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 March 31, 2022
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-20220331_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,April 29, 2022, there were issued and outstanding 1,447,590,6681,449,262,382 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 OperationsIncome (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)
8
Review Report of Independent Registered Public Accounting Firm
3320
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
3421
Item 3. Quantitative and Qualitative Disclosures About Market Risk
7552
Item 4. Controls and Procedures
7552
Part II. Other Information
7552
Item 1. Legal Proceedings
7552
Item 1A. Risk Factors
7553
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
7653
Item 4. Mine Safety Disclosures
7653
Item 6. Exhibits
77
Signature
S-1

Table of Contents

Part I.FINANCIAL INFORMATION

Item 1.6. Exhibits
Financial Statements.54
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)
March 31,
2022		December 31,
2021
 (In millions)
ASSETS  
Current assets:  
Cash and cash equivalents$8,338 $8,068 
Trade accounts receivable1,537 1,168 
Income and other tax receivables444 574 
Inventories: 
Materials and supplies, net1,741 1,669 
Mill and leach stockpiles1,227 1,170 
Product1,486 1,658 
Other current assets529 523 
Total current assets15,302 14,830 
Property, plant, equipment and mine development costs, net30,708 30,345 
Long-term mill and leach stockpiles1,377 1,387 
Other assets1,445 1,460 
Total assets$48,832 $48,022 
LIABILITIES AND EQUITY  
Current liabilities:  
Accounts payable and accrued liabilities$3,163 $3,495 
Accrued income taxes1,392 1,541 
Current portion of debt1,365 372 
Current portion of environmental and asset retirement obligations316 264 
Dividends payable218 220 
Total current liabilities6,454 5,892 
Long-term debt, less current portion8,256 9,078 
Deferred income taxes4,282 4,234 
Environmental and asset retirement obligations, less current portion4,145 4,116 
Other liabilities1,653 1,683 
Total liabilities24,790 25,003 
Equity:  
Stockholders’ equity:  
Common stock161 160 
Capital in excess of par value25,835 25,875 
Accumulated deficit(5,848)(7,375)
Accumulated other comprehensive loss(387)(388)
Common stock held in treasury(4,895)(4,292)
Total stockholders’ equity14,866 13,980 
Noncontrolling interests9,176 9,039 
Total equity24,042 23,019 
Total liabilities and equity$48,832 $48,022 
 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 OPERATIONSINCOME (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 Ended
March 31,
 20222021
(In millions, except per share amounts)
Revenues$6,603 $4,850 
Cost of sales: 
Production and delivery3,150 2,787 
Depreciation, depletion and amortization489 419 
Total cost of sales3,639 3,206 
Selling, general and administrative expenses115 100 
Mining exploration and research expenses24 7 
Environmental obligations and shutdown costs16 5 
Total costs and expenses3,794 3,318 
Operating income2,809 1,532 
Interest expense, net(127)(145)
Other income, net31 11 
Income before income taxes and equity in affiliated companies’ net earnings (losses)2,713 1,398 
Provision for income taxes(824)(443)
Equity in affiliated companies’ net earnings (losses)15 (2)
Net income1,904 953 
Net income attributable to noncontrolling interests(377)(235)
Net income attributable to common stockholders$1,527 $718 
Net income per share attributable to common stockholders:
Basic$1.05 $0.49 
Diluted$1.04 $0.48 
Weighted-average common shares outstanding:
Basic1,455 1,462 
Diluted1,469 1,477 
Dividends declared per share of common stock$0.15 $0.075 
 
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 Ended
March 31,
20222021
(In millions)
Net income$1,904 $953 
Other comprehensive income, net of taxes:
Defined benefit plans:
Actuarial losses arising during the period— (1)
Prior service costs arising during the period(1)— 
Amortization of unrecognized amounts included in net periodic benefit costs2 4 
Foreign exchange losses— (1)
Other comprehensive income1 2 
Total comprehensive income1,905 955 
Total comprehensive income attributable to noncontrolling interests(377)(234)
Total comprehensive income attributable to common stockholders$1,528 $721 
  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)
Three Months Ended
March 31,
 20222021
 (In millions)
Cash flow from operating activities:  
Net income$1,904 $953 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation, depletion and amortization489 419 
Stock-based compensation49 41 
Net charges for environmental and asset retirement obligations, including accretion55 39 
Payments for environmental and asset retirement obligations(55)(54)
Net charges for defined pension and postretirement plans10 — 
Pension plan contributions(25)(21)
Deferred income taxes48 38 
Charges for Cerro Verde royalty dispute— 5 
Payments for Cerro Verde royalty dispute— (38)
Other, net27 29 
Changes in working capital and other: 
Accounts receivable(222)(361)
Inventories47 (225)
Other current assets19 6 
Accounts payable and accrued liabilities(519)(42)
Accrued income taxes and timing of other tax payments(136)286 
Net cash provided by operating activities1,691 1,075 
Cash flow from investing activities:  
Capital expenditures:  
North America copper mines(130)(26)
South America(56)(21)
Indonesia mining(379)(290)
Indonesia smelter projects(130)(20)
Molybdenum mines(1)(1)
Other(27)(12)
Proceeds from sales of assets20 5 
Loans to PT Smelting for expansion(9)— 
Other, net(2)(3)
Net cash used in investing activities(714)(368)
Cash flow from financing activities:  
Proceeds from debt604 130 
Repayments of debt(434)(32)
Cash dividends and distributions paid:
Common stock(220)— 
Noncontrolling interests(204)— 
Treasury stock purchases(541)— 
Contributions from noncontrolling interests47 41 
Proceeds from exercised stock options101 106 
Payments for withholding of employee taxes related to stock-based awards(55)(19)
Debt financing costs and other, net(1)(1)
Net cash (used in) provided by financing activities(703)225 
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents274 932 
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year8,314 3,903 
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period$8,588 $4,835 
 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 MARCH 31
 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, 20211,603 $160 $25,875 $(7,375)$(388)146 $(4,292)$13,980 $9,039 $23,019 
Exercised and issued stock-based awards9 1 107 — — — — 108 — 108 
Stock-based compensation, including the tender of shares— — 48 — — 2 (62)(14)(10)(24)
Treasury stock purchases— — — — — 12 (541)(541)— (541)
Dividends— — (218)— — — — (218)(254)(472)
Contributions from noncontrolling interests— — 23 — — — — 23 24 47 
Net income attributable to common stockholders— — — 1,527 — — — 1,527 — 1,527 
Net income attributable to noncontrolling interests— — — — — — — — 377 377 
Other comprehensive income— — — — 1 — — 1 — 1 
Balance at March 31, 20221,612 $161 $25,835 $(5,848)$(387)160 $(4,895)$14,866 $9,176 $24,042 
 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 awards7 1 105 — — — — 106 — 106 
Stock-based compensation, including the tender of shares— — 29 — — 1 (19)10 (3)7 
Dividends— — (111)— — — — (111)(93)(204)
Contributions from noncontrolling interests— — 20 — — — — 20 21 41 
Net income attributable to common stockholders— — — 718 — — — 718 — 718 
Net income attributable to noncontrolling interests— — — — — — — — 235 235 
Other comprehensive income (loss)— — — — 3 — — 3 (1)2 
Balance at March 31, 20211,597 $160 $26,080 $(10,963)$(580)133 $(3,777)$10,920 $8,653 $19,573 

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


7
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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, 2016.2021 (2021 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-monththree-month period ended September 30, 2017,March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.2022.


Indonesia Mining. As a result ofSubsequent Events. FCX evaluated events after March 31, 2022, and through the first-quarter 2017 regulatory restrictions and uncertainties regarding long-term investment stability, PT Freeport Indonesia (PT-FI) took actions to adjust its cost structure, reduce its workforce and slow investments in its underground development projects 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 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 June 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 return 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 indate the consolidated balance sheet), compared with a net liability of $90 million (includedfinancial statements were issued, and determined any events and transactions occurring during this period that would require recognition or disclosure are appropriately addressed in other liabilities in thethese consolidated balance sheet) as of December 31, 2016.financial statements.


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 $239 million in third-quarter 2016 and $4.3 billion for the first nine months of 2016. Refer to Note 1 of FCX’s annual report on Form 10-K for the year ended December 31, 2016, for further discussion.


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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.antidilutive.

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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 Ended
March 31,
 20222021
Net income$1,904 $953 
Net income attributable to noncontrolling interests(377)(235)
Undistributed earnings allocated to participating securities(5)(4)
Net income attributable to common stockholders$1,522 $714 
Basic weighted-average shares of common stock outstanding1,455 1,462 
Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs)14 15 
Diluted weighted-average shares of common stock outstanding1,469 1,477 
Basic net income per share attributable to common stockholders$1.05 $0.49 
Diluted net income per share attributable to common stockholders$1.04 $0.48 
 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 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 382 million shares of common stock in first-quarter 2022 and 10 million shares of common stock in first-quarter 2021, were excluded for third-quarter 2017, 46 million for third-quarter 2016, 42 million for the first nine months of 2017 and 46 million for the first nine months of 2016.excluded.



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


The components of inventories follow (in millions):
March 31, 2022December 31, 2021
Current inventories:
Total materials and supplies, neta
$1,741 $1,669 
Mill stockpiles$175 $193 
Leach stockpiles1,052 977 
Total current mill and leach stockpiles$1,227 $1,170 
Raw materials (primarily concentrate)$280 $536 
Work-in-process275 195 
Finished goods931 927 
Total product$1,486 $1,658 
Long-term inventories:
Mill stockpiles$227 $226 
Leach stockpiles1,150 1,161 
Total long-term mill and leach stockpilesb
$1,377 $1,387 
 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.

a.Materials and supplies inventory was net of obsolescence reserves totaling $39 million at March 31, 2022, and $36 million at December 31, 2021.
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 income taxes follow (in millions):
Three Months Ended
March 31,
 20222021
U.S. operations$(3)

$— 
International operations(821)(443)
Total$(824)$(443)

FCX’s consolidated effective income tax rate was 30 percent for first-quarter 2022 and 32 percent for first-quarter 2021. Variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate. FCX’s consolidated effective income tax rate was 47 percent for the first nine months of 2017 and (2) percent for first nine months of 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 the unfavorable Peruvian Supreme Court ruling on the Cerro Verde royalty dispute, FCX recorded pre-tax charges 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 result of the impairment to U.S. oil and gas properties, FCX recorded tax charges 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 assets that 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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NOTE 6.5. DEBT AND EQUITY


The components of debt follow (in millions):
 March 31,
2022		December 31, 2021
Senior notes and debentures:
Issued by FCX$8,270 $8,268 
Issued by Freeport Minerals Corporation355 355 
PT-FI Term Loan603 432 
Cerro Verde Term Loan325 325 
Other68 70 
Total debt9,621 9,450 
Less current portion of debt(1,365)a(372)
Long-term debt$8,256 $9,078 
a.Includes $325 million for the Cerro Verde Term Loan due June 2022 and $995 million for the FCX 3.875% Senior Notes due March 2023.

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  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).

Revolving Credit Facility. At September 30, 2017, there wereMarch 31, 2022, 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.

Senior Notes Issued by FCX. In March 2017, FCX’s 2.15% Senior Notes matured, and the $500 million outstanding principal balance was repaid.

Cerro Verde Credit Facility and Shareholder Loans. In June 2017, Cerro Verde’s credit facility was amended to increase the commitment by $225 million to $1.5 billion, modify the amortization schedule and to extend the maturity date to June 19, 2022. The amended credit facility amortizes in four installments, with $225 million due on December 31, 2020, $225 million due on June 30, 2021, $525 million due on December 31, 2021, and the remaining balance due on the maturity date of June 19, 2022. All other terms, including the interest rates, remain 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.

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Exchanges and Early Extinguishment of Debt. During third-quarter 2017, FCX redeemed in full certain senior notes. A summary 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 gain on early extinguishment of certain senior notes was a net loss 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 million in third-quarter 2016 and $54 million for the first nine months of 2016. Partially offsetting the gains were $3 million in losses, primarily associated with the modification of Availability under FCX’s revolving credit facility consists of $3.28 billion maturing April 2024 and $220 million maturing April 2023. At March 31, 2022, FCX was in first-quarter 2016. Refercompliance with its revolving credit facility covenants.

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 fund project costs in connection with the PT Smelting expansion and construction of a precious metals refinery (PMR), and for PT-FI’s general corporate purposes. At March 31, 2022, $614 million ($603 million net of debt issuance costs) was drawn under the term loan, no amounts were drawn under the revolving credit facility and PT-FI was in compliance with its credit facility covenants.

Senior Notes 8issued by PT-FI. In April 2022, PT-FI completed the sale of $3.0 billion of unsecured senior notes, consisting of $750 million of 4.763% Senior Notes due 2027, $1.5 billion of 5.315% Senior Notes due 2032 and 10$750 million of FCX’s annual report on Form 10-K6.200% Senior Notes due 2052. PT-FI intends to use the proceeds, net of underwriting fees, of $2.99 billion to finance its smelter projects, to refinance the PT-FI Term Loan and for the year ended December 31, 2016, for further discussion.general corporate purposes.


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)capitalization) totaled $196$153 million in third-quarter 2017, $211first-quarter 2022 and $160 million in third-quarter 2016, $583 million for the first nine months of 2017 and $647 million for the first nine months of 2016.first-quarter 2021. Capitalized interest added to property, plant, equipment and mine development costs, net, totaled $33$26 million in third-quarter 2017, $24first-quarter 2022 and $15 million in third-quarter 2016, $91 millionfirst-quarter 2021. The increase in capitalized interest costs for the first nine months2022 period resulted from increased construction and development projects in process.

Share Repurchase Program. In first-quarter 2022, FCX acquired 12.3 million shares of 2017its common stock under the share repurchase program for a total cost of $541 million ($44.02 average cost per share). Through May 5, 2022, FCX acquired 28.7 million shares of its common stock for a total cost of $1.2 billion ($41.64 average cost per share) and $66 million$1.8 billion remains available for repurchases under the first nine monthsprogram.

Dividends. On March 23, 2022, FCX declared quarterly cash dividends totaling $0.15 per share ($0.075 per share base dividend and $0.075 per share variable dividend) on its common stock, which were paid on May 2, 2022, to common stockholders of 2016. Capitalized interest added to oilrecord as of April 14, 2022.

The declaration and gas properties notpayment of dividends (base or variable) and timing and amount of any share repurchases is at
the discretion of FCX’s Board of Directors (Board) and management, respectively, and is subject to amortization totaled $7 million fora number of factors, including maintaining FCX’s net debt target, capital availability, FCX’s financial results, cash requirements, business prospects, global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by FCX’s Board or management, as applicable. FCX’s share repurchase program may be modified, increased, suspended or terminated at any time at the first nine months of 2016 (none in third-quarter 2016 or 2017).Board’s discretion.


