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Item 2. Management’s Discussion and Analysis

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 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. 
 
 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 for first-quarter 2022 reflect strong operating and financial performance, cash flow generation and cash returns to shareholders. We remain focused on cost and capital management and are advancing our sustainability objectives. We achieved a 24 percent increase in copper sales and a 59 percent increase in gold sales, compared to first-quarter 2021. We plan to continue to execute our operating plans, which we expect will provide strong cash flows to support advancement of organic growth initiatives and continued cash returns to shareholders under our established financial policy, based on a favorable operational and market outlook. 
 
 As further discussed in “Operations,” first-quarter 2022 highlights include: 
 • Continued growth in operating rates at Lone Star toward achieving production of 300 million pounds of copper per year from oxide ores (compared with the initial design capacity of 200 million pounds per year). 
 • Strong performance from Cerro Verde's concentrator facilities, with milling rates averaging 394,400 metric tons of ore per day. Subject to ongoing monitoring of COVID-19 protocols, milling rates are currently expected to average approximately 400,000 metric tons of ore per day for the remainder of 2022. 
 • Increased milling rates from the underground mines at the Grasberg minerals district, which averaged 186,500 metric tons of ore per day, a 50 percent increase from milling rates in first-quarter 2021. Milling rates at the Grasberg minerals district are expected to average approximately 180,000 to 190,000 metric tons of ore per day for the remainder of 2022. 
 
 Net income attributable to common stock totaled $1.5 billion in first-quarter 2022, compared with $0.7 billion in first-quarter 2021, primarily reflecting higher copper and gold sales volumes and prices, partly offset by a higher provision for income taxes and increased energy and other input costs. Refer to “Consolidated Results” for further discussion. 
 
 At March 31, 2022, we had consolidated debt of $9.6 billion and consolidated cash and cash equivalents of $8.3 billion, resulting in net debt of $1.3 billion (including $0.6 billion of net debt for the Indonesia smelter projects). Refer to “Net Debt” for reconciliations of consolidated debt and consolidated cash and cash equivalents to net debt. 
 
 At March 31, 2022, we had no borrowings and $3.5 billion available under our revolving credit facility. At March 31, 2022, we had $1.4 billion of current debt, including $995 million of senior notes maturing in March 2023 (with redemption rights at par in December 2022) and $325 million under Cerro Verde’s Term Loan maturing in June 2022. 
 
 In April 2022, PT Freeport Indonesia (PT-FI) completed the sale of $3.0 billion of senior notes primarily in connection with its financing plans for construction of additional domestic smelting capacity. 
 
 In first-quarter 2022, we acquired 12.3 million shares of our common stock under the share repurchase program for a total cost of $541 million ($44.02 average cost per share). Through May 5, 2022, we acquired 28.7 million shares 
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 of our common stock for a total cost of $1.2 billion ($41.64 average cost per share) and $1.8 billion remains available under the share repurchase program. 
 
 Refer to Note 5 and “Capital Resources and Liquidity” for further discussion. 
 
 OUTLOOK 
 
 We continue to view the long-term outlook for our business positively, supported by limitations on supplies of copper and the requirements for copper in the world’s economy. Our financial results vary as a result of fluctuations in market prices primarily for copper, gold and, to a lesser extent, molybdenum, as well as other factors. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. Refer to “Markets” below and “Risk Factors” in Part I, Item 1A. of our 2021 Form 10-K for further discussion. Because we cannot control the 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: 
 
 Copper (millions of recoverable pounds): 
 
 North America copper mines 1,536 
 South America mining 1,154 
 Indonesia mining 1,564 
 Total 4,254 
 
 Gold (millions of recoverable ounces) 
 1.6 
 
 Molybdenum (millions of recoverable pounds) 
 80 a 
 
 a. Projected molybdenum sales include 30 million pounds produced by our Molybdenum mines and 50 million pounds produced by our North America and South America copper mines. 
 
 Consolidated sales volumes in second-quarter 2022 are expected to approximate 1.0 billion pounds of copper, 405 thousand ounces of gold and 21 million pounds of molybdenum. Projected sales volumes are dependent on operational performance, weather-related conditions, timing of shipments, and other factors 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 Form 10-K. 
 
 Consolidated Unit Net Cash Costs 
 Assuming average prices of $1,950 per ounce of gold and $19.00 per pound of molybdenum for the remainder of 2022 and achievement of current sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) for our copper mines are expected to average $1.44 per pound of copper for the year 2022 (including $1.41 per pound of copper in second-quarter 2022). The increase from the January 2022 estimate of $1.35 per pound of copper primarily reflects higher costs of energy and other consumables and currency exchange rates in South America, partly offset by higher gold volumes and commodity price assumptions. We are experiencing significant cost inflation, principally associated with energy (which represents about 20 percent of our site operating costs) and other consumables such as sulfuric acid, explosives and steel. Russia’s invasion of Ukraine has placed additional pressure on an already challenging global supply chain environment. The impact of price changes during the remainder of 2022 on consolidated unit net cash costs for the year 2022 would approximate $0.03 per pound of copper for each $100 per ounce change in the average price of gold and $0.02 per pound of copper for each $2.00 per pound change in the average price of molybdenum. Quarterly unit net cash costs vary with fluctuations in sales volumes and realized prices, primarily for gold and molybdenum. 
 
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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 $4.75 per pound for copper, $1,950 per ounce for gold, and $19.00 per pound for molybdenum for the remainder of 2022, our consolidated operating cash flows are estimated to approximate $8.6 billion (net of $0.9 billion of working capital and other uses) for the year 2022. Estimated consolidated operating cash flows for the year 2022 also reflect an estimated income tax provision of $3.4 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate for the year 2022). The impact of price changes for the remainder of 2022 on operating cash flows would approximate $300 million for each $0.10 per pound change in the average price of copper, $80 million for each $100 per ounce change in the average price of gold and $75 million for each $2.00 per pound change in the average price of molybdenum. 
 
 Consolidated Capital Expenditures 
 Consolidated capital expenditures for the year 2022 are expected to approximate $4.6 billion ($3.2 billion excluding capital expenditures for the greenfield smelter and precious metals refinery (PMR) - collectively, the Indonesia smelter projects), and include $1.9 billion for major mining projects ($1.3 billion for planned projects primarily associated with underground mine development in the Grasberg minerals district and supporting mill and power capital costs and $0.6 billion for discretionary growth projects). 
 
 Capital expenditures for the Indonesia smelter projects are expected to approximate $1.4 billion for the year 2022. 
 Development of additional smelting capacity in Indonesia will result in the elimination of export duties, providing an 
 offset to the economic cost associated with the Indonesia smelter projects. Capital expenditures for the Indonesia smelter projects are being funded with the net proceeds from PT-FI's unsecured senior notes issued in April 2022 and its available bank credit facilities. 
 
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 MARKETS 
 
 World prices for copper, gold and molybdenum can fluctuate significantly. During the period from January 2012 through March 2022, the 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 Metals Week Molybdenum Dealer Oxide weekly average price ranged from a low of $4.46 per pound in 2015 to a high of $20.01 per pound in 2021. Copper, gold and molybdenum prices are affected by numerous factors beyond our control as described further in “Risk Factors” contained in Part I, Item 1A. of our 2021 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 through March 2022. During first-quarter 2022, LME copper settlement prices ranged from a low of $4.34 per pound to a record high of $4.87 per pound, averaged $4.53 per pound and settled at $4.69 per pound on March 31, 2022. Copper prices have been supported by strong demand during the pandemic recovery, rising investor sentiment associated with copper’s prominent role in the global transition to cleaner energy, ongoing supply disruptions and falling inventories. The LME copper settlement price was $4.45 per pound on April 29, 2022. 
 
 Long-term fundamentals for copper remain positive. We believe 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 beyond those expected to commence operations in 2022 and 2023, 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. 
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 This graph presents London PM gold prices from January 2012 through March 2022. During first-quarter 2022, London PM gold prices ranged from a low of $1,788 per ounce to a high of $2,039 per ounce, averaged $1,877 per ounce, and closed at $1,942 per ounce on March 31, 2022. Many analysts expect future gold prices to be supported by the effects of elevated debt levels associated with large pandemic-related stimulus efforts, historically low U.S. interest rates and a weaker U.S. dollar. The London PM gold price was $1,911 per ounce on April 29, 2022. 
 
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 This graph presents the Metals Week Molybdenum Dealer Oxide weekly average price from January 2012 through March 2022. During first-quarter 2022, the weekly average price of molybdenum ranged from a low of $18.74 per pound to a high of $19.33 per pound, averaged $19.08 per pound, and was $19.30 per pound on March 31, 2022. Molybdenum prices continue to be supported by supply constraints and increased demand, as mines in Chile continued to report low production, logistic challenges and geopolitical risk due to Russia’s invasion of Ukraine causing traders to increase inventories. The Metals Week Molybdenum Dealer Oxide weekly average price was $19.22 per pound on April 29, 2022. 
 
