United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark one)
UNITED STATES☒
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
For the quarterly period ended September 30, 2017
OR☐
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto
Commission File Number:
                For the transition period from   to
Commission file number: 001-11307-01
fcx-20210930_g1.jpg
Freeport-McMoRan Inc.
(Exact name of registrant as specified in its charter)
Delaware74-2480931
(State or other jurisdiction of(I.R.S. Employer Identification No.)
incorporation or organization)
333 North Central Avenue
Phoenix AZAZ85004-2189
(Address of principal executive offices)(Zip Code)
(602) 366-8100
(Registrant’s telephone number, including area code)
(602) 366-8100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.10 per shareFCXThe New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.☑ Yes  ☐ No
þ Yes  o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
þ☑ Yes  o☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerþ
☑
Accelerated filer¨
☐
Non-accelerated filer  ¨(Do not check if a smaller reporting company)
☐
Smaller reporting company¨☐
Emerging growth company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
o☐ Yes  þ☑ No

On October 31, 2017,29, 2021, there were issued and outstanding 1,447,590,6681,468,473,516 shares of the registrant’s common stock, par value $0.10 per share.


FREEPORT-McMoRan INC.


Freeport-McMoRan Inc.

TABLE OF CONTENTS

Page
Part I. Financial Information
3
Item 1. Financial Statements:
3
Consolidated Balance Sheets (Unaudited)
3
Consolidated Statements of Operations (Unaudited)
4
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
5
Consolidated Statements of Cash Flows (Unaudited)
6
Consolidated StatementStatements of Equity (Unaudited)
7
Notes to Consolidated Financial Statements (Unaudited)
89
Review Report of Independent Registered Public Accounting Firm
3326
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
3427
Item 3. Quantitative and Qualitative Disclosures About Market Risk
7571
Item 4. Controls and Procedures
7571
Part II. Other Information
7571
Item 1. Legal Proceedings
7571
Item 1A. Risk Factors
7572
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
7672
Item 4. Mine Safety Disclosures
7672
Item 6. Exhibits
77
Signature
S-1

Table of Contents

Part I.
Item 5. Other Information
FINANCIAL INFORMATION
72

Item 1.6. Exhibits
Financial Statements.74
Signature
S-1


FREEPORT-McMoRan INC.
2
Table of Contents
Part I.FINANCIAL INFORMATION

Item 1.Financial Statements.

Freeport-McMoRan Inc.
CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30,
2021		December 31,
2020
 (In millions)
ASSETS  
Current assets:  
Cash and cash equivalents$7,672 $3,657 
Trade accounts receivable931 892 
Income and other tax receivables591 520 
Inventories: 
Materials and supplies, net1,617 1,594 
Mill and leach stockpiles1,086 1,014 
Product1,417 1,285 
Other current assets477 341 
Total current assets13,791 9,303 
Property, plant, equipment and mine development costs, net30,102 29,818 
Long-term mill and leach stockpiles1,450 1,463 
Other assets1,574 1,560 
Total assets$46,917 $42,144 
LIABILITIES AND EQUITY  
Current liabilities:  
Accounts payable and accrued liabilities$2,949 $2,708 
Accrued income taxes1,237 324 
Current portion of debt897 34 
Current portion of environmental and asset retirement obligations329 351 
Dividends payable111 — 
Total current liabilities5,523 3,417 
Long-term debt, less current portion8,768 9,677 
Deferred income taxes4,500 4,408 
Environmental and asset retirement obligations, less current portion3,688 3,705 
Other liabilities1,907 2,269 
Total liabilities24,386 23,476 
Equity:  
Stockholders’ equity:  
Common stock160 159 
Capital in excess of par value26,023 26,037 
Accumulated deficit(8,481)(11,681)
Accumulated other comprehensive loss(572)(583)
Common stock held in treasury(3,777)(3,758)
Total stockholders’ equity13,353 10,174 
Noncontrolling interests9,178 8,494 
Total equity22,531 18,668 
Total liabilities and equity$46,917 $42,144 
 September 30,
2017		 December 31,
2016
 (In millions)
ASSETS   
Current assets:   
Cash and cash equivalents$4,957
 $4,245
Trade accounts receivable1,024
 1,126
Income and other tax receivables522
 879
Inventories:   
Materials and supplies, net1,276
 1,306
Mill and leach stockpiles1,393
 1,338
Product1,188
 998
Other current assets241
 199
Assets held for sale549
 344
Total current assets11,150
 10,435
Property, plant, equipment and mine development costs, net22,914
 23,219
Oil and gas properties, subject to amortization, less accumulated amortization and impairments20
 74
Long-term mill and leach stockpiles1,453
 1,633
Other assets1,790
 1,956
Total assets$37,327
 $37,317
    
LIABILITIES AND EQUITY   
Current liabilities:   
Accounts payable and accrued liabilities$2,098
 $2,393
Current portion of debt2,215
 1,232
Accrued income taxes464
 66
Current portion of environmental and asset retirement obligations419
 369
Liabilities held for sale321
 205
Total current liabilities5,517
 4,265
Long-term debt, less current portion12,567
 14,795
Deferred income taxes3,771
 3,768
Environmental and asset retirement obligations, less current portion3,498
 3,487
Other liabilities1,744
 1,745
Total liabilities27,097
 28,060
    
Equity:   
Stockholders’ equity:   
Common stock158
 157
Capital in excess of par value26,743
 26,690
Accumulated deficit(15,763) (16,540)
Accumulated other comprehensive loss(443) (548)
Common stock held in treasury(3,722) (3,708)
Total stockholders’ equity6,973
 6,051
Noncontrolling interests3,257
 3,206
Total equity10,230
 9,257
Total liabilities and equity$37,327
 $37,317


The accompanying notes are an integral part of these consolidated financial statements.
3
Table of Contents

FREEPORT-McMoRan INC.Freeport-McMoRan Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
 (In millions, except per share amounts)
Revenues$4,310
 $3,877
 $11,362
 $10,453
Cost of sales:       
Production and delivery2,802
 2,529
 7,497
 7,984
Depreciation, depletion and amortization418
 643
 1,257
 1,937
Impairment of oil and gas properties—
 239
 —
 4,317
Total cost of sales3,220
 3,411
 8,754
 14,238
Selling, general and administrative expenses106
 110
 366
 408
Mining exploration and research expenses27
 13
 61
 46
Environmental obligations and shutdown costs (credits)73
 (3) 81
 18
Net gain on sales of assets(33) (13) (66) (762)
Total costs and expenses3,393
 3,518
 9,196
 13,948
Operating income (loss)917
 359
 2,166
 (3,495)
Interest expense, net(304) (187) (633) (574)
Net gain on exchanges and early extinguishment of debt11
 15
 8
 51
Other income (expense), net2
 (10) 36
 54
Income (loss) from continuing operations before income taxes and equity in affiliated companies’ net earnings626
 177
 1,577
 (3,964)
(Provision for) benefit from income taxes(387) 114
 (747) (79)
Equity in affiliated companies’ net earnings3
 1
 6
 9
Net income (loss) from continuing operations242
 292
 836
 (4,034)
Net income (loss) from discontinued operations3
 (6) 50
 (191)
Net income (loss)245
 286
 886
 (4,225)
Net loss (income) attributable to noncontrolling interests:       
Continuing operations35
 (37) (106) (146)
Discontinued operations—
 (22) (4) (44)
Preferred dividends attributable to redeemable noncontrolling interest—
 (10) —
 (31)
Net income (loss) attributable to common stockholders$280
 $217
 $776
 $(4,446)
        
Basic and diluted net income (loss) per share attributable to common stockholders:       
Continuing operations$0.19
 $0.18
 $0.50
 $(3.27)
Discontinued operations—
 (0.02) 0.03
 (0.18)
 $0.19
 $0.16
 $0.53
 $(3.45)
        
Weighted-average common shares outstanding:       
Basic1,448
 1,346
 1,447
 1,289
        
Diluted1,454
 1,351
 1,453
 1,289
        
Three Months EndedNine Months Ended
September 30,September 30,
 2021202020212020
(In millions, except per share amounts)
Revenues$6,083 $3,851 $16,681 $9,703 
Cost of sales:  
Production and delivery3,009 2,465 8,862 7,404 
Depreciation, depletion and amortization528 394 1,430 1,093 
Metals inventory adjustments14 9 15 92 
Total cost of sales3,551 2,868 10,307 8,589 
Selling, general and administrative expenses102 72 289 273 
Mining exploration and research expenses15 8 36 42 
Environmental obligations and shutdown costs13 21 51 58 
Net (gain) loss on sales of assets(60)2 (63)13 
Total costs and expenses3,621 2,971 10,620 8,975 
Operating income2,462 880 6,061 728 
Interest expense, net(138)(120)(431)(362)
Net loss on early extinguishment of debt— (59)— (100)
Other income, net36 22 56 62 
Income before income taxes and equity in affiliated companies’ net (losses) earnings2,360 723 5,686 328 
Provision for income taxes(628)(297)(1,674)(333)
Equity in affiliated companies’ net (losses) earnings(9)6 (5)12 
Net income1,723 432 4,007 7 
Net income attributable to noncontrolling interests(324)(103)(807)(116)
Net income (loss) attributable to common stockholders$1,399 $329 $3,200 $(109)
Net income (loss) per share attributable to common stockholders:
Basic$0.95 $0.22 $2.18 $(0.08)
Diluted$0.94 $0.22 $2.16 $(0.08)
Weighted-average common shares outstanding:
Basic1,469 1,453 1,466 1,453 
Diluted1,484 1,461 1,481 1,453 
Dividends declared per share of common stock$0.075 $— $0.225 $— 
 
The accompanying notes are an integral part of these consolidated financial statements.


4
Table of Contents

FREEPORT-McMoRan INC.Freeport-McMoRan Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

Three Months EndedNine Months Ended
September 30,September 30,
2021202020212020
(In millions)
Net income$1,723 $432 $4,007 $7 
Other comprehensive income (loss), net of taxes:
Defined benefit plans:
Actuarial losses arising during the period— (89)(1)(89)
Amortization of unrecognized amounts included in net periodic benefit costs4 14 12 38 
Foreign exchange losses— (1)(1)(2)
Other comprehensive income (loss)4 (76)10 (53)
Total comprehensive income (loss)1,727 356 4,017 (46)
Total comprehensive income attributable to noncontrolling interests(324)(103)(806)(115)
Total comprehensive income (loss) attributable to common stockholders$1,403 $253 $3,211 $(161)
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2017 2016 2017 2016
  (In millions)
Net income (loss) $245
 $286
 $886
 $(4,225)
         
Other comprehensive income, net of taxes:        
Unrealized gains on securities —
 2
 2
 3
Defined benefit plans:        
Actuarial gains arising during the period, net of taxes of $48 million for the nine months ended September 30, 2017 —
 —
 69
 —
Amortization or curtailment of unrecognized amounts included in net periodic benefit costs 12
 11
 42
 34
Foreign exchange gains (losses) 1
 (1) —
 (11)
Other comprehensive income 13
 12
 113
 26
         
Total comprehensive income (loss) 258
 298
 999
 (4,199)
Total comprehensive loss (income) attributable to noncontrolling interests 35
 (59) (118) (189)
Preferred dividends attributable to redeemable noncontrolling interest —
 (10) —
 (31)
Total comprehensive income (loss) attributable to common stockholders $293
 $229
 $881
 $(4,419)


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






5
Table of Contents

FREEPORT-McMoRan INC.Freeport-McMoRan Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended
September 30,
 20212020
 (In millions)
Cash flow from operating activities:  
Net income$4,007 $7��
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation, depletion and amortization1,430 1,093 
Metals inventory adjustments15 92 
Net (gain) loss on sales of assets(63)13 
Stock-based compensation79 60 
Net charges for environmental and asset retirement obligations, including accretion131 166 
Payments for environmental and asset retirement obligations(184)(162)
Net charges for defined pension and postretirement plans3 59 
Pension plan contributions(75)(30)
Net loss on early extinguishment of debt— 100 
Deferred income taxes96 119 
Charges for Cerro Verde royalty dispute11 26 
Payments for Cerro Verde royalty dispute(421)(119)
Other, net39 (53)
Changes in working capital and other: 
Accounts receivable(218)132 
Inventories(310)59 
Other current assets(77)(17)
Accounts payable and accrued liabilities123 40 
Accrued income taxes and timing of other tax payments849 105 
Net cash provided by operating activities5,435 1,690 
Cash flow from investing activities:  
Capital expenditures:  
North America copper mines(211)(398)
South America(94)(156)
Indonesia mining(904)(865)
Indonesia smelter development(79)(94)
Molybdenum mines(4)(14)
Other(52)(46)
Proceeds from sale of Freeport Cobalt150 — 
Proceeds from sales of other assets21 146 
Acquisition of minority interest in PT Smelting(33)— 
Other, net(25)(6)
Net cash used in investing activities(1,231)(1,433)
Cash flow from financing activities:  
Proceeds from debt633 3,236 
Repayments of debt(672)(3,105)
Cash dividends and distributions paid: 
Common stock(220)(73)
Noncontrolling interests(187)— 
Contributions from noncontrolling interests135 115 
Proceeds from exercised stock options189 3 
Payments for withholding of employee taxes related to stock-based awards(19)(5)
Debt financing costs and other, net(47)(51)
Net cash (used in) provided by financing activities(188)120 
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents4,016 377 
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year3,903 2,278 
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period$7,919 $2,655 
 Nine Months Ended 
 September 30, 
 2017 2016 
 (In millions) 
Cash flow from operating activities:    
Net income (loss)$886
 $(4,225) 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation, depletion and amortization1,257
 2,017
 
Net charges for Cerro Verde royalty dispute359
 —
 
Payments for Cerro Verde royalty dispute(32) (20) 
Impairment of oil and gas properties—
 4,317
 
Oil and gas non-cash drillship settlements/idle rig costs and other adjustments(33) 705
 
Net gain on sales of assets(66) (762) 
Net charges for environmental and asset retirement obligations, including accretion196
 149
 
Payments for environmental and asset retirement obligations(85) (190) 
Net charges for defined pension and postretirement plans95
 78
 
Pension plan contributions(152) (44) 
Net gain on exchanges and early extinguishment of debt(8) (51) 
Deferred income taxes77
 (22) 
(Gain) loss on disposal of discontinued operations(41) 182
 
Decrease (increase) in long-term mill and leach stockpiles181
 (84) 
Oil and gas contract settlement payments(70) —
 
Other, net59
 61
 
Changes in working capital and other tax payments, excluding amounts from dispositions:    
Accounts receivable420
 257
 
Inventories(314) 251
 
Other current assets(17) (120) 
Accounts payable and accrued liabilities(93) (80) 
Accrued income taxes and changes in other tax payments399
 175
 
Net cash provided by operating activities3,018
 2,594
 
     
Cash flow from investing activities:    
Capital expenditures:    
North America copper mines(106) (87) 
South America(65) (332) 
Indonesia(663) (706) 
Molybdenum mines(4) (2) 
Other, including oil and gas operations(182) (1,182) 
Net proceeds from the sale of additional interest in Morenci—
 996
 
Net proceeds from sales of other assets68
 410
 
Other, net(22) 9
 
Net cash used in investing activities(974) (894) 
     
Cash flow from financing activities:    
Proceeds from debt795
 3,463
 
Repayments of debt(1,991) (4,539) 
Net proceeds from sale of common stock—
 442
 
Cash dividends paid:    
Common stock(2) (5) 
Noncontrolling interests(67) (87) 
Stock-based awards net payments(10) (5) 
Debt financing costs and other, net(12) (17) 
Net cash used in financing activities(1,287) (748) 
     
Net increase in cash and cash equivalents757
 952
 
Increase in cash and cash equivalents in assets held for sale(45) (43) 
Cash and cash equivalents at beginning of year4,245
 177
 
Cash and cash equivalents at end of period$4,957
 $1,086
 
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents

FREEPORT-McMoRan INC.
CONSOLIDATED STATEMENT OF EQUITY (Unaudited)

 Stockholders’ Equity    
 Common Stock   Accum-ulated Deficit Accumu-
lated
Other Compre-
hensive
Loss		 
Common Stock
Held in Treasury
 Total
Stock-holders’ Equity		    
 
Number
of
Shares
 
At Par
Value
 
Capital in
Excess of
Par Value
   
Number
of
Shares
 
At
Cost
  
Non-
controlling
Interests
 
Total
Equity
          
 (In millions)
Balance at December 31, 20161,574
 $157
 $26,690
 $(16,540) $(548) 129
 $(3,708) $6,051
 $3,206
 $9,257
Exercised and issued stock-based awards4
 1
 4
 —
 —
 —
 —
 5
 —
 5
Stock-based compensation—
 —
 49
 —
 —
 —
 —
 49
 —
 49
Tender of shares for stock-based awards—
 —
 —
 —
 —
 1
 (14) (14) —
 (14)
Dividends—
 —
 —
 1
 —
 —
 —
 1
 (67) (66)
Net income attributable to common stockholders—
 —
 —
 776
 —
 —
 —
 776
 —
 776
Net income attributable to noncontrolling interests, including discontinued operations—
 —
 —
 —
 —
 —
 —
 —
 110
 110
Other comprehensive income—
 —
 —
 —
 105
 —
 —
 105
 8
 113
Balance at September 30, 20171,578
 $158
 $26,743
 $(15,763) $(443) 130
 $(3,722) $6,973
 $3,257
 $10,230
The accompanying notes are an integral part of these consolidated financial statements.

6
Table of Contents

Freeport-McMoRan Inc.
FREEPORT-McMoRan INC.CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)
THREE MONTHS ENDED SEPTEMBER 30
 Stockholders’ Equity  
Common StockAccum-ulated DeficitAccumu-
lated
Other Compre-
hensive
Loss		Common Stock
Held in Treasury		Total
Stock-holders’ Equity
Number
of
Shares		At Par
Value		Capital in
Excess of
Par Value		Number
of
Shares		At
Cost		Non-
controlling
Interests		Total
Equity
 (In millions)
Balance at June 30, 20211,601 $160 $26,084 $(9,880)$(576)133 $(3,777)$12,011 $8,924 $20,935 
Exercised and issued stock-based awards— — 6 — — — — 6 — 6 
Stock-based compensation, including the tender of shares— — 21 — — — — 21 — 21 
Dividends— — (111)— — — — (111)(94)(205)
Contributions from noncontrolling interests— — 23 — — — — 23 24 47 
Net income attributable to common stockholders— — — 1,399 — — — 1,399 — 1,399 
Net income attributable to noncontrolling interests— — — — — — — — 324 324 
Other comprehensive income— — — — 4 — — 4 — 4 
Balance at September 30, 20211,601 $160 $26,023 $(8,481)$(572)133 $(3,777)$13,353 $9,178 $22,531 
 Stockholders’ Equity  
Common StockAccum-ulated DeficitAccumu-
lated
Other Compre-
hensive
Loss		Common Stock
Held in Treasury		Total
Stock-holders’ Equity
Number
of
Shares		At Par
Value		Capital in
Excess of
Par Value		Number
of
Shares		At
Cost		Non-
controlling
Interests		Total
Equity
 (In millions)
Balance at June 30, 20201,583 $158 $25,905 $(12,718)$(652)131 $(3,739)$8,954 $8,201 $17,155 
Exercised and issued stock-based awards1 — 1 — — — — 1 — 1 
Stock-based compensation, including the tender of shares— — 8 — — — — 8 — 8 
Change in ownership interests— — — — — — — — 1 1 
Contributions from noncontrolling interests— — 20 — — — — 20 21 41 
Net income attributable to common stockholders— — — 329 — — — 329 — 329 
Net income attributable to noncontrolling interests— — — — — — — — 103 103 
Other comprehensive loss— — — — (76)— — (76)— (76)
Balance at September 30, 20201,584 $158 $25,934 $(12,389)$(728)131 $(3,739)$9,236 $8,326 $17,562 

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







7
Table of Contents
Freeport-McMoRan Inc.
CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)
NINE MONTHS ENDED SEPTEMBER 30
 Stockholders’ Equity  
Common StockAccum-ulated DeficitAccumu-
lated
Other Compre-
hensive
Loss		Common Stock
Held in Treasury		Total
Stock-holders’ Equity
Number
of
Shares		At Par
Value		Capital in
Excess of
Par Value		Number
of
Shares		At
Cost		Non-
controlling
Interests		Total
Equity
 (In millions)
Balance at December 31, 20201,590 $159 $26,037 $(11,681)$(583)132 $(3,758)$10,174 $8,494 $18,668 
Exercised and issued stock-based awards11 1 189 — — — — 190 — 190 
Stock-based compensation, including the tender of shares— — 64 —��— 1 (19)45 (4)41 
Dividends— — (333)— — — — (333)(187)(520)
Contributions from noncontrolling interests— — 66 — — — — 66 69 135 
Net income attributable to common stockholders— — — 3,200 — — — 3,200 — 3,200 
Net income attributable to noncontrolling interests— — — — — — — — 807 807 
Other comprehensive income (loss)— — — — 11 — — 11 (1)10 
Balance at September 30, 20211,601 $160 $26,023 $(8,481)$(572)133 $(3,777)$13,353 $9,178 $22,531 
 Stockholders’ Equity  
Common StockAccum-ulated DeficitAccumu-
lated
Other Compre-
hensive
Loss		Common Stock
Held in Treasury		Total
Stock-holders’ Equity
Number
of
Shares		At Par
Value		Capital in
Excess of
Par Value		Number
of
Shares		At
Cost		Non-
controlling
Interests		Total
Equity
 (In millions)
Balance at December 31, 20191,582 $158 $25,830 $(12,280)$(676)131 $(3,734)$9,298 $8,150 $17,448 
Exercised and issued stock-based awards2 — 2 — — — — 2 — 2 
Stock-based compensation, including the tender of shares— — 46 — — — (5)41 1 42 
Change in ownership interests— — — — — — — — 1 1 
Contributions from noncontrolling interests— — 56 — — — — 56 59 115 
Net loss attributable to common stockholders— — — (109)— — — (109)— (109)
Net income attributable to noncontrolling interests— — — — — — — — 116 116 
Other comprehensive loss— — — — (52)— — (52)(1)(53)
Balance at September 30, 20201,584 $158 $25,934 $(12,389)$(728)131 $(3,739)$9,236 $8,326 $17,562 
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Freeport-McMoRan Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


NOTE 1. GENERAL INFORMATION


The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required by generally accepted accounting principles (GAAP) in the United States (U.S.). Therefore, this information should be read in conjunction with Freeport-McMoRan Inc.’s (FCX) consolidated financial statements and notes contained in its annual report on Form 10-K for the year ended December 31, 2016.2020 (2020 Form 10-K). The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods reported. With the exception of the accounting for discontinued operations, assets held for sale, the remeasurement of a pension plan and charges related to a continuing royalty dispute with respect to historical periods at FCX’s mine in Peru, allAll such adjustments are, in the opinion of management, of a normal recurring nature. As a result of FCX’s sale of its interest in TF Holdings Limited (TFHL), FCX has reported TFHL as discontinued operations for all periods presented in the unaudited consolidated financial statements (refer to Note 2). Operating results for the nine-month period ended September 30, 2017,2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.2021.


Indonesia Mining. As a result of theTrade Accounts Receivable Agreements. In first-quarter 2017 regulatory restrictions and uncertainties regarding long-term investment stability,2021, PT Freeport Indonesia (PT-FI) took actionsentered into agreements to adjustsell certain trade accounts receivables to unrelated third-party financial institutions. The agreements were entered into in the normal course of business to fund the working capital for the additional quantity of copper to be supplied by PT-FI to PT Smelting (PT-FI’s 39.5 percent owned copper smelter and refinery in Gresik, Indonesia - see “Acquisition of Minority Interest in PT Smelting” below for further discussion). The balances sold under the agreements were excluded from trade accounts receivable on the consolidated balance sheet at September 30, 2021. Receivables are considered sold when (i) they are transferred beyond the reach of PT-FI and its cost structure, reduce its workforcecreditors, (ii) the purchaser has the right to pledge or exchange the receivables, and slow investments(iii) PT-FI has no continuing involvement in its underground development projectsthe transferred receivables. In addition, PT-FI provides no other forms of continued financial support to the purchaser of the receivables once the receivables are sold.

Gross amounts sold under these arrangements totaled $131 million in third-quarter 2021 and new smelter. These actions included workforce reductions through furlough and voluntary retirement programs. Following the furlough and voluntary retirement programs, a significant number of employees and contractors elected to participate in an illegal strike action beginning in May 2017, and were subsequently deemed to have voluntarily resigned under existing laws and regulations. As a result, PT-FI recorded charges to operating income for employee severance and related costs totaling $9 million for third-quarter 2017 and $113$319 million for the first nine months of 2017.

Additionally, because of the significant reduction in workforce, PT-FI was required to remeasure its pension assets and pension benefit obligation as of Junenine-month period ended September 30, 2017. The discount rate and rate of compensation increase used for the June 30, 2017, remeasurement were 7.50 percent and 4.00 percent, respectively, compared to the December 31, 2016, discount rate of 8.25 percent and the rate of compensation increase of 8.00 percent. The expected long-term rate of return2021. Discounts on the plan assets was unchanged (7.75 percent). The remeasurement and curtailment resulted in the projected benefit obligation declining by $145 million and plan assets declining by $21 million. In addition, PT-FI recognized a curtailment loss of $4 million in second-quarter 2017 and for the first nine months of 2017. As of September 30, 2017, the funded status of PT-FI’s pension plan was a net asset of $36 million (included in other assets in the consolidated balance sheet), compared with a net liability of $90 million (included in other liabilities in the consolidated balance sheet) as of December 31, 2016.

Oil and Gas Properties. During 2016, FCX Oil & Gas LLC (FM O&G, a wholly owned subsidiary of FCX) determined the carrying values of certain of its unevaluated properties were impaired. During the first nine months of 2016, FM O&G transferred $3.2 billion of costs (including $3.1 billion in first-quarter 2016) associated with unevaluated properties to the full cost pool, mostly reflecting impairment of the carrying values of unevaluated properties. The transfer of unevaluated properties to the full cost pool, along with the impact of the reduction in twelve-month historical prices and reserve revisions in 2016 caused net capitalized costs to exceed the related ceiling test limitation under full cost accounting rules. As a result, FM O&G recognized impairment charges of $239sold receivables totaled less than $1 million in third-quarter 20162021 and $4.3 billion$1 million for the first nine monthsnine-month period ended September 30, 2021.

Acquisition of 2016. ReferMinority Interest in PT Smelting. On April 30, 2021, PT-FI acquired 14.5 percent of the outstanding common stock of PT Smelting for $33 million, increasing its ownership interest from 25 percent to Note39.5 percent. The remaining shares of PT Smelting continue to be owned by Mitsubishi Materials Corporation. PT-FI has continued to account for its investment in PT Smelting using the equity method since it does not have control over PT Smelting.

Sale of Freeport Cobalt. On September 1, 2021, FCX’s 56-percent-owned subsidiary, Koboltti Chemicals Holdings Limited (KCHL), completed the sale of its remaining cobalt business based in Kokkola, Finland (Freeport Cobalt) to Jervois Global Limited (Jervois) for $208 million (subject to post-closing adjustments), consisting of cash consideration of $173 million and 7 percent of Jervois shares (valued at $35 million). At closing, Freeport Cobalt’s assets included cash of approximately $20 million and other net assets of $125 million. FCX recorded a gain of $60 million ($34 million to net income attributable to common stock) in third-quarter 2021. In addition, KCHL will have the right to receive contingent consideration of up to $40 million based on the future performance of Freeport Cobalt. Any gain related to the contingent consideration will be recognized when received.

The operating results of Freeport Cobalt are not significant to FCX’s annual report on Form 10-Kfinancial statements for the year ended December 31, 2016, for further discussion.2020, or the three- and nine-month periods ended September 30, 2021.


Subsequent Events. FCX evaluated events after September 30, 2021, and through the date the consolidated     financial statements were issued, and took into account events and transactions occurring during this period requiring recognition or disclosure in these consolidated financial statements.





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NOTE 2. DISPOSITIONS

TF Holdings Limited - Discontinued Operations.FCX hada70 percent interest in TFHL, which owns 80 percent of Tenke Fungurume Mining S.A. (TFM or Tenke) located in the Democratic Republic of Congo (DRC). On November 16, 2016, FCX completed the sale of its interest in TFHL to China Molybdenum Co., Ltd. (CMOC) for $2.65 billion in cash (before closing adjustments) and contingent consideration of up to $120 million in cash, consisting of $60 million if the average copper price exceeds $3.50 per pound and $60 million if the average cobalt price exceeds $20 per pound, both during calendar years 2018 and 2019. The contingent consideration is considered a derivative, and at September 30, 2017, the related fair value of $58 million was recorded in other assets on the consolidated balance sheets. During the first nine months of 2017, the fair value of the contingent consideration derivative increased by $45 million ($3 million in third-quarter 2017), primarily resulting from higher cobalt prices, and was recorded in net income (loss) from discontinued operations.

In accordance with accounting guidance, FCX has reported the results of operations of TFHL as discontinued operations in the consolidated statements of operations. The consolidated statements of cash flows are reported on a combined basis without separately presenting discontinued operations.

Net income (loss) from discontinued operations in the consolidated statements of operations consists of the following (in millions):
 Three Months Ended Nine Months Ended 
 September 30, September 30, 
 2017 2016 2017 2016 
Revenues$—
 $261
a 
$13
a 
$819
a 
Costs and expenses:        
Production and delivery costs—
 248
 —
 730
 
Depreciation, depletion and amortization—

—
 —
 80
 
Interest expense allocated from parent—
 12
b 
—
 33
b 
Other costs and expenses, net—
 4
 —
 10
 
Income (loss) before income taxes and net gain (loss) on disposal—
 (3) 13
 (34) 
Net gain (loss) on disposal3
c 
(5)
d 
41
c 
(182)
d 
Net income (loss) before income taxes3
 (8) 54
 (216) 
Benefit from (provision for) income taxes—
 2
 (4) 25
 
Net income (loss) from discontinued operations$3
 $(6) $50
 $(191) 
a.In accordance with accounting guidance, amounts are net of (eliminations) recognition of intercompany sales totaling $(53) million in third-quarter 2016, $13 million for the first nine months of 2017 and $(125) million for the first nine months of 2016.
b.In accordance with accounting guidance, interest associated with FCX’s term loan that was required to be repaid as a result of the sale of TFHL has been allocated to discontinued operations.
c.Includes a gain of $3 million in third-quarter 2017 and $45 million for the first nine months of 2017 associated with the change in the fair value of contingent consideration.
d.In accordance with accounting guidance, an estimated loss on disposal was recorded and adjusted through closing of the transaction in November 2016.

Cash flows from discontinued operations included in the consolidated statements of cash flows for the nine months ended September 30, 2016, follow (in millions):
Net cash provided by operating activities $213
Net cash used in investing activities (71)
Net cash used in financing activities (103)
Increase in cash and cash equivalents in assets held for sale $39


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Oil and Gas Operations.On July 31, 2017, FM O&G sold certain property interests in the Gulf of Mexico Shelf for cash consideration of $62 million, before closing adjustments, with an effective date of April 1, 2017. On March 17, 2017, FM O&G sold property interests in the Madden area in central Wyoming for cash consideration of $17.5 million, before closing adjustments. Under the full cost accounting rules, the sales resulted in the recognition of gains of $33 million in third-quarter 2017 and $49 million for the first nine months of 2017 because the reserves associated with these properties were significant to the full cost pool.

On June 17, 2016, FM O&G sold certain oil and gas royalty interests for cash consideration of $102 million, before closing adjustments. In addition, on July 25, 2016, FM O&G sold its Haynesville shale assets for cash consideration of $87 million, before closing adjustments. Under the full cost accounting rules, the proceeds from these transactions were recorded as a reduction to capitalized oil and gas properties, with no gain or loss recognition for the first nine months of 2016 because the reserves were not significant to the full cost pool.

Morenci. On May 31, 2016, FCX sold a 13 percent undivided interest in its Morenci unincorporated joint venture to SMM Morenci, Inc. for $1.0 billion in cash. FCX recorded a $576 million gain for the first nine months of 2016 and used losses to offset cash taxes on the transaction. A portion of the proceeds from the transaction was used to repay borrowings under FCX's unsecured bank term loan and revolving credit facility. As a result of the transaction, the unincorporated joint venture is owned 72 percent by FCX, 15 percent by Sumitomo Metal Mining Arizona, Inc. and 13 percent by SMM Morenci, Inc.

Timok. On May 2, 2016, Freeport Minerals Corporation (FMC), a wholly owned subsidiary of FCX, sold an interest in the Timok exploration project in Serbia to Global Reservoir Minerals Inc. (now known as Nevsun Resources, Ltd.) for consideration of $135 million in cash and contingent consideration of up to $107 million payable to FCX in stages upon achievement of defined development milestones. As a result of this transaction, FCX recorded a gain of $133 million for the first nine months of 2016, and no amounts were recorded for contingent consideration under the loss recovery approach.

Assets Held for Sale. Freeport Cobalt includes the large-scale cobalt refinery in Kokkola, Finland, and the related sales and marketing business, in which FCX owns an effective 56 percent interest. Kisanfu is a copper and cobalt exploration project, located near Tenke, in which FCX holds a 100 percent interest. As a result of the sale of TFHL, FCX expects to sell its interest in Freeport Cobalt and Kisanfu, and the assets and liabilities of Freeport Cobalt and Kisanfu are classified as held for sale in the consolidated balance sheets. During the first nine months of 2017, a favorable adjustment of $13 million was recorded in net gain on sales of assets in the consolidated statements of operations associated with the estimated fair value less costs to sell for the Kisanfu exploration project. The adjustment was limited to the reduction in the carrying value when the Kisanfu exploration project was initially classified as held for sale in November 2016.

NOTE 3. EARNINGS PER SHARE


FCX calculates its basic net income (loss) per share of common stock under the two-class method and calculates its diluted net income (loss) per share of common stock using the more dilutive of the two-class method or the treasury-stock method. Basic net income (loss) per share of common stock was computed by dividing net income (loss) attributable to common stockholders (after deducting accumulated dividends and undistributed earnings to participating securities) by the weighted-average shares of common stock outstanding during the period. Diluted net income (loss) per share of common stock was calculated by including the basic weighted-average shares of common stock outstanding adjusted for the effects of all potential dilutive shares of common stock, unless their effect would be anti-dilutive.stock.

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Reconciliations of net income (loss) and weighted-average shares of common stock outstanding for purposes of calculating basic and diluted net income (loss) per share follow (in millions, except per share amounts):
Three Months EndedNine Months Ended
September 30,September 30,
 2021202020212020
Net income$1,723 $432 $4,007 $7 
Net income attributable to noncontrolling interests(324)(103)(807)(116)
Undistributed earnings allocated to participating securities(4)(3)(6)(3)
Net income (loss) attributable to common stockholders$1,395 $326 $3,194 $(112)
Basic weighted-average shares of common stock outstanding1,469 1,453 1,466 1,453 
Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs)15 8 a15 — a
Diluted weighted-average shares of common stock outstanding1,484 1,461 1,481 1,453 
Basic net income (loss) per share attributable to common stockholders$0.95 $0.22 $2.18 $(0.08)
Diluted net income (loss) per share attributable to common stockholders$0.94 $0.22 $2.16 $(0.08)
 Three Months Ended Nine Months Ended 
 September 30, September 30, 
 2017 2016 2017 2016 
Net income (loss) from continuing operations$242
 $292
 $836
 $(4,034) 
Net loss (income) from continuing operations attributable to noncontrolling interests35
 (37) (106) (146) 
Preferred dividends on redeemable noncontrolling interest—
 (10) —
 (31) 
Undistributed earnings allocated to participating securities(3) (3) (3) (3) 
Net income (loss) from continuing operations attributable to common stockholders$274
 $242
 $727
 $(4,214) 
         
Net income (loss) from discontinued operations$3
 $(6) $50
 $(191) 
Net income from discontinued operations attributable to noncontrolling interests—
 (22) (4) (44) 
Net income (loss) from discontinued operations attributable to common stockholders$3
 $(28) $46
 $(235) 
         
         
Net income (loss) attributable to common stockholders$277
 $214
 $773
 $(4,449) 
         
         
Basic weighted-average shares of common stock outstanding1,448
 1,346
 1,447
 1,289
 
Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units6
 5
 6
 —
a 
Diluted weighted-average shares of common stock outstanding1,454
 1,351
 1,453
 1,289
 
         
Basic and diluted net income (loss) per share attributable to common stockholders:        
Continuing operations$0.19
 $0.18
 $0.50
 $(3.27) 
Discontinued operations—
 (0.02) 0.03
 (0.18) 
 $0.19
 $0.16
 $0.53
 $(3.45) 
         
a.Excludes approximately 2 million shares in third-quarter 2020 and 13 million shares for the first nine months of 2020 associated with outstanding stock options with exercise prices less than the average market price of FCX’s common stock and RSUs that were anti-dilutive.
a.Excludes 12 million shares of common stock for the first nine months of 2016 associated with outstanding stock options with exercise prices less than the average market price of FCX’s common stock and restricted stock units that were anti-dilutive.


Outstanding stock options with exercise prices greater than the average market price of FCX’s common stock during the period are excluded from the computation of diluted net income (loss) per share of common stock. Stock options for 384 million shares of common stock were excluded forin third-quarter 2017, 462021, 28 million forshares of common stock in third-quarter 2016, 422020, 6 million shares of common stock for the first nine months of 20172021 and 4635 million forshares of common stock the first nine months of 2016.2020 were excluded.



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NOTE 4.3. INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES


The components of inventories follow (in millions):
September 30, 2021December 31, 2020
Current inventories:
Total materials and supplies, neta
$1,617 $1,594 
Mill stockpiles$209 $205 
Leach stockpiles877 809 
Total current mill and leach stockpiles$1,086 $1,014 
Raw materials (primarily concentrate)$437 $366 
Work-in-process184 174 
Finished goods796 745 
Total product$1,417 $1,285 
Long-term inventories:
Mill stockpiles$223 $223 
Leach stockpiles1,227 1,240 
Total long-term mill and leach stockpilesb
$1,450 $1,463 
a.Materials and supplies inventory was net of obsolescence reserves totaling $37 million at September 30, 2021, and $32 million at December 31, 2020.
b.Estimated metals in stockpiles not expected to be recovered within the next 12 months.

FCX recorded charges for metals inventory adjustments totaling $15 million for the first nine months of 2021 primarily related to a leach stockpile adjustment. Net realizable value inventory adjustments to decrease metals inventory carrying values totaled $92 million for the first nine months of 2020 associated with lower market prices for copper ($58 million) and molybdenum ($34 million). Refer to Note 9 for metals inventory adjustments by business segment.

Morenci Stockpile Recoveries. In accordance with FCX's policy, processes and recovery rates for mill and leach stockpiles are monitored regularly, and recovery rate estimates are adjusted periodically as additional information becomes available and as related technology changes. Adjustments to recovery rates will typically result in a future impact to the value of the material removed from the stockpiles at a revised weighted-average cost per pound of recoverable copper.

Expected copper recovery rates for leach stockpiles are determined using small-scale laboratory tests, small- to large-scale column testing (which simulates the production process), historical trends and other factors, including mineralogy of the ore and rock type. Total copper recovery in leach stockpiles can vary significantly from a low percentage to more than 90 percent depending on several variables, including processing methodology, processing variables, mineralogy and particle size of the rock. For newly placed material on active stockpiles, as much as 80 percent of the total copper recovery may occur during the first year, and the remaining copper may be recovered over many years.

Over the last three years, FCX's Morenci mine has experienced improved recoveries and following an analysis of column testing results to date, Morenci concluded it had sufficient evidence to increase its estimated recovery rate for certain of its leach stockpiles effective July 1, 2021. As a result of the revised recovery rate, Morenci increased its estimated recoverable copper in leach stockpiles, net to its joint venture interest, by 191 million pounds. The effect of this change in estimate reduced site production and delivery costs and increased net income by $52 million ($0.04 per share) in the third quarter and first nine months of 2021.






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 September 30,
2017		 December 31, 2016 
Current inventories:    
Total materials and supplies, neta
$1,276
 $1,306
 
     
Mill stockpiles$336
 $259
 
Leach stockpiles1,057
 1,079
 
Total current mill and leach stockpiles$1,393
 $1,338
 
     
Raw materials (primarily concentrate)$285
 $255
 
Work-in-process154
 114
 
Finished goods749
 629
 
Total product inventories$1,188
 $998
 
     
Long-term inventories:    
Mill stockpiles$346
 $487
 
Leach stockpiles1,107
 1,146
 
Total long-term mill and leach stockpilesb
$1,453
 $1,633
 
a.Materials and supplies inventory was net of obsolescence reserves totaling $31 million at September 30, 2017, and $29 million at December 31, 2016.
b.Estimated metals in stockpiles not expected to be recovered within the next 12 months.


NOTE 5.4. INCOME TAXES


Geographic sources of FCX’s (provision for) benefit from income taxes follow (in millions):
Nine Months Ended
September 30,
 20212020
U.S. operations$(7)

$56 a
International operations(1,667)b(389)c
Total$(1,674)$(333)

a.Includes a tax credit of $53 million associated with the reversal of a year-end 2019 tax charge related to the sale of FCX’s interest in the lower zone of the Timok exploration project in Serbia.
b.Includes net tax benefits totaling $83 million ($66 million net of noncontrolling interest), consisting of $69 million associated with the release of a portion of the valuation allowances recorded against PT Rio Tinto Indonesia (PT RTI), PT-FI’s wholly owned subsidiary, net operating losses (NOLs) and $24 million primarily associated with the reversal of a tax reserve related to the treatment of prior year contractor support costs; partly offset by a tax charge of $10 million associated with the audit of PT-FI's 2019 tax returns.
c.Includes a tax charge of $21 million ($17 million net of noncontrolling interests) associated with establishing a tax reserve related to the treatment of prior year contractor support costs.
FCX’s consolidated effective income tax rate was 29 percent for the first nine months of 2021 and 102 percent for the first nine months of 2020. Because FCX's U.S. jurisdiction generated pre-tax losses for the first nine months of 2020 that did not result in a realized tax benefit, applicable accounting rules required FCX to adjust its 2020 estimated annual effective tax rate to exclude the impact of U.S. pre-tax losses. Variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate.

As discussed in Note 8, Cerro Verde paid the balance of its royalty dispute liabilities during third-quarter 2021, which resulted in a $252 million reduction of unrecognized tax benefits (including a $137 million reduction of accrued interest and penalties), but did not have an impact on FCX’s consolidated effectiveprovision for income taxes for the third quarter or nine months ended September 30, 2021.

In connection with the negative impacts of the COVID-19 pandemic on the global economy, governments throughout the world announced measures that are intended to provide tax and other financial relief. Such measures include the American Rescue Plan Act of 2021, enacted on March 11, 2021, and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020. None of these measures resulted in material impacts to FCX’s provision for income taxes for the nine months ended September 30, 2021 and 2020. However, certain provisions of the CARES Act provided FCX with the opportunity to accelerate collections of tax refunds, primarily those associated with the U.S. alternative minimum tax. FCX collected U.S. alternative minimum tax credit refunds of $23 million in March 2021, $24 million in October 2020 and $221 million in July 2020. FCX continues to evaluate income tax rate was 47 percentaccounting considerations of COVID-19 measures as they develop, including any impact on its measurement of existing deferred tax assets and deferred tax liabilities. FCX will recognize any impact from COVID-19 related changes to tax laws in the period in which the new legislation is enacted.

As previously disclosed in our 2020 Form 10-K, PT-FI received unfavorable Indonesia Tax Court decisions in 2018 with respect to its appeal of capitalized mine development costs on its 2012 and 2014 corporate income tax returns. PT-FI appealed those decisions to the Indonesia Supreme Court. On October 31, 2019, the Indonesia Supreme Court communicated an unfavorable ruling regarding the treatment of mine development costs on PT-FI’s 2014 tax return. During the fourth quarter of 2019, PT-FI met with the Indonesia Tax Office and developed a framework for resolution of the firstdisputed matters and progress of the framework for resolution continued in 2020 and through the nine months ended September 30, 2021.

During October 2021, PT-FI participated in discussions with the Indonesian tax office regarding progress on the framework for resolution of 2017 and (2) percent for first nine monthsdisputes arising from the audits of tax years 2012 through 2016. Geographic sources of FCX’s (provision for) benefit from income taxes follow (in millions):
 Three Months Ended Nine Months Ended 
 September 30, September 30, 
 2017 2016 2017 2016 
U.S. operationsa
$2
 $331
 $24
 $293
 
International operations(389)
b 
(217) (771)
b 
(372) 
Total$(387) $114
 $(747) $(79) 
a.Includes net tax (charges) credits of $(10) million for third-quarter 2017 and $21 million for the first nine months of 2017 associated with alternative minimum tax credit carryforwards. The third quarter and first nine months of 2016 include net tax credits of $332 million and $290 million, respectively, associated with alternative minimum tax credits, changes to valuation allowances and net operating loss carryback claims.
b.Includes net charges of $2 million associated with the Cerro Verde mining royalties dispute, consisting of tax charges of $127 million for disputed royalties and other related mining taxes for the period October 2011 through the year 2013 (when royalties were determined based on operating income), mostly offset by a tax benefit of $125 million associated with disputed royalties and other related mining taxes for the period December 2006 through the year 2013.

