8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  January 23, 2008

FREEPORT-McMoRan COPPER & GOLD INC.

(Exact name of registrant as specified in its charter)

Delaware	1-9916	74-2480931
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

One North Central Avenue
Phoenix, AZ	85004-4414
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code:  (504) 582-4000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition.

Freeport-McMoRan Copper & Gold Inc. (FCX) issued a press release dated January 23, 2008, announcing its fourth-quarter and year ended December 31, 2007 results and supplementary schedules (see exhibit 99.1) and presented slides on its web site that accompanied its January 23, 2008, earnings conference call (see exhibit 99.2).

Item 9.01.  Financial Statements and Exhibits.

(d)  Exhibits.

The Exhibits included as part of this Current Report are listed in the attached Exhibit Index.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FREEPORT-McMoRan COPPER & GOLD INC.

By: \s\ C. Donald Whitmire, Jr.

----------------------------------------

C. Donald Whitmire, Jr.

Vice President and Controller -

Financial Reporting

(authorized signatory and

Principal Accounting Officer)

Date:  January 24, 2008

Freeport-McMoRan Copper & Gold Inc.

Exhibit Index

Exhibit

Number

99.1	Press release dated January 23, 2008, titled “Freeport-McMoRan Copper & Gold Inc. Reports Fourth-Quarter and Year Ended December 31, 2007 Results” and supplementary schedules.
99.2	Slides presented in conjunction with January 23, 2008, FCX fourth-quarter 2007 earnings conference call conducted via the internet.

EX-99.1

One North Central Avenue ▪ Phoenix, AZ  85004	Financial Contacts:		Media Contact:
	Kathleen L. Quirk	David P. Joint	William L. Collier
	(602) 366-8016	(504) 582-4203	(504) 582-1750

Freeport-McMoRan Copper & Gold Inc. Reports

Fourth-Quarter and Year Ended December 31, 2007 Results

HIGHLIGHTS

§   Income from continuing operations applicable to common stock for fourth-quarter 2007 totaled $423 million, $1.07 per share (including net charges of $120 million, $0.29 per share, for special items discussed on page 2), compared with $426 million, $1.99 per share, for fourth-quarter 2006.

§   Consolidated 2007 sales from mines totaled 878 million pounds of copper, 161 thousand ounces of gold and 19 million pounds of molybdenum for fourth-quarter 2007, and 3.4 billion pounds of copper, 2.3 million ounces of gold and 52 million pounds of molybdenum for full-year 2007.  Pro forma 2007 sales, including pre-acquisition Phelps Dodge sales, totaled 3.9 billion pounds of copper, 2.3 million ounces of gold and 69 million pounds of molybdenum.

§   Consolidated 2008 sales from mines are expected to approximate 4.3 billion pounds of copper, 1.3 million ounces of gold and 75 million pounds of molybdenum, including 885 million pounds of copper, 170 thousand ounces of gold and 19 million pounds of molybdenum for first-quarter 2008.

§   Operating cash flows totaled $1.3 billion for fourth-quarter 2007 and $6.2 billion for the year, including Phelps Dodge’s amounts beginning March 20, 2007.  Assuming average prices of $3.00 per pound of copper, $800 per ounce for gold and $30 per pound for molybdenum, operating cash flows in 2008 would approximate $5 billion.

§   Capital expenditures approximated $617 million for fourth-quarter 2007 and $1.8 billion for 2007.  Projected 2008 capital expenditures total $2.4 billion, including the addition of several new incremental expansion projects in North and South America and the recently approved project to restart the Climax molybdenum mine in Colorado.

§   Commissioning of a major new copper mine in Safford, Arizona, is under way.  First copper production was achieved by year-end 2007 with ramp-up to 240 million pounds of copper per year planned by mid-2008.

§   Total debt approximated $7.2 billion and consolidated cash was $1.6 billion at December 31, 2007, compared with total debt of $8.7 billion and consolidated cash of $2.4 billion at September 30, 2007.  During fourth-quarter 2007, FCX fully repaid the remaining portion of the $10 billion in term loans issued for the Phelps Dodge acquisition.

§   Completed sale of international wire and cable business, Phelps Dodge International Corporation (PDIC), for $735 million in October 2007.

§   In December 2007, FCX’s Board of Directors approved an increase in its annual common stock dividend from $1.25 to $1.75 per share and authorized a new 20-million share open market share purchase program.

§   FCX’s preliminary estimate of consolidated recoverable reserves as of December 31, 2007, totaled 93.2 billion pounds of copper, 41.0 million ounces of gold and 2.0 billion pounds of molybdenum.  Estimated recoverable reserves include 3.5 billion pounds of copper in mill and leach stockpiles.

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PHOENIX, AZ, January 23, 2008 – Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported fourth-quarter 2007 income from continuing operations applicable to common stock of $423 million, $1.07 per share, compared with $426 million, $1.99 per share, for the fourth quarter of 2006.  For the year ended December 31, 2007, FCX reported income from continuing operations applicable to common stock of $2.7 billion, $7.41 per share, compared with $1.4 billion, $6.63 per share, in 2006.  FCX’s 2007 financial and operating results include its wholly owned subsidiary Phelps Dodge’s results following its acquisition by FCX on March 19, 2007.

Results for the 2007 periods included the following special items:

	Increase (Decrease) in
	Pre-tax						Net Income
(In millions, except per share amounts)	Income			Net Income			Per Share
Three Months Ended December 31, 2007
Purchase accounting impactsa	$	(235	)	$	(143	)	$	(0.35	)
Noncash mark-to-market accounting adjustments
on Phelps Dodge’s copper price program		37			23			0.06
Total special items	$	(198	)	$	(120	)	$	(0.29	)
Year Ended December 31, 2007
Purchase accounting impactsa	$	(1,264	)	$	(795	)	$	(2.00	)
Noncash mark-to-market accounting adjustments
on Phelps Dodge’s copper price program		(175	)		(106	)		(0.27	)
Net losses on debt reductions		(173	)		(132	)		(0.33	)
Gains on sales of marketable equity securities		85			52			0.13
Total special items	$	(1,527	)	$	(981	)	$	(2.47	)

a.   FCX has recorded its allocation of the approximate $26 billion purchase price to Phelps Dodge’s assets and liabilities based on its current estimates of fair values as of March 19, 2007.  The net purchase accounting impacts primarily reflect the impact of increases in the carrying values of acquired property, plant, and equipment and metals inventories (including mill and leach stockpiles), and also include amortization of acquired intangible assets and liabilities resulting from this preliminary purchase price allocation.  (See page 5.)  These items do not affect operating cash flows.  The purchase price allocation will be finalized during first-quarter 2008.

Results for full-year 2006 included net losses on debt reductions totaling $114 million ($74 million to net income or $0.33 per share), including a $69 million ($37 million to net income or $0.17 per share) loss on the redemption of FCX’s Gold-Denominated Preferred Stock, Series II, and net gains of $30 million ($30 million to net income or $0.13 per share) from the disposition of land and certain royalty rights.

James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said, “Our fourth-quarter and full-year 2007 performance reflects the strength of our business and the combination of the great Grasberg ore body with large-scale copper and molybdenum operations in the Americas.  We look forward to expanding our production profile in 2008 and advancing development projects in the Democratic Republic of Congo, Americas and Indonesia.  We have significant reserves and growth opportunities to supply products to a world that has growing requirements for the commodities we produce.  We have structured our business to use our significant cash flows to invest in attractive development projects, maintain a strong balance sheet and provide returns to shareholders.”

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SUMMARY FINANCIAL AND OPERATING DATA

				Years Ended
	Fourth Quarter			December 31,
	2007		2006	2007a		2006
Financial Data (in millions, except per share amounts)
Revenues	$4,184	b	$1,643	$16,939	b	$5,791	c
Operating income	$1,152	b, d	$863	$6,555	b, d	$2,869	c
Income from continuing operations
applicable to common stocke	$423	b, d	$426	$2,734	b, d, f	$1,396	c, f
Net income applicable to common stocke	$414	b, d	$426	$2,769	b, d, f	$1,396	c, f
Diluted net income (loss) per share of common stockg:
Continuing operations	$1.07	b, d	$1.99	$7.41	b, d, f	$6.63	c, f
Discontinued operations	(0.02	)	-	0.09		-
Diluted net income per share of common stock	$1.05	b, d	$1.99	$7.50	b, d, f	$6.63	c, f
Diluted average common shares outstandingg, h	409		222	397		221
Operating cash flows	$1,298		$798	$6,225		$1,866
Capital expenditures	$617		$73	$1,755		$251
Operating Data – Sales from Mines
Copper (millions of recoverable pounds)
FCX’s consolidated share	878		432	3,357		1,201
Average realized price per pound	$3.16	b	$2.88	$3.28	b	$3.13
Gold (thousands of recoverable ounces)
FCX’s consolidated share	161		508	2,298		1,736
Average realized price per ounce	$803		$628	$682		$567	c
Molybdenum (millions of recoverable pounds)
FCX’s consolidated share	19		N/A	52		N/A
Average realized price per pound	$27.84		N/A	$26.81		N/A

Note: Disclosures of after-tax amounts throughout this release are calculated by reference to the applicable tax rate.

a.   Includes Phelps Dodge results beginning March 20, 2007.

b.   Includes credits for noncash mark-to-market accounting adjustments on copper price protection programs totaling $37 million ($23 million to net income or $0.06 per share) and an increase in average realized prices of $0.04 per pound of copper in fourth-quarter 2007 and charges totaling $175 million ($106 million to net income or $0.27 per share) and a reduction in average realized prices of $0.05 per pound for full-year 2007, representing the change in the mark-to-market liability to fair value.  FCX paid $598 million upon settlement of these contracts in January 2008.  Also includes impacts of adjustments to provisionally priced concentrate and cathode sales recognized in prior periods (see discussion on page 6).

c.   Includes loss on redemption of FCX’s Gold-Denominated Preferred Stock, Series II totaling $69 million ($37 million to net income or $0.17 per share) and a reduction in average realized prices of $40 per ounce for the revenue adjustment relating to the redemption.

d.   Includes the purchase accounting impact of the increases in the carrying values of acquired property, plant, and equipment, metals inventories and intangible assets and liabilities, which increased costs by a net $232 million ($143 million to net income or $0.35 per share) in fourth-quarter 2007 and $1.3 billion ($785 million to net income or $1.98 per share) for full-year 2007, based on the currently estimated purchase price allocation (see discussion on page 5).

e.   After preferred dividends.

f.   Includes net losses on early extinguishment of debt totaling $173 million ($132 million to net income or $0.33 per share) for full-year 2007 and $32 million ($30 million to net income or $0.14 per share) for full-year 2006 for debt prepayments.  Also includes gains totaling $85 million ($52 million to net income or $0.13 per share) for full-year 2007 primarily related to sales of marketable equity securities.  Full-year 2006 includes net gains of $30 million ($30 million to net income or $0.13 per share) from the disposition of land and certain royalty rights.

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g.   Reflects assumed conversion of FCX’s 7% Convertible Senior Notes and 5½% Convertible Perpetual Preferred Stock. Also reflects assumed conversion for the year ended December 31, 2007, of FCX’s 6¾% Mandatory Convertible Preferred Stock, which was issued on March 28, 2007.  See Note h on page IV.

h.   On March 19, 2007, FCX issued 136.9 million common shares to acquire Phelps Dodge.  On March 28, 2007, FCX sold 47.15 million common shares.  Common shares outstanding on December 31, 2007, totaled 382 million.  Assuming conversion of the instruments discussed in Note g above, total potential common shares outstanding would be 445 million at December 31, 2007.

SUMMARY CONTRIBUTION ANALYSIS

FCX’s operating performance, including Phelps Dodge’s results beginning March 20, 2007, and the impact of purchase accounting adjustments, is shown below for the 2007 periods (in millions):

						(Loss)
						Income from
			Operating			Continuing
	Revenues		Income			Operations
Three Months Ended December 31, 2007
FCX, excluding Phelps Dodge	$	952	$	123		$	(230	)a
Phelps Dodge resultsb		3,112		1,261			860
Purchase accounting impacts:
Inventories and mill and leach stockpiles		-		(81	)		(50	)
Property, plant and equipment		-		(226	)		(143	)
Intangible assets and liabilities		120		75			50
Consolidated	$	4,184	$	1,152		$	487
Year Ended December 31, 2007
FCX, excluding Phelps Dodge	$	6,034	$	3,055		$	824	a
Phelps Dodge resultsb		10,785		4,756			2,903	c
Purchase accounting impacts:
Inventories and mill and leach stockpiles		-		(737	)		(464	)
Property, plant and equipment		-		(595	)		(375	)
Intangible assets and liabilities		120		76			54
Consolidated	$	16,939	$	6,555		$	2,942

a.   Includes net losses on early extinguishment of debt totaling $173 million ($132 million to net income or $0.33 per share) for full-year 2007 for debt prepayments.  Also includes net interest expense totaling $111 million ($86 million to net income or $0.21 per share) in fourth-quarter 2007 and $429 million ($335 million to net income or $0.84 per share) for full-year 2007 for new debt used to acquire Phelps Dodge.

b.   Includes credits to revenues for noncash mark-to-market accounting adjustments on copper price protection programs totaling $37 million ($23 million to net income or $0.06 per share) in fourth-quarter 2007 and charges totaling $175 million ($106 million to net income or $0.27 per share) for full-year 2007, representing the change in the mark-to-market liability to fair value.  With the acquisition of Phelps Dodge, FCX assumed Phelps Dodge’s copper hedging contracts for which the price of 486 million pounds of copper sold in 2007 was capped at $2.00 per pound.  These copper price protection programs matured at December 31, 2007, and FCX paid $598 million upon settlement in January 2008.  FCX does not currently intend to enter into similar hedging programs in the future.

c.   Includes gains totaling $85 million ($52 million to net income or $0.13 per share) for full-year 2007 primarily related to sales of marketable equity securities.

4

Purchase Accounting.  During the fourth quarter of 2007, FCX revised its preliminary purchase price allocation based on revised valuation estimates for its property, plant and equipment, which includes proven and probable reserves, resulting in an approximate $1.4 billion increase in the related estimated fair values.  FCX will finalize the purchase price allocation during first-quarter 2008.  A summary of the current purchase price allocation to the acquired assets and liabilities on March 19, 2007, follows (in billions):

							Preliminary
	Phelps Dodge						Purchase
	Historical			Fair Value			Price
	Balances			Adjustments			Allocation
Cash and cash equivalents	$	4.2		$	-		$	4.2
Inventories, including mill and leach stockpiles		0.9			2.8			3.7
Property, plant and equipment		6.0			16.2			22.2
Other assets		3.1			0.2			3.3
Allocation to goodwill		-			5.6			5.6
Total assets		14.2			24.8			39.0
Deferred income taxes (current and long-term)		(0.7	)		(6.8	)		(7.5	)
Other liabilities		(4.1	)		(0.4	)		(4.5	)
Minority interests		(1.2	)		-			(1.2	)
Total	$	8.2		$	17.6		$	25.8

The following table summarizes the impacts of purchase accounting fair value adjustments associated with the increases in the carrying values of the acquired metal inventories, including mill and leach stockpiles, property, plant and equipment, and intangible assets and liabilities resulting from the acquisition of Phelps Dodge.  These charges do not affect cash flows.  The impact on production costs from inventory valuations is expected to continue to decline in 2008.

