Item 1. Financial Statements.

Freeport-McMoRan Inc.

CONSOLIDATED BALANCE SHEETS (Unaudited)

			June 30, 2023						December 31, 2022
			(In Millions)
ASSETS
Current assets:
Cash and cash equivalents			$	6,683					$	8,146
Trade accounts receivable			675						1,336
Income and other tax receivables			417						459
Inventories:
Materials and supplies, net			2,098						1,964
Mill and leach stockpiles			1,498						1,383
Product			2,214						1,833
Other current assets			472						492
Total current assets			14,057						15,613
Property, plant, equipment and mine development costs, net			33,845						32,627
Long-term mill and leach stockpiles			1,241						1,252
Other assets			1,764						1,601
Total assets			$	50,907					$	51,093
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities			$	3,642					$	4,027
Accrued income taxes			531						744
Current portion of environmental and asset retirement obligations (AROs)			361						320
Dividends payable			217						217
Current portion of debt			37						1,037
Total current liabilities			4,788						6,345
Long-term debt, less current portion			9,458						9,583
Environmental and AROs, less current portion			4,566						4,463
Deferred income taxes			4,343						4,269
Other liabilities			1,725						1,562
Total liabilities			24,880						26,222
Equity:
Stockholders’ equity:
Common stock			162						161
Capital in excess of par value			25,028						25,322
Accumulated deficit			(2,901)						(3,907)
Accumulated other comprehensive loss			(318)						(320)
Common stock held in treasury			(5,769)						(5,701)
Total stockholders’ equity			16,202						15,555
Noncontrolling interests			9,825						9,316
Total equity			26,027						24,871
Total liabilities and equity			$	50,907					$	51,093

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

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

			Three Months Ended												Six Months Ended
			June 30,												June 30,
			2023						2022						2023						2022
			(In Millions, Except Per Share Amounts)
Revenues			$	5,737					$	5,416					$	11,126					$	12,019
Cost of sales:
Production and delivery			3,548						3,003						6,712						6,153
Depreciation, depletion and amortization (DD&A)			547						507						946						996
Metals inventory adjustments			1						18						2						18
Total cost of sales			4,096						3,528						7,660						7,167
Selling, general and administrative expenses			115						100						241						215
Mining exploration and research expenses			42						25						73						49
Environmental obligations and shutdown costs			74						29						141						45
Net gain on sales of assets			—						(2)						—						(2)
Total costs and expenses			4,327						3,680						8,115						7,474
Operating income			1,410						1,736						3,011						4,545
Interest expense, net			(171)						(156)						(322)						(283)
Net gain on early extinguishment of debt			5						8						5						8
Other income, net			24						11						112						42
Income before income taxes and equity in affiliated companies’ net earnings			1,268						1,599						2,806						4,312
Provision for income taxes			(539)						(571)						(1,038)						(1,395)
Equity in affiliated companies’ net earnings			2						10						12						25
Net income			731						1,038						1,780						2,942
Net income attributable to noncontrolling interests			(388)						(198)						(774)						(575)
Net income attributable to common stockholders			$	343					$	840					$	1,006					$	2,367
Net income per share attributable to common stockholders:
Basic			$	0.24					$	0.58					$	0.70					$	1.63
Diluted			$	0.23					$	0.57					$	0.69					$	1.61
Weighted-average shares of common stock outstanding:
Basic			1,434						1,447						1,434						1,451
Diluted			1,442						1,457						1,443						1,463
Dividends declared per share of common stock			$	0.15					$	0.15					$	0.30					$	0.30

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

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

			Three Months Ended												Six Months Ended
			June 30,												June 30,
			2023						2022						2023						2022
			(In Millions)
Net income			$	731					$	1,038					$	1,780					$	2,942
Other comprehensive income, net of taxes:
Defined benefit plans:
Prior service costs arising during the period			—						—						—						(1)
Amortization of unrecognized amounts included in net periodic benefit costs			1						2						2						4
Foreign exchange (losses) gains			—						(1)						1						(1)
Other comprehensive income			1						1						3						2
Total comprehensive income			732						1,039						1,783						2,944
Total comprehensive income attributable to noncontrolling interests			(388)						(198)						(775)						(575)
Total comprehensive income attributable to common stockholders			$	344					$	841					$	1,008					$	2,369

