Ladies and gentlemen thank you for standing by. Welcome to the Freeport-McMoRan First Quarter Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) I would now like to turn the call over to over to Miss Kathleen Quirk, Executive Vice President and Chief Financial Officer. Please go ahead ma'am.

Thank you and good morning. Welcome to the Freeport-McMoRan first quarter 2014 earnings conference call. Our results were released earlier this morning and a copy of the press release and slides for today's call are available on our website at fcx.com. Our conference call is being broadcast live on the Internet and anyone may listen to the call by accessing our website homepage and clicking on the webcast link for the conference call. In addition to analysts and investors, the financial press has been invited to listen to today's call and a replay of the webcast will be available on our website later today. Before we begin our comments, we would like to remind everyone that today's press release and certain of our comments on this call include forward-looking statements. Please refer to the cautionary language included in our press release and presentation materials and to the risk factors described in our SEC filings. On the call today are, Jim Bob Moffett, our Chairman of the Board, Richard Adkerson, Vice Chairman, President and Chief Executive Officer; Jim Flores, Vice Chairman, President and Chief Executive Officer of Freeport-McMoRan Oil & Gas and we have members of – senior team members in the room with us today. I will start by briefly summarizing the financial results and then turn the call over to Richard who will be using the slide presentation to review our performance and outlook. After our comments, we will open up the call for questions. Today, FCX reported net income attributable to common stock of $510 million, or $0.49 per share for the first quarter of 2014, which compared with $648 million or $0.68 per share for first quarter of 2013. Our first quarter results were negatively impacted by lower sales from Indonesia, attributable to the regulatory ban on…

Thanks Kathleen. Good morning, everyone. Looking at Page 3 you can see the cover of our new annual report, which we're just now beginning to distribute. It's got a band of a depiction of our resources like a rising sun coming over the earth, which I think is a good way of thinking about our company. We have this great long line of geographical diverse set of assets. At today's commodity, prices you'll see that across our set of assets we have really strong margins, in both our mining and oil and gas business, and that generates good cash flows. We have, of course, exposure to what we believe will be improving markets for commodities over time. And in addition to that we have the opportunity to grow volumes through our production profile. We've got good strong exploration leverage, both in the mining business through our Brownfield expansions and in the oil and gas business where we have Brownfield type growth opportunities from exploration, as well as Greenfield in the deepwater and in our gas exploration play. We'll be talking about that. Our company is financially strong, and we've got a great team to do things in the right way. We're experienced, and we manage our environmental responsibilities and our community responsibilities in the right way. All through 2013 and going into 2014, our code word for our company has been execution. And we have assets that we can benefit from if we execute our plans well, and we have another quarter where we've done that. We had solid performance in our mining operations in the Americas and Africa. We're going to talk about the restrictions that we have currently on our sales from PT Freeport Indonesia, because of these government export regulations. But we benefited from a very meaningful…

Great, Richard. Thank you. Welcome everybody to the call. This morning I want to start with Page 12, and go through the Brent LSS crude oil pricing relationship and kind of how it affects our business or how well-positioned our business really is. And you see the curve there with the green and orange on our slide 12, you can see that it's very consistent through the 10 years. Except for right at the end, where you saw – we saw a little pressure on the LLS side and the merger from the Brent. We believe that's a one-time type event with the opening of the southern leg at Keystone. We saw the tremendous crude oil inventories, the exiting cushing and going down to the Gulf Coast, namely Saint James refiners obviously took advantage of that and doubled down by having a significant amount of turnarounds, and therefore you had some downward pressure there on margins that affected a lot of margins of all upstream businesses. I refer you to the black box down below, where you can see what FM O&Gs realizations per barrel before hedges are, and you can seen in June $97 a barrel, obviously we had a fabulous quarter in the third quarter of 2013 $106, $94, $100, these are basically reflecting that same curve volatility, as well as its basis differentials, but in the first quarter of 2014, to a have a $99 differential when you have that type of rollout in basis, just shows you the resilience and positioning of our assets, also the quality of the oil that we're producing. When we talk about HLS, LLS, and Brent, we produce a significant amount of HLS crude oil in the Gulf of Mexico heavy Louisiana sweet, which basically trades at a premium to LLS.…

Thanks a lot, Jim. On page 19, we give our update that we do every quarter for the year 2014. Again this is based on returning to normal operations at Grasberg in May. While our sales have been restricted, we have produced concentrate in the inventory and that will allow us as we coordinate future shipments to customers and our customers have been working very cooperatively with us as we go through this situation with export ban would allow us to recover much of the shortfall that we had in the first quarter. So on that basis; we are looking at 4.3 billion pounds of copper sales for 2014, 1.6 million ounces of gold, 97 million pounds of molybdenum. Dave Thornton is here, the price of moly had gone up 30% in the past month, which is positive for us and then positive outlook of 64.2 million equivalent barrels of 70% of oil. Unit cost on the basis of $1,300 gold and $10 molybdenum, we're above that right now with the $1.41 for copper, as Jim talked about, attractive unit cost for oil at $19 per BOE. At $3 copper, last quarter we were using three and a quarter, we are not predicting, we are just showing you a model here that shows operating cash flows $7.7 billion in the basis of the plan, each $0.10 change in copper for the remainder of 2014 is significant $275 million. No changes in our capital expenditure outlook of just over $7 billion. Page 20 shows our sales profile as we go forward. You can see the significant increase and volumes that come about as we bring these development projects online. 2016 is a special year, in the sense that it's our last really full year production Grasberg open pit. So we will…

(Operator Instructions) The first question comes from the line David Gagliano with Barclays. Please go ahead with your question. David Gagliano – Barclays Capital, Inc.: Thanks to be first up. Let me just ask you a couple quick questions on Grasberg please. First of all on the commentary regarding the contingency plans you mentioned more workforce reductions capital spending reductions what's a reasonable time period to expect for the start of these contingency plans. Is this something we should expect to start to occur in Q2, Q3 or next year?