	2007
	First		Second		Third			Fourth						2008
(In millions)	Quarter		Quarter		Quarter			Quarter			Total			Estimate
Production costs	$	96	$	269	$	291		$	81		$	737		$	60
Depreciation, depletion and amortization		28		186		155			226			595			940
Amortization of intangibles		-		-		(1	)		(75	)		(76	)		75
Total	$	124	$	455	$	445		$	232		$	1,256		$	1,075
Reduction of net income	$	79	$	284	$	279		$	143		$	785		$	670

OPERATIONS

Consolidated copper sales of 878 million pounds in the fourth quarter of 2007 approximated previous estimates of 875 million pounds reported on October 24, 2007.  Slightly lower production and sales from North and South America were offset by higher sales from Indonesia.  Consolidated gold sales of 161,000 ounces in fourth-quarter 2007 were higher than previous estimates of 100,000 ounces because of mine sequencing at the Grasberg mine in Indonesia.  As expected, consolidated gold sales in the 2007 fourth quarter were lower than the year ago period because of mining a section of lower grade ore.  Consolidated molybdenum sales in fourth-quarter 2007 approximated 19 million pounds.  Pro forma consolidated sales for 2007 (including pre-acquisition Phelps Dodge sales) were 3.9 billion pounds of copper, 2.3 million ounces of gold and 69 million pounds of molybdenum.  Consolidated unit net cash costs were $1.08 per pound in the fourth quarter of 2007 and $0.75 per pound on a pro forma basis for the year 2007.  As expected, fourth-quarter 2007 unit costs were higher than prior 2007 quarterly periods and the 2007 average because of lower volumes at Grasberg.  Assuming average prices of $3.00 per pound for copper, $800 per ounce for gold and $30 per pound for molybdenum for 2008, unit net cash costs for the year 2008 would average approximately $0.96 per pound.  Pro forma amounts in the tables below reflect the inclusion of Phelps Dodge results prior to the March 19, 2007 acquisition.

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			Years Ended
	Fourth Quarter		December 31,
	2007	2006	2007	2006
	Actual	Pro forma	Pro forma	Pro forma
Consolidated Operating Data
Copper (millions of recoverable pounds)
Production	926	1,044	3,884	3,639
Salesa	878	1,031	3,862	3,630
Average realized price per pound, excluding hedging	$3.12	$2.99	$3.28	$3.06
Average realized price per pound, including hedging	$3.16	$3.19	$3.23	$2.79
Unit net cash costsb	$1.08	$0.71	$0.75	$0.70
Gold (thousands of recoverable ounces)
Production	186	544	2,329	1,863
Salesa	161	538	2,320	1,866
Average realized price per ounce	$803	$627	$682	$566	c
Molybdenum (millions of recoverable pounds)
Production	17	17	70	68
Salesa	19	18	69	69
Average realized price per pound	$27.84	$22.68	$25.87	$21.87

a.   Excludes sales of purchased metal.

b.   Reflects weighted average unit net cash costs, net of by-product credits, for all mines.  For reconciliations of unit net cash costs per pound by geographic region to production and delivery costs applicable to sales reported in FCX’s consolidated financial statements or pro forma consolidated financial results refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VIII, which is available on our web site, “www.fcx.com.”

c.   Includes a reduction of approximately $37 per ounce for a loss on redemption of FCX’s Gold-Denominated Preferred Stock, Series II.

FCX sells copper contained in concentrate, cathodes, rod and wire.  Approximately two-thirds of FCX’s copper sales are concentrate and cathodes and the remaining one-third (principally North America) is rod and wire.  Under the long-established structure of sales agreements prevalent in the industry, copper contained in concentrates and cathodes is generally provisionally priced at the time of shipment. The provisional prices are finalized in a specified future period (generally one to four months from the shipment date) based on quoted LME or COMEX prices.  The sales subject to final pricing are generally settled in a subsequent month or quarter.  Because a significant portion of FCX’s concentrate and cathode sales in any quarterly period usually remain subject to final pricing, the quarter-end price is a major determinant of recorded revenues and the average recorded realized price for copper for the period.

While LME copper prices averaged $3.28 per pound during the fourth quarter of 2007, FCX’s recorded realizations of $3.12 per pound, excluding hedging, during the fourth quarter of 2007 were heavily weighted to the applicable forward copper prices at the end of the quarter ($3.02 per pound).  Approximately half of FCX’s consolidated copper sales during the fourth quarter were provisionally priced at the time of shipment and are subject to final pricing in 2008.

At December 31, 2007, FCX’s consolidated copper sales included 402 million pounds of copper, priced at an average of $3.02 per pound, subject to final pricing over the next several months.  Each $0.05 change in the price realized from the December 31, 2007, price would result in an approximate $14 million effect on FCX’s 2008 net income.  The LME closing spot price for copper on January 22, 2008, was $3.20 per pound.  Fourth-quarter 2007 adjustments to concentrate sales recognized in prior quarters decreased revenues by $281 million ($137 million to net income or $0.33 per share) compared with a decrease of $71 million ($38 million to net income or $0.17 per share) in the fourth quarter of 2006.

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North American Mining.  FCX operates six open-pit copper mining complexes in North America (Morenci, Bagdad, Sierrita and Safford in Arizona and Chino and Tyrone in New Mexico) and conducts molybdenum mining operations at the Henderson mine in Colorado.  By-product molybdenum is produced at Sierrita, Bagdad, Chino and Morenci.  In addition, FCX is pursuing a project to restart the Climax molybdenum mine in Colorado.  All of these mining operations are wholly owned, except for Morenci.  FCX records its 85 percent joint venture interest in Morenci using the proportionate consolidation method.  The North American copper mining operations are operated in an integrated fashion and have long-lived reserves with significant additional development potential.

			Years Ended
	Fourth Quarter		December 31,
Consolidated	2007	2006	2007	2006
North American Mining Operations	Actual	Pro forma	Pro forma	Pro forma
Copper (millions of recoverable pounds)
Production	327	329	1,320	1,305
Salesa	316	333	1,332	1,303
Average realized price per pound:
Excluding hedging	$3.24	$3.13	$3.26	$3.03
Including hedgingb	$3.35	$3.75	$3.12	$2.26
Molybdenum (millions of recoverable pounds)
Production	16	17	69	68
Salesa	19	18	69	69
Average realized price per pound	$27.84	$22.68	$25.87	$21.87

a.   Excludes sales of purchased metal.

b.   Includes impact of hedging gains (losses) related to copper price protection programs.

Consolidated copper sales in North America totaled 316 million pounds in the fourth quarter of 2007, lower than the pro forma fourth-quarter 2006 sales because of the timing of sales.  Consolidated copper sales from North American operations totaled 1.3 billion pounds in each of the years ended December 31, 2007 and 2006.

FCX is the world’s largest producer of molybdenum through the Henderson molybdenum mine and as a by-product at several of its copper mines.  The Henderson block-cave underground mining complex produces high-purity, chemical-grade molybdenum concentrates, which are further processed into value-added molybdenum chemical products.

Consolidated molybdenum sales from the Henderson and by-product mines totaled 69 million pounds in each of the years ended December 31, 2007 and 2006.

Approximately 85 percent of expected 2008 molybdenum production is committed for sale throughout the world pursuant to annual or quarterly agreements based primarily on prevailing market prices one month prior to the time of sale.  For 2009, 90 percent of sales is expected to be priced at approximate prevailing market prices.  The Metals Week Dealer Oxide closing price for molybdenum on January 21, 2008, was $33.25 per pound.

Unit Net Cash Costs  for North American Copper Mines.  The following table summarizes fourth-quarter 2007 actual unit net cash costs at the North American copper mines and pro forma unit net cash costs for fourth-quarter 2006 and the years 2007 and 2006.

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							Years Ended
	Fourth Quarter						December 31,
	2007			2006			2007			2006
	Actual			Pro forma			Pro forma			Pro forma
Per pound of copper:
Site production and delivery, after adjustments	$	1.56		$	1.31		$	1.43		$	1.14
By-product credits, primarily molybdenum		(0.69	)		(0.59	)		(0.66	)		(0.60	)
Treatment charges		0.11			0.06			0.09			0.07
Unit net cash costsa	$	0.98		$	0.78		$	0.86		$	0.61

a.   For a reconciliation of actual and pro forma unit net cash costs per pound to production and delivery costs applicable to actual or pro forma sales reported in FCX’s consolidated financial statements or pro forma consolidated financial results refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VIII, which is available on our web site, “www.fcx.com.”

North America unit net cash costs were higher in fourth-quarter 2007 as compared with fourth-quarter 2006 primarily because of higher mining costs associated with additional tons mined, higher energy and labor costs and higher maintenance costs at the Morenci and Bagdad mines.  Unit net cash costs were higher for the full year 2007 as compared with the full year 2006 because of higher labor, maintenance, operating supplies and energy costs, partly offset by favorable by-product credits as a result of higher molybdenum prices.

Assuming an average copper price of $3.00 per pound and an average molybdenum price of $30 per pound for 2008 and achievement of current 2008 sales estimates, FCX estimates that its 2008 average unit net cash costs for its North American mines, including molybdenum credits, would approximate $1.00 per pound of copper.

Unit Net Cash Costsfor Henderson Molybdenum Mine.  Fourth-quarter 2007 unit net cash costs of $4.68 per pound of molybdenum at the Henderson molybdenum mine were higher, compared with pro forma unit net cash costs of $4.03 per pound for the 2006 quarter, primarily because of higher input costs, including labor, supplies and service costs, and higher taxes.  Assuming achievement of current 2008 sales estimates, FCX estimates 2008 average unit net cash costs for its Henderson mine at approximately $4.50 per pound of molybdenum.

South American Mining.  FCX operates four copper mines in South America – Candelaria, Ojos del Salado and El Abra in Chile and Cerro Verde in Peru.  These operations are consolidated in FCX’s financial statements, with outside ownership reported as minority interests.

FCX owns 80 percent of the Candelaria and Ojos del Salado mining complexes, which include the Candelaria open-pit and underground mines and the Ojos del Salado underground mines.  These mines use common processing facilities to produce copper concentrates.  FCX owns a 51 percent interest in El Abra, an open-pit mine producing electrowon copper cathodes.  FCX owns a 53.6 percent interest in Cerro Verde, an open-pit mine producing both electrowon copper cathodes and copper concentrates.

			Years Ended
	Fourth Quarter		December 31,
Consolidated	2007	2006	2007	2006
South American Mining Operations	Actual	Pro forma	Pro forma	Pro forma
Copper (millions of recoverable pounds):
Production	391	280	1,413	1,133
Sales	379	266	1,399	1,126
Average realized price per pound	$3.06	$3.00	$3.25	$3.03
Gold (thousands of recoverable ounces):
Production	33	26	116	112
Sales	30	26	114	111
Average realized price per ounce	$792	$619	$701	$552

8

South American copper sales in the fourth quarter of 2007 were higher than in the fourth quarter of 2006 primarily reflecting higher production from Cerro Verde’s new concentrator (see page 13), partly offset by lower production at El Abra as a result of lower ore grades.  Consolidated copper sales totaled 1.4 billion pounds for the full year 2007 and 1.1 billion pounds from South American operations in 2006.  The increases for full-year 2007, compared with full-year 2006, reflect incremental production from a new concentrator at Cerro Verde.

Unit Net Cash Costs.  The following table summarizes fourth-quarter 2007 actual unit net cash costs at the South American copper mines and pro forma unit net cash costs for fourth-quarter 2006 and the years 2007 and 2006.

							Years Ended
	Fourth Quarter						December 31,
	2007			2006			2007			2006
	Actual			Pro forma			Pro forma			Pro forma
Per pound of copper:
Site production and delivery, after adjustments	$	0.96		$	0.97		$	0.91		$	0.82
By-product credits, primarily gold		(0.12	)		(0.07	)		(0.09	)		(0.08	)
Treatment charges		0.18			0.15			0.20			0.17
Unit net cash costsa	$	1.02		$	1.05		$	1.02		$	0.91

a.   For a reconciliation of actual and pro forma unit net cash costs per pound to production and delivery costs applicable to actual or pro forma sales reported in FCX’s consolidated financial statements or pro forma consolidated financial results refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VIII, which is available on our web site, “www.fcx.com.”

South America unit net cash costs were slightly lower in the fourth quarter of 2007 compared with the fourth quarter of 2006 primarily because of increased production from the recently expanded mill at Cerro Verde.  Partly offsetting the benefits of Cerro Verde’s increased production were higher mining and mill costs at Candelaria and higher energy costs at El Abra.  For the full year 2007, unit net cash costs were higher because of higher energy, treatment, labor, maintenance and freight costs, partly offset by the benefits of higher production from the recently expanded mill at Cerro Verde and favorable by-product credits.

In third-quarter 2007, FCX agreed to a five-year voluntary contribution program in Peru, resulting in charges totaling $8 million, $0.02 per pound, in the fourth quarter of 2007 and $49 million, $0.03 per pound, in 2007. Contributions in future periods, which are not tax deductible, are expected to be 3.75 percent of Cerro Verde’s net annual profit after income taxes.

Assuming achievement of current 2008 sales estimates, FCX estimates that its 2008 average unit net cash costs for its South American mines, including gold credits, would approximate $1.05 per pound of copper.

Indonesian Mining.  Through its 90.6 percent owned subsidiary PT Freeport Indonesia (PT-FI), FCX operates the world’s largest copper and gold mine in terms of reserves at its Grasberg operations in Papua, Indonesia. After mining a high-grade section of the Grasberg open pit during the first half of 2007, PT-FI mined in a relatively low-grade section in the second half of 2007.  Therefore, PT-FI reported lower fourth-quarter 2007 sales volumes compared with the fourth quarter of 2006.  Copper and gold volumes in the fourth quarter of 2007 were higher than previous estimates primarily because of changes in the timing of access to higher grade ore in the Grasberg open pit.

