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Item 1. Financial Statements

2024-05-08 compared with 2023-11-03 · 163 added, 374 removed, 452 unchanged (54% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS (Unaudited)

September 30,

2024 December 31,

18 unchanged sentences

Accrued income taxes 1,322 786

Current portion of environmental and asset retirement obligations (AROs) 395 320

Dividends payable 217 217

Current portion of debt 769 766

Current portion of environmental and asset retirement obligations 325 316

Dividends payable 217 218

Total current liabilities 6,305 5,815

Long-term debt, less current portion 8,656 8,656

Environmental and AROs, less current portion 4,645 4,463

Environmental and asset retirement obligations, less current portion 5,059 4,624

Deferred income taxes 4,500 4,453

14 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three Months Ended

(In Millions, Except Per Share Amounts)

2 unchanged sentences

Production and delivery 3,844 3,165

Depreciation, depletion and amortization (DD&A) 533 508 1,479 1,504

Metals inventory adjustments 5 25 7 43

Depreciation, depletion and amortization 595 399

Total cost of sales 4,439 3,564

Selling, general and administrative expenses 144 126

Mining exploration and research expenses 30 38 103 87

Exploration and research expenses 37 31

Environmental obligations and shutdown costs

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

Total costs and expenses 4,687 3,788

1 unchanged sentence

Interest expense, net ( 89 ) ( 151 )

Net gain on early extinguishment of debt 5 20 10 28

Other income, net 129 88

9 unchanged sentences

Weighted-average shares of common stock outstanding:

1,435 1,431 1,434 1,444

1,443 1,439 1,443 1,455

Dividends declared per share of common stock $ 0.15 $ 0.15

2 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Three Months Ended

(In Millions)

2 unchanged sentences

Defined benefit plans:

Prior service costs arising during the period — — — ( 1 )

Amortization of unrecognized amounts included in net periodic benefit costs 1 1

Foreign exchange losses ( 1 ) — — ( 1 )

Foreign exchange (losses) gains ( 1 ) 1

Other comprehensive income — 2

5 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended

September 30,

Three Months Ended

(In Millions)

2 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

DD&A 1,479 1,504

Metals inventory adjustments 7 43

Net gain on sales of assets — ( 2 )

Depreciation, depletion and amortization 595 399

Stock-based compensation 53 53

Net charges for environmental and AROs, including accretion 383 180

Payments for environmental and AROs ( 181 ) ( 197 )

Net charges for environmental and asset retirement obligations, including accretion 224 117

Payments for environmental and asset retirement obligations ( 42 ) ( 60 )

Net charges for defined pension and postretirement plans 8 16

Pension plan contributions ( 18 ) ( 2 )

Net gain on early extinguishment of debt ( 10 ) ( 28 )

Deferred income taxes 46 35

Deferred profit recognized on PT Freeport Indonesia’s (PT-FI) sales to PT Smelting ( 112 ) ( 34 )

Change in deferred profit on PT Freeport Indonesia’s sales to PT Smelting — ( 112 )

Charges for social investment programs at PT Freeport Indonesia 28 14

Payments for social investment programs at PT Freeport Indonesia ( 24 ) ( 15 )

Other, net ( 39 ) 8

9 unchanged sentences

North America copper mines ( 237 ) ( 196 )

South America ( 259 ) ( 203 )

South America operations ( 82 ) ( 100 )

Indonesia mining ( 381 ) ( 427 )

2 unchanged sentences

Other ( 66 ) ( 44 )

Proceeds from sales of assets 16 102

Loans to PT Smelting for expansion ( 28 ) ( 24 )

Other, net ( 29 ) ( 10 )

Proceeds from sales of assets and other, net 5 ( 19 )

Net cash used in investing activities ( 1,277 ) ( 1,164 )

5 unchanged sentences

Noncontrolling interests ( 102 ) —

Treasury stock purchases — ( 1,347 )

Contributions from noncontrolling interests — 50

1 unchanged sentence

Payments for withholding of employee taxes related to stock-based awards ( 27 ) ( 47 )

Debt financing costs and other, net ( 2 ) ( 41 )

Net cash used in financing activities ( 342 ) ( 1,172 )

Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents ( 1,851 ) 510

Cash, cash equivalents and restricted cash and cash equivalents at beginning of year 8,390 8,314

Cash, cash equivalents and restricted cash and cash equivalents at end of period $ 6,539 $ 8,824

Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents 277 ( 1,286 )

Cash and cash equivalents and restricted cash and cash equivalents at beginning of year 6,063 8,390

Cash and cash equivalents and restricted cash and cash equivalents at end of period $ 6,340 $ 7,104

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

THREE MONTHS ENDED SEPTEMBER 30

Stockholders’ Equity

Common Stock Accum-ulated Deficit Accumu-

Other Compre-

Loss Common Stock

Held in Treasury Total

Stock-holders’ Equity

Shares At Par

Value Capital in

Par Value Number

Interests Total

(In Millions)

Balance at June 30, 2023 1,618 $ 162 $ 25,028 $ ( 2,901 ) $ ( 318 ) 184 $ ( 5,769 ) $ 16,202 $ 9,825 $ 26,027

Exercised and issued stock-based awards — — 7 — — — — 7 — 7

Stock-based compensation, including the tender of shares — — 14 — — — ( 3 ) 11 — 11

Dividends — — ( 216 ) — — — — ( 216 ) ( 116 ) ( 332 )

Net income attributable to common stockholders — — — 454 — — — 454 — 454

Net income attributable to noncontrolling interests

— — — — — — — — 510 510

Other comprehensive income (loss) — — — — 1 — — 1 ( 1 ) —

Balance at September 30, 2023 1,618 $ 162 $ 24,833 $ ( 2,447 ) $ ( 317 ) 184 $ ( 5,772 ) $ 16,459 $ 10,218 $ 26,677

Stockholders’ Equity

Common Stock Accum-ulated Deficit Accumu-

Other Compre-

Loss Common Stock

Held in Treasury Total

Stock-holders’ Equity

Shares At Par

Value Capital in

Par Value Number

Interests Total

(In Millions)

Balance at June 30, 2022 1,612 $ 161 $ 25,661 $ ( 5,008 ) $ ( 386 ) 177 $ ( 5,539 ) $ 14,889 $ 9,158 $ 24,047

Stock-based compensation, including the tender of shares — — 12 — — — — 12 — 12

Treasury stock purchases — — — — — 6 ( 162 ) ( 162 ) — ( 162 )

Dividends — — ( 213 ) — — — — ( 213 ) ( 112 ) ( 325 )

Contributions from noncontrolling interests — — 23 — — — — 23 25 48

Net income attributable to common stockholders — — — 404 — — — 404 — 404

Net income attributable to noncontrolling interests — — — — — — — — 156 156

Other comprehensive income — — — — 1 — — 1 — 1

Balance at September 30, 2022 1,612 $ 161 $ 25,483 $ ( 4,604 ) $ ( 385 ) 183 $ ( 5,701 ) $ 14,954 $ 9,227 $ 24,181

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (continued)

NINE MONTHS ENDED SEPTEMBER 30

THREE MONTHS ENDED MARCH 31

Stockholders’ Equity

13 unchanged sentences

Dividends — — ( 217 ) — — — — ( 217 ) ( 173 ) ( 390 )