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

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Table of September 30, 2017, and December 31, 2016, FCX had no price protection contracts relating to its mine production. Contents
A discussion of FCX’s 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-monththree-month periods ended September 30, 2017March 31, 2022 and 2016.2021. At September 30, 2017,March 31, 2022, FCX held copper futures and swap contracts that qualified for hedge accounting for 4684 million pounds at an average contract price of $2.83$4.47 per pound, with maturities through June 2019.February 2024.


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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 with the unrealized gains (losses)including on the related hedged item follows (in millions):
Three Months Ended Nine Months Ended Three Months Ended
September 30, September 30,March 31,
2017 2016 2017 2016 20222021
Copper futures and swap contracts:       Copper futures and swap contracts:  
Unrealized gains (losses):       Unrealized gains (losses):  
Derivative financial instruments$—
 $1
 $(1) $11
Derivative financial instruments$12 $3 
Hedged item – firm sales commitments—
 (1) 1
 (11)Hedged item – firm sales commitments(12)(3)
       
Realized gains (losses):       
Realized gains:Realized gains:
Matured derivative financial instruments12
 —
 21
 (8)Matured derivative financial instruments14 24 


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,March 31, 2022, follows:
Open PositionsAverage Price
Per Unit		Maturities Through
 ContractMarket
Embedded derivatives in provisional sales contracts:    
Copper (millions of pounds)753 $4.49 $4.71 August 2022
Gold (thousands of ounces)206 1,925 1,936 June 2022
Embedded derivatives in provisional purchase contracts:  
Copper (millions of pounds)65 4.43 4.71 July 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,March 31, 2022, Atlantic Copper held net copper forward purchase contracts for 54 million pounds at an average contract price of $2.95$4.60 per pound, with maturities through October 2017.May 2022.


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Summary of Gains (Losses). A summary of the realized and unrealized 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 Ended
March 31,
 20222021
Embedded derivatives in provisional sales contracts:a
Copper$218 $207 
Gold and other metals22 (28)
Copper forward contractsb
4 (8)
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):
March 31,
2022		December 31, 2021
Commodity Derivative Assets:  
Derivatives designated as hedging instruments:
  
Copper futures and swap contracts$24 $12 
Derivatives not designated as hedging instruments:
  
Embedded derivatives in provisional sales/purchase contracts169 64 
Copper forward contracts2 1 
Total derivative assets$195 $77 
Commodity Derivative Liabilities:
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts$20 $27 
Copper forward contracts2 1 
Total derivative liabilities$22 $28 
  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
March 31,
2022		December 31, 2021March 31,
2022		December 31, 2021
Gross amounts recognized:
Embedded derivatives in provisional
sales/purchase contracts$169 $64 $20 $27 
Copper derivatives26 13 2 1 
195 77 22 28 
Less gross amounts of offset:
Embedded derivatives in provisional
sales/purchase contracts2 3 2 3 
Copper derivatives2 1 2 1 
4 4 4 4 
Net amounts presented in balance sheet:
Embedded derivatives in provisional
sales/purchase contracts167 61 18 24 
Copper derivatives24 12 — — 
$191 $73 $18 $24 
Balance sheet classification:
Trade accounts receivable$165 $51 $8 $14 
Other current assets23 12 — — 
Other assets1 — — — 
Accounts payable and accrued liabilities2 10 10 10 
$191 $73 $18 $24 
  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,March 31, 2022, the maximum amount of credit exposure associated with derivative transactions was $78$195 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, accrued income taxes, dividends payable and long-term debt. The carrying value for cash and cash equivalents (which included time deposits of $1.9 billion at September 30, 2017, and $64 million at December 31, 2016), accounts receivable, restricted cash, and accounts payable and accruedthese financial instruments classified as current assets or liabilities approximates fair value because of their short-term nature and generally negligible credit losses (referlosses. Refer to Note 87 for the fair values of investment securities, legally restricted funds and long-term debt).debt.


In addition, as of September 30, 2017,March 31, 2022, 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 endedconsolidated statements of cash flows (in millions):
March 31,
2022		December 31, 2021
Balance sheet components:
Cash and cash equivalentsa
$8,338 $8,068 
Restricted cash and restricted cash equivalents included in:
Other current assets117 114 
Other assets133 132 
Total cash, cash equivalents, restricted cash and restricted cash equivalents presented in the consolidated statements of cash flows$8,588 $8,314 
a.Includes time deposits of $0.2 billion at each of March 31, 2022, and December 31, 2016, for further discussion of these instruments).2021.

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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 for third-quarter 2017.during first-quarter 2022.


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, accrued income taxes and dividends payable (refer to Note 7)6) follows (in millions):
At March 31, 2022
 CarryingFair Value
 AmountTotalNAVLevel 1Level 2Level 3
Assets    
Investment securities:a,b
Equity securities$70 $70 $— $70 $— $— 
U.S. core fixed income fund28 28 28 — — — 
Total98 98 28 70 — — 
Legally restricted funds:a
    
U.S. core fixed income fund62 62 62 — — — 
Government bonds and notes49 49 — — 49 — 
Corporate bonds40 40 — — 40 — 
Government mortgage-backed securities23 23 — — 23 — 
Asset-backed securities13 13 — — 13 — 
Money market funds8 8 — 8 — — 
Collateralized mortgage-backed securities3 3 — — 3 — 
Total198 198 62 8 128 — 
Derivatives:    
Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc
169 169 — — 169 — 
Copper futures and swap contractsc
24 24 — 18 6 — 
Copper forward contractsc
2 2 — 1 1 — 
       Total195 195 — 19 176 — 
Contingent consideration for the sale of the
Deepwater GOM oil and gas propertiesa
84 74 — — — 74 
Liabilities    
Derivatives:c
    
Embedded derivatives in provisional sales/purchase contracts in a gross liability position20 20 — — 20 — 
Copper forward contracts2 2 — 1 1 — 
Total22 22 — 1 21 — 
Long-term debt, including current portiond
9,621 10,190 — — 10,190 — 
 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, 2021
 CarryingFair Value
 AmountTotalNAVLevel 1Level 2Level 3
Assets    
Investment securities:a,b
Equity securities$50 $50 $— $50 $— $— 
U.S. core fixed income fund29 29 29 — — — 
Total79 79 29 50 — — 
Legally restricted funds:a
    
U.S. core fixed income fund64 64 64 — — — 
Government bonds and notes53 53 — — 53 — 
Corporate bonds45 45 — — 45 — 
Government mortgage-backed securities20 20 — — 20 — 
Asset-backed securities18 18 — — 18 — 
Money market funds8 8 — 8 — — 
Municipal bonds1 1 — — 1 — 
Total209 209 64 8 137 — 
Derivatives:    
Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc
64 64 — — 64 — 
Copper futures and swap contractsc
12 12 — 9 3 — 
Copper forward contractsc
1 1 — 1 — — 
Total77 77 — 10 67 — 
Contingent consideration for the sale of the
   Deepwater GOM oil and gas propertiesa
90 81 — — — 81 
Liabilities    
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position27 27 — — 27 — 
Copper forward contracts1 1 — 1 — — 
Total28 28 — 1 27 — 
Long-term debt, including current portiond
9,450 10,630 — — 10,630 — 
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 $117 million at March 31, 2022, and $114 million at December 31, 2021, and (ii) other assets of $133 million at March 31, 2022, and $132 million at December 31, 2021, 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. 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.

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 March 31, 2022, and December 31, 2021, and (ii) other assets totaled $64 million at March 31, 2022, and $70 million at December 31, 2021. 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,March 31, 2022, as compared towith those techniques used at December 31, 2016.2021.

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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 ninethree months of 20172022 follows (in millions):
Fair value at January 1, 2022$81 
Net unrealized loss related to assets still held at the end of the period(1)
Settlements(6)
Fair value at March 31, 2022$74 
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


EnvironmentalAsset Retirement Obligations (ARO)
Historical Smelter Sites — BoroughArizona Environmental and Reclamation Programs.FCX’s Arizona operations are subject to regulatory oversight by the Arizona Department of Carteret
As reported in Note 12Environmental Quality (ADEQ). ADEQ has adopted regulations for its aquifer protection permit (APP) program that require permits for, among other things, certain facilities, activities and structures used for mining, leaching, concentrating and smelting, and require compliance with aquifer water quality standards during operations and closure. An application for an APP requires a proposed closure strategy that will meet applicable groundwater protection requirements following cessation of FCX’s annual report on Form 10-K for the year ended December 31, 2016, from 1920 until 1986, United States Metal Refining Company (USMR),operations and an indirect wholly owned subsidiary of Cyprus Amax Minerals Company, owned and operated a copper smelter and refinery in the Borough of Carteret, New Jersey, on the banksestimate of the Arthur Kill (a narrow waterway that separates New Jersey from Staten Island). Asimplementation cost, with a result of recent off-site soil sampling in publicmore detailed closure plan required at the time operations cease. A permit applicant must demonstrate its financial ability to meet the closure costs approved by ADEQ. Closure costs for facilities covered by APPs are required to be updated every six years and private areas near the former smelter, FCXfinancial assurance mechanisms are required to be updated every two years. During first-quarter 2022, Bagdad increased its ARO liability and asset retirement cost asset by $45 million associated environmental obligationwith an updated closure strategy that Bagdad submitted to ADEQ for known and potential off-site environmental remediation by recording a $59 million chargeapproval. Morenci is also preparing an update to operating income in third-quarter 2017. Additional samplingits closure strategy for submission to ADEQ, which is ongoing and couldexpected to result in additional adjustments to the related environmental remediation obligation.increased costs that could be significant. FCX will continue updating its closure strategy and closure cost estimates at other Arizona sites, and any such updates may also result in increased costs that could be significant.


Uranium Mining Sites
16
As reported in Note 12
Table of FCX’s annual report on Form 10-K for the year ended December 31, 2016, the Department of Justice, the U.S. Environmental Protection Agency, the Navajo Nation and two FCX-related subsidiaries reached an agreement regarding the scope of environmental investigation and remediation work for 94 former uranium mining sites on tribal lands, and the related financial contributions of the U.S. government 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 credit to operating income in second-quarter 2017 after receiving court approval of the Consent Decree.Contents

Litigation
During third-quarter 2017, thereThere were no significant updates to previously reported legal proceedings included in Note 12 of FCX’s annual report on2021 Form 10-K for the year ended December 31, 2016.10-K.


Tax and Other Matters
Cerro Verde Royalty Dispute
As reported in FCX’s annual report on Form 10-K forSmelter Development Progress. On January 7, 2021, the year ended December 31, 2016, and as subsequently updated in Note 9Indonesia government levied an administrative fine of FCX’s quarterly report on Form 10-Q for the quarter ended June 30, 2017, SUNAT, Peru’s 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. Cerro Verde contested these assessments because it believes its 1998 stability agreement exempts from royalties all minerals extracted from its mining concession, irrespective of the method used for processing those minerals. No assessments have been issued$149 million 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 December 2006 through December 2008 under an installment program ($135 million paid by Cerro VerdeMarch 30, 2020, through September 30, 2017).2020, on PT-FI for failing to achieve physical development progress on its greenfield smelter as of July 31, 2020. On January 13, 2021, PT-FI responded to the Indonesia government objecting to the fine because of events outside of its control causing a delay of the greenfield smelter’s development progress. PT-FI believes that its communications during 2020 with the Indonesia government were not properly considered before the administrative fine was levied.


In October 2017,June 2021, the Peruvian Supreme CourtIndonesia government issued a ruling in favor of SUNAT that the assessments of royaltiesministerial decree for the year 2008calculation of an administrative fine for lack of smelter development in light of the COVID-19 pandemic. During 2021, PT-FI recorded charges totaling $16 million for a potential settlement of the administrative fine. On January 25, 2022, the Indonesia government submitted a new estimate of the administrative fine totaling $57 million. In March 2022, PT-FI paid the administrative fine and recorded a charge of $41 million in first-quarter 2022. Based on ore processedPT-FI’s revised smelter construction schedule, PT-FI does not believe any additional fines should be applied and will dispute any attempts by the Cerro Verde concentrator were proper under Peruvian law.Indonesia government to levy additional fines, which could be significant.


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As a result of the unfavorable Peruvian Supreme Court ruling on the 2008 royalty dispute, Cerro Verde recorded pre-tax charges totaling $357 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 madePT-FI Export License. Export licenses are valid 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 theone-year period, from January 2011 through September 2017. PT-FI is filing objections to these assessments. During 2017, the Indonesia Tax Court issued rulings against PT-FI with respect to assessments for additional taxes and penalties for the 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 exposure based on the exchange rate as of September 30, 2017, totals $516 million, including penalties) in the Indonesia Tax Court and ultimately the Indonesia Supreme Court. As of November 7, 2017, PT-FI has not paid and does not intend 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-K 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 and approval by the Indonesia government every six months, depending on smelter construction progress.

Following the issuance of the January and February 2017 regulations and discussions with the Indonesian government, In March 2022, 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 byobtained a mutually satisfactory alternative. PT-FI also committed to commence construction of a new smelter during a five-year time frame, following approval of theone-year 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 itsconcentrate export license through March 19, 2023, for anode slimes, PT Smelting’s operations (PT-FI’s 25 percent-owned2000000 metric tons of concentrate, the approval of which was based on PT-FI’s revised smelter in Indonesia) were shut down from January 19, 2017, until early March 2017. On February 10, 2017, PT-FI was forcedconstruction schedule as modified 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 violationsreflect impacts of the COW. PT-FI continues to reserve its rights under these provisions.ongoing COVID-19 pandemic.


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, 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 and Cerro Verde andcopper mines, the Grasberg minerals district (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.