9

			Years Ended
Consolidated	Fourth Quarter		December 31,
Indonesian Mining Operations	2007	2006	2007	2006
Copper (millions of recoverable pounds):
Production	208	435	1,151	1,201
Sales	183	432	1,131	1,201
Average realized price per pound	$3.03	$2.88	$3.32	$3.13
Gold (thousands of recoverable ounces):
Production	147	514	2,198	1,732
Sales	124	508	2,185	1,736
Average realized price per ounce	$807	$628	$681	$567	a

a.   Amount was $606per ounce before a loss on redemption of FCX’s Gold-Denominated Preferred Stock, Series II.

FCX’s consolidated share of annual sales from Indonesia in 2008 is projected to approximate 1.2 billion pounds of copper and 1.2 million ounces of gold.  These estimates for gold are lower than previous forecasts of 1.4 million ounces of gold because of mine plan changes.  At the Grasberg mine, the sequencing in mining areas with varying ore grades causes fluctuations in the timing of ore production, resulting in varying quarterly and annual sales of copper and gold.  PT-FI expects to continue mining in a relatively low-grade section of the Grasberg open pit in the first half of 2008 and in a higher-grade section in the second half of 2008.  Approximately 65 percent of 2008 copper sales and 75 percent of 2008 gold sales are estimated in the second half of the year.

Unit Net Cash Costs.  PT-FI’s unit net cash costs, including gold and silver credits, averaged $0.29 per pound for the year ended December 31, 2007 and $0.60 per pound for the year ended December 31, 2006.  The lower unit net cash costs in 2007 were primarily the result of higher gold and silver credits.  Fourth-quarter 2007 average unit net cash costs of $1.39 per pound of copper were higher than the $0.44 per pound in the 2006 quarter, reflecting the significantly lower copper and gold volumes, partly offset by higher gold prices during fourth-quarter 2007.  Unit site production and delivery costs will vary with fluctuations in production volumes because of the primarily fixed nature of PT-FI’s cost structure.  Because the majority of PT-FI’s costs are fixed, unit costs vary with the volumes sold and the price of gold.

							Years Ended
	Fourth Quarter						December 31,
	2007			2006			2007			2006
Per pound of copper:
Site production and delivery, after adjustments	$	1.66		$	0.77		$	1.19		$	1.03
Gold and silver credits		(0.64	)		(0.77	)		(1.36	)		(0.93	)
Treatment charges		0.29			0.33			0.34			0.40
Royalties		0.08			0.11			0.12			0.10
Unit net cash costsa	$	1.39		$	0.44		$	0.29		$	0.60

a.   For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX’s consolidated financial statements refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VIII, which is available on our web site, “www.fcx.com.”

Assuming average copper prices of $3.00 per pound and average gold prices of $800 per ounce for 2008 and achievement of current 2008 sales estimates, PT-FI estimates that its 2008 unit net cash costs, including gold and silver credits, would approximate $0.80 per pound.  The change from 2007 primarily reflects lower gold volumes.

10

OTHER ITEMS

Atlantic Copper, FCX’s wholly owned Spanish smelting unit, reported an operating loss of $7 million in the fourth quarter of 2007, compared with operating income of $19 million in the 2006 period.  Operating income was lower in the 2007 quarter because of lower treatment rates and higher operating costs resulting from a stronger euro and higher energy costs.

FCX defers recognizing profits on PT-FI’s sales to Atlantic Copper and on 25 percent of PT-FI’s sales to PT Smelting, PT-FI’s 25 percent-owned Indonesian smelting unit, until the final sales to third parties occur.  Changes in these net deferrals resulted in additions to FCX’s net income totaling $19 million, $0.05 per share, in the fourth quarter of 2007, and $8 million, $0.02 per share, for the year 2007.  For the 2006 periods, changes in these net deferrals resulted in additions to FCX’s net income totaling $4 million, $0.02 per share, in the fourth quarter and $17 million, $0.08 per share, for the year 2006.  At December 31, 2007, FCX’s net deferred profits on PT-FI concentrate inventories at Atlantic Copper and PT Smelting to be recognized in future periods’ net income after taxes and minority interest sharing totaled $93 million.  Based on copper prices of $3.00 per pound and gold prices of $800 per ounce for 2008 and current shipping schedules, FCX estimates that the net change in deferred profits on intercompany sales will result in an increase to net income of approximately $40 million in the first quarter of 2008.  The actual change in deferred intercompany profits may differ substantially from this estimate because of changes in the timing of shipments to affiliated smelters and metal prices.

FCX also defers recognizing profits on intercompany molybdenum sales from the Henderson, Bagdad, Sierrita, Chino, Morenci and Cerro Verde mines to Climax Molybdenum Marketing Corporation (CMMC) until the final sales to third parties occur.  Changes in these net deferrals resulted in reductions to FCX's net income totaling $13 million, $0.03 per share, in the fourth quarter of 2007, and $220 million, $0.55 per share, for the year 2007.  Based on molybdenum prices of $30 per pound, FCX estimates that the net change in these deferred profits will not have a material impact on first-quarter 2008 net income.  Absent significant changes in molybdenum prices, FCX does not anticipate significant changes in these deferred profits at current production and sales levels.

Discontinued Operations.  On October 31, 2007, FCX sold its international wire and cable business, PDIC, for $735 million.  The transaction generated proceeds of approximately $650 million net of taxes and other costs.  PDIC’s operating results are reported as discontinued operations in FCX’s condensed consolidated statements of income.  (Loss) income from discontinued operations for PDIC totaled $(9) million, $(0.02) per share, in the fourth quarter of 2007 and $35 million, $0.09 per share, in 2007, including transaction and related costs associated with the disposition.

PROVEN AND PROBABLE RESERVES

FCX’s estimated consolidated recoverable reserves include 93.2 billion pounds of copper, 41.0 million ounces of gold, 2.0 billion pounds of molybdenum, 230.9 million ounces of silver and 0.6 billion pounds of cobalt.  Estimated recoverable reserves were assessed using a copper price of $1.20 per pound, a gold price of $450 per ounce and a molybdenum price of $6.50 per pound, compared with FCX’s 2006 assumptions of $1.00 per pound for copper and $400 per ounce for gold and Phelps Dodge’s 2006 assumptions of $1.05 per pound for copper and $5.00 per pound for molybdenum.

	Preliminary Recoverable Reservesa
	at December 31, 2007
	Copper	Gold	Molybdenum
	(billions of lbs)	(millions of ozs)	(billions of lbs)
North America	25.8	0.2	1.8
South America	26.0	1.4	0.2
Indonesia	37.1	39.4	-
Africa	4.3	-	-
Consolidated Basisb	93.2	41.0	2.0
Net Equity Interestc	77.0	37.0	1.9

11

a.   Proven and probable recoverable reserves are estimated metal quantities from which FCX expects to be paid after application of estimated metallurgical recovery rates and smelter recovery rates, where applicable.  Recoverable reserves are that part of a mineral deposit which FCX estimates can be economically and legally extracted or produced at the time of the reserve determination.

b.   Consolidated basis represents estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg mining complex in Indonesia.

c.   Net equity interest represents estimated consolidated basis metal quantities further reduced for minority interest owners.

Net additions to recoverable copper reserves totaled approximately 2.3 billion pounds at the North American mines and approximately 1.8 billion pounds at the South American mines because of higher price assumptions partly offset by increased costs.  Partly offsetting these additions were net reductions at the Indonesian mines primarily because the Dom ore bodies (0.7 billion pounds of copper, 0.2 million ounces of gold, net of joint venture participant share) were reclassified as mineralized material following an updated risk assessment of the Dom’s proximity to the mill complex and updates to the long-term mine plans for the underground ore bodies.

	Consolidated ReservesRollforward
	Copper	Gold	Molybdenum
	(billions of lbs)	(millions of ozs)	(billions of lbs)
Reserves – Dec. 31, 2006a	93.6	42.5	2.0
Net additions/revisions	3.5	0.8	0.1
Production	(3.9)	(2.3)	(0.1)
Reserves – Dec. 31, 2007	93.2	41.0	2.0

a.   Includes Phelps Dodge amounts prior to the acquisition.

DEVELOPMENT and EXPLORATION ACTIVITIES

Development Activities.  FCX has significant development activities under way to expand its production capacity, extend its mine lives and develop large-scale underground ore bodies.  Recently completed or current major projects include the expansion of Cerro Verde which was completed in 2006 and operated at capacity in the second half of 2007; a major new mining complex currently being commissioned at Safford, Arizona; the restart of a mill and the construction of a concentrate-leach, direct-electrowinning facility at Morenci; a sulfide leach project to extend the mine life at El Abra; the development of the large-scale, high-grade underground ore bodies in the Grasberg district; a project to restart open-pit mining at Climax and development of the highly prospective Tenke Fungurume project in the Democratic Republic of Congo.

In addition to the projects currently under way, FCX is continuing to review its assets to evaluate the potential for expansion opportunities associated with existing ore bodies.  As an initial step, FCX will be developing attractive economic projects for incremental expansions at the Morenci, Sierrita and Bagdad mines in Arizona and the Cerro Verde mine in Peru.  These projects will require an estimated capital cost approximating $400 million and would provide incremental production ramping up to over 200 million pounds of copper and 7 million pounds of molybdenum by 2011.  Detailed engineering for these projects is under way.  In addition, FCX is taking steps to restart the Miami mine in Arizona, which is expected to produce approximately 100 million pounds of copper per year over an approximate five-year period beginning in 2010.  Capital investment for this restart is expected to approximate $100 million.  FCX is continuing to review potential large-scale expansion opportunities and other organic growth opportunities.

North America.  Construction of a major new copper mine in Safford, Arizona, is substantially completed and first copper was produced by year-end 2007.  The Safford copper mine will produce ore from two open-pit mines located in southeastern Arizona and includes a solution extraction/electrowinning facility.  Construction commenced in August 2006 and the mine is being commissioned in advance of initial expectations.  The total capital investment for this project approximated $675 million.  FCX will continue to pursue significant additional exploration and

12

development potential in this district, including the Lone Star project currently being evaluated with a drilling program.

In December 2007, FCX announced its plans to proceed with the restart of the Climax mine near Leadville, Colorado.  Climax is believed to be the largest, highest grade and lowest cost undeveloped molybdenum ore body in the world.  The initial $500 million project involves open pit mining and the construction of new milling facilities.  Annual production is expected to approximate 30 million pounds of molybdenum beginning in 2010 at estimated cash costs approximating $3.50 per pound.  The project is designed to enable the consideration of further large scale expansion of the Climax mine.  FCX is evaluating a second phase of the Climax project which could potentially double annual molybdenum production to 60 million pounds.

The concentrate-leach, direct electrowinning facility at Morenci is ramping up production following commissioning in third-quarter 2007.  This project uses FCX’s proprietary medium-temperature, pressure-leaching and direct-electrowinning technology which will enhance cost savings by processing concentrate on-site instead of shipping concentrate to smelters for treatment.  This project included the restart of a mill in the first half of 2007.  Mill throughput adds 115 million pounds of copper per year and is operating near capacity of 54,000 short tons per day.  The overall project required a total capital investment of approximately $250 million.

South America.  The recently expanded mill at Cerro Verde reached design capacity of 108,000 metric tons of ore per day in mid-2007 and averaged approximately 106,300 metric tons per day in the fourth quarter. This expansion enables Cerro Verde to produce approximately 650 million pounds per year (approximately 348 million pounds per year for FCX’s share) and 8 million pounds of molybdenum per year for the next several years.

At the end of 2006, a feasibility study was completed to evaluate the development of a large sulfide deposit at El Abra.  This project would extend the mine life by over ten years.  Copper production from the sulfides is targeted to begin in 2010.  The existing facilities at El Abra would be used to process the additional reserves, minimizing capital spending requirements.  Total initial capital for the project is estimated to approximate $450 million, the majority of which will be spent between 2008 and 2011.  FCX is working with Chilean authorities on an environmental impact study associated with this project.

Indonesia.  PT-FI has several projects in progress throughout the Grasberg District, including developing its large-scale underground ore bodies located beneath and adjacent to the Grasberg open pit.  The expansion of the currently producing Deep Ore Zone (DOZ) mine to 50,000 metric tons of ore per day is complete with fourth-quarter rates averaging 59,000 metric tons per day.  A further expansion of the DOZ mine to 80,000 metric tons per day is under way with completion targeted by 2010.  Other projects include the development of the high-grade Big Gossan mine, expected to ramp-up to full production of 7,000 metric tons per day in late 2010, and the continued development of the Common Infrastructure project, which will provide access to the Grasberg underground ore body, the Kucing Liar ore body and future development of the mineralized areas below the DOZ mine.

Africa.  FCX holds an effective 57.75 percent interest in the Tenke Fungurume copper/cobalt mining concessions in the Katanga province of the Democratic Republic of Congo.  FCX is the operator of the project.  The initial project at Tenke Fungurume is based on ore reserves approximating 100 million metric tons with ore grades of 2.3 percent copper and 0.3 percent cobalt.  Construction of this high potential project is in progress.  Operations are targeted to commence during 2009, with average annual production of approximately 250 million pounds of copper and approximately 18 million pounds of cobalt.

FCX is responsible for funding 70 percent of project development costs.  The total capital investment for this project is currently estimated at approximately $900 million, with approximately 35 percent incurred through December 31, 2007.  Capital cost estimates will continue to be reviewed as engineering and construction activities progress.

Exploration Activities.  FCX is conducting exploration activities near its existing mines and in other high potential areas around the world.  Aggregate exploration expenditures in 2008 are expected to approximate $175 million, compared with $119 million in 2007.

FCX’s exploration efforts in North America include drilling of the Lone Star deposit located approximately four miles from the ore body within the Safford district, as well as targets in the Morenci

13

and Bagdad districts.  FCX is also conducting exploration activities near the Henderson ore body.  In South America, exploration is ongoing in and around the Cerro Verde and Candelaria/Ojos del Salado deposits. In Africa, FCX is actively pursuing targets outside of the area of initial development at Tenke Fungurume.  The number of drill rigs operating on these and other programs near the company’s minesites increased from 26 at the end of March 2007 to 55 currently.

PT-FI’s 2008 exploration efforts in Indonesia include testing extensions of the Deep Grasberg and Kucing Liar mine complex and to evaluate targets in the area between the Ertsberg East and Grasberg mineral systems from the new Common Infrastructure tunnels.  Initial drill results from the Common Infrastructure tunnel are positive and additional drilling is in process.  FCX continues its efforts to resume exploration activities in certain prospective areas in Papua, outside Block A (the Grasberg contract area).

