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Item 2. Management’s Discussion and Analysis

2024-05-08 compared with 2023-11-03 · 394 added, 902 removed, 729 unchanged (64% of the section changed)

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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, 2023 (2023 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).

The results of operations reported and summarized below include forward-looking statements that are not guarantees of future performance and 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.

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.

Any references to 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.

We are a leading international metals company with the objective of being foremost in copper.

Headquartered 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

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)).

and significant operations in North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru.

Our results for first-quarter 2024 reflect strong operating performance, with significant increases in consolidated copper and gold sales volumes from PT Freeport Indonesia (PT-FI) compared to first-quarter 2023.

We remain focused on reliable execution of our plans, enhancing our productivity and cost performance, generating strong cash flow and building value through our organic growth pipeline.

Market fundamentals for copper have been positive, supported by copper’s increasingly important role in the global economy and limited available supplies to meet growing demand.

With our solid financial position, we are a leading producer of copper with multiple options for future growth and an experienced team with a track record of accomplishment.

Our near-term organic development pipeline is highlighted by our leach innovation initiatives, which we continue to advance through incorporation of new applications, technologies and data analytics to our leaching processes.

Incremental copper production from these initiatives totaled 51 million pounds in first-quarter 2024, compared with 22 million pounds in first-quarter 2023.

Construction of the Manyar smelter and precious metals refinery (PMR) (collectively, the Indonesia smelter projects) in Gresik, Indonesia, are advancing on schedule with a target of May 2024 for substantial construction completion.

Once completed, the Indonesia smelter projects will complement our large-scale, long-lived, low-cost operations in the Grasberg minerals district.

Net income attributable to common stockholders totaled $473 million in first-quarter 2024, compared with $663 million in first-quarter 2023.

The decrease in first-quarter 2024, compared to first-quarter 2023, primarily reflects higher income attributable to noncontrolling interests at our Indonesia operations.

Refer to “Consolidated Results” for further discussion.

At March 31, 2024, we had consolidated debt of $9.4 billion and consolidated cash and cash equivalents of $5.2 billion, $6.1 billion including $0.9 billion of current restricted cash associated with a portion of PT-FI's export proceeds required to be temporarily deposited in Indonesia banks.

Net debt totaled $0.3 billion, excluding $3.0 billion of debt for 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.

At March 31, 2024, we had $3.0 billion of availability under our revolving credit facility, and PT-FI and Cerro Verde had $1.75 billion and $350 million, respectively, of availability under their revolving credit facilities.

Refer to Note 5 and “Capital Resources and Liquidity” for further discussion of our debt balances and transactions.

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Following are our projected consolidated sales volumes for the year 2024:

Copper (millions of recoverable pounds):

Copper (billions of recoverable pounds):

North America copper mines 1.28

South America mining 1,194

Indonesia mining 1,489

South America operations 1.15

Indonesia operations 1.73 a

Gold (millions of recoverable ounces)

Molybdenum (millions of recoverable pounds)

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.

PT-FI’s current export licenses for copper concentrates and anode slimes extend through May 2024.

Consolidated sales volume estimates include exports of copper concentrates and anode slimes by PT-FI from June 2024 through December 2024 totaling 0.4 billion pounds of copper and 0.9 million ounces of gold.

Does not foot because of rounding.

Includes 50 million pounds produced by our North America copper mines and South America operations and 34 million pounds produced by our Molybdenum mines.

Consolidated sales volumes in second-quarter 2024 are expected to approximate 1.0 billion pounds of copper, 500 thousand ounces of gold and 21 million pounds of molybdenum.

Consolidated copper and gold production volumes for the year 2024 are expected to exceed 2024 sales volumes, reflecting the deferral of approximately 90 million pounds of copper and 120 thousand ounces of gold that will be processed by the Indonesia smelter projects and sold as refined metal in future periods.

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, which is currently expected by year-end 2024.

We cannot predict if PT-FI will obtain approval timely, if at all, to continue exports of copper concentrates and anode slimes beyond May 2024.

If exports were prohibited or limited, or additional financial impacts resulting from Indonesia regulations were to be assessed prior to PT-FI’s Indonesia smelter projects becoming operational by year-end 2024, PT-FI may be required to reduce production levels or be subject to additional costs, which could adversely impact our revenues and operations.

Projected sales volumes are dependent on operational performance;

extension of PT-FI’s export licenses for copper concentrates and anode slimes beyond May 2024;

the timing of the ramp-up of the Indonesia smelter projects;

weather-related conditions, including ongoing El Niño weather impacts;

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.

of our 2023 Form 10-K.

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.

Consolidated unit net cash costs (net of by-product credits) for our copper mines are expected to average $1.57 per pound of copper for the year 2024 (including $1.57 per pound of copper in second-quarter 2024), based on achievement of current volume and cost estimates, and assuming average prices of $2,300 per ounce of gold and $20.00 per pound of molybdenum for the remainder of 2024.

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.

The impact of price changes on consolidated unit net cash costs for the year 2024 would approximate $0.04 per pound of copper for each $100 per ounce change in the average price of gold and $0.02 per pound of copper for each $2 per pound change in the average price of molybdenum during the remainder of 2024.

Consolidated Operating Cash Flows

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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.

Our consolidated operating cash flows are estimated to approximate $7.4 billion, net of $0.2 billion of working capital and other uses, for the year 2024, based on current sales volume and cost estimates, extension of PT-FI’s export licenses for copper concentrates and anode slimes beyond May 2024, and assuming average prices of $4.25 per pound for copper, $2,300 per ounce for gold and $20.00 per pound for molybdenum for the remainder of 2024.

Estimated consolidated operating cash flows for the year 2024 also reflect an estimated income tax provision of $2.8 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate for the year 2024).

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.

The impact of price changes on consolidated operating cash flows for the year 2024 would approximate $270 million for each $0.10 per pound change in the average price of copper, $105 million for each $100 per ounce change in the average price of gold and $90 million for each $2 per pound change in the average price of molybdenum for the remainder of 2024.

Consolidated Capital Expenditures

Capital expenditures are expected to approximate $4.6 billion for the year 2024, including $2.3 billion for major mining projects and $1.0 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).

Projected capital expenditures for the Indonesia smelter projects in 2024 exclude capitalized interest and $0.3 billion of estimated commissioning and owner’s costs.

Projected capital expenditures for major mining projects include $1.1 billion for planned projects, primarily associated with underground mine development in the Grasberg minerals district and potential expansion projects in North America, and $1.2 billion for discretionary growth projects.

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.

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.

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.

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.

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

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.

Capital expenditures for the Indonesia smelter projects for the remainder of 2024 are expected to be funded with availability under PT-FI’s revolving credit facility.

Prices for copper, gold and molybdenum are affected by numerous factors beyond our control and can fluctuate significantly (for further discussion refer to “Risk Factors” contained in Part I, Item 1A.

of our 2023 Form 10-K).

The following graphs present the London Metal Exchange (LME) copper settlement price, the London Bullion Market Association (London) PM gold price, and the Platts Metals Daily Molybdenum Dealer Oxide weekly average price since January 2014.

During first-quarter 2024, LME copper settlement prices ranged from a low of $3.67 per pound to a high of $4.07 per pound, averaged $3.83 per pound and settled at $3.96 per pound on March 28, 2024.