17
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Product Revenues. FCX’s revenues attributable to the products it sold for the first quarters of 2022 and 2021 follow (in millions):

Three Months Ended
March 31,
 20222021
Copper:
Concentrate$2,691 $1,709 
Cathode1,435 1,234 
Rod and other refined copper products1,116 684 
Purchased coppera
70 218 
Gold811 518 
Molybdenum378 244 
Other188 253 
Adjustments to revenues:
Treatment charges(133)(97)
Royalty expenseb
(95)(63)
Export dutiesc
(98)(29)
Revenues from contracts with customers6,363 4,671 
Embedded derivativesd
240 179 
Total consolidated revenues$6,603 $4,850 
a.FCX purchases copper cathode primarily for processing by its Rod & Refining operations.
b.Reflects royalties on sales from PT-FI and Cerro Verde that will vary with the volume of metal sold and prices.
c.Reflects PT-FI export duties, including a first-quarter 2022 charge of $18 million associated with an adjustment to prior-period export duties.
d.Refer to Note 6 for discussion of embedded derivatives related to FCX’s provisionally priced concentrate and cathode sales contracts.
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Financial Information by Business SegmentsSegment
(In millions)
    
 AtlanticCorporate,
North America Copper MinesSouth America MiningCopperOther
CerroIndonesiaMolybdenumRod &Smelting& Elimi-FCX
MorenciOtherTotalVerdeOtherTotalMiningMinesRefining& RefiningnationsTotal
Three Months Ended March 31, 2022           
Revenues:            
Unaffiliated customers$90 $55 $145 $1,106 $160 $1,266 $2,326 a$— $1,743 $718 $405 b$6,603 
Intersegment711 1,095 1,806 108 — 108 78 128 9 — (2,129)— 
Production and delivery363 655 1,018 558 112 670 626 75 1,754 722 (1,715)3,150 
Depreciation, depletion and amortization44 61 105 87 10 97 248 16 1 6 16 489 
Selling, general and administrative expenses— 1 1 2 — 2 27 — — 8 77 115 
Mining exploration and research expenses— — — — — — — — — — 24 24 
Environmental obligations and shutdown costs— — — — — — — — — — 16 16 
Operating income (loss)394 433 827 567 38 605 1,503 37 (3)(18)(142)2,809 
Interest expense, net— — — 3 — 3 2 — — 2 120 127 
Provision for (benefit from) income taxes— — — 227 14 241 586 — — — (3)824 
Total assets at March 31, 20222,773 5,284 8,057 8,678 1,925 10,603 19,338 1,702 299 1,045 7,788 48,832 
Capital expenditures73 57 130 33 23 56 379 1 2 11 144 c723 
Three Months Ended March 31, 2021            
Revenues:            
Unaffiliated customers$4 $28 $32 $917 $175 $1,092 $1,383 a$— $1,309 $687 $347 b$4,850 
Intersegment564 742 1,306 

45 — 45 52 70 7 — (1,480)— 
Production and delivery269 480 749 436 103 539 455 58 1,316 673 (1,003)d2,787 
Depreciation, depletion and amortization34 46 80 89 12 101 199 15 1 7 16 419 
Selling, general and administrative expenses— 1 1 2 — 2 26 — — 7 64 100 
Mining exploration and research expenses— — — — — — — — — — 7 7 
Environmental obligations and shutdown costs— — — — — — — — — — 5 5 
Operating income (loss)265 243 508 435 60 495 755 (3)(1)— (222)1,532 
Interest expense, net— — — 13 — 13 1 — — 1 130 145 
Provision for (benefit from) income taxes— — — 173 21 194 315 — — — (66)443 
Total assets at March 31, 20212,629 5,283 7,912 8,723 1,738 10,461 17,273 1,753 235 997 5,012 43,643 
Capital expenditures10 16 26 20 1 21 290 1 1 6 25 c370 
                         
(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 PT-FI's sales to PT Smelting totaling $917 million in first-quarter 2022 and $792 million in first-quarter 2021.
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 capital expenditures for the greenfield smelter and PMR.
d.Includes charges associated with the major maintenance turnaround at the Miami Smelter totaling $68 million.
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.

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(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.

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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.
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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, andMarch 31, 2022, the related consolidated statements of operations andincome, comprehensive income, (loss) for the three-equity and nine-month periods ended September 30, 2017 and 2016, the consolidated statements of cash flows for the nine-monththree-month periods ended September 30, 2017March 31, 2022 and 2016,2021, 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, 2021, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 15, 2022, 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, 2021, 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, 2017May 5, 2022
20
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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, 2016,2021 (2021 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 mineral 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.


Our results for first-quarter 2022 reflect strong operating and financial performance, cash flow generation and cash returns to shareholders. We remain focused on cost and capital management and are advancing our sustainability objectives. We achieved a 24 percent increase in copper sales and a 59 percent increase in gold sales, compared to first-quarter 2021. We plan to continue to execute our operating plans, which we expect will provide strong cash flows to support advancement of organic growth initiatives and continued cash returns to shareholders under our established financial policy, based on a favorable operational and market outlook.

As further discussed in “Operations,” first-quarter 2022 highlights include:
•Continued growth in operating rates at Lone Star toward achieving production of 300 million pounds of copper per year from oxide ores (compared with the initial design capacity of 200 million pounds per year).
•Strong performance from Cerro Verde's concentrator facilities, with milling rates averaging 394,400 metric tons of ore per day. Subject to ongoing monitoring of COVID-19 protocols, milling rates are currently expected to average approximately 400,000 metric tons of ore per day for the remainder of 2022.
•Increased milling rates from the underground mines at the Grasberg minerals district, which averaged 186,500 metric tons of ore per day, a 50 percent increase from milling rates in first-quarter 2021. Milling rates at the Grasberg minerals district are expected to average approximately 180,000 to 190,000 metric tons of ore per day for the remainder of 2022.

Net income (loss) attributable to common stock totaled $280 million$1.5 billion in third-quarter 2017, $217 million in third-quarter 2016, $776 million for the first nine months of 2017 and $(4.4) billion for the first nine months of 2016. The 2017 periods,first-quarter 2022, compared with the 2016 periods, benefited from$0.7 billion in first-quarter 2021, primarily reflecting higher copper prices and higher gold sales volumes and prices, partly offset by lower copper sales volumesa higher provision for income taxes and higher tax expense. The 2017 periods also include a net charge of $188 million for accruals related to Peruvian government claims for disputed royalties (refer to “Operations – South America Mining” for further discussion). The first nine months of 2016 included significant charges for the impairment of oil and gas propertiesincreased energy and other oil and gas charges for drillship settlements/idle rig costs, inventory adjustments, asset impairment and restructuring, partly offset by net gains on sales of assets.input costs. Refer to “Consolidated Results” for further discussion.


At September 30, 2017,March 31, 2022, we had $5.0consolidated debt of $9.6 billion inand consolidated cash and cash equivalents of $8.3 billion, resulting in net debt of $1.3 billion (including $0.6 billion of net debt for the Indonesia smelter projects). Refer to “Net Debt” for reconciliations of consolidated debt and $14.8 billion in totalconsolidated cash and cash equivalents to net debt. We

At March 31, 2022, we had no borrowings and $3.5$3.5 billion available under our revolving credit facility. Refer to Note 6At March 31, 2022, we had $1.4 billion of current debt, including $995 million of senior notes maturing in March 2023 (with redemption rights at par in December 2022) and $325 million under Cerro Verde’s Term Loan maturing in June 2022.

In April 2022, PT Freeport Indonesia (PT-FI) completed the sale of $3.0 billion of senior notes primarily in connection with its financing plans for further discussionconstruction of debt.additional domestic smelting capacity.


We continue to manage production, exploration and administrative costs 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 thatIn first-quarter 2022, 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 developmentacquired 12.3 million shares of our copper resources,common stock under the timingshare repurchase program for a total cost of which will be dependent on market conditions.

In August 2017,$541 million ($44.02 average cost per share). Through May 5, 2022, 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 ofacquired 28.7 million shares
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completing the negotiationsof our common stock for a total cost of $1.2 billion ($41.64 average cost per share) 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$1.8 billion remains available under the dispute resolution provisions. share repurchase program.

Refer to “Operations – Indonesia Mining”Note 5 and “Capital Resources and 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 2021 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:
2022:
Copper (millions of recoverable pounds):
North America copper mines1,536 
South America mining1,154 
Indonesia mining1,564 
Total4,254 
CopperGold (millions of recoverable pounds):ounces)
1.6 
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)
9480 
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 30 million pounds produced by our Molybdenum mines and 50 million pounds produced by our North America and South America copper mines.

Consolidated sales volumes for fourth-quarter 2017in second-quarter 2022 are expected to approximate 1.0 billion pounds of copper, 625405 thousand ounces of gold and 2321 million pounds of molybdenum.

Projected sales volumes are dependent on operational performance, 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 2021 Form 10-K.


Consolidated Unit Net Cash Costs
Assuming average prices of $1,300$1,950 per ounce of gold and $8.00$19.00 per pound of molybdenum for fourth-quarter 2017the remainder of 2022 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$1.44 per pound of copper for the year 2017.2022 (including $1.41 per pound of copper in second-quarter 2022). The increase from the January 2022 estimate of $1.35 per pound of copper primarily reflects higher costs of energy and other consumables and currency exchange rates in South America, partly offset by higher gold volumes and commodity price assumptions. We are experiencing significant cost inflation, principally associated with energy (which represents about 20 percent of our site operating costs) and other consumables such as sulfuric acid, explosives and steel. Russia’s invasion of Ukraine has placed additional pressure on an already challenging global supply chain environment. The impact of price changes for fourth-quarter 2017during the remainder of 2022 on consolidated unit net cash costs for the year 2022 would approximate $0.01$0.03 per pound of copper for each $50$100 per ounce change in the average price of gold and $0.005$0.02 per pound of copper for each $2$2.00 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

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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$4.75 per pound offor copper, $1,300$1,950 per ounce offor gold, and $8.00$19.00 per pound offor molybdenum for fourth-quarter 2017,the remainder of 2022, our consolidated operating cash flows are estimated to approximate $4.3$8.6 billion (net of $0.9 billion of working capital and other uses) for the year 2017 (including $0.5 billion in working capital sources and tax payments). Projected2022. Estimated consolidated operating cash flows for the year 20172022 also reflect an estimated income tax provision of $1.3$3.4 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate for the year 2017)2022). The impact of price changes during fourth-quarter 2017for the remainder of 2022 on operating cash flows would approximate $80
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$300 million for each $0.10 per pound change in the average price of copper, $20$80 million for each $50$100 per ounce change in the average price of gold and $15$75 million for each $2$2.00 per pound change in the average price of molybdenum.


Consolidated Capital Expenditures
Consolidated capital expenditures for the year 2022 are expected to approximate $1.5$4.6 billion ($3.2 billion excluding capital expenditures for the year 2017, including $0.9greenfield smelter and precious metals refinery (PMR) - collectively, the Indonesia smelter projects), and include $1.9 billion for major mining projects ($1.3 billion for planned projects primarily associated with underground mine development in the Grasberg minerals district and supporting mill and power capital costs and $0.6 billion for underground development activities at Grasberg. As adiscretionary growth projects).

Capital expenditures for the Indonesia smelter projects are expected to approximate $1.4 billion for the year 2022.
Development of additional smelting capacity in Indonesia will result in the elimination of regulatory uncertainty, PT-FI has slowed investments in its underground development projects. If PT-FI is unableexport duties, providing an
offset to reach a definitive agreementthe economic cost associated with the Indonesian government onIndonesia smelter projects. Capital expenditures for the Indonesia smelter projects are being funded with the net proceeds from PT-FI's unsecured senior notes issued in April 2022 and its long-term mining rights, we intend to reduce or defer investments significantly in underground development projects.available bank credit facilities.


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MARKETS


World prices for copper, gold and molybdenum can fluctuate significantly. During the period from January 20072012 through September 2017,March 2022, 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$4.87 per pound in 2011;2022; 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 on2021 Form 10-K for the year ended December 31, 2016.10-K.
q3coppergraph.jpgfcx-20220331_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 20072012 through September 2017. Beginning in mid-2014,March 2022. During first-quarter 2022, LME 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. During third-quarter 2017, LME spot coppersettlement prices ranged from a low of $2.62$4.34 per pound to a record high of $3.13$4.87 per pound, averaged $2.88$4.53 per pound and closedsettled at $2.94$4.69 per pound on September 30, 2017.March 31, 2022. Copper prices have been supported by strong demand during the pandemic recovery, rising investor sentiment associated with copper’s prominent role in the global transition to cleaner energy, ongoing supply disruptions and falling inventories. The LME spot copper settlement price was $3.09$4.45 per pound on October 31, 2017.April 29, 2022.


Long-term fundamentals for copper remain positive. We believe the underlying long-term fundamentals of the copper business remain positive,future demand will be supported by the significantcopper’s role of copper in the global economytransition to renewable power, electric vehicles and a challenging long-term supply environment attributable to difficultyother carbon-reduction initiatives, and continued urbanization in replacing the outputdeveloping countries. The small number of existing large mines with new production sources. Future copper prices areapproved, large-scale projects beyond those expected to be volatilecommence operations in 2022 and are likely2023, the long lead times required to be influenced by demand from Chinapermit and emerging markets, as well as economic activity in the U.S. and other industrialized countries, the timing of the development ofbuild new supplies of copper and the production levels of mines and copper smelters.declining ore grades at existing operations continue to highlight the fundamental supply challenges for copper.
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q3goldgraph.jpgfcx-20220331_g3.jpg
This graph presents London PM gold prices from January 20072012 through September 2017. An improving economic outlook, stronger U.S. dollar and positive equity performance contributed to lower demand for gold since 2014.March 2022. During third-quarter 2017,first-quarter 2022, London PM gold prices ranged from a low of $1,211$1,788 per ounce to a high of $1,346$2,039 per ounce, averaged $1,278$1,877 per ounce, and closed at $1,283$1,942 per ounce on September 30, 2017.March 31, 2022. Many analysts expect future gold prices to be supported by the effects of elevated debt levels associated with large pandemic-related stimulus efforts, historically low U.S. interest rates and a weaker U.S. dollar. The London PM gold price was $1,270$1,911 per ounce on October 31, 2017.April 29, 2022.
q3molygraph.jpg
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fcx-20220331_g4.jpg
This graph presents the Metals Week Molybdenum Dealer Oxide weekly average pricesprice from January 20072012 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.March 2022. During third-quarter 2017,first-quarter 2022, the weekly average price of molybdenum ranged from a low of $7.11$18.74 per pound to a high of $8.88$19.33 per pound, averaged $8.14$19.08 per pound, and was $8.49$19.30 per pound on September 30, 2017.March 31, 2022. Molybdenum prices continue to be supported by supply constraints and increased demand, as mines in Chile continued to report low production, logistic challenges and geopolitical risk due to Russia’s invasion of Ukraine causing traders to increase inventories. The Metals Week Molybdenum Dealer Oxide weekly average price was $8.38$19.22 per pound on October 31, 2017.April 29, 2022.


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CONSOLIDATED RESULTS
Three Months Ended March 31,
 20222021
SUMMARY FINANCIAL DATA
(in millions, except per share amounts)
Revenuesa,b
$6,603 $4,850 
Operating incomea
$2,809 $1,532 
Net income attributable to common stockc
$1,527 d$718 e
Diluted net income per share of common stock$1.04 $0.48 
Diluted weighted-average common shares outstanding1,469 1,477 
Operating cash flowsf
$1,691 $1,075 
Capital expenditures$723 $370 
At March 31:
Cash and cash equivalents$8,338 $4,580 
Total debt, including current portion$9,621 $9,809 
 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 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 $102 million ($4942 million to net income attributable to common stock or $0.03 per share) in third-quarter 2016first-quarter 2022 and $980$146 million ($98057 million to net lossincome attributable to common stock or $0.76$0.04 per share) in first-quarter 2021 (refer to Note 6 for 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 charges totaling $38 million ($0.03 per share), primarily associated with the first nine monthssettlement of 2016,an administrative fine and an adjustment to prior-period export duties at PT-FI. These net charges, before income taxes and noncontrolling interests, were recorded to production and delivery ($43 million) and to revenues ($18 million).
e.Includes net charges totaling $38 million ($0.03 per share), primarily associated with contested matters at PT-FI (including an administrative fine levied by the Indonesia government and historical tax audits), employee separation charges in North America and asset retirement obligation adjustments. These charges, before income taxes and noncontrolling interests, were recorded to production and delivery ($37 million), interest expense, net ($4 million) and other income, net ($5 million), partly offset by credits recorded to environmental obligations and shutdown costs ($3 million).
f.Working capital and other uses totaled $811 million in first-quarter 2022 and $336 million in first-quarter 2021.