Well, Dave, what would drive that is not anything that's from a timing standpoint forces us to do it. So long as we feel as we do now that we're moving towards resolution issue. Then we will not go through the negative impacts of having workforce reductions and capital difference that's where we've been so far. If there were to be something happening within the government that would lead us to conclude at any point in time that they're just going to leave the situation in place for a long period of time that’s when we would act. So we believe this is going to be resolved in the relatively near future that there's progress being made that people are working towards a resolution and we would only act if we got word from the government “hey were not going to do anything were just going to leave is in place.” So it's not a specific time but more a reading of the progress that’s being made towards resolution. David Gagliano – Barclays Capital, Inc.: Okay. That’s helpful, thanks. And then just somewhat related the rate of deferral months that went – I think it’s now indicating 15 million pounds deferred volume each month that you're unable to export concentrates. I’m just curious why do that deferral rate increase I think it was 40 million pounds a month?

Yes, David this is Kathleen. We're just getting into some higher grade potential and so that just reflects that the gold is the same as what we had said before, but the copper is a little higher impact. David Gagliano – Barclays Capital, Inc.: What we did, Dave, when this first started is we moved out of the lower region pit and started focusing on mining at the higher areas where we had with material. All of these are things were going to have to do over time in our mine plan. So we mine higher grade material – I mean lower grade material, waste lower grade material but some and stockpiles and now just because of mine sequencing we end up getting into some higher grade material. David Gagliano – Barclays Capital, Inc.: All right. Perfect. I got it. Why don't I hop out? Thanks for taking the questions and good quarter by the way.

Thanks a lot Dave.

Your next question comes from the line of Tony Rizzuto with Cowen & Company. Please go ahead with your question.

Hey Tony. Operator lets go to… Tony B. Rizzuto – Cowen & Co. LLC: Hello.

Tony, are you there? Tony B. Rizzuto – Cowen & Co. LLC: Yes, I’m here can you hear me?

We can hear you now. Tony B. Rizzuto – Cowen & Co. LLC: All right good, good. Wow I thought I was going to be shut off asking no question here.

That will never happen. Tony B. Rizzuto – Cowen & Co. LLC: Congrats on a better performance and must better costs in Indonesia than we expected, especially during this very difficult time. It seems as though there was a bit of a breakthrough recently, at least in the regaining the ability to export, and this morning it looks like there's an article the Jakarta Post that indicates that the government has revised the controversial export duty and according to the Deputy Finance Minister, I guess, which is being quoted, but is the progressive export tax now no longer an issue Richard?

Tony let me just make a comment, and this is not just unique to Indonesia, you see it here in newspapers. As you know because you follow us over a long period of time, we did caution you about reacting to daily press releases. Comments are made by a variety of people in government and there are inconsistencies. We will keep everybody informed when there are major developments and so forth. Now we think the current export duty is prohibitive. It goes up to 60%. You just can't pay that and run your business. So when we talk about progress it is progress in the sense of dealing with this export duty and that would mean adjusting it downward. Our contract says that we pay no taxes or duties other than the ones listed in the contract, and so that’s one of these issues of where people in the government are focusing on the new mining law, we are focusing on our contract and that part of the discussions that are going on. So there is progress being made, the progress would necessarily entail a dealing with the currently prohibitively high export duties, but there are no announcements that we're prepared to make today about conclusions. And when there are, we would make them, it will require the Ministry of Finance to adopt new regulations. They have not done that yet. We have had an important step in being designated as an authorized exporter by the Ministry of trade but there is several procedure steps that we have to go through to get this behind us. Tony Rizzuto – Cowen Securities LLC: Okay. Could you maybe discuss in greater detail that the complexities you guys are facing as it relates to COW extension? And then, in light of the 2009 mining law, I know there's been some there were further changes in 2012, and the government seems like it is trying to convert the COW to that new business license structure. Should I be looking at these discussions, all of these whether it be the concentrate exports, export types of smelters, as being linked, or are they separate and distinct from the COW extension discussions?

Okay. It’s all link fundamental, but we are focusing immediately on trying to get to a point where we can export concentration returns to normal operations. That will not require dealing with all of the COW issues. We would like to see the COW issues doubt with we’ve been working very actively with the government for 2.5 years doubt to do that. That’s complicated in difficult to do in the current political environment. So it’s a two step process, first step is to reach a basis through regulatory changes and governmental approvals so that we can resume exports get back to working in a normal way and we'll continue to have discussions on the COW extension and that's where this issue comes up of our being committed to supporting and sending our COW the government warning to move COW holders to the new regime that’s define by the 2009 mining law and that’s basis for our the debate. Tony Rizzuto – Cowen Securities LLC: Okay. All right and then just to switch gears a little bit here, in terms of the asset sales and in the discussion you indicated that you're actively engaged in discussions. I was wondering, does the expansion enhance long-term viability of Morenci make it more likely you guys could part with other lesser core assets in North American mining?