Upward momentum in copper prices has continued in second-quarter 2024, and the LME copper settlement price was $4.52 per pound on April 30, 2024, bolstered by expectations of tight supplies and optimism about demand.

We believe fundamentals for copper are favorable and that future demand will be supported by copper’s critical role in the global transition to renewable power, electric vehicles and other carbon-reduction initiatives, continued urbanization in developing countries and growing connectivity globally.

This graph presents London PM gold prices from January 2014 through March 2024.

During first-quarter 2024, London PM gold prices ranged from a low of $1,985 per ounce to a high of $2,214 per ounce, averaged $2,070 per ounce and closed at $2,214 per ounce on March 28, 2024.

Gold prices hit a record high during first-quarter 2024, propelled by U.S.

interest rate cut expectations and strong safe-haven demand.

In April 2024, a new record high was reached ($2,402 per ounce on April 12, 2024) and the London PM gold price was $2,307 per ounce on April 30, 2024.

This graph presents the Platts Metals Daily Molybdenum Dealer Oxide weekly average price from January 2014 through March 2024.

During first-quarter 2024, the weekly average price of molybdenum ranged from a low of $19.34 per pound to a high of $20.42 per pound, averaged $19.93 per pound and was $19.81 per pound on March 28, 2024.

During first-quarter 2024, overall global demand for molybdenum was mixed with steady demand from energy, power generation, aerospace and defense sectors, and some weakness in the construction sector.

We believe fundamentals for molybdenum are positive with favorable demand drivers and limited supply.

The Platts Metals Daily Molybdenum Dealer Oxide weekly average price was $20.63 per pound on April 26, 2024.

CONSOLIDATED RESULTS

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

SUMMARY FINANCIAL DATA

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$ 1,634 $ 1,601

$ 4,503 $ 5,507

Net income attributable to common stock c,d

Net income attributable to common stock c

Diluted net income per share of common stock $ 0.32 $ 0.46

Diluted weighted-average shares of common stock outstanding 1,444 1,443

Operating cash flows g

Operating cash flows f

$ 1,896 $ 1,050

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$ 1,254 $ 1,121

At September 30:

Cash and cash equivalents

$ 5,208 $ 6,852

Restricted cash and cash equivalents, current $ 697 h

$ 112 $ 697 h

Restricted cash and cash equivalents, current $ 1,034 g

Total debt, including current portion

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

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.

Includes (unfavorable) favorable adjustments to prior period provisionally priced concentrate and cathode copper sales totaling $(7) million ($(2) million to net income attributable to common stock) in first-quarter 2024 and $210 million ($72 million to net income attributable to common stock) in first-quarter 2023.

Refer to Note 6 for further discussion.

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

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.

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.

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.

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.

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.

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Includes net international tax credits of $181 million, which were offset by charges of $109 million associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies and $56 million of revisions to environmental obligation estimates and $16 million of other net charges.

Includes net charges totaling $94 million, primarily associated with net adjustments to environmental obligations, contested tax matters and asset impairments in North America.

Working capital and other uses totaled $97 million in first-quarter 2024 and $452 million in first-quarter 2023.

Includes $0.9 billion at March 31, 2024, associated with a portion 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.

Three Months Ended March 31,

SUMMARY OPERATING DATA

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Average realized price per pound $ 3.94 $ 4.11

$ 3.87 $ 3.88

Site production and delivery costs per pound a

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Sales, excluding purchases

399 480 1,164 1,365

Average realized price per ounce $ 2,145 $ 1,949

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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.”

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.

Consolidated revenues totaled $6.3 billion in first-quarter 2024 and $5.4 billion in first-quarter 2023.

Revenues from our mining operations and processing facilities primarily include the sale of copper in concentrate, copper cathode, copper rod, gold in concentrate and anode slimes, 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

Three Months Ended March 31

Consolidated revenues - 2023 period $ 5,389

Higher (lower) sales volumes:

Copper 168 (779)

Gold (138) (359)

Higher sales volumes:

Molybdenum 31

Higher (lower) average realized prices:

Copper 333 (30)

(Lower) higher average realized prices:

Molybdenum (203)

Adjustments for prior period provisionally priced copper sales (217)

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

Lower Atlantic Copper revenues (83)

Lower revenues from purchased copper (38)

Higher treatment charges (28)

Higher royalties and export duties (199)

Other, including intercompany eliminations 31

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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

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.

Consolidated copper and gold sales volumes increased in first-quarter 2024, compared to first-quarter 2023, primarily reflecting higher mining and milling rates and ore grades at PT-FI.

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.

Average realized prices in first-quarter 2024, compared with first-quarter 2023, were 4% lower for copper, 10% higher for gold and 33% lower for molybdenum.

Average realized copper prices include net favorable adjustments to current period provisionally priced copper sales totaling $73 million in first-quarter 2024 and $21 million in first-quarter 2023.

As discussed in Note 6, substantially all

of our copper concentrate and some cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date).

We record revenues and invoice customers at the time of shipment based on then-current LME prices, which results in an embedded derivative on provisionally priced concentrate and cathode sales that is adjusted to fair value through earnings each period, using the period-end forward prices, until final pricing on the date of settlement.

To the extent final prices are higher or lower than what was recorded on a provisional basis, an increase or decrease to revenues is recorded each reporting period until the date of final pricing.

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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.

Net (unfavorable) favorable adjustments to prior periods’ provisionally priced copper sales ( i.e.

, provisionally priced sales at December 31, 2023 and 2022) recorded in consolidated revenues totaled $(7) million in first-quarter 2024 and $210 million in first-quarter 2023.

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.

At March 31, 2024, we had provisionally priced copper sales totaling 229 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $4.01 per pound, subject to final pricing over the next several months.

We estimate that each $0.05 change in the price realized from the March 31, 2024, recorded provisional price would have an approximate $22 million effect on 2024 revenues ($7 million to our 2024 net income attributable to common stock).

The LME copper price settled at $4.52 per pound on April 30, 2024.

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.

Atlantic Copper revenues totaled $673 million in first-quarter 2024, compared with $756 million in first-quarter 2023.

Lower revenues in first-quarter 2024, compared with first-quarter 2023, primarily reflect lower copper prices and sales volumes.

Purchased Copper.

We purchase copper cathode primarily for processing by our Rod & Refining operations.

The volumes of copper purchases vary depending on cathode production from our operations and totaled 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.

Lower revenues associated with purchased copper in first-quarter 2024, compared to first-quarter 2023, primarily reflects

lower volumes.

The volumes of copper purchases vary depending on cathode production from our operations and totaled 42 million pounds in first-quarter 2024 and 48 million pounds in first-quarter 2023.

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.

The increase in treatment charges in first-quarter 2024, compared to first-quarter 2023, primarily reflects higher copper sales volumes.

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

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.

Royalties and export duties are primarily associated with PT-FI sales.

Royalties will vary with the volume of metal sold and the prices of copper and gold.

PT-FI is currently being assessed export duties for copper concentrates at a rate of 7.5%, compared to an export duty rate of 2.5% in first-quarter 2023.

PT-FI incurred export duties totaling $156 million in first-quarter 2024 and $17 million in first-quarter 2023.

Refer to Note 13 of our 2023 Form 10-K for further discussion of export duties.

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.