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

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

			Six Months Ended
			June 30,
			2023						2022
			(In Millions)
Cash flow from operating activities:
Net income			$	1,780					$	2,942
Adjustments to reconcile net income to net cash provided by operating activities:
DD&A			946						996
Metals inventory adjustments			2						18
Net gain on sales of assets			—						(2)
Stock-based compensation			72						62
Net charges for environmental and AROs, including accretion			237						119
Payments for environmental and AROs			(114)						(120)
Net charges for defined pension and postretirement plans			31						20
Pension plan contributions			(6)						(50)
Net gain on early extinguishment of debt			(5)						(8)
Deferred income taxes			74						63
Change in deferred profit on PT Freeport Indonesia’s (PT-FI) sales to PT Smelting			(112)						27
Other, net			48						(44)
Changes in working capital and other:
Accounts receivable			756						314
Inventories			(530)						(40)
Other current assets			(17)						(99)
Accounts payable and accrued liabilities			(231)						185
Accrued income taxes and timing of other tax payments			(208)						(1,071)
Net cash provided by operating activities			2,723						3,312
Cash flow from investing activities:
Capital expenditures:
North America copper mines			(378)						(276)
South America			(183)						(124)
Indonesia mining			(833)						(759)
Indonesia smelter projects			(780)						(344)
Molybdenum mines			(22)						(9)
Other			(88)						(74)
Proceeds from sales of assets			11						96
Loans to PT Smelting for expansion			(61)						(34)
Other, net			(31)						(6)
Net cash used in investing activities			(2,365)						(1,530)
Cash flow from financing activities:
Proceeds from debt			681						4,666
Repayments of debt			(1,806)						(2,993)
Cash dividends and distributions paid:
Common stock			(432)						(438)
Noncontrolling interests			(291)						(513)
Treasury stock purchases			—						(1,185)
Contributions from noncontrolling interests			50						94
Proceeds from exercised stock options			34						106
Payments for withholding of employee taxes related to stock-based awards			(47)						(55)
Debt financing costs and other, net			(1)						(33)
Net cash used in financing activities			(1,812)						(351)
Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents			(1,454)						1,431
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year			8,390						8,314
Cash, cash equivalents and restricted cash and cash equivalents at end of period			$	6,936					$	9,745

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

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

THREE 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 March 31, 2023			1,618						$	162					$	25,227					$	(3,244)					$	(319)					184						$	(5,769)					$	16,057					$	9,591					$	25,648
Exercised and issued stock-based awards			—						—						3						—						—						—						—						3						—						3
Stock-based compensation, including the tender of shares			—						—						14						—						—						—						—						14						—						14
Dividends			—						—						(216)						—						—						—						—						(216)						(154)						(370)
Net income attributable to common stockholders			—						—						—						343						—						—						—						343						—						343
Net income attributable to noncontrolling interests			—						—						—						—						—						—						—						—						388						388
Other comprehensive income			—						—						—						—						1						—						—						1						—						1
Balance at June 30, 2023			1,618						$	162					$	25,028					$	(2,901)					$	(318)					184						$	(5,769)					$	16,202					$	9,825					$	26,027

			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 March 31, 2022			1,612						$	161					$	25,835					$	(5,848)					$	(387)					160						$	(4,895)					$	14,866					$	9,176					$	24,042
Exercised and issued stock-based awards			—						—						5						—						—						—						—						5						—						5
Stock-based compensation, including the tender of shares			—						—						15						—						—						—						—						15						(1)						14
Treasury stock purchases			—						—						—						—						—						17						(644)						(644)						—						(644)
Dividends			—						—						(217)						—						—						—						—						(217)						(239)						(456)
Contributions from noncontrolling interests			—						—						23						—						—						—						—						23						24						47
Net income attributable to common stockholders			—						—						—						840						—						—						—						840						—						840
Net income attributable to noncontrolling interests			—						—						—						—						—						—						—						—						198						198
Other comprehensive income			—						—						—						—						1						—						—						1						—						1
Balance at June 30, 2022			1,612						$	161					$	25,661					$	(5,008)					$	(386)					177						$	(5,539)					$	14,889					$	9,158					$	24,047

Freeport-McMoRan Inc.

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (continued)

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, 2022			1,613						$	161					$	25,322					$	(3,907)					$	(320)					183						$	(5,701)					$	15,555					$	9,316					$	24,871
Exercised and issued stock-based awards			5						1						55						—						—						—						—						56						—						56
Stock-based compensation, including the tender of shares			—						—						60						—						—						1						(68)						(8)						(1)						(9)
Dividends			—						—						(433)						—						—						—						—						(433)						(291)						(724)
Contributions from noncontrolling interests			—						—						24						—						—						—						—						24						26						50
Net income attributable to common stockholders			—						—						—						1,006						—						—						—						1,006						—						1,006
Net income attributable to noncontrolling interests			—						—						—						—						—						—						—						—						774						774
Other comprehensive income			—						—						—						—						2						—						—						2						1						3
Balance at June 30, 2023			1,618						$	162					$	25,028					$	(2,901)					$	(318)					184						$	(5,769)					$	16,202					$	9,825					$	26,027

			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			—						—						63						—						—						2						(62)						1						(11)						(10)
Treasury stock purchases			—						—						—						—						—						29						(1,185)						(1,185)						—						(1,185)
Dividends			—						—						(435)						—						—						—						—						(435)						(493)						(928)
Contributions from noncontrolling interests			—						—						46						—						—						—						—						46						48						94
Net income attributable to common stockholders			—						—						—						2,367						—						—						—						2,367						—						2,367
Net income attributable to noncontrolling interests			—						—						—						—						—						—						—						—						575						575
Other comprehensive income			—						—						—						—						2						—						—						2						—						2
Balance at June 30, 2022			1,612						$	161					$	25,661					$	(5,008)					$	(386)					177						$	(5,539)					$	14,889					$	9,158					$	24,047

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, 2022 (2022 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 period ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

PT-FI. Beginning January 1, 2023, FCX’s economic ownership interest in PT-FI is 48.76% and prior to January 1, 2023, FCX’s economic interest in PT-FI approximated 81%. As discussed in Note 3 of FCX’s 2022 Form 10-K, in accordance with provisions pertaining to PT-FI’s shareholders agreement, FCX's first-quarter 2023 net income included a $35 million net benefit associated with PT-FI sales volumes that were attributed to FCX at its previous approximate 81% economic ownership interest.

