FREEPORT-McMoRan COPPER & GOLD INC.

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~ ~~(Unaudited)~~

Nine Months Ended
September 30,
2005 2004
(In Thousands)
Cash flow from operating activities:
Net income (loss) $ 516,822 $ (25,363 )
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 172,731 123,755
Losses on early extinguishment and conversion of debt 38,379 14,011
Deferred income taxes (24,085 ) 76,107
Equity in PT Smelting (earnings) losses (6,473 ) 228
Minority interests' share of net income 72,971 12,914
Increase in deferred mining costs (68,610 ) (81,383 )
Amortization of deferred financing costs 5,979 6,509
Currency translation gains (4,924 ) (1,086 )
Elimination of profit on PT Freeport Indonesia sales to PT Smelting 3,120 2,473
Provision for inventory obsolescence 4,500 3,050
Other 17,888 5,825
(Increases) decreases in working capital:
Accounts receivable 5,582 (60,280 )
Inventories 7,772 (59,879 )
Prepaid expenses and other (5,696 ) (43,299 )
Accounts payable and accrued liabilities 56,084 35,394
Rio Tinto share of joint venture cash flows 8,068 (31,994 )
Accrued income taxes 82,919 (39,866 )
(Increase) decrease in working capital 154,729 (199,924 )
Net cash provided by (used in) operating activities 883,027 (62,884 )
Cash flow from investing activities:
PT Freeport Indonesia capital expenditures (85,793 ) (90,111 )
Atlantic Copper and other capital expenditures (9,814 ) (18,295 )
Proceeds from insurance settlement 2,016 -
Investment in PT Smelting and other - (1,463 )
Sale of restricted investments - 21,804
Decrease in Atlantic Copper restricted cash - 11,000
Net cash used in investing activities (93,591 ) (77,065 )
Cash flow from financing activities:
Net proceeds from sale of senior notes - 344,354
Proceeds from other debt 47,308 80,208
Repayments of debt (447,808 ) (379,427 )
Redemption of preferred stock (12,716 ) (13,664 )
Net proceeds from sale of convertible perpetual preferred stock - 1,067,000
Purchase of FCX common shares from Rio Tinto - (881,868 )
Purchases of other FCX common shares (80,227 ) (99,477 )
Cash dividends paid:
Common stock (312,936 ) (109,406 )
Preferred stock (45,376 ) (20,345 )
Minority interests (104,773 ) (1,172 )
Net proceeds from exercised stock options 8,508 5,765
Bank credit facilities fees and other (21 ) (1,561 )
Net cash used in financing activities (948,041 ) (9,593 )
Net decrease in cash and cash equivalents (158,605 ) (149,542 )
Cash and cash equivalents at beginning of year 551,450 463,652
Cash and cash equivalents at end of period $ 392,845 $ 314,110

~~The accompanying notes are an integral part of these financial statements.~~

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~~FREEPORT-McMoRan COPPER & GOLD INC.~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	~~NEW ACCOUNTING STANDARDS~~BASIS OF PRESENTATION

~~Deferred Mining Costs.~~ ~~In the mining industry, the costs of removing overburden and waste material to access mineral deposits are referred to as “stripping costs.” Currently,~~The accompanying unaudited consolidated financial statements should be read in conjunction with Freeport-McMoRan Copper & Gold Inc.’s (FCX) ~~applies the deferred mining cost method~~consolidated financial statements and notes contained in ~~accounting for~~ its post-production stripping costs, which FCX refers to as overburden removal costs. The deferred mining cost method is used by some companies in the metals mining industry; however, industry practice varies. The deferred mining cost method matches the cost of production with the sale of the related metal from the open pit by assigning each metric ton of ore removed an equivalent amount of overburden tonnage, thereby averaging overburden removal costs over the life of the mine. The mining cost capitalized in inventory and the amounts charged to cost of goods sold do not represent the actual costs incurred to mine the ore in any given period. The application of the deferred mining cost method has resulted in an asset on FCX’s balance sheets (“Deferred Mining Costs”) totaling $289.0 million at September 30, 2005 ~~and $220.4 million at December 31, 2004. For further information, see Note 1 in FCX’s 2004~~ Annual Report on Form 10-K.

~~In March 2005, the Financial Accounting Standards Board (FASB) ratified Emerging Issues Task Force (EITF) Issue No. 04-6, “Accounting for Stripping Costs Incurred during Production~~ The information furnished herein reflects all adjustments which are, in the ~~Mining Industry,” (EITF 04-6) which requires that stripping costs be considered costs~~opinion of management, necessary for a fair statement of the ~~extracted minerals and recognized as a component of inventory to be recognized in cost of sales~~results for the periods. All such adjustments are, in the ~~same period as the revenue from the sale~~opinion of ~~inventory. As a result, capitalization of stripping costs is appropriate only to the extent product inventory exists at the end~~management, of a reporting period. The guidance in EITF 04-6 is effective for financial statements issued for fiscal years beginning after December 15, 2005, with early adoption permitted. Companies may apply this guidance either by recognition of a cumulative effect adjustment to beginning retained earnings in the period of adoption or by restating prior period financial statements. FCX expects to adopt the guidance on January 1, 2006, with the most significant impacts of adoption being the deferred mining costs asset on FCX’s balance sheet on that date will be recorded, net of taxes and minority interest share, as a cumulative effect adjustment to reduce beginning retained earnings and future stripping costs will effectively be charged to cost of sales as incurred. Adoption of the new guidance will have no impact on FCX’s cash flows. The pro forma impact of applying EITF 04-6 to the periods reported in this quarterly report on Form 10-Q would be to reduce net income by $7.9 million or $0.04 per diluted sharenormal recurring nature. Operating results for the ~~third quarter of 2005, $14.5 million or $0.08 per share for the third quarter of 2004 and $36.0 million or $0.16 per diluted share for the 2005 nine-month~~three-month period ~~and to increase the net loss by $42.5 million or $0.23 per share for the 2004 nine-month period. These pro forma amounts~~ended March 31, 2006, are not necessarily indicative of ~~what charges~~the results that may be expected for ~~future periods.~~the year ending December 31, 2006. All significant intercompany transactions have been eliminated. Certain prior year amounts have been reclassified to conform to the 2006 presentation. Changes in the accounting principles applied during 2006 are discussed below in Notes 2 and 3.

2.	STOCK-BASED COMPENSATION

Accounting for Stock-Based ~~Payments.~~Compensation. ~~Refer to Note 1 in FCX’s 2004 Annual Report on Form 10-K for FCX’s accounting for share-based payments, including stock options. Through September 30, 2005,~~As of March 31, 2006, FCX has three stock-based employee compensation plans and two stock-based director compensation plans. Prior to January 1, 2006, FCX accounted for ~~grants~~options granted under all of ~~employee stock options~~its plans under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations, ~~which require~~as permitted by Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation.” APB Opinion No. 25 required compensation ~~costs~~cost for ~~stock-based employee compensation plans~~stock options to be recognized based on the difference on the date of grant, if any, between the quoted market price of the stock and the amount an employee must pay to acquire the ~~stock. If~~stock (i.e., the intrinsic value). Because all the plans require that the option exercise price be at least the market price on the date of grant, FCX recognized no compensation cost on the grant or exercise of its employees’ options through December 31, 2005. Other awards under the plans did result in compensation costs being recognized in earnings based on the intrinsic value on the date of grant for restricted stock units and the intrinsic value on the reporting or exercise date for cash-settled stock appreciation rights (SARs).

Effective January 1, 2006, FCX adopted the fair value recognition provisions of SFAS No. 123 (revised 2004), “Share-Based Payment” or “SFAS No. 123R,” using the modified prospective transition method. Under that transition method, compensation cost recognized in 2006 includes: (a) compensation costs for all stock option awards granted to employees prior to, but not yet vested as of January 1, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all stock option awards granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123R. In addition, other stock-based awards charged to expense under SFAS No. 123 continue to be charged to expense under SFAS No. 123R. These include restricted stock units and SARs. Results for prior periods have not been restated. FCX has elected to recognize compensation costs for awards that vest over several years on a straight-line basis over the vesting period. FCX’s stock option awards provide for employees to receive an additional year of vesting after an employee retires. For awards to retirement-eligible employees, FCX records one year of amortization of the awards’ value on the date of grant. Restricted stock units are performance based awards with accelerated vesting upon retirement. Therefore, in accordance with SFAS No. 123R and consistent with prior years’ accounting, FCX recognizes the compensation cost for restricted stock units granted to retirement-eligible employees in the period during which the employee performs the service related to the grant. The services are performed in the calendar year preceding the date of grant. In addition, prior to adoption of SFAS No. 123R, FCX recognized forfeitures as they occurred in its SFAS No. 123 pro forma disclosures. Beginning January 1, 2006, FCX includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of the awards.

As a result of adopting SFAS No. 123R on January 1, 2006, FCX’s income before income taxes and minority interests for the three months ended March 31, 2006, was $9.0 million lower and net income was $5.2 million ($0.03 per basic share and $0.02 per diluted share) lower than if it had continued to account for share-based compensation under APB Opinion No. 25. Basic earnings per share would have been $1.37 per share and diluted earnings per share would have been $1.25 per share for the three months ended March 31, 2006, if

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FCX had not adopted SFAS No. 123R, compared to reported earnings of $1.34 per basic share and $1.23 per diluted share.

Prior to the adoption of SFAS No. 123R, FCX presented all tax benefits resulting from the exercise of stock options as operating cash flows in the Consolidated Statements of Cash Flows. SFAS No. 123R requires the cash flows generated by tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) to be classified as financing cash flows. The $16.1 million excess tax benefit classified as a financing cash inflow in the Consolidated Statements of Cash Flows for the three months ended March 31, 2006, would have been classified as an operating cash inflow if FCX had not adopted SFAS No. 123R.

Stock-Based Compensation Cost. Compensation cost charged against earnings for stock-based awards is shown below (in thousands). FCX did not capitalize any stock-based compensation costs to fixed assets during the periods presented.

	Three Months Ended
	March 31,
	2006			2005
Stock options awarded to employees (including directors)	$	9,028		$	508	^a
Stock options awarded to nonemployees		456			319
Restricted stock units in lieu of cash awards		2,478			3,021
Stock appreciation rights		1,279			529
Total compensation cost		13,241			4,377
Tax benefit		(4,904	)		(1,302	)
Minority interest share		(722	)		(194	)
Impact on net income	$	7,615		$	2,881

a.	Represents amortization of the intrinsic value of FCX’s Class A stock options that were converted to Class B stock options in 2002.

The following table illustrates the effect on net income and earnings per share for the three months ended March 31, 2005, if FCX had applied the fair value recognition provisions of ~~Statement of Financial Accounting Standards (SFAS)~~SFAS No. 123 ~~“Accounting for Stock-Based Compensation,” which requires~~to stock-based awards granted under FCX’s stock-based compensation ~~to be recognized based~~plans (in thousands, except per share amounts):

Net income applicable to common stock, as reported	$	130,395
Add: Stock-based employee compensation expense
included in reported net income for stock option
conversions, SARs and restricted stock units,
net of taxes and minority interests		2,559
Deduct: Total stock-based employee compensation
expense determined under fair value-based method
for all awards, net of taxes and minority interests		(5,415	)
Pro forma net income applicable to common stock	$	127,539

Earnings per share:
Basic - as reported	$	0.73
Basic - pro forma	$	0.71

Diluted - as reported	$	0.70
Diluted - pro forma	$	0.67

For the pro forma computations, the values of option grants were calculated on the ~~use~~dates of grant using the Black-Scholes-Merton option pricing model and amortized to expense on a straight-line basis over the options’ vesting periods. No other discounts or restrictions related to vesting or the likelihood of vesting of stock options were applied. The following table summarizes the calculated fair values and assumptions used to

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determine the fair value ~~method,~~of FCX’s ~~net income would~~stock option grants under SFAS No. 123 during the three months ended March 31, 2005.

Fair value per stock option	$	13.99
Risk-free interest rate		3.9	%
Expected volatility rate		46	%
Expected life of options (in years)		6
Assumed annual dividend	$	1.00

Stock-Based Compensation Plans. As discussed above, FCX currently has five stock-based compensation plans and all are shareholder approved. As of March 31, 2006, only three of the plans, which are discussed below, have ~~been reduced by $3.2 million, $0.02 per basic share~~awards available for grant. FCX’s 1999 Stock Incentive Plan (the 1999 Plan) and ~~no change in earnings per diluted share,~~2003 Stock Incentive Plan (the 2003 Plan) provide for the ~~third quarter~~issuance of ~~2005, $1.5~~stock options, SARs, restricted stock units and other stock-based awards. Each plan allows FCX to grant awards for up to 8.0 million ~~$0.01 per share, for~~common shares to eligible participants. FCX also has a restricted stock program that allows FCX senior executives to elect to receive restricted stock units under each plan in place of all or part of their cash incentive compensation. Restricted stock unit grants vest over three years and are valued on the ~~third quarter~~date of ~~2004~~grant at 50 percent above the cash incentive compensation that the employee elects to replace. Dividends on restricted stock units accrue and ~~$9.5 million, $0.05 per basic share~~are subject to the awards vesting. Stock option and ~~$0.03 per diluted share, for the first nine months of 2005. FCX’s net loss for the first nine months of 2004 would have been increased by $3.7 million, $0.02 per share.~~SAR awards do not receive dividends.

In ~~December~~May 2004, FCX’s shareholders approved the ~~FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123R)~~2004 Director Compensation Plan (the 2004 Plan). The 2004 Plan authorizes awards of options and restricted stock units for up to 1.0 million shares and the one-time grant of 66,882 SARs.

Awards granted under all of the plans generally expire 10 years after the date of grant and vest in 25 percent annual increments beginning one year from the date of grant. The plans provide for employees to receive the following year’s vesting after retirement and provide for accelerated vesting if there is a change in control (as defined in the plans). Awards for 0.6 million shares under the 2004 Plan, 1.1 million shares under the 2003 Plan and 0.1 million shares under the 1999 Plan were available for new grants as of March 31, 2006.

Options and SARs. A summary of options outstanding as of March 31, 2006, including 152,427 SARs, and changes during the three months ended March 31, 2006 follows:

					Weighted
					Average	Aggregate
			Weighted		Remaining	Intrinsic
	Number of		Average		Contractual	Value
	Options		Option Price		Term (years)	($000)
Balance at January 1	7,355,612		$	31.43
Granted	1,016,250			63.77
Exercised	(1,565,336	)		21.89
Expired/Forfeited	(7,500	)		30.81
Balance at March 31	6,799,026			38.47	8.25	$	148,904

Vested and exercisable at March 31	1,473,481			29.62	7.38	$	44,425

The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option valuation model. The assumptions used to value stock option awards during the three months ended March 31, 2006, are noted in the following table. Expected volatility is based on implied volatilities from traded options on FCX’s stock and historical volatility of FCX’s stock. FCX uses historical data to estimate future option exercises, forfeitures and expected life of the options. When appropriate, separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected dividend rate is calculated as the annual dividend (excludes supplemental dividends) at the date of grant divided by the average stock price for the one-year period preceding the grant date. The risk-free interest rate is based on Federal Reserve rates in effect for bonds with maturity dates equal to the expected term of the option at the grant date.

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Expected volatility	33.3%-42.2	%
Weighted average volatility	37.7	%
Expected life of options (in years)	4.0
Expected dividend rate	2.9	%
Risk-free interest rate	4.4	%

The grant-date fair value of options granted during the three months ended March 31, 2006, was $17.93 per option. The total intrinsic value of options exercised during the three months ended March 31, 2006, was $61.5 million. As of March 31, 2006, FCX had $66.6 million of total unrecognized compensation cost related to unvested stock options expected to be recognized over a weighted average period of 1.4 years.

Cash received from stock option exercises totaled $25.2 million for the three months ended March 31, 2006, and $7.2 million for the three months ended March 31, 2005. The actual tax benefit realized for the tax deductions from stock option exercises totaled $19.6 million for the three months ended March 31, 2006 and $5.9 million for the three months ended March 31, 2005. Upon exercise of stock options and vesting of restricted stock units, employees may tender FCX shares to FCX to pay the exercise price and/or the minimum required taxes. Shares tendered to FCX for these purposes totaled 357,891 shares for the three months ended March 31, 2006, and 524,907 shares for the three months ended March 31, 2005. FCX paid $14.0 million during the three months ended March 31, 2006, and $5.7 million during the three months ended March 31, 2005, for employee taxes. FCX paid $1.8 million during the three months ended March 31, 2006, for exercised SARs. There were no SARs exercised during the three months ended March 31, 2005.

