fcx-20220930

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


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

For the quarterly period ended September 30, 2022


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

For the transition period from to

Commission file number: 001-11307-01

Freeport-McMoRan Inc.

(Exact name of registrant as specified in its charter)


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

333 North Central Avenue

Phoenix

85004-2189

(Address of principal executive offices)

(Zip Code)

(602) 366-8100

(Registrant’s telephone number, including area code)

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


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

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

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

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


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

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

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

On October 31, 2022, there were issued and outstanding 1,429,327,191 shares of the registrant’s common stock, par value $0.10 per share.

Freeport-McMoRan Inc.

TABLE OF CONTENTS



			Page

Part I. Financial Information			3

Item 1. Financial Statements:			3

Consolidated Balance Sheets (Unaudited)			3

Consolidated Statements of Income (Unaudited)			4

Consolidated Statements of Comprehensive Income (Unaudited)			5

Consolidated Statements of Cash Flows (Unaudited)			6

Consolidated Statements of Equity (Unaudited)			7

Notes to Consolidated Financial Statements (Unaudited)			9

Report of Independent Registered Public Accounting Firm			24

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			25

Item 3. Quantitative and Qualitative Disclosures About Market Risk			66

Item 4. Controls and Procedures			66

Part II. Other Information			66

Item 1. Legal Proceedings			66

Item 1A. Risk Factors			66

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			67

Item 4. Mine Safety Disclosures			67



Item 6. Exhibits			68

Signature			S-1

Table of Contents

Part I.FINANCIAL INFORMATION

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.

Table of Contents

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.

Table of Contents

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.

Table of Contents

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.

Table of Contents

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

Table of Contents

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	—	—		—