Subsequent Events. FCX evaluated events after June 30, 2023, 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												Six Months Ended
			June 30,												June 30,
			2023						2022						2023						2022
Net income			$	731					$	1,038					$	1,780					$	2,942
Net income attributable to noncontrolling interests			(388)						(198)						(774)						(575)
Undistributed dividends and earnings allocated to participating securities			(5)						(4)						(5)						(5)
Net income attributable to common stockholders			$	338					$	836					$	1,001					$	2,362
Basic weighted-average shares of common stock outstanding			1,434						1,447						1,434						1,451
Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units (RSUs)			8						10						9						12
Diluted weighted-average shares of common stock outstanding			1,442						1,457						1,443						1,463
Net income per share attributable to common stockholders:
Basic			$	0.24					$	0.58					$	0.70					$	1.63
Diluted			$	0.23					$	0.57					$	0.69					$	1.61

Shares associated with outstanding stock options with exercise prices greater than the average market price of FCX’s common stock during the period are excluded from the computation of diluted net income per share of common stock. There were no shares of common stock associated with outstanding stock options excluded in

second-quarter 2023, second-quarter 2022 and for the first six months of 2023, and 1 million shares excluded for the first six months of 2022.

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

The components of inventories follow (in millions):

			June 30, 2023						December 31, 2022
Current inventories:
Total materials and supplies, neta			$	2,098					$	1,964
Mill stockpiles			$	224					$	216
Leach stockpiles			1,274						1,167
Total current mill and leach stockpiles			$	1,498					$	1,383
Raw materials (primarily copper concentrate)			$	382					$	443
Work-in-process			189						221
Finished goodsb			1,643						1,169
Total product			$	2,214					$	1,833
Long-term inventories:
Mill stockpiles			$	216					$	199
Leach stockpiles			1,025						1,053
Total long-term mill and leach stockpilesc			$	1,241					$	1,252

a.Materials and supplies inventory was net of obsolescence reserves totaling $33 million at June 30, 2023, and $39 million at December 31, 2022.

b.The increase in finished goods inventory at June 30, 2023, was associated with the change in PT-FI's commercial arrangement with PT Smelting (PT-FI’s 39.5% owned copper smelter and refinery in Gresik, Indonesia) from a copper concentrate sales agreement to a tolling arrangement beginning on January 1, 2023. At June 30, 2023, approximately 85 million pounds of copper and 40 thousand ounces of gold from PT-FI’s production was deferred in inventory and will be sold as refined metal in future periods.

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

NOTE 4. INCOME TAXES

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

			Six Months Ended
			June 30,
			2023						2022
U.S. operations			$	3					$	(5)
International operations			(1,041)						(1,390)
Total			$	(1,038)					$	(1,395)

FCX’s consolidated effective income tax rate was 37% for the first six months of 2023 and 32% for the first six months of 2022. The higher 2023 effective income tax rate reflects the impact of pre-tax, nondeductible charges totaling $142 million for the first six months of 2023 associated with contested tax rulings by the Peruvian Supreme Court. In addition, 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.

The provisions of the U.S. Inflation Reduction Act of 2022 (the Act) became applicable to FCX on January 1, 2023. The Act includes, among other provisions, a new Corporate Alternative Minimum Tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period. As limited guidance related to how the CAMT provisions of the Act should be applied or otherwise administered has been released by the U.S. Department of the Treasury (Treasury), uncertainty remains regarding the application of the CAMT. FCX has made interpretations of certain provisions of the Act, and based on these interpretations, determined that the provisions of the Act did not impact its financial results for the first six months of

2023. However, future guidance released by the Treasury may differ from its interpretations, which could be material and may further limit FCX’s ability to realize future benefits from its U.S. net operating losses.

NOTE 5. DEBT AND EQUITY

The components of debt follow (in millions):

						June 30, 2023						December 31, 2022
Senior notes and debentures:
Issued by FCX						$	6,103					$	7,225
Issued by PT-FI						2,979						2,978
Issued by Freeport Minerals Corporation						354						355
Other						59						62
Total debt						9,495						10,620
Less current portion of debt						(37)						(1,037)
Long-term debt						$	9,458					$	9,583

Revolving Credit Facilities.

FCX and PT-FI have a $3.0 billion, unsecured revolving credit facility that matures in October 2027. Under the terms of the revolving credit facility, FCX may obtain loans and issue letters of credit in an aggregate amount of up to $3.0 billion with PT-FI’s capacity limited to $500 million, and letters of credit issuance limited to $1.5 billion. At June 30, 2023, FCX had $8 million in letters of credit issued under its revolving credit facility.

