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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, 2022 (2022 Form 10-K), filed with the United States (U.S.) Securities and Exchange Commission (SEC). The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Cautionary Statement” for further discussion). References to “Notes” are Notes included in our Notes to Consolidated Financial Statements (Unaudited). Throughout MD&A, all references to income or losses per share are on a diluted basis. Our website is for information only and the contents of our website or information connected thereto are not incorporated in, or otherwise to be regarded as part of, this Form 10-Q. 
 
 OVERVIEW 
 
 We are a leading international mining company with headquarters in Phoenix, Arizona. We operate large, long-lived, geographically diverse assets with significant proven and probable mineral reserves of copper, gold and molybdenum. We are one of the world’s largest publicly traded copper producers. Our portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits; and significant mining operations in North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru. 
 
 We faced a number of operational challenges in first-quarter 2023, including a significant weather event in Indonesia, civil unrest in Peru and productivity challenges in the U.S. In addition, beginning January 1, 2023, PT Freeport Indonesia’s (PT-FI) commercial arrangement with PT Smelting (PT-FI’s 39.5% owned copper smelter and refinery in Gresik, Indonesia) converted from a concentrate sales agreement to a tolling arrangement, which resulted in a deferral of sales to future periods. As a result of the transition, approximately 110 million pounds of copper and 110 thousand ounces of gold from PT-FI’s first-quarter 2023 production is deferred in inventory and will be sold in future periods. We currently expect increasing sales volumes for the remainder of 2023. 
 
 We believe we have a strong balance sheet and a favorable outlook for cash flow generation to support continued organic growth and cash returns to shareholders. Our organic growth pipeline is highlighted by our leach innovation initiatives, which are gaining momentum and are targeted to achieve an annual run rate of approximately 200 million pounds of copper per year by the end of 2023. 
 
 Refer to “Operations” for further discussion. 
 
 Net income attributable to common stockholders totaled $663 million in first-quarter 2023, compared with $1.5 billion in first-quarter 2022, primarily reflecting lower copper and gold sales volumes, a lower average realized price for copper and increased costs for maintenance and supplies and energy. Refer to “Consolidated Results” for further discussion of these impacts, and for discussion of the change in our economic interest in PT-FI beginning January 1, 2023. 
 
 At March 31, 2023, we had consolidated debt of $9.6 billion and consolidated cash and cash equivalents of $6.9 billion, resulting in net debt of $2.8 billion ($1.3 billion excluding net debt for the Manyar smelter and precious metals refinery (PMR) in Indonesia - collectively, the Indonesia smelter projects). In March 2023, we used approximately $1 billion of cash to fund the maturity of our 3.875% Senior Notes. Refer to “Net Debt” for reconciliations of consolidated debt and consolidated cash and cash equivalents to net debt. 
 
 At March 31, 2023, we had $3.0 billion of availability under our revolving credit facility, and PT-FI and Cerro Verde had $1.3 billion and $350 million, respectively, of availability under their respective revolving credit facilities. 
 
 Refer to Note 5 and “Capital Resources and Liquidity” for further discussion. 
 
 OUTLOOK 
 
 As further discussed in “Risk Factors” in Part I, Item 1A. of our 2022 Form 10-K, our financial results vary as a result of fluctuations in market prices primarily for copper, gold and, to a lesser extent, molybdenum, as well as other factors. World market prices for these commodities have fluctuated historically and are affected by numerous factors 
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 beyond our control. Our projected 2023 financial results are also dependent on an extension of PT-FI's export license after June 10, 2023. Refer to “Markets” below 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 2023: 
 
 Copper (millions of recoverable pounds): 
 
 North America copper mines 1,382 
 South America mining 1,222 
 Indonesia mining 1,453 
 Total 4,057 
 
 Gold (millions of recoverable ounces) 
 1.8 
 
 Molybdenum (millions of recoverable pounds) 
 79 a 
 
 a. Projected molybdenum sales include 50 million pounds produced by our North America and South America copper mines and 29 million pounds produced by our Molybdenum mines. 
 
 Consolidated sales volumes in second-quarter 2023 are expected to approximate 1.1 billion pounds of copper, 500 thousand ounces of gold and 20 million pounds of molybdenum. Projected sales volumes are dependent on operational performance, weather-related conditions, timing of shipments, and other factors, including the extension of PT-FI's export license after June 10, 2023, detailed in the “Cautionary Statement” below. 
 
 For other important factors that could cause results to differ materially from projections, refer to “Risk Factors” contained in Part I, Item 1A. of our 2022 Form 10-K. 
 
 Consolidated Unit Net Cash Costs 
 Assuming average prices of $2,000 per ounce of gold and $18.00 per pound of molybdenum for the remainder of 2023 and achievement of current volume and cost estimates, consolidated unit net cash costs (net of by-product credits) for our copper mines are expected to average $1.55 per pound of copper for the year 2023 (including $1.51 per pound of copper in second-quarter 2023). The impact of price changes during the remainder of 2023 on consolidated unit net cash costs for the year 2023 would approximate $0.04 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 also vary with fluctuations in other volumes and realized prices, such as those for gold and molybdenum. 
 
 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 $4.00 per pound for copper, $2,000 per ounce for gold, and $18.00 per pound for molybdenum for the remainder of 2023, our consolidated operating cash flows are estimated to approximate $7.0 billion (including $0.3 billion of working capital and other sources) for the year 2023. Estimated consolidated operating cash flows for the year 2023 also reflect an estimated income tax provision of $2.6 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate for the year 2023). The impact of price changes for the remainder of 2023 on operating cash flows would approximate $315 million for each $0.10 per pound change in the average price of copper, $140 million for each $100 per ounce change in the average price of gold and $90 million for each $2.00 per pound change in the average price of molybdenum. 
 
 Consolidated Capital Expenditures 
 Capital expenditures are expected to approximate $5.1 billion for the year 2023 (including $2.4 billion for major mining projects and $1.6 billion for the Indonesia smelter projects). Projected capital expenditures for major mining projects include $1.3 billion for planned projects, primarily associated with underground mine development in the Grasberg minerals district and supporting mill and power capital costs, and $1.1 billion for discretionary growth projects, primarily for development of Kucing Liar, a mill recovery project with the installation of a new copper cleaner circuit at PT-FI, and expansion projects at Bagdad and Lone Star. We closely monitor market conditions and 
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 will continue to adjust our operating plans, including capital expenditures, to protect our liquidity and preserve our asset values, as necessary. 
 
 Capital expenditures for the Indonesia smelter projects are being funded with proceeds from PT-FI's senior notes and availability under its revolving credit facility. 
 
 MARKETS 
 
 World prices for copper, gold and molybdenum can fluctuate significantly. During the period from January 2013 through March 2023, 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 Platts Metals Daily Molybdenum Dealer Oxide weekly average price ranged from a low of $4.46 per pound in 2015 to a high of $37.42 per pound in 2023. Copper, gold and molybdenum prices are affected by numerous factors beyond our control as described further in “Risk Factors” contained in Part I, Item 1A. of our 2022 Form 10-K. 
 
 This graph presents LME copper settlement prices and the combined reported stocks of copper at the LME, Commodity Exchange Inc., and the Shanghai Futures Exchange from January 2013 through March 2023. During first-quarter 2023, LME copper settlement prices ranged from a low of $3.72 per pound to a high of $4.28 per pound, averaged $4.05 per pound and settled at $4.05 per pound on March 31, 2023. Physical market tightness continues to provide significant support to the price of copper, and inventory levels remain low with slightly more than three days of global consumption available. The LME copper settlement price was $3.89 per pound on April 28, 2023. 
 
 We believe long-term fundamentals for copper are favorable and that future demand will be supported by copper’s role in the global transition to renewable power, electric vehicles and other carbon-reduction initiatives, and continued urbanization in developing countries. The small number of approved, large-scale projects beyond those that have been announced, the long lead times required to permit and build new mines and declining ore grades at existing operations continue to highlight the fundamental supply challenges for copper. 
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 This graph presents London PM gold prices from January 2013 through March 2023. During first-quarter 2023, London PM gold prices ranged from a low of $1,811 per ounce to a high of $1,994 per ounce, averaged $1,890 per ounce, and closed at $1,980 per ounce on March 31, 2023. Forecasts are divided as analysts are weighing the liquidity concerns in the U.S. banking sector and weakness of the U.S. dollar against the expected central bank response to persistent inflation. The London PM gold price was $1,983 per ounce on April 28, 2023. 
 
 This graph presents the Platts Metals Daily Molybdenum Dealer Oxide weekly average price from January 2013 through March 2023. During first-quarter 2023, the weekly average price of molybdenum ranged from a low of $24.65 per pound to a high of $37.42 per pound and averaged $32.78 per pound. As China increased exports, molybdenum prices declined significantly from the first quarter high. We believe long-term fundamentals for molybdenum are positive with favorable demand drivers and limited supply. The Platts Metals Daily Molybdenum Dealer Oxide weekly average price was $24.65 per pound on March 31, 2023, and $21.20 per pound on April 28, 2023. 
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 CONSOLIDATED RESULTS 
 
 Three Months Ended March 31, 
 2023 2022 
 SUMMARY FINANCIAL DATA 
 (in millions, except per share amounts) 
 Revenues a,b 
 $ 5,389 $ 6,603 
 Operating income a 
 $ 1,601 $ 2,809 
 
 Net income attributable to common stock c 
 $ 663 d 
 $ 1,527 e 
 
 Diluted net income per share of common stock $ 0.46 $ 1.04 
 
 Diluted weighted-average shares of common stock outstanding 1,443 1,469 
 
 Operating cash flows f 
 $ 1,050 $ 1,691 
 Capital expenditures 
 $ 1,121 $ 723 
 At March 31: 
 Cash and cash equivalents 
 $ 6,852 $ 8,338 
 Total debt, including current portion 
 $ 9,635 $ 9,621 
 
 a. Refer to Note 9 for a summary of revenues and operating income by operating division. 
 b. Includes favorable adjustments to prior period provisionally priced concentrate and cathode copper sales totaling $210 million ($72 million to net income attributable to common stock or $0.05 per share) in first-quarter 2023 and $102 million ($42 million to net income attributable to common stock or less than $0.03 per share) in first-quarter 2022. Refer to Note 6 for further discussion. 
 c. We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations – Smelting and Refining” for a summary of net impacts from changes in these deferrals. 
 d. Includes net charges totaling $94 million ($0.06 per share) primarily associated with net adjustments to environmental obligations, contested tax matters and asset impairments in North America. 
 e. 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. 
 f. Working capital and other uses totaled $467 million in first-quarter 2023 and $811 million in first-quarter 2022. 
 