Well, that’s an interesting question. We have opportunities to do that, but I think you were down in just go we can clearly unfortunate I could make it this year, but I think one of the things that comes out of there is the reality the mining industry is based. The U.S. is increasingly looking attractive for development. The energy situation here that's affecting industrial development across the board in the U.S. comes into play here in the U.S. for our mining projects. So today U.S. is a very significant advantage over expansions in South America because of the cheaper energy here. We’re also seeing increasingly the benefits of the U.S. workforce. We are nonunionized here. We have a very flexible workforce where it's easier to staff up for expansions and then adjust if you have to adjust than in South America where you have unions and government policies that make it difficult to flex your workforce. Water is an issue in the United States, but Red and his group have done a great job in securing water opportunities for us here in Arizona. Water is a huge, huge problem in Chile, and that ties into energy because of having to use desile projects that requires a lot of energy to pump the water and run the projects. So when we size things up we are increasingly encouraged about opportunities to expand U.S. and more than half of our resources now are in the U.S. So in any event, this Southwest copper district has rolled away the stone from the tomb. And you know and it’s looking really good for us. And so what we wouldn't want to do is sell assets that have significant growth opportunities because we're so positive about the long-term future for copper work and we have that in the U.S. Tony Rizzuto – Cowen Securities LLC: That makes a lot of sense. I think that I appreciate the insights. And yes, I did miss you at CESCO there, Richard

Yeah, I missed you too, Tony. All right. Thanks a lot. If you we'll let you get back in line. Tony Rizzuto – Cowen Securities LLC: Yeah, that’s what I’m going to do.

Thanks.

Your next question comes from the line of Sal Tharani with Goldman Sachs. Please go ahead with your question. Sal Tharani – Goldman Sachs: Thank you. Good morning guys.

Good morning Sal. Sal Tharani – Goldman Sachs: Wanted to just ask you if your current labor force, you are still keeping them – my understanding is that they are doing maintenance work pre-stripping. Does it imply that the future cost could be better if once these things as all the preparation work is being done right now?

Well the answer is yes. I mean our cost structure in large part is fixed. We do have some variable cost, but we have a lot of fixed cost so obviously we get volumes back up you don’t see the unit cost come down, but we are getting ahead of the curve as you mentioned some stripping activities and maintenance activities and that will have some benefits that the margin as we go forward. Getting those volumes is forwards that's where we are making money, because have to touch our margins and we just need to get the shipments going to our customers outside Indonesia. Sal Tharani – Goldman Sachs: Got you. And, Richard, is there any difficulty or concern if you reach an agreement and the new government comes in they may have a different view again, is that also hampering the discussion or are you confident that whatever deal you make or whatever solution you make with the current government will actually be honored by the next government? And we have seen Indonesian government have what they have done with their COW, and change the rules during the game. And if there's a concern that it may happen again, even after the resolution with the current government.

Listen we’ve been there for over 40 years. You think about the huge concerns that we’re there from the unknowns that happens when Suharto stepped down in 1998. And the government has evolved since then, and the government will continue to evolve in Indonesia as a lot of places in the world there's a lot of nationalistic political views that's popular with the local population. It really comes into play with natural resources and that's just something we have to do with so the answer is we're going to be dealing with this issue forever and we've had experience with it, there's a lot of reasons for whoever – the basic issue for Indonesia is this, Indonesia has grown so much and has developed over the 25 years that I've been going there. They still have a growing young population with a lot of unemployment. And while there local economy has developed they need to create jobs, any political leader that comes in from whatever party is going to be faced with the necessity of creating jobs, are there going to be – are they going to fail. And they to create jobs Indonesia does not have an internal savings rate that's enough to fund the capital investment to create jobs. So their going to need foreign investment and regardless of nationalistic views or feelings about self-sufficiency which you hear a lot today in Indonesia the reality is people there is around the world people face is creating jobs to the young people and in Indonesia and that's going to require foreign investment and that's going to require Indonesia to be part of the world economy and that's the reality. We stay out of politics. The people of Indonesia choose the kind of government they want to have and we don't try to influence that. We prepare ourselves to work with whatever government the people elect. Sal Tharani – Goldman Sachs & Co.: I did understand the smelter is going to create 500 jobs, and if you shut half the mine down, that's going to will cost 15,000 jobs to go away.

We’ve had those discussions, you can be sure that those discussions are made. Part of the problem that’s complication, I'm sure as you know, Sal, is this was originally directed at other minerals. Where Indonesia is world's largest of nickel ores, I think they provide two thirds of the bauxite to China, significant tin exports and as those industries where they were just exporting ores, Indonesia was see value creation going to other countries that’s not what it is for copper, but politically we are in a complicated situation in trying to say treat copper in a company like Freeport different than you are treating the small nickel exporters and that’s a tough political situation for the government to be in, but yes we’ve made that point and you are right. Sal Tharani – Goldman Sachs & Co.: Thank you, I’ll get back in the front queue.

Thanks.

Your next question comes from the line of Curt Woodworth with Nomura. Please go ahead with your question. Curt Woodworth – Nomura Securities International, Inc.: If you can expand on the asset sale potential, I think in the past, company has talked about potential of $3 billion to $4 billion in asset sales and then specifically with regards to California, as you're thinking in the MLP opportunity that you would want to divest that to an existing MLP or potentially create your own?

This is Jim. Regarding asset sales, we're looking and exploring all options. The LMP study and discussion we've been having internally is basically maximizing the value of our onshore oil assets. They're long lived, they're low decline, they're the prototype MLP asset in the investment banker and any of your firms will come tell you that aspect of it, but the key is, and foremost, what does it do for the FCX shareholder? And as Richard and Kathleen talked about our balance sheet discipline and with high oil prices, gives us an opportunity to transfer some of that value from the assets themselves to the FCX to shell to form a debt repayment. That being said, we still want to maximize our oil business because of the high margins and the growth. And what we're seeing, this is going to be a long-winded answer to your MLP question, but what we're seeing in the Gulf of Mexico is all the growth potential we have, all the development activity, and the ability to grow that business much faster. So we're in the early stages of getting our hands around rotating out of our onshore oil business at the highest value possible. And the MLP might be a vehicle to do that either internally, or sell, or a joint venture with it existing MLPs, or just sell outright those assets. And monetize those assets, and help accelerate the Gulf of Mexico. What we've found in our modeling is that we can grow faster in the Gulf, and hit the same targets by monetizing the onshore assets and rotating into the offshore business. The MLP discussions or valuations are going to be one part of doing that successfully, because of the valuations for those assets. The current headwinds in the MLP market are severe, with the banks exiting the hedging market and the severe backwardation. You've got 20% to 25% backwardation in the crude oil curve over the next 36 months, yet you've got oil demand never stronger, it's up 1 million, 1.5 million barrels a day worldwide with 3% GDP growth. So there's going to be continued headwinds to doing a traditional MLP of just hedging the oil volumes, levering it up, and selling it to another set of investors. At the same point in time, these properties are to be around for a long, long time. So what you could see is the next several years is us rotating that business, continue to use the excess sales proceeds to reduce the balance sheet, as well as rotate to higher growth assets in the Gulf of Mexico. And the $3 billion to $4 billion target that we've all talked about is going to be underpinned by that activity as well as anything on the mining side.