PT-FI has a $1.3 billion unsecured revolving credit facility that matures in July 2026 and Cerro Verde has a $350 million unsecured revolving credit facility that matures in May 2027.

At June 30, 2023, FCX, PT-FI and Cerro Verde had no borrowings outstanding under their respective revolving credit facilities and were in compliance with their respective covenants.

Senior Notes.

In March 2023, FCX repaid in full the outstanding principal balance of its 3.875% Senior Notes totaling $996 million at maturity.

Beginning in 2022 and through August 3, 2023, FCX has purchased $1.3 billion aggregate principal amount of its senior notes in open-market transactions for a total cost of $1.2 billion, including $131 million aggregate principal amount in the second quarter and first six months of 2023, and $103 million aggregate principal amount from July 1, 2023, through August 3, 2023. A summary of the senior note purchases and related gains on debt extinguishments for the second quarter and first six months of 2023, follows (in millions):

			Principal Amount						Discounts/Deferred Issuance Costs						Book Value						Redemption Value						Gain
5.00% Senior Notes due 2027			$	12					$	—					$	12					$	12					$	—
4.125% Senior Notes due 2028			22						—						22						21						1
4.375% Senior Notes due 2028			6						—						6						5						1
5.25% Senior Notes due 2029			31						—						31						31						—
4.25% Senior Notes due 2030			45						1						44						42						2
4.625% Senior Notes due 2030			15						—						15						14						1
			$	131					$	1					$	130					$	125					$	5

Interest Expense, Net. Consolidated interest costs (before capitalization) totaled $234 million in second-quarter 2023, $189 million in second-quarter 2022, $441 million for the first six months of 2023 and $342 million for the first six months of 2022. Consolidated interest costs (before capitalization) in the 2023 periods includes, interest expense associated with Cerro Verde’s contested tax rulings by the Peruvian Supreme Court totaling $50 million in second-quarter 2023 and $74 million for the first six months of 2023.

Capitalized interest added to property, plant, equipment and mine development costs, net, totaled $62 million in second-quarter 2023, $33 million in second-quarter 2022, $119 million for the first six months of 2023 and $59 million for the first six months of 2022. The increase in capitalized interest costs in the 2023 periods, compared to the 2022 periods, primarily resulted from increased construction and development projects in process, primarily at the Manyar smelter and precious metals refinery in Indonesia (collectively, the Indonesia smelter projects).

Share Repurchase Program and Dividends. Since mid-2021, FCX has acquired 47.8 million shares of its common stock under the share repurchase program for a total cost of $1.8 billion ($38.35 average cost per share). No shares have been purchased since July 11, 2022, and FCX has $3.2 billion available for repurchases under the program.

On June 21, 2023, FCX’s Board of Directors (Board) declared cash dividends totaling $0.15 per share on its common stock (including a $0.075 per share quarterly base cash dividend and a $0.075 per share quarterly variable, performance-based cash dividend), which was paid on August 1, 2023, to common stockholders of record as of July 14, 2023.

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

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 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 periods ended June 30, 2023 and 2022. At June 30, 2023, FCX held copper futures and swap contracts that qualified for hedge accounting for 88 million pounds at an average contract price of $3.88 per pound, with maturities through May 2025.

Summary of (Losses) Gains. A summary of the realized and unrealized (losses) gains 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												Six Months Ended
			June 30,												June 30,
			2023						2022						2023						2022
Copper futures and swap contracts:
Unrealized (losses) gains:
Derivative financial instruments			$	(25)					$	(89)					$	(11)					$	(78)
Hedged item – firm sales commitments			25						89						11						78
Realized (losses) gains:
Matured derivative financial instruments			(5)						(12)						3						2

Derivatives Not Designated as Hedging Instruments.

Embedded Derivatives. Certain FCX 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 price 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, cathode or anode slimes at the then-current LME copper, COMEX copper or London gold prices. 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, cathode and anode slime 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 price, 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, 2023, follows:

			Open Positions						Average Price Per Unit												Maturities Through
						Contract						Market
Embedded derivatives in provisional sales contracts:
Copper (millions of pounds)			587						$	3.90					$	3.78					November 2023
Gold (thousands of ounces)			165						1,980						1,919						September 2023
Embedded derivatives in provisional purchase contracts:
Copper (millions of pounds)			152						3.89						3.77						October 2023

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, 2023, Atlantic Copper held net copper forward purchase contracts for 7 million pounds at an average contract price of $3.81 per pound, with maturities through August 2023.