Contributions from noncontrolling interests

— — 24 — — — — 24 26 50

Net income attributable to common stockholders — — — 473 — — — 473 — 473

1 unchanged sentence

— — — — — — — — 689 689

Other comprehensive income — — — — 3 — — 3 — 3

Balance at September 30, 2023 1,618 $ 162 $ 24,833 $ ( 2,447 ) $ ( 317 ) 184 $ ( 5,772 ) $ 16,459 $ 10,218 $ 26,677

Balance at March 31, 2024 1,622 $ 162 $ 24,488 $ ( 1,586 ) $ ( 274 ) 186 $ ( 5,817 ) $ 16,973 $ 11,132 $ 28,105

Stockholders’ Equity

12 unchanged sentences

Stock-based compensation, including the tender of shares — — 46 — — 1 ( 68 ) ( 22 ) ( 1 ) ( 23 )

Treasury stock purchases — — — — — 35 ( 1,347 ) ( 1,347 ) — ( 1,347 )

Dividends — — ( 217 ) — — — — ( 217 ) ( 137 ) ( 354 )

2 unchanged sentences

Net income attributable to noncontrolling interests — — — — — — — — 386 386

— — — — — — — — 731 731

Other comprehensive income — — — — 1 — — 1 1 2

Balance at September 30, 2022 1,612 $ 161 $ 25,483 $ ( 4,604 ) $ ( 385 ) 183 $ ( 5,701 ) $ 14,954 $ 9,227 $ 24,181

Balance at March 31, 2023 1,618 $ 162 $ 25,227 $ ( 3,244 ) $ ( 319 ) 184 $ ( 5,769 ) $ 16,057 $ 9,591 $ 25,648

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

6 unchanged sentences

All such adjustments are, in the opinion of management, of a normal recurring nature.

Operating results for the nine-month period ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

FCX’s economic ownership interest in PT-FI is 48.76 % and prior to January 1, 2023, FCX’s economic interest in PT-FI approximated 81 %.

As discussed in Note 3 of FCX’s 2022 Form 10-K, in accordance with provisions pertaining to PT-FI’s shareholders agreement, FCX's first-quarter 2023 net income included a $ 35 million net benefit associated with PT-FI sales volumes that were attributed to FCX at its previous approximate 81 % economic ownership interest.

Operating results for the three-month period ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Dollar amounts in tables are stated in millions, except per share amounts.

Attribution of PT Freeport Indonesia’s Net Income or Loss.

As discussed in Note 3 of FCX’s 2023 Form 10-K, beginning January 1, 2023, the attribution of PT Freeport Indonesia’s (PT-FI) net income or loss is based on equity ownership percentages ( 48.76 % for FCX, 26.24 % for PT Mineral Industri Indonesia (MIND ID) and 25.00 % for PT Indonesia Papua Metal Dan Mineral) with certain exceptions, as contemplated by the economics replacement agreement in the PT-FI shareholders agreement.

As further discussed in Note 4, during first-quarter 2024, PT-FI recorded net credits of $ 215 million associated with the closure of its 2021 corporate income tax audit and resolution of the framework for disputed tax matters.

PT-FI’s net income and cash dividends associated with the settlement of this historical tax matter that originated before December 31, 2022, were attributed approximately 81 % to FCX.

As discussed in Note 3 of FCX’s 2023 Form 10-K, because PT-FI did not achieve the Gold Target during the Initial Period (as defined in the PT-FI shareholders agreement), PT-FI’s net income and cash dividends associated with the sale of approximately 190,000 ounces of gold during 2023 were attributed approximately 81 % to FCX.

Subsequent Events.

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

FCX evaluated events after March 31, 2024, and through the date the consolidated financial statements were issued and determined any events and transactions occurring during this period that would require recognition or disclosure are appropriately addressed in these consolidated financial statements.

EARNINGS PER SHARE

2 unchanged sentences

Diluted net income per share of common stock was calculated by including the basic weighted-average shares of common stock outstanding adjusted for the effects of all potential dilutive shares of common stock, unless their effect would be antidilutive.

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

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Reconciliations of net income and weighted-average shares of common stock outstanding for purposes of calculating basic and diluted net income per share follow:

Three Months Ended

Net income $ 1,162 $ 1,049

3 unchanged sentences

Basic weighted-average shares of common stock outstanding

1,435 1,431 1,434 1,444

Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs) 8 10

Diluted weighted-average shares of common stock outstanding

1,443 1,439 1,443 1,455

Net income per share attributable to common stockholders:

2 unchanged sentences

Shares associated with outstanding stock options with exercise prices greater than the average market price of FCX’s common stock during the period are excluded from the computation of diluted net income per share of common stock.

There were no shares of common stock associated with outstanding stock options excluded in the

third quarter and first nine months of 2023, and 3 million shares and 1 million shares excluded for the third quarter and first nine months of 2022, respectively.

There were no shares of common stock associated with outstanding stock options excluded in first-quarter 2024 or 2023.

INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

The components of inventories follow (in millions):

September 30,

The components of inventories follow:

2024 December 31, 2023

2 unchanged sentences

Work-in-process 252 221

Finished goods a

Finished goods 1,691 1,782

Total product $ 2,356 $ 2,472

Total materials and supplies, net b

Total materials and supplies, net a

$ 2,202 $ 2,169

5 unchanged sentences

Leach stockpiles 1,091 1,085

Total long-term mill and leach stockpiles c

Total long-term mill and leach stockpiles b

$ 1,313 $ 1,336

The increase in finished goods inventory at September 30, 2023, was primarily associated with the change in PT-FI's commercial arrangement with PT Smelting (PT-FI’s 39.5 % owned copper smelter and refinery in Gresik, Indonesia) from a copper concentrate sales agreement to a tolling arrangement beginning on January 1, 2023, and also included approximately 75 thousand ounces of gold available for sale pending approval of PT-FI’s export license for anode slimes.

See Note 8 for further discussion.

Materials and supplies inventory was net of obsolescence reserves totaling $ 31 million at September 30, 2023, and $ 39 million at December 31, 2022.

Materials and supplies inventory was net of obsolescence reserves totaling $ 48 million at March 31, 2024, and $ 41 million at December 31, 2023.

Estimated metals in stockpiles not expected to be recovered within the next 12 months.

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

Nine Months Ended

September 30,

operations $ 3

International operations ( 1,549 ) ( 1,705 ) a

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

Three Months Ended

International ( 511 ) ( 503 )

Total $ ( 512 ) $ ( 499 )

Includes a credit of $ 31 million, primarily associated with completion of Cerro Verde’s 2016 tax audit.

FCX’s consolidated effective income tax rate was 36 % for the first nine months of 2023 and 33 % for the first nine months of 2022.

A higher 2023 effective income tax rate primarily reflects the impact of pre-tax, nondeductible charges totaling $ 142 million for the first nine months of 2023 associated with contested tax rulings issued by the Peruvian Supreme Court.

In addition, variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate.

Because of its U.S.

tax position, FCX does not record a tax impact for income or losses generated in the U.S.

FCX’s consolidated effective income tax rate is a function of the various rates in the jurisdictions where it operates and was 31 % for first-quarter 2024, including a net benefit of $ 182 million related to closure of PT-FI’s 2021 corporate income tax audit and resolution of the framework for Indonesia disputed tax matters (see below for further discussion), and was 32 % for first-quarter 2023.