Here's where it comes together. Here's, fundamentally, where we’re approaching the oil and gas business in the mining business the same from this perspective. We’re big believers in the future of the commodities we’re big believers in the future of growth through our set of assets. So we are looking to enhance that. That's where we can grow. And looking at our other assets which have value and are good assets that we might could monetize through sales joint venture MLP and reach this debt target. But we've not as I mentioned in the response to Tony, we don't want to sell assets that takeaway from our future growth opportunities. In fact, we want to look for ways to enhance those assets. So we got – we got those opportunity across the board. And, Curt, we're just not at the point where we are discussing to specifically what we are doing, but our targets remain the same and we are optimistic about achieving them. Curt Woodworth – Nomura Securities International, Inc.: Okay and that's very helpful, and I appreciate it. And just a follow-up on Indonesia, it seems like one of the key points the government is trying to make is to get companies to adhere to obviously the new licensing agreements that you guys stated. And I think that for most companies operating under those IUPs, is there's a mandatory investment process. Whereas, after five years, you have to start divesting your ownership stake, and I think by year 10 it's below I think 51%. And I was wondering is this going to affect your view towards capital allocation going forward at Grasberg? Obviously, there's a substantial CapEx swing as you go underground. And do you have confidence that you'll be able to effectively uphold the existing terms that you have regarding your ownership stake?

Okay, you're right about the IUP. We have a contract of work, and under that contract we have no divestiture obligations. As we've talked before, what we’re trying to do is to sit down with the government. Finally, that we can do response to certain of their aspirations and voluntarily change the contract without throwing it out the window and abandoning it as way of protecting our interest. For example, with divestitures, we think if we as part of an agreement to extend the contract and resolve all these issues related to the review of the contract and the mining law, that for us to list an interest of PT-FI on the Indonesian exchange would be positive for all parties. Positive for the government, and positive for us. So that's the sort of thing that we’re talking about doing. But as I mentioned earlier, the challenges of our debate is this issue you raised with the government wanting to go more in the direction of the 2009 mining law, we wanting to extend the contract, and trying to reach agreement on that during an election year where all the politics are volatile. So, that's why we're focusing first on getting back to work with our exports, and continuing the discussions on the contract beyond that. If we could resolve the whole issue, then we'd do it, we want to do it. But we’ve got to face the realities of where we are in the context of Indonesia today. Curt Woodworth – Nomura Securities International, Inc.: Okay, thank you.

But let's go back to your deal, we are confident we're going to be able to have a resolution of this. So we continue our underground development, so we can operate there through 2041 in a very profitable low cost way. This has changed our view about exploration outside of PT-FI. And looking at other places in Indonesia, unfortunately for the country, this new mining law is making it very difficult to doing new projects there in the mining business. And so, we have backed off of some of our exploration opportunities that we were pursuing because of the new mining law that doesn’t’ apply to PT-FI. Curt Woodworth – Nomura Securities International, Inc.: Got it. Thank you.

Your next question comes from the line of Ralph Profiti with Credit Suisse. Please go ahead with your question. Ralph Profiti – Credit Suisse: Indonesia, perhaps for Kathleen, I'm wondering how Indonesia may affect liquidity decisions in the next say six months. We saw a net cash draw down in the quarter, and which bringing the cash balance down. While between substantial lines of credit available, the dividend, CapEx, and as Indonesia and as all things come together, how is that strategy, if any, likely to change over the next six months as it pertains to liquidity?

Well as we've been talking about our current plan is that we'll be able to resume normal exports in the second quarter and obviously what we have contingency plans as well that the deal with the situation is extended. We're not currently expecting that but we do have contingency plans. As you point out we would you have a very large undrawn revolver and do have cash on hand, but we'll manage the situation, we'll manage our outflows, we'll manage our CapEx all to maintain a very strong liquidity position. Ralph Profiti – Credit Suisse: Okay, thank you. And my second question is maybe a little bit more of housekeeping. There was $0.49 per pound that was excluded in the site production costs at PT-FI. And I'm just wondering, is that related to the increased rate of voice [ph] stripping? If we can have a little bit of discussion on what's actually in that $0.49.

Yes. Those were cost that were charged roughly the cost of sales rather than going through the normal process of going through inventory and then into cost of sales as a concentrated sold. What we did and this is consistent with accounting rules when you're not operating at normal levels, you need to keep your inventory balances at what they would otherwise would have been. So during the quarter, we incurred those costs that were outside because we didn't have volumes in inventory as those went to directly to cost of sales, but they were just the normal cost of operations it just was excess of what our normal inventory values would be have we been operating at normal capacity. Ralph Profiti – Credit Suisse: I see. Okay, thank you very much. That's clear.

It was explained as the cost of excess capacity to me I mean for example, if we could next port anything or couldn't ship anything we charge all the cost that were incurring directly as an expense of having excess capacity and this is the element of excess capacity that we have. Ralph Profiti – Credit Suisse: Thank you. That's very clear.

Ralph, I’m glad you called Kathleen, one of the benefits I have is she looks over my shoulders, I’m making all these comments. I mentioned that the Indonesian elections were last week; they were actually April 9, just to be accurate. Ralph Profiti – Credit Suisse: Thank you.

You are next question comes from the line of Tony Robson with BMO Capital Markets. Please go ahead with your question. Tony D. Robson – BMO Capital Markets Ltd.: Thank you. good morning all and thank you Richard for taking my question. Following on from Tony's comments regarding the Jakarta Post article, and I understand your comment not to jump on the latest things you hear from Indonesia, but to reiterate it again, the comments from the Energy and Mineral Resources Ministry that had talked about a flat export duty of 10%. Would a flat 10% export duty for say the next three or four years while you're building a smelter, would that be acceptable to Freeport and to PT-FI or would that be because it cuts across your contact of work as you've well pointed out, would that be an unacceptable compromise to you guys? Thank you.

Well I’m going to repeat the caution about assigning too much weight to even specific comments that are attributed to individual government officials. So would again just suggest like I do, I read the papers every morning, every evening, but don’t react specifically to what people are said or quoted as to having said. So I would just caution you about putting too much weight on that. But you do touch on an important issue for us and other contract work holders, is that whatever the rate is if one is imposed it would be contrary to the contract provision to say that were only subject to taxes that are identified work. We have urged the government if they do impose a rate, to treat it as an income tax payment, and have it credible against income taxes as an offset to income taxes. And that way our taxes would be limited to what is in the contract. We recognize that that might be difficult for the government to implement. So what we will be faced with is how to deal with this, I mean we have a strong incentive about going back to work, principally to avoid harm to our workers in the local community, we can manage this ourselves financially for the company. But we will have to work with governmental how we deal with this conflict and how it preserves our rights for the contract and we're just going to have way to see with the regulations are before we respond specifically to that. So Tony I'm sure you can appreciate we can’t speculate on that right now until we see what comes out of the government. Tony Robson – BMO Capital Markets: I understand, and thank you for that, Richard.

Okay. Thanks Tony.

Your next question comes from the line of Oscar Cabrera with Bank of America/Merrill Lynch. Please go ahead with your question.

Good morning everyone. First of all, congratulations on the strong results. We're starting to get used to oil and gas exceeding expectations, so hopefully that can be kept up. Just want to start first with a clarification. During your remarks, Richard, you mentioned that at $3 copper you expected the net debt to be down to $14 billion. Does that imply that you expect to get about $2 billion in the monetization of whatever the case may be joint ventures or asset sales? Bank of America/Merrill Lynch: Good morning everyone. First of all, congratulations on the strong results. We're starting to get used to oil and gas exceeding expectations, so hopefully that can be kept up. Just want to start first with a clarification. During your remarks, Richard, you mentioned that at $3 copper you expected the net debt to be down to $14 billion. Does that imply that you expect to get about $2 billion in the monetization of whatever the case may be joint ventures or asset sales?

No. And that's based on a model of just running our business and achieving our production volumes and cost and based on $3 copper and $1300 gold and $10 molybdenum and oil prices being roughly at where they are today. So the point out was making is even though we've had the drop in copper prices, we still have a very strong business of generating cash flows at today’s prices. Now, if prices weaken or costs go up or we have production disruptions, one of the reasons we want to derisk the balance sheet by advancing these sales and get all this debt talk behind us. But if in fact we have other headwinds deal with which in our business, might have that. We always have the flexibility of reducing capital spending, particularly in the oil and gas business as we talked about before much more so in the mining business, you can deferred capital spending and cut back its more discretionary. You don't lose resources by doing that as you know Oscar, because you’ve been there very tough for us to back off of Cerro Verde now given where we are with our oil and gas capital spending. We have more flexibility if we were to have to adjust capital spending. So but my only point was we haven’t run off any clip year from our basic operating situation and we still have a strong business, because of our margins at today’s copper prices and commodity prices. We still generate lot of cash is going to be back end loaded, because of our capital spending and the fact that we get the benefit of volumes after the capital projects are finished. But even with that backend loaded and copper prices coming off of $3.30 to over $3 now. We still have a very strong outlook.

And, Oscar, I was reiterating the fact that the Gulf of Mexico as we get further into this we're getting more comfortable with it. We're getting some of the planning and volatility we're starting to see success and results and so forth, and it's really allowing us that more flexibility, as Richard said, to support the aspect of strengthening the balance sheet. And at the same point in time, growing – have a dynamically growing world business to support their long corporations growth long-term. So, as we’re growing to this process it’s nothing like a little low copper prices to make you refine the business strategy and look at things in a different way. And I think it’s going to positive results and everybody that's been involved in the situation and asked stepped up the execution on the operations front has responded. I am just continue to be pleased with our ability to work in tandem to the corporate goals, and at the same point in time ring out some operating excellence and flexibility in each and every business here. And we expect that continue. Oscar Cabrera – Bank of America/Merrill Lynch: Thank you both. Not questioning the strength of the operation whatsoever. It's more like if you're building a new smelter refinery in Indonesia, then just want to gauge the flexibility on that net debt target. Because the expenditure of $3.5 billion or $4 billion over there, and I know you probably get a joint venture partner, it would be a different story. But anyway, second question…

Let me make clear on that, just to be specific Oscar. That doesn't include that kind of spending in Indonesia. We are talking with partners, and we also talk with government, about the need I have government incentives to deal with part of that cost. But that's not in the numbers that I talked about. With that something that would have to be dealt with. But there's several moving parts right now.

Oscar send label get free of way of the partner. Oscar Cabrera – Bank of America/Merrill Lynch: Well, we're talking to the wrong guy though. Sorry, and then in the spirit of educating the mining guy, your oil and gas sales projections for 2016, and at the end of the of the year you said 81 million barrels of oil equivalent in 2016. Now we're looking at 78 million. And I'm guessing this is just deferral, but could you just go over where the change was or what's causing that reduction?