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 CONSOLIDATED RESULTS 
 
 Three Months Ended March 31, 
 2022 2021 
 SUMMARY FINANCIAL DATA 
 (in millions, except per share amounts) 
 Revenues a,b 
 $ 6,603 $ 4,850 
 Operating income a 
 $ 2,809 $ 1,532 
 
 Net income attributable to common stock c 
 $ 1,527 d 
 $ 718 e 
 
 Diluted net income per share of common stock $ 1.04 $ 0.48 
 
 Diluted weighted-average common shares outstanding 
 1,469 1,477 
 
 Operating cash flows f 
 $ 1,691 $ 1,075 
 Capital expenditures 
 $ 723 $ 370 
 At March 31: 
 Cash and cash equivalents 
 $ 8,338 $ 4,580 
 Total debt, including current portion 
 $ 9,621 $ 9,809 
 
 a. Refer to Note 9 for a summary of revenues and operating income by operating division. 
 b. Includes favorable adjustments to prior period provisionally priced concentrate and cathode copper sales totaling $102 million ($42 million to net income attributable to common stock or $0.03 per share) in first-quarter 2022 and $146 million ($57 million to net income attributable to common stock or $0.04 per share) in first-quarter 2021 (refer to Note 6 for further discussion). 
 c. We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations – Smelting and Refining” for a summary of net impacts from changes in these deferrals. 
 d. Includes net charges totaling $38 million ($0.03 per share), primarily associated with the settlement of an administrative fine and an adjustment to prior-period export duties at PT-FI. These net charges, before income taxes and noncontrolling interests, were recorded to production and delivery ($43 million) and to revenues ($18 million). 
 e. Includes net charges totaling $38 million ($0.03 per share), primarily associated with contested matters at PT-FI (including an administrative fine levied by the Indonesia government and historical tax audits), employee separation charges in North America and asset retirement obligation adjustments. These charges, before income taxes and noncontrolling interests, were recorded to production and delivery ($37 million), interest expense, net ($4 million) and other income, net ($5 million), partly offset by credits recorded to environmental obligations and shutdown costs ($3 million). 
 f. Working capital and other uses totaled $811 million in first-quarter 2022 and $336 million in first-quarter 2021. 
 
 Three Months Ended March 31, 
 2022 2021 
 SUMMARY OPERATING DATA 
 Copper (millions of recoverable pounds) 
 
 Production 1,009 910 
 Sales, excluding purchases 1,024 825 
 Average realized price per pound $ 4.66 $ 3.94 
 Site production and delivery costs per pound a 
 $ 2.03 $ 1.86 
 Unit net cash costs per pound a 
 $ 1.33 $ 1.39 
 Gold (thousands of recoverable ounces) 
 
 Production 415 297 
 Sales, excluding purchases 
 409 258 
 Average realized price per ounce $ 1,920 $ 1,713 
 Molybdenum (millions of recoverable pounds) 
 
 Production 21 20 
 Sales, excluding purchases 
 19 21 
 Average realized price per pound $ 19.30 $ 11.62 
 
 a. Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for 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.” 
 
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 Revenues 
 Consolidated revenues totaled $6.6 billion in first-quarter 2022 and $4.9 billion in first-quarter 2021. Revenues from our mining operations 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 March 31 
 
 Consolidated revenues - 2021 period $ 4,850 
 Higher (lower) sales volumes: 
 Copper 786 
 Gold 259 
 Molybdenum (16) 
 
 Higher average realized prices: 
 Copper 737 
 Gold 85 
 Molybdenum 149 
 Adjustments for prior period provisionally priced copper sales (44) 
 Higher Atlantic Copper revenues 31 
 Lower revenues from purchased copper (148) 
 
 Higher treatment charges (36) 
 Higher royalties and export duties (101) 
 Other, including intercompany eliminations 51 
 Consolidated revenues - 2022 period $ 6,603 
 
 Sales Volumes. Consolidated copper and gold sales volumes increased in first-quarter 2022, compared with first-quarter 2021, primarily reflecting the ramp-up of underground mining at PT-FI and timing of shipments in North America. Refer to “Operations” for further discussion of sales volumes at our mining operations. 
 
 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 first-quarter 2022, compared with first-quarter 2021, were 18 percent higher for copper, 12 percent higher for gold and 66 percent higher for molybdenum. 
 
 Average realized copper prices include net favorable adjustments to current period provisionally priced copper sales ( i.e. , provisionally priced sales at March 31, 2022 and 2021) totaling $116 million in first-quarter 2022 and $61 million in first-quarter 2021. As discussed in Note 6, substantially all of our copper concentrate and cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date) based primarily on quoted LME monthly average 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 favorable adjustments to prior periods’ provisionally priced copper sales ( i.e. , provisionally priced sales at December 31, 2021 and 2020) recorded in consolidated revenues totaled $102 million in first-quarter 2022 and $146 million in first-quarter 2021. Refer to Notes 6 and 9 for a summary of total adjustments to prior period and current period provisionally priced sales. 
 
 At March 31, 2022, we had provisionally priced copper sales totaling 473 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $4.71 per pound, subject to final pricing over the next several months. We estimate that each $0.05 change in the price realized from the March 31, 2022, provisional price recorded would have an approximate $15 million effect on our 2022 net income attributable to common stock. Copper prices have declined from March 31, 2022, the LME copper settlement price averaged $4.62 per pound in April 2022 and approximated $4.30 per pound on May 4, 2022. 
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 Atlantic Copper Revenues. Atlantic Copper revenues totaled $718 million in first-quarter 2022, compared with $687 million in first-quarter 2021. Higher revenues in first-quarter 2022, compared with first-quarter 2021, primarily reflect higher copper prices. 
 
 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 15 million pounds in first-quarter 2022 and 53 million pounds in first-quarter 2021. 
 
 Treatment Charges. Revenues from our concentrate sales are recorded net of treatment charges ( i.e., fees paid to smelters that are generally negotiated annually), which will vary with the sales volumes and the price of copper. 
 
 Royalties and Export Duties. Royalties are primarily on PT-FI sales and vary with the volume of metal sold and the prices of copper and gold. PT-FI currently pays duties on concentrate exports of 5 percent, declining to 2.5 percent when development progress for additional smelting capacity in Indonesia exceeds 30 percent, and eliminated when development progress for additional smelting capacity in Indonesia exceeds 50 percent. Refer to “Operations – Indonesia Mining” for further discussion of the current progress on additional smelting capacity in Indonesia and to Note 9 for a summary of royalty expense and export duties. 
 
 Production and Delivery Costs 
 Consolidated production and delivery costs totaled $3.2 billion in first-quarter 2022 and $2.8 billion in first-quarter 2021. Higher consolidated production and delivery costs in first-quarter 2022 primarily reflect higher volumes and increased energy, maintenance and other input costs. 
 
 Site Production and Delivery Costs Per Pound. Site production and delivery costs for our copper mining operations primarily include labor, energy and commodity-based inputs, such as sulphuric acid, reagents, liners, tires and explosives. Consolidated site production and delivery costs (before net noncash and other costs) for our copper mines averaged $2.03 per pound of copper in first-quarter 2022 and $1.86 per pound of copper in first-quarter 2021. 
 
 Higher consolidated site production and delivery costs per pound of copper for first-quarter 2022, compared with first-quarter 2021, primarily reflect higher mining and milling costs and increased energy and other input costs, partly offset by higher sales volumes. Refer to “Operations – Unit Net Cash Costs” for further discussion of unit net cash costs associated with our operating divisions and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements. 
 
 Depreciation, Depletion and Amortization 
 Depreciation will vary under the unit-of-production (UOP) method as a result of changes in sales volumes and the related UOP rates at our mining operations. Consolidated depreciation, depletion and amortization (DD&A) totaled $489 million in first-quarter 2022 and $419 million in first-quarter 2021. Higher DD&A in first-quarter 2022 primarily reflects higher sales volumes and assets placed in service associated with the ramp-up of underground mining at PT-FI. 
 
 Interest Expense, Net 
 Consolidated interest costs (before capitalization) totaled $153 million in first-quarter 2022 and $160 million in first-quarter 2021. 
 
 Capitalized interest varies with the level of qualifying assets associated with our development projects and average interest rates on our borrowings. Capitalized interest totaled $26 million in first-quarter 2022 and $15 million in first-quarter 2021. The increase in capitalized interest in first-quarter 2022, compared with first-quarter 2021, is related to major mining projects primarily associated with underground development activities in the Grasberg minerals district and development of the greenfield smelter in Indonesia. Refer to “Capital Resources and Liquidity - Investing Activities” for discussion of capital expenditures associated with our major development projects. 
 
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 Income Taxes 
 Following is a summary of the approximate amounts used in the calculation of our consolidated income tax provision (in millions, except percentages): 
 
 Three Months Ended March 31, 
 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 
 $ 552 — % c 
 $ (2) $ 185 — % c 
 $ — 
 South America 612 39 % (241) 493 39 % (194) 
 Indonesia 1,512 39 % (586) 757 42 % (315) 
 
 Eliminations and other 37 N/A (10) (37) N/A 4 
 Rate adjustment d 
 — N/A 15 — N/A 62 
 
 Consolidated FCX $ 2,713 30 % $ (824) $ 1,398 32 % $ (443) 
 
 a. Represents income before income taxes and equity in affiliated companies’ net earnings (losses). 
 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. 
 d. In accordance with applicable accounting rules, we adjust our interim provision for income taxes equal to our consolidated tax rate. 
 
 Assuming achievement of current sales volume and cost estimates and average prices of $4.75 per pound for copper, $1,950 per ounce for gold and $19.00 per pound for molybdenum for the remainder of 2022, we estimate our consolidated effective tax rate for the year 2022 would approximate 31 percent. Changes in projected sales volumes and average prices during 2022 would incur tax impacts at estimated effective rates of 40 percent for Peru, 38 percent for Indonesia and 0 percent for the U.S. 
 