At current copper prices, FCX expects its U.S.

jurisdiction to generate net losses for the year 2024 that will not result in a realized tax benefit;

accordingly, applicable accounting rules require FCX to adjust its estimated annual effective tax rate to exclude the impact of U.S.

Indonesia Tax Matters.

During first-quarter 2024, in conjunction with closure of PT-FI’s 2021 corporate income tax audit and resolution of the framework for disputed tax matters, PT-FI recorded net credits of $ 215 million, including $ 199 million to provision for income taxes, $ 8 million to production and delivery and $ 8 million to interest expense, net.

In addition, FCX recognized a charge of $ 17 million to provision for income taxes related to withholding taxes and a credit of $ 26 million in other income, net associated with the reduction in the related accrual to indemnify MIND ID from potential losses arising from historical tax disputes.

Resolution of the framework for disputed tax matters also resulted in a decrease of unrecognized tax benefits of $ 276 million and a decrease of $ 43 million in related interest and penalties, as well as a decrease in contingencies related to Indonesia tax matters of $ 179 million, including a $ 35 million decrease associated with penalties and interest.

Refer to Notes 11 and 12 of FCX’s 2023 Form 10-K for further discussion.

Inflation Reduction Act of 2022.

The provisions of the U.S.

1 unchanged sentence

The Act includes, among other provisions, a new Corporate Alternative Minimum Tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period.

FCX has made interpretations of certain provisions of the Act, and based on these interpretations, determined that the provisions of the Act did not impact FCX’s financial results for the first nine months of 2023.

There has been limited guidance released by the U.S.

Department of the Treasury (the Treasury) on how the CAMT provisions of the Act should be applied or otherwise administered, and uncertainty remains regarding their application.

In October 2023, the Treasury stated publicly that it expects to issue proposed rules regarding the application of the CAMT by the end of 2023.

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

Although the U.S.

Department of the Treasury (Treasury) published guidance in 2023 that provided some additional clarity on these rules, regulations are yet to be published and uncertainty remains regarding the application of the CAMT.

Future guidance released by the Treasury may differ from FCX’s interpretations of the Act, which could be material and may further limit FCX’s ability to realize future benefits from its U.S.

net operating losses.

Pillar Two of the Global Anti-Base Erosion Rules.

In December 2021, the Organisation for Economic Co-operation and Development (OECD) published a framework for Pillar Two of the Global Anti-Base Erosion Rules, which was designed to coordinate participating jurisdictions in updating the international tax system to ensure that large multinational companies pay a minimum level of income tax.

Recommendations from the OECD regarding a global minimum income tax and other changes are being considered and/or implemented in jurisdictions where FCX operates.

At current metals market prices, FCX believes enactment of the recommended framework in jurisdictions where it operates will result in minimal impacts to its financial results in the near term.

DEBT AND EQUITY

The components of debt follow (in millions):

September 30,

The components of debt follow:

2024 December 31, 2023

8 unchanged sentences

FCX and PT-FI have a $ 3.0 billion, unsecured revolving credit facility that matures in October 2027.

Under the terms of the revolving credit facility, FCX may obtain loans and issue letters of credit in an aggregate amount of up to $ 3.0 billion with PT-FI’s capacity limited to $ 500 million, and letters of credit issuance limited to $ 1.5 billion.

At September 30, 2023, FCX had $ 7 million in letters of credit issued under its revolving credit facility.

PT-FI has a $ 1.3 billion unsecured revolving credit facility that matures in July 2026 and Cerro Verde has a $ 350 million unsecured revolving credit facility that matures in May 2027.

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

Senior Notes.

In March 2023, FCX repaid in full the outstanding principal balance of its 3.875 % Senior Notes totaling $ 996 million at maturity.

Beginning in 2022 and through November 3, 2023, FCX has purchased $ 1.3 billion aggregate principal amount of its 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.

A summary of the senior note purchases and related gains on debt extinguishments for the first nine months of 2023 follows (in millions):

Principal Amount Discounts/Deferred Issuance Costs Book Value Redemption Value Gain

5.00% Senior Notes due 2027 $ 17 $ — $ 17 $ 17 $ —

4.125% Senior Notes due 2028 61 — 61 58 3

4.375% Senior Notes due 2028 46 1 45 43 2

5.25% Senior Notes due 2029 31 — 31 31 —

4.25% Senior Notes due 2030 50 1 49 46 3

4.625% Senior Notes due 2030 28 — 28 26 2

$ 233 $ 2 $ 231 $ 221 $ 10

Under the terms of the revolving credit facility, FCX may obtain loans and issue letters of credit in an aggregate amount of up to $ 3.0 billion, with letters of credit issuance limited to $ 1.5 billion and PT-FI’s capacity limited to $ 500 million.

At March 31, 2024, FCX had $ 7 million in letters of credit issued under its revolving credit facility.

PT-FI has a $ 1.75 billion, unsecured revolving credit facility that matures in November 2028 and Cerro Verde has a $ 350 million, unsecured revolving credit facility that matures in May 2027.

At March 31, 2024, FCX, PT-FI and Cerro Verde had no borrowings outstanding under their respective revolving credit facilities and were in compliance with their respective covenants.

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 first nine months of 2023, includes

interest charges totaling $ 74 million associated with Cerro Verde’s contested tax rulings issued by the Peruvian Supreme Court.

Capitalized interest added to property, plant, equipment and mine development costs, net, 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, primarily resulted from increased construction and development projects in process, primarily at the Manyar smelter and precious metals refinery in Indonesia (collectively, the Indonesia smelter projects).

Consolidated interest costs (before capitalization) totaled $ 175 million in first-quarter 2024 and $ 207 million in first-quarter 2023, which included $ 25 million associated with Cerro Verde’s contested tax rulings issued by the Peru Supreme Court in first-quarter 2023.

Capitalized interest added to property, plant, equipment and mine development costs, net, totaled $ 86 million in first-quarter 2024 and $ 56 million in first-quarter 2023.

The increase in capitalized interest costs in first-quarter 2024 compared to first-quarter 2023, primarily resulted from increased construction and development costs for projects in process, primarily at the Manyar smelter and precious metals refinery in Indonesia (collectively, the Indonesia smelter projects).

Share Repurchase Program and Dividends.

Beginning in mid-2021 and through July 11, 2022, FCX acquired 47.8 million shares of its common stock under the share repurchase program for a total cost of $ 1.8 billion ($ 38.35 average cost per share).

FCX has $ 3.2 billion available for repurchases under the program.

On September 20, 2023, FCX’s Board of Directors (Board) declared cash dividends totaling $ 0.15 per share on its common stock (including a $ 0.075 per share quarterly base cash dividend and a $ 0.075 per share quarterly variable, performance-based cash dividend), which was paid on November 1, 2023, to common stockholders of record as of October 13, 2023.

FCX currently has $ 3.2 billion available for repurchases under its share repurchase program.

On March 27, 2024, FCX’s Board of Directors (Board) declared cash dividends totaling $ 0.15 per share on its common stock (including a $ 0.075 per share quarterly base cash dividend and a $ 0.075 per share quarterly variable, performance-based cash dividend), which were paid on May 1, 2024, to common stockholders of record as of April 15, 2024.

The declaration and payment of dividends (base or variable) and timing and amount of any share repurchases are at the discretion of FCX’s Board and management, respectively, and are subject to a number of factors, including not exceeding FCX’s net debt target, capital availability, FCX’s financial results, cash requirements, global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by FCX’s Board or management, as applicable.