As a result of these discussions and the unfavorable Peruvian Supreme Court ruling onrevised positions taken by both the Cerro Verde royalty dispute,Indonesian tax office and PT-FI, FCX recorded pre-tax chargesbelieves it can no longer conclude a resolution of $357 million to income from continuing operations and $2 million of net tax expense for the first nine months of 2017. FCX’s consolidated effective income tax rate was 39 percent for the first nine months of 2017 excluding these charges.

As a resultall of the impairmentdisputed tax items at a more-likely-than-not threshold. Because of these recent events, FCX continues to U.S. oilevaluate its uncertain tax positions and gas properties, FCX recordedmay record a material tax chargescharge during fourth-quarter 2021. This tax charge may be offset by a tax benefit related to the additional release of $1.6 billion for the first nine months of 2016 to establish a valuation allowance primarily against U.S. federal and state deferred tax assetsassociated with PT Rio Tinto net operating loss carryforwards that PT-FI may deem realizable. PT-FI will not generate a future benefit. FCX’s consolidated effective income tax rate was 32 percent for the first nine months of 2016 excluding these tax charges.
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continue to engage with the Indonesian tax office in pursuit of certain aspects of the original framework for resolution.

NOTE 6.5. DEBT AND FINANCIAL POLICY


The components of debt follow (in millions):
 September 30,
2021		December 31, 2020
Senior notes and debentures:
Issued by FCX$8,790 $8,783 
Issued by Freeport Minerals Corporation355 356 
Cerro Verde Term Loan325 523 
PT-FI Term Loan146 — 
Other49 49 
Total debt9,665 9,711 
Less current portion of debt(897)a(34)
Long-term debt$8,768 $9,677 
  September 30,
2017		 December 31, 2016
Senior notes and debentures:    
Issued by FCX $12,811
 $13,745
Issued by FMC 358
 359
Issued by Freeport-McMoRan Oil & Gas LLC (FM O&G LLC) 122
 267
Cerro Verde credit facility 1,486
 1,390
Cerro Verde shareholder loans —
 261
Other 5
 5
Total debta
 14,782
 16,027
Less current portion of debt (2,215) (1,232)
Long-term debt $12,567
 $14,795
a.Includes additions for unamortized fair value adjustments totaling $131 million at September 30, 2017 ($179 million at December 31, 2016), and is net of reductions for unamortized net discounts and unamortized debt issuance costs totaling $92 million at September 30, 2017 ($100 million at December 31, 2016).

a.Includes $524 million for the 3.55% Senior Notes, which will be redeemed on December 1, 2021, and $325 million for the Cerro Verde Term Loan due June 2022.

Revolving Credit Facility. At September 30, 2017, there were2021, FCX had no borrowings outstanding and $36$8 million in letters of credit issued under FCX’sits revolving credit facility, resulting in availability of approximately $3.5$3.5 billion,, of which approximately $1.5$1.5 billion could be used for additional letters of credit. Availability under FCX’s revolving credit facility consists of $3.28 billion maturing April 2024 and $220 million maturing April 2023.


Senior Notes Issued by FCX.In March 2017, FCX’s 2.15% Senior Notes matured,2021, FCX delivered a Covenant Reversion Notice (as defined in the third amendment to the revolving credit facility dated June 3, 2020), which provided notification of its election to end the Covenant Increase Period (as defined in the third amendment to the revolving credit facility dated June 3, 2020). As a result, the leverage ratio limit reverted to 5.25x and stepped down to 3.75x beginning with the quarter ending September 30, 2021, and the $500 million outstanding principal balanceinterest expense coverage ratio minimum reverted to 2.25x. Additionally, following FCX’s election to end the Covenant Increase Period, the additional limits on priority debt and liens, and the provisions related to minimum liquidity and restricted payments (which included restrictions on the payment of common stock dividends) are no longer applicable. At September 30, 2021, FCX was repaid.

Cerro Verde Credit Facility and Shareholder Loans. In June 2017, Cerro Verde’sin compliance with its revolving credit facility was amendedcovenants.

PT-FI Credit Facility. In July 2021, PT-FI entered into a $1.0 billion, five-year, unsecured credit facility (consisting of a $667 million term loan and a $333 million revolving credit facility) to increasefund project costs in connection with the commitment by $225PT Smelting expansion and construction of a precious metals refinery (PMR), and for PT-FI’s general corporate purposes. The term loan allows for borrowings up to $667 million to $1.5 billion, modify within the amortization schedulefirst three years, and to extendthen the maturity date to June 19, 2022. The amended credit facilityloan amortizes in four installments, with $225 million15 percent of the outstanding balance due on December 31, 2020, $225 millionin January 2025, 15 percent due on June 30, 2021, $525 millionin July 2025, 35 percent due on December 31, 2021,in January 2026 and the remaining balance35 percent due in July 2026. The $333 million revolving credit facility is available for drawings until June 2026. Amounts drawn under the credit facility bear interest at the London Inter-bank Offered Rate plus a margin of 1.875% or 2.125%, as defined by the agreement.

PT-FI’s credit facility contains customary affirmative covenants and representations and also contains standard covenants that, among other things, restrict, subject to certain exceptions, the ability of PT-FI to incur additional indebtedness; create liens on assets; enter into sale and leaseback transactions; sell assets; and modify or amend the maturity dateshareholders agreement or related governance structure. The credit facility also contains financial ratios governing maximum total leverage and minimum interest expense coverage and certain environmental and social compliance requirements.

As of June 19,September 30, 2021, $158 million ($146 million net of debt issuance costs) was drawn under the PT-FI Term Loan and no amounts were drawn under the revolving credit facility.

Senior Notes. On October 21, 2021, FCX called for redemption all of its outstanding $524 million principal amount of 3.55% Senior Notes due 2022. All other terms,The notes will be redeemed on December 1, 2021, at a redemption price equal to 100 percent of the principal amount of the notes outstanding, plus accrued and unpaid interest to, but not including, the redemption date. Annual interest rates, remaincosts associated with the same. The interest rate on Cerro Verde's credit facility was 3.14 percent at September 30, 2017. Cerro Verde used proceeds from its amended credit facility plus available cash to repay the balance of its shareholder loans in June 2017. Refer to Note 8 of FCX’s annual report on Form 10-K for the year ended December 31, 2016, for further discussion.

3.55% Senior Notes approximate $19 million. FCX has no other senior note maturities until March 2023.
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Exchanges and Early ExtinguishmentAs further discussed in the 2020 Form 10-K, in the first nine months of Debt. During third-quarter 2017,2020, FCX redeemed in full certain senior notes. A summaryor purchased a portion of its 4.00% Senior Notes due 2021, 3.55% Senior Notes due 2022, 3.875% Senior Notes due 2023 and 4.55% Senior Notes due 2024. As a result of these early debt extinguishments follows (in millions):

 Principal Amount Net Adjustments Book Value Redemption Value Gain
FCX 6.125% Senior Notes due 2019$179
 $5
 $184
 $182
 $2
FM O&G 6.125% Senior Notes due 201958
 2
 60
 59
 1
FCX 6.625% Senior Notes due 2021228
 12
 240
 234
 6
FM O&G 6.625% Senior Notes due 202133
 2
 35
 34
 1
FM O&G 6.75% Senior Notes due 202245
 2
 47
 46
 1
 $543
 $23
 $566
 $555
 $11

Partially offsetting the $11 million gaintransactions, FCX recorded a loss on early extinguishment of certain senior notes was a net lossdebt of $3 million, primarily associated with the modification of Cerro Verde’s credit facility in second-quarter 2017.

During the second and third quarters of 2016, FCX redeemed certain senior notes in exchange for its common stock, which resulted in gains of $15$59 million in third-quarter 20162020 and $54$100 million for the nine months ended September 30, 2020.

Cerro Verde Term Loan. In September 2021, Cerro Verde prepaid $200 million on its term loan. The $325 million balance of the loan is due June 2022.

Interest Expense, Net. Consolidated interest costs (before capitalization) totaled $157 million in third-quarter 2021, $160 million in third-quarter 2020, $482 million for the first nine months of 2016. Partially offsetting the gains were $3 million in losses, primarily associated with the modification of FCX’s revolving credit facility in first-quarter 2016. Refer to Notes 82021 and 10 of FCX’s annual report on Form 10-K for the year ended December 31, 2016, for further discussion.

Interest Expense, Net. Consolidated interest costs from continuing operations (before capitalization and excluding $141 million of interest expense associated with disputed Cerro Verde royalties recorded in third-quarter 2017) totaled $196 million in third-quarter 2017, $211 million in third-quarter 2016, $583$490 million for the first nine months of 2017 and $647 million for the first nine months of 2016.2020. Capitalized interest added to property, plant, equipment and mine development costs, net, totaled $33$19 million in third-quarter 2017, $242021, $40 million in third-quarter 2016, $912020, $51 million for the first nine months of 20172021 and $66$128 million for the first nine months of 2016. Capitalized2020. The decrease in capitalized interest addedfor the 2021 periods results from assets placed in service as PT-FI’s underground mining operations continue to oilramp up.

Financial Policy. In February 2021, FCX’s Board of Directors (Board) adopted a financial policy for the allocation of cash flows aligned with FCX’s strategic objectives of maintaining a strong balance sheet and gas properties notincreasing cash returns to shareholders while advancing opportunities for future growth. The policy includes a base dividend and a performance-based payout framework, whereby up to 50 percent of available cash flows generated after planned capital spending and distributions to noncontrolling interests would be allocated to shareholder returns and the balance to debt reduction and investments in value enhancing growth projects, subject to amortization totaled $7 millionFCX maintaining its net debt at a level not to exceed the net debt target of $3 billion to $4 billion (excluding project debt for additional smelting capacity in Indonesia).

In February 2021, the first nine monthsBoard reinstated a cash dividend on FCX’s common stock (base dividend), and on November 1, 2021, the Board approved (i) a new share repurchase program authorizing repurchases of 2016 (none in third-quarter 2016up to $3.0 billion of FCX common stock, and (ii) a variable cash dividend on FCX’s common stock for 2022.

The timing and amount of any share repurchases will be at the discretion of management and will depend on a variety of factors. The share repurchase program may be modified, increased, suspended or 2017).terminated at any time at the Board’s discretion. The declaration and payment of dividends (base or variable) is also at the discretion of the Board and will depend on FCX's financial results, cash requirements, business prospects, global economic conditions and other factors deemed relevant by the Board.


On September 22, 2021, FCX declared a quarterly cash dividend (base dividend) of $0.075 per share
on its common stock, which was paid on November 1, 2021, to common stockholders of record as of October 15, 2021.

NOTE 7.6. FINANCIAL INSTRUMENTS


FCX does not purchase, hold or sell derivative financial instruments unless there is an existing asset or obligation, or it anticipates a future activity that is likely to occur and will result in exposure to market risks, which FCX intends to offset or mitigate. FCX does not enter into any derivative financial instruments for speculative purposes but has entered into derivative financial instruments in limited instances to achieve specific objectives. These objectives principally relate to managing risks associated with commodity price changes, foreign currency exchange rates and interest rates.


Commodity Contracts.  From time to time, FCX has entered into derivative contracts to hedge the market risk associated with fluctuations in the prices of commodities it purchases and sells. Derivative financial instruments used by FCX to manage its risks do not contain credit risk-related contingent provisions. As

In April 2020, FCX entered into forward sales contracts for 150 million pounds of Septembercopper for settlement in May and June of 2020. The forward sales provided for fixed pricing of $2.34 per pound of copper on approximately 60 percent of North America's sales volumes for May and June 2020. These contracts resulted in hedging losses totaling $24 million in second-quarter 2020 and for the six months ended June 30, 2017, and December 31, 2016, FCX had2020. There were no price protectionremaining forward sales contracts relating to its mine production. as of June 30, 2020.


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A discussion of FCX’s other derivative contracts and programs follows.follows:


Derivatives Designated as Hedging Instruments – Fair Value Hedges
Copper Futures and Swap Contracts. Some of FCX’s U.S. copper rod and cathode customers request a fixed market price instead of the Commodity Exchange Inc. (COMEX) average copper price in the month of shipment. FCX hedges this price exposure in a manner that allows it to receive the COMEX average price in the month of shipment while the customers pay the fixed price they requested. FCX accomplishes this by entering into copper futures or swap contracts. Hedging gains or losses from these copper futures and swap contracts are recorded in revenues. FCX did not have any significant gains or losses resulting from hedge ineffectiveness during the nine-month periods ended September 30, 20172021 and 2016.2020. At September 30, 2017,2021, FCX held copper futures and swap contracts that qualified for hedge accounting for 4684 million pounds at an average contract price of $2.83$4.23 per pound, with maturities through June 2019.May 2023.


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A summary of gains (losses) recognized in revenues for derivative financial instruments related to commodity contracts that are designated and qualify as fair value hedge transactions, along withincluding the unrealized (losses) gains (losses) on the related hedged item follows (in millions):
Three Months Ended Nine Months Ended Three Months EndedNine Months Ended
September 30, September 30,September 30,September 30,
2017 2016 2017 2016 2021202020212020
Copper futures and swap contracts:       Copper futures and swap contracts:  
Unrealized gains (losses):       
Unrealized (losses) gains:Unrealized (losses) gains:  
Derivative financial instruments$—
 $1
 $(1) $11
Derivative financial instruments$(20)$1 $(28)$8 
Hedged item – firm sales commitments—
 (1) 1
 (11)Hedged item – firm sales commitments20 (1)28 (8)
       
Realized gains (losses):       Realized gains (losses):  
Matured derivative financial instruments12
 —
 21
 (8)Matured derivative financial instruments5 15 57 (1)


Derivatives Not Designated as Hedging Instruments
Embedded Derivatives. As described in Note 1 to FCX’s annual report on Form 10-K for the year ended December 31, 2016, under “Revenue Recognition,” certain Certain FCX copper concentrate, copper cathode and gold sales contracts provide for provisional pricing primarily based on the London Metal Exchange (LME) copper price or the COMEX copper price and the London Bullion Market Association (London) gold price at the time of shipment as specified in the contract. Similarly, FCX purchasesreceives market prices based on prices in the specified future month, which results in price fluctuations recorded in revenues until the date of settlement. FCX records revenues and invoices customers at the time of shipment based on then-current LME or COMEX copper underprices and the London gold prices as specified in the contracts, which results in an embedded derivative (i.e., a pricing mechanism that provide for provisional pricing.is finalized after the time of delivery) that is required to be bifurcated from the host contract. The host contract is the sale of the metals contained in the concentrate or cathode at the then-current LME or COMEX copper price, and the London gold price. FCX applies the normal purchases and normal sales scope exception in accordance with derivatives and hedge accounting guidance to the host contract in its concentrate or cathode sales agreements since thethese contracts do not allow for net settlement and always result in physical delivery. Sales and purchases with a provisional sales price contain anThe embedded derivative (i.e.,does not qualify for hedge accounting and is adjusted to fair value through earnings each period, using the price settlement mechanism is settled after the time of delivery) that is required to be bifurcated from the host contract. The host contract is the sale or purchase of the metals contained in the concentrate or cathode at the then-currentperiod-end LME or COMEX copper price orforward prices and the adjusted London gold price as defined inprices, until the contract.date of final pricing. Similarly, FCX purchases copper under contracts that provide for provisional pricing. Mark-to-market price fluctuations from these embedded derivatives related to continuing operations are recorded through the settlement date and are reflected in revenues for sales contracts and in cost of sales as production and delivery costsinventory for purchase contracts. Mark-to-market price fluctuations associated with embedded derivatives for discontinued operations, which were minimal, are included in discontinued operations for all periods presented in these financial statements.


A summary of FCX’s embedded derivatives at September 30, 2017,2021, follows:
Open PositionsAverage Price
Per Unit		Maturities Through
 ContractMarket
Embedded derivatives in provisional sales contracts:    
Copper (millions of pounds)548 $4.28 $4.05 February 2022
Gold (thousands of ounces)196 1,790 1,738 January 2022
Embedded derivatives in provisional purchase contracts:  
Copper (millions of pounds)116 4.31 4.05 February 2022


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 Open Positions 
Average Price
Per Unit
 Maturities Through
  Contract Market 
Embedded derivatives in provisional sales contracts:       
Copper (millions of pounds)546
 $2.84
 $2.93
 February 2018
Gold (thousands of ounces)194
 1,318
 1,287
 December 2017
Embedded derivatives in provisional purchase contracts:       
Copper (millions of pounds)155
 2.83
 2.93
 January 2018

Copper Forward Contracts. Atlantic Copper, FCX’s wholly owned smelting and refining unit in Spain, enters into copper forward contracts designed to hedge its copper price risk whenever its physical purchases and sales pricing periods do not match. These economic hedge transactions are intended to hedge against changes in copper prices, with the mark-to-market hedging gains or losses recorded in cost of sales.production and delivery costs. At September 30, 2017,2021, Atlantic Copper held net copper forward purchase contracts for 59 million pounds at an average contract price of $2.95$4.23 per pound, with maturities through October 2017.November 2021.


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Summary of Gains (Losses). Gains. A summary of the realized and unrealized (losses) gains (losses) recognized in operating income (loss) for commodity contracts that do not qualify as hedge transactions, including embedded derivatives, follows (in millions):
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Embedded derivatives in provisional copper and gold       
sales contractsa
$137
 $12
 $297
 $88
Copper forward contractsb
(9) (1) (14) 4
 Three Months EndedNine Months Ended
September 30,September 30,
 2021202020212020
Embedded derivatives in provisional sales contracts:a
Copper$(102)$94 $223 $18 
Gold and other metals(9)15 (22)39 
Copper forward contractsb
1 (7)(12)12 
a.Amounts recorded in revenues. 
b.Amounts recorded in cost of sales as production and delivery costs.

a.Amounts recorded in revenues. 
b.Amounts recorded in cost of sales as production and delivery costs.

Unsettled Derivative Financial Instruments
A summary of the fair values of unsettled commodity derivative financial instruments follows (in millions):
September 30,
2021		December 31, 2020
Commodity Derivative Assets:  
Derivatives designated as hedging instruments:
  
Copper futures and swap contracts$2 $15 
Derivatives not designated as hedging instruments:
  
Embedded derivatives in provisional sales/purchase contracts30 169 
Copper forward contracts5 — 
Total derivative assets$37 $184 
Commodity Derivative Liabilities:
Derivatives designated as hedging instruments:
Copper futures and swap contracts$14 $— 
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts134 21 
Copper forward contracts4 — 
Total derivative liabilities$152 $21 
  September 30,
2017		 December 31, 2016
Commodity Derivative Assets:    
Derivatives designated as hedging instruments:
    
Copper futures and swap contracts $7
 $9
Derivatives not designated as hedging instruments:
    
Embedded derivatives in provisional copper and gold    
sales/purchase contracts 74
 137
Total derivative assets $81
 $146
     
Commodity Derivative Liabilities:    
Derivatives designated as hedging instruments:
    
Copper futures and swap contracts $2
 $2
Derivatives not designated as hedging instruments:
    
Embedded derivatives in provisional copper and gold    
sales/purchase contracts 46
 56
Total derivative liabilities $48
 $58

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FCX’s commodity contracts have netting arrangements with counterparties with which the right of offset exists, and it is FCX’s policy to generally offset balances by counterpartycontract on its balance sheet. FCX’s embedded derivatives on provisional sales/purchase contracts are netted with the corresponding outstanding receivable/payable balances.

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A summary of these unsettled commodity contracts that are offset in the balance sheets follows (in millions):
AssetsLiabilities
September 30,
2021		December 31, 2020September 30,
2021		December 31, 2020
Gross amounts recognized:
Embedded derivatives in provisional
sales/purchase contracts$30 $169 $134 $21 
Copper derivatives7 15 18 — 
37 184 152 21 
Less gross amounts of offset:
Embedded derivatives in provisional
sales/purchase contracts— 1 — 1 
Copper derivatives4 — 4 — 
4 1 4 1 
Net amounts presented in balance sheet:
Embedded derivatives in provisional
sales/purchase contracts30 168 134 20 
Copper derivatives3 15 14 — 
$33 $183 $148 $20 
Balance sheet classification:
Trade accounts receivable$3 $168 $101 $— 
Other current assets4 15 — — 
Accounts payable and accrued liabilities26 — 45 20 
Other liabilities— — 2 — 
$33 $183 $148 $20 
  Assets Liabilities
  September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016
         
Gross amounts recognized:        
Commodity contracts:        
Embedded derivatives in provisional        
sales/purchase contracts $74
 $137
 $46
 $56
Copper derivatives 7
 9
 2
 2
  81
 146
 48
 58
         
Less gross amounts of offset:        
Commodity contracts:        
Embedded derivatives in provisional        
sales/purchase contracts 1
 12
 1
 12
Copper derivatives 2
 2
 2
 2
  3
 14
 3
 14
         
Net amounts presented in balance sheet:        
Commodity contracts:        
Embedded derivatives in provisional        
sales/purchase contracts 73
 125
 45
 44
Copper derivatives 5
 7
 —
 —
  $78
 $132
 $45
 $44
         
Balance sheet classification:        
Trade accounts receivable $69
 $119
 $24
 $13
Other current assets 5
 7
 —
 —
Accounts payable and accrued liabilities 4
 6
 21
 31
  $78
 $132
 $45
 $44


Credit Risk. FCX is exposed to credit loss when financial institutions with which it has entered into derivative transactions (commodity, foreign exchange and interest rate swaps) are unable to pay. To minimize the risk of such losses, FCX uses counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties. FCX does not anticipate that any of the counterparties it deals with will default on their obligations. As of September 30, 2017,2021, the maximum amount of credit exposure associated with derivative transactions was $78$37 million.


Other Financial Instruments. Other financial instruments include cash and cash equivalents, restricted cash, restricted cash equivalents, accounts receivable, restricted cash, investment securities, legally restricted funds, accounts payable and accrued liabilities, dividends payable and long-term debt. The carrying value for cash and cash equivalents (which included time deposits of $1.9$0.2 billion at September 30, 2017,2021, and $64 million$0.3 billion at December 31, 2016)2020), restricted cash, restricted cash equivalents, accounts receivable, restricted cash, and accounts payable and accrued liabilities, and dividends payable approximates fair value because of their short-term nature and generally negligible credit losses (refer to Note 87 for the fair values of investment securities, legally restricted funds and long-term debt).


In addition, as of September 30, 2017,2021, FCX has contingent consideration assets related to the sales of certain 2016 asset salesoil and gas properties (refer to Note 87 for the related fair valuevalues).

Cash, Cash Equivalents, Restricted Cash and to Note 2Restricted Cash Equivalents. The following table provides a reconciliation of FCX’s annual report on Form 10-K fortotal cash, cash equivalents, restricted cash and restricted cash equivalents presented in the year ended December 31, 2016, for further discussionconsolidated statements of these instruments).cash flows (in millions):

September 30,
2021		December 31, 2020
Balance sheet components:
Cash and cash equivalents$7,672 $3,657 
Restricted cash and restricted cash equivalents included in:
Other current assets114 97 
Other assets133 149 
Total cash, cash equivalents, restricted cash and restricted cash equivalents presented in the consolidated statements of cash flows$7,919 $3,903 
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NOTE 8.7. FAIR VALUE MEASUREMENT


Fair value accounting guidance includes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). FCX recognizes transfers between levels at the end of the reporting period. FCX did not have any significant transfers in or out of Level 1, 2 or 3 forduring third-quarter 2017.2021.


FCX’s financial instruments are recorded on the consolidated balance sheets at fair value except for contingent consideration associated with the sale of the Deepwater Gulf of Mexico (GOM) oil and gas properties (which was recorded under the loss recovery approach) and debt. A summary of the carrying amount and fair value of FCX’s financial instruments (including those measured at net asset value (NAV) as a practical expedient), other than cash and cash equivalents, accounts receivable, restricted cash, andrestricted cash equivalents, accounts receivable, accounts payable and accrued liabilities, and dividends payable (refer to Note 7)6) follows (in millions):
At September 30, 2021
 CarryingFair Value
 AmountTotalNAVLevel 1Level 2Level 3
Assets    
Investment securities:a,b
Equity securities$52 $52 $— $52 $— $— 
U.S. core fixed income fund29 29 29 — — — 
Total81 81 29 52 — — 
Legally restricted funds:a
    
U.S. core fixed income fund64 64 64 — — — 
Government bonds and notes53 53 — — 53 — 
Corporate bonds42 42 — — 42 — 
Government mortgage-backed securities24 24 — — 24 — 
Asset-backed securities14 14 — — 14 — 
Money market funds8 8 — 8 — — 
Collateralized mortgage-backed securities4 4 — — 4 — 
Municipal bonds1 1 — — 1 — 
Total210 210 64 8 138 — 
Derivatives:    
Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc
30 30 — — 30 — 
Copper forward contractsc
5 5 — 2 3 — 
Copper futures and swap contractsc
2 2 — — 2 — 
       Total37 37 — 2 35 — 
Contingent consideration for the sale of the
Deepwater GOM oil and gas propertiesa
94 85 — — — 85 
Liabilities    
Derivatives:c
    
Embedded derivatives in provisional sales/purchase contracts in a gross liability position134 134 — — 134 — 
Copper futures and swap contractsc
14 14 — 14 — — 
Copper forward contracts4 4 — 1 3 — 
Total152 152 — 15 137 — 
Long-term debt, including current portiond
9,665 10,791 — — 10,791 — 
 At September 30, 2017
 Carrying Fair Value
 Amount Total NAV Level 1 Level 2 Level 3
Assets           
Investment securities:a,b
           
U.S. core fixed income fund$25
 $25
 $25
 $—
 $—
 $—
Money market funds21
 21
 —
 21
 —
 —
Equity securities6
 6
 —
 6
 —
 —
Total52
 52
 25
 27
 —
 —
            
Legally restricted funds:a
           
U.S. core fixed income fund55
 55
 55
 —
 —
 —
Government bonds and notes38
 38
 —
 —
 38
 —
Corporate bonds30
 30
 —
 —
 30
 —
Government mortgage-backed securities25
 25
 —
 —
 25
 —
Money market funds18
 18
 —
 18
 —
 —
Asset-backed securities14
 14
 —
 —
 14
 —
Collateralized mortgage-backed securities8
 8
 —
 —
 8
 —
Municipal bonds1
 1
 —
 —
 1
 —
Total189
 189
 55
 18
 116
 —
            
Derivatives:           
Embedded derivatives in provisional sales/           
purchase contracts in a gross asset positionc
74
 74
 —
 —
 74
 —
Copper futures and swap contractsc
7
 7
 —
 5
 2
 —
Contingent consideration for the sales of TFHL           
   and onshore California oil and gas propertiesa
80
 80
 —
 —
 80
 —
Total161
 161
 —
 5
 156
 —
            
Contingent consideration for the sale of the           
     Deepwater GOM oil and gas propertiesa
150
 138
 —
 —
 —
 138
            
Total assets  $540
 $80
 $50
 $272
 $138
            
Liabilities           
Derivatives:c
           
Embedded derivatives in provisional sales/           
purchase contracts in a gross liability position46
 $46
 $—
 $—
 $46
 $—
Copper futures and swap contracts2
 2
 —
 1
 1
 —
Total48
 48
 —
 1
 47
 —
            
Long-term debt, including current portiond
14,782
 14,735
 —
 —
 14,735
 —
            
Total liabilities  $14,783
 $—
 $1
 $14,782
 $—



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At December 31, 2020
 CarryingFair Value
 AmountTotalNAVLevel 1Level 2Level 3
Assets    
Investment securities:a,b
U.S. core fixed income fund$29 $29 $29 $— $— $— 
Equity securities7 7 — 7 — — 
Total36 36 29 7 — — 
Legally restricted funds:a
    
U.S. core fixed income fund65 65 65 — — — 
Government bonds and notes49 49 — — 49 — 
Corporate bonds43 43 — — 43 — 
Government mortgage-backed securities30 30 — — 30 — 
Asset-backed securities16 16 — — 16 — 
Money market funds5 5 — 5 — — 
Collateralized mortgage-backed securities4 4 — — 4 — 
Municipal bonds1 1 — — 1 — 
Total213 213 65 5 143 — 
Derivatives:    
Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc
169 169 — — 169 — 
Copper futures and swap contractsc
15 15 — 13 2 — 
Total184 184 — 13 171 — 
Contingent consideration for the sale of the
   Deepwater GOM oil and gas propertiesa
108 88 — — — 88 
Liabilities    
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position21 21 — — 21 — 
Long-term debt, including current portiond
9,711 10,994 — — 10,994 — 
a.Current portion included in other current assets and long-term portion included in other assets.
 At December 31, 2016
 Carrying Fair Value
 Amount Total NAV Level 1 Level 2 Level 3
Assets           
Investment securities:a,b
           
U.S. core fixed income fund$23
 $23
 $23
 $—
 $—
 $—
Money market funds22
 22
 —
 22
 —
 —
Equity securities5
 5
 —
 5
 —
 —
Total50
 50
 23
 27
 —
 —
            
Legally restricted funds:a
           
U.S. core fixed income fund53
 53
 53
 —
 —
 —
Government bonds and notes36
 36
 —
 —
 36
 —
Corporate bonds32
 32
 —
 —
 32
 —
Government mortgage-backed securities25
 25
 —
 —
 25
 —
Asset-backed securities16
 16
 —
 —
 16
 —
Money market funds12
 12
 —
 12
 —
 —
Collateralized mortgage-backed securities8
 8
 —
 —
 8
 —
Municipal bonds1
 1
 —
 —
 1
 —
Total183
 183
 53
 12
 118
 —
            
Derivatives:           
Embedded derivatives in provisional sales/           
purchase contracts in a gross asset positionc
137
 137
 —
 —
 137
 —
Copper futures and swap contractsc
9
 9
 —
 8
 1
 —
Contingent consideration for the sales of TFHL           
   and onshore California oil and gas propertiesa
46
 46
 —
 —
 46
 —
Total192
 192
 —
 8
 184
 —
            
Contingent consideration for the sale of the           
   Deepwater GOM oil and gas propertiesa
150
 135
 —
 —
 —
 135
            
Total assets  $560
 $76
 $47
 $302
 $135
            
Liabilities           
Derivatives:c
           
Embedded derivatives in provisional sales/           
purchase contracts in a gross liability position56
 $56
 $—
 $—
 $56
 $—
Copper futures and swap contracts2
 2
 —
 2
 —
 —
Total58
 58
 —
 2
 56
 —
            
Contingent payments for the settlements of           
drilling rig contractse
23
 23
 —
 —
 23
 —
            
Long-term debt, including current portiond
16,027
 15,196
 —
 —
 15,196
 —
            
Total liabilities  $15,277
 $—
 $2
 $15,275
 $—
a.Current portion included in other current assets and long-term portion included in other assets.
b.Excludes time deposits (which approximated fair value) included in (i) other current assets of $41 million at September 30, 2017, and $28 million at December 31, 2016, and (ii) other assets of $122 million at both September 30, 2017, and December 31, 2016, primarily associated with an assurance bond to support PT-FI’s commitment for smelter development in Indonesia.
c.Refer to Note 7 for further discussion and balance sheet classifications.
d.Recorded at cost except for debt assumed in acquisitions, which were recorded at fair value at the respective acquisition dates.
e.Included in accounts payable and accrued liabilities.

b.Excludes time deposits (which approximated fair value) included in (i) other current assets of $114 million at September 30, 2021, and $97 million at December 31, 2020, and (ii) other assets of $132 million at September 30, 2021, and $148 million at December 31, 2020, primarily associated with an assurance bond to support PT-FI’s commitment for additional domestic smelter development in Indonesia and PT-FI’s closure and reclamation guarantees.

c.Refer to Note 6 for further discussion and balance sheet classifications.
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d.Recorded at cost except for debt assumed in acquisitions, which are recorded at fair value at the respective acquisition dates.


Valuation Techniques. The U.S. core fixed income fund is valued at net asset value (NAV).NAV. The fund strategy seeks total return consisting of income and capital appreciation primarily by investing in a broad range of investment-grade debt securities, including U.S. government obligations, corporate bonds, mortgage-backed securities, asset-backed securities and money market instruments. There are no restrictions on redemptions (which are usually within one business day of notice).

Money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.


Equity securities are valued at the closing price reported on the active market on which the individual securities are traded and, as such, are classified within Level 1 of the fair value hierarchy.


Fixed income securities (government securities, corporate bonds, asset-backed securities, collateralized mortgage-backed securities and municipal bonds) are valued using a bid-evaluation price or a mid-evaluation price. A bid-evaluation price is an estimated price at which a dealer would pay for a security. A mid-evaluation price is the average of the estimated price at which a dealer would sell a security and the estimated price at which a dealer would pay for a security. These evaluations are based on quoted prices, if available, or models that use observable inputs and, as such, are classified within Level 2 of the fair value hierarchy.


Money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

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FCX’s embedded derivatives on provisional copper concentrate, copper cathode and gold purchases and sales are valued using only quoted monthly LME or COMEX copper forward prices and the adjusted London gold forward priceprices at each reporting date based on the month of maturity (refer to Note 76 for further discussion); however, FCX’s contracts themselves are not traded on an exchange. As a result, these derivatives are classified within Level 2 of the fair value hierarchy.


FCX’s derivative financial instruments for copper futures and swap contracts and copper forward contracts that are traded on the respective exchanges are classified within Level 1 of the fair value hierarchy because they are valued using quoted monthly COMEX or LME prices at each reporting date based on the month of maturity (refer to Note 76 for further discussion). Certain of these contracts are traded on the over-the-counter market and are classified within Level 2 of the fair value hierarchy based on COMEX and LME forward prices.


The fair value of contingent consideration for the sales of TFHL and onshore California oil and gas properties is calculated based on average commodity price forecasts through applicable maturity dates using a Monte Carlo simulation model. The models use various observable inputs, including Brent crude oil forward prices, historical copper and cobalt prices, volatilities, discount rates and settlement terms. As a result, these contingent consideration assets are classified within Level 2 of the fair value hierarchy.

The fair value of contingent consideration for theIn December 2016, FCX’s sale of its Deepwater GOM oil and gas properties included up to $150 million in contingent consideration that was recorded at the total amount under the loss recovery approach. The contingent consideration is being received over time as cash flows are realized from a third-party production handling agreement for an offshore platform, with the related payments commencing in third-quarter 2018. The contingent consideration included in (i) other current assets totaled $20 million at September 30, 2021, and $12 million at December 31, 2020, and (ii) other assets totaled $74 million at September 30, 2021, and $96 million at December 31, 2020. The fair value of this contingent consideration was calculated based on a discounted cash flow model using inputs that include third-party reserve estimates for reserves, production rates and production timing, and discount rates. Because significant inputs are not observable in the market, the contingent consideration is classified within Level 3 of the fair value hierarchy.

The December 31, 2016, fair value of contingent payments for the settlements of drilling rig contracts was calculated based on the average price forecasts of West Texas Intermediate (WTI) crude oil over the 12-month period ending June 30, 2017, using a mean-reverting model. The model used various observable inputs, including WTI crude oil forward prices, volatilities, discount rate and settlement terms. As a result, these contingent payments were classified within Level 2 of the fair value hierarchy. The contingency period for FM O&G’s drilling rig contract settlements ended June 30, 2017, and no additional amounts were paid.


Long-term debt, including current portion, is primarily valued using available market quotes and, as such, is classified within Level 2 of the fair value hierarchy.


The techniques described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while FCX believes its valuation techniques are appropriate and consistent with other market participants, the use of different techniques or assumptions to determine fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There have been no changes in the techniques used at September 30, 2017,2021, as compared towith those techniques used at December 31, 2016.2020.

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A summary of the changes in the fair value of FCX’s Level 3 instrument, contingent consideration for the sale of the Deepwater GOM oil and gas properties, during the first nine months of 20172021 follows (in millions):
Fair value at January 1, 2021$88 
Net unrealized gain related to assets still held at the end of the period12 
Settlements(15)
Fair value at September 30, 2021$85 
Fair value at January 1, 2017$135
 
Net unrealized gain related to assets still held at the end of the period3
 
Fair value at September 30, 2017$138
 


NOTE 9.8. CONTINGENCIES AND COMMITMENTS


Environmental
Historical Smelter Sites — Borough of Carteret
As reported in Note 12 of FCX’s annual report on Form 10-K forNewtown Creek. From the year ended December 31, 2016, from 19201930s until 1986, United States Metal1964, Phelps Dodge Refining Company (USMR)Corporation (PDRC), an indirect wholly owned subsidiary of Cyprus Amax Minerals Company, owned andFCX, operated a copper smelter, and refinery infrom the Borough of Carteret, New Jersey,1930s until 1984 operated a copper refinery, on the banks of the Arthur Kill (a narrowNewtown Creek (the creek), which is a 3.5-mile-long waterway that separatesforms part of the boundary between Brooklyn and Queens in New JerseyYork City. Heavy industrialization along the banks of the creek and discharges from Staten Island). Asthe City of New York’s sewer system over more than a resultcentury resulted in significant environmental contamination of recent off-site soil sampling in public and private areas near the former smelter, FCX increased its associated environmental obligation for known and potential off-site environmental remediation by recording a $59 million charge to operating income in third-quarter 2017. Additional sampling is ongoing and could result in additional adjustments to the related environmental remediation obligation.

Uranium Mining Sites
As reported in Note 12 of FCX’s annual report on Form 10-K for the year ended December 31, 2016, the Department of Justice, thewaterway. In 2010, U.S. Environmental Protection Agency (EPA) notified PDRC, four other companies and the Navajo NationCity of New York that EPA considers them to be potentially responsible parties (PRPs) under the Comprehensive Environmental Response, Compensation, and two FCX-related subsidiaries reachedLiability Act of 1980. The notified parties began working with EPA to identify other PRPs. In 2010, EPA designated the creek as a Superfund site, and in 2011, PDRC and five other parties (the Newtown Creek Group, NCG) entered an agreement regardingAdministrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) to assess the scopenature and extent of environmental investigationcontamination in the creek and identify potential remedial options. The parties’ RI/FS work under the AOC and their efforts to identify other PRPs are ongoing. The final draft RI, which addressed all remaining EPA comments, was submitted in October 2021 and NCG expects EPA’s formal acceptance after their review. NCG expects to submit the draft FS in late 2025
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and currently expects EPA to select a creek-wide remedy in 2026, with the actual remediation workconstruction starting several years later. In July 2019, the NCG entered into an AOC to conduct a Focused Feasibility Study (FFS) of the first two miles of the creek to support an evaluation of an interim remedy for 94 former uranium mining sites on tribal lands,that section of the creek. In July 2021, EPA terminated the FFS, which effectively incorporates remediation of the lower creek with the site-wide remedy. FCX’s environmental liability balance for the creek was $313 million at September 30, 2021. The final costs of fulfilling this remedial obligation and the related financial contributionsallocation of costs among PRPs are uncertain and subject to change based on the results of the U.S. governmentRI/FS, the remedy ultimately selected by EPA and related allocation determinations. Changes to the overall cost of this remedial obligation and the FCX subsidiaries. The related Consent Decree was approved by the U.S. District Court for the District of Arizona in second-quarter 2017. Based on updated cash flow and timing estimates, FCX reduced its associated obligation for that contingency by recording a $41 million creditportion ultimately allocated to operating income in second-quarter 2017 after receiving court approval of the Consent Decree.PDRC could be material to FCX.


Litigation
During third-quarter 2017, thereThere were no significant updates to previously reported legal proceedings included in Note 12 of FCX’s annual report on2020 Form 10-K, other than the matters discussed below.

Asbestos and Talc Claims. As previously disclosed, since approximately 1990, various FCX affiliates have been named as defendants in a large number of lawsuits alleging personal injury from, among other things, exposure to asbestos or talc allegedly contained in industrial products, and more recently alleging the presence of asbestos contamination in talc-based cosmetic and personal care products. Cyprus Amax Minerals Company (CAMC), an indirect wholly owned subsidiary of FCX, and Cyprus Mines Corporation (Cyprus Mines), a wholly owned subsidiary of CAMC, are among the targets of such lawsuits. Cyprus Mines and subsidiaries were engaged in talc mining and processing from 1964 until 1992 when Cyprus Mines exited its talc business. On February 13, 2019, Imerys Talc America (Imerys), the current owner of the talc business assets and liabilities previously owned by Cyprus Mines, filed for Chapter 11 bankruptcy protection. On December 22, 2020, Imerys filed an amended bankruptcy plan disclosing a global settlement with Cyprus Mines and CAMC, which provides a framework for a full and comprehensive resolution of all current and future potential liabilities arising out of the Cyprus Mines talc business, including claims against FCX, its affiliates, Cyprus Mines and CAMC. The hearing to consider confirmation of the Imerys bankruptcy plan previously scheduled to be held in November 2021 has been cancelled following a recent decision by the bankruptcy judge to invalidate a substantial number of votes in favor of the plan. Consistent with the global settlement agreement, Cyprus Mines commenced its own bankruptcy process on February 11, 2021, and talc-related litigation against both Cyprus Mines and Cyprus Amax Minerals Company is stayed through 2021. The global settlement is subject to, among other things, votes by claimants in both the Imerys and Cyprus Mines bankruptcy cases as well as bankruptcy court approvals in both cases, and there can be no assurance that the global settlement will be successfully implemented. FCX has a $130 million liability balance at September 30, 2021, associated with the proposed settlement.

Louisiana Parishes Coastal Erosion Cases.As discussed in Note 12 of FCX's 2020 Form 10-K, certain FCX affiliates were named as defendants, along with numerous co-defendants, in 13 cases out of a total of 42 cases filed in Louisiana state courts by six south Louisiana parishes (Cameron, Jefferson, Plaquemines, St. Bernard, St. John the Baptist and Vermilion), alleging that certain oil and gas exploration and production operations and sulphur mining and production operations in coastal Louisiana contaminated and damaged coastal wetlands and caused significant land loss along the Louisiana coast.

In 2019, affiliates of FCX reached an agreement in principle to settle all 13 cases. The maximum out-of-pocket settlement payment will be $23.5 million with the initial payment of $15 million to be paid upon execution of the settlement agreement.

The settlement agreement must be executed by all parties, including authorized representatives of the six south Louisiana parishes originally plaintiffs in the suit and certain other non-plaintiff Louisiana parishes and the state of Louisiana. The agreement in principle does not include any admission of liability by FCX or its affiliates. FCX recorded a charge in 2019 for the year ended December 31, 2016.initial payment of $15 million, which will be paid upon execution of the settlement agreement. The settlement agreement has been executed by the FCX affiliates, the state of Louisiana and 8 of the 12 Louisiana parishes. FCX is continuing its efforts to finalize the settlement.


Tax and Other Matters
PT-FI and PT Smelting Export Licenses. In March 2021, PT-FI received a one-year extension of its export license through March 15, 2022. In July 2021, PT Smelting received a six-month extension of its anodes slimes export license, which currently expires December 30, 2021.


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Cerro Verde Royalty Dispute
As reported in FCX’s annual report on Form 10-K forDispute. SUNAT (National Superintendency of Customs and Administration), the year ended December 31, 2016, and as subsequently updated in Note 9 of FCX’s quarterly report on Form 10-Q for the quarter ended June 30, 2017, SUNAT, Peru’sPeru national tax authority, has assessed mining royalties on ore processed by the Cerro Verde concentrator which commenced operations in late 2006, for the period December 2006 to September 2011.December 2013. Cerro Verde contested each of these assessments because it believes that its 1998 stability agreement exempts from royalties all minerals extracted from its mining concession, irrespective of the method used for processing thosesuch minerals. No assessments have been issued for the period from October 2011 to December 2013, and no assessments can be issued for years after 2013, as Cerro Verde began paying royalties on all of its production in January 2014 under its new 15-year stability agreement. Since 2014, Cerro Verde has been paying the disputed assessments for the period from December 2006 through December 20082013 under an installment program ($135 million paid bypayment programs provided under Peru law. In third-quarter 2021, Cerro Verde through September 30, 2017).

In October 2017,paid the Peruvian Supreme Court issued a rulingbalance of its royalty dispute liabilities (payments totaled $356 million in favor of SUNAT that the assessments of royaltiesthird-quarter 2021 and $421 million for the year 2008 on ore processed byfirst nine months of 2021) and is proceeding with international arbitration as previously disclosed in FCX’s 2020 Form 10-K.

Development Progress of Greenfield Smelter at East Java. On January 7, 2021, the Cerro Verde concentrator were proper under Peruvian law.

TableIndonesia government levied an administrative fine of Contents

As a result of the unfavorable Peruvian Supreme Court ruling on the 2008 royalty dispute, Cerro Verde recorded pre-tax charges totaling $357$149 million ($359 million including net tax charges and $188 million net of noncontrolling interests) in third-quarter 2017, consisting of $240 million in royalty assessments, $147 million of penalties and interest related to the December 2006 to December 2008 assessments, and $97 million for related items (primarily associated with the special mining tax and net assets tax) that Cerro Verde would have incurred under the view that its concentrator was not stabilized.

