United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


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

For the quarterly period ended ~~June 30, 2022~~March 31, 2023


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

For the transition period from to

Commission file number: 001-11307-01

Freeport-McMoRan Inc.

(Exact name of registrant as specified in its charter)


Delaware						74-2480931
(State or other jurisdiction of						(I.R.S. Employer Identification No.)
incorporation or organization)

333 North Central Avenue

Phoenix

85004-2189

(Address of principal executive offices)

(Zip Code)

(602) 366-8100

(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.10 per share	FCX	The 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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). ☑ Yes ☐ 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 growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	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). ☐ Yes ☑ No

On ~~July 29, 2022,~~April 28, 2023, there were issued and outstanding ~~1,429,270,314~~1,433,286,280 shares of the registrant’s common stock, par value $0.10 per share.

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 Income (Unaudited)			4

Consolidated Statements of Comprehensive Income (Unaudited)			5

Consolidated Statements of Cash Flows (Unaudited)			6

Consolidated Statements of Equity (Unaudited)			7

Notes to Consolidated Financial Statements (Unaudited)			98

Report of Independent Registered Public Accounting Firm			2320

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2421

Item 3. Quantitative and Qualitative Disclosures About Market Risk			6552

Item 4. Controls and Procedures			6552

Part II. Other Information			6552

Item 1. Legal Proceedings			6552

Item 1A. Risk Factors			6552

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			6653

Item 4. Mine Safety Disclosures			6653



Item 6. Exhibits			6754

Signature			S-1

Table of Contents

Part I.FINANCIAL INFORMATION

Item 1.Financial Statements.

Freeport-McMoRan Inc.

CONSOLIDATED BALANCE SHEETS (Unaudited)


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In millions)					(In millions)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	9,492	$	8,068	Cash and cash equivalents	$	6,852	$	8,146
Trade accounts receivable	Trade accounts receivable	977		1,168		Trade accounts receivable	1,134		1,336
Income and other tax receivables	Income and other tax receivables	435		574		Income and other tax receivables	550		459

Inventories:	Inventories:					Inventories:
Materials and supplies, net	Materials and supplies, net	1,776		1,669		Materials and supplies, net	2,056		1,964
Mill and leach stockpiles	Mill and leach stockpiles	1,387		1,170		Mill and leach stockpiles	1,440		1,383
Product	Product	1,507		1,658		Product	2,241		1,833
Other current assets	Other current assets	608		523		Other current assets	473		492

Total current assets	Total current assets	16,182		14,830		Total current assets	14,746		15,613
Property, plant, equipment and mine development costs, net	Property, plant, equipment and mine development costs, net	31,200		30,345		Property, plant, equipment and mine development costs, net	33,159		32,627

Long-term mill and leach stockpiles	Long-term mill and leach stockpiles	1,230		1,387		Long-term mill and leach stockpiles	1,235		1,252

Other assets	Other assets	1,501		1,460		Other assets	1,769		1,601

Total assets	Total assets	$	50,113	$	48,022	Total assets	$	50,909	$	51,093

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	3,853	$	3,495	Accounts payable and accrued liabilities	$	3,836	$	4,027
Current portion of debt		1,038		372
Accrued income taxes	Accrued income taxes	507		1,541		Accrued income taxes	846		744
Current portion of environmental and asset retirement obligations	Current portion of environmental and asset retirement obligations	317		264		Current portion of environmental and asset retirement obligations	333		320
Dividends payable	Dividends payable	217		220		Dividends payable	217		217

Current portion of debt						Current portion of debt	49		1,037
Total current liabilities	Total current liabilities	5,932		5,892		Total current liabilities	5,281		6,345
Long-term debt, less current portion	Long-term debt, less current portion	10,054		9,078		Long-term debt, less current portion	9,586		9,583
Environmental and asset retirement obligations, less current portion						Environmental and asset retirement obligations, less current portion	4,493		4,463
Deferred income taxes	Deferred income taxes	4,297		4,234		Deferred income taxes	4,305		4,269
Environmental and asset retirement obligations, less current portion		4,170		4,116
Other liabilities	Other liabilities	1,613		1,683		Other liabilities	1,596		1,562

Total liabilities	Total liabilities	26,066		25,003		Total liabilities	25,261		26,222

Equity:	Equity:					Equity:
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock	Common stock	161		160		Common stock	162		161
Capital in excess of par value	Capital in excess of par value	25,661		25,875		Capital in excess of par value	25,227		25,322
Accumulated deficit	Accumulated deficit	(5,008)		(7,375)		Accumulated deficit	(3,244)		(3,907)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(386)		(388)		Accumulated other comprehensive loss	(319)		(320)
Common stock held in treasury	Common stock held in treasury	(5,539)		(4,292)		Common stock held in treasury	(5,769)		(5,701)
Total stockholders’ equity	Total stockholders’ equity	14,889		13,980		Total stockholders’ equity	16,057		15,555
Noncontrolling interests	Noncontrolling interests	9,158		9,039		Noncontrolling interests	9,591		9,316
Total equity	Total equity	24,047		23,019		Total equity	25,648		24,871
Total liabilities and equity	Total liabilities and equity	$	50,113	$	48,022	Total liabilities and equity	$	50,909	$	51,093

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

Table of Contents

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2022		2021		2022		2021			2023		2022
		(In millions, except per share amounts)									(In millions, except per share amounts)
Revenues	Revenues	$	5,416	$	5,748	$	12,019	$	10,598	Revenues	$	5,389	$	6,603
Cost of sales:	Cost of sales:									Cost of sales:
Production and delivery	Production and delivery	3,003		3,067		6,153		5,853		Production and delivery	3,165		3,150
Depreciation, depletion and amortization	Depreciation, depletion and amortization	507		483		996		902		Depreciation, depletion and amortization	399		489

Metals inventory adjustments		18		—		18		1

Total cost of sales	Total cost of sales	3,528		3,550		7,167		6,756		Total cost of sales	3,564		3,639
Selling, general and administrative expenses	Selling, general and administrative expenses	100		87		215		187		Selling, general and administrative expenses	126		115
Mining exploration and research expenses	Mining exploration and research expenses	25		14		49		21		Mining exploration and research expenses	31		24
Environmental obligations and shutdown costs	Environmental obligations and shutdown costs	29		33		45		38		Environmental obligations and shutdown costs	67		16
Net gain on sales of assets		(2)		(3)		(2)		(3)

Total costs and expenses	Total costs and expenses	3,680		3,681		7,474		6,999		Total costs and expenses	3,788		3,794
Operating income	Operating income	1,736		2,067		4,545		3,599		Operating income	1,601		2,809
Interest expense, net	Interest expense, net	(156)		(148)		(283)		(293)		Interest expense, net	(151)		(127)
Net gain on early extinguishment of debt		8		—		8		—

Other income, net	Other income, net	11		9		42		20		Other income, net	88		31
Income before income taxes and equity in affiliated companies’ net earnings	Income before income taxes and equity in affiliated companies’ net earnings	1,599		1,928		4,312		3,326		Income before income taxes and equity in affiliated companies’ net earnings	1,538		2,713
Provision for income taxes	Provision for income taxes	(571)		(603)		(1,395)		(1,046)		Provision for income taxes	(499)		(824)
Equity in affiliated companies’ net earnings	Equity in affiliated companies’ net earnings	10		6		25		4		Equity in affiliated companies’ net earnings	10		15

Net income	Net income	1,038		1,331		2,942		2,284		Net income	1,049		1,904

Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(198)		(248)		(575)		(483)		Net income attributable to noncontrolling interests	(386)		(377)

Net income attributable to common stockholders	Net income attributable to common stockholders	$	840	$	1,083	$	2,367	$	1,801	Net income attributable to common stockholders	$	663	$	1,527

Net income per share attributable to common stockholders:	Net income per share attributable to common stockholders:									Net income per share attributable to common stockholders:
Basic	Basic	$	0.58	$	0.74	$	1.63	$	1.23	Basic	$	0.46	$	1.05
Diluted	Diluted	$	0.57	$	0.73	$	1.61	$	1.21	Diluted	$	0.46	$	1.04

Weighted-average shares of common stock outstanding:	Weighted-average shares of common stock outstanding:									Weighted-average shares of common stock outstanding:
Basic	Basic	1,447		1,467		1,451		1,465		Basic	1,433		1,455
Diluted	Diluted	1,457		1,483		1,463		1,480		Diluted	1,443		1,469

Dividends declared per share of common stock	Dividends declared per share of common stock	$	0.15	$	0.075	$	0.30	$	0.15	Dividends declared per share of common stock	$	0.15	$	0.15

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

Table of Contents

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2022		2021		2022		2021			2023		2022
		(In millions)									(In millions)
Net income	Net income	$	1,038	$	1,331	$	2,942	$	2,284	Net income	$	1,049	$	1,904

Other comprehensive income, net of taxes:	Other comprehensive income, net of taxes:									Other comprehensive income, net of taxes:

Defined benefit plans:	Defined benefit plans:									Defined benefit plans:
Actuarial losses arising during the period		—		—		—		(1)

Prior service costs arising during the period	Prior service costs arising during the period	—		—		(1)		—		Prior service costs arising during the period	—		(1)
Amortization of unrecognized amounts included in net periodic benefit costs	Amortization of unrecognized amounts included in net periodic benefit costs	2		4		4		8		Amortization of unrecognized amounts included in net periodic benefit costs	1		2
Foreign exchange losses		(1)		—		(1)		(1)
Foreign exchange gains										Foreign exchange gains	1		—

Other comprehensive income	Other comprehensive income	1		4		2		6		Other comprehensive income	2		1

Total comprehensive income	Total comprehensive income	1,039		1,335		2,944		2,290		Total comprehensive income	1,051		1,905
Total comprehensive income attributable to noncontrolling interests	Total comprehensive income attributable to noncontrolling interests	(198)		(248)		(575)		(482)		Total comprehensive income attributable to noncontrolling interests	(387)		(377)

Total comprehensive income attributable to common stockholders	Total comprehensive income attributable to common stockholders	$	841	$	1,087	$	2,369	$	1,808	Total comprehensive income attributable to common stockholders	$	664	$	1,528

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

Table of Contents

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


		Six Months Ended					Three Months Ended
		June 30,					March 31,
		2022		2021			2023		2022
		(In millions)					(In millions)
Cash flow from operating activities:	Cash flow from operating activities:					Cash flow from operating activities:
Net income	Net income	$	2,942	$	2,284	Net income	$	1,049	$	1,904
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	Depreciation, depletion and amortization	996		902		Depreciation, depletion and amortization	399		489

Metals inventory adjustments		18		1

Net gain on sales of assets		(2)		(3)

Stock-based compensation	Stock-based compensation	62		56		Stock-based compensation	53		49
Net charges for environmental and asset retirement obligations, including accretion	Net charges for environmental and asset retirement obligations, including accretion	119		94		Net charges for environmental and asset retirement obligations, including accretion	117		55
Payments for environmental and asset retirement obligations	Payments for environmental and asset retirement obligations	(120)		(110)		Payments for environmental and asset retirement obligations	(60)		(55)
Net charges for defined pension and postretirement plans	Net charges for defined pension and postretirement plans	20		1		Net charges for defined pension and postretirement plans	16		10
Pension plan contributions	Pension plan contributions	(50)		(42)		Pension plan contributions	(2)		(25)
Net gain on early extinguishment of debt		(8)		—

Deferred income taxes	Deferred income taxes	63		79		Deferred income taxes	35		48

Change in deferred profit on sales to PT Smelting						Change in deferred profit on sales to PT Smelting	(112)		53

Charges for Cerro Verde royalty dispute		—		9
Payments for Cerro Verde royalty dispute		—		(65)
Other, net	Other, net	(17)		77		Other, net	22		(26)
Changes in working capital and other:	Changes in working capital and other:					Changes in working capital and other:
Accounts receivable	Accounts receivable	314		(279)		Accounts receivable	157		(222)
Inventories	Inventories	(40)		(299)		Inventories	(457)		47
Other current assets	Other current assets	(99)		(12)		Other current assets	(20)		19
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	185		272		Accounts payable and accrued liabilities	(303)		(519)
Accrued income taxes and timing of other tax payments	Accrued income taxes and timing of other tax payments	(1,071)		505		Accrued income taxes and timing of other tax payments	156		(136)
Net cash provided by operating activities	Net cash provided by operating activities	3,312		3,470		Net cash provided by operating activities	1,050		1,691

Cash flow from investing activities:	Cash flow from investing activities:					Cash flow from investing activities:
Capital expenditures:	Capital expenditures:					Capital expenditures:
North America copper mines	North America copper mines	(276)		(95)		North America copper mines	(196)		(130)
South America	South America	(124)		(47)		South America	(100)		(56)
Indonesia mining	Indonesia mining	(759)		(576)		Indonesia mining	(449)		(379)
Indonesia smelter projects	Indonesia smelter projects	(344)		(48)		Indonesia smelter projects	(323)		(130)
Molybdenum mines	Molybdenum mines	(9)		(3)		Molybdenum mines	(9)		(1)

Other	Other	(74)		(34)		Other	(44)		(27)
Proceeds from sales of assets		96		16

Loans to PT Smelting for expansion	Loans to PT Smelting for expansion	(34)		—		Loans to PT Smelting for expansion	(24)		(9)
Acquisition of minority interest in PT Smelting		—		(33)

Other, net	Other, net	(6)		(13)		Other, net	(19)		18
Net cash used in investing activities	Net cash used in investing activities	(1,530)		(833)		Net cash used in investing activities	(1,164)		(714)

Cash flow from financing activities:	Cash flow from financing activities:					Cash flow from financing activities:
Proceeds from debt	Proceeds from debt	4,666		160		Proceeds from debt	284		604
Repayments of debt	Repayments of debt	(2,993)		(179)		Repayments of debt	(1,273)		(434)

Cash dividends and distributions paid:	Cash dividends and distributions paid:					Cash dividends and distributions paid:
Common stock	Common stock	(438)		(111)		Common stock	(217)		(220)
Noncontrolling interests	Noncontrolling interests	(513)		(93)		Noncontrolling interests	—		(204)
Treasury stock purchases	Treasury stock purchases	(1,185)		—		Treasury stock purchases	—		(541)
Contributions from noncontrolling interests	Contributions from noncontrolling interests	94		88		Contributions from noncontrolling interests	50		47
Proceeds from exercised stock options	Proceeds from exercised stock options	106		184		Proceeds from exercised stock options	31		101
Payments for withholding of employee taxes related to stock-based awards	Payments for withholding of employee taxes related to stock-based awards	(55)		(19)		Payments for withholding of employee taxes related to stock-based awards	(47)		(55)
Debt financing costs and other, net	Debt financing costs and other, net	(33)		(1)		Debt financing costs and other, net	—		(1)
Net cash (used in) provided by financing activities		(351)		29
Net cash used in financing activities						Net cash used in financing activities	(1,172)		(703)

Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents		1,431		2,666
Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents						Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents	(1,286)		274

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year		8,314		3,903
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period		$	9,745	$	6,569
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year						Cash, cash equivalents and restricted cash and cash equivalents at beginning of year	8,390		8,314
Cash, cash equivalents and restricted cash and cash equivalents at end of period						Cash, cash equivalents and restricted cash and cash equivalents at end of period	$	7,104	$	8,588

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

Table of Contents

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

THREE MONTHS ENDED ~~JUNE 30~~MARCH 31


		Stockholders’ Equity																																		Stockholders’ Equity
		Common Stock									Accum-ulated Deficit				Accumu- lated Other Compre- hensive Loss				Common Stock Held in Treasury					Total Stock-holders’ 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				Number of Shares						At Par Value				Capital in Excess of Par Value							Number of Shares						At Cost				Non- controlling Interests				Total Equity
										Accum-ulated Deficit									Accumu- lated Other Compre- hensive Loss				Total Stock-holders’ Equity																		Accum-ulated Deficit						Accumu- lated Other Compre- hensive Loss										Total Stock-holders’ Equity
			(In millions)																																	(In millions)
Balance at March 31, 2022		1,612				$	161						$	25,835			$	(5,848)			$	(387)		160			$	(4,895)	$	14,866				$	9,176		$	24,042
Balance at December 31, 2022																																		Balance at December 31, 2022		1,613							$	161						$	25,322			$	(3,907)			$	(320)		183			$	(5,701)		$	15,555		$	9,316		$	24,871

Exercised and issued stock-based awards	Exercised and issued stock-based awards	—		—				5					—				—				—					—			5					—						5		Exercised and issued stock-based awards	5				1			52				—			—			—			—			53			—			53
Stock-based compensation, including the tender of shares	Stock-based compensation, including the tender of shares	—		—				15			—				—				—		—			15			(1)				14			Stock-based compensation, including the tender of shares		—					—				46			—				—				1		(68)			(22)			(1)			(23)
Treasury stock purchases		—		—				—			—				—				17		(644)			(644)			—				(644)

Dividends	Dividends	—		—				(217)			—				—				—		—			(217)			(239)				(456)			Dividends		—					—				(217)			—				—				—		—			(217)			(137)			(354)

Contributions from noncontrolling interests	Contributions from noncontrolling interests	—		—				23			—				—				—		—			23			24				47			Contributions from noncontrolling interests		—					—				24			—				—				—		—			24			26			50

Net income attributable to common stockholders	Net income attributable to common stockholders	—		—				—			840				—				—		—			840			—				840			Net income attributable to common stockholders		—					—				—			663				—				—		—			663			—			663
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	—		—				—			—				—				—		—			—			198				198			Net income attributable to noncontrolling interests		—					—				—			—				—				—		—			—			386			386
Other comprehensive income	Other comprehensive income	—		—				—			—				1				—		—			1			—				1			Other comprehensive income		—					—				—			—				1				—		—			1			1			2
Balance at June 30, 2022		1,612		$	161			$	25,661		$	(5,008)			$	(386)			177		$	(5,539)		$	14,889		$	9,158			$	24,047
Balance at March 31, 2023																																		Balance at March 31, 2023		1,618					$	162			$	25,227		$	(3,244)			$	(319)			184		$	(5,769)		$	16,057		$	9,591		$	25,648

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 March 31, 2021 1,597 $ 160 $ 26,080 $ (10,963) $ (580) 133 $ (3,777) $ 10,920 $ 8,653 $ 19,573
Exercised and issued stock-based awards 4 — 78 — — — — 78 — 78
Stock-based compensation, including the tender of shares — — 14 — — — — 14 (1) 13
Dividends — — (111) — — — — (111) — (111)
Contributions from noncontrolling interests — — 23 — — — — 23 24 47
Net income attributable to common stockholders — — — 1,083 — — — 1,083 — 1,083
Net income attributable to noncontrolling interests — — — — — — — — 248 248
Other comprehensive income — — — — 4 — — 4 — 4
Balance at June 30, 2021 1,601 $ 160 $ 26,084 $ (9,880) $ (576) 133 $ (3,777) $ 12,011 $ 8,924 $ 20,935

~~Table of Contents~~

~~Freeport-McMoRan Inc.~~

~~CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (continued)~~

~~SIX MONTHS ENDED JUNE 30~~

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, 2021 1,603 $ 160 $ 25,875 $ (7,375) $ (388) 146 $ (4,292) $ 13,980 $ 9,039 $ 23,019
Exercised and issued stock-based awards 9 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, 2022 1,612 $ 161 $ 25,661 $ (5,008) $ (386) 177 $ (5,539) $ 14,889 $ 9,158 $ 24,047


																																				Stockholders’ Equity
		Stockholders’ Equity																																		Common Stock										Accum-ulated Deficit			Accumu- lated Other Compre- hensive Loss				Common Stock Held in Treasury						Total Stock-holders’ 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
		Number of Shares		At Par Value				Capital in Excess of Par Value									Number of Shares			At Cost						Non- controlling Interests				Total Equity											Accum-ulated Deficit							Accumu- lated Other Compre- hensive Loss								Total Stock-holders’ Equity
										Accum-ulated Deficit									Accumu- lated Other Compre- hensive Loss				Total Stock-holders’ Equity						(In millions)
			(In millions)
Balance at December 31, 2020		1,590				$	159						$	26,037			$	(11,681)			$	(583)		132			$	(3,758)		$	10,174			$	8,494		$	18,668
Balance at December 31, 2021																																		Balance at December 31, 2021		1,603			$	160				$	25,875						$	(7,375)		$	(388)				146			$	(4,292)		$	13,980		$	9,039		$	23,019

Exercised and issued stock-based awards	Exercised and issued stock-based awards	11		1				183					—				—				—					—				184				—			184			Exercised and issued stock-based awards	9			1				107			—			—				—			—			108			—			108
Stock-based compensation, including the tender of shares	Stock-based compensation, including the tender of shares	—		—				43			—				—				1		(19)			24			(4)					20		Stock-based compensation, including the tender of shares		—			—			48				—			—				2			(62)			(14)			(10)			(24)

Treasury stock purchases																																		Treasury stock purchases		—			—			—				—			—				12			(541)			(541)			—			(541)

Dividends	Dividends	—		—				(222)			—				—				—		—			(222)			(93)					(315)		Dividends		—			—			(218)				—			—				—			—			(218)			(254)			(472)

Contributions from noncontrolling interests	Contributions from noncontrolling interests	—		—				43			—				—				—		—			43			45					88		Contributions from noncontrolling interests		—			—			23				—			—				—			—			23			24			47

Net income attributable to common stockholders	Net income attributable to common stockholders	—		—				—			1,801				—				—		—			1,801			—					1,801		Net income attributable to common stockholders		—			—			—				1,527			—				—			—			1,527			—			1,527
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	—		—				—			—				—				—		—			—			483					483		Net income attributable to noncontrolling interests		—			—			—				—			—				—			—			—			377			377
Other comprehensive income (loss)		—		—				—			—				7				—		—			7			(1)					6
Balance at June 30, 2021		1,601		$	160			$	26,084		$	(9,880)			$	(576)			133		$	(3,777)		$	12,011		$	8,924				$	20,935

Other comprehensive income																																		Other comprehensive income		—			—			—				—			1				—			—			1			—			1
Balance at March 31, 2022																																		Balance at March 31, 2022		1,612			$	161		$	25,835			$	(5,848)		$	(387)			160			$	(4,895)		$	14,866		$	9,176		$	24,042

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

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Freeport-McMoRan Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1. GENERAL INFORMATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required by generally accepted accounting principles 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, ~~2021 (2021~~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. All such adjustments are, in the opinion of management, of a normal recurring nature. Operating results for the ~~six-month~~three-month period ended ~~June 30, 2022,~~March 31, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2022.~~2023.

~~Sale~~PT Freeport Indonesia (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 ~~Investments.~~FCX’s 2022 Form 10-K, in accordance ~~In second-quarter 2022, Koboltti Chemicals Holdings Limited (KCHL),~~with provisions pertaining to PT-FI’s shareholders agreement, FCX's first-quarter 2023 net income included a ~~56-percent-owned subsidiary of~~$35 million net benefit associated with PT-FI sales volumes that were attributed to FCX ~~sold all of the shares it owned in Jervois Global Limited for proceeds of $60 million. The shares were received in connection with the 2021 sale of KCHL's remaining cobalt business.~~at its previous approximate 81% economic ownership interest.

Subsequent Events. FCX evaluated events after ~~June 30, 2022,~~March 31, 2023, and through the date the consolidated financial statements were issued and determined any events and transactions occurring during this period that would require recognition or disclosure are appropriately addressed in these consolidated financial statements.

NOTE 2. EARNINGS PER SHARE

FCX calculates its basic net income per share of common stock under the two-class method and calculates its diluted net income per share of common stock using the more dilutive of the two-class method or the treasury-stock method. Basic net income per share of common stock was computed by dividing net income 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 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 antidilutive.

Reconciliations of net income and weighted-average shares of common stock outstanding for purposes of calculating basic and diluted net income per share follow (in millions, except per share amounts):


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2022		2021		2022		2021			2023		2022
Net income	Net income	$	1,038	$	1,331	$	2,942	$	2,284	Net income	$	1,049	$	1,904
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(198)		(248)		(575)		(483)		Net income attributable to noncontrolling interests	(386)		(377)

Undistributed dividends and earnings allocated to participating securities	Undistributed dividends and earnings allocated to participating securities	(4)		(4)		(5)		(4)		Undistributed dividends and earnings allocated to participating securities	(5)		(5)

Net income attributable to common stockholders	Net income attributable to common stockholders	$	836	$	1,079	$	2,362	$	1,797	Net income attributable to common stockholders	$	658	$	1,522

Basic weighted-average shares of common stock outstanding	Basic weighted-average shares of common stock outstanding	1,447		1,467		1,451		1,465		Basic weighted-average shares of common stock outstanding	1,433		1,455
Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs)	Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs)	10		16		12		15		Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs)	10		14
Diluted weighted-average shares of common stock outstanding	Diluted weighted-average shares of common stock outstanding	1,457		1,483		1,463		1,480		Diluted weighted-average shares of common stock outstanding	1,443		1,469

Basic net income per share attributable to common stockholders	Basic net income per share attributable to common stockholders	$	0.58	$	0.74	$	1.63	$	1.23	Basic net income per share attributable to common stockholders	$	0.46	$	1.05

Diluted net income per share attributable to common stockholders	Diluted net income per share attributable to common stockholders	$	0.57	$	0.73	$	1.61	$	1.21	Diluted net income per share attributable to common stockholders	$	0.46	$	1.04

~~Outstanding~~Shares associated with 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 per share of common stock. There were no shares of common stock associated with outstanding stock options excluded in ~~second-quarter 2022. Excluded shares of common stock totaled 4~~first-quarter 2023 and 2 million shares associated with outstanding stock options excluded in ~~second-quarter 2021, 1 million shares for the first six months of 2022 and 7 million shares for the first six months of 2021.~~first-quarter 2022.

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NOTE 3. INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

The components of inventories follow (in millions):


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Current inventories:	Current inventories:					Current inventories:
Total materials and supplies, neta	Total materials and supplies, neta	$	1,776	$	1,669	Total materials and supplies, neta	$	2,056	$	1,964

Mill stockpiles	Mill stockpiles	$	196	$	193	Mill stockpiles	$	222	$	216
Leach stockpiles	Leach stockpiles	1,191		977		Leach stockpiles	1,218		1,167
Total current mill and leach stockpiles	Total current mill and leach stockpiles	$	1,387	$	1,170	Total current mill and leach stockpiles	$	1,440	$	1,383

Raw materials (primarily concentrate)	Raw materials (primarily concentrate)	$	436	$	536	Raw materials (primarily concentrate)	$	392	$	443
Work-in-process	Work-in-process	155		195		Work-in-process	245		221
Finished goods		916		927
Finished goodsb						Finished goodsb	1,604		1,169
Total product	Total product	$	1,507	$	1,658	Total product	$	2,241	$	1,833

Long-term inventories:	Long-term inventories:					Long-term inventories:
Mill stockpiles	Mill stockpiles	$	201	$	226	Mill stockpiles	$	206	$	199
Leach stockpiles	Leach stockpiles	1,029		1,161		Leach stockpiles	1,029		1,053
Total long-term mill and leach stockpilesb		$	1,230	$	1,387
Total long-term mill and leach stockpilesc						Total long-term mill and leach stockpilesc	$	1,235	$	1,252

a.Materials and supplies inventory was net of obsolescence reserves totaling ~~$39~~$28 million at ~~June 30, 2022,~~March 31, 2023, and ~~$36~~$39 million at December 31, ~~2021.~~2022.

b.The increase in finished goods inventory at March 31, 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 concentrate sales agreement to a tolling arrangement beginning on January 1, 2023. As a result of the arrangement, a portion of PT-FI’s first-quarter 2023 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.

FCX recorded metals inventory adjustments totaling $18 million in the second quarter and first six months of 2022, associated with a stockpile write-off at Cerro Verde ($9 million) and net realizable value adjustments related to lower market prices for copper ($9 million). Refer to Note 9 for metals inventory adjustments by business segment.

~~El Abra Stockpile Recoveries.~~ As discussed in FCX’s 2021 Form 10-K, processes and recovery rates for mill and leach stockpiles are monitored regularly, and recovery rate estimates are adjusted periodically as additional information becomes available and as related technology changes. Adjustments to recovery rates will typically result in a future impact to the value of the material removed from the stockpiles at a revised weighted-average cost per pound of recoverable copper.

Following an analysis of recent recovery data and column testing results, El Abra revised its estimated recovery rate assumptions for specific ore types expected to be processed from its existing leach stockpile. The revised estimates resulted in a 135 million pound reduction in future estimated recoverable copper from this leach stockpile which is being phased out. This revision had an unfavorable impact on El Abra’s costs but did not have a significant impact on consolidated site production and delivery costs in second-quarter 2022 or the first six months of 2022.

NOTE 4. INCOME TAXES

Geographic sources of FCX’s ~~provision~~benefit (provision) for income taxes follow (in millions):


		Six Months Ended					Three Months Ended
		June 30,					March 31,
		2022		2021			2023		2022
U.S. operations	U.S. operations	$	(5)	$	(4)	U.S. operations	$	4	$	(3)
International operations	International operations	(1,390)		(1,042)		International operations	(503)		(821)
Total	Total	$	(1,395)	$	(1,046)	Total	$	(499)	$	(824)

FCX’s consolidated effective income tax rate was ~~32 percent~~32% for ~~the first six months of 2022~~first-quarter 2023 and ~~31 percent~~30% for ~~the first six months of 2021.~~first-quarter 2022. Variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate. Because of its U.S. tax position, FCX does not record a financial statement impact for income or losses generated in the U.S.

