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 June 30, 2023
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_logoa01a01a03a46.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 OctoberJuly 31, 2017,2023, there were issued and outstanding 1,447,590,6681,433,635,627 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)
89
Review Report of Independent Registered Public Accounting Firm
3325
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
3426
Item 3. Quantitative and Qualitative Disclosures About Market Risk
7568
Item 4. Controls and Procedures
7568
Part II. Other Information
7568
Item 1. Legal Proceedings
7568
Item 1A. Risk Factors
7568
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
7669
Item 4. Mine Safety Disclosures
7669
Item 6. Exhibits
77
Signature
S-1

Table of Contents

Part I.FINANCIAL INFORMATION

Item 1.6. Exhibits
Financial Statements.70
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)
June 30,
2023		December 31,
2022
 (In Millions)
ASSETS  
Current assets:  
Cash and cash equivalents$6,683 $8,146 
Trade accounts receivable675 1,336 
Income and other tax receivables417 459 
Inventories: 
Materials and supplies, net2,098 1,964 
Mill and leach stockpiles1,498 1,383 
Product2,214 1,833 
Other current assets472 492 
Total current assets14,057 15,613 
Property, plant, equipment and mine development costs, net33,845 32,627 
Long-term mill and leach stockpiles1,241 1,252 
Other assets1,764 1,601 
Total assets$50,907 $51,093 
LIABILITIES AND EQUITY  
Current liabilities:  
Accounts payable and accrued liabilities$3,642 $4,027 
Accrued income taxes531 744 
Current portion of environmental and asset retirement obligations (AROs)361 320 
Dividends payable217 217 
Current portion of debt37 1,037 
Total current liabilities4,788 6,345 
Long-term debt, less current portion9,458 9,583 
Environmental and AROs, less current portion4,566 4,463 
Deferred income taxes4,343 4,269 
Other liabilities1,725 1,562 
Total liabilities24,880 26,222 
Equity:  
Stockholders’ equity:  
Common stock162 161 
Capital in excess of par value25,028 25,322 
Accumulated deficit(2,901)(3,907)
Accumulated other comprehensive loss(318)(320)
Common stock held in treasury(5,769)(5,701)
Total stockholders’ equity16,202 15,555 
Noncontrolling interests9,825 9,316 
Total equity26,027 24,871 
Total liabilities and equity$50,907 $51,093 
 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 EndedSix Months Ended
June 30,June 30,
 2023202220232022
(In Millions, Except Per Share Amounts)
Revenues$5,737 $5,416 $11,126 $12,019 
Cost of sales:  
Production and delivery3,548 3,003 6,712 6,153 
Depreciation, depletion and amortization (DD&A)547 507 946 996 
Metals inventory adjustments1 18 2 18 
Total cost of sales4,096 3,528 7,660 7,167 
Selling, general and administrative expenses115 100 241 215 
Mining exploration and research expenses42 25 73 49 
Environmental obligations and shutdown costs74 29 141 45 
Net gain on sales of assets— (2)— (2)
Total costs and expenses4,327 3,680 8,115 7,474 
Operating income1,410 1,736 3,011 4,545 
Interest expense, net(171)(156)(322)(283)
Net gain on early extinguishment of debt5 8 5 8 
Other income, net24 11 112 42 
Income before income taxes and equity in affiliated companies’ net earnings1,268 1,599 2,806 4,312 
Provision for income taxes(539)(571)(1,038)(1,395)
Equity in affiliated companies’ net earnings2 10 12 25 
Net income731 1,038 1,780 2,942 
Net income attributable to noncontrolling interests(388)(198)(774)(575)
Net income attributable to common stockholders$343 $840 $1,006 $2,367 
Net income per share attributable to common stockholders:
Basic$0.24 $0.58 $0.70 $1.63 
Diluted$0.23 $0.57 $0.69 $1.61 
Weighted-average shares of common stock outstanding:
Basic1,434 1,447 1,434 1,451 
Diluted1,442 1,457 1,443 1,463 
Dividends declared per share of common stock$0.15 $0.15 $0.30 $0.30 
 
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 EndedSix Months Ended
June 30,June 30,
2023202220232022
(In Millions)
Net income$731 $1,038 $1,780 $2,942 
Other comprehensive income, net of taxes:
Defined benefit plans:
Prior service costs arising during the period— — — (1)
Amortization of unrecognized amounts included in net periodic benefit costs1 2 2 4 
Foreign exchange (losses) gains— (1)1 (1)
Other comprehensive income1 1 3 2 
Total comprehensive income732 1,039 1,783 2,944 
Total comprehensive income attributable to noncontrolling interests(388)(198)(775)(575)
Total comprehensive income attributable to common stockholders$344 $841 $1,008 $2,369 
  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)
Six Months Ended
June 30,
 20232022
 (In Millions)
Cash flow from operating activities:  
Net income$1,780 $2,942 
Adjustments to reconcile net income to net cash provided by operating activities:  
DD&A946 996 
Metals inventory adjustments2 18 
Net gain on sales of assets— (2)
Stock-based compensation72 62 
Net charges for environmental and AROs, including accretion237 119 
Payments for environmental and AROs(114)(120)
Net charges for defined pension and postretirement plans31 20 
Pension plan contributions(6)(50)
Net gain on early extinguishment of debt(5)(8)
Deferred income taxes74 63 
Change in deferred profit on PT Freeport Indonesia’s (PT-FI) sales to PT Smelting(112)27 
Other, net48 (44)
Changes in working capital and other: 
Accounts receivable756 314 
Inventories(530)(40)
Other current assets(17)(99)
Accounts payable and accrued liabilities(231)185 
Accrued income taxes and timing of other tax payments(208)(1,071)
Net cash provided by operating activities2,723 3,312 
Cash flow from investing activities: 
Capital expenditures: 
North America copper mines(378)(276)
South America(183)(124)
Indonesia mining(833)(759)
Indonesia smelter projects(780)(344)
Molybdenum mines(22)(9)
Other(88)(74)
Proceeds from sales of assets11 96 
Loans to PT Smelting for expansion(61)(34)
Other, net(31)(6)
Net cash used in investing activities(2,365)(1,530)
Cash flow from financing activities:  
Proceeds from debt681 4,666 
Repayments of debt(1,806)(2,993)
Cash dividends and distributions paid:
Common stock(432)(438)
Noncontrolling interests(291)(513)
Treasury stock purchases— (1,185)
Contributions from noncontrolling interests50 94 
Proceeds from exercised stock options34 106 
Payments for withholding of employee taxes related to stock-based awards(47)(55)
Debt financing costs and other, net(1)(33)
Net cash used in financing activities(1,812)(351)
Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents(1,454)1,431 
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year8,390 8,314 
Cash, cash equivalents and restricted cash and cash equivalents at end of period$6,936 $9,745 
 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 JUNE 30
 Stockholders’ Equity  
Common StockAccum-ulated DeficitAccumu-
lated
Other Compre-
hensive
Loss		Common Stock
Held in Treasury		Total
Stock-holders’ Equity
Number
of
Shares		At Par
Value		Capital in
Excess of
Par Value		Number
of
Shares		At
Cost		Non-
controlling
Interests		Total
Equity
 (In Millions)
Balance at March 31, 20231,618 $162 $25,227 $(3,244)$(319)184 $(5,769)$16,057 $9,591 $25,648 
Exercised and issued stock-based awards— — 3 — — — — 3 — 3 
Stock-based compensation, including the tender of shares— — 14 — — — — 14 — 14 
Dividends— — (216)— — — — (216)(154)(370)
Net income attributable to common stockholders— — — 343 — — — 343 — 343 
Net income attributable to noncontrolling interests— — — — — — — — 388 388 
Other comprehensive income— — — — 1 — — 1 — 1 
Balance at June 30, 20231,618 $162 $25,028 $(2,901)$(318)184 $(5,769)$16,202 $9,825 $26,027 
 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 March 31, 20221,612 $161 $25,835 $(5,848)$(387)160 $(4,895)$14,866 $9,176 $24,042 
Exercised and issued stock-based awards— — 5 — — — — 5 — 5 
Stock-based compensation, including the tender of shares— — 15 — — — — 15 (1)14 
Treasury stock purchases— — — — — 17 (644)(644)— (644)
Dividends— — (217)— — — — (217)(239)(456)
Contributions from noncontrolling interests— — 23 — — — — 23 24 47 
Net income attributable to common stockholders— — — 840 — — — 840 — 840 
Net income attributable to noncontrolling interests— — — — — — — — 198 198 
Other comprehensive income— — — — 1 — — 1 — 1 
Balance at June 30, 20221,612 $161 $25,661 $(5,008)$(386)177 $(5,539)$14,889 $9,158 $24,047 








7
Table of Contents
Freeport-McMoRan Inc.
CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (continued)
SIX MONTHS ENDED JUNE 30
 Stockholders’ Equity  
Common StockAccum-ulated DeficitAccumu-
lated
Other Compre-
hensive
Loss		Common Stock
Held in Treasury		Total
Stock-holders’ Equity
Number
of
Shares		At Par
Value		Capital in
Excess of
Par Value		Number
of
Shares		At
Cost		Non-
controlling
Interests		Total
Equity
 (In Millions)
Balance at December 31, 20221,613 $161 $25,322 $(3,907)$(320)183 $(5,701)$15,555 $9,316 $24,871 
Exercised and issued stock-based awards5 1 55 — — — — 56 — 56 
Stock-based compensation, including the tender of shares— — 60 — — 1 (68)(8)(1)(9)
Dividends— — (433)— — — — (433)(291)(724)
Contributions from noncontrolling interests— — 24 — — — — 24 26 50 
Net income attributable to common stockholders— — — 1,006 — — — 1,006 — 1,006 
Net income attributable to noncontrolling interests— — — — — — — — 774 774 
Other comprehensive income— — — — 2 — — 2 1 3 
Balance at June 30, 20231,618 $162 $25,028 $(2,901)$(318)184 $(5,769)$16,202 $9,825 $26,027 
 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 1 112 — — — — 113 — 113 
Stock-based compensation, including the tender of shares— — 63 — — 2 (62)1 (11)(10)
Treasury stock purchases— — — — — 29 (1,185)(1,185)— (1,185)
Dividends— — (435)— — — — (435)(493)(928)
Contributions from noncontrolling interests— — 46 — — — — 46 48 94 
Net income attributable to common stockholders— — — 2,367 — — — 2,367 — 2,367 
Net income attributable to noncontrolling interests— — — — — — — — 575 575 
Other comprehensive income— — — — 2 — — 2 — 2 
Balance at June 30, 20221,612 $161 $25,661 $(5,008)$(386)177 $(5,539)$14,889 $9,158 $24,047 

The accompanying notes are an integral part of these consolidated financial statements.
8
Table of Contents
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, 2016.2022 (2022 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-monthsix-month period ended SeptemberJune 30, 2017,2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.2023.


Indonesia Mining.PT-FI. Beginning January 1, 2023, FCX’s economic ownership interest in PT-FI is 48.76% and prior to January 1, 2023, FCX’s economic interest in PT-FI approximated 81%. As discussed in Note 3 of FCX’s 2022 Form 10-K, in accordance with provisions pertaining to PT-FI’s shareholders agreement, FCX's first-quarter 2023 net income included a result of the first-quarter 2017 regulatory restrictions and uncertainties regarding long-term investment stability, PT Freeport Indonesia (PT-FI) took actions$35 million net benefit associated with PT-FI sales volumes that were attributed to adjustFCX at 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.previous approximate 81% economic ownership interest.


Additionally, because of the significant reduction in workforce, PT-FI was required to remeasure its pension assets and pension benefit obligation as ofSubsequent Events. FCX evaluated events after June 30, 2017. The discount rate2023, and rate of compensation increase used forthrough 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.


Table of Contents

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


Table of Contents

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.

Table of Contents


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 EndedSix Months Ended
June 30,June 30,
 2023202220232022
Net income$731 $1,038 $1,780 $2,942 
Net income attributable to noncontrolling interests(388)(198)(774)(575)
Undistributed dividends and earnings allocated to participating securities(5)(4)(5)(5)
Net income attributable to common stockholders$338 $836 $1,001 $2,362 
Basic weighted-average shares of common stock outstanding1,434 1,447 1,434 1,451 
Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs)8 10 9 12 
Diluted weighted-average shares of common stock outstanding1,442 1,457 1,443 1,463 
Net income per share attributable to common stockholders:
Basic$0.24 $0.58 $0.70 $1.63 
Diluted$0.23 $0.57 $0.69 $1.61 
 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
Shares 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 38 millionThere were no shares of common stock wereassociated with outstanding stock options excluded for third-quarter 2017, 46 million for third-quarter 2016, 42 millionin
9
Table of Contents
second-quarter 2023, second-quarter 2022 and for the first ninesix months of 20172023, and 461 million shares excluded for the first ninesix months of 2016.2022.



Table of Contents

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


The components of inventories follow (in millions):
June 30,
2023		December 31, 2022
Current inventories:
Total materials and supplies, neta
$2,098 $1,964 
Mill stockpiles$224 $216 
Leach stockpiles1,274 1,167 
Total current mill and leach stockpiles$1,498 $1,383 
Raw materials (primarily copper concentrate)$382 $443 
Work-in-process189 221 
Finished goodsb
1,643 1,169 
Total product$2,214 $1,833 
Long-term inventories:
Mill stockpiles$216 $199 
Leach stockpiles1,025 1,053 
Total long-term mill and leach stockpilesc
$1,241 $1,252 
 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 $33 million at June 30, 2023, and $39 million at December 31, 2022.
b.The increase in finished goods inventory at June 30, 2023, was associated with the change in PT-FI's commercial arrangement with PT Smelting (PT-FI’s 39.5% owned copper smelter and refinery in Gresik, Indonesia) from a copper concentrate sales agreement to a tolling arrangement beginning on January 1, 2023. At June 30, 2023, approximately 85 million pounds of copper and 40 thousand ounces of gold from PT-FI’s production was deferred in inventory and will be sold as refined metal in future periods.
c.Estimated metals in stockpiles not expected to be recovered within the next 12 months.

NOTE 5.4. INCOME TAXES


VariationsGeographic sources of FCX’s benefit (provision) for income taxes follow (in millions):
Six Months Ended
June 30,
 20232022
U.S. operations$3 

$(5)
International operations(1,041)(1,390)
Total$(1,038)$(1,395)


FCX’s consolidated effective income tax rate was 37% for the first six months of 2023 and 32% for the first six months of 2022. The higher 2023 effective income tax rate reflects the impact of pre-tax, nondeductible charges totaling $142 million for the first six months of 2023 associated with contested tax rulings by the Peruvian Supreme Court. In addition, variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate. FCX’s consolidated effectiveBecause of its U.S. tax position, FCX does not record a financial statement impact for income tax rate was 47 percentor losses generated in the U.S.

The provisions of the U.S. Inflation Reduction Act of 2022 (the Act) became applicable to FCX on January 1, 2023. The Act includes, among other provisions, a new Corporate Alternative Minimum Tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period. As limited guidance related to how the CAMT provisions of the Act should be applied or otherwise administered has been released by the U.S. Department of the Treasury (Treasury), uncertainty remains regarding the application of the CAMT. FCX has made interpretations of certain provisions of the Act, and based on these interpretations, determined that the provisions of the Act did not impact its financial results for the first ninesix 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):
10
 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.
Table of Contents

2023. However, future guidance released by the Treasury may differ from its interpretations, which could be material and may further limit FCX’s ability to realize future benefits from its U.S. net operating losses.

NOTE 6.5. DEBT AND EQUITY


The components of debt follow (in millions):
 June 30,
2023		December 31, 2022
Senior notes and debentures:
Issued by FCX$6,103 $7,225 
Issued by PT-FI2,979 2,978 
Issued by Freeport Minerals Corporation354 355 
Other59 62 
Total debt9,495 10,620 
Less current portion of debt(37)(1,037)
Long-term debt$9,458 $9,583 
  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. Facilities.
FCX and PT-FI have a $3.0 billion, unsecured revolving credit facility that matures in October 2027. Under the terms of the revolving credit facility, FCX may obtain loans and issue letters of credit in an aggregate amount of up to $3.0 billion with PT-FI’s capacity limited to $500 million, and letters of credit issuance limited to $1.5 billion. At SeptemberJune 30, 2017, there were no borrowings outstanding and $362023, FCX had $8 million in letters of credit issued under FCX’sits revolving credit facility.

PT-FI has a $1.3 billion unsecured revolving credit facility resultingthat matures in availability of approximately $3.5 billion, of which approximately $1.5 billion could be used for additional letters of credit.July 2026 and Cerro Verde has a $350 million unsecured revolving credit facility that matures in May 2027.


At June 30, 2023, FCX, PT-FI and Cerro Verde had no borrowings outstanding under their respective revolving credit facilities and were in compliance with their respective covenants.

Senior Notes Issued by FCX.Notes.
In March 2017, FCX’s 2.15% Senior Notes matured, and2023, FCX repaid in full 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 loans3.875% Senior Notes totaling $996 million at maturity.

Beginning in June 2017. Refer to Note 82022 and through August 3, 2023, FCX has purchased $1.3 billion aggregate principal amount of FCX’s annual report on Form 10-Kits senior notes in open-market transactions for a total cost of $1.2 billion, including $131 million aggregate principal amount in the year ended December 31, 2016, for further discussion.

Tablesecond quarter and first six months of Contents

Exchanges2023, and Early Extinguishment of Debt. During third-quarter 2017, FCX redeemed in full certain senior notes.$103 million aggregate principal amount from July 1, 2023, through August 3, 2023. A summary of these earlythe senior note purchases and related gains on debt extinguishments for the second quarter and first six months of 2023, follows (in millions):

Principal AmountDiscounts/Deferred Issuance CostsBook ValueRedemption ValueGain
5.00% Senior Notes due 2027$12 $— $12 $12 $— 
4.125% Senior Notes due 202822 — 22 21 1 
4.375% Senior Notes due 20286 — 6 5 1 
5.25% Senior Notes due 202931 — 31 31 — 
4.25% Senior Notes due 203045 1 44 42 2 
4.625% Senior Notes due 203015 — 15 14 1 
$131 $1 $130 $125 $5 

 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 $11Interest Expense, Net. Consolidated interest costs (before capitalization) totaled $234 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 $152023, $189 million in third-quarter 2016 and $54second-quarter 2022, $441 million for the first ninesix months of 2016. Partially offsetting the gains were $32023 and $342 million in losses, primarily associated with the modification of FCX’s revolving credit facility in first-quarter 2016. Refer to Notes 8 and 10 of FCX’s annual report on Form 10-K for the year ended December 31, 2016, for further discussion.

Interest Expense, Net.first six months of 2022. Consolidated interest costs from continuing operations (before capitalization and excluding $141 million ofcapitalization) in the 2023 periods includes, interest expense associated with disputed Cerro Verde royalties recorded in third-quarter 2017) totaled $196Verde’s contested tax rulings by the Peruvian Supreme Court totaling $50 million in third-quarter 2017, $211 million in third-quarter 2016, $583second-quarter 2023 and $74 million for the first ninesix months of 2017 and $647 million for the first nine months2023.

11
Table of 2016. Contents
Capitalized interest added to property, plant, equipment and mine development costs, net, totaled $62 million in second-quarter 2023, $33 million in third-quarter 2017, $24 million in third-quarter 2016, $91second-quarter 2022, $119 million for the first ninesix months of 20172023 and $66$59 million for the first ninesix months of 2016. Capitalized2022. The increase in capitalized interest addedcosts in the 2023 periods, compared to oilthe 2022 periods, primarily resulted from increased construction and gas properties notdevelopment projects in process, primarily at the Manyar smelter and precious metals refinery in Indonesia (collectively, the Indonesia smelter projects).

Share Repurchase Program and Dividends. Since mid-2021, FCX has acquired 47.8 million shares of its common stock under the share repurchase program for a total cost of $1.8 billion ($38.35 average cost per share). No shares have been purchased since July 11, 2022, and FCX has $3.2 billion available for repurchases under the program.

On June 21, 2023, FCX’s Board of Directors (Board) declared cash dividends totaling $0.15 per share on its common stock (including a $0.075 per share quarterly base cash dividend and a $0.075 per share quarterly variable, performance-based cash dividend), which was paid on August 1, 2023, to common stockholders of record as of July 14, 2023.

The declaration and payment of dividends (base or variable) and timing and amount of any share repurchases are at the discretion of FCX’s Board and management, respectively, and are subject to amortization totaled $7 million fora number of factors, including not exceeding FCX’s net debt target, capital availability, FCX’s financial results, cash requirements, 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 of September 30, 2017, and December 31, 2016, FCX had no price protection contracts relating to its mine production.

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


Derivatives Designated as Hedging Instruments –- Fair Value HedgesHedges.
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-monthsix-month periods ended SeptemberJune 30, 20172023 and 2016.2022. At SeptemberJune 30, 2017,2023, FCX held copper futures and swap contracts that qualified for hedge accounting for 4688 million pounds at an average contract price of $2.83$3.88 per pound, with maturities through June 2019.May 2025.



12
Table of Contents

Summary of (Losses) Gains. A summary of the realized and unrealized (losses) 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 EndedSix Months Ended
September 30, September 30,June 30,June 30,
2017 2016 2017 2016 2023202220232022
Copper futures and swap contracts:       Copper futures and swap contracts:  
Unrealized gains (losses):       
Unrealized (losses) gains:Unrealized (losses) gains:  
Derivative financial instruments$—
 $1
 $(1) $11
Derivative financial instruments$(25)$(89)$(11)$(78)
Hedged item – firm sales commitments—
 (1) 1
 (11)Hedged item – firm sales commitments25 89 11 78 
       
Realized gains (losses):       
Realized (losses) gains:Realized (losses) gains:  
Matured derivative financial instruments12
 —
 21
 (8)Matured derivative financial instruments(5)(12)3 2 


Derivatives Not Designated as Hedging InstrumentsInstruments.
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 price 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, cathode or anode slimes at the then-current LME copper, COMEX copper or London gold prices. 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, cathode and anode slime 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 inuntil 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 SeptemberJune 30, 2017,2023, follows:
Open PositionsAverage Price
Per Unit		Maturities Through
 ContractMarket
Embedded derivatives in provisional sales contracts:    
Copper (millions of pounds)587 $3.90 $3.78 November 2023
Gold (thousands of ounces)165 1,980 1,919 September 2023
Embedded derivatives in provisional purchase contracts:  
Copper (millions of pounds)152 3.89 3.77 October 2023
 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 SeptemberJune 30, 2017,2023, Atlantic Copper held net copper forward purchase contracts for 57 million pounds at an average contract price of $2.95$3.81 per pound, with maturities through October 2017.August 2023.








13
Table of Contents

Summary of Gains (Losses). Gains. A summary of the realized and unrealized (losses) gains (losses) recognized in operating income (loss) for commodity contracts that do not qualify as hedge transactions, including embedded derivatives, follows (in millions):
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Embedded derivatives in provisional copper and gold       
sales contractsa
$137
 $12
 $297
 $88
Copper forward contractsb
(9) (1) (14) 4
 Three Months EndedSix Months Ended
June 30,June 30,
 2023202220232022
Embedded derivatives in provisional sales contracts:a
Copper$(169)$(720)$61 $(502)
Gold and other metals(21)(33)22 (11)
Copper forward contractsb
1 22 (1)26 
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 InstrumentsInstruments.
A summary of the fair values of unsettled commodity derivative financial instruments follows (in millions):
  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

Table of Contents

June 30,
2023		December 31, 2022
Commodity Derivative Assets:  
Derivatives designated as hedging instruments:
  
Copper futures and swap contracts$— $3 
Derivatives not designated as hedging instruments:
  
Embedded derivatives in provisional sales/purchase contracts37 166 
Copper forward contracts— 1 
Total derivative assets$37 $170 
Commodity Derivative Liabilities:
Derivatives designated as hedging instruments:
Copper futures and swap contracts$10 $3 
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts100 39 
Total derivative liabilities$110 $42 
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.
14
Table of Contents
A summary of these unsettled commodity contracts that are offset in the balance sheetssheet follows (in millions):
AssetsLiabilities
June 30,
2023		December 31, 2022June 30,
2023		December 31, 2022
Gross amounts recognized:
Commodity contracts:
Embedded derivatives in provisional
sales/purchase contracts$37 $166 $99 $39 
Copper derivatives— 4 11 3 
37 170 110 42 
Less gross amounts of offset:
Commodity contracts:
Embedded derivatives in provisional
sales/purchase contracts9 — 9 — 
9 — 9 — 
Net amounts presented in balance sheet:
Commodity contracts:
Embedded derivatives in provisional
sales/purchase contracts28 166 90 39 
Copper derivatives— 4 11 3 
$28 $170 $101 $42 
Balance sheet classification:
Trade accounts receivable$8 $163 $72 $7 
Other current assets— 4 — — 
Accounts payable and accrued liabilities20 3 29 34 
Other liabilities— — — 1 
$28 $170 $101 $42 
  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 SeptemberJune 30, 2017,2023, the maximum amount of credit exposure associated with derivative transactions was $78$37 million.


Other Financial Instruments. Other financial instruments include cash, cash equivalents, restricted cash and cash equivalents, accounts receivable, restricted cash, investment securities, legally restricted funds,trust assets, 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 (refer to Note 87 for the fair values of investment securities, legally restricted funds and long-term debt).


