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 are 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. We remain focused on execution of our operating plans, while continuing to prioritize productivity and cost control, and advancing initiatives for long-term organic growth. We continue to make progress on our leach innovation initiatives, with incremental copper production from these initiatives totaling 164 million pounds for the first nine months of 2024, compared with 97 million pounds for the first nine months of 2023. We believe positive market fundamentals justify a favorable long-term outlook for copper, supported by copper’s increasingly important role in the global economy and limited available supplies to meet growing demand. In September 2024, we purchased 5.3 million shares of Cerro Verde common stock for $210 million, increasing our ownership interest in Cerro Verde to 55.08% from 53.56%. On October 14, 2024, a fire occurred during commissioning of PT Freeport Indonesia’s (PT-FI) new smelter in Gresik, Indonesia, following an equipment malfunction in the smelter furnace. The fire resulted in damage to a gas cleaning facility (electrostatic precipitator plant) and infrastructure for the production of sulfuric acid. There were no injuries. While mining operations in Central Papua and the completion and ramp-up of the precious metals refinery (PMR) project have not been impacted, smelter start-up operations have been temporarily suspended pending remediation activities. PT-FI is working with the Indonesia government to allow continued exports of copper concentrates until full ramp-up of the new smelter and PMR (collectively, PT-FI’s new downstream processing facilities) is achieved, including seeking an increase to the permitted quota for 2024. Refer to “Operations – Indonesia” for additional discussion of the incident. Net income attributable to common stockholders totaled $526 million in third-quarter 2024 and $1.6 billion for the first nine months of 2024, compared with $454 million in third-quarter 2023 and $1.5 billion for the first nine months of 2023. The increases in the 2024 periods, compared to the 2023 periods, primarily reflect higher average realized copper and gold prices, higher gold sales volumes, and lower environmental obligations and shutdown costs, partly offset by higher operating costs, income tax expense and income attributable to noncontrolling interests. Additionally, the first nine months of 2023 included interest expense recognized for Cerro Verde’s settlement of interest on a historical profit sharing liability and contested tax rulings issued by the Peruvian Supreme Court (refer to Note 4). Refer to “Consolidated Results” for further discussion. At September 30, 2024, we had consolidated debt of $9.7 billion and consolidated cash and cash equivalents of $5.0 billion, $6.0 billion including $1.0 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 $0.5 billion, excluding $3.2 billion of debt for PT-FI’s new downstream processing facilities. 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. 26 Table of Contents At September 30, 2024, we had $3.0 billion of availability under our revolving credit facility, and PT-FI and Cerro Verde had $1.5 billion and $350 million, respectively, of availability under their revolving credit facilities. Refer to Note 4 and “Capital Resources and Liquidity” for further discussion of our debt balances and transactions. OUTLOOK As further discussed in “Risk Factors” in Part I, Item 1A. of our 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 (millions of recoverable pounds): North America copper mines 1,240 South America operations 1,170 Indonesia operations 1,645 Total 4,055 Gold (millions of recoverable ounces) 1.8 Molybdenum (millions of recoverable pounds) 80 a a. Includes 50 million pounds produced by our North America copper mines and South America operations and 30 million pounds produced by our Molybdenum mines. Consolidated sales volumes in fourth-quarter 2024 are expected to approximate 980 million pounds of copper, 340 thousand ounces of gold and 20 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 85 million pounds of copper and 85 thousand ounces of gold associated with inventories held at PT-FI’s new downstream processing facilities that will be sold as refined metal in 2025. Projected sales volumes are dependent on operational performance; continuation of copper concentrate exports during the restoration period of PT-FI’s new smelter; weather-related conditions; timing of shipments and other factors detailed in the “Cautionary Statement” below. For other important factors that could cause results to differ materially from projections, refer to “Risk Factors” contained in Part I, Item 1A. of our 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 $1.58 per pound of copper for the year 2024 (including $1.72 per pound of copper in fourth-quarter 2024), based on achievement of current sales volume and cost estimates, and assuming average prices of $2,600 per ounce of gold and $20.00 per pound of molybdenum in fourth-quarter 2024. Quarterly unit net cash costs vary with fluctuations in sales volumes, including the ratio of copper and gold sales within a period, and realized prices, primarily for gold and molybdenum. The impact of price changes during fourth-quarter 2024 on consolidated unit net cash costs for the year 2024 would approximate $0.01 per pound of copper for each $100 per ounce change in the average price of gold and $0.01 per pound of copper for each $2 per pound change in the average price of molybdenum. 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 $6.8 billion for the year 2024, net of $0.4 billion of working capital and other uses, based on current sales volume and cost estimates, and assuming average prices of $4.25 per pound of copper, $2,600 per ounce of gold and $20.00 per pound of molybdenum in fourth-quarter 2024. Estimated consolidated operating cash flows for the year 2024 also reflect an estimated income tax provision of $2.7 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 in fourth-quarter 2024 on consolidated operating cash flows would approximate $90 million for each $0.10 per pound change in the average price of copper, $30 million for each $100 per ounce 27 Table of Contents change in the average price of gold and $15 million for each $2 per pound change in the average price of molybdenum. Consolidated Capital Expenditures Following is a summary of expected capital expenditures for the year 2024 (in billions): Major mining projects $ 2.2 a PT-FI’s new downstream processing facilities 1.0 b Other 1.4 Total $ 4.6 a. Primarily includes underground mine development, supporting mill and power capital costs and initial spending on a new gas-fired combined cycle facility in the Grasberg minerals district, and expansion projects in North America. b. Excludes capitalized interest and $0.3 billion of estimated commissioning and owner’s costs. Capital expenditures for PT-FI’s new downstream processing facilities are expected to be funded with PT-FI’s cash flows from operations and availability under PT-FI’s revolving credit facility. We closely monitor market conditions and will adjust our operating plans, including capital expenditures, to protect our liquidity and preserve our asset values, as necessary. 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 September 2024. During third-quarter 2024, LME copper settlement prices ranged from a low of $3.91 per pound to a high of $4.47 28 Table of Contents per pound, averaged $4.18 per pound and settled at $4.43 per pound on September 30, 2024. Strong copper prices during third-quarter 2024 primarily resulted from investor sentiment and ongoing demand in China. The LME copper settlement price was $4.28 per pound on October 31, 2024. We believe fundamentals for copper are favorable with limited available supplies and growing demand supported by copper’s critical role in the global transition to renewable power, electric vehicles and other carbon-reduction initiatives, continued urbanization in developing countries and growing connectivity globally. This graph presents London PM gold prices from January 2014 through September 2024. During third-quarter 2024, London PM gold prices ranged from a low of $2,329 per ounce to a record high of $2,664 per ounce, averaged $2,474 per ounce and closed at $2,630 per ounce on September 30, 2024. Economic uncertainty, geopolitical tensions and strong demand from central banks around the world during third-quarter 2024 continued to push gold prices to another quarterly record high. The London PM gold price was $2,734 per ounce on October 31, 2024. 29 Table of Contents This graph presents the Platts Metals Daily Molybdenum Dealer Oxide weekly average price from January 2014 through September 2024. During third-quarter 2024, the weekly average price of molybdenum ranged from a low of $20.83 per pound to a high of $23.06 per pound, averaged $21.77 per pound and was $21.59 per pound on September 30, 2024. Overall global demand for molybdenum is driven by energy, power generation, aerospace, defense and construction sectors. 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 $21.89 per pound on October 31, 2024. CONSOLIDATED RESULTS Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 SUMMARY FINANCIAL DATA (in millions, except per share amounts) Revenues a,b $ 6,790 $ 5,824 $ 19,735 $ 16,950 Operating income a,c $ 1,938 $ 1,492 $ 5,621 $ 4,503 Net income attributable to common stock b,c $ 526 d $ 454 e $ 1,615 d $ 1,460 e Diluted net income per share of common stock $ 0.36 $ 0.31 $ 1.11 $ 1.01 Diluted weighted-average shares of common stock outstanding 1,444 1,443 1,445 1,443 Operating cash flows f $ 1,872 $ 1,236 $ 5,724 $ 3,959 Capital expenditures $ 1,199 $ 1,178 $ 3,569 $ 3,462 At September 30: Cash and cash equivalents $ 5,000 $ 5,745 $ 5,000 $ 5,745 Restricted cash and cash equivalents, current g $ 1,117 $ 697 $ 1,117 $ 697 Total debt, including current portion $ 9,679 $ 9,405 $ 9,679 $ 9,405 a. Refer to Note 8 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 $(32) million ($(13) million to net income attributable to common stock) in third-quarter 2024, $4 million ($2 million to 30 Table of Contents net income attributable to common stock) in third-quarter 2023, $28 million ($9 million to net income attributable to common stock) for the first nine months of 2024 and $183 million ($62 million to net income attributable to common stock) for the first nine months of 2023. Refer to Note 5 for further discussion. c. We defer recognizing profits on intercompany sales 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 $(42) million ($(13) million to net income attributable to common stock) in third-quarter 2024, $81 million ($37 million to net income attributable to common stock) in third-quarter 2023, $79 million ($23 million to net income attributable to common stock) for the first nine months of 2024 and $153 million ($64 million to net income attributable to common stock) for the first nine months of 2023. Refer to “Operations – Smelting and Refining.” d. Includes net charges totaling $30 million in third-quarter 2024 and $81 million for the first nine months of 2024, primarily associated with impairments for legacy oil and gas matters and nonrecurring labor-related charges at Cerro Verde, partly offset by a reduction in accruals for uncertain U.S. tax positions. The first nine months of 2024 also include charges associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies, revisions to environmental obligation estimates and related litigation reserves, and inventory adjustments/write-offs, partly offset by international tax credits. e. Includes net charges totaling $117 million in third-quarter 2023 and $368 million for the first nine months of 2023, primarily associated with revisions to environmental obligation estimates and related litigation reserves, and impairments for legacy oil and gas operations. Net charges for the first nine months of 2023 also included charges for contested tax rulings issued by the Peruvian Supreme Court and an accrual for a potential administrative fine in Indonesia. f. Working capital and other uses totaled $5 million in third-quarter 2024, $482 million in third-quarter 2023, $29 million for the first nine months of 2024 and $684 million for the first nine months of 2023. g. Includes $1.0 billion at September 30, 2024, and $0.5 billion at September 30, 2023, associated with a portion of PT-FI’s export proceeds required to be temporarily deposited in Indonesia banks for 90 days in accordance with Indonesia regulations. Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 SUMMARY OPERATING DATA Copper (millions of recoverable pounds) Production 1,051 1,085 3,173 3,117 Sales, excluding purchases 1,035 1,109 3,074 2,970 Average realized price per pound $ 4.30 $ 3.80 $ 4.26 $ 3.87 Site production and delivery costs per pound a $ 2.61 $ 2.27 $ 2.49 $ 2.40 Unit net cash costs per pound a $ 1.39 b $ 1.73 $ 1.53 b $ 1.65 Gold (thousands of recoverable ounces) Production 456 532 1,448 1,420 Sales, excluding purchases 558 399 1,487 1,164 Average realized price per ounce $ 2,568 $ 1,898 $ 2,362 $ 1,932 Molybdenum (millions of recoverable pounds) Production 20 20 58 62 Sales, excluding purchases 19 20 60 59 Average realized price per pound $ 22.88 $ 23.71 $ 21.63 $ 26.05 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 (credits) by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.” b. Includes $0.03 per pound of copper for both the third quarter and first nine months of 2024 for nonrecurring labor-related charges at Cerro Verde associated with new collective labor agreements. Refer to “Operations – South America” for further discussion. Revenues Consolidated revenues totaled $6.8 billion in third-quarter 2024, $5.8 billion in third-quarter 2023, $19.7 billion for the first nine months of 2024 and $17.0 billion for the first nine months of 2023. Revenues from our mining operations and processing facilities primarily include the sale of copper cathode, copper in concentrate, copper rod, gold in concentrate and anode slimes, and molybdenum. Refer to Note 8 for a summary of product revenues. 31 Table of Contents Following is a summary of changes in our consolidated revenues between periods (in millions): Three Months Ended September 30 Nine Months Ended September 30 Consolidated revenues - 2023 period $ 5,824 $ 16,950 (Lower) higher sales volumes: Copper (279) 404 Gold 304 624 Molybdenum (27) 18 Higher (lower) average realized prices: Copper 518 1,199 Gold 374 639 Molybdenum (16) (266) Adjustments for prior period provisionally priced copper sales (36) (155) Higher Atlantic Copper revenues 65 134 Higher revenues from purchased copper 83 273 Lower treatment charges 52 76 Higher royalties and export duties (47) (323) Other, including intercompany eliminations (25) 162 Consolidated revenues - 2024 period $ 6,790 $ 19,735 Sales Volumes. Consolidated copper sales volumes decreased in third-quarter 2024, compared to third-quarter 2023, primarily as a result of the timing of shipments and lower ore grades and operating rates in North America. Consolidated gold sales volumes increased in third-quarter 2024, compared to third-quarter 2023, primarily reflecting the timing of shipments in Indonesia. Higher consolidated copper and gold sales volumes for the first nine months of 2024, compared to the 2023 period, primarily reflect higher mining and milling rates and copper ore grades at PT-FI, partly offset by lower operating rates in North America and South America. Realized Prices. Our consolidated revenues can vary significantly as a result of fluctuations in the market prices of copper, gold and molybdenum. Average realized prices in third-quarter 2024, compared with third-quarter 2023, were 13% higher for copper, 35% higher for gold and 4% lower for molybdenum. Average realized prices for the first nine months of 2024, compared with the first nine months of 2023, were 10% higher for copper, 22% higher for gold and 17% lower for molybdenum. Average realized copper prices include net favorable (unfavorable) adjustments to current period provisionally priced copper sales totaling $61 million in third-quarter 2024, $(34) million in third-quarter 2023, $248 million for the first nine months of 2024 and $(152) million for the first nine months of 2023. Average realized gold prices include net favorable (unfavorable) adjustments to current period provisionally priced gold sales totaling $74 million in third-quarter 2024, $(13) million in third-quarter 2023, $155 million for the first nine months of 2024 and $(8) million for the first nine months of 2023. As discussed in Note 5, certain sales contracts for copper and gold provide final 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 or London PM prices, which results in an embedded derivative on provisionally priced sales that are 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 and gold 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 and gold 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 June 30, 2024 and 2023, and December 31, 2023 and 2022) recorded in consolidated revenues totaled $(32) million in third-quarter 2024, $4 million in third-quarter 2023, $28 million for the first nine months of 2024 and $183 million for the first nine months of 2023. Refer to Notes 5 and 8 for a summary of total adjustments to prior period and current period provisionally priced sales. 32 Table of Contents At September 30, 2024, we had provisionally priced copper sales totaling 162 million pounds (net of intercompany sales and noncontrolling interests) recorded at an average price of $4.43 per pound, subject to final pricing over the next several months. We estimate that each $0.05 change in the price realized from the September 30, 2024, recorded provisional price would have an approximate $15 million effect on 2024 revenues ($5 million to 2024 net income attributable to common stock). The LME copper price settled at $4.28 per pound on October 31, 2024. Atlantic Copper Revenues. Atlantic Copper revenues totaled $765 million in third-quarter 2024 and $2.3 billion for the first nine months of 2024, compared with $700 million in third-quarter 2023 and $2.2 billion for the first nine months of 2023. Higher revenues in the 2024 periods, compared with the 2023 periods, primarily reflect higher copper prices and sales volumes. Purchased Copper. We purchase copper cathode primarily for processing by our Rod & Refining operations. The volumes of copper purchases vary depending on cathode production from our operations and totaled 36 million pounds in third-quarter 2024, 18 million pounds in third-quarter 2023, 142 million pounds for the first nine months of 2024 and 85 million pounds for the first nine months of 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 decrease in treatment charges in the 2024 periods, compared to the 2023 periods, primarily reflects lower copper concentrate sales volumes in South America. 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. Export duties of 2.5% were eliminated effective March 29, 2023, upon verification that construction progress of the new smelter exceeded 50% and were reinstated at a rate of 7.5% in July 2023 under a revised regulation. As discussed in Note 7, PT-FI is continuing to pay export duties of 7.5% on copper concentrates. PT-FI incurred export duties totaling $129 million in third-quarter 2024, $147 million in third-quarter 2023, $360 million for the first nine months of 2024 and $165 million for the first nine months of 2023. Production and Delivery Costs Consolidated production and delivery costs totaled $4.1 billion in third-quarter 2024, $3.6 billion in third-quarter 2023, $11.8 billion for the first nine months of 2024 and $10.3 billion for the first nine months of 2023. The 2024 periods include nonrecurring labor-related charges at Cerro Verde associated with new collective labor agreements (CLA) totaling $34 million in third-quarter 2024 and $99 million for the first nine months of 2024. Additionally, the first nine months of 2024 included charges totaling $99 million associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies (refer to Note 7 for further discussion). Site Production and Delivery Costs Per Pound. Site production and delivery costs for our copper mining operations primarily include labor, energy and other commodity-based inputs, such as sulfuric acid, explosives, steel, reagents, liners and tires. Consolidated site production and delivery costs (before net noncash and other costs) for our copper mines averaged $2.61 per pound of copper in third-quarter 2024, $2.27 per pound of copper in third-quarter 2023, $2.49 per pound of copper for the first nine months of 2024 and $2.40 per pound of copper for the first nine months of 2023. Refer to “Operations – Unit Net Cash Costs” and “Operations – Unit Net Cash (Credits) Costs” for further discussion of unit net cash costs (credits) associated with our operating divisions and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements. Depreciation, Depletion and Amortization Depreciation will vary under the unit-of-production (UOP) method as a result of changes in sales volumes and the related UOP rates at our mining operations. Consolidated depreciation, depletion and amortization (DD&A) totaled $600 million in third-quarter 2024, $533 million in third-quarter 2023, $1.7 billion for the first nine months of 2024 and $1.5 billion for the first nine months of 2023. We currently expect that DD&A will approximate $2.3 billion for the year 2024. Following completion of commissioning activities for PT-FI’s new downstream processing facilities, DD&A will include amounts associated with capitalized costs for the project. 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. 33 Table of Contents Shutdown costs include care-and-maintenance costs and any litigation, remediation or related expenditures associated with closed facilities or operations. Net revisions to long-term historical environmental obligations totaled $3 million in third-quarter 2024, $83 million in third-quarter 2023, $82 million for the first nine months of 2024 and $199 million for the first nine months of 2023. Refer to Note 7. Interest Expense, Net Consolidated interest costs (before capitalization) totaled $173 million in third-quarter 2024, $165 million in third-quarter 2023, $529 million for the first nine months of 2024 and $606 million for the first nine months of 2023. Consolidated interest costs (before capitalization) include a credit of $11 million in the 2024 periods associated with the closure of our 2017 and 2018 U.S. federal income tax exams and a credit of $13 million in the 2023 periods for the settlement of interest on Cerro Verde’s historical profit sharing liability. Additionally, the first nine months of 2023 included $74 million of interest charges associated with contested tax rulings issued by the Peruvian Supreme Court. Capitalized interest varies with the level of qualifying assets associated with our development projects and average interest rates on our borrowings. Capitalized interest added to property, plant, equipment and mine development costs, net, totaled $101 million in third-quarter 2024, $69 million in third-quarter 2023, $280 million for the first nine months of 2024 and $188 million for the first nine months of 2023. The increase in capitalized interest costs in the 2024 periods, compared to the 2023 periods, resulted from increased construction and development projects in process, primarily related to PT-FI’s new downstream processing facilities. 