FREEPORT-MCMORAN INC 10-Q

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. Our results for the third quarter and first nine months of 2023 reflect strong operating performance and continued execution of our business strategy. We remain focused on managing costs efficiently and continue to advance several important value-enhancing initiatives. Despite near-term global economic and market uncertainties, we are confident in our long-lived and high-quality asset base and have a favorable outlook on the long-term fundamentals for copper, driven by the global transition to clean energy. As a leading responsible supplier of copper with a strong balance sheet and a proven track record for successful project development, we believe we are well positioned to build long-term value for the benefit of our stakeholders. Our near-term organic development pipeline is highlighted by our leach innovation initiatives, which we believe have the potential to provide substantial value from our existing leach material and reduce capital intensity for future projects. During third-quarter 2023, incremental copper production from these initiatives totaled 46 million pounds, and we are targeting achievement of an annual run rate of approximately 200 million pounds of copper by the end of 2023, with potentially larger opportunities in the future. Cerro Verde's concentrator facilities continue to perform well, with milling rates averaging 431,300 metric tons of ore per day in third-quarter 2023, a new quarterly record. We also continue to progress our underground development activities at Grasberg, supporting large-scale, long-lived, low-cost operations. Refer to “Operations” for further discussion. Net income attributable to common stockholders totaled $454 million in third-quarter 2023 and $1.5 billion for the first nine months of 2023, compared with $404 million in third-quarter 2022 and $2.8 billion for the first nine months of 2022. The increase in third-quarter 2023, compared to third-quarter 2022, primarily reflects higher copper sales volumes and copper prices, partly offset by a higher income tax provision. The decrease for the first nine months of 2023, compared with the first nine months of 2022, primarily reflects increased costs for maintenance and supplies, partly offset by a lower income tax provision. The 2023 periods were also impacted by the change in our economic interest in PT Freeport Indonesia (PT-FI) (refer to Note 1 for further discussion). Refer to “Consolidated Results” for further discussion of these impacts. On July 24, 2023, PT-FI was granted an export license through May 2024 for 1.7 million metric tons of copper concentrate. Through June 10, 2023, PT-FI exported anode slimes under PT Smelting’s export license. A change in regulations during second-quarter 2023 requires PT-FI to follow a new administrative process for the export of anode slimes. The administrative process is advancing, and PT-FI expects to receive approval to resume exports of anode slimes during fourth-quarter 2023. Refer to Note 8 and “Operations – Indonesia Mining” for further discussion of Indonesia regulatory matters. At September 30, 2023, we had consolidated debt of $9.4 billion and consolidated cash and cash equivalents of $5.7 billion ($6.25 billion, including $0.5 billion of current restricted cash and cash equivalents associated with a 26 Table of Contents portion of PT-FI's export proceeds required to be temporarily deposited in Indonesia banks). Net debt totaled $3.2 billion ($0.8 billion excluding net debt for the Manyar smelter and precious metals refinery (PMR) in Indonesia (collectively, the Indonesia smelter projects)). Refer to “Net Debt” for reconciliations of consolidated debt, consolidated cash and cash equivalents and current restricted cash associated with PT-FI's export proceeds to net debt. Beginning in 2022 and through November 3, 2023, we purchased $1.3 billion aggregate principal amount of our senior notes in open-market transactions for a total cost of $1.2 billion, including $102 million aggregate principal amount in third-quarter 2023 and $233 million in the first nine months of 2023. At September 30, 2023, we had $3.0 billion of availability under our revolving credit facility, and PT-FI and Cerro Verde had $1.3 billion and $350 million, respectively, of availability under their respective revolving credit facilities. Refer to Note 5 and “Capital Resources and Liquidity” for further discussion of our debt balances and transactions. OUTLOOK 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 beyond our control. 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 1,373 South America mining 1,194 Indonesia mining 1,489 Total 4,056 Gold (millions of recoverable ounces) 1.74 Molybdenum (millions of recoverable pounds) 80 a a. Projected molybdenum sales include 50 million pounds produced by our North America and South America copper mines and 30 million pounds produced by our Molybdenum mines. Consolidated sales volumes in fourth-quarter 2023 are expected to approximate 1.1 billion pounds of copper, 580 thousand ounces of gold and 20 million pounds of molybdenum. Projected sales volumes are dependent on operational performance, the resumption of anode slime exports at PT-FI, weather-related conditions, timing of shipments and other factors detailed in the "Cautionary Statement" below. For other important factors that could cause results to differ materially from projections, refer to “Risk Factors” contained in Part I, Item 1A. of our 2022 Form 10-K and Part II, Item 1A. herein. Consolidated Unit Net Cash Costs Assuming average prices of $1,900 per ounce of gold and $20.00 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 $1.63 per pound of copper for the year 2023 (including $1.58 per pound of copper in fourth-quarter 2023). Estimated consolidated unit net cash costs for the year 2023 include assessment of a 7.5% export duty at PT-FI during the second half of 2023, which continues to be discussed with the Indonesia government. Quarterly unit net cash costs vary with fluctuations in sales volumes and realized prices, primarily for gold and molybdenum. The impact of price changes during fourth-quarter 2023 on consolidated unit net cash costs for the year 2023 would approximate $0.02 per pound of copper for each $100 per ounce change in the average price of gold and $0.01 per pound of copper for each $2 per pound change in the average price of molybdenum. 27 Table of Contents 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. Assuming average prices of $3.60 per pound for copper, $1,900 per ounce for gold, and $20.00 per pound for molybdenum in fourth-quarter 2023 and the resumption of anode slime exports at PT-FI, our consolidated operating cash flows are estimated to approximate $5.4 billion (net of $0.5 billion of working capital and other uses) for the year 2023. Estimated consolidated operating cash flows for the year 2023 also reflect an estimated income tax provision of $2.1 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 during fourth-quarter 2023 on operating cash flows for the year 2023 would approximate $115 million for each $0.10 per pound change in the average price of copper, $55 million for each $100 per ounce change in the average price of gold and $15 million for each $2 per pound change in the average price of molybdenum. Consolidated Capital Expenditures Capital expenditures are expected to approximate $4.8 billion for the year 2023 (including $1.9 billion for major mining projects and $1.6 billion for the Indonesia smelter projects). Projected capital expenditures for major mining projects include $1.3 billion for planned projects (primarily associated with underground mine development in the Grasberg minerals district and supporting mill and power capital costs) and $0.6 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 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 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 September 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 and Part II, Item 1A. herein. 28 Table of Contents 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 September 2023. During third-quarter 2023, LME copper settlement prices ranged from a low of $3.64 per pound to a high of $3.96 per pound, averaged $3.79 per pound and settled at $3.73 per pound on September 29, 2023. Volatility continued across the copper market in third-quarter 2023, influenced by China’s mixed economic data and wide-ranging views about the global and U.S. economy. While still relatively low relative to consumption, inventory levels rose during third-quarter 2023, with slightly more than three days of global consumption available at the end of October 2023. Rising inventory levels have translated to copper price declines, and the LME copper settlement price was $3.65 per pound on October 31, 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. 29 Table of Contents This graph presents London PM gold prices from January 2013 through September 2023. During third-quarter 2023, London PM gold prices ranged from a low of $1,871 per ounce to a high of $1,976 per ounce, averaged $1,928 per ounce, and closed at $1,871 per ounce on September 29, 2023. Forecasts are divided as analysts evaluate climbing treasury yields, the strength of the U.S. dollar, the potential lagged impact of a significant cumulative rate-hiking cycle, and sustained elevated geopolitical risk. The London PM gold price was $1,997 per ounce on October 31, 2023. This graph presents the Platts Metals Daily Molybdenum Dealer Oxide weekly average price from January 2013 through September 2023. During third-quarter 2023, the weekly average price of molybdenum ranged from a low of $22.11 per pound to a high of $25.57 per pound, averaged $23.78 per pound and was $22.61 per pound on 30 Table of Contents September 29, 2023. During third-quarter 2023, there was improved demand from Chinese steel mills, while downstream demand in Europe and North America remained low because of seasonality and economic weakness. Overall global demand for molybdenum was mixed with energy and aerospace sectors performing better than others, such as the construction sector. 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 $18.83 per pound on October 27, 2023. CONSOLIDATED RESULTS Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 SUMMARY FINANCIAL DATA (in millions, except per share amounts) Revenues a,b $ 5,824 $ 5,003 $ 16,950 $ 17,022 Operating income a $ 1,492 $ 962 $ 4,503 $ 5,507 Net income attributable to common stock c,d $ 454 e $ 404 f $ 1,460 e $ 2,771 f Diluted net income per share of common stock $ 0.31 $ 0.28 $ 1.01 $ 1.90 Diluted weighted-average shares of common stock outstanding 1,443 1,439 1,443 1,455 Operating cash flows g $ 1,236 $ 758 $ 3,959 $ 4,070 Capital expenditures $ 1,178 $ 836 $ 3,462 $ 2,422 At September 30: Cash and cash equivalents $ 5,745 $ 8,578 $ 5,745 $ 8,578 Restricted cash and cash equivalents, current $ 697 h $ 112 $ 697 h $ 112 Total debt, including current portion $ 9,405 $ 10,690 $ 9,405 $ 10,690 a. Refer to Note 9 for a summary of revenues and operating income by operating division. b. Includes favorable (unfavorable) adjustments to prior period provisionally priced concentrate and cathode copper sales totaling $4 million ($2 million to net income attributable to common stock or less than $0.01 per share) in third-quarter 2023, $(228) million ($(95) million to net income attributable to common stock or $(0.07) per share) in third-quarter 2022, $183 million ($62 million to net income attributable to common stock or $0.04 per share) for the first nine months of 2023 and $58 million ($24 million to net income attributable to common stock or $0.02 per share) for the first nine months of 2022. Refer to Note 6 for further discussion. c. Our economic interest in PT-FI is 48.76% and prior to January 1, 2023, it approximated 81%. d. We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations – Smelting and Refining” for a summary of net impacts from changes in these deferrals. e. Includes net charges totaling $117 million ($0.08 per share) in third-quarter 2023 and $368 million ($0.25 per share) for the first nine months of 2023, primarily associated with revisions to environmental obligation estimates and asset impairment charges. Net charges for the first nine months of 2023 also included charges for contested tax rulings issued by the Peruvian Supreme Court and an accrual for a potential administrative fine in Indonesia. f. Includes net credits (charges) totaling $29 million ($0.02 per share) in third-quarter 2022 and $(23) million ($(0.02) per share) for the first nine months of 2022. Net credits in third-quarter 2022 were primarily associated with gains on early extinguishment of debt and favorable adjustments associated with international tax audits, partly offset by metals inventory adjustments. The first nine months of 2022 also included net charges at PT-FI primarily associated with an administrative fine levied by the Indonesia government and a reserve for exposure associated with export duties. g. Working capital and other uses totaled $483 million in third-quarter 2023, $269 million in third-quarter 2022, $713 million for the first nine months of 2023 and $980 million for the first nine months of 2022. h. Includes $0.5 billion associated with a portion of PT-FI's export proceeds required to be temporarily deposited in Indonesia banks for 90 days in accordance with an August 2023 regulation issued by the Indonesia government. 