Restricted Stock Units. As discussed above, FCX has a restricted stock program that allows FCX senior executives to elect to receive restricted stock units under the plans in place of all or part of their annual cash incentive compensation. The annual cash incentive is a function of FCX’s consolidated operating cash flows for the preceding year. These awards of restricted stock units are considered performance-based awards. To compensate for certain restrictions and the risk of forfeiture, the restricted stock units are awarded at a 50 percent premium to the market value on the date of grant. The awards vest ratably over three years and vesting accelerates upon retirement. For retirement-eligible executives, the fair value of the restricted stock units is estimated based on projected operating cash flows for the year and is charged to expense ratably over the year the cash flows are generated.

FCX granted 332,677 restricted stock units in the three months ended March 31, 2006, and 123,044 restricted stock units in the three months ended March 31, 2005. A summary of outstanding unvested restricted stock units as of March 31, 2006, and activity during the three months ended March 31, 2006 is presented below:

			Weighted
			Average	Aggregate
	Number of		Remaining	Intrinsic
	Restricted		Contractual	Value
	Stock Units		Term (years)	($000)
Balance at January 1	317,258
Granted	332,677
Vested	(131,301	)
Forfeited	-
Balance at March 31	518,634		2.29	$	30,999

The grant-date fair value of restricted stock units granted during the three months ended March 31, 2006, was $21.2 million. Because this is a performance-based award and the requisite service period under SFAS No. 123R ~~requires all share-based payments to employees, including grants of employee stock options,~~is considered to be ~~recognized in~~ the ~~financial statements based~~calendar year prior to the grant date, the entire value of this award on ~~their fair values. SFAS No. 123R’s effective~~the date ~~is fiscal periods beginning after June 15, 2005. FCX is still reviewing~~of grant was charged to expense during the ~~provisions~~calendar year prior to the date of ~~SFAS No. 123R and expects to adopt SFAS No. 123R on January 1, 2006. Based on currently outstanding employee~~grant. The total intrinsic value of restricted stock ~~options, FCX currently estimates~~units vesting during the pro forma charge to earnings before taxes and minority interest sharing for the full year 2005 would total approximately $22 million, and the pro forma reduction in net income would be approximately $13 million, $0.07 per share using average basic shares outstanding for the third quarter of 2005. These 2005 pro forma amounts are not necessarily indicative of what charges may be for future periods.three months ended March 31, 2006, was $8.2 million.

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2.3.	DEFERRED MINING COSTS

On January 1, 2006, FCX adopted Emerging Issues Task Force Issue No. 04-6, “Accounting for Stripping Costs Incurred during Production in the Mining Industry” (EITF 04-6), which requires that stripping costs incurred during production be considered costs of the extracted minerals and included as a component of inventory to be recognized in cost of sales in the same period as the revenue from the sale of inventory. Upon adoption of EITF 04-6, FCX recorded its deferred mining costs asset ($285.4 million) at December 31, 2005, net of taxes, minority interest share and inventory effects ($135.9 million), as a cumulative effect adjustment to reduce its retained earnings on January 1, 2006. In addition, stripping costs incurred in 2006 and later periods are now charged to cost of sales as incurred. As a result of adopting EITF 04-6 on January 1, 2006, FCX’s income before income taxes and minority interests for the three months ended March 31, 2006, was $32.8 million lower and net income was $17.4 million ($0.09 per basic share and $0.08 per diluted share) lower than if it had continued to defer stripping costs. Basic earnings per share would have been $1.43 per share and diluted earnings per share would have been $1.31 per share for the three months ended March 31, 2006, if FCX had not adopted EITF 04-6, compared to reported earnings of $1.34 per basic share and $1.23 per diluted share. Adoption of the new guidance has no impact on FCX’s cash flows.

4.	EARNINGS PER SHARE

~~FCX~~FCX’s basic net income ~~(loss)~~ per share of common stock was calculated by dividing net income ~~(loss)~~ applicable to common stock by the ~~weighted average~~weighted-average number of common shares outstanding during the ~~period.~~year. The following is a reconciliation of net income ~~(loss)~~ and ~~weighted average~~weighted-average common shares outstanding for purposes of calculating diluted net income ~~(loss)~~ per share (in thousands, except per share amounts):

Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Net income (loss) before preferred dividends $ 180,930 $ 32,258 $ 516,822 $ (25,363 )
Preferred dividends (15,125 ) (15,125 ) (45,375 ) (30,366 )
Net income (loss) applicable to common stock 165,805 17,133 471,447 (55,729 )
Plus income impact of assumed conversion of:
5½% Convertible Perpetual Preferred Stock 15,125 - 45,375 -
7% Convertible Senior Notes 9,177 - 29,786 -
Diluted net income (loss) applicable to common stock $ 190,107 $ 17,133 $ 546,608 $ (55,729 )

Weighted average common shares outstanding 177,895 177,137 178,513 183,426
Add:
Shares issuable upon conversion of:

5½% Convertible Perpetual Preferred Stock 21,224 - 21,097 -
7% Convertible Senior Notes 18,410 - 18,553 -
Dilutive stock options 1,817 2,188 1,642 -
Restricted stock 478 480 480 -
Weighted average common shares outstanding for
purposes of calculating diluted net income (loss)
per share 219,824 179,805 220,285 183,426

Diluted net income (loss) per share of common stock $ 0.86 $ 0.10 $ 2.48 $ (0.30 )

Stock options representing 2.3 million shares and unvested restricted stock representing 0.4 million shares in the 2004 nine-month period that otherwise would have been included in that period’s earnings per share calculation were excluded because of the net loss reported for the period.

	Three Months Ended
	March 31,
	2006			2005
Net income before preferred dividends	$	266,775		$	145,520
Preferred dividends		(15,125	)		(15,125	)
Net income applicable to common stock		251,650			130,395
Plus income impact of assumed conversion of:
5½% Convertible Perpetual Preferred Stock		15,125			-
7% Convertible Senior Notes		5,101			10,323
Diluted net income applicable to common stock	$	271,876		$	140,718

Weighted average common shares outstanding		187,916			179,320
Add:
Shares issuable upon conversion, exercise or vesting of:
5½% Convertible Perpetual Preferred Stock		21,732			-
7% Convertible Senior Notes		10,159			18,625
Dilutive stock options		1,052			1,701
Restricted stock		618			480
Weighted average common shares outstanding for purposes of calculating
diluted net income per share		221,477			200,126

Diluted net income per share of common stock	$	1.23		$	0.70

Outstanding stock options with exercise prices greater than the average market price of ~~the~~FCX’s common stock during the period are excluded from the computation of diluted net income per share of common stock. FCX’s convertible instruments are also excluded when including the conversion of these instruments increases reported diluted net income per ~~share or when FCX reports a net loss for the period.~~share. A recap of the excluded amounts follows (in thousands, except exercise prices):

	Three Months Ended March 31,
	2006	2005
Weighted average outstanding options	677,500	-
Weighted average exercise price	$63.77	-
Dividends on 5½% Convertible Perpetual Preferred Stock	-	$15,125
Weighted average shares issuable upon conversion	-	20,915

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5.	INVENTORIES

The components of inventories follow (in thousands):

Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Weighted average outstanding options - 1,161 1,821 1,169
Weighted average exercise price - $36.77 $36.98 $36.34

Dividends on 5½% Convertible Perpetual Preferred Stock - $15,125 - $30,418
^a
Weighted average shares issuable upon conversion - 20,682 - 13,936
^a

Interest on 7% Convertible Senior Notes - $10,357
^b
- $31,072
^b
Weighted average shares issuable upon conversion - 18,625 - 18,625

Interest on 8¼% Convertible Senior Notes N/A $466
^b
N/A $3,829
^b
Weighted average shares issuable upon conversion N/A 1,364 N/A 4,097

		March 31,		December 31,
		2006		2005
PT Freeport Indonesia:	Concentrates and stockpiles -
	Average cost	$	5,466	$	14,723
Atlantic Copper:	Concentrates - First in, first out (FIFO)		130,966		137,740
	Work in process - FIFO		184,729		144,951
	Finished goods - FIFO		1,214		2,975
Total product inventories			322,375		300,389
Total materials and supplies, net			290,147		264,630
Total inventories		$	612,522	$	565,019

The average cost method was used to determine the cost of essentially all materials and supplies inventory. Materials and supplies inventory is net of obsolescence reserves totaling $16.6 million at March 31, 2006, and December 31, 2005.

a.6.	~~FCX’s 5½% Convertible Perpetual Preferred Stock was issued on March 30, 2004.~~DEBT AND EQUITY TRANSACTIONS

b.	~~Amounts are net of the effective United States federal alternative minimum tax rate of two percent.~~

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~~Stock-Based Compensation Plans.~~As of ~~September 30, 2005,~~March 31, 2006, FCX ~~has four stock-based employee compensation plans and two stock-based director compensation plans, which are more fully described in Note 7~~had total outstanding debt of $1.1 billion. Debt was reduced by a net $154.7 million during the first quarter of 2006, including $167.4 million for the mandatory redemption of FCX’s ~~2004 Annual Report~~Gold-Denominated Preferred Stock, Series II. The mandatory redemption was based on ~~Form 10-K. As discussed~~ average gold prices at the time of redemption ($548.92 per ounce) and totaled $236.4 million, resultingin Note 1, FCX accounts for options granted under all of its plans using the recognition and measurement principles of APB Opinion No. 25 and related interpretations. Because all the plans require that the option exercise price be at least the market price on the date of grant, FCX recognizes no compensation expense on the grant or exercise of its employees’ and directors’ options. The following table illustrates the effect ona $69.0 million loss recognized in revenues ($36.6 million to net income or $0.17 per share). Other debt reductions included privately negotiated transactions to induce conversion of $11.0 million of 7% Convertible Senior Notes due 2011 into 0.4 million shares of FCX common stock and ~~earnings~~purchases in open-market transactions of $11.5 million of 10⅛% Senior Notes due 2010 for $12.6 million. As a result of the induced conversion and open-market transactions, FCX recorded charges of $2.0 million ($1.3 million to net income, net of related reduction of interest expense, or $0.01 per ~~share if~~share) in the first quarter of 2006. In April 2006, FCX ~~had applied the fair value recognition provisions~~induced conversion of ~~SFAS No. 123, as discussed in Note 1 (in thousands, except per share amounts).~~

Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Net income (loss) applicable to common stock, as reported $ 165,805 $ 17,133 $ 471,447 $ (55,729 )
Add: Stock-based employee compensation expense
included in reported net income (loss) for stock option
conversions, stock appreciation rights (SARs) and
restricted stock units, net of taxes and minority interests 4,675 2,252 9,132 2,626
Deduct: Total stock-based employee compensation
expense determined under fair value-based method for
all awards, net of taxes and minority interests (7,892 ) (3,766 ) (18,646 ) (6,349 )
Pro forma net income (loss) applicable to common stock $ 162,588 $ 15,619 $ 461,933 $ (59,452 )

Earnings (loss) per share:
Basic - as reported $ 0.93 $ 0.10 $ 2.64 $ (0.30 )
Basic - pro forma $ 0.91 $ 0.09 $ 2.59 $ (0.32 )

Diluted - as reported $ 0.86 $ 0.10 $ 2.48 $ (0.30 )
Diluted - pro forma $ 0.86 $ 0.09 $ 2.45 $ (0.32 )

~~For the pro forma computations, the values~~an additional $5.0 million of ~~option grants were calculated on the dates~~7% Convertible Senior Notes due 2011 into 0.2 million shares of grant using the Black-Scholes option pricing model. No other discounts or restrictions related to vesting or the likelihood of vesting of stock options were applied. The following table summarizes the calculated average fair values and weighted-average assumptions used to determine the fair value of FCX’s stock option grants under SFAS No. 123 during the periods presented.

Three Months Ended Nine Months Ended
September 30, September 30,
2005
2004^a
2005 2004
Fair value per stock option $ 14.52 N/A $ 13.97 $ 15.00
Risk-free interest rate 3.8 % N/A 3.9 % 3.7 %
Expected volatility rate 45 % N/A 46 % 49 %
Expected life of options (in years) 6 N/A 6 6
Assumed annual dividend $ 1.00 N/A $ 1.00 $ 0.80
FCX common stock.

a.7.	~~No options were granted in the third quarter of 2004.~~EMPLOYEE BENEFITS

The components of net periodic pension benefit cost for the three months ended March 31, 2006 and 2005 follow (in thousands):

~~See Note 1 above and Note 1 in FCX’s Annual Report on Form 10-K for a discussion of SFAS No. 123R.~~

	FCX					PT Freeport Indonesia						Atlantic Copper
	2006		2005			2006			2005			2006		2005
Service cost	$	109	$	179		$	946		$	931		$	-	$	-
Interest cost		398		518			1,226			972			1,114		1,289
Expected return on plan assets		340		(22	)		(609	)		(365	)		-		-
Amortization of prior service cost		1,051		944			234			232			-		-
Amortization of net actuarial loss		14		-			134			184			221		241
Net periodic benefit cost	$	1,912	$	1,619		$	1,931		$	1,954		$	1,335	$	1,530

3.8.	~~BUSINESS SEGMENTS~~INTEREST COST

Interest expense excludes capitalized interest of $1.8 million in the first quarter of 2006 and $0.9 million in the first quarter of 2005.

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9. BUSINESS SEGMENTS

FCX has two operating segments: “mining and exploration” and “smelting and refining.” The mining and exploration segment consists of FCX’s Indonesian activities including PT Freeport Indonesia’s copper and gold mining operations, PT Puncakjaya Power’s power-generating operations (after eliminations with PT Freeport Indonesia) and FCX’s Indonesian exploration activities. The smelting and refining segment includes Atlantic Copper’s operations in Spain and PT Freeport Indonesia’s equity investment in PT Smelting in Gresik, Indonesia. The segment data presented below were prepared on the same basis as FCX’s consolidated financial statements.