In addition, as of SeptemberJune 30, 2017,2023, FCX hashad 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 and to Note 2Restricted Cash and Cash Equivalents. The following table provides a reconciliation of FCX’s annual report on Form 10-K fortotal cash, cash equivalents and restricted cash and cash equivalents presented in the year endedconsolidated statements of cash flows (in millions):
June 30,
2023		December 31, 2022
Balance sheet components:
Cash and cash equivalentsa,b
$6,683 $8,146 
Restricted cash and cash equivalents included in:
Other current assets119 111 
Other assets134 133 
Total cash, cash equivalents and restricted cash and cash equivalents presented in the consolidated statements of cash flows$6,936 $8,390 
a.Includes time deposits of $0.3 billion at June 30, 2023, and $0.5 billion at December 31, 2016,2022.
b.Includes cash designated for further discussion of these instruments).smelter development projects totaling $1.1 billion at June 30, 2023, and $1.8 billion at December 31, 2022.

15
Table of Contents

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 second-quarter 2023.


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, cash equivalents, restricted cash and cash equivalents, accounts receivable, restricted cash, and accounts payable and accrued liabilities, accrued income taxes and dividends payable (refer to Note 7)6) follows (in millions):

At September 30, 2017At June 30, 2023
Carrying Fair Value CarryingFair Value
Amount Total NAV Level 1 Level 2 Level 3 AmountTotalNAVLevel 1Level 2Level 3
Assets           Assets    
Investment securities:a,b
           
Investment securities:a,b
U.S. core fixed income fund$25
 $25
 $25
 $—
 $—
 $—
U.S. core fixed income fund$26 $26 $26 $— $— $— 
Money market funds21
 21
 —
 21
 —
 —
Equity securities6
 6
 —
 6
 —
 —
Equity securities5 5 — 5 — — 
Total52
 52
 25
 27
 —
 —
Total31 31 26 5 — — 
           
Legally restricted funds:a
           
Legally restricted funds:a
    
U.S. core fixed income fund55
 55
 55
 —
 —
 —
U.S. core fixed income fund63 63 63 — — — 
Government mortgage-backed securitiesGovernment mortgage-backed securities40 40 — — 40 — 
Government bonds and notes38
 38
 —
 —
 38
 —
Government bonds and notes33 33 — — 33 — 
Corporate bonds30
 30
 —
 —
 30
 —
Corporate bonds31 31 — — 31 — 
Government mortgage-backed securities25
 25
 —
 —
 25
 —
Asset-backed securitiesAsset-backed securities19 19 — — 19 — 
Money market funds18
 18
 —
 18
 —
 —
Money market funds17 17 — 17 — — 
Asset-backed securities14
 14
 —
 —
 14
 —
Collateralized mortgage-backed securities8
 8
 —
 —
 8
 —
Collateralized mortgage-backed securities2 2 — — 2 — 
Municipal bonds1
 1
 —
 —
 1
 —
Total189
 189
 55
 18
 116
 —
Total205 205 63 17 125 — 
           
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
Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc
Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc
37 37 — — 37 — 
           
Total assets  $540
 $80
 $50
 $272
 $138
Contingent consideration for the sale of the Deepwater GOM oil and gas propertiesa
Contingent consideration for the sale of the Deepwater GOM oil and gas propertiesa
59 51 — — — 51 
           
Liabilities           Liabilities    
Derivatives:c
           
Derivatives:c
    
Embedded derivatives in provisional sales/           
purchase contracts in a gross liability position46
 $46
 $—
 $—
 $46
 $—
Embedded derivatives in provisional sales/purchase contracts in a gross liability positionEmbedded derivatives in provisional sales/purchase contracts in a gross liability position100 100 — — 100 — 
Copper futures and swap contracts2
 2
 —
 1
 1
 —
Copper futures and swap contracts10 10 — 8 2 — 
Total48
 48
 —
 1
 47
 —
Total110 110 — 8 102 — 
           
Long-term debt, including current portiond
14,782
 14,735
 —
 —
 14,735
 —
Long-term debt, including current portiond
9,495 9,129 — — 9,129 — 
           
Total liabilities  $14,783
 $—
 $1
 $14,782
 $—



16
Table of Contents

At December 31, 2022
 CarryingFair Value
 AmountTotalNAVLevel 1Level 2Level 3
Assets    
Investment securities:a,b
U.S. core fixed income fund$25 $25 $25 $— $— $— 
Equity securities7 7 — 7 — — 
Total32 32 25 7 — — 
Legally restricted funds:a
    
U.S. core fixed income fund56 56 56 — — — 
Government mortgage-backed securities37 37 — — 37 — 
Government bonds and notes34 34 — — 34 — 
Corporate bonds31 31 — — 31 — 
Asset-backed securities17 17 — — 17 — 
Money market funds3 3 — 3 — — 
Collateralized mortgage-backed securities3 3 — — 3 — 
Total181 181 56 3 122 — 
Derivatives:c
    
Embedded derivatives in provisional sales/purchase contracts in a gross asset position166 166 — — 166 — 
Copper futures and swap contracts3 3 — 3 — — 
Copper forward contracts1 1 — 1 — — 
Total170 170 — 4 166 — 
Contingent consideration for the sale of the Deepwater GOM oil and gas propertiesa
67 57 — — — 57 
Liabilities    
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position39 39 — — 39 — 
Copper forward contracts3 3 — — 3 — 
Total42 42 — — 42 — 
Long-term debt, including current portiond
10,620 10,097 — — 10,097 — 
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 $119 million at June 30, 2023, and $118 million at December 31, 2022, associated with PT-FI’s closure and reclamation guarantees and (ii) other assets of $134 million at June 30, 2023, and $133 million at December 31, 2022, primarily associated with an assurance bond to support PT-FI’s commitment for additional domestic smelter development in Indonesia.

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


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

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


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


Fixed income securities (government securities, corporate bonds, asset-backed securities and collateralized mortgage-backed securities and municipal bonds)securities) 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.

17
Table of Contents
Money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

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 price 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 2018. The contingent consideration included in (i) other current assets totaled $17 million at June 30, 2023, and $20 million at December 31, 2022, and (ii) other assets totaled $42 million at June 30, 2023, and $47 million at December 31, 2022. 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 SeptemberJune 30, 2017,2023, as compared towith those techniques used at December 31, 2016.2022.

Table of Contents


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 ninesix months of 20172023 follows (in millions):
Fair value at January 1, 2023$57 
Net unrealized gain related to assets still held at the end of the period1 
Settlements(7)
Fair value at June 30, 2023$51 
Fair value at January 1, 2017$135
 
Net unrealized gain related to assets still held at the end of the period3
 
Fair value at September 30, 2017$138
 


NOTE 9.8. CONTINGENCIES AND COMMITMENTS


Environmental
Historical Smelter Sites — Borough of Carteret
AsThere were no significant updates to previously reported environmental matters included in Note 12 of FCX’s annual report on2022 Form 10-K, forother than the year ended December 31, 2016, from 1920 until 1986,matter discussed below.

Historical Smelter Sites. On January 30, 2017, a putative class action titled Juan Duarte, Betsy Duarte and N.D., Infant, by Parents and Natural Guardians Juan Duarte and Betsy Duarte, Leroy Nobles and Betty Nobles, on behalf of themselves and all others similarly situated v. United States MetalMetals Refining Company, (USMR)Freeport-McMoRan Copper & Gold Inc. and Amax Realty Development, Inc., an indirect wholly owned subsidiary of Cyprus Amax Minerals Company, owned and operated a copper smelter and refineryDocket No. 734-17, was filed in the BoroughSuperior Court of Carteret, New Jersey, onJersey. In July 2023, the banks of the Arthur Kill (a narrow waterway that separates New Jersey from Staten Island). As a result of recent off-site soil sampling in public and private areas near the former smelter, FCX increased its associated environmental obligation for known and potential off-site environmental remediation by recording a $59 million charge to operating income in third-quarter 2017. Additional sampling is ongoing and could result in additional adjustments to the related environmental remediation obligation.

Uranium Mining Sites
As reported in Note 12 of FCX’s annual report on Form 10-K for the year ended December 31, 2016, the Department of Justice, the U.S. Environmental Protection Agency, the Navajo Nation and two FCX-related subsidiaries reachedCourt approved an agreement regardingbetween the scopeparties pursuant to which all claims were settled for an amount not material to FCX.

18
Table 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 on2022 Form 10-K, forother than the year ended December 31, 2016.matter discussed below.


TaxLouisiana Parishes Coastal Erosion Cases. Certain FCX affiliates were named as defendants, along with numerous co-defendants, in 13 cases out of a total of 42 cases filed in Louisiana state courts by 6 south Louisiana parishes (Cameron, Jefferson, Plaquemines, St. Bernard, St. John the Baptist and Vermilion), alleging that certain oil and gas exploration and production operations and sulfur mining and production operations in coastal Louisiana contaminated and damaged coastal wetlands and caused significant land loss along the Louisiana coast. In 2019, affiliates of FCX reached an agreement in principle to settle all 13 cases and, as of October 2022, all parties have executed the settlement agreement. On March 16, 2023, a non-plaintiff coastal parish included in the settlement (Terrebonne), filed an amended petition titled Terrebonne Parish Consolidated Government vs. Louisiana Department of Natural Resources et al., Docket No. 185576, in the 32nd Judicial District Court, Terrebonne Parish, State of Louisiana, adding the settling FCX affiliates to a lawsuit that challenges whether Terrebonne Parish is validly bound to the settlement agreement and seeks to have the court declare the settlement void. FCX is evaluating and exploring options to resolve this dispute and will vigorously defend this matter.

Other Matters
Cerro Verde Royalty DisputeIndonesia Regulatory Matters
As reported in FCX’s annual report on Form 10-KOver the past several years, the Indonesia government has enacted various laws and regulations to promote downstream processing of various minerals, including copper concentrates.

Export License.On June 10, 2023, export licenses for several exporters, including PT-FI, expired. During the year ended December 31, 2016,second quarter and as subsequently updated in Note 9through July 2023, the Indonesia government issued various regulations to address exports 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 processedunrefined metals, including regulations by the Cerro Verde concentrator,Ministry of Energy and Mineral Resources (MEMR) to allow continued exports of copper concentrates through May 2024 for companies engaged in ongoing smelter development projects with construction progress greater than 50%, and regulations by the Ministry of Trade on the permitted export of various products, including copper concentrates.

On July 24, 2023, PT-FI was granted an export license through May 2024 for 1.7 million metric tons of copper concentrate. PT-FI will continue to work with the Indonesia government to obtain approvals to continue exports until the Manyar smelter is fully commissioned and has reached designed operating conditions.

Export Duties. Under PT-FI’s special mining license (IUPK), export duties are determined based on regulations that were in effect in 2018, which commenced operationsprovided that no duties are required after smelter construction progress reached 50%. In March 2023, the Indonesia government verified that construction progress on the Manyar smelter exceeded 50% and PT-FI's export duties were eliminated effective March 29, 2023.

In July 2023, the Ministry of Finance issued a revised regulation on duties for various exported products, including copper concentrates. The revised regulation assesses export duties for copper concentrates at 7.5% in late 2006,the second half of 2023 and 10% in 2024 for companies with smelter progress of 70% to 90%. For companies with smelter progress above 90%, export duties would be 5% in the period December 2006second half of 2023 and 7.5% in 2024. PT-FI is continuing 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, irrespectivediscuss the applicability of the method used for processing those minerals. No assessments have been issued forrevised regulation with the period from October 2011Indonesia government and will contest, and seek recovery of, any assessments.

Smelter Development Progress. In 2018, PT-FI agreed to December 2013,expand its domestic smelting and no assessments can be issued for years after 2013, as Cerro Verde began paying royalties onrefining capacity to process all of its productioncopper concentrates in January 2014 under its new 15-year stability agreement. Since 2014, Cerro Verde has been payingIndonesia. PT-FI is advancing the disputed assessments forconstruction of the period December 2006Indonesia smelter projects and expanding capacity at PT Smelting. PT-FI estimates construction of the Manyar smelter to be complete in mid-2024 followed by commissioning of the facilities and a ramp-up schedule through December 2008 under an installment program ($135 million paid by Cerro Verde through September 30, 2017).year-end 2024.

In October 2017, the Peruvian Supreme Court issued a ruling in favor of SUNAT that the assessments of royalties for the year 2008 on ore processed by the Cerro Verde concentrator were proper under Peruvian law.

Table of Contents


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

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

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

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

Indonesia Tax Matters
The following information includes a discussion of updates to previously reported Indonesia tax matters includeddisclosed in Note 12 of FCX’s annual report on2022 Form 10-K, forin March 2022, PT-FI paid the year ended December 31, 2016.

PT-FI received assessments from the local regional tax authorityIndonesia government an administrative fine totaling $57 million (which included charges of $41 million recorded in Papua, Indonesia, for additional taxes and penaltiesfirst-quarter 2022) related to surface water taxessmelter development delays in light of the COVID-19 pandemic.

In May 2023, MEMR issued a decree prescribing a revised formula for administrative fines for delays in construction of smelter and refining facilities, taking into account allowances for certain delays associated with the COVID-19 pandemic as verified by a third-party. In mid-July 2023, PT-FI submitted its third-party verified calculation, which resulted in an accrual for a potential administrative fine of $55 million based on the formula prescribed by the decree related to the period from August 2020 through January 2011 through September 2017.2022. PT-FI is filing objectionscontinues to these assessments. During 2017,discuss the applicability of this
19
Table of Contents
administrative fine with MEMR. Based on PT-FI’s revised smelter construction schedule, which was accepted by 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 mattergovernment in connection with the ongoing negotiationsrenewal of PT-FI's export license in early 2022, PT-FI does not believe any additional fines should be assessed under the decree.

Smelter Bond. The May 2023 decree by MEMR also requires an assurance bond to be held in escrow until project completion. PT-FI has an existing assurance bond to support its commitment for additional smelter development in Indonesia, which totals $134 million at June 30, 2023 (refer to Note 7), and may be required to make an additional refundable deposit of approximately $250 million in connection with the Indonesian government to resolve PT-FI’s long-term operating rights.May 2023 decree.
Table of Contents


Indonesia Mining Contract. Export Proceeds. 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 every six months, depending on smelter construction progress.

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

On January 12, 2017, PT-FI suspended exports in response to Indonesian regulations adopted in January 2014. In addition, as a result of labor disturbances and a delay in the renewal of its export license for anode slimes, PT Smelting’s operations (PT-FI’s 25 percent-owned smelter in Indonesia) were shut down from January 19, 2017, until early March 2017. On February 10, 2017, PT-FI was forced to suspend production as a result of limited storage capacity at PT-FI and PT Smelting. On April 21, 2017, the IndonesianIndonesia government issued a permitregulation that became effective August 1, 2023, that requires 30% of PT-FI’s gross export proceeds to PT-FI that allowed exports to resumebe temporarily deposited into Indonesia banks for a six-month period andof 90 days before withdrawal. PT-FI commenced export shipments.

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

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

In late March 2017, the Indonesian government amended the regulations to enable PT-FI to retain its COW until 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 implicationsis reviewing implementing guidelines associated with the divestment.this regulation.


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.
Table of Contents

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 four 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 minesmining operations to other divisions, including Atlantic Copper (FCX’s wholly owned smelter and refinery in Spain) and(and on 25 percent39.5% of PT-FI’s sales to PT Smelting (PT-FI’s 25-percent-owned smelter and refinery in Indonesia),for the 2022 periods) 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.

Beginning January 1, 2023, PT-FI's commercial arrangement with PT Smelting converted from a copper concentrate sales agreement to a tolling arrangement. Under this arrangement, PT-FI pays PT Smelting a tolling fee to smelt and refine its copper concentrate and PT-FI retains title to all products for sale to third parties (i.e., there are no further sales from PT-FI to PT Smelting). While the new tolling agreement with PT Smelting does not significantly change PT-FI’s economics, it impacts the timing of PT-FI’s sales and working capital requirements.

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.




20
Table of Contents

Product Revenues. FCX’s revenues attributable to the products it sold for the second quarter and first six months of 2023 and 2022 follow (in millions):

Three Months EndedSix Months Ended
June 30,June 30,
 2023202220232022
Copper:
Concentrate$2,185 $2,694 $3,772 $5,385 
Cathode1,358 1,183 2,685 2,618 
Rod and other refined copper products884 1,071 1,805 2,187 
Purchased coppera
72 104 276 174 
Gold999 909 1,530 1,720 
Molybdenum491 377 1,083 755 
Otherb
170 165 303 353 
Adjustments to revenues:
Treatment chargesc
(142)(139)(243)(272)
Royalty expensed
(94)(111)(154)(206)
PT-FI export dutiese
4 (84)(14)(182)f
Revenues from contracts with customers5,927 6,169 11,043 12,532 
Embedded derivativesg
(190)(753)83 (513)
Total consolidated revenues$5,737 $5,416 $11,126 $12,019 
a.FCX purchases copper cathode primarily for processing by its Rod & Refining operations.
b.Primarily includes revenues associated with silver.
c.Treatment charges for the second quarter and first six months of 2023 exclude tolling costs paid to PT Smelting, which are recorded as production costs in the consolidated statements of income.
d.Reflects royalties on sales from PT-FI and Cerro Verde that will vary with the volume of metal sold and prices.
e.Refer to Note 8 for further discussion of PT-FI export duties.
f.Includes a charge of $18 million associated with an adjustment to prior-period export duties.
g.Refer to Note 6 for discussion of embedded derivatives related to FCX’s provisionally priced copper concentrate and cathode sales contracts.
21
Table of Contents
Financial Information by Business SegmentsSegment
(In Millions)
 AtlanticCorporate,
North America Copper MinesSouth America MiningCopperOther
CerroIndonesiaMolybdenumRod &Smelting& Elimi-FCX
MorenciOtherTotalVerdeOtherTotalMiningMinesRefining& RefiningnationsTotal
Three Months Ended June 30, 2023           
Revenues:            
Unaffiliated customers$26 $14 $40 $783 $190 $973 $2,039 $— $1,463 $744 $478 a$5,737 
Intersegment570 980 1,550 175 — 175 198 150 10 4 (2,087)— 
Production and delivery422 744 1,166 609 174 783 858 b105 1,465 725 (1,554)3,548 
DD&A42 57 99 117 15 132 275 14 1 7 19 547 
Metals inventory adjustments1 — 1 — — — — — — — — 1 
Selling, general and administrative expenses1 — 1 2 — 2 30 — — 7 75 115 
Mining exploration and research expenses— 1 1 — — — — — — — 41 42 
Environmental obligations and shutdown costs— 1 1 — — — — — — — 73 74 
Operating income (loss)130 191 321 230 1 231 1,074 31 7 9 (263)1,410 
Interest expense, net— — — 55 c— 55 13 — — 8 95 171 
Provision for income taxes— — — 113 — 113 410 — — — 16 539 
Net income attributable to noncontrolling interests— — — 18 2 20 368 d— — — — 388 
Total assets at June 30, 20233,167 5,754 8,921 8,444 1,890 10,334 20,460 1,717 280 1,127 8,068 50,907 
Capital expenditures67 115 182 57 26 83 384 13 2 11 488 e1,163 
Three Months Ended June 30, 2022            
Revenues:            
Unaffiliated customers$17 $30 $47 $702 $180 $882 $1,920 f$— $1,753 $433 $381 a$5,416 
Intersegment730 1,078 1,808 

134 — 134 58 144 8 — (2,152)— 
Production and delivery397 720 1,117 565 177 742 564 80 1,765 463 g(1,728)3,003 
DD&A44 58 102 91 11 102 262 18 1 6 16 507 
Metals inventory adjustments— 7 7 9 2 11 — — — — — 18 
Selling, general and administrative expenses1 — 1 2 — 2 30 — — 5 62 100 
Mining exploration and research expenses— 1 1 — — — — — — — 24 25 
Environmental obligations and shutdown costs(13)— (13)— — — — — — — 42 29 
Net gain on sales of assets— — — — — — — — — — (2)(2)
Operating income (loss)318 322 640 169 (10)159 1,122 46 (5)(41)(185)1,736 
Interest expense, net— — — 4 — 4 13 — — 2 137 156 
Provision for (benefit from) income taxes— — — 68 (7)61 434 — — — 76 571 
Net income (loss) attributable to noncontrolling interests— — — 50 8 58 141 d— — — (1)198 
Total assets at June 30, 20222,839 5,338 8,177 8,379 1,843 10,222 20,679 1,702 300 1,078 7,955 50,113 
Capital expenditures63 83 146 35 33 68 388 8 2 32 219 e863 
22
                         
(In millions)      
                 
                   Atlantic Corporate,   
 North America Copper Mines South America       Copper Other   
       Cerro     Indonesia Molybdenum Rod & Smelting & Elimi- FCX 
 Morenci Other Total Verde Other Total Mining Mines Refining & Refining 
nationsa
 Total 
Three Months Ended September 30, 2017                        
Revenues:                        
Unaffiliated customers$57
 $40
 $97
 $850
 $109
 $959
 $1,121
b 
$—
 $1,137
 $554
 $442
c 
$4,310
 
Intersegment460
 548
 1,008
 64
 —
 64
 —
 65
 8
 1
 (1,146) —
 
Production and delivery244
 414
 658
 683
d 
76
 759
 406
 58
 1,141
 533
 (753) 2,802
 
Depreciation, depletion and amortization42
 54
 96
 116
 18
 134
 136
 20
 2
 7
 23
 418
 
Selling, general and administrative expenses1
 1
 2
 2
 —
 2
 32
 —
 —
 4
 66
 106
 
Mining exploration and research expenses—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 27
 27
 
Environmental obligations and shutdown costs—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 73
 73
 
Net gain on sales of assets—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (33) (33) 
Operating income (loss)230
 119
 349
 113
 15
 128
 547
 (13) 2
 11
 (107) 917
 
                         
Interest expense, net1
 —
 1
 156
d 
—
 156
 1
 —
 —
 5
 141
 304
 
Provision for income taxes—
 —
 —
 134
d 
5
 139
 233
 —
 —
 1
 14
 387
 
Total assets at September 30, 20172,844
 4,223
 7,067
 8,851
 1,595
 10,446
 11,100
 1,885
 264
 751
 5,814
e 
37,327
 
Capital expenditures26
 13
 39
 17
 3
 20
 206
 2
 1
 5
 41
 314
 
                         
Three Months Ended September 30, 2016                        
Revenues:                        
Unaffiliated customers$115
 $112
 $227
 $505
 $112
 $617
 $984
b 
$—
 $930
 $445
 $674
c 
$3,877
 
Intersegment358
 499
 857
 54
 —
 54
 2
 46
 7
 —
 (966) —
 
Production and delivery275
 464
 739
 333
 91
 424
 478
 57
 931
 416
 (516)
f 
2,529
 
Depreciation, depletion and amortization51
 78
 129
 109
 25
 134
 110
 15
 2
 7
 246
 643
 
Impairment of oil and gas properties—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 239
 239
 
Selling, general and administrative expenses1
 —
 1
 1
 1
 2
 24
 —
 —
 5
 78
 110
 
Mining exploration and research expenses—
 1
 1
 —
 —
 —
 —
 —
 —
 —
 12
 13
 
Environmental obligations and shutdown costs—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (3) (3) 
Net loss (gain) on sales of assets1
 —
 1
 —
 —
 —
 —
 —
 —
 —
 (14) (13) 
Operating income (loss)145
 68
 213
 116
 (5) 111
 374
 (26) 4
 17
 (334) 359
 
                         
Interest expense, net1
 —
 1
 21
 —
 21
 —
 —
 —
 3
 162
 187
 
Provision for (benefit from) income taxes—
 —
 —
 36
 (4) 32
 158
 —
 —
 4
 (308) (114) 
Total assets at September 30, 20162,881
 4,540
 7,421
 9,139
 1,551
 10,690
 9,718
 1,953
 238
 565
 10,815
e 
41,400
 
Capital expenditures6
 5
 11
 38
 1
 39
 253
 1
 —
 5
 185
g 
494
 
a.Includes U.S. oil and gas operations, which were previously a reportable segment.
b.Includes PT-FI's sales to PT Smelting totaling $652 million in third-quarter 2017 and $348 million in third-quarter 2016.
c.Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.
d.Includes net charges of $216 million in production and delivery costs, $141 million in interest expense and $2 million in provision for income taxes associated with disputed royalties for prior years.
e.Includes assets held for sale totaling $549 million at September 30, 2017, primarily associated with Freeport Cobalt and the Kisanfu exploration project, and $5.1 billion at September 30, 2016, which also included discontinued operations. Also includes assets associated with oil and gas operations of $272 million at September 30, 2017, and $3.5 billion at September 30, 2016.
f.Includes net charges for oil and gas operations totaling $49 million, primarily for idle rig costs, inventory adjustments and the termination of the Morocco well commitment.
g.Includes $160 million associated with oil and gas operations and $15 million associated with discontinued operations.

