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

Sales(MBOEperday):2014 73,2013 72 Reserves(MMBOE):PD 89,PUD 79

Sales(MBOEperday):2014 44,2013 70 Reserves(MMBOE):PD 39,PUD 30

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

18

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

50

100

150

200

2015e 2016e 2017e

C

a

p

E

x

P

r

o

d

u

c

t

i

o

n

CurrentProductionandCapExPlan

Production(MBOE/Day) CapEx($inBil)

$0.0

$1.0

$2.0

$3.0

$4.0

0

50

100

150

200

250

2015e 2016e 2017e

C

a

p

E

x

P

r

o

d

u

c

t

i

o

n

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

8000

10000

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

8000

10000

12000FCXRevenuebyCustomerLocation

2012 2013 2014

FCXprovidesover40%ofdownstreamcopperfortheUSMarket.

Moreimportantthantheofftakeofanyindividualplayerforcopperpricingistheoverallglobalgrowthindemand.

Copperdemandindifferentregionshasshiftedregularlyoverthelastthirtyyears:

Inthe80sgrowthwasdrivenbythedevelopedworld(DM).

Inthe90sgrowthwasspiltattimesdrivenbytheDWandattimesbyEMs.

Since2000EMdemandhasdrivenglobaldemand.

Althoughdifficulttopinpointexactlyintermsofvolumes,EMdemandinrecentyearshasasignificantoutsourcingcomponent(importedcopperintoChina,reexportedinfinalproducts).

ThelackofdirectsalestoChinaoffersFCXampleopportunitytoexpandsalesintoChina,acountrythatwill,regardlessofanyeconomicmissteps,stillconsumesignificantquantitiesofcopper,eveninrecessionordepression.

0

5000

10000

15000

20000

25000

30000

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

inal

Multip

le

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

Enterprisevalue 4,845.4 AssetValue 11,742.6Less:Netdebt (2,568.0) Less:Netdebt (2,568.0)Equityvalue 2,277.4 NetAssetValue 9,174.6

Dilutedshares: 1,039 Dilutedshares: 1,039EquityValuePerShare 2.19 NetAssetValuePerShare 8.83

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

Enterprisevalue 45,925.2 AssetValue 55,456.5Less:Netdebt (18,970.0) Less:Netdebt (18,970.0)Equityvalue 26,955.2 NetAssetValue 36,486.5

Dilutedshares: 1,039 Dilutedshares: 1,039EquityValuePerShare 25.94 NetAssetValuePerShare 35.12

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

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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.