Item 1. Financial Statements.

Freeport-McMoRan Inc.

CONSOLIDATED BALANCE SHEETS (Unaudited)

			September 30, 2022						December 31, 2021
			(In millions)
ASSETS
Current assets:
Cash and cash equivalents			$	8,578					$	8,068
Trade accounts receivable			844						1,168
Income and other tax receivables			485						574
Inventories:
Materials and supplies, net			1,873						1,669
Mill and leach stockpiles			1,369						1,170
Product			1,577						1,658
Other current assets			647						523
Total current assets			15,373						14,830
Property, plant, equipment and mine development costs, net			31,814						30,345
Long-term mill and leach stockpiles			1,194						1,387
Other assets			1,546						1,460
Total assets			$	49,927					$	48,022
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities			$	3,947					$	3,495
Current portion of debt			1,032						372
Accrued income taxes			439						1,541
Current portion of environmental and asset retirement obligations			365						264
Dividends payable			216						220
Total current liabilities			5,999						5,892
Long-term debt, less current portion			9,658						9,078
Deferred income taxes			4,316						4,234
Environmental and asset retirement obligations, less current portion			4,223						4,116
Other liabilities			1,550						1,683
Total liabilities			25,746						25,003
Equity:
Stockholders’ equity:
Common stock			161						160
Capital in excess of par value			25,483						25,875
Accumulated deficit			(4,604)						(7,375)
Accumulated other comprehensive loss			(385)						(388)
Common stock held in treasury			(5,701)						(4,292)
Total stockholders’ equity			14,954						13,980
Noncontrolling interests			9,227						9,039
Total equity			24,181						23,019
Total liabilities and equity			$	49,927					$	48,022

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

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

			Three Months Ended												Nine Months Ended
			September 30,												September 30,
			2022						2021						2022						2021
			(In millions, except per share amounts)
Revenues			$	5,003					$	6,083					$	17,022					$	16,681
Cost of sales:
Production and delivery			3,366						3,009						9,519						8,862
Depreciation, depletion and amortization			508						528						1,504						1,430
Metals inventory adjustments			25						14						43						15
Total cost of sales			3,899						3,551						11,066						10,307
Selling, general and administrative expenses			98						102						313						289
Mining exploration and research expenses			38						15						87						36
Environmental obligations and shutdown costs			6						13						51						51
Net gain on sales of assets			—						(60)						(2)						(63)
Total costs and expenses			4,041						3,621						11,515						10,620
Operating income			962						2,462						5,507						6,061
Interest expense, net			(140)						(138)						(423)						(431)
Net gain on early extinguishment of debt			20						—						28						—
Other income, net			25						36						67						56
Income before income taxes and equity in affiliated companies’ net earnings (losses)			867						2,360						5,179						5,686
Provision for income taxes			(315)						(628)						(1,710)						(1,674)
Equity in affiliated companies’ net earnings (losses)			8						(9)						33						(5)
Net income			560						1,723						3,502						4,007
Net income attributable to noncontrolling interests			(156)						(324)						(731)						(807)
Net income attributable to common stockholders			$	404					$	1,399					$	2,771					$	3,200
Net income per share attributable to common stockholders:
Basic			$	0.28					$	0.95					$	1.91					$	2.18
Diluted			$	0.28					$	0.94					$	1.90					$	2.16
Weighted-average shares of common stock outstanding:
Basic			1,431						1,469						1,444						1,466
Diluted			1,439						1,484						1,455						1,481
Dividends declared per share of common stock			$	0.15					$	0.075					$	0.45					$	0.225

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

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

			Three Months Ended												Nine Months Ended
			September 30,												September 30,
			2022						2021						2022						2021
			(In millions)
Net income			$	560					$	1,723					$	3,502					$	4,007
Other comprehensive income, net of taxes:
Defined benefit plans:
Actuarial losses arising during the period			—						—						—						(1)
Prior service costs arising during the period			—						—						(1)						—
Amortization of unrecognized amounts included in net periodic benefit costs			1						4						5						12
Foreign exchange losses			—						—						(1)						(1)
Other comprehensive income			1						4						3						10
Total comprehensive income			561						1,727						3,505						4,017
Total comprehensive income attributable to noncontrolling interests			(156)						(324)						(731)						(806)
Total comprehensive income attributable to common stockholders			$	405					$	1,403					$	2,774					$	3,211