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, which totaled $97 million in third-quarter 2024, $71 million in third-quarter 2023, $295 million for the first nine months of 2024 and $183 million for the first nine months of 2023, primarily includes amounts associated with interest income, currency exchange gains and losses, and market-to-market impacts of trust assets used to satisfy financial assurance obligations for our New Mexico mining operations. The first nine months of 2024 include a credit of $26 million 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 3), and the first nine months of 2023 include a $69 million charge associated with Cerro Verde’s contested tax rulings issued by the Peruvian Supreme Court. Income Taxes Following is a summary of the approximate amounts used in the calculation of our consolidated income tax provision (in millions, except percentages): Nine Months Ended September 30, 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 $ (393) c 8% d $ 30 c $ 180 —% d $ 3 South America 1,196 40% (475) 1,103 40% (441) Indonesia 4,709 36% (1,706) 3,135 37% (1,156) Cerro Verde historical tax matters — N/A — (142) e N/A 3 PT-FI historical tax matters 16 f N/A 182 f (5) N/A (3) Eliminations and other 139 N/A (46) 7 N/A — Rate adjustment g — N/A 12 — N/A 48 Consolidated FCX $ 5,667 35% $ (2,003) $ 4,278 36% $ (1,546) 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 $587 million for the first nine months of 2024 and $925 million for the first nine months of 2023 (refer to Note 8), the U.S. jurisdiction reflects non-operating sites and corporate-level expenses, which include interest expense associated with FCX’s senior notes and general and administrative expenses. The U.S. jurisdiction also includes net revisions to environmental obligation estimates and charges associated with oil and gas abandonment obligations and impairments. c. Includes net credits associated with the closure of our 2017 and 2018 U.S federal income tax exams. Refer to Note 3 for further discussion. d. Includes a valuation allowance release on prior year unbenefited net operating losses. 34 Table of Contents e. Reflects net charges associated with contested tax rulings issued by the Peruvian Supreme Court. f. Refer to Note 3 for further discussion of net credits associated with closure of PT-FI’s 2021 corporate income tax audit and resolution of a framework for Indonesia disputed tax matters. g. 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 of copper, $2,600 per ounce of gold and $20.00 per pound of molybdenum in fourth-quarter 2024, we estimate our consolidated effective tax rate for the year 2024 would approximate 36% (which reflects an estimated effective tax rate of 40% for fourth-quarter 2024). Changes in projected sales volumes and average prices during fourth-quarter 2024 would incur tax impacts at estimated effective rates of 39% for Peru, 36% for Indonesia and 0% for the U.S., which excludes the benefits discussed in footnote c under the table above and any impacts from the U.S. Inflation Reduction Act of 2022 (refer to Note 3). 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 $0.7 billion in third-quarter 2024, $0.5 billion in third-quarter 2023, $2.1 billion for the first nine months of 2024 and $1.3 billion for the first nine months of 2023 (refer to Note 8 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. In September 2024, we increased our ownership interest in Cerro Verde to 55.08% from 53.56%. Refer to Note 1 for further discussion. Based on achievement of current sales volume and cost estimates, and assuming average prices of $4.25 per pound of copper, $2,600 per ounce of gold and $20.00 per pound of molybdenum in fourth-quarter 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 $0.1 billion for each $0.25 per pound change in the average price of copper in fourth-quarter 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 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 incremental annual run rate target of approximately 200 million pounds of copper. Incremental copper production from these initiatives totaled 58 million pounds in third-quarter 2024 (compared with 46 million pounds in third-quarter 2023) and 164 million pounds for the first nine months of 2024 (compared with 97 million pounds for the first nine months of 2023). We are pursuing opportunities to apply recent operational enhancements on a larger scale and we are testing new innovative technology applications that we believe have the potential for significant increases in recoverable metal beyond the current run rate. 35 Table of Contents 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 $45 million in third-quarter 2024, $42 million in third-quarter 2023, $117 million for the first nine months of 2024 and $137 million for the first nine months of 2023. We estimate the costs of these studies will approximate $175 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. We also operate a copper smelter in Miami, Arizona. In addition to copper, certain of these operations produce molybdenum concentrate, gold and silver. 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 and refinery in Spain). 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 indicate the opportunity to construct new concentrating facilities to increase copper production by 200 to 250 million pounds per year at estimated incremental project capital costs of approximately $3.5 billion. 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 approximately three to four years to complete. The decision of whether 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 have commenced pre-feasibility studies in the Safford/Lone Star district to define a potential significant expansion opportunity. Positive drilling conducted in recent years indicates a large, mineralized district with opportunities to pursue a further expansion project. We are expecting to complete these studies in late 2025. The decision of whether 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. 36 Table of Contents Operating Data. Following is summary consolidated operating data for the North America copper mines: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Operating Data, Net of Joint Venture Interests Copper (millions of recoverable pounds) Production 313 344 925 1,030 Sales, excluding purchases 316 372 939 1,043 Average realized price per pound $ 4.32 $ 3.86 $ 4.29 $ 3.97 Molybdenum (millions of recoverable pounds) Production a 8 7 22 23 100% Operating Data Leach operations Leach ore placed in stockpiles (metric tons per day) 551,200 688,600 606,100 675,600 Average copper ore grade (%) 0.21 0.22 0.21 0.24 Copper production (millions of recoverable pounds) 213 245 633 718 Mill operations Ore milled (metric tons per day) 314,700 315,800 304,200 309,700 Average ore grade (%): Copper 0.29 0.30 0.30 0.33 Molybdenum 0.02 0.02 0.02 0.02 Copper recovery rate (%) 83.1 81.7 82.6 82.0 Copper production (millions of recoverable pounds) 149 155 440 481 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 totaled 316 million pounds in third-quarter 2024, 372 million pounds in third-quarter 2023, 0.9 billion pounds for the first nine months of 2024 and 1.0 billion pounds for the first nine months of 2023. Lower copper sales in the 2024 periods, compared to the 2023 periods, primarily reflect lower operating rates and ore grades. Higher third-quarter 2023 sales volumes also reflect the impact of timing of shipments. North America copper sales are estimated to approximate 1.24 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. 37 Table of Contents Gross Profit per Pound of Copper and Molybdenum The following table summarizes unit net cash costs and gross profit per pound at our North America copper mines. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. Three Months Ended September 30, 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 $ 4.32 $ 4.32 $ 21.33 $ 3.86 $ 3.86 $ 22.01 Site production and delivery, before net noncash and other costs shown below 3.64 3.25 16.83 3.01 2.71 17.35 By-product credits (0.53) — — (0.41) — — Treatment charges 0.13 0.12 — 0.10 0.10 — Unit net cash costs 3.24 3.37 16.83 2.70 2.81 17.35 DD&A 0.35 0.31 1.22 0.30 0.26 1.33 Noncash and other costs, net 0.16 b 0.15 0.40 0.14 b 0.13 0.47 Total unit costs 3.75 3.83 18.45 3.14 3.20 19.15 Revenue adjustments, primarily for pricing on prior period open sales — — — — — — Gross profit per pound $ 0.57 $ 0.49 $ 2.88 $ 0.72 $ 0.66 $ 2.86 Copper sales (millions of recoverable pounds) 317 317 372 372 Molybdenum sales (millions of recoverable pounds) a 8 7 Nine Months Ended September 30, 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 $ 4.29 $ 4.29 $ 19.97 $ 3.97 $ 3.97 $ 24.41 Site production and delivery, before net noncash and other costs shown below 3.45 3.10 16.52 2.96 2.60 17.66 By-product credits (0.45) — — (0.52) — — Treatment charges 0.13 0.13 — 0.12 0.12 — Unit net cash costs 3.13 3.23 16.52 2.56 2.72 17.66 DD&A 0.35 0.32 1.23 0.30 0.26 1.27 Noncash and other costs, net 0.14 b 0.13 0.39 0.17 b 0.15 0.87 Total unit costs 3.62 3.68 18.14 3.03 3.13 19.80 Revenue adjustments, primarily for pricing on prior period open sales — — — 0.01 0.01 — Gross profit per pound $ 0.67 $ 0.61 $ 1.83 $ 0.95 $ 0.85 $ 4.61 Copper sales (millions of recoverable pounds) 943 943 1,048 1,048 Molybdenum sales (millions of recoverable pounds) a 22 23 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 $0.06 per pound of copper in third-quarter 2024, $0.05 per pound of copper for the first nine months of 2024, and $0.08 per pound of copper for both the third quarter and first nine months of 2023, for feasibility and optimization studies. Our North America copper mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) for the North America copper mines of $3.24 per pound of copper in third-quarter 2024 and $3.13 per pound for the first nine months of 2024 were higher than average unit net cash costs of $2.70 per pound in third-quarter 2023 and $2.56 per pound for the first nine months of 2023, primarily reflecting lower copper volumes. 38 Table of Contents 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 $3.14 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 in fourth-quarter 2024. North America’s average unit net cash costs for the year 2024 would change by approximately $0.01 per pound for each $2 per pound change in the average price of molybdenum in fourth-quarter 2024. South America We manage two copper operations in South America – Cerro Verde in Peru (in which we own a 55.08% interest) and El Abra in Chile (in which we own a 51% interest), which are consolidated in our financial statements. In September 2024, we purchased 5.3 million shares of Cerro Verde common stock for $210 million, increasing our ownership interest in Cerro Verde to 55.08% from 53.56%. 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, the Cerro Verde mine produces molybdenum concentrate and silver. Development Activities. At the El Abra operations in Chile, we have completed substantial drilling and evaluations to define a large sulfide resource that would support a potential major mill project similar to the large-scale concentrator at Cerro Verde. We are preparing data for a potential submission of an environmental impact statement by year-end 2025, subject to ongoing stakeholder engagement and economic evaluations. Preliminary estimates, which remain under review, indicate that the project economics would be supported using an incentive copper price of less than $4.00 per pound. The decision of whether to proceed and timing of the potential project will take into account overall copper market conditions, required permitting and other factors. Labor Matters. In October 2024, Cerro Verde completed a new four-year CLA with one of its two unions. The agreement follows the successful completion of a new CLA with a second union in April 2024. Cerro Verde now has multi-year agreements for its hourly workforce. In connection with the new CLAs, Cerro Verde incurred nonrecurring charges of $34 million in third-quarter 2024 and $99 million for the first nine months of 2024. 39 Table of Contents Operating Data. Following is summary consolidated operating data for South America operations: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Copper (millions of recoverable pounds) Production 299 305 877 916 Sales 293 307 879 913 Average realized price per pound $ 4.29 $ 3.77 $ 4.25 $ 3.82 Molybdenum (millions of recoverable pounds) Production a 6 6 15 17 Leach operations Leach ore placed in stockpiles (metric tons per day) 157,100 164,300 167,800 190,500 Average copper ore grade (%) 0.43 0.38 0.41 0.34 Copper production (millions of recoverable pounds) 72 77 218 237 Mill operations Ore milled (metric tons per day) 423,700 431,300 415,700 420,700 Average ore grade (%): Copper 0.33 0.34 0.33 0.34 Molybdenum 0.01 0.01 0.01 0.01 Copper recovery rate (%) 84.2 79.8 83.8 82.0 Copper production (millions of recoverable pounds) 227 228 659 679 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 were not significantly different in the 2024 periods, compared to the 2023 periods. Copper sales from South America operations are expected to approximate 1.2 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. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies. 40 Table of Contents Gross Profit per Pound of Copper The following table summarizes unit net cash costs and gross profit per pound of copper at our South America operations. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements. Three Months Ended September 30, 2024 2023 By-Product Method Co-Product Method By-Product Method Co-Product Method Revenues, excluding adjustments $ 4.29 $ 4.29 $ 3.77 $ 3.77 Site production and delivery, before net noncash and other costs shown below 2.65 a 2.43 2.57 2.32 By-product credits (0.37) — (0.42) — Treatment charges 0.15 0.15 0.19 0.19 Royalty on metals 0.01 0.01 0.01 0.01 Unit net cash costs 2.44 2.59 2.35 2.52 DD&A 0.37 0.34 0.36 0.32 Noncash and other costs, net 0.10 b 0.09 0.07 b 0.07 Total unit costs 2.91 3.02 2.78 2.91 Revenue adjustments, primarily for pricing on prior period open sales (0.06) (0.06) 0.01 0.01 Gross profit per pound $ 1.32 $ 1.21 $ 1.00 $ 0.87 Copper sales (millions of recoverable pounds) 293 293 307 307 Nine Months Ended September 30, 2024 2023 By-Product Method Co-Product Method By-Product Method Co-Product Method Revenues, excluding adjustments $ 4.25 $ 4.25 $ 3.82 $ 3.82 Site production and delivery, before net noncash and other costs shown below 2.67 a 2.47 2.51 2.26 By-product credits (0.34) — (0.44) — Treatment charges 0.16 0.16 0.20 0.20 Royalty on metals 0.01 0.01 0.01 0.01 Unit net cash costs 2.50 2.64 2.28 2.47 DD&A 0.38 0.35 0.38 0.34 Noncash and other costs, net 0.07 b 0.07 0.08 b 0.07 Total unit costs 2.95 3.06 2.74 2.88 Revenue adjustments, primarily for pricing on prior period open sales 0.04 0.04 0.08 0.08 Gross profit per pound $ 1.34 $ 1.23 $ 1.16 $ 1.02 Copper sales (millions of recoverable pounds) 879 879 913 913 a. Includes $0.12 per pound of copper in third-quarter 2024 and $0.11 per pound of copper for the first nine months of 2024 for nonrecurring labor-related charges at Cerro Verde associated with new CLAs. b. Includes charges totaling $0.06 per pound of copper in third-quarter 2024, $0.05 per pound of copper for the first nine months of 2024, and $0.03 per pound of copper in both the third quarter and first nine months of 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 $2.44 per pound of copper in third-quarter 2024 and $2.50 per pound for the first nine months of 2024 were higher than average unit net cash costs of $2.35 per pound in third-quarter 2023 and $2.28 per pound for the first nine months of 2023, primarily reflecting nonrecurring labor-related charges at Cerro Verde associated with new CLAs with its two unions and lower by-product credits. 41 Table of Contents Revenues from Cerro Verde’s copper concentrate sales are recorded net of treatment charges, which will vary with Cerro Verde’s sales volumes and the price of copper. 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 $2.47 per pound of copper for the year 2024 (which includes $0.08 per pound of copper for nonrecurring labor-related charges at Cerro Verde associated with its new CLAs), based on achievement of current sales volume and cost estimates, and assuming an average price of $20.00 per pound of molybdenum in fourth-quarter 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 PT-FI’s new downstream processing facilities, PT-FI will be a fully integrated producer of refined copper and gold. Other than copper concentrate delivered to PT Smelting and PT-FI’s new smelter for further processing into refined products, most of PT-FI’s copper concentrate is sold under long-term contracts. Labor Matters. In April 2024, PT-FI reached a new two-year CLA with its three employee unions at its Grasberg minerals district operations. PT-FI did not recognize any significant nonrecurring costs associated with the new CLA. Regulatory Matters and Mining Rights. On July 2, 2024, PT-FI was granted copper concentrate and anode slimes export licenses, which are valid through December 2024. Pursuant to the Indonesia regulations, PT-FI is continuing to pay a 7.5% export duty on copper concentrates. See below for further discussion of the recent fire event at PT-FI's new smelter facility. As further discussed in FCX’s 2023 Form 10-K, PT-FI’s current special mining business license (IUPK) enables it to conduct operations in the Grasberg minerals district through 2041. Pursuant to regulations issued during 2024, PT-FI is eligible to apply for an extension of its mining rights beyond 2041, provided certain conditions are met, including ownership of integrated downstream 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 expiration of its current IUPK. PT-FI is currently preparing its application submittal. In connection with PT-FI’s application for extension, we are working to reach terms with MIND ID on a purchase and sale agreement for the transfer in 2041 of an additional 10% interest in PT-FI. 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). PT-FI is completing a mill recovery project with the installation of a new copper cleaner circuit, which is expected to begin commissioning in late 2024. Kucing Liar. Long-term mine development activities are ongoing for PT-FI’s Kucing Liar deposit in the Grasberg minerals district. Kucing Liar is expected to produce over 7 billion pounds of copper and 6 million ounces of gold between 2029 and the end of 2041, and an extension of PT-FI’s operating rights beyond 2041 would extend the life of the project. Development activities commenced in 2022 and are expected to continue over an approximate 10-year timeframe, with capital investments estimated to average approximately $400 million per year over this period. At full operating rates, 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. 42 Table of Contents Natural Gas Facilities. PT-FI plans to transition its existing energy source from coal to natural gas, which would meaningfully reduce PT-FI’s Scope 1 greenhouse gas emissions at the Grasberg minerals district. PT-FI’s planned investments in a new gas-fired combined cycle facility are expected to be incurred over the next four years, at a cost of approximately $1 billion, which represents an incremental cost of $0.4 billion compared to previously planned investments to refurbish the existing coal units. Once complete, PT-FI’s dual-fuel power plant and the new gas-fired combined cycle facility will be fueled by natural gas, supplied by a floating liquefied natural gas storage and regassification unit. Downstream Processing Facilities. On October 14, 2024, a fire occurred during commissioning of PT-FI’s new smelter in Gresik, Indonesia, following an equipment malfunction in the smelter furnace. The fire resulted in damage to a gas cleaning facility (electrostatic precipitator plant) and infrastructure for the production of sulfuric acid. There were no injuries. Smelter start-up operations have been temporarily suspended pending remediation activities. Mining operations in Central Papua and the completion and ramp-up of the PMR project have not been impacted. PT-FI has substantially completed initial damage assessments and currently estimates repair costs to approximate $100 million, which are expected to be offset through recovery under construction insurance programs. Remediation plans are in progress, including the procurement of long-lead items. Based on current delivery timelines, which continue to be evaluated, PT-FI currently expects to recommence start-up operations by mid-2025. Efforts are under way to expedite equipment orders to potentially improve the schedule. PT-FI is working with the Indonesia government to allow continued exports of copper concentrates until full ramp-up of PT-FI’s new downstream processing facilities is achieved, including seeking an increase to the permitted quota for 2024. 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 $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 1, PT-FI continues to account for its investment in PT Smelting under the equity method. Operating Data. Following is summary consolidated operating data for Indonesia operations: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Copper (millions of recoverable pounds) Production 439 436 1,371 1,171 Sales 426 430 1,256 1,014 Average realized price per pound $ 4.29 $ 3.77 $ 4.24 $ 3.81 Gold (thousands of recoverable ounces) Production 451 528 1,433 1,409 Sales 554 395 1,474 1,153 Average realized price per ounce $ 2,569 $ 1,898 $ 2,362 $ 1,932 Ore extracted and milled (metric tons per day): Grasberg Block Cave underground mine 133,400 131,000 132,100 112,000 Deep Mill Level Zone underground mine 63,200 76,900 65,000 75,700 Big Gossan underground mine 8,500 8,100 8,400 7,800 Other adjustments 700 (9,400) 1,900 (2,500) Total 205,800 206,600 207,400 193,000 Average ore grades: Copper (%) 1.26 1.21 1.29 1.18 Gold (grams per metric ton) 0.95 1.15 1.03 1.10 Recovery rates (%): Copper 88.1 89.5 88.8 89.5 Gold 77.2 77.8 77.3 77.5 PT-FI’s consolidated copper sales volumes totaled 426 million pounds in third-quarter 2024, 430 million pounds in third-quarter 2023, 1.3 billion pounds for the first nine months of 2024 and 1.0 billion pounds for the first nine 43 Table of Contents months of 2023. Higher sales volumes for the first nine months of 2024, compared to the 2023 period, primarily reflected higher ore grades and higher mining and milling rates. PT-FI’s consolidated gold sales volumes of 554 thousand ounces in third-quarter 2024 were higher than third-quarter 2023 gold sales volumes of 395 thousand ounces, primarily reflecting timing of shipments, partly offset by lower production from lower ore grades. PT-FI’s consolidated gold sales volumes of 1.5 million ounces for the first nine months of 2024 were higher than 1.2 million ounces for the first nine months of 2023, primarily reflecting higher mining and milling rates and timing of shipments. Consolidated sales volumes from PT-FI are expected to approximate 1.65 billion pounds of copper and 1.8 million ounces of gold for the year 2024. Consolidated copper and gold production volumes from PT-FI for the year 2024 are expected to exceed 2024 sales volumes, reflecting the deferral of approximately 85 million pounds of copper and 85 thousand ounces of gold associated with inventories held at PT-FI’s new downstream processing facilities expected to be sold as refined metal in 2025. Projected sales volumes are dependent on operational performance; continuation of copper concentrate exports during the restoration period of PT-FI’s new smelter; 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 September 30, 2024 2023 By-Product Method Co-Product Method By-Product Method Co-Product Method Copper Gold Copper Gold Revenues, excluding adjustments $ 4.29 $ 4.29 $ 2,569 $ 3.77 $ 3.77 $ 1,898 Site production and delivery, before net noncash and other costs shown below 1.82 1.00 599 1.42 0.96 484 Gold, silver and other by-product credits (3.50) — — (1.83) — — Treatment charges 0.37 0.20 122 0.32 0.22 109 Export duties a 0.30 0.17 99 0.34 0.23 116 Royalty on metals 0.30 0.17 95 0.19 0.12 64 Unit net cash (credits) costs (0.71) 1.54 915 0.44 1.53 773 DD&A 0.80 0.44 263 0.63 0.43 214 Noncash and other costs, net 0.12 b 0.07 41 0.02 b 0.01 6 Total unit costs 0.21 2.05 1,219 1.09 1.97 993 Revenue adjustments, primarily for pricing on prior period open sales (0.03) (0.03) 6 — — 8 Gross profit per pound/ounce $ 4.05 $ 2.21 $ 1,356 $ 2.68 $ 1.80 $ 913 Copper sales (millions of recoverable pounds) 426 426 430 430 Gold sales (thousands of recoverable ounces) 554 395 44 Table of Contents Nine Months Ended September 30, 2024 2023 By-Product Method Co-Product Method By-Product Method Co-Product Method Copper Gold Copper Gold Revenues, excluding adjustments $ 4.24 $ 4.24 $ 2,362 $ 3.81 $ 3.81 $ 1,932 Site production and delivery, before net noncash and other costs shown below 1.64 0.98 542 1.71 1.07 542 Gold, silver and other by-product credits (2.90) — — (2.32) — — Treatment charges 0.36 0.21 119 0.36 0.22 113 Export duties a 0.29 0.17 95 0.16 0.10 51 Royalty on