A summary of the charges recorded in third-quarter 2017 for the Cerro Verde royalty dispute follows (in millions):
Royalty and related assessment charges:   
 Production and delivery $216
a 
 Interest expense, net 141
 
 Provision for income taxes 2
b 
Net loss attributable to noncontrolling interests (171) 
   $188
 
a.Includes $176 million related to disputed royalty assessments for the period from December 2006 to September 2011 (when royalties were determined based on revenues), $6 million of penalties related to the December 2006 to December 2008 royalty assessments and $34 million primarily associated with the net assets tax.
b.Includes tax charges of $127 million for disputed royalties ($64 million) and other related mining taxes ($63 million) for the period October 2011 through the year 2013 when royalties were determined based on operating income, mostly offset by a tax benefit of $125 million associated with disputed royalties and other related mining taxes for the period December 2006 through the year 2013.

Cerro Verde acted in good faith in applying the provisions of its 1998 stability agreement and continues to evaluate alternatives to defend its rights. Cerro Verde intends to seek a waiver available under Peruvian law of penalties and interest associated with this matter and has not recorded charges for potential unpaid penalties and interest totaling $360 million ($193 million net of noncontrolling interests) at September 30, 2017, as FCX believes that Cerro Verde should be successful under Peruvian law in obtaining a waiver. Cerro Verde also intends to file a reimbursement claim with SUNAT for penalties and interest paid under the installment plan for the December 2006 to December 2008 assessments, and may have claims for reimbursement of payments it would not have made in the absence of the stabilization agreement, such as the overpayments made for a special (voluntary) levy (GEM), import duties and civil association contributions. No amounts have been recorded for these potential gain contingencies at September 30, 2017.

Other Peru Tax Matters
There were no significant changes to other Peru tax matters during third-quarter 2017 (refer to Note 12 of FCX’s annual report on Form 10-K for the year ended December 31, 2016).

Indonesia Tax Matters
The following information includes a discussion of updates to previously reported Indonesia tax matters included in Note 12 of FCX’s annual report on Form 10-K for the year ended December 31, 2016.

PT-FI received assessments from the local regional tax authority in Papua, Indonesia, for additional taxes and penalties related to surface water taxes for the period from January 2011March 30, 2020, through September 2017.30, 2020 (additional fines could be levied on exports after September 30, 2020), on PT-FI for failing to achieve physical development progress on the greenfield smelter as of July 31, 2020. PT-FI responded to the Indonesia government objecting to the fine because of events outside of its control that caused a delay in development progress for the greenfield smelter at East Java. PT-FI believes that its communications regarding these delays during 2020 with the Indonesia government were not properly considered before the administrative fine was levied. In June 2021, the Indonesia government issued a ministerial decree for the calculation of an administrative fine for lack of smelter development in light of the COVID-19 pandemic. PT-FI is filing objectionscontinuing to these assessments. During 2017,discuss this matter with the Indonesia Tax Court issued rulings againstgovernment as well as provide additional documentation to support its position on the cause of delays in development progress on the greenfield smelter. During the first nine months of 2021, PT-FI with respectrecorded charges totaling $16 million for a potential settlement of the administrative fine which is expected to assessments for additional taxes and penaltiesinclude a revised construction schedule for the greenfield smelter. No additional fine is expected for the construction period from January 2011 through December 2015 in the amount of $402 million (based on the exchange rate as of September 30, 2017, and including $240 million in penalties). The aggregate amount of assessments received from January 2016 through September 2017 was an additional $114 million, including penalties (based on the exchange rate as of September 30, 2017). No charges have been recorded for these assessments as of September 30, 2017, because PT-FI believes its Contract of Work (COW) exempts it from these payments and that it has the right to contest these assessments (in which FCX estimates the total exposureafter July 2020 based on the exchange rate as of September 30, 2017, totals $516 million, including penalties) inrevised schedule. The final settlement could differ from the Indonesia Tax Court and ultimately the Indonesia Supreme Court. As of November 7, 2017,amounts recorded.

Chiyoda Contract. In July 2021, PT-FI has not paid and does not intendawarded a construction contract to pay these assessments unless there is a mechanism established to secure a refund for any such payments upon the final court decision. Additionally, PT-FI is seeking to address this matter in connection with the ongoing negotiations with the Indonesian government to resolve PT-FI’s long-term operating rights.
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Indonesia Mining Contract. The following information includes updates to the discussion of PT-FI’s COW included in Note 13 of FCX’s annual report on Form 10-KChiyoda for the year ended December 31, 2016.

In January and February 2017, the Indonesian government issued new regulations to address the export of unrefined metals, including copper concentrate and anode slimes, and other matters related to the mining sector. The new regulations permit the continuation of copper concentrate exports for a five-year period through January 2022, subject to various conditions, including conversion from a contract of work to a special operating license (known as an IUPK, which does not provide the same level of fiscal and legal protections as PT-FI’s COW, which remains in effect), a commitment to the completion of smelter construction in five years and payment of export duties to be determined by the Ministry of Finance. In addition, the new regulations enable application for an extension of operating rights five years before expiration of the IUPK and require foreign IUPK holders to divest a 51 percent interest in the licensed entity to Indonesian interests no later than the tenth year of production. Export licenses would be valid for one-year periods, subject to review every six months, depending on smelter construction progress.

Following the issuance of the January and February 2017 regulations and discussions with the Indonesian government, PT-FI advised the government that it was prepared to convert its COW to an IUPK, subject to obtaining an investment stability agreement providing contractual rights with the same level of legal and fiscal certainty enumerated under its COW, and provided that the COW would remain in effect until it is replaced by a mutually satisfactory alternative. PT-FI also committed to commence construction of a new smelter during a five-year time frame, following approval of the extension of its long-term operating rights.

On January 12, 2017, PT-FI suspended exports in response to Indonesian regulations adopted in January 2014. In addition, as a result of labor disturbances and a delay in the renewal of its export license for anode slimes, PT Smelting’s operations (PT-FI’s 25 percent-ownedgreenfield smelter in Indonesia) were shut down from January 19, 2017, until early March 2017. On February 10, 2017, PT-FI was forced to suspend production as a result of limited storage capacity at PT-FI and PT Smelting. On April 21, 2017, the Indonesian government issued a permit to PT-FI that allowed exports to resume for a six-month period, and PT-FI commenced export shipments.

In mid-February 2017, pursuant to the COW’s dispute resolution process, PT-FI provided formal notice to the Indonesian government of an impending dispute listing the government's breaches and violations of the COW. PT-FI continues to reserve its rights under these provisions.

As a result of the 2017 regulatory restrictions and uncertainties regarding long-term investment stability, PT-FI took actions to adjust its cost structure, slow investments in its underground development projects and new smelter, and place certain of its workforce on furlough programs.

In late March 2017, the Indonesian government amended the regulations to enable PT-FI to retain its COW until replacedGresik, Indonesia with an IUPK accompanied by an investment stability agreement, and to grant PT-FI a temporary IUPK through October 10, 2017, that would allow concentrate exports to resume during this period. In April 2017, PT-FI entered into a Memorandumestimated contract cost of Understanding with the Indonesian government confirming that the COW would continue to be valid and honored until replaced by a mutually agreed IUPK and investment stability agreement. PT-FI agreed to continue to pay a five percent export duty during this period.$2.8 billion.


In August 2017, FCX and the Indonesian government reached an understanding on a framework that would resolve PT-FI’s long-term operating rights. This framework includes (i) conversion from the COW to an IUPK providing PT-FI with long-term operating rights through 2041, (ii) Indonesian government certainty of fiscal and legal terms during the term of the IUPK, (iii) PT-FI commitment to construct a new smelter in Indonesia within five years of reaching a definitive agreement, and (iv) divestment of 51 percent of the project area interests to Indonesian participants at fair market value structured so that FCX retains control over operations and governance of PT-FI. FCX cannot currently predict whether there will be any material accounting and tax implications associated with the divestment.

The framework requires documentation and execution of a definitive agreement, which must be approved by the FCX Board of Directors and joint venture partner Rio Tinto. The parties continue to negotiate to reach agreement on important aspects of implementation of the framework, including the timing and process of divestment, governance matters, and the determination of fair market value, and to complete documentation on a comprehensive agreement for PT-FI’s operations through 2041. The parties have expressed a mutual objective of completing the negotiations and documentation during 2017.
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In October 2017, the Indonesian government extended PT-FI’s export rights to December 31, 2017, while negotiations to reach and document a comprehensive long-term definitive agreement based on the agreed framework continue.

Until a definitive agreement is reached, PT-FI has reserved all rights under its COW, including pursuing arbitration under the dispute resolution provisions.

NOTE 10.9. BUSINESS SEGMENTS
FCX has organized its mining operations into four4 primary divisions – North America copper mines, South America mining, Indonesia mining and Molybdenum mines – and operating segments that meet certain thresholds are reportable segments. Separately disclosed in the following tables are FCX’s reportable segments, which include the Morenci, Cerro Verde and Grasberg (Indonesia Mining) copper mines, the Rod & Refining operations and Atlantic Copper Smelting & Refining.

FCX’s reportable segments previously included U.S. Oil & Gas operations. During 2016, FCX completed the sales of its Deepwater Gulf of Mexico, onshore California and Haynesville oil and gas properties. As a result, beginning in 2017, the U.S. oil and gas operations no longer qualify as a reportable segment, and oil and gas results for all periods presented have been included in Corporate, Other & Eliminations in the following tables. Refer to Note 2 of FCX’s annual report on Form 10-K for the year ended December 31, 2016, for additional information.

Intersegment sales between FCX’s business segments are based on terms similar to arms-length transactions with third parties at the time of the sale. Intersegment sales may not be reflective of the actual prices ultimately realized because of a variety of factors, including additional processing, timing of sales to unaffiliated customers and transportation premiums.


FCX defers recognizing profits on sales from its mines to other divisions,segments, including Atlantic Copper (FCX’s wholly owned smelter and refinery in Spain)Smelting & Refining, and on 2539.5 percent of PT-FI’s sales to PT Smelting, (PT-FI’s 25-percent-owned smelter and refinery in Indonesia), until final sales to third parties occur. Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices result in variability in FCX’s net deferred profits and quarterly earnings.

FCX allocates certain operating costs, expenses and capital expenditures to its operating divisions and individual segments. However, not all costs and expenses applicable to an operation are allocated. U.S. federal and state income taxes are recorded and managed at the corporate level (included in Corporate, Other & Eliminations), whereas foreign income taxes are recorded and managed at the applicable country level. In addition, most mining exploration and research activities are managed on a consolidated basis, and those costs, along with some selling, general and administrative costs, are not allocated to the operating divisions or individual segments. Accordingly, the following segment informationFinancial Information by Business Segment reflects management determinations that may not be indicative of what the actual financial performance of each operating division or segment would be if it was an independent entity.




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Product Revenues. FCX’s revenues attributable to the products it sold for the third quarters and first nine months of 2021 and 2020 follow (in millions):
Three Months EndedNine Months Ended
September 30,September 30,
 2021202020212020
Copper:
Concentrate$2,531 $1,185 $6,316 $2,783 
Cathode1,463 1,085 4,232 3,046 
Rod and other refined copper products1,048 634 2,565 1,479 
Purchased coppera
124 167 652 568 
Gold741 497 1,856 1,108 
Molybdenum372 189 904 626 
Otherb
210 159 666 431 
Adjustments to revenues:
Treatment charges(126)(95)(324)(250)
Royalty expensec
(97)(56)(242)(102)
Export dutiesd
(72)(23)(145)(43)
Revenues from contracts with customers6,194 3,742 16,480 9,646 
Embedded derivativese
(111)109 201 57 
Total consolidated revenues$6,083 $3,851 $16,681 $9,703 
a.FCX purchases copper cathode primarily for processing by its Rod & Refining operations.
b.Primarily includes revenues associated with cobalt and silver.
c.Reflects royalties on sales from PT-FI and Cerro Verde that will vary with the volume of metal sold and prices.
d.Reflects PT-FI export duties.
e.Refer to Note 6 for discussion of embedded derivatives related to FCX’s provisionally priced concentrate and cathode sales contracts.
23
Table of Contents
Financial Information by Business SegmentsSegment
(In millions)
 AtlanticCorporate,
North America Copper MinesSouth America MiningCopperOther
CerroIndonesiaMolybdenumRod &Smelting& Elimi-FCX
MorenciOtherTotalVerdeOtherTotalMiningMinesRefining& RefiningnationsTotal
Three Months Ended September 30, 2021           
Revenues:            
Unaffiliated customers$16 $64 $80 $979 $149 $1,128 $1,961 a$— $1,697 $783 $434 b$6,083 
Intersegment711 1,020 1,731 95 — 95 81 151 7 — (2,065)— 
Production and delivery312 592 904 533 97 630 569 70 1,701 765 (1,630)3,009 
Depreciation, depletion and amortization40 54 94 101 10 111 280 19 1 7 16 528 
Metals inventory adjustments13 — 13 — — — — — — — 1 14 
Selling, general and administrative expenses— 1 1 2 — 2 28 — — 5 66 102 
Mining exploration and research expenses— 1 1 — — — — — — — 14 15 
Environmental obligations and shutdown costs(1)(1)(2)— — — — — — — 15 13 
Net gain on sales of assets— — — — — — — — — — (60)c(60)
Operating income (loss)363 437 800 438 42 480 1,165 62 2 6 (53)2,462 
Interest expense, net— 1 1 6 — 6 1 — — 1 129 138 
Provision for (benefit from) income taxes— — — 197 24 221 382 d— — (1)26 628 
Total assets at September 30, 20212,586 5,244 7,830 8,554 1,843 10,397 18,592 1,726 278 1,067 7,027 46,917 
Capital expenditures42 74 116 41 6 47 328 1 1 5 43 e541 
Three Months Ended September 30, 2020            
Revenues:            
Unaffiliated customers$4 $12 $16 $632 $108 $740 $1,023 a$— $1,270 $536 $266 b$3,851 
Intersegment584 637 1,221 

66 — 66 3 42 8 3 (1,343)— 
Production and delivery308 460 768 394 83 477 409 51 1,272 522 (1,034)2,465 
Depreciation, depletion and amortization42 49 91 92 13 105 150 13 6 8 21 394 
Metals inventory adjustments— (4)(4)— — — — 3 2 — 8 9 
Selling, general and administrative expenses1 — 1 2 — 2 25 — — 5 39 72 
Mining exploration and research expenses— — — — — — — — — — 8 8 
Environmental obligations and shutdown costs— (3)(3)— — — — — — — 24 21 
Net loss on sales of assets— — — — — — — — — — 2 2 
Operating income (loss)237 147 384 210 12 222 442 (25)(2)4 (145)880 
Interest expense, net— — — 21 — 21 — — — — 99 120 
Provision for (benefit from) income taxes— — — 105 4 109 211 — — — (23)297 
Total assets at September 30, 20202,654 5,137 7,791 8,569 1,640 10,209 16,858 1,770 251 877 3,343 41,099 
Capital expenditures21 45 66 26 5 31 297 3 1 6 32 e436 
a.Includes PT-FI's sales to PT Smelting totaling $795 million in third-quarter 2021 and $506 million in third-quarter 2020.
b.Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.
c.Represents the gain on the sale of FCX’s remaining cobalt business located in Kokkola, Finland (Freeport Cobalt).
d.Includes net tax benefits of $69 million associated with the release of a portion of the valuation allowances recorded against PT RTI NOLs.
e.Includes capital expenditures for the new greenfield smelter and precious metals refinery (collectively, the Indonesia smelter project) of $31 million in third-quarter 2021 and $27 million in third-quarter 2020.
24
                         
(In millions)      
                 
                   Atlantic Corporate,   
 North America Copper Mines South America       Copper Other   
       Cerro     Indonesia Molybdenum Rod & Smelting & Elimi- FCX 
 Morenci Other Total Verde Other Total Mining Mines Refining & Refining 
nationsa
 Total 
Three Months Ended September 30, 2017                        
Revenues:                        
Unaffiliated customers$57
 $40
 $97
 $850
 $109
 $959
 $1,121
b 
$—
 $1,137
 $554
 $442
c 
$4,310
 
Intersegment460
 548
 1,008
 64
 —
 64
 —
 65
 8
 1
 (1,146) —
 
Production and delivery244
 414
 658
 683
d 
76
 759
 406
 58
 1,141
 533
 (753) 2,802
 
Depreciation, depletion and amortization42
 54
 96
 116
 18
 134
 136
 20
 2
 7
 23
 418
 
Selling, general and administrative expenses1
 1
 2
 2
 —
 2
 32
 —
 —
 4
 66
 106
 
Mining exploration and research expenses—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 27
 27
 
Environmental obligations and shutdown costs—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 73
 73
 
Net gain on sales of assets—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (33) (33) 
Operating income (loss)230
 119
 349
 113
 15
 128
 547
 (13) 2
 11
 (107) 917
 
                         
Interest expense, net1
 —
 1
 156
d 
—
 156
 1
 —
 —
 5
 141
 304
 
Provision for income taxes—
 —
 —
 134
d 
5
 139
 233
 —
 —
 1
 14
 387
 
Total assets at September 30, 20172,844
 4,223
 7,067
 8,851
 1,595
 10,446
 11,100
 1,885
 264
 751
 5,814
e 
37,327
 
Capital expenditures26
 13
 39
 17
 3
 20
 206
 2
 1
 5
 41
 314
 
                         
Three Months Ended September 30, 2016                        
Revenues:                        
Unaffiliated customers$115
 $112
 $227
 $505
 $112
 $617
 $984
b 
$—
 $930
 $445
 $674
c 
$3,877
 
Intersegment358
 499
 857
 54
 —
 54
 2
 46
 7
 —
 (966) —
 
Production and delivery275
 464
 739
 333
 91
 424
 478
 57
 931
 416
 (516)
f 
2,529
 
Depreciation, depletion and amortization51
 78
 129
 109
 25
 134
 110
 15
 2
 7
 246
 643
 
Impairment of oil and gas properties—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 239
 239
 
Selling, general and administrative expenses1
 —
 1
 1
 1
 2
 24
 —
 —
 5
 78
 110
 
Mining exploration and research expenses—
 1
 1
 —
 —
 —
 —
 —
 —
 —
 12
 13
 
Environmental obligations and shutdown costs—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (3) (3) 
Net loss (gain) on sales of assets1
 —
 1
 —
 —
 —
 —
 —
 —
 —
 (14) (13) 
Operating income (loss)145
 68
 213
 116
 (5) 111
 374
 (26) 4
 17
 (334) 359
 
                         
Interest expense, net1
 —
 1
 21
 —
 21
 —
 —
 —
 3
 162
 187
 
Provision for (benefit from) income taxes—
 —
 —
 36
 (4) 32
 158
 —
 —
 4
 (308) (114) 
Total assets at September 30, 20162,881
 4,540
 7,421
 9,139
 1,551
 10,690
 9,718
 1,953
 238
 565
 10,815
e 
41,400
 
Capital expenditures6
 5
 11
 38
 1
 39
 253
 1
 —
 5
 185
g 
494
 
a.Includes U.S. oil and gas operations, which were previously a reportable segment.
b.Includes PT-FI's sales to PT Smelting totaling $652 million in third-quarter 2017 and $348 million in third-quarter 2016.
c.Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.
d.Includes net charges of $216 million in production and delivery costs, $141 million in interest expense and $2 million in provision for income taxes associated with disputed royalties for prior years.
e.Includes assets held for sale totaling $549 million at September 30, 2017, primarily associated with Freeport Cobalt and the Kisanfu exploration project, and $5.1 billion at September 30, 2016, which also included discontinued operations. Also includes assets associated with oil and gas operations of $272 million at September 30, 2017, and $3.5 billion at September 30, 2016.
f.Includes net charges for oil and gas operations totaling $49 million, primarily for idle rig costs, inventory adjustments and the termination of the Morocco well commitment.
g.Includes $160 million associated with oil and gas operations and $15 million associated with discontinued operations.

Table of Contents

(In millions)     
AtlanticCorporate,
North America Copper MinesSouth America MiningCopperOther
CerroIndonesiaMolybdenumRod &Smelting& Elimi-FCX
MorenciOtherTotalVerdeOtherTotalMiningMinesRefining& RefiningnationsTotal
Nine months ended September 30, 2021           
Revenues:            
Unaffiliated customers$77 $147 $224 $2,721 $512 $3,233 $5,097 a$— $4,695 $2,264 $1,168 b$16,681 
Intersegment1,996 2,783 4,779 260 — 260 189 310 20 — (5,558)— 
Production and delivery932 1,646 2,578 1,463 c306 1,769 1,552 183 4,708 2,213 (4,141)d8,862 
Depreciation, depletion and amortization114 161 275 272 34 306 726 51 3 22 47 1,430 
Metals inventory adjustments13 — 13 — — — — 1 — — 1 15 
Selling, general and administrative expenses1 2 3 6 — 6 81 — — 17 182 289 
Mining exploration and research expenses— 1 1 — — — — — — — 35 36 
Environmental obligations and shutdown costs— (1)(1)— — — — — — — 52 51 
Net gain on sales of assets— — — — — — — — — — (63)e(63)
Operating income (loss)1,013 1,121 2,134 1,240 172 1,412 2,927 75 4 12 (503)6,061 
Interest expense, net— 1 1 31 — 31 8 — — 4 387 431 
Provision for (benefit from) income taxes— — — 515 62 577 1,101 f— — (1)(3)1,674 
Capital expenditures74 137 211 84 10 94 904 4 2 18 111 g1,344 
Nine months ended September 30, 2020           
Revenues:            
Unaffiliated customers$26 $35 $61 $1,479 $312 $1,791 $2,151 a$— $3,491 $1,429 $780 b$9,703 
Intersegment1,473 1,676 3,149 

156 — 156 38 171 24 16 (3,554)— 
Production and delivery1,005 1,410 2,415 1,152 297 1,449 1,130 178 3,529 1,379 (2,676)7,404 
Depreciation, depletion and amortization129 143 272 273 42 315 375 44 14 22 51 1,093 
Metals inventory adjustments4 48 52 — 3 3 — 8 3 — 26 92 
Selling, general and administrative expenses2 1 3 5 — 5 81 — — 15 169 273 
Mining exploration and research expenses— 2 2 — — — — — — — 40 42 
Environmental obligations and shutdown costs— (3)(3)— — — — — 1 — 60 58 
Net loss on sales of assets— — — — — — — — — — 13 13 
Operating income (loss)359 110 469 205 (30)175 603 (59)(32)29 (457)728 
Interest expense, net2 — 2 69 — 69 2 — — 4 285 362 
Provision for (benefit from) income taxes— — — 82 (6)76 302 — — 1 (46)333 
Capital expenditures92 306 398 116 40 156 865 14 5 17 118 g1,573 
a.Includes PT-FI's sales to PT Smelting totaling $2.3 billion for the first nine months of 2021 and $1.3 billion for the first nine months of 2020.
b.Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.
c.Includes nonrecurring charges totaling $74 million associated with labor-related charges at Cerro Verde for agreements reached with approximately 65 percent of its hourly employees.
d.Includes charges associated with the major maintenance turnaround at the Miami smelter totaling $87 million.
e.Includes a $60 million gain on the sale of Freeport Cobalt.
f.Includes net tax benefits of $69 million associated with the release of a portion of the valuation allowances recorded against PT RTI NOLs.
g.Includes capital expenditures for the Indonesia smelter project of $79 million for the first nine months of 2021 and $94 million for the first nine months of 2020.
25
                         
(In millions)      
                 
                   Atlantic Corporate,   
 North America Copper Mines South America Mining       Copper Other   
       Cerro     Indonesia Molybdenum Rod & Smelting & Elimi- FCX 
 Morenci Other Total Verde Other Total Mining Mines Refining & Refining 
nationsa
 Total 
Nine Months Ended September 30, 2017                        
Revenues:                        
Unaffiliated customers$168
 $122
 $290
 $2,057
 $332
 $2,389
 $2,720
b 
$—
 $3,290
 $1,412
 $1,261
c 
$11,362
 
Intersegment1,354
 1,704
 3,058
 237
 —
 237
 —
 199
 22
 1
 (3,517) —
 
Production and delivery772
 1,284
 2,056
 1,450
d 
245
 1,695
 1,233
e 
169
 3,299
 1,369
 (2,324) 7,497
 
Depreciation, depletion and amortization138
 192
 330
 332
 60
 392
 372
 58
 7
 21
 77
 1,257
 
Selling, general and administrative expenses2
 2
 4
 7
 —
 7
 92
e 
—
 —
 13
 250
 366
 
Mining exploration and research expenses—
 2
 2
 —
 —
 —
 —
 —
 —
 —
 59
 61
 
Environmental obligations and shutdown costs—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 81
 81
 
Net gain on sales of assets—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (66) (66) 
Operating income (loss)610
 346
 956
 505
 27
 532
 1,023
 (28) 6
 10
 (333) 2,166
 
                         
Interest expense, net2
 1
 3
 187
d 
—
 187
 1
 —
 —
 13
 429
 633
 
Provision for income taxes—
 —
 —
 288
d 
10
 298
 435
 —
 —
 4
 10
 747
 
Capital expenditures78
 28
 106
 60
 5
 65
 663
 4
 3
 30
 149
 1,020
 
                         
Nine Months Ended September 30, 2016                        
Revenues:                        
Unaffiliated customers$356
 $211
 $567
 $1,485
 $379
 $1,864
 $2,014
b 
$—
 $2,820
 $1,360

$1,828
c 
$10,453
 
Intersegment1,119
 1,594
 2,713
 155
 —
 155
 59
 136
 22
 3
 (3,088) —
 
Production and delivery913
 1,340
 2,253
 927
 313
 1,240
 1,228
 159
 2,820
 1,275
 (991)
f 
7,984
 
Depreciation, depletion and amortization170
 237
 407
 319
 83
 402
 284
 51
 7
 22
 764
 1,937
 
Impairment of oil and gas properties

—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 4,317

4,317
 
Selling, general and administrative expenses2
 2
 4
 5
 1
 6
 60
 —
 —
 13
 325
f 
408
 
Mining exploration and research expenses—
 2
 2
 —
 —
 —
 —
 —
 —
 —
 44
 46
 
Environmental obligations and shutdown costs—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 18
 18
 
Net gain on sales of assets

(576) —
 (576) —
 —
 —
 —
 —
 —
 —
 (186) (762) 
Operating income (loss)966
 224
 1,190
 389
 (18) 371
 501
 (74) 15
 53
 (5,551) (3,495) 
                         
Interest expense, net2
 1
 3
 63
 —
 63
 —
 —
 —
 11
 497
 574
 
Provision for (benefit from) income taxes—
 —
 —
 126
 (12) 114
 212
 —
 —
 5
 (252) 79
 
Capital expenditures71
 16
 87
 329
 3
 332
 706
 2
 1
 12
 1,169
g 
2,309
 
a.Includes U.S. oil and gas operations, which were previously a reportable segment.
b.Includes PT-FI’s sales to PT Smelting totaling $1.4 billion for the first nine months of 2017 and $912 million for the first nine months of 2016.
c.Includes revenues from FCX’s molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.
d.Includes net charges of $216 million in production and delivery costs, $141 million in interest expense and $2 million in provision for income taxes associated with disputed royalties for prior years.
e.Includes net charges of $112 million in production and delivery costs and $5 million in selling, general and administrative expenses for PT-FI workforce reductions.
f.Includes net charges for oil and gas operations of $942 million in production and delivery costs, primarily for drillship settlements/idle rig costs and inventory adjustments and $38 million for net restructuring charges.
g.Includes $1.1 billion associated with oil and gas operations and $70 million associated with discontinued operations.

Table of Contents

NOTE 11. GUARANTOR FINANCIAL STATEMENTS

All of the senior notes issued by FCX are fully and unconditionally guaranteed on a senior basis jointly and severally by FM O&G LLC, as guarantor, which is a 100-percent-owned subsidiary of FM O&G and FCX. The guarantee is an unsecured obligation of the guarantor and ranks equal in right of payment with all existing and future indebtedness of FM O&G LLC, including indebtedness under FCX’s revolving credit facility. The guarantee ranks senior in right of payment with all of FM O&G LLC’s future subordinated obligations and is effectively subordinated in right of payment to any debt of FM O&G LLC’s subsidiaries. The indentures provide that FM O&G LLC’s guarantee may be released or terminated for certain obligations under the following circumstances: (i) all or substantially all of the equity interests or assets of FM O&G LLC are sold to a third party; or (ii) FM O&G LLC no longer has any obligations under any FM O&G senior notes or any refinancing thereof and no longer guarantees any obligations of FCX under the revolving credit facility or any other senior debt or, in each case, any refinancing thereof.

The following condensed consolidating financial information includes information regarding FCX, as issuer, FM O&G LLC, as guarantor, and all other non-guarantor subsidiaries of FCX. Included are the condensed consolidating balance sheets at September 30, 2017, and December 31, 2016, and the related condensed consolidating statements of comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016, and the condensed consolidating statements of cash flows for the nine months ended September 30, 2017 and 2016 (in millions), which should be read in conjunction with FCX’s notes to the consolidated financial statements.

CONDENSED CONSOLIDATING BALANCE SHEET
September 30, 2017
 FCX FM O&G LLC Non-guarantor   Consolidated
 Issuer Guarantor Subsidiaries Eliminations FCX
ASSETS         
Current assets$197
 $716
 $10,948
 $(711) $11,150
Property, plant, equipment and mine development costs, net15
 11
 22,899
 (11) 22,914
Oil and gas properties, subject to amortization, less accumulated amortization and impairments—
 —
 20
 —
 20
Investments in consolidated subsidiaries20,178
 —
 —
 (20,178) —
Other assets479
 36
 3,193
 (465) 3,243
Total assets$20,869
 $763
 $37,060
 $(21,365) $37,327
          
LIABILITIES AND EQUITY         
Current liabilities$2,402
 $111
 $3,820
 $(816) $5,517
Long-term debt, less current portion10,600
 6,428
 5,621
 (10,082) 12,567
Deferred income taxes832
a 
—
 2,939
 —
 3,771
Environmental and asset retirement obligations, less current portion—
 208
 3,290
 —
 3,498
Investments in consolidated subsidiaries—
 850
 10,174
 (11,024) —
Other liabilities62
 3,341
 1,828
 (3,487) 1,744
Total liabilities13,896
 10,938
 27,672
 (25,409) 27,097
          
Equity:         
Stockholders’ equity6,973
 (10,175) 6,782
 3,393
 6,973
Noncontrolling interests—
 —
 2,606
 651
 3,257
Total equity6,973
 (10,175) 9,388
 4,044
 10,230
Total liabilities and equity$20,869
 $763
 $37,060
 $(21,365) $37,327
a.All U.S.-related deferred income taxes are recorded at the parent company.
Table of Contents

CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2016
 FCX FM O&G LLC Non-guarantor   Consolidated
 Issuer Guarantor Subsidiaries Eliminations FCX
ASSETS         
Current assets$230
 $1,790
 $11,675
 $(3,260) $10,435
Property, plant, equipment and mine development costs, net19
 24
 23,176
 —
 23,219
Oil and gas properties, subject to amortization, less accumulated amortization and impairments—
 —
 74
 —
 74
Investments in consolidated subsidiaries21,110
 —
 —
 (21,110) —
Other assets1,985
 47
 3,522
 (1,965) 3,589
Total assets$23,344
 $1,861
 $38,447
 $(26,335) $37,317
          
LIABILITIES AND EQUITY         
Current liabilities$3,895
 $308
 $3,306
 $(3,244) $4,265
Long-term debt, less current portion12,517
 6,062
 11,297
 (15,081) 14,795
Deferred income taxes826
a 
—
 2,942
 —
 3,768
Environmental and asset retirement obligations, less current portion—
 200
 3,287
 —
 3,487
Investments in consolidated subsidiary—
 893
 8,995
 (9,888) —
Other liabilities55
 3,393
 1,784
 (3,487) 1,745
Total liabilities17,293
 10,856
 31,611
 (31,700) 28,060
          
Equity:         
Stockholders’ equity6,051
 (8,995) 4,237
 4,758
 6,051
Noncontrolling interests—
 —
 2,599
 607
 3,206
Total equity6,051
 (8,995) 6,836
 5,365
 9,257
Total liabilities and equity$23,344
 $1,861
 $38,447
 $(26,335) $37,317
a.All U.S.-related deferred income taxes are recorded at the parent company.

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CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
          
Three Months Ended September 30, 2017         
 FCX FM O&G LLC Non-guarantor   Consolidated
 Issuer Guarantor Subsidiaries Eliminations FCX
Revenues$—
 $13
 $4,297
 $—
 $4,310
Total costs and expenses8
 25
 3,361
 (1) 3,393
Operating (loss) income(8) (12) 936
 1
 917
Interest expense, net(116) (59) (218) 89
 (304)
Other income (expense), net97
 3
 2
 (89) 13
(Loss) income before income taxes and equity in affiliated companies’ net earnings (losses)(27) (68) 720
 1
 626
Benefit from (provision for) income taxes21
 24
 (432) —
 (387)
Equity in affiliated companies’ net earnings (losses)286
 20
 (20) (283) 3
Net income (loss) from continuing operations280
 (24) 268
 (282) 242
Net income from discontinued operations—
 —
 3
 —
 3
Net income (loss)280
 (24) 271
 (282) 245
Net loss (income) attributable to noncontrolling interests:         
Continuing operations—
 —
 69
 (34) 35
Discontinued operations—
 —
 —
 —
 —
Net income (loss) attributable to common stockholders$280
 $(24) $340
 $(316) $280
          
Other comprehensive income (loss)13
 —
 13
 (13) 13
Total comprehensive income (loss)$293
 $(24) $353
 $(329) $293
          
Three Months Ended September 30, 2016         
 FCX FM O&G LLC Non-guarantor   Consolidated
 Issuer Guarantor Subsidiaries Eliminations FCX
Revenues$—
 $110
 $3,767
 $—
 $3,877
Total costs and expenses12
 266
a 
3,239
a 
1
 3,518
Operating (loss) income(12) (156) 528
 (1) 359
Interest expense, net(126) (18) (132) 89
 (187)
Other income (expense), net91
 —
 (10) (76) 5
(Loss) income before income taxes and equity in affiliated companies’ net (losses) earnings(47) (174) 386
 12
 177
Benefit from (provision for) income taxes343
 (197) (40) 8
 114
Equity in affiliated companies’ net (losses) earnings(75) (218) (589) 883
 1
Net income (loss) from continuing operations221
 (589) (243) 903
 292
Net (loss) income from discontinued operations(4) —
 10
 (12) (6)
Net income (loss)217
 (589) (233) 891
 286
Net income and preferred dividends attributable to noncontrolling interests:         
Continuing operations—
 —
 (24) (23) (47)
Discontinued operations—
 —
 (22) —
 (22)
Net income (loss) attributable to common stockholders$217
 $(589) $(279) $868
 $217
          
Other comprehensive income (loss)12
 —
 12
 (12) 12
Total comprehensive income (loss)$229
 $(589) $(267) $856
 $229
a.Includes charges totaling $95 million at the FM O&G LLC guarantor and $0.2 billion at the non-guarantor subsidiaries related to impairment of FCX’s oil and gas properties pursuant to full cost accounting rules.


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CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Nine Months Ended September 30, 2017         
 FCX FM O&G LLC Non-guarantor   Consolidated
 Issuer Guarantor Subsidiaries Eliminations FCX
Revenues$—
 $38
 $11,324
 $—
 $11,362
Total costs and expenses31
 86
 9,068
 11
 9,196
Operating (loss) income(31) (48) 2,256
 (11) 2,166
Interest expense, net(355) (167) (363) 252
 (633)
Other income (expense), net256
 3
 37
 (252) 44
(Loss) income before income taxes and equity in affiliated companies’ net earnings (losses)(130) (212) 1,930
 (11) 1,577
(Provision for) benefit from income taxes(111) 74
 (714) 4
 (747)
Equity in affiliated companies’ net earnings (losses)1,017
 14
 (118) (907) 6
Net income (loss) from continuing operations776
 (124) 1,098
 (914) 836
Net income from discontinued operations—
 —
 50
 —
 50
Net income (loss)776
 (124) 1,148
 (914) 886
Net income attributable to noncontrolling interests:         
Continuing operations—
 —
 (42) (64) (106)
Discontinued operations—
 —
 (4) —
 (4)
Net income (loss) attributable to common stockholders$776
 $(124) $1,102
 $(978) $776
          
Other comprehensive income (loss)105
 —
 105
 (105) 105
Total comprehensive income (loss)$881
 $(124) $1,207
 $(1,083) $881

Nine Months Ended September 30, 2016         
 FCX FM O&G LLC Non-guarantor   Consolidated
 Issuer Guarantor Subsidiaries Eliminations FCX
Revenues$—
 $294
 $10,159
 $—
 $10,453
Total costs and expenses56
 2,859
a 
11,026
a 
7
 13,948
Operating loss(56) (2,565) (867) (7) (3,495)
Interest expense, net(404) (37) (370) 237
 (574)
Other income (expense), net248
 —
 59
 (202) 105
(Loss) income before income taxes and equity in affiliated companies’ net (losses) earnings(212) (2,602) (1,178) 28
 (3,964)
(Provision for) benefit from income taxes(1,785) 725
 979
 2
 (79)
Equity in affiliated companies’ net (losses) earnings(2,450) (3,202) (5,072) 10,733
 9
Net (loss) income from continuing operations(4,447) (5,079) (5,271) 10,763
 (4,034)
Net income (loss) from discontinued operations1
 —
 (159) (33) (191)
Net (loss) income(4,446) (5,079) (5,430) 10,730
 (4,225)
Net income and preferred dividends attributable to noncontrolling interests:         
Continuing operations—
 —
 (141) (36) (177)
Discontinued operations—
 —
 (44) —
 (44)
Net (loss) income attributable to common stockholders$(4,446) $(5,079) $(5,615) $10,694
 $(4,446)
          
Other comprehensive income (loss)27
 —
 27
 (27) 27
Total comprehensive (loss) income$(4,419) $(5,079) $(5,588) $10,667
 $(4,419)
a.Includes charges totaling $1.5 billion at the FM O&G LLC guarantor and $2.8 billion at the non-guarantor subsidiaries related to impairment of FCX’s oil and gas properties pursuant to full cost accounting rules.
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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2017         
 FCX FM O&G LLC Non-guarantor   Consolidated
 Issuer Guarantor Subsidiaries Eliminations FCX
 Net cash (used in) provided by operating activities$(222) $(383) $3,623
 $—
 $3,018
          
Cash flow from investing activities:         
Capital expenditures—
 (24) (996) —
 (1,020)
Intercompany loans(609) —
 —
 609
 —
Dividends from (investments in) consolidated subsidiaries1,757
 (16) 93
 (1,834) —
Asset sales and other, net—
 58
 (12) —
 46
Net cash provided by (used in) investing activities1,148
 18
 (915) (1,225) (974)
          
Cash flow from financing activities:         
Proceeds from debt—
 —
 795
 —
 795
Repayments of debt(915) (139) (937) —
 (1,991)
Intercompany loans—
 512
 97
 (609) —
Cash dividends paid and contributions received, net(2) —
 (1,839) 1,772
 (69)
Other, net(9) (11) (64) 62
 (22)
Net cash (used in) provided by financing activities(926) 362
 (1,948) 1,225
 (1,287)
          
Net increase in cash and cash equivalents—
 (3) 760
 —
 757
Increase in cash and cash equivalents in assets held for sale—
 —
 (45) —
 (45)
Cash and cash equivalents at beginning of period—
 3
 4,242
 —
 4,245
Cash and cash equivalents at end of period$—
 $—
 $4,957
 $—
 $4,957
Nine Months Ended September 30, 2016         
 FCX FM O&G LLC Non-guarantor   Consolidated
 Issuer Guarantor Subsidiaries Eliminations FCX
 Net cash (used in) provided by operating activities$(264) $(294) $3,151
 $1
 $2,594
          
Cash flow from investing activities:         
Capital expenditures—
 (497) (1,814) 2
 (2,309)
Intercompany loans(1,021) (518) —
 1,539
 —
Dividends from (investments in) consolidated subsidiaries1,643
 (41) 124
 (1,726) —
Asset sales and other, net—
 208
 1,210
 (3) 1,415
Net cash provided by (used in) investing activities622
 (848) (480) (188) (894)
          
Cash flow from financing activities:         
Proceeds from debt1,721
 —
 1,742
 —
 3,463
Repayments of debt(2,498) —
 (2,041) —
 (4,539)
Intercompany loans—
 1,223
 316
 (1,539) —
Net proceeds from sale of common stock442
 —
 374
 (374) 442
Cash dividends paid and contributions received, net(5) (78) (2,096) 2,087
 (92)
Other, net(18) (2) (15) 13
 (22)
Net cash (used in) provided by financing activities(358) 1,143
 (1,720) 187
 (748)
          
Net increase in cash and cash equivalents—
 1
 951
 —
 952
Increase in cash and cash equivalents in assets held for sale—
 —
 (43) —
 (43)
Cash and cash equivalents at beginning of period—
 —
 177
 —
 177
Cash and cash equivalents at end of period$—
 $1
 $1,085
 $—
 $1,086


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NOTE 12. NEW ACCOUNTING STANDARDS

In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standard Update (ASU) that provides a single comprehensive revenue recognition model, which will replace most existing revenue recognition guidance, and also requires expanded disclosures. The core principle of the model is that revenue is recognized when control of goods or services has been transferred to customers at an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017, and interim reporting periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after December 15, 2016, and interim reporting periods within that reporting period. FCX will adopt this ASU January 1, 2018, and currently expects to apply the modified retrospective approach under which any cumulative effect adjustment would be recorded to retained earnings as of the adoption date. FCX has substantially completed its review of the impact of this guidance, and based on the terms of its sales contracts, does not expect the guidance to have any impact on its revenue recognition policies or processes. FCX continues to review the impact of the new guidance on its financial reporting and disclosures.
In March 2016, FASB issued an ASU that simplifies various aspects of the accounting for share-based payment transactions, including the income tax consequences, statutory tax withholding requirements, an accounting policy election for forfeitures and the classification on the statement of cash flows. FCX adopted this ASU effective January 1, 2017, and adoption did not have a material impact on its financial statements.
In March 2017, FASB issued an ASU that changes how entities with a defined benefit pension or other postretirement benefit plans present net periodic benefit cost in the income statement. This ASU requires the service cost component of net periodic benefit cost to be presented in the same income statement line item or items as other compensation costs for those employees who are receiving the retirement benefit. In addition, only the service cost component is eligible for capitalization when applicable (i.e., as a cost of inventory or an internally constructed asset). The other components of net periodic benefit cost are required to be presented separately from the service cost component and outside of operating income. These other components of net periodic benefit cost are not eligible for capitalization, and the income statement line item or items must be disclosed. For public entities, this ASU is effective for annual periods beginning after December 15, 2017, and interim reporting periods within that reporting period. Early adoption is permitted. FCX will adopt this ASU on January 1, 2018, and does not expect it to have a material impact on its presentation of the statements of operations.

NOTE 13. SUBSEQUENT EVENTS

FCX evaluated events after September 30, 2017, and through the date the consolidated financial statements were issued, and determined any events or transactions occurring during this period that would require recognition or disclosure are appropriately addressed in these consolidated financial statements.
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REVIEW REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OFTo the Board of Directors and Stockholders of
FREEPORT-McMoRan INC.Freeport-McMoRan Inc.


Results of Review of Interim Financial Statements
We have reviewed the accompanying consolidated balance sheet of Freeport-McMoRan Inc. (the Company) as of September 30, 2017, and2021, the related consolidated statements of operations, and comprehensive income (loss), and equity for the three- and nine-month periods ended September 30, 20172021 and 2016,2020, the related consolidated statements of cash flows for the nine-month periods ended September 30, 20172021 and 2016,2020, and the related notes (collectively referred to as the “consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated statement of equity for the nine-month period ended September 30, 2017. Theseinterim financial statements are the responsibility of the Company’s management.for them to be in conformity with U.S. generally accepted accounting principles.


We conducted our reviewhave previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the consolidated balance sheet of the Company as of December 31, 2020, the related consolidated statements of operations, comprehensive income (loss), cash flows and equity for the year then ended, and the related notes (not presented herein); and in our report dated February 16, 2021, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2020, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial informationstatements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States),PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Freeport-McMoRan Inc. as of December 31, 2016, and the related consolidated statements of operations, comprehensive loss, cash flows and equity for the year then ended (not presented herein) and we expressed an unqualified audit opinion on those consolidated financial statements in our report dated February 24, 2017. In our opinion, the accompanying consolidated balance sheet of Freeport-McMoRan Inc. as of December 31, 2016, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.