CASH and DEBT

At December 31, 2007, FCX had consolidated cash of $1.6 billion and net cash available to the parent company of $1.1 billion as shown below (in billions):

	December 31,
	2007
Cash from United States operations	$	0.1
Cash from international operations		1.5
Total consolidated cash		1.6
Less minority interests’ share		(0.3	)
Cash, net of minority interests’ share		1.3
Withholding tax if distributed		(0.2	)
Net cash available to parent company	$	1.1

 At December 31, 2007, FCX had $7.2 billion in debt, including $6.0 billion in acquisition debt, $0.8 billion in Phelps Dodge debt assumed in the transaction and $0.4 billion of previously existing FCX debt.  The following table summarizes FCX’s debt transactions since September 30, 2007 (in billions):

Total debt at September 30, 2007	$	8.7
Repayments of term loans		(1.5	)
Other borrowings		0.3
Other repayments		(0.3	)
Total debt at December 31, 2007	$	7.2

Since completion of the Phelps Dodge transaction on March 19, 2007, FCX has repaid a total of $10.4 billion in debt and has fully repaid the original $10 billion in term loans issued in connection with the acquisition.

OUTLOOK

FCX’s consolidated sales volumes for 2008 are currently projected to approximate 4.3 billion pounds of copper, 1.3 million ounces of gold and 75 million pounds of molybdenum.  Projected sales volumes for the first quarter of 2008 approximate 885 million pounds of copper, 170 thousand ounces of gold and 19 million pounds of molybdenum.  Because of mine sequencing at Grasberg and the ramp-up of production at Safford, second-half 2008 production is expected to be higher than the first half.  Approximately 56 percent of consolidated copper sales and 72 percent of consolidated gold sales are expected in the second half of the year.  The achievement of FCX’s sales estimates will be dependent on the achievement of targeted mining rates and expansion plans, the successful operation of production facilities, the impact of weather conditions and other factors.

Using estimated sales volumes for 2008 and assuming 2008 average prices of $3.00 per pound of copper, $800 per ounce of gold and $30 per pound of molybdenum, FCX’s consolidated operating cash flows would approximate $5 billion in 2008.  Operating cash flows in the first quarter are expected to be the lowest of the year, impacted by the $598 million payment in January 2008 to settle the 2007 copper

14

price protection contract, taxes and other working capital items and the timing of production.  Using flat pricing assumptions during the year, second-half 2008 operating cash flows would be significantly higher than the first half.  FCX’s capital expenditures for 2008 are currently estimated to approximate $2.4 billion.  FCX expects to generate cash flows during 2008 significantly greater than its capital expenditures, minority interests distributions, dividends and other cash requirements.

FINANCIAL POLICY

FCX has a long track record for maximizing shareholder values through pursuing development projects with high rates of return and returning cash to shareholders through common stock dividends and share purchases.

FCX placed a high priority on debt reduction during 2007 and has achieved meaningful debt reduction since the Phelps Dodge acquisition.  In December 2007, FCX increased its common stock annual dividend from $1.25 to $1.75 per share, with the first quarterly dividend of $0.4375 to be paid in February 2008, and authorized a new 20-million share open market share purchase program.  As of January 22, 2008, no shares have been purchased under the program.  Common dividends currently total approximately $670 million per year and preferred dividends total approximately $255 million per year.  The continuation of the positive performance of FCX’s operations would enable the company to consider additional returns to shareholders.  FCX’s management and its Board of Directors review the company’s financial policy on an ongoing basis.

 FCX is a leading international mining company with headquarters in Phoenix, Arizona.  FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum.  FCX has a dynamic portfolio of operating, expansion and growth projects in the copper industry and is the world’s largest producer of molybdenum.

The company's portfolio of assets include the Grasberg mining complex, the world's largest copper and gold mine in terms of reserves, significant mining operations in the Americas, including the large scale Morenci/Safford minerals district in North America and the Cerro Verde and El Abra operations in South America, and the potential world-class Tenke Fungurume development project in the Democratic Republic of Congo.  Additional information about FCX is available on our web site at www.fcx.com.

Cautionary Statement and Regulation G Disclosure:  This press release contains forward-looking statements in which we discuss factors we believe may affect our performance in the future.  Forward-looking statements are all statements other than historical facts, such as statements regarding projected ore grades and milling rates, projected sales volumes, projected unit net cash costs, projected operating cash flows, projected capital expenditures, the impact of copper, gold and molybdenum price changes, the impact of changes in deferred intercompany profits on earnings, projected debt and cash balances, and the impact of purchase accounting, including on production costs and depreciation, depletion and amortization expenses.  Accuracy of the forward-looking statements depends on assumptions about events that change over time and is thus susceptible to periodic change based on actual experience and new developments.  FCX cautions readers that it assumes no obligation to update or publicly release any revisions to the forward-looking statements in this press release and, except to the extent required by applicable law, does not intend to update or otherwise revise the forward-looking statements more frequently than quarterly.  Additionally, important factors that might cause future results to differ from these projections include mine sequencing, production rates, industry risks, commodity prices, political risks, weather-related risks, labor relations, currency translation risks and other factors described in FCX's Quarterly Report on Form 10-Q for the three months ended March 31, 2007, filed with the Securities and Exchange Commission (SEC).

This press release also contains certain financial measures such as unit net cash costs per pound of copper and unit net cash costs per pound of molybdenum.  As required by SEC Regulation G, reconciliations of these measures to amounts reported in FCX’s consolidated financial statements or pro forma consolidated financial results are in the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VIII, which is available on our web site, “www.fcx.com.”

A copy of this press release is available on our web site, “www.fcx.com.”  A conference call with securities analysts about fourth-quarter 2007 results is scheduled for today at 10:00 a.m. EDT.  The conference call will be broadcast on the Internet along with slides.  Interested parties may listen to the webcast live and view the slides by accessing “www.fcx.com.” A replay of the webcast will be available through Friday, February 15, 2008.

# # #

15

FREEPORT-McMoRan COPPER & GOLD INC.

SELECTED OPERATING DATA

	Three Months Ended December 31,
COPPER, Pro Formaa	Production				Sales
(millions of recoverable pounds)	2007		2006		2007		2006
MINED COPPER (FCX’s net interest in %)
North America
Morenci (85%)	159	b	178	b	159	b	180	b
Bagdad (100%)	51		46		49		46
Sierrita (100%)	37		40		36		40
Chino (100%)	56		42		49		42
Tyrone (100%)	14		15		13		16
Miami (100%)	5		4		5		5
Tohono (100%)	-		1		1		1
Safford (100%)	1		-		-		-
Other (100%)	4		3		4		3
Total North America	327		329		316		333
South America
Candelaria/Ojos del Salado (80%)	127		99		117		95
Cerro Verde (53.6%)	169		66		168		60
El Abra (51%)	95		115		94		111
Total South America	391		280		379		266
Indonesia
Grasberg (90.6%)	208	c	435	c	183	c	432	c
Consolidated	926		1,044		878		1,031
Less minority participants’ share	169		147		165		141
Net	757		897		713		890
Consolidated sales from mines					878		1,031
Purchased copper					126		127
Total consolidated sales					1,004		1,158
Average realized price per pound
Excluding hedging					$3.12		$2.99
Including hedging					$3.16	d	$3.19	d
GOLD, Pro Formaa
(thousands of recoverable ounces)
MINED GOLD (FCX’s net interest in %)
North America (100%)	6	b	4	b	7	b	4	b
South America (80%)	33		26		30		26
Indonesia (90.6%)	147	c	514	c	124	c	508	c
Consolidated	186		544		161		538
Less minority participants’ shares	20		53		18		52
Net	166		491		143		486
Consolidated sales from mines					161		538
Purchased gold					-		1
Total consolidated sales					161		539
Average realized price per ounce					$803		$627
MOLYBDENUM, Pro Formaa
(millions of recoverable pounds)
MINED MOLYBDENUM (FCX’s net interest in %)
Henderson (100%)	9		9		N/A		N/A
By-product – North America (100%)b	7		8		N/A		N/A
By-product – Cerro Verde (53.56%)	1		-		N/A		N/A
Consolidated	17		17		19		18
Purchased molybdenum					2		1
Total consolidated sales					21		19
Average realized price per pound					$27.84		$22.68

a.   The fourth-quarter 2006 data include Phelps Dodge’s pre-acquisition results for comparative purposes only.

b.   Amounts are net of Morenci’s joint venture partner’s 15 percent interest.

c.   Amounts are net of Grasberg’s joint venture partner’s interest, which varies in accordance with the terms of the joint venture agreement.

d.   Includes additions of $0.04 per pound for fourth-quarter 2007 and $0.20 per pound for fourth-quarter 2006 for mark-to-market accounting adjustments on copper price protection programs.

I

FREEPORT-McMoRan COPPER & GOLD INC.

SELECTED OPERATING DATA

(continued)

	Years Ended December 31,
COPPER, Pro Formaa	Production				Sales
(millions of recoverable pounds)	2007		2006		2007		2006
MINED COPPER (FCX’s net interest in %)
North America
Morenci (85%)	687	b	693	b	693	b	692	b
Bagdad (100%)	202		165		200		165
Sierrita (100%)	150		162		157		161
Chino (100%)	190		186		186		186
Tyrone (100%)	50		64		53		64
Miami (100%)	20		19		24		19
Tohono (100%)	3		5		3		5
Safford (100%)	1		-		-		-
Other (100%)	17		11		16		11
Total North America	1,320	c	1,305		1,332	c	1,303
South America
Candelaria/Ojos del Salado (80%)	453		429		447		425
Cerro Verde (53.6%)	594		222		587		214
El Abra (51%)	366		482		365		487
Total South America	1,413	c	1,133		1,399	c	1,126
Indonesia
Grasberg (90.6%)	1,151	d	1,201	d	1,131	d	1,201	d
Consolidated	3,884		3,639		3,862		3,630
Less minority participants’ share	653		537		647		535
Net	3,231		3,102		3,215		3,095
Consolidated sales from mines					3,862		3,630
Purchased copper					650		736
Total consolidated sales					4,512		4,366
Average realized price per pound
Excluding hedging					$3.28		$3.06
Including hedging					$3.23	e	$2.79	e
GOLD, Pro Formaa
(thousands of recoverable ounces)
MINED GOLD (FCX’s net interest in %)
North America (100%)	15	b	19	b	21	b	19	b
South America (80%)	116	f	112		114	f	111
Indonesia (90.6%)	2,198	d	1,732	d	2,185	d	1,736	d
Consolidated	2,329		1,863		2,320		1,866
Less minority participants’ shares	229		184		228		185
Net	2,100		1,679		2,092		1,681
Consolidated sales from mines					2,320		1,866
Purchased gold					6		12
Total consolidated sales					2,326		1,878
Average realized price per ounce					$682		$566	g
MOLYBDENUM, Pro Formaa
(millions of recoverable pounds)
MINED MOLYBDENUM (FCX’s net interest in %)
Henderson (100%)	39		37		N/A		N/A
By-product – North America (100%)b	30		31		N/A		N/A
By-product – Cerro Verde (53.56%)	1		-		N/A		N/A
Consolidated	70	h	68		69	h	69
Purchased molybdenum					9		8
Total consolidated sales					78		77
Average realized price per pound					$25.87		$21.87

a.   Includes Phelps Dodge’s pre-acquisition results for comparative purposes only.

b.   Amounts are net of Morenci’s joint venture partner’s 15 percent interest.

c.   Includes North American copper production of 258 million pounds and sales of 283 million pounds and South American copper production of 259 million pounds and sales of 222 million pounds for Phelps Dodge’s pre-acquisition results.

d.   Amounts are net of Grasberg’s joint venture partner’s interest, which varies in accordance with the terms of the joint venture agreement.

e.   Includes reductions of $0.05 per pound for the year ended December 31, 2007, and $0.27 per pound for the year ended December 31, 2006, for mark-to-market accounting adjustments on copper price protection programs.

f.   Includes gold production of 21 thousand ounces and sales of 18 thousand ounces for Phelps Dodge’s pre-acquisition results.

g.   Includes a reduction of approximately $37 per ounce for a loss on redemption of FCX’s Gold-Denominated Preferred Stock, Series II.

h.   Includes molybdenum production of 14 million pounds and sales of 17 million pounds for Phelps Dodge’s pre-acquisition results.

II

FREEPORT-McMoRan COPPER & GOLD INC.

SELECTED OPERATING DATA

(continued)

	Three Months Ended		Years Ended
	December 31,		December 31,
Statistical Data from Mining Operations, 100%a	2007	2006	2007	2006
North America (copper and molybdenum mines)
Copper Mines
Solution Extraction/Electrowinning (SX/EW) Operations
Leach ore placed in stockpiles (metric tons per day)	971,800	754,800	798,200	801,200
Average copper ore grade (%)	0.24	0.27	0.23	0.30
Copper production (millions of recoverable pounds)	218	249	940	1,013
Mill Operations
Ore milled (metric tons per day)	232,300	212,600	223,800	199,300
Average ore grade (%)
Copper	0.40	0.33	0.35	0.33
Molybdenum	0.02	0.02	0.02	0.02
Production (millions of recoverable pounds)
Copper	137	111	501	414
Molybdenum	7	8	30	31
Henderson Molybdenum Mine
Ore milled (metric tons per day)	24,000	22,700	24,000	22,200
Average molybdenum ore grade (%)	0.23	0.22	0.23	0.23
Molybdenum production (millions of recoverable pounds)	9	9	39	37
South America (copper mines)
SX/EW Operations
Leach ore placed in stockpiles (metric tons per day)	289,600	257,200	289,400	257,400
Average copper ore grade (%)	0.42	0.46	0.43	0.45
Copper production (millions of recoverable pounds)	139	172	569	695
Mill Operations
Ore milled (metric tons per day)	180,300	80,900	167,900	68,500
Average ore grade (%)
Copper	0.80	0.72	0.74	0.87
Molybdenum	0.02	0.02	0.02	0.02
Production (millions of recoverable pounds)
Copper	252	108	844	438
Molybdenum	1	-	1	-
Indonesia (copper mine)
Mill Operations
Ore milled (metric tons per day)	208,600	246,500	212,600	229,400
Average ore grade
Copper (%)	0.65	1.08	0.82	0.85
Gold (grams per metric ton)	0.52	0.95	1.24	0.85
Recovery rates (%)
Copper	88.8	89.5	90.5	86.1
Gold	76.5	84.2	86.2	80.9
Copper (millions of recoverable pounds)
Production	227	469	1,211	1,300
Sales	201	466	1,190	1,300
Gold (thousands of recoverable ounces)
Production	246	571	2,608	1,824
Sales	220	564	2,591	1,831

a.   Includes Phelps Dodge pre-acquisition results for comparative purposes only.