In August 2022, the U.S. Inflation Reduction Act of 2022 (Act) was signed into law, which 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. The provisions of the Act became applicable to FCX on January 1, 2023. 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 FCX’s first-quarter 2023 financial results. However, future guidance released by the Treasury may differ from FCX’s interpretations, which could be material and could further limit FCX’s ability to realize future benefits from its U.S. net operating losses.

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NOTE 5. DEBT AND EQUITY

The components of debt follow (in millions):


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022

Senior notes and debentures:	Senior notes and debentures:					Senior notes and debentures:
Issued by FCX	Issued by FCX	$	7,697	$	8,268	Issued by FCX	$	6,232	$	7,225
Issued by PT-FI	Issued by PT-FI	2,976		—		Issued by PT-FI	2,978		2,978
Issued by Freeport Minerals Corporation	Issued by Freeport Minerals Corporation	355		355		Issued by Freeport Minerals Corporation	354		355
PT-FI Term Loan		—		432

Cerro Verde Term Loan		—		325

Other	Other	64		70		Other	71		62
Total debt	Total debt	11,092		9,450		Total debt	9,635		10,620
Less current portion of debt	Less current portion of debt	(1,038)		(372)		Less current portion of debt	(49)		(1,037)
Long-term debt	Long-term debt	$	10,054	$	9,078	Long-term debt	$	9,586	$	9,583

~~FCX~~ 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 ~~June 30, 2022,~~March 31, 2023, FCX had ~~no borrowings outstanding and~~ $8 million in letters of credit issued under its revolving credit facility.

PT-FI has a $1.3 billion unsecured revolving credit facility ~~resulting~~that matures in availability of approximately $3.5 billion, of which approximately $1.5 billion could be used for additional letters of credit. Availability under FCX’s revolving credit facility consists of $3.3 billion maturing April 2024 and $0.2 billion maturing April 2023. At June 30, 2022, FCX was in compliance with its revolving credit facility covenants.July 2026.

Cerro Verde ~~Credit Facility.~~ ~~In second-quarter 2022, Cerro Verde entered into~~has a ~~new~~ $350 million ~~five-year,~~ unsecured revolving credit facility ~~and repaid the $325 million outstanding balance of its term loan.~~ that matures in May 2027.

At ~~June 30, 2022,~~March 31, 2023, FCX, PT-FI and Cerro Verde had no borrowings outstanding under ~~its~~their respective revolving credit ~~facility~~facilities and ~~was~~were in compliance with ~~its revolving credit facility~~their respective covenants.

Senior ~~Notes issued by PT-FI.~~Notes.

In ~~April 2022, PT-FI completed~~March 2023, FCX repaid in full the sale of $3.0 billion aggregate principal amount of unsecured senior notes, consisting of $750 million of 4.763% Senior Notes due 2027, $1.5 billion of 5.315% Senior Notes due 2032 and $750 million of 6.200% Senior Notes due 2052. PT-FI used $0.6 billion of the net proceeds to repay the borrowings under its term loan and expects to use the remaining net proceeds to finance its smelter projects.

~~PT-FI Credit Facility.~~ ~~In second-quarter 2022~~, PT-FI amended its five-year, unsecured revolving credit facility to, among other things, increase the availability to $1.3 billion. At June 30, 2022, PT-FI had no borrowings under its revolving credit facility and was in compliance with its revolving credit facility covenants.

~~As noted above, in second-quarter 2022, PT-FI repaid the~~outstanding principal balance of ~~the term loan portion of~~ its ~~credit facility, which cannot be redrawn, and recorded a loss on early extinguishment of debt of $10 million.~~

~~Table of Contents~~

~~Purchases of~~3.875% Senior ~~Notes.~~ In~~second-quarter 2022, FCX purchased certain of its senior notes in open-market transactions. A summary of these debt extinguishments follows:~~

Principal Amount Discounts/Deferred Issuance Costs Book Value Redemption Value Gain/(Loss)
5.00% Senior Note due 2027 $ 85 $ 1 $ 84 $ 85 $ (1)
4.125% Senior Note due 2028 90 1 89 85 4
4.375% Senior Note due 2028 106 1 105 102 3
5.25% Senior Note due 2029 85 1 84 82 2
4.25% Senior Note due 2030 17 — 17 16 1
4.625% Senior Note due 2030 66 1 65 62 3
5.40% Senior Note due 2034 15 — 15 15 —
5.450% Senior Note due 2043 118 1 117 111 6
$ 582 $ 6 $ 576 $ 558 $ 18

~~From July 1, 2022, through August 5, 2022, FCX purchased an additional $291~~Notes totaling $996 million ~~aggregate principal amount of its senior notes in open-market transactions, for a total redemption value of $273 million.~~at maturity.

Interest Expense, Net. Consolidated interest costs (before capitalization) totaled ~~$189~~$207 million in ~~second-quarter 2022, $165~~first-quarter 2023 and $153 million in ~~second-quarter 2021, $342 million for the first six months of 2022 and $325 million for the first six months of 2021.~~first-quarter 2022. The increase in consolidated interest costs (before capitalization) ~~for the 2022 periods~~ is primarily related to ~~the~~interest associated with PT-FI’s $3.0 billion of senior notes that were issued ~~by PT-FI~~ in April ~~2022.~~2022 and a charge of $25 million related to contested tax matters in Peru.

Capitalized interest added to property, plant, equipment and mine development costs, net, totaled ~~$33~~$56 million in ~~second-quarter 2022, $17~~first-quarter 2023 and $26 million in ~~second-quarter 2021, $59 million for the first six months of 2022 and $32 million for the first six months of 2021.~~first-quarter 2022. The increase in capitalized interest costs ~~for the 2022 periods~~ resulted from increased construction and development projects in ~~process.~~process, primarily at the Manyar smelter and precious metals refinery in Indonesia (collectively, the Indonesia smelter projects).

Share Repurchase Program and Dividends. ~~In second-quarter 2022,~~Since mid-2021, FCX has acquired ~~17.1~~47.8 million shares of its common stock under its share repurchase program for a total cost of $645 million ($37.66 average cost per share). For the first six months of 2022, FCX acquired 29.4 million shares of its common stock under its share repurchase program for a total cost of $1.2 billion ($40.32 average cost per share).

~~In July 2022, FCX’s Board of Directors (Board) authorized an increase in~~ the share repurchase program ~~from up to $3.0 billion to up to $5.0 billion. Through August 5, 2022, FCX has acquired 47.9 million shares of its common stock~~ for a total cost of $1.8 billion ($38.35 average cost per share), ~~and~~including 12.3 million shares in first-quarter 2022 for a cost of $541 million. No shares have been purchased since July 11, 2022. As of May 4, 2023, FCX has $3.2 billion ~~remains~~ available for repurchases under the program.

On ~~June~~March 22, ~~2022,~~2023, FCX declared quarterly cash dividends totaling $0.15 per share ($0.075 per share base dividend and $0.075 per share variable dividend) on its common stock, which were paid on ~~August~~May 1, ~~2022,~~2023, to common stockholders of record as of ~~July 15, 2022.~~April 14, 2023.

The declaration and payment of dividends (base or variable) and timing and amount of any share repurchases isare at the discretion of ~~the~~FCX’s Board of Directors (Board) and management, respectively, and isare subject to a number of factors, including maintaining FCX’s net debt target, capital availability, FCX’s financial results, cash requirements, ~~business prospects,~~ global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by FCX’s Board or management, as applicable. FCX’s share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion.

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NOTE 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.

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

Derivatives Designated as Hedging Instruments –- Fair Value Hedges

Copper Futures and Swap Contracts. Some of FCX’s U.S. copper rod and cathode customers request a fixed market price instead of the Commodity Exchange Inc. (COMEX) average copper price in the month of shipment. FCX hedges this price exposure in a manner that allows it to receive the COMEX average price in the month of shipment while the customers pay the fixed price they requested. FCX accomplishes this by entering into copper futures or swap contracts. Hedging gains or losses from these copper futures and swap contracts are recorded in revenues. FCX did not have any significant gains or losses resulting from hedge ineffectiveness during the ~~six-month~~three-month periods ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022. At ~~June 30, 2022,~~March 31, 2023, FCX held copper futures and swap contracts that qualified for hedge accounting for ~~103~~96 million pounds at an average contract price of ~~$4.36~~$3.94 per pound, with maturities through ~~March~~December 2024.

A summary of gains (losses) ~~gains~~ recognized in revenues for derivative financial instruments related to commodity contracts that are designated and qualify as fair value hedge transactions, including on the related hedged item follows (in millions):


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2022		2021		2022		2021			2023		2022
Copper futures and swap contracts:	Copper futures and swap contracts:									Copper futures and swap contracts:
Unrealized (losses) gains:
Unrealized gains (losses):										Unrealized gains (losses):
Derivative financial instruments	Derivative financial instruments	$	(89)	$	(11)	$	(78)	$	(8)	Derivative financial instruments	$	14	$	12
Hedged item – firm sales commitments	Hedged item – firm sales commitments	89		11		78		8		Hedged item – firm sales commitments	(14)		(12)

Realized (losses) gains:
Realized gains:										Realized gains:
Matured derivative financial instruments	Matured derivative financial instruments	(12)		28		2		52		Matured derivative financial instruments	8		14

Derivatives Not Designated as Hedging Instruments

Embedded Derivatives. Certain FCX 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. FCX receives 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 prices and the London gold ~~prices~~price as specified in the contracts, which results in an embedded derivative (i.e., a pricing mechanism that is finalized after the time of delivery) that is required to be bifurcated from the host contract. The host contract is the sale of the metals contained in the concentrate or cathode at the then-current LME or COMEX copper price, and the London gold price. FCX applies the normal purchases and normal sales scope exception in accordance with derivatives and hedge accounting guidance to the host contract in its concentrate or cathode sales agreements since these contracts do not allow for net settlement and always result in physical delivery. The embedded derivative does not qualify for hedge accounting and is adjusted to fair value through earnings each period, using the period-end LME or COMEX copper forward prices and the adjusted London gold ~~prices,~~price, until the date of final pricing. Similarly, FCX purchases copper under contracts that provide for provisional pricing. Mark-to-market price fluctuations from these embedded derivatives are recorded through the settlement date and are reflected in revenues for sales contracts and in inventory for purchase contracts.

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A summary of FCX’s embedded derivatives at ~~June 30, 2022,~~March 31, 2023, follows:


		Open Positions	Average Price Per Unit				Maturities Through		Open Positions	Average Price Per Unit				Maturities Through
			Contract		Market					Contract		Market
Embedded derivatives in provisional sales contracts:	Embedded derivatives in provisional sales contracts:							Embedded derivatives in provisional sales contracts:
Copper (millions of pounds)	Copper (millions of pounds)	703	$	4.41	$	3.75	December 2022	Copper (millions of pounds)	547	$	3.92	$	4.08	August 2023
Gold (thousands of ounces)	Gold (thousands of ounces)	236	1,848		1,821		October 2022	Gold (thousands of ounces)	199	1,876		1,991		June 2023
Embedded derivatives in provisional purchase contracts:	Embedded derivatives in provisional purchase contracts:							Embedded derivatives in provisional purchase contracts:
Copper (millions of pounds)	Copper (millions of pounds)	59	4.39		3.75		October 2022	Copper (millions of pounds)	78	4.01		4.06		August 2023

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 production and delivery costs. At ~~June 30, 2022,~~March 31, 2023, Atlantic Copper held net copper forward sales contracts for 3412 million pounds at an average contract price of ~~$4.06~~$4.01 per pound, with maturities through ~~August 2022.~~May 2023.

Summary of Gains (Losses) ~~Gains.~~. A summary of the realized and unrealized gains (losses) ~~gains~~ recognized in operating income for commodity contracts that do not qualify as hedge transactions, including embedded derivatives, follows (in millions):


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2022		2021		2022		2021			2023		2022
Embedded derivatives in provisional sales contracts:a	Embedded derivatives in provisional sales contracts:a									Embedded derivatives in provisional sales contracts:a
Copper	Copper	$	(720)	$	118	$	(502)	$	325	Copper	$	231	$	218
Gold and other metals	Gold and other metals	(33)		15		(11)		(13)		Gold and other metals	42		22
Copper forward contractsb	Copper forward contractsb	22		(5)		26		(13)		Copper forward contractsb	(2)		4

a.Amounts recorded in revenues.

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

Unsettled Derivative Financial Instruments

A summary of the fair values of unsettled commodity derivative financial instruments follows (in millions):

June 30,
2022 December 31, 2021
Commodity Derivative Assets:
Derivatives designated as hedging instruments:

Copper futures and swap contracts $ — $ 12
Derivatives not designated as hedging instruments:

Embedded derivatives in provisional sales/purchase contracts 38 64
Copper forward contracts 15 1
Total derivative assets $ 53 $ 77
Commodity Derivative Liabilities:
Derivatives designated as hedging instruments:
Copper futures and swap contracts $ 66 $ —
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts $ 476 $ 27
Copper forward contracts 4 1
Total derivative liabilities $ 546 $ 28


	March 31, 2023		December 31, 2022
Commodity Derivative Assets:
Derivatives designated as hedging instruments:
Copper futures and swap contracts	$	15	$	3
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts	119		166
Copper forward contracts	—		1
Total derivative assets	$	134	$	170

Commodity Derivative Liabilities:
Derivatives designated as hedging instruments:
Copper futures and swap contracts	$	—	$	3
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts	10		39


Copper forward contracts	1		—
Total derivative liabilities	$	11	$	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 contract on its balance sheet. FCX’s embedded derivatives on provisional sales/purchase contracts are netted with the corresponding outstanding receivable/payable balances.

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A summary of these unsettled commodity contracts that are offset in the balance ~~sheets~~sheet follows (in millions):


		Assets				Liabilities					Assets				Liabilities
		June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022

Gross amounts recognized:	Gross amounts recognized:									Gross amounts recognized:
Commodity contracts:										Commodity contracts:
Embedded derivatives in provisional	Embedded derivatives in provisional									Embedded derivatives in provisional
sales/purchase contracts	sales/purchase contracts	$	38	$	64	$	476	$	27	sales/purchase contracts	$	119	$	166	$	10	$	39

Copper derivatives	Copper derivatives	15		13		70		1		Copper derivatives	15		4		1		3
		53		77		546		28			134		170		11		42

Less gross amounts of offset:	Less gross amounts of offset:									Less gross amounts of offset:
Commodity contracts:										Commodity contracts:
Embedded derivatives in provisional	Embedded derivatives in provisional									Embedded derivatives in provisional
sales/purchase contracts	sales/purchase contracts	—		3		—		3		sales/purchase contracts	3		—		3		—

Copper derivatives		4		1		4		1

		4		4		4		4			3		—		3		—

Net amounts presented in balance sheet:	Net amounts presented in balance sheet:									Net amounts presented in balance sheet:
Commodity contracts:										Commodity contracts:
Embedded derivatives in provisional	Embedded derivatives in provisional									Embedded derivatives in provisional
sales/purchase contracts	sales/purchase contracts	38		61		476		24		sales/purchase contracts	116		166		7		39

Copper derivatives	Copper derivatives	11		12		66		—		Copper derivatives	15		4		1		3
		$	49	$	73	$	542	$	24		$	131	$	170	$	8	$	42

Balance sheet classification:	Balance sheet classification:									Balance sheet classification:
Trade accounts receivable	Trade accounts receivable	$	6	$	51	$	231	$	14	Trade accounts receivable	$	108	$	163	$	3	$	7
Other current assets	Other current assets	11		12		—		—		Other current assets	15		4		—		—

Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	32		10		308		10		Accounts payable and accrued liabilities	8		3		5		34
Other liabilities	Other liabilities	—		—		3		—		Other liabilities	—		—		—		1
		$	49	$	73	$	542	$	24		$	131	$	170	$	8	$	42

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. As of ~~June 30, 2022,~~March 31, 2023, the maximum amount of credit exposure associated with derivative transactions was ~~$53~~$134 million.

Other Financial Instruments. Other financial instruments include cash, ~~and~~ cash equivalents, restricted cash ~~restricted~~and cash equivalents, accounts receivable, investment securities, legally restricted ~~funds,~~trust assets, accounts payable and accrued liabilities, accrued income taxes, dividends payable and debt. The carrying value for these financial instruments classified as current assets or liabilities approximates fair value because of their short-term nature and generally negligible credit ~~losses. Refer~~losses (refer to Note 7 for the fair values of investment securities, legally restricted funds and ~~debt.~~debt).

In addition, as of ~~June 30, 2022,~~March 31, 2023, FCX has contingent consideration assets related to the sales of certain oil and gas properties (refer to Note 7 for the related fair values).

Cash, Cash Equivalents and Restricted Cash and ~~Restricted~~ Cash Equivalents. The following table provides a reconciliation of total cash, cash equivalents and restricted cash and ~~restricted~~ cash equivalents presented in the consolidated statements of cash flows (in millions):


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Balance sheet components:	Balance sheet components:					Balance sheet components:
Cash and cash equivalentsa		$	9,492	$	8,068
Restricted cash and restricted cash equivalents included in:
Cash and cash equivalentsa,b						Cash and cash equivalentsa,b	$	6,852	$	8,146
Restricted cash and cash equivalents included in:						Restricted cash and cash equivalents included in:
Other current assets	Other current assets	119		114		Other current assets	118		111
Other assets	Other assets	134		132		Other assets	134		133
Total cash, cash equivalents, restricted cash and restricted cash equivalents presented in the consolidated statements of cash flows		$	9,745	$	8,314
Total cash, cash equivalents and restricted cash and cash equivalents presented in the consolidated statements of cash flows						Total cash, cash equivalents and restricted cash and cash equivalents presented in the consolidated statements of cash flows	$	7,104	$	8,390

a.Includes time deposits of ~~$0.2~~$0.3 billion at ~~each of June 30, 2022,~~March 31, 2023, and $0.5 billion at December 31, ~~2021.~~2022.

b.Includes cash designated for smelter development projects totaling $1.5 billion at March 31, 2023, and $1.8 billion at December 31, 2022.

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NOTE 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 did not have any significant transfers in or out of Level 3 during ~~second-quarter 2022.~~first-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, ~~and~~ cash equivalents, restricted cash ~~restricted~~and cash equivalents, accounts receivable, accounts payable and accrued liabilities, accrued income taxes and dividends payable (refer to Note 6) follows (in millions):

At June 30, 2022
Carrying Fair Value
Amount Total NAV Level 1 Level 2 Level 3
Assets
Investment securities:a,b
U.S. core fixed income fund $ 26 $ 26 $ 26 $ — $ — $ —
Equity securities 5 5 — 5 — —
Total 31 31 26 5 — —
Legally restricted funds:a

U.S. core fixed income fund 56 56 56 — — —
Government bonds and notes 39 39 — — 39 —
Corporate bonds 36 36 — — 36 —
Government mortgage-backed securities 28 28 — — 28 —
Asset-backed securities 16 16 — — 16 —
Money market funds 8 8 — 8 — —
Collateralized mortgage-backed securities 3 3 — — 3 —
Total 186 186 56 8 122 —
Derivatives:c

Embedded derivatives in provisional sales/purchase contracts in a gross asset position 38 38 — — 38 —
Copper forward contracts 15 15 — 8 7 —
Total 53 53 — 8 45 —
Contingent consideration for the sale of the
Deepwater GOM oil and gas propertiesa
79 67 — — — 67
Liabilities
Derivatives:c

Embedded derivatives in provisional sales/purchase contracts in a gross liability position 476 476 — — 476 —
Copper futures and swap contracts 66 66 — 61 5 —
Copper forward contracts 4 4 — 3 1 —
Total 546 546 — 64 482 —
Long-term debt, including current portiond
11,092 10,601 — — 10,601 —


	At March 31, 2023
	Carrying		Fair Value
	Amount		Total		NAV		Level 1		Level 2		Level 3
Assets
Investment securities:a,b
U.S. core fixed income fund	$	26	$	26	$	26	$	—	$	—	$	—
Equity securities	7		7		—		7		—		—

Total	33		33		26		7		—		—

Legally restricted funds:a
U.S. core fixed income fund	63		63		63		—		—		—
Government mortgage-backed securities	38		38		—		—		38		—
Government bonds and notes	32		32		—		—		32		—
Corporate bonds	31		31		—		—		31		—
Money market funds	21		21		—		21		—		—
Asset-backed securities	19		19		—		—		19		—
Collateralized mortgage-backed securities	2		2		—		—		2		—

Total	206		206		63		21		122		—

Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross asset position	119		119		—		—		119		—

Copper futures and swap contracts	15		15		—		14		1		—





Total	134		134		—		14		120		—

Contingent consideration for the sale of the Deepwater GOM oil and gas propertiesa	63		54		—		—		—		54



Liabilities
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position	10		10		—		—		10		—



Copper forward contracts	1		1		—		—		1		—


Total	11		11		—		—		11		—




Long-term debt, including current portiond	9,635		9,336		—		—		9,336		—

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		At December 31, 2021													At December 31, 2022
		Carrying		Fair Value											Carrying		Fair Value
		Amount		Total		NAV		Level 1		Level 2		Level 3			Amount		Total		NAV		Level 1		Level 2		Level 3
Assets	Assets													Assets
Investment securities:a,b	Investment securities:a,b													Investment securities:a,b
U.S. core fixed income fund														U.S. core fixed income fund	$	25	$	25	$	25	$	—	$	—	$	—
Equity securities	Equity securities	$	50	$	50	$	—	$	50	$	—	$	—	Equity securities	7		7		—		7		—		—
U.S. core fixed income fund		29		29		29		—		—		—

Total	Total	79		79		29		50		—		—		Total	32		32		25		7		—		—

Legally restricted funds:a	Legally restricted funds:a													Legally restricted funds:a
U.S. core fixed income fund	U.S. core fixed income fund	64		64		64		—		—		—		U.S. core fixed income fund	56		56		56		—		—		—
Government mortgage-backed securities														Government mortgage-backed securities	37		37		—		—		37		—
Government bonds and notes	Government bonds and notes	53		53		—		—		53		—		Government bonds and notes	34		34		—		—		34		—
Corporate bonds	Corporate bonds	45		45		—		—		45		—		Corporate bonds	31		31		—		—		31		—
Government mortgage-backed securities		20		20		—		—		20		—
Asset-backed securities	Asset-backed securities	18		18		—		—		18		—		Asset-backed securities	17		17		—		—		17		—
Money market funds	Money market funds	8		8		—		8		—		—		Money market funds	3		3		—		3		—		—
Collateralized mortgage-backed securities														Collateralized mortgage-backed securities	3		3		—		—		3		—

Municipal bonds		1		1		—		—		1		—
Total	Total	209		209		64		8		137		—		Total	181		181		56		3		122		—

Derivatives:c	Derivatives:c													Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross asset position	Embedded derivatives in provisional sales/purchase contracts in a gross asset position	64		64		—		—		64		—		Embedded derivatives in provisional sales/purchase contracts in a gross asset position	166		166		—		—		166		—
Copper futures and swap contracts	Copper futures and swap contracts	12		12		—		9		3		—		Copper futures and swap contracts	3		3		—		3		—		—
Copper forward contracts	Copper forward contracts	1		1		—		1		—		—		Copper forward contracts	1		1		—		1		—		—

Total	Total	77		77		—		10		67		—		Total	170		170		—		4		166		—

Contingent consideration for the sale of the
Deepwater GOM oil and gas propertiesa		90		81		—		—		—		81
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	67		57		—		—		—		57

Liabilities	Liabilities													Liabilities
Derivatives:c	Derivatives:c													Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position	Embedded derivatives in provisional sales/purchase contracts in a gross liability position	27		27		—		—		27		—		Embedded derivatives in provisional sales/purchase contracts in a gross liability position	39		39		—		—		39		—

Copper forward contracts														Copper forward contracts	3		3		—		—		3		—

Copper forward contracts		1		1		—		1		—		—

Total	Total	28		28		—		1		27		—		Total	42		42		—		—		42		—

Long-term debt, including current portiond	Long-term debt, including current portiond	9,450		10,630		—		—		10,630		—		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.

b.Excludes time deposits (which approximated fair value) included in (i) other current assets of ~~$119~~$118 million at ~~June 30, 2022,~~both March 31, 2023, and ~~$114 million at~~ December 31, ~~2021,~~2022, and (ii) other assets of ~~$134~~$133 million at ~~June 30, 2022,~~both March 31, 2023, and ~~$132 million at~~ December 31, ~~2021,~~2022, primarily associated with an assurance bond to support PT-FI’s commitment for additional domestic smelter development in Indonesia and PT-FI’s closure and reclamation guarantees.

c.Refer to Note 6 for further discussion and balance sheet classifications.

d.Recorded at cost except for debt assumed in acquisitions, which are recorded at fair value at the respective acquisition dates.

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

The U.S. core fixed income fund is valued at 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).

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. 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.

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

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FCX’s embedded derivatives on provisional copper concentrate, copper cathode and gold purchases and sales are valued using quoted monthly LME or COMEX copper forward prices and the adjusted London gold ~~prices~~price at each reporting date based on the month of maturity (refer to Note 6 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 6 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.

In December 2016, FCX’s sale of its Deepwater GOM oil and gas properties included up to $150 million in contingent consideration that was recorded at the total amount under the loss recovery approach. The contingent consideration is being received over time as cash flows are realized from a third-party production handling agreement for an offshore platform, with the related payments commencing in third-quarter 2018. The contingent consideration included in (i) other current assets totaled $17 million at March 31, 2023, and $20 million at ~~June 30, 2022, and~~ December 31, ~~2021,~~2022, and (ii) other assets totaled ~~$59~~$46 million at ~~June 30, 2022,~~March 31, 2023, and ~~$70~~$47 million at December 31, ~~2021.~~2022. The fair value of this contingent consideration was calculated based on a discounted cash flow model using inputs that include third-party 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.

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 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 ~~June 30, 2022,~~March 31, 2023, as compared with those techniques used at December 31, ~~2021.~~2022.

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 ~~six~~three months of ~~2022~~2023 follows (in millions):



Fair value at January 1, ~~2022~~2023	$	8157
Net unrealized ~~loss~~gain related to assets still held at the end of the period	~~(3)~~1
Settlements	~~(11)~~(4)
Fair value at ~~June 30, 2022~~March 31, 2023	$	6754

NOTE 8. CONTINGENCIES AND COMMITMENTS

~~Asset Retirement Obligations (ARO)~~

~~Arizona Environmental and Reclamation Programs.~~FCX’s Arizona operations are subject to regulatory oversight by the Arizona Department of Environmental Quality (ADEQ). ADEQ has adopted regulations for its aquifer protection permit (APP) program that require permits for, among other things, certain facilities, activities and structures used for mining, leaching, concentrating and smelting, and require compliance with aquifer water quality standards during operations and closure. An application for an APP requires a proposed closure strategy that will meet applicable groundwater protection requirements following cessation of operations and an estimate of the implementation cost, with a more detailed closure plan required at the time operations cease. A permit applicant must demonstrate its financial ability to meet the closure costs approved by ADEQ. Closure costs for facilities covered by APPs are required to be updated approximately every six years and financial assurance mechanisms are required to be updated every two years. During the first six months of 2022, FCX’s Bagdad mine increased its ARO liability and asset retirement cost asset by $62 million, associated with its updated closure plan that was submitted to ADEQ for approval. Morenci is also preparing an update to its closure plan for submission to ADEQ, which is expected to result in increased costs that could be significant. FCX will continue updating its closure plans and closure cost estimates at other Arizona sites, and any such updates may also result in increased costs that could be significant.

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Litigation

There were no significant updates to previously reported legal proceedings included in Note 12 of FCX’s ~~2021~~2022 Form 10-K, other than the matter discussed below.

~~Asbestos~~Louisiana 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 ~~Talc Claims. As previously disclosed,~~Vermilion), alleging that certain oil and gas exploration and production operations and sulfur mining and production operations in ~~2021, Imerys obtained an injunction temporarily staying approximately 950 talc-related lawsuits against Cyprus Amax Minerals Company (CAMC), an indirect wholly owned subsidiary~~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, ~~Cyprus Mines Corporation (Cyprus Mines)~~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

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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 ~~wholly owned subsidiary of CAMC, which has been extended through at least January 2023. The interim stay~~lawsuit that challenges whether Terrebonne Parish is ~~a component of~~validly bound to the ~~global~~ settlement ~~but there can be no assurance that~~agreement and seeks to have the ~~bankruptcy~~ court ~~will continue to impose~~declare the ~~interim stay. Mediation~~settlement void. FCX is evaluating and exploring options to resolve ~~open issues in the Imerys~~this dispute and ~~Cyprus Mines bankruptcy cases is ongoing and expected to continue through 2022.~~will vigorously defend this matter.

Other Matters

Smelter Development Progress. ~~On January 7, 2021,~~As disclosed in Note 12 of FCX’s 2022 Form 10-K, in March 2022, PT-FI paid the Indonesia government ~~levied~~ an administrative fine ~~of $149~~totaling $57 million ~~for the period from March 30, 2020, through September 30, 2020, on PT-FI for failing~~related to achieve physical development progress on its greenfield smelter as of July 31, 2020. On January 13, 2021, PT-FI responded to the Indonesia government objecting to the fine because of events outside of its control causing a delay of the greenfield smelter’s development progress. PT-FI believes that its communications during 2020 with the Indonesia government were not properly considered before the administrative fine was levied.