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												Six Months Ended
			June 30,												June 30,
			2023						2022						2023						2022
Embedded derivatives in provisional sales contracts:a
Copper			$	(169)					$	(720)					$	61					$	(502)
Gold and other metals			(21)						(33)						22						(11)
Copper forward contractsb			1						22						(1)						26

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):

						June 30, 2023						December 31, 2022
Commodity Derivative Assets:
Derivatives designated as hedging instruments:
Copper futures and swap contracts						$	—					$	3
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts						37						166
Copper forward contracts						—						1
Total derivative assets						$	37					$	170
Commodity Derivative Liabilities:
Derivatives designated as hedging instruments:
Copper futures and swap contracts						$	10					$	3
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional sales/purchase contracts						100						39
Total derivative liabilities						$	110					$	42

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 sheet follows (in millions):

						Assets												Liabilities
						June 30, 2023						December 31, 2022						June 30, 2023						December 31, 2022
Gross amounts recognized:
Commodity contracts:
Embedded derivatives in provisional
sales/purchase contracts						$	37					$	166					$	99					$	39
Copper derivatives						—						4						11						3
						37						170						110						42
Less gross amounts of offset:
Commodity contracts:
Embedded derivatives in provisional
sales/purchase contracts						9						—						9						—
						9						—						9						—
Net amounts presented in balance sheet:
Commodity contracts:
Embedded derivatives in provisional
sales/purchase contracts						28						166						90						39
Copper derivatives						—						4						11						3
						$	28					$	170					$	101					$	42
Balance sheet classification:
Trade accounts receivable						$	8					$	163					$	72					$	7
Other current assets						—						4						—						—
Accounts payable and accrued liabilities						20						3						29						34
Other liabilities						—						—						—						1
						$	28					$	170					$	101					$	42

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, 2023, the maximum amount of credit exposure associated with derivative transactions was $37 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 June 30, 2023, FCX had 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):

						June 30, 2023						December 31, 2022
Balance sheet components:
Cash and cash equivalentsa,b						$	6,683					$	8,146
Restricted cash and cash equivalents included in:
Other current assets						119						111
Other assets						134						133
Total cash, cash equivalents and restricted cash and cash equivalents presented in the consolidated statements of cash flows						$	6,936					$	8,390

a.Includes time deposits of $0.3 billion at June 30, 2023, and $0.5 billion at December 31, 2022.

b.Includes cash designated for smelter development projects totaling $1.1 billion at June 30, 2023, and $1.8 billion at December 31, 2022.

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 2023.

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 June 30, 2023
			Carrying						Fair Value
			Amount						Total						NAV						Level 1						Level 2						Level 3
Assets
Investment securities:a,b
U.S. core fixed income fund			$	26					$	26					$	26					$	—					$	—					$	—
Equity securities			5						5						—						5						—						—
Total			31						31						26						5						—						—
Legally restricted funds:a
U.S. core fixed income fund			63						63						63						—						—						—
Government mortgage-backed securities			40						40						—						—						40						—
Government bonds and notes			33						33						—						—						33						—
Corporate bonds			31						31						—						—						31						—
Asset-backed securities			19						19						—						—						19						—
Money market funds			17						17						—						17						—						—
Collateralized mortgage-backed securities			2						2						—						—						2						—
Total			205						205						63						17						125						—
Embedded derivatives in provisional sales/purchase contracts in a gross asset positionc			37						37						—						—						37						—
Contingent consideration for the sale of the Deepwater GOM oil and gas propertiesa			59						51						—						—						—						51
Liabilities
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position			100						100						—						—						100						—
Copper futures and swap contracts			10						10						—						8						2						—
Total			110						110						—						8						102						—
Long-term debt, including current portiond			9,495						9,129						—						—						9,129						—

			At December 31, 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			7						7						—						7						—						—
Total			32						32						25						7						—						—
Legally restricted funds:a
U.S. core fixed income fund			56						56						56						—						—						—
Government mortgage-backed securities			37						37						—						—						37						—
Government bonds and notes			34						34						—						—						34						—
Corporate bonds			31						31						—						—						31						—
Asset-backed securities			17						17						—						—						17						—
Money market funds			3						3						—						3						—						—
Collateralized mortgage-backed securities			3						3						—						—						3						—
Total			181						181						56						3						122						—
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross asset position			166						166						—						—						166						—
Copper futures and swap contracts			3						3						—						3						—						—
Copper forward contracts			1						1						—						1						—						—
Total			170						170						—						4						166						—
Contingent consideration for the sale of the Deepwater GOM oil and gas propertiesa			67						57						—						—						—						57
Liabilities
Derivatives:c
Embedded derivatives in provisional sales/purchase contracts in a gross liability position			39						39						—						—						39						—
Copper forward contracts			3						3						—						—						3						—
Total			42						42						—						—						42						—
Long-term debt, including current portiond			10,620						10,097						—						—						10,097						—

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 $119 million at June 30, 2023, and $118 million at December 31, 2022, associated with PT-FI’s closure and reclamation guarantees and (ii) other assets of $134 million at June 30, 2023, and $133 million at December 31, 2022, primarily associated with an assurance bond to support PT-FI’s commitment for additional domestic smelter development in Indonesia.

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 and collateralized mortgage-backed securities) 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 price 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 2018. The contingent consideration included in (i) other current assets totaled $17 million at June 30, 2023, and $20 million at December 31, 2022, and (ii) other assets totaled $42 million at June 30, 2023, and $47 million at December 31, 2022. 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, 2023, as compared with those techniques used at December 31, 2022.

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 months of 2023 follows (in millions):

Fair value at January 1, 2023			$	57
Net unrealized gain related to assets still held at the end of the period			1
Settlements			(7)
Fair value at June 30, 2023			$	51

NOTE 8. CONTINGENCIES AND COMMITMENTS

Environmental

There were no significant updates to previously reported environmental matters included in Note 12 of FCX’s 2022 Form 10-K, other than the matter discussed below.

Historical Smelter Sites. On January 30, 2017, a putative class action titled Juan Duarte, Betsy Duarte and N.D., Infant, by Parents and Natural Guardians Juan Duarte and Betsy Duarte, Leroy Nobles and Betty Nobles, on behalf of themselves and all others similarly situated v. United States Metals Refining Company, Freeport-McMoRan Copper & Gold Inc. and Amax Realty Development, Inc., Docket No. 734-17, was filed in the Superior Court of New Jersey. In July 2023, the Court approved an agreement between the parties pursuant to which all claims were settled for an amount not material to FCX.

Litigation

There were no significant updates to previously reported legal proceedings included in Note 12 of FCX’s 2022 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 6 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 and, as of October 2022, all parties have executed the settlement agreement. On March 16, 2023, a non-plaintiff coastal parish included in the settlement (Terrebonne), filed an amended petition titled Terrebonne Parish Consolidated Government vs. Louisiana Department of Natural Resources et al., Docket No. 185576, in the 32nd Judicial District Court, Terrebonne Parish, State of Louisiana, adding the settling FCX affiliates to a lawsuit that challenges whether Terrebonne Parish is validly bound to the settlement agreement and seeks to have the court declare the settlement void. FCX is evaluating and exploring options to resolve this dispute and will vigorously defend this matter.

Other Matters

Indonesia Regulatory Matters

Over the past several years, the Indonesia government has enacted various laws and regulations to promote downstream processing of various minerals, including copper concentrates.

Export License. On June 10, 2023, export licenses for several exporters, including PT-FI, expired. During the second quarter and through July 2023, the Indonesia government issued various regulations to address exports of unrefined metals, including regulations by the Ministry of Energy and Mineral Resources (MEMR) to allow continued exports of copper concentrates through May 2024 for companies engaged in ongoing smelter development projects with construction progress greater than 50%, and regulations by the Ministry of Trade on the permitted export of various products, including copper concentrates.

On July 24, 2023, PT-FI was granted an export license through May 2024 for 1.7 million metric tons of copper concentrate. PT-FI will continue to work with the Indonesia government to obtain approvals to continue exports until the Manyar smelter is fully commissioned and has reached designed operating conditions.

Export Duties. Under PT-FI’s special mining license (IUPK), export duties are determined based on regulations that were in effect in 2018, which provided that no duties are required after smelter construction progress reached 50%. In March 2023, the Indonesia government verified that construction progress on the Manyar smelter exceeded 50% and PT-FI's export duties were eliminated effective March 29, 2023.

In July 2023, the Ministry of Finance issued a revised regulation on duties for various exported products, including copper concentrates. The revised regulation assesses export duties for copper concentrates at 7.5% in the second half of 2023 and 10% in 2024 for companies with smelter progress of 70% to 90%. For companies with smelter progress above 90%, export duties would be 5% in the second half of 2023 and 7.5% in 2024. PT-FI is continuing to discuss the applicability of the revised regulation with the Indonesia government and will contest, and seek recovery of, any assessments.

Smelter Development Progress. In 2018, PT-FI agreed to expand its domestic smelting and refining capacity to process all of its copper concentrates in Indonesia. PT-FI is advancing the construction of the Indonesia smelter projects and expanding capacity at PT Smelting. PT-FI estimates construction of the Manyar smelter to be complete in mid-2024 followed by commissioning of the facilities and a ramp-up schedule through year-end 2024.

As disclosed in Note 12 of FCX’s 2022 Form 10-K, in March 2022, PT-FI paid the Indonesia government an administrative fine totaling $57 million (which included charges of $41 million recorded in first-quarter 2022) related to smelter development delays in light of the COVID-19 pandemic.

In May 2023, MEMR issued a decree prescribing a revised formula for administrative fines for delays in construction of smelter and refining facilities, taking into account allowances for certain delays associated with the COVID-19 pandemic as verified by a third-party. In mid-July 2023, PT-FI submitted its third-party verified calculation, which resulted in an accrual for a potential administrative fine of $55 million based on the formula prescribed by the decree related to the period from August 2020 through January 2022. PT-FI continues to discuss the applicability of this

administrative fine with MEMR. Based on PT-FI’s revised smelter construction schedule, which was accepted by the Indonesia government in connection with the renewal of PT-FI's export license in early 2022, PT-FI does not believe any additional fines should be assessed under the decree.