III

FREEPORT-McMoRan COPPER & GOLD INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended						Years Ended
	December 31,						December 31,
	2007			2006			2007a			2006
	(In Millions, Except Per Share Amounts)
Revenuesb	$	4,184		$	1,643		$	16,939		$	5,791
Cost of sales:
Production and delivery		2,422	c		650			8,527	c		2,525
Depreciation, depletion and amortization		400	c		81			1,246	c		228
Total cost of sales		2,822			731			9,773			2,753
Exploration and research expenses		58			3			145			12
Selling, general and administrative expenses		152	d		46			466	d		157
Total costs and expenses		3,032			780			10,384			2,922
Operating income		1,152			863			6,555			2,869
Interest expense, net		(127	)		(14	)		(513	)		(76	)
Losses on early extinguishment and conversion of debt, net		(2	)		-			(173	)		(32	)
Gains on sales of assets		-			1			85	e		31
Other income, net		47			11			157			28
Equity in affiliated companies’ net earnings (losses)		5			(1	)		22			6
Income from continuing operations before income taxes
and minority interests		1,075			860			6,133			2,826
Provision for income taxes		(525	)f		(365	)		(2,400	)		(1,201	)
Minority interests in net income of consolidated subsidiaries		(63	)f		(53	)		(791	)		(168	)
Income from continuing operations		487			442			2,942			1,457
(Loss) income from discontinued operations (net of taxes of $3 million
in fourth quarter and $23 million for the year)		(9	)g		-			35	g		-
Preferred dividends		(64	)		(16	)		(208	)		(61	)
Net income applicable to common stock	$	414		$	426		$	2,769		$	1,396
Basic net income (loss) per share of common stock:
Continuing operations		$1.10			$2.17			$8.02			$7.32
Discontinued operations		(0.02	)g		-			0.10	g		-
Basic net income per share of common stock		$1.08			$2.17			$8.12			$7.32
Diluted net income (loss) per share of common stock:
Continuing operations		$1.07			$1.99			$7.41			$6.63
Discontinued operations		(0.02	)g		-			0.09	g		-
Diluted net income per share of common stockh		$1.05			$1.99			$7.50			$6.63
Average common shares outstanding:
Basic		382	i		197			341	i		191
Dilutedh		409			222			397			221
Dividends declared per share of common stock		$0.4375			$2.125			$1.375			$5.0625

a.   Includes Phelps Dodge results beginning March 20, 2007.

b.   Includes positive (negative) adjustments to prior period concentrate sales totaling $(281) million in fourth-quarter 2007, $(71) million in fourth-quarter 2006, $90 million in year 2007 and $139 million in year 2006.  In addition, credits (charges) for mark-to-market accounting adjustments on copper price protection program totaled $37 million in fourth-quarter 2007 and $(175) million in year 2007.  Year 2006 also includes a $69 million loss on mandatory redemption of FCX’s Gold-Denominated Preferred Stock, Series II.

c.   Includes impact of purchase accounting adjustments related to the Phelps Dodge acquisition, which increased production costs by $125 million in fourth-quarter 2007 and $781 million in year 2007 and increased depreciation, depletion and amortization by $226 million in fourth-quarter 2007 and $595 million in year 2007.

d.   Includes additional costs relating to the acquisition of Phelps Dodge totaling $96 million in fourth-quarter 2007 and $236 million in year 2007.  Also includes stock-based compensation costs related to second-quarter 2007 stock option grants totaling $6 million in fourth-quarter 2007 and $39 million in year 2007.

e.   Primarily represents gains on sales of marketable equity securities.

f.   Includes a $111 million one-time tax charge associated with the reversal of the Phelps Dodge APB Opinion No. 23 indefinite reinvestment assertion on certain earnings in South America, which was fully offset by a reduction in minority interests’ share of net income.

g.   Relates to the operations of PDIC, which FCX sold on October 31, 2007.

h.   Reflects assumed conversion of FCX’s 7% Convertible Senior Notes and 5½% Convertible Perpetual Preferred Stock, resulting in the exclusion of interest expense totaling less than $0.1 million in fourth-quarter 2007, $0.1 million in fourth-quarter 2006, $0.2 million in year 2007 and $13 million in year 2006 and dividends totaling approximately $15 million in each of the fourth quarters of 2007 and 2006 and approximately $60 million in each of the years 2007 and 2006.  Year 2007 also includes assumed conversion of FCX’s 6¾% Mandatory Convertible Preferred Stock, of which FCX sold 28.75 million shares on March 28, 2007, reflecting exclusion of dividends totaling $147 million.  This instrument was not dilutive for fourth-quarter 2007.  The assumed conversions reflect the inclusion of 23 million common shares in fourth-quarter 2007, 23 million common shares in fourth-quarter 2006, 53 million common shares in year 2007 and 29 million common shares in year 2006.

i.   On March 19, 2007, FCX issued 136.9 million shares to acquire Phelps Dodge; and on March 28, 2007, FCX sold 47.15 million common shares in a public offering.

IV

FREEPORT-McMoRan COPPER & GOLD INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

	December 31,
	2007			2006
	(In Millions)
ASSETS
Current assets:
Cash and cash equivalents	$	1,626		$	907
Accounts receivable		1,295			486
Inventories		2,178			724
Mill and leach stockpiles		707			-
Prepaid expenses, restricted cash and other		97			34
Total current assets		5,903			2,151
Property, plant, equipment and development costs, net		25,784			3,099
Trust assets		606			-
Long-term mill and leach stockpiles		1,106			-
Goodwill		5,393	a		-
Other assets and deferred charges		1,243			140
Total assets	$	40,035		$	5,390
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,309		$	776
Copper price protection program		598			-
Accrued income taxes		420			165
Dividends payable		212			13
Current portion of reclamation and environmental obligations		209			-
Current portion of long-term debt and short-term borrowings		31			19
Total current liabilities		3,779			973
Long-term debt, less current portion:
Senior notes		6,928			620
Project financing, equipment loans and other		252			41
Total long-term debt, less current portion		7,180			661
Deferred income taxes		7,704			800
Other liabilities and deferred credits		1,059			268
Reclamation and environmental obligations, less current portion		840			30
Total liabilities		20,562			2,732
Minority interests		1,239			213
Stockholders’ equity:
5½% Convertible Perpetual Preferred Stock		1,100			1,100
6¾% Mandatory Convertible Preferred Stock		2,875			-
Common stock		50			31
Capital in excess of par value		13,407			2,668
Retained earnings		3,601			1,415
Accumulated other comprehensive income (loss)		42			(20	)
Common stock held in treasury		(2,841	)		(2,749	)
Total stockholders’ equity		18,234			2,445
Total liabilities and stockholders’ equity	$	40,035		$	5,390

a.   During the fourth quarter of 2007, revisions to previously estimated fair values assigned to the assets acquired and the liabilities assumed from Phelps Dodge and adjustments to the purchase price resulted in a $0.9 billion reduction in goodwill.  FCX expects to finalize the purchase price allocation during the first quarter of 2008.

V

FREEPORT-McMoRan COPPER & GOLD INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Years Ended December 31,
	2007a			2006
	(In Millions)
Cash flow from operating activities:
Net income	$	2,977		$	1,457
Adjustments to reconcile net income to net cash provided by
operating activities:
Unrealized losses on copper price protection program		175			-
Depreciation, depletion and amortization		1,264			228
Minority interests in net income of consolidated subsidiaries		802			168
Noncash compensation and benefits		214			85
Losses on early extinguishment and conversion of debt, net		173			32
Gains on sales of assets		(85	)		(31	)
Deferred income taxes		(288	)		16
Other		(65	)		25
(Increases) decreases in working capital, excluding amounts
acquired from Phelps Dodge:
Accounts receivable		428			196
Inventories		272			(146	)
Prepaid expenses, restricted cash and other		21			(27	)
Accounts payable and accrued liabilities		313			15
Accrued income taxes		24			(152	)
Net cash provided by operating activities		6,225			1,866
Cash flow from investing activities:
Acquisition of Phelps Dodge, net of cash acquired		(13,910	)		(5	)
Phelps Dodge capital expenditures		(1,333	)		-
PT Freeport Indonesia capital expenditures		(368	)		(234	)
Other capital expenditures		(54	)		(17	)
Net proceeds from sale of PDIC		597			-
Proceeds from sale of assets		260			34
Other		(53	)		(2	)
Net cash used in investing activities		(14,861	)		(224	)
Cash flow from financing activities:
Proceeds from term loans under bank credit facility		12,450			-
Repayments of term loans under bank credit facility		(12,450	)		-
Net proceeds from sales of senior notes		5,880			-
Net proceeds from sale of 6¾% Mandatory Convertible Preferred Stock		2,803			-
Net proceeds from sale of common stock		2,816			-
Proceeds from other debt		744			103
Repayments of other debt		(1,069	)		(394	)
Purchases of FCX common shares		-			(100	)
Cash dividends paid:
Common stock		(421	)		(916	)
Preferred stock		(175	)		(61	)
Minority interests		(967	)b		(161	)b
Net (payments for) proceeds from exercised stock options		(14	)		15
Excess tax benefit from exercised stock options		16			21
Bank credit facilities fees and other		(258	)		(6	)
Net cash provided by (used in) financing activities		9,355			(1,499	)
Net increase in cash and cash equivalents		719			143
Cash and cash equivalents at beginning of year		907			764
Cash and cash equivalents at end of year	$	1,626		$	907

a.   Includes Phelps Dodge results beginning March 20, 2007.

b.   Represents minority interests’ share of dividends.

VI

FREEPORT-McMoRan COPPER & GOLD INC.

PRO FORMA FINANCIAL DATA (Unaudited)

Pro forma financial results assume that FCX acquired Phelps Dodge effective January 1, 2007, for the 2007 periods and effective January 1, 2006, for the 2006 periods.  The most significant adjustments relate to the impact of fair value adjustments to inventories (including mill and leach stockpiles) and property, plant and equipment using March 19, 2007, metals prices and assumptions.

	Three Months Ended				Years Ended
	December 31,				December 31,
(In millions, except per share amounts)	2007		2006		2007		2006
Revenues	$4,094	a	$4,587	a	$19,233	a	$16,653	a, b
Operating income	$1,108	a, c	$1,865	a, c	$7,243	a, c	$4,950	a, b, c
Income from continuing operations
applicable to common stockd	$395	a, c	$1,319	a, c	$3,061	a, c, e	$2,197	a, b, c, e
Diluted income from continuing operations
per share of common stock	$1.00	a, c	$3.11	a, c	$7.30	a, c, e	$5.54	a, b, c, e
Diluted average common shares outstandingf, g	410		445		448		445

Note: Disclosures of after-tax amounts are calculated by reference to the applicable tax rate.

a.   Includes credits for noncash mark-to-market accounting adjustments on copper price protection programs totaling $37 million ($23 million to net income or $0.06 per share) in fourth-quarter 2007 and $11 million ($8 million to net income or $0.02 per share) in fourth-quarter 2006 and charges totaling $195 million ($119 million to net income or $0.27 per share) in year 2007 and $1.2 billion ($915 million to net income or $2.06 per share) in year 2006.  Also includes credits for amortization of acquired intangible assets and liabilities totaling $30 million ($19 million to net income or $0.04 per share) for each of the fourth quarters of 2007 and 2006 and $120 million ($76 million to net income or $0.17 per share) for each of the years 2007 and 2006.

b.   Includes loss on redemption of FCX’s Gold-Denominated Preferred Stock, Series II and Silver-Denominated Preferred Stock totaling $82 million ($44 million to net income or $0.10 per share).

c.   Includes the purchase accounting impacts of the increases in the carrying values of acquired property, plant and equipment and metals inventories, and also includes amortization of acquired intangible assets and liabilities totaling$305 million ($192 million to net income or $0.47 per share) in fourth-quarter 2007, $366 million ($231 million to net income or $0.52 per share) in fourth-quarter 2006, $1.6 billion ($1.0 billion to net income or $2.25 per share) in year 2007 and $2.2 billion ($1.4 billion to net income or $3.13 per share) in year 2006.

d.   After preferred dividends.

e.   Includes net losses on early extinguishment of debt totaling $85 million ($63 million to net income or $0.14 per share) in year 2007 and $32 million ($30 million to net income or $0.07 per share) in year 2006 for debt prepayments.  Year 2007 also includes gains totaling $85 million ($52 million to net income or $0.12 per share) on sales of marketable equity securities.  Year 2006 also includes net gains of $30 million ($30 million to net income or $0.07 per share) from the disposition of land and certain royalty rights.

f.   Reflects assumed conversion of FCX’s 7% Convertible Senior Notes and 5½% Convertible Perpetual Preferred Stock.  Also reflects assumed conversion of FCX’s 6¾% Mandatory Convertible Preferred Stock, which was issued on March 28, 2007, for all periods except fourth-quarter 2007 in which this security was not dilutive.

g.   On March 19, 2007, FCX issued 136.9 million common shares to acquire Phelps Dodge.  On March 28, 2007, FCX sold 47.15 million common shares.  These shares are assumed to be outstanding for all periods presented.

VII

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

PRODUCT REVENUES AND UNIT NET CASH COSTS

Unit net cash costs per pound of copper and per pound of molybdenum are measures intended to provide investors with information about the cash generating capacity of FCX’s mining operations expressed on a basis relating to the primary metal product for the respective operations. FCX uses this measure for the same purpose and for monitoring operating performance by its mining operations. This information differs from measures of performance determined in accordance with U.S. generally accepted accounting principles and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. generally accepted accounting principles. This measure is presented by other metals mining companies, although FCX’s measures may not be comparable to similarly titled measures reported by other companies.

FCX presents gross profit per pound of copper using both a “by-product” method and a “co-product” method. FCX uses the by-product method in its presentation of gross profit per pound of copper because (1) the majority of its revenues are copper revenues, (2) it mines ore, which contains copper, gold, molybdenum and other metals, (3) it is not possible to specifically assign all of FCX’s costs to revenues from the copper, gold, and molybdenum and other metals it produces, (4) it is the method used to compare mining operations in certain industry publications and (5) it is the method used by FCX’s management and Board of Directors to monitor its operations. In the co-product method presentations below, costs are allocated to the different products based on their relative revenue values, which will vary to the extent our metals sales volumes and realized prices change.

In both the by-product and the co-product method calculations below, FCX shows adjustments to copper revenues for prior period open sales as separate line items. Because the copper pricing adjustments do not result from current period sales, FCX has reflected these separately from revenues on current period sales. Noncash and nonrecurring costs consist of items such as stock-based compensation costs, write-offs of equipment or unusual charges. They are removed from site production and delivery costs in the calculation of unit net cash costs. In addition, costs resulting from the application of the purchase accounting method are removed. As discussed above, gold, molybdenum and other metal revenues, excluding any impacts from redemption of the gold- and silver-denominated preferred stocks, are reflected as credits against site production and delivery costs in the by-product method. Presentations under both methods are shown below together with reconciliations to amounts reported in FCX’s consolidated financial statements or pro forma consolidated financial results.