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

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

			Nine Months Ended
			September 30,
			2022						2021
			(In millions)
Cash flow from operating activities:
Net income			$	3,502					$	4,007
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization			1,504						1,430
Metals inventory adjustments			43						15
Net gain on sales of assets			(2)						(63)
Stock-based compensation			75						79
Net charges for environmental and asset retirement obligations, including accretion			180						131
Payments for environmental and asset retirement obligations			(197)						(184)
Net charges for defined pension and postretirement plans			28						3
Pension plan contributions			(52)						(75)
Net gain on early extinguishment of debt			(28)						—
Deferred income taxes			83						96
Payments for Cerro Verde royalty dispute			—						(421)
Other, net			(86)						50
Changes in working capital and other:
Accounts receivable			456						(218)
Inventories			(184)						(310)
Other current assets			(71)						(77)
Accounts payable and accrued liabilities			84						123
Accrued income taxes and timing of other tax payments			(1,265)						849
Net cash provided by operating activities			4,070						5,435
Cash flow from investing activities:
Capital expenditures:
North America copper mines			(430)						(211)
South America			(203)						(94)
Indonesia mining			(1,148)						(904)
Indonesia smelter projects			(517)						(79)
Molybdenum mines			(16)						(4)
Other			(108)						(52)
Proceeds from sale of Freeport Cobalt			—						150
Proceeds from sales of assets			102						21
Loans to PT Smelting for expansion			(51)						—
Acquisition of minority interest in PT Smelting			—						(33)
Other, net			(10)						(25)
Net cash used in investing activities			(2,381)						(1,231)
Cash flow from financing activities:
Proceeds from debt			5,366						633
Repayments of debt			(4,073)						(672)
Cash dividends and distributions paid:
Common stock			(652)						(220)
Noncontrolling interests			(625)						(187)
Treasury stock purchases			(1,347)						—
Contributions from noncontrolling interests			142						135
Proceeds from exercised stock options			106						189
Payments for withholding of employee taxes related to stock-based awards			(55)						(19)
Debt financing costs and other, net			(41)						(47)
Net cash used in financing activities			(1,179)						(188)
Net increase in cash, cash equivalents and restricted cash and cash equivalents			510						4,016
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year			8,314						3,903
Cash, cash equivalents and restricted cash and cash equivalents at end of period			$	8,824					$	7,919

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

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

THREE MONTHS ENDED SEPTEMBER 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 June 30, 2022			1,612						$	161					$	25,661					$	(5,008)					$	(386)					177						$	(5,539)					$	14,889					$	9,158					$	24,047
Stock-based compensation, including the tender of shares			—						—						12						—						—						—						—						12						—						12
Treasury stock purchases			—						—						—						—						—						6						(162)						(162)						—						(162)
Dividends			—						—						(213)						—						—						—						—						(213)						(112)						(325)
Contributions from noncontrolling interests			—						—						23						—						—						—						—						23						25						48
Net income attributable to common stockholders			—						—						—						404						—						—						—						404						—						404
Net income attributable to noncontrolling interests			—						—						—						—						—						—						—						—						156						156
Other comprehensive income			—						—						—						—						1						—						—						1						—						1
Balance at September 30, 2022			1,612						$	161					$	25,483					$	(4,604)					$	(385)					183						$	(5,701)					$	14,954					$	9,227					$	24,181

			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 June 30, 2021			1,601						$	160					$	26,084					$	(9,880)					$	(576)					133						$	(3,777)					$	12,011					$	8,924					$	20,935
Exercised and issued stock-based awards			—						—						6						—						—						—						—						6						—						6
Stock-based compensation, including the tender of shares			—						—						21						—						—						—						—						21						—						21
Dividends			—						—						(111)						—						—						—						—						(111)						(94)						(205)
Contributions from noncontrolling interests			—						—						23						—						—						—						—						23						24						47
Net income attributable to common stockholders			—						—						—						1,399						—						—						—						1,399						—						1,399
Net income attributable to noncontrolling interests			—						—						—						—						—						—						—						—						324						324
Other comprehensive income			—						—						—						—						4						—						—						4						—						4
Balance at September 30, 2021			1,601						$	160					$	26,023					$	(8,481)					$	(572)					133						$	(3,777)					$	13,353					$	9,178					$	22,531

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (continued)

NINE MONTHS ENDED SEPTEMBER 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, 2021			1,603						$	160					$	25,875					$	(7,375)					$	(388)					146						$	(4,292)					$	13,980					$	9,039					$	23,019
Exercised and issued stock-based awards			9						1						112						—						—						—						—						113						—						113
Stock-based compensation, including the tender of shares			—						—						75						—						—						2						(62)						13						(11)						2
Treasury stock purchases			—						—						—						—						—						35						(1,347)						(1,347)						—						(1,347)
Dividends			—						—						(648)						—						—						—						—						(648)						(605)						(1,253)
Contributions from noncontrolling interests			—						—						69						—						—						—						—						69						73						142
Net income attributable to common stockholders			—						—						—						2,771						—						—						—						2,771						—						2,771
Net income attributable to noncontrolling interests			—						—						—						—						—						—						—						—						731						731
Other comprehensive income			—						—						—						—						3						—						—						3						—						3
Balance at September 30, 2022			1,612						$	161					$	25,483					$	(4,604)					$	(385)					183						$	(5,701)					$	14,954					$	9,227					$	24,181

			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						189						—						—						—						—						190						—						190
Stock-based compensation, including the tender of shares			—						—						64						—						—						1						(19)						45						(4)						41
Dividends			—						—						(333)						—						—						—						—						(333)						(187)						(520)
Contributions from noncontrolling interests			—						—						66						—						—						—						—						66						69						135
Net income attributable to common stockholders			—						—						—						3,200						—						—						—						3,200						—						3,200
Net income attributable to noncontrolling interests			—						—						—						—						—						—						—						—						807						807
Other comprehensive income (loss)			—						—						—						—						11						—						—						11						(1)						10
Balance at September 30, 2021			1,601						$	160					$	26,023					$	(8,481)					$	(572)					133						$	(3,777)					$	13,353					$	9,178					$	22,531

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

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 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, 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 nine-month period ended September 30, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Sale of Investments. In second-quarter 2022, Koboltti Chemicals Holdings Limited (KCHL), a 56-percent-owned subsidiary of FCX, sold all of the shares it owned in Jervois Global Limited for proceeds of $60 million. The shares were received in connection with the 2021 sale of KCHL's remaining cobalt business.