Consolidated production and delivery costs totaled $3.8 billion in first-quarter 2024 and $3.2 billion in first-quarter 2023.

Higher costs in first-quarter 2024, compared to first-quarter 2023, primarily reflected increased operating rates, particularly at PT-FI.

Additionally, first-quarter 2024 included charges totaling $109 million associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies (refer to Note 8 for further discussion).

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.

Lower consolidated site production and delivery costs (before net noncash and other costs) for our copper mines of $2.32 per pound of copper in first-quarter 2024, compared to $2.57 per pound of copper in first-quarter 2023, primarily reflects higher metal volumes in Indonesia.

Refer to “Operations – Unit Net Cash Costs” and “Operations – Unit Net Cash (Credits) Costs” for further discussion of unit net cash costs (credits) associated with our operating divisions and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements.

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.

Increased consolidated depreciation, depletion and amortization (DD&A) of $595 million in first-quarter 2024, compared to $399 million in first-quarter 2023, primarily reflects higher sales volumes at PT-FI.

Environmental Obligations and Shutdown Costs

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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.

Net charges for environmental obligations and shutdown costs totaled $56 million in both first-quarter 2024 and 2023.

Refer to Note 8 for further discussion.

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.

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 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.

Higher capitalized interest of $86 million in first-quarter 2024, compared to $56 million in first-quarter 2023 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.

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.

Other income, net, totaled $129 million in first-quarter 2024 and $88 million in first-quarter 2023.

The increase in other income, net, primarily reflects a credit of $26 million in first-quarter 2024 associated with the reduction in the accrual to indemnify PT Mineral Industri Indonesia (MIND ID) from potential losses arising from historical tax disputes (refer to Note 4 for additional discussion) and higher foreign currency exchange gains.

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,

Three Months Ended March 31,

Income (Loss) a

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$ (270) — % $ (1) $ 213 — % c

South America 961 d

46 % (438) 802 36 % (287) e

South America 267 39 % (103) 499 39 % (194)

Indonesia 1,627 36 % (591) 892 37 % (327)

Eliminations and other 7 N/A — 43 N/A (25)

PT-FI historical tax matters 16 N/A 182 d

Eliminations and other 34 N/A — e

Rate adjustment f

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Consolidated FCX $ 1,674 31 % $ (512) $ 1,538 32 % $ (499)

Represents income before income taxes, equity in affiliated companies' net earnings (losses), and noncontrolling interests.

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.

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.

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).

Includes a tax credit of $31 million ($16 million net of noncontrolling interest) primarily associated with completion of Cerro Verde's 2016 tax audit.

Represents income (loss) before income taxes, equity in affiliated companies' net earnings, and noncontrolling interests.

In addition to our North America Copper Mines, which had operating income of $153 million in first-quarter 2024 and $364 million in first-quarter 2023 (refer to Note 9), the U.S.

jurisdiction reflects legacy non-operating sites and corporate-level expenses, which include interest expense associated with FCX’s senior notes and general and administrative expenses.

Additionally, first-quarter 2024 also included charges of $109 million associated with assumed oil and gas abandonment obligations, and both first-quarter 2024 and 2023 included charges of $56 million for revisions to environmental obligation estimates.

Includes a valuation allowance release on prior year unbenefited net operating losses.

Refer to Note 4 for further discussion.

Includes a tax benefit of $13 million associated with a favorable Supreme Court ruling in Spain, which reversed a 2016 tax law limiting Atlantic Copper’s use of net operating losses.

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.

Assuming achievement of current sales volume and cost estimates, and average prices of $4.25 per pound for copper, $2,300 per ounce for gold and $20.00 per pound for molybdenum for the remainder of 2024, we estimate our consolidated effective tax rate for the year 2024 would approximate 35% (which reflects an estimated effective tax rate of 37% for the remainder of 2024).

Changes in projected sales volumes and average prices during 2024 would incur tax impacts at estimated effective rates of 39% for Peru, 36% for Indonesia and 0% for the U.S.

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.

for the year 2024 may be adjusted as additional guidance is released by the U.S.

Department of the Treasury on key provisions of the U.S.

Inflation Reduction Act of 2022 (refer to Note 4 for further discussion).

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

$1.75 billion for the year 2023.

Net income attributable to noncontrolling interests, which is primarily associated with our noncontrolling shareholders at PT-FI, Cerro Verde and El Abra, totaled $689 million in first-quarter 2024 and $386 million in first-quarter 2023 (refer to Note 9 for net income attributable to noncontrolling interests for each of our business segments).

Beginning January 1, 2023, our economic and ownership interest in PT-FI is 48.76%, except for net income associated with the settlement of historical tax matters in first-quarter 2024 and approximately 190 thousand ounces of gold sales in first-quarter 2023, which were attributed based on the economics prior to January 1, 2023 ( i.e.

, approximately 81% to FCX and 19% to MIND ID).

Refer to Note 1 for further discussion.

Based on achievement of current sales volume and cost estimates, extension of PT-FI’s export licenses for copper concentrates and anode slimes beyond May 2024, and assuming average prices of $4.25 per pound of copper, $2,300 per ounce of gold and $20.00 per pound of molybdenum for the remainder of 2024, we estimate that net income attributable to noncontrolling interests will approximate $2.7 billion for the year 2024.

The impact of price changes on net income attributable to noncontrolling interests for the year 2024 would approximate $0.2 billion for each $0.25 per pound change in the average price of copper for the remainder of 2024.

The actual amount will depend on many factors, including relative performance of each business segment, commodity prices, costs and other factors.

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.

2023 Annual Report on Sustainability.

In April 2024, we published our 2023 Annual Report on Sustainability marking our 23rd year of reporting on our sustainability progress.

We are committed to building upon our achievements in sustainability and our position as a leading responsible copper producer.

The Copper Mark.

We demonstrate our responsible production performance through the Copper Mark, a comprehensive assurance framework developed specifically for the copper industry, and recently extended to other metals including molybdenum.

To achieve the Copper Mark, each site is required to complete an independent external assurance process to assess conformance with various environmental, social and governance criteria.

Awarded sites must be revalidated every three years.

We have achieved, and are committed to maintaining, the Copper Mark and/or Molybdenum Mark, as applicable, at all of our sites globally.

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.

We are continuing to advance a series of initiatives across our North America and South America operations to incorporate new applications, technologies and data analytics to our leaching processes.

In late 2023, we achieved our initial annual run rate target of approximately 200 million pounds of copper.

Incremental copper production from these initiatives totaled 51 million pounds in first-quarter 2024, compared with 22 million pounds in first-quarter 2023.

We are pursuing opportunities to apply recent operational enhancements on a larger scale and are testing new technology applications that we believe have the potential for significant increases in recoverable metal beyond the current run rate.

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.

The costs for these studies are charged to production and delivery costs as incurred and totaled

$34 million in first-quarter 2024, compared with $50 million in first-quarter 2023.

We estimate the costs of these studies will approximate $200 million for the year 2024, 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.

North America

We manage seven copper operations 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 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 North America copper operations include open-pit mining, sulfide-ore concentrating, leaching and solution extraction/electrowinning (SX/EW) facilities.

A majority of the copper produced at our North America copper operations 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

current mining rates.

The timing of all future developments will be dependent on market conditions, labor and supply chain considerations and other economic factors.