metals 0.27 0.16 89 0.23 0.14 70 Unit net cash (credits) costs (0.34) 1.52 845 0.14 1.53 776 DD&A 0.73 0.44 243 0.69 0.43 216 Noncash and other costs, net 0.11 b,c 0.06 36 0.11 b,d 0.07 36 Total unit costs 0.50 2.02 1,124 0.94 2.03 1,028 Revenue adjustments, primarily for pricing on prior period open sales — — (3) 0.11 0.11 15 PT Smelting intercompany profit — — — 0.11 0.07 35 Gross profit per pound/ounce $ 3.74 $ 2.22 $ 1,235 $ 3.09 $ 1.96 $ 954 Copper sales (millions of recoverable pounds) 1,256 1,256 1,014 1,014 Gold sales (thousands of recoverable ounces) 1,474 1,153 a. Export duties of 2.5% were eliminated effective March 29, 2023, upon verification that construction progress of the new smelter exceeded 50% and were reinstated at a rate of 7.5% in July 2023 under a revised regulation. As discussed above and in Note 7, PT-FI is continuing to pay export duties of 7.5% on copper concentrates. b. Includes (i) charges totaling $0.09 per pound of copper in third-quarter 2024 and $0.06 per pound of copper for the first nine months of 2024 for operational readiness and start-up costs associated with PT-FI’s new downstream processing facilities and (ii) $0.01 per pound of copper in third-quarter 2024 and 2023 and $0.02 per pound of copper for the first nine months of 2024 and 2023 for feasibility and optimization studies. c. Includes charges totaling $0.03 per pound of copper for the first nine months of 2024 for amounts capitalized in prior years associated with construction of PT-FI’s new downstream processing facilities. d. Includes a charge totaling $0.05 per pound of copper for the first nine months of 2023 associated with a potential administrative fine. PT-FI’s unit net cash credits (including gold, silver and other by-product credits) were $0.71 per pound of copper in third-quarter 2024 and $0.34 per pound of copper for the first nine months of 2024, and PT-FI’s unit net cash costs (net of gold, silver and other by-product credits) were $0.44 per pound of copper in third-quarter 2023 and $0.14 per pound of copper for the first nine months of 2023. Unit net cash credits for the 2024 periods, compared to the 2023 periods, primarily reflect higher gold credits. Additionally, PT-FI’s site production and delivery costs will vary with the volume of metals sold, including the ratio of copper and gold sales within a period. 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 $129 million in third-quarter 2024, $78 million in third-quarter 2023, $338 million for the first nine months of 2024 and $228 million for the first nine months of 2023. Export duties totaled $129 million in third-quarter 2024, $147 million in third-quarter 2023, $360 million for the first nine months of 2024 and $165 million for the first nine months of 2023. Refer to Note 7 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 volumes and changes in copper and gold inventory. 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. 45 Table of Contents PT Smelting’s intercompany profit for the first nine months of 2023 represents the change in the deferral of 39.5% of PT-FI’s profit on sales to PT Smelting before 2023. 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. Refer to Note 1 for further discussion of PT-FI’s equity investment in PT Smelting. Average unit net cash credits (including gold, silver and other by-product credits) for PT-FI are expected to approximate $0.23 per pound of copper for the year 2024, based on achievement of current sales volumes and cost estimates, and assuming an average price of $2,600 per ounce of gold in fourth-quarter 2024. PT-FI’s average unit net cash credits for the year 2024 would change by approximately $0.03 per pound of copper for each $100 per ounce change in the average price of gold in fourth-quarter 2024. PT-FI’s unit net cash credits for the year 2024 are dependent on operational performance; continuation of copper concentrate exports during the restoration period of PT-FI’s new smelter; weather-related conditions; timing of shipments; 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 and Development Activities. Production from the primary molybdenum operations totaled 6 million pounds of molybdenum in third-quarter 2024, 7 million pounds in third-quarter 2023, 21 million pounds for the first nine months of 2024 and 22 million pounds for the first nine months of 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 $21.06 per pound of molybdenum in third-quarter 2024 and $18.59 per pound for the first nine months of 2024 were higher than average unit net cash costs of $18.07 per pound in third-quarter 2023 and $15.25 per pound for the first nine months of 2023, primarily reflecting higher costs for maintenance supplies and transitional contract labor and lower volumes. Average unit net cash costs for the primary molybdenum operations are expected to approximate $17.55 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, and the El Paso refinery in Texas. In June 2024, PT-FI substantially completed construction of its new smelter in Indonesia and commenced commissioning operations in third-quarter 2024. On October 14, 2024, a fire occurred during commissioning and smelter start-up operations have been temporarily suspended pending remediation activities (for further discussion refer to “Operations – Indonesia – Downstream Processing Facilities”). The PMR project was not impacted, and PT-FI expects to complete construction of the PMR by year-end 2024. The new smelter will smelt and refine copper 46 Table of Contents concentrate from PT-FI and the PMR will process anode slimes from the new smelter and PT Smelting. PT-FI also has a 66% (39.5% prior to June 30, 2024) ownership interest in PT Smelting, a copper smelter and refinery in Gresik, Indonesia (refer to Note 1). Once its new downstream processing facilities are operational, PT-FI’s operations will be fully integrated and treatment charges reflecting the cost of smelting and refining operations will be recorded in production and delivery costs. Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes. During the first nine months of 2024, Atlantic Copper’s copper concentrate purchases included 27% from our copper mining operations and 73% 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 $(42) million ($(13) million to net income attributable to common stock) in third-quarter 2024, $81 million ($37 million to net income attributable to common stock) in third-quarter 2023, $79 million ($23 million to net income attributable to common stock) for the first nine months of 2024 and $153 million ($64 million to net income attributable to common stock) for the first nine months of 2023. Our net deferred profits on our inventories at Atlantic Copper to be recognized in future periods’ operating income totaled $143 million ($44 million to net income attributable to common stock) at September 30, 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. In May 2024, the U.S. Environmental Protection Agency (EPA) published a final rule updating the standards for hazardous air pollutant emissions from primary copper smelters. We are evaluating this final rule to determine to what extent we would need to modify our processes and equipment and the costs involved, which could be significant. We expect that this final rule will impact our Miami, Arizona smelter operations, which process a significant portion of the copper concentrate produced by our North America copper mines. We have appealed the EPA’s final rule to the Court of Appeals for the D.C. Circuit, and we have filed a petition for reconsideration to EPA, including updated information on cost and implementation of the final rule. Refer to “Governmental Regulations – Environmental and Reclamation Matters” in Items 1 and 2. “Business and Properties” contained in Part I of our 2023 Form 10-K for additional information on new and revised environmental regulatory requirements that may result in substantial increased costs for our business. 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 $6.8 billion for the year 2024 exceed our expected consolidated capital expenditures of $4.6 billion for the year 2024. 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), near-term senior note maturities and any share or debt repurchases. At September 30, 2024, we had $5.0 billion in consolidated cash and cash equivalents, and FCX, PT-FI and Cerro Verde have $3.0 billion, $1.5 billion and $350 million, respectively, of availability under their revolving credit facilities. 47 Table of Contents At September 30, 2024, we had $1.1 billion in current restricted cash and cash equivalents, including $1.0 billion associated with PT-FI's export proceeds temporarily deposited in Indonesia banks for 90 days in accordance with a regulation issued by the Indonesia government. Financial Policy. Our financial policy is aligned with our strategic objectives of maintaining a strong balance sheet, providing cash returns to shareholders and advancing opportunities for future growth. The policy includes a base dividend and a performance-based payout framework, whereby up to 50% of available cash flows generated after planned capital spending and distributions to noncontrolling interests would be allocated to shareholder returns and the balance to debt reduction and investments in value enhancing growth projects, subject to us maintaining our net debt at a level not to exceed the net debt target of $3.0 billion to $4.0 billion (excluding debt for PT-FI’s new downstream processing facilities). Our Board of Directors (Board) reviews the structure of the performance-based payout framework at least annually. At September 30, 2024, our net debt, excluding $3.2 billion of debt for PT-FI’s new downstream processing facilities, totaled $0.5 billion (which was net of $1.0 billion of current restricted cash associated with PT-FI’s export proceeds). Refer to "Net Debt" for further discussion. On September 25, 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 November 1, 2024, to common stockholders of record as of October 15, 2024. The base and variable dividends on our common stock totaled $0.60 per share for 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) are 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. We acquired 1.2 million shares of our common stock in July 2024 for a total cost of $59 million ($50.48 average cost per share) bringing total purchases under our $5.0 billion share repurchase program to 49 million shares for a cost of $1.9 billion ($38.64 average cost per share). The timing and amount of share repurchases are 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 the Board’s discretion. 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 and withholding taxes at September 30, 2024 (in billions): Cash at domestic companies $ 2.1 Cash at international operations 2.9 a Total consolidated cash and cash equivalents 5.0 Noncontrolling interests’ share (1.4) Cash, net of noncontrolling interests’ share 3.6 Withholding taxes (0.1) Net cash available $ 3.5 a. Excludes $1.0 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. 