United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2021~~March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-11307-01

Freeport-McMoRan Inc.

(Exact name of registrant as specified in its charter)


Delaware						74-2480931
(State or other jurisdiction of						(I.R.S. Employer Identification No.)
incorporation or organization)

333 North Central Avenue

Phoenix

85004-2189

(Address of principal executive offices)

(Zip Code)

(602) 366-8100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.10 per share	FCX	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

On ~~July 30, 2021,~~April 29, 2022, there were issued and outstanding ~~1,468,064,383~~1,449,262,382 shares of the registrant’s common stock, par value $0.10 per share.

Freeport-McMoRan Inc.

TABLE OF CONTENTS



			Page

Part I. Financial Information			3

Item 1. Financial Statements:			3

Consolidated Balance Sheets (Unaudited)			3

Consolidated Statements of ~~Operations~~Income (Unaudited)			4

Consolidated Statements of Comprehensive Income ~~(Loss)~~ (Unaudited)			5

Consolidated Statements of Cash Flows (Unaudited)			6

Consolidated Statements of Equity (Unaudited)			7

Notes to Consolidated Financial Statements (Unaudited)			98

Report of Independent Registered Public Accounting Firm			2420

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2521

Item 3. Quantitative and Qualitative Disclosures About Market Risk			6752

Item 4. Controls and Procedures			6752

Part II. Other Information			6752

Item 1. Legal Proceedings			6752

Item 1A. Risk Factors			6753

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			6753

Item 4. Mine Safety Disclosures			6853



Item 6. Exhibits			6854

Signature			S-1

Table of Contents

Part I.FINANCIAL INFORMATION

Item 1.Financial Statements.

Freeport-McMoRan Inc.

CONSOLIDATED BALANCE SHEETS (Unaudited)


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(In millions)					(In millions)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	6,313	$	3,657	Cash and cash equivalents	$	8,338	$	8,068
Trade accounts receivable	Trade accounts receivable	1,100		892		Trade accounts receivable	1,537		1,168
Income and other tax receivables	Income and other tax receivables	578		520		Income and other tax receivables	444		574

Inventories:	Inventories:					Inventories:
Materials and supplies, net	Materials and supplies, net	1,616		1,594		Materials and supplies, net	1,741		1,669
Mill and leach stockpiles	Mill and leach stockpiles	1,006		1,014		Mill and leach stockpiles	1,227		1,170
Product	Product	1,596		1,285		Product	1,486		1,658
Other current assets	Other current assets	390		341		Other current assets	529		523

Total current assets	Total current assets	12,599		9,303		Total current assets	15,302		14,830
Property, plant, equipment and mine development costs, net	Property, plant, equipment and mine development costs, net	29,836		29,818		Property, plant, equipment and mine development costs, net	30,708		30,345

Long-term mill and leach stockpiles	Long-term mill and leach stockpiles	1,473		1,463		Long-term mill and leach stockpiles	1,377		1,387

Other assets	Other assets	1,528		1,560		Other assets	1,445		1,460

Total assets	Total assets	$	45,436	$	42,144	Total assets	$	48,832	$	48,022

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	3,106	$	2,708	Accounts payable and accrued liabilities	$	3,163	$	3,495
Accrued income taxes						Accrued income taxes	1,392		1,541
Current portion of debt	Current portion of debt	1,057		34		Current portion of debt	1,365		372
Accrued income taxes		919		324
Current portion of environmental and asset retirement obligations	Current portion of environmental and asset retirement obligations	334		351		Current portion of environmental and asset retirement obligations	316		264
Dividends payable	Dividends payable	111		0		Dividends payable	218		220

Total current liabilities	Total current liabilities	5,527		3,417		Total current liabilities	6,454		5,892
Long-term debt, less current portion	Long-term debt, less current portion	8,638		9,677		Long-term debt, less current portion	8,256		9,078
Deferred income taxes	Deferred income taxes	4,486		4,408		Deferred income taxes	4,282		4,234
Environmental and asset retirement obligations, less current portion	Environmental and asset retirement obligations, less current portion	3,721		3,705		Environmental and asset retirement obligations, less current portion	4,145		4,116
Other liabilities	Other liabilities	2,129		2,269		Other liabilities	1,653		1,683

Total liabilities	Total liabilities	24,501		23,476		Total liabilities	24,790		25,003

Equity:	Equity:					Equity:
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock	Common stock	160		159		Common stock	161		160
Capital in excess of par value	Capital in excess of par value	26,084		26,037		Capital in excess of par value	25,835		25,875
Accumulated deficit	Accumulated deficit	(9,880)		(11,681)		Accumulated deficit	(5,848)		(7,375)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(576)		(583)		Accumulated other comprehensive loss	(387)		(388)
Common stock held in treasury	Common stock held in treasury	(3,777)		(3,758)		Common stock held in treasury	(4,895)		(4,292)
Total stockholders’ equity	Total stockholders’ equity	12,011		10,174		Total stockholders’ equity	14,866		13,980
Noncontrolling interests	Noncontrolling interests	8,924		8,494		Noncontrolling interests	9,176		9,039
Total equity	Total equity	20,935		18,668		Total equity	24,042		23,019
Total liabilities and equity	Total liabilities and equity	$	45,436	$	42,144	Total liabilities and equity	$	48,832	$	48,022

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

Table of Contents

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~INCOME (Unaudited)


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2021		2020		2021		2020			2022		2021
		(In millions, except per share amounts)									(In millions, except per share amounts)
Revenues	Revenues	$	5,748	$	3,054	$	10,598	$	5,852	Revenues	$	6,603	$	4,850
Cost of sales:	Cost of sales:									Cost of sales:
Production and delivery	Production and delivery	3,067		2,394		5,853		4,939		Production and delivery	3,150		2,787
Depreciation, depletion and amortization	Depreciation, depletion and amortization	483		358		902		699		Depreciation, depletion and amortization	489		419

Metals inventory adjustments		0		(139)		1		83

Total cost of sales	Total cost of sales	3,550		2,613		6,756		5,721		Total cost of sales	3,639		3,206
Selling, general and administrative expenses	Selling, general and administrative expenses	87		91		187		201		Selling, general and administrative expenses	115		100
Mining exploration and research expenses	Mining exploration and research expenses	14		18		21		34		Mining exploration and research expenses	24		7
Environmental obligations and shutdown costs	Environmental obligations and shutdown costs	33		11		38		37		Environmental obligations and shutdown costs	16		5
Net (gain) loss on sales of assets		(3)		0		(3)		11

Total costs and expenses	Total costs and expenses	3,681		2,733		6,999		6,004		Total costs and expenses	3,794		3,318
Operating income (loss)		2,067		321		3,599		(152)
Operating income										Operating income	2,809		1,532
Interest expense, net	Interest expense, net	(148)		(115)		(293)		(242)		Interest expense, net	(127)		(145)
Net loss on early extinguishment of debt		0		(9)		0		(41)
Other income, net	Other income, net	9		20		20		40		Other income, net	31		11
Income (loss) before income taxes and equity in affiliated companies’ net earnings		1,928		217		3,326		(395)
Income before income taxes and equity in affiliated companies’ net earnings (losses)										Income before income taxes and equity in affiliated companies’ net earnings (losses)	2,713		1,398
Provision for income taxes	Provision for income taxes	(603)		(96)		(1,046)		(36)		Provision for income taxes	(824)		(443)
Equity in affiliated companies’ net earnings		6		3		4		6
Equity in affiliated companies’ net earnings (losses)										Equity in affiliated companies’ net earnings (losses)	15		(2)

Net income (loss)		1,331		124		2,284		(425)
Net income										Net income	1,904		953

Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(248)		(71)		(483)		(13)		Net income attributable to noncontrolling interests	(377)		(235)

Net income (loss) attributable to common stockholders		$	1,083	$	53	$	1,801	$	(438)
Net income attributable to common stockholders										Net income attributable to common stockholders	$	1,527	$	718

Net income (loss) per share attributable to common stockholders:
Net income per share attributable to common stockholders:										Net income per share attributable to common stockholders:
Basic	Basic	$	0.74	$	0.03	$	1.23	$	(0.30)	Basic	$	1.05	$	0.49
Diluted	Diluted	$	0.73	$	0.03	$	1.21	$	(0.30)	Diluted	$	1.04	$	0.48

Weighted-average common shares outstanding:	Weighted-average common shares outstanding:									Weighted-average common shares outstanding:
Basic	Basic	1,467		1,453		1,465		1,453		Basic	1,455		1,462
Diluted	Diluted	1,483		1,458		1,480		1,453		Diluted	1,469		1,477

Dividends declared per share of common stock	Dividends declared per share of common stock	$	0.075	$	0	$	0.15	$	0	Dividends declared per share of common stock	$	0.15	$	0.075

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

Table of Contents

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~ (Unaudited)


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2021		2020		2021		2020			2022		2021
		(In millions)									(In millions)
Net income (loss)		$	1,331	$	124	$	2,284	$	(425)
Net income										Net income	$	1,904	$	953

Other comprehensive income, net of taxes:	Other comprehensive income, net of taxes:									Other comprehensive income, net of taxes:

Defined benefit plans:	Defined benefit plans:									Defined benefit plans:
Actuarial losses arising during the period	Actuarial losses arising during the period	0		0		(1)		0		Actuarial losses arising during the period	—		(1)
Prior service costs arising during the period										Prior service costs arising during the period	(1)		—
Amortization of unrecognized amounts included in net periodic benefit costs	Amortization of unrecognized amounts included in net periodic benefit costs	4		12		8		24		Amortization of unrecognized amounts included in net periodic benefit costs	2		4
Foreign exchange gains (losses)		0		4		(1)		(1)
Foreign exchange losses										Foreign exchange losses	—		(1)

Other comprehensive income	Other comprehensive income	4		16		6		23		Other comprehensive income	1		2

Total comprehensive income (loss)		1,335		140		2,290		(402)
Total comprehensive income										Total comprehensive income	1,905		955
Total comprehensive income attributable to noncontrolling interests	Total comprehensive income attributable to noncontrolling interests	(248)		(71)		(482)		(12)		Total comprehensive income attributable to noncontrolling interests	(377)		(234)

Total comprehensive income (loss) attributable to common stockholders		$	1,087	$	69	$	1,808	$	(414)
Total comprehensive income attributable to common stockholders										Total comprehensive income attributable to common stockholders	$	1,528	$	721

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

Table of Contents

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


		Six Months Ended					Three Months Ended
		June 30,					March 31,
		2021		2020			2022		2021
		(In millions)					(In millions)
Cash flow from operating activities:	Cash flow from operating activities:					Cash flow from operating activities:
Net income (loss)		$	2,284	$	(425)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income						Net income	$	1,904	$	953
Adjustments to reconcile net income to net cash provided by operating activities:						Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	Depreciation, depletion and amortization	902		699		Depreciation, depletion and amortization	489		419

Metals inventory adjustments		1		83

Net (gain) loss on sales of assets		(3)		11

Stock-based compensation	Stock-based compensation	56		43		Stock-based compensation	49		41
Net charges for environmental and asset retirement obligations, including accretion	Net charges for environmental and asset retirement obligations, including accretion	94		112		Net charges for environmental and asset retirement obligations, including accretion	55		39
Payments for environmental and asset retirement obligations	Payments for environmental and asset retirement obligations	(110)		(119)		Payments for environmental and asset retirement obligations	(55)		(54)
Net charges for defined pension and postretirement plans	Net charges for defined pension and postretirement plans	1		45		Net charges for defined pension and postretirement plans	10		—
Pension plan contributions	Pension plan contributions	(42)		(29)		Pension plan contributions	(25)		(21)
Net loss on early extinguishment of debt		0		41

Deferred income taxes	Deferred income taxes	79		(28)		Deferred income taxes	48		38

Charges for Cerro Verde royalty dispute	Charges for Cerro Verde royalty dispute	9		15		Charges for Cerro Verde royalty dispute	—		5
Payments for Cerro Verde royalty dispute	Payments for Cerro Verde royalty dispute	(65)		(90)		Payments for Cerro Verde royalty dispute	—		(38)
Other, net	Other, net	77		(46)		Other, net	27		29
Changes in working capital and other:	Changes in working capital and other:					Changes in working capital and other:
Accounts receivable	Accounts receivable	(279)		83		Accounts receivable	(222)		(361)
Inventories	Inventories	(299)		168		Inventories	47		(225)
Other current assets	Other current assets	(12)		(4)		Other current assets	19		6
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	272		(73)		Accounts payable and accrued liabilities	(519)		(42)
Accrued income taxes and timing of other tax payments	Accrued income taxes and timing of other tax payments	505		(33)		Accrued income taxes and timing of other tax payments	(136)		286
Net cash provided by operating activities	Net cash provided by operating activities	3,470		453		Net cash provided by operating activities	1,691		1,075

Cash flow from investing activities:	Cash flow from investing activities:					Cash flow from investing activities:
Capital expenditures:	Capital expenditures:					Capital expenditures:
North America copper mines	North America copper mines	(95)		(332)		North America copper mines	(130)		(26)
South America	South America	(47)		(125)		South America	(56)		(21)
Indonesia		(624)		(634)

Indonesia mining						Indonesia mining	(379)		(290)
Indonesia smelter projects						Indonesia smelter projects	(130)		(20)
Molybdenum mines	Molybdenum mines	(3)		(11)		Molybdenum mines	(1)		(1)

Other	Other	(34)		(35)		Other	(27)		(12)
Proceeds from sales of assets						Proceeds from sales of assets	20		5

Proceeds from sales of assets		16		116
Acquisition of minority interest in PT Smelting		(33)		0
Loans to PT Smelting for expansion						Loans to PT Smelting for expansion	(9)		—
Other, net	Other, net	(13)		(5)		Other, net	(2)		(3)
Net cash used in investing activities	Net cash used in investing activities	(833)		(1,026)		Net cash used in investing activities	(714)		(368)

Cash flow from financing activities:	Cash flow from financing activities:					Cash flow from financing activities:
Proceeds from debt	Proceeds from debt	160		1,585		Proceeds from debt	604		130
Repayments of debt	Repayments of debt	(179)		(1,527)		Repayments of debt	(434)		(32)

Cash dividends and distributions paid:	Cash dividends and distributions paid:					Cash dividends and distributions paid:
Common stock	Common stock	(111)		(73)		Common stock	(220)		—
Noncontrolling interests	Noncontrolling interests	(93)		0		Noncontrolling interests	(204)		—
Treasury stock purchases						Treasury stock purchases	(541)		—
Contributions from noncontrolling interests	Contributions from noncontrolling interests	88		74		Contributions from noncontrolling interests	47		41
Proceeds from exercised stock options	Proceeds from exercised stock options	184		1		Proceeds from exercised stock options	101		106
Payments for withholding of employee taxes related to stock-based awards	Payments for withholding of employee taxes related to stock-based awards	(19)		(5)		Payments for withholding of employee taxes related to stock-based awards	(55)		(19)
Debt financing costs and other, net	Debt financing costs and other, net	(1)		(31)		Debt financing costs and other, net	(1)		(1)
Net cash provided by financing activities		29		24
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(703)		225

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents		2,666		(549)
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents						Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents	274		932

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year	Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year	3,903		2,278		Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year	8,314		3,903
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	6,569	$	1,729	Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	8,588	$	4,835

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

Table of Contents

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

THREE MONTHS ENDED ~~JUNE 30~~MARCH 31


		Stockholders’ Equity																																		Stockholders’ Equity
		Common Stock									Accum-ulated Deficit				Accumu- lated Other Compre- hensive Loss				Common Stock Held in Treasury					Total Stock-holders’ Equity												Common Stock												Accum-ulated Deficit				Accumu- lated Other Compre- hensive Loss				Common Stock Held in Treasury					Total Stock-holders’ Equity
		Number of Shares		At Par Value				Capital in Excess of Par Value									Number of Shares			At Cost						Non- controlling Interests			Total Equity				Number of Shares						At Par Value				Capital in Excess of Par Value							Number of Shares						At Cost				Non- controlling Interests				Total Equity
										Accum-ulated Deficit									Accumu- lated Other Compre- hensive Loss				Total Stock-holders’ Equity																		Accum-ulated Deficit						Accumu- lated Other Compre- hensive Loss										Total Stock-holders’ Equity
			(In millions)																																	(In millions)
Balance at March 31, 2021		1,597				$	160						$	26,080			$	(10,963)			$	(580)		133			$	(3,777)	$	10,920				$	8,653		$	19,573
Balance at December 31, 2021																																		Balance at December 31, 2021		1,603							$	160						$	25,875			$	(7,375)			$	(388)		146			$	(4,292)		$	13,980		$	9,039		$	23,019

Exercised and issued stock-based awards	Exercised and issued stock-based awards	4		—				78					—				—				—					—			78					—						78		Exercised and issued stock-based awards	9				1			107				—			—			—			—			108			—			108
Stock-based compensation, including the tender of shares	Stock-based compensation, including the tender of shares	—		—				14			—				—				—		—			14			(1)				13			Stock-based compensation, including the tender of shares		—					—				48			—				—				2		(62)			(14)			(10)			(24)

Treasury stock purchases																																		Treasury stock purchases		—					—				—			—				—				12		(541)			(541)			—			(541)

Dividends	Dividends	—		—				(111)			—				—				—		—			(111)			—				(111)			Dividends		—					—				(218)			—				—				—		—			(218)			(254)			(472)

Contributions from noncontrolling interests	Contributions from noncontrolling interests	—		—				23			—				—				—		—			23			24				47			Contributions from noncontrolling interests		—					—				23			—				—				—		—			23			24			47

Net income attributable to common stockholders	Net income attributable to common stockholders	—		—				—			1,083				—				—		—			1,083			—				1,083			Net income attributable to common stockholders		—					—				—			1,527				—				—		—			1,527			—			1,527
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	—		—				—			—				—				—		—			—			248				248			Net income attributable to noncontrolling interests		—					—				—			—				—				—		—			—			377			377
Other comprehensive income	Other comprehensive income	—		—				—			—				4				—		—			4			0				4			Other comprehensive income		—					—				—			—				1				—		—			1			—			1
Balance at June 30, 2021		1,601		$	160			$	26,084		$	(9,880)			$	(576)			133		$	(3,777)		$	12,011		$	8,924			$	20,935
Balance at March 31, 2022																																		Balance at March 31, 2022		1,612					$	161			$	25,835		$	(5,848)			$	(387)			160		$	(4,895)		$	14,866		$	9,176		$	24,042


		Stockholders’ Equity																																		Stockholders’ Equity
		Common Stock									Accum-ulated Deficit				Accumu- lated Other Compre- hensive Loss				Common Stock Held in Treasury					Total Stock-holders’ Equity												Common Stock												Accum-ulated Deficit				Accumu- lated Other Compre- hensive Loss				Common Stock Held in Treasury					Total Stock-holders’ Equity
		Number of Shares		At Par Value				Capital in Excess of Par Value									Number of Shares			At Cost						Non- controlling Interests			Total Equity				Number of Shares						At Par Value				Capital in Excess of Par Value							Number of Shares						At Cost				Non- controlling Interests				Total Equity
										Accum-ulated Deficit									Accumu- lated Other Compre- hensive Loss				Total Stock-holders’ Equity																		Accum-ulated Deficit						Accumu- lated Other Compre- hensive Loss										Total Stock-holders’ Equity
			(In millions)																																	(In millions)
Balance at March 31, 2020		1,583				$	158						$	25,875			$	(12,771)			$	(668)		131			$	(3,739)	$	8,855				$	8,108		$	16,963
Balance at December 31, 2020																																		Balance at December 31, 2020		1,590							$	159						$	26,037			$	(11,681)			$	(583)		132			$	(3,758)		$	10,174		$	8,494		$	18,668

Exercised and issued stock-based awards																																		Exercised and issued stock-based awards		7					1				105			—				—				—		—			106			—			106
Stock-based compensation, including the tender of shares	Stock-based compensation, including the tender of shares	—		—				9					—				—				—					—			9					1						10		Stock-based compensation, including the tender of shares	—				—			29				—			—			1			(19)			10			(3)			7

Dividends																																		Dividends		—					—				(111)			—				—				—		—			(111)			(93)			(204)

Contributions from noncontrolling interests	Contributions from noncontrolling interests	—		—				21			—				—				—		—			21			21				42			Contributions from noncontrolling interests		—					—				20			—				—				—		—			20			21			41

Net income attributable to common stockholders	Net income attributable to common stockholders	—		—				—			53				—				—		—			53			—				53			Net income attributable to common stockholders		—					—				—			718				—				—		—			718			—			718
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	—		—				—			—				—				—		—			—			71				71			Net income attributable to noncontrolling interests		—					—				—			—				—				—		—			—			235			235
Other comprehensive income		—		—				—			—				16				—		—			16			0				16
Balance at June 30, 2020		1,583		$	158			$	25,905		$	(12,718)			$	(652)			131		$	(3,739)		$	8,954		$	8,201			$	17,155
Other comprehensive income (loss)																																		Other comprehensive income (loss)		—					—				—			—				3				—		—			3			(1)			2
Balance at March 31, 2021																																		Balance at March 31, 2021		1,597					$	160			$	26,080		$	(10,963)			$	(580)			133		$	(3,777)		$	10,920		$	8,653		$	19,573

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

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~~Freeport-McMoRan Inc.~~

~~CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)~~

~~SIX MONTHS ENDED JUNE 30~~

Stockholders’ Equity
Common Stock Accum-ulated Deficit Accumu-
lated
Other Compre-
hensive
Loss Common Stock
Held in Treasury Total
Stock-holders’ Equity
Number
of
Shares At Par
Value Capital in
Excess of
Par Value Number
of
Shares At
Cost Non-
controlling
Interests Total
Equity
(In millions)
Balance at December 31, 2020 1,590 $ 159 $ 26,037 $ (11,681) $ (583) 132 $ (3,758) $ 10,174 $ 8,494 $ 18,668
Exercised and issued stock-based awards 11 1 183 — — — — 184 — 184
Stock-based compensation, including the tender of shares — — 43 — — 1 (19) 24 (4) 20
Dividends — — (222) — — — — (222) (93) (315)
Contributions from noncontrolling interests — — 43 — — — — 43 45 88
Net income attributable to common stockholders — — — 1,801 — — — 1,801 — 1,801
Net income attributable to noncontrolling interests — — — — — — — — 483 483
Other comprehensive income (loss) — — — — 7 — — 7 (1) 6
Balance at June 30, 2021 1,601 $ 160 $ 26,084 $ (9,880) $ (576) 133 $ (3,777) $ 12,011 $ 8,924 $ 20,935

Stockholders’ Equity
Common Stock Accum-ulated Deficit Accumu-
lated
Other Compre-
hensive
Loss Common Stock
Held in Treasury Total
Stock-holders’ Equity
Number
of
Shares At Par
Value Capital in
Excess of
Par Value Number
of
Shares At
Cost Non-
controlling
Interests Total
Equity
(In millions)
Balance at December 31, 2019 1,582 $ 158 $ 25,830 $ (12,280) $ (676) 131 $ (3,734) $ 9,298 $ 8,150 $ 17,448
Exercised and issued stock-based awards 1 — 1 — — — — 1 — 1
Stock-based compensation, including the tender of shares — — 38 — — — (5) 33 1 34
Contributions from noncontrolling interests — — 36 — — — — 36 38 74
Net loss attributable to common stockholders — — — (438) — — — (438) — (438)
Net income attributable to noncontrolling interests — — — — — — — — 13 13
Other comprehensive income (loss) — — — — 24 — — 24 (1) 23
Balance at June 30, 2020 1,583 $ 158 $ 25,905 $ (12,718) $ (652) 131 $ (3,739) $ 8,954 $ 8,201 $ 17,155

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Freeport-McMoRan Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1. GENERAL INFORMATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required by generally accepted accounting principles ~~(GAAP)~~ in the United States (U.S.). Therefore, this information should be read in conjunction with Freeport-McMoRan Inc.’s (FCX) consolidated financial statements and notes contained in its annual report on Form 10-K for the year ended December 31, ~~2020 (2020~~2021 (2021 Form 10-K). The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods reported. All such adjustments are, in the opinion of management, of a normal recurring nature. Operating results for the ~~six-month~~three-month period ended ~~June 30, 2021,~~March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021.~~

~~Trade Accounts Receivable Agreements.~~ In first-quarter 2021, PT Freeport Indonesia (PT-FI) entered into agreements to sell certain trade accounts receivables to unrelated third-party financial institutions. The agreements were entered into in the normal course of business to fund the working capital for the additional quantity of copper to be supplied by PT-FI to PT Smelting (PT-FI’s 39.5 percent owned copper smelter and refinery in Gresik, Indonesia - see “Acquisition of Minority Interest in PT Smelting” below for further discussion). The balances sold under the agreements were excluded from trade accounts receivable on the consolidated balance sheet at June 30, 2021. Receivables are considered sold when (i) they are transferred beyond the reach of PT-FI and its creditors, (ii) the purchaser has the right to pledge or exchange the receivables, and (iii) PT-FI has no continuing involvement in the transferred receivables. In addition, PT-FI provides no other forms of continued financial support to the purchaser of the receivables once the receivables are sold.

Gross amounts sold under these arrangements totaled $135 million in second-quarter 2021 and $188 million for the six-month period ended June 30, 2021. Discounts on the sold receivables totaled less than $1 million during 2021.

~~Acquisition of Minority Interest in PT Smelting.~~ On April 30, 2021, PT-FI acquired 14.5 percent of the outstanding common stock of PT Smelting for $33 million, increasing its ownership interest from 25 percent to 39.5 percent. The remaining shares of PT Smelting continue to be owned by Mitsubishi Materials Corporation. PT-FI has continued to account for its investment in PT Smelting using the equity method since it does not have control over PT Smelting.2022.

Subsequent Events. FCX evaluated events after ~~June 30, 2021,~~March 31, 2022, and through the date the consolidated financial statements were issued, and ~~took into account~~determined any events and transactions occurring during this period ~~requiring~~that would require recognition or disclosure are appropriately addressed in these consolidated financial statements.

On July 26, 2021, FCX’s 56-percent-owned subsidiary, Koboltti Chemicals Holdings Limited, entered into an agreement to sell its specialty cobalt business based in Kokkola, Finland (Freeport Cobalt) to Jervois Mining Limited (Jervois) for $85 million (in cash and Jervois shares) plus net working capital, estimated to approximate $125 million at June 30, 2021. In addition, FCX and its noncontrolling interest partners will have the right to receive up to $40 million in contingent cash consideration based on the future performance of the business. FCX currently estimates its share of the proceeds, excluding contingent consideration, would approximate $100 million cash plus its pro rata 56 percent share of 9.9 percent of Jervois shares. The transaction is subject to the completion of Jervois financing and other customary closing conditions and is expected to close in the third quarter of 2021. FCX expects to record a gain on the transaction.

The operating results of Freeport Cobalt are not significant to FCX’s financial statements for the year ended December 31, 2020, or the three- and six-month periods ended June 30, 2021. At June 30, 2021, Freeport Cobalt had total assets of $180 million and total liabilities of $28 million included on FCX's balance sheet. The Freeport Cobalt operations do not represent an operating segment of FCX and did not meet the criteria to be classified as held for sale at June 30, 2021.

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NOTE 2. EARNINGS PER SHARE

FCX calculates its basic net income ~~(loss)~~ per share of common stock under the two-class method and calculates its diluted net income ~~(loss)~~ per share of common stock using the more dilutive of the two-class method or the treasury-stock method. Basic net income ~~(loss)~~ per share of common stock was computed by dividing net income ~~(loss)~~ attributable to common stockholders (after deducting accumulated dividends and undistributed earnings to participating securities) by the weighted-average shares of common stock outstanding during the period. Diluted net income ~~(loss)~~ per share of common stock was calculated by including the basic weighted-average shares of common stock outstanding adjusted for the effects of all potential dilutive shares of common ~~stock.~~stock, unless their effect would be antidilutive.

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

Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Net income (loss) $ 1,331 $ 124 $ 2,284 $ (425)
Net income attributable to noncontrolling interests (248) (71) (483) (13)
Undistributed earnings allocated to participating securities (4) (3) (4) (3)
Net income (loss) attributable to common stockholders $ 1,079 $ 50 $ 1,797 $ (441)
Basic weighted-average shares of common stock outstanding 1,467 1,453 1,465 1,453
Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs) 16 5 15 0 a
Diluted weighted-average shares of common stock outstanding 1,483 1,458 1,480 1,453
Basic net income (loss) per share attributable to common stockholders: $ 0.74 $ 0.03 $ 1.23 $ (0.30)
Diluted net income (loss) per share attributable to common stockholders: $ 0.73 $ 0.03 $ 1.21 $ (0.30)

a.~~Excludes approximately 10 million shares associated with outstanding stock options with exercise prices less than the average market price of FCX’s common stock and RSUs that were anti-dilutive.~~


	Three Months Ended
	March 31,
	2022		2021
Net income	$	1,904	$	953
Net income attributable to noncontrolling interests	(377)		(235)

Undistributed earnings allocated to participating securities	(5)		(4)







Net income attributable to common stockholders	$	1,522	$	714


Basic weighted-average shares of common stock outstanding	1,455		1,462
Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs)	14		15
Diluted weighted-average shares of common stock outstanding	1,469		1,477




Basic net income per share attributable to common stockholders	$	1.05	$	0.49



Diluted net income per share attributable to common stockholders	$	1.04	$	0.48

Outstanding stock options with exercise prices greater than the average market price of FCX’s common stock during the period are excluded from the computation of diluted net income ~~(loss)~~ per share of common stock. Stock options for 42 million shares of common stock in ~~second-quarter 2021, 38~~first-quarter 2022 and 10 million shares of common stock in ~~second-quarter 2020, 7 million shares of common stock for the first six months of~~first-quarter 2021, ~~and 39 million shares of common stock the first six months of 2020~~ were excluded.

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NOTE 3. INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

The components of inventories follow (in millions):


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Current inventories:	Current inventories:					Current inventories:
Total materials and supplies, neta	Total materials and supplies, neta	$	1,616	$	1,594	Total materials and supplies, neta	$	1,741	$	1,669

Mill stockpiles	Mill stockpiles	$	172	$	205	Mill stockpiles	$	175	$	193
Leach stockpiles	Leach stockpiles	834		809		Leach stockpiles	1,052		977
Total current mill and leach stockpiles	Total current mill and leach stockpiles	$	1,006	$	1,014	Total current mill and leach stockpiles	$	1,227	$	1,170

Raw materials (primarily concentrate)	Raw materials (primarily concentrate)	$	433	$	366	Raw materials (primarily concentrate)	$	280	$	536
Work-in-process	Work-in-process	200		174		Work-in-process	275		195
Finished goods	Finished goods	963		745		Finished goods	931		927
Total product	Total product	$	1,596	$	1,285	Total product	$	1,486	$	1,658

Long-term inventories:	Long-term inventories:					Long-term inventories:
Mill stockpiles	Mill stockpiles	$	242	$	223	Mill stockpiles	$	227	$	226
Leach stockpiles	Leach stockpiles	1,231		1,240		Leach stockpiles	1,150		1,161
Total long-term mill and leach stockpilesb	Total long-term mill and leach stockpilesb	$	1,473	$	1,463	Total long-term mill and leach stockpilesb	$	1,377	$	1,387

a.Materials and supplies inventory was net of obsolescence reserves totaling ~~$33~~$39 million at ~~June 30, 2021,~~March 31, 2022, and ~~$32~~$36 million at December 31, ~~2020.~~2021.

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

FCX recorded net favorable adjustments to increase long-term metals inventory carrying values by $139 million in second-quarter 2020, including an increase to long-term copper inventories ($144 million), primarily related to the reversal of net realizable value adjustments recorded on long-term copper inventories in first-quarter 2020 because of higher copper market prices at June 30, 2020, and a decrease to long-term molybdenum inventories ($5 million) because of lower molybdenum market prices at June 30, 2020. Net realizable value inventory adjustments to decrease metals inventory carrying values totaling $83 million were recorded in the first six months of 2020 associated with lower market prices for copper ($61 million) and molybdenum ($22 million). Refer to Note 9 for metals inventory adjustments by business segment.

NOTE 4. INCOME TAXES

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

Six Months Ended
June 30,
2021 2020
U.S. operations $ (4)

$ 58 a
International operations (1,042)

(94)
Total $ (1,046) $ (36)

a.Includes a tax credit of $53 million associated with the reversal of a year-end 2019 tax charge related to the sale of FCX’s interest in the lower zone of the Timok exploration project in Serbia, after considering relevant tax law.