VIII

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

North America Mining Product Revenues and Production Costs and Unit Net Cash Costs

Three Months Ended December 31, 2007
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Molybdenum		a	Other		b	Total
Revenues, after adjustments shown below	$	1,053		$	1,053		$	207		$	18		$	1,278
Site production and delivery, before
net noncash and nonrecurring
costs shown below		485			405			86			4			495
By-product credits		(215	)		-			-			-			-
Treatment charges		34			33			-			1			34
Net cash costs		304			438			86			5			529
Depreciation, depletion and amortization		50			45			4			1			50
Noncash and nonrecurring costs, net		6			6			-			-			6
Total costs		360			489			90			6			585
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(21	)		(21	)		-			-			(21	)
Idle facility and other non-inventoriable costs		(39	)		(38	)		(1	)		-			(39	)
Gross profit	$	633		$	505		$	116		$	12		$	633
Consolidated sales
Copper (in million pounds)		312			312
Molybdenum (in million pounds)								7
Gross profit per pound of copper and molybdenum:
Revenues, after adjustments shown below	$	3.38		$	3.38		$	31.90
Site production and delivery, before
net noncash and nonrecurring
costs shown below		1.56			1.30			13.23
By-product credits		(0.69	)		-			-
Treatment charges		0.11			0.11			-
Unit net cash costs		0.98			1.41			13.23
Depreciation, depletion and amortization		0.16			0.14			0.62
Noncash and nonrecurring costs, net		0.02			0.02			0.03
Total unit costs		1.16			1.57			13.88
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(0.07	)		(0.07	)		-
Idle facility and other non-inventoriable costs		(0.13	)		(0.12	)		(0.09	)
Gross profit per pound	$	2.02		$	1.62		$	17.93
Reconciliation to Amounts Reported
				Production			Depreciation,
				And			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	1,278		$	495		$	50
Net noncash and nonrecurring costs
per above		N/A			6			N/A
Treatment charges per above		N/A			34			N/A
Revenue adjustments, primarily for pricing
on prior period open sales and hedging
per above		(21	)		N/A			N/A
Other North American operations		1,269			1,059			27
Purchase accounting impact		111			99			146
Total North American mining operations		2,637			1,693			223
South American mining operations		1,002			404			119
Indonesian mining operations		500			324			41
Atlantic Copper smelting & refining		627			620			9
Corporate, other & eliminations		(582	)		(619	)		8
As reported in FCX’s consolidated
financial statements	$	4,184		$	2,422		$	400

a.   Molybdenum by-product credits reflect volumes produced at market-based pricing and also include tolling revenues at Sierrita.

b.   Includes gold and silver.

IX

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

North America Mining Product Revenues and Production Costs and Unit Net Cash Costs (Pro Forma)

Three Months Ended December 31, 2006
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Molybdenum		a	Other		b	Total
Revenues, after adjustments shown below	$	1,097		$	1,097		$	197		$	9		$	1,303
Site production and delivery, before
net noncash and nonrecurring
costs shown below		431			376			63			5			444
By-product credits		(193	)		-			-			-			-
Treatment charges		21			21			-			-			21
Net cash costs		259			397			63			5			465
Depreciation, depletion and amortization		43			37			6			-			43
Noncash and nonrecurring costs, net		5			5			-			-			5
Total costs		307			439			69			5			513
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		146			146			-			-			146
Idle facility and other non-inventoriable costs		(16	)		(16	)		-			-			(16	)
Gross profit	$	920		$	788		$	128		$	4		$	920
Consolidated sales
Copper (in million pounds)		330			330
Molybdenum (in million pounds)								8
Gross profit per pound of copper and molybdenum:
Revenues, after adjustments shown below	$	3.32		$	3.32		$	25.98
Site production and delivery, before
net noncash and nonrecurring
costs shown below		1.31			1.14			8.22
By-product credits		(0.59	)		-			-
Treatment charges		0.06			0.06			-
Unit net cash costs		0.78			1.20			8.22
Depreciation, depletion and amortization		0.13			0.11			0.80
Noncash and nonrecurring costs, net		0.02			0.02			0.01
Total unit costs		0.93			1.33			9.03
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		0.44			0.44			-
Idle facility and other non-inventoriable costs		(0.04	)		(0.04	)		-
Gross profit per pound	$	2.79		$	2.39		$	16.95
Reconciliation to Amounts Reported
				Production			Depreciation,
				and			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	1,303		$	444		$	43
Net noncash and nonrecurring costs
per above		N/A			5			N/A
Treatment charges per above		N/A			21			N/A
Revenue adjustments, primarily for pricing
on prior period open sales and hedging
per above		146			N/A			N/A
Purchase accounting impact		30			207			179
Eliminations and other		3,108			1,526			157
As reported in FCX’s pro forma
consolidated financial results	$	4,587		$	2,203		$	379

a.   Molybdenum by-product credits reflect volumes produced at market-based pricing and also include tolling revenues at Sierrita.

b.   Includes gold and silver.

X

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

North America Mining Product Revenues and Production Costs and Unit Net Cash Costs (Pro Forma)

Year Ended December 31, 2007
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Molybdenum		a	Other		b	Total
Revenues, after adjustments shown below	$	4,242		$	4,242		$	866		$	60		$	5,168
Site production and delivery, before
net noncash and nonrecurring
costs shown below		1,883			1,609			312			23			1,944
By-product credits		(865	)		-			-			-			-
Treatment charges		119			116			-			3			119
Net cash costs		1,137			1,725			312			26			2,063
Depreciation, depletion and amortization		192			165			26			1			192
Noncash and nonrecurring costs, net		22			21			1			-			22
Total costs		1,351			1,911			339			27			2,277
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(139	)		(139	)		-			-			(139	)
Idle facility and other non-inventoriable costs		(65	)		(64	)		(1	)		-			(65	)
Gross profit	$	2,687		$	2,128		$	526		$	33		$	2,687
Consolidated sales
Copper (in million pounds)		1,316			1,316
Molybdenum (in million pounds)								30
Gross profit per pound of copper and molybdenum:
Revenues, after adjustments shown below	$	3.22		$	3.22		$	29.31
Site production and delivery, before
net noncash and nonrecurring
costs shown below		1.43			1.22			10.58
By-product credits		(0.66	)		-			-
Treatment charges		0.09			0.09			-
Unit net cash costs		0.86			1.31			10.58
Depreciation, depletion and amortization		0.15			0.12			0.87
Noncash and nonrecurring costs, net		0.02			0.02			0.03
Total unit costs		1.03			1.45			11.48
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(0.10	)		(0.10	)		-
Idle facility and other non-inventoriable costs		(0.05	)		(0.05	)		(0.02	)
Gross profit per pound	$	2.04		$	1.62		$	17.81
Reconciliation to Amounts Reported
				Production			Depreciation,
				And			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	5,168		$	1,944		$	192
Net noncash and nonrecurring costs
per above		N/A			22			N/A
Treatment charges per above		N/A			119			N/A
Revenue adjustments, primarily for pricing
on prior period open sales and hedging
per above		(139	)		N/A			N/A
Purchase accounting impact		120			851			762
Eliminations and other		14,084			6,874			556
As reported in FCX’s pro forma
consolidated financial results	$	19,233		$	9,810		$	1,510

a.   Molybdenum by-product credits reflect volumes produced at market-based pricing and also include tolling revenues at Sierrita.

b.   Includes gold and silver.

XI

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

North America Mining Product Revenues and Production Costs and Unit Net Cash Costs (Pro Forma)

Year Ended December 31, 2006
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Molybdenum		a	Other		b	Total
Revenues, after adjustments shown below	$	4,121		$	4,121		$	772		$	44		$	4,937
Site production and delivery, before
net noncash and nonrecurring
costs shown below		1,472			1,199			291			25			1,515
By-product credits		(773	)		-			-			-			-
Treatment charges		87			83			-			4			87
Net cash costs		786			1,282			291			29			1,602
Depreciation, depletion and amortization		147			122			23			2			147
Noncash and nonrecurring costs, net		20			19			1			-			20
Total costs		953			1,423			315			31			1,769
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(1,205	)		(1,205	)		-			-			(1,205	)
Idle facility and other non-inventoriable costs		(36	)		(36	)		-			-			(36	)
Gross profit	$	1,927		$	1,457		$	457		$	13		$	1,927
Consolidated sales
Copper (in million pounds)		1,292			1,292
Molybdenum (in million pounds)								31
Gross profit per pound of copper and molybdenum:
Revenues, after adjustments shown below	$	3.19		$	3.19		$	24.85
Site production and delivery, before
net noncash and nonrecurring
costs shown below		1.14			0.93			9.37
By-product credits		(0.60	)		-			-
Treatment charges		0.07			0.06			-
Unit net cash costs		0.61			0.99			9.37
Depreciation, depletion and amortization		0.11			0.09			0.77
Noncash and nonrecurring costs, net		0.02			0.02			0.03
Total unit costs		0.74			1.10			10.17
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(0.93	)		(0.93	)		-
Idle facility and other non-inventoriable costs		(0.03	)		(0.03	)		-
Gross profit per pound	$	1.49		$	1.13		$	14.68
Reconciliation to Amounts Reported
				Production			Depreciation,
				and			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	4,937		$	1,515		$	147
Net noncash and nonrecurring costs
per above		N/A			20			N/A
Treatment charges per above		N/A			87			N/A
Revenue adjustments, primarily for pricing
on prior period open sales and hedging
per above		(1,205	)		N/A			N/A
Purchase accounting impact		120			1,526			722
Eliminations and other		12,801			6,652			515
As reported in FCX’s pro forma
consolidated financial results	$	16,653		$	9,800		$	1,384

a.   Molybdenum by-product credits reflect volumes produced at market-based pricing and also include tolling revenues at Sierrita.

b.   Includes gold and silver.

XII

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

Henderson Product Revenues and Production Costs and Unit Net Cash Costs (Pro Forma)a

	Three Months Ended					Years Ended
	December 31,					December 31,
(In Millions)	2007		2006			2007		2006
Revenues, after adjustments shown below	$	288	$	213		$	1,029	$	820
Site production and delivery, before net noncash
and nonrecurring costs shown below		47		37			171		137
Net cash costs		47		37			171		137
Depreciation and amortization		15		8			39		33
Noncash and nonrecurring costs, net		-		-			1		1
Total costs		62		45			211		171
Gross profitb	$	226	$	168		$	818	$	649
Consolidated sales
Molybdenum (in million pounds)		9		9			39		37
Gross profit per pound of molybdenum:
Revenues, after adjustments shown below	$	28.65	$	23.28		$	26.10	$	22.14
Site production and delivery, before net noncash
and nonrecurring costs shown below		4.68		4.03			4.32		3.71
Unit net cash costs		4.68		4.03			4.32		3.71
Depreciation and amortization		1.43		0.87			1.00		0.89
Noncash and nonrecurring costs, net		0.02		0.02			0.02		0.02
Total unit costs		6.13		4.92			5.34		4.62
Gross profit per pound	$	22.52	$	18.36		$	20.76	$	17.52
Reconciliation to Amounts Reported
(In Millions)			Production			Depreciation,
			and			Depletion and
Three Months Ended December 31, 2007	Revenues		Delivery			Amortization
Totals presented above	$	288	$	47		$	15
Purchase accounting impact		N/A		(7	)		27
Other molybdenum operations		424		409			5
Molybdenum segment		712		449			47
Eliminations and other		3,472		1,973			353
As reported in FCX’s consolidated
financial statements	$	4,184	$	2,422		$	400
Three Months Ended December 31, 2006
Totals presented above	$	213	$	37		$	8
Purchase accounting impact		30		207			179
Eliminations and other		4,344		1,959			192
As reported in FCX’s pro forma
consolidated financial results	$	4,587	$	2,203		$	379
Year Ended December 31, 2007
Totals presented above	$	1,029	$	171		$	39
Purchase accounting impact		120		851			762
Eliminations and other		18,084		8,788			709
As reported in FCX’s pro forma
consolidated financial results	$	19,233	$	9,810		$	1,510
Year Ended December 31, 2006
Totals presented above	$	820	$	137		$	33
Purchase accounting impact		120		1,526			722
Eliminations and other		15,713		8,137			629
As reported in FCX’s pro forma
consolidated financial results	$	16,653	$	9,800		$	1,384

a.   Amounts for the three months ended December 31, 2007, are actual financial results.

b.   Gross profit reflects sales of Henderson products based on volumes produced at market-based pricing. On a consolidated basis, the Molybdenum segment includes profits on sales as they are made to third parties and realizations based on actual contract terms.

XIII

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

South America Mining Product Revenues and Production Costs and Unit Net Cash Costs

Three Months Ended December 31, 2007
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Other		a	Total
Revenues, after adjustments shown below	$	1,160		$	1,160		$	54		$	1,214
Site production and delivery, before
net noncash and nonrecurring
costs shown below		365			345			27			372
By-product credits		(47	)		-			-			-
Treatment charges		70			67			3			70
Net cash costs		388			412			30			442
Depreciation, depletion and amortization		40			39			1			40
Noncash and nonrecurring costs, net		1			1			-			1
Total costs		429			452			31			483
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(151	)		(150	)		(1	)		(151	)
Other non-inventoriable costs		(13	)		(12	)		(1	)		(13	)
Gross profit	$	567		$	546		$	21		$	567
Consolidated sales
Copper (in million pounds)		379			379
Gross profit per pound of copper:
Revenues, after adjustments shown below	$	3.06		$	3.06
Site production and delivery, before
net noncash and nonrecurring
costs shown below		0.96			0.91
By-product credits		(0.12	)		-
Treatment charges		0.18			0.18
Unit net cash costs		1.02			1.09
Depreciation, depletion and amortization		0.11			0.10
Noncash and nonrecurring costs, net		-			-
Total unit costs		1.13			1.19
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(0.40	)		(0.40	)
Other non-inventoriable costs		(0.03	)		(0.03	)
Gross profit per pound	$	1.50		$	1.44
Reconciliation to Amounts Reported
				Production			Depreciation,
				and			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	1,214		$	372		$	40
Net noncash and nonrecurring costs
per above		N/A			1			N/A
Less: Treatment charges per above		(70	)		N/A			N/A
Revenue adjustments, primarily for pricing
on prior period open sales and hedging
per above		(151	)		N/A			N/A
Purchased metal		27			27			N/A
Purchase accounting impact		9			27			78
Eliminations and other		(27	)		(23	)		1
Total South American mining operations		1,002			404			119
North American mining operations		2,637			1,693			223
Indonesian mining operations		500			324			41
Atlantic Copper smelting & refining		627			620			9
Corporate, other & eliminations		(582	)		(619	)		8
As reported in FCX’s consolidated
financial statements	$	4,184		$	2,422		$	400

a.   Includes gold, silver and molybdenum.