/s/ ERNSTErnst & YOUNGYoung LLP


Phoenix, Arizona
November 7, 20175, 2021
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Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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

In Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), “we,” “us” and “our” refer to Freeport-McMoRan Inc. (FCX) and its consolidated subsidiaries. You should read this discussion in conjunction with our consolidated financial statements, the related Management’s Discussion and Analysis of Financial Condition and Results of OperationsMD&A and the discussion of our Business and Properties in our annual report on Form 10-K for the year ended December 31, 2016,2020 (2020 Form 10-K), filed with the United States (U.S.) Securities and Exchange Commission (SEC). The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Cautionary Statement” for further discussion). References to “Notes” are Notes included in our Notes to Consolidated Financial Statements.Statements (Unaudited). Throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations,MD&A, all references to earningsincome or losses per share are on a diluted basis. Additionally, in accordance with accounting guidelines, TF Holdings Limited (TFHL), through which we held a controlling interest in the Tenke Fungurume (Tenke) mine until it was sold on November 16, 2016, is reported as a discontinued operation for all periods presented.


OVERVIEW


We are a leading international mining company with headquarters in Phoenix, Arizona. We operate large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. We are one of the world’s largest publicly traded copper producer.producers. Our portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits; and significant mining operations in the Americas,North America and South America, including the large-scale Morenci minerals district in North AmericaArizona and the Cerro Verde operation in South America.Peru.


We continue to monitor the impact of the COVID-19 pandemic on our business and maintain our vigilant operating protocols to contain and mitigate the risk of spread of COVID-19 at each of our operating sites. To date, our protocols have been effective in mitigating and preventing a major outbreak of COVID-19 at our operating sites. We will continue to monitor, assess and update our COVID-19 response and to provide assistance to employees in obtaining vaccinations.

Our results for the first nine months of 2021 reflect strong operating and financial performance, and cash flow generation. We believe we are well positioned to make investments in our business while providing shareholders with cash returns consistent with our financial policy. Refer to Note 5 and “Capital Resources and Liquidity” for further discussion of our financial policy. We continue to execute our operating plans in a safe, efficient and responsible manner and remain focused on building long-term value through solid management of our portfolio of long-lived and high-quality copper assets.

As further discussed in “Operations,” highlights for our mining operations during the first nine months of 2021 include:
•Continued success with the ramp-up of underground mining at PT Freeport Indonesia (PT-FI); on track to reach annualized metal production targets by year-end 2021.
•Strong performance from Cerro Verde's concentrator facilities with milling rates averaging 381,500 metric tons of ore per day and rates are targeted to average approximately 400,000 metric tons of ore per day in 2022.
•Current operations at the Lone Star copper leach project, which was successfully completed in the second half of 2020, are exceeding the initial design capacity of 200 million pounds of copper annually by approximately 25 percent.

We are advancing climate initiatives and recently published our updated Climate Report in September 2021, which details the work underway across our global business to reduce greenhouse gas (GHG) emissions, improve energy efficiency, advance the use of renewable energy and enhance our resilience to future climate-related risks.

Net income (loss) attributable to common stock totaled $280 million$1.4 billion in third-quarter 2017, $217 million2021, $0.3 billion in third-quarter 2016, $776 million for the first nine months of 2017 and $(4.4)2020, $3.2 billion for the first nine months of 2016. The 20172021 and $(0.1) billion for the first nine months of 2020. Results for the 2021 periods, compared with the 20162020 periods, benefited fromreflect higher copper prices and highercopper and gold sales volumes, partly offset by lower copper sales volumes anda higher tax expense. The 2017 periods also include a net charge of $188 millionprovision for accruals related to Peruvian government claims for disputed royalties (refer to “Operations – South America Mining” for further discussion).income taxes. The first nine months of 2016 included significant2020 also reflect charges fordirectly associated with the impairmentCOVID-19 pandemic and revised operating plans, including employee separation costs, totaling $178 million, losses on early extinguishment of oildebt totaling $100 million and gas properties and other oil and gas charges for drillship settlements/idle rig costs,metals inventory adjustments asset impairment and restructuring, partly offset by net gains on sales of assets.totaling $90 million. Refer to “Consolidated Results” for further discussion.


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At September 30, 2017,2021, we had $5.0consolidated debt of $9.7 billion inand consolidated cash and cash equivalents of $7.7 billion, resulting in net debt of $2.0 billion. This represents a reduction in net debt of $4.1 billion from year-end 2020. Refer to “Net Debt” for reconciliations of debt and $14.8 billion in totalcash and cash equivalents to net debt. We

At September 30, 2021, we had no borrowings and $3.5$3.5 billion available under our revolving credit facility. In September 2021, we prepaid $200 million of the Cerro Verde Term Loan and in October 2021, we announced that in December 2021 we expect to redeem our outstanding $524 million principal amount of our 3.55% Senior Notes due 2022. We have no other senior note maturities until March 2023.

In July 2021, PT-FI entered into a $1.0 billion, five-year, unsecured bank credit facility to advance projects associated with its obligation for additional domestic smelter capacity and a precious metals refinery (PMR) in Indonesia. As of September 30, 2021, $158 million ($146 million net of debt issuance costs) was drawn under this facility. Refer to Note 6 for further discussion of debt.

We continue to manage production, exploration5 and administrative costs“Capital Resources and capital spending and, subject to commodity prices and operational results, expect to generate operating cash flows in excess of capital expenditures for the years 2017 and 2018.

We believe that we have a high-quality portfolio of long-lived copper assets positioned to generate long-term value. We are pursuing opportunities to enhance our mines’ net present values, and we continue to advance studies for future development of our copper resources, the timing of which will be dependent on market conditions.

In August 2017, we reached an understanding with the Indonesian government on a framework that would resolve PT Freeport Indonesia’s (PT-FI) long-term operating rights. This framework includes (i) conversion from the Contract of Work (COW) to a new operating license (IUPK) providing PT-FI with long-term operating rights through 2041, (ii) Indonesian government certainty of fiscal and legal terms during the term of the IUPK, (iii) PT-FI commitment to construct a new smelter in Indonesia within five years of reaching a definitive agreement, and (iv) divestment of 51 percent of the project area interests to Indonesian participants at fair market value structured so that we retain control over operations and governance of PT-FI.

The framework requires documentation and execution of a definitive agreement, which must be approved by our Board of Directors (Board) and joint venture partner Rio Tinto. The parties continue to negotiate to reach agreement on important aspects of implementation of the framework, including the timing and process of divestment, governance matters, and the determination of fair market value, and to complete documentation on a comprehensive agreement for PT-FI’s operations through 2041. The parties have expressed a mutual objective of
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completing the negotiations and documentation during 2017. In October 2017, the Indonesian government extended PT-FI’s export rights to December 31, 2017, while negotiations to reach and document a comprehensive long-term definitive agreement based on the agreed framework continue. Until a definitive agreement is reached, PT-FI has reserved all rights under its COW, including pursuing arbitration under the dispute resolution provisions. Refer to “Operations – Indonesia Mining”Liquidity” for further discussion.


OUTLOOK
 
We continue to view the long-term outlook for our business positively, supported by limitations on supplies of copper and by the requirements for copper in the world’s economy. Our financial results vary as a result of fluctuations in market prices primarily for copper, gold and, to a lesser extent, molybdenum, as well as other factors. World market prices for these commodities have fluctuated historically fluctuated and are affected by numerous factors beyond our control. Refer to “Markets” below and “Risk Factors” in Part I, Item 1A. of our 2020 Form 10-K for further discussion. Because we cannot control the priceprices of our products, the key measures that management focuses on in operating our business are sales volumes, unit net cash costs, operating cash flowflows and capital expenditures.


Refer to “Operations – Indonesia Mining” for further discussion of Indonesia regulatory matters, which could have a significant impact on future results.

Consolidated Sales Volumes
Following are our projected consolidated sales volumes for the year 2017:
2021:
Copper (millions of recoverable pounds):
North America copper mines1,455 
South America mining1,030 
Indonesia mining1,327 
Total3,812 
CopperGold (millions of recoverable pounds):ounces)
1.3 
North America copper mines1,470
South America mining1,230
Indonesia mining1,010
Total3,710
Gold (thousands of recoverable ounces)
1,600
Molybdenum (millions of recoverable pounds)
9485 
a
a.Projected molybdenum sales include 34 million pounds produced by our Molybdenum mines and 60 million pounds produced by our North America and South America copper mines.

a.Projected molybdenum sales include 28 million pounds produced by our Molybdenum mines and 57 million pounds produced by our North America and South America copper mines.

Consolidated sales volumes forin fourth-quarter 20172021 are expected to approximate 1.01.025 billion pounds of copper, 625375 thousand ounces of gold and 2322 million pounds of molybdenum.

Projected sales volumes are dependent on operational performance (including from underground mining at PT-FI), weather-related conditions, timing of shipments, and other factors. factors detailed in the “Cautionary Statement” below.

For other important factors that could cause results to differ materially from projections, refer to “Cautionary Statement.”“Risk Factors” contained in Part I, Item 1A. of our 2020 Form 10-K.


Consolidated Unit Net Cash Costs
Assuming average prices of $1,300$1,800 per ounce of gold and $8.00$19.00 per pound of molybdenum forin fourth-quarter 20172021 and achievement of current sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) for our copper mines are expected to average $1.19$1.33 per pound of copper for the year 2017.2021 (including $1.26 per pound of copper in fourth-quarter 2021). The impact of price changes forduring fourth-quarter 20172021 on consolidated unit net cash costs for the year 2021 would approximate $0.01$0.015 per pound of copper for each $50$100 per ounce change in the average price of gold and $0.005$0.01 per pound of copper for each $2 per pound change in the average price of molybdenum. Quarterly unit net cash costs vary with fluctuations in sales volumes and realized prices, primarily for gold and molybdenum. Refer to “Consolidated Results – Production and Delivery Costs” for further discussion

28
Table of consolidated production costs for our mining operations.Contents

Consolidated Operating Cash FlowFlows
Our consolidated operating cash flows vary with sales volumes,volumes; prices realized from copper, gold and molybdenum sales,sales; production costs,costs; income taxes,taxes; other working capital changeschanges; and other factors. Based on current sales volume and cost estimates, and assuming average prices of $3.00$4.50 per pound offor copper, $1,300$1,800 per ounce offor gold, and $8.00$19.00 per pound offor molybdenum forin fourth-quarter 2017,2021, our consolidated operating cash flows are estimated to approximate $4.3$7.5 billion for the year 2017 (including $0.5 billion in working capital sources and tax payments). Projected2021. Estimated consolidated operating cash flows for the year 20172021 also reflect an estimated income tax provision of $1.3$2.5 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate for the year 2017)2021). The impact of price changes during fourth-quarter 20172021 on operating cash flows would approximate $80
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$100 million for each $0.10 per pound change in the average price of copper, $20$25 million for each $50$100 per ounce change in the average price of gold and $15 million for each $2 per pound change in the average price of molybdenum.


Consolidated Capital Expenditures
Consolidated capital expenditures for the year 2021 are expected to approximate $1.5$2.3 billion ($2.0 billion excluding capital expenditures for the new greenfield smelter and PMR (collectively, the Indonesia smelter project). Consolidated capital expenditures for the year 2017, including $0.92021 are expected to include $1.3 billion for major mining projects, primarily forassociated with underground development activities at Grasberg. As a result of regulatory uncertainty, PT-FI has slowed investments in its underground development projects. If PT-FI is unable to reach a definitive agreementthe Grasberg minerals district.

All costs associated with the IndonesianIndonesia smelter project will be shared 49 percent by FCX and 51 percent by PT Indonesia Asahan Aluminium (Persero) (PT Inalum, also known as MIND ID), and will be largely offset by a phase-out of the 5 percent export duty currently paid to the Indonesia government on its long-term mining rights, we intend to reduce or defer investments significantly in underground development projects.as well as the tax deductibility of smelter costs by PT-FI. Current capital expenditures for the Indonesia smelter project are being funded through PT-FI's $1.0 billion unsecured bank credit facility, with additional debt financing being evaluated.


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MARKETS


World prices for copper, gold and molybdenum can fluctuate significantly. During the period from January 20072011 through September 2017,2021, the London Metal Exchange (LME) spot copper settlement price varied from a low of $1.26$1.96 per pound in 20082016 to a record high of $4.60$4.86 per pound in 2011;2021; the London Bullion Market Association (London) PM gold price fluctuated from a low of $608$1,049 per ounce in 20072015 to a record high of $1,895$2,067 per ounce in 2011;2020; and the Metals Week Molybdenum Dealer Oxide weekly average price ranged from a low of $4.46 per pound in 2015 to a high of $33.88$20.01 per pound in 2008.2021. Copper, gold and molybdenum prices are affected by numerous factors beyond our control as described further in “Risk Factors” contained in Part I, Item 1A. of our annual report on2020 Form 10-K for the year ended December 31, 2016.10-K.
q3coppergraph.jpgfcx-20210930_g2.jpg
This graph presents LME spot copper settlement prices and the combined reported stocks of copper at the LME, Commodity Exchange Inc. (COMEX), a division of the New York Mercantile Exchange (NYMEX), and the Shanghai Futures Exchange from January 20072011 through September 2017. Beginning in mid-2014, copper prices declined because of concerns about slowing growth rates in China, a stronger U.S. dollar and a broad-based decline in commodity prices, but began to improve in fourth-quarter 2016 and into 2017.2021. During third-quarter 2017,2021, LME spot copper settlement prices ranged from a low of $2.62$3.98 per pound to a high of $3.13$4.44 per pound, averaged $2.88$4.25 per pound and closedsettled at $2.94$4.10 per pound on September 30, 2017.2021. Copper prices were volatile during the quarter as a result of a strong U.S. dollar and prospects for slowing economic growth globally, and particularly in China, partly offset by falling exchange inventories and a positive long-term outlook supported by forecasts for a continued global economic recovery and copper’s prominent role in the clean energy transition. The LME spot copper settlement price was $3.09$4.52 per pound on October 31, 2017.29, 2021.


We believe the underlying long-term fundamentals of theexpectations for longer-term copper businessdemand growth remain positive,in place. We expect future demand to be supported by the significant role of copper in the global economy and a challenging long-term supply environment attributabletransition to difficulty in replacing the output of existing large mines with new production sources. Future copper prices are expected to be volatile and are likely to be influenced by demand from China and emerging markets, as well as economic activity in the U.S.renewable energy and other industrialized countries,carbon-reduction initiatives, and continued urbanization in developing countries. The historically low inventories; limited number of approved, large-scale projects scheduled; the timing oflong lead times required to permit and build new mines; and declining ore grades at existing operations highlight the development of new supplies of copper and the production levels of mines and copper smelters.supply challenges for copper.
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q3goldgraph.jpgfcx-20210930_g3.jpg
This graph presents London PM gold prices from January 20072011 through September 2017. An improving economic outlook, stronger U.S. dollar and positive equity performance contributed to lower demand for gold since 2014.2021. During third-quarter 2017,2021, London PM gold prices ranged from a low of $1,211$1,723 per ounce to a high of $1,346$1,829 per ounce, averaged $1,278$1,790 per ounce, and closed at $1,283$1,743 per ounce on September 30, 2017.2021. While the global economic recovery has put downward pressure on gold prices, many analysts expect gold prices to remain supported by the effects of elevated debt levels associated with large pandemic-related stimulus efforts and historically low U.S. interest rates. The London PM gold price was $1,270$1,769 per ounce on October 31, 2017.29, 2021.
q3molygraph.jpg

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fcx-20210930_g4.jpg
This graph presents the Metals Week Molybdenum Dealer Oxide weekly average pricesprice from January 20072011 through September 2017. Molybdenum prices declined beginning in mid-2014 because of weaker demand from global steel and stainless steel producers but have rebounded slightly starting in mid-2016.2021. During third-quarter 2017,2021, the weekly average price of molybdenum ranged from a low of $7.11$17.84 per pound to a high of $8.88$20.01 per pound, averaged $8.14$19.09 per pound, and was $8.49$18.45 per pound on September 30, 2017.2021. Molybdenum prices have reacted to supply constraints and increased demand, as mines in both Chile and Peru reported lower production, and logistics challenges continued globally. The Metals Week Molybdenum Dealer Oxide weekly average price was $8.38$19.34 per pound on October 31, 2017.29, 2021.

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CONSOLIDATED RESULTS
Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
SUMMARY FINANCIAL DATA
(in millions, except per share amounts)
Revenuesa,b
$6,083 $3,851 $16,681 $9,703 
Operating incomea
$2,462 $880 $6,061 $728 
Net income (loss) attributable to common stockc
$1,399 d$329 e$3,200 d$(109)e
Diluted net income (loss) per share of common stock$0.94 $0.22 $2.16 $(0.08)
Diluted weighted-average common shares outstanding1,484 1,461 1,481 1,453 
Operating cash flowsf
$1,965 $1,237 $5,435 $1,690 
Capital expenditures$541 $436 $1,344 $1,573 
At September 30:
Cash and cash equivalents$7,672 $2,403 $7,672 $2,403 
Total debt, including current portion$9,665 $10,030 $9,665 $10,030 
 Three Months Ended September 30, Nine Months Ended September 30, 
 2017 2016 2017 2016 
SUMMARY FINANCIAL DATA 
(in millions, except per share amounts) 
Revenuesa,b
$4,310
 $3,877
 $11,362
 $10,453
 
Operating income (loss)a,c,d,e,f
$917
g 
$359
h 
$2,166
g 
$(3,495)
h 
Net income (loss) from continuing operationsi,j,k
$242
 $292
 $836
 $(4,034) 
Net income (loss) from discontinued operationsl
$3
 $(6) $50
 $(191) 
Net income (loss) attributable to common stock$280

$217

$776
 $(4,446) 
Diluted net income (loss) per share of common stock:        
Continuing operations$0.19
 $0.18
 $0.50
 $(3.27) 
Discontinued operations—
 (0.02) 0.03
 (0.18) 
 $0.19

$0.16

$0.53
 $(3.45) 
Diluted weighted-average common shares outstanding1,454
 1,351
 1,453
 1,289
 
         
Operating cash flowsm
$1,189
 $980
 $3,018
 $2,594
 
Capital expenditures$314
 $494
 $1,020
 $2,309
 
At September 30:        
Cash and cash equivalents$4,957
 $1,086
 $4,957
 $1,086
 
Total debt, including current portion$14,782
 $18,882
 $14,782
 $18,882
 
         
a.As further detailed ina.Refer to Note 10, following is9 for a summary of revenues and operating income (loss) by operating division (in millions):
division.
 Three Months Ended September 30, Nine Months Ended September 30, 
Revenues2017 2016 2017 2016 
North America copper mines$1,105
 $1,084
 $3,348
 $3,280
 
South America mining1,023
 671
 2,626
 2,019
 
Indonesia mining1,121
 986
 2,720
 2,073
 
Molybdenum mines65
 46
 199
 136
 
Rod & Refining1,145
 937
 3,312
 2,842
 
Atlantic Copper Smelting & Refining555
 445
 1,413
 1,363
 
Corporate, other & eliminations(704) (292) (2,256) (1,260) 
Total revenues$4,310
 $3,877
 $11,362
 $10,453
 
         
Operating income (loss)        
North America copper mines$349
 $213
 $956
 $1,190
 
South America mining128
 111
 532
 371
 
Indonesia mining547
 374
 1,023
 501
 
Molybdenum mines(13) (26) (28) (74) 
Rod & Refining2
 4
 6
 15
 
Atlantic Copper Smelting & Refining11
 17
 10
 53
 
Corporate, other & eliminations(107) (334) (333) (5,551) 
Total operating income (loss)$917
 $359
 $2,166
 $(3,495) 
b.b.Includes (unfavorable) favorable (unfavorable) adjustments to provisionally priced concentrate and cathode copper sales recognized in prior periods totaling $95 million ($39 million to net income attributable to common stock or $0.03 per share) in third-quarter 2017, $(15) million ($(7) million to net income attributable to common stock or $(0.01) per share) in third-quarter 2016, $81 million ($35 million to net income attributable to common stock or $0.02 per share) for the first nine months of 2017 and $5 million ($2 million to net loss attributable to common stock or less than $0.01 per share) for the first nine months of 2016. Refer to “Revenues” for further discussion.
c.Includes net (credits) charges to mining operations totaling $(4) million ($(4) million to net income attributable to common stock or less than $(0.01) per share) in third-quarter 2017, $40 million ($40 million to net income attributable to common stock or $0.02 per share) in third-quarter 2016, $24 million ($24 million to net income attributable to common stock or $0.02 per share) for the first nine months of 2017 and $44 million ($44 million to net loss attributable to common stock or $0.03 per share) for the first nine months of 2016, primarily for inventory adjustments and asset impairment/retirement.
d.Includes net credits to oil and gas operations totaling $4 million ($4 million to net income attributable to common stock or less than $0.01 per share) in third-quarter 2017 and $8 million ($8 million to net income attributable to common stock or
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$0.01 per share) for the first nine months of 2017, primarily related to drillship settlements,prior period provisionally priced concentrate and net charges of $49cathode copper sales totaling $(9) million ($49(3) million to net income attributable to common stock or $0.03less than $0.01 per share) in third-quarter 20162021, $71 million ($28 million to net income attributable to common stock or $0.02 per share) in third-quarter 2020, $169 million ($65 million to net income attributable to common stock or $0.05 per share) for the first nine months of 2021 and $980$(102) million ($980(42) million to net loss attributable to common stock or $0.76$(0.03) per share) for the first nine months of 2016,2020 (refer to Note 6 for drillship settlements,further discussion).
c.We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations – Smelting and Refining” for a summary of net impacts from changes in these deferrals.
d.Includes net credits (charges) totaling $79 million ($0.05 per share) in third-quarter 2021 and $(16) million ($(0.01) per share) for the first nine months of 2021. Net credits in third-quarter 2021 were primarily associated with the release of valuation allowances at PT-FI and a gain on sale of our remaining cobalt business in Kokkola, Finland (Freeport Cobalt), partly offset by metals inventory adjustments, asset impairmentadjustments. The first nine months of 2021 also included net charges primarily associated with nonrecurring labor-related charges at Cerro Verde and restructuring charges.contested matters at PT-FI (including historical tax audits and an administrative fine levied by the Indonesia government).
e.Includes a net gain on sales of assets totaling $33 million ($33 million to net income attributable to common stock or $0.02 per share) in third-quarter 2017 and $66 million ($66 million to net income attributable to common stock or $0.05 per share) for the first nine months of 2017, primarily associated with oil and gas transactions and $13 million ($13 million to net income attributable to common stock or $0.01 per share) in third quarter 2016 and $762 million ($757 million to net loss attributable to common stock or $0.59 per share) for the first nine months of 2016, primarily associated with the sales of a 13 percent undivided interest in the Morenci unincorporated joint venture and our interest in the Timok exploration project in Serbia.
f.Includes net charges (credits) to environmental obligations and related litigation reserves totaling $64 million ($64 million to net income attributable to common stock or $0.04 per share) in third-quarter 2017, $(12) million ($(12) million to net income attributable to common stock or $(0.01) per share) in third-quarter 2016, $53 million ($53 million to net income attributable to common stock or $0.04 per share) for the first nine months of 2017 and $(11) million ($(11) million to net loss attributable to common stock or $(0.01) per share) for the first nine months of 2016. Refer to Note 9 for further discussion.
g.Includes a charge of $357 million ($188 million to net income attributable to common stock or $0.13 per share) in the third-quarter and first nine months of 2017 associated with disputed Cerro Verde royalties for prior years as well as net charges of $9 million ($5 million to net income attributable to common stock or less than $0.01 per share) in third-quarter 2017 and $117 million ($62 million to net income attributable to common stock or $0.04 per share) for the first nine months of 2017 associated with workforce reductions at PT-FI.
h.Includes $239 million ($239 million to net income attributable to common stock or $0.18 per share) in third-quarter 2016 and $4.3 billion ($4.3 billion to net loss attributable to common stock or $3.35 per share) for the first nine months of 2016 to reduce the carrying value of oil and gas properties pursuant to full cost accounting rules.
i.Includes net gains on exchanges and early extinguishment of debt totaling $11 million ($11 million to net income attributable to common stock or $0.01 per share) in third-quarter 2017, $15 million ($15 million to net income attributable to common stock or $0.01 per share) in third-quarter 2016, $8 million ($8 million to net income attributable to common stock or $0.01 per share) for the first nine months of 2017 and $51 million ($51 million to net loss attributable to common stock or $0.04 per share) for the first nine months of 2016.
j.We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations – Smelting & Refining” for a summary of net impacts from changes in these deferrals.
k.Includes net tax (charges) credits of $(10) million ($(0.01) per share) in third-quarter 2017 and $21 million ($0.01 per share) for the first nine months of 2017 associated with alternative minimum tax credit carryforwards, and $332 million ($0.24 per share) in third-quarter 2016 and $290 million ($0.22 per share) for the first nine months of 2016 associated with alternative minimum tax credits, changes to valuation allowances and net operating loss carryback claims.
l.Net income from discontinued operations for the third quarter and first nine months of 2017 primarily reflects adjustments to the fair value of the potential $120 million in contingent consideration related to the November 2016 sale of our interest in TFHL, which totaled $58 million at September 30, 2017, and will continue to be adjusted through December 31, 2019. Net loss from discontinued operations for the third quarter and first nine months of 2016 includes an estimated loss of $5 million (less than $0.01 per share) and $182 million ($0.14 per share), respectively, on the sale of our interest in TFHL. Refer to Note 2 for a summary of the components of net income (loss) from discontinued operations.
m.Includes net working capital sources and changes in tax payments of $52 million in third-quarter 2017, $8 million in third-quarter 2016, $395 million for the first nine months of 2017 and $483 million for the first nine months of 2016.
e.Includes net charges totaling $101 million ($0.07 per share) in third-quarter 2020 and $347 million ($0.24 per share) for the first nine months of 2020, primarily associated with the COVID-19 pandemic and revised operating plans (including employee separation costs), net losses on early extinguishment of debt and metals inventory adjustments.
f.Working capital and other sources totaled $180 million in third-quarter 2021, $178 million in third-quarter 2020, $367 million for the first nine months of 2021 and $319 million for the first nine months of 2020.

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Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
SUMMARY OPERATING DATA
Copper (millions of recoverable pounds)
  
Production987 844 2,810 2,342 
Sales, excluding purchases1,033 848 2,787 2,336 
Average realized price per pound$4.20 $3.01 

$4.22 $2.73 
Site production and delivery costs per pounda
$1.88 $1.77 b$1.92 c$1.92 b
Unit net cash costs per pounda
$1.24 $1.32 $1.36 $1.55 
Gold (thousands of recoverable ounces)
  
Production374 237 976 584 
Sales, excluding purchases402 234 965 562 
Average realized price per ounce$1,757 $1,902 $1,780 $1,810 
Molybdenum (millions of recoverable pounds)
  
Production23 19 63 57 
Sales, excluding purchases20 20 63 59 
Average realized price per pound$18.61 $9.23 $14.36 $10.30 
a.Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs. For reconciliations of per pound unit costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.”
 Three Months Ended September 30, Nine Months Ended September 30, 
 2017 
2016a
 2017 
2016a
 
SUMMARY OPERATING DATA      
Copper (millions of recoverable pounds)
        
Production996
 1,093
 2,730
 3,091
 
Sales, excluding purchases932
 1,113
 2,683
 3,100
 
Average realized price per pound$2.94
 $2.19
 $2.79
 $2.17
 
Site production and delivery costs per poundb
$1.57
 $1.37
 $1.60
 $1.42
 
Unit net cash costs per poundb
$1.21
 $1.14
 $1.26
 $1.28
 
Gold (thousands of recoverable ounces)
        
Production418
 308
 1,010
 658
 
Sales, excluding purchases355
 317
 969
 674
 
Average realized price per ounce$1,290
 $1,327
 $1,261
 $1,292
 
Molybdenum (millions of recoverable pounds)
        
Production24
 19
 70
 58
 
Sales, excluding purchases22
 16
 71
 52
 
Average realized price per pound$9.22
 $9.14
 $9.18
 $8.36
 
Oil Equivalents        
Sales volumes        
Oil (millions of barrels (MMBbls))0.4
 9.1
 1.4
 26.1
 
Natural gas (billion cubic feet (Bcf))3.1
 13.8
 13.3
 52.2
 
Natural gas liquids (MMBbls)—
 0.6
 0.2
 1.8
 
Million barrels of oil equivalent (MMBOE)1.0
 12.0
 3.8
 36.6
 
Thousand BOE (MBOE) per day11
 131
 14
 133
 
b.Excludes charges totaling $0.04 per pound of copper in third-quarter 2020 and $0.09 per pound of copper for the first nine months of 2020, primarily associated with idle facility and contract cancellations costs related to the COVID-19 pandemic and employee separation costs associated with the April 2020 revised operating plans.
a.Excludes the results of the Tenke mine, which was sold in November 2016 and is reported as a discontinued operation. Copper sales from the Tenke mine totaled 118 million pounds in third-quarter 2016 and 365 million for the first nine months of 2016.
b.Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs. For reconciliations of per pound unit costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.”

c.Includes $0.03 per pound of copper associated with nonrecurring labor-related costs at Cerro Verde for agreements reached with approximately 65 percent of its hourly employees. Refer to “Operations – South America Mining” for further discussion.

Revenues
Consolidated revenues totaled $4.3$6.1 billion in third-quarter 2017 and $11.42021, $3.9 billion in third-quarter 2020, $16.7 billion for the first nine months of 2017, compared with $3.9 billion in third-quarter 20162021 and $10.5$9.7 billion for the first nine months of 2016.2020. Revenues from our mining operations primarily include the sale of copper concentrate, copper cathode, copper rod, gold in concentrate and molybdenum. Revenues from our oil and gas operations, mostRefer to Note 9 for a summary of which were sold in 2016, include the sale of oil, natural gas and natural gas liquids (NGLs).product revenues.
















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Following is a summary of changes in our consolidated revenues between periods (in millions):
Three Months Ended September 30Nine Months Ended September 30
Consolidated revenues - 2020 period$3,851 $9,703 
Higher sales volumes:
Copper554 1,231 
Gold319 730 
Molybdenum1 38 
Higher (lower) average realized prices:
Copper1,229 4,152 
Gold(58)(29)
Molybdenum186 254 
Adjustments for prior period provisionally priced copper sales(80)271 
Higher Atlantic Copper revenues244 819 
(Lower) higher revenues from purchased copper(43)84 
Higher treatment charges(31)(74)
Higher royalties and export duties(90)(242)
Other, including intercompany eliminations1 (256)
Consolidated revenues - 2021 period$6,083 $16,681 

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 Three Months Ended September 30 Nine Months Ended September 30
    
Revenues - 2016 period$3,877
 $10,453
(Lower) higher sales volumes:   
Copper(394) (903)
Gold50
 381
Molybdenum56
 161
Oil and gas(394) (1,031)
Higher (lower) average realized prices:   
Copper700
 1,664
Gold(13) (29)
Molybdenum2
 59
Net adjustments for prior period provisionally priced copper sales110
 76
Lower treatment charges38
 83
Higher revenues from purchased copper87
 256
Higher Atlantic Copper revenues110
 50
Other, including intercompany eliminations81
 142
Revenues - 2017 period$4,310
 $11,362
    

Sales Volumes.Consolidated copper sales decreased to 932 million pounds in third-quarter 2017, compared with 1.1 billion pounds in third-quarter 2016, primarily reflecting lower ore grades in North America and Indonesia and the timing of shipments. Consolidated copper sales decreased to 2.7 billion pounds for the first nine months of 2017, compared with 3.1 billion pounds for the first nine months of 2016, primarily reflecting lower ore grades in North America and the impact of the May 2016 sale of an additional 13 percent interest in Morenci.

Consolidated gold sales volumes increased in the 2021 periods, compared to 355 thousand ounces in third-quarter 2017 and 969 thousand ounces for the first nine months of 2017, compared with 317 thousand ounces in third-quarter 2016 and 674 thousand ounces for the first nine months of 2016,2020 periods, primarily reflecting higher ore grades in Indonesia.
Consolidated molybdenum sales volumes increased to 22 million pounds in third-quarter 2017 and 71 million pounds for the first nine monthsramp-up of 2017, compared with 16 million pounds in third-quarter 2016 and 52 million pounds for the first nine months of 2016, primarily reflecting higher demand.

underground mining at PT-FI. Refer to “Operations” for further discussion of sales volumes at our mining operations.


Oil and gas sales volumes of 1.0 MMBOE in third-quarter 2017 and 3.8 MMBOE for the first nine months of 2017, were lower than oil and gas sales volumes of 12.0 MMBOE in third-quarter 2016 and 36.6 MMBOE for the first nine months of 2016, primarily reflecting the sales of significant oil and gas properties in 2016.

Realized Prices.Our consolidated revenues can vary significantly as a result of fluctuations in the market prices of copper, gold and molybdenum. Third-quarter 2017 averageAverage realized prices for third-quarter 2021, compared with third-quarter 2016,2020, were 3440 percent higher for copper, 38 percent lower for gold and 1102 percent higher for molybdenum and average realized prices for the first nine months of 2017,2021, compared with the first nine months of 2016,2020, were 2955 percent higher for copper, 2 percent lower for gold and 1039 percent higher for molybdenum. Refer
Average realized copper prices include net (unfavorable) favorable adjustments to “Markets”current period provisionally priced copper sales totaling $(93) million in third-quarter 2021, $23 million in third-quarter 2020, $54 million for further discussion.

Provisionally Priced Copper Sales.Substantiallythe first nine months of 2021 and $120 million for the first nine months of 2020. As discussed in Note 6, substantially all of our copper concentrate and cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date) based primarily on quoted LME monthly average spot copper prices. We receive market prices based on prices in the specified future period, which results in price fluctuations recorded through revenues until the date of settlement. We record revenues and invoice customers at the time of shipment based on then-current LME prices, which results in an embedded derivative on our provisionally priced concentrate and cathode sales that is adjusted to fair value through earnings each period, using the period-end forward prices, until final pricing on the date of settlement. To the extent final prices are higher or lower than what was recorded on a provisional basis, an increase or decrease to revenues is recorded each reporting period until the date of final pricing. Accordingly, in times of rising copper prices, our revenues benefit from adjustments to the final pricing of provisionally priced sales pursuant to contracts entered into in prior periods; in times of falling copper prices, the opposite occurs. Favorable

Prior Period Provisionally Priced Copper Sales.Net (unfavorable)
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impacts of net favorable adjustments to prior periods’ provisionally priced copper sales from continuing operations(i.e., provisionally priced sales at June 30, 2021 and 2020, and December 31,
2020 and 2019) recorded in consolidated revenues totaled $95$(9) million in third-quarter 2017 and $812021, $71 million in third-quarter 2020, $169 million for the first nine months of 2017, compared with $(15) million in third-quarter 20162021 and $5$(102) million for the first nine months of 2016, primarily reflecting higher copper prices in the 2017 periods.2020. Refer to Notes 6 and 9 for a summary of total adjustments to prior period and current period provisionally priced sales.


At September 30, 2017,2021, we had provisionally priced copper sales at our copper mining operations totaling 338313 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $2.93$4.05 per pound, subject to final pricing over the next several months. We estimate that each $0.05 change in the price realized from the September 30, 2017,2021, provisional price recorded would have an approximate $11$10 million effect on our 20172021 net income attributable to common stock. The LME spot copper price was $3.09settled at $4.52 per pound on October 31, 2017.29, 2021.


Treatment Charges. Revenues from our concentrate sales are recorded netAtlantic Copper Revenues.Atlantic Copper revenues totaled $783 million in third-quarter 2021 and $2.3 billion for the first nine months of treatment charges. Lower treatment charges2021, compared with $539 million in third-quarter 2020 and $1.4 billion for the first nine months of 2020. Higher revenues in the 20172021 periods, compared with the 20162020 periods, primarily reflect lower concentrate sales volumes at North Americahigher copper mines.prices.


Purchased Copper.We purchase copper cathode primarily for processing by our Rod & Refining operations. In addition to higherThe volumes of copper prices, we had higher purchased copper volumes in the 2017 periods (75purchases vary depending on cathode production from our operations and totaled 28 million pounds in third-quarter 2017 and 195 million for the first nine months of 2017, compared with 612021, 56 million pounds in third-quarter 2016 and 1312020, 149 million pounds for the first nine months of 2016).

Atlantic Copper Revenues.Atlantic Copper revenues totaled $5552021 and 215 million in third-quarter 2017 and $1.4 billionpounds for the first nine months of 2017, compared2020. The decrease in revenues associated with $445 millionpurchased copper in third-quarter 2016 and $1.4 billion2021, compared to third-quarter 2020, primarily reflects lower volumes. The increase in revenues associated with purchased copper for the first nine months of 2016. Higher revenues2021, compared to the first nine months of 2020 periods, reflects higher prices, partly offset by lower volumes.

Treatment Charges. Revenues from our concentrate sales are recorded net of treatment charges (i.e., fees paid to smelters that are generally negotiated annually), which will vary with the sales volumes and the price of copper.

Royalties and Export Duties. Royalties are primarily on PT-FI sales and vary with the volume of metal sold and the prices of copper and gold. PT-FI will continue to pay export duties until development progress for new domestic smelting with an annual capacity of 2 million metric tons of concentrate exceeds 50 percent. Refer to “Operations – Indonesia Mining” for further discussion of the current progress on a greenfield smelter in third-quarter 2017, compared with third-quarter 2016, primarily reflect higher copper prices.Indonesia and to Note 9 for a summary of royalty expense and export duties.



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Production and Delivery Costs
Consolidated production and delivery costs totaled $2.8$3.0 billion in third-quarter 2017,2021, $2.5 billion in third-quarter 2016, $7.52020, $8.9 billion for the first nine months of 20172021 and $8.0$7.4 billion for the first nine months of 2016. Production2020. Higher consolidated production and delivery costs forin the third quarter2021 periods primarily reflect higher sales volumes, higher milling and mining costs associated with the return to pre-COVID-19 operating rates and higher maintenance and input costs. The first nine months of 2017 included2021 also include nonrecurring labor-related charges totaling $216 million at Cerro Verde associatedtotaling $74 million for agreements reached with disputed royalties for prior years (refer to “Operations – South America Mining” for further discussion). Production and delivery costs for theapproximately 65 percent of its hourly employees. The first nine months of 2016 included2020 also include charges totaling $942$202 million at oilassociated with the COVID-19 pandemic and gas operations primarily for drillship settlements and inventory adjustments.revised operating plans.


Mining Unit Site Production and Delivery Costs.Costs Per Pound. Site production and delivery costs for our copper mining operations primarily include labor, energy and commodity-based inputs, such as sulphuric acid, reagents, liners, tires and explosives. Consolidated unit site production and delivery costs (before net noncash and other costs) for our copper mines averaged $1.57$1.88 per pound of copper in third-quarter 2017 and $1.602021, $1.77 per pound of copper in third-quarter 2020, $1.92 per pound of copper for both the first nine months of 2021 and 2020.

Consolidated site production and delivery costs per pound in the third quarter and first nine months of 2021 were higher, compared with the third quarter and first nine months of 2020, primarily reflecting higher mining and milling costs associated with the return to pre-COVID-19 operating rates and higher maintenance and input costs, partly offset by higher sales volumes and lower leach unit production costs associated with higher recoveries. Consolidated site production and delivery costs per pound for the first nine months of 2017, compared2021 included nonrecurring labor-related charges at Cerro Verde for agreements reached with $1.37 per poundapproximately 65 percent of copper in third-quarter 2016its hourly employees and $1.42 per pound of copper for the first nine months of 2016. Higher consolidated unit site production and delivery costs for the 2017 periods, compared2020 excluded charges associated with the 2016 periods, primarily reflect lower copper sales volumes.COVID-19 pandemic and the April 2020 revised operating plans. Refer to “Operations – Unit Net Cash Costs” for further discussion of unit net cash costs associated with our operating divisions and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements.


Depreciation, Depletion and Amortization
Depreciation will vary under the unit-of-production (UOP) method as a result of changes in sales volumes and the related UOP rates at our individual mines.mining operations. Consolidated depreciation, depletion and amortization (DD&A) totaled $418$528 million in third-quarter 2017 and $1.32021, $394 million in third-quarter 2020, $1.4 billion for the first nine months of 2017, compared with $643 million in third-quarter 20162021 and $1.9$1.1 billion for the first nine months of 2016. Lower2020. Higher DD&A in the 20172021 periods comparedis primarily related to assets placed in service and higher sales volumes associated with the 2016 periods, primarily reflects lower DD&A from oil and gas operations resulting from salesramp-up of significant oil and gas properties in 2016.underground mining at PT-FI.


Impairment of Oil and Gas PropertiesMetals Inventory Adjustments
The review of the carrying value of our oil and gas propertiesCharges for impairment under full cost accounting rules resulted in the recognition of impairment charges totaling $239 million for third-quarter 2016 and $4.3 billion for the first nine months of 2016.

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Selling, General and Administrative Expenses
Consolidated selling, general and administrative expensesmetals inventory adjustments totaled $106$14 million in third-quarter 2017, $1102021, $9 million in third-quarter 2016, $3662020, $15 million for the first nine months of 20172021 and $408$92 million for the first nine months of 2016. Selling, general2020. Metals inventory adjustments in the 2021 periods were primarily related to a leach stockpile adjustment. Metals inventory adjustments in the 2020 periods were related to volatility in copper and administrative expenses include net oil and gas-related charges totaling $17molybdenum prices associated with the COVID-19 pandemic.

Net (Gain) Loss on Sale of Assets
Net (gain) loss on sales of assets totaled $(60) million in third-quarter 2021, $2 million in third-quarter 2020, $(63) million for the first nine months of 2017 for contract termination2021 and $38$13 million for the first nine months of 20162020. The gain on sales of assets in the 2021 periods primarily reflects the sale of Freeport Cobalt. Refer to Note 1 for restructuring.further discussion.


Interest Expense, Net
Consolidated selling, general and administrative expenses were net of capitalized general and administrative expenses at our oil and gas operations totaling $16interest costs (before capitalization) totaled $157 million in third-quarter 2016 and $662021, $160 million in third-quarter 2020, $482 million for the first nine months of 2016.

Mining Exploration2021 and Research Expenses
Consolidated exploration and research expenses for our mining operations totaled $27 million in third-quarter 2017, $13 million in third-quarter 2016, $61$490 million for the first nine months of 2017 and $46 million for the first nine months of 2016. Our mining exploration activities are generally associated with our existing mines and focus on opportunities to expand reserves and resources to support development of additional future production capacity. Exploration results continue to indicate opportunities for significant future potential reserve additions in North America and South America. Exploration spending is expected to approximate $75 million for the year 2017.2020.

Environmental Obligations and Shutdown Costs
Environmental obligation costs reflect net revisions to our long-term environmental obligations, which vary from period to period because of changes to environmental laws and regulations, the settlement of environmental matters and/or circumstances affecting our operations that could result in significant changes in our estimates. Shutdown costs include care-and-maintenance costs and any litigation, remediation or related expenditures associated with closed facilities or operations. Net charges (credits) for environmental obligations and shutdown costs totaled $73 million in third-quarter 2017, $(3) million in third-quarter 2016, $81 million for the first nine months of 2017 and $18 million for the first nine months of 2016. Refer to Note 9 for further discussion.

Net Gain on Sales of Assets
Net gain on sales of assets totaled $33 million in third-quarter 2017 and $66 million for the first nine months of 2017, primarily associated with oil and gas transactions. Net gain on sales of assets totaled $13 million in third-quarter 2016 and $762 million for the first nine months of 2016, primarily associated with the sales of a 13 percent undivided interest in the Morenci unincorporated joint venture and a portion of our interest in the Timok exploration project in Serbia.

Interest Expense, Net
Interest expense, net, for the third quarter and first nine months of 2017 includes $141 million associated with disputed Cerro Verde royalties (refer to Note 9 for additional discussion). Consolidated interest costs (before capitalization and excluding interest expense associated with disputed Cerro Verde royalties) totaled $196 million in third-quarter 2017, $211 million in third-quarter 2016, $583 million for the first nine months of 2017 and $647 million for the first nine months of 2016. Lower interest cost for the 2017 periods, compared to the 2016 periods, reflects a decrease in total debt .


Capitalized interest varies with the level of expenditures forqualifying assets associated with our development projects and average interest rates on our borrowings, and totaled $33$19 million in third-quarter 2017, $242021, $40 million in third-quarter 2016, $912020, $51 million for the first nine months of 20172021 and $73$128 million for the first nine months of 2016.2020. The decrease in capitalized interest in the 2021 periods, compared with the 2020 periods, is primarily related to significant assets at PT-FI’s underground mines being placed in service. Refer to “Capital Resources and Liquidity - Investing Activities” for discussion of capital expenditures associated with our major development projects.