31 Table of Contents Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 SUMMARY OPERATING DATA Copper (millions of recoverable pounds) Production 1,085 1,056 3,117 3,140 Sales, excluding purchases 1,109 1,060 2,970 3,171 Average realized price per pound $ 3.80 $ 3.50 $ 3.87 $ 3.88 Site production and delivery costs per pound a $ 2.27 $ 2.35 $ 2.40 $ 2.16 Unit net cash costs per pound a $ 1.73 $ 1.75 $ 1.65 $ 1.50 Gold (thousands of recoverable ounces) Production 532 448 1,420 1,339 Sales, excluding purchases 399 480 1,164 1,365 Average realized price per ounce $ 1,898 $ 1,683 $ 1,932 $ 1,786 Molybdenum (millions of recoverable pounds) Production 20 19 62 63 Sales, excluding purchases 20 17 59 56 Average realized price per pound $ 23.71 $ 17.05 $ 26.05 $ 18.64 a. Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs. For reconciliations of per pound unit net cash 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 $5.8 billion in third-quarter 2023, $5.0 billion in third-quarter 2022, and $17.0 billion for the first nine months of 2023 and 2022. Revenues from our mining operations and processing facilities primarily include the sale of copper in concentrate, copper cathode, copper rod, gold in concentrate and molybdenum. 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 September 30 Nine Months Ended September 30 Consolidated revenues - 2022 period $ 5,003 $ 17,022 Higher (lower) sales volumes: Copper 168 (779) Gold (138) (359) Molybdenum 42 62 Higher (lower) average realized prices: Copper 333 (30) Gold 86 171 Molybdenum 134 441 Adjustments for prior period provisionally priced copper sales 232 125 Higher Atlantic Copper revenues 91 444 (Lower) higher revenues from purchased copper (97) 5 (Higher) lower treatment charges (19) 10 (Higher) lower royalties and export duties (49) 171 Other, including intercompany eliminations 38 (333) Consolidated revenues - 2023 period $ 5,824 $ 16,950 Sales Volumes. Consolidated copper sales volumes increased in third-quarter 2023, compared to third-quarter 2022, primarily as a result of higher mining rates. Consolidated gold sales volumes decreased in third-quarter 2023, compared to third-quarter 2022, primarily reflecting the timing of shipments of anode slimes associated with a change in Indonesia administrative requirements for products that were previously being exported by PT Smelting. Lower consolidated copper and gold sales volumes for the first nine months of 2023, compared to the 2022 period, primarily reflect the deferral of sales recognition related to the PT Smelting tolling arrangement. Lower copper sales 32 Table of Contents volumes also reflected lower ore grades in North America, and lower gold sales volumes also reflected the timing of shipments of anode slimes in Indonesia. 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 third-quarter 2023, compared with third-quarter 2022, were 9% higher for copper, 13% higher for gold and 39% higher for molybdenum, and average realized prices for the first nine months of 2023, compared with the first nine months of 2022, were slightly lower for copper, 8% higher for gold and 40% higher for molybdenum. Average realized copper prices include net unfavorable adjustments to current period provisionally priced copper sales totaling $34 million in third-quarter 2023, $44 million in third-quarter 2022, $152 million for the first nine months of 2023 and $832 million for the first nine months of 2022. As discussed in Note 6, all of our copper concentrate and some cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date) based primarily on quoted LME monthly average 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 copper concentrate and cathode sales that is adjusted to fair value through earnings each period, using the period-end forward prices, until final pricing on the date of settlement. To the extent final prices are higher or lower than what was recorded on a provisional basis, an increase or decrease to revenues is recorded each reporting period until the date of final pricing. Accordingly, in times of rising copper prices, our revenues benefit from adjustments to the final pricing of provisionally priced sales pursuant to contracts entered into in prior periods; in times of falling copper prices, the opposite occurs. Prior Period Provisionally Priced Copper Sales. Net favorable (unfavorable) adjustments to prior periods’ provisionally priced copper sales ( i.e. , provisionally priced sales at June 30, 2023 and 2022, and December 31, 2022 and 2021) recorded in consolidated revenues totaled $4 million in third-quarter 2023, $(228) million in third-quarter 2022, $183 million for the first nine months of 2023 and $58 million for the first nine months of 2022. Refer to Notes 6 and 9 for a summary of total adjustments to prior period and current period provisionally priced sales. At September 30, 2023, we had provisionally priced copper sales totaling 257 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $3.75 per pound, subject to final pricing over the next several months. We estimate that each $0.05 change in the price realized from the September 30, 2023, recorded provisional price would have an approximate $8 million effect on our 2023 net income attributable to common stock. The LME copper price settled at $3.65 per pound on October 31, 2023. Atlantic Copper Revenues. Atlantic Copper revenues totaled $700 million in third-quarter 2023 and $2.2 billion for the first nine months of 2023, compared with $609 million in third-quarter 2022 and $1.8 billion for the first nine months of 2022. Higher revenues in the 2023 periods, compared with the 2022 periods, primarily reflects higher sales volumes, mostly because of reduced operations during 2022 associated with a scheduled major maintenance turnaround. 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 18 million pounds in third-quarter 2023, 48 million pounds in third-quarter 2022, 85 million pounds for the first nine months of 2023 and 86 million pounds for the first nine months of 2022. Treatment Charges. Revenues from our copper concentrate sales are recorded net of treatment charges ( i.e., fees paid to smelters that are generally negotiated annually), which will vary with the sales volumes and the price of copper. The 2023 periods, compared to the 2022 periods, reflect (i) lower treatment charges at PT-FI associated with the change in its commercial arrangement with PT Smelting from a copper concentrate sales agreement to a tolling arrangement (that is, beginning in 2023, costs incurred under the tolling arrangement are recorded as production costs in the consolidated statements of income) and (ii) higher rates for Cerro Verde and PT-FI’s copper concentrates. Royalties and Export Duties. Royalties are primarily associated with PT-FI sales and vary with the volume of metal sold and the prices of copper and gold. In late 2022, the export duty rate on PT-FI’s sales declined from 5% to 2.5% as a result of smelter development progress, and effective March 29, 2023, export duties were eliminated upon verification by the Indonesia government that construction progress on the Manyar smelter exceeded 50%. Subsequently, in July 2023, the Indonesia government issued a revised regulation on duties for various exported 33 Table of Contents products, including copper concentrates, and under the revised regulation, PT-FI is currently being assessed export duties for copper concentrates at 7.5% (refer to Note 8 for further discussion). PT-FI incurred export duties totaling $147 million in third-quarter 2023 (associated with the revised regulation by the Indonesia government), $80 million in third-quarter 2022, $165 million for the first nine months of 2023 and $245 million for the first nine months of 2022. Production and Delivery Costs Consolidated production and delivery costs totaled $3.5 billion in third-quarter 2023, $3.4 billion in third-quarter 2022, $10.3 billion for the first nine months of 2023 and $9.5 billion for the first nine months of 2022. Higher costs in the 2023 periods, compared to the 2022 periods, primarily reflected increased consolidated operating rates, higher commodity-related costs across our operations and increased costs of labor (including increased contract labor), particularly in North America. 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 $2.27 per pound of copper in third-quarter 2023, $2.35 per pound of copper in third-quarter 2022, $2.40 per pound of copper for the first nine months of 2023 and $2.16 per pound of copper for the first nine months of 2022. Refer to “Operations – Unit Net Cash Costs” for further discussion of unit net cash costs associated with our operating divisions and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements. Depreciation, Depletion and Amortization Depreciation will vary under the unit-of-production (UOP) method as a result of changes in sales volumes and the related UOP rates at our mining operations. Consolidated depreciation, depletion and amortization (DD&A) totaled $533 million in third-quarter 2023, $508 million in third-quarter 2022, and $1.5 billion for the first nine months of 2023 and 2022. 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 the 2023 periods, compared to the 2022 periods, primarily reflect net revisions to long-term historical environmental obligations totaling $83 million in third-quarter 2023 and $199 million for the first nine months of 2023, compared to net credits of $5 million in third-quarter 2022 and net charges of $8 million for the first nine months of 2022. Refer to Note 8 for further discussion of the 2023 revisions. Interest Expense, Net Consolidated interest costs (before capitalization) totaled $165 million in third-quarter 2023, $182 million in third-quarter 2022, $606 million for the first nine months of 2023 and $524 million for the first nine months of 2022. Consolidated interest costs (before capitalization) for the third quarter and first nine months of 2023, compared to the 2022 periods, reflects the impact of lower average outstanding debt as a result of the repayment of our 3.875% Senior Notes and open-market purchases of our senior notes (refer to Note 5). Higher consolidated interest costs (before capitalization) for the first nine months of 2023, also reflects interest charges totaling $74 million for Cerro Verde’s contested tax rulings issued by the Peruvian Supreme Court, and higher consolidated interest costs associated with PT-FI’s $3.0 billion of senior notes that were issued in April 2022. Capitalized interest varies with the level of qualifying assets associated with our development projects and average interest rates on our borrowings. Capitalized interest totaled $69 million in third-quarter 2023, $42 million in third-quarter 2022, $188 million for the first nine months of 2023 and $101 million for the first nine months of 2022. The increase in capitalized interest costs in the 2023 periods, compared to the 2022 periods, resulted from increased construction and development projects in process, primarily for the Indonesia smelter projects. Refer to “Capital Resources and Liquidity – Investing Activities” for discussion of capital expenditures associated with our major development projects. 34 Table of Contents Other Income, Net Other income, net totaled $71 million in third-quarter 2023, $25 million in third-quarter 2022, $183 million for the first nine months of 2023 and $67 million for the first nine months of 2022. The increase in other income, net primarily reflects higher interest income. The first nine months of 2023 also include a $69 million charge associated with Cerro Verde’s contested tax rulings issued by the Peruvian Supreme Court. Income Taxes Following is a summary of the approximate amounts used in the calculation of our consolidated income tax provision (in millions, except percentages): Nine Months Ended September 30, 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 $ 180 — % c $ 3 $ 854 1 % c $ (5) South America 961 d 46 % (438) 802 36 % (287) e Indonesia 3,130 37 % (1,159) 3,480 39 % (1,363) Eliminations and other 7 N/A — 43 N/A (25) Rate adjustment f — N/A 48 — N/A (30) Consolidated FCX $ 4,278 36 % $ (1,546) $ 5,179 33 % $ (1,710) a. Represents income before income taxes, equity in affiliated companies' net earnings (losses), and noncontrolling interests. 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. See below for discussion of the provisions of the U.S. Inflation Reduction Act of 2022. d. Includes net charges associated with Cerro Verde’s contested tax rulings issued by the Peruvian Supreme Court totaling $142 million ($73 million net of noncontrolling interests). e. Includes a tax credit of $31 million ($16 million net of noncontrolling interest) primarily associated with completion of Cerro Verde's 2016 tax audit. f. In accordance with applicable accounting rules, we adjust our interim provision for income taxes equal to our consolidated tax rate. Refer to Note 4 for discussion of the U.S. Inflation Reduction Act of 2022 (the Act), which became applicable to us on January 1, 2023. Assuming average prices of $3.60 per pound for copper, $1,900 per ounce for gold and $20.00 per pound for molybdenum in fourth-quarter 2023 and achievement of current sales volume and cost estimates, we estimate our consolidated effective tax rate for the year 2023 would approximate 38% (which would result in a 44% effective tax rate in fourth-quarter 2023). 