16 unchanged sentences

Hedging gains or losses from these copper futures and swap contracts are recorded in revenues.

FCX did not have any significant gains or losses resulting from hedge ineffectiveness during the nine-month periods ended September 30, 2023 and 2022.

At September 30, 2023, FCX held copper futures and swap contracts that qualified for hedge accounting for 85 million pounds at an average contract price of $ 3.85 per pound, with maturities through May 2025.

FCX did not have any significant gains or losses resulting from hedge ineffectiveness during first-quarter 2024 or 2023.

At March 31, 2024, FCX held copper futures and swap contracts that qualified for hedge accounting for 91 million pounds at an average contract price of $ 3.90 per pound, with maturities through December 2025.

Summary of Gains (Losses).

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

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

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

Three Months Ended

Copper futures and swap contracts:

2 unchanged sentences

Hedged item – firm sales commitments ( 9 ) ( 14 )

Realized losses:

Realized gains:

Matured derivative financial instruments 1 8

10 unchanged sentences

Mark-to-market price fluctuations from these embedded derivatives are recorded through the settlement date and are reflected in revenues for sales contracts and in inventory for purchase contracts.

A summary of FCX’s embedded derivatives at September 30, 2023, follows:

A summary of FCX’s embedded derivatives at March 31, 2024, follows:

Open Positions Average Price

2 unchanged sentences

Embedded derivatives in provisional sales contracts:

Copper (millions of pounds) 553 $ 3.78 $ 3.75 February 2024

Gold (thousands of ounces) 209 1,925 1,884 December 2023

Copper (millions of pounds) 463 $ 3.83 $ 4.01 August 2024

Gold (thousands of ounces) 286 2,091 2,226 July 2024

Embedded derivatives in provisional purchase contracts:

Copper (millions of pounds) 165 3.80 3.75 January 2024

Copper (millions of pounds) 92 3.83 4.00 July 2024

Copper Forward Contracts.

1 unchanged sentence

These economic hedge transactions are intended to hedge against changes in copper prices, with the mark-to-market hedging gains or losses recorded in production and delivery costs.

At September 30, 2023, Atlantic Copper held net copper forward purchase contracts for 19 million pounds at an average contract price of $ 3.77 per pound, with maturities through November 2023.

Summary of (Losses) Gains.

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

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

At March 31, 2024, Atlantic Copper held net copper forward sales contracts for 49 million pounds at an average contract price of $ 3.94 per pound, with maturities through May 2024.

Summary of Gains (Losses).

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

Three Months Ended

Embedded derivatives in provisional sales contracts:

2 unchanged sentences

Copper forward contracts b

( 1 ) 5 ( 3 ) 31

Amounts recorded in revenues.

1 unchanged sentence

Unsettled Derivative Financial Instruments.

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

September 30,

A summary of the fair values of unsettled commodity derivative financial instruments follows:

2024 December 31, 2023

7 unchanged sentences

Commodity Derivative Liabilities:

Derivatives designated as hedging instruments :

Copper futures and swap contracts $ 8 $ 3

Derivatives not designated as hedging instruments :

4 unchanged sentences

FCX’s embedded derivatives on provisional sales/purchase contracts are netted with the corresponding outstanding receivable/payable balances.

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

A summary of these net unsettled commodity contracts in the balance sheet follows (there were no offsetting amounts at March 31, 2024, and December 31, 2023):

Assets Liabilities

September 30,

2023 December 31, 2022 September 30,

2024 December 31, 2023 March 31,

2024 December 31, 2023

Gross amounts recognized:

Embedded derivatives in provisional

sales/purchase contracts $ 16 $ 166 $ 35 $ 39

Copper derivatives — 4 9 3

Less gross amounts of offset:

Embedded derivatives in provisional

sales/purchase contracts 3 — 3 —

Net amounts presented in balance sheet:

Amounts presented in balance sheet:

Embedded derivatives in provisional

6 unchanged sentences

Accounts payable and accrued liabilities — — 17 22

Other liabilities — — — 1

$ 136 $ 80 $ 19 $ 24

1 unchanged sentence

To minimize the risk of such losses, FCX uses counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties.

As of September 30, 2023, the maximum amount of credit exposure associated with derivative transactions was $ 16 million.

As of March 31, 2024, the maximum amount of credit exposure associated with derivative transactions was $ 136 million.

Other Financial Instruments.

Other financial instruments include cash, cash equivalents, restricted cash and cash equivalents, accounts receivable, investment securities, legally restricted trust assets, accounts payable and accrued liabilities, accrued income taxes, dividends payable and debt.

Other financial instruments include cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, investment securities, legally restricted trust assets, accounts payable and accrued liabilities, accrued income taxes, dividends payable and debt.

The carrying value for these financial instruments classified as current assets or liabilities approximates fair value because of their short-term nature and generally negligible credit losses (refer to Note 7 for the fair values of investment securities, legally restricted funds and debt).

In addition, as of September 30, 2023, FCX had contingent consideration assets related to the sales of certain oil and gas properties (refer to Note 7 for the related fair values).

Cash, Cash Equivalents and Restricted Cash and Cash Equivalents.

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

September 30,

In addition, as of March 31, 2024, FCX had contingent consideration assets related to the sales of certain oil and gas properties (refer to Note 7 for the related fair values).

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents.

The following table provides a reconciliation of total cash and cash equivalents and restricted cash and cash equivalents presented in the consolidated statements of cash flows:

2024 December 31, 2023

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Restricted cash and cash equivalents, long-term - included in other assets 98 97

Total cash, cash equivalents and restricted cash and cash equivalents presented in the consolidated statements of cash flows $ 6,539 $ 8,390

Includes time deposits of $ 0.3 billion at September 30, 2023, and $ 0.5 billion at December 31, 2022, and cash designated for smelter development projects totaling $ 0.6 billion at September 30, 2023, and $ 1.8 billion at December 31, 2022.

Includes $ 0.5 billion associated with PT-FI’s export proceeds.

See Note 8 for further discussion.

Total cash and cash equivalents and restricted cash and cash equivalents presented in the consolidated statements of cash flows $ 6,340 $ 6,063

Includes time deposits of $ 0.1 billion at March 31, 2024, and $ 0.3 billion at December 31, 2023, and cash designated for smelter development projects totaling $ 0.2 billion at December 31, 2023.

Includes (i) $ 0.9 billion at March 31, 2024, and $ 1.1 billion at December 31, 2023, associated with 30 % of PT-FI’s export proceeds required to be temporarily deposited in Indonesia banks for 90 days in accordance with a regulation issued by the Indonesia government and (ii) $ 147 million at March 31, 2024, and $ 145 million at December 31, 2023, in assurance bonds to support PT-FI’s commitment for smelter development in Indonesia.

FAIR VALUE MEASUREMENT

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The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

FCX did not have any significant transfers in or out of Level 3 during third-quarter 2023.

FCX did not have any significant transfers in or out of Level 3 during first-quarter 2024.

FCX’s financial instruments are recorded on the consolidated balance sheets at fair value except for contingent consideration associated with the sale of the Deepwater Gulf of Mexico (GOM) oil and gas properties (which was recorded under the loss recovery approach) and debt.