	Three Months Ended
	March 31,
	2022		2021
U.S. operations	$	(3)	$	—
International operations	(821)		(443)
Total	$	(824)	$	(443)

FCX’s consolidated effective income tax rate was 3130 percent for ~~the first six months of 2021~~first-quarter 2022 and ~~(9)~~32 percent for the first six months of 2020. Because FCX's U.S. jurisdiction generated pre-tax losses for the first six months of 2020 that did not result in a realized tax benefit, applicable accounting rules required FCX to adjust its 2020 estimated annual effective tax rate to exclude the impact of U.S. pre-tax losses.first-quarter 2021. Variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate.

In connection with the negative impacts of the COVID-19 pandemic on the global economy, governments throughout the world are announcing measures that are intended to provide tax and other financial relief. Such measures include the American Rescue Plan Act of 2021 (ARPA), enacted on March 11, 2021, and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020. None of these measures resulted in material impacts to FCX’s provision for income taxes for the six months ended June 30, 2021 and 2020.

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However, certain provisions of the CARES Act provided FCX with the opportunity to accelerate collections of tax refunds, primarily those associated with the U.S. alternative minimum tax. FCX collected U.S. alternative minimum tax credit refunds of $221 million in July 2020, $24 million in October 2020 and $23 million in March 2021. FCX continues to evaluate income tax accounting considerations of COVID-19 measures as they develop, including any impact on its measurement of existing deferred tax assets and deferred tax liabilities. FCX will recognize any impact from COVID-19 related changes to tax laws in the period in which the new legislation is enacted.

NOTE 5. DEBT AND EQUITY

The components of debt follow (in millions):


		June 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021

Senior notes and debentures:	Senior notes and debentures:						Senior notes and debentures:
Issued by FCX	Issued by FCX	$	8,787		$	8,783	Issued by FCX	$	8,270		$	8,268
Issued by Freeport Minerals Corporation (FMC)		356			356

Issued by Freeport Minerals Corporation							Issued by Freeport Minerals Corporation	355			355
PT-FI Term Loan							PT-FI Term Loan	603			432
Cerro Verde Term Loan	Cerro Verde Term Loan	524			523		Cerro Verde Term Loan	325			325

Other	Other	28			49		Other	68			70
Total debt	Total debt	9,695			9,711		Total debt	9,621			9,450
Less current portion of debt	Less current portion of debt	(1,057)		a	(34)		Less current portion of debt	(1,365)		a	(372)
Long-term debt	Long-term debt	$	8,638		$	9,677	Long-term debt	$	8,256		$	9,078

a.Includes ~~$0.5 billion for the 3.55% Senior Notes due March 2022 and $0.5 billion~~$325 million for the Cerro Verde Term Loan due June ~~2022.~~2022 and $995 million for the FCX 3.875% Senior Notes due March 2023.

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Revolving Credit Facility. At ~~June 30, 2021,~~March 31, 2022, FCX had 0no borrowings outstanding and $8 million in letters of credit issued under its revolving credit facility, resulting in availability of approximately $3.5 billion, of which approximately $1.5 billion could be used for additional letters of credit. Availability under FCX’s revolving credit facility consists of $3.28 billion maturing April 2024 and $220 million maturing April 2023.

In At March 2021, FCX delivered a Covenant Reversion Notice (as defined in the third amendment to the revolving credit facility dated June 3, 2020), which provided notification of its election to end the Covenant Increase Period (as defined in the third amendment to the revolving credit facility dated June 3, 2020). As a result, the leverage ratio limit reverted to 5.25x through the quarter ended June 30, 2021 (and will step down to 3.75x beginning with the quarter ending September 30, 2021), and the interest expense coverage ratio minimum reverted to 2.25x. Additionally, following FCX’s election to end the Covenant Increase Period, the additional limits on priority debt and liens, and the provisions related to minimum liquidity and restricted payments (which included restrictions on the payment of common stock dividends) are no longer applicable. At June 30, 2021,31, 2022, FCX was in compliance with its revolving credit facility covenants.

PT-FI Credit Facility. In July 2021, PT-FI entered into a $1.0 billion, five-year, unsecured credit facility (consisting of a $667 million term loan and a $333 million revolving credit facility) to fund project costs in connection with the PT Smelting expansion and construction of a precious metals refinery (PMR), and for PT-FI’s general corporate purposes. ~~The term loan allows for borrowings up to $667~~At March 31, 2022, $614 million ~~within the first three years, and amortizes in four installments, with 15 percent~~($603 million net of ~~the outstanding balance due in January 2025, 15 percent due in July 2025, 35 percent due in January 2026 and the remaining 35 percent due in July 2026. The $333 million revolving credit~~ ~~facility is available for drawings until June 2026. Amounts~~debt issuance costs) was drawn under the term loan, no amounts were drawn under the revolving credit facility ~~bear interest at the London Inter-bank Offered Rate plus a margin of 1.875% or 2.125%,~~ ~~as defined by the agreement.~~

~~PT-FI’s~~and PT-FI was in compliance with its credit facility contains customary affirmative covenants and representations and also contains standard covenants that, among other things, restrict, subject to certain exceptions, the ability of PT-FI to incur additional indebtedness; create liens on assets; enter into sale and leaseback transactions; sell assets; and modify or amend the shareholders agreement or related governance structure. The credit facility also contains financial ratios governing maximum total leverage and minimum interest expense coverage and certain environmental and social compliance requirements.covenants.

Senior ~~Notes.~~ Notes issued by PT-FI.In ~~March 2020, FCX~~April 2022, PT-FI completed the sale of ~~$1.3~~$3.0 billion of unsecured senior ~~notes. FCX used a portion~~notes, consisting of ~~the net proceeds from this offering to purchase or redeem its 4.00%~~$750 million of 4.763% Senior Notes due ~~2021 and to purchase a portion~~2027, $1.5 billion of ~~its 3.55%~~5.315% Senior Notes due ~~2022~~2032 and $750 million of 6.200% Senior Notes due 2052. PT-FI intends to use the ~~payment~~proceeds, net of ~~accrued~~underwriting fees, of $2.99 billion to finance its smelter projects, to refinance the PT-FI Term Loan and unpaid interest, premiums, fees and expenses in connection with these transactions. As a result of these transactions, FCX recorded a loss on early extinguishment of debt of $9 million in second-quarter 2020 and $41 million for ~~the six months ended June 30, 2020.~~general corporate purposes.

~~Table of Contents~~

Interest Expense, Net. Consolidated interest costs (before capitalization) totaled ~~$165~~$153 million in ~~second-quarter 2021, $159~~first-quarter 2022 and $160 million in ~~second-quarter 2020, $325 million for the first six months of 2021 and $330 million for the first six months of 2020.~~first-quarter 2021. Capitalized interest added to property, plant, equipment and mine development costs, net, totaled ~~$17~~$26 million in ~~second-quarter 2021, $44~~first-quarter 2022 and $15 million in ~~second-quarter 2020, $32 million for the first six months of 2021 and $88 million for the first six months of 2020.~~first-quarter 2021. The ~~decrease~~increase in capitalized interest costs for the ~~2021 periods results~~2022 period resulted from ~~significant assets placed~~increased construction and development projects in ~~service as PT-FI’s underground mining operations continue to ramp up.~~process.

~~Common Stock.~~Share Repurchase Program. In first-quarter 2022, FCX acquired 12.3 million shares of its common stock under the share repurchase program for a total cost of $541 million ($44.02 average cost per share). Through May 5, 2022, FCX acquired 28.7 million shares of its common stock for a total cost of $1.2 billion ($41.64 average cost per share) and $1.8 billion remains available for repurchases under the program.

Dividends. ~~In February 2021, FCX’s Board of Directors (the Board) reinstated a cash dividend on FCX’s common stock.~~ On ~~June~~March 23, ~~2021,~~2022, FCX declared a quarterly cash dividends totaling $0.15 per share ($0.075 per share base dividend ofand $0.075 per share variable dividend) on its common stock, which ~~was~~were paid on ~~August~~May 2, ~~2021,~~2022, to common stockholders of record as of ~~July 15, 2021.~~April 14, 2022.

The declaration and payment of dividends (base or variable) and timing and amount of any share repurchases is at

the discretion of FCX’s Board of Directors (Board) and management, respectively, and is subject to a number of factors, including maintaining FCX’s net debt target, capital availability, FCX’s financial results, cash requirements, business prospects, global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by FCX’s Board or management, as applicable. FCX’s share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion.

NOTE 6. FINANCIAL INSTRUMENTS

FCX does not purchase, hold or sell derivative financial instruments unless there is an existing asset or obligation, or it anticipates a future activity that is likely to occur and will result in exposure to market risks, which FCX intends to offset or mitigate. FCX does not enter into any derivative financial instruments for speculative purposes but has entered into derivative financial instruments in limited instances to achieve specific objectives. These objectives principally relate to managing risks associated with commodity price changes, foreign currency exchange rates and interest rates.

Commodity Contracts. From time to time, FCX has entered into derivative contracts to hedge the market risk associated with fluctuations in the prices of commodities it purchases and sells. Derivative financial instruments used by FCX to manage its risks do not contain credit risk-related contingent provisions.

~~In April 2020, FCX entered into forward sales contracts for 150 million pounds~~

Table of ~~copper for settlement in May and June of 2020. The forward sales provided for fixed pricing of $2.34 per pound of copper on approximately 60~~Contents

~~percent of North America's sales volumes for May and June 2020. These contracts resulted in hedging losses~~

~~totaling $24 million in second-quarter 2020 and for the six months ended June 30, 2020. There were no remaining~~

~~forward sales contracts as of June 30, 2020.~~

A discussion of FCX’s ~~other~~ derivative contracts and programs follows:

Derivatives Designated as Hedging Instruments – Fair Value Hedges

Copper Futures and Swap Contracts. Some of FCX’s U.S. copper rod and cathode customers request a fixed market price instead of the Commodity Exchange Inc. (COMEX) average copper price in the month of shipment. FCX hedges this price exposure in a manner that allows it to receive the COMEX average price in the month of shipment while the customers pay the fixed price they requested. FCX accomplishes this by entering into copper futures or swap contracts. Hedging gains or losses from these copper futures and swap contracts are recorded in revenues. FCX did not have any significant gains or losses resulting from hedge ineffectiveness during the ~~six-month~~three-month periods ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021. At ~~June 30, 2021,~~March 31, 2022, FCX held copper futures and swap contracts that qualified for hedge accounting for 8084 million pounds at an average contract price of ~~$4.20~~$4.47 per pound, with maturities through ~~May 2023.~~February 2024.

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


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2021		2020		2021		2020			2022		2021
Copper futures and swap contracts:	Copper futures and swap contracts:									Copper futures and swap contracts:
Unrealized (losses) gains:
Unrealized gains (losses):										Unrealized gains (losses):
Derivative financial instruments	Derivative financial instruments	$	(11)	$	40	$	(8)	$	7	Derivative financial instruments	$	12	$	3
Hedged item – firm sales commitments	Hedged item – firm sales commitments	11		(40)		8		(7)		Hedged item – firm sales commitments	(12)		(3)

Realized gains (losses):
Realized gains:										Realized gains:
Matured derivative financial instruments	Matured derivative financial instruments	28		(8)		52		(17)		Matured derivative financial instruments	14		24

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Derivatives Not Designated as Hedging Instruments

Embedded Derivatives. Certain FCX concentrate, copper cathode and gold sales contracts provide for provisional pricing primarily based on the London Metal Exchange (LME) copper price or the COMEX copper price and the London Bullion Market Association (London) gold price at the time of shipment as specified in the contract. FCX receives market prices based on prices in the specified future month, which results in price fluctuations recorded in revenues until the date of settlement. FCX records revenues and invoices customers at the time of shipment based on then-current LME or COMEX copper prices and the London gold prices as specified in the contracts, which results in an embedded derivative (i.e., a pricing mechanism that is finalized after the time of delivery) that is required to be bifurcated from the host contract. The host contract is the sale of the metals contained in the concentrate or cathode at the then-current LME or COMEX copper price, and the London gold price. FCX applies the normal purchases and normal sales scope exception in accordance with derivatives and hedge accounting guidance to the host contract in its concentrate or cathode sales agreements since these contracts do not allow for net settlement and always result in physical delivery. The embedded derivative does not qualify for hedge accounting and is adjusted to fair value through earnings each period, using the period-end LME or COMEX copper forward prices and the adjusted London gold prices, until the date of final pricing. Similarly, FCX purchases copper under contracts that provide for provisional pricing. Mark-to-market price fluctuations from these embedded derivatives are recorded through the settlement date and are reflected in revenues for sales contracts and in inventory for purchase contracts.

A summary of FCX’s embedded derivatives at ~~June 30, 2021,~~March 31, 2022, follows:


		Open Positions	Average Price Per Unit				Maturities Through		Open Positions	Average Price Per Unit				Maturities Through
			Contract		Market					Contract		Market
Embedded derivatives in provisional sales contracts:	Embedded derivatives in provisional sales contracts:							Embedded derivatives in provisional sales contracts:
Copper (millions of pounds)	Copper (millions of pounds)	597	$	4.31	$	4.25	December 2021	Copper (millions of pounds)	753	$	4.49	$	4.71	August 2022
Gold (thousands of ounces)	Gold (thousands of ounces)	157	1,848		1,762		September 2021	Gold (thousands of ounces)	206	1,925		1,936		June 2022
Embedded derivatives in provisional purchase contracts:	Embedded derivatives in provisional purchase contracts:							Embedded derivatives in provisional purchase contracts:
Copper (millions of pounds)	Copper (millions of pounds)	115	4.30		4.25		November 2021	Copper (millions of pounds)	65	4.43		4.71		July 2022

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Copper Forward Contracts. Atlantic Copper, FCX’s wholly owned smelting and refining unit in Spain, enters into copper forward contracts designed to hedge its copper price risk whenever its physical purchases and sales pricing periods do not match. These economic hedge transactions are intended to hedge against changes in copper prices, with the mark-to-market hedging gains or losses recorded in production and delivery costs. At ~~June 30, 2021,~~March 31, 2022, Atlantic Copper held net copper forward purchase contracts for 174 million pounds at an average contract price of ~~$4.36~~$4.60 per pound, with maturities through ~~August 2021.~~May 2022.

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


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2021		2020		2021		2020			2022		2021
Embedded derivatives in provisional sales contracts:a	Embedded derivatives in provisional sales contracts:a									Embedded derivatives in provisional sales contracts:a
Copper	Copper	$	118	$	162	$	325	$	(76)	Copper	$	218	$	207
Gold and other metals	Gold and other metals	15		17		(13)		24		Gold and other metals	22		(28)
Copper forward contractsb	Copper forward contractsb	(5)		(4)		(13)		19		Copper forward contractsb	4		(8)

a.Amounts recorded in revenues.

b.Amounts recorded in cost of sales as production and delivery costs.

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Unsettled Derivative Financial Instruments

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


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Commodity Derivative Assets:	Commodity Derivative Assets:					Commodity Derivative Assets:
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:					Derivatives designated as hedging instruments:
Copper futures and swap contracts	Copper futures and swap contracts	$	8	$	15	Copper futures and swap contracts	$	24	$	12
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:					Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts	Embedded derivatives in provisional sales/purchase contracts	62		169		Embedded derivatives in provisional sales/purchase contracts	169		64
Copper forward contracts	Copper forward contracts	2		0		Copper forward contracts	2		1
Total derivative assets	Total derivative assets	$	72	$	184	Total derivative assets	$	195	$	77

Commodity Derivative Liabilities:	Commodity Derivative Liabilities:					Commodity Derivative Liabilities:
Derivatives designated as hedging instruments:
Copper futures and swap contracts		$	1	$	0

Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:					Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts	Embedded derivatives in provisional sales/purchase contracts	103		21		Embedded derivatives in provisional sales/purchase contracts	$	20	$	27

Copper forward contracts	Copper forward contracts	4		0		Copper forward contracts	2		1
Total derivative liabilities	Total derivative liabilities	$	108	$	21	Total derivative liabilities	$	22	$	28

FCX’s commodity contracts have netting arrangements with counterparties with which the right of offset exists, and it is FCX’s policy to generally offset balances by contract on its balance sheet. FCX’s embedded derivatives on provisional sales/purchase contracts are netted with the corresponding outstanding receivable/payable balances.

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


		Assets				Liabilities					Assets				Liabilities
		June 30, 2021		December 31, 2020		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021

Gross amounts recognized:	Gross amounts recognized:									Gross amounts recognized:
Embedded derivatives in provisional	Embedded derivatives in provisional									Embedded derivatives in provisional
sales/purchase contracts	sales/purchase contracts	$	62	$	169	$	103	$	21	sales/purchase contracts	$	169	$	64	$	20	$	27

Copper derivatives	Copper derivatives	10		15		5		0		Copper derivatives	26		13		2		1
		72		184		108		21			195		77		22		28

Less gross amounts of offset:	Less gross amounts of offset:									Less gross amounts of offset:
Embedded derivatives in provisional	Embedded derivatives in provisional									Embedded derivatives in provisional
sales/purchase contracts	sales/purchase contracts	14		1		14		1		sales/purchase contracts	2		3		2		3

Copper derivatives	Copper derivatives	2		0		2		0		Copper derivatives	2		1		2		1
		16		1		16		1			4		4		4		4

Net amounts presented in balance sheet:	Net amounts presented in balance sheet:									Net amounts presented in balance sheet:
Embedded derivatives in provisional	Embedded derivatives in provisional									Embedded derivatives in provisional
sales/purchase contracts	sales/purchase contracts	48		168		89		20		sales/purchase contracts	167		61		18		24

Copper derivatives	Copper derivatives	8		15		3		0		Copper derivatives	24		12		—		—
		$	56	$	183	$	92	$	20		$	191	$	73	$	18	$	24

Balance sheet classification:	Balance sheet classification:									Balance sheet classification:
Trade accounts receivable	Trade accounts receivable	$	30	$	168	$	62	$	0	Trade accounts receivable	$	165	$	51	$	8	$	14
Other current assets	Other current assets	8		15		0		0		Other current assets	23		12		—		—
Other assets	Other assets	1		0		0		0		Other assets	1		—		—		—

Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	17		0		29		20		Accounts payable and accrued liabilities	2		10		10		10
Other liabilities		0		0		1		0
		$	56	$	183	$	92	$	20
											$	191	$	73	$	18	$	24

Credit Risk. FCX is exposed to credit loss when financial institutions with which it has entered into derivative transactions (commodity, foreign exchange and interest rate swaps) are unable to pay. To minimize the risk of such losses, FCX uses counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties. As of ~~June 30, 2021,~~March 31, 2022, the maximum amount of credit exposure associated with derivative transactions was ~~$72~~$195 million.

~~Table of Contents~~

Other Financial Instruments. Other financial instruments include cash and cash equivalents, restricted cash, restricted cash equivalents, accounts receivable, investment securities, legally restricted funds, accounts payable and accrued liabilities, accrued income taxes, dividends payable and debt. The carrying value for cash and cash equivalents (which included time deposits of $0.2 billion at June 30, 2021, and $0.3 billion at December 31, 2020), restricted cash, restricted cash equivalents, accounts receivable, accounts payable and accruedthese financial instruments classified as current assets or liabilities ~~and dividends payable~~ approximates fair value because of their short-term nature and generally negligible credit ~~losses (refer~~losses. Refer to Note 7 for the fair values of investment securities, legally restricted funds and ~~debt).~~debt.

In addition, as of ~~June 30, 2021,~~March 31, 2022, FCX has contingent consideration assets related to the sales of certain oil and gas properties (refer to Note 7 for the related fair values).

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


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Balance sheet components:	Balance sheet components:					Balance sheet components:
Cash and cash equivalents		$	6,313	$	3,657
Cash and cash equivalentsa						Cash and cash equivalentsa	$	8,338	$	8,068
Restricted cash and restricted cash equivalents included in:	Restricted cash and restricted cash equivalents included in:					Restricted cash and restricted cash equivalents included in:
Other current assets	Other current assets	116		97		Other current assets	117		114
Other assets	Other assets	140		149		Other assets	133		132
Total cash, cash equivalents, restricted cash and restricted cash equivalents presented in the consolidated statements of cash flows	Total cash, cash equivalents, restricted cash and restricted cash equivalents presented in the consolidated statements of cash flows	$	6,569	$	3,903	Total cash, cash equivalents, restricted cash and restricted cash equivalents presented in the consolidated statements of cash flows	$	8,588	$	8,314

a.Includes time deposits of $0.2 billion at each of March 31, 2022, and December 31, 2021.

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NOTE 7. FAIR VALUE MEASUREMENT

Fair value accounting guidance includes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). FCX did not have any significant transfers in or out of Level 3 during ~~second-quarter 2021.~~first-quarter 2022.

FCX’s financial instruments are recorded on the consolidated balance sheets at fair value except for contingent consideration associated with the sale of the Deepwater Gulf of Mexico (GOM) oil and gas properties (which was recorded under the loss recovery approach) and debt. A summary of the carrying amount and fair value of FCX’s financial instruments (including those measured at net asset value (NAV) as a practical expedient), other than cash and cash equivalents, restricted cash, restricted cash equivalents, accounts receivable, accounts payable and accrued liabilities, accrued income taxes and dividends payable (refer to Note 6) follows (in millions):


		At June 30, 2021													At March 31, 2022
		Carrying		Fair Value											Carrying		Fair Value
		Amount		Total		NAV		Level 1		Level 2		Level 3			Amount		Total		NAV		Level 1		Level 2		Level 3
Assets	Assets													Assets
Investment securities:a,b	Investment securities:a,b													Investment securities:a,b
Equity securities														Equity securities	$	70	$	70	$	—	$	70	$	—	$	—
U.S. core fixed income fund	U.S. core fixed income fund	$	29	$	29	$	29	$	0	$	0	$	0	U.S. core fixed income fund	28		28		28		—		—		—

Equity securities		15		15		0		15		0		0
Total	Total	44		44		29		15		0		0		Total	98		98		28		70		—		—

Legally restricted funds:a	Legally restricted funds:a													Legally restricted funds:a
U.S. core fixed income fund	U.S. core fixed income fund	64		64		64		0		0		0		U.S. core fixed income fund	62		62		62		—		—		—
Government bonds and notes	Government bonds and notes	54		54		0		0		54		0		Government bonds and notes	49		49		—		—		49		—
Corporate bonds	Corporate bonds	40		40		0		0		40		0		Corporate bonds	40		40		—		—		40		—
Government mortgage-backed securities	Government mortgage-backed securities	29		29		0		0		29		0		Government mortgage-backed securities	23		23		—		—		23		—
Asset-backed securities	Asset-backed securities	12		12		0		0		12		0		Asset-backed securities	13		13		—		—		13		—
Money market funds	Money market funds	6		6		0		6		0		0		Money market funds	8		8		—		8		—		—
Collateralized mortgage-backed securities	Collateralized mortgage-backed securities	3		3		0		0		3		0		Collateralized mortgage-backed securities	3		3		—		—		3		—
Municipal bonds		1		1		0		0		1		0

Total	Total	209		209		64		6		139		0		Total	198		198		62		8		128		—

Derivatives:	Derivatives:													Derivatives:
Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc	Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc	62		62		0		0		62		0		Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc	169		169		—		—		169		—

Copper futures and swap contractsc	Copper futures and swap contractsc	8		8		0		4		4		0		Copper futures and swap contractsc	24		24		—		18		6		—
Copper forward contractsc	Copper forward contractsc	2		2		0		1		1		0		Copper forward contractsc	2		2		—		1		1		—

Total	Total	72		72		0		5		67		0		Total	195		195		—		19		176		—

Contingent consideration for the sale of the	Contingent consideration for the sale of the													Contingent consideration for the sale of the
Deepwater GOM oil and gas propertiesa	Deepwater GOM oil and gas propertiesa	98		85		0		0		0		85		Deepwater GOM oil and gas propertiesa	84		74		—		—		—		74

Liabilities	Liabilities													Liabilities
Derivatives:c	Derivatives:c													Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position	Embedded derivatives in provisional sales/purchase contracts in a gross liability position	103		103		0		0		103		0		Embedded derivatives in provisional sales/purchase contracts in a gross liability position	20		20		—		—		20		—

Copper futures and swap contractsc		1		1		0		1		0		0

Copper forward contracts	Copper forward contracts	4		4		0		1		3		0		Copper forward contracts	2		2		—		1		1		—

Total	Total	108		108		0		2		106		0		Total	22		22		—		1		21		—

Long-term debt, including current portiond	Long-term debt, including current portiond	9,695		10,853		0		0		10,853		0		Long-term debt, including current portiond	9,621		10,190		—		—		10,190		—

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		At December 31, 2020													At December 31, 2021
		Carrying		Fair Value											Carrying		Fair Value
		Amount		Total		NAV		Level 1		Level 2		Level 3			Amount		Total		NAV		Level 1		Level 2		Level 3
Assets	Assets													Assets
Investment securities:a,b	Investment securities:a,b													Investment securities:a,b
Equity securities														Equity securities	$	50	$	50	$	—	$	50	$	—	$	—
U.S. core fixed income fund	U.S. core fixed income fund	$	29	$	29	$	29	$	0	$	0	$	0	U.S. core fixed income fund	29		29		29		—		—		—

Equity securities		7		7		0		7		0		0
Total	Total	36		36		29		7		0		0		Total	79		79		29		50		—		—

Legally restricted funds:a	Legally restricted funds:a													Legally restricted funds:a
U.S. core fixed income fund	U.S. core fixed income fund	65		65		65		0		0		0		U.S. core fixed income fund	64		64		64		—		—		—
Government bonds and notes	Government bonds and notes	49		49		0		0		49		0		Government bonds and notes	53		53		—		—		53		—
Corporate bonds	Corporate bonds	43		43		0		0		43		0		Corporate bonds	45		45		—		—		45		—
Government mortgage-backed securities	Government mortgage-backed securities	30		30		0		0		30		0		Government mortgage-backed securities	20		20		—		—		20		—
Asset-backed securities	Asset-backed securities	16		16		0		0		16		0		Asset-backed securities	18		18		—		—		18		—
Money market funds	Money market funds	5		5		0		5		0		0		Money market funds	8		8		—		8		—		—
Collateralized mortgage-backed securities		4		4		0		0		4		0

Municipal bonds	Municipal bonds	1		1		0		0		1		0		Municipal bonds	1		1		—		—		1		—
Total	Total	213		213		65		5		143		0		Total	209		209		64		8		137		—

Derivatives:	Derivatives:													Derivatives:
Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc	Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc	169		169		0		0		169		0		Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc	64		64		—		—		64		—
Copper futures and swap contractsc	Copper futures and swap contractsc	15		15		0		13		2		0		Copper futures and swap contractsc	12		12		—		9		3		—

Copper forward contractsc														Copper forward contractsc	1		1		—		1		—		—

Total	Total	184		184		0		13		171		0		Total	77		77		—		10		67		—

Contingent consideration for the sale of the	Contingent consideration for the sale of the													Contingent consideration for the sale of the
Deepwater GOM oil and gas propertiesa	Deepwater GOM oil and gas propertiesa	108		88		0		0		0		88		Deepwater GOM oil and gas propertiesa	90		81		—		—		—		81

Liabilities	Liabilities													Liabilities
Derivatives:c	Derivatives:c													Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position	Embedded derivatives in provisional sales/purchase contracts in a gross liability position	21		21		0		0		21		0		Embedded derivatives in provisional sales/purchase contracts in a gross liability position	27		27		—		—		27		—

Copper forward contracts														Copper forward contracts	1		1		—		1		—		—

Total														Total	28		28		—		1		27		—

Long-term debt, including current portiond	Long-term debt, including current portiond	9,711		10,994		0		0		10,994		0		Long-term debt, including current portiond	9,450		10,630		—		—		10,630		—

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

b.Excludes time deposits (which approximated fair value) included in (i) other current assets of ~~$116~~$117 million at ~~June 30, 2021,~~March 31, 2022, and ~~$97~~$114 million at December 31, ~~2020,~~2021, and (ii) other assets of ~~$139~~$133 million at ~~June 30, 2021,~~March 31, 2022, and ~~$148~~$132 million at December 31, ~~2020,~~2021, primarily associated with an assurance bond to support PT-FI’s commitment for ~~new~~additional domestic smelter development in Indonesia and PT-FI’s closure and reclamation guarantees.

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

d.Recorded at cost except for debt assumed in acquisitions, which are recorded at fair value at the respective acquisition dates.

Valuation Techniques. Equity securities are valued at the closing price reported on the active market on which the individual securities are traded and, as such, are classified within Level 1 of the fair value hierarchy.

The U.S. core fixed income fund is valued at NAV. The fund strategy seeks total return consisting of income and capital appreciation primarily by investing in a broad range of investment-grade debt securities, including U.S. government obligations, corporate bonds, mortgage-backed securities, asset-backed securities and money market instruments. There are no restrictions on redemptions (which are usually within one business day of notice).

~~Equity securities are valued at the closing price reported on the active market on which the individual securities are traded and, as such, are classified within Level 1 of the fair value hierarchy.~~

Fixed income securities (government securities, corporate bonds, asset-backed securities, collateralized mortgage-backed securities and municipal bonds) are valued using a bid-evaluation price or a mid-evaluation price. These evaluations are based on quoted prices, if available, or models that use observable inputs and, as such, are classified within Level 2 of the fair value hierarchy.

Money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

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FCX’s embedded derivatives on provisional copper concentrate, copper cathode and gold purchases and sales are valued using quoted monthly LME or COMEX copper forward prices and the adjusted London gold prices at each reporting date based on the month of maturity (refer to Note 6 for further discussion); however, FCX’s contracts themselves are not traded on an exchange. As a result, these derivatives are classified within Level 2 of the fair value hierarchy.

FCX’s derivative financial instruments for copper futures and swap contracts and copper forward contracts that are traded on the respective exchanges are classified within Level 1 of the fair value hierarchy because they are valued using quoted monthly COMEX or LME prices at each reporting date based on the month of maturity (refer to Note 6 for further discussion). Certain of these contracts are traded on the over-the-counter market and are classified within Level 2 of the fair value hierarchy based on COMEX and LME forward prices.

In December 2016, FCX’s sale of its Deepwater GOM oil and gas properties included up to $150 million in contingent consideration that was recorded at the total amount under the loss recovery approach. The contingent consideration is being received over time as cash flows are realized from a third-party production handling agreement for an offshore platform, with the related payments commencing in third-quarter 2018. The contingent consideration included in (i) other current assets totaled ~~$18~~$20 million at ~~June 30, 2021,~~March 31, 2022, and ~~$12 million at~~ December 31, ~~2020,~~2021, and (ii) other assets totaled ~~$80~~$64 million at ~~June 30, 2021,~~March 31, 2022, and ~~$96~~$70 million at December 31, ~~2020.~~2021. The fair value of this contingent consideration was calculated based on a discounted cash flow model using inputs that include third-party estimates for reserves, production rates and production timing, and discount rates. Because significant inputs are not observable in the market, the contingent consideration is classified within Level 3 of the fair value hierarchy.

Long-term debt, including current portion, is primarily valued using available market quotes and, as such, is classified within Level 2 of the fair value hierarchy.

The techniques described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while FCX believes its valuation techniques are appropriate and consistent with other market participants, the use of different techniques or assumptions to determine fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There have been no changes in the techniques used at ~~June 30, 2021,~~March 31, 2022, as compared with those techniques used at December 31, ~~2020.~~2021.