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 on key provisions of the Act. Noncontrolling Interests Net income attributable to noncontrolling interests, which is primarily associated with our noncontrolling shareholders at PT-FI, Cerro Verde and El Abra, totaled $510 million in third-quarter 2023, $156 million in third-quarter 2022, $1.3 billion for the first nine months of 2023 and $731 million for the first nine months of 2022. Our economic interest in PT-FI is 48.76% and prior to January 1, 2023, it approximated 81%. As discussed in Note 1, first-quarter 2023 net income included a $35 million net benefit associated with PT-FI sales volumes that were attributed to us at our previous approximate 81% economic ownership interest. Refer to Note 9 for net income attributable to noncontrolling interests for each of our business segments. Assuming average prices of $3.60 per pound of copper, $1,900 per ounce of gold and $20.00 per pound of molybdenum, achievement of current sales volume and cost estimates, and taking into account the change in our economic interest in PT-FI, net income attributable to noncontrolling interests is estimated to approximate 35 Table of Contents $1.75 billion for the year 2023. The actual amount will depend on many factors, including relative performance of each business segment, commodity prices, costs and other factors. OPERATIONS Responsible Production Updated Climate Report. In September 2023, we published our annual climate report, available on our website at fcx.com/sustainability . The climate report details our ongoing progress to advance our climate strategy focused on reducing our greenhouse gas (GHG) emissions, enhancing our resilience to climate risks and contributing responsibly produced copper to the global economy. We have four 2030 GHG emissions reduction targets that collectively cover nearly 100% of our Scope 1 and 2 GHG emissions. Leaching Innovation Initiatives We are advancing a series of initiatives across our North America and South America operations to incorporate new applications, technologies and data analytics to our leaching processes. We believe these leach innovation initiatives provide opportunities to produce incremental copper from our large existing leach stockpiles. Initial results support the potential for incremental low-cost additions to our production and reserve profile and we are targeting an annual run rate of approximately 200 million pounds of copper per year through these initiatives by the end of 2023. In third-quarter 2023, incremental copper production from these initiatives totaled 46 million pounds (approximately 90% of the targeted annual rate). We are pursuing new technology applications that have the potential for significant increases in recoverable metal beyond the initial target. Feasibility and Optimization Studies We are engaged in various studies associated with potential future expansion projects primarily at our mining operations. The costs for these studies are charged to production and delivery costs as incurred and totaled $42 million in third-quarter 2023, $34 million in third-quarter 2022, $137 million for the first nine months of 2023 and $84 million for the first nine months of 2022. We estimate the costs of these studies will approximate $200 million for the year 2023, subject to market conditions and other factors. North America Copper Mines We operate seven open-pit copper mines in North America – Morenci, Bagdad, Safford (including Lone Star), Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. All of the North America mining operations are wholly owned, except for Morenci. We record our 72% undivided joint venture interest in Morenci using the proportionate consolidation method. The North America copper mines include open-pit mining, sulfide-ore concentrating, leaching and solution extraction/electrowinning (SX/EW) operations. A majority of the copper produced at our North America copper mines is cast into copper rod by our Rod & Refining segment. The remainder of our North America copper production is sold as copper cathode or copper concentrate, a portion of which is shipped to Atlantic Copper (our wholly owned smelter). Molybdenum concentrate, gold and silver are also produced by certain of our North America copper mines . Operating and Development Activities. We have substantial reserves and future opportunities in the U.S., primarily associated with existing mining operations. We are planning an expansion to double the concentrator capacity of the Bagdad operation in northwest Arizona and expect to complete a feasibility study in fourth-quarter 2023. In parallel, we are advancing activities for expanded tailings infrastructure projects and are procuring an autonomous haul truck fleet to support Bagdad's long-range plans. 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 planning for a potential significant long-term investment for development of identified large sulfide resources. A tight labor market and increased competition from other employers in North America continue to represent strategic challenges that have impacted and are continuing to impact production and our ability to further expand 36 Table of Contents current mining rates. The timing of all future developments will be dependent on market conditions, labor and supply chain considerations and other economic factors. Operating Data. Following is summary consolidated operating data for the North America copper mines: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating Data, Net of Joint Venture Interests Copper (millions of recoverable pounds) Production 344 373 1,030 1,109 Sales, excluding purchases 372 361 1,043 1,131 Average realized price per pound $ 3.86 $ 3.57 $ 3.97 $ 4.17 Molybdenum (millions of recoverable pounds) Production a 7 7 23 22 100% Operating Data Leach operations Leach ore placed in stockpiles (metric tons per day) 688,600 622,200 675,600 684,200 Average copper ore grade (%) 0.22 0.30 0.24 0.29 Copper production (millions of recoverable pounds) 245 260 718 759 Mill operations Ore milled (metric tons per day) 315,800 294,600 309,700 297,600 Average ore grade (%): Copper 0.30 0.36 0.33 0.37 Molybdenum 0.02 0.02 0.02 0.02 Copper recovery rate (%) 81.7 82.3 82.0 82.2 Copper production (millions of recoverable pounds) 155 174 481 538 a. Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at the North America copper mines. Our consolidated copper sales volumes from North America totaled 372 million pounds in third-quarter 2023, 361 million pounds in third-quarter 2022, 1.0 billion pounds for the first nine months of 2023 and 1.1 billion pounds for the nine months of 2022. Copper sales volumes in the 2023 periods, compared with the 2022 periods, primarily reflect lower ore grades. The impact of lower ore grades in third-quarter 2023, compared with third-quarter 2022, was offset by the timing of shipments. 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. 37 Table of Contents Gross Profit per Pound of Copper and Molybdenum The following table summarizes unit net cash costs and gross profit per pound at our North America copper mines. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. Three Months Ended September 30, 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 $ 3.86 $ 3.86 $ 22.01 $ 3.57 $ 3.57 $ 16.75 Site production and delivery, before net noncash and other costs shown below 3.01 2.71 17.35 2.76 2.51 15.60 By-product credits (0.41) — — (0.30) — — Treatment charges 0.10 0.10 — 0.10 0.09 — Unit net cash costs 2.70 2.81 17.35 2.56 2.60 15.60 DD&A 0.30 0.26 1.33 0.28 0.25 0.95 Metals inventory adjustments 0.01 0.01 — 0.01 0.01 — Noncash and other costs, net 0.13 b 0.12 0.47 0.10 b 0.09 0.60 Total unit costs 3.14 3.20 19.15 2.95 2.95 17.15 Revenue adjustments, primarily for pricing on prior period open sales — — — (0.06) (0.06) — Gross profit per pound $ 0.72 $ 0.66 $ 2.86 $ 0.56 $ 0.56 $ (0.40) Copper sales (millions of recoverable pounds) 372 372 361 361 Molybdenum sales (millions of recoverable pounds) a 7 7 Nine Months Ended September 30, 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 $ 3.97 $ 3.97 $ 24.41 $ 4.17 $ 4.17 $ 17.87 Site production and delivery, before net noncash and other costs shown below 2.96 2.60 17.66 2.54 2.33 12.87 By-product credits (0.52) — — (0.33) — — Treatment charges 0.12 0.12 — 0.10 0.10 — Unit net cash costs 2.56 2.72 17.66 2.31 2.43 12.87 DD&A 0.30 0.26 1.27 0.27 0.25 0.88 Metals inventory adjustments 0.01 0.01 — 0.01 0.01 — Noncash and other costs, net 0.16 b 0.14 0.87 0.09 b 0.08 0.40 Total unit costs 3.03 3.13 19.80 2.68 2.77 14.15 Revenue adjustments, primarily for pricing on prior period open sales 0.01 0.01 — (0.01) (0.01) — Gross profit per pound $ 0.95 $ 0.85 $ 4.61 $ 1.48 $ 1.39 $ 3.72 Copper sales (millions of recoverable pounds) 1,048 1,048 1,131 1,131 Molybdenum sales (millions of recoverable pounds) a 23 22 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 third-quarter 2023, $0.06 per pound of copper in third-quarter 2022, $0.08 per pound of copper for the first nine months of 2023 and $0.04 per pound of copper for the first nine months of 2022 for feasibility and optimization studies. 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 $2.70 per pound of copper in third-quarter 2023 and $2.56 per pound for the first nine months of 2023 were higher than average unit net cash costs of $2.56 per pound in third-quarter 2022 and $2.31 per pound for the first nine months for 2022, primarily reflecting increased costs of labor 38 Table of Contents (including contract labor), maintenance and supplies, partly offset by higher molybdenum by-product credits and lower energy costs. 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. Assuming an average price of $20.00 per pound of molybdenum in fourth-quarter 2023 and achievement of current sales volume and cost estimates, 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. North America's average unit net cash costs for the year 2023 would change by approximately $0.01 per pound for each $2 per pound change in the average price of molybdenum in fourth-quarter 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 . During third-quarter 2023, Cerro Verde processed an average of 431,300 metric tons of ore per day through its concentrators, a new quarterly record, and entered into a new power purchase agreement that is expected to transition its electric power to fully renewable energy sources in 2026. At the El Abra operations in Chile, we have identified a large sulfide resource that would support 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. Capital cost requirements are being updated to reflect current market conditions. We are advancing plans to invest in water infrastructure to provide options to extend existing operations, while continuing to monitor Chile's regulatory and fiscal matters, as well as trends in capital costs for similar projects. 39 Table of Contents Operating Data. Following is summary consolidated operating data for South America mining: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Copper (millions of recoverable pounds) Production 305 302 916 862 Sales 307 293 913 845 Average realized price per pound $ 3.77 $ 3.47 $ 3.82 $ 3.73 Molybdenum (millions of recoverable pounds) Production a 6 4 17 18 Leach operations Leach ore placed in stockpiles (metric tons per day) 164,300 175,200 190,500 157,700 Average copper ore grade (%) 0.38 0.34 0.34 0.35 Copper production (millions of recoverable pounds) 77 85 237 217 Mill operations Ore milled (metric tons per day) 431,300 403,900 420,700 408,500 Average ore grade (%): Copper 0.34 0.32 0.34 0.32 Molybdenum 0.01 0.01 0.01 0.01 Copper recovery rate (%) 79.8 85.4 82.0 85.5 Copper production (millions of recoverable pounds) 228 217 679 645 a. Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde. Our consolidated copper sales volumes from South America totaled 307 million pounds in third-quarter 2023, 293 million pounds in third-quarter 2022, 913 million pounds for the first nine months of 2023 and 845 million pounds for the first nine months of 2022. Higher copper sales volumes in the 2023 periods, compared with the 2022 periods, primarily reflect increased milling rates and ore grades at Cerro Verde. Copper sales from South America mining are expected to approximate 1.2 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. 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. 40 Table of Contents Gross Profit per Pound of Copper The following table summarizes unit net cash costs and gross profit per pound of copper at our South America mining operations. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. Three Months Ended September 30, 2023 2022 By-Product Method Co-Product Method By-Product Method Co-Product Method Revenues, excluding adjustments $ 3.77 $ 3.77 $ 3.47 $ 3.47 Site production and delivery, before net noncash and other costs shown below 2.57 2.32 2.60 2.47 By-product credits (0.42) — (0.16) — Treatment charges 0.19 0.19 0.13 0.14 Royalty on metals 0.01 0.01 0.01 — Unit net cash costs 2.35 2.52 2.58 2.61 DD&A 0.36 0.32 0.34 0.32 Metals inventory adjustments — — 0.07 0.07 Noncash and other costs, net 0.07 a 0.07 0.09 0.08 Total unit costs 2.78 2.91 3.08 3.08 Revenue adjustments, primarily for pricing on prior period open sales 0.01 0.01 (0.25) (0.25) Gross profit per pound $ 1.00 $ 0.87 $ 0.14 $ 0.14 Copper sales (millions of recoverable pounds) 307 307 293 293 Nine Months Ended September 30, 2023 2022 By-Product Method Co-Product Method By-Product Method Co-Product Method Revenues, excluding adjustments $ 3.82 $ 3.82 $ 3.73 $ 3.73 Site production and delivery, before net noncash and other costs shown below 2.51 2.26 2.50 2.33 By-product credits (0.44) — (0.31) — Treatment charges 0.20 0.20 0.15 0.15 Royalty on metals 0.01 0.01 0.01 0.01 Unit net cash costs 2.28 2.47 2.35 2.49 DD&A 0.38 0.34 0.35 0.32 Metals inventory adjustments — — 0.04 0.04 Noncash and other costs, net 0.08 a 0.07 0.07 0.06 Total unit costs 2.74 2.88 2.81 2.91 Revenue adjustments, primarily for pricing on prior period open sales 0.08 0.08 0.04 0.04 Gross profit per pound $ 1.16 $ 1.02 $ 0.96 $ 0.86 Copper sales (millions of recoverable pounds) 913 913 845 845 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 $2.35 per pound of copper in third-quarter 2023 and $2.28 per pound for the first nine months of 2023 were lower than average unit net cash costs of $2.58 per pound in third-quarter 2022 and $2.35 per pound for the first nine months of 2022, reflecting higher molybdenum by-product credits and volumes, partly offset by higher treatment charges. 41 Table of Contents Revenues from Cerro Verde’s copper concentrate sales are recorded net of treatment charges, which will vary with Cerro Verde’s sales volumes and the price of copper. Higher treatment charges in the 2023 periods, compared to the 2022 periods, reflected higher smelting and refining rates. Because certain assets are depreciated on a straight-line basis, South America’s unit depreciation rate may vary with asset additions and the level of copper production and sales. 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. Assuming an average price of $20.00 per pound of molybdenum in fourth-quarter 2023 and achievement of current sales volume and cost estimates, average unit net cash costs (net of by-product credits) for South America mining are expected to approximate $2.34 per pound of copper for the year 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. 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. Regulatory Matters. Over the past several years, the Indonesia government has enacted various laws and regulations to promote downstream processing of various products, including copper concentrates. In 2018, PT-FI agreed to expand its domestic smelting and refining capacity to process all of its copper concentrates in Indonesia and is advancing the construction of the Indonesia smelter projects and expanding capacity at PT Smelting (refer to "Indonesia Smelter" below). On June 10, 2023, export licenses for several exporters, including PT-FI and PT Smelting, expired. On July 24, 2023, PT-FI was granted an export license through May 2024 for 1.7 million metric tons of copper concentrate. Through June 10, 2023, PT-FI exported anode slimes under PT Smelting’s export license. A change in regulations during second-quarter 2023 requires PT-FI to follow a new administrative process for the export of anode slimes. The administrative process is advancing, and PT-FI expects to receive approval to resume exports of anode slimes during fourth-quarter 2023. PT-FI is working with the Indonesia government to obtain approvals to continue exports of copper concentrates and anode slimes beyond May 2024 and until the Indonesia smelter projects are fully commissioned and reach designed operating conditions. Under PT-FI’s IUPK, export duties are determined based on regulations that were in effect in 2018 and no duties are required after smelter construction progress reached 50%. Effective March 29, 2023, PT-FI’s export duties were eliminated upon verification of smelter construction progress by the Indonesia government. In July 2023, the Ministry of Finance issued a revised regulation on duties for various exported products, including copper concentrates. Under the revised regulation PT-FI is currently being assessed export duties for copper concentrates at 7.5%, resulting in export duties totaling $147 million in third-quarter 2023. PT-FI does not believe any export duties should be assessed under the revised regulation and continues to discuss the applicability of the revised regulation with the Indonesia government because of inconsistencies with its IUPK. Refer to Note 8 for further discussion of the revised export regulation and other Indonesia regulatory matters. Mining Rights . PT-FI and the Indonesia government continue to engage in discussions regarding the extension of PT-FI's mining rights under its IUPK beyond 2041. An extension beyond 2041 would enable continuity of large-scale operations for the benefit of all stakeholders and provide growth options through additional resource development opportunities in the highly attractive Grasberg minerals district. 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 annual production volumes of approximately 1.6 billion pounds of copper and 1.6 million ounces of gold. Milling rates from these underground mines averaged 206,600 metric tons of ore per day in third- 42 Table of Contents quarter 2023, an approximate 10% increase from 188,700 metric tons of ore per day in third-quarter 2022. During third-quarter 2023, PT-FI successfully commissioned a new crusher to support increased mining rates in the Grasberg Block Cave ore body. PT-FI’s ongoing project to install additional milling facilities is expected to be complete in early 2024. The project is expected to increase milling capacity to approximately 240,000 metric tons of ore per day to provide sustained large scale production volumes. PT-FI is also advancing a mill recovery project with the installation of a new copper cleaner circuit that is expected to be completed in the second half of 2024 and to provide incremental metal production of approximately 60 million pounds of copper and 40 thousand ounces of gold per year. PT-FI is advancing plans to transition its existing energy source from coal to liquefied natural gas, which is expected to meaningfully reduce PT-FI's Scope 1 GHG emissions at the Grasberg minerals district. PT-FI is planning investments in a new gas-fired combined cycle facility at Grasberg with a targeted start date in 2027. Capital expenditures for the new facilities, to be incurred over the next three to four years, approximate $1 billion, which represents an incremental cost of $0.4 billion compared to previously planned investments to refurbish the existing coal units. 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. Indonesia Smelter . In connection with PT-FI’s 2018 agreement with the Indonesia government to secure the extension of its long-term mining rights, PT-FI agreed to expand its domestic smelting and refining capacity to process all of its copper concentrates in Indonesia. PT-FI is actively engaged in the following projects for additional domestic smelting capacity: • Construction of the Manyar smelter in Gresik, Indonesia with a capacity to process approximately 1.7 million metric tons of copper concentrate per year. Construction progress currently approximates 84% complete. Construction of the smelter has an estimated cost of $3.0 billion, including $2.8 billion for a construction contract (excluding capitalized interest, owner’s costs and commissioning) and $0.2 billion for investment in a desalinization plant. Construction is expected to be complete in mid-2024 followed by commissioning of the facilities and a ramp-up schedule through year-end 2024. • Expansion of PT Smelting's capacity by 30% to 1.3 million metric tons of copper concentrate per year, which is expected to be completed by the end of 2023. PT-FI is funding the cost of the expansion, estimated to approximate $250 million, with a loan that will convert to equity and increase PT-FI’s ownership in PT Smelting to a majority ownership interest, which is expected to occur in 2024. • The PMR is being constructed to process gold and silver from the Manyar smelter and PT Smelting. Construction is in progress with commissioning expected during 2024 at an estimated cost of $575 million, which incorporates recent revisions to scope. For the first nine months of 2023, capital expenditures for the Indonesia smelter projects totaled $1.2 billion, and are expected to approximate $1.6 billion for the year 2023. Capital expenditures for the Indonesia smelter projects are being funded with PT-FI's senior notes and availability under its revolving credit facility. 43 Table of Contents Operating Data. Following is summary consolidated operating data for Indonesia mining: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Copper (millions of recoverable pounds) Production 436 381 1,171 1,169 Sales 430 406 1,014 1,195 Average realized price per pound $ 3.77 $ 3.45 $ 3.81 $ 3.71 Gold (thousands of recoverable ounces) Production 528 445 1,409 1,330 Sales 395 476 1,153 1,356 Average realized price per ounce $ 1,898 $ 1,683 $ 1,932 $ 1,786 Ore extracted and milled (metric tons per day): Grasberg Block Cave underground mine 131,000 100,600 112,000 100,900 Deep Mill Level Zone underground mine 76,900 81,400 75,700 79,000 Big Gossan underground mine 8,100 7,600 7,800 7,500 Other adjustments (9,400) (900) (2,500) 3,400 Total 206,600 188,700 193,000 190,800 Average ore grades: Copper (%) 1.21 1.17 1.18 1.20 Gold (grams per metric ton) 1.15 1.07 1.10 1.06 Recovery rates (%): Copper 89.5 90.1 89.5 89.8 Gold 77.8 77.2 77.5 77.9 PT-FI’s consolidated copper sales of 430 million pounds in third-quarter 2023 were higher than third-quarter 2022 copper sales volumes of 406 million pounds, primarily reflecting higher mining rates and ore grades. PT-FI’s consolidated copper sales of 1.0 billion pounds for the first nine months of 2023 were lower than 1.2 billion pounds for the first nine months of 2022, primarily reflecting the deferral of sales recognition related to the PT Smelting tolling arrangement. PT-FI’s consolidated gold sales totaled 395 thousand ounces in third-quarter 2023, 476 thousand ounces in third-quarter 2022, 1.2 million ounces for the first nine months of 2023, and 1.4 million ounces for the first nine months of 2022. Lower gold sales volumes in the 2023 periods, compared with the 2022 periods, primarily reflect the timing of shipments of anode slimes associated with a change in administrative requirements for products that were previously being exported by PT Smelting. At September 30, 2023, approximately 75 thousand ounces of gold in anode slimes were included in inventory and available for sale pending approval of PT-FI’s export license for anode slimes. The first nine months of 2023 was also impacted by the deferral of sales recognition related to the PT Smelting tolling arrangement. Consolidated sales volumes from PT-FI are expected to approximate 1.5 billion pounds of copper and 1.7 million ounces of gold for the year 2023, net of a deferral of approximately 100 million pounds of copper and 180 thousand ounces of gold from mine production under tolling arrangements to be processed and sold as refined metal in future periods. Projected sales volumes are dependent on operational performance, the resumption of anode slime exports, weather-related conditions and other factors detailed in the “Cautionary Statement.” 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. 44 Table of Contents Gross Profit per Pound of Copper and per Ounce of Gold The following table summarizes the unit net cash costs and gross profit per pound of copper and per ounce of gold at our Indonesia mining operations. Refer to “Product Revenues and Production Costs” for an explanation of “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. Three Months Ended September 30, 2023 2022 By-Product Method Co-Product Method By-Product Method Co-Product Method Copper Gold Copper Gold Revenues, excluding adjustments $ 3.77 $ 3.77 $ 1,898 $ 3.45 $ 3.45 $ 1,683 Site production and delivery, before net noncash and other costs shown below 1.42 0.96 484 1.81 1.13 553 Gold, silver and other by-product credits (1.83) — — (2.00) — — Treatment charges 0.32 0.22 109 0.23 0.15 72 Export duties 0.34 0.23 116 0.20 0.12 61 Royalty on metals 0.19 0.12 64 0.20 0.12 67 Unit net cash costs 0.44 1.53 773 0.44 1.52 753 DD&A 0.63 0.43 214 0.65 0.41 200 Noncash and other costs (credits), net 0.02 a 0.01 6 (0.02) (0.01) (7) Total unit costs 1.09 1.97 993 1.07 1.92 946 Revenue adjustments, primarily for pricing on prior period open sales — — 8 (0.39) (0.39) (36) PT Smelting intercompany profit — — — 0.15 0.09 45 Gross profit per pound/ounce $ 2.68 $ 1.80 $ 913 $ 2.14 $ 1.23 $ 746 Copper sales (millions of recoverable pounds) 430 430 406 406 Gold sales (thousands of recoverable ounces) 395 476 Nine Months Ended September 30, 2023 2022 By-Product Method Co-Product Method By-Product Method Co-Product Method Copper Gold Copper Gold Revenues, excluding adjustments $ 3.81 $ 3.81 $ 1,932 $ 3.71 $ 3.71 $ 1,786 Site production and delivery, before net noncash and other costs shown below 1.71 1.07 542 1.55 0.99 476 Gold, silver and other by-product credits (2.32) — — (2.11) — — Treatment charges 0.36 0.22 113 0.24 0.15 74 Export duties 0.16 0.10 51 0.20 0.13 63 Royalty on metals 0.23 0.14 70 0.24 0.16 70 Unit net cash costs 0.14 1.53 776 0.12 1.43 683 DD&A 0.69 0.43 216 0.65 0.41 199 Noncash and other costs, net 0.11 a,b 0.07 36 0.02 b 0.01 5 Total unit costs 0.94 2.03 1,028 0.79 1.85 887 Revenue adjustments, primarily for pricing on prior period open sales 0.11 0.11 15 0.02 0.02 2 PT Smelting intercompany profit 0.11 0.07 35 0.03 0.02 9 Gross profit per pound/ounce $ 3.09 $ 1.96 $ 954 $ 2.97 $ 1.90 $ 910 Copper sales (millions of recoverable pounds) 1,014 1,014 1,195 1,195 Gold sales (thousands of recoverable ounces) 1,153 1,356 a. Includes charges totaling $0.01 per pound of copper in third-quarter 2023 and $0.02 per pound of copper for the first nine months 2023 for feasibility and optimization studies. b. Includes a charge totaling $0.05 per pound of copper for the first nine months of 2023 associated with a potential administrative fine. The first nine months of 2022 also includes a charge of $0.03 per pound of copper associated with an administrative fine. Refer to Note 8 for further discussion. 