlowerprimarymolyminesupply.

GlobalDemand ():ShakyrecoveryintheUS,QuestionsaboutChinaandEU,andFallingdemandinDM.

EUNatGasPriceIndexation(+/?):ContinuedshiftinEUmarketfromOilIndexedpricingofNatGastospotmarket,goodforoveralindustry/marketstructure,neartermpricingimplicationsareunknown.

MarketStructure ():SignificantsupplybuildGloballylikelytokeeppricesrelativlylow

OPEC(?):Traditionalrolekeepingsupplyanddemandinbalancehasbeenabandoned,forthemoment.

USExportPolicy(?):ChangetoUSCrudeOilexportpolicycouldresultinfloodofUSinventoryintomarket,changewouldbebadforpricingintheneartermbutlongtermimpactisdifficulttoanticipate,asislikelyhoodofchange.

NatGas(+/)$0.50/MCFEBITDA:$35CFO:$28

(+/)$1.00/ozEBITDA:$100CFO:$80

(+/)$50.00/ozEBITDA:$100CFO:$60

(+/)$0.10/lbEBITDA:$500CFO:$350

Copper

Gold

Molybdenum

Oil/NatGasOil(+/)$5.00/bbl

EBITDA:$190CFO:$150

ChinaandCommodityPrices

31

FCXhaslimiteddirectexposuretoChinabutstillhassignificantindirectexposureviaprices.ThereismoretocopperthanChina,afewideasworththinkingabout

0

2000

4000

6000

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10000

12000FCXRevenuebyCustomerLocation

2012 2013 2014

FCXprovidesover40%ofdownstreamcopperfortheUSMarket.

Moreimportantthantheofftakeofanyindividualplayerforcopperpricingistheoverallglobalgrowthindemand.

Copperdemandindifferentregionshasshiftedregularlyoverthelastthirtyyears:

Inthe80sgrowthwasdrivenbythedevelopedworld(DM).

Inthe90sgrowthwasspiltattimesdrivenbytheDWandattimesbyEMs.

Since2000EMdemandhasdrivenglobaldemand.

Althoughdifficulttopinpointexactlyintermsofvolumes,EMdemandinrecentyearshasasignificantoutsourcingcomponent(importedcopperintoChina,reexportedinfinalproducts).

ThelackofdirectsalestoChinaoffersFCXampleopportunitytoexpandsalesintoChina,acountrythatwill,regardlessofanyeconomicmissteps,stillconsumesignificantquantitiesofcopper,eveninrecessionordepression.

0

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2011 2012 2013 2014 2015F 2016F 2017F 2018F

CopperSupplyandConsumption

WorldSupplyRefinedSupply(kt) WorldRefinedConsumption(kt)

ChinaConsumption(kt)

Valuation

DCFofMiningAssets

33

BaseCase ProjectedYearEnding 20142019USDInMillions 2012 2013 2014 2015 2016 2017 2018 2019 CAGRSales $18,010 $18,305 $16,728 $15,872 $19,693 $22,015 $19,455 $22,132 5.8%Costofgoods sold (10,382) (11,158) (10,667) (9,655) (11,889) (13,252) (11,790) (13,443)Gross Profit 7,628 7,147 6,061 6,217 7,805 8,763 7,665 8,689 7.5%SG&A (635) (813) (616) (700) (747) (768) (704) (738)EBITDA 6,993 6,334 5,445 5,517 7,058 7,995 6,961 7,952 7.9%EBITDAMargin 39% 35% 33% 35% 36% 36% 36% 36%

Less:DD&A 1,179 1,433 1,572 1,609 1,797 1,884 1,647 1,716EBIT 5,814 4,901 3,873 3,908 5,261 6,111 5,314 6,236Less:Taxes (35%) (2,035) (1,715) (1,356) (1,368) (1,841) (2,139) (1,860) (2,183)NOPAT 3,779 3,186 2,517 2,540 3,419 3,972 3,454 4,053Plus:Depreciationandamortization 1,433 1,572 1,609 1,797 1,884 1,647 1,716Less:Capital expenditures (3,794) (3,988) (3,700) (2,800) (2,400) (2,400) (2,400)Less:Intersest (337) (389) (678) (669) (611) (499) (484)(Increase)/decreaseinworkingcapital 275 (113) (141) 413 468 (163) 436LeveredFreeCashFlow 763 (401) (370) 2,160 3,313 2,039 3,321