48 Table of Contents Debt At September 30, 2024, consolidated debt totaled $9.7 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, which we expect to redeem with cash on hand. Our next senior note maturities are in 2027. Our total debt has an average remaining duration of approximately 9 years. Refer to Note 4 for further discussion. Operating Activities We generated operating cash flows of $5.7 billion for the first nine months of 2024 and $4.0 billion for the first nine months of 2023. Higher operating cash flows for the first nine months of 2024, compared with the first nine months of 2023, primarily reflects higher average realized copper and gold prices and higher gold sales volumes, as well as changes in accruals for international income taxes and other working capital changes related to PT-FI’s tolling arrangement with PT Smelting. Investing Activities Capital Expenditures. Capital expenditures, including capitalized interest, totaled $3.6 billion for the first nine months of 2024 and $3.5 billion for the first nine months of 2023, including amounts for major mining projects ($1.3 billion for the first nine months of 2024 and $1.2 billion for the first nine months of 2023), primarily associated with underground development activities in the Grasberg minerals district, and for PT-FI’s new downstream processing facilities ($1.0 billion for the first nine months of 2024 and $1.3 billion for the first nine months of 2023). Acquisition of additional ownership interest in Cerro Verde. In September 2024, we purchased 5.3 million shares of Cerro Verde common stock for a total cost of $210 million, increasing our ownership interest in Cerro Verde to 55.08% from 53.56%. Loans to PT Smelting for Expansion. PT-FI made loans to PT Smelting totaling $28 million for the first nine months of 2024 and $109 million for the first nine months of 2023 to fund PT Smelting’s expansion project. Financing Activities Debt Transactions. Net proceeds from debt totaled $249 million for the first nine months of 2024, primarily related to borrowings under the PT-FI revolving credit facility that were used to fund capital expenditures for PT-FI’s new downstream processing facilities. Net repayments of debt totaled $1.2 billion for the first nine months of 2023, including the repayment of our 3.875% Senior Notes that matured in March 2023 totaling $996 million and open-market purchases of senior notes totaling $221 million. Cash Dividends on Common Stock. We paid cash dividends on our common stock totaling $0.6 billion during each of the first nine months of 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 4, 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 $1.3 billion (including $1.1 billion from PT-FI) for the first nine months of 2024 and $0.4 billion (including $0.2 billion from PT-FI) for the first nine months of 2023. Cash dividends and distributions to noncontrolling interests vary based on the operating results and cash requirements of our consolidated subsidiaries. Treasury Stock Purchases. In July 2024, we acquired 1.2 million shares of our common stock for a total cost of $59 million. 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. 49 Table of Contents 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 7, we recorded net charges totaling $82 million for the first nine months of 2024, primarily associated with changes in cost estimates for former processing facilities and historical smelter sites. In addition, we recorded net ARO additions totaling $0.4 billion in the first nine months of 2024, including $0.3 billion at mining operations primarily associated with revised closure plans and cost estimates to reflect our commitment to the Global Industry Standard on Tailings Management and $0.1 billion at our oil and gas properties primarily associated with assumed abandonment obligations resulting from bankruptcies of other companies. Refer to Note 12 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 7. Refer to Note 12 and “Legal Proceedings” contained in Part I, Item 3. of our 2023 Form 10-K, as updated by Note 7, for further information regarding litigation and other contingencies. NEW ACCOUNTING STANDARDS There were no significant updates to previously reported accounting standards included in Note 1 of our 2023 Form 10-K. CRITICAL ACCOUNTING ESTIMATES MD&A is based on our consolidated financial statements, which have been prepared in conformity with U.S. GAAP. The preparation of these statements requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We base these estimates on historical experience and on assumptions that we consider reasonable under the circumstances; however, reported results could differ from those based on the current estimates under different assumptions or conditions. For a description of our critical accounting estimates that require us to make the most difficult, subjective or complex judgments, refer to our 2023 Form 10-K. We have not changed any of these policies from those previously disclosed in that report. 50 Table of Contents 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 PT-FI’s new downstream processing facilities. 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 millions): As of September 30, 2024 Current portion of debt $ 769 Long-term debt, less current portion 8,910 Consolidated debt 9,679 Less: consolidated cash and cash equivalents 5,000 Less: current restricted cash associated with PT-FI’s export proceeds 964 a FCX net debt 3,715 Less: debt for PT-FI’s new downstream processing facilities 3,232 b FCX net debt, excluding debt for PT-FI’s new downstream processing facilities $ 483 a. 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. b. Represents PT-FI’s senior notes and $250 million of borrowings under PT-FI’s revolving credit facility. 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 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. 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. 51 Table of Contents North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2024 (In millions) By-Product Co-Product Method Method Copper Molybdenum a Other b Total Revenues, excluding adjustments $ 1,373 $ 1,373 $ 168 $ 46 $ 1,587 Site production and delivery, before net noncash and other costs shown below 1,153 1,030 132 39 1,201 By-product credits (166) — — — — Treatment charges 42 40 — 2 42 Net cash costs 1,029 1,070 132 41 1,243 DD&A 110 98 10 2 110 Noncash and other costs, net 51 c 48 3 — 51 Total costs 1,190 1,216 145 43 1,404 Other revenue adjustments, primarily for pricing on prior period open sales (1) (1) — — (1) Gross profit $ 182 $ 156 $ 23 $ 3 $ 182 Copper sales (millions of recoverable pounds) 317 317 Molybdenum sales (millions of recoverable pounds) a 8 Gross profit per pound of copper/molybdenum: Revenues, excluding adjustments $ 4.32 $ 4.32 $ 21.33 Site production and delivery, before net noncash and other costs shown below 3.64 3.25 16.83 By-product credits (0.53) — — Treatment charges 0.13 0.12 — Unit net cash costs 3.24 3.37 16.83 DD&A 0.35 0.31 1.22 Noncash and other costs, net 0.16 c 0.15 0.40 Total unit costs 3.75 3.83 18.45 Other revenue adjustments, primarily for pricing on prior period open sales — — — Gross profit per pound $ 0.57 $ 0.49 $ 2.88 Reconciliation to Amounts Reported Revenues Production and Delivery DD&A Totals presented above $ 1,587 $ 1,201 $ 110 Treatment charges (2) 40 — Noncash and other costs, net — 51 — Other revenue adjustments, primarily for pricing on prior period open sales (1) — — Eliminations and other 7 11 (1) North America copper mines 1,591 1,303 109 Other mining d 6,766 4,191 477 Corporate, other & eliminations (1,567) (1,417) 14 As reported in our consolidated financial statements $ 6,790 $ 4,077 $ 600 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 $18 million ($0.06 per pound of copper) for feasibility and optimization studies. d. Represents the combined total for our other segments as presented in Note 8. 52 Table of Contents North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2023 (In millions) By-Product Co-Product Method Method Copper Molybdenum a Other b Total Revenues, excluding adjustments $ 1,435 $ 1,435 $ 164 $ 43 $ 1,642 Site production and delivery, before net noncash and other costs shown below 1,121 1,008 129 35 1,172 By-product credits (156) — — — — Treatment charges 39 37 — 2 39 Net cash costs 1,004 1,045 129 37 1,211 DD&A 110 99 10 1 110 Noncash and other costs, net 53 c 48 4 1 53 Total costs 1,167 1,192 143 39 1,374 Other revenue adjustments, primarily for pricing on prior period open sales 1 1 — — 1 Gross profit $ 269 $ 244 $ 21 $ 4 $ 269 Copper sales (millions of recoverable pounds) 372 372 Molybdenum sales (millions of recoverable pounds) a 7 Gross profit per pound of copper/molybdenum: Revenues, excluding adjustments $ 3.86 $ 3.86 $ 22.01 Site production and delivery, before net noncash and other costs shown below 3.01 2.71 17.35 By-product credits (0.41) — — Treatment charges 0.10 0.10 — Unit net cash costs 2.70 2.81 17.35 DD&A 0.30 0.26 1.33 Noncash and other costs, net 0.14 c 0.13 0.47 Total unit costs 3.14 3.20 19.15 Other revenue adjustments, primarily for pricing on prior period open sales — — — Gross profit per pound $ 0.72 $ 0.66 $ 2.86 Reconciliation to Amounts Reported Revenues Production and Delivery DD&A Totals presented above $ 1,642 $ 1,172 $ 110 Treatment charges — 39 — Noncash and other costs, net — 53 — Other revenue adjustments, primarily for pricing on prior period open sales 1 — — Eliminations and other 14 15 — North America copper mines 1,657 1,279 110 Other mining d 5,764 3,865 405 Corporate, other & eliminations (1,597) (1,591) 18 As reported in our consolidated financial statements $ 5,824 $ 3,553 $ 533 a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. b. Includes gold and silver product revenues and production costs. c. Includes charges totaling $28 million ($0.08 per pound of copper) for feasibility and optimization studies. d. Represents the combined total for our other segments as presented in Note 8. 53 Table of Contents North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2024 (In millions) By-Product Co-Product Method Method Copper Molybdenum a Other b Total Revenues, excluding adjustments $ 4,048 $ 4,048 $ 433 $ 127 $ 4,608 Site production and delivery, before net noncash and other costs shown below 3,250 2,928 358 104 3,390 By-product credits (420) — — — — Treatment charges 125 120 — 5 125 Net cash costs 2,955 3,048 358 109 3,515 DD&A 327 295 26 6 327 Noncash and other costs, net 133 c 123 9 1 133 Total costs 3,415 3,466 393 116 3,975 Other revenue adjustments, primarily for pricing on prior period open sales — — — — — Gross profit $ 633 $ 582 $ 40 $ 11 $ 633 Copper sales (millions of recoverable pounds) 943 943 Molybdenum sales (millions of recoverable pounds) a 22 Gross profit per pound of copper/molybdenum: Revenues, excluding adjustments $ 4.29 $ 4.29 $ 19.97 Site production and delivery, before net noncash and other costs shown below 3.45 3.10 16.52 By-product credits (0.45) — — Treatment charges 0.13 0.13 — Unit net cash costs 3.13 3.23 16.52 DD&A 0.35 0.32 1.23 Noncash and other costs, net 0.14 c 0.13 0.39 Total unit costs 3.62 3.68 18.14 Other revenue adjustments, primarily for pricing on prior period open sales — — — Gross profit per pound $ 0.67 $ 0.61 $ 1.83 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 4,608 $ 3,390 $ 327 Treatment charges (4) 121 — Noncash and other costs, net — 133 — Eliminations and other 25 34 — North America copper mines 4,629 3,678 327 Other mining d 19,565 12,298 1,330 Corporate, other & eliminations (4,459) (4,180) 47 As reported in our consolidated financial statements $ 19,735 $ 11,796 $ 1,704 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 $48 million ($0.05 per pound of copper) for feasibility and optimization studies. d. Represents the combined total for our other segments as presented in Note 8. 54 Table of Contents North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2023 (In millions) By-Product Co-Product Method Method Copper Molybdenum a Other b Total Revenues, excluding adjustments $ 4,159 $ 4,159 $ 576 $ 129 $ 4,864 Site production and delivery, before net noncash and other costs shown below 3,097 2,729 417 113 3,259 By-product credits (543) — — — — Treatment charges 126 120 — 6 126 Net cash costs 2,680 2,849 417 119 3,385 DD&A 312 276 30 6 312 Noncash and other costs, net 180 c 157 20 3 180 Total costs 3,172 3,282 467 128 3,877 Other revenue adjustments, primarily for pricing on prior period open sales 13 13 — — 13 Gross profit $ 1,000 $ 890 $ 109 $ 1 $ 1,000 Copper sales (millions of recoverable pounds) 1,048 1,048 Molybdenum sales (millions of recoverable pounds) a 23 Gross profit per pound of copper/molybdenum: Revenues, excluding adjustments $ 3.97 $ 3.97 $ 24.41 Site production and delivery, before net noncash and other costs shown below 2.96 2.60 17.66 By-product credits (0.52) — — Treatment charges 0.12 0.12 — Unit net cash costs 2.56 2.72 17.66 DD&A 0.30 0.26 1.27 Noncash and other costs, net 0.17 c 0.15 0.87 Total unit costs 3.03 3.13 19.80 Other revenue adjustments, primarily for pricing on prior period open sales 0.01 0.01 — Gross profit per pound $ 0.95 $ 0.85 $ 4.61 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 4,864 $ 3,259 $ 312 Treatment charges (9) 117 — Noncash and other costs, net — 180 — Other revenue adjustments, primarily for pricing on prior period open sales 13 — — Eliminations and other 49 52 — North America copper mines 4,917 3,608 312 Other mining d 16,832 11,306 1,117 Corporate, other & eliminations (4,799) (4,647) 50 As reported in our consolidated financial statements $ 16,950 $ 10,267 $ 1,479 a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. b. Includes gold and silver product revenues and production costs. c. Includes charges totaling $81 million ($0.08 per pound of copper) for feasibility and optimization studies. d. Represents the combined total for our other segments as presented in Note 8. 55 Table of Contents South America Operations Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2024 (In millions) By-Product Co-Product Method Method Copper Other a Total Revenues, excluding adjustments $ 1,257 $ 1,257 $ 122 $ 1,379 Site production and delivery, before net noncash and other costs shown below 776 b 711 78 789 By-product credits (109) — — — Treatment charges 45 45 — 45 Royalty on metals 2 2 — 2 Net cash costs 714 758 78 836 DD&A 109 99 10 109 Noncash and other costs, net 28 c 28 — 28 Total costs 851 885 88 973 Other revenue adjustments, primarily for pricing on prior period open sales (18) (18) — (18) Gross profit $ 388 $ 354 $ 34 $ 388 Copper sales (millions of recoverable pounds) 293 293 Gross profit per pound of copper: Revenues, excluding adjustments $ 4.29 $ 4.29 Site production and delivery, before net noncash and other costs shown below 2.65 b 2.43 By-product credits (0.37) — Treatment charges 0.15 0.15 Royalty on metals 0.01 0.01 Unit net cash costs 2.44 2.59 DD&A 0.37 0.34 Noncash and other costs, net 0.10 c 0.09 Total unit costs 2.91 3.02 Other revenue adjustments, primarily for pricing on prior period open sales (0.06) (0.06) Gross profit per pound $ 1.32 $ 1.21 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 1,379 $ 789 $ 109 Treatment charges (45) — — Royalty on metals (2) — — Noncash and other costs, net — 28 — Other revenue adjustments, primarily for pricing on prior period open sales (18) — — Eliminations and other 2 — 1 South America operations 1,316 817 110 Other mining d 7,041 4,677 476 Corporate, other & eliminations (1,567) (1,417) 14 As reported in our consolidated financial statements $ 6,790 $ 4,077 $ 600 a. Includes silver sales of 0.9 million ounces ($30.59 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 nonrecurring labor-related charges totaling $34 million ($0.12 per pound of copper) at Cerro Verde associated with the new CLAs with its two unions. c. Includes charges totaling $18 million ($0.06 per pound of copper) for feasibility studies. d. Represents the combined total for our other segments as presented in Note 8. 56 Table of Contents South America Operations Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2023 (In millions) By-Product Co-Product Method Method Copper Other a Total Revenues, excluding adjustments $ 1,159 $ 1,159 $ 145 $ 1,304 Site production and delivery, before net noncash and other costs shown below 790 712 93 805 By-product credits (130) — — — Treatment charges 61 61 — 61 Royalty on metals 2 2 — 2 Net cash costs 723 775 93 868 DD&A 110 98 12 110 Noncash and other costs, net 22 b 21 1 22 Total costs 855 894 106 1,000 Other revenue adjustments, primarily for pricing on prior period open sales 2 2 — 2 Gross profit $ 306 $ 267 $ 39 $ 306 Copper sales (millions of recoverable pounds) 307 307 Gross profit per pound of copper: Revenues, excluding adjustments $ 3.77 $ 3.77 Site production and delivery, before net noncash and other costs shown below 2.57 2.32 By-product credits (0.42) — Treatment charges 0.19 0.19 Royalty on metals 0.01 0.01 Unit net cash costs 2.35 2.52 DD&A 0.36 0.32 Noncash and other costs, net 0.07 b 0.07 Total unit costs 2.78 2.91 Other revenue adjustments, primarily for pricing on prior period open sales 0.01 0.01 Gross profit per pound $ 1.00 $ 0.87 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 1,304 $ 805 $ 110 Treatment charges (61) — — Royalty on metals (2) — — Noncash and other costs, net — 22 — Other revenue adjustments, primarily for pricing on prior period open sales 2 — — Eliminations and other 1 — 1 South America operations 1,244 827 111 Other mining c 6,177 4,317 404 Corporate, other & eliminations (1,597) (1,591) 18 As reported in our consolidated financial statements $ 5,824 $ 3,553 $ 533 a. Includes silver sales of 1.1 million ounces ($23.31 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. b. Includes charges totaling $11 million ($0.03 per pound of copper) for feasibility studies. c. Represents the combined total for our other segments as presented in Note 8. 57 Table of Contents South America Operations Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2024 (In millions) By-Product Co-Product Method Method Copper Other a Total Revenues, excluding adjustments $ 3,737 $ 3,737 $ 342 $ 4,079 Site production and delivery, before net noncash and other costs shown below 2,347 b 2,169 217 2,386 By-product credits (302) — — — Treatment charges 144 144 — 144 Royalty on metals 6 5 1 6 Net cash costs 2,195 2,318 218 2,536 DD&A 331 303 28 331 Noncash and other costs, net 66 c 64 2 66 Total costs 2,592 2,685 248 2,933 Other revenue adjustments, primarily for pricing on prior period open sales 33 33 (1) 32 Gross profit $ 1,178 $ 1,085 $ 93 $ 1,178 Copper sales (millions of recoverable pounds) 879 879 Gross profit per pound of copper: Revenues, excluding adjustments $ 4.25 $ 4.25 Site production and delivery, before net noncash and other costs shown below 2.67 b 2.47 By-product credits (0.34) — Treatment charges 0.16 0.16 Royalty on metals 0.01 0.01 Unit net cash costs 2.50 2.64 DD&A 0.38 0.35 Noncash and other costs, net 0.07 c 0.07 Total unit costs 2.95 3.06 Other revenue adjustments, primarily for pricing on prior period open sales 0.04 0.04 Gross profit per pound $ 1.34 $ 1.23 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 4,079 $ 2,386 $ 331 Treatment charges (144) — — Royalty on metals (6) — — Noncash and other costs, net — 66 — Other revenue adjustments, primarily for pricing on prior period open sales 32 — — Eliminations and other 2 (2) 1 South America operations 3,963 2,450 332 Other mining d 20,231 13,526 1,325 Corporate, other & eliminations (4,459) (4,180) 47 As reported in our consolidated financial statements $ 19,735 $ 11,796 $ 1,704 a. Includes silver sales of 2.7 million ounces ($29.18 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to FCX’s molybdenum sales company at market-based pricing. b. Includes nonrecurring labor-related charges totaling $99 million ($0.11 per pound of copper) at Cerro Verde associated with the new CLAs with its two unions. c. Includes charges totaling $41 million ($0.05 per pound of copper) for feasibility studies. d. Represents the combined total for our other segments as presented in Note 8. 58 Table of Contents South America Operations Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2023 (In millions) By-Product Co-Product Method Method Copper Other a Total Revenues, excluding adjustments $ 3,492 $ 3,492 $ 447 $ 3,939 Site production and delivery, before net noncash and other costs shown below 2,297 2,074 272 2,346 By-product credits (401) — — — Treatment charges 179 179 — 179 Royalty on metals 6 5 1 6 Net cash costs 2,081 2,258 273 2,531 DD&A 350 310 40 350 Noncash and other costs, net 72 b 67 5 72 Total costs 2,503 2,635 318 2,953 Other revenue adjustments, primarily for pricing on prior period open sales 71 71 3 74 Gross profit $ 1,060 $ 928 $ 132 $ 1,060 Copper sales (millions of recoverable pounds) 913 913 Gross profit per pound of copper: Revenues, excluding adjustments $ 3.82 $ 3.82 Site production and delivery, before net noncash and other costs shown below 2.51 2.26 By-product credits (0.44) — Treatment charges 0.20 0.20 Royalty on metals 0.01 0.01 Unit net cash costs 2.28 2.47 DD&A 0.38 0.34 Noncash and other costs, net 0.08 b 0.07 Total unit costs 2.74 2.88 Other revenue adjustments, primarily for pricing on prior period open sales 0.08 0.08 Gross profit per pound $ 1.16 $ 1.02 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 3,939 $ 2,346 $ 350 Treatment charges (179) — — Royalty on metals (6) — — Noncash and other costs, net — 72 — Other revenue adjustments, primarily for pricing on prior period open sales 74 — — Eliminations and other — (1) — South America operations 3,828 2,417 350 Other mining c 17,921 12,497 1,079 Corporate, other & eliminations (4,799) (4,647) 50 As reported in our consolidated financial statements $ 16,950 $ 10,267 $ 1,479 a. Includes silver sales of 3.2 million ounces ($23.51 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. b. Includes charges totaling $30 million ($0.03 per pound of copper) for feasibility studies. c. Represents the combined total for our other segments as presented in Note 8. 59 Table of Contents Indonesia Operations Product Revenues, Production Costs and Unit Net Cash (Credits) Costs Three Months Ended September 30, 2024 (In millions) Co-Product Method By-Product Method Copper Gold Silver & Other a Total Revenues, excluding adjustments $ 1,826 $ 1,826 $ 1,421 $ 68 $ 3,315 Site production and delivery, before net noncash and other costs shown below 774 426 332 16 774 Gold, silver and other by-product credits (1,493) — — — — Treatment charges 157 87 67 3 157 Export duties 129 71 55 3 129 Royalty on metals 129 74 53 2 129 Net cash (credits) costs (304) 658 507 24 1,189 DD&A 340 187 146 7 340 Noncash and other costs, net 52 b 29 22 1 52 Total costs 88 874 675 32 1,581 Other revenue adjustments, primarily for pricing on prior period open sales (14) (14) 4 — (10) Gross profit $ 1,724 $ 938 $ 750 $ 36 $ 1,724 Copper sales (millions of recoverable pounds) 426 426 Gold sales (thousands of recoverable ounces) 554 Gross profit per pound of copper/per ounce of gold: Revenues, excluding adjustments $ 4.29 $ 4.29 $ 2,569 Site production and delivery, before net noncash and other costs shown below 1.82 1.00 599 Gold, silver and other by-product credits (3.50) — — Treatment charges 0.37 0.20 122 Export duties 0.30 0.17 99 Royalty on metals 0.30 0.17 95 Unit net cash (credits) costs (0.71) 1.54 915 DD&A 0.80 0.44 263 Noncash and other costs, net 0.12 b 0.07 41 Total unit costs 0.21 2.05 1,219 Other revenue adjustments, primarily for pricing on prior period open sales (0.03) (0.03) 6 Gross profit per pound/ounce $ 4.05 $ 2.21 $ 1,356 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 3,315 $ 774 $ 340 Treatment charges (65) 92 c — Export duties (129) — — Royalty on metals (129) — — Noncash and other costs, net — 52 — Other revenue adjustments, primarily for pricing on prior period open sales (10) — — Indonesia operations 2,982 918 340 Other mining d 5,375 4,576 246 Corporate, other & eliminations (1,567) (1,417) 14 As reported in our consolidated financial statements $ 6,790 $ 4,077 $ 600 a. Includes silver sales of 2.1 million ounces ($30.11 per ounce average realized price). b. Includes charges totaling $39 million ($0.09 per pound of copper) for operational readiness and start-up costs associated with PT-FI’s new downstream processing facilities, and $5 million ($0.01 per pound of copper) for feasibility and optimization studies. c. Represents tolling costs paid to PT Smelting. d. Represents the combined total for our other segments as presented in Note 8. 60 Table of Contents Indonesia Operations Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, 2023 (In millions) Co-Product Method By-Product Method Copper Gold Silver & Other a Total Revenues, excluding adjustments $ 1,621 $ 1,621 $ 749 $ 32 $ 2,402 Site production and delivery, before net noncash and other costs shown below 612 413 191 8 612 Gold, silver and other by-product credits (785) — — — — Treatment charges 138 93 43 2 138 Export duties 147 99 46 2 147 Royalty on metals 78 52 25 1 78 Net cash costs 190 657 305 13 975 DD&A 271 183 84 4 271 Noncash and other costs, net 8 b 6 2 — 8 Total costs 469 846 391 17 1,254 Other revenue adjustments, primarily for pricing on prior period open sales 1 1 3 1 5 Gross profit $ 1,153 $ 776 $ 361 $ 16 $ 1,153 Copper sales (millions of recoverable pounds) 430 430 Gold sales (thousands of recoverable ounces) 395 Gross profit per pound of copper/per ounce of gold: Revenues, excluding adjustments $ 3.77 $ 3.77 $ 1,898 Site production and delivery, before net noncash and other costs shown below 1.42 0.96 484 Gold, silver and other by-product credits (1.83) — — Treatment charges 0.32 0.22 109 Export duties 0.34 0.23 116 Royalty on metals 0.19 0.12 64 Unit net cash costs 0.44 1.53 773 DD&A 0.63 0.43 214 Noncash and other costs, net 0.02 b 0.01 6 Total unit costs 1.09 1.97 993 Other revenue adjustments, primarily for pricing on prior period open sales — — 8 Gross profit per pound/ounce $ 2.68 $ 1.80 $ 913 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 2,402 $ 612 $ 271 Treatment charges (87) 51 c — Export duties (147) — — Royalty on metals (78) — — Noncash and other costs, net — 8 — Other revenue adjustments, primarily for pricing on prior period open sales 5 — — Eliminations and other — 1 — Indonesia operations 2,095 672 271 Other mining d 5,326 4,472 244 Corporate, other & eliminations (1,597) (1,591) 18 As reported in our consolidated financial statements $ 5,824 $ 3,553 $ 533 a. Includes silver sales of 1.3 million ounces ($22.96 per ounce average realized price). b. Includes charges totaling $3 million ($0.01 per pound of copper) for feasibility and optimization studies. c. Primarily represents tolling costs paid to PT Smelting. d. Represents the combined total for our other segments as presented in Note 8. 61 Table of Contents Indonesia Operations Product Revenues, Production Costs and Unit Net Cash (Credits) Costs Nine Months Ended September 30, 2024 (In millions) Co-Product Method By-Product Method Copper Gold Silver & Other a Total Revenues, excluding adjustments $ 5,325 $ 5,325 $ 3,477 $ 169 $ 8,971 Site production and delivery, before net noncash and other costs shown below 2,062 1,224 799 39 2,062 Gold, silver and other by-product credits (3,645) — — — — Treatment charges 453 269 176 8 453 Export duties 360 213 140 7 360 Royalty on metals 338 203 130 5 338 Net cash (credits) costs (432) 1,909 1,245 59 3,213 DD&A 923 548 358 17 923 Noncash and other costs, net 139 b 82 54 3 139 Total costs 630 2,539 1,657 79 4,275 Other revenue adjustments, primarily for pricing on prior period open sales 6 6 (1) — 5 Gross profit $ 4,701 $ 2,792 $ 1,819 $ 90 $ 4,701 Copper sales (millions of recoverable pounds) 1,256 1,256 Gold sales (thousands of recoverable ounces) 1,474 Gross profit per pound of copper/per ounce of gold: Revenues, excluding adjustments $ 4.24 $ 4.24 $ 2,362 Site production and delivery, before net noncash and other costs shown below 1.64 0.98 542 Gold, silver and other by-product credits (2.90) — — Treatment charges 0.36 0.21 119 Export duties 0.29 0.17 95 Royalty on metals 0.27 0.16 89 Unit net cash (credits) costs (0.34) 1.52 845 DD&A 0.73 0.44 243 Noncash and other costs, net 0.11 b 0.06 36 Total unit costs 0.50 2.02 1,124 Other revenue adjustments, primarily for pricing on prior period open sales — — (3) Gross profit per pound/ounce $ 3.74 $ 2.22 $ 1,235 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 8,971 $ 2,062 $ 923 Treatment charges (203) 250 c — Export duties (360) — — Royalty on metals (338) — — Noncash and other costs, net — 139 — Other revenue adjustments, primarily for pricing on prior period open sales 5 — — Indonesia operations 8,075 2,451 923 Other mining d 16,119 13,525 734 Corporate, other & eliminations (4,459) (4,180) 47 As reported in our consolidated financial statements $ 19,735 $ 11,796 $ 1,704 a. Includes silver sales of 5.5 million ounces ($28.01 per ounce average realized price). b. Includes charges totaling (i) $74 million ($0.06 per pound of copper) for operational readiness and start-up costs associated with PT-FI’s new downstream processing facilities, (ii) $34 million ($0.03 per pound of copper) related to amounts capitalized in prior years associated with the construction of PT-FI’s new downstream processing facilities, and (iii) $22 million ($0.02 per pound of copper) for feasibility and optimization studies. c. Represents tolling costs paid to PT Smelting. d. Represents the combined total for our other segments as presented in Note 8. 62 Table of Contents Indonesia Operations Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, 2023 (In millions) Co-Product Method By-Product Method Copper Gold Silver & Other a Total Revenues, excluding adjustments $ 3,860 $ 3,860 $ 2,227 $ 106 $ 6,193 Site production and delivery, before net noncash and other costs shown below 1,736 1,082 624 30 1,736 Gold, silver and other by-product credits (2,350) — — — — Treatment charges 362 226 130 6 362 Export duties 165 103 59 3 165 Royalty on metals 228 144 81 3 228 Net cash costs 141 1,555 894 42 2,491 DD&A 694 433 249 12 694 Noncash and other costs, net 115 b 71 42 2 115 Total costs 950 2,059 1,185 56 3,300 Other revenue adjustments, primarily for pricing on prior period open sales 114 114 18 (1) 131 PT Smelting intercompany profit 112 70 40 2 112 Gross profit $ 3,136 $ 1,985 $ 1,100 $ 51 $ 3,136 Copper sales (millions of recoverable pounds) 1,014 1,014 Gold sales (thousands of recoverable ounces) 1,153 Gross profit per pound of copper/per ounce of gold: Revenues, excluding adjustments $ 3.81 $ 3.81 $ 1,932 Site production and delivery, before net noncash and other costs shown below 1.71 1.07 542 Gold, silver and other by-product credits (2.32) — — Treatment charges 0.36 0.22 113 Export duties 0.16 0.10 51 Royalty on metals 0.23 0.14 70 Unit net cash costs 0.14 1.53 776 DD&A 0.69 0.43 216 Noncash and other costs, net 0.11 b 0.07 36 Total unit costs 0.94 2.03 1,028 Other revenue adjustments, primarily for pricing on prior period open sales 0.11 0.11 15 PT Smelting intercompany profit 0.11 0.07 35 Gross profit per pound/ounce $ 3.09 $ 1.96 $ 954 Reconciliation to Amounts Reported Production Revenues and Delivery DD&A Totals presented above $ 6,193 $ 1,736 $ 694 Treatment charges (231) 131 c — Export duties (165) — — Royalty on metals (228) — — Noncash and other costs, net — 115 — Other revenue adjustments, primarily for pricing on prior period open sales 131 — — PT Smelting intercompany profit — (112) — Eliminations and other — 1 — Indonesia operations 5,700 1,871 694 Other mining d 16,049 13,043 735 Corporate, other & eliminations (4,799) (4,647) 50 As reported in our consolidated financial statements $ 16,950 $ 10,267 $ 1,479 a. Includes silver sales of 4.0 million ounces ($23.37 per ounce average realized price). b. Includes a charge of $55 million ($0.05 per pound of copper) associated with a potential administrative fine and $22 million ($0.02 per pound of copper) for feasibility and optimization studies. c. Primarily represents tolling costs paid to PT Smelting. d. Represents the combined total for our other segments as presented in Note 8. 63 Table of Contents Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs Three Months Ended September 30, (In millions) 2024 2023 Revenues, excluding adjustments a $ 138 $ 153 Site production and delivery, before net noncash and other costs shown below 131 116 Treatment charges and other 6 6 Net cash costs 137 122 DD&A 19 14 Noncash and other costs, net 9 4 Total costs 165 140 Gross (loss) profit $ (27) $ 13 Molybdenum sales (millions of recoverable pounds) a 6 7 Gross (loss) profit per pound of molybdenum: Revenues, excluding adjustments a $ 21.20 $ 22.58 Site production and delivery, before net noncash and other costs shown below 20.15 17.20 Treatment charges and other 0.91 0.87 Unit net cash costs 21.06 18.07 DD&A 2.85 2.13 Noncash and other costs, net 1.46 0.53 Total unit costs 25.37 20.73 Gross (loss) profit per pound $ (4.17) $ 1.85 Reconciliation to Amounts Reported Production Three Months Ended September 30, 2024 Revenues and Delivery DD&A Totals presented above $ 138 $ 131 $ 19 Treatment charges and other (6) — — Noncash and other costs, net — 9 — Molybdenum mines 132 140 19 Other mining b 8,225 5,354 567 Corporate, other & eliminations c (1,567) (1,417) 14 As reported in our consolidated financial statements $ 6,790 $ 4,077 $ 600 Three Months Ended September 30, 2023 Totals presented above $ 153 $ 116 $ 14 Treatment charges and other (6) — — Noncash and other costs, net — 4 — Molybdenum mines 147 120 14 Other mining b 7,274 5,024 501 Corporate, other & eliminations c (1,597) (1,591) 18 As reported in our consolidated financial statements $ 5,824 $ 3,553 $ 533 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 8. c. 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. 64 Table of Contents Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs Nine Months Ended September 30, (In millions) 2024 2023 Revenues, excluding adjustments a $ 434 $ 539 Site production and delivery, before net noncash and other costs shown below 376 308 Treatment charges and other 19 19 Net cash costs 395 327 DD&A 51 48 Noncash and other costs, net 17 13 Total costs 463 388 Gross (loss) profit $ (29) $ 151 Molybdenum sales (millions of recoverable pounds) a 21 22 Gross (loss) profit per pound of molybdenum: Revenues, excluding adjustments a $ 20.40 $ 25.17 Site production and delivery, before net noncash and other costs shown below 17.71 14.39 Treatment charges and other 0.88 0.86 Unit net cash costs 18.59 15.25 DD&A 2.39 2.26 Noncash and other costs, net 0.80 0.61 Total unit costs 21.78 18.12 Gross (loss) profit per pound $ (1.38) $ 7.05 Reconciliation to Amounts Reported Production Nine Months Ended September 30, 2024 Revenues and Delivery DD&A Totals presented above $ 434 $ 376 $ 51 Treatment charges and other (19) — — Noncash and other costs, net — 17 — Molybdenum mines 415 393 51 Other mining b 23,779 15,583 1,606 Corporate, other & eliminations c (4,459) (4,180) 47 As reported in our consolidated financial statements $ 19,735 $ 11,796 $ 1,704 Nine Months Ended September 30, 2023 Totals presented above $ 539 $ 308 $ 48 Treatment charges and other (19) — — Noncash and other costs, net — 13 — Molybdenum mines 520 321 48 Other mining b 21,229 14,593 1,381 Corporate, other & eliminations c (4,799) (4,647) 50 As reported in our consolidated financial statements $ 16,950 $ 10,267 $ 1,479 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 8. c. 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. 65 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 (including mine sequencing); cash flows; liquidity; PT-FI’s commissioning, remediation, including expected costs, insurance recovery and timing, and ramp up of its new smelter and completion and full production at the PMR; potential extension of PT-FI’s IUPK beyond 2041; export licenses, export duties and export volumes, including the ability to continue exports of copper concentrates in Indonesia until full ramp-up is achieved at PT-FI’s new downstream processing facilities, including the ability to increase the permitted export quota for 2024; timing of shipments of inventoried production; 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 and gold; PT-FI’s ability to continue to export and sell or inventory copper concentrates and anode slimes through remediation or completion, as applicable, and full ramp-up of its new downstream processing facilities; changes in export duties; completion of remediation activities and achieving full ramp-up of the new smelter in Indonesia; completion and full production at the PMR; 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 or inventory; 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; process 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, 66 Table of Contents 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. 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 (credits) 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. For forward-looking unit net cash costs (credits) per pound of copper and molybdenum measures, we are unable to provide a reconciliation to the most comparable GAAP measure without unreasonable effort because estimating such GAAP measures and providing a meaningful reconciliation is extremely difficult and requires a level of precision that is unavailable for these future periods and the information needed to reconcile these measures is dependent upon future events, many of which are outside of our control as described above. Forward-looking non-GAAP measures are estimated consistent with the relevant definitions and assumptions.