Table of Contents

(In Millions)     
AtlanticCorporate,
North America Copper MinesSouth America MiningCopperOther
CerroIndonesiaMolybdenumRod &Smelting& Elimi-FCX
MorenciOtherTotalVerdeOtherTotalMiningMinesRefining& RefiningnationsTotal
Six Months Ended June 30, 2023           
Revenues:            
Unaffiliated customers$58 $111 $169 $1,741 $424 $2,165 $3,238 f$— $2,986 $1,493 $1,075 a$11,126 
Intersegment1,163 1,928 3,091 419 — 419 367 373 16 11 (4,277)— 
Production and delivery803 1,525 2,328 1,229 361 1,590 1,193 b201 2,992 1,459 (3,051)6,712 
DD&A85 117 202 208 31 239 423 34 2 14 32 946 
Metals inventory adjustments1 — 1 — — — — — — — 1 2 
Selling, general and administrative expenses1 1 2 4 — 4 58 — — 15 162 241 
Mining exploration and research expenses— 1 1 — — — — — — — 72 73 
Environmental obligations and shutdown costs— 22 22 — — — — — — — 119 141 
Operating income (loss)331 373 704 719 32 751 1,931 138 8 16 (537)3,011 
Interest expense, net— — — 84 c— 84 22 — — 14 202 322 
Provision for (benefit from) income taxes— — — 300 7 307 740 — — — (9)1,038 
Net income (loss) attributable to noncontrolling interests— — — 158 20 178 639 d— — — (43)774 
Capital expenditures123 255 378 118 65 183 833 22 7 23 838 e2,284 
Six Months Ended June 30, 2022           
Revenues:            
Unaffiliated customers$107 $85 $192 $1,808 $340 $2,148 $4,246 f$— $3,496 $1,151 $786 a$12,019 
Intersegment1,441 2,173 3,614 

242 — 242 136 272 17 — (4,281)— 
Production and delivery760 1,375 2,135 1,123 289 1,412 1,190 b155 3,519 1,185 g(3,443)6,153 
DD&A88 119 207 178 21 199 510 34 2 12 32 996 
Metals inventory adjustments— 7 7 9 2 11 — — — — — 18 
Selling, general and administrative expenses1 1 2 4 — 4 57 — — 13 139 215 
Mining exploration and research expenses— 1 1 — — — — — — — 48 49 
Environmental obligations and shutdown costs(13)— (13)— — — — — — — 58 45 
Net gain on sales of assets— — — — — — — — — — (2)(2)
Operating income (loss)712 755 1,467 736 28 764 2,625 83 (8)(59)(327)4,545 
Interest expense, net— — — 7 — 7 15 — — 4 257 283 
Provision for income taxes— — — 295 7 302 1,020 — — — 73 1,395 
Net income attributable to noncontrolling interests— — — 218 14 232 331 d— — — 12 575 
Capital expenditures136 140 276 68 56 124 759 9 4 43 371 e1,586 






23
                         
(In millions)      
                 
                   Atlantic Corporate,   
 North America Copper Mines South America Mining       Copper Other   
       Cerro     Indonesia Molybdenum Rod & Smelting & Elimi- FCX 
 Morenci Other Total Verde Other Total Mining Mines Refining & Refining 
nationsa
 Total 
Nine Months Ended September 30, 2017                        
Revenues:                        
Unaffiliated customers$168
 $122
 $290
 $2,057
 $332
 $2,389
 $2,720
b 
$—
 $3,290
 $1,412
 $1,261
c 
$11,362
 
Intersegment1,354
 1,704
 3,058
 237
 —
 237
 —
 199
 22
 1
 (3,517) —
 
Production and delivery772
 1,284
 2,056
 1,450
d 
245
 1,695
 1,233
e 
169
 3,299
 1,369
 (2,324) 7,497
 
Depreciation, depletion and amortization138
 192
 330
 332
 60
 392
 372
 58
 7
 21
 77
 1,257
 
Selling, general and administrative expenses2
 2
 4
 7
 —
 7
 92
e 
—
 —
 13
 250
 366
 
Mining exploration and research expenses—
 2
 2
 —
 —
 —
 —
 —
 —
 —
 59
 61
 
Environmental obligations and shutdown costs—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 81
 81
 
Net gain on sales of assets—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (66) (66) 
Operating income (loss)610
 346
 956
 505
 27
 532
 1,023
 (28) 6
 10
 (333) 2,166
 
                         
Interest expense, net2
 1
 3
 187
d 
—
 187
 1
 —
 —
 13
 429
 633
 
Provision for income taxes—
 —
 —
 288
d 
10
 298
 435
 —
 —
 4
 10
 747
 
Capital expenditures78
 28
 106
 60
 5
 65
 663
 4
 3
 30
 149
 1,020
 
                         
Nine Months Ended September 30, 2016                        
Revenues:                        
Unaffiliated customers$356
 $211
 $567
 $1,485
 $379
 $1,864
 $2,014
b 
$—
 $2,820
 $1,360

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

—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 4,317

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

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

Table of Contents

NOTE 11. GUARANTOR FINANCIAL STATEMENTS

Alla.Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the senior notes issuedNorth America and South America copper mines.
b.Includes a $55 million charge for administrative fines in the second quarter and first six months of 2023 and $41 million for the first six months of 2022. Refer to Note 8 for further discussion.
c.Includes interest expense associated with contested tax rulings by the Peruvian Supreme Court totaling $50 million in the second quarter and $74 million for the first six months of 2023.
d.Beginning January 1, 2023, FCX’s economic and equity ownership interest in PT-FI is 48.76%. Prior to January 1, 2023, FCX's economic interest in PT-FI approximated 81%. In addition, as discussed in Note 3 of FCX’s 2022 Form 10-K, in accordance with provisions pertaining to PT-FI’s shareholders agreement, FCX’s first-quarter 2023 net income included a $35 million net benefit associated with PT-FI sales volumes that were attributed to FCX at its previous approximate 81% economic ownership interest.
e.Primarily includes capital expenditures for the Indonesia smelter projects.
f.Includes PT-FI sales to PT Smelting totaling $827 million in second-quarter 2022, $27 million for the first six months 2023 (reflecting adjustments to prior period provisionally priced copper concentrate sales) and $1.7 billion for the first six months 2022. Beginning January 1, 2023, there 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 obligationno sales from PT-FI to PT Smelting (refer to above discussion of the guarantortolling arrangement between PT-FI and ranks equalPT Smelting).
g.Includes maintenance charges and idle facility costs associated with major maintenance turnarounds totaling $40 million at Atlantic Copper in rightthe second quarter and first six months 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.2022.


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
24
 FCX FM O&G LLC Non-guarantor   Consolidated
 Issuer Guarantor Subsidiaries Eliminations FCX
ASSETS         
Current assets$197
 $716
 $10,948
 $(711) $11,150
Property, plant, equipment and mine development costs, net15
 11
 22,899
 (11) 22,914
Oil and gas properties, subject to amortization, less accumulated amortization and impairments—
 —
 20
 —
 20
Investments in consolidated subsidiaries20,178
 —
 —
 (20,178) —
Other assets479
 36
 3,193
 (465) 3,243
Total assets$20,869
 $763
 $37,060
 $(21,365) $37,327
          
LIABILITIES AND EQUITY         
Current liabilities$2,402
 $111
 $3,820
 $(816) $5,517
Long-term debt, less current portion10,600
 6,428
 5,621
 (10,082) 12,567
Deferred income taxes832
a 
—
 2,939
 —
 3,771
Environmental and asset retirement obligations, less current portion—
 208
 3,290
 —
 3,498
Investments in consolidated subsidiaries—
 850
 10,174
 (11,024) —
Other liabilities62
 3,341
 1,828
 (3,487) 1,744
Total liabilities13,896
 10,938
 27,672
 (25,409) 27,097
          
Equity:         
Stockholders’ equity6,973
 (10,175) 6,782
 3,393
 6,973
Noncontrolling interests—
 —
 2,606
 651
 3,257
Total equity6,973
 (10,175) 9,388
 4,044
 10,230
Total liabilities and equity$20,869
 $763
 $37,060
 $(21,365) $37,327
a.All U.S.-related deferred income taxes are recorded at the parent company.
Table of Contents

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

Table of Contents

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.


Table of Contents

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.
Table of Contents

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


Table of Contents

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.
Table of Contents

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 SeptemberJune 30, 2017, and2023, the related consolidated statements of operations andincome, comprehensive income, (loss)and equity for the three- and nine-monthsix-month periods ended SeptemberJune 30, 20172023 and 2016,2022, the related consolidated statements of cash flows for the nine-monthsix-month periods ended SeptemberJune 30, 20172023 and 2016,2022, 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, 2022, the related consolidated statements of income, comprehensive income, equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 15, 2023, 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, 2022, 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, 2017August 3, 2023
25
Table of Contents

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, 2016,2022 (2022 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,Our website is for information only and the contents of our website or information connected thereto are not incorporated 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 reportedor otherwise to be regarded as a discontinued operation for all periods presented.part of, this Form 10-Q.


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 the second quarter and first six months of 2023 reflect solid operating performance and execution of our business strategy. We continue to focus on managing costs efficiently and are advancing several important value-enhancing initiatives. We remain confident in our long-lived and high-quality asset base and have a favorable long-term outlook for copper, which will enable solid performance in the future. We believe we have a strong balance sheet and a positive outlook for cash flow generation to support continued organic growth and cash returns to shareholders.

Our near-term organic development pipeline is highlighted by our leach innovation initiatives, which we believe have the potential to provide substantial value from our existing leach material and reduce capital intensity for future projects. We are currently targeting an annual run rate of approximately 200 million pounds of copper per year through these initiatives by the end of 2023, with potentially larger opportunities in the future. We also continue to progress our underground development activities at Grasberg, supporting large-scale, long-lived, low-cost operations. Refer to “Operations” for further discussion.

Net income (loss) attributable to common stockstockholders totaled $280$343 million in third-quarter 2017, $217 million in third-quarter 2016, $776 million for the first nine months of 2017second-quarter 2023 and $(4.4)$1.0 billion for the first ninesix months of 2016. The 2017 periods,2023, compared with $840 million in second-quarter 2022 and $2.4 billion for the 2016 periods, benefited from higher copper prices and higher gold sales volumes, partly offset byfirst six months of 2022, primarily reflecting lower copper sales volumes resulting from shipping delays associated with the renewal of PT Freeport Indonesia’s (PT-FI) export license, lower copper prices, the change in our economic interest in PT-FI (refer to Note 1) and higher tax expense.increased costs for maintenance and supplies. The 2017 periodsresults of the first six months of 2023 also includereflect lower copper and gold sales volumes as a net chargeresult of $188 million for accrualsthe deferral of sales recognition related to Peruvian government claims for disputed royaltiesthe PT Smelting tolling arrangement (refer to “Operations – South America Mining”Note 9 for further discussion). The first nine months of 2016 included significant charges for the impairment of oil and gas properties 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. Refer to “Consolidated Results” for further discussion.discussion of these impacts.


At September 30, 2017, we had $5.0 billion in consolidated cash and cash equivalents and $14.8 billion in total debt. We had no borrowings and $3.5 billion available under our revolving credit facility.On July 24, 2023, PT-FI was granted an export license through May 2024 for 1.7 million metric tons of copper concentrate. Refer to Note 6 for further discussion of debt.

We continue to manage production, exploration8 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 that we have a high-quality portfolio of long-lived copper assets positioned to generate long-term value. We are pursuing opportunities to enhance our mines’ net present values, and we continue to advance studies for future development of our copper resources, the timing of which will be dependent on market conditions.

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

The framework requires documentation and execution of a definitive agreement, which must be approved by our Board of Directors (Board) and joint venture partner Rio Tinto. The parties continue to negotiate to reach agreement on important aspects of implementation of the framework, including the timing and process of divestment, governance matters, and the determination of fair market value, and to complete documentation on a comprehensive agreement for PT-FI’s operations through 2041. The parties have expressed a mutual objective of
Table of Contents

completing the negotiations and documentation during 2017. In October 2017, the Indonesian government extended PT-FI’s export rights to December 31, 2017, while negotiations to reach and document a comprehensive long-term definitive agreement based on the agreed framework continue. Until a definitive agreement is reached, PT-FI has reserved all rights under its COW, including pursuing arbitration under the dispute resolution provisions. Refer to “Operations – Indonesia Mining” for further discussion.discussion of Indonesia regulatory matters.


At June 30, 2023, we had consolidated debt of $9.5 billion and consolidated cash and cash equivalents of $6.7 billion, resulting in net debt of $2.8 billion ($0.9 billion excluding net debt for the Manyar smelter and precious metals refinery (PMR) in Indonesia - collectively, the Indonesia smelter projects). Refer to “Net Debt” for reconciliations of consolidated debt and consolidated cash and cash equivalents to net debt.

Beginning in 2022 and through August 3, 2023, we purchased $1.3 billion aggregate principal amount of our senior notes in open-market transactions for a total cost of $1.2 billion, including $131 million aggregate principal amount in the second quarter and first six months of 2023.

26
Table of Contents
At June 30, 2023, we had $3.0 billion of availability under our revolving credit facility, and PT-FI and Cerro Verde had $1.3 billion and $350 million, respectively, of availability under their respective revolving credit facilities.

Refer to Note 5 and “Capital Resources and Liquidity” for further discussion of our debt balances and transactions.

OUTLOOK
 
We view the long-term outlook forAs further discussed in “Risk Factors” in Part I, Item 1A. of our business positively, supported by limitations on supplies of copper and by the requirements for copper in the world’s economy. Our2022 Form 10-K, 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 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.


ReferAs discussed in Note 8, the Indonesia government issued a revised regulation on duties for various exported products, including copper concentrates. Export duties that may be assessed under this revised regulation are not reflected in our projected financial results for the second half of 2023. Based on current sales volume and metal price estimates, a 7.5% export duty on PT-FI sales during the second half of 2023 is estimated to “Operations –impact consolidated revenues by approximately $250 million ($80 million to net income attributable to common stock) for the year 2023, including approximately $120 million ($40 million to net income attributable to common stock) in third-quarter 2023. PT-FI is continuing to discuss the applicability of the revised regulation with the Indonesia Mining” for further discussiongovernment and will contest, and seek recovery of, Indonesia regulatory matters, which could have a significant impact on future results.any assessments.


Consolidated Sales Volumes
Following are our projected consolidated sales volumes for the year 2017:
2023:
Copper (millions of recoverable pounds):
North America copper mines1,376 
South America mining1,202 
Indonesia mining1,439 
Total4,017 
CopperGold (millions of recoverable pounds):ounces)
1.75 
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)
9479 
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 50 million pounds produced by our North America and South America copper mines and 29 million pounds produced by our Molybdenum mines.

Consolidated sales volumes for fourth-quarter 2017in third-quarter 2023 are expected to approximate 1.0 billion pounds of copper, 625420 thousand ounces of gold and 2320 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 2022 Form 10-K.


Consolidated Unit Net Cash Costs
Assuming average prices of $1,300$1,950 per ounce of gold and $8.00$20.00 per pound of molybdenum for fourth-quarter 2017the remainder of 2023 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$1.55 per pound of copper for the year 2017. The impact of price changes for fourth-quarter 2017 on consolidated unit net cash costs would approximate $0.012023 (including $1.61 per pound for each $50 per ounce changeof copper in the average price of gold and $0.005 per pound for each $2 per pound change in the average price of molybdenum.third-quarter 2023). Quarterly unit net cash costs vary with fluctuations in sales volumes and realized prices, primarily for gold and molybdenum. ReferThe impact of price changes during the remainder of 2023 on consolidated unit net cash costs for the year 2023 would approximate $0.03 per pound of copper for each $100 per ounce change in the average price of gold and $0.01 per pound of copper for each $2.00 per pound change in the average price of molybdenum.

Estimated consolidated unit net cash costs for the second half of 2023 do not include a 7.5% export duty at PT-FI that may be assessed under the revised regulation (refer to “Consolidated Results – Production and Delivery Costs”Note 8 for further discussiondiscussion). Based on current sales volume and metal price estimates, the assessment of a 7.5% export duty on PT-FI sales during the second half of
27
Table of Contents
2023 is estimated to increase consolidated productionunit net cash costs by $0.07 per pound of copper for our mining operations.the year 2023 (including $0.12 per pound of copper in third-quarter 2023).


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$3.90 per pound offor copper, $1,300$1,950 per ounce offor gold, and $8.00$20.00 per pound offor molybdenum for fourth-quarter 2017,the remainder of 2023, our consolidated operating cash flows are estimated to approximate $4.3$6.4 billion (net of less than $0.1 billion of working capital and other uses) for the year 2017 (including $0.5 billion in working capital sources and tax payments). Projected2023. Estimated consolidated operating cash flows for the year 20172023 also reflect an estimated income tax provision of $1.3$2.4 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate for the year 2017)2023). The impact of price changes during fourth-quarter 2017for the remainder of 2023 on operating cash flows would approximate $80
Table of Contents

$240 million for each $0.10 per pound change in the average price of copper, $20$100 million for each $50$100 per ounce change in the average price of gold and $15$60 million for each $2$2.00 per pound change in the average price of molybdenum.


Estimated consolidated operating cash flows for the second half of 2023 do not include a 7.5% export duty at PT-FI that may be assessed under the revised regulation (refer to Note 8 for further discussion of the revised regulation).

Consolidated Capital Expenditures
Consolidated capitalCapital expenditures are expected to approximate $1.5$4.8 billion for the year 2017, including $0.92023 (including $2.0 billion for major mining projects and $1.6 billion for the Indonesia smelter projects). Projected capital expenditures for major mining projects include $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 $0.7 billion for discretionary growth projects, primarily for underground development activities at Grasberg. Asof Kucing Liar, a result of regulatory uncertainty, PT-FI has slowed investments in its underground development projects. If PT-FI is unable to reach a definitive agreementmill recovery project with the Indonesian government oninstallation of a new copper cleaner circuit at PT-FI, and expansion projects at Bagdad and Lone Star. We closely monitor market conditions and will continue to adjust our operating plans, including capital expenditures, to protect our liquidity and preserve our asset values, as necessary.

Capital expenditures for the Indonesia smelter projects are being funded with proceeds from PT-FI's senior notes and availability under its long-term mining rights, we intend to reduce or defer investments significantly in underground development projects.revolving credit facility.


MARKETS


World prices for copper, gold and molybdenum can fluctuate significantly. During the period from January 20072013 through September 2017,June 2023, 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 Platts Metals WeekDaily Molybdenum Dealer Oxide weekly average price ranged from a low of $4.46 per pound in 2015 to a high of $33.88$37.42 per pound in 2008.2023. 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 on2022 Form 10-K for the year ended December 31, 2016.10-K.
q3coppergraph.jpg
28
Table of Contents
Copper Image 2Q23.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 20072013 through September 2017. Beginning in mid-2014,June 2023. During second-quarter 2023, 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$3.59 per pound to a high of $3.13$4.12 per pound, averaged $2.88$3.84 per pound and closedsettled at $2.94$3.72 per pound on SeptemberJune 30, 2017.2023. Volatility continued to be high across the copper market in second-quarter 2023, influenced by China’s weak economic data and wide-ranging views about the global economy. Physical market tightness continues to provide significant support to the price of copper, and inventory levels remain low with slightly less than two and a half days of global consumption available. The LME spot copper settlement price was $3.09$3.92 per pound on OctoberJuly 31, 2017.2023.


We believe the underlying long-term fundamentals of thefor copper business remain positive,are favorable and that future demand will be supported by the significantcopper’s role of copper in the global economy and a challenging long-term supply environment attributabletransition to difficulty in replacing the output of existing large mines with new production sources. Future copper prices are expected to be volatile and are likely to be influenced by demand from China and emerging markets, as well as economic activity in the U.S.renewable power, electric vehicles and other industrialized countries,carbon-reduction initiatives, and continued urbanization in developing countries. The small number of approved, large-scale projects beyond those that have been announced, the timing of the development oflong lead times required to permit and build 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.
29
Table of Contents

q3goldgraph.jpgGold Image 2Q23.jpg
This graph presents London PM gold prices from January 20072013 through September 2017. An improving economic outlook, stronger U.S. dollar and positive equity performance contributed to lower demand for gold since 2014.June 2023. During third-quarter 2017,second-quarter 2023, London PM gold prices ranged from a low of $1,211$1,900 per ounce to a high of $1,346$2,048 per ounce, averaged $1,278$1,976 per ounce, and closed at $1,283$1,912 per ounce on SeptemberJune 30, 2017.2023. Forecasts are divided as analysts evaluate climbing treasury yields, the strength of the U.S. dollar, the potential lagged impact of a significant cumulative rate-hiking cycle, and elevated geopolitical risk. The London PM gold price was $1,270$1,971 per ounce on OctoberJuly 31, 2017.2023.
q3molygraph.jpg
30
Table of Contents
Moly Image 2Q23.jpg
This graph presents the Platts Metals WeekDaily Molybdenum Dealer Oxide weekly average pricesprice from January 20072013 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.June 2023. During third-quarter 2017,second-quarter 2023, the weekly average price of molybdenum ranged from a low of $7.11$17.09 per pound to a high of $8.88$22.75 per pound, averaged $8.14$21.25 per pound and was $8.49$21.96 per pound on SeptemberJune 30, 2017.2023. Following sharp price increases in early 2023, China increased exports of molybdenum and Chinese buyers moderated purchases, causing significant price declines near the end of first-quarter 2023. During second-quarter 2023, buyers reentered the market and supply remained tight amidst level molybdenum demand supported by segments such as energy, aerospace and defense. We believe long-term fundamentals for molybdenum are positive with favorable demand drivers and limited supply. The Platts Metals WeekDaily Molybdenum Dealer Oxide weekly average price was $8.38$22.89 per pound on OctoberJuly 31, 2017.2023.

31
Table of Contents

CONSOLIDATED RESULTS
Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
SUMMARY FINANCIAL DATA
(in millions, except per share amounts)
Revenuesa,b
$5,737 $5,416 $11,126 $12,019 
Operating incomea
$1,410 $1,736 

$3,011 $4,545 
Net income attributable to common stockc,d
$343 e$840 f$1,006 e$2,367 f
Diluted net income per share of common stock$0.23 $0.57 $0.69 $1.61 
Diluted weighted-average shares of common stock outstanding1,442 1,457 1,443 1,463 
Operating cash flowsg
$1,673 $1,621 $2,723 $3,312 
Capital expenditures$1,163 $863 $2,284 $1,586 
At June 30:
Cash and cash equivalents$6,683 $9,492 $6,683 $9,492 
Total debt, including current portion$9,495 $11,092 $9,495 $11,092 
 Three Months Ended September 30, Nine Months Ended September 30, 
 2017 2016 2017 2016 
SUMMARY FINANCIAL DATA 
(in millions, except per share amounts) 
Revenuesa,b
$4,310
 $3,877
 $11,362
 $10,453
 
Operating income (loss)a,c,d,e,f
$917
g 
$359
h 
$2,166
g 
$(3,495)
h 
Net income (loss) from continuing operationsi,j,k
$242
 $292
 $836
 $(4,034) 
Net income (loss) from discontinued operationsl
$3
 $(6) $50
 $(191) 
Net income (loss) attributable to common stock$280

$217

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

$0.16

$0.53
 $(3.45) 
Diluted weighted-average common shares outstanding1,454
 1,351
 1,453
 1,289
 
         
Operating cash flowsm
$1,189
 $980
 $3,018
 $2,594
 
Capital expenditures$314
 $494
 $1,020
 $2,309
 
At September 30:        
Cash and cash equivalents$4,957
 $1,086
 $4,957
 $1,086
 
Total debt, including current portion$14,782
 $18,882
 $14,782
 $18,882
 
         
a.As further detailed ina.Refer to Note 10, following is9 for a summary of revenues and operating income (loss) by operating division (in millions):
division.
 Three Months Ended September 30, Nine Months Ended September 30, 
Revenues2017 2016 2017 2016 
North America copper mines$1,105
 $1,084
 $3,348
 $3,280
 
South America mining1,023
 671
 2,626
 2,019
 
Indonesia mining1,121
 986
 2,720
 2,073
 
Molybdenum mines65
 46
 199
 136
 
Rod & Refining1,145
 937
 3,312
 2,842
 
Atlantic Copper Smelting & Refining555
 445
 1,413
 1,363
 
Corporate, other & eliminations(704) (292) (2,256) (1,260) 
Total revenues$4,310
 $3,877
 $11,362
 $10,453
 
         
Operating income (loss)        
North America copper mines$349
 $213
 $956
 $1,190
 
South America mining128
 111
 532
 371
 
Indonesia mining547
 374
 1,023
 501
 
Molybdenum mines(13) (26) (28) (74) 
Rod & Refining2
 4
 6
 15
 
Atlantic Copper Smelting & Refining11
 17
 10
 53
 
Corporate, other & eliminations(107) (334) (333) (5,551) 
Total operating income (loss)$917
 $359
 $2,166
 $(3,495) 
b.b.Includes (unfavorable) favorable (unfavorable) adjustments to provisionally priced concentrate and cathode copper sales recognized in prior periods totaling $95 million ($39 million to net income attributable to common stock or $0.03 per share) in third-quarter 2017, $(15) million ($(7) million to net income attributable to common stock or $(0.01) per share) in third-quarter 2016, $81 million ($35 million to net income attributable to common stock or $0.02 per share) for the first nine months of 2017 and $5 million ($2 million to net loss attributable to common stock or less than $0.01 per share) for the first nine months of 2016. Refer to “Revenues” for further discussion.
c.Includes net (credits) charges to mining operations totaling $(4) million ($(4) million to net income attributable to common stock or less than $(0.01) per share) in third-quarter 2017, $40 million ($40 million to net income attributable to common stock or $0.02 per share) in third-quarter 2016, $24 million ($24 million to net income attributable to common stock or $0.02 per share) for the first nine months of 2017 and $44 million ($44 million to net loss attributable to common stock or $0.03 per share) for the first nine months of 2016, primarily for inventory adjustments and asset impairment/retirement.
d.Includes net credits to oil and gas operations totaling $4 million ($4 million to net income attributable to common stock or less than $0.01 per share) in third-quarter 2017 and $8 million ($8 million to net income attributable to common stock or
Table of Contents

$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 $(118) million ($49(45) million to net income attributable to common stock or $0.03$(0.03) per share) in third-quarter 2016 and $980second-quarter 2023, $(355) million ($980(154) million to net lossincome attributable to common stock or $0.76$(0.10) per share) in second-quarter 2022, $182 million ($61 million to net income attributable to common stock or $0.04 per share) for the first ninesix months of 2016,2023 and $65 million ($27 million to net income attributable to common stock or $0.02 per share) for drillship settlements,the first six months of 2022. Refer to Note 6 for further discussion.
c.Beginning January 1, 2023, our economic and equity ownership interest in PT-FI is 48.76%. Prior to January 1, 2023, our economic interest in PT-FI approximated 81%.
d.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.
e.Includes net charges totaling $157 million ($0.11 per share) in second-quarter 2023 and $251 million ($0.17 per share) for the first six months of 2023, primarily associated with charges for contested tax rulings by the Peruvian Supreme Court, environmental obligations, an accrual for a potential administrative fine in Indonesia and impairments and contract-cancellation costs.
f.Includes net charges totaling $14 million ($0.01 per share) in second-quarter 2022 and $52 million ($0.04 per share) for the first six months of 2022, primarily associated with environmental obligations and metals inventory adjustments, partly offset by a net gain on early extinguishment of debt. Net charges for the first six months of 2022 also included the settlement of an administrative fine and an adjustment to prior-period export duties at PT-FI, and asset impairmentretirement obligation adjustments.
g.Working capital and restructuring charges.other sources (uses) totaled $237 million in second-quarter 2023, $100 million in second-quarter 2022, $(230) million for the first six months of 2023 and $(711) million for the first six months of 2022.
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.