45 Table of Contents PT-FI's unit net cash costs (net of gold, silver and other by-product credits) of $0.44 per pound of copper in third-quarter 2023 approximated unit net cash costs in third-quarter 2022, primarily reflecting higher copper volumes, offset by lower gold, silver and other by-product credits and higher treatment charges and export duties. PT-FI’s unit net cash costs (net of gold, silver and other by-product credits) of $0.14 per pound of copper for the first nine months of 2023 were higher than unit net cash costs of $0.12 per pound for the first nine months of 2022, primarily reflecting increased underground maintenance costs and higher treatment charges and the impact of lower copper sales volumes, partly offset by higher gold, silver and other by-product credits. Treatment charges vary with the volume of metals sold and the price of copper, and royalties vary with the volume of metals sold and the prices of copper and gold. The increase in treatment charges per pound of copper and ounce of gold in the 2023 periods, compared with the 2022 periods, reflects higher costs associated with the new tolling arrangement with PT Smelting compared to the previous copper concentrate sales agreement. Tolling costs paid to PT Smelting are recorded as production costs in the consolidated statements of income but are reflected as treatment costs above in our unit net cash costs presentation. PT-FI’s export duties totaled $147 million in third-quarter 2023, $80 million in third-quarter 2022, $165 million for the first nine months of 2023 and $245 million for the first nine months of 2022. In late 2022, the export duty rate on PT-FI’s sales declined from 5% to 2.5% as a result of smelter development progress, and effective March 29, 2023, export duties were eliminated upon verification by the Indonesia government that construction progress on the Manyar smelter exceeded 50%. In July 2023, the Indonesia government issued a revised regulation on duties for various exported products, including copper concentrates, and under the revised regulation, PT-FI is currently being assessed export duties for copper concentrates at 7.5%. Refer to Note 8 for further discussion of the revised regulation. PT-FI’s royalties vary with the volume of metal sold and the prices of copper and gold. PT-FI’s royalties totaled $78 million in third-quarter 2023, $81 million in third-quarter 2022, $228 million for the first nine months of 2023 and $281 million for the first nine months of 2022. 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 change in the DD&A rate per pound of copper in the 2023 periods, compared with the 2022 periods, primarily reflects changes in sales volumes. 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 for the third quarter and first nine months of 2022 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 changed from a copper concentrate sales agreement to a tolling arrangement. Under this arrangement, PT-FI pays PT Smelting a tolling fee to smelt and refine its copper concentrate and PT-FI retains title to all products for sales to third parties. Accordingly, beginning in 2023, there are no further sales to PT Smelting. Assuming an average gold price of $1,900 per ounce in fourth-quarter 2023 and achievement of current sales volumes and cost estimates, unit net cash costs (including gold, silver and other by-product credits) for PT-FI are expected to approximate $0.15 per pound of copper for the year 2023. PT-FI's estimated unit net cash costs for the year 2023 include assessment of a 7.5% export duty during the second half of 2023, which continues to be discussed with the Indonesia government. PT-FI's average unit net cash costs for the year 2023 would change by approximately $0.05 per pound of copper for each $100 per ounce change in the average price of gold in fourth-quarter 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. 46 Table of Contents Operating and Development Activities. Production from the Molybdenum mines totaled 7 million pounds of molybdenum in third-quarter 2023, 8 million pounds in third-quarter 2022, 22 million pounds for the first nine months of 2023 and 23 million pounds for the first nine months of 2022. Refer to “Consolidated Results” for our consolidated molybdenum operating data, which includes sales of molybdenum produced at our Molybdenum mines and from our North America and South America copper mines. Refer to “Outlook” for projected consolidated molybdenum sales volumes and to “Markets” for a discussion of 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 $18.07 per pound of molybdenum in third-quarter 2023 and $15.25 per pound for the first nine months of 2023 were higher than average unit net cash costs of $12.10 per pound in third-quarter 2022 and $11.22 per pound for the first nine months of 2022, primarily reflecting lower production volumes associated with ore types mined and higher contract labor costs. Based on current volume and cost estimates, average unit net cash costs for the Molybdenum mines are expected to approximate $14.47 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 copper 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 the first nine months of 2023, Atlantic Copper’s copper concentrate purchases included 38% from our copper mining operations and 62% from third parties. Beginning on January 1, 2023, PT-FI's commercial arrangement with PT Smelting changed from a copper 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 copper concentrate and PT-FI retains title to all products for sale to third parties ( i.e. , there are no further sales to PT Smelting). We defer recognizing profits on sales from our mining operations to Atlantic Copper (and on 39.5% of PT-FI’s sales to PT Smelting for the 2022 periods) until final sales to third parties occur. Changes in these deferrals attributable to variability in intercompany volumes resulted in net additions to operating income totaling $81 million ($37 million to net income attributable to common stock) in third-quarter 2023, $33 million ($14 million to net income attributable to common stock) in third-quarter 2022, $153 million ($64 million to net income attributable to common stock) for the first nine months of 2023 and $73 million ($37 million to net income attributable to common stock) for the first nine months of 2022. Our net deferred profits on our inventories at Atlantic Copper to be recognized in future periods’ net income attributable to common stock totaled $30 million at September 30, 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. 47 Table of Contents 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. Our results for the first nine months of 2023 reflect strong operating performance and continued execution of our business strategy. We remain focused on managing costs efficiently and continue to advance several important value-enhancing initiatives. 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. 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 $5.4 billion for the year 2023 exceed our expected consolidated capital expenditures of $4.8 billion (which includes $1.9 billion for major mining projects and $1.6 billion for the Indonesia smelter projects that are being funded with PT-FI’s senior notes and its available credit facility). Planned capital expenditures for major mining projects over the next few years are primarily associated with projects in Indonesia, including underground development activities, supporting mill and power capital costs and initial spending on a new gas-fired combined cycle facility. In addition, we are advancing discretionary capital projects associated with the development of the Kucing Liar deposit in Grasberg and an expansion of concentrator capacity at our Bagdad operation. We have cash on hand and the financial flexibility to fund capital expenditures and our other cash requirements for the next twelve months, including noncontrolling interest distributions, income tax payments, current common stock dividends (base and variable) and any share or debt repurchases. At September 30, 2023, we had $5.7 billion in consolidated cash and cash equivalents (which includes $0.6 billion of PT-FI cash designated for Indonesia smelter projects) and FCX, PT-FI and Cerro Verde have $3.0 billion, $1.3 billion and $350 million, respectively, of availability under their revolving credit facilities. At September 30, 2023, we had $0.7 billion in current restricted cash and cash equivalents, which includes (i) $0.5 billion associated with PT-FI's export proceeds temporarily deposited in Indonesia banks in accordance with a regulation issued by the Indonesia government that became effective August 1, 2023, requiring 30% of export proceeds to be temporarily deposited into Indonesia banks for a period of 90 days before withdrawal, and (ii) $145 million in assurance to support PT-FI’s commitment for smelter development in Indonesia. Refer to Note 8 for further discussion of an additional refundable deposit that PT-FI may be required to make related to smelter development. 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 interests would be allocated to shareholder returns and the balance to debt reduction and investments in value enhancing growth projects, subject to us maintaining our net debt at a level not to exceed the net debt target of $3.0 billion to $4.0 billion (excluding net project debt for additional smelting capacity in Indonesia). Our Board of Directors (Board) will review the structure of the performance-based payout framework at least annually. At September 30, 2023, net debt, excluding net debt for the Indonesia smelter projects, totaled $0.8 billion. Refer to "Net Debt" for further discussion. On September 20, 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 November 1, 2023, to common stockholders of record as of October 13, 2023. Based on current market conditions, the base and variable dividends on our common stock are anticipated to 48 Table of Contents total $0.60 per share for 2023 (including the dividends paid on November 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 September 30, 2023 (in billions): Cash at domestic companies $ 3.1 Cash at international operations 2.6 a Total consolidated cash and cash equivalents 5.7 Cash for Indonesia smelter projects (0.6) b Noncontrolling interests’ share (0.9) Cash, net of noncontrolling interests’ share 4.2 Withholding taxes (0.1) Net cash available $ 4.1 a. Excludes $0.5 billion of cash associated with a portion of PT-FI's export proceeds required to be temporarily deposited in Indonesia banks for 90 days in accordance with an August 2023 regulation issued by the Indonesia government, which have been presented as current restricted cash and cash equivalents in FCX's consolidated balance sheet. b. Estimated remaining net proceeds from PT-FI's senior notes. 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 September 30, 2023, consolidated debt totaled $9.4 billion, with a weighted-average interest rate of 5.2%. Substantially all of our outstanding debt is fixed rate. FCX has $0.7 billion in scheduled senior note maturities through 2026 and an average remaining duration of its total debt of approximately 10 years. We had no borrowings outstanding and $7 million in letters of credit issued under our $3.0 billion revolving credit facility. Additionally, at September 30, 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 $4.0 billion (net of $0.7 billion of working capital and other uses) for the first nine months of 2023 and $4.1 billion (net of $1.0 billion of working capital and other uses) for the first nine months of 2022. Investing Activities Capital Expenditures. Capital expenditures, including capitalized interest, totaled $3.5 billion for the first nine months of 2023, including approximately $1.2 billion for major mining projects, primarily associated with underground development activities in the Grasberg minerals district and $1.2 billion for the Indonesia smelter projects. Capital expenditures, including capitalized interest, totaled $2.4 billion for the first nine months of 2022, including approximately $1.2 billion for major mining projects, primarily associated with underground development activities in the Grasberg minerals district and $0.5 billion for the Indonesia smelter projects. Proceeds from Sales of Assets. Proceeds from sales of assets totaled $16 million for the first nine months of 2023 and $102 million for the first nine months of 2022. In May 2022, we sold all of the shares we owned in Jervois Global Limited, which we received in connection with the 2021 sale of our remaining cobalt business, for proceeds of $60 million. 