XIV

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

South America Mining Product Revenues and Production Costs and Unit Net Cash Costs (Pro Forma)

Three Months Ended December 31, 2006
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Other		a	Total
Revenues, after adjustments shown below	$	793		$	793		$	19		$	812
Site production and delivery		258			249			9			258
By-product credits		(19	)		-			-			-
Treatment charges		39			37			2			39
Net cash costs		278			286			11			297
Depreciation, depletion and amortization		46			45			1			46
Total costs		324			331			12			343
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(24	)		(24	)		-			(24	)
Other non-inventoriable costs		(6	)		(6	)		-			(6	)
Gross profit	$	439		$	432		$	7		$	439
Consolidated sales
Copper (in million pounds)		266			266
Gross profit per pound of copper:
Revenues, after adjustments shown below	$	2.98		$	2.98
Site production and delivery		0.97			0.94
By-product credits		(0.07	)		-
Treatment charges		0.15			0.14
Unit net cash costs		1.05			1.08
Depreciation, depletion and amortization		0.17			0.17
Total unit costs		1.22			1.25
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(0.09	)		(0.09	)
Other non-inventoriable costs		(0.02	)		(0.02	)
Gross profit per pound	$	1.65		$	1.62
Reconciliation to Amounts Reported
				Production			Depreciation,
				and			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	812		$	258		$	46
Less: Treatment charges per above		(39	)		N/A			N/A
Revenue adjustments, primarily for pricing
on prior period open sales and hedging
per above		(24	)		N/A			N/A
Purchased metal		29			29			N/A
Purchase accounting impact		30			207			179
Eliminations and other		3,779			1,709			154
As reported in FCX’s pro forma
consolidated financial statements	$	4,587		$	2,203		$	379

a.   Includes gold and silver.

XV

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

South America Mining Product Revenues and Production Costs and Unit Net Cash Costs (Pro Forma)

Year Ended December 31, 2007
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Other		a	Total
Revenues, after adjustments shown below	$	4,552		$	4,552		$	140		$	4,692
Site production and delivery, before
net noncash and nonrecurring
costs shown below		1,268			1,221			61			1,282
By-product credits		(126	)		-			-			-
Treatment charges		286			278			8			286
Net cash costs		1,428			1,499			69			1,568
Depreciation, depletion and amortization		200			196			4			200
Noncash and nonrecurring costs, net		3			3			-			3
Total costs		1,631			1,698			73			1,771
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		18			19			(1	)		18
Other non-inventoriable costs		(34	)		(32	)		(2	)		(34	)
Gross profit	$	2,905		$	2,841		$	64		$	2,905
Consolidated sales
Copper (in million pounds)		1,399			1,399
Gross profit per pound of copper:
Revenues, after adjustments shown below	$	3.25		$	3.25
Site production and delivery, before
net noncash and nonrecurring
costs shown below		0.91			0.87
By-product credits		(0.09	)		-
Treatment charges		0.20			0.20
Unit net cash costs		1.02			1.07
Depreciation, depletion and amortization		0.14			0.14
Noncash and nonrecurring costs, net		-			-
Total unit costs		1.16			1.21
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		0.01			0.01
Other non-inventoriable costs		(0.02	)		(0.02	)
Gross profit per pound	$	2.08		$	2.03
Reconciliation to Amounts Reported
				Production			Depreciation,
				and			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	4,692		$	1,282		$	200
Net noncash and nonrecurring costs
per above		N/A			3			N/A
Less: Treatment charges per above		(286	)		N/A			N/A
Revenue adjustments, primarily for pricing
on prior period open sales and hedging
per above		18			N/A			N/A
Purchased metal		218			218			N/A
Purchase accounting impact		120			851			762
Eliminations and other		14,471			7,456			548
As reported in FCX’s pro forma
consolidated financial statements	$	19,233		$	9,810		$	1,510

a.   Includes gold, silver and molybdenum.

XVI

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

South America Mining Product Revenues and Production Costs and Unit Net Cash Costs (Pro Forma)

Year Ended December 31, 2006
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Other		a	Total
Revenues, after adjustments shown below	$	3,530		$	3,530		$	91		$	3,621
Site production and delivery, before
net noncash and nonrecurring
costs shown below		918			891			27			918
By-product credits		(91	)		-			-			-
Treatment charges		198			192			6			198
Net cash costs		1,025			1,083			33			1,116
Depreciation, depletion and amortization		193			190			3			193
Noncash and nonrecurring costs, net		2			2			-			2
Total costs		1,220			1,275			36			1,311
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(18	)		(9	)		(9	)		(18	)
Other non-inventoriable costs		(22	)		(21	)		(1	)		(22	)
Gross profit	$	2,270		$	2,225		$	45		$	2,270
Consolidated sales
Copper (in million pounds)		1,126			1,126
Gross profit per pound of copper:
Revenues, after adjustments shown below	$	3.14		$	3.14
Site production and delivery, before
net noncash and nonrecurring
costs shown below		0.82			0.79
By-product credits		(0.08	)		-
Treatment charges		0.17			0.17
Unit net cash costs		0.91			0.96
Depreciation, depletion and amortization		0.17			0.17
Noncash and nonrecurring costs, net		-			-
Total unit costs		1.08			1.13
Revenue adjustments, primarily for pricing
on prior period open sales and hedging		(0.02	)		(0.01	)
Other non-inventoriable costs		(0.02	)		(0.02	)
Gross profit per pound	$	2.02		$	1.98
Reconciliation to Amounts Reported
				Production			Depreciation,
				and			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	3,621		$	918		$	193
Net noncash and nonrecurring costs
per above		N/A			2			N/A
Less: Treatment charges per above		(198	)		N/A			N/A
Revenue adjustments, primarily for pricing
on prior period open sales and hedging
per above		(18	)		N/A			N/A
Purchased metal		213			213			N/A
Purchase accounting impact		120			1,526			722
Eliminations and other		12,915			7,141			469
As reported in FCX’s pro forma
consolidated financial statements	$	16,653		$	9,800		$	1,384

a.   Includes gold and silver.

XVII

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

Indonesia Mining Product Revenues and Production Costs and Unit Net Cash Costs

Three Months Ended December 31, 2007
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Gold		Silver		Total
Revenues, after adjustments shown below	$	592		$	592		$	110	$	7	$	709
Site production and delivery, before net noncash
and nonrecurring costs shown below		303			253			47		3		303
Gold and silver credits		(117	)		-			-		-		-
Treatment charges		54			45			8		1		54
Royalty on metals		15			13			2		-		15
Net cash costs		255			311			57		4		372
Depreciation and amortization		41			34			7		-		41
Noncash and nonrecurring costs, net		21			17			4		-		21
Total costs		317			362			68		4		434
Revenue adjustments, primarily for pricing on
prior period open sales		(140	)		(140	)		-		-		(140	)
PT Smelting intercompany profit recognized		2			2			-		-		2
Gross profit	$	137		$	92		$	42	$	3	$	137
Consolidated sales
Copper (in million pounds)		183			183
Gold (in thousand ounces)								124
Silver (in thousand ounces)										472
Gross profit per pound of copper/per ounce of gold and silver:
Revenues, after adjustments shown below	$	3.03		$	3.03		$	807.28	$	13.87
Site production and delivery, before net noncash
and nonrecurring costs shown below		1.66			1.38			377.41		6.51
Gold and silver credits		(0.64	)		-			-		-
Treatment charges		0.29			0.25			66.79		1.15
Royalty on metals		0.08			0.07			19.48		-
Unit net cash costs		1.39			1.70			463.68		7.66
Depreciation and amortization		0.23			0.19			51.93		0.90
Noncash and nonrecurring costs, net		0.12			0.09			27.06		0.47
Total unit costs		1.74			1.98			542.67		9.03
Revenue adjustments, primarily for pricing on
prior period open sales		(0.55	)		(0.55	)		75.95		1.03
PT Smelting intercompany profit recognized		0.01			0.01			2.83		0.05
Gross profit per pound/ounce	$	0.75		$	0.51		$	343.39	$	5.92
Reconciliation to Amounts Reported
				Production			Depreciation,
				and			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	709		$	303		$	41
Net noncash and nonrecurring costs per above		N/A			21			N/A
Less:    Treatment charges per above		(54	)		N/A			N/A
Royalty per above		(15	)		N/A			N/A
Revenue adjustments, primarily for pricing on
prior period open sales per above		(140	)		N/A			N/A
Total Indonesian mining operations		500			324			41
North American mining operations		2,637			1,693			223
South American mining operations		1,002			404			119
Atlantic Copper smelting & refining		627			620			9
Corporate, other & eliminations		(582	)		(619	)		8
As reported in FCX’s consolidated
financial statements	$	4,184		$	2,422		$	400

XVIII

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

Indonesia Mining Product Revenues and Production Costs and Unit Net Cash Costs

Three Months Ended December 31, 2006
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Gold		Silver		Total
Revenues, after adjustments shown below	$	1,241		$	1,241		$	319	$	16	$	1,576
Site production and delivery, before net noncash
and nonrecurring costs shown below		334			263			68		3		334
Gold and silver credits		(335	)		-			-		-		-
Treatment charges		145			114			29		2		145
Royalty on metals		46			37			9		-		46
Net cash costs		190			414			106		5		525
Depreciation and amortization		66			52			13		1		66
Noncash and nonrecurring costs, net		14			11			3		-		14
Total costs		270			477			122		6		605
Revenue adjustments, primarily for pricing on
prior period open sales		(84	)		(84	)		-		-		(84	)
PT Smelting intercompany profit recognized		4			4			-		-		4
Gross profit	$	891		$	684		$	197	$	10	$	891
Consolidated sales
Copper (in million pounds)		432			432
Gold (in thousand ounces)								508
Silver (in thousand ounces)										1,168
Gross profit per pound of copper/per ounce of gold and silver:
Revenues, after adjustments shown below	$	2.88		$	2.88		$	627.71	$	12.93
Site production and delivery, before net noncash
and nonrecurring costs shown below		0.77			0.61			133.31		2.84
Gold and silver credits		(0.77	)		-			-		-
Treatment charges		0.33			0.27			57.88		1.23
Royalty on metals		0.11			0.08			18.41		0.39
Unit net cash costs		0.44			0.96			209.60		4.46
Depreciation and amortization		0.15			0.12			26.38		0.56
Noncash and nonrecurring costs, net		0.04			0.02			5.44		0.12
Total unit costs		0.63			1.10			241.42		5.14
Revenue adjustments, primarily for pricing on
prior period open sales		(0.21	)		(0.21	)		1.09		0.46
PT Smelting intercompany profit recognized		0.02			0.01			1.76		0.04
Gross profit per pound/ounce	$	2.06		$	1.58		$	389.14	$	8.29
Reconciliation to Amounts Reported
				Production			Depreciation,
				And			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	1,576		$	334		$	66
Net noncash and nonrecurring costs per above		N/A			14			N/A
Less:    Treatment charges per above		(145	)		N/A			N/A
Royalty per above		(46	)		N/A			N/A
Revenue adjustments, primarily for pricing on
prior period open sales per above		(84	)		N/A			N/A
Total Indonesian mining operations		1,301			348			66
Atlantic Copper smelting & refining		520			486			10
Corporate, other & eliminations		(178	)		(184	)		5
As reported in FCX’s consolidated
financial statements	$	1,643		$	650		$	81

XIX

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

Indonesia Mining Product Revenues and Production Costs and Unit Net Cash Costs

Year Ended December 31, 2007
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Gold		Silver		Total
Revenues, after adjustments shown below	$	3,777		$	3,777		$	1,490	$	48	$	5,315
Site production and delivery, before net noncash
and nonrecurring costs shown below		1,342			954			376		12		1,342
Gold and silver credits		(1,538	)		-			-		-		-
Treatment charges		385			274			108		3		385
Royalty on metals		133			94			38		1		133
Net cash costs		322			1,322			522		16		1,860
Depreciation and amortization		199			141			56		2		199
Noncash and nonrecurring costs, net		46			33			12		1		46
Total costs		567			1,496			590		19		2,105
Revenue adjustments, primarily for pricing on
prior period open sales		11			11			-		-		11
PT Smelting intercompany profit recognized		13			10			3		-		13
Gross profit	$	3,234		$	2,302		$	903	$	29	$	3,234
Consolidated sales
Copper (in million pounds)		1,131			1,131
Gold (in thousand ounces)								2,185
Silver (in thousand ounces)										3,593
Gross profit per pound of copper/per ounce of gold and silver:
Revenues, after adjustments shown below	$	3.32		$	3.32		$	680.74	$	13.31
Site production and delivery, before net noncash
and nonrecurring costs shown below		1.19			0.85			172.23		3.37
Gold and silver credits		(1.36	)		-			-		-
Treatment charges		0.34			0.24			49.45		0.97
Royalty on metals		0.12			0.08			17.05		0.33
Unit net cash costs		0.29			1.17			238.73		4.67
Depreciation and amortization		0.17			0.12			25.54		0.50
Noncash and nonrecurring costs, net		0.04			0.03			5.90		0.12
Total unit costs		0.50			1.32			270.17		5.29
Revenue adjustments, primarily for pricing on
prior period open sales		0.03			0.03			1.07		0.03
PT Smelting intercompany profit recognized		0.01			0.01			1.71		0.03
Gross profit per pound/ounce	$	2.86		$	2.04		$	413.35	$	8.08
Reconciliation to Amounts Reported
				Production			Depreciation,
				and			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	5,315		$	1,342		$	199
Net noncash and nonrecurring costs per above		N/A			46			N/A
Less:    Treatment charges per above		(385	)		N/A			N/A
Royalty per above		(133	)		N/A			N/A
Revenue adjustments, primarily for pricing on
prior period open sales per above		11			N/A			N/A
Total Indonesian mining operations		4,808			1,388			199
North American mining operations		8,650			6,292			611
South American mining operations		3,845			1,278			377
Atlantic Copper smelting & refining		2,388			2,329			36
Corporate, other & eliminations		(2,752	)		(2,760	)		23
As reported in FCX’s consolidated
financial statements	$	16,939		$	8,527		$	1,246

XX

FREEPORT-McMoRan COPPER & GOLD INC.