32
Table of Contents

Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
SUMMARY OPERATING DATA
Copper (millions of recoverable pounds)
  
Production1,067 1,075 2,032 2,084 
Sales, excluding purchases1,029 a1,087 1,861 a2,111 
Average realized price per pound$3.84 $4.03 

$3.91 $4.18 
Site production and delivery costs per poundb
$2.39 $2.09 $2.47 $2.06 
Unit net cash costs per poundb
$1.47 $1.41 $1.60 $1.37 
Gold (thousands of recoverable ounces)
  
Production483 476 888 891 
Sales, excluding purchases495 a476 765 a885 
Average realized price per ounce$1,942 $1,827 $1,946 $1,861 
Molybdenum (millions of recoverable pounds)
  
Production21 23 42 44 
Sales, excluding purchases20 20 39 39 
Average realized price per pound$24.27 $19.44 $27.24 $19.37 
a.Beginning on January 1, 2023, PT-FI’s commercial arrangement with PT Smelting converted from a copper concentrate sales agreement to a tolling arrangement, which resulted in a change in timing of sales. At June 30, 2023, approximately 85 million pounds of copper and 40 thousand ounces of gold from PT-FI's production was deferred in inventory and will be sold as refined metal in future periods.
 Three Months Ended September 30, Nine Months Ended September 30, 
 2017 
2016a
 2017 
2016a
 
SUMMARY OPERATING DATA      
Copper (millions of recoverable pounds)
        
Production996
 1,093
 2,730
 3,091
 
Sales, excluding purchases932
 1,113
 2,683
 3,100
 
Average realized price per pound$2.94
 $2.19
 $2.79
 $2.17
 
Site production and delivery costs per poundb
$1.57
 $1.37
 $1.60
 $1.42
 
Unit net cash costs per poundb
$1.21
 $1.14
 $1.26
 $1.28
 
Gold (thousands of recoverable ounces)
        
Production418
 308
 1,010
 658
 
Sales, excluding purchases355
 317
 969
 674
 
Average realized price per ounce$1,290
 $1,327
 $1,261
 $1,292
 
Molybdenum (millions of recoverable pounds)
        
Production24
 19
 70
 58
 
Sales, excluding purchases22
 16
 71
 52
 
Average realized price per pound$9.22
 $9.14
 $9.18
 $8.36
 
Oil Equivalents        
Sales volumes        
Oil (millions of barrels (MMBbls))0.4
 9.1
 1.4
 26.1
 
Natural gas (billion cubic feet (Bcf))3.1
 13.8
 13.3
 52.2
 
Natural gas liquids (MMBbls)—
 0.6
 0.2
 1.8
 
Million barrels of oil equivalent (MMBOE)1.0
 12.0
 3.8
 36.6
 
Thousand BOE (MBOE) per day11
 131
 14
 133
 
b.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 net cash 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.”
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$5.7 billion in third-quarter 2017 and $11.4second-quarter 2023, $5.4 billion in second-quarter 2022, $11.1 billion for the first ninesix months of 2017, compared with $3.9 billion in third-quarter 20162023 and $10.5$12.0 billion for the first ninesix months of 2016.2022. Revenues from our mining operations and processing facilities primarily include the sale of copper in 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.
















Table of Contents


Following is a summary of changes in our consolidated revenues between periods (in millions):
Three Months Ended June 30Six Months Ended June 30
Consolidated revenues - 2022 period$5,416 $12,019 
(Lower) higher sales volumes:
Copper(229)(1,040)
Gold35 (223)
Molybdenum17 17 
(Lower) higher average realized prices:
Copper(196)(503)
Gold57 65 
Molybdenum97 311 
Adjustments for prior period provisionally priced copper sales237 117 
Higher Atlantic Copper revenues315 353 
(Lower) higher revenues from purchased copper(32)102 
(Higher) lower treatment charges(3)29 
Lower royalties and export duties105 220 
Other, including intercompany eliminations(82)(341)
Consolidated revenues - 2023 period$5,737 $11,126 
 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 volumes decreased in the second quarter and first six months of 2023, compared to 932 million poundssecond quarter and first six months of 2022, primarily as a result of shipping delays in third-quarter 2017, comparedIndonesia associated with 1.1 billion pounds in third-quarter 2016, primarily reflectingthe renewal of PT-FI's export license and lower ore grades in North AmericaAmerica. Lower copper and Indonesia and the timinggold
33
Table of shipments. Consolidated copper Contents
sales decreased to 2.7 billion poundsvolumes for the first ninesix months of 2017,2023, compared with 3.1 billion pounds forto the first nine months of 2016, primarily reflecting lower ore grades in North America and2022 period, also reflects 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, compared with 317 thousand ounces in third-quarter 2016 and 674 thousand ounces for the first nine months of 2016, primarily reflecting higher ore grades in Indonesia.
Consolidated molybdenum sales volumes increased to 22 million pounds in third-quarter 2017 and 71 million pounds for the first nine 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.

Refer to “Operations” for further discussiondeferral of sales volumes at our mining operations.recognition related to the PT Smelting tolling arrangement.


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 second-quarter 2023, compared with third-quarter 2016,second-quarter 2022, were 34 percent higher5% lower for copper, 3 percent lower6% higher for gold and 1 percent25% higher for molybdenum, and average realized prices for the first ninesix months of 2017,2023, compared with the first ninesix months of 2016,2022, were 29 percent higher6% lower for copper, 2 percent lower5% higher for gold and 10 percent41% higher for molybdenum. Refer
Average realized copper prices include net unfavorable adjustments to “Markets”current period provisionally priced copper sales totaling $52 million in second-quarter 2023, $365 million in second-quarter 2022, $121 million for further discussion.

Provisionally Priced Copper Sales.Substantiallythe first six months of 2023 and $567 million for the first six months of 2022. As discussed in Note 6, all of our copper concentrate and some 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 copper concentrate and cathode sales that is adjusted to fair value through earnings each period, using the period-end forward prices, until final pricing on the date of settlement. To the extent final prices are higher or lower than what was recorded on a provisional basis, an increase or decrease to revenues is recorded each reporting period until the date of final pricing. Accordingly, in times of rising copper prices, our revenues benefit from adjustments to the final pricing of provisionally priced sales pursuant to contracts entered into in prior periods; in times of falling copper prices, the opposite occurs. Favorable

Prior Period Provisionally Priced Copper Sales.Net (unfavorable)
Table of Contents

impacts of net favorable adjustments to prior periods’ provisionally priced copper sales from continuing operations(i.e., provisionally priced sales at March 31, 2023 and 2022, and December 31, 2022 and 2021) recorded in consolidated revenues totaled $95$(118) million in third-quarter 2017 and $81second-quarter 2023, $(355) million in second-quarter 2022, $182 million for the first ninesix months of 2017, compared with $(15)2023 and $65 million in third-quarter 2016 and $5 million for the first ninesix months of 2016, primarily reflecting higher copper prices in the 2017 periods.2022. Refer to Notes 6 and 9 for a summary of total adjustments to prior period and current period provisionally priced sales.


At SeptemberJune 30, 2017,2023, we had provisionally priced copper sales at our copper mining operations totaling 338271 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $2.93$3.77 per pound, subject to final pricing over the next several months. We estimate that each $0.05 change in the price realized from the SeptemberJune 30, 2017,2023, provisional price recorded would have an approximate $11$8 million effect on our 20172023 net income attributable to common stock. The LME spot copper price was $3.09settled at $3.92 per pound on OctoberJuly 31, 2017.2023.


Treatment Charges. Revenues from our concentrate sales are recorded netAtlantic Copper Revenues.Atlantic Copper revenues totaled $748 million in second-quarter 2023 and $1.5 billion for the first six months of treatment charges. Lower treatment charges2023, compared with $433 million in second-quarter 2022 and $1.2 billion for the first six months of 2022. Higher revenues in the 20172023 periods, compared with the 20162022 periods, primarily reflect lower concentratereflects higher sales volumes at North America copper mines.in the 2023 periods, mostly reflecting the impact of reduced operations in second-quarter 2022 because of a scheduled major maintenance turnaround.


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 19 million pounds in third-quarter 2017 and 195 million for the first nine months of 2017, compared with 61second-quarter 2023, 23 million pounds in third-quarter 2016 and 131second-quarter 2022, 67 million pounds for the first ninesix months of 2016).

Atlantic Copper Revenues.Atlantic Copper revenues totaled $5552023 and 38 million in third-quarter 2017 and $1.4 billionpounds for the first ninesix months of 2017,2022.

Treatment Charges. Revenues from our copper concentrate sales are recorded net of treatment charges (i.e., fees paid to smelters that are generally negotiated annually), which will vary with the sales volumes and the price of copper. The increase in the treatment charges in second-quarter 2023, compared with $445 millionto second-quarter 2022, primarily reflects higher treatment charges for South America copper concentrate, partly offset by lower copper concentrate sales volumes. The decrease in third-quarter 2016 and $1.4 billionthe treatment charges for the first ninesix months of 2016. Higher revenues in third-quarter 2017,2023, compared with third-quarter 2016,the first six months of 2022, primarily reflects lower copper concentrate sales volumes and PT-FI’s commercial arrangement with PT Smelting converting from a copper concentrate sales agreement to a tolling arrangement. Costs incurred under the tolling arrangement are recorded as production costs in the consolidated statements of income (refer to Note 9).


34
Table of Contents
Royalties and Export Duties. Royalties are primarily associated with PT-FI sales and vary with the volume of metal sold and the prices of copper and gold. In late 2022, the export duty rate on PT-FI’s sales declined from 5% to 2.5% as a result of smelter development progress. In March 2023, the Indonesia government verified that construction progress on the Manyar smelter exceeded 50%, which resulted in the elimination of export duties effective March 29, 2023.

Lower royalties and export duties during the 2023 periods, compared with the 2022 periods, reflect higherlower PT-FI copper prices.sales volumes and the reduction in and subsequent elimination of export duties.


In July 2023, the Indonesia government issued a revised regulation on duties for various exported products, including copper concentrates. PT-FI is continuing to discuss the applicability of the revised regulation with the Indonesia government and will contest, and seek recovery of, any assessments. Refer to Note 8 and “Outlook” for further discussion.

Production and Delivery Costs
Consolidated production and delivery costs totaled $2.8$3.5 billion in third-quarter 2017, $2.5second-quarter 2023, $3.0 billion in third-quarter 2016, $7.5second-quarter 2022, $6.7 billion for the first ninesix months of 20172023 and $8.0$6.2 billion for the first ninesix months of 2016. Production and delivery2022. Higher costs for the third quarter and first nine months of 2017 included charges totaling $216 millionin second-quarter 2023, compared to second-quarter 2022, primarily reflected increased costs at Cerro VerdePT-FI associated with disputed royalties for prior years (refer to “Operations – South America Mining” for further discussion). Productionhigher operating rates and deliveryincreased underground maintenance costs. Higher costs for the first ninesix months of 2016 included charges totaling $942 million at oil and gas operations primarily for drillship settlements and inventory adjustments.2023, compared to the first six months of 2022, also reflected higher commodity-related costs across our operations.


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 other commodity-based inputs, such as sulphuricsulfuric acid, explosives, steel, reagents, liners tires and explosives.tires. Consolidated unit site production and delivery costs (before net noncash and other costs) for our copper mines averaged $1.57$2.39 per pound of copper in third-quarter 2017 and $1.60second-quarter 2023, $2.09 per pound of copper in second-quarter 2022, $2.47 per pound of copper for the first ninesix months of 2017, compared with $1.37 per pound of copper in third-quarter 20162023 and $1.42$2.06 per pound of copper for the first ninesix months of 2016. Higher consolidated unit site production and delivery costs for the 2017 periods, compared with the 2016 periods, primarily reflect lower copper sales volumes.2022. Refer to “Operations – Unit Net Cash Costs” 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 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$547 million in third-quarter 2017 and $1.3 billion for the first nine months of 2017, compared with $643second-quarter 2023, $507 million in third-quarter 2016 and $1.9 billion for the first nine months of 2016. Lower DD&A in the 2017 periods, compared with the 2016 periods, primarily reflects lower DD&A from oil and gas operations resulting from sales of significant oil and gas properties 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.

Table of Contents

Selling, General and Administrative Expenses
Consolidated selling, general and administrative expenses totaled $106 million in third-quarter 2017, $110 million in third-quarter 2016, $366second-quarter 2022, $946 million for the first ninesix months of 20172023 and $408$996 million for the first ninesix 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.2022.

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. NetHigher net charges (credits) for environmental obligations and shutdown costs totaled $73in the 2023 periods, compared to the 2022 periods, primarily reflect net revisions to long-term historical environmental obligations totaling $60 million in third-quarter 2017, $(3) million in third-quarter 2016, $81second-quarter 2023 and $116 million for the first ninesix months of 20172023, compared to $13 million for both the second quarter and $18first six months of 2022.

Interest Expense, Net
Consolidated interest costs (before capitalization) totaled $234 million in second-quarter 2023, $189 million in second-quarter 2022, $441 million for the first ninesix 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 20172023 and $66$342 million for the first ninesix months of 2017,2022. The increase in consolidated interest costs (before capitalization) for the 2023 periods, compared to the 2022 periods, primarily associated with oil and gas transactions. Net gain on sales of assetsreflects interest charges recognized for Cerro Verde’s contested tax rulings by the Peruvian Supreme Court, which totaled $13$50 million in third-quarter 2016second-quarter 2023 and $762$74 million for the first ninesix months of 2016, primarily associated with the sales of a 13 percent undivided interest in the Morenci unincorporated joint venture and a portion of our interest in the Timok exploration project in Serbia.

Interest Expense, Net
Interest expense, net, for the third quarter and first nine months of 2017 includes $141 million associated with disputed Cerro Verde royalties (refer to Note 9 for additional discussion). Consolidated2023. Higher consolidated interest costs (before capitalization and excluding interest expense associated with disputed Cerro Verde royalties) totaled $196 million in third-quarter 2017, $211 million in third-quarter 2016, $583 millioncapitalization) for the first ninesix months of 2017 and $647 million for the first nine months2023 also reflected higher interest associated with PT-FI’s $3.0 billion of 2016. Lower interest cost for the 2017 periods, compared to the 2016 periods, reflects a decreasesenior notes that were issued in total debt .April 2022.


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 $62 million in second-quarter 2023, $33 million in third-quarter 2017, $24 million in third-quarter 2016, $91
35
Table of Contents
second-quarter 2022, $119 million for the first ninesix months of 20172023 and $73$59 million for the first ninesix months of 2016.2022. The increase in capitalized interest costs in the 2023 periods, compared to the 2022 periods, resulted from increased construction and development projects in process, primarily for the Indonesia smelter projects. Refer to “Capital Resources and Liquidity – Investing Activities” for discussion of capital expenditures associated with our major development projects.


Other Income, Net
TableOther income, net totaled $24 million in second-quarter 2023, $11 million in second-quarter 2022, $112 million for the first six months of Contents
2023 and $42 million for the first six months of 2022. The increase in other income, net primarily reflects higher interest income of $66 million for the quarterly periods and $150 million for the six month periods, partly offset by a $69 million charge in the second quarter and first six months of 2023 associated with Cerro Verde’s contested tax rulings by the Peruvian Supreme Court.


Income Taxes
Following is a summary of the approximate amounts used in the calculation of our consolidated income tax provision from continuing operations for the 2017 and 2016 periods (in millions, except percentages):

 Nine Months Ended September 30, 
 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.

Six Months Ended June 30,
20232022
Income (Loss)a
Effective
Tax Rate		Income Tax (Provision) Benefit
Income (Loss)a
Effective
Tax Rate		Income Tax (Provision) Benefit
U.S.b
$250 — %c$3 $909 1 %c$(5)
South America642 d48 %(307)776 39 %(302)
Indonesia1,981 37 %(740)2,625 39 %(1,020)
Eliminations and other(67)N/A21 2 N/A(7)
Rate adjustmente
— N/A(15)— N/A(61)
Consolidated FCX$2,806 37 %$(1,038)$4,312 32 %$(1,395)
Net Income (Loss) from Discontinued Operationsa.Represents income before income taxes and equity in affiliated companies’ net earnings.
b.In November 2016, we completedaddition to our North America mining operations, the saleU.S. jurisdiction reflects corporate-level expenses, which include interest expense associated with senior notes, general and administrative expenses, and environmental obligations and shutdown costs.
c.Includes valuation allowance release on prior year unbenefited net operating losses. See below for discussion of our interest in TFHL, through which we had an effective 56 percent interest in the Tenke copper and cobalt concessions inprovisions of the Democratic RepublicU.S. Inflation Reduction Act of Congo. In accordance2022.
d.Includes net charges associated with accounting guidelines,Cerro Verde’s contested tax rulings by the results of TFHL have been reported as discontinued operations for all periods presented. Net income from discontinued operations totaled $3 million in third-quarter 2017 and $50Peruvian Supreme Court totaling $142 million for the first ninesix months of 2017, which primarily reflected adjustments2023.
e.In accordance with applicable accounting rules, we adjust our interim provision for income taxes equal to the fair valueour consolidated tax rate.
The provisions of the potential $120 million contingent considerationU.S. Inflation Reduction Act of 2022 (the Act) became applicable to us on January 1, 2023. The Act includes, among other provisions, a new Corporate Alternative Minimum Tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period. As limited guidance related to how the sale,CAMT provisions of the Act should be applied or otherwise administered has been released by the U.S. Department of the Treasury (the Treasury), uncertainty remains regarding the application of the CAMT. We have made interpretations of certain provisions of the Act, and based on these interpretations, determined that the provisions of the Act did not impact our 2023 financial results for the first six months of 2023. However, future guidance released by the Treasury may differ from our interpretations, which totaled $58 millioncould be material and may further limit our ability to realize future benefits from our U.S. net operating losses.

Assuming achievement of current sales volume and cost estimates and average prices of $3.90 per pound for copper, $1,950 per ounce for gold and $20.00 per pound for molybdenum for the remainder of 2023, we estimate our consolidated effective tax rate for the year 2023 would approximate 36%. Changes in projected sales volumes and average prices during 2023 would incur tax impacts at September 30, 2017,estimated effective rates of 40% for Peru, 36% for Indonesia and will continue to0% for the U.S., which excludes any impact from the Act. Our projected estimated effective tax rate of 0% for the U.S. for the year 2023 may be adjusted through December 31, 2019. as additional guidance is released by the Treasury on key provisions of the Act, including guidance on the CAMT.


36
Table of Contents
Noncontrolling Interests
Net loss from discontinued operations of $6income attributable to noncontrolling interests is primarily associated with our noncontrolling shareholders at PT-FI, Cerro Verde and El Abra and totaled $388 million in third-quarter 2016 and $191second-quarter 2023, $198 million in second-quarter 2022, $774 million for the first ninesix months of 2016 include an estimated loss on disposal of $5 million for third-quarter 20162023 and $182$575 million for the first ninesix months of 2016.2022. Our economic interest in PT-FI approximated 81% through 2022, and beginning January 1, 2023, our economic interest in PT-FI is 48.76%. As discussed in Note 3 of our 2022 Form 10-K, in accordance with provisions pertaining to PT-FI’s shareholders agreement, first-quarter 2023 net income included a $35 million net benefit associated with PT-FI sales volumes that were attributed to us at our previous approximate 81% economic ownership interest. Refer to Note 29 for a summary of the components of net income (loss) from discontinued operations.attributable to noncontrolling interests for each of our business segments.


Based on current sales volume and cost estimates and assuming average prices of $3.90 per pound of copper, $1,950 per ounce of gold and $20.00 per pound of molybdenum and taking into account the change in our economic interest in PT-FI, net income attributable to noncontrolling interests is estimated to approximate $2.0 billion for the year 2023. The actual amount will depend on many factors, including relative performance of each business segment, commodity prices, costs and other factors.

OPERATIONS


Leaching Innovation Initiatives
We are advancing a series of initiatives across our North America and South America operations to incorporate new applications, technologies and data analytics to our leaching processes. We believe these leach innovation initiatives provide opportunities to produce incremental copper from our large existing leach stockpiles. Initial results support the potential for incremental low-cost additions to our production and reserve profile and we are targeting an annual run rate of approximately 200 million pounds of copper per year through these initiatives by the end of 2023. We are pursuing new technology applications that have the potential for significant increases in recoverable metal beyond the initial target.

Feasibility and Optimization Studies
We are engaged in various studies associated with potential future expansion projects primarily at our mining operations. The costs for these studies are charged to production and delivery costs as incurred and totaled $51 million in second-quarter 2023, $31 million in second-quarter 2022, $101 million for the first six months of 2023 and $50 million for the first six months of 2022. We estimate the costs of these studies will approximate $200 million for the year 2023 (including approximately $60 million in third-quarter 2023), subject to market conditions and other factors.

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% 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.
Table of Contents



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 Americathe U.S., primarily associated with existing mining operations.

We are planning an expansion to double the concentrator capacity of the Bagdad operation in northwest Arizona and expect to complete a portfoliofeasibility study in late 2023. In parallel, we are advancing plans for expanded tailings infrastructure projects to support Bagdad's long-range plans.
37
Table 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. We continue to study opportunities to reduce the capital intensity of our long-term development projects.Contents

Through exploration drilling, we have identified a significant resource at our wholly owned At Safford/Lone Star, project located near the Safford operation in eastern Arizona. The Safford mine is expected to have copper production through 2024. Initial production from the Lone Star oxide ores could begin in 2021 assuming an approximate three-year development period and using existing infrastructure atis approaching 300 million pounds of copper per year, which reflects expansion of 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 approximatelyinitial design capacity of 200 million pounds of copper per year with an approximate 20-yearyear. We have conducted significant exploration drilling in the area in recent years. The positive drilling results indicate potential opportunities to expand production to include sulfide ores in the future. We are advancing metallurgical testing and mine life. Considering theplanning for a potential significant long-term nature and size of the project, results could vary from these estimates. The project would also advance the potentialinvestment for development of a larger-scale district opportunity. We have obtained regulatory approvals for this projectidentified large sulfide resources.

A tight labor market and are assessing the timing to commence pre-stripping activities. We are conducting additional drilling as weincreased competition from other employers in North America continue to evaluate longer term opportunities available from the significant sulfide potential in the Lone Star/Safford minerals district. represent strategic challenges that are impacting production and our ability to further expand current mining rates. The timing of all future developments will be dependent on market conditions, labor and supply chain considerations and other economic factors.


Operating Data. Following is a summary of consolidated operating data for the North America copper minesmines:
Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Operating Data, Net of Joint Venture Interests  
Copper (millions of recoverable pounds)
  
Production354 382 686 736 
Sales, excluding purchases339 389 671 770 
Average realized price per pound$3.92 $4.36 $4.03 $4.46 

Molybdenum (millions of recoverable pounds)
  
Productiona
9 8 16 15 
100% Operating Data  
Leach operations  
Leach ore placed in stockpiles (metric tons per day)724,100 722,900 668,900 715,800 
Average copper ore grade (%)0.24 0.29 0.25 0.29 
Copper production (millions of recoverable pounds)239 254 473 499 
Mill operations  
Ore milled (metric tons per day)315,500 306,900 306,500 299,200 
Average ore grade (%):
Copper0.33 0.39 0.34 0.38 
Molybdenum0.02 0.02 0.02 0.02 
Copper recovery rate (%)83.8 83.2 82.2 82.1 
Copper production (millions of recoverable pounds)172 195 326 364 
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.