A summary of the carrying amount and fair value of FCX’s financial instruments (including those measured at net asset value (NAV) as a practical expedient), other than cash, cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, accrued income taxes and dividends payable (refer to Note 6) follows (in millions):

At September 30, 2023

A summary of the carrying amount and fair value of FCX’s financial instruments (including those measured at net asset value (NAV) as a practical expedient), other than cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, accrued income taxes and dividends payable (refer to Note 6), follows:

At March 31, 2024

Carrying Fair Value

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Total 211 211 65 20 126 —

Embedded derivatives in provisional sales/purchase contracts in a gross asset position c

16 16 — — 16 —

Embedded derivatives in provisional sales/purchase contracts in a gross asset position 122 122 — — 122 —

Copper futures and swap contracts 13 13 — 8 5 —

Copper forward contracts 1 1 — — 1 —

Total 136 136 — 8 128 —

Contingent consideration for the sale of the Deepwater GOM oil and gas properties a

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Embedded derivatives in provisional sales/purchase contracts in a gross liability position 16 16 — — 16 —

Copper futures and swap contracts 8 8 — 6 2 —

Copper forward contracts 3 3 — 2 1 —

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Corporate bonds 29 29 — — 29 —

Asset-backed securities 17 17 — — 17 —

Money market funds 17 17 — 17 — —

Asset-backed securities 12 12 — — 12 —

Collateralized mortgage-backed securities 1 1 — — 1 —

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Copper futures and swap contracts 4 4 — 3 1 —

Copper forward contracts 1 1 — 1 — —

Total 80 80 — 3 77 —

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Current portion included in other current assets and long-term portion included in other assets.

Excludes amounts included in restricted cash and cash equivalents and other assets (which approximated fair value), primarily amounts associated with (i) PT-FI’s export proceeds ($ 0.5 billion at September 30, 2023), (ii) an assurance bond to support PT-FI’s commitment for additional smelter development in Indonesia ($ 135 million at September 30, 2023, and $ 133 million at December 31, 2022) and (iii) PT-FI’s mine closure and reclamation guarantees ($ 111 million at September 30, 2023, and $ 103 million at December 31, 2022).

Excludes amounts included in restricted cash and cash equivalents and other assets (which approximated fair value), primarily amounts associated with (i) PT-FI’s export proceeds ($ 0.9 billion at March 31, 2024, and $ 1.1 billion at December 31, 2023), (ii) assurance bonds to support PT-FI’s commitment for additional smelter development in Indonesia ($ 147 million at March 31, 2024, and $ 145 million at December 31, 2023) and (iii) PT-FI’s mine closure and reclamation guarantees ($ 97 million at both March 31, 2024, and December 31, 2023).

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

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Certain of these contracts are traded on the over-the-counter market and are classified within Level 2 of the fair value hierarchy based on COMEX and LME forward prices.

In December 2016, FCX’s sale of its Deepwater GOM oil and gas properties included up to $ 150 million in contingent consideration that was recorded at the total amount under the loss recovery approach.

The contingent consideration is being received over time as cash flows are realized from a third-party production handling agreement for an offshore platform, with the related payments commencing in 2018.

The contingent consideration included in (i) other current assets totaled $ 17 million at September 30, 2023, and $ 20 million at December 31, 2022, and (ii) other assets totaled $ 38 million at September 30, 2023, and $ 47 million at December 31, 2022.

In December 2016, FCX’s sale of its Deepwater GOM oil and gas properties included up to $ 150 million in contingent consideration (to be received over time) that was recorded at the total amount under the loss recovery approach.

The fair value of this contingent consideration was calculated based on a discounted cash flow model using inputs that include third-party estimates for reserves, production rates and production timing, and discount rates.

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Furthermore, while FCX believes its valuation techniques are appropriate and consistent with other market participants, the use of different techniques or assumptions to determine fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

There have been no changes in the techniques used at September 30, 2023, as compared with those techniques used at December 31, 2022.

A summary of the changes in the fair value of FCX’s Level 3 instrument, contingent consideration for the sale of the Deepwater GOM oil and gas properties, during the first nine months of 2023 follows (in millions):

Fair value at January 1, 2023 $ 57

Net unrealized gain related to assets still held at the end of the period 1

Fair value at September 30, 2023 $ 47

There have been no changes in the techniques used at March 31, 2024, as compared with those techniques used at December 31, 2023.

CONTINGENCIES AND COMMITMENTS

Environmental

FCX recorded adjustments to environmental obligations totaling $ 83 million in third-quarter 2023 and $ 199 million for the first nine months of 2023, primarily related to Pinal Creek in Arizona for a refined engineering evaluation and Newtown Creek in New York based on a focused feasibility study for an early action in the East Branch tributary.

Refer to Note 12 of FCX’s 2023 Form 10-K for further discussion of FCX’s environmental obligations.

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

Historical Smelter Sites.

On January 30, 2017, a putative class action titled Juan Duarte, Betsy Duarte and N.D., Infant, by Parents and Natural Guardians Juan Duarte and Betsy Duarte, Leroy Nobles and Betty Nobles, on behalf of themselves and all others similarly situated v.

United States Metals Refining Company, Freeport-McMoRan

Copper & Gold Inc.

and Amax Realty Development, Inc.

734-17, was filed in the Superior Court of New Jersey.

In July 2023, the Court approved an agreement between the parties pursuant to which all claims were settled for an amount not material to FCX.

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

FCX recorded adjustments to environmental obligations totaling $ 56 million in first-quarter 2024, primarily for preliminary adjustments associated with an interim action workplan for a former processing facility in Steubenville, Ohio, and for groundwater remediation in Blackwell, Oklahoma associated with a historical smelter site.

Asset Retirement Obligations

Refer to Note 12 of FCX’s 2023 Form 10-K for further discussion of FCX’s asset retirement obligations (AROs).

Mining Operations.

In first-quarter 2024, we recorded ARO additions at mining operations totaling $ 256 million, primarily associated with revised closure plans and cost estimates to reflect FCX’s commitment to the Global Industry Standard on Tailings Management (Tailings Standard).

FCX may record additional ARO adjustments as it continues to update estimates to conform with the Tailings Standard.

Oil and Gas Properties.

In first-quarter 2024, Freeport-McMoRan Oil & Gas (FM O&G) recorded charges to production and delivery costs totaling $ 109 million for assumed oil and gas abandonment obligations resulting from bankruptcies of other companies.

FM O&G, as a predecessor-in-interest in oil and natural gas leases, is in the chain of title with unrelated third parties either directly or by virtue of divestiture of certain oil and natural gas assets previously owned and assigned by its subsidiaries.

Certain counterparties in these divestiture transactions or third parties in existing leases have filed for bankruptcy protection or undergone associated reorganizations and have not performed the required abandonment obligations.

Accordingly, regulations or federal laws require that FM O&G assume such obligations.

There were no significant updates to previously reported legal proceedings included in Note 12 of FCX’s 2023 Form 10-K, other than the matter discussed below.

Louisiana Parishes Coastal Erosion Cases.

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John the Baptist and Vermilion), alleging that certain oil and gas exploration and production operations and sulfur mining and production operations in coastal Louisiana contaminated and damaged coastal wetlands and caused significant land loss along the Louisiana coast.

In 2019, affiliates of FCX reached an agreement in principle to settle all 13 cases and, as of October 2022, all parties have executed the settlement agreement.

On March 16, 2023, a non-plaintiff coastal parish included in the settlement (Terrebonne), filed an amended petition titled Terrebonne Parish Consolidated Government vs.