PRODUCT REVENUES AND PRODUCTION COSTS

(continued)

Indonesia Mining Product Revenues and Production Costs and Unit Net Cash Costs

Year Ended December 31, 2006
	By-Product			Co-Product Method
(In Millions)	Method			Copper			Gold			Silver			Total
Revenues, after adjustments shown below	$	3,764		$	3,764		$	1,072		$	47		$	4,883
Site production and delivery, before net noncash
and nonrecurring costs shown below		1,235			952			271			12			1,235
Gold and silver credits		(1,119	)		-			-			-			-
Treatment charges		477			368			104			5			477
Royalty on metals		126			97			28			1			126
Net cash costs		719			1,417			403			18			1,838
Depreciation and amortization		184			142			40			2			184
Noncash and nonrecurring costs, net		44			34			10			-			44
Total costs		947			1,593			453			20			2,066
Revenue adjustments, primarily for pricing on
prior period open sales and gold/silver hedging		115	a		197			(69	)		(13	)		115
PT Smelting intercompany profit elimination		(3	)		(2	)		(1	)		-			(3	)
Gross profit	$	2,929		$	2,366		$	549		$	14		$	2,929
Consolidated sales
Copper (in million pounds)		1,201			1,201
Gold (in thousand ounces)								1,736
Silver (in thousand ounces)											3,806
Gross profit per pound of copper/per ounce of gold and silver:
Revenues, after adjustments shown below	$	3.13		$	3.13		$	566.51	b	$	8.59	c
Site production and delivery, before net noncash
and nonrecurring costs shown below		1.03			0.79			156.24			3.11
Gold and silver credits		(0.93	)		-			-			-
Treatment charges		0.40			0.31			60.41			1.20
Royalty on metals		0.10			0.08			15.94			0.32
Unit net cash costs		0.60			1.18			232.59			4.63
Depreciation and amortization		0.15			0.12			23.25			0.46
Noncash and nonrecurring costs, net		0.04			0.03			5.60			0.11
Total unit costs		0.79			1.33			261.44			5.20
Revenue adjustments, primarily for pricing on
prior period open sales		0.10	a		0.17			11.53			0.22
PT Smelting intercompany profit elimination		-			-			(0.37	)		(0.01	)
Gross profit per pound/ounce	$	2.44		$	1.97		$	316.23		$	3.60
Reconciliation to Amounts Reported
				Production			Depreciation,
				And			Depletion and
(In Millions)	Revenues			Delivery			Amortization
Totals presented above	$	4,883		$	1,235		$	184
Net noncash and nonrecurring costs per above		N/A			44			N/A
Less:    Treatment charges per above		(477	)		N/A			N/A
Royalty per above		(126	)		N/A			N/A
Revenue adjustments, primarily for pricing on
prior period open sales and hedging per above		115			N/A			N/A
Total Indonesian mining operations		4,395			1,279			184
Atlantic Copper smelting & refining		2,242			2,119			33
Corporate, other & eliminations		(846	)		(873	)		11
As reported in FCX’s consolidated
financial statements	$	5,791		$	2,525		$	228

a.   Includes a $69 million or $0.06 per pound loss on the redemption of FCX’s Gold-Denominated Preferred Stock, Series II and a $13 million or $0.01 per pound loss on the redemption of FCX’s Silver-Denominated Preferred Stock.

b.   Amount was $606.36 per ounce before the loss on the redemption of FCX’s Gold-Denominated Preferred Stock, Series II.

c.   Amount was $11.92 per ounce before the loss on the redemption of FCX’s Silver-Denominated Preferred Stock.

XXI

FREEPORT-McMoRan COPPER & GOLD INC.

PROVISION FOR INCOME TAXES

PROVISION FOR INCOME TAXES

FCX’s fourth-quarter 2007 income tax provision from continuing operations resulted from taxes on international operations ($472 million) and taxes in the U.S. ($53 million).  FCX’s income tax provision from continuing operations for 2007 resulted from taxes on international operations ($2.2 billion) and taxes in the U.S. ($215 million).  The difference between FCX’s consolidated effective income tax rate of approximately 39 percent for 2007 and the U.S. federal statutory rate of 35 percent was primarily attributable to (1) withholding taxes related to earnings from Indonesian and South American mining operations, (2) a U.S. foreign tax credit limitation and (3) an adjustment associated with the reversal of the Phelps Dodge APB Opinion No. 23, “Accounting for Income Taxes – Special Areas,” indefinite reinvestment assertion on certain earnings in South America, partly offset by a U.S. benefit for percentage depletion and an international tax rate differential.

FCX’s income tax provisions, which totaled $365 million for the fourth quarter of 2006 and $1.2 billion for 2006, resulted from taxes on PT Freeport Indonesia’s earnings.  The difference between FCX’s effective income tax rate of approximately 43 percent for 2006 and PT-FI’s Contract of Work rate of 35 percent was primarily attributable to withholding taxes incurred in connection with earnings from Indonesian mining operations and income taxes incurred by PT Indocopper Investama.

A summary of the significant components in the calculation of FCX’s consolidated provision for income taxes for 2007 follows (in millions, except percentages):

	Year Ended December 31, 2007
				Effective
	Incomea			Tax Rate		Tax
North America
Income before taxes and minority interests	$	1,875			30%	$	568
Purchase accounting adjustments		(895	)		39%		(353	)
Subtotal		980					215
South America
Income before taxes and minority interests		2,623			33%		868
Purchase accounting adjustments		(369	)		34%		(126	)
Subtotal		2,254					742
Indonesia
Income before taxes and minority interests		2,878			46%		1,326
Other
Income before taxes and minority interests		21			29%		6
Adjustmentb		N/A			N/A		111
Consolidated totals	$	6,133			39%	$	2,400

a.   Represents income from continuing operations before income taxes and minority interests.

b.   Represents an adjustment for a one-time tax charge associated with the reversal of the Phelps Dodge APB Opinion No. 23 indefinite reinvestment assertion on certain earnings in South America.  This adjustment was fully offset by a reduction in minority interests’ share of net income.

XXII

FREEPORT-McMoRan COPPER & GOLD INC.

BUSINESS SEGMENTS

FCX’s business consists of three primary operating divisions – North American mining, South American mining and Indonesian mining. Following is a discussion of the reportable segments included in these operating divisions, as well as FCX’s other reportable segment – Atlantic Copper Smelting & Refining.

North American Mining.  North American mining comprises copper operations from mining through rod production, molybdenum operations from mining through conversion to chemical and metallurgical products, and the marketing and sale of both products. The North American mining operating division includes one reportable copper production segment (Morenci), and also includes as reportable segments Rod and Refining and Molybdenum. Other North American mining operations not considered reportable segments include FCX’s other southwestern U.S. copper mines – Bagdad, Sierrita, Safford, Chino, Cobre, Tyrone, Miami, Bisbee and Tohono. In addition to copper, the Bagdad, Sierrita, Morenci and Chino mines produce other metals, including molybdenum, gold, silver and rhenium. Other North American mining operations also include the Miami smelter, which is the most significant source of sulfuric acid for the various North American leaching operations; a sales company, which functions as an agent to purchase and sell copper from the North American mines and also purchases and sells any copper not sold by the South American mines to third parties; and other ancillary operations.

South American Mining.  South American mining includes one reportable copper production segment (Cerro Verde). Other South American mining operations not considered reportable segments include FCX’s other copper mines – Candelaria, Ojos del Salado and El Abra.

Indonesian Mining.  Indonesian mining includes PT Freeport Indonesia’s Grasberg copper and gold mining operations and PT Puncakjaya Power’s power generating operations (after eliminations with PT Freeport Indonesia).

Atlantic Copper Smelting & Refining.  Atlantic Copper, FCX’s wholly owned smelting unit in Spain, smelts and refines copper concentrates and markets refined copper and precious metals in slimes.

Other.  Intersegment sales by the Indonesian and South American mines are based upon arms-length prices at the time of the sale.  Intersegment sales by any individual mine may not be reflective of the actual prices ultimately realized because of a variety of factors, including additional processing, timing of sales to unaffiliated customers and transportation premiums.

FCX also allocates certain operating costs, expenses and capital to the operating divisions and individual segments. However, not all costs and expenses applicable to a mine or operation are allocated. All federal and state income taxes are recorded and managed at the corporate level with the exception of foreign income taxes, which are generally recorded and managed at the applicable mine or operation. Accordingly, the following segment information reflects management determinations that may not be indicative of actual financial performance of each operating division or segment as if it was an independent entity.

XXIII

FREEPORT-McMoRan COPPER & GOLD INC.

BUSINESS SEGMENTS

(continued)

(In Millions)	North America									South America				Indonesia
							Other		Total		Other		Total			Atlantic
							North		North		South		South			Copper		Corporate,
				Rod and		Molyb-	American		American	Cerro	American		American			Smelting		Other &		FCX
Three Months Ended December 31, 2007	Morenci			Refining		denum	Mining		Mining	Verde	Mining		Mining	Grasberg		& Refining		Eliminations		Total
Revenues:
Unaffiliated customers	$	(4	)	1,351		712	577		2,636	234	363		597	323	a	627		1		4,184
Intersegment		537		8		-	(544	)	1	197	208		405	177		-		(583	)	-
Production and delivery		286		1,362		449	(404	)	1,693	140	264		404	324		620		(619	)	2,422
Depreciation, depletion and amortization		74		1		47	101		223	44	75		119	41		9		8		400
Exploration and research expenses		-		-		1	3		4	-	-		-	-		-		54		58
Selling, general and administrative expenses		-		-		1	4		5	-	-		-	55		5		87		152
Operating incomeb	$	173		(4	)	214	329		712	247	232		479	80		(7	)	(112	)	1,152
Interest expense, net	$	-		1		-	-		1	2	(1	)	1	2		6		117		127
Provision for income taxes	$	-		-		-	-		-	219	50		269	135		-		121		525
Total assets at December 31, 2007	$	5,015		438		3,522	10,342		19,317	4,224	4,195		8,419	3,737		915		7,647		40,035
Capital expenditures	$	112		4		24	180		320	27	31		58	95		11		133		617
Three Months Ended December 31, 2006
Revenues:
Unaffiliated customers	$	-		-		-	-		-	-	-		-	1,122	a	520		1		1,643
Intersegment		-		-		-	-		-	-	-		-	179		-		(179	)	-
Production and delivery		-		-		-	-		-	-	-		-	348		486		(184	)	650
Depreciation, depletion and amortization		-		-		-	-		-	-	-		-	66		10		5		81
Exploration and research expenses		-		-		-	-		-	-	-		-	-		-		3		3
Selling, general and administrative expenses		-		-		-	-		-	-	-		-	37		5		4		46
Operating income	$	-		-		-	-		-	-	-		-	850		19		(6	)	863
Interest expense, net	$	-		-		-	-		-	-	-		-	14		8		(8	)	14
Provision for income taxes	$	-		-		-	-		-	-	-		-	297		-		68		365
Total assets at December 31, 2006	$	-		-		-	-		-	-	-		-	4,112		915		363		5,390
Capital expenditures	$	-		-		-	-		-	-	-		-	69		4		-		73

  a.Includes PT Freeport Indonesia’s sales to PT Smelting totaling $257 million in fourth-quarter 2007 and $137 million in fourth-quarter 2006.

b.   Fourth-quarter 2007 operating income includes purchase accounting adjustments primarily associated with the impacts of the increases in the carrying values of acquired metals inventories and stockpiles and property, plant and equipment, and also the impact of amortization associated with intangible assets and liabilities recorded in purchase accounting.  Following provides the operating income impact of these adjustments on FCX’s segments and operating divisions in fourth-quarter 2007:

Purchase accounting adjustments $ (68 ) - 36 (102 ) (134 ) (25 ) (71 ) (96 ) N/A N/A (2 ) (232)

XXIV

FREEPORT-McMoRan COPPER & GOLD INC.

BUSINESS SEGMENTS

(continued)

(In Millions)	North America							South America				Indonesia
					Other		Total		Other		Total			Atlantic
					North		North		South		South			Copper	Corporate,
			Rod and	Molyb-	American		American	Cerro	American		American			Smelting	Other &		FCX
Year Ended December 31, 2007	Morenci		Refining	denum	Mining		Mining	Verde	Mining		Mining	Grasberg		& Refining	Eliminations		Total
Revenues:
Unaffiliated customers	$	68	5,108	1,746	1,719		8,641	744	1,521		2,265	3,640	a	2,388	5		16,939
Intersegment		1,709	32	-	(1,732	)	9	855	725		1,580	1,168		-	(2,757	)	-
Production and delivery		991	5,119	1,287	(1,105	)	6,292	483	795		1,278	1,388		2,329	(2,760	)	8,527
Depreciation, depletion and amortization		239	7	94	271		611	129	248		377	199		36	23		1,246
Exploration and research expenses		-	-	2	8		10	-	-		-	-		-	135		145
Selling, general and administrative expenses		-	-	10	10		20	-	-		-	188		20	238		466
Operating incomeb	$	547	14	353	803		1,717	987	1,203		2,190	3,033		3	(388	)	6,555
Interest expense, net	$	-	4	-	-		4	9	(2	)	7	12		26	464		513
Provision for income taxes	$	-	-	-	-		-	485	368		853	1,326		-	221		2,400
Capital expenditures	$	268	8	45	599		920	58	65		123	368		42	302		1,755
Year Ended December 31, 2006
Revenues:
Unaffiliated customers	$	-	-	-	-		-	-	-		-	3,543	a	2,242	6		5,791
Intersegment		-	-	-	-		-	-	-		-	852		-	(852	)	-
Production and delivery		-	-	-	-		-	-	-		-	1,279		2,119	(873	)	2,525
Depreciation, depletion and amortization		-	-	-	-		-	-	-		-	184		33	11		228
Exploration and research expenses		-	-	-	-		-	-	-		-	-		-	12		12
Selling, general and administrative expenses		-	-	-	-		-	-	-		-	211		16	(70	)	157
Operating income	$	-	-	-	-		-	-	-		-	2,721		74	74		2,869
Interest expense, net	$	-	-	-	-		-	-	-		-	20		25	31		76
Provision for income taxes	$	-	-	-	-		-	-	-		-	950		-	251		1,201
Capital expenditures	$	-	-	-	-		-	-	-		-	234		17	-		251

a.   Includes PT Freeport Indonesia’s sales to PT Smelting totaling $1.8 billion for the year ended December 31, 2007, and $1.2 billion for the year ended December 31, 2006.

b.   Year 2007 operating income includes purchase accounting adjustments primarily associated with the impacts of increases in the carrying values of acquired metals inventories and stockpiles and property, plant and equipment, and also includes the impact of amortization associated with intangible assets and liabilities recorded in purchase accounting.  Following provides the operating income impact of these adjustments on FCX’s segments and operating divisions for the year ended December 31, 2007:

Purchase accounting adjustments $ (385 ) - (105 ) (395 ) (885 ) (129 ) (240 ) (369 ) N/A N/A (2 ) (1,256)

XXV

EX-99.2