Three Months Ended March 31,
20222021
SUMMARY OPERATING DATA
Copper (millions of recoverable pounds)
Production1,009 910 
Sales, excluding purchases1,024 825 
Average realized price per pound$4.66 $3.94 
Site production and delivery costs per pounda
$2.03 $1.86 
Unit net cash costs per pounda
$1.33 $1.39 
Gold (thousands of recoverable ounces)
Production415 297 
Sales, excluding purchases409 258 
Average realized price per ounce$1,920 $1,713 
Molybdenum (millions of recoverable pounds)
Production21 20 
Sales, excluding purchases19 21 
Average realized price per pound$19.30 $11.62 
a.Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for drillship settlements, inventory adjustments, asset impairmentall copper mines, before net noncash and restructuring charges.other costs. For reconciliations of per pound unit costs (credits) by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.”
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.


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 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
 
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.”

Revenues
Consolidated revenues totaled $4.3$6.6 billion in third-quarter 2017first-quarter 2022 and $11.4 billion for the first nine months of 2017, compared with $3.9$4.9 billion in third-quarter 2016 and $10.5 billion for the first nine months of 2016.first-quarter 2021. 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 March 31
Consolidated revenues - 2021 period$4,850 
Higher (lower) sales volumes:
Copper786 
Gold259 
Molybdenum(16)
Higher average realized prices:
Copper737 
Gold85 
Molybdenum149 
Adjustments for prior period provisionally priced copper sales(44)
Higher Atlantic Copper revenues31 
Lower revenues from purchased copper(148)
Higher treatment charges(36)
Higher royalties and export duties(101)
Other, including intercompany eliminations51 
Consolidated revenues - 2022 period$6,603 
 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 to 355 thousand ounces in third-quarter 2017 and 969 thousand ounces for the first nine months of 2017,first-quarter 2022, compared with 317 thousand ounces in third-quarter 2016 and 674 thousand ounces for the first nine months of 2016,first-quarter 2021, primarily reflecting higher ore gradesthe ramp-up of underground mining at PT-FI and timing of shipments in Indonesia.
Consolidated molybdenum sales volumes increased to 22 million pounds in third-quarter 2017 and 71 million pounds for the first nine months 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.

North America. 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 in first-quarter 2022, compared with third-quarter 2016,first-quarter 2021, were 3418 percent higher for copper, 312 percent lowerhigher for gold and 166 percent higher for molybdenum,molybdenum.
Average realized copper prices include net favorable adjustments to current period provisionally priced copper sales (i.e., provisionally priced sales at March 31, 2022 and average realized prices for the first nine months of 2017, compared with the first nine months of 2016, were 29 percent higher for copper, 2 percent lower for gold2021) totaling $116 million in first-quarter 2022 and 10 percent higher for molybdenum. Refer to “Markets” for further discussion.

Provisionally Priced Copper Sales.Substantially$61 million in first-quarter 2021. 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 (unfavorable)
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impacts of netPrior Period Provisionally Priced Copper Sales.Net favorable adjustments to prior periods’ provisionally priced copper sales from continuing operations(i.e., provisionally priced sales at December 31, 2021 and 2020) recorded in consolidated revenues totaled $95$102 million in third-quarter 2017first-quarter 2022 and $81 million for the first nine months of 2017, compared with $(15)$146 million in third-quarter 2016first-quarter 2021. Refer to Notes 6 and $5 million9 for the first nine monthsa summary of 2016, primarily reflecting higher copper prices in the 2017 periods.total adjustments to prior period and current period provisionally priced sales.


At September 30, 2017,March 31, 2022, we had provisionally priced copper sales at our copper mining operations totaling 338473 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $2.93$4.71 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,March 31, 2022, provisional price recorded would have an approximate $11$15 million effect on our 20172022 net income attributable to common stock. TheCopper prices have declined from March 31, 2022, the LME spot copper settlement price was $3.09averaged $4.62 per pound in April 2022 and approximated $4.30 per pound on October 31, 2017.May 4, 2022.

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Treatment Charges. Revenues from our concentrate sales are recorded net of treatment charges. Lower treatment charges
Atlantic Copper Revenues.Atlantic Copper revenues totaled $718 million in the 2017 periods,first-quarter 2022, compared with the 2016 periods,$687 million in first-quarter 2021. Higher revenues in first-quarter 2022, compared with first-quarter 2021, 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 15 million pounds in third-quarter 2017first-quarter 2022 and 195 million for the first nine months of 2017, compared with 6153 million pounds in third-quarter 2016first-quarter 2021.

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 131 million poundsthe 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 currently pays duties on concentrate exports of 5 percent, declining to 2.5 percent when development progress for additional smelting capacity in Indonesia exceeds 30 percent, and eliminated when development progress for additional smelting capacity in Indonesia exceeds 50 percent. Refer to “Operations – Indonesia Mining” for further discussion of the first nine monthscurrent progress on additional smelting capacity in Indonesia and to Note 9 for a summary of 2016).royalty expense and export duties.


Atlantic Copper Revenues.Atlantic Copper revenues totaled $555 million in third-quarter 2017 and $1.4 billion for the first nine months of 2017, compared with $445 million in third-quarter 2016 and $1.4 billion for the first nine months of 2016. Higher revenues in third-quarter 2017, compared with third-quarter 2016, primarily reflect higher copper prices.

Production and Delivery Costs
Consolidated production and delivery costs totaled $3.2 billion in first-quarter 2022 and $2.8 billion in third-quarter 2017, $2.5 billion in third-quarter 2016, $7.5 billion for the first nine months of 2017 and $8.0 billion for the first nine months of 2016. Productionfirst-quarter 2021. Higher consolidated production and delivery costs for the third quarterin first-quarter 2022 primarily reflect higher volumes and first nine months of 2017 included charges totaling $216 million at Cerro Verde associated with disputed royalties for prior years (refer to “Operations – South America Mining” for further discussion). Productionincreased energy, maintenance and delivery costs for the first nine months of 2016 included charges totaling $942 million at oil and gas operations primarily for drillship settlements and inventory adjustments.other input costs.


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$2.03 per pound of copper in third-quarter 2017first-quarter 2022 and $1.60$1.86 per pound of copper in first-quarter 2021.

Higher consolidated site production and delivery costs per pound of copper for the first nine months of 2017,first-quarter 2022, compared with $1.37 per pound of copper in third-quarter 2016 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, compared with the 2016 periods,first-quarter 2021, primarily reflect lower copperhigher mining and milling costs and increased energy and other input costs, partly offset by higher sales volumes. 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$489 million in third-quarter 2017first-quarter 2022 and $1.3 billion for the first nine months of 2017, compared with $643$419 million in third-quarter 2016 and $1.9 billion for the first nine months of 2016. Lowerfirst-quarter 2021. Higher DD&A in the 2017 periods, compared with the 2016 periods,first-quarter 2022 primarily reflects lower DD&A from oilhigher sales volumes and gas operations resulting from sales of significant oil and gas propertiesassets placed in 2016.

Impairment of Oil and Gas Properties
The review of the carrying value of our oil and gas properties 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 expenses totaled $106 million in third-quarter 2017, $110 million in third-quarter 2016, $366 million for the first nine months of 2017 and $408 million for the first nine months of 2016. Selling, general and administrative expenses include net oil and gas-related charges totaling $17 million for the first nine months of 2017 for contract termination and $38 million for the first nine months of 2016 for restructuring.

Consolidated selling, general and administrative expenses were net of capitalized general and administrative expenses at our oil and gas operations totaling $16 million in third-quarter 2016 and $66 million for the first nine months of 2016.

Mining Exploration 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 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.

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, primarilyservice associated with the salesramp-up 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.underground mining at PT-FI.


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)capitalization) totaled $196$153 million in third-quarter 2017, $211first-quarter 2022 and $160 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 .first-quarter 2021.


Capitalized interest varies with the level of expenditures forqualifying assets associated with our development projects and average interest rates on our borrowings andborrowings. Capitalized interest totaled $33$26 million in third-quarter 2017, $24first-quarter 2022 and $15 million in third-quarter 2016, $91 millionfirst-quarter 2021. The increase in capitalized interest in first-quarter 2022, compared with first-quarter 2021, is related to major mining projects primarily associated with underground development activities in the Grasberg minerals district and development of the greenfield smelter in Indonesia. Refer to “Capital Resources and Liquidity - Investing Activities” for the first nine monthsdiscussion of 2017 and $73 million for the first nine months of 2016.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):
Three Months Ended March 31,
20222021
Income (Loss)a
Effective
Tax Rate		Income Tax (Provision) Benefit
Income (Loss)a
Effective
Tax Rate		Income Tax (Provision) Benefit
U.S.b
$552 — %c$(2)$185 — %c$— 
South America612 39 %(241)493 39 %(194)
Indonesia1,512 39 %(586)757 42 %(315)
Eliminations and other37 N/A(10)(37)N/A4 
Rate adjustmentd
— N/A15 — N/A62 
Consolidated FCX$2,713 30 %$(824)$1,398 32 %$(443)
 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) 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 related to continuing operations for the year 2017 will approximate 45 percent and would decrease with higher prices.

a.Represents income before income taxes and equity in affiliated companies’ net earnings (losses).
Net Income (Loss) from Discontinued Operationsb.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.
In November 2016, we completed the sale of our interest in TFHL, through which we had an effective 56 percent interest in the Tenke copper and cobalt concessions in the Democratic Republic of Congo. c.Includes valuation allowance release on prior year unbenefited net operating losses.
d.In accordance with applicable accounting guidelines, the resultsrules, we adjust our interim provision for income taxes equal to our consolidated tax rate.

Assuming achievement of TFHL have been reported as discontinued operationscurrent sales volume and cost estimates and average prices of $4.75 per pound for all periods presented. Net income from discontinued operations totaled $3 million in third-quarter 2017copper, $1,950 per ounce for gold and $50 million$19.00 per pound for molybdenum for the first nine monthsremainder of 2017, which primarily reflected adjustments to the fair value of the potential $120 million contingent consideration related to the sale, which totaled $58 million at September 30, 2017, and will continue to be adjusted through December 31, 2019. Net loss from discontinued operations of $6 million in third-quarter 2016 and $191 million2022, we estimate our consolidated effective tax rate for the first nine monthsyear 2022 would approximate 31 percent. Changes in projected sales volumes and average prices during 2022 would incur tax impacts at estimated effective rates of 2016 include an estimated loss on disposal of $5 million40 percent for third-quarter 2016Peru, 38 percent for Indonesia and $182 million0 percent for the first nine months of 2016. Refer to Note 2 for a summary of the components of net income (loss) from discontinued operations.U.S.


OPERATIONS


Responsible Production
2021 Annual Report on Sustainability. In April 2022, we published our 2021 Annual Report on Sustainability, which is available on our website at fcx.com/sustainability. We have a long history of environmental, social and governance (ESG) programs and are striving to continuously improve performance in these important areas. This report marks our 21st year of reporting on our sustainability progress and our second year of reporting in alignment with the Value Reporting Foundation’s SASB Standards for the Metals & Mining industry. We are committed to building upon our achievements in sustainability and we are focused on leading as a responsible copper producer.

The Copper Mark. We are committed to validating all of our copper producing sites with the Copper Mark, a comprehensive assurance framework designed to demonstrate the copper industry's responsible production practices. To achieve the Copper Mark, each site is required to complete an external assurance process to assess conformance with 32 ESG requirements. During first-quarter 2022, our Chino and Tyrone sites were awarded the Copper Mark. To date, we have achieved the Copper Mark at nine of our global sites (Chino, Tyrone, Bagdad, Morenci, Miami, El Paso, Cerro Verde, El Abra and Atlantic Copper), two sites have signed letters of commitment (Safford and Sierrita) and we expect to advance preparation for the validation process for PT-FI during 2022.

Leaching Innovation Initiatives
We have a long history of leach production and continue to pursue internal and external initiatives to advance sulfide leaching technologies, which are expected to allow us to recover additional copper from our large existing leach stockpiles. We have several initiatives ongoing across our North America and South America operations that incorporate new applications, technologies and data analytics. Initial results support the potential for incremental low-cost and low-carbon additions to our production and reserve profile.

Feasibility and Optimization Studies
We are engaged in various studies associated with potential future expansion projects primarily in North and South America. The cost of these studies are expensed as incurred. We estimate the costs of these studies will approximate $200 million for the year 2022 (including approximately $60 million in second-quarter 2022), compared with approximately $60 million for the year 2021.
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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. 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 oresulfide-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 undevelopedsubstantial reserves and resourcesfuture opportunities in North America and a portfolio of potential long-term development projects. Future investments will be undertaken based on the results of economic and technical feasibility studies, and are dependent on market conditions. U.S., primarily associated with existing mining operations.

We continue to study 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 to have copperachieve 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 200of 300 million pounds of copper per year from oxide ores (compared with an approximate 20-year mine life. Considering the long-term nature and sizeinitial design capacity of 200 million pounds per year). The oxide project at Lone Star advances the project, results could vary from these estimates. The project would also advance the potentialopportunity for development of the underlying, large-scale sulfide resources. We are also increasing exploration in the area to support metallurgical testing and mine development planning for a larger-scale district opportunity. potential significant long-term investment to build additional scale on an economically attractive basis.

We have obtained regulatory approvalsare planning an expansion to double the concentrator capacity of our Bagdad operation in northwest Arizona and are engaging stakeholders. We are commencing a feasibility study for this project and are assessing the timing to commence pre-stripping activities. We are conducting additional drilling as we continue to evaluate longer term opportunities available from the significant sulfide potential in the Lone Star/Safford minerals district. during 2022.