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Mining
and Exploration
Smelting and Refining Eliminations and Other FCX Total
(In Thousands)
Three months ended September 30, 2005:
Revenues $ 771,190
^a
$ 378,412 $ (166,332 ) $ 983,270
Production and delivery 247,001 351,517 (164,150
)^b
434,368
Depreciation and amortization 51,143 7,415 3,088 61,646
Exploration expenses 2,099 - 60 2,159
General and administrative expenses 38,394
^c
2,268 (15,116
)^c
25,546
Operating income $ 432,553 $ 17,212 $ 9,786 $ 459,551
Equity in PT Smelting earnings $ - $ 1,315 $ - $ 1,315
Interest expense, net $ 5,342 $ 4,140 $ 23,848 $ 33,330
Provision for income taxes $ 146,610 $ - $ 40,102 $ 186,712
Capital expenditures $ 32,447 $ 1,444 $ 2,425 $ 36,316
Total assets $ 3,889,800
^d
$ 723,149
^e
$ 264,832 $ 4,877,781

Three months ended September 30, 2004:
Revenues $ 447,876
^a
$ 222,184 $ (69,504 ) $ 600,556
Production and delivery 198,872 223,384 (54,240
)^b
368,016
Depreciation and amortization 46,135 7,114 2,506 55,755
Exploration expenses 1,939 - 24 1,963
General and administrative expenses 21,451
^c
3,248 1,487
^c
26,186
Operating income (loss) $ 179,479 $ (11,562 ) $ (19,281 ) $ 148,636
Equity in PT Smelting earnings $ - $ 2,678 $ - $ 2,678
Interest expense, net $ 5,133 $ 3,300 $ 29,415 $ 37,848
Provision for income taxes $ 62,729 $ - $ 8,614 $ 71,343
Capital expenditures $ 30,526 $ 3,038 $ 2 $ 33,566
Total assets $ 3,713,690
^d
$ 723,839
^e
$ 345,535 $ 4,783,064

Nine months ended September 30, 2005:
Revenues $ 2,136,974
^a
$ 982,425 $ (430,155 ) $ 2,689,244
Production and delivery 664,234 937,003 (411,277
)^b
1,189,960
Depreciation and amortization 142,285 21,645 8,801 172,731
Exploration expenses 6,263 - 158 6,421
General and administrative expenses 90,001
^c
8,173 (25,635
)^c
72,539
Operating income (loss) $ 1,234,191 $ 15,604 $ (2,202 ) $ 1,247,593
Equity in PT Smelting earnings $ - $ 6,473 $ - $ 6,473
Interest expense, net $ 16,966 $ 12,332 $ 76,872 $ 106,170
Provision for income taxes $ 429,936 $ - $ 109,488 $ 539,424
Capital expenditures $ 85,955 $ 7,307 $ 2,345 $ 95,607

Nine months ended September 30, 2004:
Revenues $ 965,901
^a
$ 605,137 $ (123,963 ) $ 1,447,075
Production and delivery 525,387 637,042 (147,122
)^b
1,015,307
Depreciation and amortization 96,738 21,209 5,808 123,755
Exploration expenses 6,807 - 170 6,977
General and administrative expenses 114,802
^c
9,344 (59,824
)^c
64,322
Operating income (loss) $ 222,167 $ (62,458 ) $ 77,005 $ 236,714
Equity in PT Smelting losses $ - $ 228 $ - $ 228
Interest expense, net $ 16,346 $ 10,071 $ 84,160 $ 110,577
Provision for income taxes $ 80,672 $ - $ 47,222 $ 127,894
Capital expenditures $ 90,229 $ 18,295 $ (118 ) $ 108,406

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	Mining and Exploration			Smelting and Refining			Eliminations and Other			FCX Total
	(In Thousands)
Three months ended March 31, 2006:
Revenues	$	796,783	^a	$	516,104		$	(226,765	)	$	1,086,122
Production and delivery		286,677			491,437			(300,199	)^b		477,915
Depreciation and amortization		33,773			7,406			2,071			43,250
Exploration expenses		2,537			-			39			2,576
General and administrative expenses		82,306	^c		3,775			(55,450	)^c		30,631
Operating income	$	391,490		$	13,486		$	126,774		$	531,750
Equity in PT Smelting earnings	$	-		$	3,559		$	-		$	3,559
Interest expense, net	$	3,273		$	5,447		$	13,951		$	22,671
Provision for income taxes	$	144,691		$	-		$	77,031		$	221,722
Capital expenditures	$	48,940		$	3,513		$	(331	)	$	52,122
Total assets	$	3,729,867	^d	$	963,594	^e	$	102,731		$	4,796,192

Three months ended March 31, 2005:
Revenues	$	687,398	^a	$	272,116		$	(156,449	)	$	803,065
Production and delivery		193,878			263,577			(92,449	)^b		365,006
Depreciation and amortization		46,925			7,089			2,912			56,926
Exploration expenses		1,892			-			28			1,920
General and administrative expenses		33,182	^c		3,004			(14,572	)^c		21,614
Operating income (loss)	$	411,521		$	(1,554	)	$	(52,368	)	$	357,599
Equity in PT Smelting earnings	$	-		$	2,596		$	-		$	2,596
Interest expense, net	$	5,727		$	3,805		$	28,016		$	37,548
Provision for income taxes	$	145,319		$	-		$	18,709		$	164,028
Capital expenditures	$	23,569		$	2,724		$	(47	)	$	26,246
Total assets	$	3,849,871	^d	$	771,158	^e	$	168,674		$	4,789,703

a.	Includes PT Freeport Indonesia’s sales to PT Smelting totaling ~~$214.1~~$282.5 million in the 2006 quarter and $234.2 million in the 2005 ~~quarter, $181.6 million in the 2004 quarter, $643.1 million in the 2005 nine-month period and $474.8 million in the 2004 nine-month period.~~quarter.

Includes deferral (recognition) of intercompany profits on 25 percent of PT Freeport Indonesia’s sales to PT Smelting, for which the final sale to third parties has not occurred, totaling ~~$3.1~~$(20.8) million in the 2006 quarter and $2.6 million in the 2005 ~~quarter, $0.5 million in the 2004 quarter, $3.1 million in the 2005 nine-month period and $2.5 million in the 2004 nine-month period.~~quarter.

Includes charges to the mining and exploration segment for the in-the-money value of FCX stock option exercises which are eliminated in consolidation totaling ~~$16.7~~$56.0 million in the 2006 quarter and $16.8 million in the 2005 ~~quarter, $2.4 million in the 2004 quarter, $34.1 million in the 2005 nine-month period and $69.3 million in the 2004 nine-month period.~~quarter.

d.	Includes PT Freeport Indonesia’s trade receivables with PT Smelting totaling ~~$98.2~~$149.6 million at ~~September 30, 2005,~~March 31, 2006, and ~~$59.0~~$120.4 million at ~~September 30, 2004.~~March 31, 2005.

e.	Includes PT Freeport Indonesia’s equity investment in PT Smelting totaling ~~$51.2~~$58.9 million at ~~September 30, 2005,~~March 31, 2006, and ~~$56.6~~$47.8 million at ~~September 30, 2004.~~March 31, 2005.

4.	~~INVENTORIES~~

~~The components of inventories follow (in thousands):~~

September 30, December 31,
2005 2004
PT Freeport Indonesia: Concentrates - Average cost $ 9,468 $ 11,830
Atlantic Copper: Concentrates - First in, first out (FIFO) 101,222 148,246
Work in process - FIFO 93,254 86,710
Finished goods - FIFO 1,127 6,479
Total product inventories 205,071 253,265
Total materials and supplies, net 244,960 213,447
Total inventories $ 450,031 $ 466,712

The average cost method was used to determine the cost of essentially all materials and supplies inventory. Materials and supplies inventory is net of obsolescence reserves totaling $17.2 million at September 30, 2005 and $17.1 million at December 31, 2004.

5.	~~DEBT AND EQUITY TRANSACTIONS~~

~~As of September 30, 2005, FCX had total outstanding debt of $1.39 billion. Debt was reduced by $565.8 million during the first nine months of 2005, primarily reflecting the following transactions:~~

·	~~first-quarter prepayment of $187.0 million of bank debt associated with PT Puncakjaya Power’s power-generating facilities at PT Freeport Indonesia’s mining operations;~~

·	~~first-quarter purchases in open market transactions of $11.0 million of 7.50% Senior Notes due 2006 and 7.20% Senior Notes due 2026;~~

·	~~third-quarter purchases in open market transactions of $149.9 million of 10⅛% Senior Notes due 2010 and $4.5 million of 7.5% Senior Notes due 2006; and~~

·	~~third-quarter privately negotiated transactions to induce conversion of $188.4 million of 7% Convertible Senior Notes due 2011 into 6.1 million shares of FCX common stock.~~

FCX recorded net charges of $38.4 million, $30.3 million to net income or $0.14 per share, in the third quarter and first nine months of 2005 as a result of these transactions. On August 1, 2005, FCX funded the seventh of eight scheduled annual redemption payments on its Silver-Denominated Preferred Stock for $17.5 million. The mandatory redemption resulted in a $12.5 million decrease in debt and a reduction of revenues of $5.0 million, $2.6 million to net income or $0.01 per share, in the third quarter of 2005.

In October 2005, FCX induced conversion of an additional $21.0 million of 7% Convertible Senior Notes due 2011 into 0.7 million shares of FCX common stock and purchased in open market transactions an additional $18.4 million of 10⅛% Senior Notes due 2010. FCX expects to record a net charge of $4.4 million, $3.4 million to net income, in the fourth quarter of 2005 as a result of these transactions.

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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations.

OVERVIEW

In management’s discussion and analysis, “we,”~~“us”~~ “us” and “our” refer to Freeport-McMoRan Copper & Gold Inc. (FCX) and its consolidated subsidiaries. References to “aggregate” amounts mean the total of our share and Rio Tinto plc’s share as our joint venture partner.You should read this discussion in conjunction with our financial statements, the related discussion and analysis of financial condition and results of operations and the discussion of our “Business and Properties” in our Form 10-K for the year ended December 31, ~~2004,~~2005, filed with the Securities and Exchange Commission. The results of operations reported and summarized below are not necessarily indicative of future operating results. References to “Notes” are Notes included in our “Notes to Consolidated Financial Statements.”

~~We operate through~~Through our majority-owned ~~subsidiaries,~~subsidiary, PT Freeport Indonesia, we have one of the world’s largest copper and ~~PT Puncakjaya Power (Puncakjaya Power),~~gold mining and ~~through Atlantic Copper, S.A. (Atlantic Copper)~~production operations in terms of reserves and ~~PT Irja Eastern Minerals (Eastern Minerals), our~~production. Our principal ~~wholly owned subsidiaries.~~ asset is a majority ownership interest in the Grasberg minerals district, which based on available year-end 2004 reserve data, contains the largest single copper reserve and the largest single gold reserve of any mine in the world.

PT Freeport Indonesia, our principal operating subsidiary, ~~conducts~~operates under an agreement, called a Contract of Work, with the Government of Indonesia. The Contract of Work allows us to conduct exploration, mining and production activities in a 24,700-acre area called Block A located in Papua, Indonesia. Under the Contract of Work, PT Freeport Indonesia also conducts exploration activities (which are currently suspended, but are under review for resumption) in an approximate 500,000-acre area called Block B in Papua. ~~Puncakjaya Power’s sole business is to supply power to PT Freeport Indonesia’s operations. Our principal asset is the Grasberg minerals district, which contains the largest single gold reserve~~All of our proven and ~~the second-largest copper reserve of any mine in the world.~~

~~Atlantic Copper’s~~probable mineral reserves and current mining operations are located in Spain and involve the smelting and refining of copper concentrates and the marketing of refined copper and precious metals in slimes. PT Freeport Indonesia owns a 25 percent interest in PT Smelting, an Indonesian company which operates a copper smelter and refinery in Gresik, Indonesia. Eastern Minerals conducts mineral exploration activities (which are currently suspended) in Papua, Indonesia.Block A.

We own 90.64 percent of PT Freeport Indonesia, ~~of which~~including 9.36 percent is owned through our wholly owned subsidiary, PT Indocopper Investama. The Government of Indonesia owns the remaining 9.36 percent of PT Freeport Indonesia. In July 2004, we received a request from the Indonesian Department of Energy and Mineral Resources that we offer to sell shares in PT Indocopper Investama to Indonesian nationals at fair market value. In response to this request and in view of the potential benefits of having additional Indonesian ownership in our project, we have agreed to consider a potential sale of an interest in PT Indocopper Investama at fair market value. Neither our Contract of Work nor Indonesian law requires us to divest any portion of our ownership interest in PT Freeport Indonesia or PT Indocopper Investama.

We also operate through a majority-owned subsidiary, PT Puncakjaya Power (Puncakjaya Power), and through Atlantic Copper, S.A. (Atlantic Copper) and PT Irja Eastern Minerals (Eastern Minerals), our other principal wholly owned subsidiaries. Puncakjaya Power’s sole business is to supply power to PT Freeport Indonesia’s operations. Atlantic Copper’s operations are in Spain and involve the smelting and refining of copper concentrates and the marketing of refined copper and precious metals in slimes. Eastern Minerals conducts mineral exploration activities (which are currently suspended) in Papua, Indonesia. PT Freeport Indonesia owns a 25 percent interest in PT Smelting, an Indonesian company which operates a copper smelter and refinery in Gresik, Indonesia.

In 1996, we established joint ventures with Rio Tinto, an international mining company with headquarters in London, England. One joint venture covers PT Freeport Indonesia’s mining operations in Block A and gives Rio Tinto, through 2021, a 40 percent interest in certain assets and future production exceeding specified annual amounts of copper, gold and silver in Block A, and, after 2021, a 40 percent interest in all production from Block A. Operating, nonexpansion capital and administrative costs are shared proportionately between PT Freeport Indonesia and Rio Tinto based on the ratio of (a) the incremental revenues from production from our expansion completed in 1998 to (b) total revenues from Block A, including production from PT Freeport Indonesia’s previously existing reserves. PT Freeport Indonesia receives 100 percent of the cash flow from specified annual amounts of copper, gold and silver through 2021, calculated by reference to its proven and probable reserves as of December 31, 1994, and 60 percent of all remaining cash flow.

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Outlook

~~Annual~~PT Freeport Indonesia’s share of annual sales ~~are~~in 2006 is expected to approximate ~~1.47~~1.3 billion pounds of copper and ~~2.8~~1.7 million ounces of gold, in 2005, increases of nearly 50 percent for copper and nearly 100 percent for gold compared with 2004. PT Freeport Indonesia expects its fourth-quarter operations to benefit from access to higher grade material and more flexible set-ups for its mining equipment in the high-grade areas of the Grasberg mine than in the third quarter, which we currently anticipate would allow PT Freeport Indonesia to generate sales estimated to approximate 480including 280 million pounds of copper and ~~1.1 million~~275 thousand ounces of gold ~~39 percent more than third-quarter copper sales and more than twice~~in the third quarter gold sales. Achieving this high level of production and sales is dependent, among other factors, on the successful operations of PT Freeport Indonesia production facilities and systems, and sales volumes could be reduced if year-end weather conditions or other factors delay concentrate loading operations, which would defer sales volumes to 2006.

~~Using estimated sales volumes for the fourth~~second quarter of 2005 and assuming average fourth-quarter 2005 prices of $1.75 per pound of copper and $465 per ounce of gold, we would generate operating cash flows approximating $1.4 billion in 2005, with approximately $500 million in the fourth quarter. Each $0.10 per pound change in copper prices in the fourth quarter is currently estimated to affect 2005 cash flows by approximately $24 million and each $25 per ounce change in gold prices is currently estimated to affect 2005 cash flows by approximately $14 million.

2006. At the Grasberg open-pit mine, the sequencing in mining areas with varying ore grades causes fluctuations in the timing of ore production, ~~which impacts~~resulting in varying quarterly and annual copper and gold sales. During 2006, approximately 60 percent of copper and 56 percent of gold sales ~~volumes, particularly for gold.~~ are expected in the second half of the year. Because of the significant level of copper and gold expected to be mined late in the year, the achievement of PT Freeport Indonesia’s 2006 sales estimates will be dependent, among other factors, on the achievement of targeted mining rates, the successful operation of PT Freeport Indonesia’s production facilities and systems and concentrate loading systems.

Based on ~~its~~our current mine ~~plan, PT Freeport Indonesia~~plans, we previously reported estimates ~~its share of~~for annual sales ~~for~~over the five-year period from 2006 ~~will approximate 1.4~~through 2010 to average approximately 1.3 billion pounds of copper and 1.9 million ounces of gold. ~~Average~~Our mine plans are based on latest available data and studies, which take into account factors such as mining and milling rates, ore grades and recoveries, economic conditions and geologic/geotechnical considerations. We update these plans to incorporate new data and conditions, with the objective of operating safely, managing risks and maximizing economic values. We are currently undertaking studies to incorporate recent geotechnical data in our future mine plans. These studies are expected to be completed and mine plans revised in the third quarter of 2006. While ongoing analyses may alter current expectations, the analyses to date indicate that the revisions would result in the deferral of certain high-grade ore previously expected to be mined in 2007 and 2008 to future years. While the annual impacts may be significant, preliminary estimates of total metal sales volumes ~~over~~for PT Freeport Indonesia are expected to be within five percent of the previously reported projected amounts for the five-year period from ~~2005~~2006 through ~~2009~~2010. We are ~~expected~~also incorporating the new data into our longer range mine plans to ~~approximate 1.35 billion pounds~~assess the optimal design of ~~copper and 2.2 million ounces~~the Grasberg open pit, which may affect the timing of ~~gold.~~our development of the Grasberg block cave ore body.

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Sales volumes may vary from these estimates depending on the areas being mined within the Grasberg open pit. Quarterly variations in sales volumes are expected to ~~vary significantly.~~be significant. Based on current ~~estimates of average annual~~estimated sales volumes ~~over~~for the ~~next five years~~remainder of 2006 and copper prices of approximately ~~$1.75~~$2.25 per pound and gold prices of approximately ~~$465~~$550 per ounce, ~~the~~we expect to generate operating cash flows approximating $1.2 billion in 2006. The impact on our ~~annual~~projected 2006 cash ~~flow~~flows for each $0.10 per pound change in copper prices in the balance of the year would approximate ~~$69~~$50 million, including the effects of price changes on related royalty costs, and for each $25 per ounce change in gold prices in the balance of the year would approximate ~~$28~~$15 million.