The settlement agreement to resolve these cases was fully executed in fourth-quarter 2022 but there was a delay in finalizing it as a result of a lawsuit challenging the settlement brought in first-quarter 2023 by a non-plaintiff coastal parish included in the settlement (Terrebonne Parish) titled Terrebonne Parish Consolidated Government v.

Louisiana Department of Natural Resources et al.

185576, in the 32nd Judicial District Court, Terrebonne Parish, State of Louisiana, adding the settling FCX affiliates to a lawsuit that challenges whether Terrebonne Parish is validly bound to the settlement agreement and seeks to have the court declare the settlement void.

FCX is evaluating and exploring options to resolve this dispute and will vigorously defend this matter.

Asbestos and Talc Claims.

As previously discussed in Note 12 of FCX’s 2022 Form 10-K, in 2021 Imerys Talc America (Imerys), an affiliate of Imerys S.A., filed the form of a settlement and release agreement to be entered into by Cyprus Amax Minerals Company (CAMC), an indirect wholly owned subsidiary of FCX, Cyprus Mines Corporation (Cyprus Mines), a wholly owned subsidiary of CAMC, FCX, Imerys and the other debtors, tort claimants’ committee and future claims representative in the Imerys bankruptcy.

The bankruptcy court continues to temporarily stay approximately 950 talc-related lawsuits against CAMC, Cyprus Mines, FCX and Imerys but there can be no assurance that the bankruptcy court will continue to impose the interim stay.

In accordance with the global settlement agreement, among other things, (1) CAMC agreed to contribute a total of $ 130 million in cash to a settlement trust in seven annual installments, which will be guaranteed by FCX, and (2) CAMC and Cyprus Mines and their affiliates will contribute to the settlement trust all rights that they have to the proceeds of certain legacy insurance policies as well as indemnity rights they have against Johnson & Johnson.

Mediation to resolve open issues in the Imerys and Cyprus Mines bankruptcy cases is ongoing, including the adequacy of the settlement and agreed contribution from CAMC, with a deadline for the parties to complete mediation by December 31, 2023, set by the bankruptcy court.

There can be no assurance that the global settlement will be successfully implemented.

Other Matters

185576, 32nd Judicial District Court, Terrebonne Parish, State of Louisiana.

During first-quarter 2024, Terrebonne Parish agreed to dismiss its lawsuit and FCX made the $ 15 million settlement payment in trust (which was accrued for in 2019) in accordance with the terms of the settlement agreement.

Indonesia 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.

Export License.

On June 10, 2023, export licenses for several exporters, including PT-FI and PT Smelting, expired.

During the second quarter and through July 2023, the Indonesia government issued various regulations to address exports of unrefined metals, including regulations by the Ministry of Energy and Mineral Resources (MEMR) to allow continued exports of copper concentrates through May 2024 for companies engaged in ongoing smelter development projects with construction progress greater than 50 %, and regulations by the Ministry of Trade on the permitted export of various products, including copper concentrates.

On July 24, 2023, PT-FI was granted an export license through May 2024 for 1.7 million metric tons of copper concentrate.

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 will continue to work 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.

Export Duties.

Under PT-FI’s special mining license (IUPK), which was granted by the Indonesia government in 2018, export duties are determined based on regulations that were in effect in 2018 and no duties are required after smelter construction progress reached 50 %.

In March 2023, the Indonesia government verified that construction progress on the Manyar smelter exceeded 50 % and PT-FI's export duties were eliminated effective March 29, 2023.

In July 2023, the Ministry of Finance issued a revised regulation on duties for various exported products, including copper concentrates.

The revised regulation assesses export duties for copper concentrates at 7.5 % in the second half of 2023 and 10 % in 2024 for companies with smelter progress of 70 % to 90 %.

For companies with smelter progress above 90 %, export duties would be 5 % in the second half of 2023 and 7.5 % in 2024.

During third-quarter 2023, PT-FI incurred $ 147 million in export duties under the revised regulation.

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.

Additionally, PT-FI is required by the Indonesia government to provide bank guarantees for unpaid export duties, which have been presented as current restricted cash and cash equivalents at September 30, 2023.

Smelter Development Progress .

In 2018, PT-FI agreed to expand its domestic smelting and refining capacity to process all of its copper concentrates in Indonesia.

PT-FI is advancing the construction of the Indonesia smelter projects and expanding capacity at PT Smelting.

PT-FI estimates construction of the Manyar smelter to be complete in mid-2024 followed by commissioning of the facilities and a ramp-up schedule through year-end 2024.

As disclosed in Note 12 of FCX’s 2022 Form 10-K, in March 2022, PT-FI paid the Indonesia government an administrative fine totaling $ 57 million (which included charges of $ 41 million recorded in first-quarter 2022) related to smelter development delays in light of the COVID-19 pandemic.

In May 2023, MEMR issued a decree prescribing a revised formula for administrative fines for delays in construction of smelter and refining facilities, taking into account allowances for certain delays associated with the COVID-19 pandemic as verified by a third-party.

In mid-July 2023, PT-FI submitted its third-party verified calculation, which resulted in an accrual for a potential administrative fine of $ 55 million based on the formula prescribed by the decree related to the period from August 2020 through January 2022.

PT-FI continues to discuss the applicability of this administrative fine with MEMR.

Based on PT-FI’s revised smelter construction schedule, which was accepted by the Indonesia government in connection with the renewal of PT-FI's export license in early 2022, PT-FI does not believe any additional fines should be assessed under the decree.

Smelter Assurance.

PT-FI has an assurance bond to support its commitment for additional smelter development in Indonesia, totaling $ 135 million at September 30, 2023, for which the terms have been fulfilled (refer to Note 7).

In August 2023, PT-FI submitted a request to MEMR for release of the assurance bond and is awaiting a response.

The decree issued by MEMR in May 2023 also requires assurance in the form of an escrow account that will be released if smelter development progress reaches 90 % of the construction plan by June 10, 2024.

During third-quarter 2023, PT-FI deposited $ 10 million in a joint account with the Indonesia government while it continues to discuss the applicability of the May 2023 decree with the Indonesia government.

If the May 2023 decree is determined to be applicable, PT-FI may be required to make an additional refundable deposit of approximately $ 370 million.

Export Proceeds .

In accordance with a regulation issued by the Indonesia government that became effective August 1, 2023, 30 % of PT-FI’s gross export proceeds are being temporarily deposited into Indonesia banks for a period of 90 days before withdrawal.

At September 30, 2023, FCX had $ 0.5 billion in current restricted cash and cash equivalents deposited in Indonesia banks in accordance with this regulation.

Refer to Notes 12, 13 and 14 of FCX’s 2023 Form 10-K for further discussion of Indonesia regulatory matters.

Export Licenses.

In first-quarter 2024, PT-FI obtained approval for revised quotas for estimated concentrate and anode slime exports through May 2024.

PT-FI is working with the Indonesia government to obtain approvals to continue exports of copper concentrates and anode slimes until the Indonesia smelter projects are fully commissioned and reach designed operating conditions, which is currently expected by year-end 2024.

BUSINESS SEGMENTS

FCX has organized its mining operations into four primary divisions - North America copper mines, South America mining, Indonesia mining and Molybdenum mines, and operating segments that meet certain thresholds are reportable segments.

Separately disclosed in the following tables are FCX’s reportable segments, which include the

Morenci and Cerro Verde copper mines, the Grasberg minerals district (Indonesia Mining), the Rod & Refining operations and Atlantic Copper Smelting & Refining.