LeveredFreeCashFlow (370) 2,160 3,313 2,039 3,321Discountperiod 1.0 2.0 3.0 4.0 5.0WACC 8.0% 8.0% 8.0% 8.0% 8.0%Discountfactor 0.926 0.857 0.794 0.735 0.681PresentvalueofeachLeveredFreeCashFlow (342)$ 1,852$ 2,630$ 1,499$ 2,260$

Weightedaveragecostofcapital: 8.0% Weightedaveragecostofcapital: 8.0%Netpresentvalueoffreecashflow 7,898.3 Netpresentvalueoffreecashflow 7,898.3Terminalmultiple 9.0x TerminalGrowthRate 2.5%Terminalvalue 56,124.4 Terminalvalue 61,886.6Presentvalueoftheterminal value 38,197.3 Presentvalueoftheterminal value 42,119.0

Enterprisevalue 46,095.6 AssetValue 50,017.3Less:Netdebt (16,402.0) Less:Netdebt (16,402.0)Equityvalue 29,693.6 NetAssetValue 33,615.3

Dilutedshares: 1,039 Dilutedshares: 1,039EquityValuePerShare 28.58 NetAssetValuePerShare 32.35

Currentshareprice: 20.82 Currentshareprice: 20.82MarginofSafety: 7.76 MarginofSafety: 11.53

6.00% 7.00% 8.00% 9.00% 10.00% 6.00% 7.00% 8.00% 9.00% 10.00%7.0x $23.74 $22.03 $20.41 $18.87 $17.42 0.5% $24.35 $22.61 $20.96 $19.40 $17.928.0x $28.23 $26.31 $24.49 $22.77 $21.14 1.5% $29.64 $27.66 $25.78 $24.00 $22.329.0x $32.71 $30.59 $28.58 $26.67 $24.87 2.5% $36.86 $34.54 $32.35 $30.28 $28.31

10.0x $37.20 $34.87 $32.66 $30.58 $28.60 3.5% $47.28 $44.49 $41.85 $39.34 $36.9711.0x $41.68 $39.15 $36.75 $34.48 $32.32 4.5% $63.66 $60.11 $56.76 $53.59 $50.58

Term

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WACC

FiscalYearEnded

PerpetuityGrowthMethodEBITMultipleMethod

WACC

Grow

thRate

Term

inal

DCFofOil/NatGasAssets

34

BaseCase ProjectedYearEnding 20142019USDinMillions 2012 2013 2014 2015 2016 2017 2018 2019 CAGRSales $2,616 $4,710 $3,017 $3,061 $3,694 $4,834 $4,908 0.8%Costofgoods sold (682) (1,237) (789) (801) (967) (1,265) (1,284)Gross Profit 1,934 3,473 2,227 2,260 2,727 3,569 3,624 0.9%SG&A (120) (207) (135) (137) (166) (217) (220)EBITDA 1,814 3,266 2,092 2,122 2,562 3,352 3,403 0.8%EBITDAMargin 69% 69% 69% 69% 69% 69% 69%

Less:DD&A 1,364 2,291 1,520 1,542 1,861 2,436 2,473EBIT 450 975 572 580 700 916 930Less:Taxes (35%) (158) (341) (200) (203) (245) (321) (326)NOPAT 293 634 372 377 455 595 605Plus:Depreciationandamortization 1,364 2,291 1,520 1,542 1,861 2,436 2,473Less:Capital expenditures (1,436) (3,205) (2,800) (2,300) (2,400) (2,400) (2,400)Less:Interest (181) (241) (171) (171) (171) (171) (171)(Increase)/decreaseinworkingcapital 275 (113) (141) 413 468 (163) 436LeveredFreeCashFlow 315 (634) (1,220) (139) 214 298 943