Molybdenum concentrate, gold and silver are also produced by certain of our North America copper operations .

Development Activities.

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

We have a potential expansion project to more than double the concentrator capacity of the Bagdad operation in northwest Arizona.

Bagdad’s reserve life currently exceeds 80 years and supports an expanded operation.

In late 2023, we completed technical and economic studies, which indicated the opportunity to construct new concentrating facilities to increase copper production by 200 to 250 million pounds per year, which is more than double Bagdad’s current annual production rate.

Estimated incremental project capital costs approximate $3.5 billion (excluding infrastructure that would be required in the long-range plans).

Expanded operations would provide improved efficiency and reduce unit net cash costs through economies of scale.

Project economics indicate that the expansion would require an incentive copper price in the range of $3.50 to $4.00 per pound and would require approximately three to four years to complete.

The decision to proceed and timing of the potential expansion will take into account overall copper market conditions, availability of labor and other factors, including progress on conversion of the existing haul truck fleet to autonomous and expanding housing alternatives to support long-range plans.

In parallel, we are advancing activities for expanded tailings infrastructure projects required under long-range plans in order to advance the potential construction timeline.

We are completing projects at our Safford/Lone Star operation to increase volumes to achieve 300 million pounds of copper per year from oxide ores, which reflects expansion of the initial design capacity of 200 million pounds of copper per year.

Additionally, positive drilling conducted in recent years indicate a large, mineralized district with opportunities to expand production significantly.

We are completing metallurgical testing and mine development planning and are commencing pre-feasibility studies for a potential significant expansion.

Pre-feasibility studies are expected to be completed in late 2025.

The decision to proceed and timing of the potential expansion will take into account results of technical and economic studies, overall copper market conditions and other 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

Three Months Ended March 31,

Operating Data, Net of Joint Venture Interests

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Copper production (millions of recoverable pounds) 153 154

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.

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

Our consolidated copper sales volumes from North America of 331 million pounds in first-quarter 2024 approximated first-quarter 2023 copper sales volumes of 332 million pounds reflecting lower ore grades, partly offset by improved leach recovery performance.

We continue to drive initiatives to enhance productivity and improve equipment reliability to offset declines in ore grades.

North America copper sales are estimated to approximate 1.3 billion pounds for the year 2024.

Refer to “Outlook” for projected molybdenum sales volumes.

Unit Net Cash Costs.

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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,

By- Product Method Co-Product Method By- Product Method Co-Product Method

Copper Molyb-

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

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

Nine Months Ended September 30,

Three Months Ended March 31,

By- Product Method Co-Product Method By- Product Method Co-Product Method

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DD&A 0.34 0.31 1.23 0.31 0.27 1.36

Metals inventory adjustments 0.01 0.01 — 0.01 0.01 —

Noncash and other costs, net 0.13 b

8 unchanged sentences

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

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.

Includes charges totaling $0.05 per pound of copper in first-quarter 2024 and $0.08 per pound of copper in first-quarter 2023 for feasibility and optimization studies.

First-quarter 2023 also includes charges totaling $0.05 per pound of copper related to asset impairments.

Our North America copper mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors.

Average unit net cash costs (net of by-product credits) for the North America copper mines of $2.70 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

(including contract labor), maintenance and supplies, partly offset by higher molybdenum by-product credits and lower energy costs.

Average unit net cash costs (net of by-product credits) for the North America copper mines of $2.98 per pound of copper in first-quarter 2024 were higher than first-quarter 2023 unit net cash costs of $2.45 per pound, primarily reflecting higher mining costs and lower molybdenum by-product credits.

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

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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.

Average unit net cash costs (net of by-product credits) for our North America copper mines are expected to approximate $3.00 per pound of copper for the year 2024, based on achievement of current sales volume and cost estimates, and assuming an average price of $20.00 per pound of molybdenum for the remainder of 2024.

North America’s average unit net cash costs for the year 2024 would change by approximately $0.03 per pound for each $2 per pound change in the average price of molybdenum for the remainder of 2024.

South America

We manage two copper operations 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 operations includes open-pit mining, sulfide-ore concentrating, leaching and SX/EW facilities.

Production from our South America operations is sold as copper concentrate or cathode under long-term contracts.

Our South America operations also sell a portion of their copper concentrate production to Atlantic Copper.

In addition to copper, Cerro Verde produces molybdenum concentrate and silver.

Labor Matters.

In April 2024, Cerro Verde reached a new four-year collective labor agreement (CLA) with one of its two unions and expects to begin negotiations in the near term with its other union.

Cerro Verde expects to incur nonrecurring charges of approximately $80 million associated with the new CLA, and may incur additional nonrecurring charges in connection with negotiations with its other union.

Development Activities.

At the El Abra operations in Chile, we have drilled out and modeled a large sulfide resource that would support a potential major mill project similar to the large-scale concentrator at Cerro Verde.

We are engaged in planning for a potential submission of an environmental impact statement by year-end 2025, subject to ongoing stakeholder engagement and economic evaluations.

In parallel, we are updating our technical studies and economic models to incorporate recent capital cost trends.

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

Following is summary consolidated operating data for South America operations:

Three Months Ended March 31,

Copper (millions of recoverable pounds)

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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.

Our consolidated copper sales from South America operations of 284 million pounds in first-quarter 2024 were lower than 302 million pounds in first-quarter 2023, primarily reflecting lower volumes of leach ore placed in stockpiles and lower milling rates associated with mill maintenance.

Molybdenum production in first-quarter 2024 was significantly lower than first-quarter 2023 as a result of mill maintenance and the impact of certain ore types on recoveries.

Copper sales from South America operations are expected to approximate 1.1 billion for the year 2024, which assume no significant impacts to water availability, which is being monitored closely in light of ongoing El Niño weather patterns.

Refer to “Outlook” for projected molybdenum sales volumes.

Unit Net Cash Costs.

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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.

The following table summarizes unit net cash costs and gross profit per pound of copper at our South America operations.

Three Months Ended September 30,

Method Co-Product

Method By-Product

Method Co-Product

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,

Three Months Ended March 31,

Method Co-Product

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DD&A 0.39 0.36 0.35 0.31

Metals inventory adjustments — — 0.04 0.04

Noncash and other costs, net 0.06 a

0.07 0.07 0.06

Total unit costs 3.05 3.08 2.64 2.85

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Copper sales (millions of recoverable pounds) 284 284 302 302

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.

Includes charges totaling $0.04 per pound of copper in first-quarter 2024 and $0.03 per pound of copper in first-quarter 2023 for feasibility and optimization studies.

Our South America operations 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 operations of $2.60 per pound of copper in first-quarter 2024 were higher than first-quarter 2023 unit net cash costs of $2.20 per pound, primarily reflecting lower molybdenum by-product credits and lower copper volumes.

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.

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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

Average unit net cash costs (net of by-product credits) for South America operations are expected to approximate $2.51 per pound of copper for the year 2024, based on achievement of current sales volume and cost estimates, and assuming an average price of $20.00 per pound of molybdenum for the remainder of 2024.

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.

We have a 48.76% ownership interest in PT-FI and manage its operations.

PT-FI's results are consolidated in our financial statements.

Upon completion and full ramp-up of the Indonesia smelter projects, PT-FI will be a fully integrated producer of refined copper and gold.