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Income Taxes
Following is a summary of the approximate amounts used in the calculation of our consolidated income tax provision from continuing operations for the 2017 and 2016 periods (in millions, except percentages):
Nine Months Ended September 30,
20212020
Income (Loss)a
Effective
Tax Rate		Income Tax (Provision) Benefit
Income (Loss)a
Effective
Tax Rate		Income Tax (Provision) Benefit
U.S.b
$1,324 1 %$(7)c$(535)10 %$56 d
South America1,425 40 %(576)149 51 %(76)
Indonesia2,940 37 %(1,101)e619 49 %(302)f
Eliminations and other(3)N/A19 95 N/A(28)
Rate adjustmentg
— N/A(9)— N/A17 
Consolidated FCX$5,686 29 %h$(1,674)$328 102 %h,i$(333)
 Nine Months Ended September 30, 
 2017 2016 
 
Income (Loss)a
 
Effective
Tax Rate
 Income Tax Benefit (Provision) 
Income (Loss)a
 
Effective
Tax Rate
 Income Tax Benefit (Provision) 
U.S.$66
 (40)% $27
b 
$(616) 47% $292
c 
South America709
 42% (296) 290
 39% (114) 
Indonesia1,035
 42% (435) 544
 39% (212) 
Cerro Verde royalty dispute(357) N/A (2)
d 
—
 N/A —
 
Impairment of oil and gas properties—
 N/A —
 (4,317) 38% 1,632
 
Valuation allowance, net—
 N/A —
 —
 N/A (1,632)
e 
Eliminations and other124
 N/A (38) 135
 N/A (46) 
Rate adjustmentf
—
 N/A (3) —
 N/A 1
 
Consolidated FCX$1,577
 47%
g 
$(747) $(3,964) (2)% $(79) 
a.Represents income (loss) before income taxes and equity in affiliated companies’ net (losses) earnings.
a.Represents income (loss) from continuing operations by geographic location before income taxes and equity in affiliated companies’ net earnings.
b.Includes net tax credits of $21 million associated with alternative minimum tax credit carryforwards.
c.Includes net tax credits of $290 million associated with alternative minimum tax credits, changes to valuation allowances and net operating loss carryback claims.
d.Includes tax charges of $127 million for disputed royalties and other related mining taxes for the period October 2011 through the year 2013 (when royalties were determined based on operating income), mostly offset by a tax benefit of $125 million associated with disputed royalties and other related mining taxes for the period December 2006 through the year 2013.
e.As a result of the impairment to U.S. oil and gas properties, we recorded tax charges to establish valuation allowances against U.S. federal and state deferred tax assets that will not generate a future benefit.
f.In accordance with applicable accounting rules, we adjust our interim provision for income taxes to equal our consolidated tax rate.
g.The consolidated effective income tax rate is a function of the combined effective tax rates for the jurisdictions in which we operate. Accordingly, variations in the relative proportions of jurisdictional income result in fluctuations to our consolidated effective income tax rate. Assuming achievement of current sales volume and cost estimates and average prices of $3.00 per pound for copper, $1,300 per ounce for gold and $8.00 per pound for molybdenum for fourth-quarter 2017, we estimate our consolidated effective tax rate
b.In addition to our North America mining operations, the U.S. jurisdiction reflects corporate-level expenses, which include interest expense associated with senior notes, general and administrative expenses, and environmental obligations and shutdown costs.
c.Includes valuation allowance release on prior year unbenefited net operating losses (NOLs).
d.Includes tax credits of $53 million associated with the reversal of a year-end 2019 tax charge related to continuing operations for the year 2017 will approximate 45 percent and would decrease with higher prices.

Net Income (Loss) from Discontinued Operations
In November 2016, we completed the sale of our interest in TFHL, through which we hadthe lower zone of the Timok exploration project in Serbia and $6 million associated with the removal of a valuation allowance on deferred tax assets.
e.Includes net tax benefits totaling $83 million ($66 million net of noncontrolling interest), consisting of $69 million associated with the release of a portion of the valuation allowances recorded against PT Rio Tinto Indonesia (PT-FI’s wholly owned subsidiary) NOLs and $24 million primarily associated with the reversal of a tax reserve related to the treatment of prior year contractor support costs; partly offset by a tax charge of $10 million associated with the audit of PT-FI's 2019 tax returns.
f.Includes tax charges totaling $29 million ($24 million net of noncontrolling interest), consisting of $21 million associated with establishing a tax reserve related to the treatment of prior year contractor support costs and $8 million associated with an effective 56 percent interest in the Tenke copper and cobalt concessions in the Democratic Republic of Congo. unfavorable 2012 Indonesia Supreme Court ruling.
g.In accordance with applicable accounting guidelines,rules, we adjust our interim provision for income taxes equal to our consolidated tax rate.
h.Our consolidated effective income tax rate is a function of the results of TFHL have been reported as discontinued operationscombined effective tax rates for all periods presented. Net income from discontinued operations totaled $3 millionthe jurisdictions in third-quarter 2017 and $50 million forwhich we operate.
i.Our U.S. jurisdiction generated net losses in the first nine months of 2017, which primarily reflected adjustments2020 that did not result in a realized tax benefit; applicable accounting rules required us to adjust our estimated annual effective tax rate to exclude the fair valueimpact of U.S. net losses.

Assuming achievement of current sales volume and cost estimates and average fourth-quarter 2021 prices of $4.50 per pound for copper, $1,800 per ounce for gold and $19.00 per pound for molybdenum, we estimate our consolidated effective tax rate for the potential $120year 2021 would approximate 30 percent. Changes in projected sales volumes and average prices during 2021 would incur tax impacts at estimated effective rates of 40 percent for Peru, 38 percent for Indonesia and 0 percent for the U.S.

The net 0 percent U.S. estimated effective tax rate for the year 2021 includes approximately $190 million contingent considerationof valuation allowance reversal related to the sale, which totaled $58an expected $900 million at September 30, 2017, and will continue to be adjusted through December 31, 2019. Net loss from discontinued operationsuse of $6 million in third-quarter 2016 and $191 million for the first nine monthsU.S. federal NOLs during 2021.

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Table of 2016 include an estimated loss on disposal of $5 million for third-quarter 2016 and $182 million for the first nine months of 2016. Refer to Note 2 for a summary of the components of net income (loss) from discontinued operations.Contents

OPERATIONS


Responsible Production
2020 Climate Report.In September 2021, we published our updated Climate Report, which details the work underway across our global business to reduce GHG emissions, improve energy efficiency, advance the use of renewable energy and enhance our resilience to future climate-related risks. The updated Climate Report reflects our continued progress towards alignment with the current recommendations of the Task Force on Climate-related Financial Disclosures.

The Copper Mark. We are committed to validating all of our copper producing sites with the Copper Mark. The Copper Mark is a robust assurance framework that demonstrates the copper industry's responsible production practices and contribution to the United Nations Sustainable Development Goals. Participating sites must complete an external assurance process to assess conformance with the Copper Mark’s 32 environmental, social and governance requirements, with a goal of being awarded the Copper Mark. We have six sites which have been certified, with five additional sites in progress.

North America Copper Mines
We operate seven open-pit copper mines in North America – Morenci, Bagdad, Safford (including Lone Star), Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. In addition to copper, certain of these mines produce molybdenum concentrate, gold and silver. All of the North America mining operations are wholly owned, except for Morenci.

We record our 72 percent undivided joint venture interest in Morenci using the proportionate consolidation method. On May 31, 2016, we completed the sale of an additional 13 percent undivided interest in Morenci. As a result of the transaction, our undivided interest in Morenci was prospectively reduced from 85 percent to 72 percent.
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The North America copper mines include open-pit mining, sulfide ore concentrating, leaching and solution extraction/electrowinning (SX/EW) operations. A majority of the copper produced at our North America copper mines is cast into copper rod by our Rod & Refining segment. The remainder of our North America copper salesproduction is in the form ofsold as copper cathode or copper concentrate, a portion of which is shipped to Atlantic Copper (our wholly owned smelter). Molybdenum concentrate, gold and silver are also produced by certain of our North America copper mines.mines.

Operating and Development Activities. We have significant undeveloped reserves and resources in Our North America and a portfoliooperating sites continue to achieve strong execution of potential long-term development projects. Future investments will be undertaken based onoperating plans. Current operations at the resultsLone Star copper leach project, which was completed in the second half of economic and technical feasibility studies, and2020, are dependent on market conditions.exceeding the initial design capacity of 200 million pounds annually by approximately 25 percent. We continue to studyadvance opportunities to reduce the capital intensity of our long-term development projects.

Through exploration drilling, we have identified a significant resource at our wholly ownedincrease Lone Star project located near the Safford operation in eastern Arizona. The Safford mine is expectedoperating rates and are evaluating a potential additional incremental oxide expansion to have copper production through 2024. Initial production from the Lone Star oxide ores could begin in 2021 assuming an approximate three-year development period and using existing infrastructure at the adjacent Safford operation. Total preliminary capital cost estimates for development, including mine equipment and pre-production stripping, approximates $850 million. Projected production from the Lone Star oxide ores would average approximately 200increase volumes to over 300 million pounds of copper per year with an approximate 20-year mine life. Consideringyear. The oxide project advances the long-term nature and size of the project, results could vary from these estimates. The project would also advance the potentialopportunity for development of the large-scale sulfide resources at Lone Star. We are increasing exploration in the area to support metallurgical testing and mine development planning for a larger-scale district opportunity. potential long-term investment in a concentrator.

We have obtained regulatory approvalssubstantial resources in North America, primarily associated with existing mining operations. Evaluations of project options for this projectfuture growth are being advanced. In addition to Lone Star, we are reviewing and actively evaluating an additional concentrator to add new capacity at our long-lived Bagdad operation, and are assessing the timingutilizing data analytics and testing new applications to commence pre-stripping activities. We are conductingrecover additional drilling as we continue to evaluate longer term opportunities availablecopper from the significant sulfide potential in the Lone Star/Safford minerals district. existing leach stockpiles.



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Operating Data. Following is a summary of consolidated operating data for the North America copper minesmines:
Three Months Ended September 30,Nine Months Ended
September 30,
 2021202020212020
Operating Data, Net of Joint Venture Interests  
Copper (millions of recoverable pounds)
  
Production377 369 1,090 1,083 
Sales, excluding purchases375 379 1,072 1,102 
Average realized price per pound$4.34 $3.01 $4.24 $2.67 

Molybdenum (millions of recoverable pounds)
  
Productiona
9 7 26 24 
100% Operating Data  
Leach operations  
Leach ore placed in stockpiles (metric tons per day)579,100 692,000 656,900 708,100 
Average copper ore grade (percent)0.30 0.26 0.29 0.27 
Copper production (millions of recoverable pounds)270 286 797 786 
Mill operations  
Ore milled (metric tons per day)274,300 255,200 269,000 291,500 
Average ore grade (percent):
Copper0.39 0.36 0.38 0.35 
Molybdenum0.03 0.03 0.03 0.02 
Copper recovery rate (percent)81.6 84.4 80.9 85.4 
Copper production (millions of recoverable pounds)170 155 476 509 
a.Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at the third quarters and first nine months of 2017 and 2016:North America copper mines.

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Operating Data, Net of Joint Venture Interests       
Copper (millions of recoverable pounds)
       
Production375
 455
 1,151
 1,411
Sales, excluding purchases347
 458
 1,130
 1,425
Average realized price per pound$2.92
 $2.19
 $2.74
 $2.18
        
Molybdenum (millions of recoverable pounds)
       
Productiona
8
 9
 25
 25
        
100% Operating Data       
SX/EW operations       
Leach ore placed in stockpiles (metric tons per day)655,600
 681,400
 681,200
 764,900
Average copper ore grade (percent)0.27
 0.31
 0.28
 0.32
Copper production (millions of recoverable pounds)280
 316
 839
 921
        
Mill operations       
Ore milled (metric tons per day)297,200
 300,500
 300,000
 299,900
Average ore grade (percent):       
Copper0.38
 0.47
 0.40
 0.48
Molybdenum0.03
 0.03
 0.03
 0.03
Copper recovery rate (percent)86.6
 87.8
 86.6
 86.3
Copper production (millions of recoverable pounds)167
 216
 527
 661
a.Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at the North America copper mines.

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North America’sOur consolidated copper sales volumes of 347from North America totaled 375 million pounds in third-quarter 20172021, 379 million pounds in third-quarter 2020, and 1.1 billion pounds for both the first nine months of 2017 were lower than third-quarter 2016 sales of 458 million pounds2021 and 1.4 billion pounds for the first nine months of 2016, primarily reflecting lower ore grades. Additionally, third-quarter 2017 was impacted by the timing of shipments.
2020. North America copper sales are estimated to approximate 1.51.46 billion pounds for the year 2017,2021, compared with 1.81.4 billion pounds in 2016.for the year 2020.


Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAPgenerally accepted accounting principles (GAAP) and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.


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Gross Profit per Pound of Copper and Molybdenum
The following table summarizes unit net cash costs and gross profit per pound at our North America copper mines for the third quarters and first nine months of 2017 and 2016.mines. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.
Three Months Ended September 30,
 20212020
 By- Product MethodCo-Product MethodBy- Product MethodCo-Product Method
Copper
Molyb-
denuma
Copper
Molyb-
denuma
Revenues, excluding adjustments$4.34 $4.34 $16.69 $3.01 $3.01 $7.72 
Site production and delivery, before net noncash
and other costs shown below
2.12 1.93 8.97 1.76 1.67 5.52 
By-product credits(0.39)— — (0.18)— — 
Treatment charges0.09 0.09 — 0.09 0.08 — 
Unit net cash costs1.82 2.02 8.97 1.67 1.75 5.52 
DD&A0.25 0.23 0.73 0.24 0.23 0.43 
Metals inventory adjustments0.03 0.03 — (0.01)(0.01)— 
Noncash and other costs, net0.08 

0.08 0.23 0.10 b0.09 0.06 
Total unit costs2.18 2.36 9.93 2.00 2.06 6.01 
Revenue adjustments, primarily for pricing
on prior period open sales
(0.02)(0.02)— — — — 
Gross profit per pound$2.14 $1.96 $6.76 $1.01 $0.95 $1.71 
Copper sales (millions of recoverable pounds)375 375 378 378  
Molybdenum sales (millions of recoverable pounds)a
9   7 
            
Three Months Ended September 30, Nine months ended September 30,
2017 2016  20212020
By- Product Method Co-Product Method By- Product Method Co-Product Method  By- Product MethodCo-Product MethodBy- Product MethodCo-Product Method
 Copper 
Molyb-
denuma
 Copper 
Molyb-
denuma
 Copper
Molyb-
denuma
Copper
Molyb-
denuma
Revenues, excluding adjustments$2.92
 $2.92
 $7.59
 $2.19
 $2.19
 $7.39
 Revenues, excluding adjustments$4.24 $4.24 $13.09 $2.67 $2.67 $8.57 
            
Site production and delivery, before net noncash
and other costs shown below
1.67
 1.56
 5.58
 1.44
 1.34
 5.51
 
Site production and delivery, before net noncash
and other costs shown below
2.11 1.95 7.54 1.91 1.78 7.05 
By-product credits(0.17) —
 —
 (0.17) —
 —
 By-product credits(0.32)— — (0.19)— — 
Treatment charges0.11
 0.11
 —
 0.10
 0.09
 —
 Treatment charges0.09 0.09 — 0.10 0.10 — 
Unit net cash costs1.61
 1.67
 5.58
 1.37
 1.43
 5.51
 Unit net cash costs1.88 2.04 7.54 1.82 1.88 7.05 
DD&A0.28
 0.27
 0.49
 0.28
 0.26
 0.70
 DD&A0.26 0.24 0.59 0.25 0.23 0.57 
Metals inventory adjustmentsMetals inventory adjustments0.01 0.01 — 0.05 0.04 — 
Noncash and other costs, net0.04
 0.04
 0.05
 0.06
 0.05
 0.13
 Noncash and other costs, net0.10 0.09 0.12 0.10 b0.10 0.12 
Total unit costs1.93
 1.98
 6.12
 1.71
 1.74
 6.34
 Total unit costs2.25 2.38 8.25 2.22 2.25 7.74 
Revenue adjustments, primarily for pricing
on prior period open sales
0.03
 0.03
 —
 —
 —
 —
 
Revenue adjustments, primarily for pricing
on prior period open sales
0.01 0.01 — (0.01)(0.01)— 
Gross profit per pound$1.02
 $0.97
 $1.47
 $0.48
 $0.45
 $1.05
 Gross profit per pound$2.00 $1.87 $4.84 $0.44 $0.41 $0.83 
            
Copper sales (millions of recoverable pounds)345
 345
   457
 457
   Copper sales (millions of recoverable pounds)1,072 1,072 1,100 1,100  
Molybdenum sales (millions of recoverable pounds)a
    8
     9
 
Molybdenum sales (millions of recoverable pounds)a
26   24 
Tablea.Reflects sales of Contents
molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.

b.Includes charges totaling $0.03 per pound of copper for both third-quarter 2020 and the first nine months of 2020, primarily associated with the April 2020 revised operating plans (including employee separation costs) and the COVID-19 pandemic.

             
 Nine Months Ended September 30, 
 2017 2016 
 By- Product Method Co-Product Method By- Product Method Co-Product Method 
  Copper 
Molyb-
denuma
  Copper 
Molyb-
denuma
 
Revenues, excluding adjustments$2.74
 $2.74
 $7.57
 $2.18
 $2.18
 $6.24
 
             
Site production and delivery, before net noncash and other costs shown below1.59
 1.50
 5.62
 1.41
 1.34
 4.86
 
By-product credits(0.16) —
 —
 (0.12) —
 —
 
Treatment charges0.11
 0.10
 —
 0.11
 0.10
 —
 
Unit net cash costs1.54
 1.60
 5.62
 1.40
 1.44
 4.86
 
DD&A0.29
 0.27
 0.56
 0.29
 0.27
 0.61
 
Noncash and other costs, net0.06
b 
0.06
 0.06
 0.05
 0.05
 0.06
 
Total unit costs1.89
 1.93
 6.24
 1.74
 1.76
 5.53
 
Revenue adjustments, primarily for pricing on prior period open sales—
 —
 —
 —
 —
 —
 
Gross profit per pound$0.85
 $0.81
 $1.33
 $0.44
 $0.42
 $0.71
 
             
Copper sales (millions of recoverable pounds)1,127
 1,127
   1,421
 1,421
   
Molybdenum sales (millions of recoverable pounds)a
    25
     25
 
a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b.Includes $21 million ($0.02 per pound of copper) for asset impairment charges at Morenci.

Our North America copper mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) for the North America copper mines of $1.61$1.82 per pound of copper in third-quarter2017 2021 and $1.54$1.88 per pound of copper for first nine months of 2021 were higher than unit net cash costs of $1.67 per pound in third-quarter 2020 and $1.82 per pound for the first nine months of 2017 were higher than unit net cash costs of $1.37 per pound in third-quarter2016 and $1.40 per pound for the first nine months of 2016,2020, primarily reflecting higher mining and milling costs associated with the return to pre-COVID-19 operating rates and higher maintenance and input costs, partly offset by higher by-product credits and lower sales volumes.leach unit production costs associated with higher recoveries.

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Because certain assets are depreciated on a straight-line basis, North America’s average unit depreciation rate may vary with asset additions and the level of copper production and sales.


Average unit net cash costs (net of by-product credits) for our North America copper mines are expected to approximate $1.58$1.85 per pound of copper for the year 2017,2021, based on achievement of current sales volume and cost estimates and assuming an average molybdenum price of $8.00$19.00 per pound forin fourth-quarter 2017.2021. North America’s average unit net cash costs for the year 20172021 would change by approximately $0.007$0.01 per pound for each $2$2 per pound change in the average price of molybdenum.molybdenum in fourth-quarter 2021.


South America Mining
We operate two copper mines in South America – Cerro Verde in Peru (in which we own a 53.56 percent interest) and El Abra in Chile (in which we own a 51 percent interest). These operations, which are consolidated in our financial statements.


South America mining includes open-pit mining, sulfide ore concentrating, leaching and SX/EW operations. Production from our South America mines is sold as copper concentrate or cathode under long-term contracts. Our South America mines also sell a portion of their copper concentrate production to Atlantic Copper. In addition to copper, the Cerro Verde mine produces molybdenum concentrate and silver.


Cerro Verde Royalty Dispute.In October 2017, the Peruvian Supreme Court issued a ruling in favorLabor Agreement. Cerro Verde's collective labor agreement (CLA) expired on August 31, 2021, and as of SUNAT, Peru’s national tax authority, that the assessmentsSeptember 30, 2021, approximately 65 percent of royaltiesits hourly employees have signed new CLAs. Cerro Verde incurred nonrecurring charges for the year 2008 on ore processed by the Cerro Verde concentrator were proper under Peruvian law.  As previously reported in our annual report on Form 10-K for the year ended December 31, 2016, SUNAT has assessed mining royalties on ore processed by the Cerro Verde concentrator for the period December 2006 to September 2011, which Cerro Verde has contested on the basis that its 1998 stability agreement exempts from royalties all minerals extracted from its mining concessions, irrespectivefirst nine months of the method used for processing those minerals. 

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As a result of the unfavorable Peruvian Supreme Court decision on the 2008 royalty dispute, Cerro Verde recorded pre-tax charges2021 totaling $357$74 million ($359 million including net tax charges and $188 million net of noncontrolling interests) in third-quarter 2017 associated with prior assessmentsthese agreements. Negotiations for new CLAs for Cerro Verde's remaining hourly employees are ongoing and potential royalty and related assessments for December 2006 through the year 2013. Effective January 1, 2014, Cerro Verde entered into a new 15-year stability agreement and has been paying royaltiesmay result in accordance with the new stability agreement.additional charges.


Cerro Verde acted in good faith in applying the provisions of its 1998 stability agreement and continues to evaluate alternatives to defend its rights. Cerro Verde intends to seek a waiver available under Peruvian law of penalties and interest associated with this dispute and has not recorded charges for potential unpaid penalties and interest totaling $360 million ($193 million net of noncontrolling interests) at September 30, 2017, as we believe that Cerro Verde should be successful under Peruvian law in obtaining a waiver. Refer to Note 9 for additional discussion.

Operating and Development Activities. The Milling rates at Cerro Verde expansion project commenced operations in September 2015 and achieved capacity operating rates during first-quarter 2016. Cerro Verde’s expanded operations benefit from its large-scale, long-lived reserves and cost efficiencies. The project expanded theVerde's concentrator facilities from 120,000averaged 381,500 metric tons of ore per day for the first nine months of 2021. Subject to 360,000ongoing monitoring of COVID-19 protocols, Cerro Verde is targeting milling rates to average approximately 400,000 metric tons of ore per day.day in 2022.

El Abra is increasing operating rates to pre-COVID-19 pandemic levels. Stacking rates at El Abra averaged 93,100 metric tons per day in third-quarter 2021, approximately 25 percent higher than third-quarter 2020. Increased stacking rates are expected to result in incremental annual production of approximately 70 million pounds of copper beginning in mid-2022, compared with 2020 levels. A new leach pad is under construction to accommodate planned stacking rates for the next several years.

We continue to evaluate a majorlarge-scale expansion at El Abra to process additional sulfide material and to achieve higher copper recoveries. Exploration results at El Abra indicate a significantAbra's large sulfide resource which could potentially support a major mill project similar to facilities recently constructed at Cerro Verde. Future investmentsVerde in 2015. Technical and economic studies continue to be evaluated to determine the optimal scope and timing for the sulfide project, and we are engaging stakeholders and preparing data required for submission of a robust permit application. We are monitoring potential changes in government regulatory and fiscal matters in Chile and will dependdefer major investment decisions pending clarity on technical studies, which are being advanced, economic factors and market conditions.these matters.


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Operating Data. Following is a summary of consolidated operating data for our South America miningmining:
Three Months Ended September 30,Nine months ended September 30,
 2021202020212020
Copper (millions of recoverable pounds)
  
Production260 253 764 716 
Sales280 250 769 716 
Average realized price per pound$4.12 $3.02 $4.21 $2.79 
Molybdenum (millions of recoverable pounds)
  
Productiona
5 6 14 14 
Leach operations  
Leach ore placed in stockpiles (metric tons per day)171,600 172,400 171,900 165,600 
Average copper ore grade (percent)0.30 0.35 0.33 0.35 
Copper production (millions of recoverable pounds)62 55 188 180 
Mill operations 
Ore milled (metric tons per day)380,300 351,000 381,500 317,600 b
Average ore grade (percent):
Copper0.31 0.33 0.30 0.35 
Molybdenum0.01 0.01 0.01 0.01 
Copper recovery rate (percent)86.1 88.4 86.3 83.5 
Copper production (millions of recoverable pounds)199 198 576 536 
a.Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde.
b.Cerro Verde mill operations for the third quarters and first nine months of 2017 and 2016:were negatively impacted by COVID-19 restrictions.

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Copper (millions of recoverable pounds)
       
Production328
 317
 932
 986
Sales327
 323
 923
 973
Average realized price per pound$2.95
 $2.19
 $2.82
 $2.17
        
Molybdenum (millions of recoverable pounds)
       
Productiona
8
 5
 21
 14
        
SX/EW operations       
Leach ore placed in stockpiles (metric tons per day)180,400
 163,000
 153,100
 158,100
Average copper ore grade (percent)0.36
 0.41
 0.37
 0.41
Copper production (millions of recoverable pounds)65
 78
 190
 250
        
Mill operations       
Ore milled (metric tons per day)379,200
 355,300
 355,400
 348,900
Average ore grade (percent):       
Copper0.44
 0.41
 0.44
 0.42
Molybdenum0.02
 0.02
 0.02
 0.02
Copper recovery rate (percent)80.9
 84.4
 82.7
 86.1
Copper production (millions of recoverable pounds)263
 239
 742
 736
a.Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde.

South America’sOur consolidated copper sales volumes of 327from South America totaled 280 million pounds in third-quarter 2017 approximated third-quarter2016 sales of 323 2021, 250 million pounds. South America’s lower consolidated copper sales volumes of 923pounds in third-quarter 2020, 769 million pounds for the first nine months of 2017, compared with 9732021 and 716 million pounds for the first nine months of 2016,2020. Higher copper sales volumes in third-quarter 2021, compared with third-quarter 2020, primarily reflect timing of shipments. Higher copper sales volumes for the Cerro Verde operation being unfavorably impacted by unusually high rainfall and a 21-day labor strike during first-quarter 2017.first nine months of 2021, compared with the first nine months of 2020, primarily reflect continued progress to return to pre-COVID-19 operating rates.


Copper sales from South America minesmining are expected to approximate 1.21.0 billion pounds of copper for the year 2017, compared with 1.3 billion pounds of copper in 2016.2021, slightly higher than the year 2020.
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Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.


Gross Profit per Pound of Copper
The following table summarizes unit net cash costs and gross profit per pound of copper at theour South America mining operations for the third quarters and first nine months of 2017 and 2016.operations. Unit net cash costs per pound of copper are reflected under the by-product and co-product methods as the South America mining operations also had sales of molybdenum and silver. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.
         
 Three Months Ended September 30, 
 2017 2016 
 
By-Product
Method
 
Co-Product
Method
 
By-Product
Method
 
Co-Product
Method
 
Revenues, excluding adjustments$2.95
 $2.95
 $2.19
 $2.19
 
         
Site production and delivery, before net noncash
    and other costs shown below
1.60
 1.50
 1.27
 1.20
 
By-product credits(0.19) —
 (0.12) —
 
Treatment charges0.22
 0.22
 0.24
 0.24
 
Royalty on metals0.01
 0.01
 0.01
 —
 
Unit net cash costs1.64
 1.73
 1.40
 1.44
 
DD&A0.41
 0.38
 0.41
 0.39
 
Noncash and other costs, net0.69
a 
0.63
 0.01
 0.01
 
Total unit costs2.74
 2.74
 1.82
 1.84
 
Revenue adjustments, primarily for pricing
    on prior period open sales
0.18
 0.18
 (0.02) (0.02) 
Gross profit per pound$0.39
 $0.39
 $0.35
 $0.33
 
         
Copper sales (millions of recoverable pounds)327
 327
 323
 323
 

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 Nine Months Ended September 30,
 2017 2016
 
By-Product
Method
 
Co-Product
Method
 
By-Product
Method
 
Co-Product
Method
Revenues, excluding adjustments$2.82
 $2.82
 $2.17
 $2.17
        
Site production and delivery, before net noncash and other costs shown below1.55
 1.45
 1.23
 1.17
By-product credits(0.17) —
 (0.10) —
Treatment charges0.22
 0.22
 0.24
 0.24
Royalty on metals0.01
 0.01
 —
 —
Unit net cash costs1.61
 1.68
 1.37
 1.41
DD&A0.42
 0.40
 0.41
 0.39
Noncash and other costs, net0.25
a 
0.23
 0.02
 0.02
Total unit costs2.28
 2.31
 1.80
 1.82
Revenue adjustments, primarily for pricing on prior period open sales0.04
 0.04
 0.01
 0.01
Gross profit per pound$0.58
 $0.55
 $0.38
 $0.36
     
 
Copper sales (millions of recoverable pounds)923
 923
 973
 973
a.Includes charges totaling $216 million ($0.66 per pound of copper in third-quarter 2017 and $0.23 per pound of copper for the first nine months of 2017) associated with disputed Cerro Verde royalties for prior years.
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Three Months Ended September 30,
 20212020
By-Product
Method		Co-Product
Method		By-Product
Method		Co-Product
Method
Revenues, excluding adjustments$4.12 $4.12 $3.02 $3.02 
Site production and delivery, before net noncash and other costs shown below2.14 a1.96 1.84 1.73 
By-product credits(0.38)— (0.17)— 
Treatment charges0.13 0.13 0.15 0.15 
Royalty on metals0.01 0.01 0.01 0.01 
Unit net cash costs1.90 2.10 1.83 1.89 
DD&A0.40 0.36 0.42 0.39 
Noncash and other costs, net0.07 0.06 0.04 b0.04 
Total unit costs2.37 2.52 2.29 2.32 
Revenue adjustments, primarily for pricing on prior period open sales(0.03)(0.03)0.16 0.16 
Gross profit per pound$1.72 $1.57 $0.89 $0.86 
Copper sales (millions of recoverable pounds)280 280 250 250 
Nine months ended September 30,
 20212020
By-Product
Method		Co-Product
Method		By-Product
Method		Co-Product
Method
Revenues, excluding adjustments$4.21 $4.21 $2.79 $2.79 
Site production and delivery, before net noncash and other costs shown below2.20 a2.04 1.83 1.72 
By-product credits(0.31)— (0.15)— 
Treatment charges0.13 0.13 0.15 0.15 
Royalty on metals0.01 0.01 0.01 0.01 
Unit net cash costs2.03 2.18 1.84 1.88 
DD&A0.40 0.36 0.44 0.41 
Noncash and other costs, net0.07 0.06 0.16 b0.15 
Total unit costs2.50 2.60 2.44 2.44 
Revenue adjustments, primarily for pricing on prior period open sales0.13 0.13 (0.10)(0.10)
Gross profit per pound$1.84 $1.74 $0.25 $0.25 
Copper sales (millions of recoverable pounds)769 769 716 716 
a.Includes $0.02 per pound of copper in third-quarter 2021 and $0.10 per pound of copper for the first nine months of 2021 associated with nonrecurring labor-related charges at Cerro Verde for agreements reached with approximately 65 percent of its hourly employees.
b.Third-quarter 2020 includes charges totaling $0.02 per pound of copper, primarily associated with the COVID-19 pandemic (including health and safety costs). The first nine months of 2020 includes charges totaling $0.13 per pound of copper, primarily associated with idle facility (Cerro Verde) and contract cancellation costs related to the COVID-19 pandemic, and employee separation costs associated with the April 2020 revised operating plans.

Our South America mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) of $1.64for the South America copper mines were $1.90 per pound of copper in third-quarter2017 and $1.61 2021, $1.83 per pound of copper in third-quarter 2020, $2.03 per pound of copper for the first nine months of 2017 were higher than unit net cash costs of $1.402021 and $1.84 per pound in third-quarter2016 and $1.37 per poundof copper for the first nine months of 2016,2020. Higher unit net cash costs in the 2021 periods, compared with the 2020 periods, primarily reflectingreflect increased milling activities, profit-sharing costs and higher mining, millingmaintenance and employeeinput costs, partly offset by higher sales volumes and by-product credits. The first nine months of 2021 also included nonrecurring labor-related charges at Cerro Verde.Verde ($0.10 per pound of copper) for new CLAs as discussed above.

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Revenues from Cerro Verde’s concentrate sales are recorded net of treatment charges. Accordingly, treatment charges, which will vary with Cerro Verde’s sales volumes and the price of copper.


Because certain assets are depreciated on a straight-line basis, South America’s unit depreciation rate may vary with asset additions and the level of copper production and sales.


Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods. Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales.


Average unit net cash costs (net of by-product credits) for our South America mining operations are expected to approximate $1.64$2.04 per pound of copper for the year 2017,2021, based on current sales volume and cost estimates and assuming an average price of $8.00$19.00 per pound of molybdenum forin fourth-quarter 2017.2021.


Indonesia Mining
Indonesia mining includes PT-FI’s Grasberg minerals district,PT-FI operates one of the world’s largest copper and gold deposits,mines at the Grasberg minerals district in Papua, Indonesia. We own 90.64 percent of PT-FI, including 9.36 percent owned through our wholly owned subsidiary, PT Indocopper Investama.

PT-FI proportionately consolidates an unincorporated joint venture with Rio Tinto plc (Rio Tinto), under which Rio Tinto has a 40 percent interest in certain assets and a 40 percent interest through 2022 in production exceeding specified annual amounts of copper, gold and silver. Refer to Note 3 in our annual report on Form 10-K for the year ended December 31, 2016, for discussion of our joint venture with Rio Tinto.

PT-FI produces copper concentrate that contains significant quantities of gold and silver. We have a 48.76 percent interest in PT-FI and manage its mining operations. As further discussed in Note 2 of our 2020 Form 10-K, under the terms of the shareholders agreement, our economic interest in PT-FI approximates 81 percent through 2022. PT-FI’s results are consolidated in our financial statements.

PT-FI continues to operate with heightened protocols and travel restrictions designed to protect the health and safety of its workforce and the surrounding community during the COVID-19 pandemic. These measures have proven effective and have enabled PT-FI to operate reliably throughout the pandemic.

Substantially all of PT-FI’s copper concentrate is sold under long-term contracts, and duringcontracts. During the first nine months of 2017, approximately half2021, 44 percent of PT-FI’s concentrate production was sold to PT Smelting its 25-percent-owned(PT-FI’s 39.5-percent owned copper smelter and refinery in Gresik, Indonesia.Indonesia).


Regulatory Matters. In JanuaryOperating and February 2017,Development Activities.The ramp-up of underground production at the Indonesian government issued new regulations to address the export of unrefined metals, including copper concentrate and anode slimes, and other matters related to the mining sector. The new regulations permit the continuation of copper concentrate exports for a five-year period through January 2022, subject to various conditions, including conversion from a contract of work to a special operating license (known as an IUPK, which does not provide the same level of fiscal and legal protections as PT-FI’s Contract of Work (COW), which remainsGrasberg minerals district in effect), a commitment to the completion of smelter construction in five years and payment of export duties to be determined by the Ministry of Finance. In addition, the new regulations enable application for an extension of operating rights five years before expiration of the IUPK and require foreign IUPK holders to divest a 51 percent interest in the licensed entity to Indonesian interests no later than the tenth year of production. Export licenses would be valid for one-year periods, subject to review every six months, depending on smelter construction progress.

Following the issuance of the January and February 2017 regulations and discussions with the Indonesian government, PT-FI advised the government that it was prepared to convert its COW to an IUPK, subject to obtaining an investment stability agreement providing contractual rights with the same level of legal and fiscal certainty enumerated under its COW, and provided that the COW would remain in effect until it is replaced by a mutually satisfactory alternative. PT-FI also committed to commence construction of a new smelter during a five-year timeframe, following approval of the extension of its long-term operating rights.

On January 12, 2017, PT-FI suspended exports in response to Indonesian regulations adopted in January 2014. In addition, as a result of labor disturbances and a delay in the renewal of its export license for anode slimes, PT Smelting’s operations were shut down from January 19, 2017, until early March 2017. On February 10, 2017, PT-FI was forced to suspend production as a result of limited storage capacity at PT-FI and PT Smelting. On April 21,
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2017, the Indonesian government issued a permit to PT-FI that allowed exports to resume for a six-month period, and PT-FI commenced export shipments.

In mid-February 2017, pursuant to the COW’s dispute resolution process, PT-FI provided formal notice to the Indonesian government of an impending dispute listing the government’s breaches and violations of the COW. PT-FIIndonesia continues to reserve its rights under these provisions.advance on schedule. Third-quarter 2021 highlights include:

As a result of the 2017 regulatory restrictions and uncertainties regarding long-term investment stability, PT-FI took actions to adjust its cost structure, slow investments in its underground development projects and new smelter, and place certain of its workforce on furlough programs.

In late March 2017, the Indonesian government amended the regulations to enable PT-FI to retain its COW until replaced with an IUPK accompanied by an investment stability agreement, and to grant PT-FI a temporary IUPK through October 10, 2017, that would allow concentrate exports to resume during this period. In April 2017, PT-FI entered into a Memorandum of Understanding with the Indonesian government confirming that the COW would continue to be valid and honored until replaced by a mutually agreed IUPK and investment stability agreement. PT-FI agreed to continue to pay a five percent export duty during this period.

In August 2017, we reached an understanding with the Indonesian government on a framework that would resolve PT-FI’s long-term operating rights. This framework includes (i) conversion from the COW to an IUPK providing PT-FI with long-term operating rights through 2041, (ii) Indonesian government certainty of fiscal and legal terms during the term of the IUPK, (iii) PT-FI commitment to construct a new smelter in Indonesia within five years of reaching a definitive agreement, and (iv) divestment of 51•Production approximated 90 percent of the project area interests to Indonesian participants at fair market value structured so that we retain control over operationsprojected ultimate annualized level and governance of PT-FI.

The framework requires documentation and execution of a definitive agreement, which must be approved by our Board and joint venture partner Rio Tinto. The parties continue to negotiateis expected to reach agreement on important aspects100 percent by year-end 2021.
•A total of implementation of the framework, including the timing and process of divestment, governance matters, and the determination of fair market value, and to complete documentation on a comprehensive agreement for PT-FI’s extended operations through 2041. The parties have expressed a mutual objective of completing the negotiations and documentation during 2017.

In October 2017, the Indonesian government extended PT-FI’s export rights to December 31, 2017, while negotiations to reach and document a comprehensive long-term definitive agreement based on the agreed framework continue. Until a definitive agreement is reached, PT-FI has reserved all rights under its COW, including pursuing arbitration under the dispute resolution provisions.

We cannot predict whether PT-FI will be successful in reaching a satisfactory definitive agreement on the terms of its long-term mining rights. Refer to “Risk Factors” contained in Part I, Item 1A. of our annual report on Form 10-K for the year ended December 31, 2016, for further discussion of risks associated with our operations in Indonesia.

Operating and Development Activities. PT-FI is currently mining the final phase of the Grasberg open pit, which contains high copper and gold ore grades. PT-FI expects to mine high-grade ore over the next several quarters prior to transitioning to27 new drawbells were constructed at the Grasberg Block Cave underground mine in early 2019.

PT-FI has several projects in the Grasberg minerals district related to the development of its large-scale, long-lived, high-grade underground ore bodies. In aggregate, these underground ore bodies are expected to produce large-scale quantities of copper and gold following the transition from the Grasberg open pit. Assuming a definitive agreement is reached to support PT-FI’s long-term investment plans, estimated annual capital spending on these projects would average $1.0 billion per year ($0.8 billion per year net to PT-FI) over the next five years. Considering the long-term nature and size of these projects, actual costs could vary from these estimates. In response to market conditions and Indonesian regulatory uncertainty, timing of these expenditures continues to be reviewed. If PT-FI is unable to reach a definitive agreement with the Indonesian government on its long-term mining rights, we intend to reduce or defer investments significantly in our underground development projects and pursue arbitration under PT-FI’s COW.

The following provides additional information on the continued development of the Common Infrastructure project, the Grasberg Block Cave underground mine and the Deep Mill Level Zone (DMLZ) ore body that lies below the
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Deep Ore Zone (DOZ) underground mine. Our current plans and mineral reserves in Indonesia assume that PT-FI’s long-term mining rights will be extended through 2041, as stated in the COW.

Common Infrastructure and Grasberg Block Cave Mine. In 2004, PT-FI commenced its Common Infrastructure project to provide access to its large undeveloped underground ore bodies located in the Grasberg minerals district through a tunnel system located approximately 400 meters deeper than its existing underground tunnel system. In addition to providing access to our underground ore bodies, the tunnel system will enable PT-FI to conduct future exploration in prospective areas associated with currently identified ore bodies. The tunnel system was completed to the Big Gossan terminal, and the Big Gossan mine was brought into production in 2010. The Big Gossan underground mine is currently preparing to restart production. Development of the DMLZ and Grasberg Block Cave underground mines, is advancing using the Common Infrastructure project tunnels as access.bringing cumulative open drawbells to 490.

The Grasberg Block Cave underground mine accounts for approximately half of our recoverable proven and probable reserves in Indonesia. Production•Combined average production from the Grasberg Block Cave and DMLZ underground mine is expected to commence in early 2019, following the end of mining of the Grasberg open pit. Targeted production rates once the Grasberg Block Cave mining operation reaches full capacity are expected to approximate 130,000-160,000mines approximated 136,200 metric tons of ore per day and PT-FI's milling rates averaged 157,400 metric tons of ore per day. PT-FI is reviewing its operating plans to determine the optimum mine plan

PT-FI’s milling rates averaged over 177,000 metric tons of ore per day for the Grasberg Block Cave underground mine.

Aggregate mine development capital for the Grasberg Block Cave underground mine and associated Common Infrastructure is expected to approximate $6.3 billion (incurred between 2008 and 2022), with PT-FI’s share totaling approximately $5.8 billion. Aggregate project costs totaling $3.2 billion have been incurred throughmonth of September 30, 2017, including $118 million during third-quarter 2017. As a result of regulatory uncertainty, PT-FI has slowed investments in its underground development projects. If PT-FI is unable to reach a definitive agreement with the Indonesian government on its long-term mining rights, we intend to reduce or defer investments significantly in our underground development projects and pursue arbitration under PT-FI’s COW.

DMLZ. The DMLZ ore body lies below the DOZ mine at the 2,590-meter elevation and represents the downward continuation of mineralization in the Ertsberg East Skarn system and neighboring Ertsberg porphyry. In September 2015, PT-FI initiated pre-commercial production that represents ore extracted during the development phase for the purpose of obtaining access to the ore body. In June 2017, production from the DMLZ underground mine was impacted by mining-induced seismic activity, which is not uncommon in block cave mining. To mitigate the impact of these events, PT-FI implemented a revised mine sequence and start-up plan in third-quarter 2017.2021. PT-FI expects DMLZmilling rates to ramp up to full capacity of 80,000average approximately 175,000 metric tons of ore per day in fourth-quarter 2021 butand to continue at a slower pace than previous estimates.that rate until additional milling facilities are installed as currently planned in 2023, which PT-FI expects will result in mill capacity of approximately 240,000 metric tons of ore per day.


Drilling efforts continuePT-FI expects to determine the extentgenerate average annual production of the ore body. Aggregate mine development capital costs for the DMLZ underground mine are expected to approximate $3.2 billion (incurred between 2009 and 2021), with PT-FI’s share totaling approximately $1.9 billion. Aggregate project costs totaling $2.1 billion have been incurred through September 30, 2017, including $62 million during third-quarter 2017. As a result of regulatory uncertainty, PT-FI has slowed investments in its underground development projects. If PT-FI is unable to reach a definitive agreement with the Indonesian government on its long-term mining rights, we intend to reduce or defer investments significantly in our underground development projects and pursue arbitration under PT-FI’s COW.

Other Matters. In late October 2017, Indonesia’s Ministry of Environment and Forestry (the Ministry) notified PT-FI of administrative sanctions related to certain activities the Ministry indicated are not reflected in its environmental permit. The Ministry also notified PT-FI that certain operational activities were inconsistent with factors set forth in its environmental permitting studies and that additional monitoring and improvements need to be undertaken related to air quality, water drainage, treatment and handling of certain wastes, and tailings management. PT-FI has been engaged in a process to update its permits through submissions and dialogue with the Ministry, which began in late 2014. PT-FI believes that it has submitted the required documentation to update its permits, and is in the process of addressing other points raised by the Ministry.

As further discussed in “Risk Factors” contained in Part I. Item 1A of our annual report on Form 10-K for the year ended December 31, 2016, in 2009, there were a series of shooting incidents within the PT-FI project area, with sporadic shooting incidents continuing through January 1, 2015. From August 2017 through November 3, 2017, there were six shooting incidents within the PT-FI project area and five shooting incidents in nearby areas, which resulted in one fatality and 12 injuries. The safety of our workforce is a critical concern, and PT-FI is working
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cooperatively with the Indonesian government to address security issues. We also continue to limit the use of the road leading to our mining and milling operations to secured convoys.