Copper and Gold Markets

As shown in the graphs below, world metal prices for copper have fluctuated during the period from 1992 through ~~October 2005~~April 2006 with the London Metal Exchange (LME) spot copper price varying from a low of approximately $0.60 per pound in 2001 to a high of ~~$1.90~~approximately $3.36 per pound on ~~October 20, 2005,~~April 26, 2006, and world gold prices have fluctuated during the period from 1998 through ~~October 2005~~April 2006 from a low of approximately $250 per ounce in 1999 to a high of approximately ~~$479~~$645 per ounce on ~~October 12, 2005.~~April 20, 2006. Current copper and gold prices reflect significantly higher levels of direct investment by commodity investors. This high level of activity can be expected to result in significantly higher levels of volatility in copper and gold prices and in the share prices of FCX and other commodity producers. Copper and gold prices are affected by numerous factors beyond our control as described further in our Form 10-K for the year ended December 31, ~~2004.~~2005.

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*	Excludes Shanghai stocks, producer, consumer and merchant stocks.

The graph above presents LME spot copper prices and reported stocks of copper at the LME and New York Commodity Exchange (COMEX) through ~~October 31, 2005. Market fundamentals for copper continued to be positive~~April 28, 2006. Since 2003 and through 2005, global demand has exceeded supply, evidenced by the decline in ~~the first nine months of 2005.~~warehouse inventories. LME and COMEX inventories ~~are~~have risen from the 2005 lows in recent months but combined stocks of approximately 150,000 metric tons at ~~levels~~March 31, 2006 represent approximately four days of ~~less~~global consumption. Despite previous market forecasts that prices would decline in 2005 and again in 2006, prices have continued to rise to new highs as projected increases in supply have fallen short of expectations, even though global demand is weaker than ~~75,000 metric tons.~~generally anticipated. Copper prices averaged ~~$1.70~~$2.24 per pound in the ~~third~~first quarter of ~~2005,~~2006, with prices ranging from ~~$1.56~~$2.06 per pound to ~~$1.80~~a multi-year high of $2.51 per pound. ~~The~~Copper prices have remained strong in April 2006 and the LME spot ~~copper~~ price closed at ~~$1.86~~$3.28 per pound on ~~October 31, 2005.~~April 28, 2006. Global copper demand ~~in the first nine months of 2005~~ has been lower than expectations; however, disruptions associated with strikes, unrest and other operational issues ~~have reduced copper supply and~~ continue to keep inventories at ~~very~~ low levels. Many market analysts expect copper supplies will increase somewhat in 2006 and prices to ~~increase in the near term as smelter capacity is projected to increase and project lower than~~moderate from current ~~prices once supplies begin to grow.~~levels. Nevertheless, analysts’ price expectations for 2006 are ~~generally~~significantly higher than they were earlier in the year, ~~partly because~~with the continuation of very low inventory levels, the potential for supply disruptions ~~discussed above.~~and the absence of major new mines being developed. Future copper prices are expected to continue to be ~~determined~~influenced by demand from China, economic performance in the United States (U.S.) and other industrialized countries, the timing of the development of new supplies of copper and production levels of mines and copper ~~smelters and other factors.~~smelters. We consider the current underlying supply and demand conditions in the global copper markets to be positive for our company.

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The environment for gold continues to be positive with gold prices recently reaching new ~~17-year~~25-year highs above $600 per ounce, supported by ~~ongoing geopolitical tensions,~~increased investment demand for gold, asongoing geopolitical tensions, a ~~hedge against inflation, increasing jewelry demand,~~weak U.S. dollar, inflationary pressures, falling production ~~for~~from older mines, limited development of new mines and actions by gold producers to reduce hedge positions. Gold prices averaged ~~$440~~$554 per ounce in the ~~third~~first quarter of ~~2005,~~2006, with prices ranging from ~~$418~~$521 per ounce to ~~$473~~$584 per ounce. The London gold price closed at ~~approximately $471~~$644 per ounce on ~~October 31, 2005.~~April 28, 2006.

CONSOLIDATED RESULTS

Summary comparative results for the ~~third-quarter and nine-month~~first-quarter periods follow (in millions, except per share amounts):

	Third Quarter				Nine Months					First Quarter
	2005		2004		2005		2004			2006		2005
Revenues	$	983.3	$	600.6	$	2,689.2	$	1,447.1		$	1,086.1	$	803.1
Operating income		459.6		148.6		1,247.6		236.7			531.8		357.6
Net income (loss) applicable to common stock		165.8		17.1		471.4		(55.7	)
Diluted net income (loss) per share of common stock		0.86		0.10		2.48		(0.30	)
Net income applicable to common stock											251.7		130.4
Diluted net income per share of common stock											1.23		0.70

Consolidated revenues include PT Freeport Indonesia’s sale of copper concentrates, which also contain significant quantities of gold and silver, and the sale by Atlantic Copper of copper anodes, copper cathodes, and gold in anodes and slimes. Consolidated revenues for the ~~third~~2006 quarter ~~of 2005 and the first nine months of 2005~~ were ~~significantly~~35 percent higher than consolidated revenues for the ~~2004 periods,~~2005 quarter, reflecting substantially higher copper and gold ~~sales volumes and~~ prices than the ~~2004 periods. Third-quarter and nine-month 2004 results were adversely affected~~2005 quarter, partly offset by lower ~~ore grades and reduced mill throughput as~~ PT Freeport Indonesia ~~completed efforts to restore safe access to~~sales volumes. As anticipated, PT Freeport Indonesia mined lower grade ore and reported lower production and sales in the ~~higher-grade ore areas in its Grasberg open-pit mine following~~first quarter of 2006, compared with the ~~fourth-quarter 2003 slippage and debris flow events. In addition, Atlantic Copper’s scheduled major maintenance turnaround adversely affected its nine-month 2004 revenues.~~2005 period.

At ~~September 30, 2005,~~March 31, 2006, we had consolidated embedded derivatives on copper sales totaling ~~298.6~~199.0 million pounds recorded at an average price of ~~$1.74~~$2.46 per pound. Final prices on these sales will be established over the next several months pursuant to terms of sales contracts. We estimate that a ~~two-cent~~five-cent change in the average price used for these embedded derivatives and realized prices for these sales would have an

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approximate $6$10 million impact on our ~~2005~~2006 consolidated revenues and an approximate $3$5 million impact on our ~~2005~~2006 consolidated net income.

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~~Third-quarter 2005~~First-quarter 2006 consolidated revenues included net additions of ~~$48.8~~$110.2 million ($~~25.9~~58.4 million to net income or ~~$0.12~~$0.26 per diluted share) primarily for final pricing of concentrates sold in ~~prior quarters,~~the previous year, compared with ~~$13.6~~$9.9 million ($~~7.0~~5.2 million to net income or ~~$0.04~~$0.03 per diluted share) ~~to third-quarter 2004 revenues. Nine-month 2005 consolidated revenues included net additions~~in the first quarter of $8.6 million ($4.5 million to net income or $0.02 per share) compared with $7.3 million ($3.7 million to net income or $0.02 per share), primarily for final pricing of concentrates sold in prior years.2005.

Consolidated revenues and net income vary significantly with fluctuations in the market prices of copper and gold, sales volumes and other factors. Based on PT Freeport Indonesia’s projected share of copper sales for the ~~fourth quarter~~remainder of ~~2005 (480 million~~2006 (1.05 billion pounds) and assuming an average price of ~~$1.75~~$2.25 per pound of copper, each $0.10 per pound change in the average price realized in the ~~fourth quarter~~balance of ~~2005~~the year would have an approximate ~~$48~~$100 million impact on our ~~fourth-quarter~~annual revenues and an approximate ~~$24~~$50 million impact on our ~~fourth-quarter~~annual net income. A $25 per ounce change in the average price realized in the ~~fourth quarter~~balance of the year on PT Freeport Indonesia’s projected share of gold sales for the ~~fourth quarter~~remainder of ~~2005 (1.1~~2006 (1.2 million ounces) would have an approximate ~~$28~~$30 million impact on our ~~fourth-quarter~~annual revenues and an approximate ~~$14~~$15 million impact on our ~~fourth-quarter~~annual net income.

On limited past occasions, in response to market conditions, we have entered into copper and gold price protection contracts for a portion of our expected future mine production to mitigate the risk of adverse price fluctuations. We currently have no copper or gold price protection contracts relating to our mine production. We ~~have~~had outstanding gold-denominated and silver-denominated preferred stock with dividends and redemption amounts determined by commodity prices. Our ~~gold-denominated preferred stock is mandatorily redeemable~~Gold-Denominated Preferred Stock, Series II was redeemed in February 2006, resulting in a $69.0 million reduction in revenues ($36.6 million to net income or $0.17 per diluted share), and the final scheduled redemption for our ~~silver-denominated preferred stock~~Silver-Denominated Preferred Stock is in August 2006 (see “Capital Resources and Liquidity - Financing Activities”).

Consolidated production and delivery costs were higher in the first quarter of 2006 at $477.9 million compared with $365.0 million for the 2005 ~~periods than the 2004 periods~~quarter. The increase was primarily because of ~~higher production costs at PT Freeport Indonesia and~~ higher costs of concentrate purchases at Atlantic Copper caused by ~~increased production volumes~~higher metals prices and higher ~~metals prices.~~ production costs at PT Freeport Indonesia primarily caused by the adoption of Emerging Issues Task Force Issue No. 04-6, “Accounting for Stripping Costs Incurred during Production in the Mining Industry” (EITF 04-6). See Note 3 and “New Accounting Standards.”

As previously reported on March 23, 2006, a mud/topsoil slide involving approximately 75,000 metric tons of material occurred from a mountain ridge above service facilities supporting PT Freeport Indonesia’s mining facilities. Regrettably, three contract workers were fatally injured in the event. The material damaged a mess hall and an adjacent area. As a result of investigations by PT Freeport Indonesia and the Indonesian Department of Energy and Mineral Resources, we are conducting geotechnical studies to identify any potential hazards to facilities from slides. The existing early warning system for potential slides, based upon rainfall and other factors, has also been expanded. PT Freeport Indonesia recorded a charge of $1.9 million ($1.0 million to net income or less than $0.01 per diluted share) in the first quarter of 2006 for damages related to this event. The event did not directly involve operations within the Grasberg open-pit mine or PT Freeport Indonesia’s milling operations.

Consolidated depreciation and amortization expense ~~increased~~decreased to ~~$61.6 million in the third quarter of 2005 and $172.7~~$43.3 million in the first ~~nine months~~quarter of ~~2005,~~2006 compared with ~~$55.8 million in the third quarter of 2004 and $123.8~~$56.9 million in the first ~~nine months~~quarter of ~~2004,~~2005, primarily because of ~~higher~~lower copper sales volumes at PT Freeport Indonesia during the ~~2005 periods.~~2006 quarter. Exploration expenses ~~totaled $2.2 million in the third quarter of 2005 and $6.4~~increased to $2.6 million in the first ~~nine months of 2005 compared with $2.0 million in the third~~ quarter of ~~2004 and $7.0~~2006 from $1.9 million in the first ~~nine months~~quarter of ~~2004~~2005 (see “Mining and Exploration - Exploration Activities”). Consolidated general and administrative expenses ~~decreased to $25.5 million in the third quarter of 2005 from $26.2 million in the third quarter of 2004 and~~ increased to ~~$72.5~~$30.6 million in the first ~~nine months~~quarter of ~~2005~~2006 from ~~$64.3~~$21.6 million in the first ~~nine months~~quarter of ~~2004~~2005 (see “Other Financial Results”).

Net interest expense decreased to ~~$33.3~~$22.7 million in the ~~third~~first quarter of ~~2005~~2006 from ~~$37.8~~$37.5 million in the ~~third~~first quarter of ~~2004~~2005 primarily because of lower debt levels. ~~Losses~~In the first quarter of 2006, we induced conversion of $11.0 million of 7% Convertible Senior Notes due 2011 into 0.4 million shares of FCX common stock and purchased in open market transactions $11.5 million of 10⅛% Senior Notes due 2010 for $12.6

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million. As a result of the induced conversion and open market transactions, we recorded losses on early extinguishment and conversion of debt ~~totaled $38.4~~totaling of $2.0 million ($~~30.3~~1.3 million to net income, ~~or $0.14 per share,~~ net of related reduction of interest ~~expense), for~~expense, or $0.01 per share) in the ~~third~~first quarter ~~and first nine months~~ of ~~2005 resulting from the open-market purchases of our 10⅛% Senior Notes and 7.5% Senior Notes and the early conversions of our 7% Convertible Senior Notes~~2006. (see “Capital Resources and Liquidity - Financing Activities”). ~~Losses on early extinguishment and conversion~~We are continuing to assess opportunities to repay debt in advance of debt totaled $14.0 million ($7.4 million to net income or $0.04 per share, net of related reduction of interest expense), for the first nine months of 2004 resulting primarily from the early conversions of our 8¼% Convertible Senior Notes (see “Capital Resources and Liquidity - Financing Activities”).scheduled maturities.

Other income includes interest income of ~~$4.7 million in the third quarter of 2005, $1.0 million in the third quarter of 2004, $11.7~~$7.0 million in the first ~~nine months~~quarter of ~~2005~~2006 and ~~$4.2~~$3.9 million in the first ~~nine months~~quarter of ~~2004.~~2005. Other income also includes the impact of translating into U.S. dollars Atlantic Copper’s net euro-denominated liabilities, primarily its retiree pension obligations. Changes in the U.S. dollar/euro exchange rate require us to adjust the dollar value of our net euro-denominated liabilities and record the adjustment in earnings. The exchange rate was ~~$1.36~~$1.18 per euro at December 31, ~~2004,~~2005, and $1.21 per euro at ~~June 30, 2005 and $1.20 per euro at September 30, 2005.~~March 31, 2006. Exchange rate effects on our net income from euro-denominated liabilities were gains (losses) of ~~$(1.3) million in the third quarter of 2005, $(0.8) million in the third quarter of 2004, $4.9~~$(1.1) million in the first ~~nine months~~quarter of ~~2005~~2006 and ~~$1.1~~$2.8 million in the first ~~nine months~~quarter of ~~2004.~~2005.

~~Table of Contents~~

PT Freeport Indonesia’s Contract of Work provides for a 35 percent corporate income tax rate. PT Indocopper Investama pays a 30 percent corporate income tax on dividends it receives from its 9.36 percent ownership in PT Freeport Indonesia. In addition, the tax treaty between Indonesia and the U.S. provides for a withholding tax rate of 10 percent on dividends and interest that PT Freeport Indonesia and PT Indocopper Investama pay to their parent company, FCX. Prior to 2005, we also incurred a U.S. alternative minimum tax at an effective rate of two percent based primarily on consolidated income, net of smelting and refining results. As a result of the enactment of the American Jobs Creation Act of 2004, the 90 percent limitation on the use of foreign tax credits to offset the U.S. federal alternative minimum tax liability has been repealed effective January 1, 2005. The removal of this limitation will reduce our U.S. federal taxes beginning in 2005. In 2004, our U.S. federal alternative minimum tax liability totaled $8.2 million. We currently record no income taxes at Atlantic Copper, which is subject to taxation in Spain, because it has not generated significant taxable income in recent years and has substantial tax loss carryforwards for which we have provided no net financial statement benefit. We receive no consolidated tax benefit from these losses because they cannot be used to offset PT Freeport Indonesia’s profits in ~~Indonesia.~~Indonesia, but can be utilized to offset Atlantic Copper’s future profits.

Parent company costs consist primarily of interest, depreciation and amortization, and general and administrative expenses. We receive minimal, if any, tax benefit from these costs, including interest expense, primarily because our parent company normally generates no taxable income from U.S. sources. As a result, our provision for income taxes as a percentage of our consolidated income before income taxes and minority interests will vary as PT Freeport Indonesia’s income changes, absent changes in Atlantic Copper and parent company costs. Summaries of the approximate significant components of the calculation of our consolidated provision for income taxes are shown below (in thousands, except percentages).