FCX has organized its mining operations into four primary divisions – North America copper mines, South America operations, Indonesia operations and Molybdenum mines, and operating segments that meet certain thresholds are reportable segments.

Separately disclosed in the following tables are FCX’s reportable segments, which include the Morenci and Cerro Verde copper mines, the Indonesia operations (including the Grasberg minerals district and the Indonesia smelter projects that are under construction), the Rod & Refining operations and Atlantic Copper Smelting & Refining.

For comparative purposes, the first-quarter 2023 table has been adjusted to conform with the current year presentation, primarily for the combination of the Grasberg minerals districts and the Indonesia smelter projects that are under construction.

The Indonesia smelter projects are expected to become fully operational by year-end 2024 and will exclusively receive concentrate from the Grasberg minerals district, which reflect PT-FI’s integrated and dependent operations within Indonesia ( i.e.

, Indonesia operations).

FCX's Chief Operating Decision Maker does, and will, make executive management decisions, including resource allocation and mine planning, for the Indonesia operations as a single business segment.

Intersegment sales between FCX’s business segments are based on terms similar to arms-length transactions with third parties at the time of the sale.

Intersegment sales may not be reflective of the actual prices ultimately realized because of a variety of factors, including additional processing, timing of sales to unaffiliated customers and transportation premiums.

FCX defers recognizing profits on sales from its 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.

FCX defers recognizing profits on intercompany sales to Atlantic Copper until final sales to third parties occur.

Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices result in variability in FCX’s net deferred profits and quarterly earnings.

Beginning January 1, 2023, PT-FI's commercial arrangement with PT Smelting 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 sale to third parties ( i.e., there are no further sales from PT-FI to PT Smelting).

While the new tolling agreement with PT Smelting does not significantly change PT-FI’s economics, it impacts the timing of PT-FI’s sales and working capital requirements.

FCX allocates certain operating costs, expenses and capital expenditures to its operating divisions and individual segments.

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federal and state income taxes are recorded and managed at the corporate level (included in Corporate, Other & Eliminations), whereas foreign income taxes are recorded and managed at the applicable country level.

In addition, most mining exploration and research activities are managed on a consolidated basis, and those costs, along with some selling, general and administrative costs, are not allocated to the operating divisions or individual segments.

Accordingly, the following Financial Information by Business Segment reflects management determinations that may not be indicative of what the actual financial performance of each operating division or segment would be if it was an independent entity.

In addition, some selling, general and administrative costs, are not allocated to the operating divisions or individual segments.

Accordingly, the following segment information reflects management determinations that may not be indicative of what the actual financial performance of each operating division or segment would be if it was an independent entity.

Product Revenues.

FCX’s revenues attributable to the products it sold for the third quarter and first nine months of 2023 and 2022 follow (in millions):

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

Concentrate $ 2,365 $ 2,091 $ 6,137 $ 7,476

FCX’s revenues attributable to the products it sold for the first quarters of 2024 and 2023 follow:

Three Months Ended

Cathode $ 1,941 $ 1,511

Concentrate 1,818 1,403

Rod and other refined copper products 953 921

Purchased copper a

71 168 347 342

Gold 1,168 531

Molybdenum 421 592

136 174 439 527

Adjustments to revenues:

Treatment charges c

PT-FI export duties c

( 156 ) ( 17 )

Treatment charges ( 129 ) ( 101 )

Royalty expense d

( 120 ) ( 60 )

PT-FI export duties e

( 133 ) ( 81 ) ( 147 ) ( 263 )

Revenues from contracts with customers 6,211 5,116

Embedded derivatives f

( 40 ) ( 306 ) 43 ( 819 )

Embedded derivatives e

Total consolidated revenues $ 6,321 $ 5,389

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Primarily includes revenues associated with silver.

Treatment charges for the third quarter and first nine months of 2023 exclude tolling costs paid to PT Smelting, which are recorded as production costs in the consolidated statements of income.

PT-FI is currently being assessed export duties for copper concentrates at a rate of 7.5 % and was paying a 2.5 % export duty in first-quarter 2023.

Reflects royalties on sales from PT-FI and Cerro Verde that will vary with the volume of metal sold and prices.

Refer to Note 8 for further discussion of PT-FI export duties.

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

Financial Information by Business Segment

(in Millions) Atlantic Corporate,

North America Copper Mines South America Mining Copper Other

Atlantic Corporate,

North America Copper Mines South America Operations Copper Other

Cerro Indonesia Molybdenum Rod & Smelting & Elimi- FCX

Morenci Other Total Verde Other Total Mining Mines Refining & Refining nations Total

Three Months Ended September 30, 2023

Morenci Other Total Verde Other Total Operations Mines Refining & Refining nations Total

Three Months Ended March 31, 2024

Unaffiliated customers $ 37 $ 40 $ 77 $ 826 $ 208 $ 1,034 $ 2,648 $ — $ 1,489 $ 673 $ 400 a

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DD&A 48 64 112 92 16 108 335 16 1 7 16 595

Metals inventory adjustments

4 — 4 1 — 1 — — — — — 5

Selling, general and administrative expenses

— 1 1 2 — 2 31 — — 9 101 144

Mining exploration and research expenses — 1 1 — — — — — — — 29 30

Exploration and research expenses 4 8 12 3 1 4 2 — — — 19 37

Environmental obligations and shutdown costs

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Operating income (loss) 66 87 153 228 21 249 1,596 10 11 7 ( 392 ) 1,634

Interest expense, net — 1 1 ( 10 ) b

— ( 10 ) 10 — — 8 87 96

Net gain on early extinguishment of debt — — — — — — — — — — 5 5

Interest expense, net — — — 5 — 5 1 — — 10 73 89

Other (expense) income, net — ( 2 ) ( 2 ) 11 13 24 38 — — 6 63 129

Provision for (benefit from) income taxes — — — 119 12 131 419 — — — ( 42 ) 508

Provision for (benefit from) income taxes — — — 91 12 103 409 b

— — ( 13 ) 13 512

Equity in affiliated companies’ net (losses) earnings — — — — — — ( 2 ) — — — 2 —

Net income attributable to noncontrolling interests — — — 84 14 98 392 c

Total assets at September 30, 2023 3,171 5,799 8,970 8,227 1,893 10,120 21,020 1,747 288 1,176 8,327 51,648

Capital expenditures 53 114 167 61 15 76 441 21 2 20 451 d

Three Months Ended September 30, 2022

Unaffiliated customers $ 18 $ 74 $ 92 $ 666 $ 215 $ 881 $ 1,726 e

Net income (loss) attributable to noncontrolling interests — — — 76 14 90 600 c

— — — ( 1 ) 689

Total assets at March 31, 2024 3,148 6,315 9,463 8,075 1,960 10,035 27,162 1,885 257 1,354 4,042 54,198

Capital expenditures 44 193 237 60 22 82 842 27 5 23 38 1,254

Three Months Ended March 31, 2023

Unaffiliated customers $ 32 $ 97 $ 129 $ 958 $ 234 $ 1,192 $ 1,199

$ — $ 1,523 $ 749 $ 597 a

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DD&A 43 60 103 91 16 107 148 20 1 7 13 399