 OPERATIONS 
 
 Responsible Production 
 2021 Annual Report on Sustainability. In April 2022, we published our 2021 Annual Report on Sustainability, which is available on our website at fcx.com/sustainability. We have a long history of environmental, social and governance (ESG) programs and are striving to continuously improve performance in these important areas. This report marks our 21st year of reporting on our sustainability progress and our second year of reporting in alignment with the Value Reporting Foundation’s SASB Standards for the Metals & Mining industry. We are committed to building upon our achievements in sustainability and we are focused on leading as a responsible copper producer. 
 
 The Copper Mark. We are committed to validating all of our copper producing sites with the Copper Mark, a comprehensive assurance framework designed to demonstrate the copper industry's responsible production practices. To achieve the Copper Mark, each site is required to complete an external assurance process to assess conformance with 32 ESG requirements. During first-quarter 2022, our Chino and Tyrone sites were awarded the Copper Mark. To date, we have achieved the Copper Mark at nine of our global sites (Chino, Tyrone, Bagdad, Morenci, Miami, El Paso, Cerro Verde, El Abra and Atlantic Copper), two sites have signed letters of commitment (Safford and Sierrita) and we expect to advance preparation for the validation process for PT-FI during 2022. 
 
 Leaching Innovation Initiatives 
 We have a long history of leach production and continue to pursue internal and external initiatives to advance sulfide leaching technologies, which are expected to allow us to recover additional copper from our large existing leach stockpiles. We have several initiatives ongoing across our North America and South America operations that incorporate new applications, technologies and data analytics. Initial results support the potential for incremental low-cost and low-carbon additions to our production and reserve profile. 
 
 Feasibility and Optimization Studies 
 We are engaged in various studies associated with potential future expansion projects primarily in North and South America. The cost of these studies are expensed as incurred. We estimate the costs of these studies will approximate $200 million for the year 2022 (including approximately $60 million in second-quarter 2022), compared with approximately $60 million for the year 2021 . 
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 North America Copper Mines 
 We operate seven open-pit copper mines in North America – Morenci, Bagdad, Safford (including Lone Star), Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. All of the North America mining operations are wholly owned, except for Morenci. We record our 72 percent undivided joint venture interest in Morenci using the proportionate consolidation method. 
 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. 
 
 We continue to increase Lone Star operating rates to achieve production of 300 million pounds of copper per year from oxide ores (compared with the initial design capacity of 200 million pounds per year). The oxide project at Lone Star advances the opportunity for development of the underlying, large-scale sulfide resources. We are also increasing exploration in the area to support metallurgical testing and mine development planning for a potential significant long-term investment to build additional scale on an economically attractive basis. 
 
 We are planning an expansion to double the concentrator capacity of our Bagdad operation in northwest Arizona and are engaging stakeholders. We are commencing a feasibility study for this project during 2022. 
 
 Operating Data. Following is summary consolidated operating data for the North America copper mines: 
 
 Three Months Ended March 31, 
 
 2022 2021 
 Operating Data, Net of Joint Venture Interests 
 Copper (millions of recoverable pounds) 
 
 Production 354 353 
 Sales, excluding purchases 381 308 
 Average realized price per pound $ 4.62 $ 3.88 
 
 Molybdenum (millions of recoverable pounds) 
 
 Production a 
 7 8 
 
 100% Operating Data 
 Leach operations 
 Leach ore placed in stockpiles (metric tons per day) 708,600 705,100 
 Average copper ore grade (percent) 0.28 0.28 
 Copper production (millions of recoverable pounds) 245 262 
 
 Mill operations 
 Ore milled (metric tons per day) 291,400 268,000 
 Average ore grade (percent): 
 Copper 0.36 0.37 
 Molybdenum 0.02 0.03 
 Copper recovery rate (percent) 80.9 78.7 
 Copper production (millions of recoverable pounds) 169 151 
 
 a. Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at the North America copper mines. 
 
 Our consolidated copper sales volumes from North America totaled 381 million pounds in first-quarter 2022, compared with 308 million pounds of copper in first-quarter 2021, primarily reflecting timing of shipments. North America copper sales are estimated to approximate 1.5 billion pounds for the year 2022. 
 
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 Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. 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. 
 
 Three Months Ended March 31, 
 2022 2021 
 By- Product Method Co-Product Method By- Product Method Co-Product Method 
 Copper Molyb- 
 denum a 
 Copper Molyb-
denum a 
 
 Revenues, excluding adjustments $ 4.62 $ 4.62 $ 17.97 $ 3.88 $ 3.88 $ 10.49 
 
 Site production and delivery, before net noncash 
 and other costs shown below 
 2.38 2.20 10.95 2.04 1.89 6.67 
 By-product credits (0.34) — — (0.30) — — 
 Treatment charges 0.09 0.09 — 0.11 0.10 — 
 Unit net cash costs 2.13 2.29 10.95 1.85 1.99 6.67 
 DD&A 0.27 0.25 0.88 0.26 0.24 0.46 
 
 Noncash and other costs, net 0.07 0.07 0.14 0.13 0.13 0.06 
 Total unit costs 2.47 2.61 11.97 2.24 2.36 7.19 
 Revenue adjustments, primarily for pricing 
 on prior period open sales 
 0.03 0.03 — 0.02 0.02 — 
 Gross profit per pound $ 2.18 $ 2.04 $ 6.00 $ 1.66 $ 1.54 $ 3.30 
 
 Copper sales (millions of recoverable pounds) 381 381 308 308 
 Molybdenum sales (millions of recoverable pounds) a 
 7 8 

 a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. 
 
 Our North America copper mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) for the North America copper mines of $2.13 per pound of copper in first-quarter 2022 were higher than unit net cash costs of $1.85 per pound in first-quarter 2021, primarily reflecting increased mining and milling rates and higher energy and other input costs, partly offset by higher sales volumes. 
 
 Because certain assets are depreciated on a straight-line basis, North America’s average unit depreciation rate may vary with asset additions and the level of copper production and sales. 
 
 Average unit net cash costs (net of by-product credits) for our North America copper mines are expected to approximate $2.22 per pound of copper for the year 2022, based on achievement of current sales volume and cost estimates and assuming an average molybdenum price of $19.00 per pound for the remainder of 2022. North America’s average unit net cash costs for the year 2022 would change by approximately $0.03 per pound for each $2.00 per pound change in the average price of molybdenum for the remainder of 2022. 
 
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 South America Mining 
 We operate two copper mines in South America – Cerro Verde in Peru (in which we own a 53.56 percent interest) and El Abra in Chile (in which we own a 51 percent interest), 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. During first-quarter 2022, milling rates at Cerro Verde's concentrator facilities averaged 394,400 metric tons of ore per day. Subject to ongoing monitoring of COVID-19 protocols, milling rates at Cerro Verde are currently expected to average approximately 400,000 metric tons of ore per day for the remainder 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. Technical and economic studies continue to be evaluated to determine the optimal scope and timing for the sulfide project. We are engaging stakeholders and preparing data required for submission of a robust permit application, while we continue to monitor potential changes in Chile’s regulatory and fiscal matters. We will defer major investment decisions pending clarity on Chile’s regulatory and fiscal matters. 
 
 Operating Data. Following is summary consolidated operating data for South America mining: 
 
 Three Months Ended March 31, 
 
 2022 2021 
 Copper (millions of recoverable pounds) 
 
 Production 274 259 
 Sales 264 259 
 Average realized price per pound $ 4.69 $ 3.96 
 
 Molybdenum (millions of recoverable pounds) 
 
 Production a 
 7 5 
 
 Leach operations 
 Leach ore placed in stockpiles (metric tons per day) 139,800 153,800 
 Average copper ore grade (percent) 0.36 0.36 
 Copper production (millions of recoverable pounds) 61 61 
 
 Mill operations 
 Ore milled (metric tons per day) 394,400 390,100 
 Average ore grade (percent): 
 Copper 0.33 0.31 
 Molybdenum 0.02 0.01 
 
 Copper recovery rate (percent) 86.6 87.6 
 Copper production (millions of recoverable pounds) 213 198 

 a. Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde. 
 
 Our consolidated copper sales volumes from South America totaled 264 million pounds in first-quarter 2022, similar to copper sales volumes of 259 million pounds in first-quarter 2021. Copper sales from South America mining are expected to approximate 1.15 billion pounds for the year 2022. 
 
 Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined 
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 in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. 
 
 Gross Profit per Pound of Copper 
 The following table summarizes unit net cash costs and gross profit per pound of copper at our South America mining operations. Unit net cash costs per pound of copper are reflected under the by-product and co-product methods as the South America mining operations also had sales of molybdenum and silver. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. 
 
 Three Months Ended March 31, 
 2022 2021 
 By-Product
Method Co-Product
Method By-Product
Method Co-Product
Method 
 Revenues, excluding adjustments $ 4.69 $ 4.69 $ 3.96 $ 3.96 
 
 Site production and delivery, before net noncash and other costs shown below 2.43 2.22 2.01 1.90 
 By-product credits (0.43) — (0.21) — 
 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 2.16 2.38 1.94 2.04 
 DD&A 0.37 0.33 0.39 0.37 
 
 Noncash and other costs, net 0.07 0.07 0.04 0.03 
 Total unit costs 2.60 2.78 2.37 2.44 
 Revenue adjustments, primarily for pricing on prior period open sales 0.21 0.21 0.32 0.32 
 Gross profit per pound $ 2.30 $ 2.12 $ 1.91 $ 1.84 
 
 Copper sales (millions of recoverable pounds) 264 264 259 259 

 Our South America mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) for South America mining of $2.16 per pound of copper in first-quarter 2022 were higher than unit net cash costs of $1.94 per pound of copper in first-quarter 2021, primarily reflecting higher acid, energy and other input costs, partly offset by higher 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 $2.23 per pound of copper for the year 2022, based on current sales volume and cost estimates and assuming an average price of $19.00 per pound of molybdenum for the remainder of 2022. 
 