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.

Labor Matters.

In April 2024, PT-FI reached a new two-year CLA with its three employee unions at its Grasberg minerals district operations.

PT-FI did not recognize any significant nonrecurring costs associated with the new CLA.

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.

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.

Over the past several years, the Indonesia government has enacted various laws and regulations related to downstream processing of various products, including copper concentrates.

In 2018, PT-FI agreed to expand its domestic smelting and refining capacity and has made substantial progress towards completion (refer to “Indonesia Smelting and Refining” below).

PT-FI’s current export licenses for copper concentrate and anode slimes extend 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.

PT-FI also continues to discuss the applicability of the Indonesia government’s revised regulation on duties for various exported products, including copper concentrates, because of inconsistencies with its special mining license (IUPK).

PT-FI is currently being assessed export duties on copper concentrates at a rate of 7.5% and incurred export duties totaling $156 million in first-quarter 2024.

Refer to Notes 12, 13 and 14 of our 2023 Form 10-K for further discussion of 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.

The Indonesia government is updating regulations that would enable PT-FI to apply for an extension of its IUPK beyond 2041.

An extension 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-

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 .

Over a multi-year investment period, PT-FI has successfully commissioned three large-scale underground mines in the Grasberg minerals district (Grasberg Block Cave, Deep Mill Level Zone and Big Gossan), which provided production volumes of 0.5 billion pounds of copper and 0.5 million ounces of gold in first-quarter 2024.

Milling rates for ore from these underground mines averaged 219,500 metric tons of ore per day in first-quarter 2024, a 33% increase from 164,800 metric tons of ore per day in first-quarter 2023.

In December 2023, PT-FI completed the installation of new milling facilities allowing it to further leverage the success of the underground mines and provide sustained large-scale production volumes.

PT-FI is completing a mill recovery project with the installation of a new copper cleaner circuit in the second half of 2024.

PT-FI plans to transition its existing energy source from coal to liquefied natural gas, which would meaningfully reduce PT-FI’s Scope 1 greenhouse gas emissions at the Grasberg minerals district.

PT-FI is planning investments in a new gas-fired combined cycle facility.

Capital expenditures for the new facilities, to be incurred over the next four years, approximate $1 billion representing an incremental cost of $0.4 billion compared to previously planned investments to refurbish the existing coal units.

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 7 billion pounds of copper and 6 million ounces of gold between 2029 and the end of 2041.

An extension of PT-FI’s operating rights beyond 2041 would extend the life of the project.

Pre-production development activities commenced in 2022 and are expected to continue over an approximate 10-year timeframe.

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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.

Indonesia Smelting and Refining.

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.

Construction progress of the Manyar smelter in Gresik, Indonesia (with a capacity to process approximately 1.7 million metric tons of copper concentrate per year) is advancing on schedule with a target of May 2024 for substantial construction completion, which will be followed by a ramp-up period through December 2024.

Construction of the smelter has an estimated cost of $3.0 billion, including $2.8 billion for a construction contract (excluding capitalized interest and $0.3 billion of estimated commissioning and owner’s costs) and $0.2 billion for investment in a desalination plant.

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.

Construction is in progress with commissioning expected during the second half of 2024.

Current cost estimates total $665 million.

During first-quarter 2024, capital expenditures for the Indonesia smelter projects totaled $0.5 billion and are expected to approximate $1.0 billion for the year 2024.

Projected capital expenditures for the Indonesia smelter projects in 2024 exclude capitalized interest and $0.3 billion of estimated commissioning and owner’s costs.

Capital expenditures for the Indonesia smelter projects for the remainder of 2024 are expected to be funded with availability under PT-FI’s revolving credit facility.

In December 2023, PT Smelting completed an expansion of its capacity by 30% to 1.3 million metric tons of copper concentrate per year.

The project was funded by PT-FI with borrowings totaling approximately $250 million that are expected to convert to equity in late second-quarter 2024, increasing PT-FI’s ownership in PT Smelting to approximately 65% from 39.5%.

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

Following is summary consolidated operating data for Indonesia operations:

Three Months Ended March 31,

Copper (millions of recoverable pounds)

12 unchanged sentences

Total 219,500 164,800

193,000 190,800

Average ore grades:

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Gold 77.5 78.2

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.

PT-FI’s consolidated sales of 493 million pounds of copper and 564 thousand ounces of gold in first-quarter 2024 were more than double first-quarter 2023 sales of 198 million pounds of copper and 266 thousand ounces of gold, primarily reflecting higher mining and milling rates and ore grades.

First-quarter 2023 sales were also impacted by weather-related disruptions and the initial deferral of sales recognition related to the PT Smelting tolling arrangement.

Consolidated sales volumes from PT-FI are expected to approximate 1.7 billion pounds of copper and 2.0 million ounces of gold for the year 2024, which includes exports of copper concentrates and anode slimes from June 2024 through December 2024 totaling 0.4 billion pounds of copper and 0.9 million ounces of gold.

Additionally, PT-FI’s consolidated copper and gold production volumes for the year 2024 are expected to exceed 2024 sales volumes, reflecting the deferral of approximately 90 million pounds of copper and 120 thousand ounces of gold that will be processed by the Indonesia smelter projects and sold as refined metal in future periods.

Projected sales volumes are dependent on operational performance;

extension of PT-FI’s export licenses for copper concentrates and anode

slimes beyond May 2024;

weather-related conditions;

and other factors detailed in the “Cautionary Statement” below.

Unit Net Cash (Credits) Costs.

We believe unit net cash (credits) costs per pound of copper is a measure that provides investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations.

We use this measure for the same purpose and for monitoring operating performance by our mining operations.

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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,

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,

The following table summarizes the unit net cash (credits) costs and gross profit per pound of copper and per ounce of gold at our Indonesia mining operations.

Refer to “Product Revenues and Production Costs” for an explanation of “by-product” and “co-product” methods and a reconciliation of unit net cash credits per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

Three Months Ended March 31,

By-Product Method Co-Product Method By-Product Method Co-Product Method

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Royalty on metals 0.23 0.15 81 0.29 0.19 76

Unit net cash costs 0.14 1.53 776 0.12 1.43 683

Unit net cash (credits) costs (0.12) 1.47 805 (0.08) 1.66 781

DD&A 0.68 0.41 224 0.75 0.45 214

Noncash and other costs, net 0.11 a,b

0.07 36 0.02 b

Noncash and other costs, net 0.05 a

0.03 16 0.16 a

Total unit costs 0.61 1.91 1,045 0.83 2.20 1,038

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Gold sales (thousands of recoverable ounces) 564 266

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.

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.

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.

Includes charges totaling $0.03 per pound of copper in first-quarter 2024 for the Indonesia smelter projects’ operational readiness and startup costs and $0.07 per pound of copper in first-quarter 2023 for feasibility and optimization studies.

PT-FI’s unit net cash credits (including gold, silver and other by-product credits) were $0.12 per pound of copper in first-quarter 2024 and $0.08 per pound of copper in first-quarter 2023.

The favorable unit net cash credits in first-quarter 2024, compared to first-quarter 2023, primarily reflect higher sales volumes, partially offset by lower by-product credits and higher export duties.

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 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.

PT-FI’s royalties totaled $118 million in first-quarter 2024 and $58 million in first-quarter 2023.