A summary of the changes in the fair value of FCX’s Level 3 instrument, contingent consideration for the sale of the Deepwater GOM oil and gas properties, during the first ~~six~~three months of ~~2021~~2022 follows (in millions):



Fair value at January 1, ~~2021~~2022	$	8881
Net unrealized ~~gain~~loss related to assets still held at the end of the period	7 (1)
Settlements	~~(10)~~(6)
Fair value at ~~June 30, 2021~~March 31, 2022	$	8574

NOTE 8. CONTINGENCIES AND COMMITMENTS

~~Environmental~~Asset Retirement Obligations (ARO)

~~Newtown Creek.~~Arizona Environmental and Reclamation Programs. ~~From~~FCX’s Arizona operations are subject to regulatory oversight by the ~~1930s until 1964, Phelps Dodge Refining Corporation (PDRC),~~Arizona Department of Environmental Quality (ADEQ). ADEQ has adopted regulations for its aquifer protection permit (APP) program that require permits for, among other things, certain facilities, activities and structures used for mining, leaching, concentrating and smelting, and require compliance with aquifer water quality standards during operations and closure. An application for an ~~indirect wholly owned subsidiary~~APP requires a proposed closure strategy that will meet applicable groundwater protection requirements following cessation of ~~FCX, operated~~operations and an estimate of the implementation cost, with a ~~copper smelter,~~more detailed closure plan required at the time operations cease. A permit applicant must demonstrate its financial ability to meet the closure costs approved by ADEQ. Closure costs for facilities covered by APPs are required to be updated every six years and ~~from the 1930s until 1984 operated a copper refinery, on the banks of Newtown Creek (the creek),~~financial assurance mechanisms are required to be updated every two years. During first-quarter 2022, Bagdad increased its ARO liability and asset retirement cost asset by $45 million associated with an updated closure strategy that Bagdad submitted to ADEQ for approval. Morenci is also preparing an update to its closure strategy for submission to ADEQ, which is a 3.5-mile-long waterway that forms part of the boundary between Brooklyn and Queens in New York City. Heavy industrialization along the banks of the creek and discharges from the City of New York’s sewer system over more than a century resulted in significant environmental contamination of the waterway. In 2010, U.S. Environmental Protection Agency (EPA) notified PDRC, four other companies and the City of New York that EPA considers them to be potentially responsible parties (PRPs) under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. The notified parties began working with EPA to identify other PRPs. In 2010, EPA designated the creek as a Superfund site, and in 2011, PDRC and five other parties (the Newtown Creek Group, NCG) entered an Administrative Order on Consent (AOC) to perform a remedial investigation/feasibility study (RI/FS) to assess the nature and extent of environmental contamination in the creek and identify potential remedial options. The parties’ RI/FS work under the AOC and their efforts to identify other PRPs are ongoing. The NCG submitted the initial draft RI to EPA in 2016 and currently expects the report to be finalized in 2021. The NCG currently anticipates a draft FS to be submitted to EPA for review and approval in 2024. EPA is not expected to ~~propose a final creek-wide remedy until after the RI/FS is completed, with the actual~~result in increased costs that could be significant. FCX will continue updating its closure strategy and closure cost estimates at other Arizona sites, and any such updates may also result in increased costs that could be significant.

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remediation construction starting several years later. In July 2019, the NCG entered into an AOC to conduct a Focused Feasibility Study (FFS) of the first two miles of the creek to support an evaluation of an interim remedy for that section of the creek. In July 2021, EPA terminated the FFS, which effectively incorporates remediation of the lower creek with the site-wide remedy. FCX’s environmental liability balance for the creek was $308 million at June 30, 2021. The final costs of fulfilling this remedial obligation and the allocation of costs among PRPs are uncertain and subject to change based on the results of the RI/FS, the remedy ultimately selected by EPA and related allocation determinations. Changes to the overall cost of this remedial obligation and the portion ultimately allocated to PDRC could be material to FCX.

Litigation

There were no significant updates to previously reported legal proceedings included in Note 12 of FCX’s ~~2020~~2021 Form ~~10-K, other than the matters discussed below.~~10-K.

~~Asbestos and Talc Claims~~. As previously disclosed, since approximately 1990, various FCX affiliates have been named as defendants in a large number of lawsuits alleging personal injury from, among other things, exposure to asbestos or talc allegedly contained in industrial products, and more recently alleging the presence of asbestos contamination in talc-based cosmetic and personal care products. Cyprus Amax Minerals Company (CAMC), an indirect wholly owned subsidiary of FCX, and Cyprus Mines Corporation (Cyprus Mines), a wholly owned subsidiary of CAMC, are among the targets of such lawsuits. Cyprus Mines and subsidiaries were engaged in talc mining and processing from 1964 until 1992 when Cyprus Mines exited its talc business. On February 13, 2019, Imerys Talc America (Imerys), the current owner of the talc business assets and liabilities previously owned by Cyprus Mines, filed for Chapter 11 bankruptcy protection. On December 22, 2020, Imerys filed an amended bankruptcy plan disclosing a global settlement with Cyprus Mines and CAMC, which provides a framework for a full and comprehensive resolution of all current and future potential liabilities arising out of the Cyprus Mines talc business, including claims against FCX, its affiliates, Cyprus Mines and CAMC. A hearing to consider confirmation of the Imerys bankruptcy plan has been scheduled to be held in November 2021. Consistent with the global settlement agreement, Cyprus Mines commenced its own bankruptcy process on February 11, 2021, and talc-related litigation against both Cyprus Mines and Cyprus Amax Minerals Company is stayed through 2021. The global settlement is subject to, among other things, votes by claimants in both the Imerys and Cyprus Mines bankruptcy cases as well as bankruptcy court approvals in both cases, and there can be no assurance that the global settlement will be successfully implemented. FCX has a $130 million liability balance at June 30, 2021, associated with the proposed settlement.

Other Matters

~~PT-FI and PT Smelting Export Licenses.~~ In March 2021, PT-FI received a one-year extension of its export license through March 15, 2022. In July 2021, PT Smelting received a six-month extension of its anodes slimes export license, which currently expires December 30, 2021.

Smelter Development Progress ~~of Greenfield Smelter at East Java~~. On January 7, 2021, the Indonesia government levied an administrative fine of $149 million for the period from March 30, 2020, through September 30, 2020, ~~(additional fines could be levied on exports after September 30, 2020),~~ on PT-FI for failing to achieve physical development progress on ~~the~~its greenfield smelter as of July 31, 2020. On January 13, 2021, PT-FI responded to the Indonesia government objecting to the fine because of events outside of its control ~~that caused~~causing a delay ~~in development progress for~~of the greenfield ~~smelter at East Java.~~smelter’s development progress. PT-FI believes that its communications during 2020 with the Indonesia government were not properly considered before the administrative fine was levied.

In June 2021, the Indonesia government issued a ministerial decree for the calculation of an administrative fine for lack of smelter development in light of the COVID-19 pandemic. PT-FI is continuing to discuss this matter with the Indonesia government as well as provide additional documentation to support its position on the cause of delays in development progress on the greenfield smelter. During ~~the first six months of~~ 2021, PT-FI recorded charges totaling $16 million ~~($3 million in second-quarter 2021 and $13 million in first-quarter 2021)~~ for a potential settlement of the administrative fine. On January 25, 2022, the Indonesia government submitted a new estimate of the administrative fine ~~which is expected to include~~totaling $57 million. In March 2022, PT-FI paid the administrative fine and recorded a charge of $41 million in first-quarter 2022. Based on PT-FI’s revised smelter construction schedule, PT-FI does not believe any additional fines should be applied and will dispute any attempts by the Indonesia government to levy additional fines, which could be significant.

PT-FI Export License. Export licenses are valid for a one-year period, subject to review and approval by the ~~greenfield smelter. No additional fine is expected~~Indonesia government every six months, depending on smelter construction progress. In March 2022, PT-FI obtained a one-year extension of its concentrate export license through March 19, 2023, for 2000000 metric tons of concentrate, the ~~construction period after July 2020~~approval of which was based on PT-FI’s revised smelter construction schedule as modified to reflect impacts of the ~~revised schedule. The final settlement could differ from the amounts recorded in 2021.~~ongoing COVID-19 pandemic.

~~Chiyoda Contract.~~ ~~In July 2021, PT-FI awarded a construction contract to Chiyoda for the construction of a new greenfield smelter in Gresik, Indonesia with an estimated contract cost of $2.8 billion.~~

~~Table of Contents~~

NOTE 9. BUSINESS SEGMENTS

FCX has organized its mining operations into 4 primary divisions – North America copper mines, South America mining, Indonesia mining and Molybdenum mines – and operating segments that meet certain thresholds are reportable segments. Separately disclosed in the following tables are FCX’s reportable segments, which include the Morenci and Cerro Verde ~~and~~copper mines, the Grasberg minerals district (Indonesia Mining) ~~copper mines,~~, the Rod & Refining operations and Atlantic Copper Smelting & Refining.

Intersegment sales between FCX’s business segments are based on terms similar to arms-length transactions with third parties at the time of the sale. Intersegment sales may not be reflective of the actual prices ultimately realized because of a variety of factors, including additional processing, timing of sales to unaffiliated customers and transportation premiums.

FCX defers recognizing profits on sales from its mines to other segments, including Atlantic Copper Smelting & Refining, and on 39.5 percent of PT-FI’s sales to PT Smelting, until final sales to third parties occur. Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices result in variability in FCX’s net deferred profits and quarterly earnings.

FCX allocates certain operating costs, expenses and capital expenditures to its operating divisions and individual segments. However, not all costs and expenses applicable to an operation are allocated. U.S. federal and state income taxes are recorded and managed at the corporate level (included in Corporate, Other & Eliminations), whereas foreign income taxes are recorded and managed at the applicable country level. In addition, most mining exploration and research activities are managed on a consolidated basis, and those costs, along with some selling, general and administrative costs, are not allocated to the operating divisions or individual segments. Accordingly, the following Financial Information by Business Segment reflects management determinations that may not be indicative of what the actual financial performance of each operating division or segment would be if it was an independent entity.

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Product Revenues. FCX’s revenues attributable to the products it sold for the ~~second~~first quarters of 2022 and ~~first six months of~~ 2021 ~~and 2020~~ follow (in millions):

Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Copper:
Concentrate $ 2,076 $ 749 $ 3,785 $ 1,598
Cathode 1,535 1,124 2,769 1,961
Rod and other refined copper products 833 303 1,517 845
Purchased coppera
310 166 528 401
Gold 597 341 1,115 611
Molybdenum 288 194 532 437
Otherb
203 115 456 272
Adjustments to revenues:
Treatment charges (101) (75) (198) (155)
Royalty expensec
(82) (26) (145) (46)
Export dutiesd
(44) (16) (73) (20)
Revenues from contracts with customers 5,615 2,875 10,286 5,904
Embedded derivativese
133 179 312 (52)
Total consolidated revenues $ 5,748 $ 3,054 $ 10,598 $ 5,852


	Three Months Ended
	March 31,
	2022		2021
Copper:
Concentrate	$	2,691	$	1,709
Cathode	1,435		1,234
Rod and other refined copper products	1,116		684
Purchased coppera	70		218
Gold	811		518
Molybdenum	378		244
Other	188		253
Adjustments to revenues:
Treatment charges	(133)		(97)
Royalty expenseb	(95)		(63)
Export dutiesc	(98)		(29)
Revenues from contracts with customers	6,363		4,671
Embedded derivativesd	240		179
Total consolidated revenues	$	6,603	$	4,850

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

b.~~Primarily includes revenues associated with cobalt and silver.~~

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

d.c.Reflects PT-FI export duties, including a first-quarter 2022 charge of $18 million associated with an adjustment to prior-period export duties.

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

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Financial Information by Business Segment


(In millions)	(In millions)																										(In millions)

																									Atlantic							Corporate,																																		Atlantic			Corporate,
		North America Copper Mines				South America Mining															Copper									Other						North America Copper Mines								South America Mining																	Copper							Other
									Cerro							Indonesia			Molybdenum		Rod &				Smelting							& Elimi-					FCX													Cerro							Indonesia				Molybdenum			Rod &		Smelting			& Elimi-			FCX
		Morenci		Other		Total			Verde			Other		Total		Mining			Mines		Refining				& Refining							nations					Total				Morenci			Other			Total			Verde			Other		Total		Mining				Mines			Refining		& Refining			nations			Total
Three Months Ended June 30, 2021
Three Months Ended March 31, 2022																							Three Months Ended March 31, 2022
Revenues:	Revenues:																																						Revenues:
Unaffiliated customers	Unaffiliated customers	$	57	$	55	$	112		$	825		$	188	$	1,013	$	1,753	a	$	0	$	1,689			$	794						$	387	b			$	5,748	Unaffiliated customers		$	90		$	55		$	145		$	1,106		$	160	$	1,266	$	2,326	a		$	—		$	1,743	$	718		$	405	b	$	6,603
Intersegment	Intersegment	721		1,021		1,742			120			0		120		56			89		6				0							(2,013)					0		Intersegment		711			1,095			1,806			108			—		108		78				128			9		—			(2,129)			—
Production and delivery	Production and delivery	351		574		925			494		c	106		600		528			56		1,691				775							(1,508)		d			3,067		Production and delivery		363			655			1,018			558			112		670		626				75			1,754		722			(1,715)			3,150
Depreciation, depletion and amortization	Depreciation, depletion and amortization	40		61		101			82			12		94		247			17		1				8							15					483		Depreciation, depletion and amortization		44			61			105			87			10		97		248				16			1		6			16			489

Selling, general and administrative expenses	Selling, general and administrative expenses	1		0		1			2			0		2		27			0		0				5							52					87		Selling, general and administrative expenses		—			1			1			2			—		2		27				—			—		8			77			115
Mining exploration and research expenses	Mining exploration and research expenses	0		0		0			0			0		0		0			0		0				0							14					14		Mining exploration and research expenses		—			—			—			—			—		—		—				—			—		—			24			24
Environmental obligations and shutdown costs	Environmental obligations and shutdown costs	1		0		1			0			0		0		0			0		0				0							32					33		Environmental obligations and shutdown costs		—			—			—			—			—		—		—				—			—		—			16			16
Net gain on sales of assets		0		0		0			0			0		0		0			0		0				0							(3)					(3)

Operating income (loss)	Operating income (loss)	385		441		826			367			70		437		1,007			16		3				6							(228)					2,067		Operating income (loss)		394			433			827			567			38		605		1,503				37			(3)		(18)			(142)			2,809

Interest expense, net	Interest expense, net	0		0		0			12			0		12		6			0		0				2							128					148		Interest expense, net		—			—			—			3			—		3		2				—			—		2			120			127
Provision for income taxes		0		0		0			145			17		162		404			0		0				0							37					603
Total assets at June 30, 2021		2,635		5,288		7,923			8,795			1,795		10,590		18,461			1,740		271				1,117							5,334					45,436
Provision for (benefit from) income taxes																							Provision for (benefit from) income taxes	—				—	—		227				14					241			586			—			—			—								(3)			824
Total assets at March 31, 2022																							Total assets at March 31, 2022	2,773				5,284	8,057		8,678				1,925					10,603			19,338			1,702			299			1,045								7,788			48,832
Capital expenditures	Capital expenditures	22		47		69			23			3		26		314			2		0				7							15					433		Capital expenditures		73			57			130			33			23		56		379				1			2		11			144		c	723

Three Months Ended June 30, 2020
Three Months Ended March 31, 2021																							Three Months Ended March 31, 2021
Revenues:	Revenues:																																						Revenues:
Unaffiliated customers	Unaffiliated customers	$	20	$	16	$	36		$	471		$	106	$	577	$	683	a	$	0	$	1,106			$	464						$	188	b			$	3,054	Unaffiliated customers		$	4		$	28		$	32		$	917		$	175	$	1,092	$	1,383	a		$	—		$	1,309	$	687		$	347	b	$	4,850
Intersegment	Intersegment	447		505		952		e	52			0		52		35			58		8				2							(1,107)					0		Intersegment		564			742			1,306			45			—		45		52				70			7		—			(1,480)			—
Production and delivery	Production and delivery	348		439		787			334			104		438		378			61		1,138				446							(854)					2,394		Production and delivery		269			480			749			436			103		539		455				58			1,316		673			(1,003)		d	2,787
Depreciation, depletion and amortization	Depreciation, depletion and amortization	43		46		89			88			14		102		124			15		6				7							15					358		Depreciation, depletion and amortization		34			46			80			89			12		101		199				15			1		7			16			419

Metals inventory adjustments		0		(89)		(89)			0			(57)		(57)		0			1		1				0							5					(139)

Selling, general and administrative expenses	Selling, general and administrative expenses	0		1		1			1			0		1		28			0		0				5							56					91		Selling, general and administrative expenses		—			1			1			2			—		2		26				—			—		7			64			100
Mining exploration and research expenses	Mining exploration and research expenses	0		1		1			0			0		0		0			0		0				0							17					18		Mining exploration and research expenses		—			—			—			—			—		—		—				—			—		—			7			7
Environmental obligations and shutdown costs	Environmental obligations and shutdown costs	0		0		0			0			0		0		0			0		0				0							11					11		Environmental obligations and shutdown costs		—			—			—			—			—		—		—				—			—		—			5			5

Operating income (loss)	Operating income (loss)	76		123		199			100			45		145		188			(19)		(31)				8							(169)					321		Operating income (loss)		265			243			508			435			60		495		755				(3)			(1)		—			(222)			1,532

Interest expense, net	Interest expense, net	1		0		1			20			0		20		1			0		0				1							92					115		Interest expense, net		—			—			—			13			—		13		1				—			—		1			130			145
Provision for (benefit from) income taxes	Provision for (benefit from) income taxes	0		0		0			29			16		45		78			0		0				1							(28)					96		Provision for (benefit from) income taxes		—			—			—			173			21		194		315				—			—		—			(66)			443
Total assets at June 30, 2020		2,697		5,198		7,895			8,515			1,631		10,146		16,848			1,777		259				726							2,579					40,230
Total assets at March 31, 2021																							Total assets at March 31, 2021	2,629				5,283	7,912		8,723				1,738					10,461			17,273			1,753			235			997								5,012			43,643
Capital expenditures	Capital expenditures	27		121		148			31			20		51		308			4		2				5							9					527		Capital expenditures		10			16			26			20			1		21		290				1			1		6			25		c	370

a.Includes PT-FI's sales to PT Smelting totaling ~~$756~~$917 million in ~~second-quarter 2021~~first-quarter 2022 and ~~$433~~$792 million in ~~second-quarter 2020.~~first-quarter 2021.

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

c.Includes ~~nonrecurring charges totaling $69 million associated with labor-related charges at Cerro Verde~~capital expenditures for ~~agreements reached with 57 percent of its hourly employees.~~the greenfield smelter and PMR.

d.Includes charges associated with the major maintenance turnaround at the Miami ~~smelter~~Smelter totaling ~~$19~~$68 million.

e.~~Includes hedging losses totaling $24 million related to forward sales contracts covering 150 million pounds of copper sales for May and June 2020 at a fixed price of $2.34 per pound.~~

~~Table of Contents~~

(In millions)
Atlantic Corporate,
North America Copper Mines South America Mining Copper Other
Cerro Indonesia Molybdenum Rod & Smelting & Elimi- FCX
Morenci Other Total Verde Other Total Mining Mines Refining & Refining nations Total
Six months ended June 30, 2021
Revenues:
Unaffiliated customers $ 61 $ 83 $ 144 $ 1,742 $ 363 $ 2,105 $ 3,136 a $ 0 $ 2,998 $ 1,481 $ 734 b $ 10,598
Intersegment 1,285 1,763 3,048 165 0 165 108 159 13 0 (3,493) 0
Production and delivery 620 1,054 1,674 930 c 209 1,139 983 113 3,007 1,448 (2,511) d 5,853
Depreciation, depletion and amortization 74 107 181 171 24 195 446 32 2 15 31 902
Metals inventory adjustments 0 0 0 0 0 0 0 1 0 0 0 1
Selling, general and administrative expenses 1 1 2 4 0 4 53 0 0 12 116 187
Mining exploration and research expenses 0 0 0 0 0 0 0 0 0 0 21 21
Environmental obligations and shutdown costs 1 0 1 0 0 0 0 0 0 0 37 38
Net gain on sales of assets 0 0 0 0 0 0 0 0 0 0 (3) (3)
Operating income (loss) 650 684 1,334 802 130 932 1,762 13 2 6 (450) 3,599
Interest expense, net 0 0 0 25 0 25 7 0 0 3 258 293
Provision for (benefit from) income taxes 0 0 0 318 38 356 719 0 0 0 (29) 1,046
Capital expenditures 32 63 95 43 4 47 624 3 1 13 20 803
Six months ended June 30, 2020
Revenues:
Unaffiliated customers $ 22 $ 23 $ 45 $ 847 $ 204 $ 1,051 $ 1,128 a $ 0 $ 2,221 $ 893 $ 514 b $ 5,852
Intersegment 889 1,039 1,928 e 90 0 90 35 129 16 13 (2,211) 0
Production and delivery 697 950 1,647 758 214 972 721 127 2,257 857 (1,642) 4,939
Depreciation, depletion and amortization 87 94 181 181 29 210 225 31 8 14 30 699
Metals inventory adjustments 4 52 56 0 3 3 0 5 1 0 18 83
Selling, general and administrative expenses 1 1 2 3 0 3 56 0 0 10 130 201
Mining exploration and research expenses 0 2 2 0 0 0 0 0 0 0 32 34
Environmental obligations and shutdown costs 0 0 0 0 0 0 0 0 1 0 36 37
Net loss on sales of assets 0 0 0 0 0 0 0 0 0 0 11 11
Operating income (loss) 122 (37) 85 (5) (42) (47) 161 (34) (30) 25 (312) (152)
Interest expense, net 2 0 2 48 0 48 2 0 0 4 186 242
(Benefit from) provision for income taxes 0 0 0 (23) (10) (33) 90 0 0 1 (22) 36
Capital expenditures 71 261 332 90 35 125 634 11 4 11 20 1,137

a.~~Includes PT-FI's sales to PT Smelting totaling $1.5 billion for the first six months of 2021 and $813 million for the first six months of 2020.~~

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

c.~~Includes nonrecurring charges totaling $69 million associated with labor-related charges at Cerro Verde for agreements reached with 57 percent of its hourly employees.~~

d.~~Includes charges associated with the major maintenance turnaround at the Miami smelter totaling $87 million.~~

e.~~Includes hedging losses totaling $24 million related to forward sales contracts covering 150 million pounds of copper sales for May and June 2020 at a fixed price of $2.34 per pound.~~

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Freeport-McMoRan Inc.

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of Freeport-McMoRan Inc. (the Company) as of ~~June 30, 2021,~~March 31, 2022, the related consolidated statements of ~~operations,~~income, comprehensive income, ~~(loss),~~equity and ~~equity for the three- and six-month periods ended June 30, 2021 and 2020, the related consolidated statements of~~ cash flows for the ~~six-month~~three-month periods ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ and the related notes (collectively referred to as the “consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, ~~2020,~~2021, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows ~~and equity~~ for the year then ended, and the related notes (not presented herein); and in our report dated February ~~16, 2021,~~15, 2022, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, ~~2020,~~2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Ernst & Young LLP

Phoenix, Arizona

~~August~~May 5, ~~2021~~2022

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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, ~~2020 (2020~~2021 (2021 Form 10-K), filed with the United States (U.S.) Securities and Exchange Commission (SEC). The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Cautionary Statement” for further discussion). 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.

OVERVIEW

We are a leading international mining company with headquarters in Phoenix, Arizona. We operate large, long-lived, geographically diverse assets with significant proven and probable mineral reserves of copper, gold and molybdenum. We are one of the world’s largest publicly traded copper producers. Our portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits; and significant mining operations in North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru.

Our results for ~~the first six months of 2021~~first-quarter 2022 reflect strong operating and financial performance, ~~and~~ cash flow ~~generation. We achieved the balance sheet targets outlined in our financial policy adopted earlier this year,~~generation and ~~believe that we are well positioned to increase~~ cash returns to ~~shareholders~~shareholders. We remain focused on cost and ~~for investments~~capital management and are advancing our sustainability objectives. We achieved a 24 percent increase in ~~long-term future growth.~~copper sales and a 59 percent increase in gold sales, compared to first-quarter 2021. We plan to continue to execute our operating plans, inwhich we expect will provide strong cash flows to support advancement of organic growth initiatives and continued cash returns to shareholders under our established financial policy, based on a ~~safe, efficient~~favorable operational and ~~responsible manner and remain focused on building long-term value through solid management of our portfolio of long-lived and high-quality copper assets.~~market outlook.

~~The ramp-up~~As further discussed in “Operations,” first-quarter 2022 highlights include:

•Continued growth in operating rates at Lone Star toward achieving production of ~~underground mining at PT Freeport Indonesia (PT-FI) is advancing on schedule and~~300 million pounds of copper per year from oxide ores (compared with the initial design capacity of 200 million pounds per year).

•Strong performance from Cerro Verde's concentrator facilities, ~~have performed well~~ with milling rates averaging ~~382,100~~394,400 metric tons of ore per day. Subject to ongoing monitoring of COVID-19 protocols, milling rates are currently expected to average approximately 400,000 metric tons of ore per day for the ~~first six months~~remainder of 2022.

•Increased milling rates from the underground mines at the Grasberg minerals district, which averaged 186,500 metric tons of ore per day, a 50 percent increase from milling rates in first-quarter 2021. ~~Our Lone Star copper leach project, which was successfully completed in~~Milling rates at the ~~second half~~Grasberg minerals district are expected to average approximately 180,000 to 190,000 metric tons of ~~2020, has achieved design capacity approximating 200 million pounds~~ore per day for the remainder of ~~copper annually with potential for further increases. Refer to “Operations” for further discussion.~~2022.

Net income ~~(loss)~~ attributable to common stock totaled ~~$1.1~~$1.5 billion in ~~second-quarter 2021, $53 million in second-quarter 2020, $1.8 billion for the first six months of 2021 and $(438) million for the first six months of 2020. Results for the 2021 periods,~~first-quarter 2022, compared with ~~the 2020 periods, reflect~~$0.7 billion in first-quarter 2021, primarily reflecting higher copper ~~prices~~ and gold sales volumes and prices, partly offset by a higher provision for income ~~taxes. The results for the 2020 periods also reflect charges directly associated with the COVID-19 pandemic~~taxes and ~~revised operating plans, including employee separation costs, totaling $144 million in second-quarter 2020~~increased energy and ~~$153 million for the first six months of 2020.~~other input costs. Refer to “Consolidated Results” for further discussion.

We continue to monitor the impact of the COVID-19 pandemic on our business and maintain our vigilant operating protocols to contain and mitigate the risk of spread of COVID-19 at each of our operating sites. To date, our protocols have been effective in mitigating and preventing a major outbreak of COVID-19 at our operating sites. We will continue to monitor, assess and update our COVID-19 response and to provide assistance to employees in obtaining vaccinations.

At ~~June 30, 2021,~~March 31, 2022, we had consolidated debt of ~~$9.7~~$9.6 billion and consolidated cash and cash equivalents of ~~$6.3~~$8.3 billion, resulting in net debt of ~~$3.4 billion. This represents a reduction in~~$1.3 billion (including $0.6 billion of net debt ~~of $2.7 billion from year-end 2020.~~for the Indonesia smelter projects). Refer to “Net Debt” for reconciliations of consolidated debt and consolidated cash and cash equivalents to net debt.

At ~~June 30, 2021,~~March 31, 2022, we had no borrowings and $3.5 billion available under our revolving credit facility. ~~We have $1.1~~At March 31, 2022, we had $1.4 billion of current debt, including $995 million of senior notes maturing in ~~debt maturities through 2022, including our 3.55% Senior Notes ($0.5 billion)~~March 2023 (with redemption rights at par in December 2022) and ~~the~~$325 million under Cerro ~~Verde~~Verde’s Term Loan maturing in June 2022.

In April 2022, PT Freeport Indonesia (PT-FI) completed the sale of $3.0 billion of senior notes primarily in connection with its financing plans for construction of additional domestic smelting capacity.

In first-quarter 2022, we acquired 12.3 million shares of our common stock under the share repurchase program for a total cost of $541 million ($~~0.5 billion)~~44.02 average cost per share). Through May 5, 2022, we acquired 28.7 million shares

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of our common stock for a total cost of $1.2 billion ($41.64 average cost per share) and $1.8 billion remains available under the share repurchase program.

Refer to Note 5 and “Capital Resources and Liquidity” for further discussion.

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OUTLOOK

We continue to view the long-term outlook for our business positively, supported by limitations on supplies of copper and by the requirements for copper in the world’s economy. 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 and “Risk Factors” in Part I, Item 1A. of our ~~2020~~2021 Form 10-K 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 ~~2021:~~2022:

Copper (millions of recoverable pounds):

North America copper mines

~~1,465~~1,536

South America mining

~~1,050~~1,154

Indonesia mining

~~1,335~~1,564

Total

~~3,850~~4,254

Gold (millions of recoverable ounces)

~~1.3~~1.6

Molybdenum (millions of recoverable pounds)

8680

a.Projected molybdenum sales include 2830 million pounds produced by our Molybdenum mines and 5850 million pounds produced by our North America and South America copper mines.

Consolidated sales volumes in ~~third-quarter 2021~~second-quarter 2022 are expected to approximate ~~1.035~~1.0 billion pounds of copper, ~~360~~405 thousand ounces of gold and 21 million pounds of molybdenum. Projected sales volumes are dependent on operational performance, ~~continued progress of the ramp-up of underground mining at PT-FI, impacts and duration of the COVID-19 pandemic,~~ weather-related conditions, timing of shipments, and other ~~factors.~~factors detailed in the “Cautionary Statement” below.

For other important factors that could cause results to differ materially from projections, refer to ~~“Cautionary Statement” and~~ “Risk Factors” contained in Part I, Item 1A. of our ~~2020~~2021 Form 10-K.

Consolidated Unit Net Cash Costs

Assuming average prices of ~~$1,800~~$1,950 per ounce of gold and ~~$16.00~~$19.00 per pound of molybdenum for the ~~second half~~remainder of ~~2021~~2022 and achievement of current sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) for our copper mines are expected to average ~~$1.35~~$1.44 per pound of copper for the year ~~2021~~2022 (including ~~$1.33~~$1.41 per pound of copper in ~~third-quarter 2021)~~second-quarter 2022). The increase from the January 2022 estimate of $1.35 per pound of copper primarily reflects higher costs of energy and other consumables and currency exchange rates in South America, partly offset by higher gold volumes and commodity price assumptions. We are experiencing significant cost inflation, principally associated with energy (which represents about 20 percent of our site operating costs) and other consumables such as sulfuric acid, explosives and steel. Russia’s invasion of Ukraine has placed additional pressure on an already challenging global supply chain environment. The impact of price changes ~~for~~during the ~~second half~~remainder of ~~2021~~2022 on consolidated unit net cash costs for the year ~~2021~~2022 would approximate ~~$0.02~~$0.03 per pound of copper for each $100 per ounce change in the average price of gold and ~~$0.01~~$0.02 per pound of copper for each $2$2.00 per pound change in the average price of molybdenum. Quarterly unit net cash costs vary with fluctuations in sales volumes and realized prices, primarily for gold and molybdenum.

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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. Based on current sales volume and cost estimates, and assuming average prices of ~~$4.25~~$4.75 per pound for copper, ~~$1,800~~$1,950 per ounce for gold, and ~~$16.00~~$19.00 per pound for molybdenum for the ~~second half~~remainder of ~~2021,~~2022, our consolidated operating cash flows are estimated to approximate ~~$7.5~~$8.6 billion ~~(including $0.4~~(net of $0.9 billion of working capital and other ~~sources)~~uses) for the year ~~2021.~~2022. Estimated consolidated operating cash flows for the year ~~2021~~2022 also reflect an estimated income tax provision of ~~$2.5~~$3.4 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate for the year ~~2021)~~2022). The impact of price changes for the ~~second half~~remainder of ~~2021~~2022 on operating cash flows would approximate ~~$200~~$300 million for each $0.10 per pound change in the average price of copper, ~~$50~~$80 million for each $100 per ounce change in the average price of gold and ~~$55~~$75 million for each $2$2.00 per pound change in the average price of molybdenum.

Consolidated Capital Expenditures

Consolidated capital expenditures for the year 2022 are expected to approximate $4.6 billion ($3.2 billion excluding capital expenditures for the greenfield smelter and precious metals refinery (PMR) - collectively, the Indonesia smelter projects), and include $1.9 billion for major mining projects ($1.3 billion for planned projects primarily associated with underground mine development in the Grasberg minerals district and supporting mill and power capital costs and $0.6 billion for discretionary growth projects).

Capital expenditures for the Indonesia smelter projects are expected to approximate $1.4 billion for the year 2022.

Development of additional smelting capacity in Indonesia will result in the elimination of export duties, providing an

offset to the economic cost associated with the Indonesia smelter projects. Capital expenditures for the Indonesia smelter projects are being funded with the net proceeds from PT-FI's unsecured senior notes issued in April 2022 and its available bank credit facilities.

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~~Consolidated Capital Expenditures~~

Consolidated capital expenditures, excluding estimated expenditures associated with Indonesia smelter development, are expected to approximate $2.2 billion for the year 2021, including $1.4 billion for major projects, primarily associated with underground development activities in the Grasberg minerals district.

Indonesia smelter development expenditures are currently expected to approximate $0.4 billion for the year 2021 (including $0.3 billion during the second half of 2021). All costs of smelter development in Indonesia will be shared 49 percent by FCX and 51 percent by PT Indonesia Asahan Aluminium (Persero) (PT Inalum, also known as MIND ID), and will be largely offset by a phase-out of the 5 percent export duty currently paid to the Indonesia government as well as the tax deductibility of smelter costs by PT-FI. PT-FI plans to use its $1 billion, five-year, unsecured credit facility (refer to Note 5) and additional debt financing to fund these projects.

MARKETS

World prices for copper, gold and molybdenum can fluctuate significantly. During the period from January ~~2011~~2012 through ~~June 2021,~~March 2022, the London Metal Exchange (LME) copper settlement price varied from a low of $1.96 per pound in 2016 to a record high of ~~$4.86~~$4.87 per pound in ~~2021;~~2022; the London Bullion Market Association (London) PM gold price fluctuated from a low of $1,049 per ounce in 2015 to a record high of $2,067 per ounce in 2020; and the Metals Week Molybdenum Dealer Oxide weekly average price ranged from a low of $4.46 per pound in 2015 to a high of ~~$19.90~~$20.01 per pound in 2021. Copper, gold and molybdenum prices are affected by numerous factors beyond our control as described further in “Risk Factors” contained in Part I, Item 1A. of our ~~2020~~2021 Form 10-K.

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 ~~2011~~2012 through ~~June 2021.~~March 2022. During ~~second-quarter 2021,~~first-quarter 2022, LME copper settlement prices ranged from a low of ~~$3.98~~$4.34 per pound to a record high of ~~$4.86~~$4.87 per pound, averaged ~~$4.40~~$4.53 per pound and settled at ~~$4.26~~$4.69 per pound on ~~June 30, 2021. As China's economy began~~March 31, 2022. Copper prices have been supported by strong demand during the pandemic recovery, rising investor sentiment associated with copper’s prominent role in the global transition to ~~recover from the COVID-19 pandemic, copper prices increased throughout 2020~~cleaner energy, ongoing supply disruptions and reached a record high during second-quarter 2021 before moderating in June 2021 as a result of a strengthening U.S. dollar and China's announcement that it would begin selling stockpiled metal commodities, including copper, to curb rising commodity costs.falling inventories. The LME copper settlement price was ~~$4.42~~$4.45 per pound on ~~July 30, 2021.~~April 29, 2022.

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~~Expectations~~Long-term fundamentals for ~~longer-term~~ copper ~~demand growth~~ remain ~~in place.~~positive. We ~~expect~~believe future demand towill be supported by copper’s role in the global transition to renewable ~~energy~~power, electric vehicles and other carbon-reduction initiatives, and continued urbanization in developing countries. The ~~limited~~small number of approved, large-scale projects ~~scheduled,~~beyond those expected to commence operations in 2022 and 2023, the long lead times required to permit and build new mines and declining ore grades at existing operations continue to highlight the fundamental supply challenges for copper.

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This graph presents London PM gold prices from January ~~2011~~2012 through ~~June 2021.~~March 2022. During ~~second-quarter 2021,~~first-quarter 2022, London PM gold prices ranged from a low of ~~$1,726~~$1,788 per ounce to a high of ~~$1,903~~$2,039 per ounce, averaged ~~$1,816~~$1,877 per ounce, and closed at ~~$1,763~~$1,942 per ounce on ~~June 30, 2021. While the continued global economic recovery has put downward pressure on gold prices, many~~March 31, 2022. Many analysts expect future gold prices to ~~remain~~be supported by the effects of elevated debt levels associated with large pandemic-related stimulus efforts, historically low U.S. interest rates and a weaker U.S. dollar. The London PM gold price was ~~$1,826~~$1,911 per ounce on ~~July 30, 2021.~~

April 29, 2022.

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This graph presents the Metals Week Molybdenum Dealer Oxide weekly average price from January ~~2011~~2012 through ~~June 2021.~~March 2022. During ~~second-quarter 2021,~~first-quarter 2022, the weekly average price of molybdenum ranged from a low of ~~$10.99~~$18.74 per pound to a high of ~~$19.90~~$19.33 per pound, averaged ~~$13.81~~$19.08 per pound, and was ~~$18.95~~$19.30 per pound on ~~June 30, 2021.~~March 31, 2022. Molybdenum prices ~~have reacted~~continue to be supported by supply ~~concerns~~constraints and increased demand, as mines in ~~both~~ Chile continued to report low production, logistic challenges and ~~Peru reported lower production and logistics challenges continued globally.~~geopolitical risk due to Russia’s invasion of Ukraine causing traders to increase inventories. The Metals Week Molybdenum Dealer Oxide weekly average price was ~~$18.13~~$19.22 per pound on ~~July 30, 2021.~~April 29, 2022.

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CONSOLIDATED RESULTS


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2021			2020			2021			2020					2022			2021
SUMMARY FINANCIAL DATA	SUMMARY FINANCIAL DATA	(in millions, except per share amounts)												SUMMARY FINANCIAL DATA		(in millions, except per share amounts)
Revenuesa,b	Revenuesa,b	$	5,748		$	3,054		$	10,598		$	5,852		Revenuesa,b		$	6,603		$	4,850
Operating income (loss)a,c		$	2,067	d,e,f	$	321	g	$	3,599	d,e,f,g	$	(152)	e,g
Operating incomea														Operating incomea		$	2,809		$	1,532

Net income (loss) attributable to common stockh		$	1,083	i	$	53	j,k,l	$	1,801	i	$	(438)	j,k,l
Diluted net income (loss) per share of common stock		$	0.73		$	0.03		$	1.21		$	(0.30)
Net income attributable to common stockc														Net income attributable to common stockc		$	1,527	d	$	718	e
Diluted net income per share of common stock														Diluted net income per share of common stock		$	1.04		$	0.48

Diluted weighted-average common shares outstanding	Diluted weighted-average common shares outstanding	1,483			1,458			1,480			1,453			Diluted weighted-average common shares outstanding		1,469			1,477

Operating cash flowsm		$	2,395		$	491		$	3,470		$	453
Operating cash flowsf														Operating cash flowsf		$	1,691		$	1,075
Capital expenditures	Capital expenditures	$	433		$	527		$	803		$	1,137		Capital expenditures		$	723		$	370
At June 30:
At March 31:														At March 31:
Cash and cash equivalents	Cash and cash equivalents	$	6,313		$	1,465		$	6,313		$	1,465		Cash and cash equivalents		$	8,338		$	4,580
Total debt, including current portion	Total debt, including current portion	$	9,695		$	9,914		$	9,695		$	9,914		Total debt, including current portion		$	9,621		$	9,809

a.Refer to Note 9 for a summary of revenues and operating income ~~(loss)~~ by operating division.

b.Includes favorable ~~(unfavorable)~~ adjustments to prior period provisionally priced concentrate and cathode copper sales totaling ~~$173~~$102 million ($6642 million to net income attributable to common stock or ~~$0.05~~$0.03 per share) in ~~second-quarter 2021, $55~~first-quarter 2022 and $146 million ($~~19 million to net income attributable to common stock or $0.01 per share) in second-quarter 2020, $169 million ($65~~57 million to net income attributable to common stock or $0.04 per share) ~~for the first six months of~~in first-quarter 2021 ~~and $(102) million ($(43) million to net loss attributable to common stock or $(0.03) per share) for the first six months of 2020~~ (refer to Note 6 for further discussion).

c.Includes net charges associated with environmental obligations and related litigation reserves totaling $20 million ($20 million to net income attributable to common stock or $0.01 per share) in second-quarter 2021, $1 million ($1 million to net income attributable to common stock or less than $0.01 per share) in second-quarter 2020, $17 million ($17 million to net income attributable to common stock or $0.01 per share) for the first six months of 2021 and $15 million ($15 million to net loss attributable to common stock or $0.01 per share) for the first six months of 2020.

d.The second quarter and first six months of 2021 include nonrecurring labor-related charges totaling $69 million ($22 million to net income attributable to common stock or $0.01 per share) at Cerro Verde for agreements reached with 57 percent of its hourly employees. Refer to “Operations – South America Mining” for further discussion.

e.Includes net gains (losses) on sales of assets totaling $3 million ($3 million to net income attributable to common stock or less than $0.01 per share) for the second quarter and first six months of 2021 and $(11) million ($(11) million to net loss attributable to common stock or $0.01 per share) for the first six months of 2020.

f.Second-quarter 2021 includes net credits totaling $10 million ($10 million to net income attributable to common stock or $0.01 per share) associated with asset retirement obligation adjustments. The first six months of 2021 also include other net charges totaling $23 million ($20 million to net income attributable to common stock or $0.01 per share) primarily associated with employee separation charges, international tax matters and asset retirement obligation adjustments.

g.Includes metals inventory adjustments totaling $139 million ($101 million to net income attributable to common stock or $0.07 per share) in second-quarter 2020, $(1) million ($(1) million to net income attributable to common stock or less than $(0.01) per share) for the first six months of 2021 and $(83) million ($(81) million to net loss attributable to common stock or $(0.06) per share) for the first six months of 2020.

h.We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations – Smelting and Refining” for a summary of net impacts from changes in these deferrals.

i.d.Includes net charges totaling $38 million ($0.03 per share), primarily associated with the settlement of an administrative fine and an adjustment to prior-period export duties at PT-FI. These net charges, before income taxes and noncontrolling interests, were recorded to production and delivery ($43 million) and to revenues ($18 million).

e.Includes net charges totaling $38 million ($0.03 per share), primarily associated with contested matters at PT-FI ~~totaling $32 million ($28 million to net~~(including an administrative fine levied by the Indonesia government and historical tax audits), employee separation charges in North America and asset retirement obligation adjustments. These charges, before income ~~attributable to common stock or 0.02 per share) in second-quarter 2021~~taxes and ~~$54 million ($48 million to net income attributable to common stock or 0.03 per share) for the first six months of 2021. These charges~~noncontrolling interests, were recorded to production and delivery ($~~17 million in second-quarter 2021 and $30 million for the first six months of 2021)~~37 million), interest expense, net ($4 ~~million in second-quarter 2021 and $8 million for the first six months of 2021)~~million) and other income, net ($~~11 million in second-quarter 2021~~5 million), partly offset by credits recorded to environmental obligations and ~~$16 million for the first six months of 2021)~~shutdown costs ($3 million).

j.~~Includes after-tax net losses on early extinguishment of debt totaling $9 million ($0.01 per share) in second-quarter 2020 and $41 million ($0.03 per share) for the first six months of 2020.~~

k.Includes charges totaling $196 million ($144 million to net income attributable to common stock or $0.10 per share) in second-quarter 2020 and $224 million ($153 million to net loss attributable to common stock or $0.11 per share) for the first six months of 2020 associated with the COVID-19 pandemic and revised operating plans, including employee separation costs. These charges were recorded to production and delivery ($153 million in second-quarter 2020 and $173 million for the first six months of 2020); depreciation, depletion and amortization ($21 million in second-quarter 2020 and $29 million for

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the first six months of 2020); selling, general and administrative ($15 million for each of the second quarter and first six months of 2020) and mining exploration and research expense ($7 million for each of the second quarter and first six months of 2020).

l.Includes net tax credits of $53 million ($0.04 per share) in second-quarter 2020 and $52 million ($0.04 per share) for the first six months of 2020. Refer to “Income Taxes” for further discussion of these net tax credits.

m.f.Working capital and other ~~sources~~uses totaled ~~$523~~$811 million in ~~second-quarter 2021, $22~~first-quarter 2022 and $336 million in ~~second-quarter 2020, $187 million for the first six months of 2021 and $141 million for the first six months of 2020.~~first-quarter 2021.


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2021			2020			2021			2020					2022		2021
SUMMARY OPERATING DATA	SUMMARY OPERATING DATA													SUMMARY OPERATING DATA
Copper (millions of recoverable pounds)	Copper (millions of recoverable pounds)													Copper (millions of recoverable pounds)
Production	Production	913			767			1,823			1,498			Production		1,009		910
Sales, excluding purchases	Sales, excluding purchases	929			759			1,754			1,488			Sales, excluding purchases		1,024		825
Average realized price per pound	Average realized price per pound	$	4.34		$	2.55	a	$	4.25		$	2.53	a	Average realized price per pound		$	4.66	$	3.94
Site production and delivery costs per poundb		$	2.02	c	$	1.82	d	$	1.94	c	$	2.00	d
Unit net cash costs per poundb		$	1.48		$	1.47		$	1.44		$	1.68
Site production and delivery costs per pounda														Site production and delivery costs per pounda		$	2.03	$	1.86
Unit net cash costs per pounda														Unit net cash costs per pounda		$	1.33	$	1.39
Gold (thousands of recoverable ounces)	Gold (thousands of recoverable ounces)													Gold (thousands of recoverable ounces)
Production	Production	305			191			602			347			Production		415		297
Sales, excluding purchases	Sales, excluding purchases	305			184			563			328			Sales, excluding purchases		409		258
Average realized price per ounce	Average realized price per ounce	$	1,794		$	1,749		$	1,785		$	1,709		Average realized price per ounce		$	1,920	$	1,713
Molybdenum (millions of recoverable pounds)	Molybdenum (millions of recoverable pounds)													Molybdenum (millions of recoverable pounds)
Production	Production	20			19			40			38			Production		21		20
Sales, excluding purchases	Sales, excluding purchases	22			18			43			39			Sales, excluding purchases		19		21
Average realized price per pound	Average realized price per pound	$	13.11		$	10.53		$	12.38		$	10.84		Average realized price per pound		$	19.30	$	11.62

a.Includes reductions to average realized prices of $0.03 per pound of copper in second-quarter 2020 and $0.02 per pound of copper for the first six months of 2020 related to forward sales contracts covering 150 million pounds of copper sales for May and June 2020 at a fixed price of $2.34 per pound. There are no remaining forward sales contracts.

b.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 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.”

c.Includes $0.07 per pound of copper in second-quarter 2021 and $0.04 per pound of copper for the first six months of 2021 associated with nonrecurring labor-related charges at Cerro Verde for agreements reached with 57 percent of its hourly employees. Refer to “Operations – South America Mining” for further discussion.

d.Excludes charges totaling $0.20 per pound of copper in second-quarter 2020 and $0.12 per pound of copper for the first six months of 2020, primarily associated with idle facility and contract cancellations costs related to the COVID-19 pandemic and employee separation costs associated with the April 2020 revised operating plans.

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Revenues

Consolidated revenues totaled ~~$5.7~~$6.6 billion in ~~second-quarter 2021, $3.1~~first-quarter 2022 and $4.9 billion in ~~second-quarter 2020, $10.6 billion for the first six months of 2021 and $5.9 billion for the first six months of 2020.~~first-quarter 2021. Revenues from our mining operations primarily include the sale of copper concentrate, copper cathode, copper rod, gold in concentrate and molybdenum. Refer to Note 9 for a summary of product revenues.

Following is a summary of changes in our consolidated revenues between periods (in millions):

Three Months Ended June 30 Six Months Ended June 30
Consolidated revenues - 2020 period $ 3,054 $ 5,852
Higher sales volumes:
Copper 435 674
Gold 215 402
Molybdenum 43 38
Higher average realized prices:
Copper 1,664 3,017
Gold 14 43
Molybdenum 56 66
Adjustments for prior period provisionally priced copper sales 118 271
Higher Atlantic Copper revenues 328 575
Higher revenues from purchased copper 144 127
Higher treatment charges (26) (43)
Higher royalties and export duties (84) (152)
Other, including intercompany eliminations (213) (272)
Consolidated revenues - 2021 period $ 5,748 $ 10,598


	Three Months Ended March 31

Consolidated revenues - 2021 period	$	4,850
Higher (lower) sales volumes:
Copper	786
Gold	259
Molybdenum	(16)

Higher average realized prices:
Copper	737
Gold	85
Molybdenum	149
Adjustments for prior period provisionally priced copper sales	(44)
Higher Atlantic Copper revenues	31
Lower revenues from purchased copper	(148)

Higher treatment charges	(36)
Higher royalties and export duties	(101)
Other, including intercompany eliminations	51
Consolidated revenues - 2022 period	$	6,603

Sales Volumes. Consolidated copper and gold sales volumes increased in ~~the~~first-quarter 2022, compared with first-quarter 2021, ~~periods, compared to the 2020 periods,~~ primarily reflecting ~~continued progress of~~ the ramp-up of underground mining at ~~PT-FI.~~PT-FI and timing of shipments in North America. Refer to “Operations” for further discussion of sales volumes at our mining operations.

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 ~~for second-quarter 2021,~~in first-quarter 2022, compared with ~~second-quarter 2020,~~first-quarter 2021, were 7018 percent higher for copper, 312 percent higher for gold and 25 percent higher for molybdenum and average realized prices for the first six months of 2021, compared with the first six months of 2020, were 68 percent higher for copper, 4 percent higher for gold and 1466 percent higher for molybdenum.

Average realized copper prices include net ~~(unfavorable)~~ favorable adjustments to current period provisionally priced copper sales (i.e., provisionally priced sales at March 31, 2022 and 2021) totaling ~~$(55)~~$116 million in ~~second-quarter 2021, $107~~first-quarter 2022 and $61 million in ~~second-quarter 2020, $156 million for the first six months of 2021 and $26 million for the first six months of 2020.~~first-quarter 2021. As discussed in Note 6, substantially all of our copper concentrate and cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date) based primarily on quoted LME monthly average copper prices. We record revenues and invoice customers at the time of shipment based on then-current LME prices, which results in an embedded derivative on provisionally priced concentrate and cathode sales that is adjusted to fair value through earnings each period, using the period-end forward prices, until final pricing on the date of settlement. To the extent final prices are higher or lower than what was recorded on a provisional basis, an increase or decrease to revenues is recorded each reporting period until the date of final pricing. Accordingly, in times of rising copper prices, our revenues benefit from adjustments to the final pricing of provisionally priced sales pursuant to contracts entered into in prior periods; in times of falling copper prices, the opposite occurs.

Prior Period Provisionally Priced Copper Sales. Net favorable ~~(unfavorable)~~ adjustments to prior periods’ provisionally priced copper sales (i.e., provisionally priced sales at ~~March~~December 31, 2021 and ~~2020, and December 31,~~

~~2020 and 2019)~~2020) recorded in consolidated revenues totaled ~~$173~~$102 million in ~~second-quarter 2021, $55~~first-quarter 2022 and $146 million in ~~second-quarter 2020, $169 million for the first six months of 2021 and $(102) million for the first six months of 2020.~~first-quarter 2021. Refer to Notes 6 and 9 for a summary of total adjustments to prior period and current period provisionally priced sales.

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At ~~June 30, 2021,~~March 31, 2022, we had provisionally priced copper sales totaling ~~368~~473 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of ~~$4.25~~$4.71 per pound, subject to final pricing over the next several months. We estimate that each $0.05 change in the price realized from the ~~June 30, 2021,~~March 31, 2022, provisional price recorded would have an approximate ~~$12~~$15 million effect on our ~~2021~~2022 net income attributable to common stock. ~~The~~Copper prices have declined from March 31, 2022, the LME copper settlement price ~~settled at $4.42~~averaged $4.62 per pound in April 2022 and approximated $4.30 per pound on ~~July 30, 2021.~~May 4, 2022.

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Atlantic Copper Revenues. Atlantic Copper revenues totaled ~~$794~~$718 million in ~~second-quarter 2021 and $1.5 billion for the first six months of 2021,~~first-quarter 2022, compared with ~~$466~~$687 million in ~~second-quarter 2020 and $906 million for the first six months of 2020.~~first-quarter 2021. Higher revenues in ~~the 2021 periods,~~first-quarter 2022, compared with ~~the 2020 periods,~~first-quarter 2021, primarily reflect higher copper prices.

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 6815 million pounds in ~~second-quarter 2021, 71~~first-quarter 2022 and 53 million pounds in second-quarter 2020, 121 million pounds for the first six months of 2021 and 159 million pounds for the first six months of 2020. The increase in revenues associated with purchased copper in the 2021 periods, compared to the 2020 periods, reflects higher copper prices.first-quarter 2021.

Treatment Charges. Revenues from our 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.

Royalties and Export Duties. Royalties are primarily on PT-FI sales and vary with the volume of metal sold and the prices of copper and gold. PT-FI ~~will continue~~currently pays duties on concentrate exports of 5 percent, declining to ~~pay export duties until~~2.5 percent when development progress for ~~new domestic~~additional smelting ~~with an annual~~ capacity ~~of 2 million metric tons of concentrate~~in Indonesia exceeds 30 percent, and eliminated when development progress for additional smelting capacity in Indonesia exceeds 50 percent. Refer to “Operations – Indonesia Mining” for further discussion of the current progress on ~~a greenfield smelter~~additional smelting capacity in Indonesia and to Note 9 for a summary of royalty expense and export duties.

Production and Delivery Costs

Consolidated production and delivery costs totaled ~~$3.1~~$3.2 billion in ~~second-quarter 2021, $2.4~~first-quarter 2022 and $2.8 billion in ~~second-quarter 2020, $5.9 billion for the first six months of 2021 and $4.9 billion for the first six months of 2020.~~first-quarter 2021. Higher consolidated production and delivery costs in ~~the 2021 periods~~first-quarter 2022 primarily reflect higher ~~sales~~ volumes ~~higher milling~~ and ~~mining costs~~increased energy, maintenance and nonrecurring labor-related charges at Cerro Verde for agreements reached with 57 percent of its hourly employees. The 2020 periods also include charges associated with the COVID-19 pandemic and revised operating plans.other input costs.

Site Production and Delivery Costs Per Pound. Site production and delivery costs for our copper mining operations primarily include labor, energy and commodity-based inputs, such as sulphuric acid, reagents, liners, tires and explosives. Consolidated site production and delivery costs (before net noncash and other costs) for our copper mines averaged ~~$2.02~~$2.03 per pound of copper in ~~second-quarter 2021, $1.82~~first-quarter 2022 and $1.86 per pound of copper in ~~second-quarter 2020, $1.94 per pound of copper for the first six months of 2021 and $2.00 per pound of copper for the first six months of 2020.~~first-quarter 2021.

~~Consolidated~~Higher consolidated site production and delivery costs per pound ~~in the second quarter and first six months~~ of ~~2021,~~copper for first-quarter 2022, compared with ~~the second quarter and first six months of 2020,~~first-quarter 2021, primarily ~~reflected~~reflect higher mining and milling costs and ~~nonrecurring labor-related charges at Cerro Verde,~~increased energy and other input costs, partly offset by higher sales volumes. ~~Consolidated site production and delivery costs for the 2020 periods excluded charges primarily associated with the COVID-19 pandemic and the April 2020 revised operating plans.~~ Refer to “Operations – Unit Net Cash Costs” for further discussion of unit net cash costs associated with our operating divisions and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements.

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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 ~~$483~~$489 million in ~~second-quarter 2021, $358~~first-quarter 2022 and $419 million in ~~second-quarter 2020, $902 million for the first six months of 2021 and $699 million for the first six months of 2020.~~first-quarter 2021. Higher DD&A in ~~the 2021 periods is~~first-quarter 2022 primarily ~~related to~~reflects higher sales volumes and assets placed in service ~~and higher sales volumes~~ associated with the ramp-up of underground mining at PT-FI.

~~Metals Inventory Adjustments~~

Net realizable value metals inventory adjustments totaled a net credit of $139 million in second-quarter 2020 and net charges of $1 million for the first six months of 2021 and $83 million for the first six months of 2020. Metals inventory adjustments in 2020 were related to volatility in copper and molybdenum prices associated with the COVID-19 pandemic.

Interest Expense, Net

Consolidated interest costs (before capitalization) totaled ~~$165~~$153 million in ~~second-quarter 2021, $159~~first-quarter 2022 and $160 million in ~~second-quarter 2020, $325 million for the first six months of 2021 and $330 million for the first six months of 2020.~~first-quarter 2021.

Capitalized interest varies with the level of qualifying assets associated with our development projects and average interest rates on our ~~borrowings, and~~borrowings. Capitalized interest totaled ~~$17~~$26 million in ~~second-quarter 2021, $44~~first-quarter 2022 and $15 million in ~~second-quarter 2020, $32 million for the first six months of 2021 and $88 million for the first six months of 2020.~~first-quarter 2021. The ~~decrease~~increase in capitalized interest in ~~the 2021 periods,~~first-quarter 2022, compared with ~~the 2020 periods,~~first-quarter 2021, is ~~primarily~~ related to ~~significant assets at PT-FI’s~~major mining projects primarily associated with underground ~~mines being placed~~development activities in ~~service.~~the Grasberg minerals district and development of the greenfield smelter in Indonesia. Refer to “Capital Resources and Liquidity - Investing Activities” for discussion of capital expenditures associated with our major development projects.

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Income Taxes

Following is a summary of the approximate amounts used in the calculation of our consolidated income tax ~~(provision) benefit~~provision (in millions, except percentages):


		Six Months Ended June 30,																	Three Months Ended March 31,
		2021								2020									2022							2021
		Income (Loss)a		Effective Tax Rate			Income Tax (Provision) Benefit			Income (Loss)a		Effective Tax Rate			Income Tax (Provision) Benefit				Income (Loss)a		Effective Tax Rate			Income Tax (Provision) Benefit		Income (Loss)a		Effective Tax Rate			Income Tax (Provision) Benefit
U.S.b	U.S.b	$	743	—	%		$	(3)	c	$	(581)	10	%		$	58	d	U.S.b	$	552	—	%	c	$	(2)	$	185	—	%	c	$	—
South America	South America	923		39	%		(356)			(57)		58	%		33			South America	612		39	%		(241)		493		39	%		(194)
Indonesia	Indonesia	1,759		41	%		(719)			169		54	%		(91)		e	Indonesia	1,512		39	%		(586)		757		42	%		(315)

Eliminations and other	Eliminations and other	(99)		N/A			5			74		N/A			(16)			Eliminations and other	37		N/A			(10)		(37)		N/A			4
Rate adjustmentf		—		N/A			27			—		N/A			(20)
Rate adjustmentd																		Rate adjustmentd	—		N/A			15		—		N/A			62

Consolidated FCX	Consolidated FCX	$	3,326	31	%	g	$	(1,046)		$	(395)	(9)	%	g,h	$	(36)		Consolidated FCX	$	2,713	30	%		$	(824)	$	1,398	32	%		$	(443)

a.Represents income ~~(loss)~~ before income taxes and equity in affiliated companies’ net ~~earnings.~~earnings (losses).

b.In addition to our North America mining operations, the U.S. jurisdiction reflects corporate-level expenses, which include interest expense associated with senior notes, general and administrative expenses, and environmental obligations and shutdown costs.

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

d.Includes a tax credit of $53 million associated with the reversal of a year-end 2019 tax charge related to the sale of our interest in the lower zone of the Timok exploration project in Serbia. Also includes a tax credit of $6 million associated with the removal of a valuation allowance on deferred tax assets.

e.~~Includes a tax charge of $8 million ($7 million net of noncontrolling interest) associated with an unfavorable 2012 Indonesia Supreme Court ruling.~~

f.In accordance with applicable accounting rules, we adjust our interim provision for income taxes equal to our consolidated tax rate.

g.~~Our consolidated effective income tax rate is a function of the combined effective tax rates for the jurisdictions in which we operate.~~

h.Our U.S. jurisdiction generated net losses in the first six months of 2020 that did not result in a realized tax benefit; applicable accounting rules required us to adjust our estimated annual effective tax rate to exclude the impact of U.S. net losses.

Assuming achievement of current sales volume and cost estimates and average prices of ~~$4.25~~$4.75 per pound for copper, ~~$1,800~~$1,950 per ounce for gold and ~~$16.00~~$19.00 per pound for molybdenum for the ~~second half~~remainder of ~~2021,~~2022, we estimate

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our consolidated effective tax rate for the year ~~2021~~2022 would approximate 31 percent. Changes in projected sales volumes and average prices during ~~2021~~2022 would incur tax impacts at estimated effective rates of 40 percent for Peru, 38 percent for Indonesia and 0 percent for the U.S.

The net 0 percent U.S. estimated effective tax rate for the year 2021 includes approximately $175 million of valuation allowance reversal related to an expected $850 million use of U.S. federal net operating losses during 2021.

OPERATIONS

Responsible Production

~~2020~~2021 Annual Report on ~~Sustainability~~.Sustainability. In April ~~2021,~~2022, we published our ~~2020~~2021 Annual Report on Sustainability, which is available on our website at ~~fcx.com.~~fcx.com/sustainability. We have a long history of environmental, social and governance (ESG) programs and are ~~continuously~~ striving to continuously improve ~~and respond to evolving stakeholder expectations.~~performance in these important areas. This report ~~marked~~marks our ~~20th~~21st year of reporting on our sustainability progress and our ~~first~~second year of reporting in alignment with the ~~Sustainability Accounting~~Value Reporting Foundation’s SASB Standards ~~Board~~for the Metals & Mining ~~framework.~~industry. We are committed to building upon our achievements in sustainability and ~~seek to contribute positively to society by supplying the world with responsibly produced copper.~~we are focused on leading as a responsible copper producer.

The Copper Mark. ~~The Copper Mark is a robust assurance framework that demonstrates the copper industry's responsible production practices and contribution~~We are committed to the United Nations Sustainable Development Goals. To date, we have six sites that have achieved the Copper Mark (the Morenci operations, Miami smelter and mine, and El Paso refinery in North America; Cerro Verde and El Abra mines in South America; and Atlantic Copper smelter and refinery in Spain). In June 2021, we commenced the Copper Mark assessment process at five additional operating sites, including Bagdad, Chino, Tyrone, Safford and Sierrita. Each of these sites will complete an external assurance process to assess conformance with the Copper Mark’s 32 ESG requirements, with a goal of being awarded the Copper Mark. We have future plans to validatevalidating all of our copper producing sites with the Copper Mark, a comprehensive assurance framework designed to demonstrate the copper industry's responsible production practices. To achieve the Copper Mark, each site is required to complete an external assurance process to assess conformance with 32 ESG requirements. During first-quarter 2022, our Chino and Tyrone sites were awarded the Copper Mark. To date, we have achieved the Copper Mark at nine of our global sites (Chino, Tyrone, Bagdad, Morenci, Miami, El Paso, Cerro Verde, El Abra and Atlantic Copper), two sites have signed letters of commitment (Safford and Sierrita) and we expect to advance preparation for the validation process for PT-FI during 2022.

Leaching Innovation Initiatives

We have a long history of leach production and continue to pursue internal and external initiatives to advance sulfide leaching technologies, which are expected to allow us to recover additional copper from our large existing leach stockpiles. We have several initiatives ongoing across our North America and South America operations that incorporate new applications, technologies and data analytics. Initial results support the potential for incremental low-cost and low-carbon additions to our production and reserve profile.

Feasibility and Optimization Studies

We are engaged in various studies associated with potential future expansion projects primarily in North and South America. The cost of these studies are expensed as incurred. We estimate the costs of these studies will approximate $200 million for the year 2022 (including approximately $60 million in second-quarter 2022), compared with approximately $60 million for the year 2021.

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North America Copper Mines

We operate seven open-pit copper mines in North America – Morenci, Bagdad, Safford (including Lone Star), Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. ~~In addition to copper, certain of these mines produce molybdenum concentrate, gold and silver.~~ All of the North America mining operations are wholly owned, except for Morenci. We record our 72 percent undivided joint venture interest in Morenci using the proportionate consolidation method.

The North America copper mines include open-pit mining, ~~sulfide ore~~sulfide-ore concentrating, leaching and solution extraction/electrowinning (SX/EW) operations. A majority of the copper produced at our North America copper mines is cast into copper rod by our Rod & Refining segment. The remainder of our North America copper production is sold as copper cathode or copper concentrate, a portion of which is shipped to Atlantic Copper (our wholly owned smelter). Molybdenum concentrate, gold and silver are also produced by certain of our North America copper mines.

Operating and Development Activities. Our North America operating sites continue to achieve strong execution of operating plans. We successfully completed the initial development of the Lone Star copper leach project in the second half of 2020, and current operations are exceeding initial design capacity approximating 200 million pounds annually. We continue to advance opportunities to increase operating rates and for development of the large-scale sulfide resource at Lone Star, including evaluating a potential additional incremental oxide expansion to increase volumes to over 300 million pounds of copper per year.

We have substantial ~~resources~~reserves and future opportunities in the U.S., primarily associated with existing mining operations. ~~Evaluation of project options for future growth are under way. In addition~~

We continue to increase Lone Star weoperating rates to achieve production of 300 million pounds of copper per year from oxide ores (compared with the initial design capacity of 200 million pounds per year). The oxide project at Lone Star advances the opportunity for development of the underlying, large-scale sulfide resources. We are ~~actively advancing studies~~also increasing exploration in the area to ~~add new~~support metallurgical testing and mine development planning for a potential significant long-term investment to build additional scale on an economically attractive basis.

We are planning an expansion to double the concentrator capacity atof our ~~long-lived~~ Bagdad operation in northwest ~~Arizona.~~Arizona and are engaging stakeholders. We are commencing a feasibility study for this project during 2022.

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Operating Data. Following is summary consolidated operating data for the North America copper mines:


		Three Months Ended June 30,					Six months ended June 30,						Three Months Ended March 31,

		2021		2020			2021		2020				2022		2021
Operating Data, Net of Joint Venture Interests	Operating Data, Net of Joint Venture Interests											Operating Data, Net of Joint Venture Interests
Copper (millions of recoverable pounds)	Copper (millions of recoverable pounds)											Copper (millions of recoverable pounds)
Production	Production	360		368			713		714			Production	354		353
Sales, excluding purchases	Sales, excluding purchases	389		368			697		723			Sales, excluding purchases	381		308
Average realized price per pound	Average realized price per pound	$	4.42	$	2.42	a	$	4.19	$	2.50	a	Average realized price per pound	$	4.62	$	3.88

Molybdenum (millions of recoverable pounds)	Molybdenum (millions of recoverable pounds)											Molybdenum (millions of recoverable pounds)
Productionb		9		9			17		17
Productiona												Productiona	7		8

100% Operating Data	100% Operating Data											100% Operating Data
Leach operations	Leach operations											Leach operations
Leach ore placed in stockpiles (metric tons per day)	Leach ore placed in stockpiles (metric tons per day)	688,000		744,000			696,500		736,100			Leach ore placed in stockpiles (metric tons per day)	708,600		705,100
Average copper ore grade (percent)	Average copper ore grade (percent)	0.30		0.28			0.29		0.28			Average copper ore grade (percent)	0.28		0.28
Copper production (millions of recoverable pounds)	Copper production (millions of recoverable pounds)	265		265			527		500			Copper production (millions of recoverable pounds)	245		262

Mill operations	Mill operations											Mill operations
Ore milled (metric tons per day)	Ore milled (metric tons per day)	264,700		286,200			266,300		309,800			Ore milled (metric tons per day)	291,400		268,000
Average ore grade (percent):	Average ore grade (percent):											Average ore grade (percent):
Copper	Copper	0.36		0.37			0.37		0.34			Copper	0.36		0.37
Molybdenum	Molybdenum	0.03		0.02			0.03		0.02			Molybdenum	0.02		0.03
Copper recovery rate (percent)	Copper recovery rate (percent)	82.4		84.6			80.5		85.8			Copper recovery rate (percent)	80.9		78.7
Copper production (millions of recoverable pounds)	Copper production (millions of recoverable pounds)	155		176			306		354			Copper production (millions of recoverable pounds)	169		151

a.Includes reductions to average realized prices of $0.06 per pound of copper in second-quarter 2020 and $0.03 per pound of copper for the first six months of 2020 related to forward sales contracts covering 150 million pounds of copper sales for May and June 2020 at a fixed price of $2.34 per pound. There are no remaining forward sales contracts.

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

Our consolidated copper sales volumes from North America totaled ~~389~~381 million pounds in ~~second-quarter 2021, 368~~first-quarter 2022, compared with 308 million pounds of copper in ~~second-quarter 2020, 697 million pounds for the first six months of~~first-quarter 2021, ~~and 723 million pounds for the first six months of 2020. The changes in sales volumes for the 2021 periods, compared with the 2020 periods,~~ primarily ~~reflect~~reflecting timing of shipments.

North America copper sales are estimated to approximate ~~1.47~~1.5 billion pounds for the year ~~2021, compared with 1.4 billion pounds for the year 2020.~~2022.

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Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure intended to provide 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.

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.

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	Three Months Ended March 31,
	2022						2021
	By- Product Method		Co-Product Method				By- Product Method		Co-Product Method
			Copper		Molyb- denuma				Copper		Molyb- denuma
Revenues, excluding adjustments	$	4.62	$	4.62	$	17.97	$	3.88	$	3.88	$	10.49

Site production and delivery, before net noncash and other costs shown below	2.38		2.20		10.95		2.04		1.89		6.67
By-product credits	(0.34)		—		—		(0.30)		—		—
Treatment charges	0.09		0.09		—		0.11		0.10		—
Unit net cash costs	2.13		2.29		10.95		1.85		1.99		6.67
DD&A	0.27		0.25		0.88		0.26		0.24		0.46

Noncash and other costs, net	0.07		0.07		0.14		0.13		0.13		0.06
Total unit costs	2.47		2.61		11.97		2.24		2.36		7.19
Revenue adjustments, primarily for pricing on prior period open sales	0.03		0.03		—		0.02		0.02		—
Gross profit per pound	$	2.18	$	2.04	$	6.00	$	1.66	$	1.54	$	3.30

Copper sales (millions of recoverable pounds)	381		381				308		308
Molybdenum sales (millions of recoverable pounds)a					7						8

Three Months Ended June 30,
2021 2020
By- Product Method Co-Product Method By- Product Method Co-Product Method
Copper
Molyb-
denuma
Copper
Molyb-
denuma
Revenues, excluding adjustments $ 4.42 $ 4.42 $ 11.75 $ 2.42 b $ 2.42 $ 8.33
Site production and delivery, before net noncash
and other costs shown below
2.14 2.03 6.86 1.85 1.73 6.76
By-product credits (0.25) — — (0.17) — —
Treatment charges 0.08 0.07 — 0.10 0.10 —
Unit net cash costs 1.97 2.10 6.86 1.78 1.83 6.76
DD&A 0.26 0.25 0.55 0.24 0.22 0.55
Metals inventory adjustments — — — (0.24) (0.24) —
Noncash and other costs, net 0.08

0.08 0.06 0.09 c 0.09 0.08
Total unit costs 2.31 2.43 7.47 1.87 1.90 7.39
Revenue adjustments, primarily for pricing
on prior period open sales
0.02 0.02 — 0.02 0.02 —
Gross profit per pound $ 2.13 $ 2.01 $ 4.28 $ 0.57 $ 0.54 $ 0.94
Copper sales (millions of recoverable pounds) 389 389 368 368
Molybdenum sales (millions of recoverable pounds)a
9 9

Six months ended June 30,
2021 2020
By- Product Method Co-Product Method By- Product Method Co-Product Method
Copper
Molyb-
denuma
Copper
Molyb-
denuma
Revenues, excluding adjustments $ 4.19 $ 4.19 $ 11.12 $ 2.50 b $ 2.50 $ 8.99
Site production and delivery, before net noncash
and other costs shown below
2.09 1.96 6.76 2.00 1.85 7.81
By-product credits (0.27) — — (0.19) — —
Treatment charges 0.09 0.09 — 0.10 0.10 —
Unit net cash costs 1.91 2.05 6.76 1.91 1.95 7.81
DD&A 0.26 0.24 0.51 0.25 0.23 0.64
Metals inventory adjustments — — — 0.08 0.07 —
Noncash and other costs, net 0.11 0.11 0.06 0.09 c 0.09 0.15
Total unit costs 2.28 2.40 7.33 2.33 2.34 8.60
Revenue adjustments, primarily for pricing
on prior period open sales
0.01 0.01 — (0.03) (0.03) —
Gross profit per pound $ 1.92 $ 1.80 $ 3.79 $ 0.14 $ 0.13 $ 0.39
Copper sales (millions of recoverable pounds) 697 697 722 722
Molybdenum sales (millions of recoverable pounds)a
17 17

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 reductions to average realized prices of $0.06 per pound of copper in second-quarter 2020 and $0.03 per pound of copper for the first six months of 2020 related to forward sales contracts covering 150 million pounds of copper sales for May and June 2020 at a fixed price of $2.34 per pound. There are no remaining forward sales contracts.

c.Includes charges totaling $0.06 per pound of copper in second-quarter 2020 and $0.03 per pound of copper for the first six months of 2020, primarily associated with the April 2020 revised operating plans (including employee separation costs) and the COVID-19 pandemic.

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 ~~$1.97~~$2.13 per pound of copper in ~~second-quarter 2021~~first-quarter 2022 were higher than unit net cash costs of ~~$1.78~~$1.85 per pound in ~~second-quarter 2020,~~first-quarter 2021, primarily reflecting ~~costs associated with higher~~increased mining and milling rates and higher ~~maintenance~~energy and other input costs, partly offset by higher by-product credits. Average unit net cash costs (net of by-product credits) of $1.91 per pound of copper for first six months of 2021 approximated average unit net cash costs for the first six months of 2020.sales volumes.

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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.

Average unit net cash costs (net of by-product credits) for our North America copper mines are expected to approximate ~~$1.91~~$2.22 per pound of copper for the year ~~2021,~~2022, based on achievement of current sales volume and cost estimates and assuming an average molybdenum price of ~~$16.00~~$19.00 per pound for the ~~second half~~remainder of ~~2021.~~2022. North America’s average unit net cash costs for the year ~~2021~~2022 would change by approximately ~~$0.02~~$0.03 per pound for each $2$2.00 per pound change in the average price of molybdenum for the ~~second half~~remainder of ~~2021.~~2022.

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South America Mining

We operate two copper mines in South America – Cerro Verde in Peru (in which we own a 53.56 percent interest) and El Abra in Chile (in which we own a 51 percent interest), which are consolidated in our financial statements.

South America mining includes open-pit mining, ~~sulfide ore~~sulfide-ore concentrating, leaching and SX/EW operations. Production from our South America mines is sold as copper concentrate or cathode under long-term contracts. Our South America mines also sell a portion of their copper concentrate production to Atlantic Copper. In addition to copper, the Cerro Verde mine produces molybdenum concentrate and silver.

~~Cerro Verde Labor Agreement.~~

During second-quarter 2021, Cerro Verde reached agreements with 57 percent of its hourly employees (including early agreement of a new four-year collective labor agreement (CLA) with one of its three unions) and incurred nonrecurring charges totaling $69 million associated with these agreements. Negotiations for new CLAs for Cerro Verde's remaining hourly employees are ongoing. The current CLA is scheduled to expire on August 31, 2021.

Operating and Development Activities. During first-quarter 2022, milling rates at Cerro Verde's concentrator facilities ~~have continued~~averaged 394,400 metric tons of ore per day. Subject to ~~perform well with~~ongoing monitoring of COVID-19 protocols, milling rates ~~averaging 382,100~~at Cerro Verde are currently expected to average approximately 400,000 metric tons of ore per day for the ~~first six months~~remainder of ~~2021. Cerro Verde expects milling rates to return to pre-COVID-19 pandemic levels of approximately 400,000 metric tons of ore per day in~~ 2022.

~~El Abra continues to implement plans to increase operating rates to pre-COVID-19 pandemic levels, subject to ongoing monitoring of public health conditions in Chile. Stacking~~

Operating rates at El Abra ~~averaged 94,200 metric tons per day in second-quarter 2021, approximately 25 percent higher than second-quarter 2020. Increased~~have returned to pre-COVID-19 levels and increased mining and stacking ~~rates~~activities are expected to result in ~~incremental annual~~an approximate 30 percent increase in El Abra copper production ~~of approximately 70 million pounds of copper beginning in mid-2022,~~for the year 2022, compared with ~~2020 levels. A new leach pad is under construction to accommodate planned stacking rates for~~ the ~~next several years.~~year 2021.

~~We continue to evaluate a large-scale expansion at El Abra to process additional sulfide material and to achieve higher copper recoveries.~~ El Abra's large sulfide resource ~~could potentially support~~supports a potential major mill project similar to ~~facilities~~the large-scale concentrator constructed at Cerro Verde in 2015. Technical and economic studies continue to be evaluated to determine the optimal scope and timing for the sulfide project. We are ~~monitoring~~engaging stakeholders and preparing data required for submission of a robust permit application, while we continue to monitor potential changes in ~~government~~Chile’s regulatory and fiscal ~~matters in Chile and~~matters. We will defer major investment decisions pending clarity on ~~these~~Chile’s regulatory and fiscal matters.

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Operating Data. Following is summary consolidated operating data for South America mining:


		Three Months Ended June 30,					Six months ended June 30,						Three Months Ended March 31,

		2021		2020			2021		2020				2022		2021
Copper (millions of recoverable pounds)	Copper (millions of recoverable pounds)											Copper (millions of recoverable pounds)
Production	Production	245		218			504		463			Production	274		259
Sales	Sales	230		219			489		466			Sales	264		259
Average realized price per pound	Average realized price per pound	$	4.31	$	2.67		$	4.28	$	2.57		Average realized price per pound	$	4.69	$	3.96

Molybdenum (millions of recoverable pounds)	Molybdenum (millions of recoverable pounds)											Molybdenum (millions of recoverable pounds)
Productiona	Productiona	4		4			9		8			Productiona	7		5

Leach operations	Leach operations											Leach operations
Leach ore placed in stockpiles (metric tons per day)	Leach ore placed in stockpiles (metric tons per day)	190,200		141,900			172,100		162,200			Leach ore placed in stockpiles (metric tons per day)	139,800		153,800
Average copper ore grade (percent)	Average copper ore grade (percent)	0.33		0.33			0.34		0.35			Average copper ore grade (percent)	0.36		0.36
Copper production (millions of recoverable pounds)	Copper production (millions of recoverable pounds)	65		62			126		125			Copper production (millions of recoverable pounds)	61		61

Mill operations	Mill operations											Mill operations
Ore milled (metric tons per day)	Ore milled (metric tons per day)	374,100		251,800		b	382,100		300,700		b	Ore milled (metric tons per day)	394,400		390,100
Average ore grade (percent):	Average ore grade (percent):											Average ore grade (percent):
Copper	Copper	0.29		0.39			0.30		0.36			Copper	0.33		0.31
Molybdenum	Molybdenum	0.01		0.01			0.01		0.01			Molybdenum	0.02		0.01

Copper recovery rate (percent)	Copper recovery rate (percent)	85.2		83.9			86.4		80.8			Copper recovery rate (percent)	86.6		87.6
Copper production (millions of recoverable pounds)	Copper production (millions of recoverable pounds)	179		156			377		338			Copper production (millions of recoverable pounds)	213		198

a.Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde.

b.~~Cerro Verde mill operations were negatively impacted by COVID-19 restrictions.~~

Our consolidated copper sales volumes from South America totaled ~~230~~264 million pounds in ~~second-quarter 2021, 219~~first-quarter 2022, similar to copper sales volumes of 259 million pounds in second-quarter 2020, 489 million pounds for the first six months of 2021 and 466 million pounds for the first six months of 2020. Higher copper sales volumes in the 2021 periods, compared with the 2020 periods, primarily reflect higher milling rates at Cerro Verde, partly offset by timing of shipments.

first-quarter 2021. Copper sales from South America mining are expected to approximate ~~1.05~~1.15 billion pounds for the year ~~2021, slightly higher than the year 2020.~~2022.

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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 ~~(Loss)~~ per Pound of Copper

The following table summarizes unit net cash costs and gross profit ~~(loss)~~ per pound of copper at our South America mining operations. Unit net cash costs per pound of copper are reflected under the by-product and co-product methods as the South America mining operations also had sales of molybdenum and silver. 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.

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	Three Months Ended March 31,
	2022				2021
	By-Product Method		Co-Product Method		By-Product Method		Co-Product Method
Revenues, excluding adjustments	$	4.69	$	4.69	$	3.96	$	3.96

Site production and delivery, before net noncash and other costs shown below	2.43		2.22		2.01		1.90
By-product credits	(0.43)		—		(0.21)		—
Treatment charges	0.15		0.15		0.13		0.13
Royalty on metals	0.01		0.01		0.01		0.01
Unit net cash costs	2.16		2.38		1.94		2.04
DD&A	0.37		0.33		0.39		0.37

Noncash and other costs, net	0.07		0.07		0.04		0.03
Total unit costs	2.60		2.78		2.37		2.44
Revenue adjustments, primarily for pricing on prior period open sales	0.21		0.21		0.32		0.32
Gross profit per pound	$	2.30	$	2.12	$	1.91	$	1.84

Copper sales (millions of recoverable pounds)	264		264		259		259

Three Months Ended June 30,
2021 2020
By-Product
Method Co-Product
Method By-Product
Method Co-Product
Method
Revenues, excluding adjustments $ 4.31 $ 4.31 $ 2.67 $ 2.67
Site production and delivery, before net noncash and other costs shown below 2.48 a 2.30 1.64 1.57
By-product credits (0.31) — (0.11) —
Treatment charges 0.13 0.13 0.15 0.15
Royalty on metals 0.01 0.01 — —
Unit net cash costs 2.31 2.44 1.68 1.72
DD&A 0.40 0.37 0.47 0.44
Metals inventory adjustments — — (0.26) (0.26)
Noncash and other costs, net 0.08 0.07 0.32 b 0.30
Total unit costs 2.79 2.88 2.21 2.20
Revenue adjustments, primarily for pricing on prior period open sales 0.38 0.38 0.20 0.20
Gross profit per pound $ 1.90 $ 1.81 $ 0.66 $ 0.67
Copper sales (millions of recoverable pounds) 230 230 219 219

Six months ended June 30,
2021 2020
By-Product
Method Co-Product
Method By-Product
Method Co-Product
Method
Revenues, excluding adjustments $ 4.28 $ 4.28 $ 2.57 $ 2.57
Site production and delivery, before net noncash and other costs shown below 2.23 a 2.09 1.84 1.72
By-product credits (0.26) — (0.14) —
Treatment charges 0.13 0.13 0.15 0.15
Royalty on metals 0.01 0.01 — —
Unit net cash costs 2.11 2.23 1.85 1.87
DD&A 0.40 0.37 0.45 0.42
Metals inventory adjustments — — 0.01 0.01
Noncash and other costs, net 0.06 0.05 0.21 b 0.20
Total unit costs 2.57 2.65 2.52 2.50
Revenue adjustments, primarily for pricing on prior period open sales 0.20 0.20 (0.15) (0.15)
Gross profit (loss) per pound $ 1.91 $ 1.83 $ (0.10) $ (0.08)
Copper sales (millions of recoverable pounds) 489 489 466 466

a.Includes $0.30 per pound of copper in second-quarter 2021 and $0.14 per pound of copper for the first six months of 2021 associated with nonrecurring labor-related charges at Cerro Verde Verde for agreements reached with 57 percent of its hourly employees.

b.Includes charges totaling $0.30 per pound of copper in second-quarter 2020 and $0.18 per pound of copper for the first six months of 2020, primarily associated with idle facility (Cerro Verde) and contract cancellation costs related to the COVID-19 pandemic and employee separation costs associated with the April 2020 revised operating plans.

Our South America mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) for ~~the~~ South America ~~copper mines were $2.31~~mining of $2.16 per pound of copper in ~~second-quarter 2021, $1.68~~first-quarter 2022 were higher than unit net cash costs of $1.94 per pound of copper in ~~second-quarter 2020, $2.11 per pound of copper for the first six months of~~first-quarter 2021, primarily reflecting higher acid, energy and ~~$1.85 per pound of copper for the first six months of 2020. Higher unit net cash~~other input costs, in the 2021 periods, compared with the 2020 periods, primarily reflect increased mining and milling activities and non-recurring labor-related costs at Cerro Verde ($0.30 per pound in second-quarter 2021 and $0.14 per pound for the first six months of 2021), partly offset by higher ~~volumes.~~by-product credits.

Revenues from Cerro Verde’s concentrate sales are recorded net of treatment charges, which will vary with Cerro Verde’s sales volumes and the price of copper.

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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 mining are expected to approximate ~~$2.02~~$2.23 per pound of copper for the year ~~2021,~~2022, based on current sales volume and cost estimates and assuming an average price of ~~$16.00~~$19.00 per pound of molybdenum for the ~~second half~~remainder of ~~2021.~~2022.

Indonesia Mining

PT-FI operates one of the world’s largest copper and gold mines at the Grasberg minerals district in Papua, Indonesia. PT-FI produces copper concentrate that contains significant quantities of gold and silver. We have a 48.76 percent interest in PT-FI and manage its mining operations. As further discussed in Note 2 of our ~~2020~~2021 Form 10-K, under the terms of the 2018 shareholders agreement, our economic interest in PT-FI approximates 81 percent through ~~2022.~~2022, and 48.76 percent thereafter. PT-FI’s results are consolidated in our financial statements.

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PT-FI continues to operate with protocols designed to protect the health and safety of its workforce during the COVID-19 pandemic. During second-quarter 2021, PT-FI began to administer vaccines to its workforce and expects this program to accelerate through the second half of 2021. Following an increase in COVID-19 cases in Indonesia, PT-FI has recently reinstituted heightened protocols and travel restrictions to protect the health of its workforce and the surrounding community.

Substantially all of PT-FI’s copper concentrate is sold under long-term contracts. During ~~first six months of 2021, 46~~first-quarter 2022, 37 percent of PT-FI’s concentrate production was sold to PT Smelting (PT-FI’s 39.5-percent owned copper smelter and refinery in Gresik, Indonesia).

Operating and Development Activities. ~~The ramp-up of~~PT-FI currently has three underground ~~production at~~operating mines in the Grasberg minerals ~~district in Indonesia continues to advance on schedule. Second-quarter 2021 highlights include:~~

•~~Production approximated 78 percent of the projected ultimate annualized level and is expected to reach 100 percent by year-end 2021.~~

•~~A total of 41 new drawbells were constructed at the~~district: Grasberg Block Cave, DMLZ and ~~Deep Mill Level Zone (DMLZ) underground mines, bringing cumulative open drawbells to over 460.~~

•~~Combined average production from the Grasberg Block Cave~~Big Gossan. In late 2021, PT-FI achieved quarterly copper and ~~DMLZ underground mines approximated 118,300 metric tons~~gold volumes approximating 100 percent of ~~ore per day. During second-quarter 2021, Grasberg Block Cave achieved a daily record~~projected annualized levels of ~~107,000 metric tons of ore per day.~~

~~The successful completion of this ramp up is expected to enable PT-FI to generate average annual production of 1.55~~approximately 1.6 billion pounds of copper and 1.6 million ounces of ~~gold~~gold.

Combined milling rates from PT-FI's underground mines averaged 186,500 metric tons of ore per day in first-quarter 2022, and PT-FI expects milling rates to average approximately 180,000 to 190,000 metric tons of ore per day for the ~~next several years~~remainder of 2022. The installation of additional milling facilities at ~~an attractive unit net cash cost, providing significant margins~~PT-FI is in progress and ~~cash flows. PT-FI expects production for the year 2021~~is currently expected to ~~approximate 1.3 billion pounds~~be completed in 2023, which will increase milling capacity to approximately 240,000 metric tons of ~~copper and 1.3 million ounces of gold, nearly double 2020 levels.~~ore per day.

PT-FI's estimated ~~annual~~ capital spending on the Grasberg Block Cave and DMLZ underground ~~mine development~~ projects for the year 2022 is expected to ~~average approximately $0.9~~approximate $1.0 billion, ~~per year for 2021 and 2022,~~ net of scheduled contributions from PT ~~Inalum.~~Indonesia Asahan

Aluminium (Persero) (PT Inalum, also known as MIND ID). PT-FI is also advancing construction of a dual-fuel power plant and upgrades to the mill circuit to improve recoveries. In accordance with applicable accounting guidance, the aggregate costs (before scheduled contributions from PT Inalum), ~~which are~~ expected to ~~average $1.1~~approximate $1.2 billion ~~per~~for the year ~~for 2021 and~~ 2022, will be reflected as an investing activity in our cash flow statement, and contributions from PT Inalum will be reflected as a financing activity.

Kucing Liar. PT-FI commenced long-term mine development activities for its Kucing Liar deposit during 2021, which is expected to produce over 6 billion pounds of copper and 5 million ounces of gold over the life of the project. Pre-production development activities will occur over an approximate 10-year timeframe, and capital investments are expected to average approximately $400 million per year over the next 10 years. At full operating rates, annual production from Kucing Liar is expected to approximate 600 million pounds of copper and 500 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.

41Export License. In March 2022, PT-FI received a one-year extension of its export license through March 19, 2023, for two million metric tons of concentrate. Export licenses are valid for a one-year period, subject to review and approval by the Indonesia government every six months, depending on smelter construction progress.

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Indonesia Smelter. ~~As discussed in Note 13~~In connection with PT-FI’s 2018 agreement with the Indonesia government to secure the extension of ~~our 2020 Form 10-K,~~its long-term mining rights, PT-FI committed to construct ~~new~~additional domestic smelting capacity totaling 2 million metric tons of concentrate per year by ~~December 2023.~~the end of 2023 (subject to force majeure provisions).

~~To fulfill its obligation for new domestic smelter capacity in Indonesia,~~ PT-FI is ~~planning~~actively engaged in the ~~following:~~

•Expansion of annual capacity at PT Smelting by 300,000 metric tons of concentrate, a 30 percent increase. PT-FI is advancing agreements with the majority owner of PT Smelting to implement the expansion plans with a target completion date of year-end 2023. PT-FI would fund the cost of the expansion, estimated to approximate $250 million, and increase its ownership in PT Smelting to a majority ownership interest.following projects for additional domestic smelting capacity:

•Construction of a ~~new~~ greenfield smelter in Gresik, Indonesia with a capacity to process approximately 1.7 million metric tons of copper concentrate per year. In July 2021, PT-FI awarded a construction contract to ~~Chiyoda~~a third-party contractor with an estimated ~~contract~~ cost of $2.8 billion. PT-FI continues to progress site preparation activities, early works and engineering procurement and construction activities. The smelter construction is expected to be completed as soon as feasible in 2024, consistent with PT-FI’s revised smelter construction schedule.

•Expansion of PT Smelting's capacity by 30 percent to 1.3 million metric tons of concentrate per year, which is ~~dependent on no further pandemic-related disruptions.~~expected to be completed by the end of 2023. PT-FI is funding the cost of the expansion, which is estimated to approximate $250 million, with a loan that will convert to equity, and increase ownership in PT Smelting to a majority ownership interest once the expansion is complete.

•Construction of a ~~precious metals refinery~~PMR to process gold and silver from ~~PT Smelting and~~ the ~~new~~ greenfield smelter ~~in Gresik,~~and PT Smelting at an estimated cost of $250 million.

~~All costs of~~During first-quarter 2022, capital expenditures for the greenfield smelter ~~development in~~and PMR (collectively, the Indonesia ~~will be shared 49 percent by FCX~~smelter projects) totaled $0.1 billion, and ~~51 percent by PT Inalum, and will be largely offset by a phase-out~~are expected to approximate $1.4 billion for the year 2022. Construction of the ~~5 percent~~additional domestic smelter capacity will result in the elimination of export ~~duty currently paid~~duties, providing an offset to the economic cost associated with the Indonesia ~~government as well as the tax deductibility~~smelter projects.

Table of smelter costs by PT-FI. In July 2021, PT-FI entered into a $1 billion, five-year, unsecured credit facility to advance these project and additional debt financing is being evaluated. Refer to Note 5 andContents

As further discussed in “Capital Resources and ~~Liquidity” for further discussion~~Liquidity,” PT-FI completed the sale of $3.0 billion of senior notes in April 2022, which will be used together with PT-FI’s available bank credit facilities primarily to fund the ~~credit facility.~~Indonesia smelter projects.

Operating Data. Following is summary consolidated operating data for Indonesia mining:


		Three Months Ended June 30,				Six months ended June 30,						Three Months Ended March 31,

		2021		2020		2021		2020				2022		2021
Copper (millions of recoverable pounds)	Copper (millions of recoverable pounds)										Copper (millions of recoverable pounds)
Production	Production	308		181		606		321			Production	381		298
Sales	Sales	310		172		568		299			Sales	379		258
Average realized price per pound	Average realized price per pound	$	4.27	$	2.67	$	4.29	$	2.54		Average realized price per pound	$	4.69	$	4.00

Gold (thousands of recoverable ounces)	Gold (thousands of recoverable ounces)										Gold (thousands of recoverable ounces)
Production	Production	303		189		597		341			Production	412		294
Sales	Sales	302		180		558		319			Sales	406		256
Average realized price per ounce	Average realized price per ounce	$	1,795	$	1,748	$	1,785	$	1,709		Average realized price per ounce	$	1,920	$	1,713

Ore extracted and milled (metric tons per day):	Ore extracted and milled (metric tons per day):										Ore extracted and milled (metric tons per day):
Grasberg Block Cave underground minea		64,400		27,200		58,100		23,100
DMLZ underground minea		53,900		27,600		50,300		23,100
DOZ underground mine		10,800		21,600		14,700		20,900
Grasberg Block Cave underground mine											Grasberg Block Cave underground mine	100,400		51,800
DMLZ underground mine											DMLZ underground mine	78,400		46,700
Big Gossan underground mine	Big Gossan underground mine	8,200		5,900		7,500		6,300			Big Gossan underground mine	7,700		6,800
Grasberg open pit		—		—		—		3,600		b
Other		5,700		(400)		3,000		—
Deep Ore Zone underground minea and other											Deep Ore Zone underground minea and other	—		18,800

Total	Total	143,000		81,900		133,600		77,000			Total	186,500		124,100
Average ore grades:	Average ore grades:										Average ore grades:
Copper (percent)	Copper (percent)	1.28		1.27		1.34		1.21			Copper (percent)	1.23		1.41
Gold (grams per metric ton)	Gold (grams per metric ton)	1.00		1.04		1.03		1.02			Gold (grams per metric ton)	1.03		1.08
Recovery rates (percent):	Recovery rates (percent):										Recovery rates (percent):
Copper	Copper	88.8		91.7		90.0		91.7			Copper	89.4		91.3
Gold	Gold	75.9		78.3		77.4		77.6			Gold	77.2		78.9

a.~~Includes ore from development activities that result~~Ore body depleted in ~~metal production.~~

b.~~Represents ore from the Grasberg open-pit stockpiles.~~2021.

Our consolidated ~~copper and gold~~ sales from PT-FI totaled ~~310~~379 million pounds of copper and ~~302~~406 thousand ounces of gold in ~~second quarter 2021 and 568~~

first-quarter 2022, compared with consolidated sales of 258 million pounds of copper and ~~558~~256 thousand ounces ~~for the first six months~~ of gold in first-quarter 2021, compared with copper and gold sales of 172 million pounds and 180 thousand ounces in second-quarter 2020 and 299 million pounds and 319 thousand ounces for the first six months of 2020. The increase in sales volumes for the 2021 periods primarily ~~reflects~~reflecting the ramp-up of underground mining ~~at PT-FI.~~

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in the Grasberg minerals district.

Consolidated sales volumes from PT-FI are expected to approximate ~~1.33~~1.6 billion pounds of copper and ~~1.3~~1.6 million ounces of gold for the year ~~2021, compared with 0.8 billion pounds of copper and 0.8 million ounces of gold for the year 2020.~~2022.

Unit Net Cash (Credits) Costs. Unit net cash (credits) costs per pound of copper is a measure intended to provide 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 costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

Three Months Ended June 30,
2021 2020
By-Product Method Co-Product Method By-Product Method Co-Product Method
Copper Gold Copper Gold
Revenues, excluding adjustments $ 4.27 $ 4.27 $ 1,795 $ 2.67 $ 2.67 $ 1,748
Site production and delivery, before net noncash and other costs shown below 1.54 1.07 449 2.00 1.17 766
Gold and silver credits (1.93) — — (1.95) — —
Treatment charges 0.24 0.16 70 0.27 0.16 105
Export duties 0.14 0.10 42 0.09 0.05 35
Royalty on metals 0.26 0.19 66 0.15 0.08 65
Unit net cash costs 0.25 1.52 627 0.56 1.46 971
DD&A 0.79 0.55 232 0.72 0.42 276
Noncash and other costs, net 0.04

0.03 11 0.05 a 0.03 17
Total unit costs 1.08 2.10 870 1.33 1.91 1,264
Revenue adjustments, primarily for pricing on prior period open sales 0.28 0.28 53 0.07 0.07 41
PT Smelting intercompany loss (0.13) (0.09) (39) (0.15) (0.09) (57)
Gross profit per pound/ounce $ 3.34 $ 2.36 $ 939 $ 1.26 $ 0.74 $ 468
Copper sales (millions of recoverable pounds) 310 310 172 172
Gold sales (thousands of recoverable ounces) 302 180

4336

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		Six Months Ended June 30,																			Three Months Ended March 31,
		2021							2020												2022												2021
		By-Product Method			Co-Product Method				By-Product Method				Co-Product Method								By-Product Method				Co-Product Method								By-Product Method				Co-Product Method
					Copper		Gold				Copper				Gold								Copper				Gold								Copper				Gold
Revenues, excluding adjustments	Revenues, excluding adjustments	$	4.29		$	4.29	$	1,785			$	2.54			$	2.54			$	1,709		Revenues, excluding adjustments	$	4.69			$	4.69			$	1,920			$	4.00			$	4.00			$	1,713

Site production and delivery, before net noncash and other costs shown below		1.51			1.05		439		2.29				1.31				884
Site production and delivery, before net noncash and other costs (credits) shown below																			Site production and delivery, before net noncash and other costs (credits) shown below		1.41				0.96				395				1.48				1.02				438
Gold and silver credits	Gold and silver credits	(1.86)			—		—		(1.91)				—				—		Gold and silver credits		(2.17)				—				—				(1.79)				—				—
Treatment charges	Treatment charges	0.24			0.17		71		0.28				0.17				110		Treatment charges		0.25				0.17				69				0.25				0.17				74
Export duties	Export duties	0.13			0.09		37		0.07				0.04				25		Export duties		0.21				0.14				59				0.11				0.08				33
Royalty on metals	Royalty on metals	0.25			0.18		68		0.15				0.08				58		Royalty on metals		0.24				0.17				69				0.24				0.16				71
Unit net cash costs		0.27			1.49		615		0.88				1.60				1,077
Unit net cash (credits) costs																			Unit net cash (credits) costs		(0.06)				1.44				592				0.29				1.43				616
DD&A	DD&A	0.78			0.55		228		0.75				0.43				289		DD&A		0.66				0.45				183				0.77				0.53				228
Noncash and other costs, net		0.01		b	—		1		0.12		a		0.06				45
Noncash and other costs (credits), net																			Noncash and other costs (credits), net		0.07		a		0.05				20				(0.03)		b		(0.02)				(10)
Total unit costs	Total unit costs	1.06			2.04		844		1.75				2.09				1,411		Total unit costs		0.67				1.94				795				1.03				1.94				834
Revenue adjustments, primarily for pricing on prior period open sales	Revenue adjustments, primarily for pricing on prior period open sales	0.12			0.12		(8)		(0.07)				(0.07)				14		Revenue adjustments, primarily for pricing on prior period open sales		0.15				0.15				8				0.25				0.25				(19)
PT Smelting intercompany loss	PT Smelting intercompany loss	(0.16)			(0.11)		(46)		—				—				—		PT Smelting intercompany loss		(0.13)				(0.09)				(39)				(0.20)				(0.14)				(56)
Gross profit per pound/ounce	Gross profit per pound/ounce	$	3.19		$	2.26	$	887	$	0.72			$	0.38			$	312	Gross profit per pound/ounce		$	4.04			$	2.81			$	1,094			$	3.02			$	2.17			$	804

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	568			568				299				299						Copper sales (millions of recoverable pounds)		379				379								258				258
Gold sales (thousands of recoverable ounces)	Gold sales (thousands of recoverable ounces)						558										319		Gold sales (thousands of recoverable ounces)										406												256

a.Includes ~~COVID-19 related costs of $0.03~~charges totaling $0.11 per pound of copper ~~in second-quarter2020~~associated with the settlement of an administrative fine levied by the Indonesia government (refer to Note 8 for further discussion), and ~~$0.01~~$0.05 per pound of copper ~~for the first six months of 2020.~~

b.~~Includes~~associated with an adjustment to prior-period export duties, partly offset by credits ~~of $0.05~~totaling $0.08 per pound of copper associated with adjustments to prior year treatment and refining costs.

b.Includes credits totaling $0.12 per pound of copper associated with adjustments to prior year treatment and refining costs, partly offset by charges ~~and charges of $0.03~~totaling $0.05 per pound of copper associated with a potential settlement of an administrative fine levied by the Indonesia government.

~~Because~~In first-quarter 2022, PT-FI’s gold and silver credits exceeded its cash costs, resulting in unit net cash credits of ~~the fixed nature~~$0.06 per pound of ~~a large portion of PT-FI's costs,~~copper, compared to unit net cash costs ~~can vary significantly from quarter to quarter depending on copper and gold volumes. PT-FI’s unit net cash costs (including~~(net of gold and silver credits) of ~~$0.25 per pound of copper in second-quarter 2021 and $0.27 per pound for the first six months of 2021, were lower than $0.56~~$0.29 per pound in ~~second-quarter 2020 and $0.88 per pound for the first six months of 2020,~~first-quarter 2021, primarily reflecting higher sales ~~volumes.~~volumes, partly offset by higher operating rates, energy and other input costs.

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 export duties totaled ~~$44~~$79 million in ~~second-quarter 2021, $16~~first-quarter 2022 and $29 million in ~~second-quarter 2020, $73 million for the first six months of 2021 and $20 million for the first six months of 2020. PT-FI will continue to pay~~first-quarter 2021. The increase in export duties ~~until development progress for new domestic smelting~~in first-quarter 2022, compared with ~~an annual capacity of 2 million metric tons of concentrate exceeds 50 percent.~~ first-quarter 2021, primarily reflects higher sales volumes.

PT-FI’s royalties totaled ~~$80~~$92 million in ~~second-quarter 2021, $25~~first-quarter 2022 and $61 million in ~~second-quarter 2020, $140 million for the first six months of 2021 and $44 million for the first six months of 2020.~~first-quarter 2021. The increase in export duties and royalties for ~~the 2021 periods,~~first-quarter 2022, compared with ~~the 2020 periods,~~first-quarter 2021, primarily ~~reflect~~reflects higher sales volumes and ~~copper~~metals prices.

Because certain assets are depreciated on a straight-line basis, PT-FI’s unit depreciation rate may vary with asset additions and the level of copper production and sales. DD&A per pound of copper under the by-product method was ~~$0.79~~$0.66 per pound in ~~second-quarter 2021 and $0.78 per pound for the first six months of 2021,~~first-quarter 2022, compared with ~~$0.72~~$0.77 per pound in ~~second-quarter 2020 and $0.75 per pound for the first six months of 2020.~~first-quarter 2021. The ~~increase~~decrease in the rate per pound of copper ~~for the 2021 periods, compared with the 2020 periods,~~ primarily reflects depletion of the ~~impact of an ongoing ramp up~~Deep Ore Zone underground mine and the ramp-up of underground mining in the Grasberg minerals district, which resulted in significantly higher copper production and sales volumes, ~~and a related unit of production depreciation rate increase resulting from~~partly offset by significant underground development assets placed into service.

Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods.

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PT Smelting intercompany loss represents the change in the deferral of PT-FI’s profit on sales to PT Smelting (25 percent prior to April 30, 2021, and 39.5 percent thereafter). Refer to “Smelting and Refining” below for further discussion.

Assuming an average gold price of ~~$1,800~~$1,950 per ounce for the ~~second half~~remainder of ~~2021~~2022 and achievement of current sales volume and cost estimates, unit net cash costs ~~(including~~(net of gold and silver credits) for PT-FI are expected to approximate ~~$0.19~~$0.10 per pound of copper for the year ~~2021. PT-FI's~~2022. PT-FI’s unit net cash costs for the year ~~2021~~2022 would change by approximately ~~$0.06~~$0.09 per pound of copper for each $100 per ounce change in the average price of gold for the ~~second half~~remainder of ~~2021.~~2022.

PT-FI’s projected sales volumes and unit net cash costs for the year ~~2021~~2022 are dependent on a number of factors, including ~~continued progress of the ramp-up of underground mining,~~ operational performance ~~impacts and duration of the COVID-19 pandemic~~ and timing of shipments.

Molybdenum Mines

We operate two wholly owned molybdenum mines in Colorado – the Henderson underground mine and the Climax open-pit mine. The Henderson and Climax 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 Henderson and Climax mines, as well as from our North America and South America copper mines, is processed at our ~~own~~ conversion facilities.

Operating and Development Activities. Production from the Molybdenum mines oftotaled 7 million pounds of molybdenum in ~~second-quarter 2021~~both first-quarter 2022 and ~~14 million pounds~~first-quarter 2021. We plan on increasing mining rates at the Climax mine during 2022 to provide options to increase volumes in response to market demand for ~~the first six months of 2021, was slightly higher than production of 6 million pounds of molybdenum in second-quarter 2020 and 13 million pounds for the first six months of 2020.~~molybdenum. Refer to “Consolidated Results” for our consolidated molybdenum operating data, which includes sales of molybdenum produced at our Molybdenum mines and from our North America and South America copper mines. Refer to “Outlook” for projected consolidated molybdenum sales volumes.

Unit Net Cash Costs Per Pound of Molybdenum. Unit net cash costs per pound of molybdenum is a measure intended to provide 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 our Molybdenum mines of ~~$8.14~~$10.89 per pound of molybdenum in ~~second-quarter 2021 and $8.53 per pound for the first six months of 2021~~first-quarter 2022 were ~~lower~~higher than average unit net cash costs of ~~$8.97~~$8.98 per pound in ~~second-quarter 2020 and $9.52 per pound for the first six months of 2020,~~first-quarter 2021, primarily reflecting higher ~~volumes.~~mining rates at the Climax mine and increased development costs at the Henderson mine. Based on current sales volume and cost estimates, average unit net cash costs for the Molybdenum mines are expected to approximate ~~$9.65~~$12.00 per pound of molybdenum for the year ~~2021.~~2022.

Refer to “Product Revenues and Production Costs” for a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

Smelting and Refining

We wholly own and operate athe Miami smelter in Arizona, ~~(Miami smelter), a~~the El Paso refinery in Texas ~~(El Paso refinery)~~ and a smelter and refinery in Spain (Atlantic Copper). Additionally, PT-FI ~~also~~ has a 39.5 percent ownership interest in PT Smelting and expects its ownership to increase to a ~~smelter and refinery in Gresik, Indonesia (PT Smelting).~~majority interest upon completion of the expansion of PT Smelting’s smelting capacity. Treatment charges for smelting and refining copper concentrate consist of a base rate per pound of copper and per ounce of gold and are generally fixed. Treatment charges represent a cost to our mining operations and income to Atlantic Copper and PT Smelting. Thus, higher treatment charges benefit our smelter operations and adversely affect our mining operations. Our North America copper mines are less significantly affected by changes in treatment charges because these operations are largely integrated with our Miami smelter and El Paso refinery.

Through this form of downstream integration, we are assured placement of a significant portion of our concentrate production.

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Our Miami smelter processes concentrate produced by our U.S. mines and also provides acid for copper leaching operations. During the first six months of 2021, we incurred charges totaling $87 million associated with a major maintenance turnaround at our Miami smelter, which were higher than original estimates as a result of extended downtime to address additional required maintenance work, the COVID-19 pandemic and weather events. The next major maintenance turnaround is scheduled for the first half of 2024.

Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes. During ~~the first six months of 2021,~~first-quarter 2022, Atlantic Copper’s concentrate purchases included 3812 percent from our copper mining operations and 6288 percent from third parties.

Atlantic Copper’s major maintenance turnarounds typically occur approximately every eight years, with shorter-term maintenance turnarounds in the interim. In April 2022, Atlantic Copper began an approximately 60-day major maintenance turnaround, for which maintenance charges are expected to total approximately $25 million.

PT-FI’s contract with PT Smelting provides for PT-FI to supply 100 percent of the copper concentrate requirements (subject to a minimum or maximum treatment charge rate) necessary for PT Smelting to produce 205,000 metric tons of copper annually on a priority basis. PT-FI may also sell copper concentrate to PT Smelting at market rates for quantities in excess of 205,000 metric tons of copper annually. During ~~the first six months of 2021,~~first-quarter 2022, PT-FI supplied ~~the substantial majority~~all of PT Smelting’s concentrate requirements. In ~~July~~November 2021, PT-FI entered into a tolling agreement with PT Smelting ~~received a six-month extension of~~that will be effective January 1, 2023, and will replace the current concentrate sales agreements between PT-FI and PT Smelting. Under the tolling agreement, PT-FI will pay PT Smelting to smelt and refine its ~~anodes slimes export license, which currently expires December 30, 2021.~~concentrate and will retain title to all products for sale to third parties.

We defer recognizing profits on sales from our mining operations to Atlantic Copper and on 39.5 percent of PT-FI’s sales to PT Smelting ~~(on 25~~(25.0 percent ~~through~~prior to April 30, ~~2021, and on 39.5 percent thereafter)~~2021) until final sales to third parties occur. Changes in these deferrals attributable to variability in intercompany volumes resulted in net additions (reductions) ~~additions~~ to operating income ~~(loss)~~ totaling ~~$(99)~~$46 million ($~~(81)~~23 million to net income attributable to common stock) in ~~second-quarter 2021~~first-quarter 2022 and ~~$(17)~~$(85) million ($~~(6)~~(63) million to net income attributable to common stock) in second-quarter 2020, $(185) million ($(145) million to net income attributable to common stock) for the first six months of 2021 and $(6) million ($1 million to net loss attributable to common stock) for the first six months of 2020.first-quarter 2021. Our net deferred profits on our inventories at Atlantic Copper and PT Smelting to be recognized in future periods’ net income attributable to common stock totaled ~~$207~~$183 million at ~~June 30, 2021.~~March 31, 2022. 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. ~~We currently estimate that approximately 40 percent of the net deferred profit balance will be recognized as income in the second half of 2021.~~

CAPITAL RESOURCES AND LIQUIDITY

We generated significant cash flows during ~~the first six months of 2021,~~first-quarter 2022, reflecting strong operating and financial performance and favorable copper and gold prices. With a favorable market ~~conditions. This~~outlook and a focus on executing our operating plans, we expect to continue to generate strong ~~performance allowed us to achieve the balance sheet targets outlined in our financial policy discussed below earlier than originally projected. Accordingly, we are well positioned to increase~~cash flows that will support advancement of organic growth initiatives and additional cash returns to shareholders ~~and for investments in long-term growth.~~under our established financial policy.

We believe that we have a high-quality portfolio of long-lived copper assets positioned to generate long-term value. ~~PT-FI has several projects in~~During first-quarter 2022, we continued to increase operating rates at Lone Star and from the underground mines at the Grasberg minerals ~~district related to~~district. Pre-production development activities for the ~~development of its large-scale, long-lived, high-grade underground ore bodies that~~Kucing Liar deposit, which commenced during 2021, are progressing ~~on schedule. We are also evaluating~~and we continue to evaluate organic growth opportunities for expansion of certain of our operations in North America and South America, ~~to enhance net present values,~~including at Bagdad, Lone Star and ~~we continue to consider future development of our copper resources,~~El Abra, the timing of which will be dependent on, among other things, market conditions.

Based on current sales volume, cost and metal price estimates discussed in “Outlook,” our projected consolidated operating cash flows of $8.6 billion for the year 2022 significantly exceed our expected consolidated capital expenditures of $4.6 billion (which includes $1.9 billion for major mining projects and $1.4 billion for the Indonesia smelter projects) and other cash requirements for the year, including share repurchases, noncontrolling interest distributions, income tax payments, common stock dividends (base and variable) and debt repayments.

We believe that our cash generating capability and financial condition, which includes $8.3 billion of consolidated

cash and cash equivalents at March 31, 2022, together with ~~availability~~$3.5 billion available under our revolving

credit facility, will be adequate to meet our operating, investing and financing ~~needs.~~needs over the next several years. Additionally, capital expenditures for the Indonesia smelter projects are being funded with the net proceeds from PT-FI’s unsecured senior notes issued in April 2022 and its available bank credit facilities.

Subject to future commodity prices for copper, gold, and molybdenum, our projected consolidated operating cash flows of $7.5 billion for the year 2021 significantly exceed our expected consolidated capital expenditures of $2.2 billion (which excludes capital expenditures for smelter development in Indonesia) and other cash requirements for the year, including common stock dividends and noncontrolling interest distributions. We plan to fund our smelter development projects in Indonesia with PT-FI’s new $1 billion, unsecured bank credit facility (see “Debt” below and Note 5) and additional debt financing. Refer to “Outlook” for further discussion of projected operating cash flows and capital expenditures for ~~2021.~~

~~At June 30, 2021, we had $9.8 billion in liquidity, comprised~~the year 2022 and to “Debt” below and Note 5 for further discussion of ~~$6.3 billion in consolidated cash~~PT-FI’s unsecured senior notes and ~~$3.5 billion of availability under our revolving~~unsecured bank credit facility.

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Financial Policy. ~~In February 2021, our Board adopted a new~~Our financial policy ~~for the allocation of cash flows~~is aligned with our strategic objectives of maintaining a strong balance sheet and increasing cash returns to shareholders ~~and~~while advancing opportunities for future growth. Under the financial policy up to 50 percent of cash flows, after planned capital spending (excluding Indonesia smelter project investments) and distributions to noncontrolling interests, will be directed to shareholder returns with the balance available for investments in future value enhancing growth projects and further debt reductions. The ~~policy includes~~Board will review the structure and the amount of the performance-based payout framework at least annually.

In February 2021, our Board of Directors (the Board) reinstated a ~~base~~cash dividend on our common stock (base dividend) at an annual rate of $0.30 per ~~share per year and a performance-based payout framework to be implemented following achievement of a~~share. In mid-2021, FCX achieved its net debt target in the range of $3$3.0 billion to $4$4.0 billion ~~excluding project~~(excluding debt for additional smelting capacity in ~~Indonesia. Under~~Indonesia). In November 2021, the Board approved the implementation of the performance-based payout framework, ~~up to 50 percent~~including (i) a $3.0 billion share repurchase program and (ii) a variable cash dividend on common stock for 2022 at an expected annual rate 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 the Board’s discretion.

~~Available cash flows for performance-based payout distributions in excess~~$0.30 per share. The combined annual rate of the base dividend ~~will be assessed by~~and the variable dividend is expected to total $0.60 per share for 2022. Based on current shares outstanding totaling 1.45 billion, the total common stock dividends (base and variable) for 2022 are expected to approximate $0.9 billion. Refer to Note 5 and “Financing Activities” below for further discussion.

In March 2022, our Board ~~at least annually. With the recent achievement~~declared 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 cash dividend), which were paid on May 2, 2022, to shareholders of record as of April 14, 2022. Refer to Item 1A. “Risk Factors” contained in Part I of our ~~net debt target, we expect the Board to consider the amount of additional cash returns to shareholders following its~~ 2021 ~~annual results. As of June 30, 2021, our consolidated net debt totaled $3.4 billion, a $2.7 billion reduction from December 31, 2020 (refer to “Net Debt”~~Form 10-K, and “Cautionary Statement” below for further ~~discussion).~~discussion.

Cash

Following is a summary of the U.S. and international components of consolidated cash and cash equivalents available to the parent company, net of noncontrolling interests’ share, taxes and other costs at ~~June 30, 2021~~March 31, 2022 (in billions):


Cash at domestic companies	$	~~4.1~~5.4
Cash at international operations	~~2.2~~2.9
Total consolidated cash and cash equivalents	~~6.3~~8.3
Noncontrolling interests’ share	(0.8)
Cash, net of noncontrolling interests’ share	~~5.5~~7.5
Withholding taxes	~~(0.1)~~(0.2)
Net cash available	$	~~5.4~~7.3

Cash held at our international operations is generally used to support our foreign operations’ capital expenditures, operating expenses, debt ~~repayment,~~repayments, working capital and other tax payments, or other cash needs. Management believes that sufficient liquidity is available in the U.S. from cash balances and availability from our revolving credit facility. We have not elected to permanently reinvest earnings from our foreign subsidiaries, and we have recorded deferred tax liabilities for foreign earnings that are available to be repatriated to the U.S. From time to time, our foreign subsidiaries distribute earnings to the U.S. through dividends that are subject to applicable withholding taxes and noncontrolling interests’ share.

Debt

At ~~June 30, 2021, our~~March 31, 2022, we had consolidated debt ~~totaled $9.7~~of $9.6 billion, with a related weighted-average interest rate of 4.6 percent. We had no borrowings outstanding and $8 million in letters of credit issued under our revolving credit facility, resulting in availability of approximately $3.5 billion.

~~On July 19, 2021,~~ In April 2022,PT-FI ~~entered into a $1~~completed the sale of $3.0 billion ~~five-year,~~of unsecured ~~bank credit facility (consisting~~senior notes, consisting of ~~a $667~~$750 million ~~term loan~~aggregate principal amount of 4.763% senior notes due April 2027, $1.5 billion aggregate principal amount of 5.315% senior notes due April 2032 and ~~a $333~~$750 million ~~revolving credit facility~~)~~. Amounts may be drawn under~~aggregate principal amount of 6.200% senior notes due April 2052. PT-FI intends to use the ~~term loan within~~proceeds, net of underwriting fees, of $2.99 billion to finance its smelter projects, to refinance the ~~first three years. The loans mature in July 2026~~PT-FI Term Loan and ~~bear interest at the London Interbank Offered Rate plus a margin of 1.875% or 2.125%, as defined in the agreement.~~for general corporate purposes.

Refer to Note 5 for further discussion of the above ~~items.~~

~~We have $1.1 billion in maturities through June 2022, including~~items, and refer to Note 8 of our ~~3.55% Senior Notes ($0.5 billion due March 2022) and the final maturity of the Cerro Verde Term Loan ($0.5 billion due June 2022). We do not have any other senior note maturities until 2023.~~

~~For~~2021 Form 10-K for additional information regarding our debt ~~arrangements, refer to Note 8 included in our 2020 Form 10-K.~~arrangements.

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Operating Activities

We reported consolidated cash provided by operating activities of ~~$3.5~~$1.7 billion ~~(including $0.2~~(net of $0.8 billion of working capital and other ~~sources) for the first six months~~uses) in first-quarter 2022 and $1.1 billion (net of ~~2021 and $453 million (including $0.1~~$0.3 billion ~~from~~of working capital and other ~~sources) for the first six months of 2020.~~uses) in first-quarter 2021. Higher operating cash flows ~~for the first six months of 2021,~~in first-quarter 2022, compared with ~~the first six months of 2020,~~first-quarter 2021, primarily reflect higher copper ~~prices~~ and gold sales ~~volumes.~~volumes and prices. Increased working capital uses in first-quarter 2022, compared with first-quarter 2021, primarily reflects timing of copper concentrate purchases by Atlantic Copper in anticipation of their major maintenance turnaround that began in April 2022, and additional income tax payments.

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Investing Activities

Capital Expenditures. Capital expenditures, including capitalized interest, totaled ~~$0.8~~$0.7 billion ~~for the first six months of 2021,~~in first-quarter 2022, including approximately ~~$0.6~~$0.4 billion for major projects primarily associated with underground development activities in the Grasberg minerals district. Capital expenditures, including capitalized interest, totaled $1.1 billion for the first six months of 2020, including approximately $0.6 billion for majormining projects primarily associated with underground development activities in the Grasberg minerals district and $0.1 billion for the ~~Lone Star copper leach project.~~Indonesia smelter projects. Capital expenditures for the Indonesia smelter projects are being funded with the net proceeds from PT-FI's unsecured senior notes issued in April 2022 and its available bank credit facilities. Refer to “Outlook” for further discussion of projected capital expenditures for the year ~~2021.~~2022.

~~Proceeds from Sales of Assets.~~ ~~Proceeds from sales of assets~~Capital expenditures, including capitalized interest, totaled ~~$16 million~~$0.4 billion in first-quarter 2021, including approximately $0.3 billion for ~~the first six months of 2021 and $116 million for the first six months of 2020,~~major mining projects primarily associated with underground development activities in the ~~contingent consideration of $60 million from the 2016 sale of TF Holdings Limited and the collection of $45 million related to the 2019 sale of the Timok exploration assets in Serbia.~~

~~Acquisition of Minority Interest in PT Smelting.On April 30, 2021, PT-FI acquired 14.5 percent of the outstanding common stock of PT Smelting for $33 million, increasing its ownership interest from 25 percent to 39.5 percent.~~Grasberg minerals district.

Financing Activities

Debt Transactions. Net ~~repayments~~borrowings of debt totaled ~~$19~~$170 million in first-quarter 2022 and $98 million in first-quarter 2021. Refer to Note 5 for ~~the first six months of 2021 and net borrowings totaled $58 million for the first six months of 2020.~~further discussion.

During the first six months of 2020, we completed the sale of $1.3 billion in senior notes and used net proceeds to purchase or redeem our senior notes due 2021 and to purchase a portion of our senior notes due 2022. We recorded losses on early extinguishment of debt totaling $41 million for the first six months of 2020 related to these transactions.

Cash Dividends and Distributions Paid. We paid cash dividends on our common stock totaling ~~$111~~$220 million ~~for the first six months of 2021~~in first-quarter 2022 and ~~$73 million for the first six months of 2020.~~

~~On June 23, 2021, we declared a quarterly cash dividend of $0.075 per share on our common stock, which was paid on August 2, 2021, to shareholders of record as of July 15,~~none in first-quarter 2021. The declaration and payment of ~~future~~ dividends (base or variable) is at the discretion of the Board and will ~~be assessed~~depend on ~~an ongoing basis, taking into account~~ our financial results, cash requirements, ~~future~~business prospects, global economic conditions and other factors deemed relevant by the Board. Refer to Note 5, Item 1A. “Risk Factors” contained in Part I of our 2021 Form 10-K, “Cautionary Statement” below and ~~for a~~ discussion of ~~the allocation of cash flows, the discussion above regarding the~~our financial policy ~~adopted by the Board in February 2021.~~above.

Cash dividends and distributions paid to noncontrolling interests, primarily at PT-FI, totaled ~~$93~~$204 million ~~for~~in first-quarter 2022 and none in first-quarter 2021. Based on the ~~first six months of 2021. There were no~~estimates discussed in “Outlook,” we currently expect cash dividends orand distributions paid to noncontrolling interests ~~paid during the first six months of 2020.~~to exceed $1.6 billion in 2022. Cash dividends and distributions to noncontrolling interests vary based on the operating results and cash requirements of our consolidated subsidiaries.

Treasury Stock Purchases. In first-quarter 2022, we acquired 12.3 million shares of our common stock under our share repurchase program for a total cost of $541 million ($44.02 average cost per share). Through May 5, 2022, we acquired 28.7 million shares of our common stock for a total cost of $1.2 billion ($41.64 average cost per share) and $1.8 billion remains available under the share repurchase program. As of April 29, 2022, we had 1.45 billion shares of common stock outstanding. The timing and amount of share repurchases is at the discretion of management and will depend on a variety of factors. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion. Refer to Item 1A. “Risk Factors” contained in Part I of our 2021 Form 10-K, “Cautionary Statement” below and discussion of our financial policy above.

Contributions from Noncontrolling Interests. We received equity contributions totaling ~~$88~~$47 million ~~for the first six months of~~in first-quarter 2022 and $41 million in first-quarter 2021 ~~and $74 million for the first six months of 2020~~ from PT Inalum for their share of capital spending on ~~PT-FI~~ underground mine development projects ~~and development of increased smelter capacity~~ in ~~Indonesia.~~the Grasberg minerals district.

Stock-based awards. ~~Following an increase in our stock price during 2021, proceeds~~Proceeds from exercised stock options totaled ~~$184~~$101 million in first-quarter 2022 and $106 million in first-quarter 2021, and payments for related employee taxes totaled $55 million in first-quarter 2022 and $19 million ~~for the first six months of~~in first-quarter 2021. See Note 10 in our ~~2020~~2021 Form 10-K for a discussion of stock-based awards.

CONTRACTUAL OBLIGATIONS

~~In July 2021, PT-FI awarded a construction contract~~Refer to ~~Chiyoda~~Note 5 for ~~the construction~~further discussion of ~~a new greenfield smelter~~PT-FI’s $3.0 billion unsecured senior notes issued in Gresik, Indonesia, with an estimated contract cost of $2.8 billion. The smelter construction is expected to be completed as soon as feasible in 2024, which is dependent on no further pandemic-related disruptions.

April 2022. There have been no other material changes in our contractual obligations since December 31, ~~2020.~~2021. Refer to Part II, Items 7. and 7A. in our 2021 Form 10-K, for information regarding our contractual obligations.

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CONTINGENCIES

Environmental and Asset Retirement Obligations

Our current and historical operating activities are subject to stringent laws and regulations governing the protection of the environment. We perform a comprehensive annual review of our environmental and asset retirement obligations and also review changes in facts and circumstances associated with these obligations at least quarterly.

Refer to Note 8 for further discussion of increases in our asset retirement obligation at the Bagdad mine. There have been no ~~material~~other significant changes to our environmental and asset retirement obligations since December 31, ~~2020. Refer to Note 8 for updates associated with our Newtown Creek environmental obligation.~~2021. Updated cost assumptions, including increases and decreases to cost estimates, changes in the anticipated scope and timing of remediation activities, and settlement of environmental matters may result in additional revisions to certain of our environmental obligations. Refer to Note 12 in our ~~2020~~2021 Form 10-K, for further information regarding our environmental and asset retirement obligations.

Litigation and Other Contingencies

There have been no material changes to our contingencies associated with legal proceedings, environmental and other matters since December 31, ~~2020.~~2021. Refer to Note 12 and “Legal Proceedings” contained in Part I, Item 3. of our ~~2020~~2021 Form 10-K, as updated by Note 8, for further information regarding legal proceedings, environmental and other matters.

NEW ACCOUNTING STANDARDS

There were no significant updates to previously reported accounting standards included in Note 1 of our ~~2020~~2021 Form 10-K.

NET DEBT

Net debt, which we define as consolidated debt less consolidated cash and cash equivalents, is intended to provide investors with information related to the performance-based payout framework in our financial policy, which requires achievement of a net debt target in the range of $3 billion to $4 billion (excluding project debt for additional smelting capacity in Indonesia). 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 follows, which may not be comparable to similarly titled measures reported by other companies (in millions):


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Current portion of debt	Current portion of debt	$	1,057	$	34	Current portion of debt	$	1,365	$	372
Long-term debt, less current portion	Long-term debt, less current portion	8,638		9,677		Long-term debt, less current portion	8,256		9,078
Consolidated debt		9,695		9,711
Consolidated debta						Consolidated debta	9,621		9,450
Less: consolidated cash and cash equivalents	Less: consolidated cash and cash equivalents	6,313		3,657		Less: consolidated cash and cash equivalents	8,338		8,068
Net debt	Net debt	$	3,382	$	6,054	Net debt	$	1,283	$	1,382

a.Includes $603 million at March 31, 2022, and $432 million at December 31, 2021, associated with the Indonesia smelter projects (refer to Note 5).

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PRODUCT REVENUES AND PRODUCTION COSTS

Unit net cash costs (credits) per pound of copper and molybdenum are measures intended to 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 ~~(loss)~~ 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 ~~(loss)~~ 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 (credits), which are removed from site production and delivery costs in the calculation of unit net cash costs (credits), consist of items such as stock-based compensation costs, long-lived asset impairments, idle facility costs, restructuring and/or unusual ~~charges.~~charges (credits). 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.