 Three Months Ended March 31, 
 2023 2022 
 SUMMARY OPERATING DATA 
 Copper (millions of recoverable pounds) 
 
 Production 965 1,009 
 Sales, excluding purchases 832 a 
 1,024 
 Average realized price per pound $ 4.11 $ 4.66 
 Site production and delivery costs per pound b 
 $ 2.57 $ 2.03 
 Unit net cash costs per pound b 
 $ 1.76 $ 1.33 
 Gold (thousands of recoverable ounces) 
 
 Production 405 415 
 Sales, excluding purchases 
 270 a 
 409 
 Average realized price per ounce $ 1,949 $ 1,920 
 Molybdenum (millions of recoverable pounds) 
 
 Production 21 21 
 Sales, excluding purchases 
 19 19 
 Average realized price per pound $ 30.32 $ 19.30 
 
 a. Beginning on January 1, 2023, PT-FI’s commercial arrangement with PT Smelting converted from a concentrate sales agreement to a tolling arrangement, which resulted in a change in timing of sales. As a result of the transition, approximately 110 million pounds of copper and 110 thousand ounces of gold from PT-FI's first-quarter 2023 production is deferred in inventory and will be sold in future periods. 
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 b. Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs. For reconciliations of per pound unit costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.” 
 
 Revenues 
 Consolidated revenues totaled $5.4 billion in first-quarter 2023 and $6.6 billion in first-quarter 2022. Revenues from our mining operations and processing facilities primarily include the sale of copper concentrate, copper cathode, copper rod, gold in concentrate and molybdenum. Refer to Note 9 for a summary of product revenues. 
 
 Following is a summary of changes in our consolidated revenues between periods (in millions): 
 
 Three Months Ended March 31 
 
 Consolidated revenues - 2022 period $ 6,603 
 Lower sales volumes: 
 Copper (895) 
 Gold (267) 
 Molybdenum — 
 
 (Lower) higher average realized prices: 
 Copper (458) 
 Gold 8 
 Molybdenum 214 
 Adjustments for prior period provisionally priced copper sales 108 
 Higher Atlantic Copper revenues 38 
 Higher revenues from purchased copper 134 
 
 Lower treatment charges 32 
 Lower royalties and export duties 115 
 Other, including intercompany eliminations (243) 
 Consolidated revenues - 2023 period $ 5,389 
 
 Sales Volumes. Consolidated copper and gold sales volumes decreased in first-quarter 2023, compared with first-quarter 2022, primarily as a result of the deferral of sales recognition related to the PT Smelting tolling arrangement and the timing of shipments. In addition, PT-FI experienced lower operating rates at the Grasberg minerals district associated with a significant weather event that temporarily disrupted operations during February 2023. 
 
 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 2023, compared with first-quarter 2022, were 12% lower for copper, 2% higher for gold and 57% higher for molybdenum. 
 
 Average realized copper prices include net favorable adjustments to current period provisionally priced copper sales totaling $21 million in first-quarter 2023 and $116 million in first-quarter 2022. As discussed in Note 6, all of our copper concentrate and some cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date) based primarily on quoted LME monthly average 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, 2022 and 2021) recorded in consolidated revenues totaled $210 million in first-quarter 2023 and $102 million in first-quarter 2022. Refer to Notes 6 and 9 for a summary of total adjustments to prior period and current period provisionally priced sales. 
 
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 At March 31, 2023, we had provisionally priced copper sales totaling 262 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $4.08 per pound, subject to final pricing over the next several months. We estimate that each $0.05 change in the price realized from the March 31, 2023, provisional price recorded would have an approximate $8 million effect on our 2023 net income attributable to common stock. The LME copper price settled at $3.89 per pound on April 28, 2023. 
 
 Beginning January 1, 2023, PT-FI’s commercial arrangement with PT Smelting converted from a concentrate sales agreement to a tolling arrangement. Under this arrangement PT-FI pays PT Smelting a tolling fee to smelt and refine its concentrate and PT-FI retains title to all products for sale to third parties ( i.e ., there are no further sales to PT Smelting). PT-FI’s sale of copper cathodes under the tolling arrangement are priced in the month of shipment and are not subject to provisional pricing. 
 
 Atlantic Copper Revenues. Atlantic Copper revenues totaled $756 million in first-quarter 2023, compared with $718 million in first-quarter 2022. Higher revenues in first-quarter 2023, compared with first-quarter 2022, primarily reflects higher sales volumes. 
 
 Purchased Copper. We purchase copper cathode primarily for processing by our Rod & Refining operations. The volumes of copper purchases vary depending on cathode production from our operations and totaled 48 million pounds in first-quarter 2023 and 15 million pounds in first-quarter 2022. 
 
 Treatment Charges. Revenues from our concentrate sales are recorded net of treatment charges ( i.e., fees paid to smelters that are generally negotiated annually), which will vary with the sales volumes and the price of copper. The decrease in the treatment charges in first-quarter 2023 compared to first-quarter 2022 primarily reflects lower sales volumes and PT-FI’s commercial arrangement with PT Smelting converting from a concentrate sales agreement to a tolling arrangement. Costs incurred under the tolling arrangement are recorded as production costs in the consolidated statements of income (refer to Note 9). 
 
 Royalties and Export Duties. Royalties are primarily associated with PT-FI sales and vary with the volume of metal sold and the prices of copper and gold. In late 2022, the export duty rate declined from 5% to 2.5% as a result of smelter development progress. In March 2023, the Indonesia government verified that construction progress on the Manyar smelter exceeded 50%, allowing PT-FI’s export duties to be eliminated effective March 29, 2023. 
 
 Lower royalties and export duties during first-quarter 2023, compared with first-quarter 2022, reflect lower PT-FI copper and gold sales volumes and copper prices as well as a lower export duty rate of 2.5% in first-quarter 2023, compared to 5% in first-quarter 2022. 
 
 Production and Delivery Costs 
 Consolidated production and delivery costs totaled $3.2 billion in both first-quarter 2023 and 2022, reflecting increased costs for energy (which represents approximately 21% of our site operating costs), unplanned maintenance and inflationary cost pressures on input costs, mostly offset by lower sales volumes. 
 
 Site Production and Delivery Costs Per Pound. Site production and delivery costs for our copper mining operations primarily include labor, energy and other commodity-based inputs, such as sulfuric acid, explosives, steel, reagents, liners and tires. Consolidated site production and delivery costs (before net noncash and other costs) for our copper mines averaged $2.57 per pound of copper in first-quarter 2023 and $2.03 per pound of copper in first-quarter 2022. 
 
 Higher consolidated site production and delivery costs per pound of copper for first-quarter 2023, compared with first-quarter 2022, primarily reflect higher energy prices and increased costs for consumables such as sulfuric acid, explosives, key equipment parts and other supplies and services. Refer to “Operations – Unit Net Cash Costs” for further discussion of unit net cash costs associated with our operating divisions and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements. 
 
 Depreciation, Depletion and Amortization 
 Depreciation will vary under the unit-of-production (UOP) method as a result of changes in sales volumes and the related UOP rates at our mining operations. Lower consolidated depreciation, depletion and amortization (DD&A) of $399 million in first-quarter 2023, compared to $489 million in first-quarter 2022, primarily reflects lower sales volumes from PT-FI. 
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 Environmental Obligations and Shutdown Costs 
 Environmental obligation costs reflect net revisions to our long-term environmental obligations, which vary from period to period because of changes to environmental laws and regulations, the settlement of environmental matters and/or circumstances affecting our operations that could result in significant changes in our estimates. Shutdown costs include care-and-maintenance costs and any litigation, remediation or related expenditures associated with closed facilities or operations. Higher net charges for environmental obligations and shutdown costs in first-quarter 2023, compared to first-quarter 2022, primarily reflect net revisions to long-term historical environmental obligations totaling $56 million in first-quarter 2023. 
 
 Interest Expense, Net 
 Consolidated interest costs (before capitalization) totaled $207 million in first-quarter 2023 and $153 million in first-quarter 2022. The increase in consolidated interest costs (before capitalization) for the 2023 period, compared to the 2022 period, is primarily related to interest associated with PT-FI’s $3.0 billion of senior notes that were issued in April 2022 and a charge of $25 million related to contested tax matters in Peru. 
 
 Capitalized interest varies with the level of qualifying assets associated with our development projects and average interest rates on our borrowings. Capitalized interest totaled $56 million in first-quarter 2023 and $26 million in first-quarter 2022. The increase in capitalized interest costs for the 2023 period resulted from increased construction and development projects in process, primarily at our Indonesia smelter projects. Refer to “Capital Resources and Liquidity – Investing Activities” for discussion of capital expenditures associated with our major development projects. 
 
 Other income, Net 
 Other income, net totaled $88 million in first-quarter 2023 and $31 million in first-quarter 2022. The increase in other income, net for the 2023 period, compared to the 2022 period, is primarily related to higher interest income. 
 
 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, 
 2023 2022 
 Income (Loss) a 
 Effective
Tax Rate Income Tax (Provision) Benefit Income (Loss) a 
 Effective
Tax Rate Income Tax (Provision) Benefit 
 U.S. b 
 $ 213 — % c 
 $ 4 $ 552 — % c 
 $ (2) 
 South America 499 39 % (194) 612 39 % (241) 
 Indonesia 887 37 % (330) 1,512 39 % (586) 
 
 Eliminations and other (61) N/A 22 37 N/A (10) 
 Rate adjustment d 
 — N/A (1) — N/A 15 
 
 Consolidated FCX $ 1,538 32 % $ (499) $ 2,713 30 % $ (824) 
 
 a. Represents income before income taxes and equity in affiliated companies’ net earnings. 
 b. In addition to our North America mining operations, the U.S. jurisdiction reflects corporate-level expenses, which include interest expense associated with senior notes, general and administrative expenses, and environmental obligations and shutdown costs. 
 c. Includes valuation allowance release on prior year unbenefited net operating losses (NOLs). See below for discussion of the provisions of the U.S. Inflation Reduction Act of 2022 (Act). 
 d. In accordance with applicable accounting rules, we adjust our interim provision for income taxes equal to our consolidated tax rate. 
 In August 2022, the Act was signed into law, which includes, among other provisions, a new Corporate Alternative Minimum Tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period. The provisions of the Act became applicable to us on January 1, 2023. As limited guidance related to how the CAMT provisions of the Act should be applied or otherwise administered has been released by the U.S. Department of the Treasury (Treasury), uncertainty remains regarding the application of the CAMT. We have made interpretations of certain provisions of the Act, and based on these interpretations, determined that the provisions of the Act did not impact our first-quarter 2023 financial results. However, future guidance released by the Treasury may differ from our interpretations, which could be material and may further limit our ability to realize future benefits from our U.S. NOLs. 
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 Assuming achievement of current sales volume and cost estimates and average prices of $4.00 per pound for copper, $2,000 per ounce for gold and $18.00 per pound for molybdenum for the remainder of 2023, we estimate our consolidated effective tax rate for the year 2023 would approximate 34%. Changes in projected sales volumes and average prices during 2023 would incur tax impacts at estimated effective rates of 40% for Peru, 36% for Indonesia and 0% for the U.S., which excludes any impact from the Act. Our projected estimated effective tax rate of 0% for the U.S. for the year 2023 may be adjusted as additional guidance is released by the Treasury on key provisions of the Act, including guidance on the CAMT. 
 
 Noncontrolling Interests 
 Net income attributable to noncontrolling interests is primarily associated with PT-FI, Cerro Verde and El Abra and totaled $386 million in first-quarter 2023 (which represented 25% of our consolidated income before income taxes) and $377 million in first-quarter 2022 (which represented 14% of our consolidated income before income taxes). Beginning January 1, 2023, our economic and equity ownership interest in PT-FI is 48.76%. Prior to January 1, 2023, our economic interest in PT-FI approximated 81%. As discussed in Note 3 of our 2022 Form 10-K, in accordance with provisions pertaining to PT-FI’s shareholders agreement, our first-quarter 2023 net income included a $35 million net benefit associated with PT-FI sales volumes that were attributed to us at our previous approximate 81% economic ownership interest. Based on current sales volume and cost estimates and assuming average prices of $4.00 per pound of copper, $2,000 per ounce of gold and $18.00 per pound of molybdenum and taking into account the change in our economic interest in PT-FI, net income attributable to noncontrolling interests is estimated to approximate $2.2 billion for the year 2023 (which would represent 30% of our consolidated income before income taxes). The actual amount will depend on many factors, including relative performance of each business segment, commodity prices, costs and other factors. 
 
 Refer to Note 9 for net income attributable to noncontrolling interests for each of our business segments. 
 
 OPERATIONS 
 
 Responsible Production 
 2022 Annual Report on Sustainability. In April 2023, we published our 2022 Annual Report on Sustainability, which is available on our website at fcx.com/sustainability , marking our 22nd year of reporting on our sustainability progress. We are committed to building upon our achievements in sustainability and our position as a leading responsible copper producer. 
 
 The Copper Mark. We demonstrate our responsible production performance through the Copper Mark, a comprehensive assurance framework developed specifically for the copper industry. To achieve the Copper Mark, each site is required to complete an independent external assurance process to assess conformance with 32 environmental, social and governance criteria. Awarded sites must be revalidated every three years. 
 
 We have achieved the Copper Mark at all 12 of our copper producing sites globally. In addition, following the extension of the Copper Mark framework to molybdenum producers in 2022, our two primary molybdenum mines and four copper mines that produce by-product molybdenum were awarded the Molybdenum Mark. 
 
 Leaching Innovation Initiatives 
 We are continuing to advance efforts to increase copper production through enhanced recoveries from our large existing leach stockpiles. We have added covers to over 30% of our historical leach pads in an effort to increase temperatures and enhance recovery within the stockpiles. We are also pursuing third-party and internal initiatives for additives to enhance recovery and have identified new areas of leach opportunities on existing stockpiles and are using data analytics to improve our operating practices. The data analytics work is providing new insights to determine optimal operating protocols under various conditions of the stockpiles. Based on results to date, we are gaining confidence in achieving our annual-run-rate target of approximately 200 million pounds of copper by the end of 2023, with potentially larger opportunities in the future. 
 
 Feasibility and Optimization Studies 
 We are engaged in various studies associated with potential future expansion projects primarily at our mining operations. The costs for these studies are charged to production and delivery costs as incurred and totaled $50 million in first-quarter 2023 and $20 million in first-quarter 2022. We estimate the costs of these studies will 
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 approximate $200 million for the year 2023 (including approximately $70 million in second-quarter 2023), compared with approximately $140 million for the year 2022, subject to market conditions and other factors. 
 
 North America Copper Mines 
 We operate seven open-pit copper mines in North America – Morenci, Bagdad, Safford (including Lone Star), Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. All of the North America mining operations are wholly owned, except for Morenci. We record our 72% undivided joint venture interest in Morenci using the proportionate consolidation method. 
 
 The North America copper mines include open-pit mining, sulfide-ore concentrating, leaching and solution extraction/electrowinning (SX/EW) operations. A majority of the copper produced at our North America copper mines is cast into copper rod by our Rod & Refining segment. The remainder of our North America copper production is sold as copper cathode or copper concentrate, a portion of which is shipped to Atlantic Copper (our wholly owned smelter). Molybdenum concentrate, gold and silver are also produced by certain of our North America copper mines . 
 
 Operating and Development Activities. We have substantial reserves and future opportunities in the U.S., primarily associated with existing mining operations. 
 
 At Safford/Lone Star, production from oxide ores is approaching 300 million pounds of copper per year, which reflects expansion of the initial design capacity of 200 million pounds of copper per year. We have conducted significant exploration drilling in the area in recent years. The positive drilling results indicate potential opportunities to expand production to include sulfide ores in the future. We are advancing metallurgical testing and mine development planning for a potential significant long-term investment for development of identified large sulfide resources. 
 
 We are planning an expansion to double the concentrator capacity of the Bagdad operation in northwest Arizona. We are conducting a feasibility study, which is expected to be completed in the second half of 2023. In parallel, we are advancing plans for expanded tailings infrastructure projects to support Bagdad's long-range plans. The timing of future developments will be dependent on market conditions, labor and supply chain considerations and other economic factors. 
 
 A tight labor market and increased competition from other employers in North America continue to represent strategic challenges that are impacting production and our ability to further expand current mining rates. 
 
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 Operating Data. Following is summary consolidated operating data for the North America copper mines: 
 
 Three Months Ended March 31, 
 
 2023 2022 
 Operating Data, Net of Joint Venture Interests 
 Copper (millions of recoverable pounds) 
 
 Production 332 354 
 Sales, excluding purchases 332 381 
 Average realized price per pound $ 4.16 $ 4.62 
 
 Molybdenum (millions of recoverable pounds) 
 
 Production a 
 7 7 
 
 100% Operating Data 
 Leach operations 
 Leach ore placed in stockpiles (metric tons per day) 613,200 708,600 
 Average copper ore grade (%) 0.27 0.28 
 Copper production (millions of recoverable pounds) 234 245 
 
 Mill operations 
 Ore milled (metric tons per day) 297,500 291,400 
 Average ore grade (%): 
 Copper 0.34 0.36 
 Molybdenum 0.02 0.02 
 Copper recovery rate (%) 80.4 80.9 
 Copper production (millions of recoverable pounds) 154 169 
 
 a. Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at the North America copper mines. 
 
 Our consolidated copper sales volumes from North America of 332 million pounds in first-quarter 2023 were lower than first-quarter 2022 copper sales volumes of 381 million pounds, primarily reflecting the timing of shipments in first-quarter 2022 and reduced production in first-quarter 2023 associated with lower mining rates, lower ore grades and unplanned maintenance, partly offset by incremental copper associated with leach initiatives. North America copper sales are estimated to approximate 1.4 billion pounds for the year 2023. 
 
 Unit Net Cash Costs. We believe unit net cash costs per pound of copper is a measure that provides investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. 
 
 Gross Profit per Pound of Copper and Molybdenum 
 The following table summarizes unit net cash costs and gross profit per pound at our North America copper mines. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. 
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 Three Months Ended March 31, 
 2023 2022 
 By- Product Method Co-Product Method By- Product Method Co-Product Method 
 Copper Molyb- 
 denum a 
 Copper Molyb-
denum a 
 
 Revenues, excluding adjustments $ 4.16 $ 4.16 $ 28.35 $ 4.62 $ 4.62 $ 17.97 
 
 Site production and delivery, before net noncash 
 and other costs shown below 
 2.91 2.54 19.85 2.38 2.20 10.95 
 By-product credits (0.59) — — (0.34) — — 
 Treatment charges 0.13 0.12 — 0.09 0.09 — 
 Unit net cash costs 2.45 2.66 19.85 2.13 2.29 10.95 
 DD&A 0.31 0.27 1.36 0.27 0.25 0.88 
 
 Noncash and other costs, net 0.22 b 
 0.18 1.60 0.07 b 
 0.07 0.14 
 Total unit costs 2.98 3.11 22.81 2.47 2.61 11.97 
 Revenue adjustments, primarily for pricing 
 on prior period open sales 
 0.04 0.04 — 0.03 0.03 — 
 Gross profit per pound $ 1.22 $ 1.09 $ 5.54 $ 2.18 $ 2.04 $ 6.00 
 
 Copper sales (millions of recoverable pounds) 335 335 381 381 
 Molybdenum sales (millions of recoverable pounds) a 
 7 7 

 a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. 
 b. Includes charges totaling $0.08 per pound of copper in first-quarter 2023 and $0.02 per pound of copper in first-quarter 2022 for feasibility and optimization studies. First-quarter 2023 also includes charges totaling $0.05 per pound of copper related to asset impairments. 
 
 Our North America copper mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) for the North America copper mines of $2.45 per pound of copper in first-quarter 2023 were higher than first-quarter 2022 unit net cash costs of $2.13 per pound of copper, primarily reflecting lower volumes and increased costs for maintenance and supplies, labor and energy, partly offset by higher molybdenum by-product credits. 
 
 Because certain assets are depreciated on a straight-line basis, North America’s average unit depreciation rate may vary with asset additions and the level of copper production and sales. 
 
 Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods. Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales. 
 
 Average unit net cash costs (net of by-product credits) for our North America copper mines are expected to approximate $2.62 per pound of copper for the year 2023, based on achievement of current volume and cost estimates and assuming an average molybdenum price of $18.00 per pound for the remainder of 2023. North America’s average unit net cash costs for the year 2023 would change by approximately $0.03 per pound for each $2 per pound change in the average price of molybdenum for the remainder of 2023. 
 
 South America Mining 
 We operate two copper mines in South America – Cerro Verde in Peru (in which we own a 53.56% interest) and El Abra in Chile (in which we own a 51% interest), which are consolidated in our financial statements. 
 
 South America mining includes open-pit mining, sulfide-ore concentrating, leaching and SX/EW operations. Production from our South America mines is sold as copper concentrate or cathode under long-term contracts. Our South America mines also sell a portion of their copper concentrate production to Atlantic Copper. In addition to copper, the Cerro Verde mine produces molybdenum concentrate and silver. 
 
 Operating and Development Activities. El Abra's large sulfide resource supports a potential major mill project similar to the large-scale concentrator at Cerro Verde. Technical and economic studies continue to be evaluated to determine the optimal scope and timing for the sulfide project. We are advancing plans to invest in water 
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 infrastructure to provide options to extend existing operations, while continuing to monitor potential changes in Chile's regulatory and fiscal matters. 
 
 Operating Data. Following is summary consolidated operating data for South America mining: 
 
 Three Months Ended March 31, 
 
 2023 2022 
 Copper (millions of recoverable pounds) 
 
 Production 304 274 
 Sales 302 264 
 Average realized price per pound $ 4.08 $ 4.69 
 
 Molybdenum (millions of recoverable pounds) 
 
 Production a 
 6 7 
 
 Leach operations 
 Leach ore placed in stockpiles (metric tons per day) 203,900 139,800 
 Average copper ore grade (%) 0.33 0.36 
 Copper production (millions of recoverable pounds) 86 61 
 
 Mill operations 
 Ore milled (metric tons per day) 405,100 394,400 
 Average ore grade (%): 
 Copper 0.34 0.33 
 Molybdenum 0.01 0.02 
 
 Copper recovery rate (%) 83.9 86.6 
 Copper production (millions of recoverable pounds) 218 213 

 a. Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde. 
 
 Beginning in December 2022 and continuing in first-quarter 2023, heightened tensions, protests and social unrest emerged in Peru following a change in the country's political leadership. Cerro Verde operated at reduced rates from time to time during first-quarter 2023. While demonstrations and road blockages subsided in recent weeks, the potential for civil unrest and disruption of commerce and supply chains continues. Cerro Verde resumed normal operations in March 2023. We continue to monitor the situation with a priority on safety and security. 
 
 Our consolidated copper sales volumes from South America of 302 million pounds in first-quarter 2023 were higher than first-quarter 2022 copper sales volumes of 264 million pounds, primarily reflecting higher mining rates. Copper sales from South America mining are expected to approximate 1.2 billion pounds for the year 2023. Refer to “Outlook” for projected molybdenum sales volumes. 
 
 Unit Net Cash Costs. We believe unit net cash costs per pound of copper is a measure that provides investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. 
 
 Gross Profit per Pound of Copper 
 The following table summarizes unit net cash costs and gross profit per pound of copper at our South America mining operations. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. 
 
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 Three Months Ended March 31, 
 2023 2022 
 By-Product
Method Co-Product
Method By-Product
Method Co-Product
Method 
 Revenues, excluding adjustments $ 4.08 $ 4.08 $ 4.69 $ 4.69 
 
 Site production and delivery, before net noncash and other costs shown below 2.54 2.27 2.43 2.22 
 By-product credits (0.53) — (0.43) — 
 Treatment charges 0.18 0.18 0.15 0.15 
 Royalty on metals 0.01 0.01 0.01 0.01 
 Unit net cash costs 2.20 2.46 2.16 2.38 
 DD&A 0.35 0.31 0.37 0.33 
 
 Noncash and other costs, net 0.09 a 
 0.08 0.07 0.07 
 Total unit costs 2.64 2.85 2.60 2.78 
 Revenue adjustments, primarily for pricing on prior period open sales 0.29 0.29 0.21 0.21 
 Gross profit per pound $ 1.73 $ 1.52 $ 2.30 $ 2.12 
 
 Copper sales (millions of recoverable pounds) 302 302 264 264 

 a. Includes $0.03 per pound of copper for feasibility and optimization studies. 
 
 Our South America mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) for South America mining of $2.20 per pound of copper in first-quarter 2023 were higher than first-quarter 2022 unit net cash costs of $2.16 per pound of copper, primarily reflecting higher energy and other input costs, partly offset by the impact of higher volumes and molybdenum by-product credits. 
 
 Revenues from Cerro Verde’s concentrate sales are recorded net of treatment charges, which will vary with Cerro Verde’s sales volumes and the price of copper. 
 
 Because certain assets are depreciated on a straight-line basis, South America’s unit depreciation rate may vary with asset additions and the level of copper production and sales. 
 
 Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods. Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales. 
 
 Average unit net cash costs (net of by-product credits) for South America mining are expected to approximate $2.36 per pound of copper for the year 2023, based on current volume and cost estimates and assuming an average price of $18.00 per pound of molybdenum for the remainder of 2023. 
 
 Indonesia Mining 
 PT-FI operates one of the world’s largest copper and gold mines at the Grasberg minerals district in Central Papua, Indonesia. PT-FI produces copper concentrate that contains significant quantities of gold and silver. We have a 48.76% ownership interest in PT-FI and manage its mining operations. PT-FI's results are consolidated in our financial statements. 
 
 Under the terms of agreements entered into in 2018, our economic interest in PT-FI approximated 81% through 2022, and beginning January 1, 2023, our economic interest in PT-FI is 48.76% (refer to Note 1 for further discussion). 
 
 Other than copper concentrate delivered to PT Smelting for further processing into refined products, most of PT-FI’s copper concentrate is sold under long-term contracts. 
 
 Operating and Development Activities. Over a multi-year investment period, PT-FI has successfully commissioned three large-scale block cave mines in the Grasberg minerals district (Grasberg Block Cave, Deep Mill Level Zone and Big Gossan), providing cumulative annualized production volumes of approximately 1.6 billion pounds of copper and 1.6 million ounces of gold. 
 
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 PT-FI is completing a project to install additional milling facilities, currently expected to be completed in early 2024. The project will increase milling capacity to approximately 240,000 metric tons of ore per day to provide sustained large scale production volumes. PT-FI is also advancing a mill recovery project with the installation of a new copper cleaner circuit that is expected to be completed in 2024 and is expected to provide incremental metal production of approximately 60 million pounds of copper and 40 thousand ounces of gold per year. 
 
 Kucing Liar . Long-term mine development activities are ongoing for PT-FI's Kucing Liar deposit in the Grasberg minerals district, which is expected to produce over 6 billion pounds of copper and 6 million ounces of gold between 2028 and the end of 2041. Pre-production development activities commenced in 2022 and are expected to continue over an approximate 10-year timeframe. Capital investments are estimated to average approximately $400 million per year over this period. At full operating rates of approximately 90,000 metric tons of ore per day, annual production from Kucing Liar is expected to approximate 550 million pounds of copper and 560 thousand ounces of gold, providing PT-FI with sustained long-term, large-scale and low-cost production. Kucing Liar will benefit from substantial shared infrastructure and PT-FI's experience and long-term success in block-cave mining. 
 
 Mining Rights . PT-FI and the Indonesia government continue to engage in discussions regarding the extension of PT-FI's mining rights under its special mining license (IUPK) beyond 2041. An extension beyond 2041 would enable continuity of large-scale operations for the benefit of all stakeholders and provide growth options through additional resource development opportunities in the highly attractive Grasberg minerals district. 
 
 Indonesia Smelter . In connection with PT-FI’s 2018 agreement with the Indonesia government to secure the extension of its long-term mining rights, PT-FI committed to construct additional domestic smelting capacity totaling 2 million metric tons of concentrate per year by the end of 2023 (subject to force majeure provisions). PT-FI is actively engaged in the following projects for additional domestic smelting capacity: 
 
 • Construction of the Manyar smelter in Gresik, Indonesia with a capacity to process approximately 1.7 million metric tons of copper concentrate per year. Smelter construction was approximately 60% complete at March 31, 2023, and is expected to be commissioned during 2024 at an estimated cost of $3.0 billion, including $2.8 billion for a construction contract (excluding capitalized interest, owner’s costs and commissioning) and $0.2 billion for investment in a desalinization plant. 
 • Expansion of PT Smelting's capacity by 30% to 1.3 million metric tons of copper concentrate per year, which is expected to be completed by the end of 2023. PT-FI is funding the cost of the expansion, estimated to approximate $250 million, with a loan that will convert to equity and increase PT-FI’s ownership in PT Smelting to a majority ownership interest upon project completion. 
 • Construction of a PMR to process gold and silver from the Manyar smelter and PT Smelting at an estimated cost of $400 million. Construction is in progress with commissioning expected during 2024. 
 
 During first-quarter 2023, capital expenditures for the Indonesia smelter projects totaled $0.3 billion, and are expected to approximate $1.6 billion for the year 2023. Capital expenditures for the Indonesia smelter projects are being funded with proceeds received from PT-FI's April 2022 senior notes offering and availability under its revolving credit facility. 
 
 Export License . In March 2023, PT-FI received an extension of its export license through June 10, 2023. PT-FI's IUPK provides that exports may continue through 2023, subject to force majeure considerations. PT-FI is working with the Indonesia government to obtain approval to continue exports as required for PT-FI’s operations until the Indonesia smelter projects are fully commissioned and reach designed operating conditions. 
 
 In late 2022, PT-FI’s export duty rate declined from 5% to 2.5% as a result of smelter development progress. In March 2023, the Indonesia government verified that construction progress on the Manyar smelter exceeded 50%, allowing PT-FI’s export duties to be eliminated effective March 29, 2023. 
 
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 Operating Data. Following is summary consolidated operating data for Indonesia mining: 
 
 Three Months Ended March 31, 
 
 2023 2022 
 Copper (millions of recoverable pounds) 
 
 Production 329 381 
 Sales 198 379 
 Average realized price per pound $ 4.07 $ 4.69 
 
 Gold (thousands of recoverable ounces) 
 
 Production 402 412 
 Sales 266 406 
 Average realized price per ounce $ 1,949 $ 1,920 
 
 Ore extracted and milled (metric tons per day): 
 Grasberg Block Cave underground mine 89,700 100,400 
 Deep Mill Level Zone underground mine 70,000 78,400 
 Big Gossan underground mine 7,000 7,700 
 Other adjustments (1,900) — 
 
 Total 164,800 186,500 
 
 Average ore grades: 
 Copper (%) 1.17 1.23 
 Gold (grams per metric ton) 1.07 1.03 
 Recovery rates (%): 
 Copper 90.3 89.4 
 Gold 78.2 77.2 

 On February 11, 2023, PT-FI’s operations were temporarily disrupted because of significant rainfall and landslides, which restricted access to infrastructure near its milling operations. After recovery activities and the clearing of debris, PT-FI resumed operations by the end of February 2023 and achieved a full recovery in March 2023. PT-FI expects milling rates to average in excess of 200,000 metric tons of ore per day for the remainder of 2023. 
 
 Our consolidated sales of 198 million pounds of copper and 266 thousand ounces of gold in first-quarter 2023 were lower than first-quarter 2022 consolidated sales of 379 million pounds of copper and 406 thousand ounces of gold, primarily as a result of the timing of sales associated with the transition to a tolling arrangement with PT Smelting in 2023 and the impact of the temporary disruption of operations in February 2023 associated with the significant weather event. 
 
 Consolidated sales volumes from PT-FI are expected to approximate 1.5 billion pounds of copper and 1.8 million ounces of gold for the year 2023, net of a deferral of approximately 110 million pounds of copper and 140 thousand ounces of gold from mine production under tolling arrangements to be processed and sold as refined metal in future periods. 
 
 Unit Net Cash (Credits) Costs. We believe unit net cash (credits) costs per pound of copper is a measure that provides investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. 
 
 Gross Profit per Pound of Copper and per Ounce of Gold 
 The following table summarizes the unit net cash (credits) costs and gross profit per pound of copper and per ounce of gold at our Indonesia mining operations. Refer to “Product Revenues and Production Costs” for an explanation of “by-product” and “co-product” methods and a reconciliation of unit net cash (credits) costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. 
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 Three Months Ended March 31, 
 2023 2022 
 By-Product Method Co-Product Method By-Product Method Co-Product Method 
 Copper Gold Copper Gold 
 Revenues, excluding adjustments $ 4.07 $ 4.07 $ 1,949 $ 4.69 $ 4.69 $ 1,920 
 
 Site production and delivery, before net noncash and other costs shown below 2.01 1.20 574 1.41 0.96 395 
 Gold and silver credits (2.84) — — (2.17) — — 
 Treatment charges 0.37 0.22 106 0.25 0.17 69 
 Export duties 0.09 0.05 25 0.21 0.14 59 
 Royalty on metals 0.29 0.19 76 0.24 0.17 69 
 Unit net cash (credits) costs (0.08) 1.66 781 (0.06) 1.44 592 
 DD&A 0.75 0.45 214 0.66 0.45 183 
 Noncash and other costs, net 0.16 a 
 0.09 43 0.07 b 
 0.05 20 
 Total unit costs 0.83 2.20 1,038 0.67 1.94 795 
 Revenue adjustments, primarily for pricing on prior period open sales 0.64 0.64 65 0.15 0.15 8 
 PT Smelting intercompany profit (loss) 0.56 0.34 162 (0.13) (0.09) (39) 
 Gross profit per pound/ounce $ 4.44 $ 2.85 $ 1,138 $ 4.04 $ 2.81 $ 1,094 
 
 Copper sales (millions of recoverable pounds) 198 198 379 379 
 Gold sales (thousands of recoverable ounces) 266 406 

 a. Includes charges totaling $0.07 per pound of copper for feasibility and optimization studies. 
 b. Includes charges totaling $0.11 per pound of copper associated with the settlement of an administrative fine levied by the Indonesia government (refer to Note 8 for further discussion), and $0.05 per pound of copper associated with an adjustment to prior-period export duties, partly offset by credits totaling $0.08 per pound of copper associated with adjustments to prior year treatment and refining costs. 
 
 PT-FI's unit net cash credits (including gold and silver credits) of $0.08 per pound of copper in first-quarter 2023 were in line with unit net cash credits of $0.06 per pound in first-quarter 2022, reflecting higher gold and silver credits, mostly offset by lower volumes. 
 
 Treatment charges vary with the volume of metals sold and the price of copper, and royalties vary with the volume of metals sold and the prices of copper and gold. The increase in treatment charges per pound of copper and ounce of gold in first-quarter 2023, compared to first-quarter 2022, reflects higher costs associated with the new tolling arrangement with PT Smelting compared to the previous concentrate sales agreement. Tolling costs paid to PT Smelting are recorded as production costs in the consolidated statements of income but are reflected as treatment costs in our unit net cash (credits) costs presentation. 
 
 PT-FI’s export duties totaled $17 million in first-quarter 2023 and $79 million in first-quarter 2022, and PT-FI’s royalties totaled $58 million in first-quarter 2023 and $92 million in first-quarter 2022. The decrease in export duties and royalties primarily reflects lower sales volumes. In late 2022, PT-FI’s export duty rate declined from 5% to 2.5% and was eliminated effective March 29, 2023. 
 
 Because certain assets are depreciated on a straight-line basis, PT-FI’s unit depreciation rate may vary with asset additions and the level of copper production and sales. The increase in the DD&A rate per pound of copper in first-quarter 2023, compared with first-quarter 2022, primarily reflects lower volumes associated with decreased operating rates as discussed above and significant underground development assets being placed into service. 
 Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods. Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales. 
 
 PT Smelting intercompany profit (loss) represents the change in the deferral of 39.5% of PT-FI’s profit on sales to PT Smelting. Beginning on January 1, 2023, PT-FI’s commercial arrangement with PT Smelting converted from a concentrate sales agreement to a tolling arrangement. Under this arrangement, PT-FI pays PT Smelting a tolling fee to smelt and refine its concentrate and PT-FI retains title to all products for sales to third parties. Accordingly, beginning in 2023, there are no further sales to PT Smelting. Refer to “Smelting and Refining” below for further discussion. 
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 Assuming an average gold price $2,000 per ounce for the remainder of 2023 and achievement of current volume and cost estimates, unit net cash credits (including gold and silver credits) for PT-FI are expected to approximate $0.15 per pound of copper for the year 2023. PT-FI's average unit net cash credits for the year 2023 would change by approximately $0.11 per pound of copper for each $100 per ounce change in the average price of gold for the remainder of 2023. 
 
 PT-FI’s projected sales volumes and unit net cash costs for the year 2023 are dependent on a number of factors, including operational performance, timing of shipments and the extension of PT-FI's export license after June 10, 2023. 
 
 Molybdenum Mines 
 We operate two wholly owned molybdenum mines in Colorado – the Climax open-pit mine and the Henderson underground mine. The Climax and Henderson mines produce high-purity, chemical-grade molybdenum concentrate, which is typically further processed into value-added molybdenum chemical products. The majority of the molybdenum concentrate produced at the Climax and Henderson mines, as well as from our North America and South America copper mines, is processed at our conversion facilities. 
 
 Operating and Development Activities. Production from the Molybdenum mines totaled 8 million pounds of molybdenum in first-quarter 2023 and was slightly higher than production of 7 million pounds of molybdenum in first-quarter 2022, primarily reflecting higher milling rates. Refer to “Consolidated Results” for our consolidated molybdenum operating data, which includes sales of molybdenum produced at our Molybdenum mines and from our North America and South America copper mines. Refer to “Outlook” for projected consolidated molybdenum sales volumes and to “Markets” for a discussion of the decline in molybdenum prices. 
 
 Unit Net Cash Costs Per Pound of Molybdenum. We believe unit net cash costs per pound of molybdenum is a measure that provides investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. 
 
 Average unit net cash costs for the Molybdenum mines of $12.24 per pound of molybdenum in first-quarter 2023 were higher than average unit net cash costs of $10.89 per pound in first-quarter 2022, primarily reflecting increased contract labor and input costs, partly offset by higher volumes. Based on current volume and cost estimates, average unit net cash costs for the Molybdenum mines are expected to approximate $13.36 per pound of molybdenum for the year 2023. Refer to “Product Revenues and Production Costs” for a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. 
 
 Smelting and Refining 
 We wholly own and operate the Miami smelter in Arizona, the El Paso refinery in Texas and Atlantic Copper, a smelter and refinery in Spain. Additionally, PT-FI has a 39.5% ownership interest in PT Smelting and expects its ownership to increase to a majority interest upon completion of the expansion of PT Smelting’s smelting capacity. Through this form of downstream integration, we are assured placement of a significant portion of our concentrate production. 
 
 Treatment charges for smelting and refining copper concentrate consist of a base rate per pound of copper and per ounce of gold and are generally fixed. Treatment charges represent a cost to our mining operations and income to Atlantic Copper. 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. 
 
 Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes. During first-quarter 2023, Atlantic Copper’s concentrate purchases included 37% from our copper mining operations and 63% from third parties. 
 
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 Beginning on January 1, 2023, PT-FI's commercial arrangement with PT Smelting converted from a concentrate sales agreement to a tolling arrangement. Under this arrangement, PT-FI pays PT Smelting a tolling fee (which PT-FI records as production costs in the consolidated statements of income) to smelt and refine its concentrate and PT-FI retains title to all products for sale to third parties ( i.e. , there are no further sales to PT Smelting). While the new tolling agreement with PT Smelting does not significantly change PT-FI's economics, it impacted the timing of PT-FI's first-quarter 2023 sales and working capital requirements. PT-FI's first-quarter 2023 production exceeded its sales primarily associated with the deferral of mine production under the tolling arrangement that will be processed and sold as refined metal in future periods. 
 
 We defer recognizing profits on sales from our mining operations to Atlantic Copper and, through December 31, 2022, on 39.5% of PT-FI’s sales to PT Smelting until final sales to third parties occur. Changes in these deferrals attributable to variability in intercompany volumes resulted in net additions to operating income totaling $111 million ($48 million to net income attributable to common stock) in first-quarter 2023 and $46 million ($23 million to net income attributable to common stock) in first-quarter 2022. Our net deferred profits on our inventories at Atlantic Copper to be recognized in future periods’ net income attributable to common stock totaled $51 million at March 31, 2023. Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices will result in variability in our net deferred profits and quarterly earnings. 
 
 CAPITAL RESOURCES AND LIQUIDITY 
 
 Our consolidated operating cash flows vary with sales volumes; prices realized from copper, gold and molybdenum sales; production costs; income taxes; other working capital changes; and other factors. We believe the actions we have taken in recent years to build a strong balance sheet, successfully expand low-cost operations and maintain flexible organic growth options while maintaining sufficient liquidity, will allow us to continue to execute our business plans in a prudent manner during periods of economic uncertainty while preserving substantial future asset values. 
 
 The banking industry has experienced disruption in recent months following the failure of certain banks, resulting in increased volatility in the global financial markets. Although these events have not had a financial impact on our business, we continue to monitor the instability in the banking industry, including any impacts on our suppliers and customers. 
 
 We closely monitor market conditions and will adjust our operating plans to protect liquidity and preserve our asset values, if necessary. We expect to maintain a strong balance sheet and liquidity position as we focus on building long-term value in our business, executing our operating plans safely, responsibly and efficiently, and prudently managing costs and capital expenditures. 
 
 Based on current sales volume, cost and metal price estimates discussed in “Outlook,” our available cash and cash equivalents plus our projected consolidated operating cash flows of $7.0 billion for the year 2023 exceed our expected consolidated capital expenditures of $5.1 billion (which includes $1.6 billion for the Indonesia smelter projects that are being funded with the remaining proceeds from PT-FI’s senior notes and its available credit facility). 
 
 We have cash on hand and the financial flexibility to fund capital expenditures and our other cash requirements for the year, including noncontrolling interest distributions, income tax payments, current common stock dividends (base and variable) and any share or debt repurchases. At March 31, 2023, we had $6.9 billion of consolidated cash and cash equivalents (which includes $1.5 billion of PT-FI cash designated for Indonesia smelter projects). FCX, PT-FI and Cerro Verde have $3.0 billion, $1.3 billion and $350 million, respectively, of availability under their revolving credit facilities. Refer to “Outlook” for further discussion of projected operating cash flows and capital expenditures for 2023 and to “Debt” below and Note 5 for further discussion. 
 
 Financial Policy. Our financial policy is aligned with our strategic objectives of maintaining a strong balance sheet, providing cash returns to shareholders and advancing opportunities for future growth. The policy includes a base dividend and a performance-based payout framework, whereby up to 50% of available cash flows generated after planned capital spending and distributions to noncontrolling interest would be allocated to shareholder returns and the balance to debt reduction and investments in value enhancing growth projects, subject to us maintaining our net debt at a level not to exceed the net debt target of $3.0 billion to $4.0 billion (excluding net project debt for additional smelting capacity in Indonesia). Our Board of Directors (Board) will review the structure of the performance-based payout framework at least annually. 
 
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 At March 31, 2023, our net debt, excluding net debt for the Indonesia smelter projects, totaled $1.3 billion. Refer to "Net Debt" for further discussion. 
 
 In March 2023, our Board declared cash dividends totaling $0.15 per share on our common stock (including a $0.075 per share quarterly base cash dividend and a $0.075 per share quarterly variable, performance-based cash dividend), which was paid on May 1, 2023, to shareholders of record as of April 14, 2023. Based on current market conditions, the base and variable dividends on our common stock are anticipated to total $0.60 per share for 2023 (including the dividends paid on May 1, 2023), comprised of a $0.30 per share base dividend and $0.30 per share variable dividend. The declaration and payment of dividends (base or variable) is at the discretion of our Board and will depend on our financial results, cash requirements, global economic conditions and other factors deemed relevant by our Board. 
 
 Cash 
 Following is a summary of the U.S. and international components of consolidated cash and cash equivalents available to the parent company, excluding cash committed for the Indonesia smelter projects and net of noncontrolling interests’ share, taxes and other costs at March 31, 2023 (in billions): 
 
 Cash at domestic companies $ 3.4 
 Cash at international operations 3.5 
 Total consolidated cash and cash equivalents 6.9 
 Cash for Indonesia smelter projects (1.5) a 
 
 Noncontrolling interests’ share (1.0) 
 Cash, net of noncontrolling interests’ share 4.4 
 Withholding taxes (0.1) 
 
 Net cash available $ 4.3 

 a. Estimated remaining net proceeds from PT-FI's April 2022 senior notes offering. 
 
 Cash held at our international operations is generally used to support our foreign operations’ capital expenditures, operating expenses, debt repayments, working capital 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, 2023, consolidated debt totaled $9.6 billion, with a weighted-average interest rate of 5.1%. Substantially all of our outstanding debt is fixed rate. We had no borrowings outstanding and $8 million in letters of credit issued under our $3.0 billion revolving credit facility. Additionally, at March 31, 2023, no amounts were drawn under PT-FI’s $1.3 billion revolving credit facility or Cerro Verde’s $350 million revolving credit facility. Refer to Note 5 for further discussion. 
 
 Operating Activities 
 We generated operating cash flows of $1.1 billion (net of $0.5 billion of working capital and other uses) in first-quarter 2023 and $1.7 billion (net of $0.8 billion of working capital and other uses) in first-quarter 2022. Lower operating cash flows in first-quarter 2023, compared with first-quarter 2022, primarily reflected lower copper prices and the impact of lower sales volumes primarily associated with PT-FI’s transition to a tolling arrangement with PT Smelting. 
 
 Investing Activities 
 Capital Expenditures. Capital expenditures, including capitalized interest, totaled $1.1 billion in first-quarter 2023, including approximately $0.4 billion for major mining projects primarily associated with underground development activities in the Grasberg minerals district and $0.3 billion for the Indonesia smelter projects. 
 
 Capital expenditures, 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. 
 
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 Loans to PT Smelting for Expansion. PT-FI made loans to PT Smelting totaling $24 million in first-quarter 2023 and $9 million in first-quarter 2022 to fund PT Smelting’s expansion project. 
 
 Financing Activities 
 Debt Transactions. Net repayments of debt totaled $1.0 billion in first-quarter 2023 reflecting the repayment of our 3.875% Senior Notes that matured in March 2023. Net proceeds from debt totaled $170 million in first-quarter 2022. 
 
 Cash Dividends on Common Stock. We paid cash dividends on our common stock totaling $217 million in first-quarter 2023 and $220 million in first-quarter 2022. The declaration and payment of dividends (base or variable) is at the discretion of our Board and will depend on our financial results, cash requirements, global economic conditions and other factors deemed relevant by our Board. Refer to Note 5, Item 1A. “Risk Factors” contained in Part I of our 2022 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above. 
 
 Cash Dividends and Distributions Paid to Noncontrolling Interests. Cash dividends and distributions paid to noncontrolling interests at our international operations totaled $204 million in first-quarter 2022 (none in first-quarter 2023). At March 31, 2023, we had dividends payable to noncontrolling interests totaling $134 million recorded in accounts payable and accrued liabilities in our consolidated balance sheets that will be paid in second-quarter 2023. Based on the estimates discussed in “Outlook,” we currently expect cash dividends and distributions paid to noncontrolling interests to exceed $2.0 billion for the year 2023. Cash dividends and distributions to noncontrolling interests vary based on the operating results and cash requirements of our consolidated subsidiaries. 
 
 Treasury Stock Purchases. Since mid-2021, we have acquired 47.8 million shares of our common stock under the share repurchase program for a total cost of $1.8 billion ($38.35 average cost per share), including 12.3 million shares in first-quarter 2022 for a cost of $541 million. No shares have been purchased since July 11, 2022. As of May 4, 2023, we had $3.2 billion available for repurchases under the program. The timing and amount of share repurchases is at the discretion of management and will depend on a variety of factors. The share repurchase program may be modified, increased, suspended or terminated at any time at our Board’s discretion. Refer to Item 1A. “Risk Factors” contained in Part I of our 2022 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above. 
 
 Contributions from Noncontrolling Interests. We received equity contributions totaling $50 million in first-quarter 2023 and $47 million in first-quarter 2022 from PT Mineral Industri Indonesia (formerly PT Indonesia Asahan Aluminium (Persero), (MIND ID)). Contributions in first-quarter 2023 were primarily associated with receipt of the final capital contribution in accordance with the PT-FI shareholders agreement. Contributions in first-quarter 2022 were associated with MIND ID’s share of capital spending on underground mine development projects in the Grasberg minerals district. Beginning on January 1, 2023, capital spending at PT-FI is being shared in accordance with the shareholders’ ownership interests. 
 
 CONTRACTUAL OBLIGATIONS 
 
 There have been no other material changes in our contractual obligations since December 31, 2022. Refer to Note 13 and Part II, Items 7. and 7A. in our 2022 Form 10-K for information regarding our contractual obligations. 
 
 CONTINGENCIES 
 
 Environmental Liabilities and AROs 
 Our current and historical operating activities are subject to stringent laws and regulations governing the protection of the environment. We perform a comprehensive annual review of our environmental liabilities and AROs and also review changes in facts and circumstances associated with these obligations at least quarterly. 
 
 There have been no significant changes to our environmental liabilities and AROs since December 31, 2022. Updated cost assumptions, including increases and decreases to cost estimates, changes in the anticipated scope and timing of remediation activities, and settlement of environmental matters may result in additional revisions to certain of our environmental liabilities and AROs. Refer to Note 12 in our 2022 Form 10-K for further information regarding our environmental liabilities and AROs. 
 
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 Litigation and Other Contingencies 
 There have been no material changes to our contingencies associated with legal proceedings, environmental and other matters since December 31, 2022. Refer to Note 12 and “Legal Proceedings” contained in Part I, Item 3. of our 2022 Form 10-K, as updated by Note 8, for further information regarding litigation and other contingencies. 
 
 NEW ACCOUNTING STANDARDS 
 
 There were no significant updates to previously reported accounting standards included in Note 1 of our 2022 Form 10-K. 
 
 NET DEBT 
 
 We believe net debt, which we define as consolidated debt less consolidated cash and cash equivalents, provides investors with information related to the performance-based payout framework in our financial policy, which requires achievement of a net debt target in the range of $3.0 billion to $4.0 billion (excluding net project debt for additional smelting capacity in Indonesia). This information differs from consolidated debt determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for consolidated debt determined in accordance with U.S. GAAP. Our net debt, which may not be comparable to similarly titled measures reported by other companies, follows (in billions): 
 
 As of March 31, 2023 As of December 31, 2022 
 Current portion of debt $ — a 
 $ 1.0 
 Long-term debt, less current portion 9.6 9.6 
 Consolidated debt 
 9.6 
 
 10.6 
 Less: consolidated cash and cash equivalents 6.9 8.1 
 FCX net debt 2.8 b 
 2.5 
 Less: net debt for Indonesia smelter projects c 
 1.5 
 
 1.2 
 FCX net debt, excluding Indonesia smelter projects $ 1.3 $ 1.3 

 a. Rounds to less than $0.1 billion 
 b. Does not foot because of rounding. 
 c. Includes consolidated debt of $3.0 billion and consolidated cash and cash equivalents of $1.5 billion as of March 31, 2023, and consolidated debt of $3.0 billion and consolidated cash and cash equivalents of $1.8 billion as of December 31, 2022. 
 
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 PRODUCT REVENUES AND PRODUCTION COSTS 
 
 We believe unit net cash costs (credits) per pound of copper and molybdenum are measures that provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for the respective operations. We use these measures for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. These measures are presented by other metals mining companies, although our measures may not be comparable to similarly titled measures reported by other companies. 
 
 We present gross profit per pound of copper in the following tables using both a “by-product” method and a “co-product” method. We use the by-product method in our presentation of gross profit per pound of copper because (i) the majority of our revenues are copper revenues, (ii) we mine ore, which contains copper, gold, molybdenum and other metals, (iii) it is not possible to specifically assign all of our costs to revenues from the copper, gold, molybdenum and other metals we produce and (iv) it is the method used by our management and Board to monitor our mining operations and to compare mining operations in certain industry publications. In the co-product method presentations, shared costs are allocated to the different products based on their relative revenue values, which will vary to the extent our metals sales volumes and realized prices change. 
 
 We show revenue adjustments for prior period open sales as a separate line item. Because these adjustments do not result from current period sales, these amounts have been reflected separately from revenues on current period sales. Noncash and other costs, net, which are removed from site production and delivery costs in the calculation of unit net cash costs (credits), consist of items such as stock-based compensation costs, long-lived asset impairments, idle facility costs, feasibility and optimization study costs, restructuring and/or unusual charges. 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, 2023 
 (In millions) By-Product Co-Product Method 
 Method Copper Molybdenum a 
 Other b 
 Total 
 Revenues, excluding adjustments $ 1,394 $ 1,394 $ 212 $ 36 $ 1,642 
 Site production and delivery, before net noncash
 and other costs shown below 976 850 149 27 1,026 
 By-product credits (198) — — — — 
 Treatment charges 42 40 — 2 42 
 Net cash costs 820 890 149 29 1,068 
 DD&A 102 90 10 2 102 
 
 Noncash and other costs, net 76 c 
 63 12 1 76 
 Total costs 998 1,043 171 32 1,246 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 15 15 — — 15 
 Gross profit $ 411 $ 366 $ 41 $ 4 $ 411 
 
 Copper sales (millions of recoverable pounds) 335 335 
 Molybdenum sales (millions of recoverable pounds) a 
 7 
 
 Gross profit per pound of copper/molybdenum: 
 
 Revenues, excluding adjustments $ 4.16 $ 4.16 $ 28.35 
 Site production and delivery, before net noncash 
 and other costs shown below 2.91 2.54 19.85 
 By-product credits (0.59) — — 
 Treatment charges 0.13 0.12 — 
 Unit net cash costs 2.45 2.66 19.85 
 DD&A 0.31 0.27 1.36 
 
 Noncash and other costs, net 0.22 c 
 0.18 1.60 
 Total unit costs 2.98 3.11 22.81 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 0.04 0.04 — 
 Gross profit per pound $ 1.22 $ 1.09 $ 5.54 
 
 Reconciliation to Amounts Reported 
 
 Revenues Production and Delivery DD&A 
 Totals presented above $ 1,642 $ 1,026 $ 102 
 Treatment charges (6) 36 — 
 Noncash and other costs, net — 76 — 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 15 — — 
 Eliminations and other 19 24 1 
 North America copper mines 1,670 1,162 103 
 Other mining d 
 5,312 3,499 283 
 
 Corporate, other & eliminations (1,593) (1,496) 13 
 As reported in our consolidated financial statements $ 5,389 $ 3,165 $ 399 
 
 a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. 
 b. Includes gold and silver product revenues and production costs. 
 c. Includes charges totaling $27 million ($0.08 per pound of copper) for feasibility and optimization studies and $16 million ($0.05 per pound of copper) related to asset impairments. 
 d. Represents the combined total for our other segments as presented in Note 9. 
 