Operating Data. Following is a summary of consolidated operating data for the North America copper minesmines:
Three Months Ended March 31,
 20222021
Operating Data, Net of Joint Venture Interests  
Copper (millions of recoverable pounds)
  
Production354 353 
Sales, excluding purchases381 308 
Average realized price per pound$4.62 $3.88 
Molybdenum (millions of recoverable pounds)
  
Productiona
7 8 
100% Operating Data  
Leach operations  
Leach ore placed in stockpiles (metric tons per day)708,600 705,100 
Average copper ore grade (percent)0.28 0.28 
Copper production (millions of recoverable pounds)245 262 
Mill operations  
Ore milled (metric tons per day)291,400 268,000 
Average ore grade (percent):
Copper0.36 0.37 
Molybdenum0.02 0.03 
Copper recovery rate (percent)80.9 78.7 
Copper production (millions of recoverable pounds)169 151 
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 381 million pounds in third-quarter 2017 and 1.1 billion pounds for the first nine months of 2017 were lower than third-quarter 2016 sales of 458first-quarter 2022, compared with 308 million pounds and 1.4 billion pounds for the first nine months of 2016,copper in first-quarter 2021, primarily reflecting lower ore grades. Additionally, third-quarter 2017 was impacted by the timing of shipments.
North America copper sales are estimated to approximate 1.5 billion pounds for the year 2017, compared with 1.8 billion pounds in 2016.2022.


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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. 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.


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 March 31,
 20222021
 By- Product MethodCo-Product MethodBy- Product MethodCo-Product Method
Copper
Molyb-
denuma
Copper
Molyb-
denuma
Revenues, excluding adjustments$4.62 $4.62 $17.97 $3.88 $3.88 $10.49 
Site production and delivery, before net noncash
and other costs shown below
2.38 2.20 10.95 2.04 1.89 6.67 
By-product credits(0.34)— — (0.30)— — 
Treatment charges0.09 0.09 — 0.11 0.10 — 
Unit net cash costs2.13 2.29 10.95 1.85 1.99 6.67 
DD&A0.27 0.25 0.88 0.26 0.24 0.46 
Noncash and other costs, net0.07 0.07 0.14 0.13 0.13 0.06 
Total unit costs2.47 2.61 11.97 2.24 2.36 7.19 
Revenue adjustments, primarily for pricing
on prior period open sales
0.03 0.03 — 0.02 0.02 — 
Gross profit per pound$2.18 $2.04 $6.00 $1.66 $1.54 $3.30 
Copper sales (millions of recoverable pounds)381 381 308 308  
Molybdenum sales (millions of recoverable pounds)a
7   8 
             
 Three 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$2.92
 $2.92
 $7.59
 $2.19
 $2.19
 $7.39
 
             
Site production and delivery, before net noncash
and other costs shown below
1.67
 1.56
 5.58
 1.44
 1.34
 5.51
 
By-product credits(0.17) —
 —
 (0.17) —
 —
 
Treatment charges0.11
 0.11
 —
 0.10
 0.09
 —
 
Unit net cash costs1.61
 1.67
 5.58
 1.37
 1.43
 5.51
 
DD&A0.28
 0.27
 0.49
 0.28
 0.26
 0.70
 
Noncash and other costs, net0.04
 0.04
 0.05
 0.06
 0.05
 0.13
 
Total unit costs1.93
 1.98
 6.12
 1.71
 1.74
 6.34
 
Revenue adjustments, primarily for pricing
on prior period open sales
0.03
 0.03
 —
 —
 —
 —
 
Gross profit per pound$1.02
 $0.97
 $1.47
 $0.48
 $0.45
 $1.05
 
             
Copper sales (millions of recoverable pounds)345
 345
   457
 457
   
Molybdenum sales (millions of recoverable pounds)a
    8
     9
 
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 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.

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

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$2.13 per pound of copper in third-quarter2017 and $1.54 per pound for the first nine months of 2017first-quarter 2022 were higher than unit net cash costs of $1.37$1.85 per pound in third-quarter2016 and $1.40 per pound for the first nine months of 2016,first-quarter 2021, primarily reflecting lowerincreased mining and milling rates and higher energy and other input costs, partly offset by higher sales volumes.


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$2.22 per pound of copper for the year 2017,2022, based on achievement of current sales volume and cost estimates and assuming an average molybdenum price of $8.00$19.00 per pound for fourth-quarter 2017.the remainder of 2022. North America’s average unit net cash costs for the year 20172022 would change by approximately $0.007$0.03 per pound for each $2$2.00 per pound change in the average price of molybdenum.molybdenum for the remainder of 2022.



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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 oresulfide-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 favor of SUNAT, Peru’s national tax authority, that the assessments of royalties 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, irrespective 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 charges totaling $357 million ($359 million including net tax charges and $188 million net of noncontrolling interests) in third-quarter 2017 associated with prior assessments 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 royalties in accordance with the new stability agreement.

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 During first-quarter 2022, milling rates at Cerro Verde's concentrator facilities averaged 394,400 metric tons of ore per day. Subject to ongoing monitoring of COVID-19 protocols, 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 the concentrator facilities from 120,000are currently expected to average approximately 400,000 metric tons of ore per day to 360,000 metric tonsfor the remainder of ore per day.2022.

We continue to evaluate a major expansionOperating rates at El Abra have returned to process additional sulfide materialpre-COVID-19 levels and increased mining and stacking activities are expected to achieve higher recoveries. Exploration results atresult in an approximate 30 percent increase in El Abra indicate a significantcopper production for the year 2022, compared with the year 2021.

El Abra's large sulfide resource which could potentially supportsupports a potential major mill project similar to facilities recentlythe large-scale concentrator 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. We are engaging stakeholders and preparing data required for submission of a robust permit application, while we continue to monitor potential changes in Chile’s regulatory and fiscal matters. We will dependdefer major investment decisions pending clarity on technical studies, which are being advanced, economic factorsChile’s regulatory and market conditions.fiscal matters.


Operating Data. Following is a summary of consolidated operating data for our South America mining operationsmining:
Three Months Ended March 31,
 20222021
Copper (millions of recoverable pounds)
  
Production274 259 
Sales264 259 
Average realized price per pound$4.69 $3.96 
Molybdenum (millions of recoverable pounds)
  
Productiona
7 5 
Leach operations  
Leach ore placed in stockpiles (metric tons per day)139,800 153,800 
Average copper ore grade (percent)0.36 0.36 
Copper production (millions of recoverable pounds)61 61 
Mill operations 
Ore milled (metric tons per day)394,400 390,100 
Average ore grade (percent):
Copper0.33 0.31 
Molybdenum0.02 0.01 
Copper recovery rate (percent)86.6 87.6 
Copper production (millions of recoverable pounds)213 198 
a.Refer to “Consolidated Results” for the third quarters and first nine monthsour consolidated molybdenum sales volumes, which include sales of 2017 and 2016:molybdenum produced at Cerro Verde.

 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 264 million pounds in third-quarter 2017 approximated third-quarter2016 sales of 323 million pounds. South America’s lower consolidatedfirst-quarter 2022, similar to copper sales volumes of 923259 million pounds for the first nine months of 2017, compared with 973 million pounds for the first nine months of 2016, reflect the Cerro Verde operation being unfavorably impacted by unusually high rainfall and a 21-day labor strike duringin first-quarter 2017.

2021. Copper sales from South America minesmining are expected to approximate 1.21.15 billion pounds of copper for the year 2017, compared with 1.3 billion pounds of copper in 2016.2022.
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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
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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
 

Three Months Ended March 31,
 20222021
By-Product
Method		Co-Product
Method		By-Product
Method		Co-Product
Method
Revenues, excluding adjustments$4.69 $4.69 $3.96 $3.96 
Site production and delivery, before net noncash and other costs shown below2.43 2.22 2.01 1.90 
By-product credits(0.43)— (0.21)— 
Treatment charges0.15 0.15 0.13 0.13 
Royalty on metals0.01 0.01 0.01 0.01 
Unit net cash costs2.16 2.38 1.94 2.04 
DD&A0.37 0.33 0.39 0.37 
Noncash and other costs, net0.07 0.07 0.04 0.03 
Total unit costs2.60 2.78 2.37 2.44 
Revenue adjustments, primarily for pricing on prior period open sales0.21 0.21 0.32 0.32 
Gross profit per pound$2.30 $2.12 $1.91 $1.84 
Copper sales (millions of recoverable pounds)264 264 259 259 
 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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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) for South America mining of $1.64$2.16 per pound of copper in third-quarter2017 and $1.61 per pound for the first nine months of 2017first-quarter 2022 were higher than unit net cash costs of $1.40$1.94 per pound of copper in third-quarter2016 and $1.37 per pound for the first nine months of 2016,first-quarter 2021, primarily reflecting higher mining, millingacid, energy and employeeother input costs, at Cerro Verde.partly offset by higher by-product credits.


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$2.23 per pound of copper for the year 2017,2022, based on current sales volume and cost estimates and assuming an average price of $8.00$19.00 per pound of molybdenum for fourth-quarter 2017.the remainder of 2022.


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 2021 Form 10-K, under the terms of the 2018 shareholders agreement, our economic interest in PT-FI approximates 81 percent through 2022, and 48.76 percent thereafter. PT-FI’s results are consolidated in our financial statements.
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Substantially all of PT-FI’s copper concentrate is sold under long-term contracts, and during the first nine months of 2017, approximately halfcontracts. During first-quarter 2022, 37 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.Operating and Development Activities.PT-FI currently has three underground operating mines in the Grasberg minerals district: Grasberg Block Cave, DMLZ and Big Gossan. In Januarylate 2021, PT-FI achieved quarterly copper and February 2017,gold volumes approximating 100 percent of projected annualized levels of approximately 1.6 billion pounds of copper and 1.6 million ounces of gold.

Combined milling rates from PT-FI's underground mines averaged 186,500 metric tons of ore per day in first-quarter 2022, and PT-FI expects milling rates to average approximately 180,000 to 190,000 metric tons of ore per day for the Indonesian government issued new regulationsremainder of 2022. The installation of additional milling facilities at PT-FI is in progress and is currently expected to addressbe completed in 2023, which will increase milling capacity to approximately 240,000 metric tons of ore per day.

PT-FI's estimated capital spending on the exportGrasberg Block Cave and DMLZ underground projects for the year 2022 is expected to approximate $1.0 billion, net of unrefined metals, including copper concentratescheduled contributions from PT Indonesia Asahan
Aluminium (Persero) (PT Inalum, also known as MIND ID). PT-FI is also advancing construction of a dual-fuel power plant and anode slimes, and other matters relatedupgrades to the mining sector. The new regulations permitmill circuit to improve recoveries. In accordance with applicable accounting guidance, the continuationaggregate costs (before scheduled contributions from PT Inalum), expected to approximate $1.2 billion for the year 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.

Kucing Liar. PT-FI commenced long-term mine development activities for its Kucing Liar deposit during 2021, which is expected to produce over 6 billion pounds of copper concentrate exportsand 5 million ounces of gold over the life of the project. Pre-production development activities will occur over an approximate 10-year timeframe, and capital investments are expected to average approximately $400 million per year over the next 10 years. At full operating rates, annual production from Kucing Liar is expected to approximate 600 million pounds of copper and 500 thousand ounces of gold, providing PT-FI with sustained long-term, large-scale and low-cost production. Kucing Liar will benefit from substantial shared infrastructure and PT-FI's experience and long-term success in block-cave mining.

Export License. In March 2022, PT-FI received a one-year extension of its export license through March 19, 2023, for two million metric tons of concentrate. Export licenses are valid for a five-yearone-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 fiscalreview and legal protections as PT-FI’s Contract of Work (COW), which remains in effect), a commitment to the completion of smelter construction in five years and payment of export duties to be determinedapproval 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 reviewIndonesia government every six months, depending on smelter construction progress.


Following the issuance of the January and February 2017 regulations and discussionsIndonesia Smelter. In connection with PT-FI’s 2018 agreement with the IndonesianIndonesia 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 ofsecure the extension of its long-term operating rights.mining rights, PT-FI committed to construct additional domestic smelting capacity totaling 2 million metric tons of concentrate per year by the end of 2023 (subject to force majeure provisions).


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 delayis actively engaged in the renewalfollowing projects for additional domestic smelting capacity:
•Construction 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,a greenfield smelter in Gresik, Indonesia with a capacity to process approximately 1.7 million metric tons of copper concentrate per year. In July 2021, PT-FI was forcedawarded a construction contract to suspend production as a resultthird-party contractor with an estimated cost 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.$2.8 billion. PT-FI continues to reserve its rights under these provisions.

As a result of the 2017 regulatory restrictionsprogress site preparation activities, early works and uncertainties regarding long-term investment stability, PT-FI took actions to adjust its cost structure, slow investments in its underground development projectsengineering procurement and newconstruction activities. The 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 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 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 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 to 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.

The Grasberg Block Cave underground mine accounts for approximately half of our recoverable proven and probable reserves in Indonesia. Production from the Grasberg Block Cave underground mineconstruction is expected to commencebe completed as soon as feasible in early 2019, following2024, consistent with PT-FI’s revised smelter construction schedule.
•Expansion of PT Smelting's capacity by 30 percent to 1.3 million metric tons of concentrate per year, which is expected to be completed by the end of mining2023. PT-FI is funding the cost of the Grasberg open pit. Targeted production ratesexpansion, which is estimated to approximate $250 million, with a loan that will convert to equity, and increase ownership in PT Smelting to a majority ownership interest once the Grasberg Block Cave mining operation reaches full capacityexpansion is complete.
•Construction of a PMR to process gold and silver from the greenfield smelter and PT Smelting at an estimated cost of $250 million.

During first-quarter 2022, capital expenditures for the greenfield smelter and PMR (collectively, the Indonesia smelter projects) totaled $0.1 billion, and are expected to approximate 130,000-160,000 metric tons of ore per day. PT-FI is reviewing its operating plans to determine the optimum mine plan$1.4 billion for the Grasberg Block Cave underground mine.

Aggregate mine development capital foryear 2022. Construction of the Grasberg Block Cave underground mine andadditional domestic smelter capacity will result in the elimination of export duties, providing an offset to the economic cost 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 through 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.Indonesia smelter projects.

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DMLZ. The DMLZ ore body lies below the DOZ mine at the 2,590-meter elevation and represents the downward continuation
Table 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. PT-FI expects DMLZ to ramp up to full capacity of 80,000 metric tons of ore per day in 2021, but at a slower pace than previous estimates.Contents

Drilling efforts continue to determine the extent 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“Capital Resources and Liquidity,” PT-FI completed the sale of $3.0 billion of senior notes in Part I. Item 1A of our annual report on Form 10-K forApril 2022, which will be used together with PT-FI’s available bank credit facilities primarily to fund 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 workingIndonesia smelter projects.
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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 quartersmining:
Three Months Ended March 31,
 20222021
Copper (millions of recoverable pounds)
  
Production381 298 
Sales379 258 
Average realized price per pound$4.69 $4.00 
Gold (thousands of recoverable ounces)
  
Production412 294 
Sales406 256 
Average realized price per ounce$1,920 $1,713 
Ore extracted and milled (metric tons per day):  
Grasberg Block Cave underground mine100,400 51,800 
DMLZ underground mine78,400 46,700 
Big Gossan underground mine7,700 6,800 
Deep Ore Zone underground minea and other
— 18,800 
Total186,500 124,100 

Average ore grades:  
Copper (percent)1.23 1.41 
Gold (grams per metric ton)1.03 1.08 
Recovery rates (percent): 
Copper89.4 91.3 
Gold77.2 78.9 
a.Ore body depleted in 2021.