PT-FI is currently being assessed export duties for copper concentrates at a rate of 7.5%, compared to an export duty rate of 2.5% in first-quarter 2023.

Export duties totaled $156 million in first-quarter 2024 and $17 million in first-quarter 2023.

Refer to Note 13 of our 2023 Form 10-K for further discussion of PT-FI’s export duties.

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.

PT Smelting’s intercompany profit in first-quarter 2023 represents the change in the deferral of 39.5% of PT-FI’s profit on sales to PT Smelting.

Beginning in 2023, PT-FI’s commercial arrangement with PT Smelting changed to a tolling arrangement and there are no further sales from PT-FI to PT Smelting.

Average unit net cash credits (including gold, silver and other by-product credits) for PT-FI are expected to approximate $0.12 per pound of copper for the year 2024, based on achievement of current sales volumes and cost estimates, and assuming an average price of $2,300 per ounce of gold for the remainder of 2024.

PT-FI’s average unit net cash credits for the year 2024 would change by approximately $0.09 per pound of copper for each $100 per ounce change in the average price of gold for the remainder of 2024.

PT-FI’s projected sales volumes and unit net cash credits for the year 2024 are dependent on operational performance;

extension of PT-FI’s export licenses for copper concentrates and anode slimes beyond May 2024;

weather-related conditions;

and other factors.

Refer to “Cautionary Statement” below, and Item 1A.

“Risk Factors” contained in Part I of our 2023 Form 10-K for further discussion of factors that could cause results to differ materially from projections.

We operate two wholly owned primary molybdenum operations in Colorado – the Climax open-pit mine and the Henderson underground mine.

The Climax and Henderson mines produce high-purity, chemical-grade molybdenum concentrate, which is typically further processed into value-added molybdenum chemical products.

The majority of the molybdenum concentrate produced at the Climax and Henderson mines, as well as from our North America and South America copper mines, is processed at our conversion facilities.

Operating and Development Activities.

Production from the Molybdenum mines totaled 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.

The majority of the molybdenum concentrate produced at the Climax and Henderson mines, as well as from our North America copper mines and South America operations, is processed at our conversion facilities.

Operating Activities.

Production from the primary molybdenum operations totaled 8 million pounds of molybdenum in each of first-quarter 2024 and 2023.

Refer to “Consolidated Results” for our consolidated molybdenum operating data, which includes sales of molybdenum produced at our primary molybdenum operations and from our North America copper mines and South America operations.

Refer to “Outlook” for projected consolidated molybdenum sales volumes and to “Markets” for a discussion of molybdenum prices.

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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.

Average unit net cash costs for the primary molybdenum operations of $15.80 per pound of molybdenum in first-quarter 2024 were higher than average unit net cash costs of $12.24 per pound in first-quarter 2023, primarily reflecting higher costs for contract labor and maintenance supplies.

Average unit net cash costs for the primary molybdenum operations are expected to approximate $15.47 per pound of molybdenum for the year 2024, based on achievement of current sales volumes and cost estimates.

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.

Through our downstream integration, we are able to assure placement of a significant portion of our copper concentrate production.

We wholly own and operate the Miami smelter in Arizona, Atlantic Copper (a smelter and refinery in Spain), and the El Paso refinery in Texas.

PT-FI also has a 39.5% ownership interest in PT Smelting, a copper smelter and refinery in Gresik, Indonesia (refer to Note 3 of our 2023 Form 10-K) and expects to complete the Indonesia smelter projects in 2024, which will smelt and refine copper concentrate from PT-FI as well as process anode slimes.

As a result, PT-FI’s operations will be

fully integrated, and treatment charges reflecting the cost of smelting and refining operations will be recorded in production and delivery costs (refer to “Indonesia Mining – Indonesia Smelting and Refining” above).

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.

In first-quarter 2024, Atlantic Copper’s copper concentrate purchases included 42% from our copper mining operations and 58% from third parties.

Atlantic Copper’s treatment charges, which consist of a base rate per pound of copper and per ounce of gold, are generally fixed and represent a cost to our mining operations and income to Atlantic Copper ( i.e.

, higher treatment charges benefit our Atlantic Copper 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.

We defer recognizing profits on sales from our mining operations to Atlantic Copper until final sales to third parties occur.

Changes in these deferrals attributable to variability in intercompany volumes resulted in net (reductions) additions to operating income totaling $(17) million ($(5) million to net income attributable to common stock) in first-quarter 2024 and $111 million ($48 million to net income attributable to common stock) in first-quarter 2023.

First-quarter 2023 benefited from the recognition of previously deferred profits on PT-FI sales to PT Smelting following the change in the commercial arrangements from a concentrate sales agreement to a tolling agreement (refer to Note 3 of our 2023 Form 10-K for further discussion).

Our net deferred profits on our inventories at Atlantic Copper to be recognized in future periods’ net income attributable to common stock totaled $63 million at March 31, 2024.

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.

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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 believe the actions we have taken in recent years to build a solid 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.

Based on current sales volume, cost and metal price estimates discussed in “Outlook,” our available cash and cash equivalents plus our projected consolidated operating cash flows of $7.4 billion for the year 2024 exceed our expected consolidated capital expenditures of $4.6 billion (which includes $1.0 billion for the Indonesia smelter projects that are expected to be funded with availability under PT-FI’s revolving credit facility).

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.

At March 31, 2024, we had $5.2 billion in consolidated cash and cash equivalents and FCX, PT-FI and Cerro Verde have $3.0 billion, $1.75 billion and $350 million, respectively, of availability under their revolving credit facilities.

At March 31, 2024, we had $1.0 billion in current restricted cash and cash equivalents, including $0.9 billion associated with PT-FI's export proceeds temporarily deposited in Indonesia banks for 90 days in accordance with a regulation issued by the Indonesia government.

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.

Our financial policy is aligned with our strategic objectives of maintaining a solid balance sheet, providing cash returns to shareholders and advancing opportunities for future growth.

Our Board of Directors (Board) reviews the structure of the performance-based payout framework at least annually.

At March 31, 2024, net debt totaled $0.3 billion (which was net of $0.9 billion of current restricted cash associated with PT-FI’s export proceeds), excluding $3.0 billion of debt for the Indonesia smelter projects.

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

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.

On March 27, 2024, 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 were paid on May 1, 2024, to common stockholders of record as of April 15, 2024.

Based on current market conditions, the base and variable dividends on our common stock are anticipated to total $0.60 per share for 2024 (including the dividends paid on February 1, 2024, and May 1, 2024), 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.

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):

and international components of consolidated cash and cash equivalents available to the parent company, net of noncontrolling interests’ share, taxes and other costs at March 31, 2024 (in billions):

Cash at domestic companies $ 2.3

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Total consolidated cash and cash equivalents 5.2

Cash for Indonesia smelter projects (0.6) b

Noncontrolling interests’ share (1.4)

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Net cash available $ 3.7

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.

Estimated remaining net proceeds from PT-FI's senior notes.

Excludes $0.9 billion of current restricted 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 a regulation issued by the Indonesia government.

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.

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through dividends that are subject to applicable withholding taxes and noncontrolling interests’ share.

At September 30, 2023, consolidated debt totaled $9.4 billion, with a weighted-average interest rate of 5.2%.