49 Table of Contents Loans to PT Smelting for Expansion. PT-FI made loans to PT Smelting totaling $109 million for the first nine months of 2023 and $51 million for the first nine months of 2022 to fund PT Smelting’s expansion project. Financing Activities Debt Transactions. Net repayments of debt totaled $1.2 billion for the first nine months of 2023, including the repayment of our 3.875% Senior Notes that matured in March 2023 totaling $996 million and open-market purchases of our senior notes for a total cost of $221 million. Refer to Note 5 for additional information. Net proceeds from debt totaled $1.3 billion for the first nine months of 2022, reflecting net proceeds from PT-FI’s $3.0 billion senior note offering, partly offset by the repayment of borrowings under PT-FI’s term loan ($0.6 billion), Cerro Verde’s term loan ($0.3 billion) and open-market purchases of our senior notes ($0.9 billion). Cash Dividends on Common Stock. We paid cash dividends on our common stock totaling $647 million for the first nine months of 2023 and $652 million for the first nine months of 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 (as updated in Part II, Item 1A. herein), “Cautionary Statement” below and the 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 $407 million for the first nine months of 2023 and $625 million for the first nine months of 2022. Based on the estimates discussed in “Outlook,” we currently expect cash dividends and distributions paid to noncontrolling interests totaling $0.5 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 our share repurchase program for a total cost of $1.8 billion ($38.35 average cost per share), including 35.1 million shares in the first nine months of 2022 for a total cost of $1.3 billion. No shares have been purchased since July 11, 2022, and we have $3.2 billion available for repurchases under the program. The timing and amount of share repurchases is at the discretion of management and will depend on a variety of factors. The share repurchase program may be modified, increased, suspended or terminated at any time at our Board’s discretion. Refer to Item 1A. “Risk Factors” contained in Part I of our 2022 Form 10-K (as updated in Part II, Item 1A. herein), “Cautionary Statement” below and discussion of our financial policy above. Contributions from Noncontrolling Interests. We received equity contributions totaling $50 million for the first nine months of 2023 and $142 million for the first nine months of 2022 from PT Mineral Industri Indonesia (formerly PT Indonesia Asahan Aluminium (Persero), (MIND ID)). Contributions for the first nine months of 2023 were primarily associated with receipt of the final capital contribution in accordance with the PT-FI shareholders agreement. Contributions for the first nine months of 2022 were associated with MIND ID’s share of capital spending on underground mine development projects in the Grasberg minerals district. Beginning on January 1, 2023, capital spending at PT-FI is being shared in accordance with the shareholders’ ownership interests. CONTRACTUAL OBLIGATIONS There have been no 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 Asset Retirement Obligations (AROs) Our current and historical operating activities are subject to stringent laws and regulations governing the protection of the environment. We perform a comprehensive annual review of our environmental liabilities and AROs and also review changes in facts and circumstances associated with these obligations at least quarterly. As discussed in Note 8, we recorded charges totaling $199 million for revisions to our environmental obligations during the first nine months of 2023, primarily associated with revised cost estimates. There have been no significant changes to our 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 50 Table of Contents 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. 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, other than the Indonesia regulatory matters discussed above in “Indonesia Mining - Regulatory Matters” and as disclosed in Note 8. Refer to Note 12 and “Legal Proceedings” contained in Part I, Item 3. of our 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 that net debt provides investors with information related to the performance-based payout framework in our financial policy, which requires us to maintain our net debt at a level not to exceed the net debt target of $3 billion to $4 billion (excluding net project debt for additional smelting capacity in Indonesia). We define net debt as consolidated debt less (i) consolidated cash and cash equivalents and (ii) current restricted cash associated with PT-FI's export proceeds. 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 September 30, 2023 As of December 31, 2022 Current portion of debt $ — a $ 1.0 Long-term debt, less current portion 9.4 9.6 Consolidated debt 9.4 10.6 Less: consolidated cash and cash equivalents 5.7 8.1 Less: current restricted cash associated with PT-FI's export proceeds b 0.5 — FCX net debt 3.2 2.5 Less: net debt for Indonesia smelter projects c 2.4 1.2 FCX net debt, excluding Indonesia smelter projects $ 0.8 $ 1.3 a. Rounds to less than $0.1 billion b. Effective August 1, 2023, and in accordance with a regulation issued by the Indonesia government, 30% of PT-FI’s export proceeds are being temporarily deposited into Indonesia banks for a period of 90 days before withdrawal and have been presented as current restricted cash and cash equivalents in FCX's consolidated balance sheet. As the 90-day holding period is the only restriction on the cash, FCX has included such amount in the calculation of net debt. c. Includes consolidated debt of $3.0 billion and consolidated cash and cash equivalents of $0.6 billion as of September 30, 2023, and consolidated debt of $3.0 billion and consolidated cash and cash equivalents of $1.8 billion as of December 31, 2022. 51 Table of Contents PRODUCT REVENUES AND PRODUCTION COSTS We believe unit net cash costs 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, 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. 52 Table of Contents North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2023 (In Millions) By-Product Co-Product Method Method Copper Molybdenum a Other b Total Revenues, excluding adjustments $ 1,435 $ 1,435 $ 164 $ 43 $ 1,642 Site production and delivery, before net noncash and other costs shown below 1,121 1,008 129 35 1,172 By-product credits (156) — — — — Treatment charges 39 37 — 2 39 Net cash costs 1,004 1,045 129 37 1,211 DD&A 110 99 10 1 110 Metals inventory adjustments 4 4 — — 4 Noncash and other costs, net 49 c 44 4 1 49 Total costs 1,167 1,192 143 39 1,374 Other revenue adjustments, primarily for pricing on prior period open sales 1 1 — — 1 Gross profit $ 269 $ 244 $ 21 $ 4 $ 269 Copper sales (millions of recoverable pounds) 372 372 Molybdenum sales (millions of recoverable pounds) a 7 Gross profit per pound of copper/molybdenum: Revenues, excluding adjustments $ 3.86 $ 3.86 $ 22.01 Site production and delivery, before net noncash and other costs shown below 3.01 2.71 17.35 By-product credits (0.41) — — Treatment charges 0.10 0.10 — Unit net cash costs 2.70 2.81 17.35 DD&A 0.30 0.26 1.33 Metals inventory adjustments 0.01 0.01 — Noncash and other costs, net 0.13 c 0.12 0.47 Total unit costs 3.14 3.20 19.15 Other revenue adjustments, primarily for pricing on prior period open sales — — — Gross profit per pound $ 0.72 $ 0.66 $ 2.86 Reconciliation to Amounts Reported Revenues Production and Delivery DD&A Metals Inventory Adjustments Totals presented above $ 1,642 $ 1,172 $ 110 $ 4 Treatment charges — 39 — — Noncash and other costs, net — 49 — — Other revenue adjustments, primarily for pricing on prior period open sales 1 — — — Eliminations and other 14 15 — — North America copper mines 1,657 1,275 110 4 Other mining d 5,764 3,859 405 1 Corporate, other & eliminations (1,597) (1,586) 18 — As reported in our consolidated financial statements $ 5,824 $ 3,548 $ 533 $ 5 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 $28 million ($0.08 per pound of copper) for feasibility and optimization studies. d. Represents the combined total for our other segments as presented in Note 9. 53 Table of Contents North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2022 (In Millions) By-Product Co-Product Method Method Copper Molybdenum a Other b Total Revenues, excluding adjustments $ 1,293 $ 1,293 $ 111 $ 38 $ 1,442 Site production and delivery, before net noncash and other costs shown below 1,000 908 104 31 1,043 By-product credits (106) — — — — Treatment charges 35 33 — 2 35 Net cash costs 929 941 104 33 1,078 DD&A 99 91 6 2 99 Metals inventory adjustments 3 3 — — 3 Noncash and other costs, net 38 c 33 4 1 38 Total costs 1,069 1,068 114 36 1,218 Other revenue adjustments, primarily for pricing on prior period open sales (20) (20) — — (20) Gross profit (loss) $ 204 $ 205 $ (3) $ 2 $ 204 Copper sales (millions of recoverable pounds) 361 361 Molybdenum sales (millions of recoverable pounds) a 7 Gross profit (loss) per pound of copper/molybdenum: Revenues, excluding adjustments $ 3.57 $ 3.57 $ 16.75 Site production and delivery, before net noncash and other costs shown below 2.76 2.51 15.60 By-product credits (0.30) — — Treatment charges 0.10 0.09 — Unit net cash costs 2.56 2.60 15.60 DD&A 0.28 0.25 0.95 Metals inventory adjustments 0.01 0.01 — Noncash and other costs, net 0.10 c 0.09 0.60 Total unit costs 2.95 2.95 17.15 Other revenue adjustments, primarily for pricing on prior period open sales (0.06) (0.06) — Gross profit (loss) per pound $ 0.56 $ 0.56 $ (0.40) Reconciliation to Amounts Reported Revenues Production and Delivery DD&A Metals Inventory Adjustments Totals presented above $ 1,442 $ 1,043 $ 99 $ 3 Treatment charges (6) 29 — — Noncash and other costs, net — 38 — — Other revenue adjustments, primarily for pricing on prior period open sales (20) — — — Eliminations and other 32 34 1 — North America copper mines 1,448 1,144 100 3 Other mining d 4,941 3,611 390 22 Corporate, other & eliminations (1,386) (1,389) 18 — As reported in our consolidated financial statements $ 5,003 $ 3,366 $ 508 $ 25 a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. b. Includes gold and silver product revenues and production costs. c. Includes charges totaling $20 million ($0.06 per pound of copper) for feasibility and optimization studies. d. Represents the combined total for our other segments as presented in Note 9. 54 Table of Contents North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2023 (In Millions) By-Product Co-Product Method Method Copper Molybdenum a Other b Total Revenues, excluding adjustments $ 4,159 $ 4,159 $ 576 $ 129 $ 4,864 Site production and delivery, before net noncash and other costs shown below 3,097 2,729 417 113 3,259 By-product credits (543) — — — — Treatment charges 126 120 — 6 126 Net cash costs 2,680 2,849 417 119 3,385 DD&A 312 276 30 6 312 Metals inventory adjustments 5 5 — — 5 Noncash and other costs, net 175 c 152 20 3 175 Total costs 3,172 3,282 467 128 3,877 Other revenue adjustments, primarily for pricing on prior period open sales 13 13 — — 13 Gross profit $ 1,000 $ 890 $ 109 $ 1 $ 1,000 Copper sales (millions of recoverable pounds) 1,048 1,048 Molybdenum sales (millions of recoverable pounds) a 23 Gross profit per pound of copper/molybdenum: Revenues, excluding adjustments $ 3.97 $ 3.97 $ 24.41 Site production and delivery, before net noncash and other costs shown below 2.96 2.60 17.66 By-product credits (0.52) — — Treatment charges 0.12 0.12 — Unit net cash costs 2.56 2.72 17.66 DD&A 0.30 0.26 1.27 Metals inventory adjustments 0.01 0.01 — Noncash and other costs, net 0.16 c 0.14 0.87 Total unit costs 3.03 3.13 19.80 Other revenue adjustments, primarily for pricing on prior period open sales 0.01 0.01 — Gross profit per pound $ 0.95 $ 0.85 $ 4.61 Reconciliation to Amounts Reported Metals Production Inventory Revenues and Delivery DD&A Adjustments Totals presented above $ 4,864 $ 3,259 $ 312 $ 5 Treatment charges (9) 117 — — Noncash and other costs, net — 175 — — Other revenue adjustments, primarily for pricing on prior period open sales 13 — — — Eliminations and other 49 52 — — North America copper mines 4,917 3,603 312 5 Other mining d 16,832 11,294 1,117 1 Corporate, other & eliminations (4,799) (4,637) 50 1 As reported in our consolidated financial statements $ 16,950 $ 10,260 $ 1,479 $ 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 gold and silver product revenues and production costs. c. Includes charges totaling $81 million ($0.08 per pound of copper) for feasibility and optimization studies. d. Represents the combined total for our other mining operations as presented in Note 9. 