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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 248 added, 107 removed, 508 unchanged (41% of the section changed)

44 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

(In Millions, Except Per Share Amounts)

10 unchanged sentences

Interest expense, net ( 88 ) ( 171 ) ( 177 ) ( 322 )

Net gain on early extinguishment of debt — 5 — 5

Other income, net 69 24 198 112

9 unchanged sentences

Weighted-average shares of common stock outstanding:

1,438 1,434 1,437 1,434

1,445 1,442 1,445 1,443

Dividends declared per share of common stock $ 0.15 $ 0.15 $ 0.30 $ 0.30

2 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

(In Millions)

11 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended

Six Months Ended

(In Millions)

8 unchanged sentences

Pension plan contributions ( 38 ) ( 6 )

Net gain on early extinguishment of debt — ( 5 )

Deferred income taxes 37 74

15 unchanged sentences

Indonesia mining ( 750 ) ( 790 )

Indonesia smelter projects ( 461 ) ( 345 )

Indonesia downstream processing facilities ( 740 ) ( 823 )

Molybdenum mines ( 63 ) ( 22 )

12 unchanged sentences

Payments for withholding of employee taxes related to stock-based awards ( 35 ) ( 47 )

Other, net ( 1 ) ( 1 )

Net cash used in financing activities ( 1,128 ) ( 1,812 )

5 unchanged sentences

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

THREE MONTHS ENDED MARCH 31

THREE MONTHS ENDED JUNE 30

Stockholders’ Equity

9 unchanged sentences

(In Millions)

Balance at December 31, 2023 1,619 $ 162 $ 24,637 $ ( 2,059 ) $ ( 274 ) 184 $ ( 5,773 ) $ 16,693 $ 10,617 $ 27,310

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

Exercised and issued stock-based awards 2 — 31 — — — — 31 — 31

4 unchanged sentences

— — — — — — — — 664 664

Balance at June 30, 2024 1,624 $ 162 $ 24,321 $ ( 970 ) $ ( 274 ) 186 $ ( 5,835 ) $ 17,404 $ 11,282 $ 28,686

Stockholders’ Equity

Common Stock Accum-ulated Deficit Accumu-

Other Compre-

Loss Common Stock

Held in Treasury Total

Stock-holders’ Equity

Shares At Par

Value Capital in

Par Value Number

Interests Total

(In Millions)

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

Exercised and issued stock-based awards — — 3 — — — — 3 — 3

Stock-based compensation, including the tender of shares — — 14 — — — — 14 — 14

Dividends — — ( 216 ) — — — — ( 216 ) ( 154 ) ( 370 )

Net income attributable to common stockholders — — — 343 — — — 343 — 343

Net income attributable to noncontrolling interests — — — — — — — — 388 388

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

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

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (continued)

SIX MONTHS ENDED JUNE 30

Stockholders’ Equity

13 unchanged sentences

Dividends — — ( 433 ) — — — — ( 433 ) ( 685 ) ( 1,118 )

Net income attributable to common stockholders — — — 1,089 — — — 1,089 — 1,089

Net income attributable to noncontrolling interests

— — — — — — — — 1,353 1,353

Balance at June 30, 2024 1,624 $ 162 $ 24,321 $ ( 970 ) $ ( 274 ) 186 $ ( 5,835 ) $ 17,404 $ 11,282 $ 28,686

Stockholders’ Equity

Common Stock Accum-ulated Deficit Accumu-

Other Compre-

Loss Common Stock

Held in Treasury Total

Stock-holders’ Equity

Shares At Par

Value Capital in

Par Value Number

Interests Total

(In Millions)

Balance at December 31, 2022 1,613 $ 161 $ 25,322 $ ( 3,907 ) $ ( 320 ) 183 $ ( 5,701 ) $ 15,555 $ 9,316 $ 24,871

Exercised and issued stock-based awards 5 1 55 — — — — 56 — 56

Stock-based compensation, including the tender of shares — — 60 — — 1 ( 68 ) ( 8 ) ( 1 ) ( 9 )

Dividends — — ( 433 ) — — — — ( 433 ) ( 291 ) ( 724 )

Contributions from noncontrolling interests — — 24 — — — — 24 26 50

1 unchanged sentence

Net income attributable to noncontrolling interests

— — — — — — — — 774 774

Other comprehensive income — — — — 2 — — 2 1 3

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

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

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

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

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

Operating results for the six-month period ended June 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

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

In December 2023, PT Smelting completed an expansion of its facilities.

The project was funded by PT Freeport Indonesia (PT-FI) with borrowings totaling $ 254 million that converted to equity effective June 30, 2024, increasing PT-FI’s ownership in PT Smelting to 66 % from 39.5 %.

As discussed in Note 3 of FCX’s 2023 Form 10-K, FCX has determined that PT Smelting, which is owned by PT-FI and Mitsubishi Materials Corporation, is a variable interest entity.

Since mutual consent of both PT Smelting shareholders is required to make the decisions that most significantly impact the economic performance of PT Smelting, PT-FI is not the primary beneficiary.

Accordingly, PT-FI will continue to account for its investment in PT Smelting under the equity method.

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

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

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

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

As further discussed in Note 3, in first-quarter 2024, PT-FI recorded net credits of $ 215 million associated with the closure of its 2021 corporate income tax audit and resolution of the framework for disputed tax matters.

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

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Subsequent Events.

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

FCX evaluated events after June 30, 2024, and through the date the consolidated financial statements were issued and determined any events and transactions occurring during this period that would require recognition or disclosure are appropriately addressed in these consolidated financial statements.

EARNINGS PER SHARE

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

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Net income $ 1,280 $ 731 $ 2,442 $ 1,780

3 unchanged sentences

Basic weighted-average shares of common stock outstanding

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

1,438 1,434 1,437 1,434

Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units 7 8 8 9

Diluted weighted-average shares of common stock outstanding

1,445 1,442 1,445 1,443

Net income per share attributable to common stockholders:

2 unchanged sentences

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

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

INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

The components of inventories follow:

2024 December 31, 2023

Current inventories:

Raw materials (primarily copper concentrate) $ 413 $ 469

Work-in-process 252 221

Finished goods 1,691 1,782

Total product $ 2,356 $ 2,472

Total materials and supplies, net a

$ 2,202 $ 2,169

Mill stockpiles $ 181 $ 179

Leach stockpiles 1,238 1,240

Total current mill and leach stockpiles $ 1,419 $ 1,419

Long-term inventories:

Mill stockpiles $ 222 $ 251

Leach stockpiles 1,091 1,085

Total long-term mill and leach stockpiles b

$ 1,313 $ 1,336

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

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

There were no shares of common stock associated with outstanding stock options excluded in any of the periods shown above.

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

Three Months Ended

Six Months Ended

International ( 1,262 ) ( 1,041 )

Total $ ( 1,266 ) $ ( 1,038 )

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

FCX’s consolidated effective income tax rate is a function of the various rates in the jurisdictions where it operates and was 34 % for the first six months of 2024, including a net benefit of $ 182 million related to closure of PT-FI’s 2021 corporate income tax audit and resolution of the framework for Indonesia disputed tax matters (see below for further discussion), and was 37 % for the first six months of 2023.

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

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

1 unchanged sentence

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

Indonesia Tax Matters.

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

PT-FI Historical Tax Matters.

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

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

1 unchanged sentence

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

Uncertain Tax Positions.

As further discussed in Note 7, in May 2024, an arbitration tribunal rejected FCX and Cerro Verde’s claims relating to the assessment of mining royalties on ore processed by the Cerro Verde concentrator for the period from December 2006 to December 2013.

Cerro Verde had previously paid the full amount of these disputed tax assessments, including the related interest and penalties, and a full reserve had been applied against these amounts;

as such, the decision by the arbitration tribunal had no impact on FCX’s consolidated financial statements.

FCX has reduced its unrecognized tax benefits by $ 269 million and related interest and penalties by $ 319 million (refer to Note 11 of FCX’s 2023 Form 10-K for a summary of unrecognized tax benefits and related interest and penalties).

Inflation Reduction Act of 2022.

2 unchanged sentences

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

FCX has made interpretations of certain provisions of the Act, and based on these interpretations, determined that the provisions of the Act did not impact FCX’s financial results for first-quarter 2024 or for the year 2023.

Although the U.S.

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

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

Although the Internal Revenue Service (IRS) and U.S.

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

net operating losses.

16 unchanged sentences

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

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

At June 30, 2024, FCX had $ 7 million in letters of credit issued under its revolving credit facility.

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

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

At June 30, 2024, FCX, PT-FI and Cerro Verde had no borrowings outstanding under their respective revolving credit facilities and were in compliance with their respective covenants.

On July 31, 2024, PT-FI borrowed $ 250 million under its revolving credit facility to fund capital expenditures for PT-FI’s new smelter and precious metals refinery (PMR) (collectively, the new downstream processing facilities).

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

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

Consolidated interest costs (before capitalization) totaled $ 181 million in second-quarter 2024, $ 234 million in second-quarter 2023, $ 356 million for the first six months of 2024 and $ 441 million for the first six months of 2023.

Consolidated interest costs (before capitalization) in the 2023 periods includes $ 50 million in second-quarter 2023 and $ 74 million for the first six months of 2023 associated with Cerro Verde’s contested tax rulings issued by the Peru Supreme Court.

Capitalized interest added to property, plant, equipment and mine development costs, net, totaled $ 93 million in second-quarter 2024, $ 62 million in second-quarter 2023, $ 179 million for the first six months of 2024 and $ 119 million for the first six months of 2023.

The increase in capitalized interest costs in the 2024 periods compared to the 2023 periods, primarily resulted from increased construction and development costs for projects in process, primarily at PT-FI’s new downstream processing facilities.

Share Repurchase Program and Dividends.

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

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

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

FCX’s share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion.

In July 2024, FCX acquired 1.2 million shares of its common stock for a total cost of $ 59 million ($ 50.48 average cost per share) bringing total purchases under its $ 5.0 billion share repurchase program to 49.0 million shares of common stock for a cost of $ 1.9 billion ($ 38.64 average cost per share).

The timing and amount of share repurchases is at the discretion of management and will depend on a variety of factors.

The share repurchase program may be modified, increased, suspended or terminated at any time at FCX’s Board of Directors’ (Board) discretion.

On June 26, 2024, FCX’s Board declared cash dividends totaling $ 0.15 per share on its common stock (including a $ 0.075 per share quarterly base cash dividend and a $ 0.075 per share quarterly variable, performance-based cash dividend), which were paid on August 1, 2024, to common stockholders of record as of July 15, 2024.

The declaration and payment of dividends (base or variable) are at the discretion of FCX’s Board, and will depend on FCX’s financial results, cash requirements, global economic conditions and other factors deemed relevant by FCX’s Board.

FINANCIAL INSTRUMENTS

14 unchanged sentences

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

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

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

FCX did not have any significant gains or losses resulting from hedge ineffectiveness during the six-month periods ended June 30, 2024 and 2023.

At June 30, 2024, FCX held copper futures and swap contracts that qualified for hedge accounting for 95 million pounds at an average contract price of $ 4.26 per pound, with maturities through March 2026.

Summary of Gains (Losses).

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

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Copper futures and swap contracts:

2 unchanged sentences

Hedged item – firm sales commitments ( 1 ) 25 ( 10 ) 11

Realized gains:

Realized gains (losses):

Matured derivative financial instruments 28 ( 5 ) 29 3

10 unchanged sentences

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

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

A summary of FCX’s embedded derivatives at June 30, 2024, follows:

Open Positions Average Price

2 unchanged sentences

Embedded derivatives in provisional sales contracts:

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

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

Copper (millions of pounds) 371 $ 4.26 $ 4.33 November 2024

Gold (thousands of ounces) 93 2,333 2,344 September 2024

Embedded derivatives in provisional purchase contracts:

Copper (millions of pounds) 92 3.83 4.00 July 2024

Copper (millions of pounds) 115 4.39 4.33 September 2024

Copper Forward Contracts.

1 unchanged sentence

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

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

At June 30, 2024, Atlantic Copper held net copper forward sales contracts for 44 million pounds at an average contract price of $ 4.38 per pound, with maturities through August 2024.

Summary of Gains (Losses).

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

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Embedded derivatives in provisional sales contracts:

2 unchanged sentences

Copper forward contracts b

( 17 ) 1 ( 26 ) ( 1 )

Amounts recorded in revenues.

11 unchanged sentences

Commodity Derivative Liabilities:

Derivatives designated as hedging instruments :

Copper futures and swap contracts $ 4 $ —

Derivatives not designated as hedging instruments :

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

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

A summary of these net unsettled commodity contracts in the balance sheet follows:

Assets Liabilities

2024 December 31, 2023 March 31,

2024 December 31, 2023 June 30,

2024 December 31, 2023

Amounts presented in balance sheet:

Gross amounts recognized:

Commodity contracts:

Embedded derivatives in provisional

1 unchanged sentence

Copper derivatives 23 4 4 1

Less gross amounts of offset:

Commodity contracts:

Embedded derivatives in provisional

sales/purchase contracts 7 — 7 —

Net amounts presented in balance sheet:

Commodity contracts:

Embedded derivatives in provisional

sales/purchase contracts 70 76 36 23

Copper derivatives 23 4 4 1

$ 93 $ 80 $ 40 $ 24

3 unchanged sentences

Accounts payable and accrued liabilities 18 — 17 22

Other liabilities — — 2 —

$ 93 $ 80 $ 40 $ 24

1 unchanged sentence

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

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

As of June 30, 2024, the maximum amount of credit exposure associated with derivative transactions was $ 100 million.

Other Financial Instruments.

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The carrying value for these financial instruments classified as current assets or liabilities approximates fair value because of their short-term nature and generally negligible credit losses (refer to Note 6 for the fair values of investment securities, legally restricted funds and debt).

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

In addition, as of June 30, 2024, FCX had contingent consideration assets related to the sales of certain oil and gas properties (refer to Note 6 for the related fair values).

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents.

7 unchanged sentences

Total cash and cash equivalents and restricted cash and cash equivalents presented in the consolidated statements of cash flows $ 6,402 $ 6,063

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

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

Includes (i) time deposits of $ 0.1 billion at June 30, 2024, and $ 0.3 billion at December 31, 2023, and (ii) cash designated for PT-FI’s new downstream processing facilities totaling $ 0.2 billion at December 31, 2023.

Includes (i) $ 0.9 billion at June 30, 2024, and $ 1.1 billion at December 31, 2023, associated with 30 % of PT-FI’s export proceeds required to be temporarily deposited in Indonesia banks for 90 days in accordance with a regulation issued by the

Indonesia government and (ii) $ 0.1 billion at each of June 30, 2024, and December 31, 2023, in assurance bonds to support PT-FI’s commitment for its new downstream processing facilities.

FAIR VALUE MEASUREMENT

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

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

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

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

A summary of the carrying amount and fair value of FCX’s financial instruments (including those measured at net asset value (NAV) as a practical expedient), other than cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, accrued income taxes and dividends payable (refer to Note 5), follows:

At March 31, 2024

At June 30, 2024

Carrying Fair Value

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Government mortgage-backed securities 49 49 — — 49 —

Government bonds and notes 32 32 — — 32 —

Corporate bonds 35 35 — — 35 —

Government bonds and notes 31 31 — — 31 —

Money market funds 19 19 — 19 — —

9 unchanged sentences

Embedded derivatives in provisional sales/purchase contracts in a gross liability position 43 43 — — 43 —

Copper forward contracts 3 3 — 2 1 —

Copper futures and swap contracts 4 4 — 2 2 —

Total 47 47 — 2 45 —

28 unchanged sentences

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

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

Excludes amounts included in restricted cash and cash equivalents and other assets (which approximated fair value), primarily amounts associated with (i) PT-FI’s export proceeds ($ 0.9 billion at June 30, 2024, and $ 1.1 billion at December 31, 2023), (ii) assurance bonds to support PT-FI’s commitment for new downstream processing facilities ($ 0.1 billion at each of June 30, 2024, and December 31, 2023) and (iii) PT-FI’s mine closure and reclamation guarantees ($ 0.1 billion at each of June 30, 2024, and December 31, 2023).

Refer to Note 5 for further discussion and balance sheet classifications.

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

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

There have been no changes in the techniques used at June 30, 2024, as compared with those techniques used at December 31, 2023.

CONTINGENCIES AND COMMITMENTS

1 unchanged sentence

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

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

FCX recorded net charges for adjustments to environmental obligations totaling $ 79 million for the first six months of 2024, primarily associated with changes in cost estimates for former processing facilities and historical smelter sites.

Asset Retirement Obligations

1 unchanged sentence

Mining Operations.

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

FCX recorded net ARO additions at mining operations totaling $ 261 million for the first six months of 2024, primarily associated with revised closure plans and cost estimates to reflect FCX’s commitment to the Global Industry Standard on Tailings Management (Tailings Standard).

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

Oil and Gas Properties.

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

Freeport-McMoRan Oil & Gas (FM O&G) recorded net ARO additions totaling $ 105 million for the first six months of 2024 primarily for assumed oil and gas abandonment obligations resulting from bankruptcies of other companies, including $ 98 million that was charged to production and delivery costs.

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

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

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

Accordingly, regulations or federal laws require that other working interest owners, including FM O&G, assume such obligations.

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

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Export Licenses.

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

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

On May 31, 2024, export licenses expired for several exporters, including PT-FI.

In second-quarter 2024, the Indonesia government issued various regulations to allow, under certain conditions, continued exports of copper concentrates and anode slimes through December 2024.

On July 2, 2024, PT-FI was granted copper concentrate and anode slimes export licenses, which are valid through December 2024 when the full ramp-up of PT-FI’s new smelter is expected.

PT-FI will continue to pay export duties on copper concentrates during the smelter ramp-up period pursuant to the Indonesia regulations.

The applicable rate prescribed by regulations is 7.5 % of the export value.

Special Mining License (IUPK).

As further discussed in FCX’s 2023 Form 10-K, PT-FI’s IUPK enables it to conduct operations in the Grasberg minerals district through 2041.

On May 30, 2024, the Indonesia government issued a regulation applicable to the country’s mineral and coal industries which outlines requirements for the granting of IUPK extensions.

The regulation provides that IUPK holders may be granted a life-of-mine extension provided certain conditions are met, including ownership of integrated downstream processing facilities that have entered the operational stage;

domestic ownership of at least 51 % and agreement with a state-owned enterprise for an additional 10 % ownership;

and commitments for additional exploration and increases in refining capacity, each as approved by the Ministry of Energy and Minerals.

Application for extension may be submitted at any time up to one year prior to the current IUPK expiration.

PT-FI expects to apply for an extension under this new regulation during 2024.

Cerro Verde Royalty Dispute.

As disclosed in Note 12 of FCX’s 2023 Form 10-K, in 2020, FCX filed on its own behalf and on behalf of Cerro Verde, international arbitration proceedings against the Peruvian government under the United States-Peru Trade Promotion Agreement relating to the assessment of mining royalties on ore processed by the Cerro Verde concentrator for the period from December 2006 to December 2013.

In May 2024, the arbitration tribunal rejected FCX and Cerro Verde's claims on the merits.

The decision by the arbitration tribunal had no impact on FCX’s consolidated financial statements.

Refer to Note 3 for discussion of the reduction in unrecognized tax benefits related to Cerro Verde tax matters.

BUSINESS SEGMENTS

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

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

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

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

Separately disclosed in the following tables are FCX’s reportable segments, which include the Morenci and Cerro Verde copper mines, the Indonesia operations (including the Grasberg minerals district and PT-FI’s new downstream processing facilities), the Rod & Refining operations and Atlantic Copper Smelting & Refining.

For comparative purposes, the 2023 tables have been adjusted to conform with the current year presentation, primarily for the combination of the Grasberg minerals district and PT-FI’s new downstream processing facilities.

PT-FI substantially completed construction of the new smelter in June 2024 and has commenced commissioning operations.

PT-FI’s new downstream processing facilities will exclusively receive concentrate from the Grasberg minerals district, which reflects PT-FI’s integrated and dependent operations within Indonesia ( i.e.

, Indonesia operations).

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

The PMR will receive anode slimes from the smelter and from PT Smelting.

FCX's Chief Executive Officer, identified as its chief operating decision maker under business segment accounting guidance, makes executive management decisions, including resource allocation and mine planning, for the Indonesia operations as a single business segment.

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

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

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

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

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Product Revenues.

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

Three Months Ended

FCX’s revenues attributable to the products it sold for the second quarter and first six months of 2024 and 2023 follow:

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Cathode $ 2,237 $ 1,670 $ 4,178 $ 3,181

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Purchased copper a

300 72 466 276

Gold 935 999 2,103 1,530

Molybdenum 476 491 897 1,083

Silver and other 139 171 288 303

Adjustments to revenues:

PT-FI export duties c

Royalty expense b

( 93 ) ( 94 ) ( 213 ) ( 154 )

Treatment charges ( 90 ) ( 142 ) ( 219 ) ( 243 )

Royalty expense d

( 120 ) ( 60 )

PT-FI export duties c

( 231 ) ( 14 ) d

Revenues from contracts with customers 6,398 5,927 12,609 11,043

Embedded derivatives e

226 ( 190 ) 336 83

Total consolidated revenues $ 6,624 $ 5,737 $ 12,945 $ 11,126

FCX purchases copper cathode primarily for processing by its Rod & Refining operations.

Primarily includes revenues associated with silver.

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

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

Export duties of 2.5 % were eliminated effective March 29, 2023, upon verification that construction progress of the new smelter exceeded 50 % and reinstated at a rate of 7.5 % in July 2023 under a revised regulation.

As discussed in Note 7, PT-FI will continue to pay export duties of 7.5 % on copper concentrates during the smelter ramp-up period pursuant to Indonesia regulations.

Includes credits associated with adjustments to prior-period export duties.

Refer to Note 5 for discussion of embedded derivatives related to FCX’s provisionally priced copper concentrate and cathode sales contracts.

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

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Unaffiliated customers $ 13 $ 10 $ 23 $ 1,075 $ 254 $ 1,329 $ 2,185 $ — $ 1,693 $ 898 $ 496 a

Intersegment 587 926 1,513 182 — 182 83 138 11 2 ( 1,929 ) —

Production and delivery 459 765 1,224 603 170 773 861

Production and delivery 438 713 1,151 679 b

134 1,692 859 ( 1,493 ) 3,875

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Interest expense, net — 1 1 5 — 5 6 — — 8 68 88

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

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

— — ( 13 ) 13 512

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

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

— — — ( 1 ) 689

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

Other income, net — 1 1 5 — 5 30 — — 2 31 69

Provision for income taxes — — — 191 23 214 490 — — 1 49 754

Equity in affiliated companies’ net earnings — — — — — — 3 — — — 1 4

Net income attributable to noncontrolling interests — — — 142 22 164 463 c

Total assets at June 30, 2024 3,182 6,508 9,690 8,368 1,988 10,356 26,501 1,915 273 1,410 4,490 54,635

Capital expenditures 47 196 243 67 23 90 648 36 11 37 51 1,116

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Unaffiliated customers $ 26 $ 14 $ 40 $ 783 $ 190 $ 973 $ 2,039

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175 — 175 198 150 10 4 ( 2,087 ) —

Production and delivery 381 781 1,162 620 187 807 338 96 1,527 734

Production and delivery 423 744 1,167 609 174 783 861 d

105 1,465 725

( 1,557 ) 3,549

DD&A 42 57 99 117 15 132 275 14 1 7 19 547

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Operating income (loss) 127 177 304 227 — 227 1,071 31 7 9 ( 239 ) 1,410

Interest expense, net — — — 55 e

— 55 12 — — 8 96 171

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

Other (expense) income, net ( 1 ) ( 2 ) ( 3 ) ( 45 ) 4 ( 41 ) 28 ( 1 ) — — 41 24

Provision for income taxes — — — 113 — 113 410 — — — 16 539

Equity in affiliated companies’ net earnings — — — — — — — — — — 2 2

Net income attributable to noncontrolling interests — — — 18 2 20 368 c

Total assets at June 30, 2023 3,167 5,754 8,921 8,444 1,890 10,334 23,446 1,717 280 1,127 5,082 50,907

Capital expenditures 67 115 182 57 26 83 841 13 2 11 31 1,163

Financial Information by Business Segment (continued)

(In Millions)

Atlantic Corporate,

North America Copper Mines South America Operations Copper Other

Cerro Indonesia Molybdenum Rod & Smelting & Elimi- FCX

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

Six Months Ended June 30, 2024

Unaffiliated customers $ 50 $ 50 $ 100 $ 1,901 $ 462 $ 2,363 $ 4,833 $ — $ 3,182 $ 1,571 $ 896 a

Intersegment 1,127 1,811 2,938 284 — 284 260 283 21 2 ( 3,788 ) —

Production and delivery 897 1,478 2,375 1,282 b

351 1,633 1,533 253 3,179 1,509 ( 2,763 ) 7,719

DD&A 93 125 218 189 33 222 583 32 2 14 33 1,104

Selling, general and administrative expenses 1 1 2 4 — 4 61 — — 15 185 267

Exploration and research expenses 9 17 26 6 3 9 6 — — — 36 77

Environmental obligations and shutdown costs — — — — — — — — — — 95 95

Operating income (loss) 177 240 417 704 75 779 2,910 ( 2 ) 22 35 ( 478 ) 3,683

Interest expense, net — 1 1 10 — 10 7 — — 18 141 177

Other (expense) income, net — ( 1 ) ( 1 ) 16 13 29 68 — — 8 94 198

Provision for (benefit from) income taxes — — — 282 35 317 899 f

— — ( 12 ) 62 1,266

Equity in affiliated companies’ net earnings — — — — — — 1 — — — 3 4

Net income attributable to noncontrolling interests — — — 218 36 254 1,063 c

— — — 36 1,353

Capital expenditures 91 389 480 127 45 172 1,490 63 16 60 89 2,370

Six Months Ended June 30, 2023

Unaffiliated customers $ 58 $ 111 $ 169 $ 1,741 $ 424 $ 2,165 $ 3,238 $ — $ 2,986 $ 1,493 $ 1,075 a

Intersegment 1,163 1,928 3,091

419 — 419 367 373 16 11 ( 4,277 ) —

Production and delivery 804 1,525 2,329 1,229 361 1,590 1,199 d

201 2,992 1,459 ( 3,056 ) 6,714

DD&A 85 117 202 208 31 239 423 34 2 14 32 946

Selling, general and administrative expenses 1 1 2 4 — 4 58 — — 15 162 241

Exploration and research expenses 6 31 37 4 2 6 — — — — 30 73

Environmental obligations and shutdown costs — 22 22 — — — — — — — 119 141

Operating income (loss) 325 343 668 715 30 745 1,925 138 8 16 ( 489 ) 3,011

Interest expense, net — — — 84 e

— 84 19 — — 14 205 322

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

Other (expense) income, net ( 2 ) 1 ( 1 ) ( 27 ) ( 2 ) ( 29 ) 60 ( 1 ) ( 1 ) ( 5 ) 89 112

Provision for (benefit from) income taxes — — — 300 7 307 740 — — — ( 9 ) 1,038

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

Equity in affiliated companies’ net earnings — — — — — — 11 — — — 1 12

Net income (loss) attributable to noncontrolling interests — — — 158 20 178 639 c

— — — ( 43 ) 774

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

Capital expenditures 123 255 378 118 65 183 1,613 22 7 23 58 2,284

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

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

Includes non-recurring costs totaling $ 65 million associated with labor-related charges at Cerro Verde.

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

Includes a $ 55 million charge for a potential administrative fine.

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

Includes interest expense associated with contested tax rulings issued by the Peruvian Supreme Court totaling $ 50 million in the second quarter and $ 74 million for the first six months of 2023.

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

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

(the Company) as of June 30, 2024, the related consolidated statements of income, comprehensive income, and equity for the three- and six-month periods ended June 30, 2024 and 2023, the related consolidated statements of cash flows for the six-month periods ended June 30, 2024 and 2023, and the related notes (collectively referred to as the “consolidated interim financial statements”).

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

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Phoenix, Arizona

August 7, 2024

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

What changed 10-Q

Item 1. Financial Statements