FREEPORT MCMORAN INC, 10-K405, 1995-03-24

FREEPORT MCMORAN INC
10-K405, 1995-03-24
AGRICULTURAL CHEMICALS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1994

Commission file number 1-8124

FREEPORT-McMoRan INC.

Organized in Delaware I.R.S. Employer Identification No. 13-3051048

1615 Poydras Street, New Orleans, Louisiana 70112

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

Securities registered pursuant to Section 12(b) of the Act:

Name of Each Exchange on
Title of Each Class Which Registered
------------------- ----------------

Common Stock Par Value $1.00 per Share New York Stock Exchange
10 7/8% Senior Subordinated Debentures due 2001 New York Stock Exchange
6.55% Convertible Subordinated Notes due 2001 New York Stock Exchange
Zero Coupon Convertible Subordinated Debentures New York Stock Exchange
due 2006

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $2,400,961,000 on March 10, 1995.

On March 10, 1995, there were issued and outstanding 136,516,816 shares of the
common stock, par value $1.00 per share, of the registrant, not including
treasury shares.

Documents Incorporated by Reference

Portions of each of the registrant's Annual Report to stockholders for the
year ended December 31, 1994 (Parts I, II and IV), the registrant's Proxy
Statement dated March 21, 1995, submitted to the registrant's stockholders in
connection with its 1995 Annual Meeting to be held on May 2, 1995 (Part III)
and the Annual Reports on Form 10-K of Freeport-McMoRan Copper & Gold Inc. and
Freeport-McMoRan Resource Partners, Limited Partnership for the year ended
December 31, 1994 (Part I).

TABLE OF CONTENTS
Page

Part I............................................................ 1
Items 1 and 2. Business and Properties......................... 1
Introduction................................................. 1
Metals ...................................................... 2
Agricultural Minerals........................................ 3
Oil and Natural Gas.......................................... 4
Research and Development..................................... 4
Environmental Matters........................................ 5
Employees.................................................... 6
Item 3. Legal Proceedings...................................... 6
Item 4. Submission of Matters to a Vote of Security Holders.... 6
Executive Officers of the Registrant............................ 6

Part II........................................................... 7
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters............................ 7
Item 6. Selected Financial Data................................ 7
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.......... 7
Item 8. Financial Statements and Supplementary Data............ 7
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................... 7

Part III.......................................................... 8
Items 10, 11, 12, and 13. Directors and Executive Officers
of the Registrant, Executive Compensation, Security
Ownership of Certain Beneficial Owners and Management,
and Certain Relationships and Related Transactions.... 8

Part IV........................................................... 8
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K........................................... 8

Signatures........................................................ 9

Index to Financial Statements..................................... F-1

Report of Independent Public Accountants.......................... F-1

Exhibit Index..................................................... E-1

PART I

Items 1 and 2. Business and Properties.
---------------------------------------

INTRODUCTION

Freeport-McMoRan Inc. ("FTX" or the "Company"*), a Delaware corporation
formed in 1981, is a leading and diversified natural resource company
currently engaged in the exploration for and mining, production and/or
processing of copper, gold, silver, sulphur, phosphate rock, phosphate-based
fertilizers, uranium, oil and natural gas, and other natural resources. FTX
engages in such activities primarily through the following entities: Freeport-
McMoRan Copper & Gold Inc. ("FCX"), a Delaware Corporation in which FTX owned
an approximate 68.9% interest as of March 10, 1995; Freeport-McMoRan Resource
Partners, Limited Partnership ("FRP"), a Delaware limited partnership in which
the Company owned an approximate 51.4% interest as of March 10, 1995; and
Freeport-McMoRan Oil & Gas Company ("FMOG"), a division of FTX. The Company's
reportable industry segments for 1994 are metals, including copper, gold and
silver (FCX); agricultural minerals, including sulphur, phosphate fertilizers
and phosphate rock (FRP); and oil and natural gas (FMOG and FRP). For
information with respect to industry segments, including foreign operations,
export sales and major customers, see Note 12 to the financial statements of
FTX and its consolidated subsidiaries referred to on page F-1 hereof (the "FTX
Financial Statements").

In May 1994, FTX announced a plan to separate its two principal
businesses, metals and agricultural minerals, into two independent financial
and operating entities. To accomplish this plan, FTX will effect a pro rata
distribution (the "Distribution") to its common stockholders of all of the
Class B common stock of FCX which it owns at the time of the Distribution on a
tax-free basis. As a result of the Distribution, FTX will no longer own any
interest in FCX. The Distribution is contingent on a number of factors,
including the recapitalization of FCX and FTX. In order for FTX to make the
Distribution on a tax-free basis, the FCX stockholders recently approved
certain changes to FCX's capital structure and the voting rights of its common
stock and preferred stock. Prior to the Distribution, the voting rights of
FCX stockholders will be amended so that holders of Class B common stock elect
80% of the FCX directors and holders of Class A common stock and holders of
preferred stock elect the balance. The Distribution is expected to occur by
June 30, 1995.

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

*The term "Company", as used in this report, shall include FTX, its
divisions, and its direct and indirect subsidiaries and affiliates, or any one
or more of them, unless the context requires FTX only.

In March 1995, FTX, FCX, The RTZ Corporation PLC ("RTZ") and RTZ America
Inc. ("RTZ America") signed letters of intent to establish a strategic
alliance. Pursuant to the proposed transactions, RTZ America will acquire
from FTX approximately 21.5 million shares of FCX Class A common stock
(approximately 10.4% of the outstanding common stock of FCX). RTZ America
also will receive an option to acquire from FTX approximately 3.5 million
shares of FCX Class A common stock. If this option is not exercised,
FTX proposes to sell such FCX Class A common stock to other buyers.

In connection with FTX's recapitalization, FTX intends to call its 6.55%
Convertible Subordinated Notes, due 2001 (the "6.55% Notes"), for redemption
for cash. The outstanding principal amount of the 6.55% Notes is approximately
$373 million. FTX also intends to call its Zero Coupon Convertible Subordi-
nated Debentures, due 2006 (the "ABC Debentures"), for redemption for cash.
The outstanding principal amount of the ABC Debentures is approximately $750
million, with a redemption cost of approximately $280 million.

If requested by FTX, RTZ America will make a cash tender offer for
certain of FTX's convertible debt, and convert any such debt to FTX common
stock. If RTZ America acquires such convertible debt and exercises its option,
after completion of the Distribution, RTZ America will own up to approximately
12% of the FTX common stock expected to be outstanding and over 18% of the
outstanding common stock of FCX. However, as the total number of shares of
FCX will not change as a result of these transactions, RTZ America's
acquisition of FCX common stock from FTX will not result in any dilution to
the current holders of FCX Class A common stock. The transactions with RTZ
America will enable FTX to complete its recapitalization and the Distribution.

In addition to RTZ America's acquisition of FCX stock, FCX, PT-FI (as
defined below) and Eastern Mining (as defined below) will enter into joint
venture arrangements with subsidiaries of RTZ pursuant to which RTZ's
subsidiaries intend to invest up to $850 million on exploration and
development projects on lands controlled by PT-FI and Eastern Mining. RTZ
also will acquire 25% of the Spanish smelter operations of RTM (as defined
below), and a 25% interest in RTM's Spanish mineral exploration program. All
of the transactions with RTZ and RTZ America are subject to, among other
things, certain regulatory approvals. The transactions are expected to be
completed by June 30, 1995; however, there can be no assurance that the trans-
actions with RTZ and RTZ America will be consummated or consummated in the
manner described above.

In May 1994, the FTX Board of Directors declared a special pro rata
distribution of one share of McMoRan Oil & Gas Co. ("MOXY") common stock for
ten shares of FTX common stock held by stockholders of record at the close of
business on May 20, 1994. MOXY, a Delaware corporation, was organized for the
purpose of carrying on substantially all of the oil and natural gas
exploration activities previously conducted by FTX.

METALS

The Company's metals segment is conducted by FCX. The principal
operating subsidiary of FCX is P.T. Freeport Indonesia Company ("PT-FI"), a
limited liability company organized under the laws of Indonesia and
domesticated in Delaware. PT-FI engages in the exploration for and
development, mining, and processing of copper, gold and silver in Indonesia
and in the marketing of concentrates containing such metals worldwide. FCX
believes that PT-FI has one of the lowest cost copper producing operations in
the world, taking into account customary credits for related gold and silver
production. At March 10, 1995, FCX owned 81.28% of the outstanding common
stock of PT-FI. Of the remaining 18.72% of the outstanding PT-FI common
stock, 9.36% is owned by the Government of the Republic of Indonesia (the
"Government") and 9.36% is owned by an Indonesian limited liability company,
P.T. Indocopper Investama Corporation ("PT-II"), in which FCX owns a 49%
interest. In 1993 FCX acquired the Spanish company Rio Tinto Minera, S.A.
("RTM") which is principally engaged in the smelting and refining of copper
concentrates in Spain through wholly owned subsidiaries. RTM provides an
additional market for a portion of PT-FI's copper concentrates. FCX's wholly
owned subsidiary, Eastern Mining Company, Inc. ("EMI"), owns 80% of the
outstanding common stock of P.T. Irja Eastern Minerals Corporation ("Eastern
Mining"), an Indonesian limited liability company, which signed a Contract of
Work with the Government in August 1994 covering approximately 2.5 million
acres in Indonesia. PT-II owns 10% of the outstanding common stock of Eastern
Mining, and P.T. Setdco Ganesha, an Indonesian limited liability company, owns
the remaining 10% of the outstanding common stock.

PT-FI's operations are located in the rugged highlands of the Sudirman
Mountain Range in the province of Irian Jaya, Indonesia, located on the
western half of the island of New Guinea. Over the last 26 years, PT-FI has
met an extraordinary combination of engineering and construction challenges to
develop its mining and milling complex and supporting infrastructure in one of
the least explored areas in the world. PT-FI's largest mine, Grasberg,
discovered in 1988, contains the largest single gold reserve and one of the
three largest open-pit copper reserves of any mine in the world. In order to
develop the Grasberg deposit, PT-FI undertook an expansion program in stages,
initially from 20,000 metric tons of ore per day ("MTPD") to 57,000 MTPD.
Expansion from 57,000 MTPD to 66,000 MTPD was completed in 1993 ahead of
schedule and within budget. PT-FI is currently expanding its production
capacity from 66,000 MTPD to 115,000 MTPD, which is expected to be completed
during the second half of 1995 and to almost double annual production to
approximately 1.1 billion pounds of copper and approximately 1.5 million
ounces of gold from the 1993 levels of 658 million pounds of copper and 787
thousand ounces of gold, respectively.

PT-FI's proved and probable ore reserves at December 31, 1994, were 28
billion recoverable pounds of copper, 39.6 million recoverable ounces of gold
and 80.8 million recoverable ounces of silver. For further information
concerning FCX's reserves of copper, gold and silver, and production, sales
and average realized price information, see Note 13 to the FTX Financial
Statements.

For further information with respect to the business and properties of
FCX, PT-FI, RTM, and Eastern Mining, reference is made to the discussion in
the FCX Annual Report on Form 10-K for the year ended December 31, 1994, under
the heading "Items 1 and 2. Business and Properties.", on pages 1 through 13,
inclusive, incorporated herein by reference.

AGRICULTURAL MINERALS

The Company's agricultural minerals segment is conducted through FRP and
consists of the production, distribution and sale of phosphate fertilizers,
the mining and sale of phosphate rock and the extraction of uranium oxide from
phosphoric acid through its interest in IMC-Agrico Company, a Delaware General
Partnership ("IMC-Agrico"); and the mining, purchase, transportation,
terminaling and sale of sulphur.

As the Administrative Managing General Partner of FRP, FTX exercises all
management powers over the business and affairs of FRP. FTX also furnishes
general executive, administrative, financial, accounting, legal,
environmental, tax, research and development, sales and certain other services
to FRP and is reimbursed by FRP for all direct and indirect costs in
connection therewith. As of March 10, 1995, FTX owned general and limited
partnership interests that constituted an approximate 51.4% interest in FRP,
with the remaining interest being publicly owned and traded on the New York
Stock Exchange. The public unitholders are entitled, through the cash
distribution for the fourth quarter of 1996, to receive minimum quarterly
distributions prior to any distribution on the partnership units held by FTX
and FMRP Inc., a Managing General Partner and Special General Partner. For
further information with respect to FRP's distributions, reference is made to
Note 2 to the FTX Financial Statements.

In January 1995, FRP acquired essentially all of the domestic assets of
Pennzoil Sulphur Co. ("Pennzoil"), a division of Pennzoil Company, including
the Culberson mine in Texas, sulphur terminals and loading facilities in
Galveston, Texas and Tampa, Florida, land and marine transportation equipment
and associated commercial contracts and obligations. Pennzoil will receive
quarterly payments from FRP over 20 years based on the prevailing price of
sulphur.

FRP has completed development of the Main Pass sulphur and oil reserves
which it discovered in 1988 and in which it has a 58.3% interest. Sulphur
production at minimal levels began during the second quarter of 1992. In 1994
sulphur production averaged 6,200 long tons per day, exceeding design
production capacity of 5,500 long tons per day. For further information with
respect to FRP's reserves of sulphur and phosphate rock and sales information,
see Note 13 to the FTX Financial Statements.

For further information with respect to the businesses and properties of
FRP, reference is made to the discussion in the FRP Annual Report on Form 10-K
for the year ended December 31, 1994, under the heading "Items 1 and 2.
Business and Properties.", on pages 1 through 11, inclusive, incorporated
herein by reference.

OIL AND NATURAL GAS

The only significant FTX oil and gas* interest is held by FRP, which is
engaged in the development and production of oil reserves at Main Pass
associated with the same caprock reservoir as the sulphur reserves. The Main
Pass oil property consists of 1,125 gross acres (656 acres net to FRP). FRP
estimates remaining proved recoverable oil reserves at Main Pass as of
December 31, 1994 to be 15.5 million barrels (7.3 million barrels net to FRP).
The development and production of these reserves are being conducted by FMOG
on behalf of FRP, as operator of the joint venture, pursuant to a management
services agreement. Oil production commenced in the fourth quarter of 1991
and averaged approximately 14,400 barrels per day during 1994. For further
information with respect to Main Pass and FTX's interest in FRP, see the
heading "Agricultural Minerals" above.

For information relating to estimates of the Company's net interests in
proved oil reserves, sales and average realized price, see Note 13 to the FTX
Financial Statements. No favorable or adverse event or major discovery has
occurred since December 31, 1994, that the Company believes would cause a
significant change in estimated proved reserves.

RESEARCH AND DEVELOPMENT

In 1993, FTX contracted with Crescent Technology, Inc. ("Crescent"), to
furnish engineering consulting, research and development, environmental and
safety services to the Company. Crescent owns and operates laboratory and
pilot plant facilities at Belle Chasse, Louisiana, where mineral analyses,
metallurgical work and other research and testing are conducted, and continues
to conduct, which contribute to the Company's commercial operations.

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

*As used hereinafter, "oil" refers to crude oil, condensate and natural
gas liquids, and "gas" refers to natural gas.

Additionally, Crescent maintains engineering consulting and mine development
groups in New Orleans, Louisiana, which provide engineering consulting,
environmental services and design and construction supervision activities
required to implement new ventures and apply improvements to existing
operations.

ENVIRONMENTAL MATTERS

The Company has a history of commitment to environmental responsibility.
Since the 1940s, long before the general public recognized the importance of
maintaining environmental quality, the Company has conducted, and continues to
conduct, preoperational, bioassay, marine ecological and other environmental
surveys to ensure the environmental compatibility of its operations. The
Company's Environmental Policy commits its operations to full compliance with
applicable laws and regulations, and prescribes the use of periodic
environmental audits of all facilities to evaluate compliance status and to
communicate that information to management. FTX has contracted with Crescent
to develop and implement corporatewide environmental programs and to study and
implement methods to reduce discharges and emissions.

The Company's domestic operations are subject to federal, state and
local laws and regulations relating to the protection of the environment.
Exploration, mining, development and production of natural resources, and
chemical processing operations of the Company, like similar operations of
other companies, may affect the environment. Moreover, such operations may
involve the extraction, handling, production, processing, treatment, storage,
transportation and disposal of materials and waste products which, under
certain conditions, may be toxic or hazardous, and expressly regulated under
environmental laws. Present and future environmental laws and regulations
applicable to Company operations may require substantial capital expenditures
or affect the Company's operations in other ways that cannot now be accurately
predicted.

The Company has made, and continues to make, expenditures with respect
to its operations for the protection of the environment. In 1992, at a cost
of $35.7 million, FRP completed the replacement of two sulphuric acid
production units at an existing fertilizer plant thereby substantially
reducing air emissions and increasing plant efficiency. As successor to FRP,
IMC-Agrico completed at the end of 1993, at a cost of $27 million, an
innovative drainage and cover plan for phosphogypsum storage areas in
Louisiana to substantially reduce substances in wastewater discharged from its
fertilizer operations, while at the same time increasing the capacity of these
storage areas.

Continued government and public emphasis on environmental issues can be
expected to result in increased future investments for environmental controls.
On analyzing its operations in relation to current and anticipated
environmental requirements, the Company does not expect that these investments
will have a significant impact on its future operations or financial
condition. For further information with respect to environmental matters,
reference is made to "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 13 through 20 and 23 through 26
of FTX's 1994 Annual Report to Stockholders, which is incorporated herein by
reference.

EMPLOYEES

As of December 31, 1994, the Company had a total of 7,913 employees,
compared with 7,658 employees at year-end 1993. PT-FI had a total of 6,074
employees as of December 31, 1994, of which approximately 94% were Indonesian.
Approximately 40% of PT-FI's Indonesian employees are members of the All
Indonesia Workers' Union, which operates under governmental supervision, with
which a labor agreement covering PT-FI's hourly-paid Indonesian employees runs
until September 30, 1995. There were no work stoppages in 1994, and relations
with the union have generally been good. Approximately 95% of RTM's 1,250
employees are covered by union contracts. RTM experienced limited work
stoppages in 1994, but relations with these unions have generally been good.
The management of the Company believes that it has good relations with all
other personnel employed in its domestic and international operations.

Item 3. Legal Proceedings.
--------------------------

Although the Company may be from time to time involved in various legal
proceedings of a character normally incident to the ordinary course of its
businesses, the Company believes that potential liability in any such pending
or threatened proceedings would not have a material adverse effect on the
financial condition or results of operations of the Company. FTX maintains
liability insurance to cover some, but not all, potential liabilities normally
incident to the ordinary course of its businesses as well as other insurance
coverages customary in its businesses, with such coverage limits as management
deems prudent.

Item 4. Submission of Matters to a Vote of Security Holders.
------------------------------------------------------------

Not applicable.

Executive Officers of the Registrant.
------------------------------------

Listed below are the names and ages, as of March 15, 1995, of the
present executive officers of FTX together with the principal positions and
offices with FTX held by each. All officers of FTX serve at the pleasure of
the Board of Directors of FTX.

Name Age Position or Office
---- --- ------------------

James R. Moffett 56 Chairman of the Board and
Chief Executive Officer
Rene L. Latiolais 52 President and Chief Operating
Officer
George A. Mealey 61 Executive Vice President
John G. Amato 51 General Counsel
Richard C. Adkerson 48 Senior Vice President
Richard H. Block 44 Senior Vice President
Thomas J. Egan 50 Senior Vice President
Charles W. Goodyear 37 Senior Vice President
W. Russell King 45 Senior Vice President

The individuals listed above have served the Company in various
executive capacities for at least the last five years.

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder
-----------------------------------------------------------------------------
Matters.
-------

The information set forth under the captions "Common Shares" and "Common
Share Dividends", on the inside back cover of FTX's 1994 Annual Report to
stockholders, is incorporated herein by reference. As of March 10, 1995,
there were 24,705 record holders of FTX's common stock.

Item 6. Selected Financial Data.
--------------------------------

The information set forth under the caption "Selected Financial Data" on
page 22 of FTX's 1994 Annual Report to stockholders, is incorporated herein by
reference.

FTX's ratio of earnings to fixed charges for each of the years 1990
through 1994, inclusive, was 5.6x, 1.6x, 2.5x, a shortfall of $241.8 million
and 2x, respectively. For this calculation, earnings are income from
continuing operations before income taxes, minority interests and fixed
charges. Fixed charges are interest, that portion of rent deemed represent-
ative of interest and the preferred stock dividend requirements of majority-
owned subsidiaries.

Item 7. Management's Discussion and Analysis of Financial Condition
---------------------------------------------------------------------------
and Results of Operations.
-------------------------

The information set forth under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations", on pages 13
through 20 and 23 through 26 of FTX's 1994 Annual Report to stockholders, is
incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data.
----------------------------------------------------

The financial statements of FTX and its consolidated subsidiaries, the
notes thereto and the report thereon of Arthur Andersen LLP, appearing on
pages 27 through 49, inclusive, and the report of management on page 21, of
FTX's 1994 Annual Report to stockholders, are incorporated herein by
reference.

Item 9. Changes in and Disagreements with Accountants on Accounting
----------------------------------------------------------------------------
and Financial Disclosure.
-------------------------

Not applicable.

PART III

Items 10, 11, 12, and 13. Directors and Executive Officers of the
---------------------------------------------------------------------
Registrant, Executive Compensation, Security Ownership
----------------------------------------------------------
of Certain Beneficial Owners and Management, and Certain
----------------------------------------------------------
Relationships and Related Transactions.
-------------------------------------------

The information set forth under the caption "Election of Directors,"
beginning on page 4 of the Proxy Statement dated March 21, 1995, submitted to
the stockholders of FTX in connection with its 1995 Annual Meeting to be held
on May 2, 1995, is incorporated herein by reference.

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
--------------------------------------------------------------------------

(a)(1), (a)(2), and (d). Financial Statements. See Index to Financial
Statements appearing on page F-1 hereof.

(a)(3) and (c). Exhibits. See Exhibit Index beginning on page E-1
hereof.

(b). Reports on Form 8-K. No reports on Form 8-K were filed by the
registrant during the fourth quarter of 1994.

SIGNATURES
----------

Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 24, 1995.

FREEPORT-McMoRan INC.

By: /s/ James R. Moffett
-------------------------
James R. Moffett
Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 24, 1995.

/s/ James R. Moffett Chairman of the Board, Chief
-------------------- Executive Officer and Director
James R. Moffett (Principal Executive Officer)

Richard C. Adkerson* Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)

John T. Eads* Controller-Financial Reporting
(Principal Accounting Officer)

Robert W. Bruce III* Director

Thomas B. Coleman* Director

William H. Cunningham* Director

Robert A. Day* Director

William B. Harrison, Jr.* Director

Henry A. Kissinger* Director

Bobby Lee Lackey* Director

Rene L. Latiolais* Director

Gabrielle K. McDonald* Director

George Putnam* Director

B. M. Rankin, Jr.* Director

Benno C. Schmidt* Director

J. Taylor Wharton* Director

Ward W. Woods, Jr.* Director

*By: /s/ James R. Moffett
--------------------
James R. Moffett
Attorney-in-Fact

INDEX TO FINANCIAL STATEMENTS
-----------------------------

The financial statements of FTX and its consolidated subsidiaries, the
notes thereto, and the report thereon of Arthur Andersen LLP, appearing on
pages 27 through 49, inclusive, of FTX's 1994 Annual Report to stockholders
are incorporated by reference.

The financial statement schedules listed below should be read in
conjunction with such financial statements contained in FTX's 1994 Annual
Report to stockholders.
Page
----
Report of Independent Public Accountants . . . . . . . . . . F-1
III-Condensed Financial Information of Registrant . . . . . F-2
VIII-Valuation and Qualifing Accounts. . . . . . . . . . . . F-6

Schedules other than those listed above have been omitted, since they
are either not required, not applicable or the required information is
included in the financial statements or notes thereto.

* * * *

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------

We have audited, in accordance with generally accepted auditing
standards, the financial statements as of December 31, 1994 and 1993 and for
each of the three years in the period ended December 31, 1994 included in
Freeport-McMoRan Inc.'s annual report to stockholders incorporated by
reference in this Form 10-K, and have issued our report thereon dated January
24, 1995. Our audits were made for the purpose of forming an opinion on those
statements taken as a whole. The schedules listed in the index above are the
responsibility of the Company's management and are presented for purposes of
complying with the Securities and Exchange Commission's rules and are not part
of the basic financial statements. The schedules for the years ended December
31, 1994, 1993 and 1992 have been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, fairly
state in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.

Arthur Andersen LLP

New Orleans, Louisiana,
January 24, 1995

FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEETS

December 31,
------------------------
1994 1993
-------- --------
ASSETS (In Thousands)
Current assets:
Accounts receivable $ 17,503 $ 15,357
Prepaid expenses and other 5,833 10,527
-------- --------
Total current assets 23,336 25,884
Property, plant and equipment - net 93,517 152,171
Investment in FCX 287,665 267,853
Investment in FRP 229,588 252,341
Investment in other subsidiaries 18,359 17,800
Long-term note due from FCX 800 12,270
Long-term note due from FRP - 100,900
Long-term receivables and other assets 77,434 114,101
-------- --------
Total assets $730,699 $943,320
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $105,860 $100,579
Long-term debt 753,433 695,624
Other liabilities and deferred credits 101,873 113,749
Deferred gain on sale of subsidiary interests - 32,719
Stockholders' equity (230,467) 649
-------- --------
Total liabilities and stockholders' equity $730,699 $943,320
======== ========

The footnotes contained in FTX's 1994 Annual Report to stockholders are an
integral part of these statements.

FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF OPERATIONS

Years Ended December 31,
-------------------------------
1994 1993 1992
-------- --------- --------
(In Thousands)
Revenues $ 749 $ 6,852 $ 49,773
Cost of sales:
Production and delivery 3,137 9,960 11,905
Depreciation and amortization 5,268 19,347 34,850
-------- --------- --------
Total cost of sales 8,405 29,307 46,755
Exploration expenses 3,738 22,067 17,407
Provision for restructuring charges - 12,403 -
Gain on valuation and sale of assets, net - (50,688) -
General and administrative expenses 12,664 19,785 27,229
-------- --------- --------
Total costs and expenses 24,807 32,874 91,391
-------- --------- --------
Operating loss (24,058) (26,022) (41,618)
Interest expense, net (60,402) (58,189) (41,909)
Equity in earnings (loss) of subsidiaries 64,973 (96,931) 106,997
Gain on sale of FCX shares - - 100,934
Gain on conversion/distribution of FCX
securities 114,750 44,116 33,753
Other income, net 2,173 4,779 1,525
-------- --------- --------
Income (loss) before income taxes 97,436 (132,247) 159,682
Credit (provision) for income taxes (24,853) 49,129 28,129
-------- --------- --------
Income (loss) before extraordinary item
and changes in accounting principle 72,583 (83,118) 187,811
Extraordinary loss on early
extinguishment of debt, net 9,108 - -
Cumulative effect of changes in
accounting principle:
FTX - (5,632) -
Equity subsidiaries - (15,085) -
-------- --------- --------
Net income (loss) 63,475 (103,835) 187,811
Preferred dividends (22,032) (22,368) (18,677)
-------- --------- --------
Net income (loss) applicable to common
stock $ 41,443 $(126,203) $169,134
======== ========= ========

The footnotes contained in FTX's 1994 Annual Report to stockholders are an
integral part of these statements.

FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOW

Years Ended December 31,
------------------------------
1994 1993 1992
-------- --------- ---------
Cash flow from operating activities: (In Thousands)
Net income (loss) $ 63,475 $(103,835) $ 187,811
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Extraordinary loss on early extinguishment
of debt 9,108 - -
Cumulative effect of changes in accounting
principle - 20,717 -
Depreciation and amortization 9,073 26,180 42,567
Other noncash charges to income, including
net reimbursements from subsidiaries - 27,623 -
Oil and gas exploration expenses 5,231 26,710 16,704
Recognition of unearned revenues in income - 5,928 (10,977)
Amortization of debt discount and financing
costs 31,113 28,771 33,909
Equity in (earnings) losses of subsidiaries (64,973) 96,931 (106,997)
Cash distributions from subsidiaries 92,000 85,853 127,124
Gain on sale of FCX Class A shares - - (100,934)
Gain on conversion/distribution of FCX
securities (114,750) (44,116) (33,753)
Gain on valuation and sale of assets, net - (50,688) -
Deferred income taxes 18,558 (54,731) 925
(Increase) decrease in working capital, net of
effect of acquisitions and dispositions:
Accounts receivable (2,146) 28,516 (12,632)
Prepaid expenses and other 4,694 (719) (8,843)
Accounts payable and accrued liabilities 22,389 (30,565) (15,092)
Payment to Freeport-McMoRan Royalty Trust (2,854) (2,296) -
Other (15,392) 924 2,364
-------- --------- ---------
Net cash provided by operating activities 55,526 61,203 122,176
-------- --------- ---------
Cash flow from investing activities:
Capital expenditures (32,958) (57,165) (96,708)
Contributions to subsidiaries - - (30,119)
Sale of assets 65,596 99,983 -
-------- --------- ---------
Net cash provided by (used in) investing
activities $ 32,638 $ 42,818 $(126,827)
-------- --------- ---------

FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOW

Years Ended December 31,
------------------------------
1994 1993 1992
--------- --------- ---------
(In Thousands)
Cash flow from financing activities:
Proceeds from sale of Convertible
Exchangeable Preferred Stock $ - $ - $ 245,700
Purchase of:
FTX common shares (67,747) (22,229) (108,591)
FCX Class A common shares (47,596) (16,482) -
10 7/8% Senior Debentures (142,919) - -
Distribution of FMPO and MOXY shares (35,441) - (28,019)
Borrowings of debt - net 155,000 3,943 330,821
(Increase) decrease in long-term note due
from FCX 11,470 (12,270) -
(Increase) decrease in long-term note due
from FRP 100,900 138,450 (239,350)
Cash dividends paid:
Common stock (44,467) (175,890) (179,677)
Preferred stock (22,110) (22,384) (16,882)
Other 4,746 1,858 -
-------- --------- ---------
Net cash provided by (used in) financing
activities (88,164) (105,004) 4,002
-------- --------- ---------
Net decrease in cash and short-term
investments - (983) (649)
Cash and short-term investments
at beginning of year - 983 1,632
-------- --------- ---------
Cash and short-term investments
at end of year $ - $ - $ 983
======== ========= =========

The footnotes contained in FTX's 1994 Annual Report to stockholders are an
integral part of these statements.

FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
for the years ended December 31, 1994, 1993 and 1992

Col. A Col. B Col. C Col. D Col. E
----------------- ------------ ----------------------- --------- ----------
Additions
-----------------------
Balance at Charged to Charged to Balance at
Beginning of Costs and Other Other-Add End
Description Period Expenses Accounts (Deduct) of Period
----------------- ------------ ----------- ---------- --------- ----------
(In Thousands)
Reserves and allowances
deducted from asset
accounts:

Reclamation and mine
shutdown reserves:
1994:
Sulphur $ 57,287 $ 1,041 $ - $ (3,223) $ 55,105
Fertilizer 38,437 2,310 - (3,064) 37,683
RTM 10,270 2,655 - - 12,925
Oil & Gas 14,963 3,799 - 1,227 19,989
-------- ------- ----- -------- --------
$120,957 $ 9,805 $ - $ (5,060)a $125,702
======== ======= ===== ======== ========

1993:
Sulphur $ 35,200 $27,562 $ - $ (5,475) $ 57,287
Fertilizer 18,543 5,365 - 14,529 b 38,437
RTM - - - 10,270 c 10,270
Oil & Gas 8,617 7,995 - (1,649) 14,963
-------- ------- ----- -------- --------
$ 62,360 $40,922 $ - $ 17,675 d $120,957
======== ======= ===== ======== ========
1992:
Sulphur $ 29,715 $ 4,335 $ - $ 1,150 $ 35,200
Fertilizer 21,772 7,123 - (10,352) 18,543
Oil & Gas 10,196 4,598 - (6,177) 8,617
-------- ------- ----- -------- --------
$ 61,683 $16,056 $ - $(15,379)e $ 62,360
======== ======= ===== ======== ========

a. Includes expenditures of $9.7 million, net of a $4.6 million decrease in
short-term payables.

b. Includes $19.7 million which represents FRP's proportionate share of
IMC-Agrico liabilities (see Note 2 to the Financial Statements) in excess
of the FRP contributed amounts.

c. Reflects the reserve associated with the acquisition of RTM, as further
discussed in Note 2 to the Financial Statements.

d. Includes expenditures of $14 million, net of a $1.7 million decrease in
short-term payables and the items discussed in Notes b and c.

e. Includes expenditures of $21.8 million and $5.6 million transferred to
FMPO (as further discussed in Note 8 to the Financial Statements), net of
a $12 million decrease in short-term payables.

Freeport-McMoRan Inc.
Exhibit Index
-------------
Sequentially
Exhibit Numbered
Number Page
------ ----

3.1 Composite copy of Certificate of
Incorporation of FTX, as amended.
Incorporated by reference to Exhibit 3.1
to the Quarterly Report on Form 10-Q of
FTX for the quarter ended June 30, 1992
(the "FTX 1992 Second Quarter Form 10-Q").

3.2 By-Laws of FTX, as amended. Incorporated
by reference to Exhibit 3.2 to the FTX
1992 Second Quarter Form 10-Q.

4.1 Certificate of Designations of the $4.375
Convertible Exchangeable Preferred Stock
of FTX. Incorporated by reference to
Exhibit 4.1 to the Current Report on Form
8-K of FTX dated March 23, 1992.

4.2 Indenture dated as of May 15, 1986 between
FTX and Manufacturers Hanover Trust
Company ("Manufacturers"), Trustee,
relating to $150,000,000 principal amount
of 10-7/8% Senior Subordinated Debentures
due 2001 of FTX. Incorporated by
reference to Exhibit 19.1 to the Quarterly
Report on Form 10-Q of FTX for the quarter
ended September 30, 1986.

4.3 Subordinated Indenture dated as of
November 9, 1990 between FTX and Chemical
Bank, Trustee, relating to subordinated
indebtedness of FTX. Incorporated by
reference to Exhibit 28.2 to the Current
Report on Form 8-K of FTX dated February
7, 1991 (the "FTX February 7, 1991 Form 8-
K").

4.4 Supplemental Indenture No. 1 dated as of
February 5, 1991 between FTX and Chemical
Bank, Trustee, relating to $373,000,000
principal amount of 6.55% Convertible
Subordinated Notes due 2001 of FTX.
Incorporated by reference to Exhibit 28.3
to the FTX February 7, 1991 Form 8-K.

4.5 Supplemental Indenture No. 2 dated as of
August 5, 1991 between FTX and Chemical
Bank, Trustee, relating to $750,000,000
face amount of Zero Coupon Convertible
Subordinated Debentures due 2006 of FTX.
Incorporated by reference to Exhibit (4-a)
to the Current Report on Form 8-K of FTX
dated August 9, 1991.

4.6 Credit Agreement dated as of June 1, 1993
(the "FTX/FRP Credit Agreement") among
FTX, FRP, the several banks which are
parties thereto (the "FTX/FRP Banks") and
Chemical Bank, as Agent (the "FTX/FRP Bank
Agent"). Incorporated by reference to
Exhibit 4.8 to the Annual Report on Form
10-K of FRP for the fiscal year ended
December 31, 1993 (the "FRP 1993 Form 10-
K").

4.7 First Amendment dated as of February 2,
1994 to the FTX/FRP Credit Agreement among
FTX, FRP, the FTX/FRP Banks and the
FTX/FRP Bank Agent. Incorporated by
reference to Exhibit 4.9 to the FRP 1993
Form 10-K.

4.8 Second Amendment dated as of March 1, 1994
to the FTX/FRP Credit Agreement among FTX,
FRP, the FTX/FRP Banks and the FTX/FRP
Bank Agent. Incorporated by reference to
Exhibit 4.10 to the FRP 1993 Form 10-K.

4.9 Third Consent and Waiver dated as of
October 18, 1994 to the FTX/FRP Credit
Agreement among FTX, FRP, the FTX/FRP
Banks and the FTX/FRP Bank Agent.
Incorporated by reference to Exhibit 4.11
to the Annual Report on From 10-K of FRP
for the fiscal year ended December 31,
1994 (the "FRP 1994 Form 10-K").

4.10 Fourth Amendment, Consent and Limited
Waiver dated as of November 23, 1994 to
the FTX/FRP Credit Agreement among FTX,
FRP, the FTX/FRP Banks and the FTX/FRP
Bank Agent. Incorporated by reference to
Exhibit 4.12 to the FRP 1994 Form 10-K.

4.11 Amended and Restated Agreement of Limited
Partnership of FRP dated as of May 29,
1987 (the "FRP Partnership Agreement")
among FTX, Freeport Phosphate Rock Company
and Geysers Geothermal Company, as general
partners, and Freeport Minerals Company
("FMC"), as general partner and attorney-
in-fact for the limited partners, of FRP.
Incorporated by reference to Exhibit B to
the Prospectus dated May 29, 1987 included
in FRP's Registration Statement on Form S-
1, as amended, as filed with the
Commission on May 29, 1987 (Registration
No. 33-13513).

4.12 Amendment to the FRP Partnership Agreement
dated as of December 16, 1988 effected by
FMC, as Administrative Managing General
Partner, and FTX, as General Partner, of
FRP. Incorporated by reference to Exhibit
3.2 to the FRP 1994 From 10-K.

4.13 Amendment to the FRP Partnership Agreement
dated as of March 29, 1990 effected by
FMC, as Administrative Managing General
Partner, and FTX, as Managing General
Partner, of FRP. Incorporated by
reference to Exhibit 19.2 to the Quarterly
Report on Form 10-Q of FRP for the quarter
ended March 31, 1990 (the "FRP 1990 First
Quarter Form 10-Q").

4.14 Amendment to the FRP Partnership Agreement
dated as of April 6, 1990 effected by FTX,
as Administrative Managing General Partner
of FRP. Incorporated by reference to
Exhibit 19.3 to the FRP 1990 First Quarter
Form 10-Q.

4.15 Amendment to the FRP Partnership Agreement
dated as of January 27, 1992 between FTX,
as Administrative Managing General
Partner, and FMRP Inc., as Managing
General Partner of FRP. Incorporated by
reference to Exhibit 3.3 to the Annual
Report on Form 10-K of FRP for the fiscal
year ended December 31, 1991 (the "FRP
1991 Form 10-K").

4.16 Amendment to the FRP Partnership Agreement
dated as of October 14, 1992 between FTX,
as Administrative Managing General
Partner, and FMRP Inc., as Managing
General Partner of FRP. Incorporated by
reference to Exhibit 3.4 to the Annual
Report on Form 10-K of FRP for the fiscal
year ended December 31, 1992 (the "FRP
1992 Form 10-K").

4.17 Deposit Agreement dated as of June 27,
1986 (the "Deposit Agreement") among FRP,
The Chase Manhattan Bank, N.A. ("Chase")
and Freeport Minerals Company, as
attorney-in-fact of those limited partners
and assignees holding depositary receipts
for units of limited partnership interests
in FRP ("Depositary Receipts").
Incorporated by reference to Exhibit 28.4
to the Current Report on Form 8-K of FTX
dated July 11, 1986.

4.18 Resignation dated December 26, 1991 of
Chase as Depositary under the Deposit
Agreement and appointment dated December
27, 1991 of Mellon Bank, N.A. ("Mellon")
as successor Depositary, effective January
1, 1992. Incorporated by reference to
Exhibit 4.5 to the FRP 1991 Form 10-K.

4.19 Service Agreement dated as of January 1,
1992 between FRP and Mellon pursuant to
which Mellon will serve as Depositary
under the Deposit Agreement and Custodian
under the Custodial Agreement.
Incorporated by reference to Exhibit 4.6
to the FRP 1991 Form 10-K.

4.20 Amendment to the Deposit Agreement dated
as of November 18, 1992 between FRP and
Mellon. Incorporated by reference to
Exhibit 4.4 to the FRP 1992 Form 10-K.

4.21 Form of Depositary Receipt. Incorporated
by reference to Exhibit 4.5 to the FRP
1992 Form 10-K.

4.22 Custodial Agreement regarding the FRP
Depositary Unit Reinvestment Plan among
FTX, FRP and Chase, effective as of April
1, 1987 (the "Custodial Agreement").
Incorporated by reference to Exhibit 19.1
to the Quarterly Report on Form 10-Q of
FRP for the quarter ended June 30, 1987.

4.23 FRP Depositary Unit Reinvestment Plan.
Incorporated by reference to Exhibit 4.4
to the FRP 1991 Form 10-K.

4.24 Composite copy of the Certificate of
Incorporation of FCX. Incorporated by
reference to Exhibit 3.1 to the Annual
Report on Form 10-K of FCX for the fiscal
year ended December 31, 1994 (the "FCX
1994 Form 10-K").

4.25 Credit Agreement dated as of June 1, 1993
(the "PT-FI Credit Agreement") among PT-
FI, the several banks which are parties
thereto (the "PT-FI Banks"), Morgan
Guaranty Trust Company of New York
("Morgan"), as PT-FI Trustee (the "PT-FI
Trustee"), and Chemical Bank, as Agent
(the "PT-FI Bank Agent"). Incorporated by
reference to Exhibit 4.10 to the FCX 1993
Form 10-K.

4.26 First Amendment dated as of February 2,
1994 to the PT-FI Credit Agreement among
PT-FI, the PT-FI Banks, the PT-FI Trustee
and the PT-FI Bank Agent. Incorporated by
reference to Exhibit 4.11 to the FCX 1993
Form 10-K.

4.27 Second Amendment dated as of March 1, 1994
to the PT-FI Credit Agreement among PT-FI,
the PT-FI Trustee and the PT-FI Bank
Agent. Incorporated by reference to
Exhibit 4.12 to the FCX 1993 Form 10-K.

4.28 Third Consent and Waiver dated as of
October 18, 1994 to the PT-FI Credit
Agreement among PT-FI, the PT-FI Banks,
the PT-FI Trustee and the PT-FI Bank
Agent. Incorporated by reference to
Exhibit 4.19 to the Annual Report on Form
10-K of FCX for the fiscal year ended
December 31, 1994 (the "FCX 1994 Form 10-
K").

4.29 Fourth Amendment, Consent and Limited
Waiver dated as of November 23, 1994 to
the PT-FI Credit Agreement among PT-FI,
the PT-FI Banks, the PT-FI Trustee and the
PT-FI Bank Agent. Incorporated by
reference to Exhibit 4.20 to the FCX 1994
Form 10-K.

4.30 Term Loan and Working Capital Agreement
dated as of November 4, 1994 (the "RTML
Term Loan") among Rio Tinto Metal, S.A.
("RTML"), the Lenders and Barclays Bank
PLC as Agent (the "Agent"). Incorporated
by reference to Exhibit 4.21 to the FCX
1994 Form 10-K.

4.31 Amendment No. 1 dated as of March 7,
1995 to the RTML Term Loan among RTML, the
Lenders and the Agent. Incorporated by
reference to Exhibit 4.22 to the FCX 1994
Form 10-K.

4.32 Automatic Stock Purchase Plan of FTX.
Incorporated by reference to Exhibit 4.28
to the Annual Report on Form 10-K of FTX
for the fiscal year ended December 31,
1992 (the "FTX 1992 Form 10-K").

10.1 Overriding Royalty Conveyance dated
September 28, 1983, from McMoRan- Freeport
Oil Company to McMoRan Oil & Gas Co.
Incorporated by reference to Exhibit 2.2
to the Quarterly Report on Form 10-Q of
FTX for the quarter ended September 30,
1983 (the "FTX 1983 Third Quarter Form 10-
Q").

10.2 Royalty Trust Indenture dated as of
September 30, 1983 between FTX, as
Trustor, and First City National Bank of
Houston ("First City"), as Trustee.
Incorporated by reference to Exhibit 2.3
to the FTX 1983 Third Quarter Form 10-Q.

10.3 First Amended and Restated Articles of
General Partnership of Freeport-McMoRan
Oil and Gas Royalty Partnership dated as
of September 30, 1983 between McMoRan
Offshore Management Co. and First City, as
Trustee. Incorporated by reference to
Exhibit 2.4 to the FTX 1983 Third Quarter
Form 10-Q.

10.4 Contract of Work dated December 30, 1991
between The Government of the Republic of
Indonesia and PT-FI. Incorporated by
reference to Exhibit 10.20 to the Annual
Report on Form 10-K of FCX for the fiscal
year ended December 31, 1991.

10.5 Contribution Agreement dated as of April
5, 1993 between FRP and IMC (the "FRP-IMC
Contribution Agreement"). Incorporated by
reference to Exhibit 2.1 to the Current
Report on Form 8-K of FRP dated July 15,
1993 (the "FRP July 15, 1993 Form 8-K").

10.6 First Amendment dated as of July 1, 1993
to the FRP-IMC Contribution Agreement.
Incorporated by reference to Exhibit 2.2
to the FRP July 15, 1993 Form 8-K.

10.7 Amended and Restated Partnership Agreement
dated as of July 1, 1993 among IMC-Agrico
GP Company, Agrico, Limited Partnership
and IMC-Agrico MP Inc. Incorporated by
reference to Exhibit 2.3 to the FRP July
15, 1993 Form 8-K.

10.8 Parent Agreement dated as of July 1, 1993
among IMC, FRP, FTX and IMC-Agrico.
Incorporated by reference to Exhibit 2.4
to the FRP July 15, 1993 Form 8-K.

10.9 Asset Purchase Agreement dated as of
October 22, 1994 between FRP and Pennzoil
Company (the "Asset Purchase Agreement").
Incorporated by reference to Exhibit 2.1
to the Current Report on Form 8-K of FRP
dated January 18, 1995 (the "FRP January
18, 1995 8-K").

10.10 Amendment No. 1 dated as of January 3,
1995 to the Asset Purchase Agreement.
Incorporated by reference to Exhibit 2.2
to the FRP January 18, 1995 8-K.
Executive Compensation Plans and
Arrangements (Exhibits 10.11 through
10.42)

10.11 FTX Employee Retirement Plan as of January
1, 1986. Incorporated by reference to
Exhibit 10.11 to the Annual Report on Form
10-K of Freeport-McMoRan Energy Partners,
Ltd. ("FMP") for the fiscal year ended
December 31, 1986.

10.12 Amendment No. 1 dated as of January 14,
1987 to the FTX Employee Retirement Plan.
Incorporated by reference to Exhibit 10.10
to the FTX 1987 Form 10-K.

10.13 Amendment No. 2 dated as of May 31, 1987
to the FTX Employee Retirement Plan.
Incorporated by reference to Exhibit 10.11
to the FTX 1987 Form 10-K.

10.14 Amendments to the FTX Employee Retirement
Plan dated August 31, 1988, March 21, 1989
and December 29, 1989. Incorporated by
reference to Exhibit 10.7 to the Annual
Report on Form 10-K of FMP for the fiscal
year ended December 31, 1989 (the "FMP
1989 Form 10-K").

10.15 Amendment to the FTX Employee Retirement
Plan dated March 6, 1990. Incorporated by
reference to Exhibit 10.26 to the Annual
Report on Form 10-K of FRP for the fiscal
year ended December 31, 1989.

10.16 Amendment to the FTX Employee Retirement
Plan dated December 20, 1991.
Incorporated by reference to Exhibit 10.6
to the FRP 1991 Form 10-K.

10.17 Master Trust Agreement dated as of October
1, 1990 between FTX and Continental Bank,
N.A., relating to the FTX Employee
Retirement Plan. Incorporated by
reference to Exhibit 19.2 to the Quarterly
Report on Form 10-Q of FTX for the quarter
ended September 30, 1990 (the "FTX 1990
Third Quarter Form 10-Q").

10.18 Excess Benefits Plan of FTX. Incorporated
by reference to Exhibit 10.3 to the
Quarterly Report on Form 10-Q of FTX for
the quarter ended March 31, 1988.

10.19 Amendments to the Excess Benefits Plan of
FTX dated January 17, 1989, December 8,
1989, June 29, 1990 and October 17, 1990.
Incorporated by reference to Exhibits
19.3, 19.4, 19.5 and 19.6, respectively,
to the FTX 1990 Third Quarter Form 10-Q.

10.20 Amended and Restated FTX Employee Capital
Accumulation Program dated September 14,
1990, generally effective as of January 1,
1989. Incorporated by reference to
Exhibit 19.1 to the FTX 1990 Third Quarter
Form 10-Q.

10.21 FTX Supplemental Executive Capital
Accumulation Plan. Incorporated by
reference to Exhibit 10.13 to the FTX 1987
Form 10-K.

10.22 Amendments, effective March 1, 1989 and
January 1, 1990, to the FTX Supplemental
Executive Capital Accumulation Plan.
Incorporated by reference to Exhibit 10.20
to the FMP 1989 Form 10-K.

10.23 Amendment, effective May 1, 1991, to the
FTX Supplemental Executive Capital
Accumulation Plan. Incorporated by
reference to Exhibit 19.1 to the FTX 1991
Third Quarter Form 10-Q.

10.24 Annual Incentive Plan of FTX, as amended.

10.25 1992 Long-Term Performance Incentive Plan
of FTX, as amended.

10.26 1987 Long-Term Performance Incentive Plan
of FTX, as amended.

10.27 FTX Variable Compensation Incentive
Program, as amended. Incorporated by
reference to Exhibit 19.4 to the FTX 1991
Third Quarter Form 10-Q.

10.28 Incentive Compensation Plan of FTX.
Incorporated by reference to Exhibit 20.3
to the Quarterly Report on Form 10-Q of
FTX for the Quarter ended June 30, 1981.

10.29 FTX Performance Incentive Awards Program,
as amended.

10.30 FTX 1992 Stock Option Plan. Incorporated
by reference to Exhibit 10.3 to the FCX
1992 Second Quarter Form 10-Q.

10.31 1982 Stock Option Plan of FTX, as amended.

10.32 FTX 1992 Stock Incentive Unit Plan.
Incorporated by reference to Exhibit 10.2
to the FCX 1992 Second Quarter Form 10-Q.

10.33 1988 Stock Option Plan for Non-Employee
Directors of FTX, as amended.
Incorporated by reference to Exhibit 10.5
to the Quarterly Report on Form 10-Q of
FTX for the quarter ended June 30, 1992.

10.34 FTX 1991 Plan for Deferral of Directors'
Fees. Incorporated by reference to
Exhibit 10.20 to the Annual Report on Form
10-K of FTX for the fiscal year ended
December 31, 1991.

10.35 FTX Directors' Charitable Gift Program.
Incorporated by reference to Exhibit 10.29
to the FTX 1992 Form 10-K.

10.36 FTX Matching Gifts Program. Incorporated
by reference to Exhibit 10.30 to the FTX
1992 Form 10-K.

10.37 Financial Counseling and Tax Return
Preparation and Certification Program of
FTX. Incorporated by reference to Exhibit
10.31 to the FTX 1992 Form 10-K.

10.38 FTX Executive Universal Life Insurance
Plan. Incorporated by reference to
Exhibit 10.32 to the FTX 1992 Form 10-K.

10.39 Letter Agreement dated January 2, 1986
between FTX and Benno C. Schmidt.
Incorporated by reference to Exhibit 10.13
to the Annual Report on Form 10-K of FTX
for the fiscal year ended December 31,
1985.

10.40 Agreement for Consulting Services between
FTX and B. M. Rankin, Jr., effective as of
January 1, 1990. Incorporated by
reference to Exhibit 19.2 to the Quarterly
Report on Form 10-Q of FTX for the quarter
ended March 31, 1990.

10.41 Consulting Agreement dated as of December
22, 1988, between FTX and Kissinger
Associates, Inc. ("Kissinger Associates").
Incorporated by reference to Exhibit 10.35
to the FTX 1992 Form 10-K.

10.42 Letter Agreement dated May 1, 1989,
between FTX and Kent Associates, Inc.
(predecessor in interest to Kissinger
Associates). Incorporated by reference to
Exhibit 10.36 to the FTX 1992 Form 10-K.

11.1 FTX and Consolidated Subsidiaries
Computation of Net Income Per Common and
Common Equivalent Share.

12.1 FTX Computation of Ratio of Earnings to
Fixed Charges.

13.1 Those portions of the 1994 Annual Report
to stockholders of FTX which are
incorporated herein by reference.

21.1 Subsidiaries of FTX.

23.1 Consent of Arthur Andersen LLP dated March
24, 1995.

24.1 Certified resolution of the Board of
Directors of FTX authorizing this report
to be signed on behalf of any officer or
director pursuant to a Power of Attorney.

24.2 Powers of Attorney pursuant to which this
report has been signed on behalf of
certain officers and directors of FTX.

27.1 FTX Financial Data Schedule.

99.1 Annual Report on Form 10-K of FRP for the
fiscal year ended December 31, 1994.

99.2 Annual report on Form 10-K of FCX for the
fiscal year ended December 31, 1994.

Exhibit 10.24

ANNUAL INCENTIVE PLAN

OF FREEPORT-MCMORAN INC.

ARTICLE I

PURPOSE OF PLAN

SECTION 1.1. The purpose of the Annual Incentive Plan
of Freeport-McMoRan Inc. (the "Plan") is to provide incentives
for senior executives whose performance in fulfilling the
responsibilities of their positions can have a major impact on
the profitability and future growth of Freeport-McMoRan Inc. (the
"Company") and its subsidiaries.

ARTICLE II

ADMINISTRATION OF THE PLAN

SECTION 2.1. Subject to the authority and powers of
the Board of Directors in relation to the Plan as hereinafter
provided, the Plan shall be administered by a Committee
designated by the Board of Directors consisting of two or more
members of the Board each of whom is a "disinterested person"
within the meaning of Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of
1934. The Committee shall have full authority to interpret the
Plan and from time to time to adopt such rules and regulations
for carrying out the Plan as it may deem best. All
determinations by the Committee shall be made by the affirmative
vote of a majority of its members, but any determination reduced
to writing and signed by a majority of the members shall be fully
as effective as if it had been made by a majority vote at a
meeting duly called and held. All decisions by the Committee
pursuant to the provisions of the Plan and all orders or
resolutions of the Board of Directors pursuant thereto shall be
final, conclusive and binding on all persons, including the
Participants, the Company and its subsidiaries and their
respective equity holders.

ARTICLE III

ELIGIBILITY FOR AND PAYMENT OF AWARDS

SECTION 3.1. Subject to the provisions of the Plan, in
each calendar year the Committee may select salaried officers or
employees (including officers or employees who are also
directors) of the Company or any of its subsidiaries to receive
Awards under the Plan with respect to such year, and determine
the amount of such Awards.

<PAGE> 1

SECTION 3.2. Subject to the provisions of the Plan,
Awards with respect to any year shall be paid to each Participant
at such time established by the Committee following the
determination of the amounts of such Awards, which payment shall
in no event be later than February 28 of the year following such
Award Year.

SECTION 3.3. Notwithstanding the provisions of Section
3.2, if, prior to the date established by the Committee for any
Award Year, a Participant shall so elect, in accordance with
procedures established by the Committee, all or any part of an
Award to such Participant with respect to such Award Year shall
be deferred and paid in one or more periodic installments, not in
excess of ten, at such time or times before or after the date of
such Participant's Termination of Employment, but not later than
ten years after such date of Termination of Employment, as shall
be specified in such election. If and only if any Award or
portion thereof is so deferred for payment after December 31 of
the year following such Award Year, such Award or portion
thereof, as the case may be, shall, commencing with January 1 of
the year following such Award Year, be increased at a rate equal
to the prime commercial lending rate announced from time to time
by The Chase Manhattan Bank, N.A. (compounded quarterly) or at
such other rate and in such manner as shall be determined from
time to time by the Committee. If such Participant's Termination
of Employment occurs for any reason other than death, retirement
under the Company's retirement plan, or retirement with the
consent of the Company outside the Company's retirement plan and
if, on the date of such Termination of Employment, there remain
unpaid any installments of Awards which have been deferred as
provided in this Section 3.3, the Committee may, in its sole
discretion, authorize payment to the Participant of the aggregate
amount of such unpaid installments in a lump sum, notwithstanding
such election.

SECTION 3.4. (a) Notwithstanding the provisions of
Sections 3.1, 3.2, 3.3, 4.2(a), and 4.2(b) hereof, any Award to
any Covered Employee shall be granted in accordance with the
provisions of this Section 3.4. Subject to the discretion of the
Committee as set forth in Section 4.2(c) hereof, the amount of
the Award that may be granted with respect to any calendar year
to the Covered Employee who is the chief executive officer of the
Company at the time of such grant shall be 32% of the Plan
Funding Amount for such year, the amount of the Award that may be
granted with respect to any calendar year to the Covered Employee
who is the chief operating officer of the Company at the time of
such grant shall be 23% of the Plan Funding Amount for such year,
and the amount of the Award that may be granted with respect to
any calendar year to any other Covered Employee shall be, as to
each such individual, 15% of the Plan Funding Amount for such
year.

<PAGE> 2

(b) All Awards to Covered Employees under the Plan
will be made and administered by two or more members of the
Committee who are also "outside directors" within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended,
and rules promulgated by the Internal Revenue Service of the
Department of the Treasury thereunder.

(c) Any provision of the Plan to the contrary
notwithstanding, no Covered Employee shall be entitled to any
payment of an Award with respect to a calendar year unless the
members of the Committee referred to in Section 3.4(b) hereof
shall have certified the Plan Funding Amount for such year and
that the condition of Section 4.1 hereof has been met for such
year.

ARTICLE IV

GENERAL PROVISIONS

SECTION 4.1. Any provision of the Plan to the contrary
notwithstanding, no Award shall be made pursuant to Section 3.1
or 3.4 with respect to any calendar year if the average of the
Return on Investment for such calendar year and each of the four
preceding calendar years, after giving effect to the aggregate
amount (if any) that was awarded or credited with respect to such
prior years and the aggregate amount that would otherwise have
been so awarded or credited with respect to such calendar year,
would be less than six percent.

SECTION 4.2. (a) In determining the aggregate amount
awarded to Participants under the Plan for any calendar year, the
Committee shall consider as a guideline that the aggregate amount
of all Awards granted with respect to any calendar year should
not exceed two and one-half percent of Net Cash Provided by
Operating Activities for such year.

(b) If Managed Net Income or Total Investment of
Capital for any year shall have been affected by special factors
(including material changes in accounting policies or practices,
material acquisitions or dispositions of property, or other
unusual items) which in the Committee's judgment should or should
not be taken into account, in whole or in part, in the equitable
administration of the Plan, the Committee may, for any purpose of
the Plan, adjust Managed Net Income or Total Investment of
Capital and make payments and reductions accordingly under the
Plan.

(c) Notwithstanding the provisions of subparagraphs
(a) and (b) above, the amount available for the grant of Awards
under the Plan to Covered Employees with respect to a calendar
year shall be equal to the Plan Funding Amount for such year and

<PAGE> 3

any adjustments made in accordance with or for the purposes of
subparagraphs (a) or (b) shall be disregarded for purposes of
calculating the Plan Funding Amount. The Committee may, in the
exercise of its discretion, determine that the aggregate amount
of all Awards granted to Covered Employees with respect to a
calendar year shall be less than the Plan Funding Amount for such
year, but the excess of such Plan Funding Amount over such
aggregate amount covered by Awards granted to Covered Employees
shall not be available for any Awards to Covered Employees with
respect to future years. In addition, the Committee may, in the
exercise of its discretion, reduce or eliminate the amount of an
Award to a Covered Employee otherwise calculated in accordance
with the provisions of Section 3.4 prior to payment thereof.

SECTION 4.3. A Participant may designate in writing a
beneficiary (including the trustee or trustees of a trust) who
shall upon the death of such Participant be entitled to receive
all amounts which would have been payable hereunder to such
Participant. A Participant may rescind or change any such
designation at any time. Except as provided in this Section 4.3,
none of the amounts which may be payable under the Plan may be
assigned or transferred otherwise than by will or by the laws of
descent and distribution.

SECTION 4.4. All payments made pursuant to the Plan
shall be subject to withholding in respect of income and other
taxes required by law to be withheld, in accordance with
procedures to be established by the Committee.

SECTION 4.5. The selection of an individual for
participation in the Plan shall not give such Participant any
right to be retained in the employ of the Company or any of its
subsidiaries, and the right of the Company and of any such
subsidiary to dismiss or discharge any such Participant is
specifically reserved. The benefits provided for Participants
under the Plan shall be in addition to, and shall in no way
preclude, other forms of compensation to or in respect of such
Participants.

SECTION 4.6. The Board of Directors and the Committee
shall be entitled to rely on the advice of counsel and other
experts, including the independent public accountants for the
Company. No member of the Board of Directors or of the Committee
or any officers of the Company or its subsidiaries shall be
liable for any act or failure to act under the Plan, except in
circumstances involving bad faith on the part of such member or
officer.

SECTION 4.7. Nothing contained in the Plan shall
prevent the Company or any subsidiary or affiliate of the Company
from adopting or continuing in effect other compensation

<PAGE> 4

arrangements, which arrangements may be either generally
applicable or applicable only in specific cases.

ARTICLE V

AMENDMENT OR TERMINATION OF THE PLAN

SECTION 5.1. The Board of Directors may at any time
terminate, in whole or in part, or from time to time amend the
Plan, provided that, except as otherwise provided in the Plan, no
such amendment or termination shall adversely affect any Awards
previously made to a Participant and deferred by such Participant
pursuant to Section 3.3. In the event of such termination, in
whole or in part, of the Plan, the Committee may in its sole
discretion direct the payment to Participants of any Awards not
theretofore paid out prior to the respective dates upon which
payments would otherwise be made hereunder to such Participants,
and in a lump sum or installments as the Committee shall
prescribe with respect to each such Participant. The Board may
at any time and from time to time delegate to the Committee any
or all of its authority under this Section 5.1.

ARTICLE VI

DEFINITIONS

SECTION 6.1. For the purposes of the Plan, the
following terms shall have the meanings indicated:

(a) Award: The grant of an award of cash by the
Committee to a Participant pursuant to Section 3.1 or
3.4.

(b) Award Year: Any calendar year with respect
to which an Award may be granted.

(d) Committee: The Committee designated pursuant
to Section 2.1. Until otherwise determined by the
Board of Directors, the Corporate Personnel Committee
designated by such Board shall be the Committee under
the Plan.

(e) Covered Employee: At any date, (i) any
individual who, with respect to the previous taxable
year of the Company, was a "covered employee" of the
Company within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended, and the

<PAGE> 5

rules promulgated thereunder by the Internal Revenue
Service of the Department of the Treasury, provided,
however, the term "Covered Employee" shall not include
any such individual who is designated by the Committee,
in its discretion, at the time of any grant as
reasonably expected not to be such a "covered employee"
with respect to the current taxable year of the Company
and (ii) any individual who is designated by the
Committee, in its discretion, at the time of any grant
as reasonably expected to be such a "covered employee"
with respect to the current taxable year of the
Company. Notwithstanding the foregoing, at any date in
fiscal year 1994, "Covered Employee" shall mean any
individual designated by the Committee, in its
discretion, at the time of any grant as reasonably
expected to be a "covered employee" with respect to the
Company's taxable year 1994.

(f) Managed Net Income: With respect to any
year, the sum of (i) the net income (or net loss) of
the Company and its consolidated subsidiaries for such
year as shown in the Company's Annual Report to
Stockholders for such year; plus (or minus) (ii) the
minority interests' share in the net income (or net
loss) of the Company's consolidated subsidiaries for
such year as shown in the Company's Annual Report to
Stockholders for such year; plus (or minus) (iii)
changes in accounting principles of the Company and its
consolidated subsidiaries for such year plus (or minus)
the minority interests' share in such changes in
accounting principles as shown in the Company's Annual
Report to Stockholders for such year; plus (iv) the
portion for such year of the deferred gain on the 1992
sale of newly issued Freeport-McMoRan Resource
Partners, Limited Partnership depositary units as shown
in the Company's Annual Report to Stockholders for such
year.

(g) Net Cash Provided by Operating Activities:
With respect to any year, the net cash provided by
operating activities of the Company and its
consolidated subsidiaries for such year as shown in the
Company's Annual Report to Stockholders for such year.

(h) Net Interest Expense: With respect to any
year, the net interest expense of the Company and its
consolidated subsidiaries for such year as shown in the
Company's Annual Report to Stockholders for such year.

(i) Participant: An individual who has been
selected by the Committee to receive an Award.

<PAGE> 6

(j) Plan Funding Amount: With respect to any
year, two and one-half percent of Net Cash Provided by
Operating Activities for such year.

(k) Return on Investment: With respect to any
year, the result (expressed as a percentage) calculated
according to the following formula:

a + (b - c)
d

in which "a" equals Managed Net Income for such year,
"b" equals Net Interest Expense for such year, "c"
equals Tax on Net Interest Expense for such year, and
"d" equals Total Investment of Capital for such year.

(l) Tax on Net Interest Expense: With respect to
any year, the tax on the net interest expense of the
Company and its consolidated subsidiaries for such year
calculated at the statutory federal income tax rate for
such year as shown in the Company's Annual Report to
Stockholders for such year.

(m) Termination of Employment: Solely for
purposes of Section 3.3 hereof, the cessation of the
rendering of services, whether or not as an employee,
to any and all of the following entities: the Company,
any subsidiary of the Company, Freeport-McMoRan Copper
& Gold Inc., any subsidiary of Freeport-McMoRan Copper
& Gold Inc., McMoRan Oil & Gas Co., any subsidiary of
McMoRan Oil & Gas Co., and any law firm rendering
services to any of the foregoing entities provided such
law firm consists of at least two or more members or
associates who are or were officers of the Company or
any subsidiary of the Company.

(n) Total Investment of Capital: With respect to
any year, the sum of (i) the weighted average of the
stockholders' equity in the Company and its
consolidated subsidiaries for such year, (ii) the
weighted average of the minority interests in the
consolidated subsidiaries of the Company for such year,
and (iii) the weighted average of the long-term debt of
the Company and its consolidated subsidiaries for such
year, all as shown in the quarterly balance sheets of
the Company and its consolidated subsidiaries for such
year.

<PAGE> 7

Exhibit 10.25

1992 LONG-TERM PERFORMANCE INCENTIVE PLAN

OF FREEPORT-McMoRan INC.

ARTICLE I

PURPOSE OF PLAN

SECTION 1.1. The purpose of the 1992 Long-Term
Performance Incentive Plan of Freeport-McMoRan Inc. (the "Plan")
is to provide incentives for senior executives whose performance
in fulfilling the responsibilities of their positions can have a
major impact on the profitability and future growth of
Freeport-McMoRan Inc. (the "Company") and its subsidiaries.

ARTICLE II

ADMINISTRATION OF THE PLAN

SECTION 2.1. Subject to the authority and powers of
the Board of Directors in relation to the Plan as hereinafter
provided, the Plan shall be administered by a Committee
designated by the Board of Directors consisting of two or more
members of the Board each of whom is a "disinterested person"
within the meaning of Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of
1934. The Committee shall have full authority to interpret the
Plan and from time to time to adopt such rules and regulations
for carrying out the Plan as it may deem best. All
determinations by the Committee shall be made by the affirmative
vote of a majority of its members, but any determination reduced
to writing and signed by a majority of the members shall be fully
as effective as if it had been made by a majority vote at a
meeting duly called and held. All decisions by the Committee
pursuant to the provisions of the Plan and all orders or
resolutions of the Board of Directors pursuant thereto shall be
final, conclusive and binding on all persons, including but not
limited to the Participants, the Company and its Subsidiaries and
their respective equity holders.

ARTICLE III

ELIGIBILITY FOR AND GRANT OF PERFORMANCE AWARDS

SECTION 3.1. Subject to the provisions of the Plan,
the Committee may from time to time select salaried officers or
employees (including officers or employees who are also
directors) of the Company or of any of its Subsidiaries to be
granted Performance Awards under the Plan, and determine the
number of Performance Units covered by each such Performance
Award. Performance Awards may be granted at different times to

<PAGE> 1

the same individual. The Plan shall expire on December 31, 1997
and no Performance Awards shall be granted hereunder after such
date.

SECTION 3.2. Upon the grant of a Performance Award to
a Participant, the Company shall establish a Performance Award
Account for such Participant and shall credit to such Performance
Award Account the number of Performance Units covered by such
Performance Award.

SECTION 3.3. The number of Performance Units
outstanding at any time shall not exceed 3,000,000. Performance
Units that shall have been forfeited or with respect to which
payment has been made pursuant to Section 4.2 or deferred
pursuant to Section 4.4 shall not thereafter be deemed to be
credited or outstanding for any purpose of the Plan and may again
be the subject of Performance Awards.

SECTION 3.4. (a) Notwithstanding the provisions of
Section 3.1, 3.2, and 3.3 hereof, the number of Performance Units
covered by an annual Performance Award that may be granted to the
Covered Employee who is the chief executive officer of the
Company at the time of such grant shall be 100,000; the number of
Performance Units covered by an annual Performance Award that may
be granted to the Covered Employee who is the chief operating
officer of the Company at the time of such grant shall be 75,000;
and the number of Performance Units covered by an annual
Performance Award that may be granted to any other Covered
Employee shall be, as to each such individual, 40,000.

(b) All Performance Awards to Covered Employees under
the Plan will be made and administered by two or more members of
the Committee who are also "outside directors" within the meaning
of Section 162(m) of the Internal Revenue Code of 1986, as
amended, and rules promulgated by the Internal Revenue Service of
the Department of the Treasury thereunder.

ARTICLE IV

CREDITS TO AND PAYMENTS FROM PARTICIPANTS'
PERFORMANCE AWARD ACCOUNTS

SECTION 4.1. Subject to the provisions of the Plan,
the Performance Award Account or Accounts of each Participant at
December 31 of any year shall be credited, as of such December
31, with an amount equal to the Annual Earnings Per Share (or Net
Loss Per Share) for such year times the number of Performance
Units then credited to each such Performance Award Account;
provided that, if in any year there shall be any outstanding Net
Loss Carryforward applicable to such Performance Award Account,
such Net Loss Carryforward shall be applied to reduce any amount

<PAGE> 2

which would otherwise be credited to such Performance Award
Account pursuant to this Section 4.1 in such year until such Net
Loss Carryforward has been fully so applied.

SECTION 4.2. (a) Subject to the provisions of the
Plan, the balance credited to a Participant's Performance Award
Account shall be paid to such Participant as soon as practicable
on or after the Award Valuation Date with respect to such
Performance Award.

(b) Payments pursuant to Section 4.2(a) shall be in
cash.

(c) Notwithstanding any other provision of the Plan to
the contrary, no Covered Employee shall be entitled to any
payment with respect to a Performance Award unless the members of
the Committee referred to in Section 3.4(b) hereof shall have
certified the amount of the Annual Earnings Per Share (or Net
Loss Per Share) for each year covered by such Performance Award.

SECTION 4.3. In addition to any amounts payable
pursuant to Section 4.2, the Committee may in its sole discretion
determine that there shall be payable to a former Participant a
supplemental amount not exceeding the excess, if any, of (i) the
amount determined in accordance with Section 4.1 which would have
been payable to such former Participant if the Award Valuation
Date with respect to a Performance Award of such Participant had
been December 31 of the first, second or third calendar year next
following the year in which such Participant's Termination of
Employment occurred (the selection of such first, second or third
calendar year to be in the sole discretion of the Committee
subject only to the last sentence of this Section 4.3) over (ii)
the amount determined in accordance with said Section 4.1 as of
December 31 of the calendar year in which such Termination of
Employment actually occurred. Any such supplemental amount so
payable shall be paid in a lump sum as promptly as practicable on
or after December 31 of the calendar year so selected by the
Committee or in one or more installments ending not later than
five years after such December 31, as the Committee may in its
discretion direct. In no event shall any payment under this
Section 4.3 be made with respect to any calendar year after the
year in which such former Participant reaches his normal
retirement date under the Company's retirement plan.

SECTION 4.4. (a) Prior to January 1 of any calendar
year in which it is anticipated that an Award Valuation Date with
respect to any Performance Award may occur, a Participant may
elect, in accordance with procedures established by the
Committee, to defer, as and to the extent hereinafter provided,
the payment of the amount, if any, which shall be paid pursuant
to Section 4.2.

<PAGE> 3

(b) All payments deferred pursuant to Section 4.4(a)
shall be paid in one or more periodic installments, not in excess
of ten, at such time or times after the applicable Award
Valuation Date, but not later than ten years after such Award
Valuation Date, as shall be specified in such Participant's
election pursuant to Section 4.4(a).

(c) In the case of payments deferred as provided in
Section 4.4(a), the unpaid amounts shall, commencing with the
applicable Award Valuation Date, be increased at a rate equal to
the prime commercial lending rate announced from time to time by
The Chase Manhattan Bank, N.A. (compounded quarterly) or at such
other rate and in such manner as shall be determined from time to
time by the Committee. If subsequent to such Participant's
election pursuant to Section 4.4(a) such Participant's
Termination of Employment occurs for any reason other than death,
Disability, retirement under the Company's retirement plan, or
retirement with the consent of the Company outside the Company's
retirement plan, the Committee may, in its sole discretion, pay
to such Participant in a lump sum the aggregate amount of any
payments so deferred, notwithstanding such election.

SECTION 4.5. Anything contained in the Plan to the
contrary notwithstanding:

(a) The Committee may, in its sole discretion,
suspend, permanently or for a specified period of time or until
further determination by the Committee, the making of any part or
all of the credits which would otherwise have been made to the
Performance Award Accounts of all the Participants or to such
Accounts of one or more Participants as shall be designated by
the Committee.

(b) All Performance Units and other amounts credited
to a Participant's Performance Award Account with respect to or
arising from any Performance Award shall be forfeited in the
event of the Discharge for Cause of such Participant prior to
December 31 of the third year following the year of grant of such
Performance Award.

(c) All Performance Units and other amounts credited
to a Participant's Performance Award Account with respect to or
arising from a Performance Award shall, unless and to the extent
that the Committee shall in its absolute discretion otherwise
determine by reason of special mitigating circumstances, be
forfeited in the event that such Participant's Termination of
Employment shall occur for any reason other than death,
Disability, retirement under the Company's retirement plan, or
retirement with the consent of the Company outside the Company's
retirement plan, at any time (except within two years after the
date on which a Change in Control shall have occurred) prior to

<PAGE> 4

December 31 of the third year following the year of grant of such
Performance Award.

(d) If any suspension is in effect pursuant to Section
4.5(a) on a date when a credit would otherwise have been made
pursuant to Section 4.1, the amounts which would have been
credited but for such suspension shall be forfeited and no
credits shall thereafter be made in lieu thereof. If the
Committee shall so determine in its sole discretion, the amounts
theretofore credited to any Performance Award Account or Accounts
shall be increased, during the suspension period, at a rate equal
to the prime commercial lending rate announced from time to time
by The Chase Manhattan Bank, N.A. (compounded quarterly) or at
such other rate and in such manner as shall be determined from
time to time by the Committee.

ARTICLE V

GENERAL INFORMATION

SECTION 5.1. If Net Income, Annual Earnings Per Share
or Net Loss Per Share for any year shall have been affected by
special factors (including material changes in accounting
policies or practices, material acquisitions or dispositions of
property, or other unusual items) which in the Committee's
judgment should or should not be taken into account, in whole or
in part, in the equitable administration of the Plan, the
Committee may, for any purpose of the Plan, adjust Net Income,
Annual Earnings Per Share or Net Loss Per Share, as the case may
be, for such year (and subsequent years as appropriate), or any
combination of them, and make credits, payments and reductions
accordingly under the Plan; provided, however, the Committee
shall not have the authority to make any such adjustments to
payments with respect to the Performance Awards of, or credits to
the Performance Award Accounts of, any Participant who is at such
time a Covered Employee. Notwithstanding the foregoing, the
Committee may, in the exercise of its discretion prior to the
making of credits to the Performance Award Accounts of
Participants with respect to a particular year, reduce or
eliminate the amount of the Annual Earnings Per Share that would
otherwise be credited to any Performance Award Account of any
Participant, including but not limited to any Covered Employee,
for such year in accordance with the terms of the Plan.

SECTION 5.2. The Committee shall for purposes of
Articles III and IV make appropriate adjustments in the number of
Performance Units which shall remain subject to Performance
Awards and in the number of Performance Units which shall have
been credited to Participants' accounts, in order to reflect any
merger or consolidation to which the Company is a party or any
stock dividend, split-up, combination or reclassification of the

<PAGE> 5

outstanding shares of Company Common Stock or any other relevant
change in the capitalization of the Company.

SECTION 5.3. A Participant may designate in writing a
beneficiary (including the trustee or trustees of a trust) who
shall upon the death of such Participant be entitled to receive
all amounts which would have been payable hereunder to such
Participant. A Participant may rescind or change any such
designation at any time. Except as provided in this Section 5.3,
none of the amounts which may be payable under the Plan may be
assigned or transferred otherwise than by will or by the laws of
descent and distribution.

SECTION 5.4. All payments made pursuant to the Plan
shall be subject to withholding in respect of income and other
taxes required by law to be withheld, in accordance with
procedures to be established by the Committee.

SECTION 5.5. The selection of an individual for
participation in the Plan shall not give such Participant any
right to be retained in the employ of the Company or any of its
Subsidiaries, and the right of the Company and of such Subsidiary
to dismiss or discharge any such Participant is specifically
reserved. The benefits provided for Participants under the Plan
shall be in addition to, and shall in no way preclude, other
forms of compensation to or in respect of such Participants.

SECTION 5.6. The Board of Directors and the Committee
shall be entitled to rely on the advice of counsel and other
experts, including the independent public accountants for the
Company. No member of the Board of Directors or of the Committee
or any officers of the Company or its Subsidiaries shall be
liable for any act or failure to act under the Plan, except in
circumstances involving bad faith on the part of such member or
officer.

SECTION 5.7. Nothing contained in the Plan shall
prevent the Company or any subsidiary or affiliate of the Company
from adopting or continuing in effect other compensation
arrangements, which arrangements may be either generally
applicable or applicable only in specific cases.

ARTICLE VI

AMENDMENT OR TERMINATION OF THE PLAN

<PAGE> 6

respect to Performance Awards previously made to such
Participant. In the event of such termination, in whole or in
part, of the Plan, the Committee may in its sole discretion
direct the payment to Participants of any amounts specified in
Article IV and not theretofore paid out, prior to the respective
dates upon which payments would otherwise be made hereunder to
such Participants, and in a lump sum or installments as the
Committee shall prescribe with respect to each such Participant.
The Board may at any time and from time to time delegate to the
Committee any or all of its authority under this Article VI.

ARTICLE VII

DEFINITIONS

SECTION 7.1. For the purposes of the Plan, the
following terms shall have the meanings indicated:

(a) Annual Earnings Per Share: With respect to any
year, the result obtained by dividing (i) Net Income for such
year by (ii) the average number of issued and outstanding shares
(excluding treasury shares and shares held by any Subsidiaries)
of Company Common Stock during such year as shown in the
Company's Annual Report to Stockholders for such year.

(b) Award Valuation Date: With respect to any
Performance Award, (i) December 31 of the year in which the
third anniversary of the grant of such Performance Award to a
Participant shall occur or, (ii) if earlier, December 31 of the
year in which such Participant's Termination of Employment shall
occur, if such Termination of Employment occurs (x) within two
years after a Change in Control or (y) as a result of death,
Disability, retirement under the Company's retirement plan or
retirement with the consent of the Company outside the Company's
retirement plan.

<PAGE> 7

transactions (a "Transaction"), so that (A) the persons who were
directors of the Company immediately before the first such
Transaction cease to constitute a majority of the Board of
Directors of the corporation which shall thereafter be in control
of the companies that were parties to or otherwise involved in
such first Transaction, or (B) the number of persons who shall
thereafter be directors of such corporation shall be fewer than
two-thirds of the number of directors of the Company immediately
prior to such first Transaction. A Change in Control shall be
deemed to take place upon the first to occur of the events
specified in the foregoing clauses (i) and (ii).

(e) Committee: The Committee designated pursuant to
Section 2.1. Until otherwise determined by the Board of
Directors, the Corporate Personnel Committee designated by such
Board shall be the Committee under the Plan.

(f) Company Common Stock: Common Stock, par value $1,
of the Company.

(g) Covered Employee: At any date, (i) any individual
who, with respect to the previous taxable year of the Company,
was a "covered employee" of the Company within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended,
and the rules promulgated thereunder by the Internal Revenue
Service of the Department of the Treasury, provided, however, the
term "Covered Employee" shall not include any such individual who
is designated by the Committee, in its discretion, at the time of
any grant or at any subsequent time as reasonably expected not to
be such a "covered employee" with respect to the current taxable
year of the Company and (ii) any individual who is designated by
the Committee, in its discretion, at the time of any grant or at
any subsequent time as reasonably expected to be such a "covered
employee" with respect to the current taxable year of the
Company. Notwithstanding the foregoing, at any date in fiscal
year 1994, "Covered Employee" shall mean any individual
designated by the Committee, in its discretion, as reasonably
expected to be a "covered employee" with respect to the Company's
taxable year 1994.

(h) Disability: In the case of any Participant,
disability which after the expiration of more than 26 weeks after
its commencement is determined to be total and permanent by a
physician selected by the Company and acceptable to such
Participant or his legal representatives.

(i) Discharge for Cause: Involuntary Termination of
Employment as a result of dishonesty or similar serious
misconduct directly related to the performance of duties for any
and all of the Related Entities.

<PAGE> 8

(j) Net Income: With respect to any year, the sum of
(i) the net income (or net loss) of the Company and its
consolidated subsidiaries for such year as shown in the Company's
Annual Report to Stockholders for such year; plus (or minus) (ii)
the minority interests' share in the net income (or net loss) of
the Company's consolidated subsidiaries for such year as shown in
the Company's Annual Report to Stockholders for such year; plus
(or minus) (iii) changes in accounting principles of the Company
and its consolidated subsidiaries for such year plus (or minus)
the minority interests' share in such changes in accounting
principles as shown in the Company's Annual Report to
Stockholders for such year; plus (iv) the portion for such year
of the deferred gain on the 1992 sale of newly issued Freeport-
McMoRan Resource Partners, Limited Partnership depositary units
as shown in the Company's Annual Report to Stockholders for such
year.

(k) Net Loss Carryforward: With respect to any
Performance Award Account, (i) an amount equal to the Net Loss
Per Share for any year times the number of Performance Units then
outstanding and credited to such Performance Award Account,
reduced by (ii) any portion thereof which has been applied in any
prior year as provided in Section 4.1.

(l) Net Loss Per Share: The amount obtained when the
calculation of Annual Earnings Per Share results in a number that
is less than zero.

(m) Participant: An individual who has been selected
by the Committee to receive a Performance Award and in respect of
whose Performance Award Account any amounts remain payable.

(n) Performance Award: The grant of Performance Units
by the Committee to a Participant pursuant to Section 3.1 or 3.4.

(o) Performance Award Account: An account established
for a Participant pursuant to Section 3.2.

(p) Performance Unit: A unit covered by Performance
Awards granted or subject to grant pursuant to Article III.

(q) Related Entities: The Company, any subsidiary of
the Company, Freeport-McMoRan Copper & Gold Inc., any subsidiary
of Freeport-McMoRan Copper & Gold Inc., McMoRan Oil & Gas Co.,
any subsidiary of McMoRan Oil & Gas Co., and any law firm
rendering services to any of the foregoing entities provided such
law firm consists of at least two or more members or associates
who are or were officers of the Company or any subsidiary of the
Company.

(r) Subsidiary: (i) Freeport-McMoRan Copper & Gold
Inc. and Freeport-McMoRan Resource Partners, Limited Partnership,

<PAGE> 9

in each case for as long as Freeport-McMoRan Inc. shall own any
equity interest in such entity, and (ii) any corporation or other
entity in which Freeport-McMoRan Inc. possesses directly or
indirectly equity interests representing at least 50% of the
total ordinary voting power or at least 50% of the total value of
all classes of equity interests of such corporation or other
entity.

(s) Termination of Employment: The cessation of the
rendering of services, whether or not as an employee, to any and
all of the Related Entities.

<PAGE> 10

Exhibit 10.26

1987 LONG-TERM PERFORMANCE INCENTIVE PLAN

OF FREEPORT-MCMORAN INC.

ARTICLE I

PURPOSE OF PLAN

SECTION 1.1. The purpose of the 1987 Long-Term Performance
Incentive Plan of Freeport-McMoRan Inc. (the "Plan") is to
provide incentives for senior executives whose performance in
fulfilling the responsibilities of their positions can have a
major impact on the profitability and future growth of Freeport-
McMoRan Inc. (the "Company") and its subsidiaries.

ARTICLE II

ADMINISTRATION OF THE PLAN

SECTION 2.1. Subject to the authority and powers of the
Board of Directors in relation to the Plan as hereinafter
provided, the Plan shall be administered by a Committee
designated by the Board of Directors consisting of two or more
members of the Board each of whom is a "disinterested person"
within the meaning of Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of
1934. The Committee shall have full authority to interpret the
Plan and from time to time to adopt such rules and regulations
for carrying out the Plan as it may deem best. All
determinations by the Committee shall be made by the affirmative
vote of a majority of its members, but any determination reduced
to writing and signed by a majority of the members shall be fully
as effective as if it had been made by a majority vote at a
meeting duly called and held. All decisions by the Committee
pursuant to the provisions of the Plan and all orders or
resolutions of the Board of Directors pursuant thereto shall be
final, conclusive and binding on all persons, including but not
limited to the Participants, the Company and its Subsidiaries and
their respective equity holders.

ARTICLE III

ELIGIBILITY FOR AND GRANT OF PERFORMANCE AWARDS

<PAGE> 1

granted Performance Awards under the Plan, and determine the
number of Performance Units covered by each such Performance
Award. Performance Awards may be granted at different times to
the same individual. The Plan shall expire on December 31, 1992
and no Performance Awards shall be granted hereunder after such
date.

SECTION 3.2. Upon the grant of a Performance Award to a
Participant, the Company shall establish a Performance Award
Account for such Participant and shall credit to such Performance
Award Account the number of Performance Units covered by such
Performance Award.

SECTION 3.3. The number of Performance Units outstanding at
any time shall not exceed 1,500,000. Performance Units that
shall have been forfeited or with respect to which payment has
been made pursuant to Section 4.2 or deferred pursuant to Section
4.4 shall not thereafter be deemed to be credited or outstanding
for any purpose of the Plan and may again be the subject of
Performance Awards.

ARTICLE IV

CREDITS TO AND PAYMENTS FROM PARTICIPANTS'
PERFORMANCE AWARD ACCOUNTS

SECTION 4.1. Subject to the provisions of Section 4.5, the
Performance Award Account or Accounts of each Participant at
December 31 of any year shall be credited, as of such December
31, with an amount equal to the Annual Earnings Per Share (or Net
Loss Per Share) for such year times the number of Performance
Units then credited to each such Performance Award Account;
provided that, if in any year there shall be any outstanding Net
Loss Carryforward applicable to such Performance Award Account,
such Net Loss Carryforward shall be applied to reduce any amount
which would otherwise be credited to such Performance Award
Account pursuant to this Section 4.1 in such year until such Net
Loss Carryforward has been fully so applied.

SECTION 4.2. (a) Subject to Section 4.4, the balance
credited to a Participant's Performance Award Account shall be
paid to such Participant as soon as practicable on or after the
Award Valuation Date with respect to such Performance Award.

(b) Payments pursuant to Section 4.2(a) shall be in cash.

<PAGE> 2

amount determined in accordance with Section 4.1 which would have
been payable to such former Participant if the Award Valuation
Date with respect to a Performance Award of such Participant had
been December 31 of the first, second or third calendar year next
following the year in which such Participant's Termination of
Employment occurred (the selection of such first, second or third
calendar year to be in the sole discretion of the Committee
subject only to the last sentence of this Section 4.3) over (ii)
the amount determined in accordance with said Section 4.1 as of
December 31 of the calendar year in which such Termination of
Employment actually occurred. Any such supplemental amount so
payable shall be paid in a lump sum as promptly as practicable on
or after December 31 of the calendar year so selected by the
Committee or in one or more installments ending not later than
five years after such December 31, as the Committee may in its
discretion direct. In no event shall any payment under this
Section 4.3 be made with respect to any calendar year after the
year in which such former Participant reaches his normal
retirement date under the Company's retirement plan.

SECTION 4.4. (a) Prior to January 1 of any calendar year
in which it is anticipated that an Award Valuation Date with
respect to any Performance Award may occur, a Participant may
elect, in accordance with procedures established by the
Committee, to defer, as and to the extent hereinafter provided,
the payment of the amount, if any, which shall be paid pursuant
to Section 4.2.

(b) All payments deferred pursuant to Section 4.4(a) shall
be paid in one or more periodic installments, not in excess of
ten, at such time or times after the applicable Award Valuation
Date, but not later than ten years after such Award Valuation
Date, as shall be specified in such Participant's election
pursuant to Section 4.4(a).

(c) In the case of payments deferred as provided in Section
4.4(a), the unpaid amounts shall, commencing with the applicable
Award Valuation Date, be increased at a rate equal to the prime
commercial lending rate announced from time to time by The Chase
Manhattan Bank, N.A. (compounded quarterly) or at such other rate
and in such manner as shall be determined from time to time by
the Committee. If subsequent to such Participant's election
pursuant to Section 4.4(a) such Participant's Termination of
Employment occurs for any reason other than death, Disability,
retirement under the Company's retirement plan, or retirement
with the consent of the Company outside the Company's retirement
plan, the Committee may, in its sole discretion, pay to such
Participant in a lump sum the aggregate amount of any payments so
deferred, notwithstanding such election.

<PAGE> 3

SECTION 4.5. Anything contained in the Plan to the contrary
notwithstanding:

(a) The Committee may, in its sole discretion,
suspend, permanently or for a specified period of time or
until further determination by the Committee, the making of
any part or all of the credits which would otherwise have
been made to the Performance Award Accounts of all the
Participants or to such Accounts of one or more Participants
as shall be designated by the Committee.

(b) All Performance Units and other amounts credited
to a Participant's Performance Award Account with respect to
or arising from any Performance Award shall be forfeited in
the event of the Discharge for Cause of such Participant
prior to December 31 of the third year following the year of
grant of such Performance Award.

(c) All Performance Units and other amounts credited
to a Participant's Performance Award Account with respect to
or arising from a Performance Award shall, unless and to the
extent that the Committee shall in its absolute discretion
otherwise determine by reason of special mitigating
circumstances, be forfeited in the event that such
Participant's Termination of Employment shall occur for any
reason other than death, Disability, retirement under the
Company's retirement plan, or retirement with the consent of
the Company outside the Company's retirement plan, at any
time (except within two years after the date on which a
Change in Control shall have occurred) prior to December 31
of the third year following the year of grant of such
Performance Award.

(d) If any suspension is in effect pursuant to Section
4.5(a) on a date when a credit would otherwise have been
made pursuant to Section 4.1, the amounts which would have
been credited but for such suspension shall be forfeited and
no credits shall thereafter be made in lieu thereof. If the
Committee shall so determine in its sole discretion, the
amounts theretofore credited to any Performance Award
Account or Accounts shall be increased, during the
suspension period, at a rate equal to the prime commercial
lending rate announced from time to time by The Chase
Manhattan Bank, N.A. (compounded quarterly) or at such other
rate and in such manner as shall be determined from time to
time by the Committee.

ARTICLE V

GENERAL INFORMATION

<PAGE> 4

SECTION 5.2. The Committee shall for purposes of Articles
III and IV make appropriate adjustments in the number of
Performance Units which shall remain subject to Performance
Awards and in the number of Performance Units which shall have
been credited to Participants' accounts, in order to reflect any
merger or consolidation to which the Company is a party or any
stock dividend, split-up, combination or reclassification of the
outstanding shares of Company Common Stock or any other relevant
change in the capitalization of the Company.

SECTION 5.4. All payments made pursuant to the Plan shall
be subject to withholding in respect of income and other taxes
required by law to be withheld, in accordance with procedures to
be established by the Committee.

<PAGE> 5

officers of the Company or its Subsidiaries shall be liable for
any act or failure to act under the Plan, except in circumstances
involving bad faith on the part of such member or officer.

ARTICLE VI

AMENDMENT OR TERMINATION OF THE PLAN

SECTION 6.1. The Board of Directors may at any time
terminate, in whole or in part, or from time to time amend the
Plan, provided that, except as otherwise provided in the Plan, no
such amendment shall increase the number of Performance Units
which may be outstanding at any time, nor shall any such
amendment or termination adversely affect the amounts credited to
the Performance Award Account of a Participant with respect to
Performance Awards previously made to such Participant. In the
event of such termination, in whole or in part, of the Plan, the
Committee may in its sole discretion direct the payment to
Participants of any amounts specified in Article IV and not
theretofore paid out, prior to the respective dates upon which
payments would otherwise be made hereunder to such Participants,
and in a lump sum or installments as the Committee shall
prescribe with respect to each such Participant. The Board may
at any time and from time to time delegate to the Committee any
or all of its authority under this Article VI.

ARTICLE VII

DEFINITIONS

SECTION 7.1. For the purposes of the Plan, the following
terms shall have the meanings indicated:

(a) Annual Earnings Per Share: With respect to any
year, the result obtained by dividing (i) Net Income for
such year by (ii) the average number of issued and
outstanding shares (excluding treasury shares and shares
held by any Subsidiaries) of Company Common Stock during
such year as shown in the Company's Annual Report to
Stockholders for such year.

(b) Award Valuation Date: With respect to any
Performance Award, (i) December 31 of the year in which the
third anniversary of the grant of such Performance Award to
a Participant shall occur or, (ii) if earlier, December 31
of the year in which such Participant's Termination of
Employment shall occur, if such Termination of Employment
occurs (x) within two years after a Change in Control or (y)
as a result of death, Disability, retirement under the

<PAGE> 6

Company's retirement plan or retirement with the consent of
the Company outside the Company's retirement plan.

(d) Change in Control: A Change in Control shall be
deemed to have occurred if either (i) any person, or any two
or more persons acting as a group, and all affiliates of
such person or persons, shall own beneficially more than 20%
of the Company Common Stock outstanding (exclusive of shares
held in the Company's treasury or by the Company's
Subsidiaries) pursuant to a tender offer, exchange offer or
series of purchases or other acquisitions, or any
combination of those transactions, or (ii) there shall be a
change in the composition of the Board of Directors of the
Company at any time within two years after any tender offer,
exchange offer, merger, consolidation, sale of assets or
contested election, or any combination of those transactions
(a "Transaction"), so that (A) the persons who were
directors of the Company immediately before the first such
Transaction cease to constitute a majority of the Board of
Directors of the corporation which shall thereafter be in
control of the companies that were parties to or otherwise
involved in such first Transaction, or (B) the number of
persons who shall thereafter be directors of such
corporation shall be fewer than two-thirds of the number of
directors of the Company immediately prior to such first
Transaction. A Change in Control shall be deemed to take
place upon the first to occur of the events specified in the
foregoing clauses (i) and (ii).

(f) Company Common Stock: Common Stock, par value $1,
of the Company.

(g) Disability: In the case of any Participant,
disability which after the expiration of more than 26 weeks
after its commencement is determined to be total and
permanent by a physician selected by the Company and
acceptable to such Participant or his legal representatives.

(h) Discharge for Cause: Involuntary Termination of
Employment as a result of dishonesty or similar serious
misconduct directly related to the performance of duties for
any and all Related Entities.

<PAGE> 7

(i) Net Income: With respect to any year, the sum of:

(i) the net income (or net loss) of the Company
and its consolidated subsidiaries for such year as
shown in the Company's Annual Report to Stockholders
for such year; plus (or minus)

(ii) the net income (or net loss) of each
Subsidiary that is not wholly-owned, directly or
indirectly, by the Company, as shown in such
Subsidiary's annual audited financial statements for
such year, attributable to shares of common stock or
other equity securities or interests that are not
owned, directly or indirectly, by the Company for such
portion of the year that the Company owned directly or
indirectly equity securities or interests in such
Subsidiary.

(j) Net Loss Carryforward: With respect to any
Performance Award Account, (i) an amount equal to the Net
Loss per Share for any year times the number of Performance
Units then outstanding and credited to such Performance
Award Account, reduced by (ii) any portion thereof which has
been applied in any prior year as provided in Section 4.1.

(k) Net Loss Per Share: The amount obtained when the
calculation of Annual Earnings Per Share results in a number
that is less than zero.

(l) Participant: An individual who has been selected
by the Committee to receive a Performance Award and in
respect of whose Performance Award Account any amounts
remain payable.

(m) Performance Award: The grant of Performance Units
by the Committee to a Participant pursuant to Section 3.1.

(n) Performance Award Account: An account established
for a Participant pursuant to Section 3.2.

(o) Performance Unit: A unit covered by Performance
Awards granted or subject to grant pursuant to Article III.

(p) Related Entities: The Company, any subsidiary of
the Company, Freeport-McMoRan Copper & Gold Inc., any
subsidiary of Freeport-McMoRan Copper & Gold Inc., McMoRan
Oil & Gas Co., any subsidiary of McMoRan Oil & Gas Co., and
any law firm rendering services to any of the foregoing
entities provided such law firm consists of at least two or

<PAGE> 8

more members or associates who are or were officers of the
Company or any subsidiary of the Company.

(q) Subsidiary: Any corporation of which stock
representing at least 50% of the ordinary voting power is
owned, directly or indirectly, by the Company and any other
entity of which equity securities or interests representing
at least 50% of the ordinary voting power or 50% of the
total value of all classes of equity securities or interests
of such entity are owned, directly or indirectly, by the
Company.

(r) Termination of Employment: The cessation of the
rendering of services, whether or not as an employee, to any
and all of the Related Entities.

<PAGE> 9

Exhibit 10.29

FREEPORT-MCMORAN INC.

PERFORMANCE INCENTIVE AWARDS PROGRAM

1. Purpose. The purpose of the Performance Incentive Awards
Program (the "Plan") of Freeport-McMoRan Inc. (the "Company") is
to provide greater incentives for certain key management,
professional and technical employees whose performance in
fulfilling the responsibilities of their positions can
significantly affect the performance of the Company or its
operating units. The Plan provides an opportunity to earn
additional compensation in the form of cash incentive payments
based on the employee's individual performance and on the results
achieved by the Company and by the operating or staff unit for
which the employee performs services.

2. Administration. The Plan shall be administered by the
Chairman of the Board of the Company who shall have full
authority to interpret the Plan and from time to time adopt rules
and regulations for carrying out the Plan, subject to such
directions as the Corporate Personnel Committee (the "Committee")
of the Company's Board of Directors may give, either as
guidelines or in particular cases. In connection with his
administration of the Plan, the Chairman of the Board may seek
the views and recommendations of the Company's Operating
Committee.

3. Eligibility for Participation. Each year the Chairman of
the Board shall select the key managerial, professional or
technical employees of the Company or of any of its subsidiaries
who shall be eligible for participation in the Plan during that
year. The Chairman of the Board may in his discretion make such
selection, in whole or in part, on the basis of minimum salary
levels, or position-point levels.

The selection of an employee for eligibility in a particular
year shall not constitute entitlement either to an incentive
payment under the Plan for that year or to selection for
eligibility in any subsequent year. Selection of employees for
eligibility in a particular year will ordinarily be made in
January of that year, but selection of any employee or employees
may be made at any subsequent time or times in such year.

No officer or employee shall receive any incentive payment
under the Plan for any year during which such officer or employee
was a participant in the Freeport-McMoRan Inc. Annual Incentive
Plan.

4. Determination of Target Incentives. At the time each
employee is selected for eligibility in the Plan for a particular

<PAGE> 1

year, the Chairman of the Board shall determine a target
incentive or a target incentive range for the employee with
respect to that year. Such incentive or range shall be
indicative of the incentive payment which the employee might
expect to receive on the basis of strong performance by such
employee, by the Company and by such employee's operating or
staff unit, having regard to such performance standards and
objectives as may be established with respect to that year.

5. Cash Incentive Payments. After the end of each year the
Chairman of the Board shall evaluate, or cause to be evaluated,
the performance of each employee selected for eligibility under
the Plan for that year, as well as the performance of the Company
and the employee's operating or staff unit. Based on such
evaluation, the Chairman of the Board shall determine whether a
cash incentive payment shall be made to such employee for that
year and, if so, the amount of such payment. The aggregate
amount of all such incentive payments shall be submitted to the
Committee for its approval. Subject to such approval, each such
payment (less applicable withholding and other taxes) shall be
made at such time established by the Chairman of the Board or the
Committee after such approval, which shall in no event be later
than February 28 of the year following the year for which the
incentive payments are made.

6. Optional Deferral of Payments. If, prior to the date
established by the Chairman of the Board or the Committee for any
year for which incentive payments are made, an employee selected
for participation in the Plan shall so elect, in accordance with
procedures established by the Chairman of the Board, all or any
part of a cash incentive payment to such employee with respect to
such year shall be deferred and paid in one or more periodic
installments, not in excess of ten, at such time or times before
or after the date of such employee's Termination of Employment
(as hereinafter defined), but not later than ten years after such
date of Termination of Employment, as shall be specified in such
election. If and only if any cash incentive payment or portion
thereof is so deferred for payment after December 31 of the year
following the year for which the incentive payment is made, such
cash incentive payment or portion thereof, as the case may be,
shall, commencing with January 1 of the year following the year
for which the incentive payment is made, be increased at a rate
equal to the prime commercial lending rate announced from time to
time by The Chase Manhattan Bank, N.A. (compounded quarterly) or
at such other rate and in such manner as shall be determined from
time to time by the Committee. If such employee's Termination of
Employment occurs for any reason other than early or normal
retirement under the retirement plan of this corporation or
retirement with the consent of this corporation outside the
retirement plan of this corporation and if, on the date of such
Termination of Employment, there remain unpaid any installments
of cash incentive payments which have been deferred as provided
in this Section 6, the Committee or the Chairman of the Board

<PAGE> 2

may, in its or his discretion, direct the payment to such
employee of the aggregate amount of such unpaid installments in a
lump sum, notwithstanding such election. Solely for purposes of
this Section 6, the term "Termination of Employment" shall mean
the cessation of the rendering of services, whether or not as an
employee, to any and all of the following entities: the Company,
any subsidiary of the Company, Freeport-McMoRan Copper & Gold
Inc., any subsidiary of Freeport-McMoRan Copper & Gold Inc.,
McMoRan Oil & Gas Co., any subsidiary of McMoRan Oil & Gas Co.,
and any law firm rendering services to any of the foregoing
entities provided such law firm consists of at least two or more
members or associates who are or were officers of the Company or
any subsidiary of the Company.

7. General Provisions. The selection of an employee for
participation in the Plan shall not give such employee any right
to be retained in the employ of the Company or any of its
subsidiaries, and the right of the Company and of such subsidiary
to dismiss or discharge any such employee is specifically
reserved. The benefits provided for employees under the Plan
shall be in addition to, and in no way preclude, other forms of
compensation to or in respect of such employee.

8. Amendment or Termination. The Committee may from time to
time amend or at any time terminate the Plan.

<PAGE> 3

Exhibit 10.31

1982 STOCK OPTION PLAN

ARTICLE I

PURPOSE OF THE PLAN

This 1982 Stock Option Plan (this "Plan") is intended to
provide a method whereby Employees (as hereinafter defined) of
Freeport-McMoRan Inc. (the "Company") and its Subsidiaries (as
hereinafter defined) who are largely responsible for their
management and growth, and who are making and continue to make
substantial contributions to their success, may be encouraged to
acquire a proprietary interest in the Company and whereby needed
new Employees may be persuaded to accept employment by the
Company and its Subsidiaries, and to provide both present and new
Employees with greater incentive, encourage their entrance or
continuance in the Company's service and promote the interests of
the Company and all its stockholders. Accordingly, the Company
may from time to time on or before April 18, 1992, in its
discretion, grant to such persons as may be selected in the
manner hereinafter provided options to purchase shares of Common
Stock of the Company ("Common Stock"), and Stock Appreciation
Rights or SARs (as hereinafter defined), on the terms and subject
to the conditions hereinafter set forth.

ARTICLE II

ADMINISTRATION OF THE PLAN

SECTION 1. Subject to the authority as described herein of
the Board of Directors of the Company (the "Board"), this Plan
shall be administered by a committee (the "Committee") designated
by the Board, which shall be composed of at least three members
of the Board all of whom are Disinterested Persons (as
hereinafter defined). Until otherwise determined by the Board,
the Corporate Personnel Committee designated by the Board shall
be the Committee under this Plan. The Committee is authorized to
interpret this Plan and may from time to time adopt such rules
and regulations for carrying out this Plan as it may deem best.
All determinations by the Committee shall be made by the
affirmative vote of a majority of its members, but any
determination reduced to writing and signed by a majority of its
members shall be fully as effective as if it had been made by a
majority vote at a meeting duly called and held. Subject to any
applicable provisions of the Company's By-Laws or of this Plan,
all determinations by the Committee or by the Board pursuant to
the provisions of this Plan, and all related orders or
resolutions of the Committee or the Board, shall be final,

<PAGE> 1

conclusive and binding on all persons, including the Company and
its stockholders, Employees and optionees.

SECTION 2. All authority delegated to the Committee
pursuant to this Plan, including that referred to in Section 1 of
this Article II, may also be exercised by the Board. No action
of the Board taken pursuant to the provisions of this Plan shall
be effective unless at the time both a majority of the Board and
a majority of the directors acting in the matter are
Disinterested Persons. In the event of any conflict or
inconsistency between determinations, orders, resolutions or
other actions of the Committee and the Board taken in connection
with this Plan, the actions of the Board shall control.

ARTICLE III

STOCK SUBJECT TO THE PLAN

SECTION 1. The shares to be issued or delivered upon
exercise of options or rights granted under this Plan shall be
made available, at the discretion of the Board, either from the
authorized but unissued shares of Common Stock of the Company or
from shares of Common Stock reacquired by the Company, including
shares purchased by the Company in the open market or otherwise
obtained; provided, however, that the Company, at the discretion
of the Committee or the Board, may, upon exercise of options or
rights granted under this Plan, cause a Subsidiary to deliver
shares of Common Stock held by such Subsidiary. Any Subsidiary
Equity Securities (as hereinafter defined) distributed pursuant
to Section 7 of Article VI of this Plan shall be made available,
at the discretion of the Board or the Committee, either directly
from the issuer thereof or from the Company's holdings of such
Subsidiary Equity Securities purchased by the Company or a
Subsidiary in the open market or otherwise obtained.

SECTION 2. Subject to the provisions of Section 3 of this
Article III, the aggregate number of shares of Common Stock which
may be subject to options or SARs granted at any time under this
Plan shall not exceed 7,500,000. If any option or SAR or portion
thereof lapses or terminates without the issuance of shares of
Common Stock or other consideration in lieu of such shares, the
shares of Common Stock subject to such option or SAR shall again
be available for grant under the Plan, to the extent of such
lapse or termination.

SECTION 3. In the event of the payment of any dividends
payable in Common Stock or in the event of any subdivision or
combination of the Common Stock, the number of shares which may
be subject to options and SARs under this Plan shall be increased
or decreased proportionately, as the case may be, and the number

<PAGE> 2

of shares or other amount deliverable upon the exercise
thereafter of any option or SAR theretofore granted (whether or
not then exercisable) shall be increased or decreased
proportionately, as the case may be, without change in the
aggregate purchase or exercise price. In the event of any other
recapitalization or reorganization affecting the Common Stock or
in the event of any significant distribution in kind (including,
without limitation, a distribution of units representing
beneficial interests in any royalty trust with respect to oil and
gas or other mineral properties and distributions of equity
securities representing interests in Subsidiaries or affiliates
of the Company), the number of shares which may be subject to
options and SARs under this Plan, and, with the consent of the
optionee, the terms of any option or SAR theretofore granted
hereunder (whether or not then exercisable), including without
limitation the number of shares or other equity securities or any
other amounts deliverable upon the exercise of such option or SAR
or of any right attached thereto or provided for therein and the
exercise price therefor, shall be subject to such adjustment as
the Committee or the Board may deem appropriate. In the event
the Company is merged or consolidated into or with another
corporation, or substantially all of its assets are sold to
another corporation, appropriate provisions shall be made for the
protection and continuation of any outstanding options and SARs
by the substitution, on an equitable basis, of such stock, other
securities, cash or combination thereof as shall be appropriate.
In the event of (i) a dividend or distribution (other than cash
dividends or distributions) with respect to any Subsidiary Equity
Securities distributable or payable in the form of cash pursuant
to Section 7 of Article VI hereof, (ii) a subdivision or
combination of any such Subsidiary Equity Securities, (iii) any
recapitalization, reorganization, merger, consolidation,
liquidation, or other extraordinary event affecting any such
Subsidiary Equity Securities, or (iv) the disposition by the
Company and its Subsidiaries of all or substantially all of their
holdings of any such Subsidiary Equity Securities, the terms of
any option or SAR theretofore granted hereunder (whether or not
then exercisable) shall be subject to such adjustment as the
Committee or the Board may deem appropriate, including, without
limitation, a proportional adjustment in the number of such
Subsidiary Equity Securities deliverable upon the exercise of
such option or SAR or of any right attached thereto or provided
for therein or the substitution, on an equitable basis, of Common
Stock, other Subsidiary Equity Securities, or cash or a
combination thereof for such Subsidiary Equity Securities.

ARTICLE IV

PURCHASE PRICE OF OPTIONED SHARES

<PAGE> 3

Unless the Committee or the Board shall fix a greater
purchase price, the purchase price per share of Common Stock
under each option, and the exercise price of any Stock
Appreciation Right, shall be 100% of the Fair Market Value (as
hereinafter defined) of a share of Common Stock at the time such
option or SAR is granted, but in no case shall such price be less
than the par value of the Common Stock.

ARTICLE V

ELIGIBILITY OF RECIPIENTS

Options and SARs will be granted only to persons who are
Employees of the Company or a Subsidiary or who have agreed in
writing to become Employees of the Company or a Subsidiary within
not more than 30 days following the date on which the option or
SAR is granted. Neither the members of the Committee nor any
member of the Board who is not an Employee of the Company or a
Subsidiary shall be eligible to receive an option or SAR under
this Plan.

ARTICLE VI

GRANT OF OPTIONS AND SARS

SECTION 1. Each option granted under this Plan shall
constitute either an incentive stock option, intended to qualify
under Section 422A of the Internal Revenue Code of 1986 (the
"Code"), or a nonqualified stock option, not intended to qualify
under said Section 422A, as determined in each case by the
Committee or the Board. The aggregate Fair Market Value
(determined as of the time the option is granted) of the stock
for which any person may be granted incentive stock options in
any calendar year prior to 1987 (under all plans of the Company
and its parent and subsidiary corporations) shall not exceed
$100,000 plus any "unused limit carryover to such year" within
the meaning of said Section 422A. With respect to any incentive
stock option granted under this Plan after December 31, 1986 and
in accordance with procedures to be established by the Committee,
the aggregate Fair Market Value (determined as of the time the
option is granted) of the stock for which any person may be
granted incentive stock options that become exercisable for the
first time during any calendar year (under all plans of the
Company and its Subsidiaries) shall not exceed $100,000. The
instruments evidencing incentive stock options granted under this
Plan shall contain such provisions with respect to sequential
exercise as may be required by said Section 422A, as in effect
from time to time. The Board of Directors shall have the
authority to amend any incentive stock option theretofore granted

<PAGE> 4

under this Plan, with the consent of the optionee, in a manner
that has the intent or effect of causing such incentive stock
option to become a nonqualified stock option.

SECTION 2. The Committee or the Board shall from time to
time determine the persons to be granted options and SARs, it
being understood that options and SARs may be granted at
different times to the same person. In addition, the Committee
or the Board shall determine (a) the number of shares subject to
each option or SAR, (b) the time or times when the options and
SARs will be granted, (c) the purchase price of the shares
subject to each option or the exercise price of each SAR, which
price shall be not less than the limit specified in Article IV,
and (d) the time or times when each option or SAR may be
exercised within the limits stated in this Plan, which except as
provided in the following sentence shall in no event be less than
six months after the date of grant thereof. Notwithstanding the
foregoing, all options and SARs granted under this Plan shall
become exercisable in their entirety at such time as there shall
be a Change in Control (as hereinafter defined) of the Company.

SECTION 3. All instruments evidencing options and SARs
granted under this Plan shall be in such form, which shall be
consistent with this Plan and any applicable determinations,
orders, resolutions or other actions of the Committee or the
Board, as the officers of the Company shall, in their discretion,
deem appropriate.

SECTION 4. If the Committee or the Board shall in its
discretion so determine, any nonqualified option granted after
April 20, 1987 which does not contain a Stock Appreciation Right
may provide that promptly following the last Income Recognition
Date (as hereinafter defined) with respect to an exercise of all
or any portion of such option the Company shall pay to the holder
of such option an amount in cash equal to the Option Gain (as
hereinafter defined) multiplied by the Applicable Rate (as
hereinafter defined). No cash payment shall be made pursuant to
this Section 4 to an optionee who is, on the effective date of
such optionee's exercise of an option or part thereof, subject to
Section 16 of the Securities Exchange Act of 1934 with respect to
the Company Common Stock covered by such option or any Subsidiary
Equity Securities including fractions thereof distributed or paid
in the form of cash pursuant to Section 7 of this Article VI in
connection with such exercise unless (x) such optionee's exercise
shall have been made only during an Election Period (as
hereinafter defined), (y) such optionee's exercise shall have
occurred following a Change in Control of the Company, or (z) the
Committee or the Board otherwise consents.

SECTION 5. Any option granted under this Plan on or after
April 20, 1987 may, if the Committee or the Board shall in its

<PAGE> 5

discretion so determine, contain a provision (a "Stock
Appreciation Right" or "SAR") that the Company shall, at the
election of the holder, purchase all or any part of such option
to the extent that such option is exercisable at the date of such
election, for an amount (payable in the form of cash, shares of
Common Stock or any combination thereof, all as the Committee or
the Board shall in its discretion determine) equal to the Stock
Appreciation Gain (as hereinafter defined) relating to such
option or part thereof so purchased on the date such election
shall be made. Such purchase pursuant to the exercise of a Stock
Appreciation Right shall not be deemed to be an exercise of such
option. The Committee, or the Board, in its discretion may also
determine to grant Stock Appreciation Rights not in connection
with or in tandem with any option, in which case each such SAR
shall represent the right to receive upon exercise, for each
share in respect of which the SAR is exercised, an amount in cash
equal to the excess of the Fair Market Value of a share of
Company Common Stock on the date of exercise over the exercise
price of such SAR. No payment shall be made pursuant to this
Section 5 to any such holder who is, on the effective date of
such holder's election, subject to Section 16 of the Securities
Exchange Act of 1934 with respect to the Company Common Stock
covered by such option or SAR or any Subsidiary Equity Securities
including fractions thereof, the value of which is included in
the payment to be made to the holder pursuant to this Section 5,
unless (x) such holder's election shall have been made only
during an Election Period, (y) such holder's election shall have
occurred following a Change in Control of the Company, or (z) the
Committee or the Board otherwise consents.

SECTION 6. Any option granted under this Plan on or after
April 20, 1987 may, if the Committee or the Board shall in its
discretion so determine, contain a provision (a "Limited Right")
that the Company shall, at the election of the holder (which
election may be made only during the period beginning on the
first day following the date of expiration of any Offer, as
hereinafter defined, and ending on the forty-fifth day following
such date), purchase all or any part of such option, for an
amount (payable entirely in cash) equal to the sum of (a) the
difference between (i) the aggregate Offer Price (as hereinafter
defined) of the shares of Common Stock covered by such option or
part thereof so purchased on the date such election shall be made
and (ii) the aggregate exercise price of such shares so covered
plus (b) the Fair Market Value of any Subsidiary Equity
Securities including fractions thereof that would have been
distributed or paid in the form of cash pursuant to Section 7 of
Article VI hereof had there been an exercise, as of the effective
date of such Limited Right exercise, of the number of shares of
Company Common Stock covered by such Limited Right exercise, as
such fair market values are determined in each case on the date
of such exercise. Such purchase pursuant to the exercise of a

<PAGE> 6

Limited Right shall not be deemed to be an exercise of such
option. Notwithstanding any other provision of this Plan, no
Limited Right may be exercised within six months of the date of
its grant.

SECTION 7. Any option granted under this Plan on or after
April 20, 1987 may provide that, upon the exercise of such option
or part thereof such optionee will be entitled to receive from
the Company any Subsidiary Equity Securities distributed or
distributable in respect of the shares of Common Stock covered by
such exercise, to which the optionee would have been entitled had
such optionee been a holder of record of such covered shares at
all times from the date of grant of such option to the date
immediately preceding the effective date of such exercise. Any
such distribution will be in kind, with cash payment for
fractional interests of any Subsidiary Equity Security to be
valued in proportion to the Fair Market Value of the respective
Subsidiary Equity Security on the date of such exercise.
Notwithstanding the foregoing, if the optionee is on the
effective date of any such exercise (i) ineligible to own any
Subsidiary Equity Securities that would otherwise be
distributable to such optionee in accordance with this Section 7
or (ii) subject to Section 16 of the Securities Exchange Act of
1934 with respect to any such Subsidiary Equity Securities that
would otherwise be distributable to such optionee in accordance
with this Section 7, such optionee shall not receive such
Subsidiary Equity Securities in kind but shall be entitled to
receive from the Company in cash the Fair Market Value, as of
such date, of any such Subsidiary Equity Securities including
fractions thereof; provided, however, no cash payment for any
Subsidiary Equity Securities including fractions thereof shall be
made pursuant to the foregoing clause (i) of this Section 7 to an
optionee who is, on the effective date of such optionee's
exercise of an option or part thereof, subject to Section 16 of
the Securities Exchange Act of 1934 with respect to such
Subsidiary Equity Securities or pursuant to the foregoing clause
(ii) of this Section 7 to an optionee unless (x) such optionee's
exercise shall have been made only during an Election Period, (y)
such optionee's exercise shall have occurred following a Change
in Control of the Company, or (z) the Committee or the Board
otherwise consents.

SECTION 8. The authority with respect to the grant of
options and SARs and the determination of the provisions thereof
contained in Sections 1 and 2 and 4 through 7 of this Article VI
may be delegated by the Committee or the Board to one or more
officers of the Company, subject to such conditions and
limitations as the Committee or the Board may prescribe;
provided, however, that no such authority shall be delegated with
respect to the grant of options or SARs to any officer or

<PAGE> 7

director of the Company or with respect to the determination of
any of the provisions thereof.

ARTICLE VII

NON-TRANSFERABILITY OF OPTIONS AND SARS

No option or SAR granted under this Plan shall be
transferable by the holder thereof otherwise than by will or by
the laws of descent and distribution, and any such option or SAR
shall be exercised during the lifetime of the holder thereof only
by such holder or such holder's duly appointed legal
representative.

ARTICLE VIII

EXERCISE OF OPTIONS AND SARS

SECTION 1. Each incentive stock option granted under this
Plan shall terminate not later than the expiration of 10 years
from the date on which it was granted. Each nonqualified stock
option and each SAR granted under this Plan shall terminate not
later than the expiration of 10 years and two days from the date
on which it was granted.

SECTION 2. Except in cases provided for in Article IX
hereof, each option and SAR granted under this Plan may be
exercised only while the holder is an Employee of the Company or
a Subsidiary or provides services to any of the Related Entities.

SECTION 3. A person electing to exercise an option then
exercisable shall give written notice to the Company of such
election and of the number of shares of Common Stock such person
has elected to purchase, and shall at the time of purchase tender
the full purchase price of such shares, which tender shall be
made in cash or cash equivalent (which may be such person's
personal check) or, if the Committee or the Board so determines
either generally or with respect to a specified option or group
of options, in shares of Common Stock already owned by such
person (which shares shall be valued for such purpose on the
basis of their Fair Market Value on the date of exercise), or in
any combination thereof. The Company shall have no obligation to
deliver shares of Common Stock pursuant to the exercise of any
option, or any Subsidiary Equity Securities distributable in
connection therewith, in whole or in part, until such payment in
full of the purchase price of such shares of Common Stock is
received by the Company. No optionee, or legal representative,
legatee or distributee of such optionee, shall be or be deemed to
be a holder of any shares of Common Stock subject to such option

<PAGE> 8

or any Subsidiary Equity Securities distributable in connection
therewith, or entitled to any rights of a stockholder of the
Company or a Subsidiary in respect of any shares of Common Stock
covered by such option or any Subsidiary Equity Securities
distributable in connection therewith until such shares of Common
Stock have been paid for in full and such shares of Common Stock
and such Subsidiary Equity Securities have been issued or
delivered by the Company. A person electing to exercise a Stock
Appreciation Right or Limited Right then exercisable shall give
written notice to the Company of such election and of the number
of shares of Common Stock covered by the option or SAR or part
thereof which is to be purchased by the Company or otherwise
exercised.

SECTION 4. Each option and SAR shall be subject to the
requirement that if at any time the Board shall in its discretion
determine that the listing, registration or qualification of the
shares of Common Stock subject to such option, or the Subsidiary
Equity Securities distributable in connection therewith, upon any
securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with,
the granting of such option or SAR or the issue or purchase of
shares thereunder or the distribution of Subsidiary Equity
Securities with respect thereto, such option or SAR may not be
exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or
obtained free from any conditions not reasonably acceptable to
the Board.

SECTION 5. The Company may establish appropriate procedures
to provide for payment or withholding of such income or other
taxes as may be required by law to be paid or withheld in
connection with the exercise of options or rights under this
Plan, and to ensure that the Company receives prompt advice
concerning the occurrence of any event which may create, or
affect the timing or amount of, any obligation to pay or withhold
any such taxes or which may make available to the Company any tax
deduction resulting from the occurrence of such event.

ARTICLE IX

TERMINATION OF EMPLOYMENT

SECTION 1. If and when the Termination of Employment of an
optionee shall occur for any reason other than death, retirement
under the Company's Retirement Plan, or retirement with the
consent of the Company outside the Company's Retirement Plan, all
of the optionee's options and SARs shall be terminated except
that (a) any option to the extent then exercisable, or (b) any

<PAGE> 9

Stock Appreciation Right or Limited Right to the extent then
exercisable, may be exercised within three months after such
Termination of Employment, but in either case not later than the
termination date of the option or SAR or in the case of a Limited
Right not later than the expiration date of such Right.

SECTION 2. If and when the Termination of Employment of an
optionee shall occur by reason of the optionee's early, normal or
deferred retirement under the Company's Retirement Plan or
retirement with the consent of the Company outside the Company's
Retirement Plan, all of the optionee's options shall be
terminated except that (a) any Stock Appreciation Right in tandem
with an option or Limited Right to the extent then exercisable or
exercisable within one year thereafter may be exercised within
three months after such retirement, but not later than the
termination date of the option or in the case of a Limited Right
not later than the expiration date of such Right, and (b) any
option or any SAR not in tandem with an option to the extent (in
either case) then exercisable or exercisable within one year
thereafter may, if it so provides, be exercised within three
years after such retirement, but not later than the termination
date of the option or SAR, unless after such retirement the
Committee or the Board determines, in its discretion, that such
option or SAR may be exercised within a period of greater
duration (not greater than five years after such retirement, and
in no event later than the termination date of the option or SAR)
or unless within 45 days after such retirement the Committee or
the Board determines, in its discretion, that such option or SAR
may be exercised only within a period of shorter duration (not
less than three months following notice of such determination to
the optionee or holder) to be specified by the Committee or the
Board, as the case may be.

SECTION 3. Any question as to whether and when there has
been a retirement under the Company's Retirement Plan or a
retirement with the consent of the Company outside the Company's
Retirement Plan or whether or when a Termination of Employment
has occurred for any other reason shall be determined by the
Committee or the Board, and any such reasonable determination
shall be final.

SECTION 4. Should an optionee die before such optionee's
Termination of Employment, all the optionee's options shall be
terminated, except that any option to the extent exercisable by
the optionee at the time of such death, together with the
unmatured installment (if any) of such option which at that time
is next scheduled to become exercisable, may be exercised within
one year after the date of such death, but not later than the
termination date of the option, by the optionee's estate or by
the person designated in the optionee's last will and testament.
Notwithstanding the foregoing, no Stock Appreciation Right or

<PAGE> 10

Limited Right shall be exercisable after the death of a holder
thereof, except that an SAR granted not in tandem with an option
may be exercised to the extent set forth in the preceding
sentence.

SECTION 5. Should an optionee die after such optionee's
Termination of Employment, all of the optionee's options shall be
terminated, except that any option to the extent exercisable by
the optionee at the time of such death may be exercised within
one year after the date of such death, but not later than the
termination date of the option, by the optionee's estate or by
the person designated in the optionee's last will and testament.
Notwithstanding the foregoing, no Stock Appreciation Right or
Limited Right shall be exercisable after the death of a holder
thereof, except that an SAR granted not in tandem with an option
may be exercised to the extent set forth in the preceding
sentence.

ARTICLE X

AMENDMENTS

SECTION 1. The Board may at any time terminate or from time
to time amend, modify or suspend this Plan; provided, however,
that no such amendment or modification without the approval of
the stockholders shall:

(a) increase the maximum number (determined as
provided in this Plan) of shares of Common Stock which may
be subject to options and SARs granted under this Plan;

(b) permit the granting of any option or SAR under
this Plan at a purchase price less than 100% of the Fair
Market Value of the Common Stock at the time such option is
granted;

(c) permit the exercise of an option or SAR unless the
full purchase price of the shares as to which the option is
exercised is paid at the time of exercise; or

(d) extend beyond April 18, 1992, the period during
which options or SARs may be granted.

SECTION 2. The Committee and the Board shall have the
authority, with the consent of the option holder, to amend or
modify any outstanding options or SARs previously granted
hereunder in a manner not inconsistent with the provisions
relating to options granted after April 20, 1987 contained in
this Plan.

<PAGE> 11

ARTICLE XI

DEFINITIONS

For the purposes of this Plan, the following terms shall have the
meanings indicated:

Applicable Rate: The rate, expressed as a percentage,
determined according to the following formula

x divided by (1-x)

in which x equals the maximum federal income tax rate
applicable to individuals in effect on the applicable Income
Recognition Date; provided, the Applicable Rate shall never
exceed 100%.

Change in Control: A Change in Control shall be deemed
to have occurred if either (a) any person, or any two or
more persons acting as a group, and all affiliates of such
person or persons, shall own beneficially more than 20% of
the Common Stock outstanding (exclusive of shares held in
the Company's treasury or by the Company's Subsidiaries)
pursuant to a tender offer, exchange offer or series of
purchases or other acquisitions, or any combination of those
transactions, or (b) there shall be a change in the
composition of the Board at any time within two years after
any tender offer, exchange offer, merger, consolidation,
sale of assets or contested election, or any combination of
those transactions (a "Transaction"), so that (i) the
persons who were directors of the Company immediately before
the first such Transaction cease to constitute a majority of
the Board of Directors of the corporation which shall
thereafter be in control of the companies that were parties
to or otherwise involved in such Transaction, or (ii) the
number of persons who shall thereafter be directors of such
corporation shall be fewer than two-thirds of the number of
directors of the Company immediately prior to such first
Transaction. A Change in Control shall be deemed to take
place upon the first to occur of the events specified in the
foregoing clauses (a) and (b).

Disinterested Persons: Such term shall have the
meaning ascribed thereto in Rule 16b-3(d)(3) under the
Securities Exchange Act of 1934 as such rule, or any
successor thereto, may be amended from time to time.

Election Period: The period beginning on the third
business day following a date on which the Company releases
for publication its quarterly or annual summary statements

<PAGE> 12

of sales and earnings, and ending on the twelfth business
day following such date.

Employee: Such term shall include any officer of the
Company or a Subsidiary whether or not employed by such
entity, any employee of the Company or a Subsidiary, and any
director who is also an employee of the Company or a
Subsidiary. Such term shall also include an employee on
approved leave of absence provided such employee's right to
continue employment with the Company or a Subsidiary upon
expiration of such employee's leave of absence is guaranteed
either by statute or by contract with or by a policy of the
Company or a Subsidiary.

Fair Market Value: The average of the high and low
quoted sale prices of a share of Common Stock or a
Subsidiary Equity Security on the date in question (or, if
there is no reported sale on such date, on the last
preceding date on which any reported sale occurred) on the
Composite Tape for the New York Stock Exchange-Listed Stocks
or, if on such date the Common Stock or Subsidiary Equity
Security is not quoted on such Composite Tape, on the New
York Stock Exchange.

Income Recognition Date: With respect to any share of
Common Stock purchased upon the exercise of an option or any
Subsidiary Equity Security distributed in connection
therewith, the later of (a) the date of such exercise, or
(b) the date on which the rights of the holder of such
option in such security become transferable and not subject
to a substantial risk of forfeiture (within the meaning of
Section 83 of the Code); provided, however, that if such
holder shall make an election pursuant to Section 83(b) of
the Code with respect to such security the Income
Recognition Date with respect thereto shall be the date of
the option exercise.

Offer: Any tender offer, exchange offer or series of
purchases or other acquisitions, or any combination of those
transactions, as a result of which any person, or any two or
more persons acting as a group, and all affiliates of such
person or persons, shall own beneficially more than 40% of
the Common Stock outstanding (exclusive of shares held in
the Company's treasury or by the Company's Subsidiaries).

Offer Price: The highest price per share of Common
Stock paid in any Offer which is in effect at any time
beginning on the ninetieth day prior to the date on which a
Limited Right is exercised. Any securities or property
which are part or all of the consideration paid for shares
of Common Stock in the Offer shall be valued in determining

<PAGE> 13

the Offer Price at the higher of (a) the valuation placed on
such securities or property by the person or persons making
such Offer, or (b) the valuation, if any, placed on such
securities or property by the Committee or the Board.

Option Gain: The sum of (a) the difference between (i)
the Fair Market Value of the shares of Common Stock covered
by the exercise of an option granted under the Plan and (ii)
the purchase price of such shares under such option plus (b)
the Fair Market Value of any Subsidiary Equity Securities
including fractions thereof distributed or paid in the form
of cash pursuant to Section 7 of Article VI hereof, as such
fair market values are determined in each case on (x) the
Income Recognition Date with respect to each such security
or (y) the date of such exercise, whichever is less.

Related Entities: The Company, any subsidiary of the
Company, Freeport-McMoRan Copper & Gold Inc., any subsidiary
of Freeport-McMoRan Copper & Gold Inc., McMoRan Oil & Gas
Co., any subsidiary of McMoRan Oil & Gas Co., and any law
firm rendering services to any of the foregoing entities
provided such law firm consists of at least two or more
members or associates who are or were officers of the
Company or any subsidiary of the Company.

Stock Appreciation Gain: The sum of (a) the difference
between (i) the Fair Market Value of the shares of Common
Stock covered by the exercise of a Stock Appreciation Right
granted under the Plan and (ii) the purchase price of such
shares under the option relating to such Stock Appreciation
Right plus (b) the Fair Market Value of any Subsidiary
Equity Securities including fractions thereof that would
have been distributed or paid in the form of cash pursuant
to Section 7 of Article VI hereof had there been an option
exercise, as of the effective date of such Stock
Appreciation Right exercise, of the number of shares of
Company Common Stock covered by such Stock Appreciation
Right exercise, as such fair market values are determined in
each case on the date of such exercise.

Stock Appreciation Right or SAR: A right granted under
the Plan pursuant to Section 5 of Article VI.

Subsidiary: Any corporation of which stock
representing at least 50% of the ordinary voting power is
owned, directly or indirectly, by the Company and any other
entity of which equity securities or interests representing
at least 50% of the ordinary voting power or 50% of the
total value of all classes of equity securities or interests
of such entity are owned, directly or indirectly, by the
Company.

<PAGE> 14

Subsidiary Equity Security: Any security or interest
in the nature of an equity security or interest, according
to generally accepted accounting principles, of a Subsidiary
or a former Subsidiary or any security or interest
representing such a security or interest; including
specifically, but without limiting the generality of the
foregoing, shares of common stock of Freeport-McMoRan Gold
Company, Freeport-McMoRan Copper & Gold Inc., Freeport-
McMoRan Oil & Gas Company, and McMoRan Oil & Gas Co. and
depositary units of Freeport-McMoRan Energy Partners, Ltd.
and Freeport-McMoRan Resource Partners, Limited Partnership.

Termination of Employment: The cessation of the
rendering of services, whether or not as an employee, to any
and all of the Related Entities.

<PAGE> 15

Exhibit 11.1

FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE

Years Ended December 31,
-----------------------------------
1994 1993 1992
-------- --------- --------
(In Thousands,
Except Per Share Amounts)
Primary:
Net income (loss) applicable
to common stock $ 41,443 $(126,203) $169,134
======== ========= ========

Average common shares outstanding 138,633 140,818 143,641
Common stock equivalents:
Stock options 590 777 874
-------- --------- --------
Average common and common
equivalent shares outstanding 139,223 141,595 144,515
======== ========= ========

Net income (loss) per common and
common equivalent share $.30 $(.89) $1.17
==== ===== =====

Fully Diluted:
Net income (loss) applicable to
common stock $ 41,443 $(126,203) $169,134
Plus preferred dividends - - 630
Plus interest, net of tax effect,
on convertible subordinated
debentures - - -
-------- --------- --------
Net income applicable to common
stock $ 41,443 $(126,203) $169,764
======== ========= ========

Average common shares outstanding 138,633 140,818 143,641
Common stock equivalents:
Stock options 590 1,281 882
Convertible securities:
Convertible subordinated
debentures - - -
Preferred stock - - 734
-------- --------- --------
Average common and common
equivalent shares
outstanding 139,223 142,099 145,257
======== ========= ========

Net income (loss) per common and
common equivalent share $.30 $(.89) $1.17
==== ===== =====

Exhibit 12.1

FREEPORT-McMoRan INC.
Computation of Ratio of Earnings to Fixed Charges

Years Ended December 31,
-------------------------------------------------
1994 1993 1992 1991 1990
---------------- -------- -------- --------
(In Thousands)
Income (loss) from
continuing operations $ 72,583 $(83,118) $187,811 $ 96,703 $283,523
Add:
Provision for income taxes 148,388 17,854 75,597 2,970 258,796
Minority interest income 168,951 (61,689) 72,987 67,953 126,415
Interest expense 91,834 79,882 51,788 98,102 100,350
Rental expense factor(a) 14,274 14,348 10,352 5,873 5,674
--------- ------- -------- -------- --------
Earnings available for fixed
charges $496,030 $(32,723) $398,535 $271,601 $774,758
======== ======== ======== ======== ========

Interest expense $ 91,834 $ 79,882 $ 51,788 $ 98,102 $100,350
Capitalized interest 53,340 62,240 84,683 67,321 32,726
Preferred stock of majority-
owned subsidiaries (b) 94,251 52,644 12,773 - -
Rental expense factor(a) 14,274 14,348 10,352 5,873 5,674
--------- ------- -------- -------- --------
Fixed charges $253,699 $209,114 $159,596 $171,296 $138,750
======== ======== ======== ======== ========

Ratio of earnings to fixed
charges(c) 2x (d) 2.5x 1.6x 5.6x
== ==== ==== ====

a. Portion of rent deemed representative of an interest factor.
b. Includes tax "gross-up" for the preferred stock dividend requirements of
majority-owned subsidiaries included in minority interest income.
c. For purposes of this calculation, earnings are income from continuing
operations before income taxes, minority interests and fixed charges.
Fixed charges consist of interest, that portion of rent deemed
representative of interest, and the preferred stock dividend requirements
of majority-owned subsidiaries.
d. Earnings were inadequate to cover fixed charges by $241.8 million.

Exhibit 13.1

FREEPORT-McMoRan INC.
SELECTED FINANCIAL DATA

1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(In Millions, Except Per Share Amounts)
Revenues $1,982.4 $1,610.6 $1,654.9 $1,579.2 $1,580.6
Operating income (loss) 370.8 (88.5) 251.9 223.9 731.5
Net income (loss) from:
Operations $(18.8) $ (68.0) $ 34.4 $90.8 $ 13.4
Nonrecurring gains/(losses),
net a 69.3 (37.5) 134.7 5.0 257.3
Changes in accounting principle
and early extinguishment of
debt (9.1) (20.7) - (55.7) -
------ ------- ------ ----- ------
Net income (loss) applicable to
common stock $ 41.4 $(126.2) $169.1 $40.1 $270.7
====== ======= ====== ===== ======
Net income (loss) per primary share from:
Operations $(.13) $(.48) $ .24 $.65 $ .12
Nonrecurring gains/(losses),
net a .50 (.26) .93 .04 2.23
Changes in accounting principle
and early extinguishment of
debt (.07) (.15) - (.40) -
----- ----- ----- ---- -----
Net income (loss) applicable to
common stock $ .30 $(.89) $1.17 $.29 $2.35
===== ===== ===== ==== =====
Average common shares
outstanding 139.2 141.6 144.5 139.6 115.2

Earnings by sources:b
Metals
Indonesian copper/gold $280.2 $161.7c $276.4 $177.7 $204.5
Spanish copper smelter/gold (.1) (6.4) - - -
North American gold - - - - 316.0d
Agricultural minerals 123.8 (105.0)e 16.6 72.5 236.1f
Energy
Oil and natural gas g (9.1) (41.5) (24.5) (23.9) (41.4)
Uranium - - - 17.1 13.5
Geothermal - - - - 13.2
Other (24.0) (97.3)h (16.6) (19.5) (10.4)
------ ------ ------ ------ ------
Operating income $370.8 $(88.5) $251.9 $223.9 $731.5
====== ====== ====== ====== ======

Dividends per common share:
Cash $ .3125 $1.25 $1.250 $1.25 $1.25
Property i 1.2946 - .175 - -
------- ----- ------ ----- -----
$1.6071 $1.25 $1.425 $1.25 $1.25
======= ===== ====== ===== =====
At December 31:
Property, plant and equipment,
net $3,366.2 $2,773.7 $2,276.9 $2,253.8 $2,204.5
Long-term debt, including
current portion and short-
term borrowings 1,671.3 1,331.7 1,510.7 1,942.0 1,591.0
Minority interests 1,507.5 1,199.3 782.9 293.6 309.3
Stockholders' equity (230.5) .6 346.0 388.3 337.4
Total assets 4,373.6 3,714.1 3,546.7 3,565.4 3,101.3

a. In 1994, includes gains on the conversion/distribution of FCX securities
($74.6 million or $0.54 per share) and an insurance settlement ($11.9
million or $0.09 per share), net of a minority interest charge ($17.2
million or $0.12 per share) because FTX did not receive its proportionate
share of distributions from FRP; in 1993, includes the loss on the
restructuring activities and the loss on valuation and sale of assets
($66.2 million or $0.46 per share), net of a gain on the conversion of FCX
securities ($28.7 million or $0.20 per share); in 1992, from the sale and
conversion of FCX securities; in 1991, from an insurance settlement gain
($7.3 million or $0.05 per share), net of a loss on the valuation of
assets ($2.3 million or $0.02 per share); and in 1990, from the sale of
assets.
b. Restated to conform to 1994 presentation.
c. Includes charges totaling $37.1 million for restructuring and other
related charges.
d. Includes $311.2 million gain from the sale of Freeport-McMoRan Gold
Company.
e. Includes net charges totaling $73.5 million for restructuring, asset
recoverability and other related charges.
f. Includes $183.6 million gain from the sale of assets.
g. Includes charges totaling $84.4 million for restructuring, asset
recoverability and other related charges in 1993. Also includes $69.1
million gain in 1993, $4.3 million gain in 1991 and $14.6 million gain in
1990 from the sale of oil and gas properties.
h. Includes charges totaling $70.5 million for asset recoverability and other
related charges.
i. Reflects the fair market value of the FCX and MOXY shares distributed in
1994 and the FM Properties Inc. shares distributed in 1992.

FREEPORT-McMoRan INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS

For FTX 1994 proved to be a year of achievement; building on the
accomplishments of 1993 while focusing on expansion and growth opportunities
for the future. FTX conducts its metals operations through its 68.3 percent-
owned affiliate FCX and conducts its agricultural minerals operations through
its 51.4 percent-owned affiliate FRP. Highlights for FTX and its operating
units include the following:

- Dramatic improvements in world copper and phosphate fertilizer markets
resulted in significantly higher earnings from its Metals and Agricultural
Minerals segments. Product realizations continued to strengthen into
1995.
- PT-FI continued toward mine and mill capacity of 115,000 MTPD; completion
is expected during the second half of 1995. PT-FI will have doubled its
mill throughput rate in less than three years.
- RTM's, smelter expansion to 270,000 metric tons of metal per year is
under way. FCX also agreed in principle to form a joint venture to
construct a copper smelter with annual production of 200,000 metric tons
of metal. Subsequent to completion of these projects, approximately 70
percent of PT-FI's expanded annual concentrate production will be sold to
affiliates at market prices.
- FRP concentrated on maximizing operational and organizational efficiencies
as a result of the formation of IMC-Agrico. The January 1995 purchase of
the Pennzoil sulphur assets and the pending acquisition of Fertiberia
provide additional growth opportunities.
- FTX's plan to separate its two principal businesses, copper/gold and
agricultural minerals, into two independent financial and operating
entities progressed (see Note 2 to the financial statements). As a result
of this plan, FTX would no longer own any interest in FCX. The spinoff of
FCX is expected to provide greater access to credit markets and reduce
financing costs for FCX and FRP. The proposed distribution, expected to
occur by mid-1995, will include a restructuring of the liabilities of FTX
which requires the use of a portion of the FCX shares currently owned by
FTX.

RESULTS OF OPERATIONS
1994 1993 1992
-------- -------- --------
(In Millions,
Except Per Share Amounts)
Revenues $1,982.4 $1,610.6 $1,654.9
Operating income (loss) 370.8a (88.5)b 251.9
Net income (loss) to common stock 41.4a,c (126.2)d 169.1c
Net income (loss) per primary share .30a,c (.89)d 1.17c
Operating income (loss) by segment:
Metals $280.1 $155.3 $276.4
Agricultural minerals 123.8 (105.0) 16.6
Energy (9.1) (41.5) (24.5)
Other (24.0) (97.3) (16.6)
------ ------ ------
$370.8 $(88.5) $251.9
====== ====== ======
a. Includes a $32.6 million gain ($11.9 million to net income or $0.09 per
share) from an insurance settlement on the June 1993 ore pass cave-in.
b. Includes a net charge of $196.4 million for restructuring the
administrative organization, asset sales/recoverability and other related
charges (Note 4).
c. Includes a $74.6 million gain ($0.54 per share) in 1994 and a $134.7
million gain ($0.93 per share) in 1992 on the sale/conversion/distribution
of FCX securities (Notes 2, 5, and 7). 1994 also includes a $17.2 million
minority interest charge ($0.12 per share) because FTX did not receive its
proportionate share of distributions from FRP (Note 2) and a $9.1 million
charge ($0.07 per share) from the early extinguishment of debt (Note 5).
d. Includes a $37.5 million charge ($0.26 per share) for the items discussed
in Note b, net of a gain on the conversion of FCX securities. Also
includes a $20.7 million charge ($0.15 per share) for the cumulative
effect of changes in accounting principle (Note 1).

1994 COMPARED WITH 1993
FTX's results benefited from higher sales volumes and product realizations for
nearly all of its commodities (Note 13). Depreciation and amortization for
1994 was lower as a result of adjustments caused by FRP's disproportionate
interest in cash distributions from the IMC-Agrico joint venture (Note 2) and
from lower oil sales volumes. Exploration expenditures for 1994 declined
reflecting the formation of MOXY in May 1994 (Note 8), partially offset by
increases at FCX. General and administrative expenses in 1994 benefited from
the formation of IMC-Agrico and other restructuring activities undertaken in
1993. General and administrative expenses were higher for the metals segment
because of the additional personnel and administrative effort required to
manage its expanding operations.

Interest expense increased in 1994 as a result of higher average interest
rates and the Main Pass sulphur project becoming operational for accounting
purposes in July 1993 (previously, related interest costs were capitalized).
See Note 6 to the financial statements for information on the provision for
income taxes. Minority interests' share of net income reflected a $22.9
million increase in FCX preferred stock dividends and a $26.5 million charge
because FTX did not receive its proportionate share of distributions from FRP.

Metals Operations. FCX and its operating units contributed 1994 operating
income of $280.1 million on revenues of $1,212.3 million compared with
operating income of $155.3 million on revenues of $925.9 million for 1993.
Significant items affecting operating income follow (in millions):

Metals operating income - 1993 $155.3
------
Increases (decreases):
Price realizations:
Copper 82.7
Gold 15.4
Sales volumes:
Copper 49.9
Gold 11.5
Treatment charges (14.4)
Adjustments to prior year concentrate sales 10.3
RTM revenues, net of eliminations 140.0
Other (9.0)
------
Revenue variance 286.4a
Cost of sales (180.7)
1993 provision for restructuring charges 20.8
1994 gain on insurance settlement 32.6
Exploration expenses (6.6)
General and administrative (27.7)
------
124.8
------
Metals operating income - 1994 $280.1
======

a. Includes net reductions totaling $103 million in 1994 and net additions
totaling $36.8 million in 1993 related to PT-FI's price protection
program. Also includes reductions totaling $4.3 million in 1994 and $5.9
million in 1993 related to RTM's hedging program.

Revenues increased significantly primarily because of a 13 percent
improvement in PT-FI's copper realizations, including the impact of the price
protection program, and a 5 percent increase in gold realizations.
Additionally, copper sales volumes rose 9 percent resulting from expanded mill
throughput, partially offset by lower grades and recoveries.

Treatment charges increased because of higher copper sales volumes and
prices, as certain charges vary with the price of copper. Treatment charges,
which are negotiated annually with customers, will decline significantly on a
per-pound basis in 1995 as a result of the overall tightness currently being
experienced in the copper concentrates market, although higher copper prices
expected in 1995 would somewhat offset reduced charges because of price
participation.

Adjustments to prior year concentrate sales are caused by changes in
prices on prior year open sales. Rising copper prices in early 1994 caused
positive adjustments as opposed to negative adjustments for 1993 when copper
prices declined early in the year. As discussed in Note 1 to the financial
statements, PT-FI recorded $1.01 per pound during the third quarter and fourth
quarter of 1994 on 192 million pounds of open copper sales at year end. This
price will not be adjusted in 1995 because of PT-FI's price protection
program.

PT-FI's 1994 mill throughput rate rose 16 percent. PT-FI's 1994 site
production and delivery costs totaled $401.5 million compared with $317.1
million for 1993, excluding charges related to restructuring activities
discussed below. Unit site production and delivery costs increased 8 cents
per pound because of lower copper grades and recoveries, higher jobsite
administrative expenses, expansion related activities and costs associated
with initial privatization efforts. Unit royalty costs were higher in 1994
because of higher copper prices. Recovery rates for copper and gold vary
depending on the quality of the ore mined. PT-FI anticipates mining a lower
copper grade ore in 1995 which is expected to have a negative impact on its
unit costs and operating results prior to completion of the expansion.
Operating results are expected to improve during the second half of 1995 as
the expansion is completed and higher gold grades are projected. For at least
a year following attainment of 115,000 MTPD, PT-FI intends to fine-tune its
operations to achieve cost efficiencies and maximum cash flows from its
expanded operations. During this optimization period, PT-FI will continue to
review the feasibility of further expansions as well as the results of
exploration activities to ascertain where best to make future investments.

As a result of significant 1993 reserve additions, PT-FI's 1994
depreciation rate decreased to 7.5 cents per pound compared with 8.3 cents for
1993. The initial depreciation rate for 1995 is expected to increase to 8.1
cents per pound as capital expenditures were added in 1994 to support current
operating levels. Once operating levels reach 115,000 MTPD, the depreciation
rate will be reevaluated to take into account the 115,000 MTPD expansion
capital additions, changes in ore reserve estimates and assessments of future
expansion.

In June 1993, two of PT-FI's four mill level ore passes caved resulting in
a blockage of a portion of the ore pass delivery system. The blockage's
primary effect was to limit mill throughput to approximately 40,700 MTPD for
eight weeks. The impact of the blockage was minimized by using an ore
stockpile adjacent to the mill and installing conveyors to alternative ore
pass systems. In December 1994, PT-FI settled the resulting property and
business interruption insurance claims and recognized a $32.6 million gain.

PT-FI's copper concentrates, which contain significant amounts of
recoverable gold and silver, are sold primarily under long-term sales
agreements. PT-FI's current markets include Japan, Asia, Europe and North
America. PT-FI has commitments from various parties to purchase virtually all
of its estimated 1995 production at market prices. Sales for 1995, currently
estimated to be approximately 850 million pounds of copper and 1.1 million
ounces of gold will depend on the timing of completion of the 115,000 MTPD
expansion. Upon completion of RTM's smelter expansion and the proposed Gresik
smelter (Note 10), FTX anticipates that approximately 70 percent of PT-FI's
expanded annual concentrate production will be sold to affiliates at market
prices.

During 1994, PT-FI implemented a price protection program at a cost of
$31.7 million to cover anticipated copper sales for 1995 and a portion of
1996. In late 1994 and early 1995, when spot copper prices rose
significantly, PT-FI closed a portion of its 1995 contracts realizing $46.9
million which will be recognized in first-half 1995 revenues. As a result of
these transactions, PT-FI will realize $1.21 per pound on 142.2 million pounds
of copper in the first half of 1995. An additional 155.2 million pounds of
first-half 1995 PT-FI copper sales will be priced at a minimum average price
of $0.88 per pound, with full participation in prices above an average of
$0.98 per pound. For the second half of 1995, PT-FI's program established a
minimum average price of $0.83 per pound on sales of 396.8 million pounds of
copper with full participation in prices above that amount. PT-FI will also
realize an average price of $1.13 per pound on 119 million pounds of copper
during the second half of 1995. For 1996, PT-FI's program currently has
established a minimum average price of $0.90 per pound on 596.9 million pounds
of copper, with full participation in prices above that amount. As of
December 31, 1994, the unrecognized cost to unwind PT-FI's hedging positions
was approximately $40 million, net of deferred gains on closed contracts. As
conditions warrant, PT-FI may modify or extend its existing program. This
program reflects a philosophy of providing for an assurance of realizing the
benefits of higher copper prices for a significant portion of FCX's production
while it is expanding its operations. Subsequently, management's intention is
to provide a floor price for its production, if attainable at an acceptable
cost, to protect operating cash flow from the impact of potentially
significant declines in copper prices, while providing for full participation
in potentially higher prices.

RTM generated earnings of $0.6 million in 1994 compared with a $15.7
million loss for the 1993 period. Smelter cash margins improved in 1994
because of higher operating rates, cost reduction efforts and greater price
participation resulting from higher copper prices. Cathode refinery
operations also continued to maintain high operating rates. Higher 1994 mill
throughput and recoveries at RTM's gold mining operations resulted in an
increase in gold sales; however, the impact was more than offset by
significantly lower silver grades. Fluctuations in RTM's ore grades are
expected to continue as the mine nears the end of its economic life.

RTM's 1995 results are expected to be negatively affected by the
significant industrywide decline in treatment charge rates. Additionally,
RTM's smelter will be shutdown in 1995 for major maintenance turnarounds and
expansion tie-ins. RTM's results continue to be subject to variations based
on the relative value of the U.S. dollar and the Spanish peseta. Based on
current operating levels, a one peseta change in the exchange rate has an
approximate $1 million impact on RTM's annual earnings and cash flow.

To assure price participations on a portion of its estimated 1995
concentrate purchases, RTM wrote call option contracts in December 1994 on
19.8 million pounds of copper for 1995 at an average price of $1.18 per pound,
collecting $4.6 million in premiums. These premiums were deferred and will be
recognized in cost of sales during 1995. RTM also has a hedging program for
its mining operations. At December 31, 1994, RTM had sold forward 56,280
ounces of gold at $394.75 per ounce and 1,106,520 ounces of silver at $4.82
per ounce for 1995. As of December 31, 1994, the unrecognized cost to unwind
RTM's hedging position was $0.5 million.

FCX continues its exploration activities within the original 24,700 acre
Block A area, the adjacent approximate 4.8 million acre Block B area and the
approximate 2.5 million acre Eastern Mining area. Delineation drilling
continues at the Big Gossan prospect within Block A with development expected
to begin in early 1995. Exploration activities continue in other locations
including the Wanagon and Lembah Tembaga prospects, both within Block A, and
the Wabu gold prospect in Block B. Exploratory drilling with three rigs is
also continuing at Etna Bay located within the Eastern Mining acreage. PT-FI
has relinquished its rights to approximately 1.7 million acres at Block B and
will relinquish an additional approximate 3.2 million acres over the next four
years. Similarly, 75 percent of the Eastern Mining area must be relinquished
over the next two to seven years. FCX's exploration costs, currently budgeted
at approximately $50 million for 1995, totaled $40.4 million in 1994, $33.7
million in 1993 and $12.2 million in 1992.

FCX's general and administrative expenses were $109 million in 1994, $81.4
million in 1993 and $68.5 million in 1992. The increases resulted from the
inclusion of RTM activities for a full year in 1994 and additional personnel
and administrative efforts to manage the expanding operations. Included in
the 1993 amount were charges of $6.3 million primarily consisting of a $2
million write-off of deferred charges incurred in 1992 for a planned
securities offering that was withdrawn and $4 million to downsize FCX's
management information systems (MIS) structure.

Agricultural Minerals Operations. FTX's agricultural minerals segment, which
includes FRP's fertilizer and phosphate rock operations (conducted through
IMC-Agrico) and its sulphur business, reported 1994 operating income of $123.8
million on revenues of $730.4 million compared with an operating loss of $105
million on revenues of $619.3 million in 1993. Significant items affecting
operating income follow (in millions):

Agricultural minerals operating loss - 1993 $ (105.0)
--------
Increases (decreases):
Sales volumes 15.8
Realizations 102.7
Other (7.4)
--------
Revenue variance 111.1
Cost of sales 46.8a,b
1993 provision for restructuring charges 33.9
1993 loss on valuation and sale of assets, net 14.8
General and administrative and exploration 22.2a
--------
228.8
--------
Agricultural minerals operating income - 1994 $ 123.8
========
a. 1993 included $17.5 million in cost of sales and $7.3 million in general
and administrative expenses resulting from the restructuring project.
b. 1994 included a $15.8 million reduction and 1993 included a $10.8 million
increase to depreciation and amortization caused by FRP's disproportionate
interest in IMC-Agrico cash distributions.

FRP's 1994 sales volumes for DAP, its principal fertilizer product, were
slightly below 1993 levels. Sales activity benefited from continued strong
export demand and improved domestic activity. This demand caused producer
inventories to remain at prior-year levels despite a rise in industrywide
production. As a result, phosphate fertilizer prices rose sharply from the
near 20-year lows experienced during 1993, with FRP's average DAP realization
increasing 32 percent. Unit production costs benefited from efficiencies at
IMC-Agrico, somewhat offset by higher raw material prices for ammonia.

Strong export demand for phosphate fertilizer products has continued into
early 1995, resulting in improving phosphate fertilizer prices. IMC-Agrico
resumed production at its only idle fertilizer facility in January 1995.

FRP's phosphate rock sales volumes rose 14 percent during 1994, reflecting
increased demand and the addition of a long-term supply contract in October
1994.

Main Pass sulphur production averaged nearly 6,200 TPD, exceeding full
design operating rates of 5,500 TPD, which lowered unit production costs from
1993. Production is expected to be maintained near the 6,000 TPD level for
the immediate future. With increased Main Pass production, FRP ceased
operating the marginally profitable Caminada mine in January 1994. Average
sulphur realizations for 1994 were lower, reflecting the decline in prices
which occurred throughout 1993. However, improved phosphate fertilizer
operating rates, coupled with reduced imports, resulted in sulphur price
increases in Tampa, Florida since mid-1994. As a result, Tampa sulphur prices
are currently above year-ago levels. To the extent U.S. phosphate fertilizer
production remains strong, improved sulphur demand is expected to continue,
although the availability of Canadian sulphur impacts the potential for
significant price increases.

Oil and Gas Operations. Prior to the May 1994 MOXY distribution, FTX's oil
and gas operations (excluding the Main Pass oil operation) involved exploring
for new reserves. These activities generated a 1994 loss of $11.9 million,
including exploration expense of $5.2 million. Earnings for 1993 totaled $20
million as FTX recognized a $69.1 million gain from the $95.3 million cash
sale of the undeveloped reserves discovered at East Cameron Blocks 331/332
offshore Louisiana, partially offset by exploration expense of $22.3 million
and $24.4 million of charges resulting from the restructuring project.
Subsequent to the MOXY distribution, FTX's only significant oil and gas
operations occured at Main Pass.

Main Pass oil operations achieved the following:

1994 1993
--------- ---------
Sales (barrels) 2,533,700 3,443,000
Average realized price $13.74 $14.43
Operating income (in millions) $2.8 $(61.5)

Main Pass oil production was limited during 1994 because of a
redevelopment program which involved drilling two additional wells and
recompleting three existing wells. FRP's 1995 net production is estimated to
approximate 1994 levels, as the benefits of the redevelopment program are
expected to partially offset declining reservoir production. Oil realizations
recovered somewhat from the signifiant decline which occurred in late 1993,
with prices rising to near $15 per barrel in January 1995. The 1993 price
decline resulted in a $60 million charge to FRP's earnings for the excess net
book value of its Main Pass oil assets over the estimated future net cash flow
to be received.

Restructuring Activities. During 1993, FTX undertook a restructuring of its
administrative organization. This restructuring represented a major step by
FTX to lower the costs of operating and administering its businesses in
response to weak market prices of commodities produced by its operating units.
As part of this restructuring, FTX significantly reduced the number of
employees engaged in administrative functions, changed its MIS environment to
achieve efficiencies, reduced its needs for office space, outsourced a number
of administrative functions and took other actions to lower costs. The
restructuring process resulted in FTX incurring certain one-time costs (Note
4).

CAPITAL RESOURCES AND LIQUIDITY
Net cash provided by operating activities during 1994 increased to $506.8
million, compared with $117.3 million for 1993, primarily reflecting higher
income from operations. Cash used in investing activities totaled $694.2
million during 1994, compared with $429 million in 1993, reflecting an
increase in capital expenditures for continuing expansion at PT-FI and RTM.
Cash flow provided by financing activities totaled $189.2 million compared
with a use of $29.5 million during 1993. The 1994 period included $515.4
million of proceeds from public securities offerings compared with $561.1
million in 1993. During 1994, FTX acquired 3.8 million of its common shares
for an aggregate $67.7 million and 2.2 million FCX Class A common shares for
an aggregate $47.6 million under its established program to acquire shares
when warranted by market conditions. During 1993, 1.3 million FTX shares and
0.8 million FCX shares were purchased for an aggregate $38.7 million. FTX had
additions to debt of $7.1 million in 1994, net of the purchase of its 10 7/8%
Debentures, compared with net repayments of $179.5 million during 1993. The
reduction in cash dividends paid during 1994 resulted from FTX's June 1994
change in dividend policy to begin distributing FCX common stock in lieu of
paying cash dividends (Note 7).

Net cash provided by operating activities declined in 1993 to $117.3
million from $339.6 million for 1992, primarily reflecting lower income from
operations. Net cash used in investing activities was $429 million compared
with $885.5 million for 1992. Increased metals capital expenditures were
incurred in 1993 associated with PT-FI's expansion and lower capital
expenditures were incurred at Main Pass and in FRP's agricultural minerals
operations, where development projects were completed in 1992. Asset sales
generated proceeds of $145.2 million during 1993; 1992 included the purchase
of an indirect interest in PT-FI for $211.9 million. Net cash used in
financing activities was $29.5 million in 1993; 1992 financing activities
provided net cash of $837.3 million. The 1993 period included $561.1 million
of proceeds from the FCX preferred stock offerings, and 1992 included $1.3
billion of proceeds form equity security offerings. Increased distributions
to minority interest holders of FCX and FRP securities were made during 1993
as a result of the equity sales during 1993. As indicated above, an aggregate
$38.7 million was spent in 1993 to purchae FTX and FCX shares; in 1992, 5.7
million FTX shares and 0.8 million FCX shares were purchased for an aggregate
$123.8 million. Net long-term debt repayments were $179.5 million in 1993
compared with net borrowings of $53.7 million in 1992.

During 1995, PT-FI's estimated capital expenditures are expected to
approximate $450 million. These expenditures will be funded by operating cash
flow, sales of infrastructure assets, the bank credit facility (Note 5) and
other financing sources. Upon completion of the 115,000 MTPD expansion during
the second half of 1995, PT-FI's operating cash flow will increase
significantly. For at least one year after completion fo the 115,000 MTPD
expansion, FCX plans to undertake efforts to reduce costs and maximize cash
flows. During this period, FCX will assess the feasibility of further
mine/mill expansions, taking into account the results of its exploration
activities, to determine where best to make future investments in capital
projects. In connection with FTX's proposed restructuring plan (Note 2), the
existing FTX credit agreement in which PT-FI participates is expected to be
modified to become a separate facility for PT-FI and a new facility will be
arranged for FCX and PT-FI which is expected to provide greater access to
credit markets and reduce financing costs. PT-FI's long-lived, low-cost
reserve base provides it potential access to a broad range of sources of
capital, including additional public and private issuances of securities.

In June 1994, RTM signed a turnkey contract to expand its smelter capacity
to 270,000 metric tons of metal per year by early 1996 at a cost of
approximately $215 million. In December 1994, RTM obtained $290 million of
project financing, nonrecourse to FCX, which also provided funds for
refinancing a portion of RTM's gold, silver and working capital loans (Note
5). RTM's future operating cash flow will be determined by the supply and
demand for copper smelter capacity, smelter and refining production rates, the
exchange rate between the U.S. dollar and the Spanish peseta and prices and
sales volumes of gold.

In January 1995, FCX agreed in principle to form a joint venture, 20
percent owned by FCX, to develop a 200,000 metric tons of metal per year
copper smelter in Gresik, Indonesia (Note 10). Alternatives for financing the
estimated $550 million aggregate project cost, which excludes approximately
$100 million of working capital, are being reviewed.

In January 1995, FRP acquired essentially all of the domestic assets of
Pennzoil Co.'s sulphur division. Pennzoil will receive quarterly payments
from FRP over 20 years based on the prevailing price of sulphur. The
installment payments may be terminated earlier either by FRP through the
exercise of a $65 million call option or by Pennzoil through a $10 million put
option. Neither option may be exercised prior to 1999.

FRP has agreed in principle to acquire Fertiberia, S.L., the restructured
nitrogen and phosphate fertilizer business of Ercros, S.A., a Spanish
conglomerate. Since September 1993, FRP has managed this company with the
goal of establishing Fertiberia as a financially viable concern. FRP intends
to continue to work with the Spanish authorities on improving the operations
of Fertiberia and eventually to acquire essentially all of the company's
capital stock in return for agreeing to make a capital contribution of $11.5
million upon closing and a further contingent payment of $10 million in
January 1998. As part of the agreement, $38.5 million of nonrecourse
financing has been arranged at Fertiberia with payment terms dependent upon
its financial performance. The acquisition of Fertiberia, one of the largest
fertilizer manufacturers in Europe, is conditioned upon satisfaction of a
number of issues.

Publicly owned FRP units have cumulative rights to receive quarterly
distributions of 60 cents per unit through the distribution for the quarter
ending December 31, 1996 (the Preference Period) before any distributions may
be made to FTX. On January 20, 1995, FRP declared a distribution of 60 cents
per publicly held unit ($30.2 million) and 26 cents per FTX-owned unit ($13.9
million), payable February 15, 1995, bringing the total unpaid distribution to
FTX to $353.1 million. Unpaid distributions to FTX will be recoverable from
one-half of the excess of future quarterly FRP distributions over 60 cents per
unit for all units. The January 1995 distributable cash included $52.2
million from IMC-Agrico. FRP's future distributions will be dependent on the
distributions received from IMC-Agrico and Fertiberia and future cash flow
from FRP's sulphur and oil operations.

FTX is primarily a holding company and its sources of cash flow are
dividends and distributions from its ownership in FCX and FRP. Through mid-
1994, FTX borrowed funds when the cash received from FCX, FRP and asset sales
was insufficient to pay dividends and cover FTX's other cash requirements for
interest, general and administrative expenses and oil and gas operations.
Since the second quarter of 1994, in lieu of paying a $0.3125 quarterly cash
dividend to its common stockholders, FTX distributed quarterly one FCX Class A
common share for each 80 FTX common shares owned.

Subsequent to the spin-off of FCX (Note 2), FTX's business activity will
essentially consist of its 51.4 percent ownership in FRP and its source of
cash flow will be distributions from FRP, which are subject to the FRP public
unitholders' preferential distribution right discussed above. FTX will have
certain obligations relating to its past business activities including income
tax settlements, oil and gas payments and employee benefit liabilities. It
may also have obligations relating to its guarantee of the debt of FM
Properties Inc. (FMPO) discussed in Note 8 to the financial statements. FTX
anticipates that its cash distributions from FRP and amounts available to it
under the new FTX/FRP credit facility (Note 5) will be sufficient to meet
these obligations. FTX's Board of Directors will determine its new dividend
policy based on the availability of cash to FTX.

1993 COMPARED WITH 1992
Results for 1993 were adversely affected by significantly reduced earnings
from FTX's metals and agricultural minerals business segments, generally
caused by lower product realizations and charges resulting from the
restructuring project. The reduction in general and administrative expenses
reflected the initial benefits from the restructuring activities. Interest
expense increased, as no interest was capitalized on the Main Pass sulphur
operations subsequent to its becoming operational for accounting purposes in
July 1993. See Note 6 to the financial statements for information on the
provision for income taxes. Minority interests' share of net income increased
as a result of dividends following the issuance of additional FCX preferred
stock during 1993 (Note 2).

Metals Operations. FCX contributed 1993 operating income of $155.3 million on
revenues of $925.9 million compared with operating income of $276.4 million on
revenues of $714.3 million for 1992. Revenues in 1993 increased as a result
of the RTM acquisition. PT-FI revenues were down 4 percent primarily because
of lower copper realizations. Operating income was affected adversely by
increased unit site production and delivery, general and administrative and
exploration costs, and by RTM's losses. Significant items affecting operating
income follow (in millions):

Metals operating income - 1992 $276.4
------
Increases (decreases):
Price realizations:
Copper (84.7)
Gold 14.7
Sales volumes:
Copper (5.5)
Gold 30.2
Treatment charges 23.6
Adjustments to prior year concentrate sales (13.0)
RTM revenues, net of eliminations 240.7
Other 5.6
------
Revenue variance 211.6 a
Cost of sales (277.4)b
1993 provision for restructuring charges (20.8)
Exploration expenses (21.6)
General and administrative (12.9)b
------
(121.1)
------
Metals operating income - 1993 $155.3
======

a. Includes net additions totaling $36.8 million in 1993 and net reductions
totaling $8.9 million in 1992 related to PT-FI's price protection program.
Also includes reductions totaling $5.9 million in 1993 related to RTM's
hedging program.
b. 1993 included $10 million in cost of sales and $6.3 million in general and
administrative expenses resulting from the restructuring project.

Copper price realizations, taking into account PT-FI's price protection
program, were 12 percent lower than in 1992. Gold realizations were up 6
percent. Although mill throughput averaged 62,300 MTPD in 1993, 8 percent
higher than in 1992, copper sales volumes decreased slightly because of a
reduction in inventory during 1992. Gold sales volumes in 1993 benefited from
higher gold grades and an increase in gold recovery rates. Treatment charges
declined 3.4 cents per pound from 1992, resulting from a tightening in the
concentrate market and lower copper prices. Open copper sales at the
beginning of 1993 were recorded at an average price of $1.04 per pound, but
subsequently were adjusted downward as copper prices fell during the first few
months of the year.

PT-FI's unit site production and delivery costs, excluding charges related
to the restructuring project, rose slightly from 1992 because of costs
incurred in connection with the ore pass blockage and higher production
overhead costs related to expansion activities. Unit cash production costs
declined 9.6 cents per pound in 1993, benefiting from higher gold and silver
credits, lower treatment charges and reduced royalties. PT-FI's depreciation
rate increased from 7.4 cents per pound during 1992 to 8.3 cents in 1993,
reflecting the increased cost relating to the 66,000 MTPD expansion.

Agricultural Minerals Operations. FTX's agricultural minerals segment
reported a 1993 operating loss of $105 million on revenues of $619.3 million
compared with operating income of $16.6 million on revenues of $799 million in
1992. Significant items affecting operating income follow (in millions):

Agricultural minerals operating income - 1992 $ 16.6
-------
Increases (decreases):
Sales volumes (67.4)
Realizations (103.2)
Other (9.1)
-------
Revenue variance (179.7)
Cost of sales 89.5a
1993 provision for restructuring charges (33.9)
1993 loss on valuation and sale of assets, net (14.8)
General and administrative and exploration 17.3a
-------
(121.6)
-------
Agricultural minerals operating loss - 1993 $(105.0)
=======

a. 1993 included $17.5 million in cost of sales and $7.3 million in general
and administrative expenses resulting from the restructuring project.

Weak industrywide demand and changes attributable to FRP's participation
in IMC-Agrico resulted in 1993 DAP sales volumes declining 17 percent. Unit
production costs, excluding charges related to the restructuring project,
declined from 1992 reflecting initial production efficiencies from IMC-Agrico,
reduced raw material costs for sulphur and lower phosphate rock mining
expenses, partially offset by increased natural gas costs and lower production
volumes. FRP's realization for DAP was lower, reflecting the near 20-year low
prices realized during 1993 as well as an increase in the lower-priced Florida
sales by IMC-Agrico. FRP's proportionate share of the larger IMC-Agrico
phosphate rock operation caused 1993 sales volumes to increase 12 percent.

Combined sulphur production from the Caminada and Main Pass mines
increased compared with 1992. However, sales volumes declined 16 percent,
primarily because of reduced purchases by IMC-Agrico resulting from its
curtailed fertilizer production. Due to a significant decline in the market
price of sulphur during 1993, FRP recorded a 1993 charge to earnings for the
excess of capitalized cost over expected realization of its non-Main Pass
sulphur assets, primarily the Caminada sulphur mine. Main Pass sulphur became
operational for accounting purposes beginning July 1993.

Oil and Gas Operations. FTX's non-Main Pass oil operations generated 1993
earnings of $20 million, including exploration expense of $22.3 million, $24.4
million of charges resulting from the restructuring project and a $69.1
million gain from the sale of the East Cameron Block 331/332 oil and gas
property. A loss of $29.1 million, including exploration expense of $18.3
million, was generated in 1992. During 1992, FTX transferred substantially
all of its non-Main Pass oil and gas properties to FMPO, whose shares were
distributed to FTX common shareholders (Note 8).

Main Pass oil operations achieved the following:

1993 1992
--------- ---------
Sales (barrels) 3,443,000 4,884,000
Average realized price $14.43 $15.91
Operating income (in millions) $(61.5) $4.6

Main Pass oil production during early 1993 was hampered by water
encroachment. As discussed earlier, the 1993 operating loss includes a $60
million recoverability charge because of lower oil prices.

ENVIRONMENTAL
FTX has a history of commitment to environmental responsibility. Since the
1940s, long before public attention focused on the importance of maintaining
environmental quality, FTX has conducted preoperational, bioassay, marine
ecological and other environmental surveys to ensure the environmental
compatibility of its operations. FTX's Environmental Policy commits its
operations to full compliance with local, state and federal laws and
regulations, and prescribes the use of periodic environmental audits of all
domestic facilities to evaluate compliance status and communicate that
information to management. FTX has access to environmental specialists who
have developed and implemented corporatewide environmental programs. FTX's
operating units continue to study and implement methods to reduce discharges
and emissions.

Federal legislation (sometimes referred to as "Superfund") requires
payments for cleanup of certain abandoned waste disposal sites, even though
such waste disposal activities were performed in compliance with regulations
applicable at the time of disposal. Under the Superfund legislation, one
party may, under certain circumstances, be required to bear more than its
proportional share of cleanup costs at a site where it has responsibility
pursuant to the legislation, if payments cannot be obtained from other
responsible parties. Other legislation mandates cleanup of certain wastes at
unabandoned sites. States also have regulatory programs that can mandate
waste cleanup. Liability under these laws involves inherent uncertainties.

FTX has received notices from governmental agencies that it is one of many
potentially responsible parties at certain sites under relevant federal and
state environmental laws. Further, FTX is aware of additional sites for which
it may receive such notices in the future. Some of these sites involve
significant cleanup costs; however, at each of these sites other large and
viable companies with equal or larger proportionate shares are among the
potentially responsible parties. The ultimate settlement for such sites
usually occurs several years subsequent to the receipt of notices identifying
potentially responsible parties because of the many complex technical and
financial issues associated with site cleanup. FTX believes that the
aggregation of any costs associated with these potential liabilities will not
exceed amounts accrued and expects that any costs would be incurred over a
period of years.

FTX maintains insurance coverage in amounts deemed prudent for certain
types of damages associated with environmental liabilities which arise from
unexpected and unforeseen events and has an indemnification agreement covering
certain acquired sites (Note 10).

In June 1994, a sinkhole was found at a phosphogypsum storage area at IMC-
Agrico's New Wales, Florida facility. In addition, there was an earthen dam
breach at two of its phosphate rock facilities in late 1994 (Note 10). While
there is no evidence indicating underground water contamination in areas away
from the facilities, this issue continues to be monitored. If there were
contamination, which IMC-Agrico considers unlikely, the costs that would be
required are uncertain and cannot be estimated at the present. If significant
costs were incurred it would be necessary to determine the applicability of
insurance coverage maintained by IMC-Agrico, and separately by FRP, and for
the sharing of costs between the joint venture partners.

FTX has made, and will continue to make, expenditures at its operations
for protection of the environment. Continued government and public emphasis
on environmental issues can be expected to result in increased future
investments for environmental controls, which will be charged against income
from future operations. Present and future environmental laws and regulations
applicable to FTX's operations may require substantial capital expenditures
and may affect its operations in other ways that cannot now be accurately
predicted.
--------------------------------
The results of operations reported and summarized above are not necessarily
indicative of future operating results.

REPORT OF MANAGEMENT

Freeport-McMoRan Inc. (the Company) is responsible for the preparation of the
financial statements and all other information contained in this Annual
Report. The financial statements have been prepared in conformity with
generally accepted accounting principles and include amounts that are based on
management's informed judgments and estimates.

The Company maintains a system of internal accounting controls designed
to provide reasonable assurance at reasonable costs that assets are
safeguarded against loss or unauthorized use, that transactions are executed
in accordance with management's authorization and that transactions are
recorded and summarized properly. The system is tested and evaluated on a
regular basis by the Company's internal auditors, Price Waterhouse LLP. In
accordance with generally accepted auditing standards, the Company's
independent public accountants, Arthur Andersen LLP, have developed an overall
understanding of our accounting and financial controls and have conducted
other tests as they consider necessary to support their opinion on the
financial statements.

The Board of Directors, through its Audit Committee composed solely of
non-employee directors, is responsible for overseeing the integrity and
reliability of the Company's accounting and financial reporting practices and
the effectiveness of its system of internal controls. Arthur Andersen LLP and
Price Waterhouse LLP meet regularly with, and have access to, this committee,
with and without management present, to discuss the results of their audit
work.

James R. Moffett Richard C. Adkerson
Chairman of the Board and Senior Vice President and
Chief Executive Officer Chief Financial Officer

FREEPORT-MCMORAN INC.
BALANCE SHEETS

December 31,
-----------------------
1994 1993
---------- ----------
ASSETS (In Thousands)
Current assets:
Cash and short-term investments $ 41,548 $ 39,785
Accounts receivable:
Customers 200,416 174,716
Other 111,848 94,046
Inventories:
Products 200,624 158,639
Materials and supplies 223,074 186,694
Prepaid expenses and other 18,331 25,675
---------- ----------
Total current assets 795,841 679,555
---------- ----------
Property, plant and equipment 4,906,825 4,210,575
Less accumulated depreciation and amortization 1,540,582 1,436,845
---------- ----------
Net property, plant and equipment 3,366,243 2,773,730
---------- ----------
Other assets 211,491 260,782
---------- ----------
Total assets $4,373,575 $3,714,067
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 571,118 $ 408,289
Current portion of long-term debt
and short-term borrowings 24,412 49,256
---------- ----------
Total current liabilities 595,530 457,545
Long-term debt, less current portion 1,646,882 1,282,424
Accrued postretirement benefits and pension costs 263,137 239,134
Reclamation and mine shutdown reserves 125,702 120,957
Other liabilities and deferred credits 172,722 212,536
Deferred income taxes 292,580 201,553
Minority interests 1,507,489 1,199,269
Stockholders' equity:
Preferred stock, par value $1, at liquidation
value, authorized 50,000,000 shares:
$1.875 Convertible Exchangeable - 6,286
$4.375 Convertible Exchangeable 250,000 250,000
Common stock, par value $1, authorized
300,000,000 shares 166,365 165,293
Capital in excess of par value of common stock - 21,868
Retained earnings (deficit) (221,925) (81,224)
Cumulative foreign translation adjustment (2,555) (7,187)
Common stock held in treasury - 29,179,000
and 25,334,600 shares, respectively, at cost (422,352) (354,387)
---------- ----------
(230,467) 649
---------- ----------
Total liabilities and stockholders' equity $4,373,575 $3,714,067
========== ==========
The accompanying notes are an integral part of these financial statements.

FREEPORT-MCMORAN INC.
STATEMENTS OF OPERATIONS

Years Ended December 31,
------------------------------------
1994 1993 1992
---------- ---------- ----------
(In Thousands,
Except Per Share Amounts)
Revenues $1,982,396 $1,610,581 $1,654,911
Cost of sales:
Production and delivery 1,297,007 1,141,705 986,274
Depreciation and amortization 132,713 191,938 202,382
---------- ---------- ----------
Total cost of sales 1,429,720 1,333,643 1,188,656
Exploration expenses 47,052 65,080 37,036
Provision for restructuring charges - 67,145 -
Loss on valuation and sale of
assets, net - 64,114 -
Gain on insurance settlement (32,602) - -
General and administrative expenses 167,390 169,059 177,363
---------- ---------- ----------
Total costs and expenses 1,611,560 1,699,041 1,403,055
---------- ---------- ----------
Operating income (loss) 370,836 (88,460) 251,856
Interest expense, net (91,834) (79,882) (51,788)
Gain on sale of FCX Class A shares - - 100,934
Gain on conversion/distribution of FCX
securities 114,750 44,116 33,753
Other income (expense), net (3,830) (2,727) 1,640
---------- ---------- ----------
Income (loss) before income taxes
and minority interests 389,922 (126,953) 336,395
Provision for income taxes (148,388) (17,854) (75,597)
Minority interests in net (income)
loss of consolidated subsidiaries (168,951) 61,689 (72,987)
---------- ---------- ----------
Income (loss) before extraordinary
item and changes in accounting
principle 72,583 (83,118) 187,811
Extraordinary loss on early
extinguishment of debt, net (9,108) - -
Cumulative effect of changes in
accounting principle, net - (20,717) -
---------- ---------- ----------
Net income (loss) 63,475 (103,835) 187,811
Preferred dividends (22,032) (22,368) (18,677)
---------- ---------- ----------
Net income (loss) applicable to
common stock $ 41,443 $ (126,203) $ 169,134
========== ========== ==========
Primary and fully diluted net income (loss) per share:
Before extraordinary item and changes
in accounting principle $.37 $(.74) $1.17
Extraordinary loss on early
extinguishment of debt (.07) - -
Cumulative effect of changes in
accounting principle - (.15) -
---- ----- -----
$.30 $(.89) $1.17
==== ===== =====

Average common and common equivalent shares outstanding:
Primary 139,223 141,595 144,515
======= ======= =======
Fully diluted 139,223 142,099 145,257
======= ======= =======
Dividends per common share:
Cash $ .3125 $1.250 $1.250
Property 1.2946 - .175
------- ------ ------
$1.6071 $1.250 $1.425
======= ====== ======
The accompanying notes are an integral part of these financial statements.

FREEPORT-MCMORAN INC.
STATEMENTS OF STOCKHOLDERS' EQUITY

Years Ended December 31,
---------------------------------
1994 1993 1992
--------- -------- --------
(In Thousands)
$1.875 Convertible exchangeable preferred stock:
Balance at beginning of year $ 6,286 $ 7,453 $ 9,680
Conversions to common stock and
redemptions (6,286) (1,167) (2,227)
--------- -------- --------
Balance at end of year - 6,286 7,453
--------- -------- --------
$4.375 Convertible exchangeable preferred stock:
Balance at beginning of year 250,000 250,000 -
Issuance of shares - - 250,000
--------- -------- --------
Balance at end of year 250,000 250,000 250,000
--------- -------- --------
Common stock:
Balance at beginning of year 165,293 164,818 81,796
Two-for-one stock split - - 81,796
Conversions to common stock and other 1,072 475 1,226
--------- -------- --------
Balance at end of year 166,365 165,293 164,818
--------- -------- --------
Capital in excess of par value of common stock:
Balance at beginning of year 21,868 186,032 352,705
Two-for-one stock split - - (81,796)
Dividends on preferred stock - (20,499) -
Dividends on common stock (35,600) (131,992) (92,124)
Conversions to common stock and other 13,732 (11,673) 7,247
--------- -------- --------
Balance at end of year - 21,868 186,032
--------- -------- --------
Retained earnings (deficit):
Balance at beginning of year (81,224) 68,532 163,754
Net income (loss) 63,475 (103,835) 187,811
Dividends on preferred stock (22,032) (1,869) (18,677)
Dividends on common stock (182,144) (44,052) (264,356)
--------- -------- --------
Balance at end of year (221,925) (81,224) 68,532
--------- -------- --------
Cumulative foreign translation adjustment:
Balance at beginning of year (7,187) - -
Adjustment 4,632 (7,187) -
--------- -------- --------
Balance at end of year (2,555) (7,187) -
--------- -------- --------
Common stock held in treasury:
Balance at beginning of year (354,387) (330,814) (219,654)
Purchase of 3,831,800, 1,326,200 and
5,705,100 shares, respectively (67,747) (22,229) (108,591)
Other (218) (1,344) (2,569)
--------- -------- --------
Balance at end of year (422,352) (354,387) (330,814)
--------- -------- --------
Total stockholders' equity $(230,467) $ 649 $346,021
========= ======== ========

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

FREEPORT-MCMORAN INC.
STATEMENTS OF CASH FLOW

Years Ended December 31,
---------------------------------
1994 1993 1992
--------- --------- ---------
(In Thousands)
Cash flow from operating activities:
Net income (loss) $ 63,475 $(103,835) $ 187,811
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Cumulative effect of changes in
accounting principle - 20,717 -
Extraordinary loss on early
extinguishment of debt 9,108 - -
Depreciation and amortization 137,038 199,506 211,176
Other noncash charges to income - 33,194 -
Provision for restructuring charges, net
of payments - 23,890 -
Loss on valuation and sale of
assets, net - 64,114 -
Oil and gas exploration expenses 5,231 26,710 18,333
Amortization of debt discount and
financing costs 37,128 41,166 51,206
Gain on sale of FCX Class A shares - - (100,934)
Gain on conversion/distribution of FCX
securities (114,750) (44,116) (33,753)
Deferred income taxes 96,065 (39,035) 53,079
Minority interests' share of
net income (loss) 168,951 (61,689) 72,987
Cash distribution from IMC-Agrico in
excess of capital interest 43,293 - -
Reclamation and mine shutdown
expenditures (9,837) (9,980) (18,038)
(Increase) decrease in working capital, net
of effect of acquisitions and dispositions:
Accounts receivable (44,614) 2,821 (14,672)
Inventories (40,320) 4,475 (20,675)
Prepaid expenses and other 7,350 (10,873) (23,037)
Accounts payable and accrued
liabilities 163,283 (24,590) (43,001)
Other (14,574) (5,186) (845)
--------- --------- ---------
Net cash provided by operating activities 506,827 117,289 339,637
--------- --------- ---------
Cash flow from investing activities:
Capital expenditures:
PT-FI (664,735) (450,854) (367,842)
RTM, including acquisition cost (78,735) (12,658) -
Main Pass (10,941) (37,427) (117,902)
Agricultural minerals (18,740) (14,743) (86,815)
Oil and gas (12,493) (35,455) (50,493)
Other (20,577) (27,450) (59,557)
Sale of assets:
Oil and gas - 95,250 -
Geothermal 36,910 23,000 -
Other 75,092 26,961 -
Purchase of indirect interest in PT-FI - - (211,892)
Other - 4,375 8,962
--------- --------- ---------
Net cash used in investing activities $(694,219) $(429,001) $(885,539)
--------- --------- ---------

FREEPORT-MCMORAN INC.
STATEMENTS OF CASH FLOW

Years Ended December 31,
---------------------------------
1994 1993 1992
---------- -------- --------
(In Thousands)
Cash flow from financing activities:
Proceeds from sale of:
Convertible exchangeable preferred stock $ - $ - $245,700
FRP 8 3/4% Senior subordinated notes 146,125 - -
FRP depositary units - - 425,996
FCX Class A common shares - - 174,142
FCX preferred and preference stock 252,985 561,090 217,867
FCX 9 3/4% Senior notes 116,276 - -
PT-FI common shares - - 212,485
Purchase of FTX common shares (67,747) (22,229) (108,591)
Purchase of FCX Class A common shares (47,596) (16,482) (15,253)
Distributions paid to minority interests:
FCX (110,312) (74,848) (46,051)
FRP (121,184) (121,180) (109,450)
Distribution of MOXY and FMPO shares (35,441) - (28,019)
Net proceeds from infrastructure financing 110,825 20,000 -
Proceeds from debt 1,865,928 635,376 851,447
Repayment of debt (1,715,954) (814,920) (797,735)
Purchase of 10 7/8% Senior Debentures (142,919) - -
Cash dividends paid:
Common stock (44,467) (175,890) (179,677)
Preferred stock (22,110) (22,384) (16,882)
Other 4,746 1,962 11,322
---------- -------- --------
Net cash provided by (used in) financing
activities 189,155 (29,505) 837,301
---------- -------- --------
Net increase (decrease) in cash and
short-term investments 1,763 (341,217) 291,399
Cash and short-term investments at
beginning of year 39,785 381,002 89,603
---------- -------- --------
Cash and short-term investments at
end of year $ 41,548 $ 39,785 $381,002
========== ======== ========
Interest paid $ 94,631 $ 94,557 $ 95,787
========== ======== ========
Income taxes paid $ 42,576 $ 15,925 $ 28,123
========== ======== ========

The accompanying notes, which include information in Notes 1 through 5, 7 and
8 regarding noncash transactions, are an integral part of these financial
statements.

FREEPORT-MCMORAN INC.
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation. The consolidated financial statements of Freeport-
McMoRan Inc. (FTX) include all majority-owned subsidiaries and its publicly
traded partnerships (Note 2). Investments in joint ventures and partnerships
(other than publicly traded entities) are generally reflected using the
proportionate consolidation method in accordance with standard industry
practice. All significant intercompany transactions have been eliminated.
Certain prior year amounts have been reclassified to conform to the 1994
presentation.

Cash and Short-Term Investments. Highly liquid investments purchased with a
maturity of three months or less are considered cash equivalents. Cash and
short-term investments owned by consolidated entities are not available to FTX
until a distribution is paid to all owners of an entity's equity securities.

Accounts Receivable. In 1994, IMC-Agrico Company (IMC-Agrico) entered into an
agreement whereby it can sell on an ongoing basis up to $75 million of
accounts receivable. FTX's accounts receivable at December 31, 1994 were net
of $17.9 million of receivables sold.

Inventories. Inventories are generally stated at the lower of average cost or
market and removed at average cost. Rio Tinto Minera, S.A. (RTM) uses the
first-in, first-out (FIFO) cost method.

Property, Plant and Equipment. Property, plant and equipment is carried at
cost. Mineral exploration costs are expensed as incurred, except in the year
the property is deemed to contain a viable mineral deposit, in which case they
are capitalized. Development costs, including interest incurred during the
construction and development period, are capitalized. Expenditures for
replacements and improvements are capitalized. Depreciation for mining and
production assets, including mineral interests, is determined using the unit-
of-production method based on estimated recoverable reserves. Other assets
are depreciated on a straight-line basis over estimated useful lives of 15 to
30 years for buildings and 3 to 25 years for machinery and equipment.

Oil and Gas Costs. FTX follows the successful efforts method of accounting
for its oil and gas operations. Costs of leases, productive exploratory wells
and development activities are capitalized. Other exploration costs are
expensed. Depreciation and amortization is determined on a field-by-field
basis using the unit-of-production method. Gain or loss is included in
income when properties are sold.

Environmental Remediation and Compliance. Environmental expenditures that
relate to current operations are expensed or capitalized as appropriate.
Expenditures resulting from the remediation of an existing condition caused by
past operations, and which do not contribute to current or future revenue
generation, are expensed. Liabilities are recognized for remedial activities
when the efforts are probable and the cost can be reasonably estimated.

Derivatives. Derivatives have been used by FTX to manage certain market risks
resulting from fluctuations in commodity prices (primarily copper and gold),
foreign exchange rates and interest rates by creating offsetting market
exposures. Costs or premiums and gains or losses on the contracts, including
closed contracts, are recognized with the hedged transaction. Also, gains or
losses are recognized if the hedged transaction is no longer expected to
occur. FTX monitors its credit risk on an ongoing basis and considers this
risk to be minimal because its contracts are with a diversified group of
financially strong counterparties.

Freeport-McMoRan Copper & Gold Inc. (FCX) redeemable preferred stocks and
gold and silver denominated loans are treated as hedges of future production
and are carried at their original issue value (the acquisition date value for
the RTM gold and silver denominated loans). As principal payments occur,
differences between the carrying value and the payment are recorded as an
adjustment to revenues.

Concentrate Sales. Revenues from P.T. Freeport Indonesia Company (PT-FI)
concentrate sales are recorded net of royalties, treatment costs and the
impact of its price protection program. PT-FI's concentrate sales agreements
provide for provisional billings based on world metals prices, primarily the
London Metal Exchange, with actual settlement on the copper portion generally
based on appropriate future prices. Revenues, recorded initially using
provisional prices, are adjusted using current prices. At December 31, 1994,
copper sales totaling 192 million pounds remained to be contractually priced
in 1995. As a result of PT-FI's hedging activities, it will realize an
average of $1.01 per pound on these sales. Gold sales are priced according to
individual contract terms.

In December 1991, PT-FI and the Government of Indonesia (the Government)
signed a contract of work (the COW) with a 30-year term and two 10-year
extensions permitted. Under the COW, PT-FI pays the Government a royalty of
1.5 percent to 3.5 percent on the value of copper sold, net of delivery costs
and treatment and refining charges, and a 1 percent royalty on gold and silver
sales. The royalties totaled $19.4 million in 1994, $9.5 million in 1993 and
$15.7 million in 1992.

Foreign Translation Adjustment. RTM's assets and liabilities are translated
to U.S. dollars using the exchange rate in effect at the balance sheet date,
with FTX's share of the translation adjustments recorded as a component of
stockholders' equity. Results of operations are translated using the average
exchange rates during the period.

Net Income Per Share. Primary net income per share is computed by dividing
net income applicable to common stock by the average common and common
equivalent shares outstanding. Fully diluted net income per share is computed
assuming all convertible securities, if dilutive, were converted at the
beginning of the period or date of issuance, whichever is later.

Changes in Accounting Principle. During 1993, FTX adopted the following
changes in accounting principle effective January 1, 1993:

Periodic Scheduled Maintenance - These costs are expensed when incurred.
Previously, costs were capitalized when incurred and amortized.

Deferred Charges - Costs that directly relate to the acquisition,
construction and development of assets and to the issuance of debt and related
instruments are deferred. Previously, certain other costs that benefited
future periods were deferred.

Management Information Systems (MIS) - MIS equipment and software that
have a material impact on net income are capitalized. Other MIS costs,
including equipment and purchased software, that involve immaterial amounts
(currently individual expenditures of less than $0.5 million) and short
estimated productive lives (currently less than three years) are charged to
expense when incurred. Previously, most expenditures for MIS equipment and
purchased software were capitalized.

These changes were adopted to improve the measurement of operating
results by expensing cash expenditures when incurred unless they directly
relate to long-lived asset additions. The change in accounting for MIS costs
also recognizes the rapid rate of technology change in MIS which results in a
need for continuing investments. These changes did not have a material impact
on 1993 income before changes in accounting principle.

2. PUBLIC SUBSIDIARIES
Distribution of FCX Investment. FTX is pursuing a plan to separate its two
principal businesses, copper/gold and agricultural minerals, into two
independent financial and operating entities. To accomplish this plan, FTX
would make a pro-rata distribution of its common stock ownership in FCX to FTX
common stockholders. As a result of this distribution, which will require a
series of steps to implement, FTX would no longer own any interest in FCX.
The proposed distribution, which is expected to take several months to
implement, is contingent on a number of factors including completion of a
restructuring of the liabilities of FTX including its long-term debt, which
will include the use of a portion of the FCX shares currently owned by FTX,
and changing the voting rights of FCX stockholders so that the Class B
stockholders elect 80 percent of the FCX directors and the Class A
stockholders and preferred stockholders elect the balance. The change in
voting rights is subject to FCX Class A stockholder approval. There can be no
assurances that these contingencies will be met. In an Internal Revenue
Service private-letter ruling, FTX has received assurance that the
distribution of FCX Class B common shares to FTX common stockholders will be
tax-free.

Freeport-McMoRan Copper & Gold Inc. FTX's metals operations are conducted
through its publicly traded subsidiary, FCX. FTX's ownership of the FCX Class
A and Class B common stock combined was 68.3 percent at December 31, 1994 and
71.8 percent at December 31, 1993. FCX's operations are conducted primarily
through its subsidiaries, PT-FI which principally operates the Indonesian
copper and gold mining facilities and RTM which operates a copper smelter in
Spain (Note 3).

In December 1992, FCX purchased 49 percent (10.5 million shares) of the
capital stock of a publicly traded Indonesian entity which owned 10 percent of
PT-FI. The fair market value of FCX Class A common stock at the time of the
agreement was the basis for calculating the purchase price. In December 1993
and January 1994, PT-FI issued shares of its stock to FCX in exchange for the
conversion of certain intercompany notes. FCX's direct ownership in PT-FI
totaled 81.3 percent and 80.8 percent at December 31, 1994 and 1993,
respectively. At December 31, 1994, PT-FI's net assets totaled $261.2
million, including $57.6 million of retained earnings.

In July 1992, FCX sold publicly 8.6 million shares of its Class A common
stock, resulting in an after-tax gain to FTX of $100.9 million, and 9 million
depositary shares for net proceeds of $392 million. Each depositary share
represents 2 16/17 shares of its 7% Convertible Exchangeable Special
Preference Stock, has a cumulative annual cash dividend of $1.75 (payable
quarterly) and a $25 liquidation preference, and is convertible at the option
of the holder into 1.021 shares of FCX Class A common stock. Beginning August
1995, FCX may redeem these depositary shares for cash at $26.225 per share
(declining ratably to $25 per share in March 2002) plus accrued and unpaid
dividends.

In July 1993, FCX sold publicly 14 million depositary shares representing
its Step-Up Convertible Preferred Stock for net proceeds of $340.7 million.
Each depositary share has a cumulative annual cash dividend (payable
quarterly) of $1.25 through August 1996 and $1.75 thereafter and a $25
liquidation preference, and is convertible at the option of the holder into
0.835 shares of FCX Class A common stock. From August 1996 through August
1999, FCX may redeem these depositary shares for 0.835 shares of FCX Class A
common stock per depositary share if the market price of FCX Class A common
stock exceeds certain specified levels. Thereafter, FCX may redeem these
depositary shares at $25 per share (payable in FCX Class A common stock, cash
or a combination of both, at FCX's option) plus accrued and unpaid dividends.

In August 1993, FCX sold publicly 6 million depositary shares
representing its Gold-Denominated Preferred Stock for net proceeds of $220.4
million. Each depositary share has a cumulative quarterly cash dividend equal
to the value of 0.000875 ounces of gold and will be redeemed in August 2003
for the cash value of 0.1 ounces of gold.

In January 1994, FCX sold publicly 4.3 million depositary shares
representing its Gold-Denominated Preferred Stock, Series II for net proceeds
of $158.5 million. Each depositary share has a cumulative quarterly cash
dividend equal to the value of 0.0008125 ounces of gold and will be redeemed
in February 2006 for the cash value of 0.1 ounces of gold.

In July 1994, FCX sold publicly 4.8 million depositary shares
representing its Silver-Denominated Preferred Stock for net proceeds of $94.5
million. Each depositary share has a cumulative quarterly cash dividend equal
to the value of 0.04125 ounces of silver. Annually, beginning in August 1999,
FCX will redeem the underlying Silver-Denominated Preferred Stock in eight
equal installments.

The FCX redeemable preferred stocks are being reported as a hedge of
future gold and silver sales for accounting purposes (Note 1). FTX reports
the FCX preferred stock and related dividends as minority interests in its
financial statements.

PT-FI entered into joint ventures owned one-third by PT-FI and two-thirds
by P.T. ALatieF Nusakarya Corporation (ALatieF), an Indonesian investor, to
purchase and manage certain PT-FI infrastructure assets for $270 million. The
management agreements, which are terminable by either party upon six months
written notice after debt repayment, provide ALatieF with a guaranteed minimum
rate of return on its investment and result in the joint ventures being
consolidated for financial reporting purposes. The joint ventures have
purchased $194.9 million of infrastructure assets through December 31, 1994
and are expected to purchase the final $75.1 million of assets in 1995.
Funding for the purchases consists of $90 million in equity contributions by
the joint venture partners, the ALatieF bank loan and the 9 3/4% Senior Notes
(Note 5).

In December 1994, PT-FI entered into a joint venture, 30 percent owned by
PT-FI, to purchase and manage its power-related assets for an estimated $215
million. A $100 million sale occurred in December 1994 and the remaining
sales are expected to take place by the end of 1995. PT-FI guaranteed the
joint venture a minimum rate of return and is obligated to make minimum
payments sufficient to allow the joint venture to meet its debt service. PT-
FI accounts for its investment in the joint venture using the equity method.

PT-FI is proceeding with plans to sell other nonoperating assets whereby
the purchaser will operate the assets and provide services to PT-FI and its
designees.

Freeport-McMoRan Resource Partners, Limited Partnership (FRP). FTX's
fertilizer and sulphur operations and its Main Pass oil operations are
conducted through its publicly traded affiliate, FRP. FTX owned 51.4 percent
and 51.3 percent of the FRP units outstanding at December 31, 1994 and 1993,
respectively.

In July 1993, FRP and IMC Global Inc. (IGL) formed the IMC-Agrico joint
venture, operated by IGL, for their respective phosphate fertilizer
businesses, including phosphate rock and uranium. FRP's "Current Interest",
reflecting cash to be distributed from ongoing operations, initially was 58.6
percent and its "Capital Interest", reflecting the purchase or sale of long-
term assets or any required capital contributions, was 46.5 percent. These
ownership percentages (55 percent and 45.1 percent, respectively, at December
31, 1994) decline in annual increments to 40.6 percent for the fiscal year
ending June 30, 1998 and remain constant thereafter. At December 31, 1994,
FRP's investment in IMC-Agrico totaled $399.2 million. IMC-Agrico's assets
are not available to FRP until distributions are paid by the joint venture.

Publicly owned FRP units have cumulative rights to receive quarterly
distributions of 60 cents per unit through the distribution for the quarter
ending December 31, 1996 (the Preference Period) before any distributions may
be made to FTX. On January 20, 1995, FRP declared a distribution of 60 cents
per publicly held unit ($30.2 million) and 26 cents per FTX-owned unit ($13.9
million), bringing the total unpaid distributions to FTX to $353.1 million.
During the Preference Period the unpaid FTX distributions will be payable,
after a 60 cents per unit quarterly distribution is paid to all unitholders,
equal to the lesser of any deficiency or one-half of the amount by which
distributable cash exceeds a 60 cents per unit distribution. Remaining
distributable cash will be paid to all unitholders according to their
percentage interests. After the Preference Period, distribution deficiencies
on FTX-owned FRP units will be paid as described above after any deficiencies
in the cumulative quarterly distribution to the public are paid and a
quarterly distribution of 60 cents per unit has been paid to all unitholders.

In February 1992, FRP sold publicly 19.5 million new units, resulting in
a gain to FTX of $136.6 million which was deferred because of the FRP public
unitholders' distribution priority. Even though FTX had not been receiving
its proportionate share of FRP distributions, FTX was able to reflect its
proportionate share of FRP's earnings through recognition of portions of the
deferred gain ($32.6 million in 1994, $62.2 million in 1993 and $41.8 million
in 1992) prior to the third quarter of 1994. However, the remaining deferred
gain was utilized and FTX recognized an additional minority interest charge in
1994 of $26.5 million. In future periods, FTX's share of the reported
financial results of FRP will depend on the extent to which FTX receives its
proportionate share of FRP distributions. To the extent that public
unitholders receive a disproportionately large share of FRP distributions, as
has been the case since early 1992, FTX will recognize a smaller share of
FRP's reported earnings than would be represented by its percentage ownership
of FRP.

3. ACQUISITIONS
In March 1993, FCX acquired a 65 percent interest in RTM and in December 1993,
RTM redeemed the remaining 35 percent. At December 31, 1994, RTM's net assets
totaled $80.2 million. The purchase price allocation follows (in thousands):

Current assets $101,454
Current liabilities (158,445)
Property, plant and equipment 277,170
Other assets 5,358
Long-term debt (38,941)
Accrued postretirement benefits and other liabilities (176,206)
--------
Net cash investment $ 10,390
========

4. RESTRUCTURING AND VALUATION CHARGES
Restructuring Charges. During 1993, FTX recognized restructuring expenses
totaling $67.1 million. The charges consisted of $30.3 million for personnel
related costs, $15 million for excess office space and furniture and fixtures
resulting from staff reductions, $8.2 million for downsizing its MIS
structure, $4.8 million of deferred charges relating to FTX's and PT-FI's
credit facilities which were substantially revised in June 1993 and $8.8
million for IMC-Agrico formation costs.

In connection with the restructuring project, FTX changed its accounting
systems and undertook a detailed review of its accounting records and
valuation of various assets and liabilities. As a result of this process, FTX
recorded charges totaling $65.1 million, comprised of (a) $26.2 million of
production and delivery costs consisting of $10.4 million for revised
estimates of prior year costs; $6.3 million for revised estimates of
environmental liabilities; $5 million for materials and supplies inventory
obsolescence and $4.5 million for adjustments in converting accounting
systems, (b) $18.7 million of depreciation and amortization consisting of
$11.5 million for estimated future abandonment and reclamation costs and $7.2
million for the write-down of miscellaneous properties, (c) $4.4 million of
exploration expenses for the write-down of an unproved oil and gas property
and (d) $15.8 million of general and administrative expenses consisting of
$9.4 million to downsize FTX's MIS structure and $6.4 million for the write-
off of miscellaneous assets.

Asset Sales/Recoverability. During 1993, FTX sold a nonproducing oil and gas
property recognizing a gain of $69.1 million, and FRP sold assets, primarily
certain previously mined phosphate rock acreage, recognizing a gain of $11.8
million. FRP also sold its remaining interests in producing geothermal
properties for $63.5 million, consisting of $23 million in cash and $40.5
million of interest-bearing notes (included in other assets), recognizing a
$31 million charge to expense and recording a $9 million charge for impairment
of its undeveloped geothermal properties. In 1994, FRP received prepayment of
these notes.

FTX charged $105 million to expense during 1993 for the recoverability
of certain assets, primarily FRP's Main Pass oil and non-Main Pass sulphur
assets.

5. LONG-TERM DEBT
December 31,
-----------------------
1994 1993
---------- ----------
(In Thousands)
Notes payable:
FTX credit agreement, average rate 5.5% in 1994
and 4.1% in 1993 $ 425,000 $ 388,000
RTM project financing, average rate 8.3% in 1994 110,000 -
ALatieF loan, average rate 6.7% in 1994 57,000 60,000
FCX equipment loan 70,000 -
Other, primarily RTM borrowings 34,276 57,709
---------- ----------
Total notes payable 696,276 505,709
---------- ----------
Publicly traded notes and debentures:
10 7/8% Senior Subordinated Debentures due 2001 - 125,358
6.55% Convertible Subordinated Notes, face amount of
$373 million, effective rate of 9.825%, due 2001 318,237 311,863
Zero Coupon Convertible Subordinated Debentures, face
amount of $749.7 million, effective rate of 9%,
due 2006 270,196 247,427
FRP 8 3/4% Senior Subordinated Notes due 2004 150,000 -
FCX 9 3/4% Senior Notes due 2001 120,000 -
FCX Zero Coupon Exchangeable Notes - 102,039
---------- ----------
Total publicly traded notes and debentures 858,433 786,687
---------- ----------
RTM gold and silver denominated loans, average rate
1.2% in 1994 and 1.3% in 1993 16,585 39,284
PT-FI capital lease obligation, net of $244 million
in future interest (Note 2) 100,000 -
---------- ----------
1,671,294 1,331,680
Less current portion and short-term borrowings 24,412 49,256
---------- ----------
$1,646,882 $1,282,424
========== ==========

Notes Payable. FTX has a variable rate credit agreement (the Credit
Agreement) structured as a revolving line of credit through June 1996 followed
by a 3 1/2 year reducing revolver. The Credit Agreement is part of an $800
million committed credit facility and is subject to a borrowing base,
redetermined annually by the banks, which establishes maximum consolidated
debt for FTX. As of December 31, 1994, $466.7 million was available under the
borrowing base and $377 million of borrowings were unused under the credit
facility. FTX guarantees any borrowings under the Credit Agreement and is
required to retain control of FRP and PT-FI. Under certain circumstances, FTX
could be required to pledge a portion of its equity in FCX and FRP. PT-FI
also assigned its existing and future sales contracts and pledged its rights
under the COW and certain assets as security for its borrowings. The Credit
Agreement provides for working capital requirements, specified coverage of
fixed charges and restrictions on other borrowings.

The proposed spinoff of FCX (Note 2) is expected to occur by mid-1995 and
will include a restructuring of the liabilities of FTX which requires the use
of a portion of the FCX shares currently owned by FTX. FTX has discussed with
several potential investors transactions that which would provide for the
recapitalization or refinancing of its debt and guarantees. However, no
agreements have been reached with respect to any transaction. Separate bank
credit facilities are being arranged for FTX/FRP and FCX/PT-FI. The
restructuring plan is expected to provide greater access to credit markets and
reduce financing costs for the FTX companies from that which would be
available otherwise.

In 1994, RTM obtained variable rate project financing (the RTM Facility)
consisting of a $225 million term loan facility and a $65 million working
capital facility, both nonrecourse to FCX. The term loan facility matures in
thirty-six equal quarterly payments starting September 30, 1996. The working
capital facility matures June 2005. The RTM Facility requires certain hedging
arrangements, restricts other borrowings and specifies certain coverage
ratios. Prior to the completion of the expansion, the RTM Facility is secured
by RTM's capital stock and thereafter by 51 percent of the capital stock.

The ALatieF bank loan, entered into as part of the PT-FI infrastructure
sales (Note 2), has a variable interest rate and is guaranteed by PT-FI.
Principal payments total $3 million annually with a balloon payment in
December 1998.

In December 1994, FCX entered into a $70 million variable rate equipment
loan secured by certain PT-FI assets. Principal payments total $7 million
annually with a balloon payment in December 2001.

In February 1994, IMC-Agrico entered into a three-year $75 million
variable rate credit facility (the IMC-Agrico Facility). Borrowings under the
IMC-Agrico Facility are unsecured with a negative pledge on substantially all
of IMC-Agrico's assets. The IMC-Agrico Facility has minimum capital, fixed
charge and current ratio requirements for IMC-Agrico; places limitations on
debt at IMC-Agrico; and restricts the ability of IMC-Agrico to make cash
distributions in excess of distributable cash generated.

Publicly Traded Notes and Debentures. During 1994, FTX defeased $125.3
million of its 10 7/8% Senior Subordinated Debentures resulting in a $9.1
million after-tax extraordinary loss.

FTX's 6.55% Convertible Subordinated Notes are convertible at the
holder's option into 48.55 shares of FTX common stock per $1,000 principal
amount (equivalent to a conversion price of $20.60 per FTX share). FTX may
redeem these notes for cash at 91.21 percent of principal (increasing ratably
to 100 percent over the term of the notes) plus accrued interest.

FTX's Zero Coupon Convertible Subordinated Debentures are convertible, at
the holder's option, into 14.42 shares of FTX common stock per $1,000
principal amount (subject to adjustment in certain events), with FTX having
the right to pay cash in lieu of all or part of such FTX common stock. FTX
may redeem these debentures for cash at the issue price plus accrued original
issue discount. The debentures have a contingent payment feature (if the
market price of FTX common stock exceeds certain specified amounts) payable in
FTX common stock, cash or a combination of both, at FTX's option. The
debentures contain purchase rights at the holder's option, as of August 1996
or 2001, at the issue price plus accrued original issue discount.

In February 1994, FRP sold publicly $150 million of 8 3/4% Senior
Subordinated Notes and in April 1994, a wholly owned subsidiary of FCX sold
publicly $120 million of 9 3/4% Senior Notes which are guaranteed by FCX.

In 1991, FCX sold $1.035 billion face amount of Zero Coupon Exchangeable
Notes. Notes with a face amount of $386 million, $322.6 million and $326.4
million were presented for exchange in 1994-1992, respectively, for which FCX
issued 5.8 million, 4.8 million and 4.5 million shares of its Class A common
stock. FCX also paid $0.3 million in 1994 and $7.9 million in 1992. As a
result of these exchanges, FTX recognized a pretax gain of $9.3 million in
1994, $44.1 million in 1993 and $33.8 million in 1992.

RTM Gold and Silver Denominated Loans. In December 1994, RTM used borrowings
under the RTM facility to in effect defease its two gold and silver
denominated loans. RTM retired one of its gold and silver loans and purchased
55,000 ounces of gold at $379.81 per ounce to offset the remaining gold loan
(5,000 ounces payable quarterly). The purchased gold is recorded as product
inventory or other long-term assets according to the payment terms.

Minimum Principal Payments. Payments scheduled for each of the five
succeeding years based on the amounts and terms outstanding at December 31,
1994 are $24.4 million in 1995, $82.8 million in 1996, $145.5 million in 1997,
$187.9 million in 1998 and $140.6 million in 1999.

Capitalized Interest. Capitalized interest totaled $53.3 million in 1994,
$62.2 million in 1993 and $84.7 million in 1992.

6. INCOME TAXES
Effective January 1, 1992, FTX adopted Statement of Financial Accounting
Standards No. 109, the new accounting standard for income taxes. The
cumulative adjustment to taxes and the impact on 1992 earnings from operations
were not material. The components of FTX's net deferred tax asset (included
in other assets) and liability are as follows:

1994 1993
Consolidated Tax Group Consolidated Tax Group
----------------------- ----------------------
FTX FCX FTX FCX
--------- --------- --------- ---------
(In Thousands)
Deferred tax asset:
Net operating loss
carryforwards $121,248 $ - $ 58,650 $ -
Alternative Minimum Tax
credits 47,183 26,972 43,242 29,465
Other tax carryforwards 45,637 - 41,814 -
Deferred compensation,
postretirement and
pension benefits 55,039 - 44,820 -
Reclamation and shutdown
reserve 24,908 - 25,371 -
Other 14,440 - 49,332 -
Less valuation allowance (45,637) (26,972) (41,814) (29,465)
-------- --------- --------- ---------
Total deferred tax
asset 262,818 - 221,415 -
-------- --------- --------- ---------
Deferred tax liability:
Property, plant and
equipment (116,215) (290,259) (100,499) (199,956)
Basis in subsidiaries (39,380) - (21,554) -
Other (42,155) (2,321) (10,527) (1,597)
-------- --------- --------- ---------
Total deferred tax
liability (197,750) (292,580) (132,580) (201,553)
-------- --------- --------- ---------
Net deferred tax asset
(liability) $ 65,068 $(292,580) $ 88,835 $(201,553)
======== ========= ========= =========

The net deferred tax asset is from FTX's domestic operations and the net
deferred tax liability relates to PT-FI's operations. Recognition of a
deferred tax asset is dependent upon FTX's evaluation that it is more likely
than not that it will ultimately be realized from future domestic operating
income. FTX believes that no valuation allowance is needed for its net
operating loss (NOL) carryforwards and alternative minimum tax (AMT) credits
because historically it has been able to use substantially all of its tax
benefits and tax-planning strategies are available that would enable it to use
these deferred tax assets. The NOL carryforwards do not expire until the
years 2007-2009 and the AMT credits can be carried forward indefinitely. FTX
has provided a valuation allowance for the other tax credit and charitable
contribution carryforwards as they can only be used subsequent to the NOL
carryforwards and AMT credits and substantially all expire between 1995 and
2000. A valuation allowance has been provided at FCX for all AMT credits, as
these would only be used should FCX be required to pay regular U.S. tax, which
is unlikely.

RTM is subject to taxation in Spain. FCX has provided a valuation
allowance equal to the future tax benefits resulting from RTM's approximately
$122 million of additional tax basis and for $5.5 million of net operating
losses because RTM has not generated taxable income in recent years.

FTX does not provide deferred taxes for certain financial and income tax
reporting differences related to FCX and FRP which are considered permanent in
duration. These differences resulted primarily from gains recognized for
financial reporting purposes upon the sale of FCX shares and FRP units. As of
December 31, 1994, these basis differences were approximately $185 million for
FCX and $330 million for FRP. If ownership in these subsidiaries were to fall
below 50 percent, FTX would be required to charge earnings for taxes on the
difference between the book and tax basis of its investment.

During 1994, FTX requested and received a ruling from the Internal
Revenue Service that a spinoff of the FCX shares currently held by FTX to its
common shareholders would qualify as a tax-free reorganization, provided
certain conditions are met. FTX has announced its intention to enter into
this transaction during 1995 (Note 2). If the transaction is consummated the
basis difference relating to FCX shares described above would be eliminated.

The provision for income taxes consists of the following:

1994 1993 1992
-------- ------- --------
(In Thousands)
Current income taxes:
Federal $ 12,612 $(2,497) $(24,565)
Foreign 26,829 54,994 45,996
State (638) 4,391 1,087
-------- ------- --------
38,803 56,888 22,518
-------- ------- --------
Deferred income taxes:
Federal 13,174 (54,730) (10,359)
Foreign 91,027 4,600 63,438
State 480 - -
-------- ------- --------
104,681 (50,130) 53,079
-------- ------- --------
$143,484 $ 6,758 $ 75,597
======== ======= ========
<TABLE>
Reconciliations of the differences between income taxes computed at the
federal statutory tax rate and income taxes recorded follow:
<CAPTION>
1994 1993 1992
---------------- ----------------- ------------------
Amount Percent Amount Percent Amount Percent
-------- ------- -------- ------- -------- -------
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Income taxes computed at the federal
statutory tax rate $131,363 35% $(61,193) 35% $114,374 34%
Increase (decrease) attributable to:
FCX dividend 6,453 2 6,456 (3) 5,799 2
Statutory depletion (1,780) (1) (2,016) 1 (5,126) (2)
Partnership minority interests (25,342) (7) 45,057 (26) (3,253) (1)
Sale of subsidiary interests - - - - (45,794) (14)
Minimum, state and foreign taxes 10,963 3 18,462 (11) 13,855 4
Sales of assets and other 21,827 6 (8) - (4,258) (1)
-------- -- -------- -- -------- --
Provision for income taxes $143,484 38% $ 6,758 (4)% $ 75,597 22%
======== == ======== == ======== ==
</TABLE>

7. STOCKHOLDERS' EQUITY
Preferred Stock. In March 1992, FTX issued 5 million shares of its $4.375
Convertible Exchangeable Preferred Stock, each with a $50 liquidation value,
convertible into FTX common stock at a conversion price of $21.57 per share.
Beginning March 1997, FTX may redeem this preferred stock for cash at $52.1875
per share (declining ratably to $50 per share in March 2002) plus accrued and
unpaid dividends.

Common Stock. In June 1994, FTX changed its dividend policy and distributed
quarterly one FCX common share for each 80 FTX common shares owned in lieu of
paying a $0.3125 quarterly cash dividend to its stockholders. FTX recorded
pretax gains totaling $105.5 million in 1994 related to these property
dividends. Subsequent to the FTX restructuring, FTX's Board of Directors will
determine a new dividend policy.

Stock Options. FTX's stock option plans provide for the issuance of stock
options and stock appreciation rights (SARs) at no less than market value at
time of grant. Under the 1992 stock option plans, FTX can grant options to
employees to purchase up to 9.5 million shares, including SARs and stock
incentive units (SIUs), which are similar to SARs. The 1988 Stock Option Plan
for Non-Employee Directors authorizes FTX to grant options to purchase up to
1.5 million shares. Under certain options, FTX will pay cash to the optionee
equal to an amount based on the maximum individual federal income tax rate in
effect at the time of exercise. In connection with the distribution of FCX
and McMoRan Oil & Gas Co. (MOXY) shares, each option was adjusted to preserve
the economic value of the option and similar adjustments will occur for future
FCX share distributions. Additionally, the FCX spin-off would result in an
adjustment to the average option price based on the value of the distribution.
Generally, stock options terminate ten years from the date of grant. A
summary of stock options outstanding, including SARs and SIUs, follows:

1994 1993
---------------------- -----------------------
Average Average
Number of Option Number of Option
Options Price Options Price
---------- ------- ---------- -------
Beginning of year 13,742,990 $17.69 13,386,365 $17.58
Granted 1,787,200 19.42 1,358,800 18.37
Adjustments 954,161 -
Exercised (689,446) 15.90 (416,639) 14.35
Expired (113,377) 17.90 (585,536) 18.87
---------- ----------
End of year 15,681,528 16.46 13,742,990 17.69
========== ==========

At December 31, 1994, stock options representing 10.7 million shares were
exercisable at an average option price of $15.92 per share. Options for 1.6
million shares and 0.6 million shares were available for new grants under the
1992 and 1988 Stock Option Plans, respectively, as of December 31, 1994.

8. PROPERTY DISTRIBUTIONS
FM Properties Inc. (FMPO). In June 1992, FTX transferred substantially all of
its domestic oil and gas properties and real estate held for development by it
and certain of its subsidiaries, excluding FRP, to a partnership which is
currently 99.8 percent owned by FMPO. FTX owns a 0.2 percent interest in the
partnership and serves as its managing general partner. In May 1992, FTX
declared a distribution of one FMPO common share for each ten FTX common
shares owned. Selected financial information of FMPO follows:

1994 1993 May 31, 1992
-------- -------- ------------
(In Thousands)
Balance Sheets:
Current assets $ 6,857 $ 99,839 $ 42,103
Current liabilities, excluding current
portion of long-term debt 18,671 37,968 13,302
Oil and gas properties, net - - 444,676
Investment in real estate 198,453 286,459 248,647
Total assets 214,365 392,865 741,618
Long-term debt (guaranteed by FTX) 132,075 173,796 493,305
Stockholders' equity 59,370 145,660 176,588
Statements of Operations:
Revenues 40,435 26,027
Operating loss (123,739) (17,722)
Net loss (86,290) (18,814)
Cash Flow:
Operating activities 11,968 103,920
Investing activities 29,019 196,372
Financing activities (42,270) (300,517)

During recent months, FMPO has been engaged in discussions with third
parties regarding obtaining new financing for its existing debt, which has
significant maturities beginning in January 1996 when $74 million becomes due.
The new financing may involve issuing new debt, common or preferred equity
investments or sales of assets. An objective in arranging new financing for
FMPO will be to eliminate the FTX guarantee of FMPO's debt. In the event that
FMPO's refinancing is not complete at the time of the FCX spinoff, an
arrangement is being considered that would involve FCX's guaranteeing a
significant portion of FMPO's debt pending completion of FMPO's refinancing.
Based on an analysis, using generally accepted accounting principles, of the
carrying amount in its financial statements of its investment in real estate
assets, FMPO concluded that it should reduce these amounts through a $115
million pretax, noncash write-down in 1994.

During 1993, FMPO sold all of its producing oil and gas properties and
used the proceeds, a portion of which was received in 1994, to reduce its
long-term debt.

McMoRan Oil & Gas Co. (MOXY). In May 1994, FTX's Board of Directors declared
a special distribution of one common share of its newly formed, wholly owned
subsidiary, MOXY for each ten FTX common shares. MOXY was organized for the
purpose of carrying on substantially all of the oil and gas exploration
activities previously conducted by FTX. The net assets transferred to MOXY at
FTX's historical cost follow (in thousands):

Cash and short-term investments $35,441
Property, plant and equipment 13,052
Other assets 10,113
Current liabilities (1,138)
-------
$57,468
=======

9. PENSION AND OTHER EMPLOYEE BENEFITS
The FTX pension plan covers substantially all United States and certain
overseas employees. Employees covered by collective bargaining agreements and
most nonresident aliens, many of whom are covered by other plans, are not
included. Benefits are based on compensation levels and years of service.
FTX funds its pension liability in accordance with Internal Revenue Service
guidelines. Additionally, for those participants in the qualified defined
benefit plan whose benefits are limited under federal income tax laws, FTX
sponsors an unfunded, nonqualified plan. Information on the two plans
follows:

December 31,
----------------------
1994 1993
--------- ---------
(In Thousands)
Actuarial present value of benefit obligations
(projected unit credit method):
Vested $ 90,396 $ 93,609
Nonvested 1,643 2,236
-------- ---------
Accumulated benefit obligations $ 92,039 $ 95,845
======== =========

Projected benefit obligations (projected unit credit
method) $(114,599) $(130,585)
Less plan assets at fair value 108,326 107,917
--------- ---------
Projected benefit obligations in excess of plan
assets (6,273) (22,668)
Unrecognized net (gain) loss from past experience
different from that assumed (5,179) 16,518
Unrecognized prior service costs 4,340 4,833
Unrecognized net asset at January 1, 1986,
being recognized over 19 years (3,763) (4,142)
--------- ---------
Accrued pension cost $ (10,875) $ (5,459)
========= =========

In determining the present value of benefit obligations for 1994 and
1993, FTX used a 8.25 percent and 7 percent discount rate, respectively, a 5
percent annual increase in future compensation levels and a 9 percent average
expected rate of return on assets.

Net pension cost includes the following:

1994 1993 1992
------ ------- -------
(In Thousands)
Service cost $5,668 $ 8,573 $ 7,376
Interest cost on projected benefit
obligations 9,008 9,739 8,609
Actual return on plan assets 126 (9,388) (10,220)
Net amortization and deferral (8,814) 1,423 3,689
Termination benefits 2,404 26 1,813
------ ------- -------
Net pension cost $8,392 $10,373 $11,267
====== ======= =======

RTM has an unfunded contractual obligation to supplement the amounts paid
to retired employees. Based on a discount rate of 8 percent, the accrued
liability totaled $84.7 million at December 31, 1994. RTM expensed $6.8
million in 1994 and $5.2 million since its acquisition in 1993 for interest on
this obligation. Cash payments were $7.8 million in 1994 and $8 million in
1993.

The operator of IMC-Agrico maintains non-contributory pension plans that
cover substantially all of its employees. As of July 1, 1994, FRP's share of
the actuarial present value of the vested projected benefit obligation was
$7.5 million based on a discount rate of 8.4 percent and a 5 percent annual
increase in future compensation levels. As of December 31, 1994, these plans
are unfunded. FRP's share of the expense related to these plans totaled $3.6
million in 1994 and $1.5 million in 1993.

FTX provides certain health care and life insurance benefits for retired
employees. The related expense totaled $13.9 million in 1994 ($1.5 million
for service cost and $12.4 million in interest for prior period services),
$12.4 million in 1993 ($1.9 million and $10.5 million, respectively) and $12.5
million in 1992 ($1.6 million and $10.9 million, respectively). Summary
information of the plan follows:

December 31,
-------------------
1994 1993
-------- --------
Actuarial present value of accumulated (In Thousands)
postretirement obligation:
Retirees $121,077 $118,418
Fully eligible active plan participants 9,750 14,066
Other active plan participants 5,105 14,083
-------- --------
Total accumulated postretirement obligation 135,932 146,567
Unrecognized net gain (loss) 4,470 (14,237)
-------- --------
Accrued postretirement benefit cost $140,402 $132,330
======== ========

The initial health care cost trend rate used was 11.5 percent for 1993,
decreasing 0.5 percent per year until reaching 6 percent. A one percent
increase in the trend rate would increase the amounts by approximately 10
percent. The discount rate used was 8.25 percent in 1994 and 7 percent in
1993. FTX has the right to modify or terminate these benefits.

The operator of IMC-Agrico provides certain health care benefits for
retired employees. At July 1, 1994, FRP's share of the accumulated
postretirement obligation was $3.6 million, which was unfunded, with FRP's
share of expense being $0.5 million in 1994 and $0.4 million in 1993. The
initial health care cost trend rate used was 10.4 percent, decreasing
gradually to 5.5 percent in 2003. The discount rate used was 8.4 percent.
Employees are not vested and benefits are subject to change.

FTX has an Employee Capital Accumulation Program which permits eligible
employees to defer a portion of their pretax earnings. FTX also has an
unfunded excess benefits plan for employees to defer amounts in excess of the
limitations imposed by the Internal Revenue Code. FTX matches employee
deferrals up to 5 percent of basic earnings through an investment in FTX
common shares. FTX has other employee benefits plans, certain of which are
related to its performance, which costs are recognized currently in general
and administrative expense. The cost of these plans totaled $20.6 million in
1994, $7.6 million in 1993 and $15.9 million in 1992.

As a result of the proposed FCX spinoff, FCX is currently in the process
of establishing its own employee benefit and stock option plans and will
assume certain liabilities associated with FTX's employee benefits and stock
option plans.

10. COMMITMENTS AND CONTINGENCIES
Litigation. While FTX is a defendant in various lawsuits incurred in the
ordinary course of its businesses, management believes the potential liability
in such lawsuits is not material or is adequately covered by insurance, third
party indemnity agreements or reserves previously established. FTX maintains
liability and other insurance customary in its businesses, with coverage
limits deemed prudent.

Environmental. FTX makes expenditures at its operations for protection of the
environment. FTX is subject to contingencies as a result of environmental
laws and regulations. The related future cost is indeterminable due to such
factors as the unknown timing and extent of the corrective actions that may be
required and the application of joint and several liability. However, FTX
believes that such costs will not have a material adverse effect on its
operations or financial position.

Estimated future expenditures to restore properties and related
facilities to a state required to comply with environmental and other
regulations are accrued over the life of the properties. The future
expenditures are estimated based on current costs, laws and regulations. As
of December 31, 1994, FRP had accrued $55 million for abandonment and
restoration of its non-Main Pass sulphur assets, approximately one-half of
which will be reimbursed by third parties, and $42.8 million for reclamation
of land relating to mining and processing phosphate rock. FRP estimates that
its share of abandonment and restoration costs of the Main Pass sulphur mine
will approximate $35 million, $1.4 million of which had been accrued at
December 31, 1994, with essentially all costs to be incurred after mine
closure in approximately 30 years. Additionally, at December 31, 1994 FCX had
an accrual of $12.9 million related to RTM's impending mine closure. These
estimates are by their nature imprecise and can be expected to be revised over
time due to changes in government regulations, operations, technology and
inflation.

In June 1994, a sinkhole was found at a phosphogypsum storage area at
IMC-Agrico's New Wales, Florida facility. In addition, there was an earthen
dam breach at two of its phosphate rock facilities in late 1994. IMC-Agrico
accrued $10.8 million ($4.9 million net to FRP) during 1994 for costs to
rectify these situations. While there is no evidence indicating underground
water contamination in areas away from the facilities, this issue continues to
be monitored. If there were contamination, which IMC-Agrico considers
unlikely, the costs that would be required are uncertain and cannot be
estimated at the present. If significant costs were incurred it would be
necessary to determine the applicability of insurance coverage maintained by
IMC-Agrico, and separately by FRP, and for the sharing of costs between the
joint venture partners.

FRP has an indemnification for environmental remediation costs in excess
of an aggregate $5 million on certain identified sites (FRP has previously
accrued the $5 million). The third party has assumed management of these
sites. Based on FRP's review of the potential liabilities and the third
party's financial condition, FRP concluded that it is remote that FRP would
have any additional liability. FTX believes its exposure on other domestic
abandoned environmental sites will not exceed amounts accrued and expects that
any costs would be incurred over a period of years.

FTX believes it is in compliance with all applicable Indonesian
environmental laws, rules and regulations. Based on current Indonesian
environmental regulations, eventual mine closure and reclamation costs for
Irian Jaya mining operations are not expected to be material.

RTM's expansion costs include approximately $18 million to modify and
expand its sulphuric acid plants. Subsequent to expansion, RTM believes its
facilities will be in compliance with all existing Spanish and European
environmental standards.

Long-Term Contracts and Operating Leases. In June 1994, RTM signed a turnkey
contract to expand its smelter capacity to 270,000 metric tons of metal per
year by early 1996 at a cost of approximately $215 million, of which $154
million had not been incurred at December 31, 1994. In addition, RTM has
commitments to purchase concentrate (excluding PT-FI) of 338,750 metric tons
in 1995, 285,000 metric tons in 1996, 330,000 metric tons in 1997, 280,000
metric tons in 1998 and a total of 280,000 metric tons from 1999-2000, at
market prices.

In January 1995, FCX agreed in principle to form a joint venture, 20
percent owned by FCX, to develop a 200,000 metric tons of metal per year
copper smelter in Gresik, Indonesia. Design is under way and construction is
expected to begin in 1995, with operations commencing as soon as the second
half of 1998. Alternatives for financing the estimated $550 million aggregate
project cost, which excludes approximately $100 million of working capital,
are being reviewed. It is contemplated that PT-FI would provide all of the
smelter's concentrate requirements at market rates; however, for the first
fifteen years of operations the treatment and refining charges would not fall
below a certain minimum rate. FCX has also agreed to assign its earnings in
the joint venture to support an after-tax return of 13 percent to the 70
percent partner, if necessary, for the first twenty years of commercial
operations. Additionally, the 10 percent partner has an option, exercisable
on the third anniversary of commercial operations, to require FCX to purchase
its interest at a 10 percent annual return.

FTX's minimum annual contractual charges under noncancellable long-term
contracts and operating leases which extend to 2009 total $385.2 million, with
$40 million in 1995, $38.5 million in 1996, $35.5 million in 1997, $32.9
million in 1998 and $31.9 million in 1999. Total rental expense under long-
term contracts and operating leases amounted to $41.7 million in 1994, $43
million in 1993 and $31.4 million in 1992.

11. FINANCIAL INSTRUMENTS
Summarized below are the financial instruments (including all derivative
instruments) whose carrying amount is not equal to its fair value at December
31, 1994. Fair values are based on quoted market prices and other available
market information.

Carrying Fair
Amount Value
---------- ----------
(In Thousands)
Price protection program:
Open contracts in asset position $ 25,165 $ 84,602
Open contracts in liability position (98,900) (234,134)
Debt:
Long-term debt (Note 5) (1,671,294) (1,677,087)
Foreign exchange contracts:
$U.S./Deutsche marks - 2,750
$U.S./Spanish pesetas - 2,459
Interest rate swaps - (6,409)
Redeemable preferred stocks (Note 2) (500,007) (437,999)

Price Protection Program. PT-FI has forward and option contracts to hedge the
market risk associated with fluctuations in commodity prices. At December 31,
1994, PT-FI had sold forward 608.5 million pounds of copper at an average
price of $0.92 per pound for delivery at various dates through March 1996.
PT-FI also has call option contracts for 218.3 million pounds of copper from
January-June 1995 with an average price of $0.98 per pound and put option
contracts for 993.7 million pounds of copper from October 1995 to December
1996 at an average price of $0.87 per pound. Deferred gains on closed
contracts at December 31, 1994 totaled $36.2 million.

At December 31, 1994, RTM had sold forward 56,280 ounces of gold at
$394.75 per ounce and 1,106,520 ounces of silver at $4.82 per ounce for 1995.
RTM had also bought forward 2.5 million pounds of copper at $1.36 per pound to
eliminate the copper price risk of its concentrate inventory. Additionally,
RTM has written call option contracts on 19.8 million pounds of copper at an
average price of $1.18 per pound to assure minimum price participations on a
portion of its estimated 1995 concentrate purchases. A deferred loss of $1.6
million was recorded in 1994 resulting from RTM's repayment of one of its gold
and silver loans.

Debt. Portions of RTM's smelter expansion contract are denominated in
Deutsche marks and Spanish pesetas while the related financing is denominated
in U.S. dollars. To eliminate exposure to fluctuations in foreign exchange
rates, RTM entered foreign exchange contracts which mature through March 1996,
totaling $73.8 million on 117 million Deutsche marks and $85.8 million on 11.8
billion Spanish pesetas at December 31, 1994.

FTX and its affiliates entered into interest rate swaps to manage
exposure to interest rate changes on a portion of its variable rate debt.
Under 1986 interest rate exchange agreements, FTX pays an average fixed rate
of 8.2 percent on $150.1 million of financing until April 1996. FTX and FRP
pay an average fixed rate of 10.2 percent on interest rate exchange agreements
entered into in late 1987 and early 1988 on $66.3 million of financing at
December 31, 1994, reducing annually through 1999. PT-FI pays 8.3 percent on
a 1991 agreement covering $71.4 million of financing at December 31, 1994,
reducing annually through 1999. Under these interest swaps, FTX and its
subsidiaries received an average interest rate of 4.4 percent in 1994, 3.4
percent in 1993 and 4.2 percent in 1992, resulting in additional interest
costs of $13.1 million, $17.6 million and $12.2 million, respectively.

12. SEGMENT FINANCIAL INFORMATION
FTX's business segments consist of the following: Metals, which includes
FCX's Indonesian copper/gold operations and the RTM smelting operations in
Spain; Agricultural Minerals, which includes FRP's fertilizer and sulphur
businesses; and Energy, which includes the oil and gas operations of FTX and
FRP. FTX's foreign operations are primarily conducted by FCX.
<TABLE>
<CAPTION>
Agricultural
Metals a Minerals Energy Other Total
1994 --------- ----------- ------- --------- ----------
---- (In Thousands)
<S> <C> <C> <C> <C> <C>
Revenues $1,212,284 $ 730,391 $35,636 $ 4,085 $1,982,396b
Production and delivery 740,261 534,650 10,896 11,200 1,297,007
Depreciation and amortization 75,100 33,811 20,755 3,047 132,713
Exploration expenses 40,380 - 5,231 1,441 47,052
Gain on insurance settlement (32,602) - - - (32,602)
General and administrative expenses 109,011 38,148 7,810 12,421 167,390
---------- ---------- ------- ------- ----------
Operating income (loss) $ 280,134 $ 123,782 $(9,056) $(24,024) $ 370,836
========== ========== ======= ======== ==========
Capital expenditures $ 737,714 $ 20,278 $21,897 $ 20,576 $ 800,465
========== ========== ======= ======== ==========
Total assets $3,040,197 $1,083,375 $42,830 $207,173 $4,373,575
========== ========== ======= ======== ==========

1993
----
Revenues $ 925,932 $ 619,332 $ 56,680 $ 8,637 $1,610,581b
Production and delivery 566,765 544,448 13,012 17,480 1,141,705
Depreciation and amortization 67,906 70,803 42,000 11,229 191,938
Exploration expenses 33,748 2,261 26,708 2,363 65,080
Provision for restructuring charges 20,795 33,947 12,403 - 67,145
Loss on valuation and sale of
assets, net - 14,802 (9,107) 58,419 64,114
General and administrative expenses 81,399 58,091 13,169 16,400 169,059
---------- ---------- -------- --------- ----------
Operating income (loss) $ 155,319 $ (105,020) $(41,505) $ (97,254)$ (88,460)
========== ========== ======== ========= ==========

Capital expenditures $ 453,122 $ 46,270c $ 40,394 $ 28,411 $ 568,197
========== ========== ======== ========= ==========

Total assets $2,116,653 $1,194,304 $ 68,062 $ 335,048 $3,714,067
========== ========== ======== ========= ==========

1992
----
Revenues $ 714,315 $ 799,032 $127,799 $ 13,765 $1,654,911b
Production and delivery 308,948 638,503 28,861 9,962 986,274
Depreciation and amortization 48,272 66,299 79,942 7,869 202,382
Exploration expenses 12,185 4,777 18,394 1,680 37,036
General and administrative
expenses 68,481 72,828 25,155 10,899 177,363
---------- ---------- -------- -------- ----------
Operating income (loss) $ 276,429 $ 16,625 $(24,553) $(16,645) $ 251,856
========== ========== ======== ======== ==========

Capital expenditures $ 367,842 $ 170,224c $ 55,580 $ 48,160 $ 641,806
========== ========== ======== ======== ==========

Total assets $1,694,005 $1,233,085 $180,987 $438,634 $3,546,711
========== ========== ======== ======== ==========
<FN>
a. Includes the operations of RTM (Note 3) since its acquisition. RTM
revenues totaled $536.7 million with operating income at breakeven during
1994 and identifiable assets of $536.6 million at December 31, 1994.
Revenues totaled $288.4 million with an operating loss of $6.4 million
during 1993 and identifiable assets of $352 million at December 31, 1993.
b. Export sales to Asia, Australia, Latin America and Canada approximated 15
percent, 13 percent and 20 percent of total revenues for 1994-1992,
respectively. Sales to Japanese companies by FCX were 12 percent, 19
percent and 15 percent of total revenues for 1994-1992, respectively.
c. Includes Main Pass Sulphur development costs ($16.6 million in 1993 and
$20.8 million in 1992) and capitalized interest ($11.1 million in 1993
and $17.7 million in 1992) prior to becoming operational for accounting
purposes in 1993.
</TABLE>

13. SUPPLEMENTARY MINERAL RESERVE, PRODUCTION AND SALES INFORMATION
(UNAUDITED)
Proved and probable mineral reserves, including proved oil reserves, follow:
December 31,
--------------------------------------------
1994 1993 1992 1991 1990
------- ------- ------- ------- -------
(In Thousands)
Copper-thousands of recoverable
pounds a 28,000 26,800 20,900 21,800 13,900
Gold-recoverable ouncesa 39,700b 39,500b 32,100 32,400 19,500
Silver-recoverable ounces a 84,000b 85,200b 44,700 50,000 34,700
Sulphur-long tons c 41,018 38,637 41,570 42,780 44,125
Phosphate rock-short tons d 206,661 215,156 208,655 206,183 205,752
Oil-barrelse 7,279 9,962 13,861 18,496 18,785

a. Recoverable content reflects an estimated recovery rate of 90 percent
for copper, 80 percent for gold and 70 percent for silver, less normal
smelting and refining allowances.
b. Includes 0.1 million ounces of gold and 3.2 million ounces of silver
for 1994, and 0.4 million ounces of gold and 8.5 million ounces of
silver for 1993 attributable to RTM.
c. Includes 41 million tons in 1994, 38.6 million tons in 1993, 39
million tons in 1992 and 39.1 million tons in 1991 and 1990, net to
FRP before royalties, at Main Pass, subject to a 12.5 percent federal
royalty based on net mine revenues.
d. For 1994 and 1993, represents FRP's share, based on its Capital
Interest ownership, of the IMC-Agrico reserves. Contains an average
of 68 percent bone phosphate of lime.
e. Reflects only Main Pass reserves.

Production, sales and average realized prices follow.

1994 1993 1992 1991 1990
METALS ------- ------- ------- ------- -------
PT-FI (In Thousands, Except Average Realizations)
Copper (recoverable pounds)
Production 710,300 658,400 619,100 466,700 361,800
Sales 700,800 645,700 651,800 439,700 348,000
Average realized price a $1.02 $.90 $1.03 $1.01 $1.20
Gold (recoverable ounces)
Production 784 787 641 421 284
Sales 795 763 679 398 273
Average realized price $381.13 $361.74 $340.11 $358.76 $378.30
Silver (recoverable ounces)
Production 1,305 1,541 1,643 1,568 1,749
Sales 1,335 1,481 1,804 1,621 1,664
Average realized price $5.08 $4.15 $3.72 $3.87 $4.61
RTM (since acquisition)
Smelter operations
Concentrate treated
(metric tons) 485 330
Anode production (pounds) 347,500 299,300
Cathode production (pounds)312,100 227,300
Gold operations
Production (recoverable ounces)173 133
Average realized price $363.05 $337.33
AGRICULTURAL MINERALS
Phosphate fertilizers (short tons)b
Diammonium phosphate
Sales:
Florida 1,081
Louisiana 970
Other 217
------
Total sales 2,268 2,303 2,760 2,841 2,568
Average realized price:c
Florida $146.53
Louisiana 152.48
Monoammonium phosphate
Sales:
Granular 298 423 509 476 438
Powdered 162 55
Average realized price:c
Granular $158.54
Powdered 129.24
Granular triple superphosphate
Sales 465
Average realized pricec $114.76 565 715 710 717
Phosphate rock (short tons)b
Sales 4,373
Average realized price c $21.38 3,840 3,441 2,247 1,455
Sulphur (long tons)
Sales d 2,088 1,973 2,346 2,528 2,491
ENERGY
Oil (barrels)
Sales 2,534 3,443 4,884 351 -
Average realized price $13.74 $14.43 $15.91 $13.34 -

a. Excludes adjustments for prior year concentrate sales or price protection
program costs. Excluding amounts recognized under PT-FI's price
protection program, the realization for 1994 and 1993 would have been
$1.15 and $0.82 per pound, respectively.
b. Certain information prior to the formation of IMC-Agrico was not recorded
on a basis consistent with that currently being presented and therefore is
not available. Reflects FRP's 46.5 percent share of the IMC-Agrico assets
for the year ended June 30, 1994, while FRP received 58.6 percent of the
cash flow generated during such period. FRP's share of the IMC-Agrico
assets for the year ended June 30, 1995 is 45.1 percent, while FRP will
receive 55 percent of the cash flow.
c. Represents average realization f.o.b. plant/mine.
d. Includes 739,900 tons, 1,138,800 tons, 1,654,300 tons, 1,612,400 tons and
1,564,000 tons for 1994-1990, respectively, which represent internal
consumption and Main Pass start-up sales that are not included in sales
for accounting purposes.

14. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Net Income (Loss)
Net Income Per Common Share
(Loss) -----------------
Operating Applicable To Fully
Revenues Income (Loss) Common Stock Primary Diluted
---------- ------------- ------------- ------- -------
(In Thousands, Except Per Share Amounts)
1994
1st Quartera $ 449,594 $ 65,522 $ 12,373 $ .09 $ .09
2nd Quarterb 468,398 72,304 4,634 .03 .03
3rd Quarterc 503,187 88,289 6,044 .04 .04
4th Quarterd 561,217 144,721 18,392 .13 .13
---------- -------- ---------
$1,982,396 $370,836 $ 41,443 .30 .30
========== ======== =========
1993
1st Quartere $ 300,821 $(45,516) $ (55,346) $(.39) $(.39)
2nd Quarterf 421,818 (158,439) (77,379) (.54) (.54)
3rd Quarterg 402,353 101,335 26,786 .19 .19
4th Quarterh 485,589 14,160 (20,264) (.14) (.14)
---------- -------- ---------
$1,610,581 $(88,460) $(126,203) (.89) (.89)
========== ======== =========

a. Includes a $44 million gain ($28.6 million to net income or $0.20 per
share) on the conversion of FCX securities and a $5.5 million charge to
net income ($0.04 per share) related to early extinguishment of debt.
b. Includes a $26 million gain ($16.9 million to net income or $0.12 per
share) on the distribution of FCX securities and a $3.6 million charge to
net income ($0.03 per share) related to early extinguishment of debt.
c. Includes a $25.8 million gain ($16.7 million to net income or $0.12 per
share) on the distribution of FCX securities and a $10.9 million minority
interest charge ($7.1 million to net income or $0.05 per share) because
FTX did not receive its proportionate share of FRP distributions.
d. Includes gains of $19 million ($12.4 million or $0.09 per share) on the
distribution of FCX securities and $32.6 million ($11.9 million to net
income or $0.09 per share) from an insurance settlement on the June 1993
ore pass cave-in, net of a $15.6 million minority interest charge ($10.1
million to net income or $0.07 per share) because FTX did not receive its
proportionate share of FRP distributions.
e. Includes a $47.4 million charge ($18.5 million to net income or $0.13 per
share) related to administrative restructuring costs and the sale of FRP's
producing geothermal assets, and an $8 million gain ($5.3 million to net
income or $0.04 per share) related to the conversion of FCX notes. Also
includes a $20.7 million charge ($0.15 per share), net of taxes and
minority interests, for the cumulative effect of changes in accounting
principle.
f. Includes a $165.6 million charge ($74.6 million to net income or $0.52 per
share) related to restructuring, asset recoverability and other related
charges. Also includes a $25.3 million gain ($16.7 million to net income
or $0.12 per share) related to the conversion of FCX notes.
g. Includes a $70.2 million gain ($46.1 million to net income or $0.32 per
share) primarily from the sale of an oil and gas property.
h. Includes a $64.3 million charge ($22.8 million to net income or $0.16 per
share) primarily related to the recoverability of FRP's Main Pass oil
investment, a $10.7 million gain ($3.6 million to net income or $0.03 per
share) from FRP's sale of certain previously mined phosphate rock acreage
and a $13.7 million gain ($8.9 million to net income or $0.06 per share)
related to the conversion of FCX notes.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF FREEPORT-McMoRan INC.:
We have audited the accompanying balance sheets of Freeport-McMoRan Inc. (the
Company), a Delaware Corporation, and consolidated subsidiaries as of December
31, 1994 and 1993, and the related statements of operations, cash flow and
stockholders' equity for each of the three years in the period ended December
31, 1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial statements of
IMC-Agrico Company (the Joint Venture). The Company's share of the Joint
Venture constitutes 12 percent and 16 percent of assets and 33 percent and 15
percent of revenues of the Company's totals as of December 31, 1994 and 1993
and the years then ended, respectively. Those statements were audited by
other auditors whose report has been furnished to us and our opinion, insofar
as it relates to the amounts included for the Company's interest in the Joint
Venture, is based solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the report of other
auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Freeport-McMoRan Inc. and consolidated
subsidiaries as of December 31, 1994 and 1993 and the results of its
operations and its cash flow for each of the three years in the period ended
December 31, 1994 in conformity with generally accepted accounting principles.

As discussed in Notes 6 and 1 to the consolidated financial statements,
effective January 1, 1992, the Company changed its method of accounting for
income taxes, and effective January 1, 1993, changed its method of accounting
for periodic scheduled maintenance costs, deferred charges, and costs of
management information systems.

Arthur Andersen LLP
New Orleans, Louisiana,
January 24, 1995

Common Shares. Our common shares trade on the New York Stock Exchange (NYSE)
under the symbol FTX. The FTX share price is reported daily in the financial
press under "FrptMc" in most listings of NYSE securities. At year-end 1994
the number of holders of record of our common stock was 25,076.

Common share price ranges on the NYSE composite tape during 1994 and 1993:

1994 1993
------------------- ------------------
High Low High Low
------ ------ ------ ------
First Quarter $21.75 $18.75 $22.63 $17.00
Second Quarter 19.75 16.25 22.25 18.13
Third Quarter 20.00 16.13 19.38 17.50
Fourth Quarter 19.88 16.75 19.88 15.75

Restructuring Plan/Common Share Dividends. On May 3, 1994 FTX announced a
restructuring plan to separate its two principal businesses, copper/gold and
agricultural minerals, into two independent financial and operating entities.
At the same time, FTX announced that during the interim period it would
distribute common shares of FCX to FTX common shareholders in lieu of cash
dividends. Each FTX shareholder entitled to receive a fractional share was
paid cash in lieu of the fractional share. Subsequent to the completion of
the restructuring plan, the FTX Board of Directors will determine a new
dividend policy for FTX which will depend on the financial performance of FRP.
For the first quarter of 1994 and for 1993 our Board of Directors fixed the
amount of the regular quarterly common stock cash dividend at $0.3125 per
common share.

On May 12, 1994, the Board of Directors declared a special pro-rata
distribution of one share of MOXY common stock for each 10 shares of FTX
common stock. Each shareholder entitled to receive a fractional share was
paid cash in lieu of the fractional share.

Cash and property dividends paid during 1994 and 1993:

1994
----------------------------------------------------------------------
DIVIDEND PER FTX SHARE RECORD DATE PAYMENT DATE
---------------------- ------------- ------------
$.3125 Feb. 15, 1994 Mar. 1, 1994
1/80 FCX share* May 16, 1994 Jun. 1, 1994
1/10 MOXY share* May 20, 1994 May 20, 1994
1/80 FCX share* Aug. 15, 1994 Sep. 1, 1994
1/80 FCX share* Nov. 15, 1994 Dec. 1, 1994

* Below is a summary of the cost basis of shares for the property dividends.

Cost Basis Cash in Lieu Rate For
Record Date Share Per Share Fractional Share
------------ ----- ---------- ---------------------
May 16, 1994 FCX $24.1875 $24.4375
May 20, 1994 MOXY 4.5000 5.4933
Aug. 15, 1994 FCX 22.7500 21.0625
Nov. 15, 1994 FCX 20.0625 22.0625

1993
-----------------------------------------------------------------------
DIVIDEND PER FTX SHARE RECORD DATE PAYMENT DATE
---------------------- ------------- ------------
$.3125 Feb. 15, 1993 Mar. 1, 1993
.3125 May 14, 1993 Jun. 1, 1993
.3125 Aug. 16, 1993 Sep. 1, 1993
.3125 Nov. 15, 1993 Dec. 1, 1993

EXHIBIT 21.1

List of Subsidiaries of
FREEPORT-McMoRan INC.

Name Under Which
Entity Organized It Does Busines
-------------------------------- --------- ----------------

Freeport-McMoRan Copper &
Gold Inc. Delaware Same
P.T. Freeport Indonesia
Company Indonesia
and Delaware Same
Rio Tinto Metal, S.A. Spain Same

Freeport-McMoRan Resource
Partners, Limited Partnership Delaware Same
IMC-Agrico Company Delaware Same

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the
incorporation by reference of our reports included herein or
incorporated by reference in this Form 10-K, into Freeport-
McMoRan Inc.'s previously filed Registration Statements on Forms
S-3 (File Nos. 33-37716 and 33-41547) and the Registration
Statements on Forms S-8 (File Nos. 2-85000, 33-14641, 33-29580,
33-30417 and 33-62170).

/s/ Arthur Andersen LLP
-------------------------
Arthur Andersen LLP

New Orleans, Louisiana
March 24, 1995

Exhibit 24.1

FREEPORT-McMoRan INC.

Certificate of Secretary
------------------------

I, Michael C. Kilanowski, Jr., Secretary of Freeport-

McMoRan Inc. (the "Corporation"), a Delaware corporation, do

hereby certify that the following resolution was duly adopted by

the Board of Directors of the Corporation at a meeting held on

February 29, 1984, and that such resolution has not been amended,

modified or rescinded and is in full force and effect:

RESOLVED, That any report, registration statement
or other form filed on behalf of this corporation
pursuant to the Securities Exchange Act of 1934, or any
amendment to any such report, registration statement or
other form, may be signed on behalf of any director or
officer of this corporation pursuant to a power of
attorney executed by such director or officer.

IN WITNESS WHEREOF, I have hereunto set my name and the

seal of the Corporation this 10th day of March, 1995.

/s/ Michael C. Kilanowski, Jr.
(Seal) -----------------------------
Michael C.Kilanowski, Jr.
Secretary

Exhibit 24.2