Metals inventory adjustments

2 1 3 2 20 22 — — — — — 25

Selling, general and administrative expenses

— 1 1 2 — 2 28 — — 8 87 126

Mining exploration and research expenses — — — — — — — — — — 38 38

Exploration and research expenses 3 16 19 1 1 2 — — — — 10 31

Environmental obligations and shutdown costs

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Interest expense, net — — — 29 — 29 7 — — 6 109 151

Net gain on early extinguishment of debt — — — — — — — — — — 20 20

Other (expense) income, net ( 1 ) 3 2 18 ( 6 ) 12 32 — ( 1 ) ( 5 ) 48 88

Provision for (benefit from) income taxes — — — 187 7 194 330 — — — ( 25 ) 499

Equity in affiliated companies' net earnings — — — — — — 7 — — — 1 8

Net income attributable to noncontrolling interests — — — 29 11 40 105 c

Total assets at September 30, 2022 2,996 5,456 8,452 8,390 1,826 10,216 20,496 1,701 216 1,082 7,764 49,927

Capital expenditures 71 83 154 41 38 79 389 7 2 17 188 d

Financial Information by Business Segment (continued)

(In Millions)

Atlantic Corporate,

North America Copper Mines South America Mining Copper Other

Cerro Indonesia Molybdenum Rod & Smelting & Elimi- FCX

Morenci Other Total Verde Other Total Mining Mines Refining & Refining nations Total

Nine Months Ended September 30, 2023

Unaffiliated customers $ 75 $ 133 $ 208 $ 2,563 $ 627 $ 3,190 $ 5,268 e

$ — $ 4,552 $ 2,185 $ 1,547 a

Intersegment 1,787 2,922 4,709 638 — 638 432 520 28 19 ( 6,346 ) —

Production and delivery 1,279 2,324 3,603 1,877 539 2,416 1,860 f

321 4,558 2,139 ( 4,637 ) 10,260

DD&A 132 180 312 302 48 350 694 48 4 21 50 1,479

Metals inventory adjustments 5 — 5 1 — 1 — — — — 1 7

Selling, general and administrative expenses 1 2 3 7 — 7 90 — — 21 238 359

Mining exploration and research expenses — 2 2 — — — — — — — 101 103

Environmental obligations and shutdown costs — 26 26 — — — — — — — 213 239

Operating income (loss) 445 521 966 1,014 40 1,054 3,056 151 18 23 ( 765 ) 4,503

Interest expense, net — 1 1 74 b

— 74 32 — — 22 289 418

Net gain on early extinguishment of debt — — — — — — — — — — 10 10

Other (expense) income, net ( 4 ) ( 8 ) ( 12 ) ( 36 ) 11 ( 25 ) 92 ( 1 ) ( 1 ) — 130 183

Provision for (benefit from) income taxes — — — 419 19 438 1,159 — — — ( 51 ) 1,546

Equity in affiliated companies' net earnings — — — — — — 9 — — — 3 12

Equity in affiliated companies’ net earnings (losses) — — — — — — 11 — — — ( 1 ) 10

Net income (loss) attributable to noncontrolling interests — — — 140 18 158 271 c

— — — ( 43 ) 386

Capital expenditures 176 369 545 179 80 259 1,274 43 9 43 1,289 d

Nine Months Ended September 30, 2022

Unaffiliated customers $ 125 $ 159 $ 284 $ 2,474 $ 555 $ 3,029 $ 5,972 e

$ — $ 4,932 $ 1,755 $ 1,050 a

Intersegment 1,992 2,978 4,970

325 — 325 208 399 24 5 ( 5,931 ) —

Production and delivery 1,168 2,111 3,279 1,702 510 2,212 1,853 f

249 4,969 1,789 g

( 4,832 ) 9,519

DD&A 132 175 307 262 35 297 775 52 3 20 50 1,504

Metals inventory adjustments 2 8 10 11 22 33 — — — — — 43

Selling, general and administrative expenses 1 2 3 6 — 6 83 — — 19 202 313

Mining exploration and research expenses — 1 1 — — — — — — — 86 87

Environmental obligations and shutdown costs ( 13 ) 1 ( 12 ) — — — — — — — 63 51

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

Operating income (loss) 827 839 1,666 818 ( 12 ) 806 3,469 98 ( 16 ) ( 68 ) ( 448 ) 5,507

Interest expense, net — 1 1 12 — 12 30 — — 8 372 423

Net (loss) gain on early extinguishment of debt — — — — — — ( 10 ) — — — 38 28

Other (expense) income, net ( 1 ) ( 32 ) ( 33 ) ( 11 ) 12 1 27 ( 1 ) ( 1 ) 29 45 67

Provision for (benefit from) income taxes — — — 298 ( 11 ) 287 1,363 — — — 60 1,710

Equity in affiliated companies' net earnings — — — — — — 27 — — — 6 33

Net income attributable to noncontrolling interests — — — 247 25 272 436 c

Capital expenditures 207 223 430 109 94 203 1,148 16 6 60 559 d

Total assets at March 31, 2023 3,142 5,668 8,810 8,612 1,871 10,483 23,462 1,707 221 1,152 5,074 50,909

Capital expenditures 56 140 196 61 39 100 772 9 5 12 27 1,121

Financial Information by Business Segment (continued)

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

The third quarter and first nine months of 2023 include a $ 13 million credit for the settlement of interest on Cerro Verde's historical profit sharing liability.

The first nine months of 2023 also includes $ 74 million of interest charges associated with contested tax rulings issued by the Peruvian Supreme Court.

FCX’s economic interest in PT-FI is 48.76 % and prior to January 1, 2023, it approximated 81 %.

Refer to Note 1 for further discussion of first-quarter 2023 gold sales volumes that were attributed approximately 81 % to FCX in accordance with the PT-FI shareholders agreement.

Primarily includes capital expenditures for the Indonesia smelter projects.

Includes PT-FI sales to PT Smelting totaling $ 572 million in third-quarter 2022, $ 27 million for the first nine months of 2023 (reflecting adjustments to prior period provisionally priced concentrate sales) and $ 2.3 billion for the first nine months of 2022.

Beginning January 1, 2023, there are no sales from PT-FI to PT Smelting (refer to above discussion of the tolling arrangement between PT-FI and PT Smelting).

Includes charges for administrative fines of $ 55 million for the first nine months of 2023 and $ 41 million for the first nine months of 2022.

Refer to Note 8 for further discussion.

Includes maintenance charges and idle facility costs associated with major maintenance turnarounds totaling $ 41 million at Atlantic Copper for the first nine months of 2022.

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

Includes a net benefit to income taxes totaling $ 182 million associated with the closure of PT-FI’s 2021 corporate income tax audit and resolution of the framework for disputed tax matters.

Refer to Note 1 for further discussion of the attribution of PT-FI’s net income or loss .

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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We have reviewed the accompanying consolidated balance sheet of Freeport-McMoRan Inc.

(the Company) as of September 30, 2023, the related consolidated statements of income, comprehensive income, and equity for the three- and nine-month periods ended September 30, 2023 and 2022, the related consolidated statements of cash flows for the nine-month periods ended September 30, 2023 and 2022, and the related notes (collectively referred to as the “consolidated interim financial statements”).

(the Company) as of March 31, 2024, the related consolidated statements of income, comprehensive income, equity and cash flows for the three-month periods ended March 31, 2024 and 2023, and the related notes (collectively referred to as the “consolidated interim financial statements”).

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements for them to be in conformity with U.S.

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Phoenix, Arizona

November 3, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements