FREEPORT-MCMORAN INC 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. In Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), “we,” “us” and “our” refer to Freeport-McMoRan Inc. (FCX) and its consolidated subsidiaries. You should read this discussion in conjunction with our consolidated financial statements, the related MD&A and the discussion of our Business and Properties in our annual report on Form 10-K for the year ended December 31, 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 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. 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. OVERVIEW 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 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. 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. 23 Table of Contents OUTLOOK As further discussed in “Risk Factors” in Part I, Item 1A. of our 2023 Form 10-K, our financial results vary as a result of fluctuations in market prices primarily for copper, gold and, to a lesser extent, molybdenum, as well as other factors. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. Refer to “Markets” below for further discussion. Because we cannot control the prices of our products, the key measures that management focuses on in operating our business are sales volumes, unit net cash costs, operating cash flows and capital expenditures. Consolidated Sales Volumes Following are our projected consolidated sales volumes for the year 2024: Copper (billions of recoverable pounds): North America copper mines 1.28 South America operations 1.15 Indonesia operations 1.73 a Total 4.15 b Gold (millions of recoverable ounces) 2.0 a Molybdenum (millions of recoverable pounds) 84 c a. 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. b. Does not foot because of rounding. c. 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 2023 Form 10-K. Consolidated Unit Net Cash Costs 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 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. 24 Table of Contents Consolidated Operating Cash Flows Our consolidated operating cash flows vary with sales volumes; prices realized from copper, gold and molybdenum sales; production costs; income taxes; other working capital changes; and other factors. 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 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 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 for the remainder of 2024 are expected to be funded with availability under PT-FI’s revolving credit facility. 25 Table of Contents MARKETS 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. 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 2014 through March 2024. 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. 26 Table of Contents 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. 27 Table of Contents 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 March 31, 2024 2023 SUMMARY FINANCIAL DATA (in millions, except per share amounts) Revenues a,b $ 6,321 $ 5,389 Operating income a $ 1,634 $ 1,601 Net income attributable to common stock c $ 473 d $ 663 e 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 f $ 1,896 $ 1,050 Capital expenditures $ 1,254 $ 1,121 At March 31: Cash and cash equivalents $ 5,208 $ 6,852 Restricted cash and cash equivalents, current $ 1,034 g $ 118 Total debt, including current portion $ 9,425 $ 9,635 a. Refer to Note 9 for a summary of revenues and operating income by operating division. b. 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. c. We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations – Smelting and Refining” for a summary of net impacts from changes in these deferrals. d. Includes net 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. e. Includes net charges totaling $94 million, primarily associated with net adjustments to environmental obligations, contested tax matters and asset impairments in North America. f. Working capital and other uses totaled $97 million in first-quarter 2024 and $452 million in first-quarter 2023. g. 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. 28 Table of Contents Three Months Ended March 31, 2024 2023 SUMMARY OPERATING DATA Copper (millions of recoverable pounds) Production 1,085 965 Sales, excluding purchases 1,108 832 Average realized price per pound $ 3.94 $ 4.11 Site production and delivery costs per pound a $ 2.32 $ 2.57 Unit net cash costs per pound a $ 1.51 $ 1.76 Gold (thousands of recoverable ounces) Production 549 405 Sales, excluding purchases 568 270 Average realized price per ounce $ 2,145 $ 1,949 Molybdenum (millions of recoverable pounds) Production 18 21 Sales, excluding purchases 20 19 Average realized price per pound $ 20.38 $ 30.32 a. Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs. For reconciliations of per pound unit net cash costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.” Revenues Consolidated revenues totaled $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 March 31 Consolidated revenues - 2023 period $ 5,389 Higher sales volumes: Copper 1,134 Gold 581 Molybdenum 31 (Lower) higher average realized prices: Copper (188) Gold 111 Molybdenum (203) Adjustments for prior period provisionally priced copper sales (217) 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 Consolidated revenues - 2024 period $ 6,321 Sales Volumes. 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 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 29 Table of Contents 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. Accordingly, in times of rising copper prices, our revenues benefit from adjustments to the final pricing of provisionally priced sales pursuant to contracts entered into in prior periods; in times of falling copper prices, the opposite occurs. Prior Period Provisionally Priced Copper Sales. Net (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 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 $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. 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 increase in treatment charges in first-quarter 2024, compared to first-quarter 2023, primarily reflects higher copper sales volumes. Royalties and Export Duties. 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 $3.8 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. 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. 30 Table of Contents 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. 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 Environmental obligation costs reflect net revisions to our long-term environmental obligations, which vary from period to period because of changes to environmental laws and regulations, the settlement of environmental matters and/or circumstances affecting our operations that could result in significant changes in our estimates. Shutdown costs include care-and-maintenance costs and any litigation, remediation or related expenditures associated with closed facilities or operations. 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 $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. 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 $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. Income Taxes Following is a summary of the approximate amounts used in the calculation of our consolidated income tax provision (in millions, except percentages): Three Months Ended March 31, 2024 2023 Income (Loss) a Effective Tax Rate Income Tax (Provision) Benefit Income (Loss) a Effective Tax Rate Income Tax (Provision) Benefit U.S. b $ (270) — % $ (1) $ 213 — % c $ 4 South America 267 39 % (103) 499 39 % (194) Indonesia 1,627 36 % (591) 892 37 % (327) PT-FI historical tax matters 16 N/A 182 d (5) N/A (3) Eliminations and other 34 N/A — e (61) N/A 22 Rate adjustment f — N/A 1 — N/A (1) Consolidated FCX $ 1,674 31 % $ (512) $ 1,538 32 % $ (499) a. Represents income (loss) before income taxes, equity in affiliated companies' net earnings, and noncontrolling interests. b. 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. c. Includes a valuation allowance release on prior year unbenefited net operating losses. d. Refer to Note 4 for further discussion. e. 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. 31 Table of Contents f. In accordance with applicable accounting rules, we adjust our interim provision for income taxes equal to our consolidated tax rate. Assuming achievement of current sales volume and cost estimates, and average prices of $4.25 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 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 $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. OPERATIONS Responsible Production 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 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 32 Table of Contents $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 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 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 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. 33 Table of Contents Operating Data. Following is summary consolidated operating data for the North America copper mines: Three Months Ended March 31, 2024 2023 Operating Data, Net of Joint Venture Interests Copper (millions of recoverable pounds) Production 314 332 Sales, excluding purchases 331 332 Average realized price per pound $ 3.96 $ 4.16 Molybdenum (millions of recoverable pounds) Production a 7 7 100% Operating Data Leach operations Leach ore placed in stockpiles (metric tons per day) 617,400 613,200 Average copper ore grade (%) 0.21 0.27 Copper production (millions of recoverable pounds) 211 234 Mill operations Ore milled (metric tons per day) 307,600 297,500 Average ore grade (%): Copper 0.32 0.34 Molybdenum 0.02 0.02 Copper recovery rate (%) 81.0 80.4 Copper production (millions of recoverable pounds) 153 154 a. 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. We believe unit net cash costs per pound of copper is a measure that provides investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. 34 Table of Contents Gross Profit per Pound of Copper and Molybdenum The following table summarizes unit net cash costs and gross profit per pound at our North America copper mines. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. Three Months Ended March 31, 2024 2023 By- Product Method Co-Product Method By- Product Method Co-Product Method Copper Molyb- denum a Copper Molyb- denum a Revenues, excluding adjustments $ 3.96 $ 3.96 $ 18.49 $ 4.16 $ 4.16 $ 28.35 Site production and delivery, before net noncash and other costs shown below 3.23 2.92 15.89 2.91 2.54 19.85 By-product credits (0.38) — — (0.59) — — Treatment charges 0.13 0.13 — 0.13 0.12 — Unit net cash costs 2.98 3.05 15.89 2.45 2.66 19.85 DD&A 0.34 0.31 1.23 0.31 0.27 1.36 Noncash and other costs, net 0.13 b 0.12 0.44 0.22 b 0.18 1.60 Total unit costs 3.45 3.48 17.56 2.98 3.11 22.81 Revenue adjustments, primarily for pricing on prior period open sales — — — 0.04 0.04 — Gross profit per pound $ 0.51 $ 0.48 $ 0.93 $ 1.22 $ 1.09 $ 5.54 Copper sales (millions of recoverable pounds) 333 333 335 335 Molybdenum sales (millions of recoverable pounds) a 7 7 a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. b. Includes charges totaling $0.05 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 $2.98 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. Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods. Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales. Average unit net cash costs (net of by-product credits) for our North America copper mines are expected to approximate $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. 35 Table of Contents 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 operations: Three Months Ended March 31, 2024 2023 Copper (millions of recoverable pounds) Production 280 304 Sales 284 302 Average realized price per pound $ 3.94 $ 4.08 Molybdenum (millions of recoverable pounds) Production a 3 6 Leach operations Leach ore placed in stockpiles (metric tons per day) 170,400 203,900 Average copper ore grade (%) 0.41 0.33 Copper production (millions of recoverable pounds) 71 86 Mill operations Ore milled (metric tons per day) 397,200 405,100 Average ore grade (%): Copper 0.33 0.34 Molybdenum 0.01 0.01 Copper recovery rate (%) 83.3 83.9 Copper production (millions of recoverable pounds) 209 218 a. Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde. 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. We believe unit net cash costs per pound of copper is a measure that provides investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. 36 Table of Contents Gross Profit per Pound of Copper The following table summarizes unit net cash costs and gross profit per pound of copper at our South America operations. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. Three Months Ended March 31, 2024 2023 By-Product Method Co-Product Method By-Product Method Co-Product Method Revenues, excluding adjustments $ 3.94 $ 3.94 $ 4.08 $ 4.08 Site production and delivery, before net noncash and other costs shown below 2.61 2.47 2.54 2.27 By-product credits (0.20) — (0.53) — Treatment charges 0.18 0.18 0.18 0.18 Royalty on metals 0.01 0.01 0.01 0.01 Unit net cash costs 2.60 2.66 2.20 2.46 DD&A 0.39 0.36 0.35 0.31 Noncash and other costs, net 0.06 a 0.06 0.09 a 0.08 Total unit costs 3.05 3.08 2.64 2.85 Revenue adjustments, primarily for pricing on prior period open sales — — 0.29 0.29 Gross profit per pound $ 0.89 $ 0.86 $ 1.73 $ 1.52 Copper sales (millions of recoverable pounds) 284 284 302 302 a. 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. Because certain assets are depreciated on a straight-line basis, South America’s unit depreciation rate may vary with asset additions and the level of copper production and sales. Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods. Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales. Average unit net cash costs (net of by-product credits) for South America 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. Indonesia 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 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. 37 Table of Contents 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 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. 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 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. Kucing Liar. Long-term mine development activities are ongoing for PT-FI’s Kucing Liar deposit in the Grasberg minerals district, which is expected to produce over 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. Capital investments are estimated to average approximately $400 million per year over this period. At full operating rates of approximately 90,000 metric tons of ore per day, annual production from Kucing Liar is expected to approximate 560 million pounds of copper and 520 thousand ounces of gold, providing PT-FI with sustained long-term, large-scale and low-cost production. Kucing Liar will benefit from substantial shared infrastructure and PT-FI’s experience and long-term success in block-cave mining. Indonesia 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. 38 Table of Contents 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 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 operations: Three Months Ended March 31, 2024 2023 Copper (millions of recoverable pounds) Production 491 329 Sales 493 198 Average realized price per pound $ 3.92 $ 4.07 Gold (thousands of recoverable ounces) Production 545 402 Sales 564 266 Average realized price per ounce $ 2,145 $ 1,949 Ore extracted and milled (metric tons per day): Grasberg Block Cave underground mine 139,300 89,700 Deep Mill Level Zone underground mine 67,300 70,000 Big Gossan underground mine 9,000 7,000 Other adjustments 3,900 (1,900) Total 219,500 164,800 Average ore grades: Copper (%) 1.31 1.17 Gold (grams per metric ton) 1.13 1.07 Recovery rates (%): Copper 89.4 90.3 Gold 77.5 78.2 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 39 Table of Contents 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. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. Gross Profit per Pound of Copper and per Ounce of Gold The following table summarizes the unit net cash (credits) costs and gross profit per pound of copper and per ounce of gold at our Indonesia mining operations. Refer to “Product Revenues and Production Costs” for an explanation of “by-product” and “co-product” methods and a reconciliation of unit net cash credits per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. Three Months Ended March 31, 2024 2023 By-Product Method Co-Product Method By-Product Method Co-Product Method Copper Gold Copper Gold Revenues, excluding adjustments $ 3.92 $ 3.92 $ 2,145 $ 4.07 $ 4.07 $ 1,949 Site production and delivery, before net noncash and other costs shown below 1.53 0.92 504 2.01 1.20 574 Gold, silver and other by-product credits (2.55) — — (2.84) — — Treatment charges 0.35 0.21 116 0.37 0.22 106 Export duties 0.32 0.19 104 0.09 0.05 25 Royalty on metals 0.23 0.15 81 0.29 0.19 76 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 0.05 a 0.03 16 0.16 a 0.09 43 Total unit costs 0.61 1.91 1,045 0.83 2.20 1,038 Revenue adjustments, primarily for pricing on prior period open sales (0.01) (0.01) (14) 0.64 0.64 65 PT Smelting intercompany profit — — — 0.56 0.34 162 Gross profit per pound/ounce $ 3.30 $ 2.00 $ 1,086 $ 4.44 $ 2.85 $ 1,138 Copper sales (millions of recoverable pounds) 493 493 198 198 Gold sales (thousands of recoverable ounces) 564 266 a. 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. 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. 40 Table of Contents 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’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. Molybdenum 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 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. Unit Net Cash Costs Per Pound of Molybdenum. We believe unit net cash costs per pound of molybdenum is a measure that provides investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. Average unit net cash costs for the 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 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 41 Table of Contents 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. 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. CAPITAL RESOURCES AND LIQUIDITY Our consolidated operating cash flows vary with sales volumes; prices realized from copper, gold and molybdenum sales; production costs; income taxes; other working capital changes; and other factors. We 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 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 $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 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 solid 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 debt for the Indonesia smelter projects). Our Board of Directors (Board) reviews the structure of the performance-based payout framework at least annually. 42 Table of Contents 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 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. Cash Following is a summary of the U.S. and international components of consolidated cash and cash equivalents available to the parent company, net of noncontrolling interests’ share, taxes and other costs at March 31, 2024 (in billions): Cash at domestic companies $ 2.3 Cash at international operations 2.9 a Total consolidated cash and cash equivalents 5.2 Noncontrolling interests’ share (1.4) Cash, net of noncontrolling interests’ share 3.8 Withholding taxes (0.1) Net cash available $ 3.7 a. 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. Management believes that sufficient liquidity is available in the U.S. from cash balances and availability from our revolving credit facility. We have not elected to permanently reinvest earnings from our foreign subsidiaries, and we have recorded deferred tax liabilities for foreign earnings that are available to be repatriated to the U.S. From time to time, our foreign subsidiaries distribute earnings to the U.S. through dividends that are subject to applicable withholding taxes and noncontrolling interests’ share. Debt At March 31, 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. 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 $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. 43 Table of Contents Investing Activities Capital Expenditures. 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 $1.0 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 $0.2 billion in each of first-quarter 2024 and 2023. The declaration and payment of dividends (base or variable) is at the discretion of our Board and will depend on our financial results, cash requirements, global economic conditions and other factors deemed relevant by our Board. Refer to Note 5, Item 1A. “Risk Factors” contained in Part I of our 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 $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. Contributions from Noncontrolling 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 There have been no material changes in our contractual obligations since December 31, 2023. Refer to Note 13 and Part II, Items 7. and 7A. in our 2023 Form 10-K for information regarding our contractual obligations. CONTINGENCIES 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 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. of our 2023 Form 10-K, as updated by Note 8, for further information regarding litigation and other contingencies. 44 Table of Contents NEW ACCOUNTING STANDARDS There were no significant updates to previously reported accounting standards included in Note 1 of our 2023 Form 10-K. NET DEBT We believe that net debt provides investors with information related to the performance-based payout framework in our financial policy, which requires us to maintain our net debt at a level not to exceed the net debt target of $3 billion to $4 billion (excluding debt for the Indonesia smelter projects). We define net debt as consolidated debt less (i) consolidated cash and cash equivalents and (ii) current restricted cash associated with PT-FI's export proceeds. This information differs from consolidated debt determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for consolidated debt determined in accordance with U.S. GAAP. Our net debt, which may not be comparable to similarly titled measures reported by other companies, follows (in billions): As of March 31, 2024 Current portion of debt $ 0.8 Long-term debt, less current portion 8.7 Consolidated debt 9.4 a Less: consolidated cash and cash equivalents 5.2 Less: current restricted cash associated with PT-FI’s export proceeds b 0.9 FCX net debt 3.3 Less: debt for Indonesia smelter projects c 3.0 FCX net debt, excluding debt for the Indonesia smelter projects $ 0.3 a. Does not foot because of rounding. b. 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. c. Represents senior notes issued by PT-FI. 45 Table of Contents PRODUCT REVENUES AND PRODUCTION COSTS We believe unit net cash costs (credits) per pound of copper and molybdenum are measures that provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for the respective operations. We use these measures for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. These measures are presented by other metals mining companies, although our measures may not be comparable to similarly titled measures reported by other companies. We present gross profit per pound of copper in the following tables using both a “by-product” method and a “co-product” method. We use the by-product method in our presentation of gross profit per pound of copper because (i) the majority of our revenues are copper revenues, (ii) we mine ore, which contains copper, gold, molybdenum and other metals, (iii) it is not possible to specifically assign all of our costs to revenues from the copper, gold, molybdenum and other metals we produce and (iv) it is the method used by our management and Board to monitor our mining operations and to compare mining operations in certain industry publications. In the co-product method presentations, shared costs are allocated to the different products based on their relative revenue values, which will vary to the extent our metals sales volumes and realized prices change. We show revenue adjustments for prior period open sales as a separate line item. Because these adjustments do not result from current period sales, these amounts have been reflected separately from revenues on current period sales. Noncash and other costs, net which are removed from site production and delivery costs in the calculation of unit net cash costs, 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. The following schedules are presentations under both the by-product and co-product methods together with reconciliations to amounts reported in our consolidated financial statements. 46 Table of Contents North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended March 31, 2024 (In millions) By-Product Co-Product Method Method Copper Molybdenum a Other b Total Revenues, excluding adjustments $ 1,316 $ 1,316 $ 136 $ 39 $ 1,491 Site production and delivery, before net noncash and other costs shown below 1,074 973 116 32 1,121 By-product credits (128) — — — — Treatment charges 44 42 — 2 44 Net cash costs 990 1,015 116 34 1,165 DD&A 111 101 9 1 111 Noncash and other costs, net 45 c 41 4 — 45 Total costs 1,146 1,157 129 35 1,321 Gross profit $ 170 $ 159 $ 7 $ 4 $ 170 Copper sales (millions of recoverable pounds) 333 333 Molybdenum sales (millions of recoverable pounds) a 7 Gross profit per pound of copper/molybdenum: Revenues, excluding adjustments $ 3.96 $ 3.96 $ 18.49 Site production and delivery, before net noncash and other costs shown below 3.23 2.92 15.89 By-product credits (0.38) — — Treatment charges 0.13 0.13 — Unit net cash costs 2.98 3.05 15.89 DD&A 0.34 0.31 1.23 Noncash and other costs, net 0.13 c 0.12 0.44 Total unit costs 3.45 3.48 17.56 Gross profit per pound $ 0.51 $ 0.48 $ 0.93 Reconciliation to Amounts Reported Revenues Production and Delivery DD&A Totals presented above $ 1,491 $ 1,121 $ 111 Treatment charges (3) 41 — Noncash and other costs, net — 45 — Eliminations and other 14 17 1 North America copper mines 1,502 1,224 112 Other mining d 6,278 3,890 467 Corporate, other & eliminations (1,459) (1,270) 16 As reported in our consolidated financial statements $ 6,321 $ 3,844 $ 595 a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. b. Includes gold and silver product revenues and production costs. c. Includes charges totaling $15 million ($0.05 per pound of copper) for feasibility studies. d. Represents the combined total for our other segments as presented in Note 9. 47 Table of Contents North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended March 31, 2023 (In millions) By-Product Co-Product Method Method Copper Molybdenum a Other b Total Revenues, excluding adjustments $ 1,394 $ 1,394 $ 212 $ 36 $ 1,642 Site production and delivery, before net noncash and other costs shown below 976 850 149 27 1,026 By-product credits (198) — — — — Treatment charges 42 40 — 2 42 Net cash costs 820 890 149 29 1,068 DD&A 102 90 10 2 102 Noncash and other costs, net 76 c 63 12 1 76 Total costs 998 1,043 171 32 1,246 Other revenue adjustments, primarily for pricing on prior period open sales 15 15 — — 15 Gross profit $ 411 $ 366 $ 41 $ 4 $ 411 Copper sales (millions of recoverable pounds) 335 335 Molybdenum sales (millions of recoverable pounds) a 7 Gross profit per pound of copper/molybdenum: Revenues, excluding adjustments $ 4.16 $ 4.16 $ 28.35 Site production and delivery, before net noncash and other costs shown below 2.91 2.54 19.85 By-product credits (0.59) — — Treatment charges 0.13 0.12 — Unit net cash costs 2.45 2.66 19.85 DD&A 0.31 0.27 1.36 Noncash and other costs, net 0.22 c 0.18 1.60 Total unit costs 2.98 3.11 22.81 Other revenue adjustments, primarily for pricing on prior period open sales 0.04 0.04 — Gross profit per pound $ 1.22 $ 1.09 $ 5.54 Reconciliation to Amounts Reported Revenues Production and Delivery DD&A Totals presented above $ 1,642 $ 1,026 $ 102 Treatment charges (6) 36 — Noncash and other costs, net — 76 — Other revenue adjustments, primarily for pricing on prior period open sales 15 — — Eliminations and other 19 24 1 North America copper mines 1,670 1,162 103 Other mining d 5,312 3,502 283 Corporate, other & eliminations (1,593) (1,499) 13 As reported in our consolidated financial statements $ 5,389 $ 3,165 $ 399 a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. b. Includes gold and silver product revenues and production costs. c. Includes charges totaling $27 million ($0.08 per pound of copper) for feasibility and optimization studies and $16 million ($0.05 per pound of copper) related to asset impairments. d. Represents the combined total for our other segments as presented in Note 9. 48 Table of Contents 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 Method Copper Other a Total Revenues, excluding adjustments $ 1,119 $ 1,119 $ 70 $ 1,189 Site production and delivery, before net noncash and other costs shown below 743 703 53 756 By-product credits (57) — — — Treatment charges 50 50 — 50 Royalty on metals 2 2 — 2 Net cash costs 738 755 53 808 DD&A 108 101 7 108 Noncash and other costs, net 18 b 18 — 18 Total costs 864 874 60 934 Other revenue adjustments, primarily for pricing on prior period open sales (1) — (1) (1) Gross profit $ 254 $ 245 $ 9 $ 254 Copper sales (millions of recoverable pounds) 284 284 Gross profit per pound of copper: Revenues, excluding adjustments $ 3.94 $ 3.94 Site production and delivery, before net noncash and other costs shown below 2.61 2.47 By-product credits (0.20) — Treatment charges 0.18 0.18 Royalty on metals 0.01 0.01 Unit net cash costs 2.60 2.66 DD&A 0.39 0.36 Noncash and other costs, net 0.06 b 0.06 Total unit costs 3.05 3.08 Other revenue adjustments, primarily for pricing on prior period open sales — — Gross profit per pound $ 0.89 $ 0.86 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 1,189 $ 756 $ 108 Treatment charges (50) — — Royalty on metals (2) — — Noncash and other costs, net — 18 — Other revenue adjustments, primarily for pricing on prior period open sales (1) — — Eliminations and other — (1) — South America operations 1,136 773 108 Other mining c 6,644 4,341 471 Corporate, other & eliminations (1,459) (1,270) 16 As reported in our consolidated financial statements $ 6,321 $ 3,844 $ 595 a. Includes silver sales of 0.8 million ounces ($24.45 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. b. Includes charges totaling $11 million ($0.04 per pound of copper) for feasibility studies. c. Represents the combined total for our other segments as presented in Note 9. 49 Table of Contents 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 Method Copper Other a Total Revenues, excluding adjustments $ 1,229 $ 1,229 $ 173 $ 1,402 Site production and delivery, before net noncash and other costs shown below 767 685 98 783 By-product credits (160) — — — Treatment charges 55 55 — 55 Royalty on metals 2 2 — 2 Net cash costs 664 742 98 840 DD&A 107 94 13 107 Noncash and other costs, net 26 b 23 3 26 Total costs 797 859 114 973 Other revenue adjustments, primarily for pricing on prior period open sales 89 89 3 92 Gross profit $ 521 $ 459 $ 62 $ 521 Copper sales (millions of recoverable pounds) 302 302 Gross profit per pound of copper: Revenues, excluding adjustments $ 4.08 $ 4.08 Site production and delivery, before net noncash and other costs shown below 2.54 2.27 By-product credits (0.53) — Treatment charges 0.18 0.18 Royalty on metals 0.01 0.01 Unit net cash costs 2.20 2.46 DD&A 0.35 0.31 Noncash and other costs, net 0.09 b 0.08 Total unit costs 2.64 2.85 Other revenue adjustments, primarily for pricing on prior period open sales 0.29 0.29 Gross profit per pound $ 1.73 $ 1.52 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 1,402 $ 783 $ 107 Treatment charges (55) — — Royalty on metals (2) — — Noncash and other costs, net — 26 — Other revenue adjustments, primarily for pricing on prior period open sales 92 — — Eliminations and other (1) (2) — South America operations 1,436 807 107 Other mining c 5,546 3,857 279 Corporate, other & eliminations (1,593) (1,499) 13 As reported in our consolidated financial statements $ 5,389 $ 3,165 $ 399 a. Includes silver sales of 1.0 million ounces ($23.41 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. b. Includes charges totaling $9 million ($0.03 per pound of copper) for feasibility studies. c. Represents the combined total for our other segments as presented in Note 9. 50 Table of Contents Indonesia Operations Product Revenues, Production Costs and Unit Net Cash (Credits) Costs Three Months Ended March 31, 2024 (In millions) Co-Product Method By-Product Method Copper Gold Silver & Other a Total Revenues, excluding adjustments $ 1,938 $ 1,938 $ 1,209 $ 56 $ 3,203 Site production and delivery, before net noncash and other costs shown below 753 456 284 13 753 Gold, silver and other by-product credits (1,257) — — — — Treatment charges 173 105 65 3 173 Export duties 156 94 59 3 156 Royalty on metals 118 70 46 2 118 Net cash (credits) costs (57) 725 454 21 1,200 DD&A 335 203 126 6 335 Noncash and other costs, net 23 b 14 9 — 23 Total costs 301 942 589 27 1,558 Other revenue adjustments, primarily for pricing on prior period open sales (7) (7) (7) (1) (15) Gross profit $ 1,630 $ 989 $ 613 $ 28 $ 1,630 Copper sales (millions of recoverable pounds) 493 493 Gold sales (thousands of recoverable ounces) 564 Gross profit per pound of copper/per ounce of gold: Revenues, excluding adjustments $ 3.92 $ 3.92 $ 2,145 Site production and delivery, before net noncash and other costs shown below 1.53 0.92 504 Gold, silver and other by-product credits (2.55) — — Treatment charges 0.35 0.21 116 Export duties 0.32 0.19 104 Royalty on metals 0.23 0.15 81 Unit net cash (credits) costs (0.12) 1.47 805 DD&A 0.68 0.41 224 Noncash and other costs, net 0.05 b 0.03 16 Total unit costs 0.61 1.91 1,045 Other revenue adjustments, primarily for pricing on prior period open sales (0.01) (0.01) (14) Gross profit per pound/ounce $ 3.30 $ 2.00 $ 1,086 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 3,203 $ 753 $ 335 Treatment charges (89) 84 c — Export duties (156) — — Royalty on metals (118) — — Noncash and other costs, net — 23 — Other revenue adjustments, primarily for pricing on prior period open sales (15) — — Eliminations and other — 1 — Indonesia operations 2,825 861 335 Other mining d 4,955 4,253 244 Corporate, other & eliminations (1,459) (1,270) 16 As reported in our consolidated financial statements $ 6,321 $ 3,844 $ 595 a. Includes silver sales of 2.1 million ounces ($23.90 per ounce average realized price). b. Includes charges totaling $15 million ($0.03 per pound of copper) for the Indonesia smelter projects’ operational readiness and startup costs. c. Represents tolling costs paid to PT Smelting. d. Represents the combined total for our other segments as presented in Note 9. 51 Table of Contents Indonesia Operations Product Revenues, Production Costs and Unit Net Cash (Credits) Costs Three Months Ended March 31, 2023 (In millions) Co-Product Method By-Product Method Copper Gold Silver & Other a Total Revenues, excluding adjustments $ 806 $ 806 $ 518 $ 28 $ 1,352 Site production and delivery, before net noncash and other costs shown below 399 238 153 8 399 Gold, silver and other by-product credits (563) — — — — Treatment charges 74 44 28 2 74 Export duties 17 10 7 — 17 Royalty on metals 58 37 20 1 58 Net cash (credits) costs (15) 329 208 11 548 DD&A 148 88 57 3 148 Noncash and other costs, net 30 b 18 11 1 30 Total costs 163 435 276 15 726 Other revenue adjustments, primarily for pricing on prior period open sales 126 126 17 — 143 PT Smelting intercompany profit 112 67 43 2 112 Gross profit $ 881 $ 564 $ 302 $ 15 $ 881 Copper sales (millions of recoverable pounds) 198 198 Gold sales (thousands of recoverable ounces) 266 Gross profit per pound of copper/per ounce of gold: Revenues, excluding adjustments $ 4.07 $ 4.07 $ 1,949 Site production and delivery, before net noncash and other costs shown below 2.01 1.20 574 Gold, silver and other by-product credits (2.84) — — Treatment charges 0.37 0.22 106 Export duties 0.09 0.05 25 Royalty on metals 0.29 0.19 76 Unit net cash (credits) costs (0.08) 1.66 781 DD&A 0.75 0.45 214 Noncash and other costs, net 0.16 b 0.09 43 Total unit costs 0.83 2.20 1,038 Other revenue adjustments, primarily for pricing on prior period open sales 0.64 0.64 65 PT Smelting intercompany profit 0.56 0.34 162 Gross profit per pound/ounce $ 4.44 $ 2.85 $ 1,138 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 1,352 $ 399 $ 148 Treatment charges (52) 22 — Export duties (17) — — Royalty on metals (58) — — Noncash and other costs, net — 30 — Other revenue adjustments, primarily for pricing on prior period open sales 143 — — PT Smelting intercompany profit — (112) — Eliminations and other — (1) — Indonesia operations 1,368 338 148 Other mining c 5,614 4,326 238 Corporate, other & eliminations (1,593) (1,499) 13 As reported in our consolidated financial statements $ 5,389 $ 3,165 $ 399 a. Includes silver sales of 0.9 million ounces ($23.29 per ounce average realized price). b. Includes net charges totaling $13 million ($0.07 per pound of copper) for feasibility and optimization studies. c. Represents the combined total for our other segments as presented in Note 9. 52 Table of Contents Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended March 31, (In millions) 2024 2023 Revenues, excluding adjustments a $ 152 $ 230 Site production and delivery, before net noncash and other costs shown below 116 91 Treatment charges and other 7 7 Net cash costs 123 98 DD&A 16 20 Noncash and other costs, net 3 5 Total costs 142 123 Gross profit $ 10 $ 107 Molybdenum sales (millions of recoverable pounds) a 8 8 Gross profit per pound of molybdenum: Revenues, excluding adjustments a $ 19.47 $ 28.96 Site production and delivery, before net noncash and other costs shown below 14.94 11.39 Treatment charges and other 0.86 0.85 Unit net cash costs 15.80 12.24 DD&A 2.08 2.57 Noncash and other costs, net 0.33 0.68 Total unit costs 18.21 15.49 Gross profit per pound $ 1.26 $ 13.47 Reconciliation to Amounts Reported Production Three Months Ended March 31, 2024 Revenues and Delivery DD&A Totals presented above $ 152 $ 116 $ 16 Treatment charges and other (7) — — Noncash and other costs, net — 3 — Molybdenum mines 145 119 16 Other mining b 7,635 4,995 563 Corporate, other & eliminations (1,459) (1,270) 16 As reported in our consolidated financial statements $ 6,321 $ 3,844 $ 595 Three Months Ended March 31, 2023 Totals presented above $ 230 $ 91 $ 20 Treatment charges and other (7) — — Noncash and other costs, net — 5 — Molybdenum mines 223 96 20 Other mining b 6,759 4,568 366 Corporate, other & eliminations (1,593) (1,499) 13 As reported in our consolidated financial statements $ 5,389 $ 3,165 $ 399 a. Reflects sales of the Molybdenum mines’ production to our molybdenum sales company at market-based pricing. On a consolidated basis, realizations are based on the actual contract terms for sales to third parties; as a result, our consolidated average realized price per pound of molybdenum will differ from the amounts reported in this table. b. Represents the combined total for our other segments as presented in Note 9. Also includes amounts associated with our molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America copper mines and South America operations. 53 Table of Contents CAUTIONARY STATEMENT Our discussion and analysis contains forward-looking statements in which we discuss our potential future performance, operations and projects. Forward-looking statements are all statements other than statements of historical facts, such as plans, projections, or expectations relating to business outlook, strategy, goals or targets; global market conditions; ore grades and milling rates; production and sales volumes; unit net cash costs (credits) and operating costs; capital expenditures; operating plans; cash flows; liquidity; 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; our commitment to deliver responsibly produced copper and molybdenum, including plans to implement, validate and maintain validation of our operating sites under specific frameworks; execution of our energy and climate strategies and the underlying assumptions and estimated impacts on our business and stakeholders related thereto; achievement of 2030 climate targets and 2050 net zero aspiration; improvements in operating procedures and technology innovations and applications; exploration efforts and results; development and production activities, rates and costs; future organic growth opportunities; tax rates; the impact of copper, gold and molybdenum price changes; the impact of deferred intercompany profits on earnings; mineral reserve and mineral resource estimates; final resolution of settlements associated with ongoing legal and environmental proceedings; debt repurchases; and the ongoing implementation of our financial policy and future returns to shareholders, including dividend payments (base or variable) and share repurchases. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “targets,” “intends,” “likely,” “will,” “should,” “could,” “to be,” “potential,” “assumptions,” “guidance,” “aspirations,” “future,” “commitments,” “pursues,” “initiatives,” “objectives,” “opportunities,” “strategy” and any similar expressions are intended to identify those assertions as forward-looking statements. The declaration and payment of dividends (base or variable), and timing and amount of any share repurchases are at the discretion of 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. Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, supply of and demand for, and prices of the commodities we produce, primarily copper; PT-FI’s ability to continue to export and sell copper concentrates and anode slimes; changes in export duties, including results of proceedings to dispute export duties; completion of additional domestic smelting and refining capacity in Indonesia; production rates; timing of shipments; price and availability of consumables and components we purchase as well as constraints on supply and logistics, and transportation services; changes in our cash requirements, financial position, financing or investment plans; changes in general market, economic, geopolitical, regulatory or industry conditions; reductions in liquidity and access to capital; changes in tax laws and regulations; political and social risks, including the potential effects of violence in Indonesia, civil unrest in Peru, and relations with local communities and Indigenous Peoples; operational risks inherent in mining, with higher inherent risks in underground mining; mine sequencing; changes in mine plans or operational modifications, delays, deferrals or cancellations, including the ability to smelt and refine; results of technical, economic or feasibility studies; potential inventory adjustments; potential impairment of long-lived mining assets; satisfaction of requirements in accordance with PT-FI's IUPK to extend mining rights from 2031 through 2041; discussions relating to the extension of PT-FI’s IUPK beyond 2041; cybersecurity 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; weather- and climate-related risks; environmental risks, including availability of secure water supplies; litigation results; tailings management; our ability to comply with our responsible production commitments under specific frameworks and any changes to such frameworks and other factors described in more detail under the heading “Risk Factors” contained in Part I, Item 1A. of our 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 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. 54 Table of Contents 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. GAAP. 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.