55 Table of Contents North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2022 (In Millions) By-Product Co-Product Method Method Copper Molybdenum a Other b Total Revenues, excluding adjustments $ 4,720 $ 4,720 $ 393 $ 95 $ 5,208 Site production and delivery, before net noncash and other costs shown below 2,882 2,643 283 70 2,996 By-product credits (374) — — — — Treatment charges 112 109 — 3 112 Net cash costs 2,620 2,752 283 73 3,108 DD&A 306 282 19 5 306 Metals inventory adjustments 10 9 1 — 10 Noncash and other costs, net 104 c 94 8 2 104 Total costs 3,040 3,137 311 80 3,528 Other revenue adjustments, primarily for pricing on prior period open sales (13) (13) — — (13) Gross profit $ 1,667 $ 1,570 $ 82 $ 15 $ 1,667 Copper sales (millions of recoverable pounds) 1,131 1,131 Molybdenum sales (millions of recoverable pounds) a 22 Gross profit per pound of copper/molybdenum: Revenues, excluding adjustments $ 4.17 $ 4.17 $ 17.87 Site production and delivery, before net noncash and other costs shown below 2.54 2.33 12.87 By-product credits (0.33) — — Treatment charges 0.10 0.10 — Unit net cash costs 2.31 2.43 12.87 DD&A 0.27 0.25 0.88 Metals inventory adjustments 0.01 0.01 — Noncash and other costs, net 0.09 c 0.08 0.40 Total unit costs 2.68 2.77 14.15 Other revenue adjustments, primarily for pricing on prior period open sales (0.01) (0.01) — Gross profit per pound $ 1.48 $ 1.39 $ 3.72 Reconciliation to Amounts Reported Metals Production Inventory Revenues and Delivery DD&A Adjustments Totals presented above $ 5,208 $ 2,996 $ 306 $ 10 Treatment charges (15) 97 — — Noncash and other costs, net — 104 — — Other revenue adjustments, primarily for pricing on prior period open sales (13) — — — Eliminations and other 74 82 1 — North America copper mines 5,254 3,279 307 10 Other mining d 16,649 11,072 1,147 33 Corporate, other & eliminations (4,881) (4,832) 50 — As reported in our consolidated financial statements $ 17,022 $ 9,519 $ 1,504 $ 43 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 $49 million ($0.04 per pound of copper) for feasibility and optimization studies. d. Represents the combined total for our other mining operations as presented in Note 9. 56 Table of Contents South America Mining Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2023 (In Millions) By-Product Co-Product Method Method Copper Other a Total Revenues, excluding adjustments $ 1,159 $ 1,159 $ 145 $ 1,304 Site production and delivery, before net noncash and other costs shown below 790 712 93 805 By-product credits (130) — — — Treatment charges 61 61 — 61 Royalty on metals 2 2 — 2 Net cash costs 723 775 93 868 DD&A 110 98 12 110 Metals inventory adjustments 1 1 — 1 Noncash and other costs, net 21 b 20 1 21 Total costs 855 894 106 1,000 Other revenue adjustments, primarily for pricing on prior period open sales 2 2 — 2 Gross profit $ 306 $ 267 $ 39 $ 306 Copper sales (millions of recoverable pounds) 307 307 Gross profit per pound of copper: Revenues, excluding adjustments $ 3.77 $ 3.77 Site production and delivery, before net noncash and other costs shown below 2.57 2.32 By-product credits (0.42) — Treatment charges 0.19 0.19 Royalty on metals 0.01 0.01 Unit net cash costs 2.35 2.52 DD&A 0.36 0.32 Metals inventory adjustments — — Noncash and other costs, net 0.07 b 0.07 Total unit costs 2.78 2.91 Other revenue adjustments, primarily for pricing on prior period open sales 0.01 0.01 Gross profit per pound $ 1.00 $ 0.87 Reconciliation to Amounts Reported Metals Production Inventory Revenues and Delivery DD&A Adjustments Totals presented above $ 1,304 $ 805 $ 110 $ 1 Treatment charges (61) — — — Royalty on metals (2) — — — Noncash and other costs, net — 21 — — Other revenue adjustments, primarily for pricing on prior period open sales 2 — — — Eliminations and other 1 — 1 — South America mining 1,244 826 111 1 Other mining c 6,177 4,308 404 4 Corporate, other & eliminations (1,597) (1,586) 18 — As reported in our consolidated financial statements $ 5,824 $ 3,548 $ 533 $ 5 a. Includes silver sales of 1.1 million ounces ($23.31 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. b. Includes charges totaling $11 million ($0.03 per pound of copper) for feasibility studies. c. Represents the combined total for our other segments as presented in Note 9. 57 Table of Contents South America Mining Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2022 (In Millions) By-Product Co-Product Method Method Copper Other a Total Revenues, excluding adjustments $ 1,017 $ 1,017 $ 62 $ 1,079 Site production and delivery, before net noncash and other costs shown below 761 723 52 775 By-product credits (48) — — — Treatment charges 40 40 — 40 Royalty on metals 2 2 — 2 Net cash costs 755 765 52 817 DD&A 99 93 6 99 Metals inventory adjustments 22 22 — 22 Noncash and other costs, net 25 23 2 25 Total costs 901 903 60 963 Other revenue adjustments, primarily for pricing on prior period open sales (73) (73) — (73) Gross profit $ 43 $ 41 $ 2 $ 43 Copper sales (millions of recoverable pounds) 293 293 Gross profit per pound of copper: Revenues, excluding adjustments $ 3.47 $ 3.47 Site production and delivery, before net noncash and other costs shown below 2.60 2.47 By-product credits (0.16) — Treatment charges 0.13 0.14 Royalty on metals 0.01 — Unit net cash costs 2.58 2.61 DD&A 0.34 0.32 Metals inventory adjustments 0.07 0.07 Noncash and other costs, net 0.09 0.08 Total unit costs 3.08 3.08 Other revenue adjustments, primarily for pricing on prior period open sales (0.25) (0.25) Gross profit per pound $ 0.14 $ 0.14 Reconciliation to Amounts Reported Metals Production Inventory Revenues and Delivery DD&A Adjustments Totals presented above $ 1,079 $ 775 $ 99 $ 22 Treatment charges (40) — — — Royalty on metals (2) — — — Noncash and other costs, net — 25 — — Other revenue adjustments, primarily for pricing on prior period open sales (73) — — — Eliminations and other — — (1) — South America mining 964 800 98 22 Other mining b 5,425 3,955 392 3 Corporate, other & eliminations (1,386) (1,389) 18 — As reported in our consolidated financial statements $ 5,003 $ 3,366 $ 508 $ 25 a. Includes silver sales of 1.1 million ounces ($17.11 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. b. Represents the combined total for our other segments as presented in Note 9. 58 Table of Contents South America Mining Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2023 (In Millions) By-Product Co-Product Method Method Copper Other a Total Revenues, excluding adjustments $ 3,492 $ 3,492 $ 447 $ 3,939 Site production and delivery, before net noncash and other costs shown below 2,297 2,074 272 2,346 By-product credits (401) — — — Treatment charges 179 179 — 179 Royalty on metals 6 5 1 6 Net cash costs 2,081 2,258 273 2,531 DD&A 350 310 40 350 Metals inventory adjustments 1 1 — 1 Noncash and other costs, net 71 b 66 5 71 Total costs 2,503 2,635 318 2,953 Other revenue adjustments, primarily for pricing on prior period open sales 71 71 3 74 Gross profit $ 1,060 $ 928 $ 132 $ 1,060 Copper sales (millions of recoverable pounds) 913 913 Gross profit per pound of copper: Revenues, excluding adjustments $ 3.82 $ 3.82 Site production and delivery, before net noncash and other costs shown below 2.51 2.26 By-product credits (0.44) — Treatment charges 0.20 0.20 Royalty on metals 0.01 0.01 Unit net cash costs 2.28 2.47 DD&A 0.38 0.34 Metals inventory adjustments — — Noncash and other costs, net 0.08 b 0.07 Total unit costs 2.74 2.88 Other revenue adjustments, primarily for pricing on prior period open sales 0.08 0.08 Gross profit per pound $ 1.16 $ 1.02 Reconciliation to Amounts Reported Metals Production Inventory Revenues and Delivery DD&A Adjustments Totals presented above $ 3,939 $ 2,346 $ 350 $ 1 Treatment charges (179) — — — Royalty on metals (6) — — — Noncash and other costs, net — 71 — — Other revenue adjustments, primarily for pricing on prior period open sales 74 — — — Eliminations and other — (1) — — South America mining 3,828 2,416 350 1 Other mining c 17,921 12,481 1,079 5 Corporate, other & eliminations (4,799) (4,637) 50 1 As reported in our consolidated financial statements $ 16,950 $ 10,260 $ 1,479 $ 7 a. Includes silver sales of 3.2 million ounces ($23.51 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 $30 million ($0.03 per pound of copper) for feasibility studies. c. Represents the combined total for our other mining operations as presented in Note 9. 59 Table of Contents South America Mining Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2022 (In Millions) By-Product Co-Product Method Method Copper Other a Total Revenues, excluding adjustments $ 3,149 $ 3,149 $ 302 $ 3,451 Site production and delivery, before net noncash and other costs shown below 2,114 1,968 188 2,156 By-product credits (260) — — — Treatment charges 124 124 — 124 Royalty on metals 7 6 1 7 Net cash costs 1,985 2,098 189 2,287 DD&A 297 272 25 297 Metals inventory adjustments 32 31 1 32 Noncash and other costs, net 60 57 3 60 Total costs 2,374 2,458 218 2,676 Other revenue adjustments, primarily for pricing on prior period open sales 35 35 — 35 Gross profit $ 810 $ 726 $ 84 $ 810 Copper sales (millions of recoverable pounds) 845 845 Gross profit per pound of copper: Revenues, excluding adjustments $ 3.73 $ 3.73 Site production and delivery, before net noncash and other costs shown below 2.50 2.33 By-product credits (0.31) — Treatment charges 0.15 0.15 Royalty on metals 0.01 0.01 Unit net cash costs 2.35 2.49 DD&A 0.35 0.32 Metals inventory adjustments 0.04 0.04 Noncash and other costs, net 0.07 0.06 Total unit costs 2.81 2.91 Other revenue adjustments, primarily for pricing on prior period open sales 0.04 0.04 Gross profit per pound $ 0.96 $ 0.86 Reconciliation to Amounts Reported Metals Production Inventory Revenues and Delivery DD&A Adjustments Totals presented above $ 3,451 $ 2,156 $ 297 $ 32 Treatment charges (124) — — — Royalty on metals (7) — — — Noncash and other costs, net — 60 — — Other revenue adjustments, primarily for pricing on prior period open sales 35 — — — Eliminations and other (1) (4) — 1 South America mining 3,354 2,212 297 33 Other mining b 18,549 12,139 1,157 10 Corporate, other & eliminations (4,881) (4,832) 50 — As reported in our consolidated financial statements $ 17,022 $ 9,519 $ 1,504 $ 43 a. Includes silver sales of 3.2 million ounces ($21.24 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. b. Represents the combined total for our other mining operations as presented in Note 9. 60 Table of Contents Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2023 (In Millions) Co-Product Method By-Product Method Copper Gold Silver & Other a Total Revenues, excluding adjustments $ 1,621 $ 1,621 $ 749 $ 32 $ 2,402 Site production and delivery, before net noncash and other costs shown below 612 413 191 8 612 Gold, silver and other by-product credits (785) — — — — Treatment charges 138 93 43 2 138 Export duties 147 99 46 2 147 Royalty on metals 78 52 25 1 78 Net cash costs 190 657 305 13 975 DD&A 271 183 84 4 271 Noncash and other costs, net 8 b 6 2 — 8 Total costs 469 846 391 17 1,254 Other revenue adjustments, primarily for pricing on prior period open sales 1 1 3 1 5 Gross profit $ 1,153 $ 776 $ 361 $ 16 $ 1,153 Copper sales (millions of recoverable pounds) 430 430 Gold sales (thousands of recoverable ounces) 395 Gross profit per pound of copper/per ounce of gold: Revenues, excluding adjustments $ 3.77 $ 3.77 $ 1,898 Site production and delivery, before net noncash and other costs shown below 1.42 0.96 484 Gold, silver and other by-product credits (1.83) — — Treatment charges 0.32 0.22 109 Export duties 0.34 0.23 116 Royalty on metals 0.19 0.12 64 Unit net cash costs 0.44 1.53 773 DD&A 0.63 0.43 214 Noncash and other costs, net 0.02 b 0.01 6 Total unit costs 1.09 1.97 993 Other revenue adjustments, primarily for pricing on prior period open sales — — 8 Gross profit per pound/ounce $ 2.68 $ 1.80 $ 913 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 2,402 $ 612 $ 271 Treatment charges (87) 51 — Export duties (147) — — Royalty on metals (78) — — Noncash and other costs, net — 8 — Other revenue adjustments, primarily for pricing on prior period open sales 5 — — Eliminations and other — (4) — Indonesia mining 2,095 667 271 Other mining c 5,326 4,467 244 Corporate, other & eliminations (1,597) (1,586) 18 As reported in our consolidated financial statements $ 5,824 $ 3,548 $ 533 a. Includes silver sales of 1.3 million ounces ($22.96 per ounce average realized price). b. Includes charges totaling $3 million ($0.01 per pound of copper) for feasibility and optimization studies. c. Represents the combined total for our other segments as presented in Note 9. 