Our consolidated sales from PT-FI totaled 379 million pounds of copper and first nine months406 thousand ounces of 2017 and 2016:gold in
 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’sfirst-quarter 2022, compared with consolidated copper sales volumes of 258 million pounds of copper and 256 thousand ounces of gold 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,first-quarter 2021, primarily reflecting the impactramp-up 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 occurredunderground mining 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.minerals district.

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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, consolidatedConsolidated sales volumes from Indonesia miningPT-FI are expected to approximate 1.01.6 billion pounds of copper and 1.6 million ounces of gold for the year 2017, compared with 1.1 billion pounds of copper and 1.1 million ounces of gold for the year 2016. At the Grasberg mine, the sequencing of mining areas with varying ore grades causes fluctuations in quarterly and annual production of copper and gold.2022.


Indonesia mining’s projected sales volumes for the year 2017 are dependent on a number of factors, including operational performance, workforce productivity and the timing of shipments.

Unit Net Cash (Credits) Costs. Unit net cash (credits) 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 and per Ounce of Gold
The following table summarizes the unit net cash (credits) 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.
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 Three 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$2.95
 $2.95
 $1,290
 $2.20
 $2.20
 $1,327
            
Site production and delivery, before net noncash and other costs shown below1.41
 0.87
 383
 1.37
 0.86
 520
Gold and silver credits(1.80) —
 —
 (1.29) —
 —
Treatment charges0.27
 0.17
 74
 0.27
 0.17
 104
Export duties0.08
 0.05
 22
 0.10
 0.07
 39
Royalty on metals0.17
 0.10
 48
 0.12
 0.07
 50
Unit net cash costs0.13
 1.19
 527
 0.57
 1.17
 713
DD&A0.53
 0.33
 143
 0.33
 0.21
 125
Noncash and other costs, net0.09
a 
0.06
 25
 0.05
b 
0.03
 19
Total unit costs0.75
 1.58
 695
 0.95
 1.41
 857
Revenue adjustments, primarily for pricing on prior period open sales0.11
 0.11
 4
 (0.02) (0.02) 1
PT Smelting intercompany loss(0.07) (0.04) (19) (0.03) (0.02) (10)
Gross profit per pound/ounce$2.24
 $1.44
 $580
 $1.20
 $0.75
 $461
            
Copper sales (millions of recoverable pounds)258
 258
   332
 332
  
Gold sales (thousands of recoverable ounces)    352
     307
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Three Months Ended March 31,
 20222021
 By-Product MethodCo-Product MethodBy-Product MethodCo-Product Method
 CopperGoldCopperGold
Revenues, excluding adjustments$4.69 $4.69 $1,920 $4.00 $4.00 $1,713 
Site production and delivery, before net noncash and other costs (credits) shown below1.41 0.96 395 1.48 1.02 438 
Gold and silver credits(2.17)— — (1.79)— — 
Treatment charges0.25 0.17 69 0.25 0.17 74 
Export duties0.21 0.14 59 0.11 0.08 33 
Royalty on metals0.24 0.17 69 0.24 0.16 71 
Unit net cash (credits) costs(0.06)1.44 592 0.29 1.43 616 
DD&A0.66 0.45 183 0.77 0.53 228 
Noncash and other costs (credits), net0.07 a0.05 20 (0.03)b(0.02)(10)
Total unit costs0.67 1.94 795 1.03 1.94 834 
Revenue adjustments, primarily for pricing on prior period open sales0.15 0.15 8 0.25 0.25 (19)
PT Smelting intercompany loss(0.13)(0.09)(39)(0.20)(0.14)(56)
Gross profit per pound/ounce$4.04 $2.81 $1,094 $3.02 $2.17 $804 
Copper sales (millions of recoverable pounds)379 379  258 258  
Gold sales (thousands of recoverable ounces)  406   256 
 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 portiona.Includes charges totaling $0.11 per pound of copper associated with the settlement of an administrative fine levied by the Indonesia government (refer to Note 8 for further discussion), and $0.05 per pound of copper associated with an adjustment to prior-period export duties, partly offset by credits totaling $0.08 per pound of copper associated with adjustments to prior year treatment and refining costs.
b.Includes credits totaling $0.12 per pound of copper associated with adjustments to prior year treatment and refining costs, partly offset by charges totaling $0.05 per pound of copper associated with a potential settlement of an administrative fine levied by the Indonesia government.

In first-quarter 2022, PT-FI’s gold and silver credits exceeded its cash costs, are fixed andresulting in unit costs vary depending on production volumes and other factors. Indonesia’snet cash credits of $0.06 per pound of copper, compared to unit net cash costs (including(net of gold and silver credits) of $0.13$0.29 per pound of copper in third-quarter 2017 and $0.26 per pound of copper for the first nine months of 2017 were lower than unit net cash costs of $0.57 per pound of copper in third-quarter2016 and $0.92 per pound of copper for the first nine months of 2016,first-quarter 2021, primarily reflecting higher gold and silver credits,sales volumes, partly offset by lower copper sales volumes.higher operating rates, energy and other input costs.


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 export duties totaled $79 million in first-quarter 2022 and $29 million in first-quarter 2021. The increase in export duties in first-quarter 2022, compared with first-quarter 2021, primarily reflects higher sales volumes.

PT-FI’s royalties totaled $43$92 million in third-quarter 2017, $40first-quarter 2022 and $61 million in third-quarter 2016, $106 millionfirst-quarter 2021. The increase in export duties and royalties for the first nine months of 2017 and $84 million for the first nine months of 2016. Export duties totaled $21 million in third-quarter 2017, $34 million in third-quarter 2016, $62 million for the first nine months of 2017 and $63 million for the first nine months of 2016. As further discussed above in “Regulatory Matters,” PT-FI agreed to continue to pay a five percent export duty.

Higher depreciation rates for the 2017 periods,first-quarter 2022, compared with the 2016 periods,first-quarter 2021, primarily relate toreflects higher amortization of asset retirement costs associated with revised estimates at the end of 2016 for an overburden stockpile. Additionally, becausesales volumes and metals 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 $0.66 per pound in first-quarter 2022, compared with $0.77 per pound in first-quarter 2021. The decrease in the rate per pound of copper primarily reflects depletion of the Deep Ore Zone underground mine and the ramp-up of underground mining in the Grasberg minerals district, which resulted in significantly higher copper production and sales volumes, partly offset by 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

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Table of adjustments to prior period provisionally priced copper sales.Contents

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$1,950 per ounce for fourth-quarter 2017the remainder of 2022 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$0.10 per pound of copper for the year 2017. Indonesia mining’s2022. PT-FI’s unit net cash costs for the year 20172022 would change by approximately $0.04$0.09 per pound of copper for each $50$100 per ounce change in the average price of gold.gold for the remainder of 2022.

TablePT-FI’s projected sales volumes and unit net cash costs for the year 2022 are dependent on a number of Contents
factors, including operational performance and timing of shipments.


Because of the fixed nature of a large portion of Indonesia’s costs, unit costs vary from quarter to quarter depending on copper and gold volumes.

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 87 million pounds of molybdenum in third-quarter2017, 5 million poundsboth first-quarter 2022 and first-quarter 2021. We plan on increasing mining rates at the Climax mine during 2022 to provide options to increase volumes in third-quarter 2016, 24 million poundsresponse to market demand for the first nine months of 2017 and 19 million pounds for the first nine months of 2016.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.


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$10.89 per pound of molybdenum in third-quarter2017 and $7.60 per pound of molybdenum for the first nine months of 2017first-quarter 2022 were lowerhigher than average unit net cash costs of $10.28$8.98 per pound of molybdenum in third-quarter 2016 and $8.39 per pound of molybdenum for the first nine months of 2016,first-quarter 2021, primarily reflecting higher volumes. Assuming achievement ofmining rates at the Climax mine and increased development costs at the Henderson mine. Based on current sales volume and cost estimates, we estimateaverage unit net cash costs for the Molybdenum mines are expected to average $7.85approximate $12.00 per pound of molybdenum for the year 2017. 2022.

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 athe Miami smelter in Arizona, (Miami smelter)the El Paso refinery in Texas and a smelter and refinery in Spain (Atlantic Copper). Additionally, PT-FI owns 25has a 39.5 percent ownership interest in PT Smelting and expects its ownership to increase to a majority interest upon completion of a smelter and refinery in Gresik, Indonesia (PT Smelting).the expansion of PT Smelting’s smelting capacity. 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.

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Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes. During the first nine months of 2017,first-quarter 2022, Atlantic Copper’s concentrate purchases included 12 percent from our copper mining operations included 16and 88 percent from our North America copper mines and 10 percent from South America mining, with the remainder purchased from third parties.


Atlantic Copper’s major maintenance turnarounds typically occur approximately every eight years, with shorter-term maintenance turnarounds in the interim. In March 2017, PT Smelting’s anode slimes export license was renewed through March 1, 2018. April 2022, Atlantic Copper began an approximately 60-day major maintenance turnaround, for which maintenance charges are expected to total approximately $25 million.

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,first-quarter 2022, PT-FI supplied substantially all of PT Smelting’s concentrate requirements. MinimumIn November 2021, PT-FI entered into a tolling agreement with PT Smelting that will be effective January 1, 2023, and maximum treatment charge rates have been approved through April 2020.will replace the current concentrate sales agreements between PT-FI and PT Smelting. Under the tolling agreement, PT-FI will pay PT Smelting to smelt and refine its concentrate and will retain title to all products for sale to third parties.


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We defer recognizing profits on sales from our mining operations to Atlantic Copper and on 2539.5 percent of PT-FI’s sales to PT Smelting (25.0 percent prior to April 30, 2021) 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 $46 million ($23 million to net income attributable to common stock of $24stock) in first-quarter 2022 and $(85) million ($(63) million to net income attributable to common stock) in third-quarter2017, $17 million for third-quarter 2016, less than $1 million for the first nine months of 2017 and $6 million for the first nine months of 2016.first-quarter 2021. 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$183 million at September 30, 2017.March 31, 2022. 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.


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 first-quarter 2022, reflecting strong operating and financial performance and favorable copper and gold prices. With a favorable market outlook and a focus on executing our operating plans, we expect to continue to generate strong cash flows that will support advancement of organic growth initiatives and additional cash returns to shareholders under our established financial policy.

We believe that we have a high-quality portfolio of long-lived copper assets positioned to generate long-term value. WeDuring first-quarter 2022, we continued to increase operating rates at Lone Star and from the underground mines at the Grasberg minerals district. Pre-production development activities for the Kucing Liar deposit, which commenced during 2021, are pursuing opportunities to enhance our mines’ net present values,progressing and we continue to advance studiesevaluate organic growth opportunities 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 $8.6 billion for the year 2022 significantly exceed our expected consolidated capital expenditures of $4.6 billion (which includes $1.9 billion for major mining projects and $1.4 billion for the Indonesia smelter projects) and other cash requirements for the year, including share repurchases, noncontrolling interest distributions, income tax payments, common stock dividends (base and variable) and debt repayments.

We believe that our cash generating capability and financial condition, which includes $8.3 billion of consolidated
cash and cash equivalents at March 31, 2022, together with $3.5 billion available under our revolving
credit facility, will be adequate to meet our operating, investing and financing needs over the next several years. Additionally, capital expenditures for the Indonesia smelter projects are being funded with the net proceeds from PT-FI’s unsecured senior notes issued in April 2022 and its available bank credit facilities.

Refer to “Outlook” for further discussion of projected operating cash flows and capital expenditures for the year 2022 and to “Debt” below and Note 5 for further discussion of PT-FI’s unsecured senior notes and unsecured bank credit facility.

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Financial Policy. Our financial policy is aligned with our strategic objectives of maintaining a strong balance sheet and increasing cash returns to shareholders while advancing opportunities for future growth. Under the financial policy up to 50 percent of cash flows, after planned capital spending (excluding Indonesia smelter project investments) and distributions to noncontrolling interests, will be directed to shareholder returns with the balance available for investments in future value enhancing growth projects and further debt reductions. The Board will review the structure and the amount of the performance-based payout framework at least annually.

In February 2021, our Board of Directors (the Board) reinstated a cash dividend on our common stock (base dividend) at an annual rate of $0.30 per share. In mid-2021, FCX achieved its net debt target in the range of $3.0 billion to $4.0 billion (excluding debt for additional smelting capacity in Indonesia). In November 2021, the Board approved the implementation of the performance-based payout framework, including (i) a $3.0 billion share repurchase program and (ii) a variable cash dividend on common stock for 2022 at an expected 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 for 2022. Based on current shares outstanding totaling 1.45 billion, the total common stock dividends (base and variable) for 2022 are expected to approximate $0.9 billion. Refer to Note 5 and “Financing Activities” below for further discussion.

In March 2022, our Board declared dividends totaling $0.15 per share on our common stock (including a $0.075 per share quarterly base cash dividend and a $0.075 per share quarterly variable cash dividend), which were paid on May 2, 2022, to shareholders of record as of April 14, 2022. Refer to Item 1A. “Risk Factors” contained in Part I of our 2021 Form 10-K, and “Cautionary Statement” below for further discussion.

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, 2017March 31, 2022 (in billions):
Cash at domestic companies$5.4 
Cash at international operations2.9 
Total consolidated cash and cash equivalents8.3 
Noncontrolling interests’ share(0.8)
Cash, net of noncontrolling interests’ share7.5 
Withholding taxes(0.2)

Net cash available$7.3 
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 repayments, 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 isAt March 31, 2022, we had consolidated debt of $9.6 billion, with 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 amountrate of senior notes, resulting in annual cash interest savings of approximately $35 million.4.6 percent. 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, we had no borrowings $36outstanding and $8 million in letters of credit issued and availability of $3.5 billion under our revolving credit facility, which matures on May 31, 2019.resulting in availability of approximately $3.5 billion.


In April 2022,PT-FI completed the sale of $3.0 billion of unsecured senior notes, consisting of $750 million aggregate principal amount of 4.763% senior notes due April 2027, $1.5 billion aggregate principal amount of 5.315% senior notes due April 2032 and $750 million aggregate principal amount of 6.200% senior notes due April 2052. PT-FI intends to use the proceeds, net of underwriting fees, of $2.99 billion to finance its smelter projects, to refinance the PT-FI Term Loan and for general corporate purposes.

Refer to Note 65 for further discussion of debt.the above items, and refer to Note 8 of our 2021 Form 10-K for additional information regarding our debt arrangements.