LeveredFreeCashFlow (1,220.4) (138.7) 213.6 297.6 943.1Discountperiod 1.0 2.0 3.0 4.0 5.0WACC 8.0% 8.0% 8.0% 8.0% 8.0%Discountfactor 0.926 0.857 0.794 0.735 0.681PresentvalueofeachLeveredFreeCashFlow (1,130.0) (118.9) 169.6 218.7 641.8

Weightedaveragecostofcapital: 8.0% Weightedaveragecostofcapital: 8.0%Netpresentvalueoffreecashflow (218.8) Netpresentvalueoffreecashflow (218.8)Terminalmultiple 8.0x Terminalmultiple 2.5%Terminalvalue 7,440.9 Terminalvalue 17,575.2Presentvalueoftheterminal value 5,064.2 Presentvalueoftheterminal value 11,961.4



Currentshareprice: 20.82 Currentshareprice: 20.82MarginofSafety: (18.63) MarginofSafety: (11.99)

6.00% 7.00% 8.00% 9.00% 10.00% 6.00% 7.00% 8.00% 9.00% 10.00%6.0x $1.54 $1.36 $1.18 $1.02 $0.86 0.5% $6.47 $6.02 $5.60 $5.19 $4.827.0x $2.21 $2.00 $1.79 $1.60 $1.42 1.5% $7.97 $7.45 $6.96 $6.50 $6.068.0x $2.88 $2.63 $2.40 $2.18 $1.98 2.5% $10.02 $9.41 $8.83 $8.28 $7.779.0x $3.55 $3.27 $3.01 $2.76 $2.53 3.5% $12.98 $12.23 $11.53 $10.86 $10.23

10.0x $4.22 $3.91 $3.62 $3.35 $3.09 4.5% $17.63 $16.67 $15.76 $14.90 $14.09

WACC

FiscalYearEnded

EBITMultipleMethod PerpetuityGrowthMethod

WACC

Term

inal

Multip

le

Term

inal

Grow

thRate

CombinedDCF

35

BaseCase ProjectedYearEnding 20142019USDInMillions 2012 2013 2014 2015 2016 2017 2018 2019 CAGRSales $18,010 $20,921 $21,438 $18,888 $22,754 $25,709 $24,289 $27,040 4.8%Costofgoods sold (10,382) (11,840) (11,904) (10,444) (12,690) (14,218) (13,055) (14,727)Gross Profit 7,628 9,081 9,534 8,444 10,065 11,490 11,234 12,313 5.2%SG&A (635) (933) (823) (835) (884) (934) (921) (958)EBITDA 6,993 8,148 8,711 7,609 9,180 10,557 10,313 11,355 5.4%EBITDAMargin 39% 39% 41% 40% 40% 41% 42% 42%

Less:DD&A 1,179 2,797 3,863 3,129 3,340 3,745 4,083 4,189EBIT 5,814 5,351 4,848 4,480 5,841 6,811 6,230 7,166Less:Taxes (35%) (2,035) (1,873) (1,697) (1,568) (2,044) (2,384) (2,180) (2,508)NOPAT 3,779 3,478 3,151 2,912 3,796 4,427 4,049 4,658Plus:Depreciationandamortization 2,797 3,863 3,129 3,340 3,745 4,083 4,189Less:Capital expenditures (5,230) (7,193) (6,500) (5,100) (4,800) (4,800) (4,800)Less:Intersest (518) (630) (849) (840) (782) (670) (655)(Increase)/decreaseinworkingcapital 275 (113) (141) 413 468 (163) 436LeveredFreeCashFlow 802 (922) (1,449) 1,609 3,059 2,499 3,828

LeveredFreeCashFlow (1,449) 1,609 3,059 2,499 3,828Discountperiod 1.0 2.0 3.0 4.0 5.0WACC 8.0% 8.0% 8.0% 8.0% 8.0%Discountfactor 0.926 0.857 0.794 0.735 0.681PresentvalueofeachLeveredFreeCashFlow (1,342)$ 1,379$ 2,428$ 1,837$ 2,605$