Table of Contents

North America’sOur consolidated copper sales volumes of 347from North America totaled 339 million pounds in third-quarter 2017 and 1.1 billionsecond-quarter 2023, 389 million pounds in second-quarter 2022, 671 million pounds for the first ninesix months of 2017 were lower than third-quarter 2016 sales of 4582023 and 770 million pounds and 1.4 billion pounds for the first ninesix months of 2016,2022. Lower copper sales volumes in the 2023 periods, compared with the 2022 periods, primarily reflectingreflect lower ore grades. Additionally, third-quarter 2017 was impacted bygrades and the timing of shipments.
shipments, partly offset by incremental copper associated with leach initiatives. North America copper sales are estimated to approximate 1.51.4 billion pounds for the year 2017, compared with 1.8 billion pounds in 2016.2023.


Unit Net Cash Costs. Unit We believe unit net cash costs per pound of copper is a measure intended to providethat provides 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.



38
Table of Contents
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 June 30,
 20232022
 By- Product MethodCo-Product MethodBy- Product MethodCo-Product Method
Copper
Molyb-
denuma
Copper
Molyb-
denuma
Revenues, excluding adjustments$3.92 $3.92 $23.08 $4.36 $4.36 $18.75 
Site production and delivery, before net noncash
and other costs shown below
2.93 2.55 16.04 2.50 2.30 12.42 
By-product credits(0.55)— — (0.35)— — 
Treatment charges0.13 0.13 — 0.11 0.11 — 
Unit net cash costs2.51 2.68 16.04 2.26 2.41 12.42 
DD&A0.29 0.26 1.15 0.27 0.24 0.81 
Metals inventory adjustments— — — 0.02 0.02 0.16 
Noncash and other costs, net0.15 b0.13 0.60 0.09 b0.08 0.32 
Total unit costs2.95 3.07 17.79 2.64 2.75 13.71 
Revenue adjustments, primarily for pricing
on prior period open sales
(0.03)(0.03)— (0.10)(0.10)— 
Gross profit per pound$0.94 $0.82 $5.29 $1.62 $1.51 $5.04 
Copper sales (millions of recoverable pounds)341 341 389 389  
Molybdenum sales (millions of recoverable pounds)a
9   8 
            
Three Months Ended September 30, Six Months Ended June 30,
2017 2016  20232022
By- Product Method Co-Product Method By- Product Method Co-Product Method  By- Product MethodCo-Product MethodBy- Product MethodCo-Product Method
 Copper 
Molyb-
denuma
 Copper 
Molyb-
denuma
 Copper
Molyb-
denuma
Copper
Molyb-
denuma
Revenues, excluding adjustments$2.92
 $2.92
 $7.59
 $2.19
 $2.19
 $7.39
 Revenues, excluding adjustments$4.03 $4.03 $25.52 $4.46 $4.46 $18.36 
            
Site production and delivery, before net noncash
and other costs shown below
1.67
 1.56
 5.58
 1.44
 1.34
 5.51
 
Site production and delivery, before net noncash
and other costs shown below
2.92 2.55 17.81 2.44 2.25 11.68 
By-product credits(0.17) —
 —
 (0.17) —
 —
 By-product credits(0.57)— — (0.35)— — 
Treatment charges0.11
 0.11
 —
 0.10
 0.09
 —
 Treatment charges0.13 0.12 — 0.10 0.10 — 
Unit net cash costs1.61
 1.67
 5.58
 1.37
 1.43
 5.51
 Unit net cash costs2.48 2.67 17.81 2.19 2.35 11.68 
DD&A0.28
 0.27
 0.49
 0.28
 0.26
 0.70
 DD&A0.30 0.26 1.24 0.27 0.25 0.85 
Metals inventory adjustmentsMetals inventory adjustments— — — 0.01 0.01 0.08 
Noncash and other costs, net0.04
 0.04
 0.05
 0.06
 0.05
 0.13
 Noncash and other costs, net0.19 b0.16 1.06 0.09 b0.07 0.23 
Total unit costs1.93
 1.98
 6.12
 1.71
 1.74
 6.34
 Total unit costs2.97 3.09 20.11 2.56 2.68 12.84 
Revenue adjustments, primarily for pricing
on prior period open sales
0.03
 0.03
 —
 —
 —
 —
 
Revenue adjustments, primarily for pricing
on prior period open sales
0.02 0.02 — (0.01)(0.01)— 
Gross profit per pound$1.02
 $0.97
 $1.47
 $0.48
 $0.45
 $1.05
 Gross profit per pound$1.08 $0.96 $5.41 $1.89 $1.77 $5.52 
            
Copper sales (millions of recoverable pounds)345
 345
   457
 457
   Copper sales (millions of recoverable pounds)676 676 770 770  
Molybdenum sales (millions of recoverable pounds)a
    8
     9
 
Molybdenum sales (millions of recoverable pounds)a
16   15 
Tablea.Reflects sales of Contents
molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.

b.Includes charges totaling $0.08 per pound of copper in second-quarter 2023, $0.05 per pound of copper in second-quarter 2022, $0.08 per pound of copper for the first six months of 2023 and $0.04 per pound of copper for the first six months of 2022 for feasibility and optimization studies.

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

Our North America copper mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) for the North America copper mines of $1.61$2.51 per pound of copper in third-quarter2017second-quarter 2023 and $1.54$2.48 per pound for the first ninesix months of 20172023 were higher than second-quarter 2022 unit net cash costs of $1.37$2.26 per pound in third-quarter2016and $1.40$2.19 per pound for the first ninesix months for 2022, reflecting the impact of 2016, primarily reflecting lower sales volumes.volumes and increased

39
Table of Contents
costs of maintenance, supplies and labor, partly offset by higher molybdenum by-product credits and lower costs of energy.

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.


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 North America copper mines are expected to approximate $1.58$2.56 per pound of copper for the year 2017,2023, based on achievement of current sales volume and cost estimates and assuming an average molybdenum price of $8.00$20.00 per pound for fourth-quarter 2017.the second half of 2023. North America’s average unit net cash costs for the year 20172023 would change by approximately $0.007$0.02 per pound for each $2$2 per pound change in the average price of molybdenum.molybdenum for the second half of 2023.


South America Mining
We operate two copper mines in South America – Cerro Verde in Peru (in which we own a 53.56 percent53.56% interest) and El Abra in Chile (in which we own a 51 percent51% 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. 

Table of Contents

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 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 120,000 metric tons of ore per day to 360,000 metric tons of ore per day.
We continue to evaluate a major expansion at El Abra to process additional sulfide material and to achieve higher recoveries. Exploration results at El Abra indicate a significantAbra's large sulfide resource which could potentially supportsupports a potential major mill project similar to facilities recently constructedthe large-scale concentrator at Cerro Verde. Future investments will depend on technicalTechnical and economic studies whichcontinue to be evaluated to determine the optimal scope and timing for the sulfide project. We are being advanced, economic factorsadvancing plans to invest in water infrastructure to provide options to extend existing operations, while continuing to monitor potential changes in Chile'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 June 30,Six Months Ended June 30,
 2023202220232022
Copper (millions of recoverable pounds)
  
Production307 286 611 560 
Sales304 288 606 552 
Average realized price per pound$3.78 $3.83 $3.85 $4.00 
Molybdenum (millions of recoverable pounds)
  
Productiona
5 7 11 14 
Leach operations  
Leach ore placed in stockpiles (metric tons per day)203,600 157,700 203,800 148,800 
Average copper ore grade (%)0.33 0.37 0.33 0.36 
Copper production (millions of recoverable pounds)74 71 160 132 
Mill operations 
Ore milled (metric tons per day)425,500 427,100 415,300 410,800 
Average ore grade (%):
Copper0.35 0.31 0.34 0.32 
Molybdenum0.01 0.01 0.01 0.02 
Copper recovery rate (%)82.6 84.4 83.2 85.5 
Copper production (millions of recoverable pounds)233 215 451 428 
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.

40
Table of Contents
 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 304 million pounds in third-quarter 2017 approximated third-quarter2016 sales of 323second-quarter 2023, 288 million pounds. South America’s lower consolidated copper sales volumes of 923pounds in second-quarter 2022, 606 million pounds for the first ninesix months of 2017, compared with 9732023 and 552 million pounds for the first ninesix months of 2016,2022. Higher copper sales volumes in the 2023 periods, compared with the 2022 periods, primarily reflect the Cerro Verde operation being unfavorably impacted by unusually high rainfallhigher mill ore grades and a 21-day labor strike during first-quarter 2017.

increased production from leach ore placed on stockpiles. Copper sales from South America minesmining are expected to approximate 1.2 billion pounds of copper for the year 2017, compared with 1.3 billion pounds of copper in 2016.2023. Refer to “Outlook” for projected molybdenum sales volumes.
Table of Contents


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


Gross Profit per Pound of Copper
The following table summarizes unit net cash costs and gross profit per pound of copper at theour South America mining operations for the third quarters and first nine months of 2017 and 2016. 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.operations. 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 June 30,
 20232022
By-Product
Method		Co-Product
Method		By-Product
Method		Co-Product
Method
Revenues, excluding adjustments$3.78 $3.78 $3.83 $3.83 
Site production and delivery, before net noncash and other costs shown below2.43 2.22 2.48 2.29 
By-product credits(0.37)— (0.35)— 
Treatment charges0.21 0.21 0.15 0.15 
Royalty on metals0.01 0.01 0.01 0.01 
Unit net cash costs2.28 2.44 2.29 2.45 
DD&A0.44 0.39 0.35 0.32 
Metals inventory adjustments— — 0.04 0.03 
Noncash and other costs, net0.08 a0.07 0.06 0.06 
Total unit costs2.80 2.90 2.74 2.86 
Revenue adjustments, primarily for pricing on prior period open sales(0.22)(0.22)(0.53)(0.53)
Gross profit per pound$0.76 $0.66 $0.56 $0.44 
Copper sales (millions of recoverable pounds)304 304 288 288 

41
 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.
Table of Contents

Six Months Ended June 30,
 20232022
By-Product
Method		Co-Product
Method		By-Product
Method		Co-Product
Method
Revenues, excluding adjustments$3.85 $3.85 $4.00 $4.00 
Site production and delivery, before net noncash and other costs shown below2.49 2.25 2.45 2.26 
By-product credits(0.45)— (0.38)— 
Treatment charges0.19 0.19 0.15 0.15 
Royalty on metals0.01 0.01 0.01 0.01 
Unit net cash costs2.24 2.45 2.23 2.42 
DD&A0.40 0.35 0.36 0.32 
Metals inventory adjustments— — 0.02 0.02 
Noncash and other costs, net0.08 a0.07 0.06 0.06 
Total unit costs2.72 2.87 2.67 2.82 
Revenue adjustments, primarily for pricing on prior period open sales0.11 0.11 0.06 0.06 
Gross profit per pound$1.24 $1.09 $1.39 $1.24 
Copper sales (millions of recoverable pounds)606 606 552 552 
a.Includes $0.04 per pound of copper in second-quarter 2023 and $0.03 per pound of copper for the first six months of 2023 for feasibility and optimization studies.

Our South America mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) of $1.64for South America mining were $2.28 per pound of copper in third-quarter2017 and $1.61second-quarter 2023, $2.29 per pound of copper in second-quarter 2022, $2.24 per pound of copper for the first ninesix months of 2017 were higher than unit net cash costs of $1.402023 and $2.23 per pound in third-quarter2016 and $1.37 per poundof copper for the first ninesix months of 2016, primarily reflecting2022. The impact of higher mining, millingvolumes in the 2023 periods was offset by higher costs of maintenance, supplies and employee costs at Cerro Verde.consumables, and increased treatment charges. The first six months of 2023 also reflected the impact of higher molybdenum credits.


Revenues from Cerro Verde’s copper 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. Higher treatment charges in the 2023 periods, compared to the 2022 periods, reflected higher smelting and refining rates.


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. Increased DD&A rates per pound of copper in the 2023 periods, compared to the 2022 periods, primarily reflect a correction in the useful lives of certain fixed assets at Cerro Verde, which resulted in additional depreciation being recognized in second-quarter 2023.


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$2.33 per pound of copper for the year 2017,2023, based on current sales volume and cost estimates and assuming an average price of $8.00$20.00 per pound of molybdenum for fourth-quarter 2017.the second half of 2023.


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 Central 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. Substantially allWe have a 48.76% ownership interest in PT-FI and manage its mining operations. PT-FI's results are consolidated in our financial statements.

Other than copper concentrate delivered to PT Smelting for further processing into refined products, most of PT-FI’s copper concentrate is sold under long-term contracts,contracts.


42
Table of Contents
Regulatory Matters.Over the past several years, the Indonesia government has enacted various laws and duringregulations to promote downstream processing of various minerals, including copper concentrates. In 2018, PT-FI agreed to expand its domestic smelting and refining capacity to process all of its copper concentrates in Indonesia and is advancing the first nine monthsconstruction of 2017, approximately half of PT-FI’s concentrate production was sold tothe Indonesia smelter projects and expanding capacity at PT Smelting its 25-percent-owned smelter(refer to “Indonesia Smelter” below for further discussion of construction progress).

Export License. On June 10, 2023, a ban on the export of copper concentrate went into effect in accordance with Indonesia regulations and refineryexport licenses for several exporters, including PT-FI, expired. During the second quarter and in Gresik, Indonesia.

Regulatory Matters. In January and February 2017,July 2023, the IndonesianIndonesia government issued newvarious regulations to address the exportexports of unrefined metals, including copper concentrate and anode slimes, and other matters related to the mining sector. The new regulations permit the continuation of copper concentrate exports for a five-year period through January 2022, subject to various conditions, including conversion from a contract of work to a special operating license (known as an IUPK, which does not provide the same level of fiscal and legal protections as PT-FI’s Contract of Work (COW), which 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.Energy and Mineral Resources (MEMR) to allow continued exports of copper concentrates through May 2024 for companies engaged in ongoing smelter development projects with construction progress greater than 50%, and regulations by the Ministry of Trade on the permitted export of various products, including copper concentrates.

On July 24, 2023, PT-FI was granted an export license through May 2024 for 1.7 million metric tons of copper concentrate. PT-FI will continue to work with the Indonesia government to obtain approvals to continue exports until the Manyar smelter is fully commissioned and has reached designed operating conditions.

Export Duties. Under PT-FI’s special mining license (IUPK), export duties are determined based on regulations that were in effect in 2018, which provided that no duties are required after smelter construction progress reached 50%. In addition,March 2023, the new regulations enable applicationIndonesia government verified that construction progress on the Manyar smelter exceeded 50% and PT-FI's export duties were eliminated effective March 29, 2023.

In July 2023, the Ministry of Finance issued a revised regulation on duties for an extension of operating rights five years before expirationvarious exported products, including copper concentrates. PT-FI is continuing to discuss the applicability of the IUPK and require foreign IUPK holders to divest a 51 percent interest in the licensed entity to Indonesian interests no later than the tenth year of production. Export licenses would be valid for one-year periods, subject to review every six months, depending on smelter construction progress.

Following the issuance of the January and February 2017 regulations and discussionsrevised regulation 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 leveland will contest, and seek recovery of, legal and fiscal certainty enumerated under its COW, and provided that the COW would remain in effect until it is replaced by a mutually satisfactory alternative. PT-FI also committed to commence construction of a new smelter during a five-year timeframe, following approval of the extension of its long-term operating rights.any assessments.


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

2017, the Indonesian government issued a permit to PT-FI that allowed exports to resume for a six-month period, and PT-FI commenced export shipments.

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

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

In late March 2017, the Indonesian government amended the regulations to enable PT-FI to retain its COW until 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,Note 8 for further discussion of risks associated with ourthe revised export regulation and other Indonesia regulatory matters.

Mining Rights. PT-FI and the Indonesia government continue to engage in discussions regarding the extension of PT-FI's mining rights under its IUPK beyond 2041. An extension beyond 2041 would enable continuity of large-scale operations for the benefit of all stakeholders and provide growth options through additional resource development opportunities in Indonesia.the highly attractive Grasberg minerals district.


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.

Over a multi-year investment period, PT-FI has several projectssuccessfully commissioned three large-scale block cave mines 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(Grasberg Block Cave, underground mine and the Deep Mill Level Zone (DMLZ) ore body that lies below the
Table of Contents

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 toBig Gossan), 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 intoannual 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 mine is expected to commence in early 2019, following the end of mining of the Grasberg open pit. Targeted production rates once the Grasberg Block Cave mining operation reaches full capacity are expected to approximate 130,000-160,000 metric tons of ore per day. PT-FI is reviewing its operating plans to determine the optimum mine plan for the Grasberg Block Cave underground mine.

Aggregate mine development capital for the Grasberg Block Cave underground mine and associated Common Infrastructure is expected to approximate $6.3 billion (incurred between 2008 and 2022), with PT-FI’s share totaling approximately $5.8 billion. Aggregate project costs totaling $3.2 billion have been incurred 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.

DMLZ. The DMLZ ore body lies below the DOZ mine at the 2,590-meter elevation and represents the downward continuation of mineralization in the Ertsberg East Skarn system and neighboring Ertsberg porphyry. In September 2015, PT-FI initiated pre-commercial production that represents ore extracted during the development phase for the purpose of obtaining access to the ore body. In June 2017, production from the DMLZ underground mine was impacted by mining-induced seismic activity, which is not uncommon in block cave mining. To mitigate the impact of these events, PT-FI implemented a revised mine sequence and start-up plan in third-quarter 2017. 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.

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 in Part I. Item 1A of our annual report on Form 10-K for the year ended December 31, 2016, in 2009, there were a series of shooting incidents within the PT-FI project area, with sporadic shooting incidents continuing through January 1, 2015. From August 2017 through November 3, 2017, there were six shooting incidents within the PT-FI project area and five shooting incidents in nearby areas, which resulted in one fatality and 12 injuries. The safety of our workforce is a critical concern, and PT-FI is working
Table of Contents

cooperatively with the Indonesian government to address security issues. We also continue to limit the use of the road leading to our mining and milling operations to secured convoys.

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

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

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

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

Table of Contents

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

Assuming achieving planned operating rates for fourth-quarter 2017, consolidated sales volumes from Indonesia mining are expected to approximate 1.0approximately 1.6 billion pounds of copper and 1.6 million ounces of gold.

PT-FI’s ongoing project to install additional milling facilities is currently expected to be completed in 2024. The project will increase milling capacity to approximately 240,000 metric tons of ore per day to provide sustained large scale production volumes. PT-FI is also advancing a mill recovery project with the installation of a new copper cleaner circuit that is expected to be completed in the second half of 2024 and to provide incremental metal production of approximately 60 million pounds of copper and 40 thousand ounces of gold per year.

Kucing Liar. Long-term mine development activities are ongoing for PT-FI's Kucing Liar deposit in the year 2017, compared with 1.1Grasberg minerals district, which is expected to produce over 6 billion pounds of copper and 1.16 million ounces of gold between 2028 and the end of 2041. Pre-production development activities commenced in 2022 and are expected to continue over an approximate 10-year timeframe. Capital investments are estimated to average approximately $400 million per year over this period. At full operating rates of approximately 90,000 metric tons of ore per day, annual production from Kucing Liar is expected to approximate 550 million pounds of copper and 560 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.


43
Table of Contents
Indonesia Smelter. In connection with PT-FI’s 2018 agreement with the Indonesia government to secure the extension of its long-term mining rights, PT-FI agreed to expand its domestic smelting and refining capacity to process all of its copper concentrates in Indonesia. PT-FI is actively engaged in the following projects for additional domestic smelting capacity:

•Construction of the Manyar smelter in Gresik, Indonesia with a capacity to process approximately 1.7 million metric tons of copper concentrate per year. Construction progress currently approximates 75%. Construction of the smelter has an estimated cost of $3.0 billion, including $2.8 billion for a construction contract (excluding capitalized interest, owner’s costs and commissioning) and $0.2 billion for investment in a desalinization plant. Construction is expected to be complete in mid-2024 followed by commissioning of the facilities and a ramp-up schedule through year-end 2024.
•Expansion of PT Smelting's capacity by 30% to 1.3 million metric tons of copper concentrate per year, which is expected to be completed by the end of 2023. PT-FI is funding the cost of the expansion, estimated to approximate $250 million, with a loan that will convert to equity and increase PT-FI’s ownership in PT Smelting to a majority ownership interest, which is expected to occur in 2024.
•The PMR is being constructed to process gold and silver from the Manyar smelter and PT Smelting. Construction is in progress with commissioning expected during 2024 at an estimated cost of $525 million.

For the first six months of 2023, capital expenditures for the Indonesia smelter projects totaled $0.8 billion, and are expected to approximate $1.6 billion for the year 2023. Capital expenditures for the Indonesia smelter projects are being funded with proceeds received from PT-FI's senior notes and availability under its revolving credit facility.

Operating Data. Following is summary consolidated operating data for Indonesia mining:
Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Copper (millions of recoverable pounds)
  
Production406 407 735 788 
Sales386 410 584 789 
Average realized price per pound$3.82 $3.86 $3.83 $4.04 
Gold (thousands of recoverable ounces)
  
Production479 473 881 885 
Sales492 474 758 880 
Average realized price per ounce$1,942 $1,827 $1,946 $1,861 
Ore extracted and milled (metric tons per day):  
Grasberg Block Cave underground mine114,800 101,800 102,300 101,100 
Deep Mill Level Zone underground mine80,200 77,300 75,100 77,800 
Big Gossan underground mine8,200 7,400 7,600 7,500 
Other adjustments3,900 10,500 1,100 5,400 
Total207,100 197,000 

186,100 191,800 
Average ore grades:  
Copper (%)1.15 1.22 1.16 1.22 
Gold (grams per metric ton)1.05 1.08 1.06 1.05 
Recovery rates (%): 
Copper88.9 89.8 89.5 89.6 
Gold76.7 79.0 77.4 78.2 

PT-FI’s consolidated copper sales of 386 million pounds in second-quarter 2023 and 584 million pounds for the first six months of 2023 were lower than consolidated copper sales of 410 million pounds in second-quarter 2022 and 789 million pounds for the first six months of 2022, reflecting shipping delays associated with the renewal of PT-FI's export license. PT-FI's consolidated copper sales for the first six months of 2023 also reflects the deferral of sales recognition related to the PT Smelting tolling arrangement.

PT-FI’s consolidated gold sales of 492 thousand ounces in second-quarter 2023 were higher than second-quarter 2022 consolidated gold sales of 474 thousand ounces, primarily reflecting the timing of sales. PT-FI’s consolidated gold sales of 758 thousand ounces for the first six months of 2023 were lower than consolidated gold sales of 880
44
Table of Contents
thousand ounces for the first six months of 2022, primarily reflects the deferral of sales recognition related to the PT Smelting tolling arrangement.

Consolidated sales volumes from PT-FI are expected to approximate 1.4 billion pounds of copper and 1.7 million ounces of gold for the year 2016. At the Grasberg mine, the sequencing2023, net of mining areas with varying ore grades causes fluctuations in quarterly and annual productiona deferral of approximately 90 million pounds of copper and gold.

Indonesia mining’s projected130 thousand ounces of gold from mine production under tolling arrangements to be processed and sold as refined metal in future periods. Projected sales volumes for the year 2017 are dependent on a number of factors, including operational performance, workforce productivityweather-related conditions and other factors detailed in the timing of shipments.“Cautionary Statement.”


Unit Net Cash (Credits) Costs. Unit We believe unit net cash (credits) costs per pound of copper is a measure intended to providethat provides 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 (credits) costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.
           