Smelter Bond. The May 2023 decree by MEMR also requires an assurance bond to be held in escrow until project completion. PT-FI has an existing assurance bond to support its commitment for additional smelter development in Indonesia, which totals $134 million at June 30, 2023 (refer to Note 7), and may be required to make an additional refundable deposit of approximately $250 million in connection with the May 2023 decree.

Export Proceeds. The Indonesia government issued a regulation that became effective August 1, 2023, that requires 30% of PT-FI’s gross export proceeds to be temporarily deposited into Indonesia banks for a period of 90 days before withdrawal. PT-FI is reviewing implementing guidelines associated with this regulation.

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 mining operations to Atlantic Copper (and on 39.5% of PT-FI’s sales to PT Smelting for the 2022 periods) 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.

Beginning January 1, 2023, PT-FI's commercial arrangement with PT Smelting converted from a copper concentrate sales agreement to a tolling arrangement. Under this arrangement, PT-FI pays PT Smelting a tolling fee to smelt and refine its copper concentrate and PT-FI retains title to all products for sale to third parties (i.e., there are no further sales from PT-FI to PT Smelting). While the new tolling agreement with PT Smelting does not significantly change PT-FI’s economics, it impacts the timing of PT-FI’s sales and working capital requirements.

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 second quarter and first six months of 2023 and 2022 follow (in millions):

			Three Months Ended												Six Months Ended
			June 30,												June 30,
			2023						2022						2023						2022
Copper:
Concentrate			$	2,185					$	2,694					$	3,772					$	5,385
Cathode			1,358						1,183						2,685						2,618
Rod and other refined copper products			884						1,071						1,805						2,187
Purchased coppera			72						104						276						174
Gold			999						909						1,530						1,720
Molybdenum			491						377						1,083						755
Otherb			170						165						303						353
Adjustments to revenues:
Treatment chargesc			(142)						(139)						(243)						(272)
Royalty expensed			(94)						(111)						(154)						(206)
PT-FI export dutiese			4						(84)						(14)						(182)			f
Revenues from contracts with customers			5,927						6,169						11,043						12,532
Embedded derivativesg			(190)						(753)						83						(513)
Total consolidated revenues			$	5,737					$	5,416					$	11,126					$	12,019

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

b.Primarily includes revenues associated with silver.

c.Treatment charges for the second quarter and first six months of 2023 exclude tolling costs paid to PT Smelting, which are recorded as production costs in the consolidated statements of income.

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

e.Refer to Note 8 for further discussion of PT-FI export duties.

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

g.Refer to Note 6 for discussion of embedded derivatives related to FCX’s provisionally priced copper 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 June 30, 2023
Revenues:
Unaffiliated customers			$	26											$	14					$	40					$	783					$	190					$	973					$	2,039											$	—					$	1,463					$	744																							$	478		a			$	5,737
Intersegment			570												980						1,550						175						—						175						198												150						10						4																								(2,087)						—
Production and delivery			422												744						1,166						609						174						783						858			b									105						1,465						725																								(1,554)						3,548
DD&A			42												57						99						117						15						132						275												14						1						7																								19						547
Metals inventory adjustments			1												—						1						—						—						—						—												—						—						—																								—						1
Selling, general and administrative expenses			1												—						1						2						—						2						30												—						—						7																								75						115
Mining exploration and research expenses			—												1						1						—						—						—						—												—						—						—																								41						42
Environmental obligations and shutdown costs			—												1						1						—						—						—						—												—						—						—																								73						74
Operating income (loss)			130												191						321						230						1						231						1,074												31						7						9																								(263)						1,410
Interest expense, net			—												—						—						55			c			—						55						13												—						—						8																								95						171
Provision for income taxes			—												—						—						113						—						113						410												—						—						—																								16						539
Net income attributable to noncontrolling interests			—												—						—						18						2						20						368			d									—						—						—																								—						388
Total assets at June 30, 2023			3,167												5,754						8,921						8,444						1,890						10,334						20,460												1,717						280						1,127																								8,068						50,907
Capital expenditures			67												115						182						57						26						83						384												13						2						11																								488			e			1,163
Three Months Ended June 30, 2022
Revenues:
Unaffiliated customers			$	17											$	30					$	47					$	702					$	180					$	882					$	1,920		f									$	—					$	1,753					$	433																							$	381		a			$	5,416
Intersegment			730												1,078						1,808						134						—						134						58												144						8						—																								(2,152)						—
Production and delivery			397												720						1,117						565						177						742						564												80						1,765						463																					g			(1,728)						3,003
DD&A			44												58						102						91						11						102						262												18						1						6																								16						507
Metals inventory adjustments			—												7						7						9						2						11						—												—						—						—																								—						18
Selling, general and administrative expenses			1												—						1						2						—						2						30												—						—						5																								62						100
Mining exploration and research expenses			—												1						1						—						—						—						—												—						—						—																								24						25
Environmental obligations and shutdown costs			(13)												—						(13)						—						—						—						—												—						—						—																								42						29
Net gain on sales of assets			—												—						—						—						—						—						—												—						—						—																								(2)						(2)
Operating income (loss)			318												322						640						169						(10)						159						1,122												46						(5)						(41)																								(185)						1,736
Interest expense, net			—												—						—						4						—						4						13												—						—						2																								137						156
Provision for (benefit from) income taxes			—												—						—						68						(7)						61						434												—						—						—																								76						571
Net income (loss) attributable to noncontrolling interests			—												—						—						50						8						58						141			d									—						—						—																								(1)						198
Total assets at June 30, 2022			2,839												5,338						8,177						8,379						1,843						10,222						20,679												1,702						300						1,078																								7,955						50,113
Capital expenditures			63												83						146						35						33						68						388												8						2						32																								219			e			863