Weightedaveragecostofcapital: 8.0% Weightedaveragecostofcapital: 8.0%Netpresentvalueoffreecashflow 6,907.8 Netpresentvalueoffreecashflow 6,907.8Terminalmultiple 8.0x TerminalGrowthRate 2.5%Terminalvalue 57,329.3 Terminalvalue 71,333.9Presentvalueoftheterminal value 39,017.3 Presentvalueoftheterminal value 48,548.6



Currentshareprice: 20.82 Currentshareprice: 20.82MarginofSafety: 5.12 MarginofSafety: 14.30

6.00% 7.00% 8.00% 9.00% 10.00% 6.00% 7.00% 8.00% 9.00% 10.00%6.0x $19.86 $18.16 $16.56 $15.03 $13.59 0.5% $25.82 $23.85 $21.99 $20.22 $18.557.0x $25.01 $23.08 $21.25 $19.52 $17.87 1.5% $31.92 $29.67 $27.54 $25.53 $23.628.0x $30.17 $28.00 $25.94 $24.00 $22.16 2.5% $40.24 $37.61 $35.12 $32.76 $30.539.0x $35.32 $32.91 $30.64 $28.48 $26.44 3.5% $52.25 $49.07 $46.06 $43.21 $40.51

10.0x $40.47 $37.83 $35.33 $32.96 $30.72 4.5% $71.13 $67.08 $63.25 $59.63 $56.19

Term

inal

Multip

le

Term

inal

Grow

thRate

FiscalYearEnded

EBITMultipleMethod PerpetuityGrowthMethod

WACC WACC

RelativeValuationAcrossmostmetricsFCXtradesatadiscounttoitspeers.

36

2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017ENYSE:FCX FreeportMcMoRan 21.48 USD 20.66 27.2 10.0 6.4 10.1 7.7 5.9 3.7 3.0 2.5

CopperLSE:ANTO Antofagasta 10.99 GBpUSD 11.14 18.0 14.7 12.1 9.0 6.8 5.5 8.2 6.3 5.9TSX:FM FirstQuantumMinerals 8.17 CADUSD 13.61 19.6 8.0 5.1 24.0 9.1 5.8 6.6 3.8 3.1LSE:KAZ KAZMinerals 1.56 GBpUSD 3.50 NM 17.4 4.8 30.7 8.4 4.1 16.1 5.0 2.2WSE:KGH KGHMPolskaMiedz 6.41 PLNUSD 32.05 9.1 9.5 7.6 8.3 8.3 6.7 5.5 6.6 5.4NYSE:SCCO SouthernCopperCorp 24.20 USD 30.00 20.6 15.1 10.6 13.6 9.9 7.2 13.9 11.7 8.1TSX:LUN LundinMining 2.98 CADUSD 4.15 10.7 9.3 6.2 9.5 9.2 7.1 4.3 4.2 3.7Average(simple) 15.6 12.4 7.7 15.9 8.6 6.1 9.1 6.3 4.7

DiversifiedMiningLSE:AAL AngloAmerican 21.71 GBpUSD 15.48 12.1 9.0 6.6 9.9 7.9 6.0 3.7 3.3 2.6ASX:BHP BHPBilliton 122.48 AUDUSD 23.02 15.9 19.2 14.3 10.6 12.7 9.7 6.7 6.8 6.0LSE:RIO RioTinto 78.61 GBpUSD 42.87 14.6 11.7 10.6 11.9 10.3 8.9 7.2 6.1 5.4NYSE:VALE Vale 28.07 USD 5.87 NM 3.8 3.4 14.4 9.4 6.1 3.2 4.1 NMTSX:TCK.B TeckResources 8.00 CAD 13.86 16.3 12.1 8.1 11.6 8.8 6.7 4.6 3.9 3.4LSE:GLEN Glencore 58.43 GBpUSD 4.52 18.1 11.6 9.4 19.2 13.3 11.3 5.1 4.9 4.4Average(simple) 15.4 11.2 8.7 12.9 10.4 8.1 5.1 4.9 4.4