~~In June 2021, the Indonesia government issued a ministerial decree for the calculation of an administrative fine for~~ lack of smelter development in light of the COVID-19 ~~pandemic. During 2021, PT-FI recorded~~pandemic (first-quarter 2022 included charges totaling $16 million for a potential settlement of the administrative fine. On January 25, 2022, the Indonesia government submitted a new estimate of the administrative fine totaling $57 million. In March 2022, PT-FI paid the administrative fine and recorded a charge of $41 million ~~in first-quarter 2022.~~associated with the administrative fine). Based on PT-FI’s revised smelter construction schedule, PT-FI does not believe any additional fines should be applied and will dispute any attempts by the Indonesia government to levy additional fines, which could be significant.

PT-FI Export License. ~~Export~~Indonesia regulations require PT-FI and PT Smelting to renew their export licenses ~~are valid for a one-year period,~~annually, subject to review ~~and approval~~ by the Indonesia government every six months, depending on smelter construction progress. In March ~~2022,~~2023, PT-FI ~~obtained a one-year~~received an extension of its ~~concentrate~~ export license through June 10, 2023. PT-FI's special mining license provides that exports may continue through 2023, subject to force majeure considerations. PT-FI is working with the Indonesia government to obtain approval to continue exports as required for PT-FI’s operations until the Indonesia smelter projects are fully commissioned and reach designed operating conditions.

PT-FI Export Duties. In late 2022, PT-FI’s export duty rate declined from 5% to 2.5% as a result of smelter development progress. In March ~~19,~~ 2023, ~~for 2000000 metric tons of concentrate,~~ the ~~approval of which was based~~Indonesia government verified that construction progress on the Manyar smelter exceeded 50%, allowing PT-FI’s ~~revised smelter construction schedule as modified~~export duties to ~~reflect impacts of the ongoing COVID-19 pandemic.~~be eliminated effective March 29, 2023.

NOTE 9. BUSINESS SEGMENTS

FCX has organized its mining operations into 4four 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 copper mines, the Grasberg minerals district (Indonesia Mining), the Rod & Refining operations and Atlantic Copper Smelting & Refining.

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

FCX defers recognizing profits on sales from its mines to other segments, including Atlantic Copper Smelting & Refining and, through December 31, 2022, on ~~39.5 percent~~39.5% of PT-FI’s sales to PT Smelting, 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.

19Beginning January 1, 2023, PT-FI's commercial arrangement with PT Smelting converted from a concentrate sales agreement to a tolling arrangement. Under this arrangement, PT-FI pays PT Smelting a tolling fee to smelt and refine its 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 impacted the timing of PT-FI’s first-quarter 2023 sales and working capital requirements, as a portion of PT-FI’s first-quarter 2023 production was deferred in inventory and will be sold as refined metal in future periods.

~~Table of Contents~~

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 Financial 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.

Table of Contents

Product Revenues. FCX’s revenues attributable to the products it sold for the ~~second~~first quarters of 2023 and ~~first six months of~~ 2022 ~~and 2021~~ follow (in millions):


		Three Months Ended				Six Months Ended						Three Months Ended
		June 30,				June 30,						March 31,
		2022		2021		2022			2021			2023		2022
Copper:	Copper:										Copper:
Concentrate	Concentrate	$	2,694	$	2,076	$	5,385		$	3,785	Concentrate	$	1,587	$	2,691
Cathode	Cathode	1,183		1,535		2,618			2,769		Cathode	1,327		1,435
Rod and other refined copper products	Rod and other refined copper products	1,071		833		2,187			1,517		Rod and other refined copper products	921		1,116
Purchased coppera	Purchased coppera	104		310		174			528		Purchased coppera	204		70
Molybdenum											Molybdenum	592		378
Gold	Gold	909		597		1,720			1,115		Gold	531		811
Molybdenum		377		288		755			532
Other		165		203		353			456
Otherb											Otherb	133		188
Adjustments to revenues:	Adjustments to revenues:										Adjustments to revenues:
Treatment charges		(139)		(101)		(272)			(198)
Royalty expenseb		(111)		(82)		(206)			(145)
Export dutiesc		(84)		(44)		(182)		d	(73)
Treatment chargesc											Treatment chargesc	(101)		(133)
Royalty expensed											Royalty expensed	(60)		(95)
PT-FI export dutiese											PT-FI export dutiese	(18)		(98)		f
Revenues from contracts with customers	Revenues from contracts with customers	6,169		5,615		12,532			10,286		Revenues from contracts with customers	5,116		6,363
Embedded derivativese		(753)		133		(513)			312
Embedded derivativesg											Embedded derivativesg	273		240
Total consolidated revenues	Total consolidated revenues	$	5,416	$	5,748	$	12,019		$	10,598	Total consolidated revenues	$	5,389	$	6,603

a.FCX purchases copper cathode primarily for processing by its Rod & Refining operations.

b.Primarily includes revenues associated with silver.

c.First-quarter 2023 treatment charges 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.

c.e.~~Reflects~~Refer to Note 8 for further discussion of PT-FI export duties.

d.f.Includes a charge of $18 million associated with an adjustment to prior-period export duties.

e.g.Refer to Note 6 for discussion of embedded derivatives related to FCX’s provisionally priced copper concentrate and cathode sales contracts.

2018

Table of Contents

Financial Information by Business Segment


(In millions)	(In millions)																										(In millions)

																									Atlantic											Corporate,																																					Atlantic			Corporate,
		North America Copper Mines				South America Mining														Copper												Other								North America Copper Mines										South America Mining																	Copper								Other
								Cerro							Indonesia			Molybdenum		Rod &					Smelting											& Elimi-					FCX															Cerro							Indonesia				Molybdenum				Rod &		Smelting			& Elimi-			FCX
		Morenci		Other		Total		Verde			Other		Total		Mining			Mines		Refining					& Refining											nations					Total				Morenci					Other			Total			Verde			Other		Total		Mining				Mines				Refining		& Refining			nations			Total
Three Months Ended June 30, 2022
Revenues:
Unaffiliated customers		$	17	$	30	$	47	$	702		$	180	$	882	$	1,920	a	$	—	$	1,753				$	433										$	381	b			$	5,416
Intersegment		730		1,078		1,808		134			—		134		58			144		8					—											(2,152)					—
Production and delivery		397		720		1,117		565			177		742		564			80		1,765					463								c			(1,728)					3,003
Depreciation, depletion and amortization		44		58		102		91			11		102		262			18		1					6											16					507

Metals inventory adjustments		—		7		7		9			2		11		—			—		—					—											—					18
Selling, general and administrative expenses		1		—		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
Total assets at June 30, 2022		2,839		5,338		8,177		8,379			1,843		10,222		20,679			1,702		300					1,078											7,955					50,113
Capital expenditures		63		83		146		35			33		68		388			8		2					32											219		d			863

Three Months Ended June 30, 2021
Three Months Ended March 31, 2023																						Three Months Ended March 31, 2023
Revenues:	Revenues:																																										Revenues:
Unaffiliated customers	Unaffiliated customers	$	57	$	55	$	112	$	825		$	188	$	1,013	$	1,753	a	$	—	$	1,689				$	794										$	387	b			$	5,748	Unaffiliated customers		$	32				$	97		$	129		$	958		$	234	$	1,192	$	1,199	a		$	—			$	1,523	$	749		$	597	b	$	5,389
Intersegment	Intersegment	721		1,021		1,742		120			—		120		56			89		6					—											(2,013)					—		Intersegment		593					948			1,541			244			—		244		169				223				6		7			(2,190)			—
Production and delivery	Production and delivery	351		574		925		494		e	106		600		528			56		1,691					775											(1,508)		c			3,067		Production and delivery		381					781			1,162			620			187		807		335				96				1,527		734			(1,496)			3,165
Depreciation, depletion and amortization	Depreciation, depletion and amortization	40		61		101		82			12		94		247			17		1					8											15					483		Depreciation, depletion and amortization		43					60			103			91			16		107		148				20				1		7			13			399

Selling, general and administrative expenses	Selling, general and administrative expenses	1		—		1		2			—		2		27			—		—					5											52					87		Selling, general and administrative expenses		—					1			1			2			—		2		28				—				—		8			87			126
Mining exploration and research expenses	Mining exploration and research expenses	—		—		—		—			—		—		—			—		—					—											14					14		Mining exploration and research expenses		—					—			—			—			—		—		—				—				—		—			31			31
Environmental obligations and shutdown costs	Environmental obligations and shutdown costs	1		—		1		—			—		—		—			—		—					—											32					33		Environmental obligations and shutdown costs		—					21			21			—			—		—		—				—				—		—			46			67
Net gain on sales of assets		—		—		—		—			—		—		—			—		—					—											(3)					(3)

Operating income (loss)	Operating income (loss)	385		441		826		367			70		437		1,007			16		3					6											(228)					2,067		Operating income (loss)		201					182			383			489			31		520		857				107				1		7			(274)			1,601

Interest expense, net	Interest expense, net	—		—		—		12			—		12		6			—		—					2											128					148		Interest expense, net		—					—			—			29			—		29		9				—				—		6			107			151
Provision for income taxes		—		—		—		145			17		162		404			—		—					—											37					603
Total assets at June 30, 2021		2,635		5,288		7,923		8,795			1,795		10,590		18,135			1,740		271					1,117											5,660					45,436
Provision for (benefit from) income taxes																						Provision for (benefit from) income taxes	—					—		—				187					7					194			330					—			—			—								(25)				499
Net income attributable to noncontrolling interests																						Net income attributable to noncontrolling interests	—					—		—				140					18					158			271		c			—			—			—								(43)				386
Total assets at March 31, 2023																						Total assets at March 31, 2023	3,142					5,668		8,810				8,612					1,871					10,483			21,046					1,707			221			1,152								7,490				50,909
Capital expenditures	Capital expenditures	22		47		69		23			3		26		286			2		—					7											43		d			433		Capital expenditures		56					140			196			61			39		100		449				9				5		12			350		d	1,121

Three Months Ended March 31, 2022																						Three Months Ended March 31, 2022
Revenues:																						Revenues:
Unaffiliated customers																						Unaffiliated customers	$	90				$	55	$	145			$	1,106				$	160				$	1,266		$	2,326	a			$	—		$	1,743		$	718							$	405		b	$	6,603
Intersegment																						Intersegment	711					1,095		1,806				108					—					108			78					128			9			—								(2,129)				—
Production and delivery																						Production and delivery	363					655		1,018				558					112					670			626					75			1,754			722								(1,715)				3,150
Depreciation, depletion and amortization																						Depreciation, depletion and amortization	44					61		105				87					10					97			248					16			1			6								16				489

Selling, general and administrative expenses																						Selling, general and administrative expenses	—					1		1				2					—					2			27					—			—			8								77				115
Mining exploration and research expenses																						Mining exploration and research expenses	—					—		—				—					—					—			—					—			—			—								24				24
Environmental obligations and shutdown costs																						Environmental obligations and shutdown costs	—					—		—				—					—					—			—					—			—			—								16				16

Operating income (loss)																						Operating income (loss)	394					433		827				567					38					605			1,503					37			(3)			(18)								(142)				2,809

Interest expense, net																						Interest expense, net	—					—		—				3					—					3			2					—			—			2								120				127
Provision for (benefit from) income taxes																						Provision for (benefit from) income taxes	—					—		—				227					14					241			586					—			—			—								(3)				824
Net income attributable to noncontrolling interests																						Net income attributable to noncontrolling interests	—					—		—				168					6					174			190		c			—			—			—								13				377
Total assets at March 31, 2022																						Total assets at March 31, 2022	2,773					5,284		8,057				8,678					1,925					10,603			19,338					1,702			299			1,045								7,788				48,832
Capital expenditures																						Capital expenditures	73					57		130				33					23					56			379					1			2			11								144			d	723

a.Includes ~~PT-FI's~~PT-FI sales to PT Smelting totaling ~~$827~~$27 million in ~~second-quarter 2022~~first-quarter 2023 (reflecting adjustments to prior period provisionally priced concentrate sales) and ~~$756~~$917 million in ~~second-quarter 2021.~~first-quarter 2022. Beginning January 1, 2023, there are no sales from PT-FI to PT Smelting (refer to above discussion of the tolling arrangement between PT-FI and PT Smelting).

b.Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.

c.~~Includes charges~~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%. 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 ~~major maintenance turnarounds totaling $40 million~~PT-FI sales volumes that were attributed to FCX at ~~Atlantic Copper in second-quarter 2022 and $19 million at the Miami smelter in second-quarter 2021.~~

d.~~Includes capital expenditures for the greenfield smelter and precious metals refinery (collectively, the Indonesia smelter projects).~~

e.~~Includes nonrecurring charges totaling $69 million associated with labor-related costs at Cerro Verde.~~

~~Table of Contents~~

(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 nations Total
Six Months Ended June 30, 2022
Revenues:
Unaffiliated customers $ 107 $ 85 $ 192 $ 1,808 $ 340 $ 2,148 $ 4,246 a $ — $ 3,496 $ 1,151 $ 786 b $ 12,019
Intersegment 1,441 2,173 3,614 242 — 242 136 272 17 — (4,281) —
Production and delivery 760 1,375 2,135 1,123 289 1,412 1,190 155 3,519 1,185 c (3,443) 6,153
Depreciation, depletion and amortization 88 119 207 178 21 199 510 34 2 12 32 996
Metals inventory adjustments — 7 7 9 2 11 — — — — — 18
Selling, general and administrative expenses 1 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
Capital expenditures 136 140 276 68 56 124 759 9 4 43 371 d 1,586
Six Months Ended June 30, 2021
Revenues:
Unaffiliated customers $ 61 $ 83 $ 144 $ 1,742 $ 363 $ 2,105 $ 3,136 a $ — $ 2,998 $ 1,481 $ 734 b $ 10,598
Intersegment 1,285 1,763 3,048

165 — 165 108 159 13 — (3,493) —
Production and delivery 620 1,054 1,674 930 e 209 1,139 983 113 3,007 1,448 (2,511) c 5,853
Depreciation, depletion and amortization 74 107 181 171 24 195 446 32 2 15 31 902
Metals inventory adjustments — — — — — — — 1 — — — 1
Selling, general and administrative expenses 1 1 2 4 — 4 53 — — 12 116 187
Mining exploration and research expenses — — — — — — — — — — 21 21
Environmental obligations and shutdown costs 1 — 1 — — — — — — — 37 38
Net gain on sales of assets — — — — — — — — — — (3) (3)
Operating income (loss) 650 684 1,334 802 130 932 1,762 13 2�� 6 (450) 3,599
Interest expense, net — — — 25 — 25 7 — — 3 258 293
Provision for (benefit from) income taxes — — — 318 38 356 719 — — — (29) 1,046
Capital expenditures 32 63 95 43 4 47 576 3 1 13 68 d 803

a.~~Includes PT-FI's sales to PT Smelting totaling $1.7 billion for the first six months of 2022 and $1.5 billion for the first six months of 2021.~~

b.~~Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.~~

c.Includes charges associated with major maintenance turnarounds totaling $40 million at Atlantic Copper for the first six months of 2022 and $87 million at the Miami smelter for the first six months of 2021.its previous approximate 81% economic ownership interest.

d.Primarily includes capital expenditures for the Indonesia smelter projects.

e.~~Includes nonrecurring charges totaling $69 million associated with labor-related costs at Cerro Verde.~~

2219

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

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 ~~June 30, 2022,~~March 31, 2023, the related consolidated statements of income, comprehensive income, ~~and~~ equity ~~for the three-~~ and ~~six-month periods ended June 30, 2022 and 2021, the related consolidated statements of~~ cash flows for the ~~six-month~~three-month periods ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ and the related notes (collectively referred to as the “consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements 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) (PCAOB), the consolidated balance sheet of the Company as of December 31, ~~2021,~~2022, the related consolidated statements of ~~operations,~~income, comprehensive income, ~~(loss),~~ equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 15, ~~2022,~~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, ~~2021,~~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 statements 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 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.

/s/ Ernst & Young LLP

Phoenix, Arizona

~~August 5, 2022~~May 4, 2023

2320

Table of Contents

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 MD&A and the discussion of our Business and Properties in our annual report on Form 10-K for the year ended December 31, ~~2021 (2021~~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 (Unaudited). Throughout MD&A, all references to income or losses per share are on a diluted basis. Our website is for information only and the contents of our website or information connected thereto are not incorporated in, or otherwise to be regarded as 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 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 North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru.

~~Our results~~We faced a number of operational challenges in first-quarter 2023, including a significant weather event in Indonesia, civil unrest in Peru and productivity challenges in the U.S. In addition, beginning January 1, 2023, PT Freeport Indonesia’s (PT-FI) commercial arrangement with PT Smelting (PT-FI’s 39.5% owned copper smelter and refinery in Gresik, Indonesia) converted from a concentrate sales agreement to a tolling arrangement, which resulted in a deferral of sales to future periods. As a result of the transition, approximately 110 million pounds of copper and 110 thousand ounces of gold from PT-FI’s first-quarter 2023 production is deferred in inventory and will be sold in future periods. We currently expect increasing sales volumes for the ~~first six months~~remainder of 2022 reflect solid operating results, with strong margins and cash flow generation, despite the decline in copper prices that began in second-quarter 2022. We believe the actions we have taken in recent years to build a strong balance sheet, successfully expand low-cost operations, and maintain flexible growth options while maintaining sufficient liquidity will allow us to continue to execute our business plans in a prudent manner, despite current economic uncertainty, while preserving substantial future asset values. While we recognize the near-term volatility in our markets, we are optimistic about our portfolio of assets, our strong management and operating teams, and the long-term prospects for the copper markets we serve.2023.

The London Metal Exchange (LME) copper settlement price averaged $4.43 per pound for the first six months of 2022 and reached a record high of $4.87 per pound in March 2022, supported by copper's increasingly important role in decarbonization technologies and limited mine supply. Beginning in second-quarter 2022, a series of macro-economic factors (concerns about the global economy, higher U.S. interest rates and currency exchange rates among other factors) led to a precipitous decline in copper prices. The LME copper settlement price declined from $4.69 per pound at March 31, 2022, to $3.74 per pound at June 30, 2022, and was $$3.54 per pound on July 29, 2022. Physical market fundamentals remain tight as evidenced by low levels of global exchange stocks. Our global customer base reports healthy demand for copper. We believe the outlook for copper fundamentals in the medium- and long-term remain favorable, with studies indicating that demand for copper may double in 15 years based on the global movement towards decarbonization. We also believe substantial new mine supply development will be required to meet the goals of the global energy transition, and current prices for copper are insufficient to support new mine supply development, which is expected to add to future supply deficits.

~~Our management team and global organization have substantial experience and success in executing under volatile market conditions.~~ We believe we ~~benefit from a diversified operations portfolio with an attractive cost structure, long-lived reserves, optionality in our project pipeline and~~have a strong balance sheet and ~~liquidity position.~~a favorable outlook for cash flow generation to support continued organic growth and cash returns to shareholders. Our organic growth pipeline is highlighted by our leach innovation initiatives, which are gaining momentum and are targeted to achieve an annual run rate of approximately 200 million pounds of copper per year by the end of 2023.

~~We are closely monitoring market conditions and will adjust our operating plans~~Refer to protect our liquidity and preserve our asset values, as 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.“Operations” for further discussion.

Net income attributable to common ~~stock~~stockholders totaled ~~$0.8~~$663 million in first-quarter 2023, compared with $1.5 billion in ~~second-quarter~~first-quarter 2022, ~~compared with $1.1 billion in second-quarter 2021,~~ primarily reflecting lower copper prices and unfavorable adjustments to provisionally priced copper sales, partly offset by higher copper and gold sales volumes. Net income attributable to common stock totaled $2.4 billion for the first six months of 2022, compared with $1.8 billion for the first six months of 2021, primarily reflecting higher copper and gold sales volumes, ~~partly offset by~~ a ~~higher provision~~lower average realized price for ~~income taxes~~copper and ~~lower copper prices. The results~~increased costs for ~~the 2022 periods, compared with the 2021 periods, also reflect increased energy~~maintenance and ~~other input costs.~~supplies and energy. Refer to “Consolidated Results” for further ~~discussion.~~discussion of these impacts, and for discussion of the change in our economic interest in PT-FI beginning January 1, 2023.

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At ~~June 30, 2022,~~March 31, 2023, we had consolidated debt of ~~$11.1~~$9.6 billion and consolidated cash and cash equivalents of ~~$9.5~~$6.9 billion, resulting in net debt of ~~$1.6~~$2.8 billion ($~~1.0~~1.3 billion excluding net debt for the Manyar smelter and precious metals refinery (PMR) in Indonesia - collectively, the Indonesia smelter projects). In March 2023, we used approximately $1 billion of cash to fund the maturity of our 3.875% Senior Notes. Refer to “Net Debt” for reconciliations of consolidated debt and consolidated cash and cash equivalents to net debt.

At ~~June 30, 2022,~~March 31, 2023, we had ~~$3.5~~$3.0 billion of availability under our revolving credit facility, and PT-FI and Cerro Verde ~~have~~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.

OUTLOOK

~~Despite uncertain market conditions~~As further discussed in ~~the near-term, we continue to believe the medium- and long-term outlook for~~“Risk Factors” in Part I, Item 1A. of our ~~business is positive, supported by limitations on supplies of copper and the expected requirements for copper in the world’s economy. Our~~2022 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 and are affected by numerous factors

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beyond our control. ~~Copper prices, in particular, experienced a significant drop beginning in second-quarter 2022.~~Our projected 2023 financial results are also dependent on an extension of PT-FI's export license after June 10, 2023. Refer to “Markets” below ~~and “Risk Factors” in Part I, Item 1A. of our 2021 Form 10-K~~ for further discussion. Because we cannot control the prices of our products, the key measures that management focuses on in operating our business are sales volumes, unit net cash costs, operating cash flows and capital expenditures.

Consolidated Sales Volumes

Following are our projected consolidated sales volumes for the year ~~2022:~~2023:

Copper (millions of recoverable pounds):

North America copper mines

~~1,505~~1,382

South America mining

~~1,160~~1,222

Indonesia mining

~~1,549~~1,453

Total

~~4,214~~4,057

Gold (millions of recoverable ounces)

~~1.7~~1.8

Molybdenum (millions of recoverable pounds)

8079

a.Projected molybdenum sales include ~~30 million pounds produced by our Molybdenum mines and~~ 50 million pounds produced by our North America and South America copper mines and 29 million pounds produced by our Molybdenum mines.

Consolidated sales volumes in ~~third-quarter 2022~~second-quarter 2023 are expected to approximate ~~1.0~~1.1 billion pounds of copper, ~~400~~500 thousand ounces of gold and 2120 million pounds of molybdenum. Projected sales volumes are dependent on operational performance, weather-related conditions, timing of shipments, and other factors, including the extension of PT-FI's export license after June 10, 2023, detailed in the “Cautionary Statement” below.

For other important factors that could cause results to differ materially from projections, refer to “Risk Factors” contained in Part I, Item 1A. of our ~~2021~~2022 Form 10-K.

Consolidated Unit Net Cash Costs

Assuming average prices of ~~$1,700~~$2,000 per ounce of gold and ~~$16.00~~$18.00 per pound of molybdenum for the ~~second half~~remainder of ~~2022~~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 ~~$1.50~~$1.55 per pound of copper for the year ~~2022~~2023 (including ~~$1.67~~$1.51 per pound of copper in ~~third-quarter 2022)~~second-quarter 2023). The increase from previous estimates primarily reflects lower by-product credits caused by lower projected gold and molybdenum prices. We also continue to experience significant cost inflation, principally associated with higher energy prices (which represents about 20 percent of our site operating costs) and increased costs for other consumables such as sulfuric acid, explosives and steel. The impact of price changes during the ~~second half~~remainder of ~~2022~~2023 on consolidated unit net cash costs for the year ~~2022~~2023 would approximate ~~$0.02~~$0.04 per pound of copper for each $100 per ounce change in the average price of gold and ~~$0.01~~$0.02 per pound of copper for each $2.00 per pound change in the average price of molybdenum. Quarterly unit net cash costs also vary with fluctuations in ~~sales~~other volumes and realized prices, ~~primarily~~such as those for gold and molybdenum.

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Consolidated Operating Cash Flows

Our consolidated operating cash flows vary with sales volumes; prices realized from copper, gold and molybdenum sales; production costs; income taxes; other working capital changes; and other factors. Based on current sales volume and cost estimates, and assuming average prices of ~~$3.25~~$4.00 per pound for copper, ~~$1,700~~$2,000 per ounce for gold, and ~~$16.00~~$18.00 per pound for molybdenum for the ~~second half~~remainder of ~~2022,~~2023, our consolidated operating cash flows are estimated to approximate ~~$4.5~~$7.0 billion ~~(net of $1.4~~(including $0.3 billion of working capital and other ~~uses)~~sources) for the year ~~2022.~~2023. Estimated consolidated operating cash flows for the year ~~2022~~2023 also reflect an estimated income tax provision of ~~$2.0~~$2.6 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate for the year ~~2022)~~2023). The impact of price changes for the ~~second half~~remainder of ~~2022~~2023 on operating cash flows would approximate ~~$230~~$315 million for each $0.10 per pound change in the average price of copper, ~~$80~~$140 million for each $100 per ounce change in the average price of gold and ~~$50~~$90 million for each $2.00 per pound change in the average price of molybdenum.

Consolidated Capital Expenditures

Capital expenditures are expected to approximate ~~$4.5~~$5.1 billion for the year ~~2022~~2023 (including ~~$1.9~~$2.4 billion for major mining projects and ~~$1.4~~$1.6 billion for ~~the greenfield smelter and precious metals refinery (PMR) - collectively,~~ 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 ~~$0.6~~$1.1 billion for discretionary growth ~~projects.~~projects, primarily for development of Kucing Liar, a mill recovery project with the installation of a new copper cleaner circuit at PT-FI, and expansion projects at Bagdad and Lone Star. We closely monitor market conditions and

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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 ~~available~~ revolving credit facility. Construction of the additional domestic smelter capacity will result in the elimination of export duties, providing an offset to the economic cost associated with the Indonesia smelter projects. Based on current development progress of additional smelting capacity, PT-FI expects export duties to be reduced from the current rate of 5 percent to 2.5 percent by the end of 2022, and eliminated in the second half of 2023.

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MARKETS

World prices for copper, gold and molybdenum can fluctuate significantly. During the period from January ~~2012~~2013 through ~~June 2022,~~March 2023, the ~~LME~~London Metal Exchange (LME) copper settlement price varied from a low of $1.96 per pound in 2016 to a record high of $4.87 per pound in 2022; the London Bullion Market Association (London) PM gold price fluctuated from a low of $1,049 per ounce in 2015 to a record high of $2,067 per ounce in 2020; and the Platts Metals ~~Week~~Daily Molybdenum Dealer Oxide weekly average price ranged from a low of $4.46 per pound in 2015 to a high of ~~$20.01~~$37.42 per pound in ~~2021.~~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 ~~2021~~2022 Form 10-K.

This graph presents LME copper settlement prices and the combined reported stocks of copper at the LME, Commodity Exchange Inc., and the Shanghai Futures Exchange from January ~~2012~~2013 through ~~June 2022.~~March 2023. During ~~second-quarter 2022,~~first-quarter 2023, LME copper settlement prices ranged from a low of ~~$3.74~~$3.72 per pound to a high of ~~$4.73~~$4.28 per pound, averaged ~~$4.31~~$4.05 per pound and settled at ~~$3.74~~$4.05 per pound on June 30, 2022. Beginning in June 2022, copper prices declined sharply as a result of a series of macro-economic factors, including concerns about the global economy, Chinese economic data, rising U.S. interest rates and currency exchange rates relatedMarch 31, 2023. Physical market tightness continues to provide significant support to the ~~strength~~price of ~~the U.S. dollar.~~copper, and inventory levels remain low with slightly more than three days of global consumption available. The LME copper settlement price was ~~$3.54~~$3.89 per pound on July 29, 2022. Future copper prices may continue to be volatile and are expected to be influenced by, among other things, demand from China and economic activity, including the possibility of global recession.April 28, 2023.

We believe ~~the weakness in current financial market sentiment is inconsistent with physical markets~~long-term fundamentals for copper are favorable and ~~longer-term fundamentals. We continue to believe~~that future demand will be supported by copper’s role in the global transition to renewable power, electric vehicles and other carbon-reduction initiatives, and continued urbanization in developing countries. The small number of approved, large-scale projects ~~scheduled~~ beyond those that have been announced, the long lead times required to permit and build new mines and declining ore grades at existing operations continue to highlight the fundamental supply challenges for copper. ~~The current copper price weakness is expected to add to the already significant barriers to future copper supply development.~~

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This graph presents London PM gold prices from January ~~2012~~2013 through ~~June 2022.~~March 2023. During ~~second-quarter 2022,~~first-quarter 2023, London PM gold prices ranged from a low of ~~$1,810~~$1,811 per ounce to a high of ~~$1,977~~$1,994 per ounce, averaged ~~$1,871~~$1,890 per ounce, and closed at ~~$1,817~~$1,980 per ounce on ~~June 30, 2022. The strength~~March 31, 2023. Forecasts are divided as analysts are weighing the liquidity concerns in the U.S. banking sector and weakness of the U.S. dollar ~~has negatively impacted gold prices as~~against the ~~U.S. dollar index reached a 20-year high in June 2022.~~expected central bank response to persistent inflation. The London PM gold price was ~~$1,753~~$1,983 per ounce on ~~July 29, 2022.~~April 28, 2023.