 Indonesia Mining 
 PT-FI operates one of the world’s largest copper and gold mines at the Grasberg minerals district in Papua, Indonesia. PT-FI produces copper concentrate that contains significant quantities of gold and silver. We have a 48.76 percent interest in PT-FI and manage its mining operations. As further discussed in Note 2 of our 2021 Form 10-K, under the terms of the 2018 shareholders agreement, our economic interest in PT-FI approximates 81 percent through 2022, and 48.76 percent thereafter. PT-FI’s results are consolidated in our financial statements. 
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 Substantially all of PT-FI’s copper concentrate is sold under long-term contracts. During first-quarter 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. PT-FI currently has three underground operating mines in the Grasberg minerals district: Grasberg Block Cave, DMLZ and Big Gossan. In late 2021, PT-FI achieved quarterly copper and gold volumes approximating 100 percent of projected annualized levels of approximately 1.6 billion pounds of copper and 1.6 million ounces of gold. 
 
 Combined milling rates from PT-FI's underground mines averaged 186,500 metric tons of ore per day in first-quarter 2022, and PT-FI expects milling rates to average approximately 180,000 to 190,000 metric tons of ore per day for the remainder of 2022. The installation of additional milling facilities at PT-FI is in progress and is currently expected to be completed in 2023, which will increase milling capacity to approximately 240,000 metric tons of ore per day. 
 
 PT-FI's estimated capital spending on the Grasberg Block Cave and DMLZ underground projects for the year 2022 is expected to approximate $1.0 billion, net of scheduled contributions from PT Indonesia Asahan 
 Aluminium (Persero) (PT Inalum, also known as MIND ID). PT-FI is also advancing construction of a dual-fuel power plant and upgrades to the mill circuit to improve recoveries. 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 mine development activities for its Kucing Liar deposit during 2021, which is expected to produce over 6 billion pounds of copper and 5 million ounces of gold over the life of the project. Pre-production development activities will occur over an approximate 10-year timeframe, and capital investments are expected to average approximately $400 million per year over the next 10 years. At full operating rates, annual production from Kucing Liar is expected to approximate 600 million pounds of copper and 500 thousand ounces of gold, providing PT-FI with sustained long-term, large-scale and low-cost production. Kucing Liar will benefit from substantial shared infrastructure and PT-FI's experience and long-term success in block-cave mining. 
 
 Export License . In March 2022, PT-FI received a one-year extension of its export license through March 19, 2023, for two million metric tons of concentrate. Export licenses are valid for a one-year period, subject to review and approval by the Indonesia government every six months, depending on smelter construction progress. 
 
 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 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 construction contract to a third-party contractor with an estimated cost of $2.8 billion. PT-FI continues to progress site preparation activities, early works and engineering procurement and construction activities. The smelter construction is expected to be completed as soon as feasible in 2024, consistent with PT-FI’s revised smelter construction schedule. 
 • Expansion of PT Smelting's capacity by 30 percent to 1.3 million metric tons of concentrate per year, which is expected to be completed by the end of 2023. PT-FI is funding the cost of the expansion, which is estimated to approximate $250 million, with a loan that will convert to equity, and increase ownership in PT Smelting to a majority ownership interest once the expansion is complete. 
 • Construction of a PMR to process gold and silver from the greenfield smelter and PT Smelting at an estimated cost of $250 million. 
 
 During first-quarter 2022, capital expenditures for the greenfield smelter and PMR (collectively, the Indonesia smelter projects) totaled $0.1 billion, and are expected to approximate $1.4 billion for the year 2022. 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. 
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 As further discussed in “Capital Resources and Liquidity,” PT-FI completed the sale of $3.0 billion of senior notes in April 2022, which will be used together with PT-FI’s available bank credit facilities primarily to fund the Indonesia smelter projects. 
 
 Operating Data. Following is summary consolidated operating data for Indonesia mining: 
 
 Three Months Ended March 31, 
 
 2022 2021 
 Copper (millions of recoverable pounds) 
 
 Production 381 298 
 Sales 379 258 
 Average realized price per pound $ 4.69 $ 4.00 
 
 Gold (thousands of recoverable ounces) 
 
 Production 412 294 
 Sales 406 256 
 Average realized price per ounce $ 1,920 $ 1,713 
 
 Ore extracted and milled (metric tons per day): 
 Grasberg Block Cave underground mine 100,400 51,800 
 DMLZ underground mine 78,400 46,700 
 Big Gossan underground mine 7,700 6,800 
 Deep Ore Zone underground mine a and other 
 — 18,800 
 
 Total 186,500 124,100 
 
 Average ore grades: 
 Copper (percent) 1.23 1.41 
 Gold (grams per metric ton) 1.03 1.08 
 Recovery rates (percent): 
 Copper 89.4 91.3 
 Gold 77.2 78.9 

 a. Ore body depleted in 2021. 
 
 Our consolidated sales from PT-FI totaled 379 million pounds of copper and 406 thousand ounces of gold in 
 first-quarter 2022, compared with consolidated sales of 258 million pounds of copper and 256 thousand ounces of gold in first-quarter 2021, primarily reflecting the ramp-up of underground mining in the Grasberg minerals district. 
 Consolidated sales volumes from PT-FI are expected to approximate 1.6 billion pounds of copper and 1.6 million ounces of gold for the year 2022. 
 
 Unit Net Cash (Credits) Costs. Unit net cash (credits) costs per pound of copper is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. 
 
 Gross Profit per Pound of Copper and per Ounce of Gold 
 The following table summarizes the unit net cash (credits) costs and gross profit per pound of copper and per ounce of gold at our Indonesia mining operations. Refer to “Product Revenues and Production Costs” for an explanation of “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. 
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 Three Months Ended March 31, 
 2022 2021 
 By-Product Method Co-Product Method By-Product Method Co-Product Method 
 Copper Gold Copper Gold 
 Revenues, excluding adjustments $ 4.69 $ 4.69 $ 1,920 $ 4.00 $ 4.00 $ 1,713 
 
 Site production and delivery, before net noncash and other costs (credits) shown below 1.41 0.96 395 1.48 1.02 438 
 Gold and silver credits (2.17) — — (1.79) — — 
 Treatment charges 0.25 0.17 69 0.25 0.17 74 
 Export duties 0.21 0.14 59 0.11 0.08 33 
 Royalty on metals 0.24 0.17 69 0.24 0.16 71 
 Unit net cash (credits) costs (0.06) 1.44 592 0.29 1.43 616 
 DD&A 0.66 0.45 183 0.77 0.53 228 
 Noncash and other costs (credits), net 0.07 a 
 0.05 20 (0.03) b 
 (0.02) (10) 
 Total unit costs 0.67 1.94 795 1.03 1.94 834 
 Revenue adjustments, primarily for pricing on prior period open sales 0.15 0.15 8 0.25 0.25 (19) 
 PT Smelting intercompany loss (0.13) (0.09) (39) (0.20) (0.14) (56) 
 Gross profit per pound/ounce $ 4.04 $ 2.81 $ 1,094 $ 3.02 $ 2.17 $ 804 
 
 Copper sales (millions of recoverable pounds) 379 379 258 258 
 Gold sales (thousands of recoverable ounces) 406 256 

 a. Includes charges totaling $0.11 per pound of copper associated with the settlement of an administrative fine levied by the Indonesia government (refer to Note 8 for further discussion), and $0.05 per pound of copper associated with an adjustment to prior-period export duties, partly offset by credits totaling $0.08 per pound of copper associated with adjustments to prior year treatment and refining costs. 
 b. Includes credits totaling $0.12 per pound of copper associated with adjustments to prior year treatment and refining costs, partly offset by charges totaling $0.05 per pound of copper associated with a potential settlement of an administrative fine levied by the Indonesia government. 
 
 In first-quarter 2022, PT-FI’s gold and silver credits exceeded its cash costs, resulting in unit net cash credits of $0.06 per pound of copper, compared to unit net cash costs (net of gold and silver credits) of $0.29 per pound in first-quarter 2021, primarily reflecting higher sales volumes, partly offset by higher operating rates, energy and other input costs. 
 
 Treatment charges vary with the volume of metals sold and the price of copper, and royalties vary with the volume of metals sold and the prices of copper and gold. 
 
 PT-FI’s export duties totaled $79 million in first-quarter 2022 and $29 million in first-quarter 2021. The increase in export duties in first-quarter 2022, compared with first-quarter 2021, primarily reflects higher sales volumes. 
 
 PT-FI’s royalties totaled $92 million in first-quarter 2022 and $61 million in first-quarter 2021. The increase in export duties and royalties for first-quarter 2022, compared with first-quarter 2021, primarily reflects higher sales volumes and metals prices. 
 
 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. DD&A per pound of copper under the by-product method was $0.66 per pound in first-quarter 2022, compared with $0.77 per pound in first-quarter 2021. The decrease in the rate per pound of copper primarily reflects depletion of the Deep Ore Zone underground mine and the ramp-up of underground mining in the Grasberg minerals district, which resulted in significantly higher copper production and sales volumes, partly offset by significant underground development assets placed into service. 
 
 Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods. 
 
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 PT Smelting intercompany loss represents the change in the deferral of PT-FI’s profit on sales to PT Smelting (25 percent prior to April 30, 2021, and 39.5 percent thereafter). Refer to “Smelting and Refining” below for further discussion. 
 
 Assuming an average gold price of $1,950 per ounce for the remainder of 2022 and achievement of current sales volume and cost estimates, unit net cash costs (net of gold and silver credits) for PT-FI are expected to approximate $0.10 per pound of copper for the year 2022. PT-FI’s unit net cash costs for the year 2022 would change by approximately $0.09 per pound of copper for each $100 per ounce change in the average price of gold for the remainder of 2022. 
 
 PT-FI’s projected sales volumes and unit net cash costs for the year 2022 are dependent on a number of factors, including operational performance and timing of shipments. 
 
 Molybdenum Mines 
 We operate two wholly owned molybdenum mines in Colorado – the Henderson underground mine and the Climax open-pit mine. The Henderson and Climax mines produce high-purity, chemical-grade molybdenum concentrate, which is typically further processed into value-added molybdenum chemical products. The majority of the molybdenum concentrate produced at the Henderson and Climax mines, as well as from our North America and South America copper mines, is processed at our conversion facilities. 
 
 Operating and Development Activities. Production from the Molybdenum mines totaled 7 million pounds of molybdenum in both first-quarter 2022 and first-quarter 2021. We plan on increasing mining rates at the Climax mine during 2022 to provide options to increase volumes in response to market demand for molybdenum. Refer to “Consolidated Results” for our consolidated molybdenum operating data, which includes sales of molybdenum produced at our Molybdenum mines and from our North America and South America copper mines. Refer to “Outlook” for projected consolidated molybdenum sales volumes. 
 
 Unit Net Cash Costs Per Pound of Molybdenum. Unit net cash costs per pound of molybdenum is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. 
 
 Average unit net cash costs for our Molybdenum mines of $10.89 per pound of molybdenum in first-quarter 2022 were higher than average unit net cash costs of $8.98 per pound in first-quarter 2021, primarily reflecting higher mining rates at the Climax mine and increased development costs at the Henderson mine. Based on current sales volume and cost estimates, average unit net cash costs for the Molybdenum mines are expected to approximate $12.00 per pound of molybdenum for the year 2022. 
 
 Refer to “Product Revenues and Production Costs” for a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. 
 
 Smelting and Refining 
 We wholly own and operate the Miami smelter in Arizona, the El Paso refinery in Texas and a smelter and refinery in Spain (Atlantic Copper). Additionally, PT-FI has a 39.5 percent 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. Treatment charges for smelting and refining copper concentrate consist of a base rate per pound of copper and per ounce of gold and are generally fixed. Treatment charges represent a cost to our mining operations and income to Atlantic Copper and PT Smelting. Thus, higher treatment charges benefit our smelter operations and adversely affect our mining operations. Our North America copper mines are less significantly affected by changes in treatment charges because these operations are largely integrated with our Miami smelter and El Paso refinery. 
 
 Through this form of downstream integration, we are assured placement of a significant portion of our concentrate production. 
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 Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes. During first-quarter 2022, Atlantic Copper’s concentrate purchases included 12 percent from our copper mining operations and 88 percent from third parties. 
 
 Atlantic Copper’s major maintenance turnarounds typically occur approximately every eight years, with shorter-term maintenance turnarounds in the interim. In April 2022, Atlantic Copper began an approximately 60-day major maintenance turnaround, for which maintenance charges are expected to total approximately $25 million. 
 
 PT-FI’s contract with PT Smelting provides for PT-FI to supply 100 percent of the copper concentrate requirements (subject to a minimum or maximum treatment charge rate) necessary for PT Smelting to produce 205,000 metric tons of copper annually on a priority basis. PT-FI may also sell copper concentrate to PT Smelting at market rates for quantities in excess of 205,000 metric tons of copper annually. During first-quarter 2022, PT-FI supplied all of PT Smelting’s concentrate requirements. 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 agreements between PT-FI and PT Smelting. Under the tolling agreement, PT-FI will pay PT Smelting to smelt and refine its concentrate and will retain title to all products for sale to third parties. 
 
 We defer recognizing profits on sales from our mining operations to Atlantic Copper and on 39.5 percent of PT-FI’s sales to PT Smelting (25.0 percent prior to April 30, 2021) until final sales to third parties occur. Changes in these deferrals attributable to variability in intercompany volumes resulted in net additions (reductions) to operating income totaling $46 million ($23 million to net income attributable to common stock) in first-quarter 2022 and $(85) million ($(63) million to net income attributable to common stock) in first-quarter 2021. Our net deferred profits on our inventories at Atlantic Copper and PT Smelting to be recognized in future periods’ net income attributable to common stock totaled $183 million at March 31, 2022. Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices will result in variability in our net deferred profits and quarterly earnings. 
 
 CAPITAL RESOURCES AND LIQUIDITY 
 
 Our consolidated operating cash flows vary with sales volumes; prices realized from copper, gold and molybdenum sales; production costs; income taxes; other working capital changes; and other factors. 
 
 We generated significant cash flows during first-quarter 2022, reflecting strong operating and financial performance and favorable copper and gold prices. With a favorable market outlook and a focus on executing our operating plans, we expect to continue to generate strong cash flows that will support advancement of organic growth initiatives and additional cash returns to shareholders under our established financial policy. 
 
 We believe that we have a high-quality portfolio of long-lived copper assets positioned to generate long-term value. During first-quarter 2022, we continued to increase operating rates at Lone Star and from the underground mines at the Grasberg minerals district. Pre-production development activities for the Kucing Liar deposit, which commenced during 2021, are progressing and we continue to evaluate organic growth opportunities for expansion of certain of our operations in North America and South America, including at Bagdad, Lone Star and El Abra, the timing of which will be dependent on, among other things, market conditions. 
 
 Based on current sales volume, cost and metal price estimates discussed in “Outlook,” our projected consolidated operating cash flows of $8.6 billion for the year 2022 significantly exceed our expected consolidated capital expenditures of $4.6 billion (which includes $1.9 billion for major mining projects and $1.4 billion for the Indonesia smelter projects) and other cash requirements for the year, including share repurchases, noncontrolling interest distributions, income tax payments, common stock dividends (base and variable) and debt repayments. 
 
 We believe that our cash generating capability and financial condition, which includes $8.3 billion of consolidated 
 cash and cash equivalents at March 31, 2022, together with $3.5 billion available under our revolving 
 credit facility, will be adequate to meet our operating, investing and financing needs over the next several years. Additionally, capital expenditures for the Indonesia smelter projects are being funded with the net proceeds from PT-FI’s unsecured senior notes issued in April 2022 and its available bank credit facilities. 
 
 Refer to “Outlook” for further discussion of projected operating cash flows and capital expenditures for the year 2022 and to “Debt” below and Note 5 for further discussion of PT-FI’s unsecured senior notes and unsecured bank credit facility. 
 
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 Financial Policy. Our financial policy is aligned with our strategic objectives of maintaining a strong balance sheet and increasing cash returns to shareholders while advancing opportunities for future growth. Under the financial policy up to 50 percent of cash flows, after planned capital spending (excluding Indonesia smelter project investments) and distributions to noncontrolling interests, will be directed to shareholder returns with the balance available for investments in future value enhancing growth projects and further debt reductions. The Board will review the structure and the amount of the performance-based payout framework at least annually. 
 
 In February 2021, our Board of Directors (the Board) reinstated a cash dividend on our common stock (base dividend) at an annual rate of $0.30 per share. In mid-2021, FCX achieved its net debt target in the range of $3.0 billion to $4.0 billion (excluding debt for additional smelting capacity in Indonesia). In November 2021, the Board approved the implementation of the performance-based payout framework, including (i) a $3.0 billion share repurchase program and (ii) a variable cash dividend on common stock for 2022 at an expected annual rate of $0.30 per share. The combined annual rate of the base dividend and the variable dividend is expected to total $0.60 per share for 2022. Based on current shares outstanding totaling 1.45 billion, the total common stock dividends (base and variable) for 2022 are expected to approximate $0.9 billion. Refer to Note 5 and “Financing Activities” below for further discussion. 
 
 In March 2022, our Board declared dividends totaling $0.15 per share on our common stock (including a $0.075 per share quarterly base cash dividend and a $0.075 per share quarterly variable cash dividend), which were paid on May 2, 2022, to shareholders of record as of April 14, 2022. Refer to Item 1A. “Risk Factors” contained in Part I of our 2021 Form 10-K, and “Cautionary Statement” below for further discussion. 
 
 Cash 
 Following is a summary of the U.S. and international components of consolidated cash and cash equivalents available to the parent company, net of noncontrolling interests’ share, taxes and other costs at March 31, 2022 (in billions): 
 
 Cash at domestic companies $ 5.4 
 Cash at international operations 2.9 
 Total consolidated cash and cash equivalents 8.3 
 Noncontrolling interests’ share (0.8) 
 Cash, net of noncontrolling interests’ share 7.5 
 Withholding taxes (0.2) 
 
 Net cash available $ 7.3 

 Cash held at our international operations is generally used to support our foreign operations’ capital expenditures, operating expenses, debt repayments, working capital and other tax payments, or other cash needs. Management believes that sufficient liquidity is available in the U.S. from cash balances and availability from our revolving credit facility. We have not elected to permanently reinvest earnings from our foreign subsidiaries, and we have recorded deferred tax liabilities for foreign earnings that are available to be repatriated to the U.S. From time to time, our foreign subsidiaries distribute earnings to the U.S. through dividends that are subject to applicable withholding taxes and noncontrolling interests’ share. 
 
 Debt 
 At March 31, 2022, we had consolidated debt of $9.6 billion, with a related weighted-average interest rate of 4.6 percent. We had no borrowings outstanding and $8 million in letters of credit issued under our revolving credit facility, resulting in availability of approximately $3.5 billion. 
 
 In April 2022, PT-FI completed the sale of $3.0 billion of unsecured senior notes, consisting of $750 million aggregate principal amount of 4.763% senior notes due April 2027, $1.5 billion aggregate principal amount of 5.315% senior notes due April 2032 and $750 million aggregate principal amount of 6.200% senior notes due April 2052. PT-FI intends to use the proceeds, net of underwriting fees, of $2.99 billion to finance its smelter projects, to refinance the PT-FI Term Loan and for general corporate purposes. 
 
 Refer to Note 5 for further discussion of the above items, and refer to Note 8 of our 2021 Form 10-K for additional information regarding our debt arrangements. 
 
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 Operating Activities 
 We reported consolidated cash provided by operating activities of $1.7 billion (net of $0.8 billion of working capital and other uses) in first-quarter 2022 and $1.1 billion (net of $0.3 billion of working capital and other uses) in first-quarter 2021. Higher operating cash flows in first-quarter 2022, compared with first-quarter 2021, primarily reflect higher copper and gold sales volumes and prices. Increased working capital uses in first-quarter 2022, compared with first-quarter 2021, primarily reflects timing of copper concentrate purchases by Atlantic Copper in anticipation of their major maintenance turnaround that began in April 2022, and additional income tax payments. 
 
 Investing Activities 
 Capital Expenditures. Capital expenditures, including capitalized interest, totaled $0.7 billion in first-quarter 2022, including approximately $0.4 billion for major mining projects primarily associated with underground development activities in the Grasberg minerals district and $0.1 billion for the Indonesia smelter projects. Capital expenditures for the Indonesia smelter projects are being funded with the net proceeds from PT-FI's unsecured senior notes issued in April 2022 and its available bank credit facilities. Refer to “Outlook” for further discussion of projected capital expenditures for the year 2022. 
 
 Capital expenditures, including capitalized interest, totaled $0.4 billion in first-quarter 2021, including approximately $0.3 billion for major mining projects primarily associated with underground development activities in the Grasberg minerals district. 
 
 Financing Activities 
 Debt Transactions. Net borrowings of debt totaled $170 million in first-quarter 2022 and $98 million in first-quarter 2021. Refer to Note 5 for further discussion. 
 
 Cash Dividends and Distributions Paid. We paid cash dividends on our common stock totaling $220 million in first-quarter 2022 and none in first-quarter 2021. The declaration and payment of dividends (base or variable) is at the discretion of the Board and will depend on our financial results, cash requirements, business prospects, global economic conditions and other factors deemed relevant by the Board. Refer to Note 5, Item 1A. “Risk Factors” contained in Part I of our 2021 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above. 
 
 Cash dividends and distributions paid to noncontrolling interests, primarily at PT-FI, totaled $204 million in first-quarter 2022 and none in first-quarter 2021. Based on the estimates discussed in “Outlook,” we currently expect cash dividends and distributions paid to noncontrolling interests to exceed $1.6 billion in 2022. Cash dividends and distributions to noncontrolling interests vary based on the operating results and cash requirements of our consolidated subsidiaries. 
 
 Treasury Stock Purchases. In first-quarter 2022, we acquired 12.3 million shares of our common stock under our share repurchase program for a total cost of $541 million ($44.02 average cost per share). Through May 5, 2022, we acquired 28.7 million shares of our common stock for a total cost of $1.2 billion ($41.64 average cost per share) and $1.8 billion remains available under the share repurchase program. As of April 29, 2022, we had 1.45 billion shares of common stock outstanding. The timing and amount of share repurchases is at the discretion of management and will depend on a variety of factors. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion. Refer to Item 1A. “Risk Factors” contained in Part I of our 2021 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above. 
 
 Contributions from Noncontrolling Interests. We received equity contributions totaling $47 million in first-quarter 2022 and $41 million in first-quarter 2021 from PT Inalum for their share of capital spending on underground mine development projects in the Grasberg minerals district. 
 
 Stock-based awards. Proceeds from exercised stock options totaled $101 million in first-quarter 2022 and $106 million in first-quarter 2021, and payments for related employee taxes totaled $55 million in first-quarter 2022 and $19 million in first-quarter 2021. See Note 10 in our 2021 Form 10-K for a discussion of stock-based awards. 
 
 CONTRACTUAL OBLIGATIONS 
 
 Refer to Note 5 for further discussion of PT-FI’s $3.0 billion unsecured senior notes issued in April 2022. There have been no other material changes in our contractual obligations since December 31, 2021. Refer to Part II, Items 7. and 7A. in our 2021 Form 10-K, for information regarding our contractual obligations. 
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 CONTINGENCIES 
 
 Environmental and Asset Retirement Obligations 
 Our current and historical operating activities are subject to stringent laws and regulations governing the protection of the environment. We perform a comprehensive annual review of our environmental and asset retirement obligations and also review changes in facts and circumstances associated with these obligations at least quarterly. 
 
 Refer to Note 8 for further discussion of increases in our asset retirement obligation at the Bagdad mine. There have been no other significant changes to our environmental and asset retirement obligations since December 31, 2021. Updated cost assumptions, including increases and decreases to cost estimates, changes in the anticipated scope and timing of remediation activities, and settlement of environmental matters may result in additional revisions to certain of our environmental obligations. Refer to Note 12 in our 2021 Form 10-K, for further information regarding our environmental and asset retirement obligations. 
 
 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. Refer to Note 12 and “Legal Proceedings” contained in Part I, Item 3. of our 2021 Form 10-K, as updated by Note 8, for further information regarding legal proceedings, environmental and other matters. 
 
 NEW ACCOUNTING STANDARDS 
 
 There were no significant updates to previously reported accounting standards included in Note 1 of our 2021 Form 10-K. 
 
 NET DEBT 
 
 Net debt, which we define as consolidated debt less consolidated cash and cash equivalents, is intended to provide investors with information related to the performance-based payout framework in our financial policy, which requires achievement of a net debt target in the range of $3 billion to $4 billion (excluding project debt for additional smelting capacity in Indonesia). This information differs from consolidated debt determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for consolidated debt determined in accordance with U.S. GAAP. Our net debt follows, which may not be comparable to similarly titled measures reported by other companies (in millions): 
 
 March 31, 2022 December 31, 2021 
 Current portion of debt $ 1,365 $ 372 
 Long-term debt, less current portion 8,256 9,078 
 Consolidated debt a 
 9,621 
 
 9,450 
 Less: consolidated cash and cash equivalents 8,338 8,068 
 Net debt $ 1,283 $ 1,382 

 a. Includes $603 million at March 31, 2022, and $432 million at December 31, 2021, associated with the Indonesia smelter projects (refer to Note 5). 
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 PRODUCT REVENUES AND PRODUCTION COSTS 
 
 Unit net cash costs (credits) per pound of copper and molybdenum are measures intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for the respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. These measures are presented by other metals mining companies, although our measures may not be comparable to similarly titled measures reported by other companies. 
 
 We present gross profit per pound of copper in the following tables using both a “by-product” method and a “co-product” method. We use the by-product method in our presentation of gross profit per pound of copper because (i) the majority of our revenues are copper revenues, (ii) we mine ore, which contains copper, gold, molybdenum and other metals, (iii) it is not possible to specifically assign all of our costs to revenues from the copper, gold, molybdenum and other metals we produce and (iv) it is the method used by our management and Board to monitor our mining operations and to compare mining operations in certain industry publications. In the co-product method presentations, shared costs are allocated to the different products based on their relative revenue values, which will vary to the extent our metals sales volumes and realized prices change. 
 
 We show revenue adjustments for prior period open sales as a separate line item. Because these adjustments do not result from current period sales, these amounts have been reflected separately from revenues on current period sales. Noncash and other costs (credits), which are removed from site production and delivery costs in the calculation of unit net cash costs (credits), consist of items such as stock-based compensation costs, long-lived asset impairments, idle facility costs, restructuring and/or unusual charges (credits). As discussed above, gold, molybdenum and other metal revenues at copper mines are reflected as credits against site production and delivery costs in the by-product method. The following schedules are presentations under both the by-product and co-product methods together with reconciliations to amounts reported in our consolidated financial statements. 
 
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 North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs 
 
 Three Months Ended March 31, 2022 
 (In millions) By-Product Co-Product Method 
 Method Copper Molybdenum a 
 Other b 
 Total 
 Revenues, excluding adjustments $ 1,763 $ 1,763 $ 138 $ 27 $ 1,928 
 Site production and delivery, before net noncash
 and other costs shown below 908 839 84 17 940 
 By-product credits (133) — — — — 
 Treatment charges 36 35 — 1 36 
 Net cash costs 811 874 84 18 976 
 DD&A 105 96 7 2 105 
 
 Noncash and other costs, net 28 27 1 — 28 
 Total costs 944 997 92 20 1,109 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 11 11 — — 11 
 Gross profit $ 830 $ 777 $ 46 $ 7 $ 830 
 
 Copper sales (millions of recoverable pounds) 381 381 
 Molybdenum sales (millions of recoverable pounds) a 
 7 
 
 Gross profit per pound of copper/molybdenum: 
 
 Revenues, excluding adjustments $ 4.62 $ 4.62 $ 17.97 
 Site production and delivery, before net noncash 
 and other costs shown below 2.38 2.20 10.95 
 By-product credits (0.34) — — 
 Treatment charges 0.09 0.09 — 
 Unit net cash costs 2.13 2.29 10.95 
 DD&A 0.27 0.25 0.88 
 
 Noncash and other costs, net 0.07 0.07 0.14 
 Total unit costs 2.47 2.61 11.97 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 0.03 0.03 — 
 Gross profit per pound $ 2.18 $ 2.04 $ 6.00 
 
 Reconciliation to Amounts Reported 
 
 Revenues Production and Delivery DD&A 
 Totals presented above $ 1,928 $ 940 $ 105 
 Treatment charges (4) 32 — 
 Noncash and other costs, net — 28 — 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 11 — — 
 Eliminations and other 16 18 — 
 North America copper mines 1,951 1,018 105 
 Other mining c 
 6,376 3,847 368 
 
 Corporate, other & eliminations (1,724) (1,715) 16 
 As reported in our consolidated financial statements $ 6,603 $ 3,150 $ 489 
 
 a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. 
 b. Includes gold and silver product revenues and production costs. 
 c. Represents the combined total for our other segments, as presented in Note 9. 
 
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 North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs 
 
 Three Months Ended March 31, 2021 
 (In millions) By-Product Co-Product Method 
 Method Copper Molybdenum a 
 Other b 
 Total 
 Revenues, excluding adjustments $ 1,193 $ 1,193 $ 88 $ 34 $ 1,315 
 Site production and delivery, before net noncash
 and other costs shown below 627 580 56 21 657 
 By-product credits (92) — — — — 
 Treatment charges 33 31 — 2 33 
 Net cash costs 568 611 56 23 690 
 DD&A 80 74 4 2 80 
 
 Noncash and other costs, net 41 
 
 40 — 1 41 
 Total costs 689 725 60 26 811 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 7 7 — — 7 
 Gross profit $ 511 $ 475 $ 28 $ 8 $ 511 
 
 Copper sales (millions of recoverable pounds) 308 308 
 Molybdenum sales (millions of recoverable pounds) a 
 8 
 
 Gross profit per pound of copper/molybdenum: 
 
 Revenues, excluding adjustments $ 3.88 $ 3.88 $ 10.49 
 Site production and delivery, before net noncash
 and other costs shown below 2.04 1.89 6.67 
 By-product credits (0.30) — — 
 Treatment charges 0.11 0.10 — 
 Unit net cash costs 
 1.85 1.99 6.67 
 DD&A 0.26 0.24 0.46 
 
 Noncash and other costs, net 0.13 0.13 0.06 
 Total unit costs 
 2.24 2.36 7.19 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 0.02 0.02 — 
 Gross profit per pound $ 1.66 $ 1.54 $ 3.30 
 
 Reconciliation to Amounts Reported 
 Revenues Production and Delivery DD&A 
 Totals presented above $ 1,315 $ 657 $ 80 
 Treatment charges (5) 28 — 
 Noncash and other costs, net — 41 — 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 7 — — 
 Eliminations and other 21 23 — 
 North America copper mines 1,338 749 80 
 Other mining c 
 4,645 3,041 323 
 
 Corporate, other & eliminations (1,133) (1,003) 16 
 As reported in our consolidated financial statements $ 4,850 $ 2,787 $ 419 
 
 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 March 31, 2022 
 (In millions) By-Product Co-Product Method 
 Method Copper Other a 
 Total 
 Revenues, excluding adjustments $ 1,236 $ 1,236 $ 125 $ 1,361 
 Site production and delivery, before net noncash
 and other costs shown below 640 587 67 654 
 By-product credits (111) — — — 
 Treatment charges 39 39 — 39 
 Royalty on metals 3 3 — 3 
 Net cash costs 571 629 67 696 
 DD&A 97 88 9 97 
 
 Noncash and other costs, net 17 
 
 16 1 17 
 Total costs 685 733 77 810 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 55 55 — 55 
 Gross profit $ 606 $ 558 $ 48 $ 606 
 
 Copper sales (millions of recoverable pounds) 264 264 
 
 Gross profit per pound of copper: 
 
 Revenues, excluding adjustments $ 4.69 $ 4.69 
 Site production and delivery, before net noncash
 and other costs shown below 2.43 2.22 
 By-product credits (0.43) — 
 Treatment charges 0.15 0.15 
 Royalty on metals 0.01 0.01 
 Unit net cash costs 2.16 2.38 
 DD&A 0.37 0.33 
 
 Noncash and other costs, net 0.07 
 
 0.07 
 Total unit costs 2.60 2.78 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 0.21 0.21 
 Gross profit per pound $ 2.30 $ 2.12 
 
 Reconciliation to Amounts Reported 
 Production 
 Revenues and Delivery DD&A 
 Totals presented above $ 1,361 $ 654 $ 97 
 Treatment charges (39) — — 
 Royalty on metals (3) — — 
 Noncash and other costs, net — 17 — 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 55 — — 
 Eliminations and other — (1) — 
 South America mining 1,374 670 97 
 Other mining b 
 6,953 4,195 376 
 
 Corporate, other & eliminations (1,724) (1,715) 16 
 As reported in our consolidated financial statements $ 6,603 $ 3,150 $ 489 
 
 a. Includes silver sales of 1.0 million ounces ($23.36 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. 
 b. Represents the combined total for our other segments, as presented in Note 9. 
 
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 South America Mining Product Revenues, Production Costs and Unit Net Cash Costs 
 
 Three Months Ended March 31, 2021 
 (In millions) By-Product Co-Product Method 
 Method Copper Other a 
 Total 
 Revenues, excluding adjustments $ 1,026 $ 1,026 $ 65 $ 1,091 
 Site production and delivery, before net noncash
 and other costs shown below 520 491 39 530 
 By-product credits (55) — — — 
 Treatment charges 35 35 — 35 
 Royalty on metals 2 2 — 2 
 Net cash costs 502 528 39 567 
 DD&A 101 95 6 101 
 
 Noncash and other costs, net 10 9 1 10 
 Total costs 613 632 46 678 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 83 83 — 83 
 Gross profit $ 496 $ 477 $ 19 $ 496 
 
 Copper sales (millions of recoverable pounds) 259 259 
 
 Gross profit per pound of copper: 
 
 Revenues, excluding adjustments $ 3.96 $ 3.96 
 Site production and delivery, before net noncash
 and other costs shown below 2.01 1.90 
 By-product credits (0.21) — 
 Treatment charges 0.13 0.13 
 Royalty on metals 0.01 0.01 
 Unit net cash costs 1.94 2.04 
 DD&A 0.39 0.37 
 
 Noncash and other costs, net 0.04 0.03 
 Total unit costs 2.37 2.44 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 0.32 0.32 
 Gross profit per pound $ 1.91 $ 1.84 
 
 Reconciliation to Amounts Reported 
 Production 
 Revenues and Delivery DD&A 
 Totals presented above $ 1,091 $ 530 $ 101 
 Treatment charges (35) — — 
 Royalty on metals (2) — — 
 Noncash and other costs, net — 10 — 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 83 — — 
 Eliminations and other — (1) — 
 South America mining 1,137 539 101 
 Other mining b 
 4,846 3,251 302 
 
 Corporate, other & eliminations (1,133) (1,003) 16 
 As reported in our consolidated financial statements $ 4,850 $ 2,787 $ 419 
 
 a. Includes silver sales of 0.9 million ounces ($26.13 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. 
 b. Represents the combined total for our other segments, as presented in Note 9. 
 