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


Three Months Ended June 30, 2021
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
(In millions)	(In millions)	By-Product		Co-Product Method								(In millions)	By-Product		Co-Product Method
		Method		Copper		Molybdenuma		Otherb		Total			Method		Copper		Molybdenuma		Otherb		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	1,717	$	1,717	$	97	$	32	$	1,846	Revenues, excluding adjustments	$	1,763	$	1,763	$	138	$	27	$	1,928
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	833		789		56		18		863		Site production and delivery, before net noncash and other costs shown below	908		839		84		17		940
By-product credits	By-product credits	(99)		—		—		—		—		By-product credits	(133)		—		—		—		—
Treatment charges	Treatment charges	31		29		—		2		31		Treatment charges	36		35		—		1		36
Net cash costs	Net cash costs	765		818		56		20		894		Net cash costs	811		874		84		18		976
DD&A	DD&A	102		95		5		2		102		DD&A	105		96		7		2		105

Noncash and other costs, net	Noncash and other costs, net	31		30		1		—		31		Noncash and other costs, net	28		27		1		—		28
Total costs	Total costs	898		943		62		22		1,027		Total costs	944		997		92		20		1,109
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	8		8		—		—		8		Other revenue adjustments, primarily for pricing on prior period open sales	11		11		—		—		11
Gross profit	Gross profit	$	827	$	782	$	35	$	10	$	827	Gross profit	$	830	$	777	$	46	$	7	$	830

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	389		389								Copper sales (millions of recoverable pounds)	381		381
Molybdenum sales (millions of recoverable pounds)a	Molybdenum sales (millions of recoverable pounds)a					9						Molybdenum sales (millions of recoverable pounds)a					7

Gross profit per pound of copper/molybdenum:	Gross profit per pound of copper/molybdenum:											Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	4.42	$	4.42	$	11.75					Revenues, excluding adjustments	$	4.62	$	4.62	$	17.97
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	2.14		2.03		6.86						Site production and delivery, before net noncash and other costs shown below	2.38		2.20		10.95
By-product credits	By-product credits	(0.25)		—		—						By-product credits	(0.34)		—		—
Treatment charges	Treatment charges	0.08		0.07		—						Treatment charges	0.09		0.09		—
Unit net cash costs	Unit net cash costs	1.97		2.10		6.86						Unit net cash costs	2.13		2.29		10.95
DD&A	DD&A	0.26		0.25		0.55						DD&A	0.27		0.25		0.88

Noncash and other costs, net	Noncash and other costs, net	0.08		0.08		0.06						Noncash and other costs, net	0.07		0.07		0.14
Total unit costs	Total unit costs	2.31		2.43		7.47						Total unit costs	2.47		2.61		11.97
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	0.02		0.02		—						Other revenue adjustments, primarily for pricing on prior period open sales	0.03		0.03		—
Gross profit per pound	Gross profit per pound	$	2.13	$	2.01	$	4.28					Gross profit per pound	$	2.18	$	2.04	$	6.00

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported											Reconciliation to Amounts Reported

		Revenues		Production and Delivery		DD&A							Revenues		Production and Delivery		DD&A
Totals presented above	Totals presented above	$	1,846	$	863	$	102					Totals presented above	$	1,928	$	940	$	105
Treatment charges	Treatment charges	(12)		19		—						Treatment charges	(4)		32		—
Noncash and other costs, net	Noncash and other costs, net	—		31		—						Noncash and other costs, net	—		28		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	8		—		—						Other revenue adjustments, primarily for pricing on prior period open sales	11		—		—
Eliminations and other	Eliminations and other	12		12		(1)						Eliminations and other	16		18		—
North America copper mines	North America copper mines	1,854		925		101						North America copper mines	1,951		1,018		105
Other miningc	Other miningc	5,520		3,650		367						Other miningc	6,376		3,847		368

Corporate, other & eliminations	Corporate, other & eliminations	(1,626)		(1,508)		15						Corporate, other & eliminations	(1,724)		(1,715)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	5,748	$	3,067	$	483					As reported in our consolidated financial statements	$	6,603	$	3,150	$	489

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

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

Three Months Ended June 30, 2020
(In millions) By-Product Co-Product Method
Method Copper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments $ 888 c $ 888 $ 71 $ 18 $ 977
Site production and delivery, before net noncash
    and other costs shown below 678 636 57 10 703
By-product credits (64) — — — —
Treatment charges 37 36 — 1 37
Net cash costs 651 672 57 11 740
DD&A 88 82 5 1 88
Metals inventory adjustments (89) (89) — — (89)
Noncash and other costs, net 36 d 34 1 1 36
Total costs 686 699 63 13 775
Other revenue adjustments, primarily for pricing
    on prior period open sales 6 6 — — 6
Gross profit $ 208 $ 195 $ 8 $ 5 $ 208
Copper sales (millions of recoverable pounds) 368 368
Molybdenum sales (millions of recoverable pounds)a
9
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments $ 2.42 c $ 2.42 $ 8.33
Site production and delivery, before net noncash
    and other costs shown below 1.85 1.73 6.76
By-product credits (0.17) — —
Treatment charges 0.10 0.10 —
Unit net cash costs 1.78 1.83 6.76
DD&A 0.24 0.22 0.55
Metals inventory adjustments (0.24) (0.24) —
Noncash and other costs, net 0.09 d 0.09 0.08
Total unit costs 1.87 1.90 7.39
Other revenue adjustments, primarily for pricing
    on prior period open sales 0.02 0.02 —
Gross profit per pound $ 0.57 $ 0.54 $ 0.94
Reconciliation to Amounts Reported
Revenues Production and Delivery DD&A Metals Inventory Adjustments
Totals presented above $ 977 $ 703 $ 88 $ (89)
Treatment charges (2) 35 — —
Noncash and other costs, net — 36 — —
Other revenue adjustments, primarily for pricing
    on prior period open sales 6 — — —
Eliminations and other 7 13 1 —
North America copper mines 988 787 89 (89)
Other mininge
2,985 2,461 254 (55)
Corporate, other & eliminations (919) (854) 15 5
As reported in our consolidated financial statements $ 3,054 $ 2,394 $ 358 $ (139)

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 reductions to revenues and average realized prices totaling $24 million ($0.06 per pound of copper) related to forward sales contracts covering 150 million pounds of copper sales for May and June 2020 at a fixed price of $2.34 per pound.

d.~~Includes charges totaling $22 million ($0.06 per pound of copper) primarily associated with the April 2020 revised operating plans (including employee separation costs) and the COVID-19 pandemic.~~

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

~~Table of Contents~~

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


Six months ended June 30, 2021
Three Months Ended March 31, 2021												Three Months Ended March 31, 2021
(In millions)	(In millions)	By-Product		Co-Product Method								(In millions)	By-Product		Co-Product Method
		Method		Copper		Molybdenuma		Otherb		Total			Method		Copper		Molybdenuma		Otherb		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	2,919	$	2,919	185		67		3,171		Revenues, excluding adjustments	$	1,193	$	1,193	$	88	$	34	$	1,315
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	1,459		1,369		113		40		1,522		Site production and delivery, before net noncash and other costs shown below	627		580		56		21		657
By-product credits	By-product credits	(189)		—		—		—		—		By-product credits	(92)		—		—		—		—
Treatment charges	Treatment charges	63		60		—		3		63		Treatment charges	33		31		—		2		33
Net cash costs	Net cash costs	1,333		1,429		113		43		1,585		Net cash costs	568		611		56		23		690
DD&A	DD&A	181		169		8		4		181		DD&A	80		74		4		2		80

Noncash and other costs, net	Noncash and other costs, net	73		71		1		1		73		Noncash and other costs, net	41		40		—		1		41
Total costs	Total costs	1,587		1,669		122		48		1,839		Total costs	689		725		60		26		811
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	7		7		—		—		7		Other revenue adjustments, primarily for pricing on prior period open sales	7		7		—		—		7
Gross profit	Gross profit	$	1,339	$	1,257	$	63	$	19	$	1,339	Gross profit	$	511	$	475	$	28	$	8	$	511

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	697		697								Copper sales (millions of recoverable pounds)	308		308
Molybdenum sales (millions of recoverable pounds)a	Molybdenum sales (millions of recoverable pounds)a					17						Molybdenum sales (millions of recoverable pounds)a					8

Gross profit per pound of copper/molybdenum:	Gross profit per pound of copper/molybdenum:											Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	4.19	$	4.19	$	11.12					Revenues, excluding adjustments	$	3.88	$	3.88	$	10.49
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	2.09		1.96		6.76						Site production and delivery, before net noncash and other costs shown below	2.04		1.89		6.67
By-product credits	By-product credits	(0.27)		—		—						By-product credits	(0.30)		—		—
Treatment charges	Treatment charges	0.09		0.09		—						Treatment charges	0.11		0.10		—
Unit net cash costs	Unit net cash costs	1.91		2.05		6.76						Unit net cash costs	1.85		1.99		6.67
DD&A	DD&A	0.26		0.24		0.51						DD&A	0.26		0.24		0.46

Noncash and other costs, net	Noncash and other costs, net	0.11		0.11		0.06						Noncash and other costs, net	0.13		0.13		0.06
Total unit costs	Total unit costs	2.28		2.40		7.33						Total unit costs	2.24		2.36		7.19
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	0.01		0.01		—						Other revenue adjustments, primarily for pricing on prior period open sales	0.02		0.02		—
Gross profit per pound	Gross profit per pound	$	1.92	$	1.80	$	3.79					Gross profit per pound	$	1.66	$	1.54	$	3.30

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported											Reconciliation to Amounts Reported
													Revenues		Production and Delivery		DD&A
				Production
		Revenues		and Delivery		DD&A
Totals presented above	Totals presented above	$	3,171	$	1,522	$	181					Totals presented above	$	1,315	$	657	$	80
Treatment charges	Treatment charges	(17)		46		—						Treatment charges	(5)		28		—
Noncash and other costs, net	Noncash and other costs, net	—		73		—						Noncash and other costs, net	—		41		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	7		—		—						Other revenue adjustments, primarily for pricing on prior period open sales	7		—		—
Eliminations and other	Eliminations and other	31		33		—						Eliminations and other	21		23		—
North America copper mines	North America copper mines	3,192		1,674		181						North America copper mines	1,338		749		80
Other miningc	Other miningc	10,165		6,690		690						Other miningc	4,645		3,041		323

Corporate, other & eliminations	Corporate, other & eliminations	(2,759)		(2,511)		31						Corporate, other & eliminations	(1,133)		(1,003)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	10,598	$	5,853	$	902					As reported in our consolidated financial statements	$	4,850	$	2,787	$	419

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

~~Table of Contents~~

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

Six months ended June 30, 2020
(In millions) By-Product Co-Product Method
Method Copper
Molybdenuma
Otherb
Total
Revenues, excluding adjustments $ 1,799 c $ 1,799 147 44 1,990
Site production and delivery, before net noncash
    and other costs shown below 1,439 1,333 128 28 1,489
By-product credits (141) — — — —
Treatment charges 76 73 — 3 76
Net cash costs 1,374 1,406 128 31 1,565
DD&A 180 166 10 4 180
Metals inventory adjustments 56 54 — 2 56
Noncash and other costs, net 69 d 65 2 2 69
Total costs 1,679 1,691 140 39 1,870
Other revenue adjustments, primarily for pricing
    on prior period open sales (22) (22) — — (22)
Gross profit $ 98 $ 86 $ 7 $ 5 $ 98
Copper sales (millions of recoverable pounds) 722 722
Molybdenum sales (millions of recoverable pounds)a
17
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments $ 2.50 c $ 2.50 $ 8.99
Site production and delivery, before net noncash
    and other costs shown below 2.00 1.85 7.81
By-product credits (0.19) — —
Treatment charges 0.10 0.10 —
Unit net cash costs 1.91 1.95 7.81
DD&A 0.25 0.23 0.64
Metals inventory adjustments 0.08 0.07 —
Noncash and other costs, net 0.09 d 0.09 0.15
Total unit costs 2.33 2.34 8.60
Other revenue adjustments, primarily for pricing
    on prior period open sales (0.03) (0.03) —
Gross profit per pound $ 0.14 $ 0.13 $ 0.39
Reconciliation to Amounts Reported
Metals
Production Inventory
Revenues and Delivery DD&A Adjustments
Totals presented above $ 1,990 $ 1,489 $ 180 $ 56
Treatment charges (10) 66 — —
Noncash and other costs, net — 69 — —
Other revenue adjustments, primarily for pricing
    on prior period open sales (22) — — —
Eliminations and other 15 23 1 —
North America copper mines 1,973 1,647 181 56
Other mininge
5,576 4,934 488 9
Corporate, other & eliminations (1,697) (1,642) 30 18
As reported in our consolidated financial statements $ 5,852 $ 4,939 $ 699 $ 83

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 reductions to revenues and average realized prices totaling $24 million ($0.03 per pound of copper) related to forward sales contracts covering 150 million pounds of copper sales for May and June 2020 at a fixed price of $2.34 per pound.

d.~~Includes charges totaling $22 million ($0.03 per pound of copper) primarily associated with the April 2020 revised operating plans (including employee separation costs) and the COVID-19 pandemic.~~

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

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


Three Months Ended June 30, 2021
Three Months Ended March 31, 2022											Three Months Ended March 31, 2022
(In millions)	(In millions)	By-Product			Co-Product Method						(In millions)	By-Product		Co-Product Method
		Method			Copper		Othera		Total			Method		Copper		Othera		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	995		$	995	$	82	$	1,077	Revenues, excluding adjustments	$	1,236	$	1,236	$	125	$	1,361
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	573		b	531		52		583		Site production and delivery, before net noncash and other costs shown below	640		587		67		654
By-product credits	By-product credits	(72)			—		—		—		By-product credits	(111)		—		—		—
Treatment charges	Treatment charges	29			29		—		29		Treatment charges	39		39		—		39
Royalty on metals	Royalty on metals	2			2		—		2		Royalty on metals	3		3		—		3
Net cash costs	Net cash costs	532			562		52		614		Net cash costs	571		629		67		696
DD&A	DD&A	94			86		8		94		DD&A	97		88		9		97

Noncash and other costs, net	Noncash and other costs, net	18			17		1		18		Noncash and other costs, net	17		16		1		17
Total costs	Total costs	644			665		61		726		Total costs	685		733		77		810
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	88			88		—		88		Other revenue adjustments, primarily for pricing on prior period open sales	55		55		—		55
Gross profit	Gross profit	$	439		$	418	$	21	$	439	Gross profit	$	606	$	558	$	48	$	606

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	230			230						Copper sales (millions of recoverable pounds)	264		264

Gross profit per pound of copper:	Gross profit per pound of copper:										Gross profit per pound of copper:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	4.31		$	4.31					Revenues, excluding adjustments	$	4.69	$	4.69
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	2.48		b	2.30						Site production and delivery, before net noncash and other costs shown below	2.43		2.22
By-product credits	By-product credits	(0.31)			—						By-product credits	(0.43)		—
Treatment charges	Treatment charges	0.13			0.13						Treatment charges	0.15		0.15
Royalty on metals	Royalty on metals	0.01			0.01						Royalty on metals	0.01		0.01
Unit net cash costs	Unit net cash costs	2.31			2.44						Unit net cash costs	2.16		2.38
DD&A	DD&A	0.40			0.37						DD&A	0.37		0.33

Noncash and other costs, net	Noncash and other costs, net	0.08			0.07						Noncash and other costs, net	0.07		0.07
Total unit costs	Total unit costs	2.79			2.88						Total unit costs	2.60		2.78
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	0.38			0.38						Other revenue adjustments, primarily for pricing on prior period open sales	0.21		0.21
Gross profit per pound	Gross profit per pound	$	1.90		$	1.81					Gross profit per pound	$	2.30	$	2.12

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported										Reconciliation to Amounts Reported
					Production									Production
		Revenues			and Delivery		DD&A					Revenues		and Delivery		DD&A
Totals presented above	Totals presented above	$	1,077		$	583	$	94			Totals presented above	$	1,361	$	654	$	97
Treatment charges	Treatment charges	(29)			—		—				Treatment charges	(39)		—		—
Royalty on metals	Royalty on metals	(2)			—		—				Royalty on metals	(3)		—		—
Noncash and other costs, net	Noncash and other costs, net	—			18		—				Noncash and other costs, net	—		17		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	88			—		—				Other revenue adjustments, primarily for pricing on prior period open sales	55		—		—
Eliminations and other	Eliminations and other	(1)			(1)		—				Eliminations and other	—		(1)		—
South America mining	South America mining	1,133			600		94				South America mining	1,374		670		97
Other miningc		6,241			3,975		374
Other miningb											Other miningb	6,953		4,195		376

Corporate, other & eliminations	Corporate, other & eliminations	(1,626)			(1,508)		15				Corporate, other & eliminations	(1,724)		(1,715)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	5,748		$	3,067	$	483			As reported in our consolidated financial statements	$	6,603	$	3,150	$	489

a.Includes silver sales of ~~0.8~~1.0 million ounces ($~~27.33~~23.36 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 charges totaling $69 million ($0.30 per pound of copper) associated with labor-related charges at Cerro Verde.~~

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

5546

Table of Contents

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


Three Months Ended June 30, 2020
Three Months Ended March 31, 2021											Three Months Ended March 31, 2021
(In millions)	(In millions)	By-Product			Co-Product Method						(In millions)	By-Product		Co-Product Method
		Method			Copper		Othera		Total			Method		Copper		Othera		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	586		$	586	$	32	$	618	Revenues, excluding adjustments	$	1,026	$	1,026	$	65	$	1,091
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	360			343		24		367		Site production and delivery, before net noncash and other costs shown below	520		491		39		530
By-product credits	By-product credits	(25)			—		—		—		By-product credits	(55)		—		—		—
Treatment charges	Treatment charges	32			32		—		32		Treatment charges	35		35		—		35
Royalty on metals	Royalty on metals	1			1		—		1		Royalty on metals	2		2		—		2
Net cash costs	Net cash costs	368			376		24		400		Net cash costs	502		528		39		567
DD&A	DD&A	103			98		5		103		DD&A	101		95		6		101
Metals inventory adjustments		(57)			(57)		—		(57)

Noncash and other costs, net	Noncash and other costs, net	71		b	67		4		71		Noncash and other costs, net	10		9		1		10
Total costs	Total costs	485			484		33		517		Total costs	613		632		46		678
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	44			44		—		44		Other revenue adjustments, primarily for pricing on prior period open sales	83		83		—		83
Gross profit (loss)		$	145		$	146	$	(1)	$	145
Gross profit											Gross profit	$	496	$	477	$	19	$	496

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	219			219						Copper sales (millions of recoverable pounds)	259		259

Gross profit per pound of copper:	Gross profit per pound of copper:										Gross profit per pound of copper:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	2.67		$	2.67					Revenues, excluding adjustments	$	3.96	$	3.96
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	1.64			1.57						Site production and delivery, before net noncash and other costs shown below	2.01		1.90
By-product credits	By-product credits	(0.11)			—						By-product credits	(0.21)		—
Treatment charges	Treatment charges	0.15			0.15						Treatment charges	0.13		0.13
Royalty on metals	Royalty on metals	—			—						Royalty on metals	0.01		0.01
Unit net cash costs	Unit net cash costs	1.68			1.72						Unit net cash costs	1.94		2.04
DD&A	DD&A	0.47			0.44						DD&A	0.39		0.37
Metals inventory adjustments		(0.26)			(0.26)

Noncash and other costs, net	Noncash and other costs, net	0.32		b	0.30						Noncash and other costs, net	0.04		0.03
Total unit costs	Total unit costs	2.21			2.20						Total unit costs	2.37		2.44
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	0.20			0.20						Other revenue adjustments, primarily for pricing on prior period open sales	0.32		0.32
Gross profit per pound	Gross profit per pound	$	0.66		$	0.67					Gross profit per pound	$	1.91	$	1.84

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported								Metals		Reconciliation to Amounts Reported
					Production				Inventory					Production
		Revenues			and Delivery		DD&A		Adjustments			Revenues		and Delivery		DD&A
Totals presented above	Totals presented above	$	618		$	367	$	103	$	(57)	Totals presented above	$	1,091	$	530	$	101
Treatment charges	Treatment charges	(32)			—		—		—		Treatment charges	(35)		—		—
Royalty on metals	Royalty on metals	(1)			—		—		—		Royalty on metals	(2)		—		—
Noncash and other costs, net	Noncash and other costs, net	—			71		—		—		Noncash and other costs, net	—		10		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	44			—		—		—		Other revenue adjustments, primarily for pricing on prior period open sales	83		—		—
Eliminations and other	Eliminations and other	—			—		(1)		—		Eliminations and other	—		(1)		—
South America mining	South America mining	629			438		102		(57)		South America mining	1,137		539		101
Other miningc		3,344			2,810		241		(87)
Other miningb											Other miningb	4,846		3,251		302

Corporate, other & eliminations	Corporate, other & eliminations	(919)			(854)		15		5		Corporate, other & eliminations	(1,133)		(1,003)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	3,054		$	2,394	$	358	$	(139)	As reported in our consolidated financial statements	$	4,850	$	2,787	$	419

a.Includes silver sales of ~~0.6~~0.9 million ounces ($~~14.55~~26.13 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 $66 million ($0.30 per pound of copper), primarily associated with idle facility (Cerro Verde) and contract cancellation costs related to the COVID-19 pandemic and employee separation costs associated with the April 2020 revised operating plans.

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

~~Table of Contents~~

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

Six months ended June 30, 2021
(In millions) By-Product Co-Product Method
Method Copper
Othera
Total
Revenues, excluding adjustments $ 2,093 $ 2,093 $ 147 $ 2,240
Site production and delivery, before net noncash
    and other costs shown below 1,092 b 1,022 91 1,113
By-product credits (126) — — —
Treatment charges 64 64 — 64
Royalty on metals 4 4 — 4
Net cash costs 1,034 1,090 91 1,181
DD&A 195 181 14 195
Noncash and other costs, net 28 26 2 28
Total costs 1,257 1,297 107 1,404
Other revenue adjustments, primarily for pricing
    on prior period open sales 99 99 — 99
Gross profit $ 935 $ 895 $ 40 $ 935
Copper sales (millions of recoverable pounds) 489 489
Gross profit per pound of copper:
Revenues, excluding adjustments $ 4.28 $ 4.28
Site production and delivery, before net noncash
    and other costs shown below 2.23 b 2.09
By-product credits (0.26) —
Treatment charges 0.13 0.13
Royalty on metals 0.01 0.01
Unit net cash costs 2.11 2.23
DD&A 0.40 0.37
Noncash and other costs, net 0.06 0.05
Total unit costs 2.57 2.65
Other revenue adjustments, primarily for pricing
    on prior period open sales 0.20 0.20
Gross profit per pound $ 1.91 $ 1.83
Reconciliation to Amounts Reported
Production
Revenues and Delivery DD&A
Totals presented above $ 2,240 $ 1,113 $ 195
Treatment charges (64) — —
Royalty on metals (4) — —
Noncash and other costs, net — 28 —
Other revenue adjustments, primarily for pricing
    on prior period open sales 99 — —
Eliminations and other (1) (2) —
South America mining 2,270 1,139 195
Other miningc
11,087 7,225 676
Corporate, other & eliminations (2,759) (2,511) 31
As reported in our consolidated financial statements $ 10,598 $ 5,853 $ 902

a.Includes silver sales of 1.7 million ounces ($26.67 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 charges totaling $69 million ($0.14 per pound of copper) associated with labor-related charges at Cerro Verde.~~

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

~~Table of Contents~~

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

Six months ended June 30, 2020
(In millions) By-Product Co-Product Method
Method Copper
Othera
Total
Revenues, excluding adjustments $ 1,199 $ 1,199 $ 86 $ 1,285
Site production and delivery, before net noncash
    and other costs shown below 853 800 73 873
By-product credits (66) — — —
Treatment charges 72 72 — 72
Royalty on metals 2 2 — 2
Net cash costs 861 874 73 947
DD&A 210 195 15 210
Metals inventory adjustments 3 3 — 3
Noncash and other costs, net 100 b 95 5 100
Total costs 1,174 1,167 93 1,260
Other revenue adjustments, primarily for pricing
    on prior period open sales (70) (70) — (70)
Gross loss $ (45) $ (38) $ (7) $ (45)
Copper sales (millions of recoverable pounds) 466 466
Gross loss per pound of copper:
Revenues, excluding adjustments $ 2.57 $ 2.57
Site production and delivery, before net noncash
    and other costs shown below 1.84 1.72
By-product credits (0.14) —
Treatment charges 0.15 0.15
Royalty on metals — —
Unit net cash costs 1.85 1.87
DD&A 0.45 0.42
Metals inventory adjustments 0.01 0.01
Noncash and other costs, net 0.21 b 0.20
Total unit costs 2.52 2.50
Other revenue adjustments, primarily for pricing
    on prior period open sales (0.15) (0.15)
Gross loss per pound $ (0.10) $ (0.08)
Reconciliation to Amounts Reported
Metals
Production Inventory
Revenues and Delivery DD&A Adjustments
Totals presented above $ 1,285 $ 873 $ 210 $ 3
Treatment charges (72) — — —
Royalty on metals (2) — — —
Noncash and other costs, net — 100 — —
Other revenue adjustments, primarily for pricing
    on prior period open sales (70) — — —
Eliminations and other — (1) — —
South America mining 1,141 972 210 3
Other miningc
6,408 5,609 459 62
Corporate, other & eliminations (1,697) (1,642) 30 18
As reported in our consolidated financial statements $ 5,852 $ 4,939 $ 699 $ 83

a.Includes silver sales of 1.5 million ounces ($16.37 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 charges totaling $86 million ($0.18 per pound of copper) primarily associated with idle facility (Cerro Verde) and contract cancellation costs related to the COVID-19 pandemic and employee separation costs associated with the April 2020 revised operating plans.

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

5847

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


Three Months Ended June 30, 2021
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
(In millions)	(In millions)	By-Product		Co-Product Method								(In millions)	By-Product			Co-Product Method
		Method		Copper		Gold		Silvera		Total			Method			Copper		Gold		Silvera		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	1,323	$	1,323	$	543	$	37	$	1,903	Revenues, excluding adjustments	$	1,778		$	1,778	$	780	$	38	$	2,596
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	476		331		136		9		476		Site production and delivery, before net noncash and other costs shown below	534			366		160		8		534
Gold and silver credits	Gold and silver credits	(597)		—		—		—		—		Gold and silver credits	(821)			—		—		—		—
Treatment charges	Treatment charges	74		52		21		2		75		Treatment charges	93			64		28		1		93
Export duties	Export duties	44		30		13		1		44		Export duties	79			54		24		1		79
Royalty on metals	Royalty on metals	80		59		20		1		80		Royalty on metals	92			63		28		1		92
Net cash costs		77		472		190		13		675
Net cash (credits) costs												Net cash (credits) costs	(23)			547		240		11		798
DD&A	DD&A	247		172		70		5		247		DD&A	248			169		75		4		248

Noncash and other costs, net	Noncash and other costs, net	11		8		3		—		11		Noncash and other costs, net	27		b	19		8		—		27
Total costs	Total costs	335		652		263		18		933		Total costs	252			735		323		15		1,073
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	87		87		16		2		105		Other revenue adjustments, primarily for pricing on prior period open sales	57			57		3		—		60
PT Smelting intercompany loss	PT Smelting intercompany loss	(41)		(28)		(12)		(1)		(41)		PT Smelting intercompany loss	(53)			(36)		(16)		(1)		(53)
Gross profit	Gross profit	$	1,034	$	730	$	284	$	20	$	1,034	Gross profit	$	1,530		$	1,064	$	444	$	22	$	1,530

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	310		310								Copper sales (millions of recoverable pounds)	379			379
Gold sales (thousands of recoverable ounces)	Gold sales (thousands of recoverable ounces)					302						Gold sales (thousands of recoverable ounces)						406

Gross profit per pound of copper/per ounce of gold:	Gross profit per pound of copper/per ounce of gold:											Gross profit per pound of copper/per ounce of gold:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	4.27	$	4.27	$	1,795					Revenues, excluding adjustments	$	4.69		$	4.69	$	1,920
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	1.54		1.07		449						Site production and delivery, before net noncash and other costs shown below	1.41			0.96		395
Gold and silver credits	Gold and silver credits	(1.93)		—		—						Gold and silver credits	(2.17)			—		—
Treatment charges	Treatment charges	0.24		0.16		70						Treatment charges	0.25			0.17		69
Export duties	Export duties	0.14		0.10		42						Export duties	0.21			0.14		59
Royalty on metals	Royalty on metals	0.26		0.19		66						Royalty on metals	0.24			0.17		69
Unit net cash costs		0.25		1.52		627
Unit net cash (credits) costs												Unit net cash (credits) costs	(0.06)			1.44		592
DD&A	DD&A	0.79		0.55		232						DD&A	0.66			0.45		183

Noncash and other costs, net	Noncash and other costs, net	0.04		0.03		11						Noncash and other costs, net	0.07		b	0.05		20
Total unit costs	Total unit costs	1.08		2.10		870						Total unit costs	0.67			1.94		795
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	0.28		0.28		53						Other revenue adjustments, primarily for pricing on prior period open sales	0.15			0.15		8
PT Smelting intercompany loss	PT Smelting intercompany loss	(0.13)		(0.09)		(39)						PT Smelting intercompany loss	(0.13)			(0.09)		(39)
Gross profit per pound/ounce	Gross profit per pound/ounce	$	3.34	$	2.36	$	939					Gross profit per pound/ounce	$	4.04		$	2.81	$	1,094

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported											Reconciliation to Amounts Reported
				Production												Production
		Revenues		and Delivery		DD&A							Revenues			and Delivery		DD&A
Totals presented above	Totals presented above	$	1,903	$	476	$	247					Totals presented above	$	2,596		$	534	$	248
Treatment charges	Treatment charges	(75)		—		—						Treatment charges	(93)			—		—
Export duties	Export duties	(44)		—		—						Export duties	(79)			—		—
Royalty on metals	Royalty on metals	(80)		—		—						Royalty on metals	(92)			—		—
Noncash and other costs, net	Noncash and other costs, net	—		11		—						Noncash and other costs, net	12			39		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	105		—		—						Other revenue adjustments, primarily for pricing on prior period open sales	60			—		—
PT Smelting intercompany loss	PT Smelting intercompany loss	—		41		—						PT Smelting intercompany loss	—			53		—
Indonesia mining	Indonesia mining	1,809		528		247						Indonesia mining	2,404			626		248
Other miningb		5,565		4,047		221
Other miningc												Other miningc	5,923			4,239		225

Corporate, other & eliminations	Corporate, other & eliminations	(1,626)		(1,508)		15						Corporate, other & eliminations	(1,724)			(1,715)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	5,748	$	3,067	$	483					As reported in our consolidated financial statements	$	6,603		$	3,150	$	489

a.Includes silver sales of ~~1.4~~1.6 million ounces ($~~26.08~~24.35 per ounce average realized price).

b.Includes charges of $41 million ($0.11 per pound of copper) associated with a settlement of an administrative fine levied by the Indonesia government and $18 million ($0.05 per pound of copper) associated with an adjustment to prior-period export duties, partly offset by credits of $30 million ($0.08 per pound of copper) associated with adjustments to prior year treatment and refining costs.