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2005			2004			2005			2004			2006			2005
Mining and exploration segment operating income^a	$	449,248		$	181,896		$	1,268,335		$	291,427		$	447,527		$	428,307
Mining and exploration segment interest expense, net		(5,342	)		(5,133	)		(16,966	)		(16,346	)		(3,273	)		(5,727	)
Intercompany operating profit (deferred) recognized		(1,904	)		(15,056	)		(17,124	)		23,563
Intercompany operating profit recognized (deferred)														74,211			(63,570	)
Income before taxes		442,002			161,707			1,234,245			298,644			518,465			359,010
Indonesian corporate income tax rate (35%) plus U.S.
alternative minimum tax rate (2%) for 2004		35	%		37	%		35	%		37	%
Indonesian corporate income tax rate														35	%		35	%
Corporate income taxes		154,701			59,832			431,986			110,498			181,463			125,654

Approximate PT Freeport Indonesia net income		287,301			101,875			802,259			188,146			337,002			233,356
Withholding tax on FCX’s equity share		9.064	%		9.064	%		9.064	%		9.064	%		9.064	%		9.064	%
Withholding taxes		26,041			9,234			72,717			17,054			30,546			21,151

PT Indocopper Investama corporate income tax		9,840			3,005			30,921			3,005			5,623			14,124
Other, net		(3,870	)		(728	)		3,800			(2,663	)		4,090			3,099
FCX consolidated provision for income taxes	$	186,712		$	71,343		$	539,424		$	127,894		$	221,722		$	164,028

FCX consolidated effective tax rate		48	%		63	%		48	%		b			43	%		50	%

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Excludes charges for the in-the-money value of FCX stock option exercises, which are eliminated in consolidation, totaling ~~$16.7~~$56.0 million for the 2006 quarter and $16.8 million for the 2005 ~~quarter, $2.4 million for the 2004 quarter, $34.1 million for the 2005 nine-month period and $69.3 million for the 2004 nine-month period.~~

b.	~~Rate is not meaningful given the small amount of consolidated income before taxes and minority interests for the 2004 nine-month period.~~quarter.

RESULTS OF OPERATIONS

We have two operating segments: “mining and exploration” and “smelting and refining.” The mining and exploration segment consists of our Indonesian activities including PT Freeport Indonesia’s copper and gold mining operations, Puncakjaya Power’s power generating operations (after eliminations with PT Freeport Indonesia) and our Indonesian exploration activities, including those of Eastern Minerals. The smelting and refining segment includes Atlantic Copper’s operations in Spain and PT Freeport Indonesia’s equity investment in PT Smelting. Summary comparative operating income (loss) data by segment follow (in millions):

~~Table of Contents~~

	Third Quarter					Nine Months						First Quarter
	2005		2004			2005			2004			2006		2005
Mining and exploration^a	$	432.6	$	179.5		$	1,234.2		$	222.2		$	391.5	$	411.5
Smelting and refining		17.2		(11.6	)		15.6			(62.5	)		13.5		(1.6	)
Intercompany eliminations and other^{a, b}		9.8		(19.3	)		(2.2	)		77.0			126.8		(52.3	)
FCX operating income	$	459.6	$	148.6		$	1,247.6		$	236.7		$	531.8	$	357.6

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per share and diluted earnings per share would have been $1.25 per share for the three months ended March 31, 2006, if we had not adopted SFAS No. 123R, compared to reported earnings of $1.34 per basic share and $1.23 per diluted share.

Prior to the adoption of SFAS No. 123R, we presented all tax benefits resulting from the exercise of stock options as operating cash flows in the Consolidated Statements of Cash Flows. SFAS No. 123R requires the cash flows generated by tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) to be classified as financing cash flows. The $16.1 million excess tax benefit classified as a financing cash inflow in the Consolidated Statements of Cash Flows for the three months ended March 31, 2006 would have been classified as an operating cash inflow if we had not adopted SFAS No. 123R.

Compensation cost charged against earnings for stock-based awards is shown below (in thousands). We did not capitalize any stock-based compensation costs to fixed assets during the periods presented.

	Three Months Ended March 31,
	2006			2005
Production and delivery costs	$	6,077		$	1,294
General and administrative expenses		6,737	^a		3,083	^{a, b}
Exploration expenses		427			-
Total stock-based compensation cost	$	13,241		$	4,377

a.	Amounts are before Rio Tinto’s share of joint venture reimbursements for employee exercises of in-the-money stock options which reduced general and administrative expenses by $4.5 million in the 2006 quarter and $2.9 million in the 2005 quarter.

b.	Includes $0.5 million for amortization of the intrinsic value of FCX’s Class A stock options that were converted to Class B stock options in 2002.

As of March 31, 2006, total compensation cost related to nonvested stock option awards not yet recognized in earnings was $66.6 million.

PRODUCT REVENUES AND PRODUCTION COSTS

PT Freeport Indonesia Product Revenues and Unit Net Cash Costs

All amounts used in both the by-product and co-product method presentations are included in our recorded results under generally accepted accounting principles. We separately identify certain of these amounts as shown in the following reconciliation to amounts reported in our consolidated financial statements and as explained ~~below.~~here.

1.	We show adjustments to copper revenues for prior period open sales as separate line items. Because such copper pricing adjustments do not result from current period sales, we have reflected these separately from revenues on current period sales.

2.	Noncash and nonrecurring costs, which consist of items such as stock-based compensation costs starting January 1, 2006, write-offs of equipment or unusual charges, have not been material. They are removed from site production and delivery costs in the calculation of unit net cash costs.

3.	Gold and silver revenues, excluding any impacts from redemption of our gold-and silver-denominated preferred stocks, are reflected as credits against site production and delivery costs in the by-product method.

Three Months Ended September 30, 2005

By-Product Co-Product Method
(In Thousands) Method Copper Gold Silver Total
Revenues, after adjustments shown below $ 593,374 $ 593,374 $ 210,377 $ 7,402 $ 811,153

Site production and delivery, before net noncash
and nonrecurring costs shown below 244,532
^a
178,880
^b
63,421
^b
2,231
^b
244,532
Gold and silver credits (217,779 ) - - - -
Treatment charges 86,197 63,055 22,356 786 86,197
Royalty on metals 20,348 14,885 5,277 186 20,348
Unit net cash costs 133,298 256,820 91,054 3,203 351,077
Depreciation and amortization 51,143 37,412 13,264 467 51,143
Noncash and nonrecurring costs, net 2,469 1,806 640 23 2,469
Total unit costs 186,910 296,038 104,958 3,693 404,689
Revenue adjustments, primarily for pricing on
prior period open sales and silver hedging 66,582 71,534 - (4,952 ) 66,582
PT Smelting intercompany profit elimination (3,096 ) (2,265 ) (803 ) (28 ) (3,096 )
Gross profit (loss) $ 469,950 $ 366,605 $ 104,616 $ (1,271 ) $ 469,950

Reconciliation to Amounts Reported

(In Thousands) Revenues Production and Delivery Depreciation and Amortization
Totals presented above $ 811,153 $ 244,532 $ 51,143
Net noncash and nonrecurring costs per above N/A 2,469 N/A
Less: Treatment charges per above (86,197 ) N/A N/A
Royalty per above (20,348 ) N/A N/A
Revenue adjustments, primarily for pricing on
prior period open sales and hedging per above 66,582 N/A N/A
Mining and exploration segment 771,190 247,001 51,143
Smelting and refining segment 378,412 351,517 7,415
Eliminations and other (166,332 ) (164,150 ) 3,088
As reported in FCX’s consolidated financial
statements $ 983,270 $ 434,368 $ 61,646

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Three Months Ended March 31, 2006
	By-Product			Co-Product Method
(In Thousands)	Method			Copper			Gold			Silver			Total
Revenues, after adjustments shown below	$	543,138		$	543,138		$	282,799		$	7,757		$	833,694

Site production and delivery, before net noncash
and nonrecurring costs shown below		275,008			179,163			93,286			2,559			275,008
Gold and silver credits		(290,556	)		-			-			-			-
Treatment charges		83,642	^a		54,491	^b		28,373	^b		778	^b		83,642
Royalty on metals		19,935			12,988			6,762			185			19,935
Unit net cash costs		88,029			246,642			128,421			3,522			378,585
Depreciation and amortization		33,773			22,003			11,456			314			33,773
Noncash and nonrecurring costs, net		11,669			7,602			3,958			109			11,669
Total unit costs		133,471			276,247			143,835			3,945			424,027
Revenue adjustments, primarily for pricing on
prior period open sales and gold hedging		66,666			135,628			(68,962	)		-			66,666
PT Smelting intercompany profit recognized		20,828			13,569			7,065			194			20,828
Gross profit	$	497,161		$	416,088		$	77,067		$	4,006		$	497,161

Reconciliation to Amounts Reported
(In Thousands)	Revenues			Production and Delivery			Depreciation and Amortization
Totals presented above	$	833,694		$	275,008		$	33,773
Net noncash and nonrecurring costs per above		N/A			11,669			N/A
Less: Treatment charges per above		(83,642	)		N/A			N/A
Royalty per above		(19,935	)		N/A			N/A
Revenue adjustments, primarily for pricing on
prior period open sales and hedging per above		66,666			N/A			N/A
Mining and exploration segment		796,783			286,677			33,773
Smelting and refining segment		516,104			491,437			7,406
Eliminations and other		(226,765	)		(300,199	)		2,071
As reported in FCX’s consolidated financial
statements	$	1,086,122		$	477,915		$	43,250

Three Months Ended March 31, 2005
	By-Product			Co-Product Method
(In Thousands)	Method			Copper			Gold			Silver			Total
Revenues, after adjustments shown below	$	500,413		$	500,413		$	250,998		$	9,100		$	760,511

Site production and delivery, before net noncash
and nonrecurring costs shown below		193,354	^c		127,226	^d		63,814	^d		2,314	^d		193,354
Gold and silver credits		(260,098	)		-			-			-			-
Treatment charges		71,486			47,037			23,594			855			71,486
Royalty on metals		18,778			12,356			6,197			225			18,778
Unit net cash costs		23,520			186,619			93,605			3,394			283,618
Depreciation and amortization		46,925			30,877			15,487			561			46,925
Noncash and nonrecurring costs, net		524			345			173			6			524
Total unit costs		70,969			217,841			109,265			3,961			331,067
Revenue adjustments, primarily for pricing on
prior period open sales		17,151			17,151			-			-			17,151
PT Smelting intercompany profit elimination		(2,576	)		(1,695	)		(850	)		(31	)		(2,576	)
Gross profit	$	444,019		$	298,028		$	140,883		$	5,108		$	444,019

~~Net of deferred mining costs totaling $15.8~~Includes $10.1 million or ~~4.6¢~~4.5 cents per ~~pound. Upon adoption of EITF 04-6, mining costs will no longer be deferred. See Note 1 of Notes~~pound for adjustments to ~~Consolidated Financial Statements.~~December 31, 2005 concentrate sales subject to final pricing to reflect the impact on treatment charges resulting from the increase in copper prices since December 31, 2005.

~~Net of deferred mining costs totaling $11.6~~Includes $6.6 million or ~~3.3¢~~2.9 cents per pound for copper, ~~$4.1~~$3.4 million or ~~$8.63~~$7.25 per ounce for gold and $0.1 million or ~~$0.14~~$0.13 per ounce for ~~silver. See Note a above.~~silver for adjustments to December 31, 2005 concentrate sales subject to final pricing to reflect the impact on treatment charges resulting from the increase in copper prices since December 31, 2005.

3335

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Three Months Ended September 30, 2004

By-Product Co-Product Method
(In Thousands) Method Copper Gold Silver Total
Revenues, after adjustments shown below $ 349,395 $ 349,395 $ 139,919 $ 5,249 $ 494,563

Site production and delivery, before net noncash
and nonrecurring costs shown below 196,635
^a
138,917
^b
55,631
^b
2,087
^b
196,635
Gold and silver credits (145,168 ) - - - -
Treatment charges 51,367 36,290 14,532 545 51,367
Royalty on metals 11,601 8,196 3,282 123 11,601
Unit net cash costs 114,435 183,403 73,445 2,755 259,603
Depreciation and amortization 46,135 32,593 13,052 490 46,135
Noncash and nonrecurring costs, net 2,237 1,580 633 24 2,237
Total unit costs 162,807 217,576 87,130 3,269 307,975
Revenue adjustments, primarily for pricing on
prior period open sales and silver hedging 16,281 17,722 - (1,441 ) 16,281
PT Smelting intercompany profit elimination (517 ) (365 ) (147 ) (5 ) (517 )
Gross profit $ 202,352 $ 149,176 $ 52,642 $ 534 $ 202,352

Reconciliation to Amounts Reported

(In Thousands) Revenues Production and Delivery Depreciation and Amortization
Totals presented above $ 494,563 $ 196,635 $ 46,135
Net noncash and nonrecurring costs per above N/A 2,237 N/A
Less: Treatment charges per above (51,367 ) N/A N/A
Royalty per above (11,601 ) N/A N/A
Revenue adjustments, primarily for pricing on
prior period open sales and hedging per above 16,281 N/A N/A
Mining and exploration segment 447,876 198,872 46,135
Smelting and refining segment 222,184 223,384 7,114
Eliminations and other (69,504 ) (54,240 ) 2,506
As reported in FCX’s consolidated financial
statements $ 600,556 $ 368,016 $ 55,755

a.c.

Net of deferred mining costs totaling ~~$23.7~~$32.2 million or ~~9.0¢~~9.8 cents per pound. ~~Upon~~Following adoption of EITF 04-6 ~~mining~~on January 1, 2006 (see Note 3 and New Accounting Standards), stripping costs ~~will~~are no longer be deferred. ~~See Note 1 of Notes to Consolidated Financial Statements.~~

b.d.	Net of deferred mining costs totaling ~~$16.7~~$21.2 million or ~~6.4¢~~6.5 cents per pound for copper, ~~$6.7~~$10.6 million or ~~$19.14~~$17.86 per ounce for gold and ~~$0.3~~$0.4 million or $0.30 per ounce for ~~silver. See~~silver (see Note ~~a above.~~c above).

Nine Months Ended September 30, 2005

By-Product Co-Product Method
(In Thousands) Method Copper Gold Silver Total
Revenues, after adjustments shown below $ 1,660,045 $ 1,660,045 $ 725,415 $ 23,908 $ 2,409,368

Site production and delivery, before net noncash
and nonrecurring costs shown below 658,958
^a
454,019
^b
198,400
^b
6,539
^b
658,958
Gold and silver credits (749,323 ) - - - -
Treatment charges 225,551 155,404 67,909 2,238 225,551
Royalty on metals 56,867 39,181 17,122 564 56,867
Unit net cash costs 192,053 648,604 283,431 9,341 941,376
Depreciation and amortization 142,285 98,034 42,839 1,412 142,285
Noncash and nonrecurring costs, net 5,276 3,635 1,589 52 5,276
Total unit costs 339,614 750,273 327,859 10,805 1,088,937
Revenue adjustments, primarily for pricing on
prior period open sales and silver hedging 10,024 14,976 - (4,952 ) 10,024
PT Smelting intercompany profit elimination (3,120 ) (2,150 ) (939 ) (31 ) (3,120 )
Gross profit $ 1,327,335 $ 922,598 $ 396,617 $ 8,120 $ 1,327,335

Reconciliation to Amounts Reported
(In Thousands)	Revenues			Production and Delivery			Depreciation and Amortization
Totals presented above	$	760,511		$	193,354		$	46,925
Net noncash and nonrecurring costs per above		N/A			524			N/A
Less: Treatment charges per above		(71,486	)		N/A			N/A
Royalty per above		(18,778	)		N/A			N/A
Revenue adjustments, primarily for pricing on
prior period open sales per above		17,151			N/A			N/A
Mining and exploration segment		687,398			193,878			46,925
Smelting and refining segment		272,116			263,577			7,089
Eliminations and other		(156,449	)		(92,449	)		2,912
As reported in FCX’s consolidated financial
statements	$	803,065		$	365,006		$	56,926