Three Months Ended September 30,Three Months Ended June 30,
2017 2016 20232022
By-Product Method Co-Product Method By-Product Method Co-Product Method By-Product MethodCo-Product MethodBy-Product MethodCo-Product Method
 Copper Gold Copper Gold CopperGoldCopperGold
Revenues, excluding adjustments$2.95
 $2.95
 $1,290
 $2.20
 $2.20
 $1,327
Revenues, excluding adjustments$3.82 $3.82 $1,942 $3.86 $3.86 $1,827 
           
Site production and delivery, before net noncash and other costs shown below1.41
 0.87
 383
 1.37
 0.86
 520
Site production and delivery, before net noncash and other costs shown below1.88 1.12 569 1.43 0.91 433 
Gold and silver credits(1.80) —
 —
 (1.29) —
 —
Gold and silver credits(2.60)— — (2.17)— — 
Treatment charges0.27
 0.17
 74
 0.27
 0.17
 104
Treatment charges0.39 0.23 118 0.24 0.15 72 
Export duties0.08
 0.05
 22
 0.10
 0.07
 39
Export dutiesa
Export dutiesa
— — — 0.21 0.13 63 
Royalty on metals0.17
 0.10
 48
 0.12
 0.07
 50
Royalty on metals0.24 0.14 72 0.27 0.18 74 
Unit net cash costs0.13
 1.19
 527
 0.57
 1.17
 713
Unit net cash (credits) costsUnit net cash (credits) costs(0.09)1.49 759 (0.02)1.37 642 
DD&A0.53
 0.33
 143
 0.33
 0.21
 125
DD&A0.71 0.42 216 0.63 0.41 193 
Noncash and other costs, net0.09
a 
0.06
 25
 0.05
b 
0.03
 19
Noncash and other costs, net0.20 b,c0.12 60 0.01 0.01 2 
Total unit costs0.75
 1.58
 695
 0.95
 1.41
 857
Total unit costs0.82 2.03 1,035 0.62 1.79 837 
Revenue adjustments, primarily for pricing on prior period open sales0.11
 0.11
 4
 (0.02) (0.02) 1
Revenue adjustments, primarily for pricing on prior period open sales(0.14)(0.14)1 (0.49)(0.49)(17)
PT Smelting intercompany loss(0.07) (0.04) (19) (0.03) (0.02) (10)
PT Smelting intercompany profitPT Smelting intercompany profit— — — 0.06 0.04 19 
Gross profit per pound/ounce$2.24
 $1.44
 $580
 $1.20
 $0.75
 $461
Gross profit per pound/ounce$2.86 $1.65 $908 $2.81 $1.62 $992 
           
Copper sales (millions of recoverable pounds)258
 258
   332
 332
  Copper sales (millions of recoverable pounds)386 386  410 410  
Gold sales (thousands of recoverable ounces)    352
     307
Gold sales (thousands of recoverable ounces)  492   474 
45
Table of Contents

Six Months Ended June 30,
 20232022
 By-Product MethodCo-Product MethodBy-Product MethodCo-Product Method
 CopperGoldCopperGold
Revenues, excluding adjustments$3.83 $3.83 $1,946 $4.04 $4.04 $1,861 
Site production and delivery, before net noncash and other costs shown below1.93 1.14 578 1.42 0.92 426 
Gold and silver credits(2.68)— — (2.17)— — 
Treatment charges0.38 0.23 115 0.24 0.16 73 
Export dutiesa
0.03 0.02 9 0.21 0.14 63 
Royalty on metals0.26 0.15 73 0.26 0.17 72 
Unit net cash (credits) costs(0.08)1.54 775 (0.04)1.39 634 
DD&A0.72 0.43 217 0.64 0.42 194 
Noncash and other costs, net0.18 b,c0.11 55 0.04 b0.03 11 
Total unit costs0.82 2.08 1,047 0.64 1.84 839 
Revenue adjustments, primarily for pricing on prior period open sales0.19 0.19 22 0.04 0.04 3 
PT Smelting intercompany profit (loss)0.19 0.11 58 (0.03)(0.02)(10)
Gross profit per pound/ounce$3.39 $2.05 $979 $3.41 $2.22 $1,015 
Copper sales (millions of recoverable pounds)584 584  789 789  
Gold sales (thousands of recoverable ounces)  758   880 
a.In March 2023, the Indonesia government verified that construction progress of the Manyar smelter exceeded 50% and export duties were eliminated effective March 29, 2023. Refer to Note 8 for further discussion of the revised export duty regulation that was issued by the Indonesia government.
 Nine Months Ended September 30,
 2017 2016
 By-Product Method Co-Product Method By-Product Method Co-Product Method
  Copper Gold  Copper Gold
Revenues, excluding adjustments$2.81
 $2.81
 $1,261
 $2.17
 $2.17
 $1,292
            
Site production and delivery, before net noncash and other costs shown below1.71
 1.01
 451
 1.70
 1.08
 639
Gold and silver credits(1.98) —
 —
 (1.28) —
 —
Treatment charges0.27
 0.16
 71
 0.29
 0.18
 109
Export duties0.10
 0.06
 26
 0.09
 0.06
 34
Royalty on metals0.16
 0.09
 47
 0.12
 0.07
 48
Unit net cash costs0.26
 1.32
 595
 0.92
 1.39
 830
DD&A0.59
 0.35
 156
 0.40
 0.25
 152
Noncash and other costs, net0.22
a 
0.13
 58
 0.04
b 
0.03
 16
Total unit costs1.07
 1.80
 809
 1.36
 1.67
 998
Revenue adjustments, primarily for pricing on prior period open sales0.06
 0.06
 9
 —
 —
 25
PT Smelting intercompany loss(0.03) (0.01) (7) (0.01) (0.01) (4)
Gross profit per pound/ounce$1.77
 $1.06
 $454
 $0.80
 $0.49
 $315
            
Copper sales (millions of recoverable pounds)630
 630
   702
 702
  
Gold sales (thousands of recoverable ounces)    956
     653
a.Includes costs charged directly to production and delivery costs totaling $9 million ($0.03 per pound of copper) for third-quarter 2017 and $112 million ($0.18 per pound of copper) for the first nine months of 2017 as a result of workforce reductions.
b.Includes asset retirement charges of $17 million ($0.05 per pound of copper in third-quarter 2016 and $0.02 per pound of copper for the first nine months of 2016).
A significant portion of PT-FI’s costs are fixed and unit costs vary depending on production volumes and other factors. Indonesia’s unit net cash costs (including gold and silver credits) of $0.13b.Includes a charge totaling $0.14 per pound of copper in third-quarter 2017second-quarter 2023 and $0.26$0.09 per pound of copper for the first ninesix months of 2017 were lower than unit net cash costs2023 associated with a potential administrative fine. The first six months of $0.572022 also includes a charge of $0.05 per pound of copper associated with an administrative fine. Refer to Note 8 for further discussion.
c.Includes charges totaling $0.03 per pound of copper in third-quarter2016second-quarter 2023 and $0.92$0.04 per pound of copper for the first ninesix months 2023 for feasibility and optimization studies.

PT-FI's unit net cash credits (including gold and silver credits) of $0.09 per pound of copper in second-quarter 2023 and $0.08 per pound of copper for the first six months of 2016, primarily2023 were higher than unit net cash credits of $0.02 per pound of copper in second-quarter 2022 and $0.04 per pound of copper for the first six months of 2022, reflecting higher gold and silver credits and lower export duties, partly offset by higher operating rates, increased underground maintenance costs and treatment charges and the impact of lower copper sales volumes.


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. The increase in treatment charges per pound of copper and ounce of gold in the 2023 periods, compared with the 2022 periods, reflects higher costs associated with the new tolling arrangement with PT Smelting compared to the previous copper concentrate sales agreement. Tolling costs paid to PT Smelting are recorded as production costs in the consolidated statements of income but are reflected as treatment costs above in our unit net cash (credits) costs presentation.


PT-FI’s royalties vary with the volume of metal sold and the prices of copper and gold. PT-FI’s royalties totaled $43$92 million in third-quarter 2017, $40second-quarter 2023, $108 million in third-quarter 2016, $106second-quarter 2022, $150 million for the first ninesix months of 20172023 and $84$201 million for the first ninesix months of 2016. Export duties totaled $21 million2022. The decrease in third-quarter 2017, $34 million in third-quarter 2016, $62 millionPT-FI’s royalties 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 20172023 periods, compared withto the 20162022 periods, primarily relate to higher amortization of asset retirement costs associated with revised estimates at the end of 2016 for an overburden stockpile. Additionally, becausereflects lower sales volumes and copper prices.

Because certain assets are depreciated on a straight-line basis, PT-FI’s unit depreciation rate variesmay vary with asset additions and the level of copper production and sales. The increase in the DD&A rate per pound of copper in 2023 periods, compared with the 2022 periods, primarily reflects underground development assets being placed into service.


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


46
Table of Contents
PT Smelting intercompany lossprofit (loss) for the second quarter and first six months of 2022 represents the change in the deferral of 25 percent39.5% of PT-FI’s profit on sales to PT Smelting. ReferBeginning on January 1, 2023, PT-FI’s commercial arrangement with PT Smelting converted from a copper concentrate sales agreement to “Operations –a tolling arrangement. Under this arrangement, PT-FI pays PT Smelting & Refining”a tolling fee to smelt and refine its copper concentrate and PT-FI retains title to all products for sales to third parties. Accordingly, beginning in 2023, there are no further discussion.sales to PT Smelting.


Assuming an average gold price of $1,300$1,950 per ounce for fourth-quarter 2017the second half of 2023 and achievement of current sales volume and cost estimates, unit net cash costs (net ofcredits (including gold and silver credits) for Indonesia miningPT-FI are expected to approximate $0.07$0.06 per pound of copper for the year 2017. Indonesia mining’s2023. PT-FI's average unit net cash costscredits for the year 20172023 would change by approximately $0.04$0.07 per pound of copper for each $50$100 per ounce change in the average price of gold.gold for the second half of 2023.

TableAs discussed in Note 8, in July 2023, the Indonesia government issued a revised regulation on duties for various exported products, including copper concentrates. Export duties that may be assessed under this revised regulation are not reflected in PT-FI's estimated unit net cash credits for the second half of Contents

Because2023. Based on current sales volume and metal price estimates, the assessment of a 7.5% export duty on PT-FI’s sales during the second half of 2023 is estimated to reduce PT-FI's unit net cash credits by $0.19 per pound of copper for the year 2023 (including $0.31 per pound of copper in third-quarter 2023). PT-FI is continuing to discuss the applicability of the fixed naturerevised regulation with the Indonesia government and will contest, and seek recovery of, a large portion of Indonesia’s costs, unit costs vary from quarter to quarter depending on copper and gold volumes.any assessments.


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.and the Henderson underground mine. The HendersonClimax and ClimaxHenderson 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 HendersonClimax and ClimaxHenderson 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 7 million pounds of molybdenum in second-quarter 2023, 15 million pounds for the first six months of 2023, 8 million pounds of molybdenum in third-quarter2017, 5 million pounds in third-quarter 2016, 24second-quarter 2022 and 15 million pounds for the first ninesix months of 2017 and 19 million pounds for the first nine months of 2016.2022. 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.volumes and to “Markets” for a discussion of molybdenum prices.


Unit Net Cash Costs Per Pound of Molybdenum. Unit We believe unit net cash costs per pound of molybdenum is a measure intended to providethat provides 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 ourthe Molybdenum mines of $7.90$15.99 per pound of molybdenum in third-quarter2017second-quarter 2023 and $7.60$13.95 per pound of molybdenum for the first ninesix months of 20172023 were lowerhigher than average unit net cash costs of $10.28$10.62 per pound of molybdenum in third-quarter 2016second-quarter 2022 and $8.39$10.75 per pound of molybdenum for the first ninesix months of 2016,2022, primarily reflecting higher volumes. Assuming achievement ofcontract labor and input costs. Based on current sales volume and cost estimates, we estimateaverage unit net cash costs for the Molybdenum mines are expected to average $7.85approximate $14.13 per pound of molybdenum for the year 2017.2023. 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 Atlantic Copper, a smelter and refinery in Spain (Atlantic Copper).Spain. Additionally, PT-FI owns 25 percenthas a 39.5% ownership interest in PT Smelting and expects its ownership to increase to a majority interest upon completion of the expansion of PT Smelting’s smelting capacity. Through this form of downstream integration, we are assured placement of a smelter and refinery in Gresik, Indonesia (PT Smelting). significant portion of our copper concentrate production.
47
Table of Contents
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, higherCopper. 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. Through this form of downstream integration, we are assured placement of a significant portion of our concentrate production.smelter and El Paso refinery.


Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes. During the first ninesix months of 2017,2023, Atlantic Copper’s copper concentrate purchases included 45% from our copper mining operations included 16 percent from our North America copper mines and 10 percent from South America mining, with the remainder purchased55% from third parties.


In March 2017, PT Smelting’s anode slimes export license was renewed through MarchBeginning on January 1, 2018. PT-FI’s contract2023, PT-FI's commercial arrangement with PT Smelting provides for PT-FI to supply 100 percent of theconverted from a copper concentrate requirements (subjectsales agreement to a minimum or maximum rate) necessary fortolling arrangement. Under this arrangement, PT-FI pays PT Smelting a tolling fee (which PT-FI records as production costs in the consolidated statements of income) to produce 205,000 metric tons of copper annually on a priority basis. PT-FI may also sellsmelt and refine its copper concentrate and PT-FI retains title to all products for sale to third parties (i.e., there are no further sales 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, PT-FI supplied substantially all of PT Smelting’s concentrate requirements. Minimum and maximum treatment charge rates have been approved through April 2020.Smelting).


Table of Contents

We defer recognizing profits on sales from our mining operations to Atlantic Copper and(and on 25 percent39.5% of PT-FI’s sales to PT Smelting for the 2022 periods) until final sales to third parties occur. Changes in these deferrals attributable to variability in intercompany volumes resulted in net (reductions) additions to operating income totaling $(39) million ($(21) million to net income attributable to common stock of $24stock) in second-quarter 2023, $(7) million in third-quarter2017, $17 million for third-quarter 2016, less(less than $1 million to net income attributable to common stock) in second-quarter 2022, $72 million ($27 million to net income attributable to common stock) for the first ninesix months of 20172023 and $6$40 million ($23 million to net income attributable to common stock) for the first ninesix months of 2016.2022. 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$63 million at SeptemberJune 30, 2017.2023. 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 believe thatthe actions we have taken in recent years to build a high-quality portfolio of long-lived copper assets positionedstrong balance sheet, successfully expand low-cost operations and maintain flexible organic growth options while maintaining sufficient liquidity, will allow us to generate long-term value. We are pursuing opportunities to enhance our mines’ net present values, and we continue to advance studiesexecute our business plans in a prudent manner during periods of economic uncertainty while preserving substantial future asset values.

We closely monitor market conditions and will adjust our operating plans to protect liquidity and preserve our asset values, if necessary. We expect to maintain a strong balance sheet and liquidity position as we focus on building long-term value in our business, executing our operating plans safely, responsibly and efficiently, and prudently managing costs and capital expenditures.

Based on current sales volume, cost and metal price estimates discussed in “Outlook,” our available cash and cash equivalents plus our projected consolidated operating cash flows of $6.4 billion for the year 2023 exceed our expected consolidated capital expenditures of $4.8 billion (which includes $1.6 billion for the Indonesia smelter projects that are being funded with the remaining proceeds from PT-FI’s senior notes and its available credit facility).

As discussed in “Outlook,” our projected financial results for the second half of 2023 do not include a 7.5% export duty at PT-FI that may be assessed under a revised regulation issued by the Indonesia government in July 2023.

Additionally, as further discussed in Note 8, PT-FI may be required to make an additional refundable smelter deposit of approximately $250 million and deposit 30% of its gross export proceeds into Indonesian banks for a period of 90 days before withdrawal.

We have cash on hand and the financial flexibility to fund capital expenditures and our other cash requirements for the year, including noncontrolling interest distributions, income tax payments, current common stock dividends (base and variable) and any share or debt repurchases. At June 30, 2023, we had $6.7 billion of consolidated cash and cash equivalents (which includes $1.1 billion of PT-FI cash designated for Indonesia smelter projects). FCX, PT-FI and Cerro Verde have $3.0 billion, $1.3 billion and $350 million, respectively, of availability under their revolving credit facilities. Refer to “Outlook” for further discussion of projected operating cash flows and capital expenditures for 2023, and to “Debt” below and Note 5 for further discussion.
48
Table of Contents
Financial Policy. Our financial policy is aligned with our strategic objectives of maintaining a strong balance sheet, providing cash returns to shareholders and advancing opportunities for future developmentgrowth. The policy includes a base dividend and a performance-based payout framework, whereby up to 50% of available cash flows generated after planned capital spending and distributions to noncontrolling interests would be allocated to shareholder returns and the balance to debt reduction and investments in value enhancing growth projects, subject to us maintaining our net debt at a level not to exceed the net debt target of $3.0 billion to $4.0 billion (excluding net project debt for additional smelting capacity in Indonesia). Our Board of Directors (Board) will review the structure of the performance-based payout framework at least annually.

At June 30, 2023, our net debt, excluding net debt for the Indonesia smelter projects, totaled $0.9 billion. Refer to "Net Debt" for further discussion.

On June 21, 2023, our Board declared cash 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, performance-based cash dividend), which was paid on August 1, 2023, to common stockholders of record as of July 14, 2023. Based on current market conditions, the base and variable dividends on our common stock are anticipated to total $0.60 per share for 2023 (including the dividends paid on August 1, 2023), comprised of a $0.30 per share base dividend and $0.30 per share variable dividend. The declaration and payment of dividends (base or variable) is at the discretion of our copper resources, the timing of whichBoard and will be dependentdepend on market conditions.our financial results, cash requirements, global economic conditions and other factors deemed relevant by our Board.


Cash
Following is a summary of the U.S. and international components of consolidated cash and cash equivalents available to the parent company, excluding cash committed for the Indonesia smelter projects and net of noncontrolling interests’ share, taxes and other costs at SeptemberJune 30, 20172023 (in billions):
Cash at domestic companies$3.3 
Cash at international operations3.4 
Total consolidated cash and cash equivalents6.7 
Cash for Indonesia smelter projects(1.1)a
Noncontrolling interests’ share(1.0)
Cash, net of noncontrolling interests’ share4.6 
Withholding taxes(0.1)

Net cash available$4.5 
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
a.Estimated remaining net proceeds from PT-FI's senior notes offering.

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 June 30, 2023, consolidated debt totaled $9.5 billion, with a summaryweighted-average interest rate of 5.2%. Substantially all of our totaloutstanding debt and the related weighted-average interest rates at September 30, 2017 (in billions, except percentages):
   Weighted-
   Average
   Interest Rate
Senior Notes$13.3
 4.4%
Cerro Verde credit facility1.5
 3.1%
Total debt$14.8
 4.2%
    
In September 2017, we redeemed $543 million aggregate principal amount of senior notes, resulting in annual cash interest savings of approximately $35 million.is fixed rate. 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 $3.5under our $3.0 billion revolving credit facility. Additionally, at June 30, 2023, no amounts were drawn under ourPT-FI’s $1.3 billion revolving credit facility which matures on May 31, 2019.

or Cerro Verde’s $350 million revolving credit facility. Refer to Note 65 for further discussion of debt.discussion.
Table of Contents

Operating Activities
We generated consolidated operating cash flows of $3.0$2.7 billion (including $0.4(net of $0.2 billion inof working capital sources and changes in tax payments)other uses) for the first ninesix months of 20172023 and $2.6$3.3 billion (including $0.5(net of $0.7 billion inof working capital sources and changes in tax payments)other uses) for the first ninesix months of 2016.

Subject to future commodity prices for copper, gold and molybdenum, we expect estimated consolidated2022. Lower operating cash flows for the years 2017first six months of 2023, compared with first six months of 2022, primarily reflected lower copper prices, lower copper and 2018, plus available cashgold sales volumes and availability under our credit facilityhigher production and uncommitted lines of credit,delivery costs (refer 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”“Consolidated Results” for further discussiondiscussion), partly offset by working capital changes.


49
Table of projected operating cash flows for the year 2017, and to “Risk Factors,” contained in Part I, Item 1A. of our annual report on Form 10-K for the year ended December 31, 2016, for discussion of regulatory matters in Indonesia, which could have a significant impact on future results.Contents

Investing Activities
Capital Expenditures. Capital expenditures, including capitalized interest, totaled $1.0 billion for the first nine months of 2017, including $0.6 billion for major mining projects. Capital expenditures, including capitalized interest, totaled $2.3 billion for the first ninesix months of 2016, consisting of $1.2 billion for mining operations (including2023, including approximately $0.9$0.8 billion for major projects)mining projects primarily associated with underground development activities in the Grasberg minerals district and $1.1$0.8 billion for oil and gas operations.the Indonesia smelter projects.


Lower capitalCapital expenditures, for the first nine months of 2017, compared with the first nine months of 2016, primarily reflect a decrease in oil 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. Refer to “Outlook” for further discussion of projected capital expenditures for the year 2017.

Dispositions. Net proceeds from asset salesincluding capitalized interest, totaled $1.4$1.6 billion for the first ninesix months of 20162022, including approximately $0.8 billion for major mining projects primarily associated with underground development activities in the $1.0Grasberg minerals district and $0.3 billion for the Indonesia smelter projects.

Proceeds from Sales of Assets. Proceeds from sales of assets totaled $11 million for the first six months of 2023 and $96 million for the first six months of 2022. In May 2022, we sold all of the shares we owned in Jervois Global Limited, which we received in connection with the 2021 sale of an additional 13 percent undivided interest in Morenci,our remaining cobalt business, for proceeds of $60 million.

Loans to PT Smelting for Expansion.PT-FI made loans to PT Smelting totaling $61 million for the salefirst six months of an interest in2023 and $34 million for the Timok exploration project in Serbia and from oil and gas asset sales, including the Haynesville shale assets and certain oil and gas royalty interests. Referfirst six months of 2022 to Note 2 for further discussion of these transactions.fund PT Smelting’s expansion project.


Financing Activities
Debt Transactions. Net repayments of debt totaled $1.1 billion for the first ninesix months of 2017 totaled $1.2 billion primarily for the redemption and repayment of senior notes and2023, including the repayment of Cerro Verde’s shareholder loans,our 3.875% Senior Notes that matured in March 2023 totaling $996 million and open-market purchases of our senior notes for a total cost of $125 million. Refer to Note 5 for additional information.

Net proceeds from debt totaled $1.7 billion for the first six months of 2022, reflecting net proceeds from PT-FI’s $3.0 billion senior note offering, partly offset by the additionalrepayment of borrowings onunder PT-FI’s term loan ($0.6 billion) and Cerro Verde’s credit facility.term loan ($0.3 billion), and open-market purchases of our senior notes ($0.6 billion).


Net repayments of debtCash Dividends on Common Stock. We paid cash dividends on our common stock totaling $432 million for the first ninesix months of 2016 totaled $1.1 billion, primarily reflecting payments2023 and $438 million for the first six months of $0.6 billion on our term loan, $0.2 billion on the Cerro Verde credit facility and $0.2 billion on lines of credit.

Dividends. The Board suspended our annual common stock dividend in December 2015.2022. The declaration and payment of dividends (base or variable) is at the discretion of our Board and will depend uponon our financial results, cash requirements, future prospectsglobal economic conditions and other factors deemed relevant by our Board. Refer to Note 5, Item 1A. “Risk Factors” contained in Part I of our 2022 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above.


Common stockCash Dividends and Distributions Paid to Noncontrolling Interests. Cash dividends of $2and distributions paid to noncontrolling interests at our international operations totaled $291 million for the first ninesix months of 20172023 and $5$513 million for the first ninesix months of 2016 related to accumulated2022. Based on the estimates discussed in “Outlook,” we currently expect cash dividends paid for vested stock-based compensation.

Cash dividendsand distributions paid to noncontrolling interests totaled $67 milliontotaling $1.1 billion for the first nine months of 2017year 2023. Cash dividends and $87 million for the first nine months of 2016. These payments willdistributions to noncontrolling interests vary based on the operating results and cash requirements of our consolidated subsidiaries.


Treasury Stock Purchases. Since mid-2021, we have acquired 47.8 million shares of our common stock under the share repurchase program for a total cost of $1.8 billion ($38.35 average cost per share), including 29.4 million shares in the first six months of 2022 for a total cost of $1.2 billion. No shares have been purchased since July 11, 2022, and we have $3.2 billion available for repurchases under the program. 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 our Board’s discretion. Refer to Item 1A. “Risk Factors” contained in Part I of our 2022 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above.

Contributions from Noncontrolling Interests. We received equity contributions totaling $50 million for the first six months of 2023 and $94 million for the first six months of 2022 from PT Mineral Industri Indonesia (formerly PT Indonesia Asahan Aluminium (Persero), (MIND ID)). Contributions for the first six months of 2023 were primarily associated with receipt of the final capital contribution in accordance with the PT-FI shareholders agreement. Contributions for the first six months of 2022 were associated with MIND ID’s share of capital spending on underground mine development projects in the Grasberg minerals district. Beginning on January 1, 2023, capital spending at PT-FI is being shared in accordance with the shareholders’ ownership interests.
50
Table of Contents
CONTRACTUAL OBLIGATIONS


As further discussed in Note 6, during the first nine months of 2017, we have reduced our December 31, 2016, total debt balance by $1.25 billion. There have been no other material changes in our contractual obligations since December 31, 2016.2022. Refer to Note 13 and Part II, Items 7. and 7A. in our annual report on2022 Form 10-K for the year ended December 31, 2016, for information regarding our contractual obligations.

Table of Contents


CONTINGENCIES


Environmental Liabilities and Asset Retirement Obligations (AROs)
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 liabilities and asset retirement obligationsAROs and also review changes in facts and circumstances associated with these obligations at least quarterly. Other than as disclosed

As discussed in Note 9, there“Consolidated Results – Environmental Obligations and Shutdown Costs,” we recorded $116 million in revisions to our environmental obligations during the first six months of 2023 primarily associated with revised cost estimates. There have been no materialsignificant changes to our environmental and asset retirement obligationsAROs since December 31, 2016.2022. 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.liabilities and AROs. Refer to Note 12 in our annual report on2022 Form 10-K for the year ended December 31, 2016, for further information regarding our environmental liabilities and asset retirement obligations.AROs.


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, 2016.2022 other than the Indonesia regulatory matters discussed above in “Indonesia Mining-Regulatory Matters and as disclosed in Note 8. Refer to Note 12 and “Legal Proceedings” contained in Part I, Item 3. of our annual report on2022 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 proceedingslitigation and other matters.contingencies.


NEW ACCOUNTING STANDARDS


ReferThere were no significant updates to previously reported accounting standards included in Note 121 of our 2022 Form 10-K.

NET DEBT

We believe that net debt, which we define as consolidated debt less consolidated cash and cash equivalents, provides investors with information related to the performance-based payout framework in our financial policy, which requires us to maintain our net debt at a level not to exceed the net debt target of $3 billion to $4 billion (excluding net project debt for additional smelting capacity in Indonesia). This information differs from consolidated debt determined in accordance with U.S. GAAP and should not be considered in isolation or as a summarysubstitute for consolidated debt determined in accordance with U.S. GAAP. Our net debt, which may not be comparable to similarly titled measures reported by other companies, follows (in billions):
As of June 30, 2023As of December 31, 2022
Current portion of debt$— a$1.0 
Long-term debt, less current portion9.5 9.6 
Consolidated debt9.5 

10.6 
Less: consolidated cash and cash equivalents6.7 8.1 
FCX net debt2.8 2.5 
Less: net debt for Indonesia smelter projectsb
1.9 

1.2 
FCX net debt, excluding Indonesia smelter projects$0.9 $1.3 
a.Rounds to less than $0.1 billion
b.Includes consolidated debt of recently adopted accounting standards.$3.0 billion and consolidated cash and cash equivalents of $1.1 billion as of June 30, 2023, and consolidated debt of $3.0 billion and consolidated cash and cash equivalents of $1.8 billion as of December 31, 2022.



