Debt and Equity

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt and Equity

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.