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This graph presents the Platts Metals ~~Week~~Daily Molybdenum Dealer Oxide weekly average price from January ~~2012~~2013 through ~~June 2022.~~March 2023. During ~~second-quarter 2022,~~first-quarter 2023, the weekly average price of molybdenum ranged from a low of ~~$17.08~~$24.65 per pound to a high of ~~$19.31 per pound, averaged $18.42~~$37.42 per pound and ~~was $17.08~~averaged $32.78 per ~~pound on June 30, 2022. During second-quarter 2022, concerns about China’s zero-COVID-19 policies, inflation~~pound. As China increased exports, molybdenum prices declined significantly from the first quarter high. We believe long-term fundamentals for molybdenum are positive with favorable demand drivers and ~~anticipated lower summer steel production prompted price weakness that has continued into July 2022.~~limited supply. The Platts Metals ~~Week~~Daily Molybdenum Dealer Oxide weekly average price was ~~$15.15~~$24.65 per pound on ~~July 29, 2022.~~

March 31, 2023, and $21.20 per pound on April 28, 2023.

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CONSOLIDATED RESULTS


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2022			2021			2022			2021					2023			2022
SUMMARY FINANCIAL DATA	SUMMARY FINANCIAL DATA	(in millions, except per share amounts)												SUMMARY FINANCIAL DATA		(in millions, except per share amounts)
Revenuesa,b	Revenuesa,b	$	5,416		$	5,748		$	12,019		$	10,598		Revenuesa,b		$	5,389		$	6,603
Operating incomea	Operating incomea	$	1,736		$	2,067		$	4,545		$	3,599		Operating incomea		$	1,601		$	2,809

Net income attributable to common stockc	Net income attributable to common stockc	$	840	d	$	1,083	e	$	2,367	d	$	1,801	e	Net income attributable to common stockc		$	663	d	$	1,527	e
Diluted net income per share of common stock	Diluted net income per share of common stock	$	0.57		$	0.73		$	1.61		$	1.21		Diluted net income per share of common stock		$	0.46		$	1.04

Diluted weighted-average shares of common stock outstanding	Diluted weighted-average shares of common stock outstanding	1,457			1,483			1,463			1,480			Diluted weighted-average shares of common stock outstanding		1,443			1,469

Operating cash flowsf	Operating cash flowsf	$	1,621		$	2,395		$	3,312		$	3,470		Operating cash flowsf		$	1,050		$	1,691
Capital expenditures	Capital expenditures	$	863		$	433		$	1,586		$	803		Capital expenditures		$	1,121		$	723
At June 30:
At March 31:														At March 31:
Cash and cash equivalents	Cash and cash equivalents	$	9,492		$	6,313		$	9,492		$	6,313		Cash and cash equivalents		$	6,852		$	8,338
Total debt, including current portion	Total debt, including current portion	$	11,092		$	9,695		$	11,092		$	9,695		Total debt, including current portion		$	9,635		$	9,621

a.Refer to Note 9 for a summary of revenues and operating income by operating division.

b.Includes ~~(unfavorable)~~ favorable adjustments to prior period provisionally priced concentrate and cathode copper sales totaling ~~$(355)~~$210 million ($~~(154) million to net income attributable to common stock or $(0.10) per share) in second-quarter 2022, $173 million ($66~~72 million to net income attributable to common stock or $0.05 per share) in ~~second-quarter 2021, $65~~first-quarter 2023 and $102 million ($2742 million to net income attributable to common stock or ~~$0.02~~less than $0.03 per share) ~~for the first six months of 2022 and $169 million ($65 million to net income attributable to common stock or $0.04 per share) for the first six months of 2021.~~in first-quarter 2022. Refer to Note 6 for further discussion.

c.We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations – Smelting and Refining” for a summary of net impacts from changes in these deferrals.

d.Includes net charges totaling ~~$14~~$94 million ($~~0.01~~0.06 per share) ~~in second-quarter 2022 and $52 million ($0.04 per share) for the first six months of 2022. Net charges for second-quarter 2022 were~~ primarily associated with net adjustments to environmental obligations, contested tax matters and ~~metals inventory adjustments, partly offset by a~~asset impairments in North America.

e.Includes net ~~gain on early extinguishment of debt. Net~~ charges ~~for the first six months of 2022 also included~~totaling $38 million ($0.03 per share), primarily associated with the settlement of an administrative fine and an adjustment to prior-period export duties at ~~PT-FI, and asset retirement obligation (ARO) adjustments.~~

e.Includes net charges totaling $56 million ($0.04 per share) in second-quarter 2021 and $94 million ($0.06 per share) for the first six months of 2021, primarily associated with contested matters at PT-FI (including historical tax audits and an administrative fine levied by the Indonesia government), nonrecurring labor-related costs at Cerro Verde and adjustments to environmental obligations and AROs.PT-FI.

f.Working capital and other ~~sources (uses)~~uses totaled ~~$100~~$467 million in ~~second-quarter 2022, $523~~first-quarter 2023 and $811 million in ~~second-quarter 2021, $(711) million for the first six months of 2022 and $187 million for the first six months of 2021.~~first-quarter 2022.


	Three Months Ended March 31,
		2023			2022
SUMMARY OPERATING DATA
Copper (millions of recoverable pounds)
Production		965			1,009
Sales, excluding purchases		832		a	1,024
Average realized price per pound		$	4.11		$	4.66
Site production and delivery costs per poundb		$	2.57		$	2.03
Unit net cash costs per poundb		$	1.76		$	1.33
Gold (thousands of recoverable ounces)
Production		405			415
Sales, excluding purchases		270		a	409
Average realized price per ounce		$	1,949		$	1,920
Molybdenum (millions of recoverable pounds)
Production		21			21
Sales, excluding purchases		19			19
Average realized price per pound		$	30.32		$	19.30

a.Beginning on January 1, 2023, PT-FI’s commercial arrangement with PT Smelting converted from a concentrate sales agreement to a tolling arrangement, which resulted in a change in timing of sales. As a result of the transition, approximately 110 million pounds of copper and 110 thousand ounces of gold from PT-FI's first-quarter 2023 production is deferred in inventory and will be sold in future periods.

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Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
SUMMARY OPERATING DATA
Copper (millions of recoverable pounds)

Production 1,075 913 2,084 1,823
Sales, excluding purchases 1,087 929 2,111 1,754
Average realized price per pound $ 4.03 $ 4.34

$ 4.18 $ 4.25
Site production and delivery costs per pounda
$ 2.09 $ 2.02 b $ 2.06 $ 1.94 b
Unit net cash costs per pounda
$ 1.41 $ 1.48 $ 1.37 $ 1.44
Gold (thousands of recoverable ounces)

Production 476 305 891 602
Sales, excluding purchases 476 305 885 563
Average realized price per ounce $ 1,827 $ 1,794 $ 1,861 $ 1,785
Molybdenum (millions of recoverable pounds)

Production 23 20 44 40
Sales, excluding purchases 20 22 39 43
Average realized price per pound $ 19.44 $ 13.11 $ 19.37 $ 12.38

a.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 ~~(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.”

b.Includes $0.07 per pound of copper in second-quarter 2021 and $0.04 per pound of copper for the first six months of 2021 associated with nonrecurring labor-related costs at Cerro Verde. Refer to “Operations – South America Mining” for further discussion.

Revenues

Consolidated revenues totaled $5.4 billion in ~~second-quarter 2022, $5.7~~first-quarter 2023 and $6.6 billion in ~~second-quarter 2021, $12.0 billion for the first six months of 2022 and $10.6 billion for the first six months of 2021.~~first-quarter 2022. Revenues from our mining operations and processing facilities primarily include the sale of copper concentrate, copper cathode, copper rod, gold in concentrate and molybdenum. Refer to Note 9 for a summary of product revenues.

Following is a summary of changes in our consolidated revenues between periods (in millions):

Three Months Ended June 30 Six Months Ended June 30
Consolidated revenues - 2021 period $ 5,748 $ 10,598
Higher (lower) sales volumes:
Copper 681 1,515
Gold 305 575
Molybdenum (34) (49)
(Lower) higher average realized prices:
Copper (337) (148)
Gold 16 67
Molybdenum 121 270
Adjustments for prior period provisionally priced copper sales (528) (104)
Lower Atlantic Copper revenues (361) (330)
Lower revenues from purchased copper (206) (354)
Higher treatment charges (38) (74)
Higher royalties and export duties (69) (170)
Other, including intercompany eliminations 118 223
Consolidated revenues - 2022 period $ 5,416 $ 12,019


	Three Months Ended March 31

Consolidated revenues - 2022 period	$	6,603
Lower sales volumes:
Copper	(895)
Gold	(267)
Molybdenum	—

(Lower) higher average realized prices:
Copper	(458)
Gold	8
Molybdenum	214
Adjustments for prior period provisionally priced copper sales	108
Higher Atlantic Copper revenues	38
Higher revenues from purchased copper	134

Lower treatment charges	32
Lower royalties and export duties	115
Other, including intercompany eliminations	(243)
Consolidated revenues - 2023 period	$	5,389

Sales Volumes. Consolidated copper and gold sales volumes ~~increased~~decreased in ~~the 2022 periods,~~first-quarter 2023, compared with first-quarter 2022, primarily as a result of the ~~2021 periods, primarily reflecting increased~~deferral of sales recognition related to the PT Smelting tolling arrangement and the timing of shipments. In addition, PT-FI experienced lower operating rates at the Grasberg minerals district ~~and Cerro Verde. Refer to “Operations” for further discussion of sales volumes at our mining operations.~~associated with a significant weather event that temporarily disrupted operations during February 2023.

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Realized Prices. Our consolidated revenues can vary significantly as a result of fluctuations in the market prices of copper, gold and molybdenum. Average realized prices in ~~second-quarter 2022,~~first-quarter 2023, compared with ~~second-quarter 2021,~~first-quarter 2022, were ~~7 percent~~12% lower for copper, ~~2 percent~~2% higher for gold and 48 percent higher for molybdenum, and average realized prices for the first six months of 2022, compared with the first six months of 2021, were 2 percent lower for copper, 4 percent higher for gold and 56 percent57% higher for molybdenum.

Average realized copper prices include net ~~(unfavorable)~~ favorable adjustments to current period provisionally priced copper sales totaling ~~$(365)~~$21 million in ~~second-quarter 2022, $(55)~~first-quarter 2023 and $116 million in ~~second-quarter 2021, $(567) million for the first six months of 2022 and $156 million for the first six months of 2021.~~first-quarter 2022. As discussed in Note 6, ~~substantially~~ 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 copper prices. We record revenues and invoice customers at the time of shipment based on then-current LME prices, which results in an embedded derivative on provisionally priced concentrate and cathode sales that is adjusted to fair value through earnings each period, using the period-end forward prices, until final pricing on the date of settlement. To the extent final prices are higher or lower than what was recorded on a provisional basis, an increase or decrease to revenues is recorded each reporting period until the date of final pricing. Accordingly, in times of rising copper prices, our revenues benefit from adjustments to the final pricing of provisionally priced sales pursuant to contracts entered into in prior periods; in times of falling copper prices, the opposite occurs.

Prior Period Provisionally Priced Copper Sales. Net ~~(unfavorable)~~ favorable adjustments to prior periods’ provisionally priced copper sales (i.e., provisionally priced sales at ~~March~~December 31, 2022 and ~~2021, and December 31, 2021 and 2020)~~2021) recorded in consolidated revenues totaled ~~$(355)~~$210 million in ~~second-quarter 2022, $173~~first-quarter 2023 and $102 million in ~~second-quarter 2021, $65 million for the first six months of 2022 and $169 million for the first six months of 2021.~~first-quarter 2022. Refer to Notes 6 and 9 for a summary of total adjustments to prior period and current period provisionally priced sales.

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At ~~June 30, 2022,~~March 31, 2023, we had provisionally priced copper sales totaling ~~447~~262 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of ~~$3.75~~$4.08 per pound, subject to final pricing over the next several months. We estimate that each $0.05 change in the price realized from the ~~June 30, 2022,~~March 31, 2023, provisional price recorded would have an approximate ~~$14~~$8 million effect on our ~~2022~~2023 net income attributable to common stock. The LME copper price settled at ~~$$3.54~~$3.89 per pound on ~~July 29, 2022.~~April 28, 2023.

Beginning January 1, 2023, PT-FI’s commercial arrangement with PT Smelting converted from a concentrate sales agreement to a tolling arrangement. Under this arrangement PT-FI pays PT Smelting a tolling fee to smelt and refine its concentrate and PT-FI retains title to all products for sale to third parties (i.e., there are no further sales to PT Smelting). PT-FI’s sale of copper cathodes under the tolling arrangement are priced in the month of shipment and are not subject to provisional pricing.

Atlantic Copper Revenues. Atlantic Copper revenues totaled ~~$433~~$756 million in ~~second-quarter 2022 and $1.2 billion for the first six months of 2022,~~first-quarter 2023, compared with ~~$794~~$718 million in ~~second-quarter 2021 and $1.5 billion for the first six months of 2021. Lower~~first-quarter 2022. Higher revenues in ~~the 2022 periods,~~first-quarter 2023, compared with ~~2021 periods,~~first-quarter 2022, primarily reflects ~~reduced operations as a result of a scheduled major maintenance turnaround that began in second-quarter 2022.~~higher sales volumes.

Purchased Copper. We purchase copper cathode primarily for processing by our Rod & Refining operations. The volumes of copper purchases vary depending on cathode production from our operations and totaled 2348 million pounds in ~~second-quarter 2022, 68~~first-quarter 2023 and 15 million pounds in second-quarter 2021, 38 million pounds for the first six months of 2022 and 121 million pounds for the first six months of 2021. The decrease in revenues associated with purchased copper in the 2022 periods, compared to the 2021 periods, reflects the impact of lower purchases and copper prices.first-quarter 2022.

Treatment Charges. Revenues from our concentrate sales are recorded net of treatment charges (i.e., fees paid to smelters that are generally negotiated annually), which will vary with the sales volumes and the price of copper. The ~~increase~~decrease in the treatment charges in ~~the~~first-quarter 2023 compared to first-quarter 2022 ~~periods~~ primarily reflects ~~higher copper~~lower sales ~~volumes.~~volumes and PT-FI’s commercial arrangement with PT Smelting converting from a 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).

Royalties and Export Duties. Royalties are primarily onassociated with PT-FI sales and vary with the volume of metal sold and the prices of copper and gold. ~~Higher~~In late 2022, the export duty rate 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%, allowing PT-FI’s export duties to be eliminated effective March 29, 2023.

Lower royalties and export duties ~~in the~~during first-quarter 2023, compared with first-quarter 2022, ~~periods, compared to the 2021 periods, are primarily associated with increased~~reflect lower PT-FI copper and gold sales ~~volumes. PT-FI currently pays duties on concentrate exports of 5 percent, declining to 2.5 percent when development progress for additional smelting capacity in Indonesia exceeds 30 percent,~~volumes and ~~eliminated when development progress for additional smelting capacity in Indonesia exceeds 50 percent. Based on current development progress of additional smelting capacity, PT-FI expects~~copper prices as well as a lower export ~~duties to be reduced from the current~~duty rate of ~~5 percent~~2.5% in first-quarter 2023, compared to ~~2.5 percent by the end of 2022, and eliminated~~5% in the second half of 2023. Refer to “Operations – Indonesia Mining” for further discussion of the current progress on additional smelting capacity in Indonesia and to Note 9 for a summary of royalty expense and export duties.first-quarter 2022.

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Production and Delivery Costs

Consolidated production and delivery costs totaled ~~$3.0~~$3.2 billion in ~~second-quarter~~both first-quarter 2023 and 2022, ~~$3.1 billion in second-quarter 2021, $6.2 billion~~reflecting increased costs for ~~the first six months of 2022 and $5.9 billion for the first six months of 2021. We continue to experience significant cost inflation, principally associated with higher~~ energy ~~prices~~ (which represents approximately ~~20 percent~~21% of our site operating costs), unplanned maintenance and ~~increased~~inflationary cost pressures on input costs, ~~for other consumables such as sulfuric acid, explosives and steel. These higher costs were partly~~mostly offset by lower ~~costs at Atlantic Copper related to reduced operations as a result of a scheduled major maintenance turnaround that began in second-quarter 2022.~~sales volumes.

Site Production and Delivery Costs Per Pound. Site production and delivery costs for our copper mining operations primarily include labor, energy and other commodity-based inputs, such as sulfuric acid, explosives, steel, reagents, liners and tires. Consolidated site production and delivery costs (before net noncash and other costs) for our copper mines averaged ~~$2.09~~$2.57 per pound of copper in ~~second-quarter 2022, $2.02~~first-quarter 2023 and $2.03 per pound of copper in ~~second-quarter 2021, $2.06 for the first six months of 2022 and $1.94 for the first six months of 2021.~~first-quarter 2022.

Higher consolidated site production and delivery costs per pound of copper for ~~the second quarter and first six months of 2022,~~first-quarter 2023, compared with ~~the second quarter and first six months of 2021,~~first-quarter 2022, primarily reflect higher energy prices and increased costs ~~associated with energy, input costs (including operating supplies~~for consumables such as sulfuric acid, explosives, key equipment parts and ~~steel)~~other supplies and ~~maintenance.~~services. Refer to “Operations – Unit Net Cash Costs” for further discussion of unit net cash costs associated with our operating divisions and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements.

Depreciation, Depletion and Amortization

Depreciation will vary under the unit-of-production (UOP) method as a result of changes in sales volumes and the related UOP rates at our mining operations. ~~Consolidated~~Lower consolidated depreciation, depletion and amortization (DD&A) ~~totaled $507~~of $399 million in ~~second-quarter 2022, $483~~first-quarter 2023, compared to $489 million in ~~second-quarter 2021, $996 million for the first six months of~~first-quarter 2022, ~~and $902 million for the first six months of 2021. Higher DD&A in the 2022 periods~~ primarily reflects ~~higher~~lower sales volumes ~~and assets placed in service associated with the ramp-up of underground mining at~~from PT-FI.

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~~Metals Inventory Adjustments~~

~~Metals inventory adjustments totaled $18 million for~~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 ~~second quarter and first six months~~settlement of 2022 and $1 million for the first six months of 2021. Metals inventory adjustments in the 2022 periods include net realizable value (NRV) inventory adjustments related to lower market prices for copper ($9 million) and a stockpile write-off at Cerro Verde ($9 million).

As discussed in “Markets,” there has been a sharp decline in the price of copper in recent months. The LME copper settlement price was $3.74 per pound on June 30, 2022, and $3.54 per pound on July 29, 2022. Prolonged environmental matters and/or ~~further declines in the prices of the commodities~~circumstances affecting our operations that ~~we sell, particularly copper,~~ could result in ~~additional NRV inventory adjustments, which could be significant.~~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. Higher net charges for environmental obligations and shutdown costs in first-quarter 2023, compared to first-quarter 2022, primarily reflect net revisions to long-term historical environmental obligations totaling $56 million in first-quarter 2023.

Interest Expense, Net

Consolidated interest costs (before capitalization) totaled ~~$189~~$207 million in ~~second-quarter 2022, $165~~first-quarter 2023 and $153 million in ~~second-quarter 2021, $342 million for the first six months of 2022 and $325 million for the first six months of 2021. Higher~~first-quarter 2022. The increase in consolidated interest costs (before capitalization) infor the 2023 period, compared to the 2022 ~~periods are~~period, is primarily related to ~~PT-FI's~~interest associated with PT-FI’s $3.0 billion of senior notes that were issued in April ~~2022. Nearly all~~2022 and a charge of ~~our outstanding debt is fixed rate.~~$25 million related to contested tax matters in Peru.

Capitalized interest varies with the level of qualifying assets associated with our development projects and average interest rates on our borrowings. Capitalized interest totaled ~~$33~~$56 million in ~~second-quarter 2022, $17~~first-quarter 2023 and $26 million in ~~second-quarter 2021, $59 million for the first six months of 2022 and $32 million for the first six months of 2021.~~first-quarter 2022. The increase in capitalized interest incosts for the ~~2022 periods, compared with the 2021 periods, is related to major mining projects primarily associated with underground development activities in the Grasberg minerals district~~2023 period resulted from increased construction and development ~~of the greenfield~~projects in process, primarily at our Indonesia smelter ~~in Indonesia.~~projects. Refer to “Capital Resources and Liquidity -– Investing Activities” for discussion of capital expenditures associated with our major development projects.

Other income, Net ~~Gain on Early Extinguishment of Debt~~

~~Net gain on extinguishment of debt~~Other income, net totaled $8$88 million in first-quarter 2023 and $31 million in first-quarter 2022. The increase in other income, net for the ~~second quarter and first six months of~~2023 period, compared to the 2022 ~~consisting of $18 million associated with senior note purchases, partly offset by a charge of $10 million associated with the repayment of the PT-FI term loan. Refer~~period, is primarily related to ~~Note 5 for further discussion.~~higher interest income.

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Income Taxes

Following is a summary of the approximate amounts used in the calculation of our consolidated income tax provision (in millions, except percentages):

Six Months Ended June 30,
2022 2021
Income (Loss)a
Effective
Tax Rate Income Tax (Provision) Benefit
Income (Loss)a
Effective
Tax Rate Income Tax (Provision) Benefit
U.S.b
$ 909 1 % c $ (5) $ 743 — % c $ (3)
South America 776 39 % (302) 923 39 % (356)
Indonesia 2,625 39 % (1,020) 1,759 41 % (719)
Eliminations and other 2 N/A (7) (99) N/A 5
Rate adjustmentd
— N/A (61) — N/A 27
Consolidated FCX $ 4,312 32 % $ (1,395) $ 3,326 31 % $ (1,046)


	Three Months Ended March 31,
	2023							2022
	Income (Loss)a		Effective Tax Rate			Income Tax (Provision) Benefit		Income (Loss)a		Effective Tax Rate			Income Tax (Provision) Benefit
U.S.b	$	213	—	%	c	$	4	$	552	—	%	c	$	(2)
South America	499		39	%		(194)		612		39	%		(241)
Indonesia	887		37	%		(330)		1,512		39	%		(586)


Eliminations and other	(61)		N/A			22		37		N/A			(10)
Rate adjustmentd	—		N/A			(1)		—		N/A			15


Consolidated FCX	$	1,538	32	%		$	(499)	$	2,713	30	%		$	(824)

a.Represents income before income taxes and equity in affiliated companies’ net earnings.

b.In addition to our North America mining operations, the U.S. jurisdiction reflects corporate-level expenses, which include interest expense associated with senior notes, general and administrative expenses, and environmental obligations and shutdown costs.

c.Includes valuation allowance release on prior year unbenefited net operating ~~losses.~~losses (NOLs). See below for discussion of the provisions of the U.S. Inflation Reduction Act of 2022 (Act).

d.In accordance with applicable accounting rules, we adjust our interim provision for income taxes equal to our consolidated tax rate.

In August 2022, the Act was signed into law, which 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. The provisions of the Act became applicable to us on January 1, 2023. 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. 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 first-quarter 2023 financial results. However, future guidance released by the Treasury may differ from our interpretations, which could be material and may further limit our ability to realize future benefits from our U.S. NOLs.

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Assuming achievement of current sales volume and cost estimates and average prices of ~~$3.25~~$4.00 per pound for copper, ~~$1,700~~$2,000 per ounce for gold and ~~$16.00~~$18.00 per pound for molybdenum for the ~~second half~~remainder of ~~2022,~~2023, we estimate our consolidated effective tax rate for the year ~~2022~~2023 would approximate 34 percent (which would result in a 47 percent effective tax rate in third-quarter 2022). The consolidated effective tax rate would decrease with higher prices - for example, we estimate that an increase in the average price of copper to $3.50 per pound for the second half of 2022 would result in an estimated effective tax rate of approximately 33 percent for the year 2022 (which would result in a 38 percent effective tax rate in third-quarter 2022)34%. Changes in projected sales volumes and average prices during ~~2022~~2023 would incur tax impacts at estimated effective rates of ~~39 percent~~40% for Peru, ~~38 percent~~36% for Indonesia and ~~0 percent~~0% 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 as additional guidance is released by the Treasury on key provisions of the Act, including guidance on the CAMT.

Noncontrolling Interests

Net income attributable to noncontrolling interests is primarily associated with PT-FI, Cerro Verde and El Abra and totaled $386 million in first-quarter 2023 (which represented 25% of our consolidated income before income taxes) and $377 million in first-quarter 2022 (which represented 14% of our consolidated income before income taxes). 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%. As discussed in Note 3 of our 2022 Form 10-K, in accordance with provisions pertaining to PT-FI’s shareholders agreement, our 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. Based on current sales volume and cost estimates and assuming average prices of $4.00 per pound of copper, $2,000 per ounce of gold and $18.00 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 $2.2 billion for the year 2023 (which would represent 30% of our consolidated income before income taxes). The actual amount will depend on many factors, including relative performance of each business segment, commodity prices, costs and other factors.

Refer to Note 9 for net income attributable to noncontrolling interests for each of our business segments.

OPERATIONS

Responsible Production

~~2021~~2022 Annual Report on Sustainability. In April ~~2022,~~2023, we published our ~~2021~~2022 Annual Report on Sustainability, which is available on our website at fcx.com/~~sustainability.~~sustainability, marking our 22nd year of reporting on our sustainability progress. We ~~have~~are committed to building upon our achievements in sustainability and our position as a ~~long history of environmental, social and governance (ESG) programs, and we are focused on~~ leading ~~as a~~ responsible copper producer.

The Copper Mark. We ~~are committed to validating all of~~demonstrate our ~~copper producing sites with~~responsible production performance through the Copper Mark, a comprehensive assurance framework ~~designed to demonstrate~~developed specifically for the copper ~~industry's responsible production practices.~~industry. To achieve the Copper Mark, each site is required to complete an independent external assurance process to assess conformance with 32 ~~ESG requirements. During second-quarter 2022, Safford~~environmental, social and ~~Sierrita were awarded the Copper Mark. To date, we~~governance criteria. Awarded sites must be revalidated every three years.

We have achieved the Copper Mark at all 1112 of our ~~eligible~~ copper producing sites globally. In addition, following the extension of the Copper Mark framework to molybdenum producers in ~~North America, South America~~2022, our two primary molybdenum mines and ~~Europe, and PT-FI has signed a letter of commitment and initiated~~four copper mines that produce by-product molybdenum were awarded the ~~validation process.~~Molybdenum Mark.

Leaching Innovation Initiatives

We are ~~advancing~~continuing to advance efforts to ~~improve~~increase copper recovery from all ore types using leach processes. Several initiatives ongoing across our North America and South America operations incorporate new applications, technologies and data analytics. We believe these leach innovation initiatives provide potential opportunities to produce incremental copperproduction through enhanced recoveries from our large existing leach stockpiles. We have added covers to over 30% of our historical leach pads in an effort to increase temperatures and enhance recovery within the stockpiles. We are also pursuing third-party and internal initiatives for additives to enhance recovery and have identified new areas of leach opportunities on existing stockpiles and ~~lower-grade material currently classified as waste. Initial~~are using data analytics to improve our operating practices. The data analytics work is providing new insights to determine optimal operating protocols under various conditions of the stockpiles. Based on results ~~support~~to date, we are gaining confidence in achieving our annual-run-rate target of approximately 200 million pounds of copper by the ~~potential for incremental low-cost additions to our production and reserve profile.~~end of 2023, with potentially larger opportunities in the future.

~~Table of Contents~~

Feasibility and Optimization Studies

We are engaged in various studies associated with potential future expansion projects primarily ~~in North America and South America.~~at our mining operations. The costs for these studies are charged to production and delivery costs as incurred and totaled ~~$31~~$50 million in ~~second-quarter 2022, $11~~first-quarter 2023 and $20 million in ~~second-quarter 2021, $50 million for the first six months of 2022 and $16 million for the first six months of 2021.~~first-quarter 2022. We estimate the costs of these studies will

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approximate ~~$180~~$200 million for the year ~~2022~~2023 (including approximately ~~$60~~$70 million in ~~third-quarter 2022)~~second-quarter 2023), compared with approximately ~~$60~~$140 million for the year ~~2021,~~2022, 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 percent~~72% undivided joint venture interest in Morenci using the proportionate consolidation method.

The North America copper mines include open-pit mining, sulfide-ore concentrating, leaching and solution extraction/electrowinning (SX/EW) operations. A majority of the copper produced at our North America copper mines is cast into copper rod by our Rod & Refining segment. The remainder of our North America copper production is sold 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.

Operating and Development Activities. We have substantial reserves and future opportunities in the U.S., primarily associated with existing mining operations.