At March 31, 2024, 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.

We have $0.7 billion in scheduled senior note maturities in November 2024 with no further senior note maturities until 2027.

Our total debt has an average remaining duration of approximately 10 years.

At March 31, 2024, we had no borrowings and $7 million in letters of credit issued under our $3.0 billion revolving credit facility, and there were no borrowings under PT-FI’s $1.75 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.

We generated operating cash flows of $1.9 billion (net of $0.1 billion of working capital and other uses) in first-quarter 2024 and $1.1 billion (net of $0.5 billion of working capital and other uses) in first-quarter 2023.

Higher operating cash flows in first-quarter 2024, compared with first-quarter 2023, primarily reflects higher copper and gold sales volumes and higher gold prices.

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.

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.

Capital expenditures, including capitalized interest, totaled $1.3 billion in first-quarter 2024, including $0.4 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.

Capital expenditures, including capitalized interest, totaled $1.1 billion in first-quarter 2023, including $0.4 billion for major mining projects, primarily associated with underground development activities in the Grasberg minerals district, and $0.3 billion for the Indonesia smelter projects.

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).

Net repayments of debt totaled $1.0 billion in first-quarter 2023 reflecting the repayment of our 3.875% Senior Notes that matured in March 2023.

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.

We paid cash dividends on our common stock totaling $0.2 billion in each of first-quarter 2024 and 2023.

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.

“Risk Factors” contained in Part I of our 2023 Form 10-K, “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 paid to noncontrolling interests at our international operations totaled $102 million in first-quarter 2024 (none in first-quarter 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.

We received equity contributions totaling $50 million in first-quarter 2023 from MIND ID, primarily associated with receipt of the final capital contribution in accordance with the PT-FI shareholders agreement.

CONTRACTUAL OBLIGATIONS

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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

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.

Environmental Obligations and AROs

Our current and historical operating activities are subject to various environmental laws and regulations.

We perform a comprehensive annual review of our environmental obligations 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 $56 million for revisions to our environmental obligations 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.

In addition, we recorded ARO additions totaling $365 million in first-quarter 2024, including $256 million at our mining operations primarily associated with revised closure plans and cost estimates to reflect our commitment to the Global Industry Standard on Tailings Management, and $109 million associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies.

Refer to Note 12 “Environmental” and “AROs” of our 2023 Form 10-K for further information about contingencies associated with environmental matters 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.

There have been no significant updates to our contingencies associated with legal proceedings, environmental and other matters since December 31, 2023, other than as disclosed in Note 8.

Refer to Note 12 and “Legal Proceedings” contained in Part I, Item 3.

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There were no significant updates to previously reported accounting standards included in Note 1 of our 2023 Form 10-K.

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.

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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

As of March 31, 2024

Current portion of debt $ 0.8

Long-term debt, less current portion 8.7

Consolidated debt 9.4

Consolidated debt 9.4 a

consolidated cash and cash equivalents 5.2

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FCX net debt 3.3

net debt for Indonesia smelter projects c

FCX net debt, excluding Indonesia smelter projects $ 0.8 $ 1.3

Rounds to less than $0.1 billion

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.

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.

debt for Indonesia smelter projects c

FCX net debt, excluding debt for the Indonesia smelter projects $ 0.3

Does not foot because of rounding.

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 are presented as current restricted cash and cash equivalents in our consolidated balance sheet.

As the 90-day holding period is the only restriction on the cash, we have included such amount in the calculation of net debt.

Represents senior notes issued by PT-FI.

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 believe unit net cash costs (credits) per pound of copper and molybdenum are measures that provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for the respective operations.

We use these measures for the same purpose and for monitoring operating performance by our mining operations.

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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.

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 accretion of AROs, inventory write-offs and adjustments, 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.

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

Three Months Ended September 30, 2023

Three Months Ended March 31, 2024

(In millions) By-Product Co-Product Method

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DD&A 111 101 9 1 111

Metals inventory adjustments 4 4 — — 4

Noncash and other costs, net 45 c

Total costs 1,146 1,157 129 35 1,321

Other revenue adjustments, primarily for pricing

on prior period open sales 1 1 — — 1

Gross profit $ 170 $ 159 $ 7 $ 4 $ 170

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DD&A 0.34 0.31 1.23

Metals inventory adjustments 0.01 0.01 —

Noncash and other costs, net 0.13 c

Total unit costs 3.45 3.48 17.56

Other revenue adjustments, primarily for pricing

on prior period open sales — — —

Gross profit per pound $ 0.51 $ 0.48 $ 0.93

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

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

Includes gold and silver product revenues and production costs.

Includes charges totaling $28 million ($0.08 per pound of copper) for feasibility and optimization studies.

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

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

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

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

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

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

Revenues Production and Delivery DD&A

Totals presented above $ 1,491 $ 1,121 $ 111

1 unchanged sentence

Noncash and other costs, net — 45 —

Other revenue adjustments, primarily for pricing

on prior period open sales (20) — — —

Eliminations and other 14 17 1

6 unchanged sentences

Includes gold and silver product revenues and production costs.

Includes charges totaling $20 million ($0.06 per pound of copper) for feasibility and optimization studies.

Includes charges totaling $15 million ($0.05 per pound of copper) for feasibility studies.

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

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

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2023

(In millions) By-Product Co-Product Method

7 unchanged sentences

DD&A 102 90 10 2 102

Metals inventory adjustments 5 5 — — 5

Noncash and other costs, net 76 c

12 unchanged sentences

Unit net cash costs

DD&A 0.30 0.26 1.27

Metals inventory adjustments 0.01 0.01 —

Noncash and other costs, net 0.16 c

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

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

2.45 2.66 19.85

Corporate, other & eliminations (4,799) (4,637) 50 1

As reported in our consolidated financial statements $ 16,950 $ 10,260 $ 1,479 $ 7

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

Includes gold and silver product revenues and production costs.

Includes charges totaling $81 million ($0.08 per pound of copper) for feasibility and optimization studies.

Represents the combined total for our other mining operations as presented in Note 9.

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

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 0.31 0.27 1.36

Metals inventory adjustments 10 9 1 — 10

Noncash and other costs, net 0.22 c

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

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

Total unit costs

2.98 3.11 22.81

Other revenue adjustments, primarily for pricing

2 unchanged sentences

Reconciliation to Amounts Reported

Production Inventory

Revenues and Delivery DD&A Adjustments

Revenues Production and Delivery DD&A

Totals presented above $ 1,642 $ 1,026 $ 102

11 unchanged sentences

Includes gold and silver product revenues and production costs.

Includes charges totaling $49 million ($0.04 per pound of copper) for feasibility and optimization studies.

Represents the combined total for our other mining operations as presented in Note 9.

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

Three Months Ended September 30, 2023

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

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

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

Three Months Ended March 31, 2024

(In millions) By-Product Co-Product Method

8 unchanged sentences

DD&A 108 101 7 108

Metals inventory adjustments 1 1 — 1

Noncash and other costs, net 18 b

13 unchanged sentences

DD&A 0.39 0.36

Metals inventory adjustments — —

Noncash and other costs, net 0.06 b

3 unchanged sentences

Gross profit per pound $ 0.89 $ 0.86

Reconciliation to Amounts Reported Metals

Production Inventory

Revenues and Delivery DD&A Adjustments

Reconciliation to Amounts Reported

Revenues and Delivery DD&A

Totals presented above $ 1,189 $ 756 $ 108

5 unchanged sentences

Eliminations and other — (1) —

South America mining 1,244 826 111 1

South America operations 1,136 773 108

Other mining c

6 unchanged sentences

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

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

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

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.