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 Indonesia Mining Product Revenues, Production Costs and Unit Net Cash (Credits) Costs 
 
 Three Months Ended March 31, 2022 
 (In millions) By-Product Co-Product Method 
 Method Copper Gold Silver a 
 Total 
 Revenues, excluding adjustments $ 1,778 $ 1,778 $ 780 $ 38 $ 2,596 
 Site production and delivery, before net noncash
 and other costs shown below 534 366 160 8 534 
 Gold and silver credits (821) — — — — 
 Treatment charges 93 64 28 1 93 
 Export duties 79 54 24 1 79 
 Royalty on metals 92 63 28 1 92 
 Net cash (credits) costs (23) 547 240 11 798 
 DD&A 248 169 75 4 248 
 
 Noncash and other costs, net 27 b 
 19 8 — 27 
 Total costs 252 735 323 15 1,073 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 57 57 3 — 60 
 PT Smelting intercompany loss (53) (36) (16) (1) (53) 
 Gross profit $ 1,530 $ 1,064 $ 444 $ 22 $ 1,530 
 
 Copper sales (millions of recoverable pounds) 379 379 
 Gold sales (thousands of recoverable ounces) 406 
 
 Gross profit per pound of copper/per ounce of gold: 
 
 Revenues, excluding adjustments $ 4.69 $ 4.69 $ 1,920 
 Site production and delivery, before net noncash
 and other costs shown below 1.41 0.96 395 
 Gold and silver credits (2.17) — — 
 Treatment charges 0.25 0.17 69 
 Export duties 0.21 0.14 59 
 Royalty on metals 0.24 0.17 69 
 Unit net cash (credits) costs (0.06) 1.44 592 
 DD&A 0.66 0.45 183 
 
 Noncash and other costs, net 0.07 b 
 0.05 20 
 Total unit costs 0.67 1.94 795 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 0.15 0.15 8 
 PT Smelting intercompany loss (0.13) (0.09) (39) 
 Gross profit per pound/ounce $ 4.04 $ 2.81 $ 1,094 
 
 Reconciliation to Amounts Reported 
 Production 
 Revenues and Delivery DD&A 
 Totals presented above $ 2,596 $ 534 $ 248 
 Treatment charges (93) — — 
 Export duties (79) — — 
 Royalty on metals (92) — — 
 Noncash and other costs, net 12 39 — 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 60 — — 
 PT Smelting intercompany loss — 53 — 
 Indonesia mining 2,404 626 248 
 Other mining c 
 5,923 4,239 225 
 
 Corporate, other & eliminations (1,724) (1,715) 16 
 As reported in our consolidated financial statements $ 6,603 $ 3,150 $ 489 
 
 a. Includes silver sales of 1.6 million ounces ($24.35 per ounce average realized price). 
 b. Includes charges of $41 million ($0.11 per pound of copper) associated with a settlement of an administrative fine levied by the Indonesia government and $18 million ($0.05 per pound of copper) associated with an adjustment to prior-period export duties, partly offset by credits of $30 million ($0.08 per pound of copper) associated with adjustments to prior year treatment and refining costs. 
 c. Represents the combined total for our other segments, as presented in Note 9. 
 
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 Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs 
 
 Three Months Ended March 31, 2021 
 (In millions) By-Product Co-Product Method 
 Method Copper Gold Silver a 
 Total 
 Revenues, excluding adjustments $ 1,032 $ 1,032 $ 437 $ 30 $ 1,499 
 Site production and delivery, before net noncash
 and other credits shown below 383 264 112 7 383 
 Gold and silver credits (462) — — — — 
 Treatment charges 65 45 19 1 65 
 Export duties 29 20 8 1 29 
 Royalty on metals 61 42 18 1 61 
 Net cash costs 76 371 157 10 538 
 DD&A 199 137 58 4 199 
 Noncash and other credits, net (8) b 
 (6) (2) — (8) 
 Total costs 267 502 213 14 729 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 65 65 (5) — 60 
 PT Smelting intercompany loss (49) (34) (14) (1) (49) 
 Gross profit $ 781 $ 561 $ 205 $ 15 $ 781 
 
 Copper sales (millions of recoverable pounds) 258 258 
 Gold sales (thousands of recoverable ounces) 256 
 
 Gross profit per pound of copper/per ounce of gold: 
 
 Revenues, excluding adjustments $ 4.00 $ 4.00 $ 1,713 
 Site production and delivery, before net noncash
 and other costs shown below 1.48 1.02 438 
 Gold and silver credits (1.79) — — 
 Treatment charges 0.25 0.17 74 
 Export duties 0.11 0.08 33 
 Royalty on metals 0.24 0.16 71 
 Unit net cash costs 0.29 1.43 616 
 DD&A 0.77 0.53 228 
 Noncash and other credits, net (0.03) b 
 (0.02) (10) 
 Total unit costs 1.03 1.94 834 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 0.25 0.25 (19) 
 PT Smelting intercompany loss (0.20) (0.14) (56) 
 Gross profit per pound/ounce $ 3.02 $ 2.17 $ 804 
 
 Reconciliation to Amounts Reported 
 Production 
 Revenues and Delivery DD&A 
 Totals presented above $ 1,499 $ 383 $ 199 
 Treatment charges (65) — — 
 Export duties (29) — — 
 Royalty on metals (61) — — 
 Noncash and other credits, net 31 23 — 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 60 — — 
 PT Smelting intercompany loss — 49 — 
 Indonesia mining 1,435 455 199 
 Other mining c 
 4,548 3,335 204 
 
 Corporate, other & eliminations (1,133) (1,003) 16 
 As reported in our consolidated financial statements $ 4,850 $ 2,787 $ 419 
 
 a. Includes silver sales of 1.2 million ounces ($24.61 per ounce average realized price). 
 b. Includes credits of $31 million ($0.12 per pound of copper) associated with adjustments to prior year treatment and refining costs. Also includes a charge of $13 million ($0.05 per pound of copper) associated with a potential settlement of an administrative fine levied by the Indonesia government. 
 c. Represents the combined total for our other segments, as presented in Note 9. 
 
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 Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs 
 
 Three Months Ended March 31, 
 (In millions) 2022 2021 
 
 Revenues, excluding adjustments a 
 $ 134 $ 76 
 Site production and delivery, before net noncash
 and other costs shown below 72 54 
 Treatment charges and other 6 6 
 Net cash costs 78 60 
 DD&A 16 15 
 
 Noncash and other costs, net 3 
 
 4 
 Total costs 97 79 
 Gross profit (loss) $ 37 $ (3) 
 
 Molybdenum sales (millions of recoverable pounds) a 
 7 7 
 
 Gross profit (loss) per pound of molybdenum: 
 
 Revenues, excluding adjustments a 
 $ 18.75 $ 11.38 
 Site production and delivery, before net noncash
 and other costs shown below 10.04 8.13 
 Treatment charges and other 0.85 0.85 
 Unit net cash costs 10.89 8.98 
 DD&A 2.27 2.23 
 
 Noncash and other costs, net 0.40 
 
 0.55 
 Total unit costs 13.56 11.76 
 Gross profit (loss) per pound $ 5.19 $ (0.38) 
 
 Reconciliation to Amounts Reported 
 
 Production 
 Three Months Ended March 31, 2022 Revenues and Delivery DD&A 
 Totals presented above $ 134 $ 72 $ 16 
 Treatment charges and other (6) — — 
 Noncash and other costs, net — 3 — 
 Molybdenum mines 128 75 16 
 Other mining b 
 8,199 4,790 457 
 
 Corporate, other & eliminations (1,724) (1,715) 16 
 As reported in our consolidated financial statements $ 6,603 $ 3,150 $ 489 
 
 Three Months Ended March 31, 2021 
 Totals presented above $ 76 $ 54 $ 15 
 Treatment charges and other (6) — — 
 Noncash and other costs, net — 4 — 
 
 Molybdenum mines 70 58 15 
 Other mining b 
 5,913 3,732 388 
 
 Corporate, other & eliminations (1,133) (1,003) 16 
 As reported in our consolidated financial statements $ 4,850 $ 2,787 $ 419 
 
 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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 CAUTIONARY STATEMENT 
 Our discussion and analysis contains forward-looking statements in which we discuss our potential future performance. Forward-looking statements are all statements other than statements of historical facts, such as plans, projections, or expectations relating to business outlook, strategy, goals or targets; ore grades and milling rates; production and sales volumes; unit net cash 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); our commitments to deliver responsibly produced copper, including plans to implement and validate all of our operating sites under the Copper Mark and to comply with other disclosure frameworks; execution of our energy and climate strategies and the underlying assumptions and estimated impacts on our business related thereto; achievement of climate commitments and net zero aspirations; improvements in operating procedures and technology innovations; exploration efforts and results; development and production activities, rates and costs; future organic growth opportunities; tax rates; export quotas and duties; 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; 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," “intends,” “likely,” “will,” “should,” “could,” “to be,” ”potential," “assumptions,” “guidance,” “aspirations,” “future” and any similar expressions are intended to identify those assertions as forward-looking statements. The declaration and payment of dividends (base or variable) and timing and amount of any share repurchases is at the discretion of the Board and management, respectively, and is subject to a number of factors, including maintaining our net debt target, capital availability, our financial results, cash requirements, business prospects, global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by the Board or management, as applicable. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion. 
 
 We caution readers that forward-looking statements are not guarantees of future performance and actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, supply of and demand for; and prices of the commodities we produce, primarily copper; changes in our cash requirements, financial position, financing or investment plans; changes in general market, economic, tax, regulatory or industry conditions, including as a result of Russia’s invasion of Ukraine; reductions in liquidity and access to capital; the ongoing COVID-19 pandemic and any future public health crisis; political and social risks; operational risks inherent in mining, with higher inherent risks in underground mining; fluctuations in price and availability of commodities purchased; constraints on supply, logistics and transportation services; mine sequencing; changes in mine plans or operational modifications, delays, deferrals or cancellations; production rates; 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 and in the province of Papua; the Indonesia government's extension of PT-FI's export license after March 19, 2023; satisfaction of requirements in accordance with PT-FI's IUPK to extend mining rights from 2031 through 2041; the Indonesia government's approval of a deferred schedule for completion of additional domestic smelting capacity in Indonesia; cybersecurity incidents; labor relations, including labor-related work stoppages and costs; the 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 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 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. 
 
 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 Cash Costs (Credits)” for further discussion of unit net cash costs (credits) associated with our operating divisions, and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to 
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 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.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
FREEPORT-MCMORAN INC 10-Q

Item 2. Management’s Discussion and Analysis