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Operating Activities
We generatedreported consolidated cash provided by operating activities of $1.7 billion (net of $0.8 billion of working capital and other uses) in first-quarter 2022 and $1.1 billion (net of $0.3 billion of working capital and other uses) in first-quarter 2021. Higher operating cash flows of $3.0 billion (including $0.4 billion in first-quarter 2022, compared with first-quarter 2021, primarily reflect higher copper and gold sales volumes and prices. Increased working capital sourcesuses in first-quarter 2022, compared with first-quarter 2021, primarily reflects timing of copper concentrate purchases by Atlantic Copper in anticipation of their major maintenance turnaround that began in April 2022, and changes inadditional income tax payments) for the first nine months of 2017 and $2.6 billion (including $0.5 billion in working capital sources and changes in tax payments) for the first nine months of 2016.payments.

Subject to future commodity prices for copper, gold and molybdenum, we expect estimated consolidated operating cash flows for the years 2017 and 2018, plus available cash and availability under our credit facility and uncommitted lines of credit, to be sufficient to fund our budgeted capital expenditures, scheduled debt maturities, noncontrolling interest distributions and other cash requirements for the year. Refer to “Outlook” for further discussion 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.


Investing Activities
Capital Expenditures. Capital expenditures, including capitalized interest, totaled $1.0$0.7 billion for the first nine months of 2017,in first-quarter 2022, including $0.6approximately $0.4 billion for major mining projects primarily associated with underground development activities in the Grasberg minerals district and $0.1 billion for the Indonesia smelter 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) and $1.1 billion for oil and gas operations.

Lower capital expenditures for the first nine months of 2017, comparedIndonesia smelter projects are being funded with the first nine months of 2016, primarily reflect a decreasenet proceeds from PT-FI's unsecured senior notes issued in oilApril 2022 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.its available bank credit facilities. Refer to “Outlook” for further discussion of projected capital expenditures for the year 2017.2022.


Dispositions. Net proceeds from asset salesCapital expenditures, including capitalized interest, totaled $1.4$0.4 billion in first-quarter 2021, including approximately $0.3 billion for the first nine months of 2016major mining projects primarily associated with the $1.0 billion sale of an additional 13 percent undivided interest in Morenci, the sale of an interestunderground development activities in the Timok exploration projectGrasberg minerals district.

Financing Activities
Debt Transactions. Net borrowings of debt totaled $170 million in Serbiafirst-quarter 2022 and from oil and gas asset sales, including the Haynesville shale assets and certain oil and gas royalty interests.$98 million in first-quarter 2021. Refer to Note 25 for further discussion of these transactions.discussion.


Financing Activities
Debt Transactions. Net repayments of debt for the first nine months of 2017 totaled $1.2 billion primarily for the redemptionCash Dividends 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 billionDistributions Paid. We paid cash dividends 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 dividendtotaling $220 million in December 2015.first-quarter 2022 and none in first-quarter 2021. The declaration and payment of dividends (base or variable) is at the discretion of ourthe Board and will depend uponon our financial results, cash requirements, futurebusiness prospects, global economic conditions and other factors deemed relevant by the Board. Refer to Note 5, Item 1A. “Risk Factors” contained in Part I of our Board.2021 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above.

Common stock dividends of $2 million for the first nine months of 2017 and $5 million for the first nine months of 2016 related to accumulated dividends paid for vested stock-based compensation.


Cash dividends and distributions paid to noncontrolling interests, primarily at PT-FI, totaled $67$204 million forin first-quarter 2022 and none in first-quarter 2021. Based on the first nine months of 2017estimates discussed in “Outlook,” we currently expect cash dividends and $87 million for the first nine months of 2016. These payments willdistributions paid to noncontrolling interests to exceed $1.6 billion in 2022. Cash dividends and distributions to noncontrolling interests vary based on the operating results and cash requirements of our consolidated subsidiaries.


Treasury Stock Purchases. In first-quarter 2022, we acquired 12.3 million shares of our common stock under our share repurchase program for a total cost of $541 million ($44.02 average cost per share). Through May 5, 2022, we acquired 28.7 million shares of our common stock for a total cost of $1.2 billion ($41.64 average cost per share) and $1.8 billion remains available under the share repurchase program. As of April 29, 2022, we had 1.45 billion shares of common stock outstanding. The timing and amount of share repurchases is at the discretion of management and will depend on a variety of factors. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion. Refer to Item 1A. “Risk Factors” contained in Part I of our 2021 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above.

Contributions from Noncontrolling Interests. We received equity contributions totaling $47 million in first-quarter 2022 and $41 million in first-quarter 2021 from PT Inalum for their share of capital spending on underground mine development projects in the Grasberg minerals district.

Stock-based awards. Proceeds from exercised stock options totaled $101 million in first-quarter 2022 and $106 million in first-quarter 2021, and payments for related employee taxes totaled $55 million in first-quarter 2022 and $19 million in first-quarter 2021. See Note 10 in our 2021 Form 10-K for a discussion of stock-based awards.

CONTRACTUAL OBLIGATIONS


AsRefer to Note 5 for further discusseddiscussion of PT-FI’s $3.0 billion unsecured senior notes issued in Note 6, during the first nine months of 2017, we have reduced our December 31, 2016, total debt balance by $1.25 billion.April 2022. There have been no other material changes in our contractual obligations since December 31, 2016.2021. Refer to Part II, Items 7. and 7A. in our annual report on2021 Form 10-K, for the year ended December 31, 2016, for information regarding our contractual obligations.

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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

Refer to Note 8 for further discussion of increases in Note 9, thereour asset retirement obligation at the Bagdad mine. There have been no materialother significant changes to our environmental and asset retirement obligations since December 31, 2016.2021. 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. Refer to Note 12 in our annual report on2021 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, 2016.2021. Refer to Note 12 and “Legal Proceedings” contained in Part I, Item 3. of our annual report on2021 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 2021 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):
March 31, 2022December 31, 2021
Current portion of debt$1,365 $372 
Long-term debt, less current portion8,256 9,078 
Consolidated debta
9,621 

9,450 
Less: consolidated cash and cash equivalents8,338 8,068 
Net debt$1,283 $1,382 
a.Includes $603 million at March 31, 2022, and $432 million at December 31, 2021, associated with the Indonesia smelter projects (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 (credits) 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 (credits), which are removed from site production and delivery costs in the calculation of unit
net cash costs (credits), 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.charges (credits). 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 March 31, 2022  
(In millions)By-ProductCo-Product Method
MethodCopper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments$1,763 $1,763 $138 $27 $1,928 
Site production and delivery, before net noncash
    and other costs shown below		908 839 84 17 940 
By-product credits(133)— — — — 
Treatment charges36 35 — 1 36 
Net cash costs811 874 84 18 976 
DD&A105 96 7 2 105 
Noncash and other costs, net28 27 1 — 28 
Total costs944 997 92 20 1,109 
Other revenue adjustments, primarily for pricing
    on prior period open sales		11 11 — — 11 
Gross profit$830 $777 $46 $7 $830 
Copper sales (millions of recoverable pounds)381 381 
Molybdenum sales (millions of recoverable pounds)a
7 
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments$4.62 $4.62 $17.97 
Site production and delivery, before net noncash
    and other costs shown below		2.38 2.20 10.95 
By-product credits(0.34)— — 
Treatment charges0.09 0.09 — 
Unit net cash costs2.13 2.29 10.95 
DD&A0.27 0.25 0.88 
Noncash and other costs, net0.07 0.07 0.14 
Total unit costs2.47 2.61 11.97 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.03 0.03 — 
Gross profit per pound$2.18 $2.04 $6.00 
Reconciliation to Amounts Reported    
 
RevenuesProduction and DeliveryDD&A
Totals presented above$1,928 $940 $105  
Treatment charges(4)32 —  
Noncash and other costs, net— 28 —  
Other revenue adjustments, primarily for pricing
    on prior period open sales		11 — —  
Eliminations and other16 18 —  
North America copper mines1,951 1,018 105  
Other miningc
6,376 3,847 368 
Corporate, other & eliminations(1,724)(1,715)16  
As reported in our consolidated financial statements$6,603 $3,150 $489  
            
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 March 31, 2021  
(In millions)By-ProductCo-Product Method
MethodCopper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments$1,193 $1,193 $88 $34 $1,315 
Site production and delivery, before net noncash
    and other costs shown below		627 580 56 21 657 
By-product credits(92)— — — — 
Treatment charges33 31 — 2 33 
Net cash costs568 611 56 23 690 
DD&A80 74 4 2 80 
Noncash and other costs, net41 

40 — 1 41 
Total costs689 725 60 26 811 
Other revenue adjustments, primarily for pricing
    on prior period open sales		7 7 — — 7 
Gross profit$511 $475 $28 $8 $511 
Copper sales (millions of recoverable pounds)308 308 
Molybdenum sales (millions of recoverable pounds)a
8 
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments$3.88 $3.88 $10.49 
Site production and delivery, before net noncash
    and other costs shown below		2.04 1.89 6.67 
By-product credits(0.30)— — 
Treatment charges0.11 0.10 — 
Unit net cash costs1.85 1.99 6.67 
DD&A0.26 0.24 0.46 
Noncash and other costs, net0.13 0.13 0.06 
Total unit costs2.24 2.36 7.19 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.02 0.02 — 
Gross profit per pound$1.66 $1.54 $3.30 
Reconciliation to Amounts Reported     
RevenuesProduction and DeliveryDD&A 
Totals presented above$1,315 $657 $80  
Treatment charges(5)28 —  
Noncash and other costs, net— 41 —  
Other revenue adjustments, primarily for pricing
    on prior period open sales		7 — —  
Eliminations and other21 23 —  
North America copper mines1,338 749 80  
Other miningc
4,645 3,041 323 
Corporate, other & eliminations(1,133)(1,003)16  
As reported in our consolidated financial statements$4,850 $2,787 $419  
          
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.
b.Includes gold and silver product revenues and production costs.
c.Represents the combined total for our other segments, as presented in Note 9.


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.



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North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs
      
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, 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 March 31, 2022
(In millions)By-ProductCo-Product Method
MethodCopper
Othera
Total
Revenues, excluding adjustments$1,236 $1,236 $125 $1,361 
Site production and delivery, before net noncash
    and other costs shown below		640 587 67 654 
By-product credits(111)— — — 
Treatment charges39 39 — 39 
Royalty on metals3 3 — 3 
Net cash costs571 629 67 696 
DD&A97 88 9 97 
Noncash and other costs, net17 

16 1 17 
Total costs685 733 77 810 
Other revenue adjustments, primarily for pricing
    on prior period open sales		55 55 — 55 
Gross profit$606 $558 $48 $606 
Copper sales (millions of recoverable pounds)264 264 
Gross profit per pound of copper:
Revenues, excluding adjustments$4.69 $4.69 
Site production and delivery, before net noncash
    and other costs shown below		2.43 2.22 
By-product credits(0.43)— 
Treatment charges0.15 0.15 
Royalty on metals0.01 0.01 
Unit net cash costs2.16 2.38 
DD&A0.37 0.33 
Noncash and other costs, net0.07 

0.07 
Total unit costs2.60 2.78 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.21 0.21 
Gross profit per pound$2.30 $2.12 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$1,361 $654 $97 
Treatment charges(39)— — 
Royalty on metals(3)— — 
Noncash and other costs, net— 17 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		55 — — 
Eliminations and other— (1)— 
South America mining1,374 670 97 
Other miningb
6,953 4,195 376 
Corporate, other & eliminations(1,724)(1,715)16 
As reported in our consolidated financial statements$6,603 $3,150 $489 
a.Includes silver sales of 1.0 million ounces ($23.36 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 segments, as presented in Note 9.

46
 
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.
Table of Contents

South America Mining Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended March 31, 2021
(In millions)By-ProductCo-Product Method
MethodCopper
Othera
Total
Revenues, excluding adjustments$1,026 $1,026 $65 $1,091 
Site production and delivery, before net noncash
    and other costs shown below		520 491 39 530 
By-product credits(55)— — — 
Treatment charges35 35 — 35 
Royalty on metals2 2 — 2 
Net cash costs502 528 39 567 
DD&A101 95 6 101 
Noncash and other costs, net10 9 1 10 
Total costs613 632 46 678 
Other revenue adjustments, primarily for pricing
    on prior period open sales		83 83 — 83 
Gross profit$496 $477 $19 $496 
Copper sales (millions of recoverable pounds)259 259 
Gross profit per pound of copper:
Revenues, excluding adjustments$3.96 $3.96 
Site production and delivery, before net noncash
    and other costs shown below		2.01 1.90 
By-product credits(0.21)— 
Treatment charges0.13 0.13 
Royalty on metals0.01 0.01 
Unit net cash costs1.94 2.04 
DD&A0.39 0.37 
Noncash and other costs, net0.04 0.03 
Total unit costs2.37 2.44 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.32 0.32 
Gross profit per pound$1.91 $1.84 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$1,091 $530 $101 
Treatment charges(35)— — 
Royalty on metals(2)— — 
Noncash and other costs, net— 10 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		83 — — 
Eliminations and other— (1)— 
South America mining1,137 539 101 
Other miningb
4,846 3,251 302 
Corporate, other & eliminations(1,133)(1,003)16 
As reported in our consolidated financial statements$4,850 $2,787 $419 
      
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 0.9 million ounces ($26.13 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 segments, as presented in Note 9.






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.


Table of Contents

South America Mining Product Revenues, Production Costs and Unit Net Cash Costs
     
Nine Months Ended September 30, 2017    
(In millions) By-Product Co-Product Method
  Method Copper 
Othera
 Total
Revenues, excluding adjustments $2,605
 $2,605
 $190
 $2,795
Site production and delivery, before net noncash        
and other costs shown below 1,429
 1,340
 123
 1,463
By-product credits (156) —
 —
 —
Treatment charges 204
 204
 —
 204
Royalty on metals 6
 5
 1
 6
Net cash costs 1,483
 1,549
 124
 1,673
DD&A 392
 365
 27
 392
Noncash and other costs, net 234
b 
217
 17
 234
Total costs 2,109
 2,131
 168
 2,299
Revenue adjustments, primarily for pricing        
on prior period open sales 40
 40
 —
 40
Gross profit $536
 $514
 $22
 $536
         
Copper sales (millions of recoverable pounds) 923
 923
    
         
Gross profit per pound of copper:    
         
Revenues, excluding adjustments $2.82
 $2.82
    
Site production and delivery, before net noncash        
and other costs shown below 1.55
 1.45
    
By-product credits (0.17) —
    
Treatment charges 0.22
 0.22
    
Royalty on metals 0.01
 0.01
    
Unit net cash costs 1.61
 1.68
    
DD&A 0.42
 0.40
    
Noncash and other costs, net 0.25
b 
0.23
    
Total unit costs 2.28
 2.31
    
Revenue adjustments, primarily for pricing        
on prior period open sales 0.04
 0.04
    
Gross profit per pound $0.58
 $0.55
    
         
Reconciliation to Amounts Reported        
(In millions)   Production    
  Revenues and Delivery DD&A  
Totals presented above $2,795
 $1,463
 $392
  
Treatment charges (204) —
 —
  
Royalty on metals (6) —
 —
  
Noncash and other costs, net —
 234
 —
  
Revenue adjustments, primarily for pricing        
on prior period open sales 40
 —
 —
  
Eliminations and other 1
 (2) —
  
South America mining 2,626
 1,695
 392
  
Other miningc
—
10,992
 8,126
 788
  
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 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.

Table of Contents

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


47

Indonesia Mining Product Revenues, Production Costs and Unit Net Cash (Credits) Costs
Three Months Ended March 31, 2022
(In millions)By-ProductCo-Product Method
MethodCopperGold
Silvera
Total
Revenues, excluding adjustments$1,778 $1,778 $780 $38 $2,596 
Site production and delivery, before net noncash
    and other costs shown below		534 366 160 8 534 
Gold and silver credits(821)— — — — 
Treatment charges93 64 28 1 93 
Export duties79 54 24 1 79 
Royalty on metals92 63 28 1 92 
Net cash (credits) costs(23)547 240 11 798 
DD&A248 169 75 4 248 
Noncash and other costs, net27 b19 8 — 27 
Total costs252 735 323 15 1,073 
Other revenue adjustments, primarily for pricing
    on prior period open sales		57 57 3 — 60 
PT Smelting intercompany loss(53)(36)(16)(1)(53)
Gross profit$1,530 $1,064 $444 $22 $1,530 
Copper sales (millions of recoverable pounds)379 379 
Gold sales (thousands of recoverable ounces)406 
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments$4.69 $4.69 $1,920 
Site production and delivery, before net noncash
    and other costs shown below		1.41 0.96 395 
Gold and silver credits(2.17)— — 
Treatment charges0.25 0.17 69 
Export duties0.21 0.14 59 
Royalty on metals0.24 0.17 69 
Unit net cash (credits) costs(0.06)1.44 592 
DD&A0.66 0.45 183 
Noncash and other costs, net0.07 b0.05 20 
Total unit costs0.67 1.94 795 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.15 0.15 8 
PT Smelting intercompany loss(0.13)(0.09)(39)
Gross profit per pound/ounce$4.04 $2.81 $1,094 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$2,596 $534 $248 
Treatment charges(93)— — 
Export duties(79)— — 
Royalty on metals(92)— — 
Noncash and other costs, net12 39 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		60 — — 
PT Smelting intercompany loss— 53 — 
Indonesia mining2,404 626 248 
Other miningc
5,923 4,239 225 
Corporate, other & eliminations(1,724)(1,715)16 
As reported in our consolidated financial statements$6,603 $3,150 $489 
a.Includes silver sales of 1.6 million ounces ($24.35 per ounce average realized price).
b.Includes charges of $41 million ($0.11 per pound of copper) associated with a settlement of an administrative fine levied by the Indonesia government and $18 million ($0.05 per pound of copper) associated with an adjustment to prior-period export duties, partly offset by credits of $30 million ($0.08 per pound of copper) associated with adjustments to prior year treatment and refining costs.
c.Represents the combined total for our other segments, as presented in Note 9.

48
     
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.

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.


Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended March 31, 2021
(In millions)By-ProductCo-Product Method
MethodCopperGold
Silvera
Total
Revenues, excluding adjustments$1,032 $1,032 $437 $30 $1,499 
Site production and delivery, before net noncash
    and other credits shown below		383 264 112 7 383 
Gold and silver credits(462)— — — — 
Treatment charges65 45 19 1 65 
Export duties29 20 8 1 29 
Royalty on metals61 42 18 1 61 
Net cash costs76 371 157 10 538 
DD&A199 137 58 4 199 
Noncash and other credits, net(8)b(6)(2)— (8)
Total costs267 502 213 14 729 
Other revenue adjustments, primarily for pricing
    on prior period open sales		65 65 (5)— 60 
PT Smelting intercompany loss(49)(34)(14)(1)(49)
Gross profit$781 $561 $205 $15 $781 
Copper sales (millions of recoverable pounds)258 258 
Gold sales (thousands of recoverable ounces)256 
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments$4.00 $4.00 $1,713 
Site production and delivery, before net noncash
    and other costs shown below		1.48 1.02 438 
Gold and silver credits(1.79)— — 
Treatment charges0.25 0.17 74 
Export duties0.11 0.08 33 
Royalty on metals0.24 0.16 71 
Unit net cash costs0.29 1.43 616 
DD&A0.77 0.53 228 
Noncash and other credits, net(0.03)b(0.02)(10)
Total unit costs1.03 1.94 834 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.25 0.25 (19)
PT Smelting intercompany loss(0.20)(0.14)(56)
Gross profit per pound/ounce$3.02 $2.17 $804 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$1,499 $383 $199 
Treatment charges(65)— — 
Export duties(29)— — 
Royalty on metals(61)— — 
Noncash and other credits, net31 23 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		60 — — 
PT Smelting intercompany loss— 49 — 
Indonesia mining1,435 455 199 
Other miningc
4,548 3,335 204 
Corporate, other & eliminations(1,133)(1,003)16 
As reported in our consolidated financial statements$4,850 $2,787 $419 
     
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 ($16.70a.Includes silver sales of 1.2 million ounces ($24.61 per ounce average realized price).
b.Includes credits of $31 million ($0.12 per pound of copper) associated with adjustments to prior year treatment and refining costs. Also includes a charge of $13 million ($0.05 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.
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.





49

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


Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended March 31,
(In millions)20222021
Revenues, excluding adjustmentsa
$134 $76 
Site production and delivery, before net noncash
    and other costs shown below		72 54 
Treatment charges and other6 6 
Net cash costs78 60 
DD&A16 15 
Noncash and other costs, net3 

4 
Total costs97 79 
Gross profit (loss)$37 $(3)
Molybdenum sales (millions of recoverable pounds)a
7 7 
Gross profit (loss) per pound of molybdenum:
Revenues, excluding adjustmentsa
$18.75 $11.38 
Site production and delivery, before net noncash
    and other costs shown below		10.04 8.13 
Treatment charges and other0.85 0.85 
Unit net cash costs10.89 8.98 
DD&A2.27 2.23 
Noncash and other costs, net0.40 

0.55 
Total unit costs13.56 11.76 
Gross profit (loss) per pound$5.19 $(0.38)
Reconciliation to Amounts Reported
Production
Three Months Ended March 31, 2022Revenuesand DeliveryDD&A
Totals presented above$134 $72 $16 
Treatment charges and other(6)— — 
Noncash and other costs, net— 3 — 
Molybdenum mines128 75 16 
Other miningb
8,199 4,790 457 
Corporate, other & eliminations(1,724)(1,715)16 
As reported in our consolidated financial statements$6,603 $3,150 $489 
Three Months Ended March 31, 2021
Totals presented above$76 $54 $15 
Treatment charges and other(6)— — 
Noncash and other costs, net— 4 — 
Molybdenum mines70 58 15 
Other miningb
5,913 3,732 388 
Corporate, other & eliminations(1,133)(1,003)16 
As reported in our consolidated financial statements$4,850 $2,787 $419 
         
 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.
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.




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.

50

Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs
 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.

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 business outlook, strategy, goals or targets; ore grades and milling rates,rates; production and sales volumes,volumes; unit net cash costs,costs; capital expenditures; operating costs; operating plans; cash flows, capital expenditures,flows; liquidity; PT-FI’s financing, construction and completion of additional domestic smelting capacity in Indonesia in accordance with the terms of the special mining license (IUPK); our commitments to deliver responsibly produced copper, including plans to implement and validate all of our operating sites under the Copper Mark and to comply with other disclosure frameworks; execution of our energy and climate strategies and the underlying assumptions and estimated impacts on our business related thereto; achievement of climate commitments and net zero aspirations; improvements in operating procedures and technology innovations; exploration efforts and results,results; development and production activities, rates and costs, liquidity,costs; future organic growth opportunities; 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; mineral reserve estimates,and mineral resource estimates; final resolution of settlements associated with ongoing legal proceedings; and the ongoing implementation of our financial policy 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,” “aspirations,” “future” and any similar expressions are intended to identify those assertions as forward-looking statements. The declaration and payment of dividends (base or variable) and timing and amount of any share repurchases is at the discretion of the Board and management, respectively, and is subject to a number of factors, including maintaining our net debt target, capital availability, our financial results, cash requirements, business prospects, global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by the Board or management, as applicable. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion.


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, supply of and demand for,for; and prices of copper, goldthe commodities we produce, primarily copper; changes in our cash requirements, financial position, financing or investment plans; changes in general market, economic, tax, regulatory or industry conditions, including as a result of Russia’s invasion of Ukraine; reductions in liquidity and molybdenum;access to capital; the ongoing COVID-19 pandemic and any future public health crisis; political and social risks; operational risks inherent in mining, with higher inherent risks in underground mining; fluctuations in price and availability of commodities purchased; constraints on supply, logistics and transportation services; 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 technical, economic or 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; industry risks; regulatory changes (including adoptionthe Indonesia government's extension of financial assurance regulations as proposed byPT-FI's export license after March 19, 2023; satisfaction of requirements in accordance with PT-FI's IUPK to extend mining rights from 2031 through 2041; the U.S. Environmental Protection Agency under CERCLAIndonesia government's approval of a deferred schedule for completion of additional domestic smelting capacity in Indonesia; cybersecurity incidents; labor relations, including labor-related work stoppages and costs; the hard rockresults of the human health assessment to evaluate the potential impacts of tailings and mining industry); political risks; labor relations;waste, and compliance with applicable environmental, health and safety laws and regulations; weather- and climate-related risks; environmental risks;risks and litigation results (including the final disposition of the unfavorable Indonesia Tax Court ruling relatingresults; our ability to surface water taxescomply with our responsible production commitments under specific frameworks and the outcome of Cerro Verde’s royalty dispute with the Peruvian national tax authority);any changes to such frameworks and other factors described in more detail under the heading “Risk Factors” contained in Part I, Item 1A. “Risk Factors” of our annual report on2021 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,changes.

This report on Form 10-Q also contains financial measures such as net debt and we undertake no obligationunit net cash costs (credits) per pound of copper and molybdenum, which are not recognized under U.S. GAAP. Refer to update any forward-looking statements.“Operations – Unit Net Cash Costs (Credits)” for further discussion of unit net cash costs (credits) associated with our operating divisions, and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to

51

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.


Item 3.Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our market risks during the nine-monththree-month period ended September 30, 2017. March 31, 2022.

For additional information on market risks, refer to “Disclosures About Market Risks” included in Part II, Items 7. and 7A. of our annual report on2021 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 March 31, 2022.

(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.March 31, 2022, 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 on2021 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 2021 Form 10-K.

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.



52

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 on2021 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.March 31, 2022.


There were noThe following table sets forth information with respect to shares of FCX common stock purchased by us during the three months ended September 30, 2017. March 31, 2022, and the approximate dollar value of shares that may yet be purchased pursuant to our share repurchase program:

Period(a) Total
Number of
Shares Purchased		(b) Average
Price Paid Per Share
(c) Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programsa
(d) Approximate Dollar Value of Shares That May
Yet Be Purchased Under the Plans or Programsa
January 1-31, 20222,630,474  $42.46 2,630,474 $2,400,065,904 
February 1-28, 20225,021,731 b$41.05 4,858,739 $2,201,152,367 
March 1-31, 20224,791,738 $48.01 4,791,738 $1,971,105,007 
Total12,443,943 $44.03 12,280,951 
a.On July 21, 2008,November 1, 2021, our Board of Directors approved an increase in our open-marketa share purchaserepurchase program forauthorizing repurchases of up to 30 million shares. There have been no purchases under this$3.0 billion of our common stock. The share repurchase program since 2008. This programdoes not obligate us to acquire any specific amount of shares and does not have an expiration date. At September 30, 2017, there
b.Includes 162,992 shares acquired in connection with stock option exercises during the period shown. All other share repurchases were 23.7 million shares that could still be purchasedmade under theour publicly announced program.

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.

53
Table of Contents

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
4.110.1
IndentureConcentrate Purchase and Sales Agreement dated effective December 11, 1996, between PT Freeport Indonesia and PT Smelting.S-3001-11307-0111/5/2001
10.2
Amendment No. 1 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 IndentureMarch 19, 1998, Amendment No. 2 dated as of February 13, 2012, between FCX and U.S. Bank National Association,December 1, 2000, Amendment No. 3 dated as Trustee (relating to the 3.55% Senior Notes due 2022).8-K001-11307-012/13/2012
4.3
Fourth Supplemental Indentureof January 1, 2003, Amendment No. 4 dated as of May 31, 2013, among FCX, Freeport-McMoRan Oil & Gas LLC10, 2004, Amendment No. 5 dated as of March 19, 2009, Amendment No. 6 dated as of January 1, 2011, and U.S. Bank National Association,Amendment No. 7 dated as Trustee (relatingof October 29, 2012, 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,Concentrate Purchase and the 5.40% Senior Notes due 2034).Sales Agreement dated effective December 11, 1996, between PT Freeport Indonesia and PT Smelting.8-K10-K001-11307-016/3/20132/27/2015
4.410.3
Fifth Supplemental IndentureAmendment No. 9 dated as of April 10, 2017 to the Concentrate Purchase and Sales Agreement dated December 11,1996 between PT Freeport Indonesia and PT Smelting.10-K001-11307-012/20/2018
10.4
Amendment No. 10 dated as of March 5, 2020, Amendment No. 11 dated as of March 31, 2021, Amendment No. 12 dated as of October 13, 2021, and Amendment No. 13 dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating30, 2021, to the 2.30% Senior Notes due 2017).Concentrate Purchase and Sales Agreement dated effective December 11, 1996, between PT Freeport Indonesia and PT Smelting.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

X
Filed
Exhibitwith thisIncorporated by Reference
NumberExhibit TitleForm 10-QFormFile No.Date Filed
4.915.1
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

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 Subsidiary Guarantors and Subsidiary Issuers of Guaranteed Securities.10-K001-11307-012/15/2022
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
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.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
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Table of Contents

Filed
ExhibitFiled
Exhibitwith thisIncorporated by Reference
NumberExhibit TitleForm 10-QFormFile No.Date Filed
101.INS101.PREXBRL Instance Document.X
101.SCHXBRL Taxonomy Extension Schema.X
101.CALXBRL Taxonomy Extension Calculation Linkbase.X
101.DEFXBRL Taxonomy Extension Definition Linkbase.X
101.LABXBRL 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.

55


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, 2017May 5, 2022

S-1