Oscar this is Kathleen. As Rich will notice we move some production into 2014 we’re previously saying $61 million BOEs and our $64 million and we have move some of the plan shut ins into 2015 and then moved some from 2015 into 2016. So, that's affected the volumes, but that's really what's driving and I think you'll see getting some volumes excelerated to do what we can to offset some of the shortfalls we've had in the mining business.

Right, and Osacar and the shutting she's talking about are the platform modifications so we can bring on incremental production from the tie backs. As we again thinking about the business everyday and making sure we are making the best decisions that made operational sense to group all those together at the end of 2015 and first quarter of 2016 and so there is so affected production, it wouldn’t be individual well its just timing of us 45 days shut ins for each one of those make in facilities/

And this worth pointing out that these facilities were acquired from BP and Shell in the fall of 2012. So the team is learning more and getting experienced with it so changes in this range Oscar are just to be expected. I mean there's nothing that's significant about it as Kathleen said, its just we try to give you an outlook every quarter and outlooks are going to change. Oscar Cabrera – Bank of America/Merrill Lynch: No, I appreciate that, Richard. Thank you all. And it is just again, educating the mining guy. Thanks very much.

You are making a lot of progress Oscar; we don’t keep working with you.

Your next question comes from the lines of Paretosh Misra with Morgan Stanley. Please go ahead with you question. Paretosh Misra – Morgan Stanley & Co. LLC: At Grasberg, I see that the mill operating rate declined versus the last quarter, but what about the mining rate, did that remain pretty much unchanged, so you just basically did more stripping?

It did it was in the range of changes it was down a little bit, our mine rated downward DOZ mine, which is at relatively full capacity is still 50,000 instead of 65 or 70, so we are making some adjustments to that and listen somebody mentioned earlier Mark Johnsons here, those guys have done a great job. We completed our labor contract last fall. We've had a harmonious situation working. We’ve had a good safety performance in the first quarter which was big concern and focus of our company after the experiences over the last couple of years, but the team has worked very well together; we appreciate the support of our union and our workers so we've tweaked it Paretosh. It's down slightly but we are continuing to operate at essentially full mining rates. Paretosh Misra – Morgan Stanley & Co. LLC: Got it. And maybe a quick one for Jim, it could be a question similar to Oscar's question. For the second half of 2014, third quarter guidance is up, but fourth-quarter is unchanged. Anything major that's driving that?

Yes, that was what Kathleen talked about. We had previously planned to shut our Marlin facility down for the entirety of the third quarter of 2014. We've now shift that to the third quarter of 2015. So that's between 30,000 and 40,000 barrels a day that will be on stream here in the fourth quarter, and add to those volumes and those numbers. Paretosh Misra – Morgan Stanley & Co. LLC: Got it. Thank you very much.

Thank you.

Your next question comes from the line of John Tumazos with John Tumazos' Very Independent Research. Please go ahead with your question. John Tumazos – John Tumazos' Very Independent Research: Thank you very much for all your efforts resolving the issues overseas, and the patient deliberations on the refinancing. I'm a small shareholder and appreciate your hard work. Some of Jim's comments about the oil and the gas properties went over my head. Could you explain the unrisked potential, is that before a feasibility study saying what's recoverable? And could you elaborate a little bit about the Highlander discovery and its relationship to Davey Jones and Blackbeard and the deep output potential please?

Sure, John. On page 15, you're talking about the green box in our slide saying Total Net Unrisked Resource Potential of 1.1 billion BOE, barrels of oil equivalent. That was respective to the blocks, the new tracks and new leases that we're the parent high bidder on, and are waiting to be awarded. We're trying to give everybody a feel of what we feel is the resource potential. When we start talking about putting it into a plan to be funded as a CapEx item and refining those plans, we will do it on a risk basis to make sure it's competitive with the rate of returns on a risk basis. But when you're risking 1 billion barrels of oil, you get to a big number. When you start with 1 billion barrels of oil and when you start risking, you get to a big number especially when you're talking about $10 to $15 a barrel, costs may be as low as $5 in some of these cases, some nice big reservoirs when you already have the infrastructure in place. So I appreciate your question to give you a little more.

Thank you. Let me say because I've talked with John so long about this. Maybe, John, what this is, this is a geologic analysis of what the opportunity is. So in the oil and gas business what the opportunity is. So in the oil and gas business what the next would be, would to do further geological analysis of the subsurface through seismic studies and so forth. But ultimately, you have to drill wells to have discoveries or not and then you delineated and then you move towards a development plan. So this is sort of like in the mining industry of having, widely space and now you have to do exploratory drilling delineation drilling and then you move towards deciding specifically how you have a development plan. That makes sense John. John Tumazos – John Tumazos Very Independent Research: Yes, that's real good. Thank you, Jim, and, Richard. And could you explain a little bit the Highlander discovery and the analogies to the other deep wells? That was a little bit fuzzy to me?

[Technical Difficulties] John Tumazos – John Tumazos Very Independent Research: Thank you very much, I can listen for hours.

Thanks John.

Your next question comes from the line of Brian Yu with Citigroup. Please go ahead with your question. Brian Hsien Yu – Citigroup Global Markets Inc.: Great, thank. Hey Rich, I've got a couple of clarification questions. One is just on the smelter costs. I think last quarter, you guys said maybe less than $3 billion, and then Oscar earlier mentioned $3.5 billion to $ billion. I was wondering if you could just elaborate what your more recent studies or look suggests about the CapEx on a 100% basis before any government subsidies?