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

5948

Table of Contents

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


Three Months Ended June 30, 2020
Three Months Ended March 31, 2021													Three Months Ended March 31, 2021
(In millions)	(In millions)	By-Product			Co-Product Method								(In millions)	By-Product			Co-Product Method
		Method			Copper		Gold		Silvera		Total			Method			Copper		Gold		Silvera		Total
Revenues, excluding adjustments	Revenues, excluding adjustments	$	458		$	458	$	315	$	13	$	786	Revenues, excluding adjustments	$	1,032		$	1,032	$	437	$	30	$	1,499
Site production and delivery, before net noncash and other costs shown below		345			201		138		6		345
Site production and delivery, before net noncash and other credits shown below													Site production and delivery, before net noncash and other credits shown below	383			264		112		7		383
Gold and silver credits	Gold and silver credits	(336)			—		—		—		—		Gold and silver credits	(462)			—		—		—		—
Treatment charges	Treatment charges	47			27		19		1		47		Treatment charges	65			45		19		1		65
Export duties	Export duties	16			10		6		—		16		Export duties	29			20		8		1		29
Royalty on metals	Royalty on metals	25			13		12		—		25		Royalty on metals	61			42		18		1		61
Net cash costs	Net cash costs	97			251		175		7		433		Net cash costs	76			371		157		10		538
DD&A	DD&A	124			72		50		2		124		DD&A	199			137		58		4		199
Noncash and other costs, net		8		b	5		3		—		8
Noncash and other credits, net													Noncash and other credits, net	(8)		b	(6)		(2)		—		(8)
Total costs	Total costs	229			328		228		9		565		Total costs	267			502		213		14		729
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	12			12		7		1		20		Other revenue adjustments, primarily for pricing on prior period open sales	65			65		(5)		—		60
PT Smelting intercompany loss	PT Smelting intercompany loss	(25)			(15)		(10)		—		(25)		PT Smelting intercompany loss	(49)			(34)		(14)		(1)		(49)
Gross profit	Gross profit	$	216		$	127	$	84	$	5	$	216	Gross profit	$	781		$	561	$	205	$	15	$	781

Copper sales (millions of recoverable pounds)	Copper sales (millions of recoverable pounds)	172			172								Copper sales (millions of recoverable pounds)	258			258
Gold sales (thousands of recoverable ounces)	Gold sales (thousands of recoverable ounces)						180						Gold sales (thousands of recoverable ounces)						256

Gross profit per pound of copper/per ounce of gold:	Gross profit per pound of copper/per ounce of gold:												Gross profit per pound of copper/per ounce of gold:

Revenues, excluding adjustments	Revenues, excluding adjustments	$	2.67		$	2.67	$	1,748					Revenues, excluding adjustments	$	4.00		$	4.00	$	1,713
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	2.00			1.17		766						Site production and delivery, before net noncash and other costs shown below	1.48			1.02		438
Gold and silver credits	Gold and silver credits	(1.95)			—		—						Gold and silver credits	(1.79)			—		—
Treatment charges	Treatment charges	0.27			0.16		105						Treatment charges	0.25			0.17		74
Export duties	Export duties	0.09			0.05		35						Export duties	0.11			0.08		33
Royalty on metals	Royalty on metals	0.15			0.08		65						Royalty on metals	0.24			0.16		71
Unit net cash costs	Unit net cash costs	0.56			1.46		971						Unit net cash costs	0.29			1.43		616
DD&A	DD&A	0.72			0.42		276						DD&A	0.77			0.53		228
Noncash and other costs, net		0.05		b	0.03		17
Noncash and other credits, net													Noncash and other credits, net	(0.03)		b	(0.02)		(10)
Total unit costs	Total unit costs	1.33			1.91		1,264						Total unit costs	1.03			1.94		834
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	0.07			0.07		41						Other revenue adjustments, primarily for pricing on prior period open sales	0.25			0.25		(19)
PT Smelting intercompany loss	PT Smelting intercompany loss	(0.15)			(0.09)		(57)						PT Smelting intercompany loss	(0.20)			(0.14)		(56)
Gross profit per pound/ounce	Gross profit per pound/ounce	$	1.26		$	0.74	$	468					Gross profit per pound/ounce	$	3.02		$	2.17	$	804

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported												Reconciliation to Amounts Reported
					Production												Production
		Revenues			and Delivery		DD&A							Revenues			and Delivery		DD&A
Totals presented above	Totals presented above	$	786		$	345	$	124					Totals presented above	$	1,499		$	383	$	199
Treatment charges	Treatment charges	(47)			—		—						Treatment charges	(65)			—		—
Export duties	Export duties	(16)			—		—						Export duties	(29)			—		—
Royalty on metals	Royalty on metals	(25)			—		—						Royalty on metals	(61)			—		—
Noncash and other costs, net		—			8		—
Noncash and other credits, net													Noncash and other credits, net	31			23		—
Other revenue adjustments, primarily for pricing on prior period open sales	Other revenue adjustments, primarily for pricing on prior period open sales	20			—		—						Other revenue adjustments, primarily for pricing on prior period open sales	60			—		—
PT Smelting intercompany loss	PT Smelting intercompany loss	—			25		—						PT Smelting intercompany loss	—			49		—
Indonesia mining	Indonesia mining	718			378		124						Indonesia mining	1,435			455		199
Other miningc	Other miningc	3,255			2,870		219						Other miningc	4,548			3,335		204

Corporate, other & eliminations	Corporate, other & eliminations	(919)			(854)		15						Corporate, other & eliminations	(1,133)			(1,003)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	3,054		$	2,394	$	358					As reported in our consolidated financial statements	$	4,850		$	2,787	$	419

a.Includes silver sales of ~~0.8~~1.2 million ounces ($~~17.09 per ounce average realized price).~~

b.~~Includes COVID-19 related costs totaling $4 million ($0.03 per pound of copper).~~

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

~~Table of Contents~~

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

Six months ended June 30, 2021
(In millions) By-Product Co-Product Method
Method Copper Gold
Silvera
Total
Revenues, excluding adjustments $ 2,435 $ 2,435 $ 995 $ 68 $ 3,498
Site production and delivery, before net noncash
    and other costs shown below 859 598 244 17 859
Gold and silver credits (1,059) — — — —
Treatment charges 140 97 40 3 140
Export duties 73 51 21 1 73
Royalty on metals 140 100 38 2 140
Net cash costs 153 846 343 23 1,212
DD&A 446 310 127 9 446
Noncash and other costs, net 3 b 2 1 — 3
Total costs 602 1,158 471 32 1,661
Other revenue adjustments, primarily for pricing
    on prior period open sales 72 72 (4) — 68
PT Smelting intercompany loss (90) (63) (25) (2) (90)
Gross profit $ 1,815 $ 1,286 $ 495 $ 34 $ 1,815
Copper sales (millions of recoverable pounds) 568 568
Gold sales (thousands of recoverable ounces) 558
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments $ 4.29 $ 4.29 $ 1,785
Site production and delivery, before net noncash
    and other costs shown below 1.51 1.05 439
Gold and silver credits (1.86) — —
Treatment charges 0.24 0.17 71
Export duties 0.13 0.09 37
Royalty on metals 0.25 0.18 68
Unit net cash costs 0.27 1.49 615
DD&A 0.78 0.55 228
Noncash and other costs, net 0.01 b — 1
Total unit costs 1.06 2.04 844
Other revenue adjustments, primarily for pricing
    on prior period open sales 0.12 0.12 (8)
PT Smelting intercompany loss (0.16) (0.11) (46)
Gross profit per pound/ounce $ 3.19 $ 2.26 $ 887
Reconciliation to Amounts Reported
Production
Revenues and Delivery DD&A
Totals presented above $ 3,498 $ 859 $ 446
Treatment charges (140) — —
Export duties (73) — —
Royalty on metals (140) — —
Noncash and other costs, net 31 34 —
Other revenue adjustments, primarily for pricing
    on prior period open sales 68 — —
PT Smelting intercompany loss — 90 —
Indonesia mining 3,244 983 446
Other miningc
10,113 7,381 425
Corporate, other & eliminations (2,759) (2,511) 31
As reported in our consolidated financial statements $ 10,598 $ 5,853 $ 902

a.~~Includes silver sales of 2.6 million ounces ($26.05~~24.61 per ounce average realized price).

b.Includes credits of $31 million ($~~0.05~~0.12 per pound of copper) associated with adjustments to prior year treatment and refining ~~charges and charges~~costs. Also includes a charge of ~~$16~~$13 million ($~~0.03~~0.05 per pound of copper) associated with a potential settlement of an administrative fine levied by the Indonesia government.

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

~~Table of Contents~~

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

Six months ended June 30, 2020
(In millions) By-Product Co-Product Method
Method Copper Gold
Silvera
Total
Revenues, excluding adjustments $ 760 $ 760 $ 545 $ 22 $ 1,327
Site production and delivery, before net noncash
    and other costs shown below 686 393 282 11 686
Gold and silver credits (572) — — — —
Treatment charges 85 49 35 1 85
Export duties 20 11 8 1 20
Royalty on metals 44 25 19 — 44
Net cash costs 263 478 344 13 835
DD&A 225 129 92 4 225
Noncash and other costs, net 35 b 20 14 1 35
Total costs 523 627 450 18 1,095
Other revenue adjustments, primarily for pricing
    on prior period open sales (20) (20) 5 — (15)
Gross profit $ 217 $ 113 $ 100 $ 4 $ 217
Copper sales (millions of recoverable pounds) 299 299
Gold sales (thousands of recoverable ounces) 319
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments $ 2.54 $ 2.54 $ 1,709
Site production and delivery, before net noncash
    and other costs shown below 2.29 1.31 884
Gold and silver credits (1.91) — —
Treatment charges 0.28 0.17 110
Export duties 0.07 0.04 25
Royalty on metals 0.15 0.08 58
Unit net cash costs 0.88 1.60 1,077
DD&A 0.75 0.43 289
Noncash and other costs, net 0.12 b 0.06 45
Total unit costs 1.75 2.09 1,411
Other revenue adjustments, primarily for pricing
    on prior period open sales (0.07) (0.07) 14
Gross profit per pound/ounce $ 0.72 $ 0.38 $ 312
Reconciliation to Amounts Reported
Production
Revenues and Delivery DD&A
Totals presented above $ 1,327 $ 686 $ 225
Treatment charges (85) — —
Export duties (20) — —
Royalty on metals (44) — —
Noncash and other costs, net — 35 —
Other revenue adjustments, primarily for pricing
    on prior period open sales (15) — —
Indonesia mining 1,163 721 225
Other miningc
6,386 5,860 444
Corporate, other & eliminations (1,697) (1,642) 30
As reported in our consolidated financial statements $ 5,852 $ 4,939 $ 699

a.~~Includes silver sales of 1.3 million ounces ($16.30 per ounce average realized price).~~

b.~~Includes COVID-19 related costs totaling $4 million ($0.01 per pound of copper).~~

c.~~Represents the combined total for our segments, as presented in Note 9.~~

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


		Three Months Ended June 30,										Three Months Ended March 31,
(In millions)	(In millions)	2021		2020							(In millions)	2022		2021

Revenues, excluding adjustmentsa	Revenues, excluding adjustmentsa	$	95	$	63						Revenues, excluding adjustmentsa	$	134	$	76
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	54		53							Site production and delivery, before net noncash and other costs shown below	72		54
Treatment charges and other	Treatment charges and other	6		5							Treatment charges and other	6		6
Net cash costs	Net cash costs	60		58							Net cash costs	78		60
DD&A	DD&A	17		15							DD&A	16		15
Metals inventory adjustments		—		1

Noncash and other costs, net	Noncash and other costs, net	2		8		b					Noncash and other costs, net	3		4
Total costs	Total costs	79		82							Total costs	97		79
Gross profit (loss)	Gross profit (loss)	$	16	$	(19)						Gross profit (loss)	$	37	$	(3)

Molybdenum sales (millions of recoverable pounds)a	Molybdenum sales (millions of recoverable pounds)a	7		6							Molybdenum sales (millions of recoverable pounds)a	7		7

Gross profit (loss) per pound of molybdenum:	Gross profit (loss) per pound of molybdenum:										Gross profit (loss) per pound of molybdenum:

Revenues, excluding adjustmentsa	Revenues, excluding adjustmentsa	$	12.77	$	9.69						Revenues, excluding adjustmentsa	$	18.75	$	11.38
Site production and delivery, before net noncash and other costs shown below	Site production and delivery, before net noncash and other costs shown below	7.29		8.12							Site production and delivery, before net noncash and other costs shown below	10.04		8.13
Treatment charges and other	Treatment charges and other	0.85		0.85							Treatment charges and other	0.85		0.85
Unit net cash costs	Unit net cash costs	8.14		8.97							Unit net cash costs	10.89		8.98
DD&A	DD&A	2.29		2.29							DD&A	2.27		2.23
Metals inventory adjustments		—		0.16

Noncash and other costs, net	Noncash and other costs, net	0.30		1.34		b					Noncash and other costs, net	0.40		0.55
Total unit costs	Total unit costs	10.73		12.76							Total unit costs	13.56		11.76
Gross profit (loss) per pound	Gross profit (loss) per pound	$	2.04	$	(3.07)						Gross profit (loss) per pound	$	5.19	$	(0.38)

Reconciliation to Amounts Reported	Reconciliation to Amounts Reported										Reconciliation to Amounts Reported
									Metals
				Production					Inventory					Production
Three Months Ended June 30, 2021		Revenues		and Delivery			DD&A		Adjustments
Three Months Ended March 31, 2022											Three Months Ended March 31, 2022	Revenues		and Delivery		DD&A
Totals presented above	Totals presented above	$	95	$	54		$	17	$	—	Totals presented above	$	134	$	72	$	16
Treatment charges and other	Treatment charges and other	(6)		—			—		—		Treatment charges and other	(6)		—		—
Noncash and other costs, net	Noncash and other costs, net	—		2			—		—		Noncash and other costs, net	—		3		—
Molybdenum mines	Molybdenum mines	89		56			17		—		Molybdenum mines	128		75		16
Other miningc		7,285		4,519			451		—
Other miningb											Other miningb	8,199		4,790		457

Corporate, other & eliminations	Corporate, other & eliminations	(1,626)		(1,508)			15		—		Corporate, other & eliminations	(1,724)		(1,715)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	5,748	$	3,067		$	483	$	—	As reported in our consolidated financial statements	$	6,603	$	3,150	$	489

Three Months Ended June 30, 2020
Three Months Ended March 31, 2021											Three Months Ended March 31, 2021
Totals presented above	Totals presented above	$	63	$	53		$	15	$	1	Totals presented above	$	76	$	54	$	15
Treatment charges and other	Treatment charges and other	(5)		—			—		—		Treatment charges and other	(6)		—		—
Noncash and other costs, net	Noncash and other costs, net	—		8			—		—		Noncash and other costs, net	—		4		—

Molybdenum mines	Molybdenum mines	58		61			15		1		Molybdenum mines	70		58		15
Other miningc		3,915		3,187			328		(145)
Other miningb											Other miningb	5,913		3,732		388

Corporate, other & eliminations	Corporate, other & eliminations	(919)		(854)			15		5		Corporate, other & eliminations	(1,133)		(1,003)		16
As reported in our consolidated financial statements	As reported in our consolidated financial statements	$	3,054	$	2,394		$	358	$	(139)	As reported in our consolidated financial statements	$	4,850	$	2,787	$	419

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.Includes charges totaling $6 million ($1.00 per pound of molybdenum) primarily associated with the April 2020 revised operating plans (including employee separation costs) and contract cancellation costs related to the COVID-19 pandemic.

c.Represents the combined total for our other segments, as presented in Note 9. Also includes amounts associated with our molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.

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

~~Table of Contents~~

Six months ended June 30,
(In millions) 2021 2020
Revenues, excluding adjustmentsa
$ 171 $ 140
Site production and delivery, before net noncash
and other costs shown below 108 117
Treatment charges and other 12 11
Net cash costs 120 128
DD&A 32 31
Metals inventory adjustments 1 5
Noncash and other costs, net 5 10 b
Total costs 158 174
Gross profit (loss) $ 13 $ (34)
Molybdenum sales (millions of recoverable pounds)a
14 13
Gross profit (loss) per pound of molybdenum:
Revenues, excluding adjustmentsa
$ 12.12 $ 10.36
Site production and delivery, before net noncash
and other costs shown below 7.68 8.67
Treatment charges and other 0.85 0.85
Unit net cash costs 8.53 9.52
DD&A 2.27 2.29
Metals inventory adjustments 0.06 0.35
Noncash and other costs, net 0.36 0.79 b
Total unit costs 11.22 12.95
Gross profit (loss) per pound $ 0.90 $ (2.59)
Reconciliation to Amounts Reported
Metals
Production Inventory
Six months ended June 30, 2021 Revenues and Delivery DD&A Adjustments
Totals presented above $ 171 $ 108 $ 32 $ 1
Treatment charges and other (12) — — —
Noncash and other costs, net — 5 — —
Molybdenum mines 159 113 32 1
Other miningc
13,198 8,251 839 —
Corporate, other & eliminations (2,759) (2,511) 31 —
As reported in our consolidated financial statements $ 10,598 $ 5,853 $ 902 $ 1
Six months ended June 30, 2020
Totals presented above $ 140 $ 117 $ 31 $ 5
Treatment charges and other (11) — — —
Noncash and other costs, net — 10 — —
Molybdenum mines 129 127 31 5
Other miningc
7,420 6,454 638 60
Corporate, other & eliminations (1,697) (1,642) 30 18
As reported in our consolidated financial statements $ 5,852 $ 4,939 $ 699 $ 83

b.Includes charges totaling $6 million ($0.48 per pound of molybdenum) primarily associated with the April 2020 revised operating plans (including employee separation costs) and contract cancellation costs related to the COVID-19 pandemic.

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~~GUARANTOR SUMMARIZED FINANCIAL INFORMATION~~

All of the senior notes issued by FCX are fully and unconditionally guaranteed on a senior basis jointly and severally by Freeport-McMoRan Oil & Gas LLC (FM O&G LLC), as guarantor, which is a 100-percent-owned subsidiary of FCX Oil & Gas LLC (FM O&G) and FCX. The guarantee is an unsecured obligation of the guarantor and ranks equal in right of payment with all existing and future indebtedness of FM O&G LLC, including indebtedness under our revolving credit facility. The guarantee ranks senior in right of payment with all of FM O&G LLC’s future subordinated obligations and is effectively subordinated in right of payment to any debt of FM O&G LLC’s subsidiaries. The indentures provide that FM O&G LLC’s guarantee obligations may be released or terminated upon: (i) the sale of all or substantially all of the equity interests or assets of FM O&G LLC to a third party that is not our subsidiary or our affiliate; (ii) FM O&G LLC no longer having any obligations under any FM O&G senior notes or any refinancing thereof and no longer being a co-borrower or guarantor of any of our obligations under the revolving credit facility or any other senior debt or, in each case, any refinancing thereof; or (iii) the discharge of our obligations under the indentures in accordance with their terms.

The following summarized financial data includes information regarding FCX, as issuer, FM O&G LLC, as guarantor, and all our other non-guarantor subsidiaries at June 30, 2021, and December 31, 2020, and for the six months ended June 30, 2021.

FCX FM O&G LLC Non-guarantor Consolidated
Issuer Guarantor Subsidiaries Eliminations FCX
As of June 30, 2021
Current assets $ 163 $ 704 $ 12,625 $ (893) $ 12,599
Noncurrent assets 416 6 32,784 (369) 32,837
Current liabilities 809 30 5,595 (907) 5,527
Noncurrent liabilities 9,019 11,340 14,079 (15,464) 18,974
As of December 31, 2020
Current assets $ 65 $ 697 $ 9,287 $ (746) $ 9,303
Noncurrent assets 785 6 32,806 (756) 32,841
Current liabilities 187 31 3,964 (765) 3,417
Noncurrent liabilities 9,433 11,208 15,075 (15,657) 20,059
Six Months Ended June 30, 2021
Revenues $ — $ 28 $ 10,570 $ — $ 10,598
Operating (loss) income (21) 7 3,596 17 3,599
Net income (loss) 1,801 a (85) a 2,400 (1,832) 2,284

a.~~Net income (loss) equals net income (loss) attributable to common stockholders because net income attributable to noncontrolling interests is zero for issuer and guarantor.~~

~~Table of Contents~~

CAUTIONARY STATEMENT

Our discussion and analysis contains forward-looking statements in which we discuss our potential future performance. 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; ore grades and milling rates; ~~business outlook;~~ production and sales volumes; unit net cash costs; ~~cash flows;~~ capital expenditures; ~~liquidity;~~ operating costs; operating plans; ~~our financial policy; our expectations regarding PT-FI's ramp-up of underground mining activities and future~~ cash ~~flows through 2022; PT-FI's development,~~flows; liquidity; PT-FI’s financing, construction and completion of ~~new~~additional domestic smelting capacity in Indonesia ~~totaling 2 million metric tons~~in accordance with the terms of ~~concentrate per year by December 2023; expectations regarding negotiations with hourly employees at Cerro Verde including completion of new CLAs;~~the special mining license (IUPK); our commitments to deliver responsibly produced copper, including plans to implement and validate all of our operating sites under ~~specific~~the Copper Mark and to comply with other disclosure frameworks; execution of our energy and climate strategies and the underlying assumptions and estimated impacts on our business related thereto; achievement of climate commitments and net zero aspirations; improvements in operating procedures and ~~technology;~~technology innovations; exploration efforts and results; development and production activities, rates and costs; future organic growth opportunities; tax rates; export quotas and duties; the impact of copper, gold and molybdenum price changes; the impact of deferred intercompany profits on earnings; ~~mineralization~~mineral reserve and ~~reserve~~mineral resource estimates; ~~execution~~final resolution of ~~the settlement agreements~~settlements associated with ongoing legal proceedings; and the ~~Louisiana coastal erosion cases and talc-related litigation; descriptions~~ongoing implementation of our ~~objectives, strategies, plans, goals or targets, including our net debt target;~~financial policy and future returns to shareholders, including dividend payments (base or variable) and share ~~purchases and sales.~~repurchases. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” "targets," “intends,” “likely,” “will,” “should,” “could,” “to be,” ”potential," “assumptions,” “guidance,” “aspirations,” “future” and any similar expressions are intended to identify those assertions as forward-looking statements. The declaration and payment of ~~future~~ dividends (base or variable) and timing and amount of any share repurchases is at the discretion of the Board and ~~will depend on~~management, respectively, and is subject to a number of factors, including maintaining our net debt target, capital availability, our financial results, cash requirements, ~~future~~business prospects, global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by the ~~Board.~~Board or management, as applicable. The 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, ~~changes in our credit rating;~~supply of and demand for; and prices of the commodities we produce, primarily copper; changes in our cash requirements, financial position, financing ~~plans~~ or investment plans; changes in general market, economic, tax, regulatory or industry ~~conditions;~~conditions, including as a result of Russia’s invasion of Ukraine; reductions in liquidity and access to capital; the ~~duration and scope of and uncertainties associated with the~~ongoing COVID-19 pandemic ~~(including new and emerging strains and variants of COVID-19), and the impact thereof on commodity prices, our business and the global economy,~~ and any ~~related actions taken by governments~~future public health crisis; political and ~~businesses; our ability to contain~~social risks; operational risks inherent in mining, with higher inherent risks in underground mining; fluctuations in price and ~~mitigate the risk~~availability of ~~spread or major outbreak of COVID-19 at our operating sites, including at PT-FI’s remote operating site in Papua;~~commodities purchased; constraints on supply, oflogistics and ~~demand for, and prices of, copper, gold and molybdenum;~~transportation services; mine sequencing; changes in mine plans or operational modifications, delays, deferrals or cancellations; production rates; timing of shipments; results of technical, economic or feasibility studies; potential inventory adjustments; potential impairment of long-lived mining assets; the potential effects of violence in Indonesia generally and in the province of Papua; the Indonesia government's extension of PT-FI's export license after March ~~15, 2022; risks associated with underground mining;~~19, 2023; satisfaction of requirements in accordance with PT-FI's ~~special mining license~~IUPK to extend mining rights from 2031 through 2041; the Indonesia government's approval of a deferred schedule for completion of ~~new~~additional domestic smelting capacity in Indonesia; ~~expected results from improvements in operating procedures and technology, including innovation initiatives; industry risks; regulatory changes; political and social risks;~~cybersecurity incidents; labor relations, including labor-related work stoppages and costs; the results of the human health assessment to evaluate the potential impacts of tailings and mining waste, and compliance with applicable environmental, health and safety laws and regulations; weather- and climate-related risks; environmental ~~risks;~~risks and litigation results; cybersecurity incidents; changes in general market, economic and industry conditions; financial condition of our customers, suppliers, vendors, partners and affiliates, particularly during weak economic conditions and extended periods of volatile commodity prices; reductions in liquidity and access to capital; our ability to comply with our responsible production commitments under specific frameworks and any changes to such ~~frameworks;~~frameworks and other factors described in more detail under the heading “Risk Factors” contained in Part I, Item 1A. of our ~~2020~~2021 Form 10-K.

Investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made, including for example commodity prices, which we cannot control, and production volumes and costs or technological solutions and innovation, some aspects of which we may not be able to control. Further, we may make changes to our business plans that could affect our results. We caution investors that we undertake no obligation to update any forward-looking statements, which speak only as of the date made, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes.

This report on Form 10-Q also contains financial 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”~~Costs (Credits)” 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

Table of Contents

production and delivery costs applicable to sales reported in our consolidated financial statements. Refer to “Net Debt” for reconciliations of debt and consolidated cash and cash equivalents to net debt.

~~Table of Contents~~

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our market risks during the ~~six-month~~three-month period ended ~~June 30, 2021.~~March 31, 2022.

For additional information on market risks, refer to “Disclosures About Market Risks” included in Part II, Items 7. and 7A. of our ~~2020~~2021 Form 10-K. For projected sensitivities of our operating cash flow to changes in commodity prices, refer to “Outlook” in Part I, Item 2. of this quarterly report on Form 10-Q; for projected sensitivities of our provisionally priced copper sales to changes in commodity prices refer to “Consolidated Results – Revenues” in Part I, Item 2. of this quarterly report on Form 10-Q.

Item 4.Controls and Procedures.

(a)Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer, with the participation of management, have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report on Form 10-Q. Based on their evaluation, they have concluded that our disclosure controls and procedures were effective as of ~~June 30, 2021.~~March 31, 2022.

(b)Changes in internal control over financial reporting. There has been no change in our internal control over financial reporting that occurred during the quarter ended ~~June 30, 2021,~~March 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II.OTHER INFORMATION

Item 1.Legal Proceedings.

We are involved in numerous legal proceedings that arise in the ordinary course of our business or are associated with environmental issues. We are also involved periodically in reviews, inquiries, investigations and other proceedings initiated by or involving government agencies, some of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief.

Management does not believe, based on currently available information, that the outcome of any legal proceeding reported in Part I, Item 3. “Legal Proceedings” and Note 12 of our ~~2020~~2021 Form 10-K, and Note 8 herein, will have a material adverse effect on our financial condition; although individual or cumulative outcomes could be material to our operating results for a particular period, depending on the nature and magnitude of the outcome and the operating results for the period.

There have been no material changes to legal proceedings previously disclosed in Part I, Item 3. “Legal Proceedings” and Note 12 of our ~~2020~~2021 Form 10-K. ~~Refer to Note 8 for updates to our talc and asbestos claims.~~

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Item 1A. Risk Factors.

There have been no material changes to our risk factors previously disclosed in Part I, Item 1A. “Risk Factors” of our ~~2020~~2021 Form 10-K.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of equity securities during the three months ended ~~June 30, 2021.~~March 31, 2022.

~~There were no~~The following table sets forth information with respect to shares of FCX common stock purchased by us during the three months ended ~~June 30, 2021.~~ March 31, 2022, and the approximate dollar value of shares that may yet be purchased pursuant to our share repurchase program:


Period	(a) Total Number of Shares Purchased		(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programsa	(d) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programsa
January 1-31, 2022	2,630,474		$	42.46	2,630,474	$	2,400,065,904
February 1-28, 2022	5,021,731	b	$	41.05	4,858,739	$	2,201,152,367
March 1-31, 2022	4,791,738		$	48.01	4,791,738	$	1,971,105,007
Total	12,443,943		$	44.03	12,280,951

a.On ~~July 31, 2008,~~November 1, 2021, our Board approved ~~an increase in our open-market~~a share ~~purchase~~repurchase program ~~for~~authorizing repurchases of up to ~~30 million~~$3.0 billion of our common stock. The share repurchase program does not obligate us to acquire any specific amount of shares ~~which~~and does not have an expiration date. ~~There have been no purchases~~

b.Includes 162,992 shares acquired in connection with stock option exercises during the period shown. All other share repurchases were made under ~~this program since 2008. At June 30, 2021, there were 23.7 million shares that could still be purchased under the~~our publicly announced program.

~~Table of Contents~~

Item 4.Mine Safety Disclosures.

The safety and health of all employees is our highest priority. Management believes that safety and health considerations are integral to, and compatible with, all other functions in the organization and that proper safety and health management will enhance production and reduce costs. Our approach towards the safety and health of our workforce is to continuously improve performance through implementing robust management systems and providing adequate training, safety incentive and occupational health programs. The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this quarterly report on Form 10-Q.

Table of Contents

Item 6.Exhibits.

Filed

Exhibit

with this

Incorporated by Reference

Number

Exhibit Title

Form 10-Q

Form

File No.

Date Filed

2.1*

~~PTFI~~PT-FI Divestment Agreement dated as of September 27, 2018 among FCX, International Support LLC, PT Freeport Indonesia, PT Indocopper Investama and PT Indonesia Asahan Aluminium (Persero).

10-Q

001-11307-01

11/9/2018

2.2

Supplemental and Amendment Agreement to the PT-FI Divestment Agreement, dated December 21, 2018, among FCX, PT Freeport Indonesia, PT Indonesia Papua Metal Dan Mineral (f/k/a PT Indocopper Investama), PT Indonesia Asahan Aluminium (Persero) and International Support LLC.

10-K

001-11307-01

2/15/2019

3.1

Amended and Restated Certificate of Incorporation of FCX, effective as of June 8, 2016.

8-K

001-11307-01

6/9/2016

3.2

Amended and Restated By-Laws of FCX, effective as of June 3, 2020.

8-K

001-11307-01

6/3/2020

10.1

Concentrate Purchase and Sales Agreement dated effective December 11, 1996, between PT Freeport Indonesia and PT Smelting.

S-3

001-11307-01

11/5/2001

10.2

Amendment No. 1 dated as of March 19, 1998, Amendment No. 2 dated as of December 1, 2000, Amendment No. 3 dated as of January 1, 2003, Amendment No. 4 dated as of May 10, 2004, Amendment No. 5 dated as of March 19, 2009, Amendment No. 6 dated as of January 1, 2011, and Amendment No. 7 dated as of October 29, 2012, to the Concentrate Purchase and Sales Agreement dated effective December 11, 1996, between PT Freeport Indonesia and PT Smelting.

10-K

001-11307-01

2/27/2015

10.3

Amendment No. 9 dated as of April 10, 2017 to the Concentrate Purchase and Sales Agreement dated December 11,1996 between PT Freeport Indonesia and PT Smelting.

10-K

001-11307-01

2/20/2018

10.4

Amendment No. 10 dated as of March 5, 2020, Amendment No. 11 dated as of March 31, 2021, Amendment No. 12 dated as of October 13, 2021, and Amendment No. 13 dated as of November 30, 2021, to the Concentrate Purchase and Sales Agreement dated effective December 11, 1996, between PT Freeport Indonesia and PT Smelting.

15.1

Letter from Ernst & Young LLP regarding unaudited interim financial statements.

22.1

List of ~~Guarantor Subsidiaries~~Subsidiary Guarantors and Subsidiary Issuers of Guaranteed Securities.

10-K

001-11307-01

2/~~16/2021~~15/2022

31.1

Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d – 14(a).

31.2

Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d – 14(a).

32.1

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2

Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350.

95.1

Mine Safety and Health Administration Safety Data.

101.INS

XBRL Instance Document- the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase.

Table of Contents

Filed

Exhibit

with this

Incorporated by Reference

Number

Exhibit Title

Form 10-Q

Form

File No.

Date Filed

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase.

104

The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL.

* The registrant agrees to furnish supplementally to the Securities and Exchange Commission (SEC) a copy of any omitted schedule or exhibit upon the request of the SEC in accordance with Item 601(a)(5) of Regulation S-K.

6855

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Freeport-McMoRan Inc.

			By:			/s/ C. Donald Whitmire, Jr.
						C. Donald Whitmire, Jr.
						Vice President and
						Controller - Financial Reporting
						(authorized signatory
						and Principal Accounting Officer)

Date: ~~August~~May 5, ~~2021~~2022

S-1


	Three Months Ended June 30		Six Months Ended June 30

Consolidated revenues - 2020 period	$	3,054	$	5,852
Higher sales volumes:
Copper	435		674
Gold	215		402
Molybdenum	43		38

Higher average realized prices:
Copper	1,664		3,017
Gold	14		43
Molybdenum	56		66
Adjustments for prior period provisionally priced copper sales	118		271
Higher Atlantic Copper revenues	328		575
Higher revenues from purchased copper	144		127

Higher treatment charges	(26)		(43)
Higher royalties and export duties	(84)		(152)
Other, including intercompany eliminations	(213)		(272)
Consolidated revenues - 2021 period	$	5,748	$	10,598



Six months ended June 30, 2020
(In millions)	By-Product			Co-Product Method
	Method			Copper		Molybdenuma		Otherb		Total
Revenues, excluding adjustments	$	1,799	c	$	1,799	147		44		1,990
Site production and delivery, before net noncash and other costs shown below	1,439			1,333		128		28		1,489
By-product credits	(141)			—		—		—		—
Treatment charges	76			73		—		3		76
Net cash costs	1,374			1,406		128		31		1,565
DD&A	180			166		10		4		180
Metals inventory adjustments	56			54		—		2		56
Noncash and other costs, net	69		d	65		2		2		69
Total costs	1,679			1,691		140		39		1,870
Other revenue adjustments, primarily for pricing on prior period open sales	(22)			(22)		—		—		(22)
Gross profit	$	98		$	86	$	7	$	5	$	98

Copper sales (millions of recoverable pounds)	722			722
Molybdenum sales (millions of recoverable pounds)a						17

Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments	$	2.50	c	$	2.50	$	8.99
Site production and delivery, before net noncash and other costs shown below	2.00			1.85		7.81
By-product credits	(0.19)			—		—
Treatment charges	0.10			0.10		—
Unit net cash costs	1.91			1.95		7.81
DD&A	0.25			0.23		0.64
Metals inventory adjustments	0.08			0.07		—
Noncash and other costs, net	0.09		d	0.09		0.15
Total unit costs	2.33			2.34		8.60
Other revenue adjustments, primarily for pricing on prior period open sales	(0.03)			(0.03)		—
Gross profit per pound	$	0.14		$	0.13	$	0.39

Reconciliation to Amounts Reported
								Metals
				Production				Inventory
	Revenues			and Delivery		DD&A		Adjustments
Totals presented above	$	1,990		$	1,489	$	180	$	56
Treatment charges	(10)			66		—		—
Noncash and other costs, net	—			69		—		—
Other revenue adjustments, primarily for pricing on prior period open sales	(22)			—		—		—
Eliminations and other	15			23		1		—
North America copper mines	1,973			1,647		181		56
Other mininge	5,576			4,934		488		9


Corporate, other & eliminations	(1,697)			(1,642)		30		18
As reported in our consolidated financial statements	$	5,852		$	4,939	$	699	$	83


	FCX			FM O&G LLC			Non-guarantor				Consolidated
	Issuer			Guarantor			Subsidiaries		Eliminations		FCX
As of June 30, 2021
Current assets	$	163		$	704		$	12,625	$	(893)	$	12,599
Noncurrent assets	416			6			32,784		(369)		32,837
Current liabilities	809			30			5,595		(907)		5,527
Noncurrent liabilities	9,019			11,340			14,079		(15,464)		18,974

As of December 31, 2020
Current assets	$	65		$	697		$	9,287	$	(746)	$	9,303
Noncurrent assets	785			6			32,806		(756)		32,841
Current liabilities	187			31			3,964		(765)		3,417
Noncurrent liabilities	9,433			11,208			15,075		(15,657)		20,059

Six Months Ended June 30, 2021
Revenues	$	—		$	28		$	10,570	$	—	$	10,598
Operating (loss) income	(21)			7			3,596		17		3,599
Net income (loss)	1,801		a	(85)		a	2,400		(1,832)		2,284