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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 c 
 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 c 
 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 d 
 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. Includes charges totaling $8 million ($0.02 per pound of copper) for feasibility and optimization studies. 
 d. 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, 2023 
 (In millions) By-Product Co-Product Method 
 Method Copper Other a 
 Total 
 Revenues, excluding adjustments $ 1,229 $ 1,229 $ 173 $ 1,402 
 Site production and delivery, before net noncash
 and other costs shown below 767 685 98 783 
 By-product credits (160) — — — 
 Treatment charges 55 55 — 55 
 Royalty on metals 2 2 — 2 
 Net cash costs 664 742 98 840 
 DD&A 107 94 13 107 
 
 Noncash and other costs, net 26 b 
 23 3 26 
 Total costs 797 859 114 973 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 89 89 3 92 
 Gross profit $ 521 $ 459 $ 62 $ 521 
 
 Copper sales (millions of recoverable pounds) 302 302 
 
 Gross profit per pound of copper: 
 
 Revenues, excluding adjustments $ 4.08 $ 4.08 
 Site production and delivery, before net noncash
 and other costs shown below 2.54 
 
 2.27 
 By-product credits (0.53) — 
 Treatment charges 0.18 0.18 
 Royalty on metals 0.01 0.01 
 Unit net cash costs 2.20 2.46 
 DD&A 0.35 0.31 
 
 Noncash and other costs, net 0.09 b 
 0.08 
 Total unit costs 2.64 2.85 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 0.29 0.29 
 Gross profit per pound $ 1.73 $ 1.52 
 
 Reconciliation to Amounts Reported 
 Production 
 Revenues and Delivery DD&A 
 Totals presented above $ 1,402 $ 783 $ 107 
 Treatment charges (55) — — 
 Royalty on metals (2) — — 
 Noncash and other costs, net — 26 — 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 92 — — 
 Eliminations and other (1) (2) — 
 South America mining 1,436 807 107 
 Other mining c 
 5,546 3,854 279 
 
 Corporate, other & eliminations (1,593) (1,496) 13 
 As reported in our consolidated financial statements $ 5,389 $ 3,165 $ 399 
 
 a. Includes silver sales of 1.0 million ounces ($23.41 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. 
 b. Includes charges totaling $9 million ($0.03 per pound of copper) for feasibility studies. 
 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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 Indonesia Mining Product Revenues, Production Costs and Unit Net Cash (Credits) Costs 
 
 Three Months Ended March 31, 2023 
 (In millions) By-Product Co-Product Method 
 Method Copper Gold Other a 
 Total 
 Revenues, excluding adjustments $ 806 $ 806 $ 518 $ 28 $ 1,352 
 Site production and delivery, before net noncash
 and other costs shown below 399 238 153 8 399 
 Gold and silver credits (563) — — — — 
 Treatment charges 74 44 28 2 74 
 Export duties 17 10 7 — 17 
 Royalty on metals 58 37 20 1 58 
 Net cash (credits) costs (15) 329 208 11 548 
 DD&A 148 88 57 3 148 
 
 Noncash and other costs, net 30 b 
 18 11 1 30 
 Total costs 163 435 276 15 726 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 126 126 17 — 143 
 PT Smelting intercompany profit 112 67 43 2 112 
 Gross profit $ 881 $ 564 $ 302 $ 15 $ 881 
 
 Copper sales (millions of recoverable pounds) 198 198 
 Gold sales (thousands of recoverable ounces) 266 
 
 Gross profit per pound of copper/per ounce of gold: 
 
 Revenues, excluding adjustments $ 4.07 $ 4.07 $ 1,949 
 Site production and delivery, before net noncash
 and other costs shown below 2.01 1.20 574 
 Gold and silver credits (2.84) — — 
 Treatment charges 0.37 0.22 106 
 Export duties 0.09 0.05 25 
 Royalty on metals 0.29 0.19 76 
 Unit net cash (credits) costs (0.08) 1.66 781 
 DD&A 0.75 0.45 214 
 
 Noncash and other costs, net 0.16 b 
 0.09 43 
 Total unit costs 0.83 2.20 1,038 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 0.64 0.64 65 
 PT Smelting intercompany profit 0.56 0.34 162 
 Gross profit per pound/ounce $ 4.44 $ 2.85 $ 1,138 
 
 Reconciliation to Amounts Reported 
 Production 
 Revenues and Delivery DD&A 
 Totals presented above $ 1,352 $ 399 $ 148 
 Treatment charges (52) 22 c 
 — 
 Export duties (17) — — 
 Royalty on metals (58) — — 
 Noncash and other costs, net — 30 — 
 Other revenue adjustments, primarily for pricing
 on prior period open sales 143 — — 
 PT Smelting intercompany profit — (112) — 
 Eliminations and other — (4) — 
 Indonesia mining 1,368 335 148 
 Other mining d 
 5,614 4,326 238 
 
 Corporate, other & eliminations (1,593) (1,496) 13 
 As reported in our consolidated financial statements $ 5,389 $ 3,165 $ 399 
 
 a. Includes silver sales of 0.9 million ounces ($23.29 per ounce average realized price). 
 b. Includes charges totaling $13 million ($0.07 per pound of copper) for feasibility and optimization studies. 
 c. Represents tolling costs paid to PT Smelting. 
 d. Represents the combined total for our other segments as presented in Note 9. 
 
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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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 Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs 
 
 Three Months Ended March 31, 
 (In millions) 2023 2022 
 
 Revenues, excluding adjustments a 
 $ 230 $ 134 
 Site production and delivery, before net noncash
 and other costs shown below 91 72 
 Treatment charges and other 7 6 
 Net cash costs 98 78 
 DD&A 20 16 
 
 Noncash and other costs, net 5 
 
 3 
 Total costs 123 97 
 Gross profit $ 107 $ 37 
 
 Molybdenum sales (millions of recoverable pounds) a 
 8 7 
 
 Gross profit per pound of molybdenum: 
 
 Revenues, excluding adjustments a 
 $ 28.96 $ 18.75 
 Site production and delivery, before net noncash
 and other costs shown below 11.39 10.04 
 Treatment charges and other 0.85 0.85 
 Unit net cash costs 12.24 10.89 
 DD&A 2.57 2.27 
 
 Noncash and other costs, net 0.68 
 
 0.40 
 Total unit costs 15.49 13.56 
 Gross profit per pound $ 13.47 $ 5.19 
 
 Reconciliation to Amounts Reported 
 Production 
 Three Months Ended March 31, 2023 Revenues and Delivery DD&A 
 Totals presented above $ 230 $ 91 $ 20 
 Treatment charges and other (7) — — 
 Noncash and other costs, net — 5 — 
 Molybdenum mines 223 96 20 
 Other mining b 
 6,759 4,565 366 
 
 Corporate, other & eliminations (1,593) (1,496) 13 
 As reported in our consolidated financial statements $ 5,389 $ 3,165 $ 399 
 
 Three Months Ended March 31, 2022 
 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 
 
 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; global market conditions; ore grades and milling rates; production and sales volumes; unit net cash costs and operating costs; capital expenditures; 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 its IUPK; extension of PT-FI’s IUPK beyond 2041 and export permit beyond June 10, 2023; our commitment to deliver responsibly produced copper and molybdenum, including plans to implement, validate and maintain validation of our operating sites under specific frameworks; execution of our energy and climate strategies and the underlying assumptions and estimated impacts on our business related thereto; achievement of 2030 climate targets and 2050 net zero aspiration; improvements in operating procedures and technology innovations; exploration efforts and results; development and production activities, rates and costs; future organic growth opportunities; tax rates; export quotas; the impact of copper, gold and molybdenum price changes; the impact of deferred intercompany profits on earnings; mineral reserve and mineral resource estimates; final resolution of settlements associated with ongoing legal proceedings; debt repurchases; 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,” “commitments,” “pursues,” “initiatives,” “objectives,” “opportunities,” “strategy” and any similar expressions are intended to identify those assertions as forward-looking statements. The declaration and payment of dividends (base or variable), and timing and amount of any share repurchases are at the discretion of the Board and management, respectively, and are subject to a number of factors, including maintaining our net debt target, capital availability, our financial results, cash requirements, global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by the Board or management, as applicable. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion. 
 
 We caution readers that forward-looking statements are not guarantees of future performance and actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, supply of and demand for, and prices of the commodities we produce, primarily copper; price and availability of consumables and components we purchase as well as constraints on supply and logistics, and transportation services; changes in our cash requirements, financial position, financing or investment plans; changes in general market, economic, regulatory or industry conditions; reductions in liquidity and access to capital; changes in tax laws and regulations, including the impact of the Act; any major public health crisis; political and social risks, including the potential effects of violence in Indonesia, civil unrest in Peru, and relations with local communities and Indigenous Peoples; operational risks inherent in mining, with higher inherent risks in underground mining; 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; PT-FI's ability to export and sell copper concentrate and anode slimes; satisfaction of requirements in accordance with PT-FI's IUPK to extend mining rights from 2031 through 2041; the Indonesia government's approval of a deferred schedule for completion of additional domestic smelting capacity in Indonesia; discussions relating to the extension of PT-FI’s IUPK beyond 2041; cybersecurity incidents; labor relations, including labor-related work stoppages and costs; compliance with applicable environmental, health and safety laws and regulations; weather- and climate-related risks; environmental risks, including availability of secure water supplies, and litigation results; our ability to comply with our responsible production commitments under specific frameworks and any changes to such frameworks and other factors described in more detail under the heading “Risk Factors” contained in Part I, Item 1A. of our 2022 Form 10-K. 
 
 Investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made, including for example commodity prices, which we cannot control, and production volumes and costs or technological solutions and innovation, some aspects of which we may not be able to control. Further, we may make changes to our business plans that could affect our results. We caution investors that we undertake no obligation to update any forward-looking statements, which speak only as of the date made, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes. 
 
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 This report on Form 10-Q also contains financial measures such as net debt and unit net cash costs per pound of copper and molybdenum, which are not recognized under U.S. GAAP. Refer to “Operations – Unit Net Cash Costs” for further discussion of unit net cash costs associated with our operating divisions, and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements. Refer to “Net Debt” for reconciliations of debt and consolidated cash and cash equivalents to net debt.
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