51
Table of Contents
PRODUCT REVENUES AND PRODUCTION COSTS


Mining Product Revenues and Unit Net Cash Cost
UnitWe believe unit net cash costs (credits) per pound of copper and molybdenum are measures intended tothat 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 measurethese measures 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, net, 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, feasibility and optimization study costs, restructuring and/or unusual charges. As discussed above, gold, molybdenum and
other metal revenues at copper mines are reflected as credits against site production and delivery costs in the by-product method. The following schedules are presentations under both the by-product and co-product methods
together with reconciliations to amounts reported in our consolidated financial statements.

52
Table of Contents

North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended June 30, 2023  
(In Millions)By-ProductCo-Product Method
MethodCopper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments$1,337 $1,337 $200 $51 $1,588 
Site production and delivery, before net noncash
    and other costs shown below		999 870 139 51 1,060 
By-product credits(190)— — — — 
Treatment charges46 43 — 3 46 
Net cash costs855 913 139 54 1,106 
DD&A99 87 10 2 99 
Metals inventory adjustments1 1 — — 1 
Noncash and other costs, net51 c45 5 1 51 
Total costs1,006 1,046 154 57 1,257 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(11)(11)— — (11)
Gross profit (loss)$320 $280 $46 $(6)$320 
Copper sales (millions of recoverable pounds)341 341 
Molybdenum sales (millions of recoverable pounds)a
9 
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments$3.92 $3.92 $23.08 
Site production and delivery, before net noncash
    and other costs shown below		2.93 2.55 16.04 
By-product credits(0.55)— — 
Treatment charges0.13 0.13 — 
Unit net cash costs2.51 2.68 16.04 
DD&A0.29 0.26 1.15 
Metals inventory adjustments— — — 
Noncash and other costs, net0.15 c0.13 0.60 
Total unit costs2.95 3.07 17.79 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.03)(0.03)— 
Gross profit per pound$0.94 $0.82 $5.29 
Reconciliation to Amounts Reported    
 
RevenuesProduction and DeliveryDD&AMetals Inventory Adjustments
Totals presented above$1,588 $1,060 $99 $1 
Treatment charges(3)43 — —  
Noncash and other costs, net— 51 — — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(11)— — — 
Eliminations and other16 12 — — 
North America copper mines1,590 1,166 99 1 
Other miningd
5,756 3,936 429 — 
Corporate, other & eliminations(1,609)(1,554)19 — 
As reported in our consolidated financial statements$5,737 $3,548 $547 $1 
            
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.Includes charges totaling $26 million ($0.08 per pound of copper) for feasibility and optimization studies.
d.Represents the combined total for our other segments as presented in Note 9.

53
Table of Contents

North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended June 30, 2022  
(In Millions)By-ProductCo-Product Method
MethodCopper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments$1,697 $1,697 $144 $30 $1,871 
Site production and delivery, before net noncash
    and other costs shown below		975 897 95 21 1,013 
By-product credits(136)— — — — 
Treatment charges41 40 — 1 41 
Net cash costs880 937 95 22 1,054 
DD&A103 95 7 1 103 
Metals inventory adjustments7 6 1 — 7 
Noncash and other costs, net36 c33 2 1 36 
Total costs1,026 1,071 105 24 1,200 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(37)(37)— — (37)
Gross profit$634 $589 $39 $6 $634 
Copper sales (millions of recoverable pounds)389 389 
Molybdenum sales (millions of recoverable pounds)a
8 
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments$4.36 $4.36 $18.75 
Site production and delivery, before net noncash
    and other costs shown below		2.50 2.30 12.42 
By-product credits(0.35)— — 
Treatment charges0.11 0.11 — 
Unit net cash costs2.26 2.41 12.42 
DD&A0.27 0.24 0.81 
Metals inventory adjustments0.02 0.02 0.16 
Noncash and other costs, net0.09 c0.08 0.32 
Total unit costs2.64 2.75 13.71 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.10)(0.10)— 
Gross profit per pound$1.62 $1.51 $5.04 
Reconciliation to Amounts Reported     
RevenuesProduction and DeliveryDD&AMetals Inventory Adjustments 
Totals presented above$1,871 $1,013 $103 $7  
Treatment charges(5)36 — —  
Noncash and other costs, net— 36 — —  
Other revenue adjustments, primarily for pricing
    on prior period open sales		(37)— — —  
Eliminations and other26 32 (1)—  
North America copper mines1,855 1,117 102 7  
Other miningd
5,332 3,614 389 11 
Corporate, other & eliminations(1,771)(1,728)16 —  
As reported in our consolidated financial statements$5,416 $3,003 $507 $18  
          
Three Months Ended September 30, 2016   
(In millions)By-Product Co-Product Method
 Method Copper 
Molybdenuma
 
Otherb
 Total
Revenues, excluding adjustments$1,002
 $1,002
 $65
 $35
 $1,102
Site production and delivery, before net noncash
    and other costs shown below
659
 610
 48
 25
 683
By-product credits(76) —
 —
 —
 —
Treatment charges45
 42
 —
 3
 45
Net cash costs628
 652
 48
 28
 728
DD&A

127
 117
 6
 4
 127
Noncash and other costs, net26

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

0.28
 0.26
 0.70
    
Noncash and other costs, net0.06

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

b.Includes gold and silver product revenues and production costs.
c.Includes charges totaling $21 million ($0.05 per pound of copper) for feasibility and optimization studies.
d.Represents the combined total for our other segments as presented in Note 9.





54
Table of Contents

North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs
Six Months Ended June 30, 2023
(In Millions)By-ProductCo-Product Method
MethodCopper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments$2,723 $2,723 $412 $86 $3,221 
Site production and delivery, before net noncash
    and other costs shown below		1,975 1,720 288 78 2,086 
By-product credits(387)— — — — 
Treatment charges88 83 — 5 88 
Net cash costs1,676 1,803 288 83 2,174 
DD&A202 178 20 4 202 
Metals inventory adjustments1 1 — — 1 
Noncash and other costs, net126 c107 17 2 126 
Total costs2,005 2,089 325 89 2,503 
Other revenue adjustments, primarily for pricing
    on prior period open sales		13 13 — — 13 
Gross profit (loss)$731 $647 $87 $(3)$731 
Copper sales (millions of recoverable pounds)676 676 
Molybdenum sales (millions of recoverable pounds)a
16 
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments$4.03 $4.03 $25.52 
Site production and delivery, before net noncash
    and other costs shown below		2.92 2.55 17.81 
By-product credits(0.57)— — 
Treatment charges0.13 0.12 — 
Unit net cash costs2.48 2.67 17.81 
DD&A0.30 0.26 1.24 
Metals inventory adjustments— — — 
Noncash and other costs, net0.19 c0.16 1.06 
Total unit costs2.97 3.09 20.11 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.02 0.02 — 
Gross profit per pound$1.08 $0.96 $5.41 
Reconciliation to Amounts Reported
Metals
ProductionInventory
Revenuesand DeliveryDD&AAdjustments
Totals presented above$3,221 $2,086 $202 $1 
Treatment charges(9)79 — — 
Noncash and other costs, net— 126 — — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		13 — — — 
Eliminations and other35 37 — — 
North America copper mines3,260 2,328 202 1 
Other miningd
11,068 7,435 712 — 
Corporate, other & eliminations(3,202)(3,051)32 1 
As reported in our consolidated financial statements$11,126 $6,712 $946 $2 
a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b.Includes gold and silver product revenues and production costs.
c.Includes charges totaling $53 million ($0.08 per pound of copper) for feasibility and optimization studies.
d.Represents the combined total for our other mining operations as presented in Note 9.




55
      
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
Six Months Ended June 30, 2022
(In Millions)By-ProductCo-Product Method
MethodCopper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments$3,440 

$3,440 $282 $57 $3,779 
Site production and delivery, before net noncash
    and other costs shown below		1,883 1,735 179 39 1,953 
By-product credits(269)— — — — 
Treatment charges77 75 — 2 77 
Net cash costs1,691 1,810 179 41 2,030 
DD&A207 192 13 2 207 
Metals inventory adjustments7 6 1 — 7 
Noncash and other costs, net65 c60 4 1 65 
Total costs1,970 2,068 197 44 2,309 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(7)(7)— — (7)
Gross profit$1,463 $1,365 $85 $13 $1,463 
Copper sales (millions of recoverable pounds)770 770 
Molybdenum sales (millions of recoverable pounds)a
15 
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments$4.46 

$4.46 $18.36 
Site production and delivery, before net noncash
    and other costs shown below		2.44 2.25 11.68 
By-product credits(0.35)— — 
Treatment charges0.10 0.10 — 
Unit net cash costs2.19 2.35 11.68 
DD&A0.27 0.25 0.85 
Metals inventory adjustments0.01 0.01 0.08 
Noncash and other costs, net0.09 c0.07 0.23 
Total unit costs2.56 2.68 12.84 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.01)(0.01)— 
Gross profit per pound$1.89 $1.77 $5.52 
Reconciliation to Amounts Reported
Metals
ProductionInventory
Revenuesand DeliveryDD&AAdjustments
Totals presented above$3,779 $1,953 $207 $7 
Treatment charges(9)68 — — 
Noncash and other costs, net— 65 — — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(7)— — — 
Eliminations and other43 49 — — 
North America copper mines3,806 2,135 207 7 
Other miningd
11,708 7,461 757 11 
Corporate, other & eliminations(3,495)(3,443)32 — 
As reported in our consolidated financial statements$12,019 $6,153 $996 $18 
a.Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b.Includes gold and silver product revenues and production costs.
c.Includes charges totaling $29 million ($0.04 per pound of copper) for feasibility and optimization studies.
d.Represents the combined total for our other mining operations as presented in Note 9.



56
      
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 June 30, 2023
(In Millions)By-ProductCo-Product Method
MethodCopper
Othera
Total
Revenues, excluding adjustments$1,153 $1,153 $128 $1,281 
Site production and delivery, before net noncash
    and other costs shown below		741 678 82 760 
By-product credits(109)— — — 
Treatment charges62 62 — 62 
Royalty on metals2 2 — 2 
Net cash costs696 742 82 824 
DD&A132 118 14 132 
Noncash and other costs, net24 b23 1 24 
Total costs852 883 97 980 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(69)(69)— (69)
Gross profit$232 $201 $31 $232 
Copper sales (millions of recoverable pounds)304 304 
Gross profit per pound of copper:
Revenues, excluding adjustments$3.78 $3.78 
Site production and delivery, before net noncash
    and other costs shown below		2.43 

2.22 
By-product credits(0.37)— 
Treatment charges0.21 0.21 
Royalty on metals0.01 0.01 
Unit net cash costs2.28 2.44 
DD&A0.44 0.39 
Noncash and other costs, net0.08 b0.07 
Total unit costs2.80 2.90 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.22)(0.22)
Gross profit per pound$0.76 $0.66 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$1,281 $760 $132 
Treatment charges(62)— — 
Royalty on metals(2)— — 
Noncash and other costs, net— 24 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(69)— — 
Eliminations and other— (1)— 
South America mining1,148 783 132 
Other miningc
6,198 4,319 396 
Corporate, other & eliminations(1,609)(1,554)19 
As reported in our consolidated financial statements$5,737 $3,548 $547 
a.Includes silver sales of 1.1 million ounces ($23.02 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 $11 million ($0.04 per pound of copper) for feasibility studies.
c.Represents the combined total for our other segments as presented in Note 9.

57
 
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 June 30, 2022
(In Millions)By-ProductCo-Product Method
MethodCopper
Othera
Total
Revenues, excluding adjustments$1,102 $1,102 $116 $1,218 
Site production and delivery, before net noncash
    and other costs shown below		712 658 69 727 
By-product credits(101)— — — 
Treatment charges44 44 — 44 
Royalty on metals3 3 — 3 
Net cash costs658 705 69 774 
DD&A101 91 10 101 
Metals inventory adjustments11 10 1 11 
Noncash and other costs, net18 17 1 18 
Total costs788 823 81 904 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(154)(154)— (154)
Gross profit$160 $125 $35 $160 
Copper sales (millions of recoverable pounds)288 288 
Gross profit per pound of copper:
Revenues, excluding adjustments$3.83 $3.83 
Site production and delivery, before net noncash
    and other costs shown below		2.48 2.29 
By-product credits(0.35)— 
Treatment charges0.15 0.15 
Royalty on metals0.01 0.01 
Unit net cash costs2.29 2.45 
DD&A0.35 0.32 
Metals inventory adjustments0.04 0.03 
Noncash and other costs, net0.06 0.06 
Total unit costs2.74 2.86 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.53)(0.53)
Gross profit per pound$0.56 $0.44 
Reconciliation to Amounts ReportedMetals
ProductionInventory
Revenuesand DeliveryDD&AAdjustments
Totals presented above$1,218 $727 $101 $11 
Treatment charges(44)— — — 
Royalty on metals(3)— — — 
Noncash and other costs, net— 18 — — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(154)— — — 
Eliminations and other(1)(3)1 — 
South America mining1,016 742 102 11 
Other miningb
6,171 3,989 389 7 
Corporate, other & eliminations(1,771)(1,728)16 — 
As reported in our consolidated financial statements$5,416 $3,003 $507 $18 
      
Three Months Ended September 30, 2016     
(In millions) By-Product Co-Product Method 
  Method Copper 
Othera
 Total 
Revenues, excluding adjustments $709
 $709
 $50
 $759
 
Site production and delivery, before net noncash         
and other costs shown below 409
 386
 35
 421
 
By-product credits (38) —
 —
 —
 
Treatment charges 79
 79
 —
 79
 
Royalty on metals 2
 2
 —
 2
 
Net cash costs 452
 467
 35
 502
 
DD&A 134
 126
 8
 134
 
Noncash and other costs, net 4
 3
 1
 4
 
Total costs 590
 596
 44
 640
 
Revenue adjustments, primarily for pricing         
on prior period open sales (7) (7) —
 (7) 
Gross profit $112
 $106
 $6
 $112
 
          
Copper sales (millions of recoverable pounds) 323
 323
     
          
Gross profit per pound of copper:     
          
Revenues, excluding adjustments $2.19
 $2.19
     
Site production and delivery, before net noncash         
and other costs shown below 1.27
 1.20
     
By-product credits (0.12) —
     
Treatment charges 0.24
 0.24
     
Royalty on metals 0.01
 —
     
Unit net cash costs 1.40
 1.44
     
DD&A 0.41
 0.39
     
Noncash and other costs, net 0.01
 0.01
     
Total unit costs 1.82
 1.84
     
Revenue adjustments, primarily for pricing         
on prior period open sales (0.02) (0.02)     
Gross profit per pound $0.35
 $0.33
     
          
Reconciliation to Amounts Reported         
(In millions)   Production     
  Revenues and Delivery DD&A   
Totals presented above $759
 $421
 $134
   
Treatment charges (79) —
 —
   
Royalty on metals (2) —
 —
   
Noncash and other costs, net —
 4
 —
   
Revenue adjustments, primarily for pricing         
on prior period open sales (7) —
 —
   
Eliminations and other —
 (1) —
   
South America mining 671
 424
 134
   
Other miningb
 3,498
 2,621
 263
   
Corporate, other & eliminations (292) (516) 246
   
As reported in FCX’s consolidated financial statements $3,877
 $2,529
 $643
   
          
a.Includes silver sales of 952 thousand ounces ($21.72 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.
b.Represents the combined total for our other mining operations, including North America copper mines, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.

a.Includes silver sales of 1.1 million ounces ($23.26 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.







58
Table of Contents

South America Mining Product Revenues, Production Costs and Unit Net Cash Costs
Six Months Ended June 30, 2023
(In Millions)By-ProductCo-Product Method
MethodCopper
Othera
Total
Revenues, excluding adjustments$2,331 $2,331 $301 $2,632 
Site production and delivery, before net noncash
    and other costs shown below		1,508 1,363 179 1,542 
By-product credits(270)— — — 
Treatment charges118 118 — 118 
Royalty on metals4 3 1 4 
Net cash costs1,360 1,484 180 1,664 
DD&A239 212 27 239 
Noncash and other costs, net50 b46 4 50 
Total costs1,649 1,742 211 1,953 
Other revenue adjustments, primarily for pricing
    on prior period open sales		71 71 3 74 
Gross profit$753 $660 $93 $753 
Copper sales (millions of recoverable pounds)606 606 
Gross profit per pound of copper:
Revenues, excluding adjustments$3.85 $3.85 
Site production and delivery, before net noncash
    and other costs shown below		2.49 2.25 
By-product credits(0.45)— 
Treatment charges0.19 0.19 
Royalty on metals0.01 0.01 
Unit net cash costs2.24 2.45 
DD&A0.40 0.35 
Noncash and other costs, net0.08 b0.07 
Total unit costs2.72 2.87 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.11 0.11 
Gross profit per pound$1.24 $1.09 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$2,632 $1,542 $239 
Treatment charges(118)— — 
Royalty on metals(4)— — 
Noncash and other costs, net— 50 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		74 — — 
Eliminations and other— (2)— 
South America mining2,584 1,590 239 
Other miningc
11,744 8,173 675 
Corporate, other & eliminations(3,202)(3,051)32 
As reported in our consolidated financial statements$11,126 $6,712 $946 
     
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 2.1 million ounces ($23.20 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.
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.

b.Includes charges totaling $19 million ($0.03 per pound of copper) for feasibility studies.
c.Represents the combined total for our other mining operations as presented in Note 9.




59
Table of Contents

South America Mining Product Revenues, Production Costs and Unit Net Cash Costs
Six Months Ended June 30, 2022
(In Millions)By-ProductCo-Product Method
MethodCopper
Othera
Total
Revenues, excluding adjustments$2,204 $2,204 $240 $2,444 
Site production and delivery, before net noncash
    and other costs shown below		1,352 1,244 135 1,379 
By-product credits(213)— — — 
Treatment charges84 84 — 84 
Royalty on metals6 5 1 6 
Net cash costs1,229 1,333 136 1,469 
DD&A198 179 19 198 
Metals inventory adjustments11 10 1 11 
Noncash and other costs, net35 33 2 35 
Total costs1,473 1,555 158 1,713 
Other revenue adjustments, primarily for pricing
    on prior period open sales		35 35 — 35 
Gross profit$766 $684 $82 $766 
Copper sales (millions of recoverable pounds)552 552 
Gross profit per pound of copper:
Revenues, excluding adjustments$4.00 $4.00 
Site production and delivery, before net noncash
    and other costs shown below		2.45 2.26 
By-product credits(0.38)— 
Treatment charges0.15 0.15 
Royalty on metals0.01 0.01 
Unit net cash costs2.23 2.42 
DD&A0.36 0.32 
Metals inventory adjustments0.02 0.02 
Noncash and other costs, net0.06 0.06 
Total unit costs2.67 2.82 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.06 0.06 
Gross profit per pound$1.39 $1.24 
Reconciliation to Amounts Reported
Metals
ProductionInventory
Revenuesand DeliveryDD&AAdjustments
Totals presented above$2,444 $1,379 $198 $11 
Treatment charges(84)— — — 
Royalty on metals(6)— — — 
Noncash and other costs, net— 35 — — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		35 — — — 
Eliminations and other1 (2)1 — 
South America mining2,390 1,412 199 11 
Other miningb
13,124 8,184 765 7 
Corporate, other & eliminations(3,495)(3,443)32 — 
As reported in our consolidated financial statements$12,019 $6,153 $996 $18 
a.Includes silver sales of 2.1 million ounces ($23.31 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 as presented in Note 9.

60
      
Nine Months Ended September 30, 2016     
(In millions) By-Product Co-Product Method 
  Method Copper 
Othera
 Total 
Revenues, excluding adjustments $2,115
 $2,115
 $129
 $2,244
 
Site production and delivery, before net noncash         
and other costs shown below 1,199
 1,140
 88
 1,228
 
By-product credits (100) —
 —
 —
 
Treatment charges 230
 230
 —
 230
 
Royalty on metals 5
 5
 —
 5
 
Net cash costs 1,334
 1,375
 88
 1,463
 
DD&A 401
 379
 22
 401
 
Noncash and other costs, net 15
 14
 1
 15
 
Total costs 1,750
 1,768
 111
 1,879
 
Revenue adjustments, primarily for pricing         
on prior period open sales 9
 9
 —
 9
 
Gross profit $374
 $356
 $18
 $374
 
          
Copper sales (millions of recoverable pounds) 973
 973
     
          
Gross profit per pound of copper:     
          
Revenues, excluding adjustments $2.17
 $2.17
     
Site production and delivery, before net noncash         
and other costs shown below 1.23
 1.17
     
By-product credits (0.10) —
     
Treatment charges 0.24
 0.24
     
Royalty on metals —
 —
     
Unit net cash costs 1.37
 1.41
     
DD&A 0.41
 0.39
     
Noncash and other costs, net 0.02
 0.02
     
Total unit costs 1.80
 1.82
     
Revenue adjustments, primarily for pricing         
on prior period open sales 0.01
 0.01
     
Gross profit per pound $0.38
 $0.36
     
          
Reconciliation to Amounts Reported         
(In millions)   Production     
  Revenues and Delivery DD&A   
Totals presented above $2,244
 $1,228
 $401
   
Treatment charges (230) —
 —
   
Royalty on metals (5) —
 —
   
Noncash and other costs, net —
 15
 —
   
Revenue adjustments, primarily for pricing         
on prior period open sales 9
 —
 —
   
Eliminations and other 1
 (3) 1
   
South America mining 2,019
 1,240
 402
   
Other miningb
 9,694
 7,735

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


Table of Contents

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

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

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

Table of Contents

Indonesia Mining Product Revenues, Production Costs and Unit Net Cash (Credits) Costs
Three Months Ended June 30, 2023
(In Millions)By-ProductCo-Product Method
MethodCopperGold
Silvera
Total
Revenues, excluding adjustments$1,473 $1,473 $956 $45 $2,474 
Site production and delivery, before net noncash
    and other costs shown below		725 432 280 13 725 
Gold and silver credits(1,002)— — — — 
Treatment charges151 90 58 3 151 
Royalty on metals92 55 36 1 92 
Net cash (credits) costs(34)577 374 17 968 
DD&A275 164 106 5 275 
Noncash and other costs, net77 b46 30 1 77 
Total costs318 787 510 23 1,320 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(54)(54)1 — (53)
Gross profit$1,101 $632 $447 $22 $1,101 
Copper sales (millions of recoverable pounds)386 386 
Gold sales (thousands of recoverable ounces)492 
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments$3.82 $3.82 $1,942 
Site production and delivery, before net noncash
    and other costs shown below		1.88 1.12 569 
Gold and silver credits(2.60)— — 
Treatment charges0.39 0.23 118 
Royalty on metals0.24 0.14 72 
Unit net cash (credits) costs(0.09)1.49 759 
DD&A0.71 0.42 216 
Noncash and other costs, net0.20 b0.12 60 
Total unit costs0.82 2.03 1,035 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.14)(0.14)1 
Gross profit per pound/ounce$2.86 $1.65 $908 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$2,474 $725 $275 
Treatment charges(92)59 

— 
Royalty on metals(92)— — 
Noncash and other costs, net— 77 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(53)— — 
Eliminations and other— (3)— 
Indonesia mining2,237 858 275 
Other miningc
5,109 4,244 253 
Corporate, other & eliminations(1,609)(1,554)19 
As reported in our consolidated financial statements$5,737 $3,548 $547 
     
Nine Months Ended September 30, 2017    
(In millions) By-Product Co-Product Method
  Method Copper Gold 
Silvera
 Total
Revenues, excluding adjustments $1,772
 $1,772
 $1,206
 $32
 $3,010
Site production and delivery, before net noncash          
and other costs shown below 1,076
 634
 431
 11
 1,076
Gold and silver credits (1,247) —
 —
 —
 —
Treatment charges 170
 100
 68
 2
 170
Export duties 62
 36
 25
 1
 62
Royalty on metals 106
 60
 45
 1
 106
Net cash costs 167
 830
 569
 15
 1,414
DD&A 372
 219
 149
 4
 372
Noncash and other costs, net 140
b 
82
 56
 2
 140
Total costs 679
 1,131
 774
 21
 1,926
Revenue adjustments, primarily for pricing on          
prior period open sales 39
 39
 9
 —
 48
PT Smelting intercompany loss (17) (10) (7) —
 (17)
Gross profit $1,115
 $670
 $434
 $11
 $1,115
           
Copper sales (millions of recoverable pounds) 630
 630
      
Gold sales (thousands of recoverable ounces)     956
    
           
Gross profit per pound of copper/per ounce of gold:      
           
Revenues, excluding adjustments $2.81
 $2.81
 $1,261
    
Site production and delivery, before net noncash          
and other costs shown below 1.71
 1.01
 451
    
Gold and silver credits (1.98) —
 —
    
Treatment charges 0.27
 0.16
 71
    
Export duties 0.10
 0.06
 26
    
Royalty on metals 0.16
 0.09
 47
    
Unit net cash costs 0.26
 1.32
 595
    
DD&A 0.59
 0.35
 156
    
Noncash and other costs, net 0.22
b 
0.13
 58
    
Total unit costs 1.07
 1.80
 809
    
Revenue adjustments, primarily for pricing on          
prior period open sales 0.06
 0.06
 9
    
PT Smelting intercompany loss (0.03) (0.01) (7)    
Gross profit per pound/ounce $1.77
 $1.06
 $454
    
           
Reconciliation to Amounts Reported          
(In millions)   Production      
  Revenues and Delivery DD&A    
Totals presented above $3,010
 $1,076
 $372
    
Treatment charges (170) —
 —
    
Export duties (62) —
 —
    
Royalty on metals (106) —
 —
    
Noncash and other costs, net —
 140
 —
    
Revenue adjustments, primarily for pricing on          
prior period open sales 48
 —
 —
    
PT Smelting intercompany loss —
 17
 —
    
Indonesia mining 2,720
 1,233
 372
    
Other miningc
 10,898
 8,588
 808
    
Corporate, other & eliminations (2,256) (2,324) 77
    
As reported in FCX’s consolidated financial statements $11,362
 $7,497
 $1,257
    
           
a.Includes silver sales of 1.9 million ounces ($16.70 per ounce average realized price).
b.Includes $112 million ($0.18 per pound of copper) of costs charged directly to production and delivery costs as a result of workforce reductions.
c.Represents the combined total for our other mining operations, including North America copper mines, South America mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10.

a.Includes silver sales of 1.8 million ounces ($23.07 per ounce average realized price).

b.Includes a charge totaling $55 million ($0.14 per pound of copper) associated with a potential administrative fine and charges totaling $12 million ($0.03 per pound of copper) for feasibility and optimization studies.