Yes. And part of it is and this is just to indicate what the study is the current smelter we have at Gresik is Mitsubishi technology smelter that continues casting. And new smelters that are being built in China older outokumpu type flash smelters is what we have and a version of that, an early version of that in copper and also right in our mine smelter here in United States. China which has been constructing smelters aggressively in recent years because of their internal demand for copper have advanced that technology and are building large-scale smelters using the outokumpu type flash smelting. So one of the things we're studying is different aspects of that. We had an international engineering firm do a prefeasibility type studies which was focused on the Mitsubishi type situation. That's what we talked about earlier. I think at this point and we're working with Antam which is suggesting that with Indonesia we might have beneficial labor costs, et cetera. So, it's in the range of $2 billion to$2.5 billion is the number two think about. There is some working capital issues associated with that but all of this is still within a pretty wide range of potential estimating I wont call it areas, but just estimating ranges is because of the stage of studies today. Brian Hsien Yu – Citigroup Global Markets Inc.: Got it. Okay, that's helpful. And then secondly, just back to the earlier discussion about MLPs. And my understanding is that the valuations step up, a good portion of it has to do with tax savings, but you don't pay any taxes, at least at the operations level, both at the energy or on the copper side. So are there corporate tax savings that you would expect to realize from putting some assets into an MLP type structure that we should take into consideration?

Let me just make a couple of comments about taxes, we pay substantial foreign taxes as you know, you know where we operate. So our cash tax obligations are substantial. Not so much in the United States, particularly with oil and gas acquisition, because of some net operating loss carry forwards have transferred over and the current deductibility of intangible drilling and development costs. So the benefit is not so much to the corporation, but to the investors. In other words, the initial attractiveness of MLPs was to individual investors where you weren’t faced with having taxes at a corporate level, and then taxes on dividends. It was a true partnership, so it eliminated the INU level taxes, and then the tax attributes like IDCs and so forth flow through to the unit holders, but what's happened since in the development of the MLP concept is today even a number of non-tax paying investors, institutional investors are attracted to MLPs because of the distribution aspects of it in the low interest rate environment. In other words they see distributions from MLPs providing current cash returns in relation to investment from other income yielding type vehicle. So a lot of today's investors in MLPs that are not attracted to it from the tax attribute side, its still there for individual investors, but more just from the fact that MLPs are structured in ways to give attractive current income distributions. And so that resulted in attractive multiples in the public marketplace, those are admittedly higher for what's called midstream MLPs where you have contracts to give a surety of our cash flows and upstream MLPs typically trade in lower valuations, but we have assets particularly in California that are attractive for the MLP models and it gives us opportunity to look at it. As Jim talked about, our real objective here which is maybe different from some other MLP developers is to create a monetization event, so we can meet our debt targets. We are focused – we are really focused on building value FCX shares, I mean that’s what we really want to do. So the management team we are in the same views as our shareholders and we're trying to find ways as our shareholders and we are trying to find ways of increasing the value of FCX’s shares. We feel they are significantly undervalued today, almost every management team you talk to if going to say that, but we believe we can by executing our plans experiencing what we believe to be favorable future markets, dealing the problems like this Indonesian problem , and strengthening our balance sheet we think ultimately that will translate into our share price. And that's what we're all working towards. Brian Hsien Yu – Citigroup Global Markets Inc.: Okay, great thanks Richard.

Your next question comes from the line of David Lipschitz with CLSA. Please go ahead with your question. David A. Lipschitz – CLSA Americas LLC: Good morning. My quick question is, have you talked with other companies, other than the government, such as new moderns something like that about building a smelter? Are they involved in those talks as well?

The answer is definitely yes. We’ve talk with other companies in an appropriate way about their situations and you might want to speak for themselves, but their resource is significantly different than the Grasberg resource. Always has been in particularly in terms of mine life and so forth. But I mentioned we're working with Aneka Tambang, Antam the state owned mining company in Indonesia we’ve also had discussion with others and so we’re opened to working with partners and have active discussion going on with them. David A. Lipschitz – CLSA Americas LLC: Okay, thanks.

Your next question comes from the line of Garrett Nelson with BB&T Capital Markets. Please go ahead with your question. Garrett Nelson – BB&T Capital Markets: :

It's mainly the changes in the Grasberg volumes, and the timing of those.

It's the makeup. In other words, our production of copper concentrate is higher than our sales and so we’ve increased our inventory of copper concentrates which with clearance to export will work it way into the marketplace over time. So that’s why we talk about the shortfall is not being lost volumes, but deferred volumes. Garrett Nelson – BB&T Capital Markets: Okay. And then switching over, as you noted, the moly market has shown some signs of life here over the past couple months. As the world's largest producer of that metal, I was hoping you could provide some color as to what you're seeing fundamentally that's driving the price strengthening?

I'm going to asked Dave Thornton to come down here and get by the phone. Dave is the guy that runs our moly business.

Yes, the fundamentals are basically is that the market has tightened up primarily in Europe as we've seen some improvement in the European economies, mainly Spain, Italy, big steel producing regions and countries. And then the supply has been tight, so mainly you're going – the traders in the market, the suppliers who are basically like us are meeting our contractual obligations. So mine supply is tight demand picked up a little bit but not a lot, but because of the tightness in the market we're seeing that the traders are involved more. And we're seeing some uptick, price has increased roughly $3 in a month. And that still occurring, although we are seeing that the trade is backing off a little bit and taking some profits looks like recently. So the price has come back off around $12.50 last ever. Garrett Nelson – BB&T Capital Markets: Yeah.

Molybdenum is a relatively small global market.

Right.

And so changes can have a dramatic effect over short periods of time. Most molybdenum goes as a metal into steel alloys. A significant part of our production, because of our high grade of molybdenum that we produce at our standalone molybdenum mines in Colorado, Henderson and Climax, goes into higher values from a margin standpoint chemical marketplace where it's used as catalysts in refineries and for other chemical – high-end chemical users. But, with Europe being a substantial steel producer and with some upticks in the steel marketplace, that's created a tightness in a relatively small global marketplace. Garrett Nelson – BB&T Capital Markets: Okay, that’s great detail. Thanks a lot.

Your next question comes from the line of Charles Bradford with Bradford Research. Please go ahead with your question. Charles Bradford – Bradford Research: Hi, good morning. I've just gotten back from China, and they've continued to revise their back data. For right now it's 2013, the effect of which is to reduce the growth rates in March 2014. The same thing occurred of course all of last year. Do you have any evidence or have you seen anything whether the same is occurring in copper? Because frankly our copper concentrate data out of China has almost disappeared, and we're sort of at a loss as whether the same thing is occurring.

Copper concentrate data? Charles A. Bradford – Bradford Research, Inc.: Yes.

Well you are seeing a situation where with the development of the smelter business in China there is more important concentrates in relation that there has been historically but listen Chuck, we commercially sell product into China we sell copper, cobalt occasionally some of it and we worked directly with customers. We’re not traders and you know the numbers you talk about get obscured, because of this issue of how copper flows in and out of these bonded warehouses and so forth and I know it’s a complicated situation we’re not a great source of information for that sort of thing. All I can report on is how we are dealing with customers and normal course of business. And what was seeing is relatively strong demand both for copper and for cobalt.

Just we've been tracking in the past their own copper concentrate production tying it to imports, and then eventually into refined output, and the data just is a little bit more sparse than usual, but they seem to have been reporting much lower growth rates than otherwise would have been the case if they hadn't revised up last year.

Yea, well there is a CRU report that came out this morning, I read in the predawn hours and you can look at it and see their commentary on that very subjects. Charles A. Bradford – Bradford Research, Inc.: Well, thank you very much.

Thanks.

Your final question comes from the line of Brian MacArthur with UBS. Please go ahead with your question. Brian T. MacArthur – UBS Securities Canada, Inc.: Good morning. Just a couple of quick questions. For Indonesia, and I think it's come up before with the smelter, there's been different cost estimates and whatever, but I just want to be clear. This smelter if it gets built, will be big enough to take the remaining concentrate out of Grasberg going forward so we're not going to get stuck with say 20% of the con still getting hit with a graduated tax. It would seem to me that would be an awfully big smelter.

Well there are capacity limits for building a smelter. The biggest smelters in the world are flash furnace smelters that can produce 400,000 tons a year which say takes 1.6 million tons of concentrate. That plus we actually would not cover us in all years, but our production is variable. Particularly as we make this transition from open pit to total underground operations. So that is one of the complicated issues we're dealing with. I just want to point out something Brian; under the current regulations the export duty applies to all concentrate exports, not just what's net above smelter future to smelter requirements. So that’s one of the issues that’s still under discussions and subject to regulatory changes. Brian T. MacArthur – UBS Securities Canada, Inc.: Okay.

There are other developers I might mention, Indonesian companies had indicated plans to develop smaller scale smelters in Indonesia, there is not a lot of details on those plans, we have signed conditional sales agreements to sell occasionally certain amount of concentrates to those Indonesian smelter developers. Brian T. MacArthur – UBS Securities Canada, Inc.: Great, thanks. My second question then just relates as mentioned, you do pay a lot of taxes to the Indonesians. Can you just refresh my memory how you pay them, when they get their cash? And secondly, the fact that now you're only at 40%, and therefore, you're not paying tax on exported concentrate. Does that affect the overall tax structure at all going forward?

Our taxes are defined by the contract of work. We have a 35% tax rate, even though the tax rate generally in Indonesia today is 25% and then and that tax is based on incomes, there are some specific rules about how you calculate it, but its an accounting base taxable income determination, you apply that rates to it. Then in addition when dividends are paid from PT-FI to FCX there is an incremental 10% tax on those dividends. And so that’s where you add that up, plus the royalties, plus the dividends on the government’s 9.3% -- 9.36% equity interest is where you get the Indonesian government’s participation in total income greater than 50%. And so what is affecting the current income tax, but income taxes are paid basically on a one year lag basis, right in other words your current year’s taxes is essentially based on your earnings from the prior year. So what's happening to the government today is because we are incurring 100% of the cost selling half or less of our concentrates, the taxable income is shrinking and so the government tax take of that which is payable next year is being reduced. Accounting purposes as you know well, because you follow this I think more closely than anyone else, we accrue for the tax expense based on our current income recognition, not when the taxes are paid. Brian T. MacArthur – UBS Securities Canada, Inc.: Right. Okay, thanks. And just last question, and again like Oscar being a mining guy, just on Eagle Ford, it obviously had a very good first quarter. You provided different guidance a little bit for this year. But if I looked at it in simple terms, it looks like there's a pretty fast decline rate going forward to get to your averages for the year. Is that because you're harvesting that aggressively for cash, or is that something that was better-than-expected the first quarter, how should I think about that going forward?

I think a little bit of both. I mean obviously, we reduced our rig counts from nine rigs 2.5 years ago to two rigs. And what that means, obviously, is less the completions in the future. We’ve been managing that completion inventory, at the same point in time, the wells have performed better overall in the field. So therefore, it's slowing that decline rate, because they're staying at higher production rates early on in their lives. So as we go forward, the production rates are probably a little conservative going forward. And we probably be adjusting those later this year, as we get a little more time on those curves and feel like we can feel good about projecting giving you tighter projections. But right now, the field continues to outperform on all fronts. Brian T. MacArthur – UBS Securities Canada, Inc.: Great, thank you very much.

Thank you, Brian. And listen thanks everyone for joining us on our call. Jim Bob?

[Technical Difficulties]

Thanks good bye. Thanks Jim thanks Team, everybody’s good work and thank all of you fro being part of our call and your interest in our company. Let David know if you have any follow-up question and we’ll respond to them. Thank s.

Ladies and gentlemen, that concludes our call for today. Thank you for your participation. You may now disconnect.