CATHODE CASH UNIT COST

~~Table of Contents~~

Reconciliation to Amounts Reported

(In Thousands) Revenues Production and Delivery Depreciation and Amortization
Totals presented above $ 2,409,368 $ 658,958 $ 142,285
Net noncash and nonrecurring costs per above N/A 5,276 N/A
Less: Treatment charges per above (225,551 ) N/A N/A
Royalty per above (56,867 ) N/A N/A
Revenue adjustments, primarily for pricing on
prior period open sales and hedging per above 10,024 N/A N/A
Mining and exploration segment 2,136,974 664,234 142,285
Smelting and refining segment 982,425 937,003 21,645
Eliminations and other (430,155 ) (411,277 ) 8,801
As reported in FCX’s consolidated financial
statements $ 2,689,244 $ 1,189,960 $ 172,731

a.	~~Net of deferred mining costs totaling $68.6 million or 6.9¢ per pound. Upon adoption of EITF 04-6, mining costs will no longer be deferred. See Note 1 of Notes to Consolidated Financial Statements.~~

b.	~~Net of deferred mining costs totaling $47.3 million or 4.8¢ per pound for copper, $20.7 million or $12.25 per ounce for gold and $0.7 million or $0.20 per ounce for silver. See Note a above.~~

Nine Months Ended September 30, 2004

By-Product Co-Product Method
(In Thousands) Method Copper Gold Silver Total
Revenues, after adjustments shown below $ 755,834 $ 755,834 $ 327,229 $ 13,991 $ 1,097,054

Site production and delivery, before net noncash
and nonrecurring costs shown below 520,180
^a
358,387
^b
155,159
^b
6,634
^b
520,180
Gold and silver credits (341,220 ) - - - -
Treatment charges 118,759 81,821 35,423 1,515 118,759
Royalty on metals 24,323 16,758 7,255 310 24,323
Unit net cash costs 322,042 456,966 197,837 8,459 663,262
Depreciation and amortization 96,738 66,649 28,855 1,234 96,738
Noncash and nonrecurring costs, net 5,207 3,587 1,554 66 5,207
Total unit costs 423,987 527,202 228,246 9,759 765,207
Revenue adjustments, primarily for pricing on
prior period open sales and silver hedging 11,929 13,370 - (1,441 ) 11,929
PT Smelting intercompany profit elimination (2,473 ) (1,704 ) (738 ) (31 ) (2,473 )
Gross profit $ 341,303 $ 240,298 $ 98,245 $ 2,760 $ 341,303

Reconciliation to Amounts Reported

(In Thousands) Revenues Production and Delivery Depreciation and Amortization
Totals presented above $ 1,097,054 $ 520,180 $ 96,738
Net noncash and nonrecurring costs per above N/A 5,207 N/A
Less: Treatment charges per above (118,759 ) N/A N/A
Royalty per above (24,323 ) N/A N/A
Revenue adjustments, primarily for pricing on
prior period open sales and hedging per above 11,929 N/A N/A
Mining and exploration segment 965,901 525,387 96,738
Smelting and refining segment 605,137 637,042 21,209
Eliminations and other (123,963 ) (147,122 ) 5,808
As reported in FCX’s consolidated financial
statements $ 1,447,075 $ 1,015,307 $ 123,755

a.	~~Net of deferred mining costs totaling $81.4 million or 14.2¢ per pound. Upon adoption of EITF 04-6, mining costs will no longer be deferred. See Note 1 of Notes to Consolidated Financial Statements.~~

b.	~~Net of deferred mining costs totaling $56.1 million or 9.8¢ per pound for copper, $24.3 million or $29.43 per ounce for gold and $1.0 million or $0.47 per ounce for silver. See Note a above.~~

~~Table of Contents~~

~~Atlantic Copper~~ Cathode ~~Cash Unit Cost Per Pound Of Copper~~

~~Atlantic Copper cathode~~ cash unit cost per pound of copper is a measure intended to provide investors with information about the costs ~~it incurs~~incurred to produce cathodes at ~~its~~our smelting operations in ~~Spain.~~Spain and Indonesia. We use this measure for the same purpose and for monitoring operating performance at ~~Atlantic Copper’s~~our smelting operations. This information differs from measures of performance determined in accordance with generally accepted accounting principles and should not be considered in isolation or as a substitute for measures of performance determined in accordance with generally accepted accounting principles. Other smelting companies present this measure, although Atlantic Copper’s ~~measure~~and PT Smelting’s measures may not be comparable to similarly titled measures reported by other companies.

Atlantic Copper Cathode Cash Unit Cost Per Pound Of Copper

The reconciliation below presents reported production costs for our smelting and refining segment (Atlantic Copper) and subtracts or adds components of those costs that do not directly relate to the process of converting copper concentrates to cathodes. The adjusted production costs amounts are used to calculate Atlantic Copper’s cathode cash unit cost per pound of copper (in thousands, except per pound amounts):

	Three Months Ended March 31,
	2006			2005
Smelting and refining segment production costs reported in FCX’s
consolidated financial statements	$	491,437		$	263,577
Less:
Raw material purchase costs		(325,940	)		(197,271	)
Production costs of anodes sold		(4,273	)		(3,435	)
Other		1,169			(1,160	)
Credits:
Gold and silver revenues		(130,044	)		(31,948	)
Acid and other by-product revenues		(6,659	)		(7,300	)
Production costs used in calculating cathode cash unit cost per pound	$	25,690		$	22,463

Pounds of cathode produced		129,400			131,700

Cathode cash unit cost per pound	$	0.20		$	0.17

Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Smelting and refining segment production costs reported
in FCX’s consolidated financial statements $ 351,517 $ 223,384 $ 937,003 $ 637,042
^a
Less:
Raw material purchase costs (237,502 ) (36,358 ) (643,972 ) (204,236 )
Production costs of wire rod and wire -
^b
(127,938 ) -
^b
(212,228 )
Production costs of anodes sold (4,194 ) (1,656 ) (10,008 ) (2,070 )
Other (1,238 ) (430 ) (2,260 ) (5,195 )
Credits:
Gold and silver revenues (78,215 ) (30,081 ) (188,636 ) (104,104 )
Acid and other by-product revenues (7,818 ) (5,713 ) (22,408 ) (18,085 )
Production costs used in calculating cathode cash unit
cost per pound $ 22,550 $ 21,208 $ 69,719 $ 91,124
Pounds of cathode produced 138,200 131,000 407,700 327,300
Cathode cash unit cost per pound $ 0.16 $ 0.16 $ 0.17 $ 0.28

a.	~~Includes $27.5 million, $0.14 per pound, for costs related to Atlantic Copper’s major maintenance turnaround.~~

b.	~~Atlantic Copper sold its wire rod and wire assets in December 2004.~~

Table of Contents

PT Smelting Cathode Cash Unit Cost Per Pound Ofof Copper

PT Smelting cathode cash unit cost per pound of copper is a measure intended to provide investors with information about the costs it incurs to produce cathodes at its smelting operations in Indonesia. We use this measure for the same purpose and for monitoring operating performance at PT Smelting’s smelting operations. This information differs from measures of performance determined in accordance with generally accepted accounting principles and should not be considered in isolation or as a substitute for measures of performance determined in accordance with generally accepted accounting principles. Other smelting companies present this measure, although PT Smelting’s measure may not be comparable to similarly titled measures reported by other companies. The calculation below presents PT Smelting’s reported operating costs and subtracts or adds components of those costs that do not directly relate to the process of converting copper concentrates to cathodes. PT Smelting’s operating costs are then reconciled to PT Freeport Indonesia’s equity in PT Smelting earnings ~~(losses)~~ reported in ~~our~~FCX’s consolidated financial statements (in thousands, except per pound amounts):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,						Three Months Ended March 31,
	2005			2004			2005			2004			2006			2005
Operating costs - PT Smelting (100%)	$	21,696		$	15,480		$	57,770		$	49,240		$	23,966		$	18,451
Add: Gold and silver refining charges		1,112			1,327			3,187			3,039			1,466			956
Less: Acid and other by-product revenues		(3,616	)		(4,065	)		(11,117	)		(9,547	)		(3,737	)		(3,860	)
Production cost of anodes sold		-			(162	)		-			(249	)
Other		(114	)		(428	)		(1,070	)		412			(429	)		(502	)
Production costs used in calculating cathode cash unit
cost per pound	$	19,078		$	12,152		$	48,770		$	42,895
Production costs used in calculating cathode cash unit cost per pound													$	21,266		$	15,045

Pounds of cathode produced		144,700			136,300			434,300			320,200			142,400			143,500

Cathode cash unit cost per pound	$	0.13		$	0.09		$	0.11		$	0.13		$	0.15		$	0.10

Reconciliation to Amounts Reported
Operating costs per above													$	(23,966	)	$	(18,451	)
Other costs														(472,038	)		(278,151	)
Revenue and other income														510,478			307,226
PT Smelting net income														14,474			10,624

PT Freeport Indonesia’s 25% equity interest														3,619			2,656
Amortization of excess investment cost														(60	)		(60	)
Equity in PT Smelting earnings reported in FCX’s consolidated
financial statements													$	3,559		$	2,596

~~Table of Contents~~

Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Reconciliation to Amounts Reported
Operating costs per above $ (21,696 ) $ (15,480 ) $ (57,770 ) $ (49,240 )
Other costs (332,544 ) (250,338 ) (923,489 ) (585,247 )
Revenue and other income 359,738 276,771 1,007,872 634,297
PT Smelting net income (loss) 5,498 10,953 26,613 (190 )

PT Freeport Indonesia’s 25% equity interest 1,375 2,738 6,653 (48 )
Amortization of excess investment cost (60 ) (60 ) (180 ) (180 )
Equity in PT Smelting earnings (losses) reported in
FCX’s consolidated financial statements $ 1,315 $ 2,678 $ 6,473 $ (228 )

CAUTIONARY STATEMENT

Our discussion and analysis contains forward-looking statements in which we discuss our expectations regarding future performance. Forward-looking statements are all statements other than historical facts, such as those regarding anticipated sales volumes, ore grades, commodity prices, general and administrative expenses, unit net cash costs, operating cash flows, royalty costs, capital expenditures, debt repayments and refinancing, debt maturities, treatment charge rates, depreciation rates, exploration efforts and results, dividend payments, liquidity and other financial commitments. We caution you that these statements are not guarantees of future performance, and our actual results may differ materially from those projected, anticipated or assumed in the forward-looking statements. Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include unanticipated mining, milling and other processing problems, accidents that lead to personal injury or property damage, persistent commodity price reductions, changes in political, social or economic circumstances in our area of operations, variances in ore grades, labor relations, adverse weather conditions, the speculative nature of mineral exploration, fluctuations in interest rates and other adverse financial market conditions, and other factors described in more detail under the heading “Risk Factors” in our Form 10-K for the year ended December 31, ~~2004.~~2005.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There have been no significant changes in our market risks since the year ended December 31, ~~2004.~~2005. For more information, please read the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2004.~~2005.

Table of Contents

Item 4. Controls and Procedures.

(a) Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer, with the participation of management, have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report on Form 10-Q. Based on their evaluation, they have concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to FCX (including our consolidated subsidiaries) required to be disclosed in our periodic Securities and Exchange Commission filings.

(b) Changes in internal controls. There has been no change in our internal control over financial reporting that occurred during the ~~third~~first quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

PART ~~II.~~II. OTHER INFORMATION

Item 1. Legal Proceedings.

We are involved from time to time in various legal proceedings of a character normally incident to the ordinary course of our business. We believe that potential liability in such proceedings would not have a material adverse effect on our financial condition or results of operations. We maintain liability insurance to cover some, but not all, potential liabilities normally incident to the ordinary course of our business as well as other insurance coverage customary in our business, with coverage limits that we deem prudent.

~~Table~~As reported in January 2006, we are responding to requests from governmental authorities in the United States and Indonesia for information about PT Freeport Indonesia primarily relating to PT Freeport Indonesia’s support of ~~Contents~~
Indonesian security institutions. As described in our Form 10-K for the year ended December 31, 2005, we provide support to assist security institutions deployed and directed by the Government of Indonesia with infrastructure, logistics and the hardship elements of posting in Papua and our practices adhere to the joint U.S. State Department-British Foreign Office Voluntary Principles on Security and Human Rights. We are cooperating with these requests. We are also responding to various requests from Indonesian authorities related to our operations.


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended ~~September 30, 2005~~March 31, 2006
OR
[ ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from	toTo
Commission File Number: 1-9916



Freeport-McMoRan Copper & Gold Inc.
(Exact name of registrant as specified in its charter)

Delaware	74-2480931
(State or other jurisdiction of ~~incorporation or organization)~~	(IRS Employer Identification No.)
incorporation or organization)

1615 Poydras Street
*New Orleans, LouisianaLouisiana**	70112
(Address of principal executive offices)	(Zip Code)


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


	Page
Part I. Financial Information	3

Item 1. Financial Statements:

Condensed Consolidated Balance Sheets (Unaudited)	3

Consolidated Statements of ~~Operations~~Income (Unaudited)	4

Consolidated Statements of Cash Flows (Unaudited)	5

Notes to Consolidated Financial Statements	6

~~Remarks~~	11

Report of Independent Registered Public Accounting Firm	1214

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations	1315

Item 3. Quantitative and Qualitative Disclosures about Market Risk	37

Item 4. Controls and Procedures	3738

Part II. Other Information	3738

Item 1. Legal Proceedings	3738

Item 1A. Risk Factors	38

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 6. Exhibits	38

Signature	3839

Exhibit Index	E-1

	September 30,			December 31,			March 31,			December 31,
	2005			2004			2006			2005
	(In Thousands)						(In Thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	392,845		$	551,450		$	284,070		$	763,599
Restricted cash		500			500
Accounts receivable		418,689			435,062			616,090			687,969
Inventories		450,031			466,712			612,522			565,019
Prepaid expenses and other		13,129			6,223			13,989			5,795
Total current assets		1,275,194			1,459,947			1,526,671			2,022,382
Property, plant, equipment and development costs, net		3,120,311			3,199,292			3,095,779			3,088,931
Deferred mining costs		289,025			220,415			-			285,355
Other assets		142,097			159,539			114,824			119,999
Investment in PT Smelting		51,154			47,802			58,918			33,539
Total assets	$	4,877,781		$	5,086,995		$	4,796,192		$	5,550,206

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	440,229		$	386,590		$	433,731		$	573,560
Current portion of long-term debt and short-term borrowings		195,581			78,214			90,077			253,350
Accrued income taxes		160,641			92,346			56,231			327,041
Rio Tinto share of joint venture cash flows		68,292			60,224			33,015			125,809
Unearned customer receipts		57,570			33,021			32,746			57,184
Accrued interest payable		15,635			47,167			12,980			32,034
Total current liabilities		937,948			697,562			658,780			1,368,978
Long-term debt, less current portion:
Senior notes		746,021			911,336			612,900			624,365
Convertible senior notes		386,565			575,000			312,667			323,667
Equipment and other loans		57,901			67,624			51,171			54,529
Atlantic Copper debt		33			4,426			34,455			37
Redeemable preferred stock		-			179,880
PT Puncakjaya Power bank debt		-			135,426
Total long-term debt, less current portion		1,190,520			1,873,692			1,011,193			1,002,598
Accrued postretirement benefits and other liabilities		204,177			200,228			217,228			210,259
Deferred income taxes		909,141			932,416			831,113			902,386
Minority interests		187,976			219,448			215,601			222,991
Stockholders' equity:
Stockholders’ equity:
Convertible perpetual preferred stock		1,100,000			1,100,000			1,100,000			1,100,000
Class B common stock		29,310			28,496			29,898			29,696
Capital in excess of par value of common stock		2,090,782			1,852,816			2,303,626			2,212,246
Retained earnings		762,823			604,680			1,035,300			1,086,191
Accumulated other comprehensive income		7,181			11,342			11,989			10,749
Common stock held in treasury		(2,542,077	)		(2,433,685	)		(2,618,536	)		(2,595,888	)
Total stockholders’ equity		1,448,019			1,163,649			1,862,277			1,842,994
Total liabilities and stockholders’ equity	$	4,877,781		$	5,086,995		$	4,796,192		$	5,550,206