Exploration&ProductionNYSE:APC AnadarkoPetroleum 47.76 USD 93.30 NM 155.0 43.4 NM 39.9 19.7 10.5 7.5 6.9NYSE:APA Apache 24.99 USD 66.96 NM 93.0 30.2 NM 30.0 21.3 5.8 4.6 4.6NYSE:HES Hess 21.62 USD 75.26 NM NM 90.2 NM 174.8 31.7 6.8 4.9 4.8NYSE:NBL NobleEnergy 19.59 USD 49.90 122.9 66.7 31.6 46.0 32.5 18.7 8.5 7.0 6.5NYSE:OXY Occidental 61.40 USD 79.72 67.7 26.4 24.6 55.9 27.5 15.2 11.2 8.1 7.4Average(simple) 95.3 85.3 44.0 50.9 60.9 21.3 8.6 6.4 6.0

NameTickerPE EV/EBIT CFPSShare

PriceCurrencyMktCap

($bn)

FCXtradesatadiscounttobothcopperpeersanddiversifiedminingfirms. FCStradesatasignificantdiscounttoE&Pswithsimilarreserveprofiles.

Appendix

AppendixA:CommodityPriceDeck

38

Commoditypricedeckbasedonfutures,CreditSuisseandBankofAmericaEstimates.

CommodityForecastBear Base Bull Bear Base Bull Bear Base Bull Bear Base Bull Bear Base Bull

Copper $perLB 2.15 2.5 3.22 2.3 2.65 3.5 2.65 2.95 4 2.6 2.95 4 2.95 3.27 4Gold $perOz 1,000 1,200 1,550 1,000 1,250 1,650 950 1,250 1,500 900 1,250 1,500 950 1,300 1,500WTI $perbbl 45 57 76 52 67 85 53 72 94 63 78 95 64 81 97Molybdnum $perLB 7 10 14 7 11 15 9 11 16 8 12 16 8 12 16Cobalt $perLB 9 14 17 9 13 15 10 13 16 10 13 16 11 13 16

FY2015 FY2016 FY2017 FY2018 FY2019

AppendixB:PossiblePEPartners

39

Company Fund Vintage FundSize CapitalCalled(%) TotalValue Company Fund Vintage Target ExpectedCompletionAPO ApolloNaturalResources 2012 1,300 45% 568 APO EnergyCreditOpps 2015 600 Apr15BX EnergyPartners 2011 2,500 51% 1875 NaturalResourceII 2016 2,500 Jun16

EnergyII 2003 1,100 96% 212 EnergyPartnersI 2015 4,500 Jan15EnergyIII 2005 3,800 100% 1527 GSODistressedEnergy 2015 3,000 Dec15EnergyIV 2008 5,980 93% 3322 InternationalEnergyII 2015 2,500 Jan15NGPX 2012 3,586 73% 3037 PowerII 215 1,250 Sep15InterationalEnergy 2013 1,780 11% 147 NGPXI 2015 5,300 Jan15KKRNaturalResources 2010 1,250 81% 629 EnergyMezzII 2015 2,500 Jun15EnergyandIncome 2013 2,000 18% 359 KKR SpecialSitsII 2016 2,750 Mar16KKRGlobalEnergy Various 1,028 12% 76 OAK PowerOppsIV 2015 1,000 Mar15PowerOppsI 2000 454 85% 0PowerOppsII 2005 1,020 56% 75HighstarCapital 2007 3,500 112% 3769PowerOppsIII 2010 1,040 50% 550

Source:Prequin,CompanyData,CreditSuisseEstimates

OAK

PEFocusedEnergyFundsAlreadyRaised PEEnergyFocusedFundsBeingRaised

CG

BX

CG

KKR

AlthoughlargeamountsofcapitalhavebeenraisedbyenergyfocusedPEfirms,verylittlehasactuallybeendeployed.

Freeport McMorRan

Documents

fcxisanopportunityt

copperde oilprices

increaseinth commodityprices