Subsequent Events. FCX evaluated events after September 30, 2022, and through the date the consolidated financial statements were issued, and determined any events and transactions occurring during this period that would require recognition or disclosure are appropriately addressed in these consolidated financial statements.

NOTE 2. EARNINGS PER SHARE

FCX calculates its basic net income per share of common stock under the two-class method and calculates its diluted net income per share of common stock using the more dilutive of the two-class method or the treasury-stock method. Basic net income per share of common stock was computed by dividing net income 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 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, unless their effect would be antidilutive.

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

			Three Months Ended												Nine Months Ended
			September 30,												September 30,
			2022						2021						2022						2021
Net income			$	560					$	1,723					$	3,502					$	4,007
Net income attributable to noncontrolling interests			(156)						(324)						(731)						(807)
Undistributed dividends and earnings allocated to participating securities			(5)						(4)						(6)						(6)
Net income attributable to common stockholders			$	399					$	1,395					$	2,765					$	3,194
Basic weighted-average shares of common stock outstanding			1,431						1,469						1,444						1,466
Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs)			8						15						11						15
Diluted weighted-average shares of common stock outstanding			1,439						1,484						1,455						1,481
Basic net income per share attributable to common stockholders			$	0.28					$	0.95					$	1.91					$	2.18
Diluted net income per share attributable to common stockholders			$	0.28					$	0.94					$	1.90					$	2.16

Outstanding stock options with exercise prices greater than the average market price of FCX’s common stock during the period are excluded from the computation of diluted net income per share of common stock. Excluded shares of common stock totaled 3 million shares in third-quarter 2022, 4 million shares in third-quarter 2021, 1 million shares for the first nine months of 2022 and 6 million shares for the first nine months of 2021.

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

The components of inventories follow (in millions):

			September 30, 2022						December 31, 2021
Current inventories:
Total materials and supplies, neta			$	1,873					$	1,669
Mill stockpiles			$	202					$	193
Leach stockpiles			1,167						977
Total current mill and leach stockpiles			$	1,369					$	1,170
Raw materials (primarily concentrate)			$	353					$	536
Work-in-process			204						195
Finished goods			1,020						927
Total product			$	1,577					$	1,658
Long-term inventories:
Mill stockpiles			$	203					$	226
Leach stockpiles			991						1,161
Total long-term mill and leach stockpilesb			$	1,194					$	1,387

a.Materials and supplies inventory was net of obsolescence reserves totaling $41 million at September 30, 2022, and $36 million at December 31, 2021.

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

FCX recorded metals inventory adjustments totaling $25 million in third-quarter 2022, primarily associated with net realizable value (NRV) adjustments related to lower market prices for copper and higher costs associated with revised estimated recoverable copper at El Abra discussed below. Metal inventory adjustments totaled $43 million for the first nine months of 2022, including $33 million associated with NRV adjustments related to lower market prices for copper and $10 million for stockpile write-offs at Cerro Verde. FCX recorded charges for metals inventory adjustments totaling $15 million for the first nine months of 2021, primarily related to a leach stockpile adjustment. Refer to Note 9 for metals inventory adjustments by business segment.

El Abra Stockpile Adjustment. As discussed in FCX’s 2021 Form 10-K, processes and recovery rates for mill and leach stockpiles are monitored regularly, and recovery rate estimates are adjusted periodically as additional information becomes available and as related technology changes. Adjustments to recovery rates will typically result in a future impact to the value of the material removed from the stockpiles at a revised weighted-average cost per pound of recoverable copper.

In second-quarter 2022, FCX’s El Abra mine revised its estimated recovery rate assumptions for specific ore types expected to be processed from its existing leach stockpile. The revised estimates resulted in a 135 million pound reduction in future estimated recoverable copper from this leach stockpile, which is being phased out. This revision had an unfavorable impact on El Abra’s costs but did not have a significant impact on FCX’s consolidated site production and delivery costs for the 2022 periods.

NOTE 4. INCOME TAXES

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

			Nine Months Ended
			September 30,
			2022						2021
U.S. operations			$	(5)					$	(7)
International operations			(1,705)			a			(1,667)			b
Total			$	(1,710)					$	(1,674)

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

b.Includes net tax benefits totaling $83 million ($66 million net of noncontrolling interest), consisting of $69 million associated with the release of a portion of the valuation allowances recorded against PT Rio Tinto Indonesia (PT RTI) net operating losses (NOLs) and $24 million primarily associated with the reversal of a tax reserve related to the treatment of prior year contractor support costs, partly offset by a tax charge of $10 million associated with the audit of PT Freeport Indonesia’s (PT-FI) 2019 tax returns.

FCX’s consolidated effective income tax rate was 33 percent for the first nine months of 2022 and 29 percent for the first nine months of 2021. Variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate. Because of its U.S. tax position, FCX does not record a financial statement impact for income or losses generated in the U.S.

On August 16, 2022, the U.S. Inflation Reduction Act of 2022 (the Inflation Reduction Act) was signed into law, which includes, among other provisions, (i) a new corporate alternative minimum tax of 15 percent on the adjusted financial statement income (AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period, and (ii) a new excise tax of 1 percent on the fair market value of net corporate stock repurchases. The provisions of the Inflation Reduction Act are effective for tax years beginning after December 31, 2022. FCX continues to analyze the impacts of the Inflation Reduction Act on its future results of operations.

NOTE 5. DEBT AND EQUITY

The components of debt follow (in millions):

						September 30, 2022						December 31, 2021
Senior notes and debentures:
Issued by FCX						$	7,301					$	8,268
Issued by PT-FI						2,976						—
Issued by Freeport Minerals Corporation						355						355
PT-FI Term Loan						—						432
Cerro Verde Term Loan						—						325
Other						58						70
Total debt						10,690						9,450
Less current portion of debt						(1,032)						(372)
Long-term debt						$	9,658					$	9,078

Credit Facilities

FCX. At September 30, 2022, FCX had no borrowings outstanding and $8 million in letters of credit issued under its unsecured revolving credit facility and was in compliance with its revolving credit facility covenants.

In October 2022, FCX and PT-FI entered into a new $3.0 billion, five-year, unsecured revolving credit facility, which replaced FCX’s prior revolving credit facility that was scheduled to mature in April 2024. The new revolving credit facility matures on October 19, 2027. Under the terms of the new revolving credit facility, FCX and PT-FI may obtain loans and issue letters of credit in an aggregate amount of up to $3.0 billion with PT-FI’s capacity limited to $500 million. Letters of credit may be issued up to $1.5 billion. Interest on loans made under the new revolving credit facility may, at the option of FCX or PT-FI, be determined based on the Secured Overnight Financing Rate plus a spread to be determined by reference to a grid based on FCX’s credit rating. The new revolving credit facility contains customary affirmative covenants and representations, and also contains various negative covenants that, among other things and subject to certain exceptions, restrict the ability of FCX’s subsidiaries that are not borrowers or guarantors to incur additional indebtedness (including guarantee obligations) and the ability of FCX or FCX’s subsidiaries to: create liens on assets; enter into sale and leaseback transactions; engage in mergers, liquidations and dissolutions; and sell assets. In addition, the new revolving credit facility contains a total leverage ratio financial covenant. FCX does not expect any material income statement impact associated with the refinancing.

PT-FI. In April 2022**,** PT-FI amended its five-year, unsecured revolving credit facility to, among other things, increase the availability to $1.3 billion. At September 30, 2022, PT-FI had no borrowings under its revolving credit facility and was in compliance with its revolving credit facility covenants.

Cerro Verde. In May 2022, Cerro Verde entered into a new $350 million, five-year, unsecured revolving credit facility. At September 30, 2022, Cerro Verde had no borrowings outstanding under its revolving credit facility and was in compliance with its revolving credit facility covenants.

Senior Notes

FCX. In May 2022, FCX began purchasing certain of its senior notes in open-market transactions and recorded gains on early extinguishment of debt totaling $20 million in third-quarter 2022 and $38 million for the first nine months of 2022. A summary of these debt extinguishments for the first nine months of 2022, follows (in millions):

			Principal Amount						Discounts/Deferred Issuance Costs						Book Value						Redemption Value						Gain
5.00% Senior Notes due 2027			$	103					$	1					$	102					$	102					$	—
4.125% Senior Notes due 2028			133						1						132						126						6
4.375% Senior Notes due 2028			166						2						164						158						6
5.25% Senior Notes due 2029			97						2						95						93						2
4.25% Senior Notes due 2030			76						1						75						71						4
4.625% Senior Notes due 2030			229						2						227						215						12
5.40% Senior Notes due 2034			20						—						20						20						—
5.450% Senior Notes due 2043			160						2						158						150						8
			$	984					$	11					$	973					$	935					$	38

From October 1, 2022, through November 4, 2022, FCX purchased an additional $78 million aggregate principal amount of its senior notes in open-market transactions, for a total redemption value of $72 million.

PT-FI. In April 2022, PT-FI completed the sale of $3.0 billion aggregate principal amount of unsecured senior notes, consisting of $750 million of 4.763% Senior Notes due 2027, $1.5 billion of 5.315% Senior Notes due 2032 and $750 million of 6.200% Senior Notes due 2052. PT-FI used $0.6 billion of the net proceeds to repay the borrowings under its term loan and expects to use the remaining net proceeds to finance its smelter projects.

Term Loans

PT-FI. In April 2022, PT-FI repaid the principal balance of the term loan portion of its credit facility, which cannot be redrawn, and recorded a loss on early extinguishment of debt of $10 million.

Cerro Verde. In May 2022, Cerro Verde repaid the principal balance of its term loan, which cannot be redrawn.

Interest Expense, Net. Consolidated interest costs (before capitalization) totaled $182 million in third-quarter 2022, $157 million in third-quarter 2021, $524 million for the first nine months of 2022 and $482 million for the first nine months of 2021. The increase in consolidated interest costs (before capitalization) for the 2022 periods, compared to the 2021 periods, is primarily related to the senior notes issued by PT-FI in April 2022.

Capitalized interest added to property, plant, equipment and mine development costs, net, totaled $42 million in third-quarter 2022, $19 million in third-quarter 2021, $101 million for the first nine months of 2022 and $51 million for the first nine months of 2021. The increase in capitalized interest costs for the 2022 periods resulted from increased construction and development projects in process, primarily at our Indonesia mining operations.

Share Repurchase Program and Dividends. In July 2022, FCX’s Board of Directors (Board) authorized an increase in the share repurchase program from up to $3.0 billion to up to $5.0 billion. No shares have been purchased since July 11, 2022. FCX has acquired 47.9 million shares of its common stock for a total cost of $1.8 billion ($38.35 average cost per share), including 35.1 million shares of its common stock under its share repurchase program for a total cost of $1.3 billion ($38.36 average cost per share) for the first nine months of 2022. FCX has $3.2 billion available for repurchases under the program.

On September 21, 2022, FCX declared quarterly cash dividends totaling $0.15 per share ($0.075 per share base dividend and $0.075 per share variable dividend) on its common stock, which were paid on November 1, 2022, to common stockholders of record as of October 14, 2022.

The declaration and payment of dividends (base or variable) and timing and amount of any share repurchases are at the discretion of the Board and management, respectively, and are subject to a number of factors, including 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.

A discussion of FCX’s 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 nine-month periods ended September 30, 2022 and 2021. At September 30, 2022, FCX held copper futures and swap contracts that qualified for hedge accounting for 96 million pounds at an average contract price of $3.93 per pound, with maturities through May 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 on the related hedged item follows (in millions):

			Three Months Ended												Nine Months Ended
			September 30,												September 30,
			2022						2021						2022						2021
Copper futures and swap contracts:
Unrealized gains (losses):
Derivative financial instruments			$	17					$	(20)					$	(61)					$	(28)
Hedged item – firm sales commitments			(17)						20						61						28
Realized (losses) gains:
Matured derivative financial instruments			(50)						5						(48)						57

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 September 30, 2022, follows:

			Open Positions						Average Price Per Unit												Maturities Through
						Contract						Market
Embedded derivatives in provisional sales contracts:
Copper (millions of pounds)			829						$	3.68					$	3.45					March 2023
Gold (thousands of ounces)			281						1,725						1,679						January 2023
Embedded derivatives in provisional purchase contracts:
Copper (millions of pounds)			153						3.77						3.47						December 2022

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 September 30, 2022, Atlantic Copper held net copper forward purchase contracts for 10 million pounds at an average contract price of $3.51 per pound, with maturities through November 2022.

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

			Three Months Ended												Nine Months Ended
			September 30,												September 30,
			2022						2021						2022						2021
Embedded derivatives in provisional sales contracts:a
Copper			$	(272)					$	(102)					$	(774)					$	223
Gold and other metals			(34)						(9)						(45)						(22)
Copper forward contractsb			5						1						31						(12)

a.Amounts recorded in revenues.

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

Unsettled Derivative Financial Instruments

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

						September 30, 2022						December 31, 2021
Commodity Derivative Assets:
Derivatives designated as hedging instruments:
Copper futures and swap contracts						$	—					$	12
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts						68						64
Copper forward contracts						—						1
Total derivative assets						$	68					$	77
Commodity Derivative Liabilities:
Derivatives designated as hedging instruments:
Copper futures and swap contracts						$	49					$	—
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts						222						27
Copper forward contracts						1						1
Total derivative liabilities						$	272					$	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.

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

						Assets												Liabilities
						September 30, 2022						December 31, 2021						September 30, 2022						December 31, 2021
Gross amounts recognized:
Embedded derivatives in provisional
sales/purchase contracts						$	68					$	64					$	222					$	27
Copper derivatives						—						13						50						1
						68						77						272						28
Less gross amounts of offset:
Embedded derivatives in provisional
sales/purchase contracts						6						3						6						3
Copper derivatives						—						1						—						1
						6						4						6						4
Net amounts presented in balance sheet:
Embedded derivatives in provisional
sales/purchase contracts						62						61						216						24
Copper derivatives						—						12						50						—
						$	62					$	73					$	266					$	24
Balance sheet classification:
Trade accounts receivable						$	29					$	51					$	94					$	14
Other current assets						—						12						—						—
Accounts payable and accrued liabilities						33						10						169						10
Other liabilities						—						—						3						—
						$	62					$	73					$	266					$	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 September 30, 2022, the maximum amount of credit exposure associated with derivative transactions was $68 million.

Other Financial Instruments. Other financial instruments include cash, cash equivalents, restricted cash and cash equivalents, accounts receivable, investment securities, legally restricted trust assets, accounts payable and accrued liabilities, accrued income taxes, dividends payable and debt. The carrying value for these financial instruments classified as current assets or liabilities approximates fair value because of their short-term nature and generally negligible credit losses. Refer to Note 7 for the fair values of investment securities, legally restricted funds and debt.

In addition, as of September 30, 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 and Restricted Cash and Cash Equivalents. The following table provides a reconciliation of total cash, cash equivalents and restricted cash and cash equivalents presented in the consolidated statements of cash flows (in millions):

						September 30, 2022						December 31, 2021
Balance sheet components:
Cash and cash equivalentsa						$	8,578					$	8,068
Restricted cash and cash equivalents included in:
Other current assets						112						114
Other assets						134						132
Total cash, cash equivalents and restricted cash and cash equivalents presented in the consolidated statements of cash flows						$	8,824					$	8,314

a.Includes time deposits of $0.4 billion at September 30, 2022, and $0.2 billion at December 31, 2021.

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 third-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, cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, accrued income taxes and dividends payable (refer to Note 6) follows (in millions):

			At September 30, 2022
			Carrying						Fair Value
			Amount						Total						NAV						Level 1						Level 2						Level 3
Assets
Investment securities:a,b
U.S. core fixed income fund			$	25					$	25					$	25					$	—					$	—					$	—
Equity securities			5						5						—						5						—						—
Total			30						30						25						5						—						—
Legally restricted funds:a
U.S. core fixed income fund			55						55						55						—						—						—
Government bonds and notes			35						35						—						—						35						—
Corporate bonds			33						33						—						—						33						—
Government mortgage-backed securities			27						27						—						—						27						—
Asset-backed securities			17						17						—						—						17						—
Money market funds			8						8						—						8						—						—
Collateralized mortgage-backed securities			3						3						—						—						3						—
Total			178						178						55						8						115						—
Embedded derivatives in provisional sales/purchase contracts in a gross asset position			68						68						—						—						68						—
Contingent consideration for the sale of the Deepwater GOM oil and gas propertiesa			71						60						—						—						—						60
Liabilities
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position			222						222						—						—						222						—
Copper futures and swap contracts			49						49						—						42						7						—
Copper forward contracts			1						1						—						1						—						—
Total			272						272						—						43						229						—
Long-term debt, including current portiond			10,690						9,578						—						—						9,578						—

			At December 31, 2021
			Carrying						Fair Value
			Amount						Total						NAV						Level 1						Level 2						Level 3
Assets
Investment securities:a,b
Equity securities			$	50					$	50					$	—					$	50					$	—					$	—
U.S. core fixed income fund			29						29						29						—						—						—
Total			79						79						29						50						—						—
Legally restricted funds:a
U.S. core fixed income fund			64						64						64						—						—						—
Government bonds and notes			53						53						—						—						53						—
Corporate bonds			45						45						—						—						45						—
Government mortgage-backed securities			20						20						—						—						20						—
Asset-backed securities			18						18						—						—						18						—
Money market funds			8						8						—						8						—						—
Municipal bonds			1						1						—						—						1						—
Total			209						209						64						8						137						—
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross asset position			64						64						—						—						64						—
Copper futures and swap contracts			12						12						—						9						3						—
Copper forward contracts			1						1						—						1						—						—
Total			77						77						—						10						67						—
Contingent consideration for the sale of the Deepwater GOM oil and gas propertiesa			90						81						—						—						—						81
Liabilities
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position			27						27						—						—						27						—
Copper forward contracts			1						1						—						1						—						—
Total			28						28						—						1						27						—
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 $112 million at September 30, 2022, and $114 million at December 31, 2021, and (ii) other assets of $134 million at September 30, 2022, and $132 million at December 31, 2021, primarily associated with an assurance bond to support PT-FI’s commitment for 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. 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.

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 $20 million at September 30, 2022, and December 31, 2021, and (ii) other assets totaled $51 million at September 30, 2022, and $70 million at December 31, 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 September 30, 2022, as compared with those techniques used at December 31, 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 nine months of 2022 follows (in millions):

Fair value at January 1, 2022			$	81
Net unrealized loss related to assets still held at the end of the period			(2)
Settlements			(19)
Fair value at September 30, 2022			$	60

NOTE 8. CONTINGENCIES AND COMMITMENTS

Asset Retirement Obligations (ARO)

Arizona Environmental and Reclamation Programs. FCX’s Arizona operations are subject to regulatory oversight by the 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 APP requires a proposed closure strategy that will meet applicable groundwater protection requirements following cessation of operations and an estimate of the implementation cost, with a 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 approximately every six years and financial assurance mechanisms are required to be updated every two years. During the first nine months of 2022, FCX’s Morenci and Bagdad mines increased each of their ARO liability and asset retirement cost asset by $117 million and $65 million, respectively, associated with their

updated closure strategies and plans for stockpiles and tailings impoundments that were submitted to ADEQ for approval. FCX will continue updating its closure plans and closure cost estimates at other Arizona sites, and any such updates may also result in increased costs that could be significant.

Litigation

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

Louisiana Parishes Coastal Erosion Cases. Certain FCX affiliates were named as defendants, along with numerous co-defendants, in 13 cases out of a total of 42 cases filed in Louisiana state courts by six south Louisiana parishes (Cameron, Jefferson, Plaquemines, St. Bernard, St. John the Baptist and Vermilion), alleging that certain oil and gas exploration and production operations and sulfur mining and production operations in coastal Louisiana contaminated and damaged coastal wetlands and caused significant land loss along the Louisiana coast. In 2019, affiliates of FCX reached an agreement in principle to settle all 13 cases. The settlement agreement has now been executed by all parties as of the end of October 2022. The agreement in principle does not include any admission of liability by FCX or its affiliates. FCX recorded a charge in 2019 for the initial payment of $15 million. In connection with execution of the settlement agreement by all parties, the FCX affiliates will fund the $15 million initial payment and be fully released and dismissed from all 13 pending cases.

Asbestos and Talc Claims. As previously disclosed, in 2021, Imerys obtained an injunction temporarily staying approximately 950 talc-related lawsuits against Cyprus Amax Minerals Company (CAMC), an indirect wholly owned subsidiary of FCX, and Cyprus Mines Corporation (Cyprus Mines), a wholly owned subsidiary of CAMC, which has been extended through at least January 2023. The interim stay is a component of the global settlement but there can be no assurance that the bankruptcy court will continue to impose the interim stay. Mediation to resolve open issues in the Imerys and Cyprus Mines bankruptcy cases is ongoing and expected to continue through the end of 2022, and FCX expects the overall process for its global settlement to continue into 2023.

Other Matters

Smelter Development Progress. 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, on PT-FI for failing to achieve physical development progress on 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 causing a delay of the greenfield 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. During 2021, PT-FI recorded charges totaling $16 million for a potential settlement of the administrative fine. On January 25, 2022, the Indonesia government submitted a new estimate of the administrative fine 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 by the 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 two million metric tons of concentrate, the approval of which was based on PT-FI’s revised smelter construction schedule as modified to reflect impacts of the ongoing COVID-19 pandemic.

NOTE 9. BUSINESS SEGMENTS

FCX has organized its mining operations into four 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 copper mines, the Grasberg minerals district (Indonesia Mining), 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.

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

			Three Months Ended												Nine Months Ended
			September 30,												September 30,
			2022						2021						2022						2021
Copper:
Concentrate			$	2,091					$	2,531					$	7,476					$	6,316
Cathode			1,255						1,463						3,873						4,232
Rod and other refined copper products			755						1,048						2,942						2,565
Purchased coppera			168						124						342						652
Gold			858						741						2,578						1,856
Molybdenum			304						372						1,059						904
Other			174						210						527						666
Adjustments to revenues:
Treatment charges			(132)						(126)						(404)						(324)
Royalty expenseb			(83)						(97)						(289)						(242)
PT-FI export duties			(81)						(72)						(263)			c			(145)
Revenues from contracts with customers			5,309						6,194						17,841						16,480
Embedded derivativesd			(306)						(111)						(819)						201
Total consolidated revenues			$	5,003					$	6,083					$	17,022					$	16,681

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

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

c.Includes a charge of $18 million associated with an adjustment to prior-period export duties.

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

Financial Information by Business Segment

(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
Three Months Ended September 30, 2022
Revenues:
Unaffiliated customers			$	18											$	74					$	92					$	666					$	215					$	881					$	1,726		a									$	—					$	1,436					$	604																							$	264		b			$	5,003
Intersegment			551												805						1,356						83						—						83						72												127						7						5																								(1,650)						—
Production and delivery			408												736						1,144						579						221						800						663												94						1,450						604																								(1,389)						3,366
Depreciation, depletion and amortization			44												56						100						84						14						98						265												18						1						8																								18						508
Metals inventory adjustments			2												1						3						2						20						22						—												—						—						—																								—						25
Selling, general and administrative expenses			—												1						1						2						—						2						26												—						—						6																								63						98
Mining exploration and research expenses			—												—						—						—						—						—						—												—						—						—																								38						38
Environmental obligations and shutdown costs			—												1						1						—						—						—						—												—						—						—																								5						6
Operating income (loss)			115												84						199						82						(40)						42						844												15						(8)						(9)																								(121)						962
Interest expense, net			—												1						1						5						—						5						15												—						—						4																								115						140
Provision for (benefit from) income taxes			—												—						—						3						(18)						(15)						343												—						—						—																								(13)						315
Total assets at September 30, 2022			2,996												5,456						8,452						8,390						1,826						10,216						20,496												1,701						216						1,082																								7,764						49,927
Capital expenditures			71												83						154						41						38						79						389												7						2						17																								188			c			836
Three Months Ended September 30, 2021
Revenues:
Unaffiliated customers			$	16											$	64					$	80					$	979					$	149					$	1,128					$	1,961		a									$	—					$	1,697					$	783																							$	434		b			$	6,083
Intersegment			711												1,020						1,731						95						—						95						81												151						7						—																								(2,065)						—
Production and delivery			312												592						904						533						97						630						569												70						1,701						765																								(1,630)						3,009
Depreciation, depletion and amortization			40												54						94						101						10						111						280												19						1						7																								16						528
Metals inventory adjustments			13												—						13						—						—						—						—												—						—						—																								1						14
Selling, general and administrative expenses			—												1						1						2						—						2						28												—						—						5																								66						102
Mining exploration and research expenses			—												1						1						—						—						—						—												—						—						—																								14						15
Environmental obligations and shutdown costs			(1)												(1)						(2)						—						—						—						—												—						—						—																								15						13
Net gain on sales of assets			—												—						—						—						—						—						—												—						—						—																								(60)			d			(60)
Operating income (loss)			363												437						800						438						42						480						1,165												62						2						6																								(53)						2,462
Interest expense, net			—												1						1						6						—						6						1												—						—						1																								129						138
Provision for (benefit from) income taxes			—												—						—						197						24						221						382			e									—						—						(1)																								26						628
Total assets at September 30, 2021			2,586												5,244						7,830						8,554						1,843						10,397						18,592												1,726						278						1,067																								7,027						46,917
Capital expenditures			42												74						116						41						6						47						328												1						1						5																								43			c			541

a.Includes PT-FI's sales to PT Smelting totaling $572 million in third-quarter 2022 and $795 million in third-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 capital expenditures for the greenfield smelter and precious metals refinery (collectively, the Indonesia smelter projects).

d.Represents the gain on the sale of FCX’s remaining cobalt business located in Kokkola, Finland (Freeport Cobalt).

e.Includes net tax benefits of $69 million associated with the release of a portion of the valuation allowances recorded against PT RTI NOLs.

(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
Nine Months Ended September 30, 2022
Revenues:
Unaffiliated customers			$	125											$	159					$	284					$	2,474											$	555					$	3,029					$	5,972		a									$	—					$	4,932					$	1,755					$	1,050		b			$	17,022
Intersegment			1,992												2,978						4,970						325												—						325						208												399						24						5						(5,931)						—
Production and delivery			1,168												2,111						3,279						1,702												510						2,212						1,853												249						4,969						1,789			c			(4,832)						9,519
Depreciation, depletion and amortization			132												175						307						262												35						297						775												52						3						20						50						1,504
Metals inventory adjustments			2												8						10						11												22						33						—												—						—						—						—						43
Selling, general and administrative expenses			1												2						3						6												—						6						83												—						—						19						202						313
Mining exploration and research expenses			—												1						1						—												—						—						—												—						—						—						86						87
Environmental obligations and shutdown costs			(13)												1						(12)						—												—						—						—												—						—						—						63						51
Net gain on sales of assets			—												—						—						—												—						—						—												—						—						—						(2)						(2)
Operating income (loss)			827												839						1,666						818												(12)						806						3,469												98						(16)						(68)						(448)						5,507
Interest expense, net			—												1						1						12												—						12						30												—						—						8						372						423
Provision for (benefit from) income taxes			—												—						—						298												(11)						287						1,363												—						—						—						60						1,710
Capital expenditures			207												223						430						109												94						203						1,148												16						6						60						559			d			2,422
Nine Months Ended September 30, 2021
Revenues:
Unaffiliated customers			$	77											$	147					$	224					$	2,721											$	512					$	3,233					$	5,097		a									$	—					$	4,695					$	2,264					$	1,168		b			$	16,681
Intersegment			1,996												2,783						4,779						260												—						260						189												310						20						—						(5,558)						—
Production and delivery			932												1,646						2,578						1,463			e									306						1,769						1,552												183						4,708						2,213						(4,141)			c			8,862
Depreciation, depletion and amortization			114												161						275						272												34						306						726												51						3						22						47						1,430
Metals inventory adjustments			13												—						13						—												—						—						—												1						—						—						1						15
Selling, general and administrative expenses			1												2						3						6												—						6						81												—						—						17						182						289
Mining exploration and research expenses			—												1						1						—												—						—						—												—						—						—						35						36
Environmental obligations and shutdown costs			—												(1)						(1)						—												—						—						—												—						—						—						52						51
Net gain on sales of assets			—												—						—						—												—						—						—												—						—						—						(63)			f			(63)
Operating income (loss)			1,013												1,121						2,134						1,240												172						1,412						2,927												75						4						12						(503)						6,061
Interest expense, net			—												1						1						31												—						31						8												—						—						4						387						431
Provision for (benefit from) income taxes			—												—						—						515												62						577						1,101			g									—						—						(1)						(3)						1,674
Capital expenditures			74												137						211						84												10						94						904												4						2						18						111			d			1,344

a.Includes PT-FI's sales to PT Smelting totaling $2.3 billion for both the first nine months of 2022 and 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 charges associated with major maintenance turnarounds totaling $41 million at Atlantic Copper in 2022 and $87 million at the Miami smelter in 2021.

d.Primarily includes capital expenditures for the Indonesia smelter projects.

e.Includes nonrecurring charges totaling $74 million associated with labor-related costs at Cerro Verde.

f.Includes a $60 million gain on the sale of Freeport Cobalt.

g.Includes net tax benefits of $69 million associated with the release of the valuation allowances recorded against PT RTI NOLs.

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 September 30, 2022, the related consolidated statements of income, comprehensive income, and equity for the three- and nine-month periods ended September 30, 2022 and 2021, the related consolidated statements of cash flows for the nine-month periods ended September 30, 2022 and 2021, 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, 2021, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 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, 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

November 4, 2022