At Safford/Lone Star, production from oxide ores is ~~increasing its operating rates to achieve targeted production of approximately~~approaching 300 million pounds of copper per year, ~~in 2023 from oxide ores (compared with~~which reflects expansion of the initial design capacity of 200 million pounds of copper per ~~year). The oxide project at Lone Star advances the opportunity for development of the underlying, large-scale sulfide resources.~~year. We ~~are also increasing~~have conducted significant exploration drilling in the area in recent years. The positive drilling results indicate potential opportunities to ~~support~~expand production to include sulfide ores in the future. We are advancing metallurgical testing and mine development planning for a potential significant long-term investment ~~to build additional scale on an economically attractive basis.~~for development of identified large sulfide resources.

We are planning an expansion to double the concentrator capacity of ~~our~~the Bagdad operation in northwest Arizona. We are ~~engaging stakeholders and have commenced~~conducting a feasibility study, which is expected to be completed in ~~2023,~~the second half of 2023. In parallel, we are advancing plans for ~~this project.~~expanded tailings infrastructure projects to support Bagdad's long-range plans. The timing of future developments will be dependent on market conditions, labor and supply chain considerations and other economic factors.

A tight labor market and increased competition from other employers in North America continue to represent strategic challenges that are impacting production and our ability to further expand current mining rates.

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Operating Data. Following is summary consolidated operating data for the North America copper mines:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,

		2022		2021		2022		2021			2023		2022
Operating Data, Net of Joint Venture Interests	Operating Data, Net of Joint Venture Interests									Operating Data, Net of Joint Venture Interests
Copper (millions of recoverable pounds)	Copper (millions of recoverable pounds)									Copper (millions of recoverable pounds)
Production	Production	382		360		736		713		Production	332		354
Sales, excluding purchases	Sales, excluding purchases	389		389		770		697		Sales, excluding purchases	332		381
Average realized price per pound	Average realized price per pound	$	4.36	$	4.42	$	4.46	$	4.19	Average realized price per pound	$	4.16	$	4.62

Molybdenum (millions of recoverable pounds)	Molybdenum (millions of recoverable pounds)									Molybdenum (millions of recoverable pounds)
Productiona	Productiona	8		9		15		17		Productiona	7		7

100% Operating Data	100% Operating Data									100% Operating Data
Leach operations	Leach operations									Leach operations
Leach ore placed in stockpiles (metric tons per day)	Leach ore placed in stockpiles (metric tons per day)	722,900		688,000		715,800		696,500		Leach ore placed in stockpiles (metric tons per day)	613,200		708,600
Average copper ore grade (percent)		0.29		0.30		0.29		0.29
Average copper ore grade (%)										Average copper ore grade (%)	0.27		0.28
Copper production (millions of recoverable pounds)	Copper production (millions of recoverable pounds)	254		265		499		527		Copper production (millions of recoverable pounds)	234		245

Mill operations	Mill operations									Mill operations
Ore milled (metric tons per day)	Ore milled (metric tons per day)	306,900		264,700		299,200		266,300		Ore milled (metric tons per day)	297,500		291,400
Average ore grade (percent):
Average ore grade (%):										Average ore grade (%):
Copper	Copper	0.39		0.36		0.38		0.37		Copper	0.34		0.36
Molybdenum	Molybdenum	0.02		0.03		0.02		0.03		Molybdenum	0.02		0.02
Copper recovery rate (percent)		83.2		82.4		82.1		80.5
Copper recovery rate (%)										Copper recovery rate (%)	80.4		80.9
Copper production (millions of recoverable pounds)	Copper production (millions of recoverable pounds)	195		155		364		306		Copper production (millions of recoverable pounds)	154		169

a.Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at the North America copper mines.

Our consolidated copper sales volumes from North America ~~totaled 389~~of 332 million pounds in ~~both second-quarter~~first-quarter 2023 were lower than first-quarter 2022 copper sales volumes of 381 million pounds, primarily reflecting the timing of shipments in first-quarter 2022 and ~~second-quarter 2021, 770 million pounds for the first six months of 2022~~reduced production in first-quarter 2023 associated with lower mining rates, lower ore grades and ~~697 million pounds for the first six months of 2021. The changes in production and sales volumes for the 2022 periods, compared~~unplanned maintenance, partly offset by incremental copper associated with ~~the 2021 periods, primarily reflect timing of shipments.~~

leach initiatives. North America copper sales are estimated to approximate ~~1.5~~1.4 billion pounds for the year ~~2022.~~2023.

Unit Net Cash Costs. ~~Unit~~We believe unit net cash costs per pound of copper is a measure ~~intended to provide~~that 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. generally accepted accounting principles (GAAP) and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

Gross Profit per Pound of Copper and Molybdenum

The following table summarizes unit net cash costs and gross profit per pound at our North America copper mines. 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.

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		Three Months Ended June 30,																									Three Months Ended March 31,
		2022												2021													2023												2022
		By- Product Method				Co-Product Method								By- Product Method				Co-Product Method									By- Product Method				Co-Product Method								By- Product Method				Co-Product Method
				Copper				Molyb- denuma								Copper				Molyb- denuma									Copper				Molyb- denuma								Copper				Molyb- denuma
Revenues, excluding adjustments	Revenues, excluding adjustments			$	4.36			$	4.36			$	18.75			$	4.42			$	4.42			$	11.75			Revenues, excluding adjustments	$	4.16			$	4.16			$	28.35			$	4.62			$	4.62			$	17.97

Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	2.50				2.30				12.42				2.14				2.03				6.86				Site production and delivery, before net noncash and other costs shown below	2.91				2.54				19.85				2.38				2.20				10.95
By-product credits	By-product credits	(0.35)				—				—				(0.25)				—				—				By-product credits	(0.59)				—				—				(0.34)				—				—
Treatment charges	Treatment charges	0.11				0.11				—				0.08				0.07				—				Treatment charges	0.13				0.12				—				0.09				0.09				—
Unit net cash costs	Unit net cash costs	2.26				2.41				12.42				1.97				2.10				6.86				Unit net cash costs	2.45				2.66				19.85				2.13				2.29				10.95
DD&A	DD&A	0.27				0.24				0.81				0.26				0.25				0.55				DD&A	0.31				0.27				1.36				0.27				0.25				0.88
Metals inventory adjustments		0.02				0.02				0.16				—				—				—

Noncash and other costs, net	Noncash and other costs, net	0.09				0.08				0.32				0.08				0.08				0.06				Noncash and other costs, net	0.22		b		0.18				1.60				0.07		b		0.07				0.14
Total unit costs	Total unit costs	2.64				2.75				13.71				2.31				2.43				7.47				Total unit costs	2.98				3.11				22.81				2.47				2.61				11.97
Revenue adjustments, primarily for pricing on prior period open sales	Revenue adjustments, primarily for pricing on prior period open sales	(0.10)				(0.10)				—				0.02				0.02				—				Revenue adjustments, primarily for pricing on prior period open sales	0.04				0.04				—				0.03				0.03				—
Gross profit per pound	Gross profit per pound	$	1.62			$	1.51			$	5.04			$	2.13			$	2.01			$	4.28			Gross profit per pound	$	1.22			$	1.09			$	5.54			$	2.18			$	2.04			$	6.00

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	389				389								389				389								Copper sales (millions of recoverable pounds)	335				335								381				381
Molybdenum sales (millions of recoverable pounds)a	Molybdenum sales (millions of recoverable pounds)a									8												9				Molybdenum sales (millions of recoverable pounds)a									7												7

Six Months Ended June 30,
2022 2021
By- Product Method Co-Product Method By- Product Method Co-Product Method
Copper
Molyb-
denuma
Copper
Molyb-
denuma
Revenues, excluding adjustments $ 4.46 $ 4.46 $ 18.36 $ 4.19 $ 4.19 $ 11.12
Site production and delivery, before net noncash
and other costs shown below
2.44 2.25 11.68 2.09 1.96 6.76
By-product credits (0.35) — — (0.27) — —
Treatment charges 0.10 0.10 — 0.09 0.09 —
Unit net cash costs 2.19 2.35 11.68 1.91 2.05 6.76
DD&A 0.27 0.25 0.85 0.26 0.24 0.51
Metals inventory adjustments 0.01 0.01 0.08 — — —
Noncash and other costs, net 0.09 0.07 0.23 0.11 0.11 0.06
Total unit costs 2.56 2.68 12.84 2.28 2.40 7.33
Revenue adjustments, primarily for pricing
on prior period open sales
(0.01) (0.01) — 0.01 0.01 —
Gross profit per pound $ 1.89 $ 1.77 $ 5.52 $ 1.92 $ 1.80 $ 3.79
Copper sales (millions of recoverable pounds) 770 770 697 697
Molybdenum sales (millions of recoverable pounds)a
15 17

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 charges totaling $0.08 per pound of copper in first-quarter 2023 and $0.02 per pound of copper in first-quarter 2022 for feasibility and optimization studies. First-quarter 2023 also includes charges totaling $0.05 per pound of copper related to asset impairments.

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. ~~Our mining operations continue to experience significant cost inflation, principally associated with higher energy and other input costs. In addition to these higher costs, average~~Average unit net cash costs (net of by-product credits) for the North America copper mines of ~~$2.26~~$2.45 per pound of copper in ~~second-quarter~~first-quarter 2023 were higher than first-quarter 2022 ~~and $2.19~~unit net cash costs of $2.13 per pound of copper, primarily reflecting lower volumes and increased costs for ~~the first six months of 2022, compared with $1.97 per pound in second-quarter 2021~~maintenance and ~~$1.91 per pound for the first six months of 2021, reflect higher operating rates,~~supplies, labor and energy, partly offset by higher molybdenum by-product credits.

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.

~~Second-quarter 2022 revenue~~Revenue adjustments ~~at our North America copper mines~~ primarily ~~reflect the impact of declining copper~~result from changes in prices on provisionally priced copper sales ~~which include intercompany sales that are eliminated upon consolidation.~~recognized in prior periods. Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales.

~~Table of Contents~~

Average unit net cash costs (net of by-product credits) for our North America copper mines are expected to approximate ~~$2.25~~$2.62 per pound of copper for the year ~~2022,~~2023, based on achievement of current ~~sales~~ volume and cost estimates and assuming an average molybdenum price of ~~$16.00~~$18.00 per pound for the ~~second half~~remainder of ~~2022.~~2023. North America’s average unit net cash costs for the year ~~2022~~2023 would change by approximately ~~$0.02~~$0.03 per pound for each ~~$2.00~~$2 per pound change in the average price of molybdenum for the ~~second half~~remainder of ~~2022.~~2023.

South America Mining

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

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

Operating and Development Activities. The first six months of 2022 reflected strong performance from Cerro Verde's concentrator facilities, including achievement of a quarterly record milling average of 427,100 metric tons of ore per day during second-quarter 2022. Subject to ongoing monitoring of COVID-19 protocols, milling rates at Cerro Verde are currently expected to average over 400,000 metric tons of ore per day for the second half of 2022.

Operating rates at El Abra have returned to pre-COVID-19 levels and increased mining and stacking activities are expected to result in an approximate 30 percent increase in El Abra copper production for the year 2022, compared with the year 2021.

El Abra's large sulfide resource supports a potential major mill project similar to the large-scale concentrator ~~constructed~~ at Cerro ~~Verde in 2015.~~Verde. Technical and economic studies continue to be evaluated to determine the optimal scope and timing for the sulfide project. We are ~~considering options~~advancing plans to invest in water

Table of Contents

infrastructure to provide options to extend existing operations, while ~~we continue~~continuing to monitor potential changes in ~~Chile’s regulatory and fiscal matters. We will defer major investment decisions pending clarity on Chile’s~~Chile's regulatory and fiscal matters.

Operating Data. Following is summary consolidated operating data for South America mining:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,

		2022		2021		2022		2021			2023		2022
Copper (millions of recoverable pounds)	Copper (millions of recoverable pounds)									Copper (millions of recoverable pounds)
Production	Production	286		245		560		504		Production	304		274
Sales	Sales	288		230		552		489		Sales	302		264
Average realized price per pound	Average realized price per pound	$	3.83	$	4.31	$	4.00	$	4.28	Average realized price per pound	$	4.08	$	4.69

Molybdenum (millions of recoverable pounds)	Molybdenum (millions of recoverable pounds)									Molybdenum (millions of recoverable pounds)
Productiona	Productiona	7		4		14		9		Productiona	6		7

Leach operations	Leach operations									Leach operations
Leach ore placed in stockpiles (metric tons per day)	Leach ore placed in stockpiles (metric tons per day)	157,700		190,200		148,800		172,100		Leach ore placed in stockpiles (metric tons per day)	203,900		139,800
Average copper ore grade (percent)		0.37		0.33		0.36		0.34
Average copper ore grade (%)										Average copper ore grade (%)	0.33		0.36
Copper production (millions of recoverable pounds)	Copper production (millions of recoverable pounds)	71		65		132		126		Copper production (millions of recoverable pounds)	86		61

Mill operations	Mill operations									Mill operations
Ore milled (metric tons per day)	Ore milled (metric tons per day)	427,100		374,100		410,800		382,100		Ore milled (metric tons per day)	405,100		394,400
Average ore grade (percent):
Average ore grade (%):										Average ore grade (%):
Copper	Copper	0.31		0.29		0.32		0.30		Copper	0.34		0.33
Molybdenum	Molybdenum	0.01		0.01		0.02		0.01		Molybdenum	0.01		0.02

Copper recovery rate (percent)		84.4		85.2		85.5		86.4
Copper recovery rate (%)										Copper recovery rate (%)	83.9		86.6
Copper production (millions of recoverable pounds)	Copper production (millions of recoverable pounds)	215		179		428		377		Copper production (millions of recoverable pounds)	218		213

a.Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde.

Beginning in December 2022 and continuing in first-quarter 2023, heightened tensions, protests and social unrest emerged in Peru following a change in the country's political leadership. Cerro Verde operated at reduced rates from time to time during first-quarter 2023. While demonstrations and road blockages subsided in recent weeks, the potential for civil unrest and disruption of commerce and supply chains continues. Cerro Verde resumed normal operations in March 2023. We continue to monitor the situation with a priority on safety and security.

~~Table of Contents~~

Our consolidated copper sales volumes from South America ~~totaled 288~~of 302 million pounds in ~~second-quarter~~first-quarter 2023 were higher than first-quarter 2022 ~~230 million pounds in second-quarter 2021, 552 million pounds for the first six months of 2022 and 489 million pounds for the first six months of 2021. Higher~~ copper sales volumes ~~in the 2022 periods, compared with the 2021 periods,~~of 264 million pounds, primarily ~~reflect~~reflecting higher mining ~~and milling rates at Cerro Verde.~~

rates. Copper sales from South America mining are expected to approximate 1.2 billion pounds for the year ~~2022.~~2023. Refer to “Outlook” for projected molybdenum sales volumes.

Unit Net Cash Costs. ~~Unit~~We believe unit net cash costs per pound of copper is a measure ~~intended to provide~~that 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 our South America mining 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 June 30,
2022 2021
By-Product
Method Co-Product
Method By-Product
Method Co-Product
Method
Revenues, excluding adjustments $ 3.83 $ 3.83 $ 4.31 $ 4.31
Site production and delivery, before net noncash and other costs shown below 2.48 2.29 2.48 a 2.30
By-product credits (0.35) — (0.31) —
Treatment charges 0.15 0.15 0.13 0.13
Royalty on metals 0.01 0.01 0.01 0.01
Unit net cash costs 2.29 2.45 2.31 2.44
DD&A 0.35 0.32 0.40 0.37
Metals inventory adjustments 0.04 b 0.03 — —
Noncash and other costs, net 0.06 0.06 0.08 0.07
Total unit costs 2.74 2.86 2.79 2.88
Revenue adjustments, primarily for pricing on prior period open sales (0.53) (0.53) 0.38 0.38
Gross profit per pound $ 0.56 $ 0.44 $ 1.90 $ 1.81
Copper sales (millions of recoverable pounds) 288 288 230 230

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		Six Months Ended June 30,											Three Months Ended March 31,
		2022					2021						2023					2022
		By-Product Method			Co-Product Method		By-Product Method			Co-Product Method			By-Product Method			Co-Product Method		By-Product Method		Co-Product Method
Revenues, excluding adjustments	Revenues, excluding adjustments	$	4.00		$	4.00	$	4.28		$	4.28	Revenues, excluding adjustments	$	4.08		$	4.08	$	4.69	$	4.69

Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	2.45			2.26		2.23		a	2.09		Site production and delivery, before net noncash and other costs shown below	2.54			2.27		2.43		2.22
By-product credits	By-product credits	(0.38)			—		(0.26)			—		By-product credits	(0.53)			—		(0.43)		—
Treatment charges	Treatment charges	0.15			0.15		0.13			0.13		Treatment charges	0.18			0.18		0.15		0.15
Royalty on metals	Royalty on metals	0.01			0.01		0.01			0.01		Royalty on metals	0.01			0.01		0.01		0.01
Unit net cash costs	Unit net cash costs	2.23			2.42		2.11			2.23		Unit net cash costs	2.20			2.46		2.16		2.38
DD&A	DD&A	0.36			0.32		0.40			0.37		DD&A	0.35			0.31		0.37		0.33
Metals inventory adjustments		0.02		b	0.02		—			—

Noncash and other costs, net	Noncash and other costs, net	0.06			0.06		0.06			0.05		Noncash and other costs, net	0.09		a	0.08		0.07		0.07
Total unit costs	Total unit costs	2.67			2.82		2.57			2.65		Total unit costs	2.64			2.85		2.60		2.78
Revenue adjustments, primarily for pricing on prior period open sales	Revenue adjustments, primarily for pricing on prior period open sales	0.06			0.06		0.20			0.20		Revenue adjustments, primarily for pricing on prior period open sales	0.29			0.29		0.21		0.21
Gross profit per pound	Gross profit per pound	$	1.39		$	1.24	$	1.91		$	1.83	Gross profit per pound	$	1.73		$	1.52	$	2.30	$	2.12

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	552			552		489			489		Copper sales (millions of recoverable pounds)	302			302		264		264

a.Includes ~~$0.30 per pound of copper in second-quarter 2021 and $0.14~~$0.03 per pound of copper for ~~the first six months of 2021 associated with nonrecurring labor-related costs at Cerro Verde.~~feasibility and optimization studies.

b.~~Primarily reflects a stockpile write-off at Cerro Verde.~~

Our South America mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. ~~Our mining operations continue to experience significant cost inflation, principally associated with higher energy and other input costs. In addition to higher overall costs, average~~Average unit net cash costs (net of by-product credits) for South America mining of ~~$2.29~~$2.20 per pound of copper in ~~second-quarter~~first-quarter 2023 were higher than first-quarter 2022 ~~and $2.23~~unit net cash costs of $2.16 per pound of copper, ~~for the first six months of 2022, compared with $2.31 per pounds of copper in second-quarter 2021~~primarily reflecting higher energy and ~~$2.11 per pound of copper for the first six months of 2021, reflect higher sales volumes and by-product credits. Average unit net cash~~other input costs, ~~for the 2022 periods also reflect~~partly offset by the impact of ~~a change in estimate of copper recoveries in a leach stockpile at El Abra (refer to Note 3)~~higher volumes and ~~the 2021 periods reflect nonrecurring labor-related costs at Cerro Verde.~~

As discussed in Note 3, the change in estimate of recoverable copper in the existing leach stockpile at El Abra resulted in a 135-million-pound reduction to its work in-process inventory volumes, which resulted in a higher average cost per pound of copper. Refer to “Consolidated Results - Metals Inventory Adjustments” for discussion of potential future NRV adjustments that may result because of prolonged or further declines in the price of copper.molybdenum by-product credits.

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

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

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

Average unit net cash costs (net of by-product credits) for South America mining are expected to approximate ~~$2.31~~$2.36 per pound of copper for the year ~~2022,~~2023, based on current ~~sales~~ volume and cost estimates and assuming an average price of ~~$16.00~~$18.00 per pound of molybdenum for the ~~second half~~remainder of ~~2022.~~2023.

Indonesia Mining

PT-FI operates one of the world’s largest copper and gold mines at the Grasberg minerals district in Central Papua, Indonesia. PT-FI produces copper concentrate that contains significant quantities of gold and silver. We have a ~~48.76 percent~~48.76% ownership interest in PT-FI and manage its mining operations. ~~As further discussed in Note 2 of our 2021 Form~~

~~Table of Contents~~

~~10-K, under the terms of the 2018 shareholders agreement, our economic interest in PT-FI approximates 81 percent through 2022, and 48.76 percent thereafter. PT-FI’s~~PT-FI's results are consolidated in our financial statements.

~~Substantially all~~Under the terms of agreements entered into in 2018, our economic interest in PT-FI approximated 81% through 2022, and beginning January 1, 2023, our economic interest in PT-FI is 48.76% (refer to Note 1 for further discussion).

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. ~~During first six months of 2022, 37 percent of PT-FI’s concentrate production was sold to PT Smelting (PT-FI’s 39.5-percent owned copper smelter and refinery in Gresik, Indonesia).~~

Operating and Development Activities. Over a multi-year investment period, PT-FI ~~currently~~ has successfully commissioned three ~~underground operating~~large-scale block cave mines in the Grasberg minerals ~~district: Grasberg~~district (Grasberg Block Cave, Deep Mill Level Zone ~~(DMLZ)~~ and Big ~~Gossan. In late 2021, PT-FI achieved quarterly copper and gold~~Gossan), providing cumulative annualized production volumes ~~approximating 100 percent of projected annualized levels~~ of approximately 1.6 billion pounds of copper and 1.6 million ounces of gold.

~~PT-FI's milling rates for ore produced from its underground mines averaged 191,800 metric tons~~

Table of ~~ore per day for the first six months of 2022, and~~ Contents

PT-FI ~~expects milling rates~~is completing a project to ~~average approximately 190,000 metric tons of ore per day for the second half of 2022. The installation of~~install additional milling facilities, ~~at PT-FI is~~ currently expected to be completed in ~~2023, which would~~early 2024. The project will increase milling capacity to approximately 240,000 metric tons of ore per day ~~and~~to provide ~~for continued annualized copper and gold~~sustained large scale production ~~volumes of approximately 1.6 billion pounds of copper and 1.6 million ounces of gold.~~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 first half of~~ 2024 and is expected to provide incremental metal production of approximately 60 million pounds of copper and 40 thousand ounces of gold per year.

For the year 2022, PT-FI's estimated capital spending on the Grasberg Block Cave and DMLZ underground projects, including construction of a dual-fuel power plant, is expected to approximate $1.0 billion, net of scheduled contributions from PT Indonesia Asahan Aluminium (Persero) (PT Inalum, also known as MIND ID). In accordance with applicable accounting guidance, the aggregate costs (before scheduled contributions from PT Inalum), expected to approximate $1.2 billion for the year 2022, will be reflected as an investing activity in our cash flow statement, and contributions from PT Inalum will be reflected as a financing activity.

Kucing Liar. ~~PT-FI commenced long-term~~Long-term mine development activities are ongoing for ~~its~~PT-FI's Kucing Liar deposit ~~during 2021,~~in the Grasberg minerals district, which is expected to produce over 6 billion pounds of copper and 56 million ounces of gold ~~over~~between 2028 and the ~~life~~end of ~~the project.~~2041. Pre-production development activities ~~will occur~~commenced in 2022 and are expected to continue over an approximate 10-year ~~timeframe, and capital~~timeframe. Capital investments are ~~expected~~estimated to average approximately $400 million per year ~~(including approximately $200 million for the year 2022).~~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 ~~600~~550 million pounds of copper and ~~500~~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.

Mining Rights. PT-FI and the Indonesia ~~Smelter.~~government continue to engage in discussions regarding the extension of PT-FI's mining rights under its special mining license (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 the highly attractive Grasberg minerals district.

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 committed to construct additional domestic smelting capacity totaling 2 million metric tons of concentrate per year by the end of 2023 (subject to force majeure provisions).

PT-FI is actively engaged in the following projects for additional domestic smelting capacity:

•Construction of ~~a greenfield~~the Manyar smelter in Gresik, Indonesia with a capacity to process approximately 1.7 million metric tons of copper concentrate per year. ~~In July 2021, PT-FI awarded a~~Smelter construction ~~contract~~was approximately 60% complete at March 31, 2023, and is expected to ~~a third-party contractor with~~be commissioned during 2024 at an estimated cost of $3.0 billion, including $2.8 ~~billion. The greenfield smelter~~billion for a construction ~~currently approximately 30 percent complete, is expected to be completed as soon as feasible~~contract (excluding capitalized interest, owner’s costs and commissioning) and $0.2 billion for investment in ~~2024.~~a desalinization plant.

•Expansion of PT Smelting's capacity by ~~30 percent~~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 completed agreements in November 2021 with the majority owner of PT Smelting to implement the expansion plans.~~ PT-FI is funding the cost of the expansion, estimated to approximate $250 million, with a loan that ~~is expected to~~will convert to equity ~~increasing~~and increase PT-FI’s ownership in PT Smelting ~~from a 39.5 percent ownership interest~~ to a majority ownership interest ~~once the expansion is complete.~~upon project completion.

•Construction of a PMR to process gold and silver from the ~~greenfield~~Manyar smelter and PT Smelting at an estimated cost of $400 million. Construction is in progress with commissioning expected during 2024.

During first-quarter 2023, capital expenditures for the Indonesia smelter projects totaled $0.3 billion, and are expected to approximate $1.6 billion for the year 2023. Capital expenditures for the Indonesia smelter projects ~~which~~ are being funded with ~~PT-FI’s~~proceeds received from PT-FI's April 2022 senior notes offering and ~~available~~availability under its revolving credit ~~facility, totaled $0.3 billion~~facility.

Export License. In March 2023, PT-FI received an extension of its export license through June 10, 2023. PT-FI's IUPK provides that exports may continue through 2023, subject to force majeure considerations. PT-FI is working with the Indonesia government to obtain approval to continue exports as required for PT-FI’s operations until the ~~first six months~~Indonesia smelter projects are fully commissioned and reach designed operating conditions.

In late 2022, PT-FI’s export duty rate declined from 5% to 2.5% as a result of ~~2022 and are expected~~smelter development progress. In March 2023, the Indonesia government verified that construction progress on the Manyar smelter exceeded 50%, allowing PT-FI’s export duties to ~~approximate $1.4 billion for the year 2022.~~be eliminated effective March 29, 2023.

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Construction of the additional domestic smelter capacity will result in the elimination of export duties, providing an offset to the economic cost associated with the Indonesia smelter projects. Based on current development progress of additional smelting capacity, PT-FI expects export duties to be reduced from the current rate of 5 percent to 2.5 percent by the end of 2022, and eliminated in the second half of 2023.

Operating Data. Following is summary consolidated operating data for Indonesia mining:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,

		2022		2021		2022		2021			2023		2022
Copper (millions of recoverable pounds)	Copper (millions of recoverable pounds)									Copper (millions of recoverable pounds)
Production	Production	407		308		788		606		Production	329		381
Sales	Sales	410		310		789		568		Sales	198		379
Average realized price per pound	Average realized price per pound	$	3.86	$	4.27	$	4.04	$	4.29	Average realized price per pound	$	4.07	$	4.69

Gold (thousands of recoverable ounces)	Gold (thousands of recoverable ounces)									Gold (thousands of recoverable ounces)
Production	Production	473		303		885		597		Production	402		412
Sales	Sales	474		302		880		558		Sales	266		406
Average realized price per ounce	Average realized price per ounce	$	1,827	$	1,795	$	1,861	$	1,785	Average realized price per ounce	$	1,949	$	1,920

Ore extracted and milled (metric tons per day):	Ore extracted and milled (metric tons per day):									Ore extracted and milled (metric tons per day):
Grasberg Block Cave underground mine	Grasberg Block Cave underground mine	101,800		64,400		101,100		58,100		Grasberg Block Cave underground mine	89,700		100,400
DMLZ underground mine		77,300		53,900		77,800		50,300
Deep Mill Level Zone underground mine										Deep Mill Level Zone underground mine	70,000		78,400
Big Gossan underground mine	Big Gossan underground mine	7,400		8,200		7,500		7,500		Big Gossan underground mine	7,000		7,700
Deep Ore Zone underground minea and other		10,500		16,500		5,400		17,700
Other adjustments										Other adjustments	(1,900)		—

Total	Total	197,000		143,000		191,800		133,600		Total	164,800		186,500
Average ore grades:	Average ore grades:									Average ore grades:
Copper (percent)		1.22		1.28		1.22		1.34
Copper (%)										Copper (%)	1.17		1.23
Gold (grams per metric ton)	Gold (grams per metric ton)	1.08		1.00		1.05		1.03		Gold (grams per metric ton)	1.07		1.03
Recovery rates (percent):
Recovery rates (%):										Recovery rates (%):
Copper	Copper	89.8		88.8		89.6		90.0		Copper	90.3		89.4
Gold	Gold	79.0		75.9		78.2		77.4		Gold	78.2		77.2

a.
~~Ore body depleted~~

On February 11, 2023, PT-FI’s operations were temporarily disrupted because of significant rainfall and landslides, which restricted access to infrastructure near its milling operations. After recovery activities and the clearing of debris, PT-FI resumed operations by the end of February 2023 and achieved a full recovery in ~~2021.~~March 2023. PT-FI expects milling rates to average in excess of 200,000 metric tons of ore per day for the remainder of 2023.

Our consolidated sales of 198 million pounds of copper and 266 thousand ounces of gold in first-quarter 2023 were lower than first-quarter 2022 consolidated sales ~~from PT-FI totaled 410~~of 379 million pounds of copper and ~~474~~406 thousand ounces of gold, primarily as a result of the timing of sales associated with the transition to a tolling arrangement with PT Smelting in ~~second-quarter 2022~~2023 and ~~789 million pounds and 880 thousand ounces for~~ the ~~first six months~~impact of ~~2022, compared~~the temporary disruption of operations in February 2023 associated with ~~copper and gold sales of 310 million pounds and 302 thousand ounces in second-quarter 2021 and 568 million pounds and 558 thousand ounces for~~ the ~~first six months of 2021. The increase in sales volumes for the 2022 periods, primarily reflects increased operating rates at the Grasberg minerals district.~~significant weather event.

Consolidated sales volumes from PT-FI are expected to approximate 1.5 billion pounds of copper and ~~1.7~~1.8 million ounces of gold for the year ~~2022.~~2023, net of a deferral of approximately 110 million pounds of copper and 140 thousand ounces of gold from mine production under tolling arrangements to be processed and sold as refined metal in future periods.

Unit Net Cash (Credits) Costs. ~~Unit~~We believe unit net cash (credits) costs per pound of copper is a measure ~~intended to provide~~that 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. 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.

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		Three Months Ended June 30,																		Three Months Ended March 31,
		2022						2021												2023												2022
		By-Product Method		Co-Product Method				By-Product Method				Co-Product Method								By-Product Method				Co-Product Method								By-Product Method				Co-Product Method
				Copper		Gold				Copper				Gold								Copper				Gold								Copper				Gold
Revenues, excluding adjustments	Revenues, excluding adjustments	$	3.86	$	3.86	$	1,827			$	4.27			$	4.27			$	1,795		Revenues, excluding adjustments	$	4.07			$	4.07			$	1,949			$	4.69			$	4.69			$	1,920

Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	1.43		0.91		433		1.54				1.07				449		Site production and delivery, before net noncash and other costs shown below		2.01				1.20				574				1.41				0.96				395
Gold and silver credits	Gold and silver credits	(2.17)		—		—		(1.93)				—				—		Gold and silver credits		(2.84)				—				—				(2.17)				—				—
Treatment charges	Treatment charges	0.24		0.15		72		0.24				0.16				70		Treatment charges		0.37				0.22				106				0.25				0.17				69
Export duties	Export duties	0.21		0.13		63		0.14				0.10				42		Export duties		0.09				0.05				25				0.21				0.14				59
Royalty on metals	Royalty on metals	0.27		0.18		74		0.26				0.19				66		Royalty on metals		0.29				0.19				76				0.24				0.17				69
Unit net cash (credits) costs	Unit net cash (credits) costs	(0.02)		1.37		642		0.25				1.52				627		Unit net cash (credits) costs		(0.08)				1.66				781				(0.06)				1.44				592
DD&A	DD&A	0.63		0.41		193		0.79				0.55				232		DD&A		0.75				0.45				214				0.66				0.45				183
Noncash and other costs, net	Noncash and other costs, net	0.01		0.01		2		0.04				0.03				11		Noncash and other costs, net		0.16		a		0.09				43				0.07		b		0.05				20
Total unit costs	Total unit costs	0.62		1.79		837		1.08				2.10				870		Total unit costs		0.83				2.20				1,038				0.67				1.94				795
Revenue adjustments, primarily for pricing on prior period open sales	Revenue adjustments, primarily for pricing on prior period open sales	(0.49)		(0.49)		(17)		0.28				0.28				53		Revenue adjustments, primarily for pricing on prior period open sales		0.64				0.64				65				0.15				0.15				8
PT Smelting intercompany profit (loss)	PT Smelting intercompany profit (loss)	0.06		0.04		19		(0.13)				(0.09)				(39)		PT Smelting intercompany profit (loss)		0.56				0.34				162				(0.13)				(0.09)				(39)
Gross profit per pound/ounce	Gross profit per pound/ounce	$	2.81	$	1.62	$	992	$	3.34			$	2.36			$	939	Gross profit per pound/ounce		$	4.44			$	2.85			$	1,138			$	4.04			$	2.81			$	1,094

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	410		410				310				310						Copper sales (millions of recoverable pounds)		198				198								379				379
Gold sales (thousands of recoverable ounces)	Gold sales (thousands of recoverable ounces)					474										302		Gold sales (thousands of recoverable ounces)										266												406

Six Months Ended June 30,
2022 2021
By-Product Method Co-Product Method By-Product Method Co-Product Method
Copper Gold Copper Gold
Revenues, excluding adjustments $ 4.04 $ 4.04 $ 1,861 $ 4.29 $ 4.29 $ 1,785
Site production and delivery, before net noncash and other costs shown below 1.42 0.92 426 1.51 1.05 439
Gold and silver credits (2.17) — — (1.86) — —
Treatment charges 0.24 0.16 73 0.24 0.17 71
Export duties 0.21 0.14 63 0.13 0.09 37
Royalty on metals 0.26 0.17 72 0.25 0.18 68
Unit net cash (credits) costs (0.04) 1.39 634 0.27 1.49 615
DD&A 0.64 0.42 194 0.78 0.55 228
Noncash and other costs, net 0.04 0.03 11 0.01 — 1
Total unit costs 0.64 1.84 839 1.06 2.04 844
Revenue adjustments, primarily for pricing on prior period open sales 0.04 0.04 3 0.12 0.12 (8)
PT Smelting intercompany (loss) (0.03) (0.02) (10) (0.16) (0.11) (46)
Gross profit per pound/ounce $ 3.41 $ 2.22 $ 1,015 $ 3.19 $ 2.26 $ 887
Copper sales (millions of recoverable pounds) 789 789 568 568
Gold sales (thousands of recoverable ounces) 880 558

a.Includes charges totaling $0.07 per pound of copper for feasibility and optimization studies.

b.Includes charges totaling $0.11 per pound of copper associated with the settlement of an administrative fine levied by the Indonesia government (refer to Note 8 for further discussion), and $0.05 per pound of copper associated with an adjustment to prior-period export duties, partly offset by credits totaling $0.08 per pound of copper associated with adjustments to prior year treatment and refining costs.

~~For the 2022 periods, PT-FI’s~~PT-FI's unit net cash credits (including gold and silver ~~credits exceeded its cash costs resulting~~credits) of $0.08 per pound of copper in first-quarter 2023 were in line with unit net cash credits of ~~$0.02 per pound of copper in second-quarter 2022 and $0.04 per pound for the first six months of 2022, compared to unit net cash costs of $0.25~~$0.06 per pound in ~~second-quarter 2021~~first-quarter 2022, reflecting higher gold and ~~$0.27 per pound for the first six months of 2021.~~

~~Lower site production and delivery unit costs (before net noncash and other costs) in the 2022 periods primarily reflect higher sales volumes, partly~~silver credits, mostly offset by ~~higher operating rates, energy and other input costs.~~lower 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 first-quarter 2023, compared to first-quarter 2022, reflects higher costs associated with the new tolling arrangement with PT Smelting compared to the previous 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 in our unit net cash (credits) costs presentation.

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PT-FI’s export duties totaled ~~$85~~$17 million in ~~second-quarter 2022, $44~~first-quarter 2023 and $79 million in ~~second-quarter 2021, $164 million for the first six months of~~first-quarter 2022, and ~~$73~~PT-FI’s royalties totaled $58 million ~~for the first six months of 2021.~~in first-quarter 2023 and $92 million in first-quarter 2022. The ~~increase~~decrease in export duties ~~for the 2022 periods, compared with the 2021 periods,~~and royalties primarily reflects ~~higher~~lower sales volumes. In late 2022, PT-FI’s export ~~sales volumes.~~

~~PT-FI’s royalties totaled $108 million in second-quarter 2022, $80 million in second-quarter 2021, $201 million for the first six months of 2022~~duty rate declined from 5% to 2.5% and ~~$140 million for the first six months of 2021. The increase in royalties for the 2022 periods, compared with the 2021 periods, primarily reflects higher sales volumes.~~was eliminated effective March 29, 2023.

Because certain assets are depreciated on a straight-line basis, PT-FI’s unit depreciation rate may vary with asset additions and the level of copper production and sales. The ~~decrease~~increase in the DD&A rate per pound of copper ~~for the 2022 periods,~~in first-quarter 2023, compared with ~~the 2021 periods,~~first-quarter 2022, primarily reflects ~~depletion of the Deep Ore Zone underground mine during 2021 and higher~~lower volumes associated with ~~increased~~decreased operating rates ~~partly offset by~~as discussed above and significant underground development assets being placed into service.

PT Smelting intercompany profit (loss) represents the change in the deferral of 39.5% of PT-FI’s profit on sales to PT Smelting. Beginning on January 1, 2023, PT-FI’s commercial arrangement with PT Smelting ~~(25 percent prior~~converted from a concentrate sales agreement to ~~April 30, 2021,~~a tolling arrangement. Under this arrangement, PT-FI pays PT Smelting a tolling fee to smelt and ~~39.5 percent thereafter).~~refine its concentrate and PT-FI retains title to all products for sales to third parties. Accordingly, beginning in 2023, there are no further sales to PT Smelting. Refer to “Smelting and Refining” below for further discussion.

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Assuming an average gold price ~~of $1,700~~$2,000 per ounce for the ~~second half~~remainder of ~~2022~~2023 and achievement of current ~~sales~~ volume and cost estimates, unit net cash ~~costs (net of~~credits (including gold and silver credits) for PT-FI are expected to approximate ~~$0.18~~$0.15 per pound of copper for the year ~~2022. PT-FI’s~~2023. PT-FI's average unit net cash ~~costs~~credits for the year ~~2022~~2023 would change by approximately ~~$0.07~~$0.11 per pound of copper for each $100 per ounce change in the average price of gold for the ~~second half~~remainder of ~~2022.~~2023.

PT-FI’s projected sales volumes and unit net cash costs for the year ~~2022~~2023 are dependent on a number of factors, including operational performance, ~~and~~ timing of ~~shipments.~~shipments and the extension of PT-FI's export license after June 10, 2023.

Molybdenum Mines

We operate two wholly owned molybdenum mines in Colorado – the Climax open-pit mine and the Henderson underground mine. The Climax and Henderson 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 Climax and Henderson mines, as well as from our North America and South America copper mines, is processed at our conversion facilities.

Operating and Development Activities. Production from the Molybdenum mines totaled 8 million pounds of molybdenum in ~~second-quarter 2022, 15 million pounds for the first six months~~first-quarter 2023 and was slightly higher than production of ~~2022,~~ 7 million pounds of molybdenum in ~~second-quarter 2021 and 14 million pounds for the first six months of 2021.~~first-quarter 2022, primarily reflecting higher milling rates. 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. Refer to “Outlook” for projected consolidated molybdenum sales ~~volumes.~~volumes and to “Markets” for a discussion of the decline in 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 provide~~that 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 ~~our~~the Molybdenum mines of ~~$10.62~~$12.24 per pound of molybdenum in ~~second-quarter 2022 and $10.75 per pound for the first six months of 2022~~first-quarter 2023 were higher than average unit net cash costs of ~~$8.14~~$10.89 per pound in ~~second-quarter 2021 and $8.53 per pound for the first six months of 2021,~~first-quarter 2022, primarily reflecting ~~higher energy, outside service costs~~increased contract labor and ~~other~~ input costs, ~~and increased development costs at the Henderson mine.~~partly offset by higher volumes. Based on current ~~sales~~ volume and cost estimates, average unit net cash costs for the Molybdenum mines are expected to approximate ~~$11.75~~$13.36 per pound of molybdenum for the year ~~2022.~~

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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 the Miami smelter in Arizona, the El Paso refinery in Texas and Atlantic Copper, a smelter and refinery in Spain. Additionally, PT-FI has a ~~39.5 percent~~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 significant portion of our concentrate production.

Treatment charges for smelting and refining copper concentrate consist of a base rate per pound of copper and per ounce of gold and are generally fixed. Treatment charges represent a cost to our mining operations and income to Atlantic ~~Copper and PT Smelting. Thus, higher~~Copper. 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 and El Paso refinery.

~~Through this form of downstream integration, we are assured placement of a significant portion of our concentrate production.~~

Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes. During ~~the first six months of 2022,~~first-quarter 2023, Atlantic Copper’s concentrate purchases included ~~37 percent~~37% from our copper mining operations and ~~63 percent~~63% from third parties.

Atlantic Copper’s major maintenance turnarounds typically occur approximately every eight years, with shorter-term maintenance turnarounds in the interim. In second-quarter 2022, Atlantic Copper substantially completed a 78-day major maintenance turnaround and incurred maintenance charges and idle facility costs totaling $40 million.

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Our Miami smelter completed a major maintenance turnaround in second-quarter 2021 and incurred maintenance charges and idle facility costs totaling $19 million in second-quarter 2021 and $87 million for the first six months of 2021. Major maintenance turnarounds at the Miami smelter are anticipated to occur approximately every two or three years, with the next major maintenance turnaround scheduled for the first half of 2024.

~~PT-FI’s contract~~Beginning on January 1, 2023, PT-FI's commercial arrangement with PT Smelting ~~provides for PT-FI to supply 100 percent of the copper concentrate requirements (subject to~~converted from a minimum or maximum treatment charge rate) necessary for PT Smelting to produce 205,000 metric tons of copper annually on a priority basis. PT-FI may also sell copper concentrate to PT Smelting at market rates for quantities in excess of 205,000 metric tons of copper annually. In November 2021, PT-FI entered into a tolling agreement with PT Smelting that will be effective January 1, 2023, and will replace the current concentrate sales agreement ~~as amended.~~to a tolling arrangement. Under ~~the tolling agreement,~~this arrangement, PT-FI ~~will pay~~pays PT Smelting a tolling fee (which PT-FI records as production costs in the consolidated statements of income) to smelt and refine its concentrate and ~~will retain~~PT-FI retains title to all products for sale to third ~~parties.~~parties (i.e., there are no further sales to PT Smelting). While the new tolling agreement with PT Smelting does not significantly change PT-FI's economics, it impacted the timing of PT-FI's first-quarter 2023 sales and working capital requirements. PT-FI's first-quarter 2023 production exceeded its sales primarily associated with the deferral of mine production under the tolling arrangement that will be processed and sold as refined metal in future periods.

We defer recognizing profits on sales from our mining operations to Atlantic Copper and, through December 31, 2022, on ~~39.5 percent~~39.5% of PT-FI’s sales to PT Smelting 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 ~~$(7)~~$111 million ~~(less than $1~~($48 million to net income attributable to common stock) in ~~second-quarter 2022, $(99) million ($(81) million to net income attributable to common stock) in second-quarter 2021, $40~~first-quarter 2023 and $46 million ($23 million to net income attributable to common stock) ~~for the first six months of 2022 and $(185) million ($(145) million to net income attributable to common stock) for the first six months of 2021.~~in first-quarter 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 ~~$157~~$51 million at ~~June 30, 2022.~~March 31, 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; prices realized from copper, gold and molybdenum sales; production costs; income taxes; other working capital changes; and other factors. We ~~generated operating cash flows totaling $3.3 billion during the first six months of 2022, reflecting solid operating and financial performance. We~~ believe the actions we have taken in recent years to build a strong balance sheet, successfully expand low-cost operations and maintain flexible organic growth options while maintaining sufficient liquidity, will allow us to continue to execute our business plans in a prudent manner ~~despite current~~during periods of economic uncertainty while preserving substantial future asset values.

The banking industry has experienced disruption in recent months following the failure of certain banks, resulting in increased volatility in the global financial markets. Although these events have not had a financial impact on our business, we continue to monitor the instability in the banking industry, including any impacts on our suppliers and customers.

We ~~are~~ closely ~~monitoring~~monitor market conditions and will ~~be prepared to~~ adjust our operating plans to protect liquidity and preserve our asset values, if ~~required.~~necessary. We ~~will~~expect to maintain a strong balance sheet and liquidity position as we focus on building

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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 $7.0 billion for the year ~~2022 of $4.5 billion are~~2023 exceed our expected ~~to exceed projected~~consolidated capital expenditures of ~~$3.1~~$5.1 billion ~~which~~(which includes ~~$1.9~~$1.6 billion ~~for major mining projects but excludes $1.4 billion of projected capital expenditures~~ for the Indonesia smelter projects that are being funded with the remaining proceeds from PT-FI’s senior notes and its available ~~revolving~~ credit ~~facility.~~ facility).

We have cash on hand and the financial flexibility to fund ~~these~~capital expenditures ~~as well as~~and our other cash requirements for the year, including noncontrolling interest distributions, income tax payments, ~~debt repayments,~~current common stock dividends (base and variable) and any share or debt repurchases.

~~Our cash generating capability and financial condition at June 30, 2022, which includes $9.5~~ At March 31, 2023, we had $6.9 billion of consolidated cash and cash equivalents ~~(including $2.4 billion from PT-FI’s senior notes), together with $3.5~~(which includes $1.5 billion of ~~availability under our revolving credit facility, is expected to be adequate to meet our operating, investing and financing needs~~PT-FI cash designated for ~~the foreseeable future. In addition,~~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 ~~the year 2022~~2023 and to “Debt” ~~below.~~below and Note 5 for further discussion.

Financial Policy. Our financial policy is aligned with our strategic objectives of maintaining a strong balance sheet, ~~and increasing~~providing cash returns to shareholders ~~while~~and advancing opportunities for future growth. The policy includes a base dividend and a performance-based payout framework, whereby up to ~~50 percent~~50% of available cash flows generated after planned capital spending and distributions to noncontrolling interest 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). ~~The~~Our Board of Directors (Board) will review the structure of the performance-based payout framework at least annually.

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At ~~June 30, 2022,~~March 31, 2023, our net debt, excluding net debt for the Indonesia smelter projects, totaled ~~$1.0~~$1.3 billion. Refer to "Net ~~Debt."~~Debt" for further discussion.

In March 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 May 1, 2023, to shareholders of record as of April 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 May 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 Board and will depend on 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 ~~June 30, 2022~~March 31, 2023 (in billions):


Cash at domestic companies	$	~~5.1~~3.4
Cash at international operations	~~4.4~~3.5		a
Total consolidated cash and cash equivalents	~~9.5~~6.9
Cash for Indonesia smelter projects	(1.5)		a
Noncontrolling interests’ share	~~(1.1)~~(1.0)
Cash, net of noncontrolling interests’ share	~~8.4~~4.4
Withholding taxes	~~(0.3)~~(0.1)
Net cash available	$	~~8.1~~4.3

a.~~Includes $2.4 billion~~Estimated remaining net proceeds from PT-FI's April 2022 senior notes ~~that is expected to be used to finance its smelter projects.~~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.

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Debt

At ~~June 30, 2022, we had~~March 31, 2023, consolidated debt ~~of $11.1~~totaled $9.6 billion, with a weighted-average interest rate of ~~5.0 percent. Nearly~~5.1%. Substantially all of our outstanding debt is fixed rate. We had no borrowings outstanding and $8 million in letters of credit issued under our ~~$3.5~~$3.0 billion revolving credit facility. Additionally, at ~~June 30, 2022,~~March 31, 2023, no amounts were drawn under PT-FI’s $1.3 billion revolving credit facility or Cerro Verde’s $350 million revolving credit facility.

Refer to Note 5 for further discussion.

Operating Activities

We ~~reported consolidated~~generated operating cash ~~provided by operating activities~~flows of ~~$3.3~~$1.1 billion (net of ~~$0.7~~$0.5 billion of working capital and other uses) ~~for the first six months~~in first-quarter 2023 and $1.7 billion (net of ~~2022 and $3.5 billion (including $0.2~~$0.8 billion of working capital and other ~~sources) for the first six months of 2021.~~uses) in first-quarter 2022. Lower operating cash flows ~~for the first six months of 2022,~~in first-quarter 2023, compared with first-quarter 2022, primarily reflected lower copper prices and the ~~first six months~~impact of ~~2021, primarily reflect an increase in income tax payments at our international operations, partly offset by higher copper and gold~~lower sales volumes ~~and other working capital changes.~~primarily associated with PT-FI’s transition to a tolling arrangement with PT Smelting.

Investing Activities

Capital Expenditures. Capital expenditures, including capitalized interest, totaled ~~$1.6~~$1.1 billion ~~for the first six months of 2022,~~in first-quarter 2023, including approximately ~~$0.8~~$0.4 billion for major mining projects primarily associated with underground development activities in the Grasberg minerals district and $0.3 billion for the Indonesia smelter projects. Capital expenditures for the Indonesia smelter projects are being funded by PT-FI's senior notes and its available revolving credit facility. Refer to “Outlook” for further discussion of projected capital expenditures for the year 2022.

Capital expenditures, including capitalized interest, totaled ~~$0.8~~$0.7 billion ~~for the first six months of 2021,~~in first-quarter 2022, including approximately ~~$0.6~~$0.4 billion for major mining projects primarily associated with underground development activities in the Grasberg minerals ~~district.~~district and $0.1 billion for the Indonesia smelter projects.

~~Proceeds from Sales~~Table of ~~Assets.~~ Proceeds from sales of assets totaled $96 million for the first six months of 2022 and $16 million for the first six months of 2021. In May 2022, we sold all of the shares we owned in Jervois Global Limited for proceeds of $60 million (refer to Note 1).

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

Loans to PT Smelting for Expansion. PT-FI made loans to PT Smelting totaling ~~$34~~$24 million ~~during the first six months of~~in first-quarter 2023 and $9 million in first-quarter 2022 to fund PT Smelting’s expansion project.

Financing Activities

Debt Transactions. Net ~~borrowings~~repayments of debt totaled ~~$1.7~~$1.0 billion for the first six months of 2022 and net payments of debt totaled $19 million for the first six months of 2021. Net borrowings for the first six months of 2022 primarily reflected borrowings under PT-FI’s $3.0 billion senior note offering that was completed in ~~April 2022, partly offset by~~first-quarter 2023 reflecting the repayment of borrowings under PT-FI’s term loan ($0.6 billion) and Cerro Verde’s term loan ($0.3 billion). In addition, during the second quarter and first six months of 2022, we completed open-market purchases of $582our 3.875% Senior Notes that matured in March 2023. Net proceeds from debt totaled $170 million aggregate principal amount of FCX senior notes for a total cost of $558 million. From July 1, 2022, through August 5, 2022, we purchased an additional $291 million aggregate principal amount of our senior notes in ~~open-market transactions, for a total redemption value of $273 million.~~first-quarter 2022.

~~Refer to Note 5 for further discussion of our debt.~~

Cash Dividends ~~and Distributions Paid.~~on Common Stock. We paid cash dividends on our common stock totaling ~~$438~~$217 million ~~for the first six months of 2022~~in first-quarter 2023 and ~~$111~~$220 million ~~for the first six months of 2021.~~in first-quarter 2022. The declaration and payment of dividends (base or variable) is at the discretion of ~~the~~our Board and will depend on our financial results, cash requirements, ~~business prospects,~~ global economic conditions and other factors deemed relevant by ~~the~~our Board. Refer to Note 5, Item 1A. “Risk Factors” contained in Part I of our ~~2021~~2022 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above.

Cash Dividends and Distributions Paid to Noncontrolling Interests.Cash dividends and distributions paid to noncontrolling interests at our international operations totaled ~~$513~~$204 million ~~for the first six months of~~in first-quarter 2022 (none in first-quarter 2023). At March 31, 2023, we had dividends payable to noncontrolling interests totaling $134 million recorded in accounts payable and ~~$93 million for the first six months of 2021.~~accrued liabilities in our consolidated balance sheets that will be paid in second-quarter 2023. Based on the estimates discussed in “Outlook,” we currently expect cash dividends and distributions paid to noncontrolling interests to ~~approximate $0.9~~

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exceed $2.0 billion for the year ~~2022.~~2023. Cash dividends and distributions to noncontrolling interests vary based on the operating results and cash requirements of our consolidated subsidiaries.

Treasury Stock Purchases. ~~During the first six months of 2022,~~Since mid-2021, we have acquired ~~29.4~~47.8 million shares of our common stock under ~~our share repurchase program for a total cost of $1.2 billion ($40.32 average cost per share). In July 2022, the Board authorized an increase in~~ the share repurchase program ~~from up to $3.0 billion to up to $5.0 billion. Through August 5, 2022, we acquired 47.9 million shares of our common stock~~ for a total cost of $1.8 billion ($38.35 average cost per share) ~~and~~, including 12.3 million shares in first-quarter 2022 for a cost of $541 million. No shares have been purchased since July 11, 2022. As of May 4, 2023, we had $3.2 billion ~~remains~~ available for repurchases under the ~~share repurchase~~ 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 ~~the~~our Board’s discretion. Refer to Item 1A. “Risk Factors” contained in Part I of our ~~2021~~2022 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above.

Contributions from Noncontrolling Interests. We received equity contributions totaling ~~$94~~$50 million ~~for the first six months of~~in first-quarter 2023 and $47 million in first-quarter 2022 ~~and $88 million for the first six months of 2021~~ from PT ~~Inalum for their~~Mineral Industri Indonesia (formerly PT Indonesia Asahan Aluminium (Persero), (MIND ID)). Contributions in first-quarter 2023 were primarily associated with receipt of the final capital contribution in accordance with the PT-FI shareholders agreement. Contributions in first-quarter 2022 were associated with MIND ID’s share of capital spending on underground mine development projects in the Grasberg minerals district.

~~Stock-based awards.~~ ~~Proceeds from exercised stock options totaled $106 million for~~ Beginning on January 1, 2023, capital spending at PT-FI is being shared in accordance with the first six months of 2022 and $184 million for the first six months of 2021, and payments for related employee taxes totaled $55 million for the first six months of 2022 and $19 million for the first six months of 2021. See Note 10 in our 2021 Form 10-K for a discussion of stock-based awards.shareholders’ ownership interests.

CONTRACTUAL OBLIGATIONS

Refer to Note 5 for further discussion of PT-FI’s $3.0 billion aggregate principal amount of unsecured senior notes issued in April 2022, and the repayment of borrowings under PT-FI’s term loan and Cerro Verde’s term loan. There have been no other material changes in our contractual obligations since December 31, ~~2021.~~2022. Refer to Note 13 and Part II, Items 7. and 7A. in our ~~2021~~2022 Form 10-K for information regarding our contractual obligations.

CONTINGENCIES

Environmental Liabilities and 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 AROs and also review changes in facts and circumstances associated with these obligations at least quarterly.

~~Refer to Note 8 for further discussion of increases in our ARO at the Bagdad mine.~~ There have been no ~~other~~ significant changes to our environmental liabilities and AROs since December 31, ~~2021.~~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 ~~2021~~2022 Form 10-K for further information regarding our environmental liabilities and AROs.

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Litigation and Other Contingencies

There have been no material changes to our contingencies associated with legal proceedings, environmental and other matters since December 31, ~~2021.~~2022. Refer to Note 12 and “Legal Proceedings” contained in Part I, Item 3. of our ~~2021~~2022 Form 10-K, as updated by Note 8, for further information regarding ~~AROs, legal proceedings, environmental~~litigation and other ~~matters.~~contingencies.

NEW ACCOUNTING STANDARDS

There were no significant updates to previously reported accounting standards included in Note 1 of our ~~2021~~2022 Form 10-K.

~~Table of Contents~~

NET DEBT

~~Net~~We believe net debt, which we define as consolidated debt less consolidated cash and cash equivalents, ~~is intended to provide~~provides investors with information related to the performance-based payout framework in our financial policy, which requires achievement of a net debt target in the range of $3$3.0 billion to $4$4.0 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 substitute for consolidated debt determined in accordance with U.S. GAAP. Our net debt, ~~follows,~~ which may not be comparable to similarly titled measures reported by other companies, follows (in ~~millions)~~billions):


		June 30, 2022		December 31, 2021			As of March 31, 2023			As of December 31, 2022
Current portion of debt	Current portion of debt	$	1,038	$	372	Current portion of debt	$	—	a	$	1.0
Long-term debt, less current portion	Long-term debt, less current portion	10,054		9,078		Long-term debt, less current portion	9.6			9.6
Consolidated debt	Consolidated debt	11,092		9,450		Consolidated debt	9.6			10.6
Less: consolidated cash and cash equivalents	Less: consolidated cash and cash equivalents	9,492		8,068		Less: consolidated cash and cash equivalents	6.9			8.1
Net debt		$	1,600	$	1,382
Less: net debt for Indonesia smelter projectsa		585		207
FCX net debt						FCX net debt	2.8		b	2.5
Less: net debt for Indonesia smelter projectsc						Less: net debt for Indonesia smelter projectsc	1.5			1.2
FCX net debt, excluding Indonesia smelter projects	FCX net debt, excluding Indonesia smelter projects	$	1,015	$	1,175	FCX net debt, excluding Indonesia smelter projects	$	1.3		$	1.3

a.Rounds to less than $0.1 billion

b.Does not foot because of rounding.

c.Includes consolidated debt of $3.0 billion and consolidated cash and cash equivalents of ~~$2.4~~$1.5 billion as of ~~June 30, 2022,~~March 31, 2023, and consolidated debt of ~~$0.4~~$3.0 billion and consolidated cash and cash equivalents of ~~$0.2~~$1.8 billion as of December 31, ~~2021.~~2022.

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PRODUCT REVENUES AND PRODUCTION COSTS

~~Unit~~We believe unit net cash costs (credits) per pound of copper and molybdenum are measures ~~intended to~~that provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for the respective operations. We use ~~this measure~~these 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 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, long-lived asset impairments, idle facility costs, feasibility and optimization study costs, restructuring and/or unusual ~~charges (credits).~~charges. As discussed above, gold, molybdenum and other metal revenues at copper mines are reflected as credits against site production and delivery costs in the by-product method. The following schedules are presentations under both the by-product and co-product methods together with reconciliations to amounts reported in our consolidated financial statements.

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North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs


Three Months Ended June 30, 2022
Three Months Ended March 31, 2023												Three Months Ended March 31, 2023
(In millions)	(In millions)	By-Product		Co-Product Method								(In millions)	By-Product			Co-Product Method
		Method		Copper		Molybdenuma		Otherb		Total			Method			Copper		Molybdenuma		Otherb		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	1,697	$	1,697	$	144	$	30	$	1,871	Revenues, excluding adjustments	$	1,394		$	1,394	$	212	$	36	$	1,642
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	975		897		95		21		1,013		Site production and delivery, before net noncash and other costs shown below	976			850		149		27		1,026
By-product credits	By-product credits	(136)		—		—		—		—		By-product credits	(198)			—		—		—		—
Treatment charges	Treatment charges	41		40		—		1		41		Treatment charges	42			40		—		2		42
Net cash costs	Net cash costs	880		937		95		22		1,054		Net cash costs	820			890		149		29		1,068
DD&A	DD&A	103		95		7		1		103		DD&A	102			90		10		2		102
Metals inventory adjustments		7		6		1		—		7

Noncash and other costs, net	Noncash and other costs, net	36		33		2		1		36		Noncash and other costs, net	76		c	63		12		1		76
Total costs	Total costs	1,026		1,071		105		24		1,200		Total costs	998			1,043		171		32		1,246
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	(37)		(37)		—		—		(37)		Other revenue adjustments, primarily for pricing on prior period open sales	15			15		—		—		15
Gross profit	Gross profit	$	634	$	589	$	39	$	6	$	634	Gross profit	$	411		$	366	$	41	$	4	$	411

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	389		389								Copper sales (millions of recoverable pounds)	335			335
Molybdenum sales (millions of recoverable pounds)a	Molybdenum sales (millions of recoverable pounds)a					8						Molybdenum sales (millions of recoverable pounds)a						7

Gross profit per pound of copper/molybdenum:	Gross profit per pound of copper/molybdenum:											Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	4.36	$	4.36	$	18.75					Revenues, excluding adjustments	$	4.16		$	4.16	$	28.35
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	2.50		2.30		12.42						Site production and delivery, before net noncash and other costs shown below	2.91			2.54		19.85
By-product credits	By-product credits	(0.35)		—		—						By-product credits	(0.59)			—		—
Treatment charges	Treatment charges	0.11		0.11		—						Treatment charges	0.13			0.12		—
Unit net cash costs	Unit net cash costs	2.26		2.41		12.42						Unit net cash costs	2.45			2.66		19.85
DD&A	DD&A	0.27		0.24		0.81						DD&A	0.31			0.27		1.36
Metals inventory adjustments		0.02		0.02		0.16

Noncash and other costs, net	Noncash and other costs, net	0.09		0.08		0.32						Noncash and other costs, net	0.22		c	0.18		1.60
Total unit costs	Total unit costs	2.64		2.75		13.71						Total unit costs	2.98			3.11		22.81
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	(0.10)		(0.10)		—						Other revenue adjustments, primarily for pricing on prior period open sales	0.04			0.04		—
Gross profit per pound	Gross profit per pound	$	1.62	$	1.51	$	5.04					Gross profit per pound	$	1.22		$	1.09	$	5.54

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported											Reconciliation to Amounts Reported

		Revenues		Production and Delivery		DD&A		Metals Inventory Adjustments					Revenues			Production and Delivery		DD&A
Totals presented above	Totals presented above	$	1,871	$	1,013	$	103	$	7			Totals presented above	$	1,642		$	1,026	$	102
Treatment charges	Treatment charges	(5)		36		—		—				Treatment charges	(6)			36		—
Noncash and other costs, net	Noncash and other costs, net	—		36		—		—				Noncash and other costs, net	—			76		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	(37)		—		—		—				Other revenue adjustments, primarily for pricing on prior period open sales	15			—		—
Eliminations and other	Eliminations and other	26		32		(1)		—				Eliminations and other	19			24		1
North America copper mines	North America copper mines	1,855		1,117		102		7				North America copper mines	1,670			1,162		103
Other miningc		5,332		3,614		389		11
Other miningd												Other miningd	5,312			3,499		283

Corporate, other & eliminations	Corporate, other & eliminations	(1,771)		(1,728)		16		—				Corporate, other & eliminations	(1,593)			(1,496)		13
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	5,416	$	3,003	$	507	$	18			As reported in our consolidated financial statements	$	5,389		$	3,165	$	399

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 $27 million ($0.08 per pound of copper) for feasibility and optimization studies and $16 million ($0.05 per pound of copper) related to asset impairments.

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

5044

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North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs


Three Months Ended June 30, 2021
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
(In millions)	(In millions)	By-Product		Co-Product Method								(In millions)	By-Product			Co-Product Method
		Method		Copper		Molybdenuma		Otherb		Total			Method			Copper		Molybdenuma		Otherb		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	1,717	$	1,717	$	97	$	32	$	1,846	Revenues, excluding adjustments	$	1,763		$	1,763	$	138	$	27	$	1,928
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	833		789		56		18		863		Site production and delivery, before net noncash and other costs shown below	908			839		84		17		940
By-product credits	By-product credits	(99)		—		—		—		—		By-product credits	(133)			—		—		—		—
Treatment charges	Treatment charges	31		29		—		2		31		Treatment charges	36			35		—		1		36
Net cash costs	Net cash costs	765		818		56		20		894		Net cash costs	811			874		84		18		976
DD&A	DD&A	102		95		5		2		102		DD&A	105			96		7		2		105

Noncash and other costs, net	Noncash and other costs, net	31		30		1		—		31		Noncash and other costs, net	28		c	27		1		—		28
Total costs	Total costs	898		943		62		22		1,027		Total costs	944			997		92		20		1,109
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	8		8		—		—		8		Other revenue adjustments, primarily for pricing on prior period open sales	11			11		—		—		11
Gross profit	Gross profit	$	827	$	782	$	35	$	10	$	827	Gross profit	$	830		$	777	$	46	$	7	$	830

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	389		389								Copper sales (millions of recoverable pounds)	381			381
Molybdenum sales (millions of recoverable pounds)a	Molybdenum sales (millions of recoverable pounds)a					9						Molybdenum sales (millions of recoverable pounds)a						7

Gross profit per pound of copper/molybdenum:	Gross profit per pound of copper/molybdenum:											Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	4.42	$	4.42	$	11.75					Revenues, excluding adjustments	$	4.62		$	4.62	$	17.97
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	2.14		2.03		6.86						Site production and delivery, before net noncash and other costs shown below	2.38			2.20		10.95
By-product credits	By-product credits	(0.25)		—		—						By-product credits	(0.34)			—		—
Treatment charges	Treatment charges	0.08		0.07		—						Treatment charges	0.09			0.09		—
Unit net cash costs	Unit net cash costs	1.97		2.10		6.86						Unit net cash costs	2.13			2.29		10.95
DD&A	DD&A	0.26		0.25		0.55						DD&A	0.27			0.25		0.88

Noncash and other costs, net	Noncash and other costs, net	0.08		0.08		0.06						Noncash and other costs, net	0.07		c	0.07		0.14
Total unit costs	Total unit costs	2.31		2.43		7.47						Total unit costs	2.47			2.61		11.97
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	0.02		0.02		—						Other revenue adjustments, primarily for pricing on prior period open sales	0.03			0.03		—
Gross profit per pound	Gross profit per pound	$	2.13	$	2.01	$	4.28					Gross profit per pound	$	2.18		$	2.04	$	6.00

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported											Reconciliation to Amounts Reported
		Revenues		Production and Delivery		DD&A							Revenues			Production and Delivery		DD&A
Totals presented above	Totals presented above	$	1,846	$	863	$	102					Totals presented above	$	1,928		$	940	$	105
Treatment charges	Treatment charges	(12)		19		—						Treatment charges	(4)			32		—
Noncash and other costs, net	Noncash and other costs, net	—		31		—						Noncash and other costs, net	—			28		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	8		—		—						Other revenue adjustments, primarily for pricing on prior period open sales	11			—		—
Eliminations and other	Eliminations and other	12		12		(1)						Eliminations and other	16			18		—
North America copper mines	North America copper mines	1,854		925		101						North America copper mines	1,951			1,018		105
Other miningc		5,520		3,650		367
Other miningd												Other miningd	6,376			3,847		368

Corporate, other & eliminations	Corporate, other & eliminations	(1,626)		(1,508)		15						Corporate, other & eliminations	(1,724)			(1,715)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	5,748	$	3,067	$	483					As reported in our consolidated financial statements	$	6,603		$	3,150	$	489

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~~Includes charges totaling $8 million ($0.02 per pound of copper) for ~~our other segments as presented in Note 9.~~feasibility and optimization studies.

~~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-Product Co-Product Method
Method Copper
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 charges 77 75 — 2 77
Net cash costs 1,691 1,810 179 41 2,030
DD&A 207 192 13 2 207
Metals inventory adjustments 7 6 1 — 7
Noncash and other costs, net 65 60 4 1 65
Total costs 1,970 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 charges 0.10 0.10 —
Unit net cash costs 2.19 2.35 11.68
DD&A 0.27 0.25 0.85
Metals inventory adjustments 0.01 0.01 0.08
Noncash and other costs, net 0.09 0.07 0.23
Total unit costs 2.56 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
Production Inventory
Revenues and Delivery DD&A Adjustments
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 other 43 49 — —
North America copper mines 3,806 2,135 207 7
Other miningc
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.d.Represents the combined total for our other segments as presented in Note 9.

~~Table of Contents~~

~~North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs~~

Six Months Ended June 30, 2021
(In millions) By-Product Co-Product Method
Method Copper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments $ 2,919

$ 2,919 $ 185 $ 67 $ 3,171
Site production and delivery, before net noncash
    and other costs shown below 1,459 1,369 113 40 1,522
By-product credits (189) — — — —
Treatment charges 63 60 — 3 63
Net cash costs 1,333 1,429 113 43 1,585
DD&A 181 169 8 4 181
Noncash and other costs, net 73 71 1 1 73
Total costs 1,587 1,669 122 48 1,839
Other revenue adjustments, primarily for pricing
    on prior period open sales 7 7 — — 7
Gross profit $ 1,339 $ 1,257 $ 63 $ 19 $ 1,339
Copper sales (millions of recoverable pounds) 697 697
Molybdenum sales (millions of recoverable pounds)a
17
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments $ 4.19

$ 4.19 $ 11.12
Site production and delivery, before net noncash
    and other costs shown below 2.09 1.96 6.76
By-product credits (0.27) — —
Treatment charges 0.09 0.09 —
Unit net cash costs 1.91 2.05 6.76
DD&A 0.26 0.24 0.51
Noncash and other costs, net 0.11 0.11 0.06
Total unit costs 2.28 2.40 7.33
Other revenue adjustments, primarily for pricing
    on prior period open sales 0.01 0.01 —
Gross profit per pound $ 1.92 $ 1.80 $ 3.79
Reconciliation to Amounts Reported
Production
Revenues and Delivery DD&A
Totals presented above $ 3,171 $ 1,522 $ 181
Treatment charges (17) 46 —
Noncash and other costs, net — 73 —
Other revenue adjustments, primarily for pricing
    on prior period open sales 7 — —
Eliminations and other 31 33 —
North America copper mines 3,192 1,674 181
Other miningc
10,165 6,690 690
Corporate, other & eliminations (2,759) (2,511) 31
As reported in our consolidated financial statements $ 10,598 $ 5,853 $ 902

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

b.~~Includes gold and silver product revenues and production costs.~~

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

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


Three Months Ended June 30, 2022
Three Months Ended March 31, 2023										Three Months Ended March 31, 2023
(In millions)	(In millions)	By-Product		Co-Product Method						(In millions)	By-Product			Co-Product Method
		Method		Copper		Othera		Total			Method			Copper		Othera		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	1,102	$	1,102	$	116	$	1,218	Revenues, excluding adjustments	$	1,229		$	1,229	$	173	$	1,402
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	712		658		69		727		Site production and delivery, before net noncash and other costs shown below	767			685		98		783
By-product credits	By-product credits	(101)		—		—		—		By-product credits	(160)			—		—		—
Treatment charges	Treatment charges	44		44		—		44		Treatment charges	55			55		—		55
Royalty on metals	Royalty on metals	3		3		—		3		Royalty on metals	2			2		—		2
Net cash costs	Net cash costs	658		705		69		774		Net cash costs	664			742		98		840
DD&A	DD&A	101		91		10		101		DD&A	107			94		13		107
Metals inventory adjustments		11		10		1		11

Noncash and other costs, net	Noncash and other costs, net	18		17		1		18		Noncash and other costs, net	26		b	23		3		26
Total costs	Total costs	788		823		81		904		Total costs	797			859		114		973
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	(154)		(154)		—		(154)		Other revenue adjustments, primarily for pricing on prior period open sales	89			89		3		92
Gross profit	Gross profit	$	160	$	125	$	35	$	160	Gross profit	$	521		$	459	$	62	$	521

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	288		288						Copper sales (millions of recoverable pounds)	302			302

Gross profit per pound of copper:	Gross profit per pound of copper:									Gross profit per pound of copper:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	3.83	$	3.83					Revenues, excluding adjustments	$	4.08		$	4.08
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	2.48		2.29						Site production and delivery, before net noncash and other costs shown below	2.54			2.27
By-product credits	By-product credits	(0.35)		—						By-product credits	(0.53)			—
Treatment charges	Treatment charges	0.15		0.15						Treatment charges	0.18			0.18
Royalty on metals	Royalty on metals	0.01		0.01						Royalty on metals	0.01			0.01
Unit net cash costs	Unit net cash costs	2.29		2.45						Unit net cash costs	2.20			2.46
DD&A	DD&A	0.35		0.32						DD&A	0.35			0.31
Metals inventory adjustments		0.04		0.03

Noncash and other costs, net	Noncash and other costs, net	0.06		0.06						Noncash and other costs, net	0.09		b	0.08
Total unit costs	Total unit costs	2.74		2.86						Total unit costs	2.64			2.85
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	(0.53)		(0.53)						Other revenue adjustments, primarily for pricing on prior period open sales	0.29			0.29
Gross profit per pound	Gross profit per pound	$	0.56	$	0.44					Gross profit per pound	$	1.73		$	1.52

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported							Metals		Reconciliation to Amounts Reported
				Production				Inventory						Production
		Revenues		and Delivery		DD&A		Adjustments			Revenues			and Delivery		DD&A
Totals presented above	Totals presented above	$	1,218	$	727	$	101	$	11	Totals presented above	$	1,402		$	783	$	107
Treatment charges	Treatment charges	(44)		—		—		—		Treatment charges	(55)			—		—
Royalty on metals	Royalty on metals	(3)		—		—		—		Royalty on metals	(2)			—		—
Noncash and other costs, net	Noncash and other costs, net	—		18		—		—		Noncash and other costs, net	—			26		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	(154)		—		—		—		Other revenue adjustments, primarily for pricing on prior period open sales	92			—		—
Eliminations and other	Eliminations and other	(1)		(3)		1		—		Eliminations and other	(1)			(2)		—
South America mining	South America mining	1,016		742		102		11		South America mining	1,436			807		107
Other miningb		6,171		3,989		389		7
Other miningc										Other miningc	5,546			3,854		279

Corporate, other & eliminations	Corporate, other & eliminations	(1,771)		(1,728)		16		—		Corporate, other & eliminations	(1,593)			(1,496)		13
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	5,416	$	3,003	$	507	$	18	As reported in our consolidated financial statements	$	5,389		$	3,165	$	399

a.Includes silver sales of ~~1.1~~1.0 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.~~

~~Table of Contents~~

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

Three Months Ended June 30, 2021
(In millions) By-Product Co-Product Method
Method Copper
Othera
Total
Revenues, excluding adjustments $ 995 $ 995 $ 82 $ 1,077
Site production and delivery, before net noncash
    and other costs shown below 573 b 531 52 583
By-product credits (72) — — —
Treatment charges 29 29 — 29
Royalty on metals 2 2 — 2
Net cash costs 532 562 52 614
DD&A 94 86 8 94
Noncash and other costs, net 18 17 1 18
Total costs 644 665 61 726
Other revenue adjustments, primarily for pricing
    on prior period open sales 88 88 — 88
Gross profit $ 439 $ 418 $ 21 $ 439
Copper sales (millions of recoverable pounds) 230 230
Gross profit per pound of copper:
Revenues, excluding adjustments $ 4.31 $ 4.31
Site production and delivery, before net noncash
    and other costs shown below 2.48 b 2.30
By-product credits (0.31) —
Treatment charges 0.13 0.13
Royalty on metals 0.01 0.01
Unit net cash costs 2.31 2.44
DD&A 0.40 0.37
Noncash and other costs, net 0.08 0.07
Total unit costs 2.79 2.88
Other revenue adjustments, primarily for pricing
    on prior period open sales 0.38 0.38
Gross profit per pound $ 1.90 $ 1.81
Reconciliation to Amounts Reported
Production
Revenues and Delivery DD&A
Totals presented above $ 1,077 $ 583 $ 94
Treatment charges (29) — —
Royalty on metals (2) — —
Noncash and other costs, net — 18 —
Other revenue adjustments, primarily for pricing
    on prior period open sales 88 — —
Eliminations and other (1) (1) —
South America mining 1,133 600 94
Other miningc
6,241 3,975 374
Corporate, other & eliminations (1,626) (1,508) 15
As reported in our consolidated financial statements $ 5,748 $ 3,067 $ 483

a.~~Includes silver sales of 0.8 million ounces ($27.33~~23.41 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.

b.Includes ~~nonrecurring~~ charges totaling ~~$69~~$9 million ($~~0.30~~0.03 per pound of copper) ~~associated with labor related costs at Cerro Verde.~~for feasibility studies.

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

5546

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Six Months Ended June 30, 2022

Three Months Ended March 31, 2022										Three Months Ended March 31, 2022
(In millions)	(In millions)	By-Product		Co-Product Method						(In millions)	By-Product		Co-Product Method
		Method		Copper		Othera		Total			Method		Copper		Othera		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	2,204	$	2,204	$	240	$	2,444	Revenues, excluding adjustments	$	1,236	$	1,236	$	125	$	1,361
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	1,352		1,244		135		1,379		Site production and delivery, before net noncash and other costs shown below	640		587		67		654
By-product credits	By-product credits	(213)		—		—		—		By-product credits	(111)		—		—		—
Treatment charges	Treatment charges	84		84		—		84		Treatment charges	39		39		—		39
Royalty on metals	Royalty on metals	6		5		1		6		Royalty on metals	3		3		—		3
Net cash costs	Net cash costs	1,229		1,333		136		1,469		Net cash costs	571		629		67		696
DD&A	DD&A	198		179		19		198		DD&A	97		88		9		97
Metals inventory adjustments		11		10		1		11

Noncash and other costs, net	Noncash and other costs, net	35		33		2		35		Noncash and other costs, net	17		16		1		17
Total costs	Total costs	1,473		1,555		158		1,713		Total costs	685		733		77		810
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	35		35		—		35		Other revenue adjustments, primarily for pricing on prior period open sales	55		55		—		55
Gross profit	Gross profit	$	766	$	684	$	82	$	766	Gross profit	$	606	$	558	$	48	$	606

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	552		552						Copper sales (millions of recoverable pounds)	264		264

Gross profit per pound of copper:	Gross profit per pound of copper:									Gross profit per pound of copper:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	4.00	$	4.00					Revenues, excluding adjustments	$	4.69	$	4.69
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	2.45		2.26						Site production and delivery, before net noncash and other costs shown below	2.43		2.22
By-product credits	By-product credits	(0.38)		—						By-product credits	(0.43)		—
Treatment charges	Treatment charges	0.15		0.15						Treatment charges	0.15		0.15
Royalty on metals	Royalty on metals	0.01		0.01						Royalty on metals	0.01		0.01
Unit net cash costs	Unit net cash costs	2.23		2.42						Unit net cash costs	2.16		2.38
DD&A	DD&A	0.36		0.32						DD&A	0.37		0.33
Metals inventory adjustments		0.02		0.02

Noncash and other costs, net	Noncash and other costs, net	0.06		0.06						Noncash and other costs, net	0.07		0.07
Total unit costs	Total unit costs	2.67		2.82						Total unit costs	2.60		2.78
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	0.06		0.06						Other revenue adjustments, primarily for pricing on prior period open sales	0.21		0.21
Gross profit per pound	Gross profit per pound	$	1.39	$	1.24					Gross profit per pound	$	2.30	$	2.12

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported									Reconciliation to Amounts Reported
								Metals
				Production				Inventory					Production
		Revenues		and Delivery		DD&A		Adjustments			Revenues		and Delivery		DD&A
Totals presented above	Totals presented above	$	2,444	$	1,379	$	198	$	11	Totals presented above	$	1,361	$	654	$	97
Treatment charges	Treatment charges	(84)		—		—		—		Treatment charges	(39)		—		—
Royalty on metals	Royalty on metals	(6)		—		—		—		Royalty on metals	(3)		—		—
Noncash and other costs, net	Noncash and other costs, net	—		35		—		—		Noncash and other costs, net	—		17		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	35		—		—		—		Other revenue adjustments, primarily for pricing on prior period open sales	55		—		—
Eliminations and other	Eliminations and other	1		(2)		1		—		Eliminations and other	—		(1)		—
South America mining	South America mining	2,390		1,412		199		11		South America mining	1,374		670		97
Other miningb	Other miningb	13,124		8,184		765		7		Other miningb	6,953		4,195		376

Corporate, other & eliminations	Corporate, other & eliminations	(3,495)		(3,443)		32		—		Corporate, other & eliminations	(1,724)		(1,715)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	12,019	$	6,153	$	996	$	18	As reported in our consolidated financial statements	$	6,603	$	3,150	$	489

a.Includes silver sales of ~~2.1~~1.0 millionounces ($~~23.31~~23.36 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.

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

~~Table of Contents~~

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

Six Months Ended June 30, 2021
(In millions) By-Product Co-Product Method
Method Copper
Othera
Total
Revenues, excluding adjustments $ 2,093 $ 2,093 $ 147 $ 2,240
Site production and delivery, before net noncash
    and other costs shown below 1,092 b 1,022 91 1,113
By-product credits (126) — — —
Treatment charges 64 64 — 64
Royalty on metals 4 4 — 4
Net cash costs 1,034 1,090 91 1,181
DD&A 195 181 14 195
Noncash and other costs, net 28 26 2 28
Total costs 1,257 1,297 107 1,404
Other revenue adjustments, primarily for pricing
    on prior period open sales 99 99 — 99
Gross profit $ 935 $ 895 $ 40 $ 935
Copper sales (millions of recoverable pounds) 489 489
Gross profit per pound of copper:
Revenues, excluding adjustments $ 4.28 $ 4.28
Site production and delivery, before net noncash
    and other costs shown below 2.23 b 2.09
By-product credits (0.26) —
Treatment charges 0.13 0.13
Royalty on metals 0.01 0.01
Unit net cash costs 2.11 2.23
DD&A 0.40 0.37
Noncash and other costs, net 0.06 0.05
Total unit costs 2.57 2.65
Other revenue adjustments, primarily for pricing
    on prior period open sales 0.20 0.20
Gross profit per pound $ 1.91 $ 1.83
Reconciliation to Amounts Reported
Production
Revenues and Delivery DD&A
Totals presented above $ 2,240 $ 1,113 $ 195
Treatment charges (64) — —
Royalty on metals (4) — —
Noncash and other costs, net — 28 —
Other revenue adjustments, primarily for pricing
    on prior period open sales 99 — —
Eliminations and other (1) (2) —
South America mining 2,270 1,139 195
Other miningc
11,087 7,225 676
Corporate, other & eliminations (2,759) (2,511) 31
As reported in our consolidated financial statements $ 10,598 $ 5,853 $ 902

a.Includes silver sales of 1.7 million ounces ($26.67 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.

b.~~Includes nonrecurring charges totaling $69 million ($0.14 per pound of copper) associated with labor related costs at Cerro Verde.~~

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

5747

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Three Months Ended June 30, 2022
Three Months Ended March 31, 2023												Three Months Ended March 31, 2023
(In millions)	(In millions)	By-Product		Co-Product Method								(In millions)	By-Product			Co-Product Method
		Method		Copper		Gold		Silvera		Total			Method			Copper			Gold		Othera		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	1,582	$	1,582	$	865	$	32	$	2,479	Revenues, excluding adjustments	$	806		$	806		$	518	$	28	$	1,352
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	587		374		205		8		587		Site production and delivery, before net noncash and other costs shown below	399			238			153		8		399
Gold and silver credits	Gold and silver credits	(888)		—		—		—		—		Gold and silver credits	(563)			—			—		—		—
Treatment charges	Treatment charges	98		63		34		1		98		Treatment charges	74			44			28		2		74
Export duties	Export duties	85		54		30		1		85		Export duties	17			10			7		—		17
Royalty on metals	Royalty on metals	108		72		35		1		108		Royalty on metals	58			37			20		1		58
Net cash (credits) costs	Net cash (credits) costs	(10)		563		304		11		878		Net cash (credits) costs	(15)			329			208		11		548
DD&A	DD&A	262		167		91		4		262		DD&A	148			88			57		3		148

Noncash and other costs, net	Noncash and other costs, net	3		2		1		—		3		Noncash and other costs, net	30		b	18			11		1		30
Total costs	Total costs	255		732		396		15		1,143		Total costs	163			435			276		15		726
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	(201)		(201)		(8)		(1)		(210)		Other revenue adjustments, primarily for pricing on prior period open sales	126			126			17		—		143
PT Smelting intercompany profit	PT Smelting intercompany profit	26		17		9		—		26		PT Smelting intercompany profit	112			67			43		2		112
Gross profit	Gross profit	$	1,152	$	666	$	470	$	16	$	1,152	Gross profit	$	881		$	564		$	302	$	15	$	881

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	410		410								Copper sales (millions of recoverable pounds)	198			198
Gold sales (thousands of recoverable ounces)	Gold sales (thousands of recoverable ounces)					474						Gold sales (thousands of recoverable ounces)							266

Gross profit per pound of copper/per ounce of gold:	Gross profit per pound of copper/per ounce of gold:											Gross profit per pound of copper/per ounce of gold:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	3.86	$	3.86	$	1,827					Revenues, excluding adjustments	$	4.07		$	4.07		$	1,949
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	1.43		0.91		433						Site production and delivery, before net noncash and other costs shown below	2.01			1.20			574
Gold and silver credits	Gold and silver credits	(2.17)		—		—						Gold and silver credits	(2.84)			—			—
Treatment charges	Treatment charges	0.24		0.15		72						Treatment charges	0.37			0.22			106
Export duties	Export duties	0.21		0.13		63						Export duties	0.09			0.05			25
Royalty on metals	Royalty on metals	0.27		0.18		74						Royalty on metals	0.29			0.19			76
Unit net cash (credits) costs	Unit net cash (credits) costs	(0.02)		1.37		642						Unit net cash (credits) costs	(0.08)			1.66			781
DD&A	DD&A	0.63		0.41		193						DD&A	0.75			0.45			214

Noncash and other costs, net	Noncash and other costs, net	0.01		0.01		2						Noncash and other costs, net	0.16		b	0.09			43
Total unit costs	Total unit costs	0.62		1.79		837						Total unit costs	0.83			2.20			1,038
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	(0.49)		(0.49)		(17)						Other revenue adjustments, primarily for pricing on prior period open sales	0.64			0.64			65
PT Smelting intercompany profit	PT Smelting intercompany profit	0.06		0.04		19						PT Smelting intercompany profit	0.56			0.34			162
Gross profit per pound/ounce	Gross profit per pound/ounce	$	2.81	$	1.62	$	992					Gross profit per pound/ounce	$	4.44		$	2.85		$	1,138

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported											Reconciliation to Amounts Reported
				Production												Production
		Revenues		and Delivery		DD&A							Revenues			and Delivery			DD&A
Totals presented above	Totals presented above	$	2,479	$	587	$	262					Totals presented above	$	1,352		$	399		$	148
Treatment charges	Treatment charges	(98)		—		—						Treatment charges	(52)			22		c	—
Export duties	Export duties	(85)		—		—						Export duties	(17)			—			—
Royalty on metals	Royalty on metals	(108)		—		—						Royalty on metals	(58)			—			—
Noncash and other costs, net	Noncash and other costs, net	—		3		—						Noncash and other costs, net	—			30			—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	(210)		—		—						Other revenue adjustments, primarily for pricing on prior period open sales	143			—			—
PT Smelting intercompany profit	PT Smelting intercompany profit	—		(26)		—						PT Smelting intercompany profit	—			(112)			—
Eliminations and other												Eliminations and other	—			(4)			—
Indonesia mining	Indonesia mining	1,978		564		262						Indonesia mining	1,368			335			148
Other miningb		5,209		4,167		229
Other miningd												Other miningd	5,614			4,326			238

Corporate, other & eliminations	Corporate, other & eliminations	(1,771)		(1,728)		16						Corporate, other & eliminations	(1,593)			(1,496)			13
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	5,416	$	3,003	$	507					As reported in our consolidated financial statements	$	5,389		$	3,165		$	399

a.Includes silver sales of ~~1.6~~0.9 million ounces ($~~20.71~~23.29 per ounce average realized price).

b.Includes charges totaling $13 million ($0.07 per pound of copper) for feasibility and optimization studies.

c.Represents tolling costs paid to PT Smelting.

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

~~Table of Contents~~

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

Three Months Ended June 30, 2021
(In millions) By-Product Co-Product Method
Method Copper Gold
Silvera
Total
Revenues, excluding adjustments $ 1,323 $ 1,323 $ 543 $ 37 $ 1,903
Site production and delivery, before net noncash
    and other costs shown below 476 331 136 9 476
Gold and silver credits (597) — — — —
Treatment charges 74 52 21 2 75
Export duties 44 30 13 1 44
Royalty on metals 80 59 20 1 80
Net cash costs 77 472 190 13 675
DD&A 247 172 70 5 247
Noncash and other costs, net 11 8 3 — 11
Total costs 335 652 263 18 933
Other revenue adjustments, primarily for pricing
    on prior period open sales 87 87 16 2 105
PT Smelting intercompany loss (41) (28) (12) (1) (41)
Gross profit $ 1,034 $ 730 $ 284 $ 20 $ 1,034
Copper sales (millions of recoverable pounds) 310 310
Gold sales (thousands of recoverable ounces) 302
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments $ 4.27 $ 4.27 $ 1,795
Site production and delivery, before net noncash
    and other costs shown below 1.54 1.07 449
Gold and silver credits (1.93) — —
Treatment charges 0.24 0.16 70
Export duties 0.14 0.10 42
Royalty on metals 0.26 0.19 66
Unit net cash costs 0.25 1.52 627
DD&A 0.79 0.55 232
Noncash and other costs, net 0.04 0.03 11
Total unit costs 1.08 2.10 870
Other revenue adjustments, primarily for pricing
    on prior period open sales 0.28 0.28 53
PT Smelting intercompany loss (0.13) (0.09) (39)
Gross profit per pound/ounce $ 3.34 $ 2.36 $ 939
Reconciliation to Amounts Reported
Production
Revenues and Delivery DD&A
Totals presented above $ 1,903 $ 476 $ 247
Treatment charges (75) — —
Export duties (44) — —
Royalty on metals (80) — —
Noncash and other costs, net — 11 —
Other revenue adjustments, primarily for pricing
    on prior period open sales 105 — —
PT Smelting intercompany loss — 41 —
Indonesia mining 1,809 528 247
Other miningb
5,565 4,047 221
Corporate, other & eliminations (1,626) (1,508) 15
As reported in our consolidated financial statements $ 5,748 $ 3,067 $ 483

a.~~Includes silver sales of 1.4 million ounces ($26.08 per ounce average realized price).~~

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

5948

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Six Months Ended June 30, 2022

Three Months Ended March 31, 2022													Three Months Ended March 31, 2022
(In millions)	(In millions)	By-Product			Co-Product Method								(In millions)	By-Product			Co-Product Method
		Method			Copper		Gold		Silvera		Total			Method			Copper		Gold		Silvera		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	3,184		$	3,184	$	1,638	$	69	$	4,891	Revenues, excluding adjustments	$	1,778		$	1,778	$	780	$	38	$	2,596
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	1,121			730		375		16		1,121		Site production and delivery, before net noncash and other costs shown below	534			366		160		8		534
Gold and silver credits	Gold and silver credits	(1,710)			—		—		—		—		Gold and silver credits	(821)			—		—		—		—
Treatment charges	Treatment charges	191			124		64		3		191		Treatment charges	93			64		28		1		93
Export duties	Export duties	164			107		55		2		164		Export duties	79			54		24		1		79
Royalty on metals	Royalty on metals	201			135		64		2		201		Royalty on metals	92			63		28		1		92
Net cash (credits) costs	Net cash (credits) costs	(33)			1,096		558		23		1,677		Net cash (credits) costs	(23)			547		240		11		798
DD&A	DD&A	510			332		171		7		510		DD&A	248			169		75		4		248

Noncash and other costs, net	Noncash and other costs, net	30		b	20		10		—		30		Noncash and other costs, net	27		b	19		8		—		27
Total costs	Total costs	507			1,448		739		30		2,217		Total costs	252			735		323		15		1,073
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	32			32		3		—		35		Other revenue adjustments, primarily for pricing on prior period open sales	57			57		3		—		60
PT Smelting intercompany loss	PT Smelting intercompany loss	(27)			(17)		(9)		(1)		(27)		PT Smelting intercompany loss	(53)			(36)		(16)		(1)		(53)
Gross profit	Gross profit	$	2,682		$	1,751	$	893	$	38	$	2,682	Gross profit	$	1,530		$	1,064	$	444	$	22	$	1,530

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	789			789								Copper sales (millions of recoverable pounds)	379			379
Gold sales (thousands of recoverable ounces)	Gold sales (thousands of recoverable ounces)						880						Gold sales (thousands of recoverable ounces)						406

Gross profit per pound of copper/per ounce of gold:	Gross profit per pound of copper/per ounce of gold:												Gross profit per pound of copper/per ounce of gold:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	4.04		$	4.04	$	1,861					Revenues, excluding adjustments	$	4.69		$	4.69	$	1,920
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	1.42			0.92		426						Site production and delivery, before net noncash and other costs shown below	1.41			0.96		395
Gold and silver credits	Gold and silver credits	(2.17)			—		—						Gold and silver credits	(2.17)			—		—
Treatment charges	Treatment charges	0.24			0.16		73						Treatment charges	0.25			0.17		69
Export duties	Export duties	0.21			0.14		63						Export duties	0.21			0.14		59
Royalty on metals	Royalty on metals	0.26			0.17		72						Royalty on metals	0.24			0.17		69
Unit net cash (credits) costs	Unit net cash (credits) costs	(0.04)			1.39		634						Unit net cash (credits) costs	(0.06)			1.44		592
DD&A	DD&A	0.64			0.42		194						DD&A	0.66			0.45		183

Noncash and other costs, net	Noncash and other costs, net	0.04		b	0.03		11						Noncash and other costs, net	0.07		b	0.05		20
Total unit costs	Total unit costs	0.64			1.84		839						Total unit costs	0.67			1.94		795
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	0.04			0.04		3						Other revenue adjustments, primarily for pricing on prior period open sales	0.15			0.15		8
PT Smelting intercompany loss	PT Smelting intercompany loss	(0.03)			(0.02)		(10)						PT Smelting intercompany loss	(0.13)			(0.09)		(39)
Gross profit per pound/ounce	Gross profit per pound/ounce	$	3.41		$	2.22	$	1,015					Gross profit per pound/ounce	$	4.04		$	2.81	$	1,094

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported												Reconciliation to Amounts Reported
					Production												Production
		Revenues			and Delivery		DD&A							Revenues			and Delivery		DD&A
Totals presented above	Totals presented above	$	4,891		$	1,121	$	510					Totals presented above	$	2,596		$	534	$	248
Treatment charges	Treatment charges	(191)			—		—						Treatment charges	(93)			—		—
Export duties	Export duties	(164)			—		—						Export duties	(79)			—		—
Royalty on metals	Royalty on metals	(201)			—		—						Royalty on metals	(92)			—		—
Noncash and other costs, net	Noncash and other costs, net	12			42		—						Noncash and other costs, net	12			39		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	35			—		—						Other revenue adjustments, primarily for pricing on prior period open sales	60			—		—
PT Smelting intercompany loss	PT Smelting intercompany loss	—			27		—						PT Smelting intercompany loss	—			53		—
Indonesia mining	Indonesia mining	4,382			1,190		510						Indonesia mining	2,404			626		248
Other miningc	Other miningc	11,132			8,406		454						Other miningc	5,923			4,239		225

Corporate, other & eliminations	Corporate, other & eliminations	(3,495)			(3,443)		32						Corporate, other & eliminations	(1,724)			(1,715)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	12,019		$	6,153	$	996					As reported in our consolidated financial statements	$	6,603		$	3,150	$	489

a.Includes silver sales of ~~3.1~~1.6 million ounces ($~~22.18~~24.35 per ounce average realized price).

b.Includes ~~credits of $30 million ($0.04 per pound of copper) associated with adjustments to prior year treatment and refining~~ charges ~~and a charge~~ of $41 million ($~~0.05~~0.11 per pound of copper) associated with a settlement of an administrative fine levied by the Indonesia ~~government. Also includes a charge of~~government and $18 million ($~~0.02~~0.05 per pound of copper) ~~to reserve for exposure~~ associated with an adjustment to prior-period export duties, inpartly offset by credits of $30 million ($0.08 per pound of copper) associated with adjustments to prior ~~periods.~~year treatment and refining costs.

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

~~Table of Contents~~

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

Six Months Ended June 30, 2021
(In millions) By-Product Co-Product Method
Method Copper Gold
Silvera
Total
Revenues, excluding adjustments $ 2,435 $ 2,435 $ 995 $ 68 $ 3,498
Site production and delivery, before net noncash
    and other costs shown below 859 598 244 17 859
Gold and silver credits (1,059) — — — —
Treatment charges 140 97 40 3 140
Export duties 73 51 21 1 73
Royalty on metals 140 100 38 2 140
Net cash costs 153 846 343 23 1,212
DD&A 446 310 127 9 446
Noncash and other costs, net 3 b 2 1 — 3
Total costs 602 1,158 471 32 1,661
Other revenue adjustments, primarily for pricing
    on prior period open sales 72 72 (4) — 68
PT Smelting intercompany loss (90) (63) (25) (2) (90)
Gross profit $ 1,815 $ 1,286 $ 495 $ 34 $ 1,815
Copper sales (millions of recoverable pounds) 568 568
Gold sales (thousands of recoverable ounces) 558
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments $ 4.29 $ 4.29 $ 1,785
Site production and delivery, before net noncash
    and other credits shown below 1.51 1.05 439
Gold and silver credits (1.86) — —
Treatment charges 0.24 0.17 71
Export duties 0.13 0.09 37
Royalty on metals 0.25 0.18 68
Unit net cash costs 0.27 1.49 615
DD&A 0.78 0.55 228
Noncash and other costs, net 0.01 b — 1
Total unit costs 1.06 2.04 844
Other revenue adjustments, primarily for pricing
    on prior period open sales 0.12 0.12 (8)
PT Smelting intercompany loss (0.16) (0.11) (46)
Gross profit per pound/ounce $ 3.19 $ 2.26 $ 887
Reconciliation to Amounts Reported
Production
Revenues and Delivery DD&A
Totals presented above $ 3,498 $ 859 $ 446
Treatment charges (140) — —
Export duties (73) — —
Royalty on metals (140) — —
Noncash and other costs, net 31 34 —
Other revenue adjustments, primarily for pricing
    on prior period open sales 68 — —
PT Smelting intercompany loss — 90 —
Indonesia mining 3,244 983 446
Other miningc
10,113 7,381 425
Corporate, other & eliminations (2,759) (2,511) 31
As reported in our consolidated financial statements $ 10,598 $ 5,853 $ 902

a.~~Includes silver sales of 2.6 million ounces ($26.05 per ounce average realized price).~~

b.Includes credits of $31 million ($0.05 per pound of copper) associated with adjustments to prior year treatment and refining charges and a charge of $16 million ($0.03 per pound of copper) associated with a potential settlement of an administrative fine levied by the Indonesia government.

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

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


		Three Months Ended June 30,							Three Months Ended March 31,
(In millions)	(In millions)	2022		2021				(In millions)	2023		2022

Revenues, excluding adjustmentsa	Revenues, excluding adjustmentsa	$	151	$	95			Revenues, excluding adjustmentsa	$	230	$	134
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	78		54				Site production and delivery, before net noncash and other costs shown below	91		72
Treatment charges and other	Treatment charges and other	7		6				Treatment charges and other	7		6
Net cash costs	Net cash costs	85		60				Net cash costs	98		78
DD&A	DD&A	18		17				DD&A	20		16

Noncash and other costs, net	Noncash and other costs, net	2		2				Noncash and other costs, net	5		3
Total costs	Total costs	105		79				Total costs	123		97
Gross profit	Gross profit	$	46	$	16			Gross profit	$	107	$	37

Molybdenum sales (millions of recoverable pounds)a	Molybdenum sales (millions of recoverable pounds)a	8		7				Molybdenum sales (millions of recoverable pounds)a	8		7

Gross profit per pound of molybdenum:	Gross profit per pound of molybdenum:							Gross profit per pound of molybdenum:

Revenues, excluding adjustmentsa	Revenues, excluding adjustmentsa	$	18.87	$	12.77			Revenues, excluding adjustmentsa	$	28.96	$	18.75
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	9.77		7.29				Site production and delivery, before net noncash and other costs shown below	11.39		10.04
Treatment charges and other	Treatment charges and other	0.85		0.85				Treatment charges and other	0.85		0.85
Unit net cash costs	Unit net cash costs	10.62		8.14				Unit net cash costs	12.24		10.89
DD&A	DD&A	2.27		2.29				DD&A	2.57		2.27

Noncash and other costs, net	Noncash and other costs, net	0.30		0.30				Noncash and other costs, net	0.68		0.40
Total unit costs	Total unit costs	13.19		10.73				Total unit costs	15.49		13.56
Gross profit per pound	Gross profit per pound	$	5.68	$	2.04			Gross profit per pound	$	13.47	$	5.19

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported							Reconciliation to Amounts Reported
				Production							Production
Three Months Ended June 30, 2022		Revenues		and Delivery		DD&A
Three Months Ended March 31, 2023								Three Months Ended March 31, 2023	Revenues		and Delivery		DD&A
Totals presented above	Totals presented above	$	151	$	78	$	18	Totals presented above	$	230	$	91	$	20
Treatment charges and other	Treatment charges and other	(7)		—		—		Treatment charges and other	(7)		—		—
Noncash and other costs, net	Noncash and other costs, net	—		2		—		Noncash and other costs, net	—		5		—
Molybdenum mines	Molybdenum mines	144		80		18		Molybdenum mines	223		96		20
Other miningb	Other miningb	7,043		4,651		473		Other miningb	6,759		4,565		366

Corporate, other & eliminations	Corporate, other & eliminations	(1,771)		(1,728)		16		Corporate, other & eliminations	(1,593)		(1,496)		13
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	5,416	$	3,003	$	507	As reported in our consolidated financial statements	$	5,389	$	3,165	$	399

Three Months Ended June 30, 2021
Three Months Ended March 31, 2022								Three Months Ended March 31, 2022
Totals presented above	Totals presented above	$	95	$	54	$	17	Totals presented above	$	134	$	72	$	16
Treatment charges and other	Treatment charges and other	(6)		—		—		Treatment charges and other	(6)		—		—
Noncash and other costs, net	Noncash and other costs, net	—		2		—		Noncash and other costs, net	—		3		—

Molybdenum mines	Molybdenum mines	89		56		17		Molybdenum mines	128		75		16
Other miningb	Other miningb	7,285		4,519		451		Other miningb	8,199		4,790		457

Corporate, other & eliminations	Corporate, other & eliminations	(1,626)		(1,508)		15		Corporate, other & eliminations	(1,724)		(1,715)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	5,748	$	3,067	$	483	As reported in our consolidated financial statements	$	6,603	$	3,150	$	489

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.

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

Six Months Ended June 30,
(In millions) 2022 2021
Revenues, excluding adjustmentsa
$ 285 $ 171
Site production and delivery, before net noncash
and other costs shown below 150 108
Treatment charges and other 13 12
Net cash costs 163 120
DD&A 34 32
Metals inventory adjustments — 1
Noncash and other costs, net 5 5
Total costs 202 158
Gross profit $ 83 $ 13
Molybdenum sales (millions of recoverable pounds)a
15 14
Gross profit per pound of molybdenum:
Revenues, excluding adjustmentsa
$ 18.81 $ 12.12
Site production and delivery, before net noncash
and other costs shown below 9.90 7.68
Treatment charges and other 0.85 0.85
Unit net cash costs 10.75 8.53
DD&A 2.27 2.27
Metals inventory adjustments — 0.06
Noncash and other costs, net 0.34 0.36
Total unit costs 13.36 11.22
Gross profit per pound $ 5.45 $ 0.90
Reconciliation to Amounts Reported
Metals
Production Inventory
Six Months Ended June 30, 2022 Revenues and Delivery DD&A Adjustments
Totals presented above $ 285 $ 150 $ 34 $ —
Treatment charges and other (13) — — —
Noncash and other costs, net — 5 — —
Molybdenum mines 272 155 34 —
Other miningb
15,242 9,441 930 18
Corporate, other & eliminations (3,495) (3,443) 32 —
As reported in our consolidated financial statements $ 12,019 $ 6,153 $ 996 $ 18
Six Months Ended June 30, 2021
Totals presented above $ 171 $ 108 $ 32 $ 1
Treatment charges and other (12) — — —
Noncash and other costs, net — 5 — —
Molybdenum mines 159 113 32 1
Other miningb
13,198 8,251 839 —
Corporate, other & eliminations (2,759) (2,511) 31 —
As reported in our consolidated financial statements $ 10,598 $ 5,853 $ 902 $ 1

~~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; production and sales volumes; unit net cash costs and operating costs; capital expenditures; ~~operating costs;~~ operating plans; cash flows; liquidity; PT-FI’s financing, construction and completion of additional domestic smelting capacity in Indonesia in accordance with the terms of ~~the special mining license (IUPK);~~its IUPK; extension of PT-FI’s IUPK beyond 2041 and export permit beyond June 10, 2023; our ~~commitments~~commitment to deliver responsibly produced copper and molybdenum, including plans to implement, validate and ~~validate all~~maintain validation of our operating sites under ~~the Copper Mark and to comply with other disclosure~~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 ~~commitments~~targets and 2050 net zero aspiration; improvements in operating procedures and technology innovations; exploration efforts and results; development and production activities, rates and costs; future organic growth opportunities; tax rates; export ~~quotas and duties;~~quotas; the impact of copper, gold and molybdenum price changes; the impact of deferred intercompany profits on earnings; mineral reserve and mineral resource estimates; final resolution of settlements associated with ongoing legal proceedings; debt ~~repurchases~~repurchases; and the ongoing implementation of our financial policy and future returns to shareholders, including dividend payments (base or variable) and share repurchases. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” ~~"targets,"~~“targets,” “intends,” “likely,” “will,” “should,” “could,” “to be,” ~~”potential,"~~“potential,” “assumptions,” “guidance,” “aspirations,” ~~“future”~~“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 isare at the discretion of the Board and management, respectively, and isare subject to a number of factors, including maintaining our net debt target, capital availability, our financial results, cash requirements, ~~business prospects,~~ global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by the Board or management, as applicable. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion.

We caution readers that forward-looking statements are not guarantees of future performance and actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, supply of and demand for, and prices of the commodities we produce, primarily copper; 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, ~~tax,~~ regulatory or industry ~~conditions, including as a result of Russia’s invasion of Ukraine or potential global economic downturn or recession;~~conditions; reductions in liquidity and access to capital; changes in tax laws and regulations, including the ~~ongoing COVID-19 pandemic and~~impact of the Act; any ~~future~~major public health crisis; political and social ~~risks;~~risks, including the potential effects of violence in Indonesia, civil unrest in Peru, and relations with local communities and Indigenous Peoples; operational risks inherent in mining, with higher inherent risks in underground mining; ~~fluctuations in price and availability of commodities purchased; constraints on supply, logistics and transportation services;~~ mine sequencing; changes in mine plans or operational modifications, delays, deferrals or cancellations; production rates; timing of shipments; results of technical, economic or feasibility studies; potential inventory adjustments; potential impairment of long-lived mining assets; ~~the potential effects of violence in Indonesia generally~~PT-FI's ability to export and ~~in the province of Papua; the Indonesia government's extension of PT-FI's export license after March 19, 2023;~~sell copper concentrate and anode slimes; satisfaction of requirements in accordance with PT-FI's IUPK to extend mining rights from 2031 through 2041; the Indonesia government's approval of a deferred schedule for completion of additional domestic smelting capacity in Indonesia; discussions relating to the extension of PT-FI’s IUPK beyond 2041; cybersecurity incidents; labor relations, including labor-related work stoppages and costs; ~~the results of the human health assessment to evaluate the potential impacts of tailings and mining waste, and~~ compliance with applicable environmental, health and safety laws and regulations; weather- and climate-related risks; environmental risks, including availability of secure water supplies, and litigation results; our ability to comply with our responsible production commitments under specific frameworks and any changes to such frameworks and other factors described in more detail under the heading “Risk Factors” contained in Part I, Item 1A. of our ~~2021~~2022 Form 10-K.

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

Table of Contents

This report on Form 10-Q also contains financial measures such as net debt and unit net cash costs ~~(credits)~~ per pound of copper and molybdenum, which are not recognized under U.S. GAAP. Refer to “Operations – Unit Net

~~Table of Contents~~

Cash ~~Costs (Credits)”~~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. Refer to “Net Debt” for reconciliations of debt and consolidated cash and cash equivalents to net debt.

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our market risks during the ~~six-month~~three-month period ended ~~June 30, 2022.~~

March 31, 2023. For additional information on market risks, refer to “Disclosures About Market Risks” included in Part II, Items 7. and 7A. of our ~~2021~~2022 Form 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 projected sensitivities of our provisionally priced copper sales to changes in commodity prices refer to “Consolidated Results – Revenues” in Part I, Item 2. of this quarterly report on Form 10-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, 2022.~~March 31, 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 ~~June 30, 2022,~~March 31, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II.OTHER INFORMATION

Item 1.Legal Proceedings.

We are involved in numerous legal proceedings that arise in the ordinary course of our business or are associated with environmental issues. We are also involved periodically in 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 Part I, Item 3. “Legal Proceedings” and Note 12 of our ~~2021~~2022 Form 10-K, and Note 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.

There have been no material changes to legal proceedings previously disclosed in Part I, Item 3. “Legal Proceedings” and Note 12 of our ~~2021~~2022 Form ~~10-K. Refer to~~10-K, except as described in Note 8 ~~for an update to our asbestos and talc claims.~~herein.

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 ~~2021~~2022 Form 10-K.

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

There were no unregistered sales of equity securities during the three months ended ~~June 30, 2022.~~March 31, 2023.

The following table sets forth information with respect to shares of FCX common stock purchased by us during the three months ended ~~June 30, 2022~~March 31, 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, 2022 2,668,891 $ 46.85 2,668,891 $ 1,846,078,689
May 1-31, 2022 5,581,338 $ 37.64 5,581,338 $ 1,636,023,901
June 1-30, 2022 8,863,479 $ 34.91 8,863,479 $ 1,326,563,372
Total 17,113,708 $ 37.66 17,113,708


Period	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programsa	(d) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programsa
January 1-31, 2023	—	$	—	—	$	3,164,642,228
February 1-28, 2023	—	$	—	—	$	3,164,642,228
March 1-31, 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 19, 2022, our Board authorized an increase in the share repurchase program ~~from up to $3.0 billion to~~ up to $5.0 billion. The share repurchase program does not obligate us to acquire any specific amount of shares and does not have an expiration date.

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.

6653

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Item 6.Exhibits.

Filed

Exhibit

with this

Incorporated by Reference

Number

Exhibit Title

Form 10-Q

Form

File 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-Q

001-11307-01

11/9/2018

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-K

001-11307-01

2/15/2019

3.1

Amended and Restated Certificate of Incorporation of FCX, effective as of June 8, 2016.

8-K

001-11307-01

6/9/2016

3.2

Amended and Restated By-Laws of FCX, effective as of June 3, 2020.

8-K

001-11307-01

6/3/2020

15.1

Letter from Ernst & Young LLP regarding unaudited interim financial statements.

22.1

List of Subsidiary Guarantors and Subsidiary Issuers of Guaranteed Securities.

10-K

001-11307-01

2/15/~~2022~~2023

31.1

Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d – 14(a).

31.2

Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d – 14(a).

32.1

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2

Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350.

95.1

Mine Safety and Health Administration Safety Data.

101.INS

XBRL 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.

101.SCH

Inline XBRL Taxonomy Extension Schema.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase.

104

The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL.

* The registrant agrees to furnish supplementally to the Securities and Exchange 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.

6754

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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.

			By:			/s/ Ellie L. Mikes
						Ellie L. Mikes
						Vice President and Chief Accounting Officer
						(authorized signatory
						and Principal Accounting Officer)

Date: ~~August 5, 2022~~May 4, 2023

S-1



	Principal Amount		Discounts/Deferred Issuance Costs		Book Value		Redemption Value		Gain/(Loss)

5.00% Senior Note due 2027	$	85	$	1	$	84	$	85	$	(1)
4.125% Senior Note due 2028	90		1		89		85		4
4.375% Senior Note due 2028	106		1		105		102		3
5.25% Senior Note due 2029	85		1		84		82		2
4.25% Senior Note due 2030	17		—		17		16		1
4.625% Senior Note due 2030	66		1		65		62		3
5.40% Senior Note due 2034	15		—		15		15		—
5.450% Senior Note due 2043	118		1		117		111		6
	$	582	$	6	$	576	$	558	$	18


	At June 30, 2022
	Carrying		Fair Value
	Amount		Total		NAV		Level 1		Level 2		Level 3
Assets
Investment securities:a,b
U.S. core fixed income fund	$	26	$	26	$	26	$	—	$	—	$	—
Equity securities	5		5		—		5		—		—

Total	31		31		26		5		—		—

Legally restricted funds:a
U.S. core fixed income fund	56		56		56		—		—		—
Government bonds and notes	39		39		—		—		39		—
Corporate bonds	36		36		—		—		36		—
Government mortgage-backed securities	28		28		—		—		28		—
Asset-backed securities	16		16		—		—		16		—
Money market funds	8		8		—		8		—		—
Collateralized mortgage-backed securities	3		3		—		—		3		—

Total	186		186		56		8		122		—

Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross asset position	38		38		—		—		38		—


Copper forward contracts	15		15		—		8		7		—




Total	53		53		—		8		45		—

Contingent consideration for the sale of the
Deepwater GOM oil and gas propertiesa	79		67		—		—		—		67



Liabilities
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position	476		476		—		—		476		—


Copper futures and swap contracts	66		66		—		61		5		—
Copper forward contracts	4		4		—		3		1		—


Total	546		546		—		64		482		—




Long-term debt, including current portiond	11,092		10,601		—		—		10,601		—


	Three Months Ended June 30		Six Months Ended June 30

Consolidated revenues - 2021 period	$	5,748	$	10,598
Higher (lower) sales volumes:
Copper	681		1,515
Gold	305		575
Molybdenum	(34)		(49)

(Lower) higher average realized prices:
Copper	(337)		(148)
Gold	16		67
Molybdenum	121		270
Adjustments for prior period provisionally priced copper sales	(528)		(104)
Lower Atlantic Copper revenues	(361)		(330)
Lower revenues from purchased copper	(206)		(354)

Higher treatment charges	(38)		(74)
Higher royalties and export duties	(69)		(170)
Other, including intercompany eliminations	118		223
Consolidated revenues - 2022 period	$	5,416	$	12,019



Six Months Ended June 30, 2021
(In millions)	By-Product		Co-Product Method
	Method		Copper		Molybdenuma		Otherb		Total
Revenues, excluding adjustments	$	2,919	$	2,919	$	185	$	67	$	3,171
Site production and delivery, before net noncash and other costs shown below	1,459		1,369		113		40		1,522
By-product credits	(189)		—		—		—		—
Treatment charges	63		60		—		3		63
Net cash costs	1,333		1,429		113		43		1,585
DD&A	181		169		8		4		181

Noncash and other costs, net	73		71		1		1		73
Total costs	1,587		1,669		122		48		1,839
Other revenue adjustments, primarily for pricing on prior period open sales	7		7		—		—		7
Gross profit	$	1,339	$	1,257	$	63	$	19	$	1,339

Copper sales (millions of recoverable pounds)	697		697
Molybdenum sales (millions of recoverable pounds)a					17

Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments	$	4.19	$	4.19	$	11.12
Site production and delivery, before net noncash and other costs shown below	2.09		1.96		6.76
By-product credits	(0.27)		—		—
Treatment charges	0.09		0.09		—
Unit net cash costs	1.91		2.05		6.76
DD&A	0.26		0.24		0.51

Noncash and other costs, net	0.11		0.11		0.06
Total unit costs	2.28		2.40		7.33
Other revenue adjustments, primarily for pricing on prior period open sales	0.01		0.01		—
Gross profit per pound	$	1.92	$	1.80	$	3.79

Reconciliation to Amounts Reported

			Production
	Revenues		and Delivery		DD&A
Totals presented above	$	3,171	$	1,522	$	181
Treatment charges	(17)		46		—
Noncash and other costs, net	—		73		—
Other revenue adjustments, primarily for pricing on prior period open sales	7		—		—
Eliminations and other	31		33		—
North America copper mines	3,192		1,674		181
Other miningc	10,165		6,690		690


Corporate, other & eliminations	(2,759)		(2,511)		31
As reported in our consolidated financial statements	$	10,598	$	5,853	$	902