(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, 2023
Revenues:
Unaffiliated customers			$	58											$	111					$	169					$	1,741											$	424					$	2,165					$	3,238		f									$	—					$	2,986					$	1,493					$	1,075		a			$	11,126
Intersegment			1,163												1,928						3,091						419												—						419						367												373						16						11						(4,277)						—
Production and delivery			803												1,525						2,328						1,229												361						1,590						1,193			b									201						2,992						1,459						(3,051)						6,712
DD&A			85												117						202						208												31						239						423												34						2						14						32						946
Metals inventory adjustments			1												—						1						—												—						—						—												—						—						—						1						2
Selling, general and administrative expenses			1												1						2						4												—						4						58												—						—						15						162						241
Mining exploration and research expenses			—												1						1						—												—						—						—												—						—						—						72						73
Environmental obligations and shutdown costs			—												22						22						—												—						—						—												—						—						—						119						141
Operating income (loss)			331												373						704						719												32						751						1,931												138						8						16						(537)						3,011
Interest expense, net			—												—						—						84			c									—						84						22												—						—						14						202						322
Provision for (benefit from) income taxes			—												—						—						300												7						307						740												—						—						—						(9)						1,038
Net income (loss) attributable to noncontrolling interests			—												—						—						158												20						178						639			d									—						—						—						(43)						774
Capital expenditures			123												255						378						118												65						183						833												22						7						23						838			e			2,284
Six Months Ended June 30, 2022
Revenues:
Unaffiliated customers			$	107											$	85					$	192					$	1,808											$	340					$	2,148					$	4,246		f									$	—					$	3,496					$	1,151					$	786		a			$	12,019
Intersegment			1,441												2,173						3,614						242												—						242						136												272						17						—						(4,281)						—
Production and delivery			760												1,375						2,135						1,123												289						1,412						1,190			b									155						3,519						1,185			g			(3,443)						6,153
DD&A			88												119						207						178												21						199						510												34						2						12						32						996
Metals inventory adjustments			—												7						7						9												2						11						—												—						—						—						—						18
Selling, general and administrative expenses			1												1						2						4												—						4						57												—						—						13						139						215
Mining exploration and research expenses			—												1						1						—												—						—						—												—						—						—						48						49
Environmental obligations and shutdown costs			(13)												—						(13)						—												—						—						—												—						—						—						58						45
Net gain on sales of assets			—												—						—						—												—						—						—												—						—						—						(2)						(2)
Operating income (loss)			712												755						1,467						736												28						764						2,625												83						(8)						(59)						(327)						4,545
Interest expense, net			—												—						—						7												—						7						15												—						—						4						257						283
Provision for income taxes			—												—						—						295												7						302						1,020												—						—						—						73						1,395
Net income attributable to noncontrolling interests			—												—						—						218												14						232						331			d									—						—						—						12						575
Capital expenditures			136												140						276						68												56						124						759												9						4						43						371			e			1,586

a.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.

b.Includes a $55 million charge for administrative fines in the second quarter and first six months of 2023 and $41 million for the first six months of 2022. Refer to Note 8 for further discussion.

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

d.Beginning January 1, 2023, FCX’s economic and equity ownership interest in PT-FI is 48.76%. Prior to January 1, 2023, FCX's economic interest in PT-FI approximated 81%. In addition, as discussed in Note 3 of FCX’s 2022 Form 10-K, in accordance with provisions pertaining to PT-FI’s shareholders agreement, FCX’s first-quarter 2023 net income included a $35 million net benefit associated with PT-FI sales volumes that were attributed to FCX at its previous approximate 81% economic ownership interest.

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

f.Includes PT-FI sales to PT Smelting totaling $827 million in second-quarter 2022, $27 million for the first six months 2023 (reflecting adjustments to prior period provisionally priced copper concentrate sales) and $1.7 billion for the first six months 2022. Beginning January 1, 2023, there are no sales from PT-FI to PT Smelting (refer to above discussion of the tolling arrangement between PT-FI and PT Smelting).

g.Includes maintenance charges and idle facility costs associated with major maintenance turnarounds totaling $40 million at Atlantic Copper in the second quarter and first six months of 2022.

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, 2023, the related consolidated statements of income, comprehensive income, and equity for the three- and six-month periods ended June 30, 2023 and 2022, the related consolidated statements of cash flows for the six-month periods ended June 30, 2023 and 2022, 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, 2022, the related consolidated statements of income, comprehensive income, equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 15, 2023, 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, 2022, 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 3, 2023