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

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

Nine Months Ended September 30, 2023

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

Three Months Ended March 31, 2023

(In millions) By-Product Co-Product Method

8 unchanged sentences

DD&A 107 94 13 107

Metals inventory adjustments 1 1 — 1

Noncash and other costs, net 26 b

13 unchanged sentences

DD&A 0.35 0.31

Metals inventory adjustments — —

Noncash and other costs, net 0.09 b

4 unchanged sentences

Reconciliation to Amounts Reported

Production Inventory

Revenues and Delivery DD&A Adjustments

Revenues and Delivery DD&A

Totals presented above $ 1,402 $ 783 $ 107

5 unchanged sentences

Eliminations and other (1) (2) —

South America mining 3,828 2,416 350 1

South America operations 1,436 807 107

Other mining c

5 unchanged sentences

Includes charges totaling $9 million ($0.03 per pound of copper) for feasibility studies.

Represents the combined total for our other mining operations as presented in Note 9.

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

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

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

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.

Represents the combined total for our other mining operations as presented in Note 9.

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

Three Months Ended September 30, 2023

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

Indonesia Operations Product Revenues, Production Costs and Unit Net Cash (Credits) Costs

Three Months Ended March 31, 2024

(In millions) Co-Product Method

7 unchanged sentences

Royalty on metals 118 70 46 2 118

Net cash costs 190 657 305 13 975

Net cash (credits) costs (57) 725 454 21 1,200

DD&A 335 203 126 6 335

14 unchanged sentences

Royalty on metals 0.23 0.15 81

Unit net cash costs 0.44 1.53 773

Unit net cash (credits) costs (0.12) 1.47 805

DD&A 0.68 0.41 224

7 unchanged sentences

Totals presented above $ 3,203 $ 753 $ 335

Treatment charges (87) 51

Treatment charges (89) 84 c

Export duties (156) — —

4 unchanged sentences

Eliminations and other — 1 —

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

Includes silver sales of 1.3 million ounces ($22.96 per ounce average realized price).

Includes charges totaling $3 million ($0.01 per pound of copper) for feasibility and optimization studies.

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

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

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

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

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

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

Indonesia operations 2,825 861 335

Other mining d

4,955 4,253 244

2 unchanged sentences

Includes silver sales of 2.1 million ounces ($23.90 per ounce average realized price).

Includes net credits totaling $21 million ($0.05 per pound of copper) associated with historical tax audits.

Includes charges totaling $15 million ($0.03 per pound of copper) for the Indonesia smelter projects’ operational readiness and startup costs.

Represents tolling costs paid to PT Smelting.

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

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

Nine Months Ended September 30, 2023

Indonesia Operations Product Revenues, Production Costs and Unit Net Cash (Credits) Costs

Three Months Ended March 31, 2023

(In millions) Co-Product Method

7 unchanged sentences

Royalty on metals 58 37 20 1 58

Net cash costs 141 1,555 894 42 2,491

Net cash (credits) costs (15) 329 208 11 548

DD&A 148 88 57 3 148

15 unchanged sentences

Royalty on metals 0.29 0.19 76

Unit net cash costs 0.14 1.53 776

Unit net cash (credits) costs (0.08) 1.66 781

DD&A 0.75 0.45 214

16 unchanged sentences

Eliminations and other — (1) —

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

Includes silver sales of 4.0 million ounces ($23.37 per ounce average realized price).

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.

Represents the combined total for our other mining operations as presented in Note 9.

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

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

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

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

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

Indonesia operations 1,368 338 148

Other mining c

3 unchanged sentences

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

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.

Represents the combined total for our other mining operations as presented in Note 9.

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

Three Months Ended September 30,

(In Millions) 2023 2022

Revenues, excluding adjustments a

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

Noncash and other costs, net 4

Total costs 140 119

Gross profit $ 13 $ 15

Molybdenum sales (millions of recoverable pounds) a

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

Total unit costs 20.73 14.66

Gross profit per pound $ 1.85 $ 1.85

Reconciliation to Amounts Reported

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

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.

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

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.

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

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions) 2024 2023

20 unchanged sentences

Reconciliation to Amounts Reported

Nine Months Ended September 30, 2023 Revenues and Delivery DD&A

Three Months Ended March 31, 2024 Revenues and Delivery DD&A

Totals presented above $ 152 $ 116 $ 16

6 unchanged sentences

As reported in our consolidated financial statements $ 6,321 $ 3,844 $ 595

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Totals presented above $ 230 $ 91 $ 20

10 unchanged sentences

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 copper mines and South America operations.

CAUTIONARY STATEMENT

4 unchanged sentences

production and sales volumes;

unit net cash costs and operating costs;

unit net cash costs (credits) and operating costs;

capital expenditures;

operating plans;

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;

PT-FI’s construction and completion of additional domestic smelting and refining capacity in Indonesia in accordance with the terms of its IUPK;

extension of PT-FI’s IUPK beyond 2041;

export licenses;

export duties;

export volumes;

13 unchanged sentences

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.

The declaration and payment of dividends (base or variable), and timing and amount of any share repurchases are at the discretion of our 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 our Board or management, as applicable.

Our 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.

2 unchanged sentences

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;

completion of additional domestic smelting and refining capacity in Indonesia;

production rates;

4 unchanged sentences

reductions in liquidity and access to capital;

changes in tax laws and regulations, including the impact of the Act;

any major public health crisis;

changes in tax laws and regulations;

political and social risks, including the potential effects of violence in Indonesia, civil unrest in Peru, and relations with local communities and Indigenous Peoples;

1 unchanged sentence

mine sequencing;

changes in mine plans or operational modifications, delays, deferrals or cancellations;

changes in mine plans or operational modifications, delays, deferrals or cancellations, including the ability to smelt and refine;

results of technical, economic or feasibility studies;

3 unchanged sentences

discussions relating to the extension of PT-FI’s IUPK beyond 2041;

cybersecurity incidents;

labor relations, including labor-related work stoppages and costs;

cybersecurity risks;

any major public health crisis;

labor relations, including labor-related work stoppages and increased costs;

compliance with applicable environmental, health and safety laws and regulations;

4 unchanged sentences

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.

of our 2023 Form 10-K.

Investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made, including for example commodity prices, which we cannot control, and production volumes and costs or technological solutions and 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,

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.

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.

We undertake no obligation to update any forward-looking statements, which speak only as of the date made, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes.

This report on Form 10-Q also contains measures such as net debt and unit net cash costs (credits) per pound of copper and molybdenum, which are not recognized under U.S.

Refer to “Operations – Unit Net Cash Costs” and “Operations - Unit Net Cash (Credits) Costs” for further discussion of unit net cash costs (credits) associated with our operating divisions, and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements.

Refer to “Net Debt” for reconciliations of consolidated debt, consolidated cash and cash equivalents, and current restricted cash associated with PT-FI’s export proceeds to net debt.

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 2. Management’s Discussion and Analysis