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



61
Table of Contents

Indonesia Mining Product Revenues, Production Costs and Unit Net Cash (Credits) Costs
Three Months Ended June 30, 2022
(In Millions)By-ProductCo-Product Method
MethodCopperGold
Silvera
Total
Revenues, excluding adjustments$1,582 $1,582 $865 $32 $2,479 
Site production and delivery, before net noncash
    and other costs shown below		587 374 205 8 587 
Gold and silver credits(888)— — — — 
Treatment charges98 63 34 1 98 
Export duties85 54 30 1 85 
Royalty on metals108 72 35 1 108 
Net cash (credits) costs(10)563 304 11 878 
DD&A262 167 91 4 262 
Noncash and other costs, net3 b2 1 — 3 
Total costs255 732 396 15 1,143 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(201)(201)(8)(1)(210)
PT Smelting intercompany profit26 17 9 — 26 
Gross profit$1,152 $666 $470 $16 $1,152 
Copper sales (millions of recoverable pounds)410 410 
Gold sales (thousands of recoverable ounces)474 
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments$3.86 $3.86 $1,827 
Site production and delivery, before net noncash
    and other costs shown below		1.43 0.91 433 
Gold and silver credits(2.17)— — 
Treatment charges0.24 0.15 72 
Export duties0.21 0.13 63 
Royalty on metals0.27 0.18 74 
Unit net cash (credits) costs(0.02)1.37 642 
DD&A0.63 0.41 193 
Noncash and other costs, net0.01 0.01 2 
Total unit costs0.62 1.79 837 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(0.49)(0.49)(17)
PT Smelting intercompany profit0.06 0.04 19 
Gross profit per pound/ounce$2.81 $1.62 $992 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$2,479 $587 $262 
Treatment charges(98)— — 
Export duties(85)— — 
Royalty on metals(108)— — 
Noncash and other costs, net— 3 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		(210)— — 
PT Smelting intercompany profit— (26)— 
Indonesia mining1,978 564 262 
Other miningb
5,209 4,167 229 
Corporate, other & eliminations(1,771)(1,728)16 
As reported in our consolidated financial statements$5,416 $3,003 $507 
a.Includes silver sales of 1.6 million ounces ($20.71 per ounce average realized price).
b.Represents the combined total for our other segments as presented in Note 9.




62
      
Nine Months Ended September 30, 2016     
(In millions) By-Product Co-Product Method 
  Method Copper 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.

Table of Contents

Indonesia Mining Product Revenues, Production Costs and Unit Net Cash (Credits) Costs
Six Months Ended June 30, 2023
(In Millions)By-ProductCo-Product Method
MethodCopperGold
Silvera
Total
Revenues, excluding adjustments$2,238 $2,238 $1,474 $73 $3,785 
Site production and delivery, before net noncash
    and other costs shown below		1,124 665 438 21 1,124 
Gold and silver credits(1,564)— — — — 
Treatment charges224 133 87 4 224 
Export duties18 10 7 1 18 
Royalty on metals150 92 55 3 150 
Net cash (credits) costs(48)900 587 29 1,516 
DD&A423 250 165 8 423 
Noncash and other costs, net107 b63 42 2 107 
Total costs482 1,213 794 39 2,046 
Other revenue adjustments, primarily for pricing
    on prior period open sales		114 114 18 (1)131 
PT Smelting intercompany profit112 66 44 2 112 
Gross profit$1,982 $1,205 $742 $35 $1,982 
Copper sales (millions of recoverable pounds)584 584 
Gold sales (thousands of recoverable ounces)758 
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments$3.83 $3.83 $1,946 
Site production and delivery, before net noncash
    and other costs shown below		1.93 1.14 578 
Gold and silver credits(2.68)— — 
Treatment charges0.38 0.23 115 
Export duties0.03 0.02 9 
Royalty on metals0.26 0.15 73 
Unit net cash (credits) costs(0.08)1.54 775 
DD&A0.72 0.43 217 
Noncash and other costs, net0.18 b0.11 55 
Total unit costs0.82 2.08 1,047 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.19 0.19 22 
PT Smelting intercompany profit0.19 0.11 58 
Gross profit per pound/ounce$3.39 $2.05 $979 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$3,785 $1,124 $423 
Treatment charges(143)81 — 
Export duties(18)— — 
Royalty on metals(150)— — 
Noncash and other costs, net— 107 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		131 — — 
PT Smelting intercompany profit— (112)— 
Eliminations and other— (7)— 
Indonesia mining3,605 1,193 423 
Other miningc
10,723 8,570 491 
Corporate, other & eliminations(3,202)(3,051)32 
As reported in our consolidated financial statements$11,126 $6,712 $946 
a.Includes silver sales of 2.7 million ounces ($23.28 per ounce average realized price).
b.Includes a charge of $55 million ($0.09 per pound of copper) associated with a potential administrative fine and charges totaling $25 million ($0.04 per pound of copper) for feasibility and optimization studies.
c.Represents the combined total for our other mining operations as presented in Note 9.

63
Table of Contents
Indonesia Mining Product Revenues, Production Costs and Unit Net Cash (Credits) Costs
Six Months Ended June 30, 2022
(In Millions)By-ProductCo-Product Method
MethodCopperGold
Silvera
Total
Revenues, excluding adjustments$3,184 $3,184 $1,638 $69 $4,891 
Site production and delivery, before net noncash
    and other costs shown below		1,121 730 375 16 1,121 
Gold and silver credits(1,710)— — — — 
Treatment charges191 124 64 3 191 
Export duties164 107 55 2 164 
Royalty on metals201 135 64 2 201 
Net cash (credits) costs(33)1,096 558 23 1,677 
DD&A510 332 171 7 510 
Noncash and other costs, net30 b20 10 — 30 
Total costs507 1,448 739 30 2,217 
Other revenue adjustments, primarily for pricing
    on prior period open sales		32 32 3 — 35 
PT Smelting intercompany loss(27)(17)(9)(1)(27)
Gross profit$2,682 $1,751 $893 $38 $2,682 
Copper sales (millions of recoverable pounds)789 789 
Gold sales (thousands of recoverable ounces)880 
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments$4.04 $4.04 $1,861 
Site production and delivery, before net noncash
    and other credits shown below		1.42 0.92 426 
Gold and silver credits(2.17)— — 
Treatment charges0.24 0.16 73 
Export duties0.21 0.14 63 
Royalty on metals0.26 0.17 72 
Unit net cash (credits) costs(0.04)1.39 634 
DD&A0.64 0.42 194 
Noncash and other costs, net0.04 b0.03 11 
Total unit costs0.64 1.84 839 
Other revenue adjustments, primarily for pricing
    on prior period open sales		0.04 0.04 3 
PT Smelting intercompany loss(0.03)(0.02)(10)
Gross profit per pound/ounce$3.41 $2.22 $1,015 
Reconciliation to Amounts Reported
Production
Revenuesand DeliveryDD&A
Totals presented above$4,891 $1,121 $510 
Treatment charges(191)— — 
Export duties(164)— — 
Royalty on metals(201)— — 
Noncash and other costs, net12 42 — 
Other revenue adjustments, primarily for pricing
    on prior period open sales		35 — — 
PT Smelting intercompany loss— 27 — 
Indonesia mining4,382 1,190 510 
Other miningc
11,132 8,406 454 
Corporate, other & eliminations(3,495)(3,443)32 
As reported in our consolidated financial statements$12,019 $6,153 $996 
a.Includes silver sales of 3.1 million ounces ($22.18 per ounce average realized price).
b.Includes charges of $41 million ($0.05 per pound of copper) associated with a settlement of an administrative fine levied by the Indonesia government (refer to Note 8) and $18 million ($0.02 per pound of copper) to reserve for exposure associated with export duties in prior periods, partly offset by a credit of $30 million ($0.04 per pound of copper) associated with adjustments to prior year treatment and refining charges.
c.Represents the combined total for our other mining operations as presented in Note 9.
64
Table of Contents
Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs
Three Months Ended June 30,
(In Millions)20232022
Revenues, excluding adjustmentsa
$156 $151 
Site production and delivery, before net noncash
    and other costs shown below		101 78 
Treatment charges and other6 7 
Net cash costs107 85 
DD&A14 18 
Noncash and other costs, net4 

2 
Total costs125 105 
Gross profit$31 $46 
Molybdenum sales (millions of recoverable pounds)a
7 8 
Gross profit per pound of molybdenum:
Revenues, excluding adjustmentsa
$23.28 $18.87 
Site production and delivery, before net noncash
    and other costs shown below		15.13 9.77 
Treatment charges and other0.86 0.85 
Unit net cash costs15.99 10.62 
DD&A2.01 2.27 
Noncash and other costs, net0.59 

0.30 
Total unit costs18.59 13.19 
Gross profit per pound$4.69 $5.68 
Reconciliation to Amounts Reported
Production
Three Months Ended June 30, 2023Revenuesand DeliveryDD&A
Totals presented above$156 $101 $14 
Treatment charges and other(6)— — 
Noncash and other costs, net— 4 — 
Molybdenum mines150 105 14 
Other miningb
7,196 4,997 514 
Corporate, other & eliminations(1,609)(1,554)19 
As reported in our consolidated financial statements$5,737 $3,548 $547 
Three Months Ended June 30, 2022
Totals presented above$151 $78 $18 
Treatment charges and other(7)— — 
Noncash and other costs, net— 2 — 
Molybdenum mines144 80 18 
Other miningb
7,043 4,651 473 
Corporate, other & eliminations(1,771)(1,728)16 
As reported in our consolidated financial statements$5,416 $3,003 $507 
         
 Three Months Ended September 30,   
(In millions)2017 2016     
         
Revenues, excluding adjustmentsa
$72
 $51
     
Site production and delivery, before net noncash
 and other costs shown below
56
 53
     
Treatment charges and other7
 5
     
Net cash costs63
 58
     
DD&A20
 15
     
Noncash and other costs, net2
 4
     
Total costs85
 77
     
Gross loss$(13) $(26)     
         
Molybdenum sales (millions of recoverable pounds)a
8
 5
     
         
Gross loss per pound of molybdenum:   
         
Revenues, excluding adjustmentsa
$9.02
 $9.08
     
Site production and delivery, before net noncash
 and other costs shown below
7.05
 9.42
     
Treatment charges and other0.85
 0.86
     
Unit net cash costs7.90
 10.28
     
DD&A2.44
 2.63
     
Noncash and other costs, net0.28
 0.77
     
Total unit costs10.62
 13.68
     
Gross loss per pound$(1.60) $(4.60)     
         
Reconciliation to Amounts Reported        
(In millions)        
         
   Production     
Three Months Ended September 30, 2017Revenues and Delivery DD&A   
Totals presented above$72
 $56
 $20
   
Treatment charges and other(7) —
 —
   
Noncash and other costs, net—
 2
 —
   
Molybdenum mines65
 58
 20
   
Other miningb
4,949
 3,497
 375
   
Corporate, other & eliminations(704) (753) 23
   
As reported in FCX’s consolidated financial statements$4,310
 $2,802
 $418
   
         
Three Months Ended September 30, 2016        
Totals presented above$51
 $53
 $15
   
Treatment charges and other(5) —
 —
   
Noncash and other costs, net—
 4
 —
   
Molybdenum mines46
 57
 15
   
Other miningb
4,123
 2,988
 382
   
Corporate, other & eliminations(292) (516) 246
   
As reported in FCX’s consolidated financial statements$3,877
 $2,529
 $643
   
         
a.Reflects sales of the Molybdenum mines’ production to our molybdenum sales company at market-based pricing. On a consolidated basis, realizations are based on the actual contract terms for sales to third parties; as a result, our consolidated average realized price per pound of molybdenum will differ from the amounts reported in this table.
a.Reflects sales of the Molybdenum mines’ production to our molybdenum sales company at market-based pricing. On a consolidated basis, realizations are based on the actual contract terms for sales to third parties; as a result, our consolidated average realized price per pound of molybdenum will differ from the amounts reported in this table.
b.Represents the combined total for our other mining operations, including North America copper mines, South America mining, Indonesia mining, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10. Also includes amounts associated with our molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.

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






65
Table of Contents

Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs
Six Months Ended June 30,
(In Millions)20232022
Revenues, excluding adjustmentsa
$386 $285 
Site production and delivery, before net noncash
    and other costs shown below		192 150 
Treatment charges and other13 13 
Net cash costs205 163 
DD&A34 34 
Noncash and other costs, net9 5 
Total costs248 202 
Gross profit$138 $83 
Molybdenum sales (millions of recoverable pounds)a
15 15 
Gross profit per pound of molybdenum:
Revenues, excluding adjustmentsa
$26.36 $18.81 
Site production and delivery, before net noncash
    and other costs shown below		13.10 9.90 
Treatment charges and other0.85 0.85 
Unit net cash costs13.95 10.75 
DD&A2.32 2.27 
Noncash and other costs, net0.64 0.34 
Total unit costs16.91 13.36 
Gross profit per pound$9.45 $5.45 
Reconciliation to Amounts Reported
Production
Six months ended June 30, 2023Revenuesand DeliveryDD&A
Totals presented above$386 $192 $34 
Treatment charges and other(13)— — 
Noncash and other costs, net— 9 — 
Molybdenum mines373 201 34 
Other miningb
13,955 9,562 880 
Corporate, other & eliminations(3,202)(3,051)32 
As reported in our consolidated financial statements$11,126 $6,712 $946 
Six months ended June 30, 2022
Totals presented above$285 $150 $34 
Treatment charges and other(13)— — 
Noncash and other costs, net— 5 — 
Molybdenum mines272 155 34 
Other miningb
15,242 9,441 930 
Corporate, other & eliminations(3,495)(3,443)32 
As reported in our consolidated financial statements$12,019 $6,153 $996 
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.


 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.
66
Table of Contents

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; global market conditions; ore grades and milling rates,rates; production and sales volumes,volumes; unit net cash costs and operating costs; capital expenditures; 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 its IUPK; extension of PT-FI’s IUPK beyond 2041 and export licenses; payment of export duties; export volumes; our commitment to deliver responsibly produced copper and molybdenum, including plans to implement, validate and maintain validation of our operating sites under specific frameworks; execution of our energy and climate strategies and the underlying assumptions and estimated impacts on our business related thereto; achievement of 2030 climate targets and 2050 net zero aspiration; improvements in operating procedures and technology innovations and applications; exploration efforts and results,results; development and production activities, rates and costs, liquidity,costs; future organic growth opportunities; tax rates,rates; 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 and environmental proceedings; debt repurchases; 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,” “intends,” “likely,” “will,” “should,” “could,” “to be,” “potential”“potential,” “assumptions,” “guidance,” “aspirations,” “future,” “commitments,” “pursues,” “initiatives,” “objectives,” “opportunities,” “strategy” 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 are at the discretion of the Board and management, respectively, and are subject to a number of factors, including not exceeding our net debt target, capital availability, our financial results, cash requirements, 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, and prices of the commodities we produce, primarily copper; PT-FI’s ability to continue to export and sell copper goldconcentrates and molybdenum; mine sequencing;anode slimes; changes in export duties; the Indonesia government’s approval of a deferred schedule for completion of additional domestic smelting capacity in Indonesia; production rates; timing of shipments; price and availability of consumables and components we purchase as well as constraints on supply and logistics, and transportation services; changes in our cash requirements, financial position, financing or investment plans; changes in general market, economic, regulatory or industry conditions; reductions in liquidity and access to capital; changes in tax laws and regulations, including the impact of the Act; any major public health crisis; political and social risks, including the potential effects of costviolence in Indonesia, civil unrest in Peru, and capital expenditure reductionsrelations with local communities and production curtailments on financialIndigenous Peoples; operational risks inherent in mining, with higher inherent risks in underground mining; mine sequencing; changes in mine plans or operational modifications, delays, deferrals or cancellations; results and cash flow;of technical, economic or feasibility studies; potential inventory adjustments; potential impairment of long-lived mining assets; satisfaction of requirements in accordance with PT-FI's IUPK to extend mining rights from 2031 through 2041; discussions relating to the outcomeextension of negotiationsPT-FI’s IUPK beyond 2041; cybersecurity incidents; labor relations, including labor-related work stoppages and costs; compliance with the Indonesian government regarding PT-FI’s long-term operating rights; the potential effects of violence in Indonesia generallyapplicable environmental, health and in the province of Papua; industry risks; regulatory changes (including adoption of financial assurance regulations as proposed by the U.S. Environmental Protection Agency under CERCLA for the hard rock mining industry); political risks; labor relations;safety laws and regulations; weather- and climate-related risks; environmental risks;risks, including availability of secure water supplies, 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 on2022 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 innovations, some aspects of which we may not be able to control. Further, we may make changes to our business plans that could affect our results. We caution investors that we do not intendundertake no obligation to update any forward-looking statements, more frequently than quarterlywhich speak only as of the date made, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes, and we undertake no obligation to update any forward-looking statements.changes.

67
Table of Contents

This report on Form 10-Q also contains measures such as net debt and unit net cash costs per pound of copper and molybdenum, which are not recognized under U.S. GAAP. Refer to “Operations – Unit Net Cash Costs” for further discussion of unit net cash costs associated with our operating divisions, and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements. Refer to “Net Debt” for reconciliations of debt and consolidated cash and cash equivalents to net debt.
Item 3.Quantitative and Qualitative Disclosures About Market Risk.


Item 3.Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our market risks during the nine-monthsix-month period ended SeptemberJune 30, 2017.2023. For additional information on market risks, refer to “Disclosures About Market Risks” included in Part II, Items 7. and 7A. of our annual report on2022 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 June 30, 2023.

(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 SeptemberJune 30, 2017.2023, 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 on2022 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 2022 Form 10-K, except as described in Note 8 herein.


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.


Table of Contents

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 on2022 Form 10-K for the year ended December 31, 2016, except as disclosed in Part II, 10-K.

68
Table of Contents
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 SeptemberJune 30, 2017.2023.


There were noThe following table sets forth information with respect to shares of FCX common stock purchased by us during the three months ended SeptemberJune 30, 2017.2023, 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
April 1-30, 2023— $— — $3,164,642,228 
May 1-31, 2023— $— — $3,164,642,228 
June 1-30, 2023— $— — $3,164,642,228 
Total— $— — 
a.On November 1, 2021, our Board approved a share repurchase program authorizing repurchases of up to $3.0 billion of our common stock. On July 21, 2008,19, 2022, our Board of Directors approvedauthorized an increase in our open-marketthe share purchaserepurchase program for up to 30 million shares. There have been no purchases under this$5.0 billion. 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 were 23.7 million shares that could still be purchased under the 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.

69
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
4.115.1
Indenture dated as of February 13, 2012, between FCX and U.S. Bank National Association, as Trustee (relating to the 3.55% Senior Notes due 2022, the 2.30% Senior Notes due 2017, the 4.00% Senior Notes due 2021, the 4.55% Senior Notes due 2024, and the 5.40% Senior Notes due 2034).8-K001-11307-012/13/2012
4.2
Third Supplemental Indenture dated as of February 13, 2012, between FCX and U.S. Bank National Association, as Trustee (relating to the 3.55% Senior Notes due 2022).8-K001-11307-012/13/2012
4.3
Fourth Supplemental Indenture dated as of May 31, 2013, among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 3.55% Senior Notes due 2022, the 2.30% Senior Notes due 2017, the 4.00% Senior Notes due 2021, the 4.55% Senior Notes due 2024, and the 5.40% Senior Notes due 2034).8-K001-11307-016/3/2013
4.4
Fifth Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 2.30% Senior Notes due 2017).8-K001-11307-0111/14/2014
4.5
Sixth Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 4.00% Senior Notes due 2021).8-K001-11307-0111/14/2014
4.6
Seventh Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as (relating to the 4.55% Senior Notes due 2024).8-K001-11307-0111/14/2014
4.7
Eighth Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 5.40% Senior Notes due 2034).8-K001-11307-0111/14/2014
4.8
Indenture dated as of March 7, 2013, between FCX and U.S. Bank National Association, as Trustee (relating to the 2.375% Senior Notes due 2018, the 3.100% Senior Notes due 2020, the 3.875% Senior Notes due 2023, and the 5.450% Senior Notes due 2043).8-K001-11307-013/7/2013
Table of Contents

Filed
Exhibitwith thisIncorporated by Reference
NumberExhibit TitleForm 10-QFormFile No.Date Filed
4.9
Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.5% Senior Notes due 2020 and the 6.875% Senior Notes due 2023).8-K001-314703/13/2007
4.10
Sixteenth Supplemental Indenture dated as of October 26, 2012 to the Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto and Wells Fargo Bank, N.A., as Trustee (relating to the 6.5% Senior Notes due 2020).8-K001-3147010/26/2012
4.11
Seventeenth Supplemental Indenture dated as of October 26, 2012 to the Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto and Wells Fargo Bank, N.A., as Trustee (relating to the 6.875% Senior Notes due 2023).8-K001-3147010/26/2012
4.12
Eighteenth Supplemental Indenture dated as of May 31, 2013 to the Indenture dated as of March 13, 2007, among Freeport-McMoRan Oil & Gas LLC, as Successor Issuer, FCX Oil & Gas Inc., as Co-Issuer, FCX, as Parent Guarantor, Plains Exploration & Production Company, as Original Issuer, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.5% Senior Notes due 2020 and the 6.875% Senior Notes due 2023).8-K001-11307-016/3/2013
4.13
Nineteenth Supplemental Indenture dated as of September 30, 2016 to the Indenture dated as of March 13, 2007, among Freeport-McMoRan Oil & Gas LLC, as Successor Issuer, FCX Oil & Gas Inc., as Co-Issuer, FMSTP Inc., as Additional Co-Issuer, FCX, as Parent Guarantor, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.50% Senior Notes due 2020 and the 6.875% Senior Notes due 2023).10-Q001-11307-0111/9/2016
4.14
Twentieth Supplemental Indenture dated as of December 13, 2016 to the Indenture dated as of March 13, 2007, among Freeport-McMoRan Oil & Gas LLC, as Successor Issuer, FCX Oil & Gas LLC, as Co-Issuer, FMSTP Inc., as Additional Co-Issuer, FCX, as Parent Guarantor, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.50% Senior Notes due 2020 and the 6.875% Senior Notes due 2023).8-K001-11307-0112/13/2016
4.15
Form of Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and The Chase Manhattan Bank, as Trustee (relating to the 7.125% Senior Notes due 2027, the 9.50% Senior Notes due 2031, and the 6.125% Senior Notes due 2034).S-3333-364159/25/1997
4.16
Form of 7.125% Debenture due November 1, 2027 of Phelps Dodge Corporation issued on November 5, 1997, pursuant to the Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and The Chase Manhattan Bank, as Trustee (relating to the 7.125% Senior Notes due 2027).8-K01-0008211/3/1997
4.17
Form of 9.5% Note due June 1, 2031 of Phelps Dodge Corporation issued on May 30, 2001, pursuant to the Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and First Union National Bank, as successor Trustee (relating to the 9.50% Senior Notes due 2031).8-K01-000825/30/2001
4.18
Form of 6.125% Note due March 15, 2034 of Phelps Dodge Corporation issued on March 4, 2004, pursuant to the Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and First Union National Bank, as successor Trustee (relating to the 6.125% Senior Notes due 2034).10-K01-000823/7/2005
Table of Contents

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-K001-11307-012/15/2023
31.1
Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d – 14(a).X
31.2
Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d – 14(a).X
32.1
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.X
32.2
Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350.X
95.1
Mine Safety and Health Administration Safety Data.X
Table of Contents

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

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

70
Table of Contents


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:/s/ Ellie L. Mikes
Ellie L. Mikes
By:/s/ C. Donald Whitmire, Jr.
C. Donald Whitmire, Jr.
Vice President and Chief Accounting Officer
Controller - Financial Reporting(authorized signatory
(authorized signatory
and Principal Accounting Officer)






Date:  November 7, 2017August 3, 2023

S-1