	Three Months Ended
	March 31,
	2006			2005
	(In Thousands)
Cash flow from operating activities:
Net income	$	266,775		$	145,520
Adjustments to reconcile net income to net cash (used in) provided by
operating activities:
Depreciation and amortization		43,250			56,926
Minority interests’ share of net income		27,126			21,088
Stock-based compensation		9,637			940
Long-term compensation and postretirement benefits		7,416			4,251
Losses (gains) on early extinguishment and conversion of debt		1,973			(37	)
Deferred income taxes		41,886			(12,020	)
Equity in PT Smelting earnings		(3,559	)		(2,596	)
Increase in deferred mining costs		-			(32,219	)
(Recognition) elimination of profit on PT Freeport Indonesia sales
to PT Smelting		(20,828	)		2,576
Provision for inventory obsolescence		1,500			1,500
Other		2,190			(500	)
(Increases) decreases in working capital:
Accounts receivable		65,150			34,774
Inventories		(40,318	)		18,997
Prepaid expenses and other		(7,284	)		(6,901	)
Accounts payable and accrued liabilities		(157,573	)		(73,027	)
Rio Tinto share of joint venture cash flows		(92,794	)		2,493
Accrued income taxes		(268,300	)		473
Increase in working capital		(501,119	)		(23,191	)
Net cash (used in) provided by operating activities		(123,753	)		162,238

Cash flow from investing activities:
PT Freeport Indonesia capital expenditures		(48,609	)		(23,522	)
Atlantic Copper and other capital expenditures		(3,513	)		(2,724	)
Sale of assets		2,003			-
Investment in PT Smelting and other		(317	)		(85	)
Proceeds from insurance settlement		-			2,016
Net cash used in investing activities		(50,436	)		(24,315	)

Cash flow from financing activities:
Proceeds from debt		55,509			37,428
Repayments of debt		(201,016	)		(220,245	)
Redemption of step-up preferred stock		-			(215	)
Cash dividends paid:
Common stock		(153,155	)		(134,740	)
Preferred stock		(15,125	)		(15,126	)
Minority interests		(18,744	)		(47,431	)
Net proceeds from exercised stock options		11,140			1,511
Excess tax benefit from exercised stock options		16,057			-
Other		(6	)		(13	)
Net cash used in financing activities		(305,340	)		(378,831	)
Net decrease in cash and cash equivalents		(479,529	)		(240,908	)
Cash and cash equivalents at beginning of year		763,599			551,450
Cash and cash equivalents at end of period	$	284,070		$	310,542


PT Freeport Indonesia, 100% Aggregate Operating Data
Ore milled (metric tons per day)	216,800	199,400
Average ore grade
Copper (percent)	0.72	1.14
Gold (grams per metric ton)	0.92	1.62
Recovery rates (percent)
Copper	82.5	89.6
Gold	80.6	82.7
Copper (recoverable)
Production (000s of pounds)	246,600	390,300
Production (metric tons)	111,900	177,000
Sales (000s of pounds)	251,300	381,400
Sales (metric tons)	114,000	173,000
Gold (recoverable ounces)
Production	470,700	763,900
Sales	486,300	743,200

	2006
PT Freeport Indonesia revenues - prior year period	$	687.4
Price realizations:
Copper		206.4
Gold		(10.0	)
Sales volumes:
Copper		(155.7	)
Gold		(52.4	)
Adjustments, primarily for copper pricing on prior year
open sales		128.5
Treatment charges, royalties and other		(7.4	)
PT Freeport Indonesia revenues - current year period	$	796.8

	Third			Nine
	Quarter			Months
PT Freeport Indonesia revenues - prior year period	$	447.9		$	965.9
Sales volumes:
Copper		113.1			545.0
Gold		49.9			341.5
Price realizations:
Copper		134.3			358.7
Gold		22.3			60.0
Adjustments, primarily for copper pricing on prior period open sales		46.1			(1.5	)
Treatment charges, royalties and other		(42.4	)		(132.6	)
PT Freeport Indonesia revenues - current year period	$	771.2		$	2,137.0

Gross profit (loss) per pound of copper (¢)/per ounce of gold and silver ($):
Three Months Ended September 30, 2005
Pounds of copper sold (000s)	346,300		346,300
Ounces of gold sold					475,000
Ounces of silver sold							1,065,500

	By-Product		Co-Product Method
	Method		Copper		Gold		Silver
Revenues, after adjustments shown below	172.8	¢	172.8	¢	$445.79		$5.25

Site production and delivery, before net non-
cash and nonrecurring costs shown below	70.6	^a	51.7	^b	133.52	^b	2.09	^b
Gold and silver credits	(62.9	)	-		-		-
Treatment charges	24.9		18.2		47.06		0.74
Royalty on metals	5.9		4.3		11.11		0.17
Unit net cash costs^c	38.5		74.2		191.69		3.00
Depreciation and amortization	14.8		10.8		27.92		0.44
Noncash and nonrecurring costs, net	0.7		0.5		1.35		0.02
Total unit costs	54.0		85.5		220.96		3.46
Revenue adjustments, primarily for pricing
on prior period open sales and silver hedging	17.8		19.3		(2.90	)	(2.95	)
PT Smelting intercompany profit elimination	(0.9	)	(0.7	)	(1.69	)	(0.03	)
Gross profit (loss) per pound/ounce	135.7	¢	105.9	¢	$220.24		$(1.19	)

Three Months Ended September 30, 2004
Pounds of copper sold (000s)	261,900		261,900
Ounces of gold sold					350,000
Ounces of silver sold							837,800

	By-Product		Co-Product Method
	Method		Copper		Gold		Silver
Revenues, after adjustments shown below	134.0	¢	134.0	¢	$398.89		$5.25

Site production and delivery, before net non-
cash and nonrecurring costs shown below	75.1	^d	53.0	^e	158.95	^e	2.49	^e
Gold and silver credits	(55.4	)	-		-		-
Treatment charges	19.6		13.9		41.52		0.65
Royalty on metals	4.4		3.1		9.38		0.15
Unit net cash costs^c	43.7		70.0		209.85		3.29
Depreciation and amortization	17.6		12.4		37.29		0.58
Noncash and nonrecurring costs, net	0.9		0.6		1.81		0.03
Total unit costs	62.2		83.0		248.95		3.90
Revenue adjustments, primarily for pricing
on prior period open sales and silver hedging	5.7		6.1		0.89		(0.70	)
PT Smelting intercompany profit elimination	(0.2	)	(0.1	)	(0.42	)	(0.01	)
Gross profit per pound/ounce	77.3	¢	57.0	¢	$150.41		$0.64

Gross Profit per Pound of Copper (¢)/per Ounce of Gold and Silver ($)

Three Months Ended March 31, 2006
Pounds of copper sold (000s)	225,200		225,200
Ounces of gold sold					472,500
Ounces of silver sold							707,100

	By-Product		Co-Product Method
	Method		Copper		Gold		Silver
Revenues, after adjustments shown below	242.9	¢	242.9	¢	$405.54	^a	$9.76

Site production and delivery, before net non-
cash and nonrecurring costs shown below	122.1		79.6		197.43		3.62
Gold and silver credits	(129.0	)	-		-		-
Treatment charges	37.1	^b	24.2	^c	60.05	^c	1.10	^c
Royalty on metals	8.9		5.8		14.31		0.26
Unit net cash costs^d	39.1		109.6		271.79		4.98
Depreciation and amortization	15.0		9.8		24.25		0.44
Noncash and nonrecurring costs, net	5.2		3.4		8.38		0.15
Total unit costs	59.3		122.8		304.42		5.57
Revenue adjustments, primarily for pricing on
prior period open sales	28.0	^e	58.7		47.03		1.20
PT Smelting intercompany profit recognized	9.2		6.0		14.95		0.27
Gross profit per pound/ounce	220.8	¢	184.8	¢	$163.10		$5.66

Gross profit per pound of copper (¢)/per ounce of gold and silver ($):
Nine Months Ended September 30, 2005
Pounds of copper sold (000s)	988,100		988,100
Ounces of gold sold					1,686,700
Ounces of silver sold							3,393,500

	By-Product		Co-Product Method
	Method		Copper		Gold		Silver
Revenues, after adjustments shown below	167.4	¢	167.4	¢	$431.88		$5.59

Site production and delivery, before net non-
cash and nonrecurring costs shown below	66.7	^a	45.9	^b	117.63	^b	1.93	^b
Gold and silver credits	(75.8	)	-		-		-
Treatment charges	22.8		15.7		40.26		0.66
Royalty on metals	5.8		4.0		10.15		0.17
Unit net cash costs^c	19.5		65.6		168.04		2.76
Depreciation and amortization	14.4		9.9		25.40		0.42
Noncash and nonrecurring costs, net	0.5		0.4		0.94		0.02
Total unit costs	34.4		75.9		194.38		3.20
Revenue adjustments, primarily for pricing
on prior period open sales and silver hedging	1.6		2.1		(1.80	)	0.01
PT Smelting intercompany profit elimination	(0.3	)	(0.2	)	(0.56	)	(0.01	)
Gross profit per pound/ounce	134.3	¢	93.4	¢	$235.14		$2.39

Nine Months Ended September 30, 2004
Pounds of copper sold (000s)	572,400		572,400
Ounces of gold sold					824,900
Ounces of silver sold							2,216,000

	By-Product		Co-Product Method
	Method		Copper		Gold		Silver
Revenues, after adjustments shown below	131.1	¢	131.1	¢	$396.33		$5.54

Site production and delivery, before net non-
cash and nonrecurring costs shown below	90.9	^d	62.6	^e	188.09	^e	2.99	^e
Gold and silver credits	(59.6	)	-		-		-
Treatment charges	20.7		14.3		42.94		0.68
Royalty on metals	4.2		2.9		8.80		0.14
Unit net cash costs^c	56.2		79.8		239.83		3.81
Depreciation and amortization	16.9		11.6		34.98		0.56
Noncash and nonrecurring costs, net	0.9		0.6		1.88		0.03
Total unit costs	74.0		92.0		276.69		4.40
Revenue adjustments, primarily for pricing
on prior period open sales and silver hedging	2.9		3.2		0.35		0.12
PT Smelting intercompany profit elimination	(0.4	)	(0.3	)	(0.89	)	(0.01	)
Gross profit per pound/ounce	59.6	¢	42.0	¢	$119.10		$1.25

Three Months Ended March 31, 2005
Pounds of copper sold (000s)	328,100		328,100
Ounces of gold sold					595,300
Ounces of silver sold							1,270,300

	By-Product		Co-Product Method
	Method		Copper		Gold		Silver
Revenues, after adjustments shown below	151.3	¢	151.3	¢	$426.74		$7.04

Site production and delivery, before net non-
cash and nonrecurring costs shown below	58.9	^a	38.8	^b	107.20	^b	1.82	^b
Gold and silver credits	(79.3	)	-		-		-
Treatment charges	21.8		14.3		39.63		0.67
Royalty on metals	5.7		3.8		10.41		0.18
Unit net cash costs^c	7.1		56.9		157.24		2.67
Depreciation and amortization	14.3		9.4		26.02		0.44
Noncash and nonrecurring costs, net	0.2		0.1		0.29		-
Total unit costs	21.6		66.4		183.55		3.11
Revenue adjustments, primarily for pricing on
prior period open sales	6.4		6.4		(5.10	)	0.11
PT Smelting intercompany profit elimination	(0.8	)	(0.5	)	(1.43	)	(0.02	)
Gross profit per pound/ounce	135.3	¢	90.8	¢	$236.66		$4.02

*Atlantic Copper Operating Results*
(In Millions)							First Quarter
							2006		2005
	Third Quarter			Nine Months
(In Millions)	2005	2004		2005	2004
Gross profit (loss)	$19.5	$(8.3	)	$23.8	$(53.1	)^a
Gross profit							$17.3		$1.5
Add depreciation and amortization expense	7.4	7.1		21.6	21.2		7.4		7.1
Other	1.5	0.4		3.6	4.4		(0.4	)	1.0
Cash margin (deficit)	$28.4	$(0.8	)	$49.0	$(27.5	)^a
Cash margin							$24.3		$9.6

Operating income (loss) (in millions)	$17.2	$(11.6	)	$15.6	$(62.5	)	$13.5		$(1.6	)
Concentrate and scrap treated (metric tons)	253,600	231,300		716,300	547,900		250,700		215,800
Anodes production (000s of pounds)	162,300	145,200		469,100	352,100		157,100		147,400
Cathodes, wire rod and wire sales (000s of pounds)	138,500	128,100		411,900	342,500
Cathode cash unit cost per pound^b	$0.16	$0.16		$0.17	$0.28
Treatment rates per pound							$0.29		$0.17
Cathodes sales (000s of pounds)							136,600		132,600
Cathode cash unit cost per pound^a							$0.20		$0.17
Gold sales in anodes and slimes (ounces)	176,400	72,200		422,600	249,000		245,600		67,300

	2006			2007		2008		2009		2010		Thereafter
Equipment loans and other	$	10.1		$	13.5	$	13.5	$	13.5	$	10.2	$	3.8
7.50% Senior Notes due 2006		55.4			-		-		-		-		-
Atlantic Copper debt		8.7			34.5		-		-		-		-
Redeemable preferred stock		12.5			-		-		-		-		-
10⅛% Senior Notes due 2010		-			-		-		-		272.4		-
7% Convertible Senior Notes due 2011^a		-			-		-		-		-		312.7
6⅞% Senior Notes due 2014		-			-		-		-		-		340.3
7.20% Senior Notes due 2026		-			-		-		-		-		0.2
Total debt maturities	$	86.7		$	48.0	$	13.5	$	13.5	$	282.6	$	657.0
Pro forma adjustments		15.5	^b		-		-		-		-		(5.0	)^c
Pro forma debt maturities	$	102.2		$	48.0	$	13.5	$	13.5	$	282.6	$	652.0

3.1		Amended and Restated Certificate of Incorporation of Freeport-McMoRan Copper & Gold Inc. (FCX). Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q of FCX for the quarter ended March 31, 2002 (the FCX 2002 First Quarter Form 10-Q).

3.2		Certificate of Amendment to Amended and Restated Certificate of Incorporation of FCX. Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q of FCX for the quarter ended March 31, 2003 (the FCX 2003 First Quarter Form 10-Q).

3.3		Amended and Restated By-Laws of FCX ~~dated~~ as ~~of February 3, 2004.~~amended, effective January 31, 2006. Incorporated by reference to Exhibit 3.3 to the ~~Annual~~Current Report on Form ~~10-K~~8-K of FCX ~~for the fiscal year ended December~~dated January 31, ~~2003 (the FCX 2003 Form 10-K).~~2006.

4.1		Deposit Agreement dated as of January 15, 1994, among FCX, Mellon, as Depositary, and holders of depositary receipts (Gold-Denominated II Depositary Receipts) evidencing certain Depositary Shares, each of which, in turn, represented 0.05 shares of Gold-Denominated Preferred Stock II. Incorporated by reference to Exhibit 4.5 to the Quarterly Report on Form 10-Q of FCX for the quarter ended June 30, 2002 (the FCX 2002 Second Quarter Form 10-Q).

~~4.2~~		~~Form of Gold-Denominated II Depositary Receipt. Incorporated by reference to Exhibit 4.6 to the FCX 2002 Second Quarter Form 10-Q.~~

~~4.3~~		Deposit Agreement dated as of July 25, 1994, among FCX, Mellon, as Depositary, and holders of depositary receipts (Silver-Denominated Depositary Receipts) evidencing certain Depositary Shares, each of which, in turn, initially represented 0.025 shares of Silver-Denominated Preferred Stock. Incorporated by reference to Exhibit 4.7 to the Quarterly Report on Form 10-Q of FCX for the quarter ended June 30, 2002 (the FCX 2002 Second Quarter Form ~~10-Q.~~10-Q).

~~4.4~~4.2		Form of Silver-Denominated Depositary Receipt. Incorporated by reference to Exhibit 4.8 to the FCX 2002 Second Quarter Form 10-Q.

~~4.5~~4.3		Certificate of Designations of 5½% Convertible Perpetual Preferred Stock of FCX. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of FCX dated March 30, 2004 and filed March 31, 2004.

~~4.6~~4.4		Amended and Restated Credit Agreement dated as of September 30, 2003, but effective as of October 2, 2003, among FCX, PT Freeport Indonesia, the several financial institutions that are parties thereto, U.S. Bank Trust National Association, as PT Freeport Indonesia Trustee, J.P. Morgan Securities Inc., as Arranger, and JPMorgan Chase Manhattan Bank as Administrative Agent, Issuing Bank, Security Agent, JAA Security Agent and Documentation Agent. Incorporated by reference to Exhibit 4.7 to the Quarterly Report on Form 10-Q of FCX for the quarter ended September 30, 2003.

~~4.7~~4.5		Senior Indenture dated as of November 15, 1996, from FCX to The Chase Manhattan Bank, as Trustee. Incorporated by reference to Exhibit 4.4 to the Registration Statement on Form S-3 of FCX filed November 5, 2001 (the FCX November 5, 2001 Form S-3).