61 Table of Contents Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2022 (In Millions) Co-Product Method By-Product Method Copper Gold Silver & Other a Total Revenues, excluding adjustments $ 1,400 $ 1,400 $ 802 $ 30 $ 2,232 Site production and delivery, before net noncash and other credits shown below 735 461 264 10 735 Gold, silver and other by-product credits (814) — — — — Treatment charges 95 60 34 1 95 Export duties 80 50 29 1 80 Royalty on metals 81 48 32 1 81 Net cash costs 177 619 359 13 991 DD&A 265 167 95 3 265 Noncash and other credits, net (10) b (7) (3) — (10) Total costs 432 779 451 16 1,246 Other revenue adjustments, primarily for pricing on prior period open sales (158) (158) (17) (1) (176) PT Smelting intercompany profit 60 38 22 — 60 Gross profit $ 870 $ 501 $ 356 $ 13 $ 870 Copper sales (millions of recoverable pounds) 406 406 Gold sales (thousands of recoverable ounces) 476 Gross profit per pound of copper/per ounce of gold: Revenues, excluding adjustments $ 3.45 $ 3.45 $ 1,683 Site production and delivery, before net noncash and other credits shown below 1.81 1.13 553 Gold, silver and other by-product credits (2.00) — — Treatment charges 0.23 0.15 72 Export duties 0.20 0.12 61 Royalty on metals 0.20 0.12 67 Unit net cash costs 0.44 1.52 753 DD&A 0.65 0.41 200 Noncash and other credits, net (0.02) b (0.01) (7) Total unit costs 1.07 1.92 946 Other revenue adjustments, primarily for pricing on prior period open sales (0.39) (0.39) (36) PT Smelting intercompany profit 0.15 0.09 45 Gross profit per pound/ounce $ 2.14 $ 1.23 $ 746 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 2,232 $ 735 $ 265 Treatment charges (95) — — Export duties (80) — — Royalty on metals (81) — — Noncash and other credits, net (2) (12) — Other revenue adjustments, primarily for pricing on prior period open sales (176) — — PT Smelting intercompany profit — (60) — Indonesia mining 1,798 663 265 Other mining c 4,591 4,092 225 Corporate, other & eliminations (1,386) (1,389) 18 As reported in our consolidated financial statements $ 5,003 $ 3,366 $ 508 a. Includes silver sales of 1.6 million ounces ($18.58 per ounce average realized price). b. Includes net credits totaling $21 million ($0.05 per pound of copper) associated with historical tax audits. c. Represents the combined total for our other segments as presented in Note 9. 62 Table of Contents Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2023 (In Millions) Co-Product Method By-Product Method Copper Gold Silver & Other a Total Revenues, excluding adjustments $ 3,860 $ 3,860 $ 2,227 $ 106 $ 6,193 Site production and delivery, before net noncash and other costs shown below 1,736 1,082 624 30 1,736 Gold, silver and other by-product credits (2,350) — — — — Treatment charges 362 226 130 6 362 Export duties 165 103 59 3 165 Royalty on metals 228 144 81 3 228 Net cash costs 141 1,555 894 42 2,491 DD&A 694 433 249 12 694 Noncash and other costs, net 115 b 71 42 2 115 Total costs 950 2,059 1,185 56 3,300 Other revenue adjustments, primarily for pricing on prior period open sales 114 114 18 (1) 131 PT Smelting intercompany profit 112 70 40 2 112 Gross profit $ 3,136 $ 1,985 $ 1,100 $ 51 $ 3,136 Copper sales (millions of recoverable pounds) 1,014 1,014 Gold sales (thousands of recoverable ounces) 1,153 Gross profit per pound of copper/per ounce of gold: Revenues, excluding adjustments $ 3.81 $ 3.81 $ 1,932 Site production and delivery, before net noncash and other costs shown below 1.71 1.07 542 Gold, silver and other by-product credits (2.32) — — Treatment charges 0.36 0.22 113 Export duties 0.16 0.10 51 Royalty on metals 0.23 0.14 70 Unit net cash costs 0.14 1.53 776 DD&A 0.69 0.43 216 Noncash and other costs, net 0.11 b 0.07 36 Total unit costs 0.94 2.03 1,028 Other revenue adjustments, primarily for pricing on prior period open sales 0.11 0.11 15 PT Smelting intercompany profit 0.11 0.07 35 Gross profit per pound/ounce $ 3.09 $ 1.96 $ 954 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 6,193 $ 1,736 $ 694 Treatment charges (231) 131 — Export duties (165) — — Royalty on metals (228) — — Noncash and other costs, net — 115 — Other revenue adjustments, primarily for pricing on prior period open sales 131 — — PT Smelting intercompany profit — (112) — Eliminations and other — (10) — Indonesia mining 5,700 1,860 694 Other mining c 16,049 13,037 735 Corporate, other & eliminations (4,799) (4,637) 50 As reported in our consolidated financial statements $ 16,950 $ 10,260 $ 1,479 a. Includes silver sales of 4.0 million ounces ($23.37 per ounce average realized price). b. Includes a charge of $55 million ($0.05 per pound of copper) associated with a potential administrative fine and charges totaling $22 million ($0.02 per pound of copper) for feasibility and optimization studies. c. Represents the combined total for our other mining operations as presented in Note 9. 63 Table of Contents Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2022 (In Millions) Co-Product Method By-Product Method Copper Gold Silver & Other a Total Revenues, excluding adjustments $ 4,433 $ 4,433 $ 2,422 $ 98 $ 6,953 Site production and delivery, before net noncash and other costs shown below 1,855 1,183 646 26 1,855 Gold, silver and other by-product credits (2,523) — — — — Treatment charges 287 183 100 4 287 Export duties 245 156 85 4 245 Royalty on metals 281 183 95 3 281 Net cash costs 145 1,705 926 37 2,668 DD&A 775 494 270 11 775 Noncash and other costs, net 20 b 13 7 — 20 Total costs 940 2,212 1,203 48 3,463 Other revenue adjustments, primarily for pricing on prior period open sales 25 25 3 — 28 PT Smelting intercompany profit 34 21 12 1 34 Gross profit $ 3,552 $ 2,267 $ 1,234 $ 51 $ 3,552 Copper sales (millions of recoverable pounds) 1,195 1,195 Gold sales (thousands of recoverable ounces) 1,356 Gross profit per pound of copper/per ounce of gold: Revenues, excluding adjustments $ 3.71 $ 3.71 $ 1,786 Site production and delivery, before net noncash and other credits shown below 1.55 0.99 476 Gold, silver and other by-product credits (2.11) — — Treatment charges 0.24 0.15 74 Export duties 0.20 0.13 63 Royalty on metals 0.24 0.16 70 Unit net cash costs 0.12 1.43 683 DD&A 0.65 0.41 199 Noncash and other costs, net 0.02 b 0.01 5 Total unit costs 0.79 1.85 887 Other revenue adjustments, primarily for pricing on prior period open sales 0.02 0.02 2 PT Smelting intercompany profit 0.03 0.02 9 Gross profit per pound/ounce $ 2.97 $ 1.90 $ 910 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 6,953 $ 1,855 $ 775 Treatment charges (287) — — Export duties (245) — — Royalty on metals (281) — — Noncash and other costs, net 12 32 — Other revenue adjustments, primarily for pricing on prior period open sales 28 — — PT Smelting intercompany profit — (34) — Indonesia mining 6,180 1,853 775 Other mining c 15,723 12,498 679 Corporate, other & eliminations (4,881) (4,832) 50 As reported in our consolidated financial statements $ 17,022 $ 9,519 $ 1,504 a. Includes silver sales of 4.7 million ounces ($20.80 per ounce average realized price). b. Includes a net charge of $30 million ($0.02 per pound of copper) consisting of charges associated with a settlement of an administrative fine levied by the Indonesia government and a reserve for exposure associated with export duties in prior periods, partially offset by credits for adjustments to prior year treatment and refining charges and historical tax audits. c. Represents the combined total for our other mining operations as presented in Note 9. 64 Table of Contents Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, (In Millions) 2023 2022 Revenues, excluding adjustments a $ 153 $ 134 Site production and delivery, before net noncash and other costs shown below 116 91 Treatment charges and other 6 7 Net cash costs 122 98 DD&A 14 18 Noncash and other costs, net 4 3 Total costs 140 119 Gross profit $ 13 $ 15 Molybdenum sales (millions of recoverable pounds) a 7 8 Gross profit per pound of molybdenum: Revenues, excluding adjustments a $ 22.58 $ 16.51 Site production and delivery, before net noncash and other costs shown below 17.20 11.26 Treatment charges and other 0.87 0.84 Unit net cash costs 18.07 12.10 DD&A 2.13 2.16 Noncash and other costs, net 0.53 0.40 Total unit costs 20.73 14.66 Gross profit per pound $ 1.85 $ 1.85 Reconciliation to Amounts Reported Production Three Months Ended September 30, 2023 Revenues and Delivery DD&A Totals presented above $ 153 $ 116 $ 14 Treatment charges and other (6) — — Noncash and other costs, net — 4 — Molybdenum mines 147 120 14 Other mining b 7,274 5,014 501 Corporate, other & eliminations (1,597) (1,586) 18 As reported in our consolidated financial statements $ 5,824 $ 3,548 $ 533 Three Months Ended September 30, 2022 Totals presented above $ 134 $ 91 $ 18 Treatment charges and other (7) — — Noncash and other costs, net — 3 — Molybdenum mines 127 94 18 Other mining b 6,262 4,661 472 Corporate, other & eliminations (1,386) (1,389) 18 As reported in our consolidated financial statements $ 5,003 $ 3,366 $ 508 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. 65 Table of Contents Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, (In Millions) 2023 2022 Revenues, excluding adjustments a $ 539 $ 419 Site production and delivery, before net noncash and other costs shown below 308 241 Treatment charges and other 19 20 Net cash costs 327 261 DD&A 48 52 Noncash and other costs, net 13 8 Total costs 388 321 Gross profit $ 151 $ 98 Molybdenum sales (millions of recoverable pounds) a 22 23 Gross profit per pound of molybdenum: Revenues, excluding adjustments a $ 25.17 $ 18.01 Site production and delivery, before net noncash and other costs shown below 14.39 10.37 Treatment charges and other 0.86 0.85 Unit net cash costs 15.25 11.22 DD&A 2.26 2.23 Noncash and other costs, net 0.61 0.37 Total unit costs 18.12 13.82 Gross profit per pound $ 7.05 $ 4.19 Reconciliation to Amounts Reported Production Nine Months Ended September 30, 2023 Revenues and Delivery DD&A Totals presented above $ 539 $ 308 $ 48 Treatment charges and other (19) — — Noncash and other costs, net — 13 — Molybdenum mines 520 321 48 Other mining b 21,229 14,576 1,381 Corporate, other & eliminations (4,799) (4,637) 50 As reported in our consolidated financial statements $ 16,950 $ 10,260 $ 1,479 Nine Months Ended September 30, 2022 Totals presented above $ 419 $ 241 $ 52 Treatment charges and other (20) — — Noncash and other costs, net — 8 — Molybdenum mines 399 249 52 Other mining b 21,504 14,102 1,402 Corporate, other & eliminations (4,881) (4,832) 50 As reported in our consolidated financial statements $ 17,022 $ 9,519 $ 1,504 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. 66 Table of Contents CAUTIONARY STATEMENT Our discussion and analysis contains forward-looking statements in which we discuss our potential future performance, operations and projects. 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 licenses; PT-FI’s resumption of exports of anode slimes; payment of export duties; export volumes; our commitment to deliver responsibly produced copper and molybdenum, including plans to implement, validate and maintain validation of our operating sites under specific frameworks; execution of our energy and climate strategies and the underlying assumptions and estimated impacts on our business and stakeholders related thereto; achievement of 2030 climate targets and 2050 net zero aspiration; improvements in operating procedures and technology innovations and applications; exploration efforts and results; development and production activities, rates and costs; future organic growth opportunities; tax rates; 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 and environmental proceedings; debt repurchases; and the ongoing implementation of our financial policy and future returns to shareholders, including dividend payments (base or variable) and share 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 not exceeding our net debt target, capital availability, our financial results, cash requirements, global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by the Board or management, as applicable. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion. We caution readers that forward-looking statements are not guarantees of future performance and actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, supply of and demand for, and prices of the commodities we produce, primarily copper; PT-FI’s ability to continue to export and sell copper concentrates and anode slimes; changes in export duties, including results of proceedings to dispute export duties; the Indonesia government’s approval of a deferred schedule for completion of additional domestic smelting capacity in Indonesia; production rates; timing of shipments; price and availability of consumables and components we purchase as well as constraints on supply and logistics, and transportation services; changes in our cash requirements, financial position, financing or investment plans; changes in general market, economic, geopolitical, 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; results of technical, economic or feasibility studies; potential inventory adjustments; potential impairment of long-lived mining assets; satisfaction of requirements in accordance with PT-FI's IUPK to extend mining rights from 2031 through 2041; discussions relating to the 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; litigation results; tailings management; 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 and Part II, Item 1A. herein. Investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made, including for example commodity prices, which we cannot control, and production volumes and costs or technological solutions and innovations, some aspects of which we may not be able to control. Further, we may make changes to our business plans that could affect our results. We caution investors that we undertake no obligation to update any forward-looking statements, 67 Table of Contents which speak only as of the date made, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes. This report on Form 10-Q also contains 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 consolidated debt, consolidated cash and cash equivalents and current restricted cash associated with PT-FI’s export proceeds to net debt.