Operating Data. Following is a summary of consolidated operating data for our Indonesia mining operations for the third quarters and first nine months of 2017 and 2016:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Operating Data, Net of Joint Venture Interest       
Copper (millions of recoverable pounds)
       
Production293
 321
 647
 694
Sales258
 332
 630
 702
Average realized price per pound$2.95
 $2.20
 $2.81
 $2.17
        
Gold (thousands of recoverable ounces)
       
Production412
 301
 992
 637
Sales352
 307
 956
 653
Average realized price per ounce$1,290
 $1,327
 $1,261
 $1,292
        
100% Operating Data       
Ore milled (metric tons per day):a
       
Grasberg open pit130,500
 135,600
 91,200
 117,200
DOZ underground mineb
34,500
 35,100
 29,400
 38,700
DMLZ underground mine2,400
 6,000
 3,100
 5,000
Grasberg Block Cave4,200
 2,800
 3,600
 2,600
Big Gossan underground mine—
 1,000
 500
 700
Total171,600
 180,500
 127,800
 164,200
Average ore grades:       
Copper (percent)0.91
 1.02
 1.00
 0.86
Gold (grams per metric ton)0.98
 0.69
 1.08
 0.58
Recovery rates (percent):       
Copper91.1
 91.4
 91.6
 90.5
Gold84.7
 82.7
 84.9
 81.4
Production:       
Copper (millions of recoverable pounds)277
 327
 670
 736
Gold (thousands of recoverable ounces)405
 300
 993
 664
a.Amounts represent the approximate average daily throughput processed at PT-FI’s mill facilities from each producing mine and from development activities that result in metal production.
b.Ore milled from the DOZ underground mine is expected to ramp up to 60,000 metric tons of ore per day in 2018.

Indonesia mining’s consolidated copper sales volumes of 258 million pounds in third-quarter 2017 were lower than sales of 332 million pounds in third-quarter 2016, primarily reflecting lower copper ore grades and timing of shipments. Indonesia mining’s consolidated copper sales volumes of 630 million pounds for the first nine months of 2017 were lower than sales of 702 million pounds for the first nine months of 2016, primarily reflecting the impact of regulatory restrictions on PT-FI’s concentrate exports at the beginning of 2017 (see discussion above in “Regulatory Matters”).

Indonesia’s consolidated gold sales of 352 thousand ounces in third-quarter 2017 and 956 thousand ounces for the first nine months of 2017 were higher than sales of 307 thousand ounces in third-quarter 2016 and 653 thousand ounces for the first nine months of 2016, primarily reflecting higher gold ore grades, partly offset by timing of shipments.

During third-quarter 2017, PT-FI's labor productivity improved significantly following a recovery from disruptions that occurred in the first half of the year. Mining and milling rates improved throughout the quarter, and PT-FI continues to assess opportunities to advance mining of a section of high-grade material during 2018 and 2019 through open-pit mining rather than over time through the Grasberg Block Cave underground mine.

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In October 2017, PT-FI and union officials commenced discussions for a new two-year labor agreement. The existing agreement will continue in effect until a new agreement is consummated.

Assuming achieving planned operating rates for fourth-quarter 2017, consolidated sales volumes from Indonesia mining are expected to approximate 1.01.55 billion pounds of copper and 1.6 million ounces of gold for the next several years at an attractive unit net cash cost, providing significant margins and cash flows. For the year 2017, compared with 1.12021, PT-FI production is expected to approximate 1.3 billion pounds of copper and 1.11.3 million ounces of gold, nearly double 2020 levels.

PT-FI's estimated annual capital spending on underground mine development projects is expected to average approximately $0.9 billion per year for 2021 and 2022, net of scheduled contributions from PT Inalum. In accordance with applicable accounting guidance, aggregate costs (before scheduled contributions from PT Inalum), which are expected to average $1.1 billion per year for 2021 and 2022, will be reflected as an investing activity in our cash flow statement, and contributions from PT Inalum will be reflected as a financing activity.

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Kucing Liar. PT-FI is planning to commence long-term mine development activities for its Kucing Liar deposit to produce approximately 6 billion pounds of copper and 6 million ounces of gold over the life of the project. Refer to our 2020 Form 10-K for further discussion of Kucing Liar. Similar to PT-FI's experience with large-scale, block-cave mines, pre-production development activities will occur over an approximate 10-year timeframe. At full operating rates, annual production from Kucing Liar is expected to exceed 500 million pounds of copper and 500,000 ounces of gold, providing PT-FI with sustained long-term, large-scale and low-cost production. Capital investments for Kucing Liar over the next 10 years are expected to average approximately $400 million per year. Kucing Liar will benefit from substantial shared infrastructure and PT-FI's experience and long-term success in block-cave mining.

Indonesia Smelter. As discussed in Note 13 of our 2020 Form 10-K, PT-FI committed to construct additional domestic smelting capacity totaling 2 million metric tons of concentrate per year. During 2020, PT-FI notified the Indonesia government of schedule delays for construction of the greenfield smelter resulting from the COVID-19 pandemic and continues to review with the government a revised schedule for the project.

To fulfill its obligation for additional domestic smelter capacity in Indonesia, PT-FI is planning the following:
•Construction of a new greenfield smelter in Gresik, Indonesia with a capacity to process approximately 1.7 million metric tons of concentrate per year. In July 2021, PT-FI awarded a construction contract to Chiyoda with an estimated cost of $2.8 billion. The smelter construction is expected to be completed as soon as feasible in 2024, which is subject to, among other things, pandemic-related disruptions.
•Expansion of annual capacity at PT Smelting by 300,000 metric tons of concentrate, a 30 percent increase. PT-FI is advancing agreements with the majority owner of PT Smelting to implement the expansion plans with a target completion date of year-end 2023. PT-FI would fund the cost of the expansion, estimated to approximate $250 million, and increase its ownership in PT Smelting to a majority ownership interest.
•Construction of a PMR to process gold and silver from the new greenfield smelter and PT Smelting at an estimated cost of $250 million.

All costs of smelter development in Indonesia will be shared 49 percent by FCX and 51 percent by PT Inalum, and will be largely offset by a phase-out of the 5 percent export duty currently paid to the Indonesia government as well as the tax deductibility of smelter costs by PT-FI.

In July 2021, PT-FI entered into a $1.0 billion, five-year, unsecured bank credit facility to advance these projects. As of September 30, 2021, $158 million ($146 million net of debt issuance costs) was drawn under this facility. Additional debt financing is being evaluated to fund the projects. Refer to Note 5 and “Capital Resources and Liquidity” for further discussion of the credit facility. Capital expenditures for the Indonesia smelter project totaled $0.1 billion for the first nine months of 2021, and are expected to approximate $0.3 billion for the year 2021.


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Operating Data. Following is summary consolidated operating data for Indonesia mining:
Three Months Ended September 30,Nine months ended September 30,
 2021202020212020
Copper (millions of recoverable pounds)
  
Production350 222 956 543 
Sales378 219 946 518 
Average realized price per pound$4.11 $3.00 $4.21 $2.79 
Gold (thousands of recoverable ounces)
  
Production371 236 968 577 
Sales399 230 957 549 
Average realized price per ounce$1,757 $1,902 $1,780 $1,810 
Ore extracted and milled (metric tons per day):  
Grasberg Block Cave underground minea
76,500 30,800 64,300 25,700 
DMLZ underground minea
59,700 29,100 53,500 25,100 
Deep Ore Zone underground mineb
2,700 20,700 10,600 20,900 
Big Gossan underground mine7,400 7,100 7,500 6,600 
Other11,100 (400)5,700 2,200 
Total157,400 87,300 

141,600 80,500 
Average ore grades:  
Copper (percent)1.30 1.45 1.32 1.30 
Gold (grams per metric ton)1.05 1.20 1.04 1.08 
Recovery rates (percent): 
Copper90.1 92.3 90.0 92.0 
Gold78.6 79.3 77.8 78.2 
a.Includes ore from development activities that result in metal production.
b.Expected to cease production by December 31, 2021.

Our consolidated copper and gold sales from PT-FI totaled 378 million pounds and 399 thousand ounces in third-quarter 2021 and 946 million pounds and 957 thousand ounces for the first nine months of 2021, compared with copper and gold sales of 219 million pounds and 230 thousand ounces in third-quarter 2020 and 518 million pounds and 549 thousand ounces for the first nine months of 2020. The increase in sales volumes for the 2021 periods primarily reflects the ramp-up of underground mining at PT-FI and the timing of shipments.

Consolidated sales volumes from PT-FI are expected to approximate 1.3 billion pounds of copper and 1.3 million ounces of gold for the year 2016. At the Grasberg mine, the sequencing of mining areas2021, compared with varying ore grades causes fluctuations in quarterly and annual production0.8 billion pounds of copper and gold.

Indonesia mining’s projected sales volumes0.8 million ounces of gold for the year 2017 are dependent on a number of factors, including operational performance, workforce productivity and the timing of shipments.2020.


Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.



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Gross Profit per Pound of Copper and per Ounce of Gold
The following table summarizes the unit net cash costs and gross profit per pound of copper and per ounce of gold at our Indonesia mining operations for the third quarters and first nine months of 2017 and 2016.operations. Refer to “Product Revenues and Production Costs” for an explanation of “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.
Three Months Ended September 30,
 20212020
 By-Product MethodCo-Product MethodBy-Product MethodCo-Product Method
 CopperGoldCopperGold
Revenues, excluding adjustments$4.11 $4.11 $1,757 $3.00 $3.00 $1,902 
Site production and delivery, before net noncash and other costs shown below1.46 0.99 424 1.71 1.01 639 
Gold and silver credits(1.97)— — (2.16)— — 
Treatment charges0.24 0.16 69 0.26 0.16 98 
Export duties0.19 0.13 54 0.11 0.06 40 
Royalty on metals0.25 0.18 63 0.21 0.12 79 
Unit net cash costs0.17 1.46 610 0.13 1.35 856 
DD&A0.74 0.50 215 0.68 0.40 256 
Noncash and other costs, net— 

— — 0.11 a0.06 40 
Total unit costs0.91 1.96 825 0.92 1.81 1,152 
Revenue adjustments, primarily for pricing on prior period open sales— — 16 0.13 0.13 49 
PT Smelting intercompany loss(0.04)(0.03)(12)(0.08)(0.05)(31)
Gross profit per pound/ounce$3.16 $2.12 $936 $2.13 $1.27 $768 
Copper sales (millions of recoverable pounds)378 378  219 219  
Gold sales (thousands of recoverable ounces)  399   230 
           
Three Months Ended September 30,Nine Months Ended September 30,
2017 2016 20212020
By-Product Method Co-Product Method By-Product Method Co-Product Method By-Product MethodCo-Product MethodBy-Product MethodCo-Product Method
 Copper Gold Copper Gold CopperGoldCopperGold
Revenues, excluding adjustments$2.95
 $2.95
 $1,290
 $2.20
 $2.20
 $1,327
Revenues, excluding adjustments$4.21 $4.21 $1,780 $2.79 $2.79 $1,810 
           
Site production and delivery, before net noncash and other costs shown below1.41
 0.87
 383
 1.37
 0.86
 520
Site production and delivery, before net noncash and other costs shown below1.49 1.03 434 2.05 1.19 773 
Gold and silver credits(1.80) —
 —
 (1.29) —
 —
Gold and silver credits(1.91)— — (2.02)— — 
Treatment charges0.27
 0.17
 74
 0.27
 0.17
 104
Treatment charges0.24 0.17 70 0.28 0.16 104 
Export duties0.08
 0.05
 22
 0.10
 0.07
 39
Export duties0.15 0.10 45 0.08 0.05 31 
Royalty on metals0.17
 0.10
 48
 0.12
 0.07
 50
Royalty on metals0.26 0.18 66 0.18 0.10 68 
Unit net cash costs0.13
 1.19
 527
 0.57
 1.17
 713
Unit net cash costs0.23 1.48 615 0.57 1.50 976 
DD&A0.53
 0.33
 143
 0.33
 0.21
 125
DD&A0.76 0.52 222 0.72 0.42 273 
Noncash and other costs, net0.09
a 
0.06
 25
 0.05
b 
0.03
 19
Noncash and other costs, net0.01 b0.01 1 0.11 a0.07 41 
Total unit costs0.75
 1.58
 695
 0.95
 1.41
 857
Total unit costs1.00 2.01 838 1.40 1.99 1,290 
Revenue adjustments, primarily for pricing on prior period open sales0.11
 0.11
 4
 (0.02) (0.02) 1
Revenue adjustments, primarily for pricing on prior period open sales0.08 0.08 (5)(0.03)(0.03)8 
PT Smelting intercompany loss(0.07) (0.04) (19) (0.03) (0.02) (10)PT Smelting intercompany loss(0.11)(0.08)(33)(0.04)(0.02)(13)
Gross profit per pound/ounce$2.24
 $1.44
 $580
 $1.20
 $0.75
 $461
Gross profit per pound/ounce$3.18 $2.20 $904 $1.32 $0.75 $515 
           
Copper sales (millions of recoverable pounds)258
 258
   332
 332
  Copper sales (millions of recoverable pounds)946 946  518 518  
Gold sales (thousands of recoverable ounces)    352
     307
Gold sales (thousands of recoverable ounces)  957   549 
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 Nine Months Ended September 30,
 2017 2016
 By-Product Method Co-Product Method By-Product Method Co-Product Method
  Copper Gold  Copper Gold
Revenues, excluding adjustments$2.81
 $2.81
 $1,261
 $2.17
 $2.17
 $1,292
            
Site production and delivery, before net noncash and other costs shown below1.71
 1.01
 451
 1.70
 1.08
 639
Gold and silver credits(1.98) —
 —
 (1.28) —
 —
Treatment charges0.27
 0.16
 71
 0.29
 0.18
 109
Export duties0.10
 0.06
 26
 0.09
 0.06
 34
Royalty on metals0.16
 0.09
 47
 0.12
 0.07
 48
Unit net cash costs0.26
 1.32
 595
 0.92
 1.39
 830
DD&A0.59
 0.35
 156
 0.40
 0.25
 152
Noncash and other costs, net0.22
a 
0.13
 58
 0.04
b 
0.03
 16
Total unit costs1.07
 1.80
 809
 1.36
 1.67
 998
Revenue adjustments, primarily for pricing on prior period open sales0.06
 0.06
 9
 —
 —
 25
PT Smelting intercompany loss(0.03) (0.01) (7) (0.01) (0.01) (4)
Gross profit per pound/ounce$1.77
 $1.06
 $454
 $0.80
 $0.49
 $315
            
Copper sales (millions of recoverable pounds)630
 630
   702
 702
  
Gold sales (thousands of recoverable ounces)    956
     653
a.Includes costs charged directly to production and delivery costs totaling $9 million ($0.03 per pound of copper) for third-quarter 2017 and $112 million ($0.18 per pound of copper) for the first nine months of 2017 as a result of workforce reductions.
b.Includes asset retirement charges of $17 million ($0.05 per pound of copper in third-quarter 2016 and $0.02 per pound of copper for the first nine months of 2016).
A significant portion of PT-FI’s costs are fixed and unit costs vary depending on production volumes and other factors. Indonesia’s unit net casha.Includes COVID-19 related costs (including goldone-time incremental employee benefits and silver credits) of $0.13health and safety costs) totaling $0.05 per pound of copper in third-quarter 20172020 and $0.26$0.03 per pound of copper for the first nine months of 2017 were lower than2020.
b.Includes credits of $0.03 per pound of copper associated with adjustments to prior year treatment and refining charges and charges of $0.02 per pound of copper associated with a potential settlement of an administrative fine levied by the Indonesia government.

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Because of the fixed nature of a large portion of PT-FI's costs, unit net cash costs depend on copper and gold volumes. PT-FI’s unit net cash costs (net of $0.57gold and silver credits) of $0.17 per pound of copper in third-quarter2016 and $0.92 2021 were higher than $0.13 per pound in third-quarter, primarily reflecting lower by-product credits and higher export duties and royalties associated with higher copper prices, partly offset by higher volumes. PT-FI’s unit net cash costs (net of coppergold and silver credits) of $0.23 per pound for the first nine months of 2016,2021, were lower than $0.57 per pound for the first nine months of 2020, primarily reflecting higher gold and silver credits,sales volumes, partly offset by lower copper sales volumes.higher mining costs associated with the ramp-up of underground mining and higher export duties and royalties.


Treatment charges vary with the volume of metals sold and the price of copper, and royalties vary with the volume of metals sold and the prices of copper and gold.


PT-FI’s royaltiesexport duties totaled $43$71 million in third-quarter 2017, $402021, $24 million in third-quarter 2016, $1062020, $145 million for the first nine months of 20172021 and $84$43 million for the first nine months of 2016. Export2020. PT-FI will continue to pay export duties until development progress for additional domestic smelting capacity of 2 million metric tons of concentrate per year exceeds 50 percent. PT-FI’s royalties totaled $21$94 million in third-quarter 2017, $342021, $45 million in third-quarter 2016, $622020, $234 million for the first nine months of 20172021 and $63$92 million for the first nine months of 2016. As further discussed above2020. The increase in “Regulatory Matters,” PT-FI agreed to continue to pay a five percent export duty.

Higher depreciation ratesduties and royalties for the 20172021 periods, compared with the 20162020 periods, primarily relate toreflect higher amortization of asset retirement costs associated with revised estimates at the end of 2016 for an overburden stockpile. Additionally, becausesales volumes and copper prices.

Because certain assets are depreciated on a straight-line basis, PT-FI’s unit depreciation rate variesmay vary with asset additions and the level of copper production and sales. DD&A per pound of copper under the by-product method was $0.74 per pound in third-quarter 2021 and $0.76 per pound for the first nine months of 2021, compared with $0.68 per pound in third-quarter 2020 and $0.72 per pound for the first nine months of 2020. The increase in the rate per pound of copper for the 2021 periods, compared with the 2020 periods, primarily reflects the significant underground development assets placed into service.


Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods. Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales.


PT Smelting intercompany loss represents the change in the deferral of 25 percent of PT-FI’s profit on sales to PT Smelting.Smelting (25 percent prior to April 30, 2021, and 39.5 percent thereafter). Refer to “Operations – Smelting &“Smelting and Refining” below for further discussion.


Assuming an average gold price of $1,300$1,800 per ounce forin fourth-quarter 20172021 and achievement of current sales volume and cost estimates, unit net cash costs (net of gold and silver credits) for Indonesia miningPT-FI are expected to approximate $0.07$0.22 per pound of copper for the year 2017. Indonesia mining’s2021. The impact of prices changes during fourth-quarter 2021 on PT-FI's unit net cash costs for the year 20172021 would change by approximatelyapproximate $0.04 per pound of copper for each $50$100 per ounce change in the average price of gold.

TablePT-FI’s projected sales volumes and unit net cash costs for the year 2021 are dependent on a number of Contents

Becausefactors, including continued progress of the fixed natureramp-up of a large portionunderground mining, operational performance, timing of Indonesia’s costs, unit costs vary from quarter to quarter depending on coppershipments and gold volumes.other factors detailed in the “Cautionary Statement” below.


Molybdenum Mines
We haveoperate two wholly owned molybdenum mines in North AmericaColorado – the Henderson underground mine and the Climax open-pit mine, both in Colorado.mine. The Henderson and Climax mines produce high-purity, chemical-grade molybdenum concentrate, which is typically further processed into value-added molybdenum chemical products. The majority of the molybdenum concentrate produced at the Henderson and Climax mines, as well as from our North America and South America copper mines, is processed at our own conversion facilities.


Operating and Development Activities. In response to market conditions, the Henderson molybdenum mine continues to operate at reduced rates. Production from the Molybdenum mines totaled 8of 9 million pounds of molybdenum in third-quarter2017, 5 million pounds in third-quarter 2016, 24 2021 and 23 million pounds for the first nine months of 20172021, was higher than production of 6 million pounds of molybdenum in third-quarter 2020 and 19 million pounds for the first nine months of 2016.2020, primarily reflecting higher milling rates at the Climax mine as it returns to pre-COVID-19 levels. FCX may increase rates at the Climax mine if necessary to satisfy increasing requirements for molybdenum. Refer to “Consolidated Results” for our consolidated molybdenum operating data, which includes sales of molybdenum produced at our Molybdenum mines and from our North America and South America copper mines, and refermines. Refer to “Outlook” for projected consolidated molybdenum sales volumes.


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Unit Net Cash Costs Per Pound of Molybdenum. Unit net cash costs per pound of molybdenum is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.


Average unit net cash costs for our Molybdenum mines of $7.90 per pound of molybdenum in third-quarter2017 and $7.60$8.54 per pound of molybdenum for both the third quarter and first nine months of 20172021 were lower than average unit net cash costs of $10.28$9.72 per pound of molybdenum in third-quarter 2016 2020 and $8.39$9.58 per pound of molybdenum for the first nine months of 2016,2020, primarily reflecting higher volumes. Assuming achievement ofBased on current sales volume and cost estimates, we estimateaverage unit net cash costs for the Molybdenum mines are expected to average $7.85approximate $9.10 per pound of molybdenum for the year 2017. 2021.

Refer to “Product Revenues and Production Costs” for a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.


Smelting and Refining
We wholly own and operate a smelter in Arizona (Miami smelter), a refinery in Texas (El Paso refinery) and a smelter and refinery in Spain (Atlantic Copper). Additionally, PT-FI owns 25has a 39.5 percent of a smelter and refineryownership interest in Gresik, Indonesia (PT Smelting).PT Smelting. Treatment charges for smelting and refining copper concentrate consist of a base rate per pound of copper and per ounce of gold and are generally fixed. Treatment charges represent a cost to our mining operations and income to Atlantic Copper and PT Smelting. Thus, higher treatment charges benefit our smelter operations and adversely affect our mining operations. Our North America copper mines are less significantly affected by changes in treatment charges because these operations are largely integrated with our Miami smelter.smelter and El Paso refinery. Through this form of downstream integration, we are assured placement of a significant portion of our concentrate production.


Our Miami smelter processes concentrate produced by our U.S. mines and also provides acid for copper leaching operations. During the first nine months of 2021, we incurred charges totaling $87 million associated with a major maintenance turnaround at our Miami smelter, which were higher than original estimates as a result of extended downtime to address additional required maintenance work, the COVID-19 pandemic and weather events. The next major maintenance turnaround is scheduled for the first half of 2024.

Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes. During the first nine months of 2017,2021, Atlantic Copper’s concentrate purchases included 33 percent from our copper mining operations included 16and 67 percent from our North America copper mines and 10 percent from South America mining, with the remainder purchased from third parties.


In March 2017, PT Smelting’s anode slimes export license was renewed through March 1, 2018. PT-FI’s contract with PT Smelting provides for PT-FI to supply 100 percent of the copper concentrate requirements (subject to a minimum or maximum treatment charge rate) necessary for PT Smelting to produce 205,000 metric tons of copper annually on a priority basis. PT-FI may also sell copper concentrate to PT Smelting at market rates for quantities in excess of 205,000 metric tons of copper annually. During the first nine months of 2017,2021, PT-FI supplied substantially allthe substantial majority of PT Smelting’s concentrate requirements. Minimum and maximum treatment charge rates have been approved through April 2020.In July 2021, PT Smelting received a six-month extension of its anodes slimes export license, which currently expires December 30, 2021.


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We defer recognizing profits on sales from our mining operations to Atlantic Copper and on 25 percent of PT-FI’s sales to PT Smelting (on 25 percent through April 30, 2021, and on 39.5 percent thereafter) until final sales to third parties occur. Changes in these deferrals attributable to variability in intercompany volumes resulted in net additions (reductions) to operating income totaling $41 million ($48 million to net income attributable to common stock of $24stock) in third-quarter 2021, $(21) million ($(21) million to net income attributable to common stock) in third-quarter2017, $17 2020, $(144) million for third-quarter 2016, less than $1($(97) million to net income attributable to common stock) for the first nine months of 20172021 and $6$(27) million ($(20) million to net loss attributable to common stock) for the first nine months of 2016.2020. Our net deferred profits on our inventories at Atlantic Copper and PT Smelting to be recognized in future periods’ net income attributable to common stock totaled $62$156 million at September 30, 2017.2021. Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices will result in variability in our net deferred profits and quarterly earnings. Based on current estimates, in fourth-quarter 2021, we do not expect a significant change in our net deferred profits on intercompany copper sales but project a net deferral of profits on intercompany molybdenum sales of approximately $40 million ($30 million to net income attributable to common stock).

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CAPITAL RESOURCES AND LIQUIDITY


Our consolidated operating cash flows vary with sales volumes,volumes; prices realized from copper, gold and molybdenum sales,sales; production costs,costs; income taxes,taxes; other working capital changeschanges; and other factors.

We generated significant cash flows during the first nine months of 2021, reflecting strong operating and financial performance. With a favorable market outlook and a focus on executing our operating plans, we expect further increases in sales volumes and cash flows in 2022 and we believe we are well positioned to provide cash returns to shareholders consistent with our financial policy.

We believe that we have a high-quality portfolio of long-lived copper assets positioned to generate long-term value. The ramp-up of underground mining at PT-FI continues to be successful and is advancing on schedule, with production rates expected to reach the projected ultimate annualized levels by year-end 2021. With the success of the Grasberg Block Cave and DMLZ underground projects, PT-FI is planning to commence long-term mine development activities for its Kucing Liar deposit. We are pursuingalso evaluating organic growth opportunities to enhance our mines’ net present values, and we continue to advance studies for future developmentexpansion of certain of our copper resources,operations in North America and South America, including at Bagdad, Lone Star and El Abra, the timing of which will be dependent on, among other things, market conditions.


Based on current sales volume, cost and metal price estimates discussed in “Outlook”, our projected consolidated operating cash flows of $7.5 billion for the year 2021 significantly exceed our expected consolidated capital expenditures of $2.3 billion (which include $0.3 billion of capital expenditures for the Indonesia smelter project) and other cash requirements for the year, including debt repayments, common stock dividends and noncontrolling interest distributions. We believe that our cash generating capability and financial condition, together with availability under our revolving credit facility, will be adequate to meet our operating, investing and financing needs. Expenditures for the Indonesia smelter project are currently being funded by PT-FI’s new $1.0 billion unsecured bank credit facility and additional debt financing for this project is being evaluated. Refer to “Outlook” for further discussion of projected operating cash flows and capital expenditures for 2021 and to “Debt” below and Note 5 for further discussion of PT-FI’s credit facility.

At September 30, 2021, we had $11.2 billion in liquidity, comprised of $7.7 billion in consolidated cash and $3.5 billion of availability under our revolving credit facility.

Financial Policy. In February 2021, our Board of Directors (Board) adopted a financial policy for the allocation of cash flows aligned with our strategic objectives of maintaining a strong balance sheet and increasing cash returns to shareholders while advancing opportunities for future growth. The policy includes a base dividend and a performance-based payout framework whereby up to 50 percent of available cash flows generated after planned capital spending and distributions to noncontrolling interests would be allocated to shareholder returns and the balance to debt reduction and investments in value enhancing growth projects, subject to maintaining the net debt target described below.

In February 2021, the Board reinstated a cash dividend on our common stock (base dividend) at an annual rate of $0.30 per share, and on November 1, 2021, the Board approved (i) a new share repurchase program authorizing repurchases of up to $3.0 billion of our common stock and (ii) a variable cash dividend on common stock for 2022 at an annual rate of $0.30 per share. The combined annual rate of the base dividend and the variable dividend is expected to total $0.60 per share. The Board intends to declare quarterly dividends for 2022 of $0.15 per share (including the $0.075 variable component), with the initial quarterly dividend expected to be paid on February 1, 2022. Based on current shares outstanding totaling 1.47 billion, the total common stock dividend (base and variable) for 2022 currently expected to be paid approximates $0.9 billion. Refer to “Cautionary Statement.”

Our performance-based payout framework is designed to maintain net debt at a level not to exceed the range of $3 billion to $4 billion (excluding project debt for additional smelting capacity in Indonesia). The Board will review the structure and the amount of the performance-based payout framework at least annually.


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Cash
Following is a summary of the U.S. and international components of consolidated cash and cash equivalents available to the parent company, net of noncontrolling interests’ share, taxes and other costs at September 30, 20172021 (in billions):
Cash at domestic companies$5.0 
Cash at international operations2.7 
Total consolidated cash and cash equivalents7.7 
Noncontrolling interests’ share(0.9)
Cash, net of noncontrolling interests’ share6.8 
Withholding taxes(0.1)

Net cash available$6.7 
Cash at domestic companies$3.7
Cash at international operations1.3
Total consolidated cash and cash equivalents5.0
Noncontrolling interests’ share(0.4)
Cash, net of noncontrolling interests’ share4.6
Withholding taxes and other(0.1)
Net cash available$4.5

Cash held at our international operations is generally used to support our foreign operations’ capital expenditures, operating expenses, debt repayment, working capital and other tax payments, or other cash needs. Management believes that
sufficient liquidity is available in the U.S. from cash balances and availability from our revolving credit facility. We have not elected to permanently reinvest earnings from our foreign subsidiaries, and we have recorded deferred tax liabilities for foreign earnings that are available to be repatriated to the U.S. From time to time, our foreign subsidiaries distribute earnings to the U.S. through dividends that are subject to applicable withholding taxes and noncontrolling interests’ share.


Debt
Following is a summary of our total debt and the related weighted-average interest rates at September 30, 2017 (in billions, except percentages):
   Weighted-
   Average
   Interest Rate
Senior Notes$13.3
 4.4%
Cerro Verde credit facility1.5
 3.1%
Total debt$14.8
 4.2%
    
In September 2017, we redeemed $543 million aggregate principal amount of senior notes, resulting in annual cash interest savings of approximately $35 million. We recognized an $11 million gain on early extinguishment of debt in connection with the redemptions. During the first nine months of 2017, we have reduced our total debt balance by $1.25 billion. Maturities of debt at September 30, 2017, total $0.7 billion in fourth-quarter 2017, $1.5 billion in 2018, $1.9 billion in 2020, $1.3 billion in 2021 and $9.4 billion thereafter.

At September 30, 2017, we2021, our consolidated debt totaled $9.7 billion, with a weighted-average interest rate of 4.6 percent. We had no borrowings $36outstanding and $8 million in letters of credit issued and availability of $3.5 billion under our revolving credit facility, resulting in availability of approximately $3.5 billion.

In September 2021, Cerro Verde elected to prepay $200 million on its term loan, reducing the outstanding balance to $325 million, which matures in June 2022.

In July 2021, PT-FI entered into a $1.0 billion, five-year, unsecured bank credit facility (consisting of a $667 million term loan and a $333 million revolving credit facility). Amounts may be drawn under the term loan within the first three years, and then the loan amortizes in four installments. The revolving credit facility is available for drawings until June 2026. The facility matures in July 2026 and amounts drawn bear interest at the London Interbank Offered Rate plus a margin of 1.875% or 2.125%, as defined by the agreement. As of September 30, 2021, $158 million ($146 million net of debt issuance costs) was drawn under the PT-FI Term Loan and no amounts were drawn under the revolving credit facility.

On October 21, 2021, we called for redemption on May 31, 2019.December 1, 2021, all of our outstanding $524 million principal amount of our 3.55% Senior Notes due 2022. We have no other senior note maturities until March 2023.


Refer to Note 65 for further discussion of debt.the above items, and refer to Note 8 of our 2020 Form 10-K for additional information regarding our debt arrangements.
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Operating Activities
We generatedreported consolidated cash provided by operating cash flowsactivities of $3.0$5.4 billion (including $0.4 billion inof working capital sources and changes in tax payments)other sources) for the first nine months of 20172021 and $2.6$1.7 billion (including $0.5$0.3 billion infrom working capital sources and changes in tax payments)other sources) for the first nine months of 2016.

Subject to future commodity prices for copper, gold and molybdenum, we expect estimated consolidated2020. Higher operating cash flows for the years 2017first nine months of 2021, compared with the first nine months of 2020, primarily reflect higher copper prices and 2018, plus available cashcopper and availability under our credit facilitygold sales volumes.

In third-quarter 2021, Cerro Verde paid the balance of its royalty dispute liabilities (payments totaled $356 million in third-quarter 2021 and uncommitted lines of credit, to be sufficient to fund our budgeted capital expenditures, scheduled debt maturities, noncontrolling interest distributions and other cash requirements$421 million for the year.first nine months of 2021). Refer to “Outlook”Note 8 for further discussiondiscussion.


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Table of projected operating cash flows for the year 2017, and to “Risk Factors,” contained in Part I, Item 1A. of our annual report on Form 10-K for the year ended December 31, 2016, for discussion of regulatory matters in Indonesia, which could have a significant impact on future results.Contents

Investing Activities
Capital Expenditures. Capital expenditures, including capitalized interest, totaled $1.0$1.3 billion for the first nine months of 2017,2021, including $0.6 billion for major mining projects. Capital expenditures, including capitalized interest, totaled $2.3 billion for the first nine months of 2016, consisting of $1.2 billion for mining operations (including approximately $0.9 billion for major projects)mining projects primarily associated with underground development activities in the Grasberg minerals district and $1.1$0.1 billion for oil and gas operations.

Lower capitalthe Indonesia smelter project. Capital expenditures for the first nine months of 2017, compared with the first nine months of 2016, primarily reflect a decrease in oilIndonesia smelter project are currently being funded by PT-FI's $1.0 billion unsecured bank credit facility and gas activities as a result of the sales of significant oil and gas properties in 2016 and a decrease in major mining projects associated with the completion of the Cerro Verde expansion.additional debt financing for this project is being evaluated. Refer to “Outlook” for further discussion of projected capital expenditures for the year 2017.2021.


Dispositions. Net proceeds from asset salesCapital expenditures, including capitalized interest, totaled $1.4$1.6 billion for the first nine months of 20162020, including approximately $1.0 billion for major mining projects primarily associated with underground development activities in the $1.0 billion saleGrasberg minerals district and the Lone Star copper leach project.

Proceeds from Sale of an additional 13 percent undivided interest in Morenci,Freeport Cobalt. On September 1, 2021, we completed the sale of an interest in the Timok exploration project in SerbiaFreeport Cobalt to Jervois Global Limited (Jervois) for $208 million, including net cash proceeds of $150 million and from oil and gas asset sales, including the Haynesville shale assets and certain oil and gas royalty interests.shares of Jervois. Refer to Note 21 for further discussiondiscussion.

Proceeds from Sales of these transactions.

Financing Activities
Debt Transactions. Net repaymentsOther Assets. Proceeds from sales of debt for the first nine months of 2017other assets totaled $1.2 billion primarily for the redemption and repayment of senior notes and the repayment of Cerro Verde’s shareholder loans, partly offset by the additional borrowings on Cerro Verde’s credit facility.

Net repayments of debt for the first nine months of 2016 totaled $1.1 billion, primarily reflecting payments of $0.6 billion on our term loan, $0.2 billion on the Cerro Verde credit facility and $0.2 billion on lines of credit.

Dividends. The Board suspended our annual common stock dividend in December 2015. The declaration of dividends is at the discretion of our Board and will depend upon our financial results, cash requirements, future prospects and other factors deemed relevant by our Board.

Common stock dividends of $2$21 million for the first nine months of 20172021 and $5$146 million for the first nine months of 2020. Proceeds from sales of other assets for the first nine months of 2020 are primarily associated with the contingent consideration of $60 million from the 2016 sale of TF Holdings Limited, the collection of $45 million related to accumulated dividends paidthe 2019 sale of the Timok exploration assets in Serbia, and $31 million associated with the sale of royalty assets.

Acquisition of Minority Interest in PT Smelting.On April 30, 2021, PT-FI acquired 14.5 percent of the outstanding common stock of PT Smelting for vested stock-based compensation.$33 million, increasing its ownership interest from 25 percent to 39.5 percent.


Cash dividends paid to noncontrolling interestsFinancing Activities
Debt Transactions. Net repayments of debt totaled $67$39 million for the first nine months of 2017 and $872021, primarily associated with Cerro Verde’s election to prepay $200 million on its term loan at the end of September 2021, partly offset by borrowings of $158 million under the PT-FI credit facility.

Net proceeds from debt totaled $131 million for the first nine months of 2016. These payments will2020, primarily reflecting the issuance of $2.8 billion of new senior notes in July 2020 and March 2020, partly offset by the use of proceeds to purchase and redeem senior notes maturing in 2021, 2022, 2023 and 2024.

Refer to Note 5 for further discussion.

Cash Dividends and Distributions Paid. We paid cash dividends on our common stock totaling $220 million for the first nine months of 2021 and $73 million for the first nine months of 2020.

On September 22, 2021, we declared a quarterly cash dividend of $0.075 per share on our common stock, which was paid on November 1, 2021, to shareholders of record as of October 15, 2021. Refer to “Cautionary Statement” and the discussion above regarding our financial policy.

Cash dividends and distributions paid to noncontrolling interests at PT-FI and Cerro Verde totaled $187 million for the first nine months of 2021. There were no cash dividends or distributions to noncontrolling interests paid during the first nine months of 2020. Cash dividends and distributions to noncontrolling interests vary based on the operating results and cash requirements of our consolidated subsidiaries.


CONTRACTUAL OBLIGATIONS

As further discussed in Note 6, duringContributions from Noncontrolling Interests. We received equity contributions totaling $135 million for the first nine months of 2017, we have reduced2021 and $115 million for the first nine months of 2020 from PT Inalum for their share of capital spending on PT-FI underground mine development projects and development of increased smelter capacity in Indonesia.

Stock-based awards. Following an increase in our December 31, 2016, total debt balance by $1.25stock price during 2021, proceeds from exercised stock options totaled $189 million and payments for related employee taxes totaled $19 million for the first nine months of 2021. See Note 10 in our 2020 Form 10-K for a discussion of stock-based awards.

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CONTRACTUAL OBLIGATIONS

In July 2021, PT-FI awarded a contract to Chiyoda for the construction of a new greenfield smelter in Gresik, Indonesia, with an estimated contract cost of $2.8 billion. ThereThe smelter construction is expected to be completed as soon as feasible in 2024, which is subject to, among other things, potential pandemic-related disruptions.

Besides PT-FI’s $1.0 billion credit facility and the Chiyoda contract, there have been no other material changes in our contractual obligations since December 31, 2016. Refer to Part II, Items 7. and 7A. in our annual report on Form 10-K for the year ended December 31, 2016, for information regarding our contractual obligations.2020.

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CONTINGENCIES


Environmental and Asset Retirement Obligations
Our current and historical operating activities are subject to stringent laws and regulations governing the protection of the environment. We perform a comprehensive annual review of our environmental and asset retirement obligations and also review changes in facts and circumstances associated with these obligations at least quarterly. Other than as disclosed in Note 9, there

There have been no material changes to our environmental and asset retirement obligations since December 31, 2016.2020. Refer to Note 8 for updates associated with our Newtown Creek environmental obligation. Updated cost assumptions, including increases and decreases to cost estimates, changes in the anticipated scope and timing of remediation activities, and settlement of environmental matters may result in additional revisions to certain of our environmental obligations. We are planning a detailed review in fourth-quarter 2021 of our asset retirement obligations in Indonesia, specifically around our historical overburden stockpiles related to previous open-pit mining operations. Potential adjustments could be significant. Refer to Note 12 in our annual report on2020 Form 10-K, for the year ended December 31, 2016, for further information regarding our environmental and asset retirement obligations.


Litigation and Other Contingencies
Other than as discussed in Note 9, thereThere have been no material changes to our contingencies associated with legal proceedings, environmental and other matters since December 31, 2016.2020. Refer to Note 12 and “Legal Proceedings” contained in Part I, Item 3. of our annual report on2020 Form 10-K, for the year ended December 31, 2016, as updated inby Note 9 in our quarterly reports on Form 10-Q for the quarters ended March 31, 2017, and June 30, 2017,8, for further information regarding legal proceedings, environmental and other matters.


NEW ACCOUNTING STANDARDS


ReferThere were no significant updates to previously reported accounting standards included in Note 1 of our 2020 Form 10-K.

NET DEBT

Net debt, which we define as consolidated debt less consolidated cash and cash equivalents, is intended to provide investors with information related to the performance-based payout framework in our financial policy, which requires achievement of a net debt target in the range of $3 billion to $4 billion (excluding project debt for additional smelting capacity in Indonesia). This information differs from consolidated debt determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for consolidated debt determined in accordance with U.S. GAAP. Our net debt follows, which may not be comparable to similarly titled measures reported by other companies (in millions):
September 30, 2021December 31, 2020
Current portion of debt$897 $34 
Long-term debt, less current portion8,768 9,677 
Consolidated debt9,665 a9,711 
Less: consolidated cash and cash equivalents7,672 3,657 
Net debt$1,993 $6,054 
a.Includes $146 million, net of debt issuance costs, for the PT-FI Term Loan (refer to Note 12 for a summary5).
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Table of recently adopted accounting standards.Contents

PRODUCT REVENUES AND PRODUCTION COSTS

Mining Product Revenues and Unit Net Cash Cost
Unit net cash costs per pound of copper and molybdenum are measures intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for the respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. These measures are presented by other metals mining companies, although our measures may not be comparable to similarly titled measures reported by other companies.


We present gross profit per pound of copper in the following tables using both a “by-product” method and a “co-product” method. We use the by-product method in our presentation of gross profit per pound of copper because (i) the majority of our revenues are copper revenues, (ii) we mine ore, which contains copper, gold, molybdenum and other metals, (iii) it is not possible to specifically assign all of our costs to revenues from the copper, gold, molybdenum and other metals we produce and (iv) it is the method used by our management and our Board to monitor our mining operations and to compare mining operations in certain industry publications. In the co-product method presentations, shared costs are allocated to the different products based on their relative revenue values, which will vary to the extent our metals sales volumes and realized prices change.


We show revenue adjustments for prior period open sales as a separate line item. Because these adjustments do not result from current period sales, these amounts have been reflected separately from revenues on current period
sales. Noncash and other costs, which are removed from site production and delivery costs in the calculation of unit
net cash costs, consist of items such as stock-based compensation costs, start-up costs, inventory adjustments,
long-lived asset impairments, idle facility costs, restructuring and/or unusual charges. As discussed above, gold, molybdenum and
other metal revenues at copper mines are reflected as credits against site production and delivery costs in the by-product method. The following schedules are presentations under both the by-product and co-product methods
together with reconciliations to amounts reported in our consolidated financial statements.



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North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended September 30, 2021  
(In millions)By-ProductCo-Product Method
MethodCopper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments$1,627 $1,627 $152 $27 $1,806 
Site production and delivery, before net noncash
    and other costs shown below		795 724 82 20 826 
By-product credits(148)— — — — 
Treatment charges35 33 — 2 35 
Net cash costs682 757 82 22 861 
DD&A94 85 7 2 94 
Metals inventory adjustments13 13 — — 13 
Noncash and other costs, net30 

28 2 — 30 
Total costs819 883 91 24 998 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(7)(7)— — (7)
Gross profit$801 $737 $61 $3 $801 
Copper sales (millions of recoverable pounds)375 375 
Molybdenum sales (millions of recoverable pounds)a
9 
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments$4.34 $4.34 $16.69 
Site production and delivery, before net noncash
    and other costs shown below		2.12 1.93 8.97 
By-product credits(0.39)— — 
Treatment charges0.09 0.09 — 
Unit net cash costs1.82 2.02 8.97 
DD&A0.25 0.23 0.73 
Metals inventory adjustments0.03 0.03 — 
Noncash and other costs, net0.08 

0.08 0.23 
Total unit costs2.18 2.36 9.93 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.02)(0.02)— 
Gross profit per pound$2.14 $1.96 $6.76 
Reconciliation to Amounts Reported    
 
RevenuesProduction and DeliveryDD&AMetals Inventory Adjustments
Totals presented above$1,806 $826 $94 $13  
Treatment charges(4)31 — —  
Noncash and other costs, net— 30 — —  
Other revenue adjustments, primarily for pricing
    on prior period open sales		(7)— — —  
Eliminations and other16 17 — —  
North America copper mines1,811 904 94 13  
Other miningc
5,903 3,735 418 — 
Corporate, other & eliminations(1,631)(1,630)16 1  
As reported in our consolidated financial statements$6,083 $3,009 $528 $14  
            
Three Months Ended September 30, 2017     
(In millions) By-Product Co-Product Method 
  Method Copper 
Molybdenuma
 
Otherb
 Total 
Revenues, excluding adjustments $1,011
 $1,011
 $62
 $19
 $1,092
 
Site production and delivery, before net noncash
    and other costs shown below
 576
 541
 45
 11
 597
 
By-product credits (60) —
 —
 —
 —
 
Treatment charges 39
 38
 —
 1
 39
 
Net cash costs 555
 579
 45
 12
 636
 
DD&A 96
 90
 4
 2
 96
 
Noncash and other costs, net 15
 14
 1
 —
 15
 
Total costs 666
 683
 50
 14
 747
 
Revenue adjustments, primarily for pricing
    on prior period open sales
 7
 7
 —
 —
 7
 
Gross profit $352
 $335
 $12
 $5
 $352
 
            
Copper sales (millions of recoverable pounds) 345
 345
       
Molybdenum sales (millions of recoverable pounds)a
     8
     
            
Gross profit per pound of copper/molybdenum:      
            
Revenues, excluding adjustments $2.92
 $2.92
 $7.59
     
Site production and delivery, before net noncash
    and other costs shown below
 1.67
 1.56
 5.58
     
By-product credits (0.17) —
 —
     
Treatment charges 0.11
 0.11
 —
     
Unit net cash costs 1.61
 1.67
 5.58
     
DD&A

 0.28
 0.27
 0.49
     
Noncash and other costs, net 0.04
 0.04
 0.05
     
Total unit costs 1.93
 1.98
 6.12
     
Revenue adjustments, primarily for pricing
    on prior period open sales
 0.03
 0.03
 —
     
Gross profit per pound $1.02
 $0.97
 $1.47
     
            
Reconciliation to Amounts Reported           
(In millions) Revenues Production and Delivery DD&A     
Totals presented above $1,092
 $597
 $96
     
Treatment charges (8) 31
 —
     
Noncash and other costs, net —
 15
 —
     
Revenue adjustments, primarily for pricing
    on prior period open sales
 7
 —
 —
     
Eliminations and other 14
 15
 —
     
North America copper mines 1,105
 658
 96
     
Other miningc
 3,909
 2,897
 299
     
Corporate, other & eliminations (704) (753) 23
     
As reported in FCX’s consolidated financial statements $4,310
 $2,802
 $418
     
a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b.Includes gold and silver product revenues and production costs.
c.Represents the combined total for our other mining operations, including South America mining, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.

a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.

b.Includes gold and silver product revenues and production costs.
c.Represents the combined total for our other segments, as presented in Note 9.