~~4.8~~4.6		First Supplemental Indenture dated as of November 18, 1996, from FCX to The Chase Manhattan Bank, as Trustee, providing for the issuance of the Senior Notes and supplementing the Senior Indenture dated November 15, 1996, from FCX to such Trustee, providing for the issuance of the 7.50% Senior Notes due 2006 and the 7.20% Senior Notes due 2026. Incorporated by reference to Exhibit 4.5 to the FCX November 5, 2001 Form S-3.

~~4.9~~4.7		Indenture dated as of January 29, 2003, from FCX to The Bank of New York, as Trustee, with respect to the 10⅛% Senior Notes due 2010. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of FCX dated February 6, 2003.

~~4.10~~
4.8		Indenture dated as of February 11, 2003, from FCX to The Bank of New York, as Trustee, with respect to the 7% Convertible Senior Notes due 2011. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of FCX dated February 11, 2003 and filed February 25, 2003.


~~4.11~~4.9		Indenture dated as of February 3, 2004, from FCX to The Bank of New York, as Trustee, with respect to the 6⅞% Senior Notes due 2014. Incorporated by reference to Exhibit 4.12 to the Annual Report on Form 10-K of FCX for the fiscal year ended December 31, 2003 (the FCX 2003 Form ~~10-K.~~10-K).

~~4.12~~4.10		Rights Agreement dated as of May 3, 2000, between FCX and ChaseMellon Shareholder Services, L.L.C., as Rights Agent. Incorporated by reference to Exhibit 4.26 to the Quarterly Report on Form 10-Q of FCX for the quarter ended March 31, 2000.

~~4.13~~4.11		Amendment No. 1 to Rights Agreement dated as of February 26, 2002, between FCX and Mellon Investor Services. Incorporated by reference to Exhibit 4.16 to the FCX 2002 First Quarter Form 10-Q.

10.1		Contract of Work dated December 30, 1991, between the Government of the Republic of Indonesia and PT Freeport Indonesia. Incorporated by reference to Exhibit 10.1 to the FCX November 5, 2001 Form S-3.

10.2		Contract of Work dated August 15, 1994, between the Government of the Republic of Indonesia and PT Irja Eastern Minerals Corporation. Incorporated by reference to Exhibit 10.2 to the FCX November 5, 2001 Form S-3.

10.3		Participation Agreement dated as of October 11, 1996, between PT Freeport Indonesia and P.T. RTZ-CRA Indonesia with respect to a certain contract of work. Incorporated by reference to Exhibit 10.4 to the FCX November 5, 2001 Form S-3.

10.4		Agreement dated as of October 11, 1996, to Amend and Restate Trust Agreement among PT Freeport Indonesia, FCX, the RTZ Corporation PLC, P.T. RTZ-CRA Indonesia, RTZ Indonesian Finance Limited and First Trust of New York, National Association, and The Chase Manhattan Bank, as Administrative Agent, JAA Security Agent and Security Agent. Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of FCX dated November 13, 1996 and filed November 15, 1996.

10.5		Concentrate Purchase and Sales Agreement dated effective December 11, 1996, between PT Freeport Indonesia and PT Smelting. Incorporated by reference to Exhibit 10.3 to the FCX November 5, 2001 Form S-3.

10.6		Second Amended and Restated Joint Venture and Shareholders’ Agreement dated as of December 11, 1996, among Mitsubishi Materials Corporation, Nippon Mining and Metals Company, Limited and PT Freeport Indonesia. Incorporated by reference to Exhibit 10.5 to the FCX November 5, 2001 Form S-3.

10.7		Settlement Agreement dated December 17, 2004, between Underwriters Subscribing to Certain Policies Reinsuring the Original Policy, Freeport-McMoRan Insurance Company Limited, FM Services Company (FMS) and FCX. Incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K of FCX for the fiscal year ended December 31, 2004 (the FCX 2004 Form 10-K).

		Executive Compensation Plans and Arrangements (Exhibits 10.8 through ~~10.55)~~10.59)

10.8		Annual Incentive Plan of FCX as amended effective February 2, 1999. Incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K of FCX for the fiscal year ended December 31, 1998 (the FCX 1998 Form 10-K).

10.9		FCX Performance Incentive Awards Program as amended effective February 2, 1999. Incorporated by reference to Exhibit 10.13 to the FCX 1998 Form 10-K.


10.10		FCX President’s Award Program. Incorporated by reference to Exhibit 10.7 to the FCX November 5, 2001 Form S-3.


10.11		FCX ~~Adjusted~~1995 Stock ~~Award Plan.~~Option Plan, as amended and restated. Incorporated by reference to Exhibit ~~10.12~~10.3 to the Current Report on Form 8-K of FCX ~~2003~~dated May 2, 2006 (the FCX May 2, 2006 Form ~~10-K.~~8-K).

10.12		FCX ~~1995~~Amended and Restated 1999 Stock ~~Option Plan.~~Incentive Plan, as amended and restated. Incorporated by reference to Exhibit ~~10.13~~10.2 to the FCX ~~2003~~May 2, 2006 Form ~~10-K.~~8-K.

10.13		~~FCX 1999 Stock Incentive Plan. Incorporated by reference to Exhibit 10.13 to the Quarterly Report on Form 10-Q of FCX for the quarter ended June 30, 2005 (the FCX 2005 Second Quarter Form 10-Q).~~

~~10.14~~		Form of Notice of Grant of Nonqualified Stock Options under the 1999 Stock Incentive Plan. Incorporated by reference to Exhibit 10.14 to the FCX 2005 Second Quarter Form 10-Q.

~~10.15~~10.14		Form of Restricted Stock Unit Agreement under the 1999 Stock Incentive Plan. Incorporated by reference to Exhibit 10.15 to the FCX 2005 Second Quarter Form 10-Q.

~~10.16~~10.15		Form of Performance-Based Restricted Stock Unit Agreement under the 1999 Stock Incentive Plan. Incorporated by reference to Exhibit 10.16 to the FCX 2005 Second Quarter Form 10-Q.

~~10.17~~10.16		FCX 1999 Long-Term Performance Incentive Plan. Incorporated by reference to Exhibit 10.19 to the Annual Report of FCX on Form 10-K for the year ended December 31, 1999 (the FCX 1999 Form 10-K).

~~10.18~~10.17		FCX Stock Appreciation Rights Plan dated May 2, 2000. Incorporated by reference to Exhibit 10.20 to the Quarterly Report on Form 10-Q of FCX for the quarter ended June 30, 2001 (the FCX 2001 Second Quarter Form 10-Q).

~~10.19~~10.18		FCX 2003 Stock Incentive ~~Plan.~~Plan, as amended and restated. Incorporated by reference to Exhibit ~~10.19~~10.1 to the FCX ~~2005 Second Quarter~~May 2, 2006 Form ~~10-Q.~~8-K.

~~10.20~~10.19		Form of Notice of Grant of Nonqualified Stock Options under the 2003 Stock Incentive Plan. Incorporated by reference to Exhibit 10.20 to the FCX 2005 Second Quarter Form 10-Q.

~~10.21~~10.20		Form of Restricted Stock Unit Agreement under the 2003 Stock Incentive Plan. Incorporated by reference to Exhibit 10.21 to the FCX 2005 Second Quarter Form 10-Q.

~~10.22~~10.21		Form of Performance-Based Restricted Stock Unit Agreement under the 2003 Stock Incentive Plan. Incorporated by reference to Exhibit 10.22 to the FCX 2005 Second Quarter Form 10-Q.

~~10.23~~10.22		FCX 1995 Stock Option Plan for Non-Employee Directors. Incorporated by reference to Exhibit 10.23 to the FCX 2005 Second Quarter Form 10-Q.

~~10.24~~10.23		FCX 2004 Director Compensation Plan. Incorporated by reference to Exhibit 10.24 to the FCX 2005 Second Quarter Form 10-Q.

10.24		Form of Amendment No. 1 to Notice of Grant of Nonqualified Stock Options and Stock Appreciation Rights under the 2004 Director Compensation Plan. Incorporated by reference to Exhibit 10.4 to the FCX May 2, 2006 Form 8-K.

10.25		FCX 2006 Stock Incentive Plan. Incorporated by reference to Exhibit 10.6 to the FCX May 2, 2006 Form 8-K.

10.26		Form of Notice of Grant of Nonqualified Stock Options under the 2006 Stock Incentive Plan. Incorporated by reference to Exhibit 10.7 to the FCX May 2, 2006 Form 8-K.

10.27		Form of Restricted Stock Unit Agreement under the 2006 Stock Incentive Plan. Incorporated by reference to Exhibit 10.8 to the FCX May 2, 2006 Form 8-K.


10.28		Form of Performance-Based Restricted Stock Unit Agreement under the 2006 Stock Incentive Plan. Incorporated by reference to Exhibit 10.9 to the FCX May 2, 2006 Form 8-K.

10.29		FCX Director Compensation. Incorporated by reference to Exhibit 10.25 to the FCX 2004 Form 10-K.

~~10.26~~10.30		FCX Supplemental Executive Retirement Plan dated February 26, 2004. Incorporated by reference to Exhibit 10.26 to the FCX 2004 Form 10-K.

~~10.27~~10.31		Amendment No. 1 to FCX Supplemental Executive Retirement Plan. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of FCX dated May 3, 2005.

~~10.28~~10.32		FCX 2005 Annual Incentive Plan. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of FCX dated May 5, 2005.

~~10.29~~10.33		~~Amended Financial Counseling and Tax Return Preparation and Certification Program of FCX.~~FCX Executive Services Program. Incorporated by reference to Exhibit ~~10.18~~10.5 to the FCX ~~2003 First Quarter~~May 2, 2006 Form ~~10-Q.~~8-K.

~~10.30~~10.34		FM Services Company Performance Incentive Awards Program as amended effective February 2, 1999. Incorporated by reference to Exhibit 10.19 to the FCX 1998 Form 10-K.

~~10.31~~
10.35		Amended FM Services Company Financial Counseling and Tax Return Preparation and Certification Program. Incorporated by reference to Exhibit 10.20 to the FCX 2003 First Quarter Form 10-Q.

~~10.32~~10.36		Consulting Agreement dated as of December 22, 1988, with Kissinger Associates, Inc. (Kissinger Associates). Incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K of FCX for the fiscal year ended December 31, 1997 (the FCX 1997 Form 10-K).

~~10.33~~10.37		Letter Agreement dated May 1, 1989, with Kent Associates, Inc. (Kent Associates, predecessor in interest to Kissinger Associates). Incorporated by reference to Exhibit 10.22 to the FCX 1997 Form 10-K.

~~10.34~~10.38		Letter Agreement dated January 27, 1997, among Kissinger Associates, Kent Associates, FCX, Freeport-McMoRan Inc., and FMS. Incorporated by reference to Exhibit 10.26 to the Annual Report on Form 10-K of FCX for the fiscal year ended December 31, 2001 (the FCX 2001 Form 10-K).

~~10.35~~10.39		Supplemental Consulting Agreement with Kissinger Associates and Kent Associates, effective as of January 1, ~~2005.~~2006. Incorporated by reference to Exhibit ~~10.2~~10.35 to the ~~Current~~Annual Report on Form ~~8-K~~10-K of FCX ~~filed on~~for the fiscal year ended December ~~30, 2004~~31, 2005 (the FCX ~~December 30, 2004~~2005 Form ~~8-K)~~10-K).

~~10.36~~10.40		Agreement for Consulting Services between FTX and B. M. Rankin, Jr. effective as of January 1, 1990 (assigned to FMS as of January 1, 1996). Incorporated by reference to Exhibit 10.24 to the FCX 1997 Form 10-K.

~~10.37~~10.41		Supplemental Agreement between FMS and B. M. Rankin, Jr. dated December 15, 1997. Incorporated by reference to Exhibit 10.25 to the FCX 1997 Form 10-K.

~~10.38~~10.42		Supplemental Letter Agreement between FMS and B. M. Rankin, Jr., effective as of January 1, ~~2005.~~2006. Incorporated by reference to Exhibit ~~10.36~~10.38 to the FCX ~~2004~~2005 Form 10-K.

~~10.39~~10.43		Letter Agreement effective as of January 7, 1997, between Senator J. Bennett Johnston, Jr. and FMS. Incorporated by reference to Exhibit 10.31 to the FCX 2001 Form 10-K.

~~10.40~~10.44		Supplemental Letter Agreement dated July 14, 2003, between J. Bennett Johnston, Jr. and FMS. Incorporated by reference to Exhibit 10.28 to the Quarterly Report on Form 10-Q of FCX for the quarter ended June 30, 2003.


~~10.41~~		~~Supplemental Consulting Agreement between FMS and J. Bennett Johnston, Jr., effective as of January 1, 2005. Incorporated by reference to Exhibit 10.1 to the FCX December 30, 2004 Form 8-K.~~

~~10.42~~10.45		Supplemental Letter Agreement between FMS and J. Bennett Johnston, Jr., dated January 18, 2005. Incorporated by reference to Exhibit 10.40 to the FCX 2004 Form 10-K.

~~10.43~~10.46		Supplemental Consulting Agreement between FMS and J. Bennett Johnston, Jr., effective as of January 1, 2006. Incorporated by reference to Exhibit 10.42 to the FCX 2005 Form 10-K.

10.47		Letter Agreement dated November 1, 1999, between FMS and Gabrielle K. McDonald. Incorporated by reference to Exhibit 10.33 to the FCX 1999 Form 10-K.

~~10.44~~10.48		Supplemental Letter Agreement, between FMS and Gabrielle K. McDonald, effective as of January 1, ~~2005.~~2006. Incorporated by reference to Exhibit ~~10.3~~10.44 to the FCX ~~December 30, 2004~~2005 Form ~~8-K.~~10-K.

~~10.45~~10.49		Executive Employment Agreement dated April 30, 2001, between FCX and James R. Moffett. Incorporated by reference to Exhibit 10.35 to the FCX 2001 Second Quarter Form 10-Q.

~~10.46~~10.50		Executive Employment Agreement dated April 30, 2001, between FCX and Richard C. Adkerson. Incorporated by reference to Exhibit 10.36 to the FCX 2001 Second Quarter Form 10-Q.

~~10.47~~10.51		Change of Control Agreement dated April 30, 2001, between FCX and James R. Moffett. Incorporated by reference to Exhibit 10.37 to the FCX 2001 Second Quarter Form 10-Q.

~~10.48~~10.52		Change of Control Agreement dated April 30, 2001, between FCX and Richard C. Adkerson. Incorporated by reference to Exhibit 10.38 to the FCX 2001 Second Quarter Form 10-Q.

~~10.49~~
10.53		First Amendment to Executive Employment Agreement dated December 10, 2003, between FCX and James R. Moffett. Incorporated by reference to Exhibit 10.36 to the FCX 2003 Form 10-K.

~~10.50~~10.54		First Amendment to Executive Employment Agreement dated December 10, 2003, between FCX and Richard C. Adkerson. Incorporated by reference to Exhibit 10.37 to the FCX 2003 Form 10-K.

~~10.51~~10.55		First Amendment to Change of Control Agreement dated December 10, 2003, between FCX and James R. Moffett. Incorporated by reference to Exhibit 10.38 to the FCX 2003 Form 10-K.

~~10.52~~10.56		First Amendment to Change of Control Agreement dated December 10, 2003, between FCX and Richard C. Adkerson. Incorporated by reference to Exhibit 10.39 to the FCX 2003 Form 10-K.

~~10.53~~10.57		Change of Control Agreement dated February 3, 2004, between FCX and Michael J. Arnold. Incorporated by reference to Exhibit 10.40 to the FCX 2003 Form 10-K.

~~10.54~~10.58		Change of Control Agreement dated February 3, 2004, between FCX and Mark J. Johnson. Incorporated by reference to Exhibit 10.41 to the FCX 2003 Form 10-K.

~~10.55~~10.59		Change of Control Agreement dated February 3, 2004, between FCX and Kathleen L. Quirk. Incorporated by reference to Exhibit 10.42 to the FCX 2003 Form 10-K.

15.1		Letter from Ernst & Young LLP regarding unaudited interim financial statements.

31.1		Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d - 14(a).

31.2		Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d - 14(a).

32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350.