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North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended September 30, 2020  
(In millions)By-ProductCo-Product Method
MethodCopper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments$1,138 $1,138 $63 $30 $1,231 
Site production and delivery, before net noncash
    and other costs shown below		667 630 45 16 691 
By-product credits(69)— — — — 
Treatment charges33 32 — 1 33 
Net cash costs631 662 45 17 724 
DD&A92 85 4 3 92 
Metals inventory adjustments(4)(4)— — (4)
Noncash and other costs, net37 c35 — 2 37 
Total costs756 778 49 22 849 
Other revenue adjustments, primarily for pricing
    on prior period open sales		1 1 — — 1 
Gross profit$383 $361 $14 $8 $383 
Copper sales (millions of recoverable pounds)378 378 
Molybdenum sales (millions of recoverable pounds)a
7 
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments$3.01 $3.01 $7.72 
Site production and delivery, before net noncash
    and other costs shown below		1.76 1.67 5.52 
By-product credits(0.18)— — 
Treatment charges0.09 0.08 — 
Unit net cash costs1.67 1.75 5.52 
DD&A0.24 0.23 0.43 
Metals inventory adjustments(0.01)(0.01)— 
Noncash and other costs, net0.10 c0.09 0.06 
Total unit costs2.00 2.06 6.01 
Other revenue adjustments, primarily for pricing
    on prior period open sales		— — — 
Gross profit per pound$1.01 $0.95 $1.71 
Reconciliation to Amounts Reported     
RevenuesProduction and DeliveryDD&AMetals Inventory Adjustments 
Totals presented above$1,231 $691 $92 $(4) 
Treatment charges(4)29 — —  
Noncash and other costs, net— 37 — —  
Other revenue adjustments, primarily for pricing
    on prior period open sales		1 — — —  
Eliminations and other9 11 (1)—  
North America copper mines1,237 768 91 (4) 
Other miningd
3,691 2,731 282 5 
Corporate, other & eliminations(1,077)(1,034)21 8  
As reported in our consolidated financial statements$3,851 $2,465 $394 $9  
          
Three Months Ended September 30, 2016   
(In millions)By-Product Co-Product Method
 Method Copper 
Molybdenuma
 
Otherb
 Total
Revenues, excluding adjustments$1,002
 $1,002
 $65
 $35
 $1,102
Site production and delivery, before net noncash
    and other costs shown below
659
 610
 48
 25
 683
By-product credits(76) —
 —
 —
 —
Treatment charges45
 42
 —
 3
 45
Net cash costs628
 652
 48
 28
 728
DD&A

127
 117
 6
 4
 127
Noncash and other costs, net26

25
 1
 —
 26
Total costs781
 794
 55
 32
 881
Revenue adjustments, primarily for pricing
    on prior period open sales
(3) (3) —
 —
 (3)
Gross profit$218
 $205
 $10
 $3
 $218
          
Copper sales (millions of recoverable pounds)457
 457
      
Molybdenum sales (millions of recoverable pounds)a
   9
    
          
Gross profit per pound of copper/molybdenum:     
          
Revenues, excluding adjustments$2.19
 $2.19
 $7.39
    
Site production and delivery, before net noncash
     and other costs shown below
1.44
 1.34
 5.51
    
By-product credits(0.17) —
 —
    
Treatment charges0.10
 0.09
 —
    
Unit net cash costs1.37
 1.43
 5.51
    
DD&A

0.28
 0.26
 0.70
    
Noncash and other costs, net0.06

0.05
 0.13
    
Total unit costs1.71
 1.74
 6.34
    
Revenue adjustments, primarily for pricing
    on prior period open sales
—
 —
 —
    
Gross profit per pound$0.48
 $0.45
 $1.05
    
          
Reconciliation to Amounts Reported         
(In millions)Revenues Production and Delivery DD&A    
Totals presented above$1,102
 $683
 $127
    
Treatment charges(26) 19
 —
    
Noncash and other costs, net—
 26
 —
    
Revenue adjustments, primarily for pricing
    on prior period open sales
(3) —
 —
    
Eliminations and other11
 11
 2
    
North America copper mines1,084
 739
 129
    
Other miningc
3,085
 2,306
 268
    
Corporate, other & eliminations(292) (516) 246
    
As reported in FCX’s consolidated financial statements$3,877
 $2,529
 $643
    
a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b.Includes gold and silver product revenues and production costs.
c.Represents the combined total for our other mining operations, including South America mining, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.

b.Includes gold and silver product revenues and production costs.
c.Includes charges totaling $10 million ($0.03 per pound of copper) primarily associated with the April 2020 revised operating plans (including employee separation costs) and the COVID-19 pandemic (including health and safety costs).
d.Represents the combined total for our other segments, as presented in Note 9.



56
Table of Contents

North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs
Nine months ended September 30, 2021
(In millions)By-ProductCo-Product Method
MethodCopper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments$4,538 $4,538 337 93 4,968 
Site production and delivery, before net noncash
    and other costs shown below		2,254 2,093 194 60 2,347 
By-product credits(337)— — — — 
Treatment charges98 93 — 5 98 
Net cash costs2,015 2,186 194 65 2,445 
DD&A275 254 15 6 275 
Metals inventory adjustments13 13 — — 13 
Noncash and other costs, net103 99 3 1 103 
Total costs2,406 2,552 212 72 2,836 
Other revenue adjustments, primarily for pricing
    on prior period open sales		7 7 — — 7 
Gross profit$2,139 $1,993 $125 $21 $2,139 
Copper sales (millions of recoverable pounds)1,072 1,072 
Molybdenum sales (millions of recoverable pounds)a
26 
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments$4.24 $4.24 $13.09 
Site production and delivery, before net noncash
    and other costs shown below		2.11 1.95 7.54 
By-product credits(0.32)— — 
Treatment charges0.09 0.09 — 
Unit net cash costs1.88 2.04 7.54 
DD&A0.26 0.24 0.59 
Metals inventory adjustments0.01 0.01 — 
Noncash and other costs, net0.10 0.09 0.12 
Total unit costs2.25 2.38 8.25 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.01 0.01 — 
Gross profit per pound$2.00 $1.87 $4.84 
Reconciliation to Amounts Reported
Metals
ProductionInventory
Revenuesand DeliveryDD&AAdjustments
Totals presented above$4,968 $2,347 $275 $13 
Treatment charges(21)77 — — 
Noncash and other costs, net— 103 — — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		7 — — — 
Eliminations and other49 51 — — 
North America copper mines5,003 2,578 275 13 
Other miningc
16,068 10,425 1,108 1 
Corporate, other & eliminations(4,390)(4,141)47 1 
As reported in our consolidated financial statements$16,681 $8,862 $1,430 $15 
a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b.Includes gold and silver product revenues and production costs.
c.Represents the combined total for our other segments, as presented in Note 9.






57
      
Nine Months Ended September 30, 2017     
(In millions) By-Product Co-Product Method 
  Method Copper 
Molybdenuma
 
Otherb
 Total 
Revenues, excluding adjustments $3,091
 $3,091
 $184
 $62
 $3,337
 
Site production and delivery, before net noncash           
and other costs shown below 1,794
 1,688
 137
 34
 1,859
 
By-product credits (181) —
 —
 —
 —
 
Treatment charges 121
 116
 —
 5
 121
 
Net cash costs 1,734
 1,804
 137
 39
 1,980
 
DD&A 329
 309
 14
 6
 329
 
Noncash and other costs, net 68
c 
66
 1
 1
 68
 
Total costs 2,131
 2,179
 152
 46
 2,377
 
Revenue adjustments, primarily for pricing           
on prior period open sales 4
 4
 —
 —
 4
 
Gross profit $964
 $916
 $32
 $16
 $964
 
            
Copper sales (millions of recoverable pounds) 1,127
 1,127
       
Molybdenum sales (millions of recoverable pounds)a
     25
     
            
Gross profit per pound of copper/molybdenum:       
            
Revenues, excluding adjustments $2.74
 $2.74
 $7.57
     
Site production and delivery, before net noncash           
and other costs shown below 1.59
 1.50
 5.62
     
By-product credits (0.16) —
 —
     
Treatment charges 0.11
 0.10
 —
     
Unit net cash costs 1.54
 1.60
 5.62
     
DD&A 0.29
 0.27
 0.56
     
Noncash and other costs, net 0.06
c 
0.06
 0.06
     
Total unit costs 1.89
 1.93
 6.24
     
Revenue adjustments, primarily for pricing           
on prior period open sales —
 —
 —
     
Gross profit per pound $0.85
 $0.81
 $1.33
     
            
Reconciliation to Amounts Reported           
(In millions)           
    Production       
  Revenues and Delivery DD&A     
Totals presented above $3,337
 $1,859
 $329
     
Treatment charges (36) 85
 —
     
Noncash and other costs, net —
 68
 —
     
Revenue adjustments, primarily for pricing           
on prior period open sales 4
 —
 —
     
Eliminations and other 43
 44
 1
     
North America copper mines 3,348
 2,056
 330
     
Other miningd
 10,270
 7,765
 850
     
Corporate, other & eliminations (2,256) (2,324) 77
     
As reported in FCX’s consolidated financial statements $11,362
 $7,497
 $1,257
     
 
a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b.Includes gold and silver product revenues and production costs.
c.Includes $21 million ($0.02 per pound of copper) for asset impairment charges at Morenci.
d.Represents the combined total for our other mining operations, including South America mining, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.
Table of Contents

North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs
Nine months ended September 30, 2020
(In millions)By-ProductCo-Product Method
MethodCopper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments$2,939 

$2,939 210 73 3,222 
Site production and delivery, before net noncash
    and other costs shown below		2,106 1,963 173 44 2,180 
By-product credits(209)— — — — 
Treatment charges109 105 — 4 109 
Net cash costs2,006 2,068 173 48 2,289 
DD&A272 251 14 7 272 
Metals inventory adjustments52 49 — 3 52 
Noncash and other costs, net107 c101 3 3 107 
Total costs2,437 2,469 190 61 2,720 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(22)(22)— — (22)
Gross profit$480 $448 $20 $12 $480 
Copper sales (millions of recoverable pounds)1,100 1,100 
Molybdenum sales (millions of recoverable pounds)a
24 
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments$2.67 

$2.67 $8.57 
Site production and delivery, before net noncash
    and other costs shown below		1.91 1.78 7.05 
By-product credits(0.19)— — 
Treatment charges0.10 0.10 — 
Unit net cash costs1.82 1.88 7.05 
DD&A0.25 0.23 0.57 
Metals inventory adjustments0.05 0.04 — 
Noncash and other costs, net0.10 c0.10 0.12 
Total unit costs2.22 2.25 7.74 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.01)(0.01)— 
Gross profit per pound$0.44 $0.41 $0.83 
Reconciliation to Amounts Reported
Metals
ProductionInventory
Revenuesand DeliveryDD&AAdjustments
Totals presented above$3,222 $2,180 $272 $52 
Treatment charges(14)95 — — 
Noncash and other costs, net— 107 — — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(22)— — — 
Eliminations and other24 33 — — 
North America copper mines3,210 2,415 272 52 
Other miningd
9,267 7,665 770 14 
Corporate, other & eliminations(2,774)(2,676)51 26 
As reported in our consolidated financial statements$9,703 $7,404 $1,093 $92 
a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b.Includes gold and silver product revenues and production costs.
c.Includes charges totaling $32 million ($0.03 per pound of copper) primarily associated with the April 2020 revised operating plans (including employee separation costs) and the COVID-19 pandemic (including health and safety costs).
d.Represents the combined total for our other segments, as presented in Note 9.
58
      
Nine Months Ended September 30, 2016     
(In millions) By-Product Co-Product Method 
  Method Copper 
Molybdenuma
 
Otherb
 Total 
Revenues, excluding adjustments $3,092
 $3,092
 $155
 $76
 $3,323
 
Site production and delivery, before net noncash           
and other costs shown below 2,008
 1,904
 121
 46
 2,071
 
By-product credits (168) —
 —
 —
 —
 
Treatment charges 148
 142
 —
 6
 148
 
Net cash costs 1,988
 2,046
 121
 52
 2,219
 
DD&A 405
 381
 15
 9
 405
 
Noncash and other costs, net 74
 72
 1
 1
 74
 
Total costs 2,467
 2,499
 137
 62
 2,698
 
Revenue adjustments, primarily for pricing           
on prior period open sales (1) (1) —
 —
 (1) 
Gross profit $624
 $592
 $18
 $14
 $624
 
            
Copper sales (millions of recoverable pounds) 1,421
 1,421
       
Molybdenum sales (millions of recoverable pounds)a
     25
     
            
Gross profit per pound of copper/molybdenum:       
            
Revenues, excluding adjustments $2.18
 $2.18
 $6.24
     
Site production and delivery, before net noncash           
and other costs shown below 1.41
 1.34
 4.86
     
By-product credits (0.12) —
 —
     
Treatment charges 0.11
 0.10
 —
     
Unit net cash costs 1.40
 1.44
 4.86
     
DD&A 0.29
 0.27
 0.61
     
Noncash and other costs, net 0.05
 0.05
 0.06
     
Total unit costs 1.74
 1.76
 5.53
     
Revenue adjustments, primarily for pricing           
on prior period open sales —
 —
 —
     
Gross profit per pound $0.44
 $0.42
 $0.71
     
            
Reconciliation to Amounts Reported           
(In millions)   Production       
  Revenues and Delivery DD&A     
Totals presented above $3,323
 $2,071
 $405
     
Treatment charges (74) 74
 —
     
Noncash and other costs, net —
 74
 —
     
Revenue adjustments, primarily for pricing           
on prior period open sales (1) —
 —
     
Eliminations and other 32
 34
 2
     
North America copper mines 3,280
 2,253
 407
     
Other miningc
 8,433
 6,722
 766
     
Corporate, other & eliminations (1,260) (991) 764
     
As reported in FCX’s consolidated financial statements $10,453
 $7,984
 $1,937
     
 
a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b.Includes gold and silver product revenues and production costs.
c.Represents the combined total for our other mining operations, including South America mining, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.

Table of Contents

South America Mining Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended September 30, 2021
(In millions)By-ProductCo-Product Method
MethodCopper
Othera
Total
Revenues, excluding adjustments$1,153 $1,153 $120 $1,273 
Site production and delivery, before net noncash
    and other costs shown below		597 b546 64 610 
By-product credits(107)— — — 
Treatment charges38 38 — 38 
Royalty on metals3 2 1 3 
Net cash costs531 586 65 651 
DD&A112 101 11 112 
Noncash and other costs, net20 

19 1 20 
Total costs663 706 77 783 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(8)(8)— (8)
Gross profit$482 $439 $43 $482 
Copper sales (millions of recoverable pounds)280 280 
Gross profit per pound of copper:
Revenues, excluding adjustments$4.12 $4.12 
Site production and delivery, before net noncash
    and other costs shown below		2.14 b1.96 
By-product credits(0.38)— 
Treatment charges0.13 0.13 
Royalty on metals0.01 0.01 
Unit net cash costs1.90 2.10 
DD&A0.40 0.36 
Noncash and other costs, net0.07 

0.06 
Total unit costs2.37 2.52 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.03)(0.03)
Gross profit per pound$1.72 $1.57 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$1,273 $610 $112 
Treatment charges(38)— — 
Royalty on metals(3)— — 
Noncash and other costs, net— 20 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(8)— — 
Eliminations and other(1)— (1)
South America mining1,223 630 111 
Other miningc
6,491 4,009 401 
Corporate, other & eliminations(1,631)(1,630)16 
As reported in our consolidated financial statements$6,083 $3,009 $528 
a.Includes silver sales of 1.0 million ounces ($24.34 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.
b.Includes nonrecurring charges totaling $5 million ($0.02 per pound of copper) associated with labor related charges at Cerro Verde.
c.Represents the combined total for our other segments, as presented in Note 9.

59
 
Three Months Ended September 30, 2017    
(In millions) By-Product Co-Product Method
  Method Copper 
Othera
 Total
Revenues, excluding adjustments $965
 $965
 $75
 $1,040
Site production and delivery, before net noncash        
and other costs shown below 524
 490
 46
 536
By-product credits (63) —
 —
 —
Treatment charges 73
 73
 —
 73
Royalty on metals 2
 2
 —
 2
Net cash costs 536
 565
 46
 611
DD&A 134
 125
 9
 134
Noncash and other costs, net 225
b 
207
 18
 225
Total costs 895
 897
 73
 970
Revenue adjustments, primarily for pricing        
on prior period open sales 59
 59
 —
 59
Gross profit $129
 $127
 $2
 $129
         
Copper sales (millions of recoverable pounds) 327
 327
    
         
Gross profit per pound of copper:    
         
Revenues, excluding adjustments $2.95
 $2.95
    
Site production and delivery, before net noncash        
and other costs shown below 1.60
 1.50
    
By-product credits (0.19) —
    
Treatment charges 0.22
 0.22
    
Royalty on metals 0.01
 0.01
    
Unit net cash costs 1.64
 1.73
    
DD&A 0.41
 0.38
    
Noncash and other costs, net 0.69
b 
0.63
    
Total unit costs 2.74
 2.74
    
Revenue adjustments, primarily for pricing        
on prior period open sales 0.18
 0.18
    
Gross profit per pound $0.39
 $0.39
    
         
Reconciliation to Amounts Reported        
(In millions)        
    Production    
  Revenues and Delivery DD&A  
Totals presented above $1,040
 $536
 $134
  
Treatment charges (73) —
 —
  
Royalty on metals (2) —
 —
  
Noncash and other costs, net —
 225
 —
  
Revenue adjustments, primarily for pricing        
on prior period open sales 59
 —
 —
  
Eliminations and other (1) (2) —
  
South America mining 1,023
 759
 134
  
Other miningc
 3,991
 2,796
 261
  
Corporate, other & eliminations (704) (753) 23
  
As reported in FCX’s consolidated financial statements $4,310
 $2,802
 $418
  
         
a.Includes silver sales of 1.0 million ounces ($16.15 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.
b.Includes charges totaling $216 million ($0.66 per pound of copper) associated with disputed Cerro Verde royalties for prior years.
c.Represents the combined total for our other mining operations, including North America copper mines, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.

South America Mining Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended September 30, 2020
(In millions)By-ProductCo-Product Method
MethodCopper
Othera
Total
Revenues, excluding adjustments$754 $754 $53 $807 
Site production and delivery, before net noncash
    and other costs shown below		459 432 38 470 
By-product credits(42)— — — 
Treatment charges40 40 — 40 
Royalty on metals1 1 — 1 
Net cash costs458 473 38 511 
DD&A105 98 7 105 
Noncash and other costs, net9 b8 1 9 
Total costs572 579 46 625 
Other revenue adjustments, primarily for pricing
    on prior period open sales		41 41 — 41 
Gross profit$223 $216 $7 $223 
Copper sales (millions of recoverable pounds)250 250 
Gross profit per pound of copper:
Revenues, excluding adjustments$3.02 $3.02 
Site production and delivery, before net noncash
    and other costs shown below		1.84 1.73 
By-product credits(0.17)— 
Treatment charges0.15 0.15 
Royalty on metals0.01 0.01 
Unit net cash costs1.83 1.89 
DD&A0.42 0.39 
Noncash and other costs, net0.04 b0.04 
Total unit costs2.29 2.32 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.16 0.16 
Gross profit per pound$0.89 $0.86 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$807 $470 $105 
Treatment charges(40)— — 
Royalty on metals(1)— — 
Noncash and other costs, net— 9 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		41 — — 
Eliminations and other(1)(2)— 
South America mining806 477 105 
Other miningc
4,122 3,022 268 
Corporate, other & eliminations(1,077)(1,034)21 
As reported in our consolidated financial statements$3,851 $2,465 $394 
      
Three Months Ended September 30, 2016     
(In millions) By-Product Co-Product Method 
  Method Copper 
Othera
 Total 
Revenues, excluding adjustments $709
 $709
 $50
 $759
 
Site production and delivery, before net noncash         
and other costs shown below 409
 386
 35
 421
 
By-product credits (38) —
 —
 —
 
Treatment charges 79
 79
 —
 79
 
Royalty on metals 2
 2
 —
 2
 
Net cash costs 452
 467
 35
 502
 
DD&A 134
 126
 8
 134
 
Noncash and other costs, net 4
 3
 1
 4
 
Total costs 590
 596
 44
 640
 
Revenue adjustments, primarily for pricing         
on prior period open sales (7) (7) —
 (7) 
Gross profit $112
 $106
 $6
 $112
 
          
Copper sales (millions of recoverable pounds) 323
 323
     
          
Gross profit per pound of copper:     
          
Revenues, excluding adjustments $2.19
 $2.19
     
Site production and delivery, before net noncash         
and other costs shown below 1.27
 1.20
     
By-product credits (0.12) —
     
Treatment charges 0.24
 0.24
     
Royalty on metals 0.01
 —
     
Unit net cash costs 1.40
 1.44
     
DD&A 0.41
 0.39
     
Noncash and other costs, net 0.01
 0.01
     
Total unit costs 1.82
 1.84
     
Revenue adjustments, primarily for pricing         
on prior period open sales (0.02) (0.02)     
Gross profit per pound $0.35
 $0.33
     
          
Reconciliation to Amounts Reported         
(In millions)   Production     
  Revenues and Delivery DD&A   
Totals presented above $759
 $421
 $134
   
Treatment charges (79) —
 —
   
Royalty on metals (2) —
 —
   
Noncash and other costs, net —
 4
 —
   
Revenue adjustments, primarily for pricing         
on prior period open sales (7) —
 —
   
Eliminations and other —
 (1) —
   
South America mining 671
 424
 134
   
Other miningb
 3,498
 2,621
 263
   
Corporate, other & eliminations (292) (516) 246
   
As reported in FCX’s consolidated financial statements $3,877
 $2,529
 $643
   
          
a.Includes silver sales of 952 thousand ounces ($21.72 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.
b.Represents the combined total for our other mining operations, including North America copper mines, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.

a.Includes silver sales of 0.9 million ounces ($24.84 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.

b.Includes charges totaling $5 million ($0.02 per pound of copper), primarily associated with the COVID-19 pandemic (including health and safety costs).
c.Represents the combined total for our other segments, as presented in Note 9.







60

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

    
Nine Months Ended September 30, 2017    
Nine months ended September 30, 2021Nine months ended September 30, 2021
(In millions) By-Product Co-Product Method(In millions)By-ProductCo-Product Method
 Method Copper 
Othera
 TotalMethodCopper
Othera
Total
Revenues, excluding adjustments $2,605
 $2,605
 $190
 $2,795
Revenues, excluding adjustments$3,238 $3,238 $267 $3,505 
Site production and delivery, before net noncash        
and other costs shown below 1,429
 1,340
 123
 1,463
Site production and delivery, before net noncash
and other costs shown below		Site production and delivery, before net noncash
and other costs shown below		1,690 b1,568 155 1,723 
By-product credits (156) —
 —
 —
By-product credits(234)— — — 
Treatment charges 204
 204
 —
 204
Treatment charges101 101 — 101 
Royalty on metals 6
 5
 1
 6
Royalty on metals8 7 1 8 
Net cash costs 1,483
 1,549
 124
 1,673
Net cash costs1,565 1,676 156 1,832 
DD&A 392
 365
 27
 392
DD&A306 282 24 306 
Noncash and other costs, net 234
b 
217
 17
 234
Noncash and other costs, net49 45 4 49 
Total costs 2,109
 2,131
 168
 2,299
Total costs1,920 2,003 184 2,187 
Revenue adjustments, primarily for pricing        
on prior period open sales 40
 40
 —
 40
Other revenue adjustments, primarily for pricing
on prior period open sales		Other revenue adjustments, primarily for pricing
on prior period open sales		98 98 — 98 
Gross profit $536
 $514
 $22
 $536
Gross profit$1,416 $1,333 $83 $1,416 
        
Copper sales (millions of recoverable pounds) 923
 923
    Copper sales (millions of recoverable pounds)769 769 
        
Gross profit per pound of copper:Gross profit per pound of copper:    Gross profit per pound of copper:
        
Revenues, excluding adjustments $2.82
 $2.82
    Revenues, excluding adjustments$4.21 $4.21 
Site production and delivery, before net noncash        
and other costs shown below 1.55
 1.45
    
Site production and delivery, before net noncash
and other costs shown below		Site production and delivery, before net noncash
and other costs shown below		2.20 b2.04 
By-product credits (0.17) —
    By-product credits(0.31)— 
Treatment charges 0.22
 0.22
    Treatment charges0.13 0.13 
Royalty on metals 0.01
 0.01
    Royalty on metals0.01 0.01 
Unit net cash costs 1.61
 1.68
    Unit net cash costs2.03 2.18 
DD&A 0.42
 0.40
    DD&A0.40 0.36 
Noncash and other costs, net 0.25
b 
0.23
    Noncash and other costs, net0.07 0.06 
Total unit costs 2.28
 2.31
    Total unit costs2.50 2.60 
Revenue adjustments, primarily for pricing        
on prior period open sales 0.04
 0.04
    
Other revenue adjustments, primarily for pricing
on prior period open sales		Other revenue adjustments, primarily for pricing
on prior period open sales		0.13 0.13 
Gross profit per pound $0.58
 $0.55
    Gross profit per pound$1.84 $1.74 
        
Reconciliation to Amounts Reported        Reconciliation to Amounts Reported
(In millions)   Production    
Production
 Revenues and Delivery DD&A  Revenuesand DeliveryDD&A
Totals presented above $2,795
 $1,463
 $392
  Totals presented above$3,505 $1,723 $306 
Treatment charges (204) —
 —
  Treatment charges(101)— — 
Royalty on metals (6) —
 —
  Royalty on metals(8)— — 
Noncash and other costs, net —
 234
 —
  Noncash and other costs, net— 49 — 
Revenue adjustments, primarily for pricing        
on prior period open sales 40
 —
 —
  
Other revenue adjustments, primarily for pricing
on prior period open sales		Other revenue adjustments, primarily for pricing
on prior period open sales		98 — — 
Eliminations and other 1
 (2) —
  Eliminations and other(1)(3)— 
South America mining 2,626
 1,695
 392
  South America mining3,493 1,769 306 
Other miningc
—
10,992
 8,126
 788
  
Other miningc
17,578 11,234 1,077 
Corporate, other & eliminations—
(2,256) (2,324) 77
  Corporate, other & eliminations(4,390)(4,141)47 
As reported in FCX’s consolidated financial statements $11,362
 $7,497
 $1,257
  
As reported in our consolidated financial statementsAs reported in our consolidated financial statements$16,681 $8,862 $1,430 
        
a.Includes silver sales of 2.8 million ounces ($16.66 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.
b.Includes charges totaling $216 million ($0.23 per pound of copper) associated with disputed Cerro Verde royalties for prior years.
c.Represents the combined total for our other mining operations, including North America copper mines, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.

a.Includes silver sales of 2.7 million ounces ($25.81 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to FCX's molybdenum sales company at market-based pricing.
b.Includes nonrecurring charges totaling $74 million ($0.10 per pound of copper) associated with labor related charges at Cerro Verde for agreements reached with approximately 65 percent of its hourly employees.
c.Represents the combined total for our other segments, as presented in Note 9.




61
Table of Contents

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

Nine months ended September 30, 2020
(In millions)By-ProductCo-Product Method
MethodCopper
Othera
Total
Revenues, excluding adjustments$1,994 $1,994 $139 $2,133 
Site production and delivery, before net noncash
    and other costs shown below		1,313 1,231 111 1,342 
By-product credits(110)— — — 
Treatment charges111 111 — 111 
Royalty on metals4 4 — 4 
Net cash costs1,318 1,346 111 1,457 
DD&A316 294 22 316 
Metals inventory adjustments3 3 — 3 
Noncash and other costs, net109 b103 6 109 
Total costs1,746 1,746 139 1,885 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(70)(70)— (70)
Gross profit$178 $178 $— $178 
Copper sales (millions of recoverable pounds)716 716 
Gross profit per pound of copper:
Revenues, excluding adjustments$2.79 $2.79 
Site production and delivery, before net noncash
    and other costs shown below		1.83 1.72 
By-product credits(0.15)— 
Treatment charges0.15 0.15 
Royalty on metals0.01 0.01 
Unit net cash costs1.84 1.88 
DD&A0.44 0.41 
Metals inventory adjustments— — 
Noncash and other costs, net0.16 b0.15 
Total unit costs2.44 2.44 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.10)(0.10)
Gross profit per pound$0.25 $0.25 
Reconciliation to Amounts Reported
Metals
ProductionInventory
Revenuesand DeliveryDD&AAdjustments
Totals presented above$2,133 $1,342 $316 $3 
Treatment charges(111)— — — 
Royalty on metals(4)— — — 
Noncash and other costs, net— 109 — — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(70)— — — 
Eliminations and other(1)(2)(1)— 
South America mining1,947 1,449 315 3 
Other miningc
10,530 8,631 727 63 
Corporate, other & eliminations(2,774)(2,676)51 26 
As reported in our consolidated financial statements$9,703 $7,404 $1,093 $92 
a.Includes silver sales of 2.5 million ounces ($19.58 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to FCX's molybdenum sales company at market-based pricing.
b.Includes charges totaling $91 million ($0.13 per pound of copper) primarily associated with idle facility (Cerro Verde) and contract cancellation costs related to the COVID-19 pandemic and employee separation costs associated with the April 2020 revised operating plans.
c.Represents the combined total for our other segments, as presented in Note 9.


62
      
Nine Months Ended September 30, 2016     
(In millions) By-Product Co-Product Method 
  Method Copper 
Othera
 Total 
Revenues, excluding adjustments $2,115
 $2,115
 $129
 $2,244
 
Site production and delivery, before net noncash         
and other costs shown below 1,199
 1,140
 88
 1,228
 
By-product credits (100) —
 —
 —
 
Treatment charges 230
 230
 —
 230
 
Royalty on metals 5
 5
 —
 5
 
Net cash costs 1,334
 1,375
 88
 1,463
 
DD&A 401
 379
 22
 401
 
Noncash and other costs, net 15
 14
 1
 15
 
Total costs 1,750
 1,768
 111
 1,879
 
Revenue adjustments, primarily for pricing         
on prior period open sales 9
 9
 —
 9
 
Gross profit $374
 $356
 $18
 $374
 
          
Copper sales (millions of recoverable pounds) 973
 973
     
          
Gross profit per pound of copper:     
          
Revenues, excluding adjustments $2.17
 $2.17
     
Site production and delivery, before net noncash         
and other costs shown below 1.23
 1.17
     
By-product credits (0.10) —
     
Treatment charges 0.24
 0.24
     
Royalty on metals —
 —
     
Unit net cash costs 1.37
 1.41
     
DD&A 0.41
 0.39
     
Noncash and other costs, net 0.02
 0.02
     
Total unit costs 1.80
 1.82
     
Revenue adjustments, primarily for pricing         
on prior period open sales 0.01
 0.01
     
Gross profit per pound $0.38
 $0.36
     
          
Reconciliation to Amounts Reported         
(In millions)   Production     
  Revenues and Delivery DD&A   
Totals presented above $2,244
 $1,228
 $401
   
Treatment charges (230) —
 —
   
Royalty on metals (5) —
 —
   
Noncash and other costs, net —
 15
 —
   
Revenue adjustments, primarily for pricing         
on prior period open sales 9
 —
 —
   
Eliminations and other 1
 (3) 1
   
South America mining 2,019
 1,240
 402
   
Other miningb
 9,694
 7,735

771
   
Corporate, other & eliminations (1,260) (991) 764
   
As reported in FCX’s consolidated financial statements $10,453
 $7,984
 $1,937
   
          
a.Includes silver sales of 2.8 million ounces ($17.99 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.
b.Represents the combined total for our other mining operations, including North America copper mines, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.


Table of Contents

Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs
     
Three Months Ended September 30, 2017    
(In millions) By-Product Co-Product Method
  Method Copper Gold 
Silvera
 Total
Revenues, excluding adjustments $762
 $762
 $453
 $11
 $1,226
Site production and delivery, before net noncash          
and other costs shown below 364
 226
 134
 4
 364
Gold and silver credits (466) —
 —
 —
 —
Treatment charges 71
 44
 26
 1
 71
Export duties 21
 13
 8
 —
 21
Royalty on metals 43
 26
 17
 —
 43
Net cash costs 33
 309
 185
 5
 499
DD&A 136
 85
 50
 1
 136
Noncash and other costs, net 24
b 
15
 9
 —
 24
Total costs 193
 409
 244
 6
 659
Revenue adjustments, primarily for pricing on          
prior period open sales 28
 28
 2
 —
 30
PT Smelting intercompany loss (18) (11) (7) —
 (18)
Gross profit $579
 $370
 $204
 $5
 $579
           
Copper sales (millions of recoverable pounds) 258
 258
      
Gold sales (thousands of recoverable ounces)     352
    
           
Gross profit per pound of copper/per ounce of gold:      
           
Revenues, excluding adjustments $2.95
 $2.95
 $1,290
    
Site production and delivery, before net noncash          
and other costs shown below 1.41
 0.87
 383
    
Gold and silver credits (1.80) —
 —
    
Treatment charges 0.27
 0.17
 74
    
Export duties 0.08
 0.05
 22
    
Royalty on metals 0.17
 0.10
 48
    
Unit net cash costs 0.13
 1.19
 527
    
DD&A 0.53
 0.33
 143
    
Noncash and other costs, net 0.09
b 
0.06
 25
    
Total unit costs 0.75
 1.58
 695
    
Revenue adjustments, primarily for pricing on          
prior period open sales 0.11
 0.11
 4
    
PT Smelting intercompany loss (0.07) (0.04) (19)    
Gross profit per pound/ounce $2.24
 $1.44
 $580
    
           
Reconciliation to Amounts Reported          
(In millions)   Production      
  Revenues and Delivery DD&A    
Totals presented above $1,226
 $364
 $136
    
Treatment charges (71) —
 —
    
Export duties (21) —
 —
    
Royalty on metals (43) —
 —
    
Noncash and other costs, net —
 24
 —
    
Revenue adjustments, primarily for pricing on          
prior period open sales 30
 —
 —
    
PT Smelting intercompany loss —
 18
 —
    
Indonesia mining 1,121
 406
 136
    
Other miningc
 3,893
 3,149
 259
    
Corporate, other & eliminations (704) (753) 23
    
As reported in FCX’s consolidated financial statements $4,310
 $2,802
 $418
    
           
a.Includes silver sales of 666 thousand ounces ($16.64 per ounce average realized price).
b.Includes $9 million ($0.03 per pound of copper) of costs charged directly to production and delivery costs as a result of workforce reductions.
c.Represents the combined total for our other mining operations, including North America copper mines, South America mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.
Table of Contents

Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs
 
Three Months Ended September 30, 2016     
(In millions) By-Product Co-Product Method 
  Method Copper Gold 
Silvera
 Total 
Revenues, excluding adjustments $729
 $729
 $408
 $18
 $1,155
 
Site production and delivery, before net noncash           
and other costs shown below 453
 286
 160
 7
 453
 
Gold and silver credits (427) —
 —
 —
 —
 
Treatment charges 90
 57
 32
 1
 90
 
Export duties 34
 21
 12
 1
 34
 
Royalty on metals 40
 24
 15
 1
 40
 
Net cash costs 190
 388
 219
 10
 617
 
DD&A 110
 69
 39
 2
 110
 
Noncash and other costs, net 16
b 
11
 5
 —
 16
 
Total costs 316
 468
 263
 12
 743
 
Revenue adjustments, primarily for pricing on           
prior period open sales (6) (6) —
 1
 (5) 
PT Smelting intercompany loss (9) (6) (3) —
 (9) 
Gross profit $398
 $249
 $142
 $7
 $398
 
            
Copper sales (millions of recoverable pounds) 332
 332
       
Gold sales (thousands of recoverable ounces)     307
     
            
Gross profit per pound of copper/per ounce of gold:       
            
Revenues, excluding adjustments $2.20
 $2.20
 $1,327
     
Site production and delivery, before net noncash           
and other costs shown below 1.37
 0.86
 520
     
Gold and silver credits (1.29) —
 —
     
Treatment charges 0.27
 0.17
 104
     
Export duties 0.10
 0.07
 39
     
Royalty on metals 0.12
 0.07
 50
     
Unit net cash costs 0.57
 1.17
 713
     
DD&A 0.33
 0.21
 125
     
Noncash and other costs, net 0.05
b 
0.03
 19
     
Total unit costs 0.95
 1.41
 857
     
Revenue adjustments, primarily for pricing on           
prior period open sales (0.02) (0.02) 1
     
PT Smelting intercompany loss (0.03) (0.02) (10)     
Gross profit per pound/ounce $1.20
 $0.75
 $461
     
            
Reconciliation to Amounts Reported           
(In millions)   Production       
  Revenues and Delivery DD&A     
Totals presented above $1,155
 $453
 $110
     
Treatment charges (90) —
 —
     
Export duties (34) —
 —
     
Royalty on metals (40) —
 —
     
Noncash and other costs, net —
 16
 —
     
Revenue adjustments, primarily for pricing on           
prior period open sales (5) —
 —
     
PT Smelting intercompany loss —
 9
 —
     
Indonesia mining 986
 478
 110
     
Other miningc
 3,183
 2,567

287
     
Corporate, other & eliminations (292) (516) 246
     
As reported in FCX’s consolidated financial statements $3,877
 $2,529
 $643
     
            
a.Includes silver sales of 928 thousand ounces ($18.97 per ounce average realized price).
b.Includes asset retirement charges of $17 million ($0.05 per pound of copper).
c.Represents the combined total for our other mining operations, including North America copper mines, South America mining, Molybdenum    mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.

Table of Contents

Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended September 30, 2021
(In millions)By-ProductCo-Product Method
MethodCopperGold
Silvera
Total
Revenues, excluding adjustments$1,555 $1,555 $701 $37 $2,293 
Site production and delivery, before net noncash
    and other costs shown below		553 375 169 9 553 
Gold and silver credits(744)— — — — 
Treatment charges90 61 27 2 90 
Export duties71 48 22 1 71 
Royalty on metals94 67 25 2 94 
Net cash costs64 551 243 14 808 
DD&A280 190 86 4 280 
Total costs344 741 329 18 1,088 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(2)(2)6 — 4 
PT Smelting intercompany loss(16)(11)(5)— (16)
Gross profit$1,193 $801 $373 $19 $1,193 
Copper sales (millions of recoverable pounds)378 378 
Gold sales (thousands of recoverable ounces)399 
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments$4.11 $4.11 $1,757 
Site production and delivery, before net noncash
    and other costs shown below		1.46 0.99 424 
Gold and silver credits(1.97)— — 
Treatment charges0.24 0.16 69 
Export duties0.19 0.13 54 
Royalty on metals0.25 0.18 63 
Unit net cash costs0.17 1.46 610 
DD&A0.74 0.50 215 
Total unit costs0.91 1.96 825 
Other revenue adjustments, primarily for pricing
    on prior period open sales		— — 16 
PT Smelting intercompany loss(0.04)(0.03)(12)
Gross profit per pound/ounce$3.16 $2.12 $936 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$2,293 $553 $280 
Treatment charges(90)— — 
Export duties(71)— — 
Royalty on metals(94)— — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		4 — — 
PT Smelting intercompany loss— 16 — 
Indonesia mining2,042 569 280 
Other miningb
5,672 4,070 232 
Corporate, other & eliminations(1,631)(1,630)16 
As reported in our consolidated financial statements$6,083 $3,009 $528 
     
Nine Months Ended September 30, 2017    
(In millions) By-Product Co-Product Method
  Method Copper Gold 
Silvera
 Total
Revenues, excluding adjustments $1,772
 $1,772
 $1,206
 $32
 $3,010
Site production and delivery, before net noncash          
and other costs shown below 1,076
 634
 431
 11
 1,076
Gold and silver credits (1,247) —
 —
 —
 —
Treatment charges 170
 100
 68
 2
 170
Export duties 62
 36
 25
 1
 62
Royalty on metals 106
 60
 45
 1
 106
Net cash costs 167
 830
 569
 15
 1,414
DD&A 372
 219
 149
 4
 372
Noncash and other costs, net 140
b 
82
 56
 2
 140
Total costs 679
 1,131
 774
 21
 1,926
Revenue adjustments, primarily for pricing on          
prior period open sales 39
 39
 9
 —
 48
PT Smelting intercompany loss (17) (10) (7) —
 (17)
Gross profit $1,115
 $670
 $434
 $11
 $1,115
           
Copper sales (millions of recoverable pounds) 630
 630
      
Gold sales (thousands of recoverable ounces)     956
    
           
Gross profit per pound of copper/per ounce of gold:      
           
Revenues, excluding adjustments $2.81
 $2.81
 $1,261
    
Site production and delivery, before net noncash          
and other costs shown below 1.71
 1.01
 451
    
Gold and silver credits (1.98) —
 —
    
Treatment charges 0.27
 0.16
 71
    
Export duties 0.10
 0.06
 26
    
Royalty on metals 0.16
 0.09
 47
    
Unit net cash costs 0.26
 1.32
 595
    
DD&A 0.59
 0.35
 156
    
Noncash and other costs, net 0.22
b 
0.13
 58
    
Total unit costs 1.07
 1.80
 809
    
Revenue adjustments, primarily for pricing on          
prior period open sales 0.06
 0.06
 9
    
PT Smelting intercompany loss (0.03) (0.01) (7)    
Gross profit per pound/ounce $1.77
 $1.06
 $454
    
           
Reconciliation to Amounts Reported          
(In millions)   Production      
  Revenues and Delivery DD&A    
Totals presented above $3,010
 $1,076
 $372
    
Treatment charges (170) —
 —
    
Export duties (62) —
 —
    
Royalty on metals (106) —
 —
    
Noncash and other costs, net —
 140
 —
    
Revenue adjustments, primarily for pricing on          
prior period open sales 48
 —
 —
    
PT Smelting intercompany loss —
 17
 —
    
Indonesia mining 2,720
 1,233
 372
    
Other miningc
 10,898
 8,588
 808
    
Corporate, other & eliminations (2,256) (2,324) 77
    
As reported in FCX’s consolidated financial statements $11,362
 $7,497
 $1,257
    
           
a.Includes silver sales of 1.9 million ounces ($16.70 per ounce average realized price).
b.Includes $112 million ($0.18 per pound of copper) of costs charged directly to production and delivery costs as a result of workforce reductions.
c.Represents the combined total for our other mining operations, including North America copper mines, South America mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.

a.Includes silver sales of 1.7 million ounces ($22.22 per ounce average realized price).

b.Represents the combined total for our other segments, as presented in Note 9.









63
Table of Contents

Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended September 30, 2020
(In millions)By-ProductCo-Product Method
MethodCopperGold
Silvera
Total
Revenues, excluding adjustments$659 $659 $437 $24 $1,120 
Site production and delivery, before net noncash
    and other costs shown below		376 221 147 8 376 
Gold and silver credits(474)— — — — 
Treatment charges58 34 23 1 58 
Export duties24 14 9 1 24 
Royalty on metals45 26 18 1 45 
Net cash costs29 295 197 11 503 
DD&A150 88 59 3 150 
Noncash and other costs, net24 b14 9 1 24 
Total costs203 397 265 15 677 
Other revenue adjustments, primarily for pricing
    on prior period open sales		28 28 11 2 41 
PT Smelting intercompany loss(17)(10)(7)— (17)
Gross profit$467 $280 $176 $11 $467 
Copper sales (millions of recoverable pounds)219 219 
Gold sales (thousands of recoverable ounces)230 
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments$3.00 $3.00 $1,902 
Site production and delivery, before net noncash
    and other costs shown below		1.71 1.01 639 
Gold and silver credits(2.16)— — 
Treatment charges0.26 0.16 98 
Export duties0.11 0.06 40 
Royalty on metals0.21 0.12 79 
Unit net cash costs0.13 1.35 856 
DD&A0.68 0.40 256 
Noncash and other costs, net0.11 b0.06 40 
Total unit costs0.92 1.81 1,152 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.13 0.13 49 
PT Smelting intercompany loss(0.08)(0.05)(31)
Gross profit per pound/ounce$2.13 $1.27 $768 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$1,120 $376 $150 
Treatment charges(58)— — 
Export duties(24)— — 
Royalty on metals(53)(8)— 
Noncash and other costs, net— 24 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		41 — — 
PT Smelting intercompany loss— 17 — 
Indonesia mining1,026 409 150 
Other miningc
3,902 3,090 223 
Corporate, other & eliminations(1,077)(1,034)21 
As reported in our consolidated financial statements$3,851 $2,465 $394 
a.Includes silver sales of 1.0 million ounces ($24.29 per ounce average realized price).
b.Includes COVID-19 related costs (including one-time incremental employee benefits and health and safety costs) totaling $10 million ($0.05 per pound of copper).
c.Represents the combined total for our other segments, as presented in Note 9.



64
      
Nine Months Ended September 30, 2016     
(In millions) By-Product Co-Product Method 
  Method Copper Gold 
Silvera
 Total 
Revenues, excluding adjustments $1,525
 $1,525
 $844
 $36
 $2,405
 
Site production and delivery, before net noncash           
and other costs shown below 1,190
 754
 418
 18
 1,190
 
Gold and silver credits (897) —
 —
 —
 —
 
Treatment charges 202
 128
 71
 3
 202
 
Export duties 63
 40
 22
 1
 63
 
Royalty on metals 84
 51
 32
 1
 84
 
Net cash costs 642
 973
 543
 23
 1,539
 
DD&A 284
 180
 100
 4
 284
 
Noncash and other costs, net 31
b 
20
 10
 1
 31
 
Total costs 957
 1,173
 653
 28
 1,854
 
Revenue adjustments, primarily for pricing on           
prior period open sales —
 —
 17
 —
 17
 
PT Smelting intercompany loss (7) (5) (2) —
 (7) 
Gross profit $561
 $347
 $206
 $8
 $561
 
            
Copper sales (millions of recoverable pounds) 702
 702
       
Gold sales (thousands of recoverable ounces)     653
     
            
Gross profit per pound of copper/per ounce of gold:       
            
Revenues, excluding adjustments $2.17
 $2.17
 $1,292
     
Site production and delivery, before net noncash           
and other costs shown below 1.70
 1.08
 639
     
Gold and silver credits (1.28) —
 —
     
Treatment charges 0.29
 0.18
 109
     
Export duties 0.09
 0.06
 34
     
Royalty on metals 0.12
 0.07
 48
     
Unit net cash costs 0.92
 1.39
 830
     
DD&A 0.40
 0.25
 152
     
Noncash and other costs, net 0.04
b 
0.03
 16
     
Total unit costs 1.36
 1.67
 998
     
Revenue adjustments, primarily for pricing on           
prior period open sales —
 —
 25
     
PT Smelting intercompany loss (0.01) (0.01) (4)     
Gross profit per pound/ounce $0.80
 $0.49
 $315
     
            
Reconciliation to Amounts Reported           
(In millions)   Production       
  Revenues and Delivery DD&A     
Totals presented above $2,405
 $1,190
 $284
     
Treatment charges (202) —
 —
     
Export duties (63) —
 —
     
Royalty on metals (84) —
 —
     
Noncash and other costs, net —
 31
 —
     
Revenue adjustments, primarily for pricing on           
prior period open sales 17
 —
 —
     
PT Smelting intercompany loss —
 7
 —
     
Indonesia mining 2,073
 1,228
 284
     
Other miningc
 9,640
 7,747
 889
     
Corporate, other & eliminations (1,260) (991) 764
     
As reported in FCX’s consolidated financial statements $10,453
 $7,984
 $1,937
     
            
a.Includes silver sales of 2.0 million ounces ($17.95 per ounce average realized price).
b.Includes asset retirement charges of $17 million ($0.02 per pound of copper).
c.Represents the combined total for our other mining operations, including North America copper mines, South America mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.


Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs
Nine months ended September 30, 2021
(In millions)By-ProductCo-Product Method
MethodCopperGold
Silvera
Total
Revenues, excluding adjustments$3,989 $3,989 $1,703 $104 $5,796 
Site production and delivery, before net noncash
    and other costs shown below		1,412 972 415 25 1,412 
Gold and silver credits(1,803)— — — — 
Treatment charges229 158 67 4 229 
Export duties145 99 43 3 145 
Royalty on metals234 167 63 4 234 
Net cash costs217 1,396 588 36 2,020 
DD&A726 499 213 14 726 
Noncash and other costs, net3 b2 1 — 3 
Total costs946 1,897 802 50 2,749 
Other revenue adjustments, primarily for pricing
    on prior period open sales		71 71 (4)— 67 
PT Smelting intercompany loss(106)(73)(31)(2)(106)
Gross profit$3,008 $2,090 $866 $52 $3,008 
Copper sales (millions of recoverable pounds)946 946 
Gold sales (thousands of recoverable ounces)957 
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments$4.21 $4.21 $1,780 
Site production and delivery, before net noncash
    and other costs shown below		1.49 1.03 434 
Gold and silver credits(1.91)— — 
Treatment charges0.24 0.17 70 
Export duties0.15 0.10 45 
Royalty on metals0.26 0.18 66 
Unit net cash costs0.23 1.48 615 
DD&A0.76 0.52 222 
Noncash and other costs, net0.01 b0.01 1 
Total unit costs1.00 2.01 838 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.08 0.08 (5)
PT Smelting intercompany loss(0.11)(0.08)(33)
Gross profit per pound/ounce$3.18 $2.20 $904 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$5,796 $1,412 $726 
Treatment charges(229)— — 
Export duties(145)— — 
Royalty on metals(234)— — 
Noncash and other costs, net31 34 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		67 — — 
PT Smelting intercompany loss— 106 — 
Indonesia mining5,286 1,552 726 
Other miningc
15,785 11,451 657 
Corporate, other & eliminations(4,390)(4,141)47 
As reported in our consolidated financial statements$16,681 $8,862 $1,430 
a.Includes silver sales of 4.3 million ounces ($24.50 per ounce average realized price).
b.Includes credits of $31 million ($0.03 per pound of copper) associated with adjustments to prior year treatment and refining charges and charges of $16 million ($0.02 per pound of copper) associated with a potential settlement of an administrative fine levied by the Indonesia government.
c.Represents the combined total for our other segments, as presented in Note 9.

65
Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs
Nine months ended September 30, 2020
(In millions)By-ProductCo-Product Method
MethodCopperGold
Silvera
Total
Revenues, excluding adjustments$1,447 $1,447 $994 $48 $2,489 
Site production and delivery, before net noncash
    and other costs shown below		1,062 617 424 21 1,062 
Gold and silver credits(1,046)— — — — 
Treatment charges143 83 57 3 143 
Export duties43 25 17 1 43 
Royalty on metals92 53 38 1 92 
Net cash costs294 778 536 26 1,340 
DD&A375 218 150 7 375 
Noncash and other costs, net56 b33 22 1 56 
Total costs725 1,029 708 34 1,771 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(20)(20)4 — (16)
PT Smelting intercompany loss(18)(11)(7)— (18)
Gross profit$684 $387 $283 $14 $684 
Copper sales (millions of recoverable pounds)518 518 
Gold sales (thousands of recoverable ounces)549 
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments$2.79 $2.79 $1,810 
Site production and delivery, before net noncash
    and other costs shown below		2.05 1.19 773 
Gold and silver credits(2.02)— — 
Treatment charges0.28 0.16 104 
Export duties0.08 0.05 31 
Royalty on metals0.18 0.10 68 
Unit net cash costs0.57 1.50 976 
DD&A0.72 0.42 273 
Noncash and other costs, net0.11 b0.07 41 
Total unit costs1.40 1.99 1,290 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.03)(0.03)8 
PT Smelting intercompany loss(0.04)(0.02)(13)
Gross profit per pound/ounce$1.32 $0.75 $515 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$2,489 $1,062 $375 
Treatment charges(143)— — 
Export duties(43)— — 
Royalty on metals(98)(6)— 
Noncash and other costs, net— 56 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(16)— — 
PT Smelting intercompany loss— 18 — 
Indonesia mining2,189 1,130 375 
Other miningc
10,288 8,950 667 
Corporate, other & eliminations(2,774)(2,676)51 
As reported in our consolidated financial statements$9,703 $7,404 $1,093 
a.Includes silver sales of 2.3 million ounces ($20.73 per ounce average realized price).
b.Includes COVID-19 related costs (including one-time incremental employee benefits and health and safety costs) of $14 million ($0.03 per pound of copper).
c.Represents the combined total for our segments, as presented in Note 9.
66
Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended September 30,
(In millions)20212020
Revenues, excluding adjustmentsa
$158 $47 
Site production and delivery, before net noncash
    and other costs shown below		67 47 
Treatment charges and other7 5 
Net cash costs74 52 
DD&A19 13 
Metals inventory adjustments— 3 
Noncash and other costs, net3 

4 
Total costs96 72 
Gross profit (loss)$62 $(25)
Molybdenum sales (millions of recoverable pounds)a
9 6 
Gross profit (loss) per pound of molybdenum:
Revenues, excluding adjustmentsa
$18.13 $8.83 
Site production and delivery, before net noncash
    and other costs shown below		7.70 8.88 
Treatment charges and other0.84 0.84 
Unit net cash costs8.54 9.72 
DD&A2.14 2.38 
Metals inventory adjustments— 0.67 
Noncash and other costs, net0.30 

0.54 
Total unit costs10.98 13.31 
Gross profit (loss) per pound$7.15 $(4.48)
Reconciliation to Amounts Reported
Metals
ProductionInventory
Three Months Ended September 30, 2021Revenuesand DeliveryDD&AAdjustments
Totals presented above$158 $67 $19 $— 
Treatment charges and other(7)— — — 
Noncash and other costs, net— 3 — — 
Molybdenum mines151 70 19 — 
Other miningb
7,563 4,569 493 13 
Corporate, other & eliminations(1,631)(1,630)16 1 
As reported in our consolidated financial statements$6,083 $3,009 $528 $14 
Three Months Ended September 30, 2020
Totals presented above$47 $47 $13 $3 
Treatment charges and other(5)— — — 
Noncash and other costs, net— 4 — — 
Molybdenum mines42 51 13 3 
Other miningb
4,886 3,448 360 (2)
Corporate, other & eliminations(1,077)(1,034)21 8 
As reported in our consolidated financial statements$3,851 $2,465 $394 $9 
         
 Three Months Ended September 30,   
(In millions)2017 2016     
         
Revenues, excluding adjustmentsa
$72
 $51
     
Site production and delivery, before net noncash
 and other costs shown below
56
 53
     
Treatment charges and other7
 5
     
Net cash costs63
 58
     
DD&A20
 15
     
Noncash and other costs, net2
 4
     
Total costs85
 77
     
Gross loss$(13) $(26)     
         
Molybdenum sales (millions of recoverable pounds)a
8
 5
     
         
Gross loss per pound of molybdenum:   
         
Revenues, excluding adjustmentsa
$9.02
 $9.08
     
Site production and delivery, before net noncash
 and other costs shown below
7.05
 9.42
     
Treatment charges and other0.85
 0.86
     
Unit net cash costs7.90
 10.28
     
DD&A2.44
 2.63
     
Noncash and other costs, net0.28
 0.77
     
Total unit costs10.62
 13.68
     
Gross loss per pound$(1.60) $(4.60)     
         
Reconciliation to Amounts Reported        
(In millions)        
         
   Production     
Three Months Ended September 30, 2017Revenues and Delivery DD&A   
Totals presented above$72
 $56
 $20
   
Treatment charges and other(7) —
 —
   
Noncash and other costs, net—
 2
 —
   
Molybdenum mines65
 58
 20
   
Other miningb
4,949
 3,497
 375
   
Corporate, other & eliminations(704) (753) 23
   
As reported in FCX’s consolidated financial statements$4,310
 $2,802
 $418
   
         
Three Months Ended September 30, 2016        
Totals presented above$51
 $53
 $15
   
Treatment charges and other(5) —
 —
   
Noncash and other costs, net—
 4
 —
   
Molybdenum mines46
 57
 15
   
Other miningb
4,123
 2,988
 382
   
Corporate, other & eliminations(292) (516) 246
   
As reported in FCX’s consolidated financial statements$3,877
 $2,529
 $643
   
         
a.Reflects sales of the Molybdenum mines’ production to our molybdenum sales company at market-based pricing. On a consolidated basis, realizations are based on the actual contract terms for sales to third parties; as a result, our consolidated average realized price per pound of molybdenum will differ from the amounts reported in this table.
a.Reflects sales of the Molybdenum mines’ production to our molybdenum sales company at market-based pricing. On a consolidated basis, realizations are based on the actual contract terms for sales to third parties; as a result, our consolidated average realized price per pound of molybdenum will differ from the amounts reported in this table.
b.Represents the combined total for our other mining operations, including North America copper mines, South America mining, Indonesia mining, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10. Also includes amounts associated with our molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.

b.Represents the combined total for our other segments, as presented in Note 9. Also includes amounts associated with our molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.






67

Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs
Nine months ended September 30,
(In millions)20212020
Revenues, excluding adjustmentsa
$329 $187 
Site production and delivery, before net noncash
    and other costs shown below		175 164 
Treatment charges and other19 16 
Net cash costs194 180 
DD&A51 44 
Metals inventory adjustments1 8 
Noncash and other costs, net8 14 b
Total costs254 246 
Gross profit (loss)$75 $(59)
Molybdenum sales (millions of recoverable pounds)a
23 19 
Gross profit (loss) per pound of molybdenum:
Revenues, excluding adjustmentsa
$14.41 $9.92 
Site production and delivery, before net noncash
    and other costs shown below		7.69 8.73 
Treatment charges and other0.85 0.85 
Unit net cash costs8.54 9.58 
DD&A2.21 2.31 
Metals inventory adjustments0.04 0.44 
Noncash and other costs, net0.34 0.72 b
Total unit costs11.13 13.05 
Gross profit (loss) per pound$3.28 $(3.13)
Reconciliation to Amounts Reported
Metals
ProductionInventory
Nine months ended September 30, 2021Revenuesand DeliveryDD&AAdjustments
Totals presented above$329 $175 $51 $1 
Treatment charges and other(19)— — — 
Noncash and other costs, net— 8 — — 
Molybdenum mines310 183 51 1 
Other miningc
20,761 12,820 1,332 13 
Corporate, other & eliminations(4,390)(4,141)47 1 
As reported in our consolidated financial statements$16,681 $8,862 $1,430 $15 
Nine months ended September 30, 2020
Totals presented above$187 $164 $44 $8 
Treatment charges and other(16)— — — 
Noncash and other costs, net— 14 — — 
Molybdenum mines171 178 44 8 
Other miningc
12,306 9,902 998 58 
Corporate, other & eliminations(2,774)(2,676)51 26 
As reported in our consolidated financial statements$9,703 $7,404 $1,093 $92 
a.Reflects sales of the Molybdenum mines’ production to our molybdenum sales company at market-based pricing. On a consolidated basis, realizations are based on the actual contract terms for sales to third parties; as a result, our consolidated average realized price per pound of molybdenum will differ from the amounts reported in this table.
b.Includes charges totaling $7 million ($0.36 per pound of molybdenum) primarily associated with contract cancellation costs related to the COVID-19 pandemic and employee separation costs associated with April 2020 revised operating plans.
c.Represents the combined total for our other segments, as presented in Note 9. Also includes amounts associated with our molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.


68
 Nine Months Ended September 30,   
(In millions)2017 2016     
         
Revenues, excluding adjustmentsa
$220
 $153
     
Site production and delivery, before net noncash
 and other costs shown below
164
 146
     
Treatment charges and other21
 17
     
Net cash costs185
 163
     
DD&A58
 51
     
Noncash and other costs, net5
 13
     
Total costs248
 227
     
Gross loss$(28) $(74)     
         
Molybdenum sales (millions of recoverable pounds)a
24
 19
     
         
Gross loss per pound of molybdenum:   
         
Revenues, excluding adjustmentsa
$9.05
 $7.94
     
Site production and delivery, before net noncash
 and other costs shown below
6.75
 7.53
     
Treatment charges and other0.85
 0.86
     
Unit net cash costs7.60
 8.39
     
DD&A2.38
 2.65
     
Noncash and other costs, net0.23
 0.72
     
Total unit costs10.21
 11.76
     
Gross loss per pound$(1.16) $(3.82)     
         
Reconciliation to Amounts Reported        
(In millions)        
         
   Production     
Nine Months Ended September 30, 2017Revenues and Delivery DD&A   
Totals presented above$220
 $164
 $58
   
Treatment charges and other(21) —
 —
   
Noncash and other costs, net—
 5
 —
   
Molybdenum mines199
 169
 58
   
Other miningb
13,419
 9,652
 1,122
   
Corporate, other & eliminations(2,256) (2,324) 77
   
As reported in FCX’s consolidated financial statements$11,362
 $7,497
 $1,257
   
         
Nine Months Ended September 30, 2016        
Totals presented above$153
 $146
 $51
   
Treatment charges and other(17) —
 —
   
Noncash and other costs, net—
 13
 —
   
Molybdenum mines136
 159
 51
   
Other miningb
11,577
 8,816
 1,122
   
Corporate, other & eliminations(1,260) (991) 764
   
As reported in FCX’s consolidated financial statements$10,453
 $7,984
 $1,937
   
         
a.Reflects sales of the Molybdenum mines’ production to our molybdenum sales company at market-based pricing. On a consolidated basis, realizations are based on the actual contract terms for sales to third parties; as a result, our consolidated average realized price per pound of molybdenum will differ from the amounts reported in this table.
b.Represents the combined total for our other mining operations, including North America copper mines, South America mining, Indonesia mining, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10. Also includes amounts associated with our molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.

GUARANTOR SUMMARIZED FINANCIAL INFORMATION

All of the senior notes issued by FCX are fully and unconditionally guaranteed on a senior basis jointly and severally by Freeport-McMoRan Oil & Gas LLC (FM O&G LLC), as guarantor, which is a 100-percent-owned subsidiary of FCX Oil & Gas LLC (FM O&G) and FCX. The guarantee is an unsecured obligation of the guarantor and ranks equal in right of payment with all existing and future indebtedness of FM O&G LLC, including indebtedness under our revolving credit facility. The guarantee ranks senior in right of payment with all of FM O&G LLC’s future subordinated obligations and is effectively subordinated in right of payment to any debt of FM O&G LLC’s subsidiaries. The indentures provide that FM O&G LLC’s guarantee obligations may be released or terminated upon: (i) the sale of all or substantially all of the equity interests or assets of FM O&G LLC to a third party that is not our subsidiary or our affiliate; (ii) FM O&G LLC no longer having any obligations under any FM O&G senior notes or any refinancing thereof and no longer being a co-borrower or guarantor of any of our obligations under the revolving credit facility or any other senior debt or, in each case, any refinancing thereof; or (iii) the discharge of our obligations under the indentures in accordance with their terms.

The following summarized financial data includes information regarding FCX, as issuer, FM O&G LLC, as guarantor, and all our other non-guarantor subsidiaries at September 30, 2021, and December 31, 2020, and for the nine months ended September 30, 2021.

FCXFM O&G LLCNon-guarantorConsolidated
IssuerGuarantorSubsidiariesEliminationsFCX
As of September 30, 2021
Current assets$151 $745 $13,815 $(920)$13,791 
Noncurrent assets432 6 33,078 (390)33,126 
Current liabilities717 39 5,635 (868)5,523 
Noncurrent liabilities9,050 11,405 13,975 (15,567)18,863 
As of December 31, 2020
Current assets$65 $697 $9,287 $(746)$9,303 
Noncurrent assets785 6 32,806 (756)32,841 
Current liabilities187 31 3,964 (765)3,417 
Noncurrent liabilities9,433 11,208 15,075 (15,657)20,059 
Nine Months Ended September 30, 2021
Revenues$— $41 $16,640 $— $16,681 
Operating (loss) income(33)10 6,069 15 6,061 
Net income (loss)3,200 a(133)a4,262 (3,322)4,007 
a.Net income (loss) equals net income (loss) attributable to common stockholders because net income attributable to noncontrolling interests is zero for issuer and guarantor.
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CAUTIONARY STATEMENT

Our discussion and analysis contains forward-looking statements in which we discuss our potential future performance. Forward-looking statements are all statements other than statements of historical facts, such as plans, projections, or expectations relating to ore grades and milling rates,rates; business outlook; production and sales volumes,volumes; unit net cash costs,costs; cash flows; capital expenditures; liquidity; operating costs; operating plans; the implementation of our financial policy; PT-FI's ramp-up of underground mining activities and future cash flows capital expenditures,through 2022; PT-FI's development, financing, construction and completion of new domestic smelting capacity in Indonesia in accordance with the terms of the special mining license (IUPK); expectations regarding negotiations with hourly employees at Cerro Verde including completion of new CLAs; our commitments to deliver responsibly produced copper, including plans to implement and validate all of our operating sites under specific frameworks; execution of our energy and climate strategies and the underlying assumptions and estimated impacts on our business related thereto; improvements in operating procedures and technology; exploration efforts and results,results; development and production activities, rates and costs, liquidity,costs; tax rates,rates; export quotas and duties; the impact of copper, gold and molybdenum price changes,changes; the impact of deferred intercompany profits on earnings,earnings; mineralization and reserve estimates,estimates; execution of the settlement agreements associated with the Louisiana coastal erosion cases and talc-related litigation; descriptions of our objectives, strategies, plans, goals or targets and future returns to shareholders, including dividend payments (base or variable) and share purchases and sales.repurchases. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “targets,”"targets," “intends,” “likely,” “will,” “should,” “could,” “to be,” “potential””potential," “assumptions,” “guidance,” “future” and any similar expressions are intended to identify those assertions as forward-looking statements. The timing and amount of any share repurchases will be at the discretion of management and will depend on a variety of factors including, but not limited to, our operating performance, cash flow and financial position, the market price of the shares and general economic and market conditions. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion. The declaration and payment of dividends (base or variable) is also at the discretion of the Board and will depend on our financial results, cash requirements, business prospects, global economic conditions and other factors deemed relevant by the Board.


We caution readers that forward-looking statements are not guarantees of future performance and actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, changes in our credit rating; changes in our cash requirements, financial position, financing plans or investment plans; ability to continue to maintain our net debt at a level not to exceed the net debt target in our financial policy; changes in general market, economic, tax, regulatory or industry conditions; the duration and scope of and uncertainties associated with the COVID-19 pandemic (including new and emerging strains and variants of COVID-19), and the impact thereof on commodity prices, our business and any related actions taken by governments and businesses; our ability to contain and mitigate the risk of spread or major outbreak of COVID-19 at our operating sites, including at PT-FI’s remote operating site in Papua; supply of and demand for, and prices of, copper, gold and molybdenum; mine sequencing; changes in mine plans or operational modifications, delays, deferrals or cancellations; production rates; potential effectstiming of cost and capital expenditure reductions and production curtailments on financialshipments; results and cash flow;of feasibility studies; potential inventory adjustments; potential impairment of long-lived mining assets; the outcome of negotiations with the Indonesian government regarding PT-FI’s long-term operating rights; the potential effects of violence in Indonesia generally and in the province of Papua; the Indonesia government's extension of PT-FI's export license after March 15, 2022; risks associated with underground mining; satisfaction of requirements in accordance with PT-FI's IUPK to extend mining rights from 2031 through 2041; the Indonesia government's approval of a deferred schedule for completion of new domestic smelting capacity in Indonesia; expected results from improvements in operating procedures and technology, including innovation initiatives; industry risks; regulatory changes (including adoption of financial assurance regulations as proposed by the U.S. Environmental Protection Agency under CERCLA for the hard rock mining industry);changes; political and social risks; labor relations;relations, including labor-related work stoppages and costs; weather- and climate-related risks; environmental risks; litigation results (includingand completion of settlement agreements; cybersecurity incidents; changes in general market, economic and industry conditions; financial condition of our customers, suppliers, vendors, partners and affiliates; reductions in liquidity and access to capital; our ability to comply with our responsible production commitments under specific frameworks and any changes to such frameworks; our ability to consummate the final dispositionredemption of the unfavorable Indonesia Tax Court ruling relating to surface water taxes and the outcome of Cerro Verde’s royalty dispute with the Peruvian national tax authority);senior notes and other factors described in more detail under the heading “Risk Factors” contained in Part I, Item 1A. “Risk Factors” of our annual report on2020 Form 10-K for the year ended December 31, 2016, filed with the SEC as updated by our subsequent filings with the SEC. With respect to our operations in Indonesia, such factors include whether PT-FI will be able to resolve complex regulatory matters in Indonesia and continue to export copper after December 31, 2017.10-K.


Investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made, including for example commodity prices, which we cannot control, and production volumes and costs or technological solutions and innovation, some aspects of which we may not be able to control. Further, we may make changes to our business plans that could affect our results. We caution investors that we do not intendundertake no obligation to update any forward-looking statements, more frequently than quarterlywhich speak only as of the date made, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes, and we undertake no obligation to update any forward-looking statements.changes.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk.

This report on Form 10-Q also contains financial measures such as net debt and unit net cash costs per pound of copper and molybdenum, which are not recognized under U.S. GAAP. Refer to “Operations – Unit Net Cash Costs” for further discussion of unit net cash costs associated with our operating divisions, and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements. Refer to “Net Debt” for reconciliations of debt and consolidated cash and cash equivalents to net debt.

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our market risks during the nine-month period ended September 30, 2017. 2021.

For additional information on market risks, refer to “Disclosures About Market Risks” included in Part II, Items 7. and 7A. of our annual report on2020 Form 10-K for the year ended December 31, 2016.10-K. For projected sensitivities of our operating cash flow to changes in commodity prices, refer to “Outlook” in Part I, Item 2. of this quarterly report on Form 10-Q for the period ended September 30, 2017;10-Q; for projected sensitivities of our provisionally priced copper sales and derivative instruments to changes in commodity prices refer to “Consolidated Results – Revenues” in Part I, Item 2. of this quarterly report on Form 10-Q for10-Q.

Item 4.Controls and Procedures.

(a)Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer, with the participation of management, have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report on Form 10-Q. Based on their evaluation, they have concluded that our disclosure controls and procedures were effective as of September 30, 2021.

(b)Changes in internal control over financial reporting. There has been no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2017.2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


Item 4.
Controls and Procedures.

(a)
Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer, with the participation of management, have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report on Form 10-Q. Based on their evaluation, they have concluded that our disclosure controls and procedures are effective as of September 30, 2017.

(b)
Changes in internal control over financial reporting. There has been no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2017, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II.OTHER INFORMATION

Part II.OTHER INFORMATION

Item 1.
Legal Proceedings.

Item 1.Legal Proceedings.

We are involved in numerous legal proceedings that arise in the ordinary course of our business or that are associated with environmental issues arising from legacy operations conducted over the years by Freeport Minerals Corporation and its affiliates.issues. We are also involved from time to timeperiodically in other reviews, inquiries, investigations and other proceedings initiated by or involving government agencies, some of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief.


Management does not believe, based on currently available information, that the outcome of any legal proceeding reported in Note 9 of this quarterly report on Form 10-Q for the period ended September 30, 2017, and in Part I, Item 3. “Legal Proceedings” and Note 12 of our annual report on2020 Form 10-K, for the year ended December 31, 2016, as updated inand Note 9 in our quarterly reports on Form 10-Q for the quarters ended March 31, 2017, and June 30, 2017,8 herein, will have a material adverse effect on our financial condition; although individual or cumulative outcomes could be material to our operating results for a particular period, depending on the nature and magnitude of the outcome and the operating results for the period.


Environmental ProceedingsThere have been no material changes to legal proceedings previously disclosed in Part I, Item 3. “Legal Proceedings” and Note 12 of our 2020 Form 10-K. Refer to Note 8 for updates to our talc and asbestos claims.

Notices of Violation - Cerro Verde

In September 2017, Cerro Verde paid approximately $148,000, including interest, in connection with final resolution of a Notice of Violation (NOV) issued in December 2006 by Peru’s Agency for Environmental Assessment and Enforcement (OEFA) alleging a spill of dry tailings from a pipeline near the Enlozada tailings dam and findings of dissolved oxidized copper in excess of permissible limits near the Hyuarondo dam.  In September 2017, Cerro Verde also paid approximately $169,000, including interest, in connection with final resolution of an NOV issued in October 2008 by OEFA alleging findings of dissolved oxidized copper in excess of permissible limits, that sprinklers were not being used to moisten stockpiles or the conveyer belt at a concentrator plant, and that the uncleanliness of septic tanks at the transfer station resulted in findings of raw sewage in the treated water used for landscaping around administrative buildings.



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Item 1A. Risk Factors.


There have been no material changes to our risk factors previously disclosed in Part I, Item 1A. “Risk Factors” of our annual report on2020 Form 10-K for the year ended December 31, 2016, except as disclosed in Part II, 10-K.

Item 1A. “Risk Factors”2.Unregistered Sales of our quarterly report on Form 10-Q for the quarter ended March 31, 2017, which provided as follows:Equity Securities and Use of Proceeds.

The risk factor “Mine closure and reclamation regulations impose substantial costs on our operations and include requirements that we provide financial assurance supporting those obligations. We also have plugging and abandonment obligations related to our remaining oil and gas properties, and are required to provide bonds or other forms of financial assurance in connection with those operations. Changes in or the failure to comply with these requirements could have a material adverse effect on us” which was included in our annual report on Form 10-K for the year ended December 31, 2016, is updated to add the following:

The United States (U.S.) Environmental Protection Agency extended the comment period for the proposed regulations under Section 108(b) of CERCLA to July 11, 2017. Since filing our annual report on Form 10-K in February 2017, we have evaluated the potential impact of these proposed rules. Based on this evaluation, we believe that, if adopted without material modification, the rules would impose financial responsibility obligations on U.S. hard rock mining operations that are unnecessary, duplicative of existing state and other federal requirements, and unreasonable. Our initial calculations also suggest that the financial responsibility amounts would be difficult, if not impossible, for us and others to meet with corporate resources, and would be extremely expensive, if not impossible, to finance with third-party financial instruments such as letters of credit, bonds or insurance. We and others in the industry will continue to participate in the public comment process and oppose the adoption of these rules in anything like their proposed form, as adoption in that form would severely harm the international competitiveness of the U.S. hard rock mining industry and would materially and adversely affect our cash flows, results of operations and financial condition.

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


There were no unregistered sales of equity securities during the three months ended September 30, 2017.2021.


There were no shares of common stock purchased by us during the three months ended September 30, 2017. 2021. On July 21, 2008,November 1, 2021, our Board of Directors approved an increase in our open-marketa new share purchaserepurchase program, for up to 30 million shares. There have been no purchases under this program since 2008. This programwhich does not have an expiration date. At September 30, 2017, there were 23.7 million shares that could still be purchased underdate, authorizing repurchases of up to $3.0 billion of our common stock.This new share repurchase program supersedes and replaces the program.share repurchase program previously authorized by our Board in July 2008.

Item 4.Mine Safety Disclosures.

Item 4.Mine Safety Disclosures.

The safety and health of all employees is our highest priority. Management believes that safety and health considerations are integral to, and compatible with, all other functions in the organization and that proper safety and health management will enhance production and reduce costs. Our approach towards the safety and health of our workforce is to continuously improve performance through implementing robust management systems and providing adequate training, safety incentive and occupational health programs. The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this quarterly report on Form 10-Q.

Item 5. Other Information.

Appointment of New Independent Director

On November 1, 2021, our Board increased the size of the Board from nine to ten directors and appointed Ryan M. Lance to serve as a director of FCX, effective immediately, and as a member of the Corporate Responsibility Committee, effective November 2, 2021. Mr. Lance will serve as a director until our 2022 annual meeting of stockholders and until his successor is duly elected and qualified.

The Board affirmatively determined that Mr. Lance has no material relationship with us and is independent in accordance with the director independence standards established under our Corporate Governance Guidelines, which comply with the New York Stock Exchange corporate governance rules, and other applicable laws, rules and regulations. There is no arrangement or understanding between Mr. Lance and any other person pursuant to which he was appointed as a director. There are no transactions in which Mr. Lance has an interest requiring disclosure under Item 404(a) of Regulation S-K.

Our Board is now comprised of ten members, including nine independent directors.

Mr. Lance will be compensated in accordance with our non-management director compensation program, which is described in our definitive proxy statement on Schedule 14A filed with the U.S. Securities and Exchange Commission on April 22, 2021 (the 2021 Proxy Statement) under the heading “Director Compensation.” On November 1, 2021, Mr. Lance received a pro-rata equity award of 2,500 restricted stock units (RSUs), which will vest on the first anniversary of the grant date, or November 1, 2022.

Appointment of Chief Financial Officer

On November 2, 2021, we announced the appointment of Maree Robertson as Senior Vice President and Chief Financial Officer, effective as of March 1, 2022 (the Effective Date). In this role, Ms. Robertson will assume responsibility for our accounting, finance and tax functions, including financial reporting, operational accounting, internal controls, financial planning and analysis, treasury and risk management. Ms. Robertson will report to Kathleen L. Quirk. Ms. Quirk has served as Chief Financial Officer since 2003 and was appointed to an expanded role of President in February 2021. Ms. Quirk will continue to serve as President.
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Ms. Robertson, age 46, served as Chief Financial Officer, Energy and Minerals of Rio Tinto Group, a multinational metals and mining company, since September 2019. Prior to joining Rio Tinto, Ms. Robertson had a 17-year career at BHP Group, a multinational natural resources company, serving in a broad range of international finance functions, including Vice President, Finance, Petroleum USA; Head of Finance, Conventional and Potash, Petroleum USA; Vice President, Finance, Potash Canada; and Vice President, Finance, Minera Escondida Ltda. Ms. Robertson joined BHP in 2002 after four years in the PricewaterhouseCoopers natural resource audit practice. Ms. Robertson holds a Bachelor of Commerce from the University of Melbourne.

As of the Effective Date, Ms. Robertson will be paid an annual base salary of $625,000. She will be eligible to participate in our Annual Incentive Plan with a target to be set at 125 percent of her base salary for 2022. Ms. Robertson will also be eligible to receive long-term incentive awards with a grant date value equal to 300 percent of her base salary granted in a form determined by the Compensation Committee, which may include performance share units, stock options and RSUs. The Compensation Committee will have discretion each year to set these amounts.

Upon the Effective Date, Ms. Robertson will receive sign-on incentives as compensation for certain incentives received from her former employer expected to be forfeited upon joining us as follows: (1) a one-time grant of RSUs that will vest ratably over three years with a grant date value of $1.25 million, with the number of RSUs to be determined based on the 20-day trailing average stock price from the Effective Date, and (2) a one-time cash payment of $625,000 subject to repayment or partial repayment if she resigns at any time within two years following the Effective Date. In addition, Ms. Robertson will be eligible to participate in our Executive Change in Control Severance Plan. Severance benefits under the plan include: (1) a lump sum cash payment equal to two times the sum of Ms. Robertson’s base salary plus her average bonus, (2) a prorated bonus for the year of termination calculated based on her average bonus and the number of days worked during the year of termination, and (3) 18 months of health benefit continuation.

There are no family relationships between Ms. Robertson and any director, executive officer, or person nominated or chosen by us to become a director or executive officer of FCX. Ms. Robertson is not a party to any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

For additional information regarding our executive compensation program and our Executive Change in Control Severance Plan, see our 2021 Proxy Statement.
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Item 6.Exhibits.
Item 6.Exhibits.

Filed
Exhibitwith thisIncorporated by Reference
NumberExhibit TitleForm 10-QFormFile No.Date Filed
2.1*
PT-FI Divestment Agreement dated as of September 27, 2018 among FCX, International Support LLC, PT Freeport Indonesia, PT Indocopper Investama and PT Indonesia Asahan Aluminium (Persero).10-Q001-11307-0111/9/2018
2.2
Supplemental and Amendment Agreement to the PT-FI Divestment Agreement, dated December 21, 2018, among FCX, PT Freeport Indonesia, PT Indonesia Papua Metal Dan Mineral (f/k/a PT Indocopper Investama), PT Indonesia Asahan Aluminium (Persero) and International Support LLC.10-K001-11307-012/15/2019
3.1
Amended and Restated Certificate of Incorporation of FCX, effective as of June 8, 2016.8-K001-11307-016/9/2016
3.2
Amended and Restated By-Laws of FCX, effective as of June 8, 2016.3, 2020.8-K001-11307-016/9/20163/2020
4.115.1
Indenture dated as of February 13, 2012, between FCX and U.S. Bank National Association, as Trustee (relating to the 3.55% Senior Notes due 2022, the 2.30% Senior Notes due 2017, the 4.00% Senior Notes due 2021, the 4.55% Senior Notes due 2024, and the 5.40% Senior Notes due 2034).8-K001-11307-012/13/2012
4.2
Third Supplemental Indenture dated as of February 13, 2012, between FCX and U.S. Bank National Association, as Trustee (relating to the 3.55% Senior Notes due 2022).8-K001-11307-012/13/2012
4.3
Fourth Supplemental Indenture dated as of May 31, 2013, among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 3.55% Senior Notes due 2022, the 2.30% Senior Notes due 2017, the 4.00% Senior Notes due 2021, the 4.55% Senior Notes due 2024, and the 5.40% Senior Notes due 2034).8-K001-11307-016/3/2013
4.4
Fifth Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 2.30% Senior Notes due 2017).8-K001-11307-0111/14/2014
4.5
Sixth Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 4.00% Senior Notes due 2021).8-K001-11307-0111/14/2014
4.6
Seventh Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as (relating to the 4.55% Senior Notes due 2024).8-K001-11307-0111/14/2014
4.7
Eighth Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 5.40% Senior Notes due 2034).8-K001-11307-0111/14/2014
4.8
Indenture dated as of March 7, 2013, between FCX and U.S. Bank National Association, as Trustee (relating to the 2.375% Senior Notes due 2018, the 3.100% Senior Notes due 2020, the 3.875% Senior Notes due 2023, and the 5.450% Senior Notes due 2043).8-K001-11307-013/7/2013
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Filed
Exhibitwith thisIncorporated by Reference
NumberExhibit TitleForm 10-QFormFile No.Date Filed
4.9
Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.5% Senior Notes due 2020 and the 6.875% Senior Notes due 2023).8-K001-314703/13/2007
4.10
Sixteenth Supplemental Indenture dated as of October 26, 2012 to the Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto and Wells Fargo Bank, N.A., as Trustee (relating to the 6.5% Senior Notes due 2020).8-K001-3147010/26/2012
4.11
Seventeenth Supplemental Indenture dated as of October 26, 2012 to the Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto and Wells Fargo Bank, N.A., as Trustee (relating to the 6.875% Senior Notes due 2023).8-K001-3147010/26/2012
4.12
Eighteenth Supplemental Indenture dated as of May 31, 2013 to the Indenture dated as of March 13, 2007, among Freeport-McMoRan Oil & Gas LLC, as Successor Issuer, FCX Oil & Gas Inc., as Co-Issuer, FCX, as Parent Guarantor, Plains Exploration & Production Company, as Original Issuer, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.5% Senior Notes due 2020 and the 6.875% Senior Notes due 2023).8-K001-11307-016/3/2013
4.13
Nineteenth Supplemental Indenture dated as of September 30, 2016 to the Indenture dated as of March 13, 2007, among Freeport-McMoRan Oil & Gas LLC, as Successor Issuer, FCX Oil & Gas Inc., as Co-Issuer, FMSTP Inc., as Additional Co-Issuer, FCX, as Parent Guarantor, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.50% Senior Notes due 2020 and the 6.875% Senior Notes due 2023).10-Q001-11307-0111/9/2016
4.14
Twentieth Supplemental Indenture dated as of December 13, 2016 to the Indenture dated as of March 13, 2007, among Freeport-McMoRan Oil & Gas LLC, as Successor Issuer, FCX Oil & Gas LLC, as Co-Issuer, FMSTP Inc., as Additional Co-Issuer, FCX, as Parent Guarantor, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.50% Senior Notes due 2020 and the 6.875% Senior Notes due 2023).8-K001-11307-0112/13/2016
4.15
Form of Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and The Chase Manhattan Bank, as Trustee (relating to the 7.125% Senior Notes due 2027, the 9.50% Senior Notes due 2031, and the 6.125% Senior Notes due 2034).S-3333-364159/25/1997
4.16
Form of 7.125% Debenture due November 1, 2027 of Phelps Dodge Corporation issued on November 5, 1997, pursuant to the Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and The Chase Manhattan Bank, as Trustee (relating to the 7.125% Senior Notes due 2027).8-K01-0008211/3/1997
4.17
Form of 9.5% Note due June 1, 2031 of Phelps Dodge Corporation issued on May 30, 2001, pursuant to the Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and First Union National Bank, as successor Trustee (relating to the 9.50% Senior Notes due 2031).8-K01-000825/30/2001
4.18
Form of 6.125% Note due March 15, 2034 of Phelps Dodge Corporation issued on March 4, 2004, pursuant to the Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and First Union National Bank, as successor Trustee (relating to the 6.125% Senior Notes due 2034).10-K01-000823/7/2005
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Filed
Exhibitwith thisIncorporated by Reference
NumberExhibit TitleForm 10-QFormFile No.Date Filed
4.19
Supplemental Indenture dated as of April 4, 2007 to the Indenture dated as of September 22, 1997, among Phelps Dodge Corporation, as Issuer, Freeport-McMoRan Copper & Gold Inc., as Parent Guarantor, and U.S. Bank National Association, as Trustee (relating to the 7.125% Senior Notes due 2027, the 9.50% Senior Notes due 2031, and the 6.125% Senior Notes due 2034).

10-K001-11307-012/26/2016
4.20
Indenture dated as of December 13, 2016, among FCX, Freeport-McMoRan Oil & Gas LLC, as guarantor, and U.S. Bank National Association, as Trustee (relating to the 6.125% Senior Notes due 2019, the 6.50% Senior Notes due 2020, the 6.625% Senior Notes due 2021, the 6.75% Senior Notes due 2022, and the 6.875% Senior Notes due 2023).8-K001-11307-0112/13/2016
4.21
Registration Rights Agreement dated as of December 13, 2016 among FCX, Freeport-McMoRan Oil & Gas LLC, as Guarantor, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Managers, relating to the 6.125% Senior Notes due 2019.8-K001-11307-0112/13/2016
4.22
Registration Rights Agreement dated as of December 13, 2016 among FCX, Freeport-McMoRan Oil & Gas LLC, as Guarantor, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Managers, relating to the 6.50% Senior Notes due 2020.8-K001-11307-0112/13/2016
4.23
Registration Rights Agreement dated as of December 13, 2016 among FCX, Freeport-McMoRan Oil & Gas LLC, as Guarantor, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Managers, relating to the 6.625% Senior Notes due 2021.8-K001-11307-0112/13/2016
4.24
Registration Rights Agreement dated as of December 13, 2016 among FCX, Freeport-McMoRan Oil & Gas LLC, as Guarantor, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Managers, relating to the 6.75% Senior Notes due 2022.8-K001-11307-0112/13/2016
4.25
Registration Rights Agreement dated as of December 13, 2016 among FCX, Freeport-McMoRan Oil & Gas LLC, as Guarantor, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Managers, relating to the 6.875% Senior Notes due 2023.8-K001-11307-0112/13/2016
15.1
Letter from Ernst & Young LLP regarding unaudited interim financial statements.X
22.1
List of Guarantor Subsidiaries10-K001-11307-012/16/2021
31.1
Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d – 14(a).X
31.2
Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d – 14(a).X
32.1
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.X
32.2
Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350.X
95.1
Mine Safety and Health Administration Safety Data.X
Table of Contents

101.INSXBRL Instance Document- the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X
101.SCHFiled
Exhibitwith thisIncorporated by Reference
NumberExhibit TitleForm 10-QFormFile No.Date Filed
101.INSXBRL Instance Document.X
101.SCHInline XBRL Taxonomy Extension Schema.X
101.CALInline XBRL Taxonomy Extension Calculation Linkbase.X
101.DEFInline XBRL Taxonomy Extension Definition Linkbase.X
101.LABInline XBRL Taxonomy Extension Label Linkbase.X
101.PREInline XBRL Taxonomy Extension Presentation Linkbase.X
104The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL.X

* Indicates management contract or compensatory plan or arrangement.

Note: Certain instruments with respect to long-term debt of FCX have not been filed as exhibits to this Quarterly Report on Form 10-Q since the total amount of securities authorized under any such instrument does not exceed 10 percent of the total assets of FCX and its subsidiaries on a consolidated basis. FCXThe registrant agrees to furnish a copy of each such instrument upon request ofsupplementally to the Securities and Exchange Commission.Commission (SEC) a copy of any omitted schedule or exhibit upon the request of the SEC in accordance with Item 601(a)(5) of Regulation S-K.

74


SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Freeport-McMoRan Inc.
FREEPORT-McMoRan INC.
By:
By:/s/ C. Donald Whitmire, Jr.
C. Donald Whitmire, Jr.
Vice President and
Controller - Financial Reporting
(authorized signatory
and Principal Accounting Officer)






Date:  November 7, 20175, 2021

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