Freeport-McMoRan · 10-Q · Item 2 MD&A

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

In Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), “we,” “us” and “our” refer to Freeport-McMoRan Inc. (FCX) and its consolidated subsidiaries. You should read this discussion in conjunction with our consolidated financial statements, the related MD&A and the discussion of our Business and Properties in our annual report on Form 10-K for the year ended December 31, 2025 (2025 Form 10-K), filed with the United States (U.S.) Securities and Exchange Commission (SEC). The results of operations reported and summarized below include forward-looking statements that are not guarantees of future performance and are not necessarily indicative of future operating results (refer to “Cautionary Statement” for further discussion).

References to “Notes” are Notes included in our Notes to Consolidated Financial Statements (Unaudited). Throughout MD&A, all references to income or losses per share are on a diluted basis. Any references to our website are for information only and the contents of our website or information connected thereto are not incorporated in, or otherwise to be regarded as part of, this Form 10-Q.

OVERVIEW

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

We achieved strong results in second-quarter 2026, supported by solid execution of our operating plans and favorable realized prices for copper, gold and molybdenum. The strength and diversity of our portfolio of assets contributed to these results, as operating income from our U.S. copper mines more than doubled in the first six months of 2026, compared to the first six months of 2025, primarily reflecting higher average realized copper and molybdenum prices. This increase helped offset lower operating income from Indonesia during the continued phased ramp-up of the Grasberg Block Cave underground mine.

PT Freeport Indonesia (T1PTFI) has made steady progress with the phased ramp-up of the Grasberg Block Cave underground mine following the September 2025 external mud rush incident and we remain focused on a safe and sustainable ramp-up to full operating capacity. Refer to “Operations – Indonesia” for further discussion of the Grasberg Block Cave ramp-up.

At our U.S. and South America operations, we are advancing testing of innovative technologies to target significant increases in incremental production from leaching initiatives. T2We are targeting reaching an annual run rate of 300 million pounds of copper from these initiatives by the end of 2026 and believe there is potential for further significant increases in recoverable metal in future years. T3We are finalizing cost estimates for an opportunity to more than double the concentrator capacity of the Bagdad operation in northwest Arizona and have advanced technical and economic studies in preparation for a potential investment decision during the second half of 2026. Additionally, we are advancing our evaluation of a potential major expansion at our El Abra mine in Chile. Refer to “Operations – United States” and “Operations – South America” for further discussion.

In May 2026, we purchased 2.0 million shares of Cerro Verde common stock in the open market for $107 million, increasing our ownership interest in Cerro Verde from 55.08% to 55.66%.

Net income attributable to common stockholders totaled $984 million in second-quarter 2026, $772 million in second-quarter 2025, $1.9 billion for the first six months of 2026 and $1.1 billion for the first six months of 2025. Higher net income attributable to common stock in the 2026 periods, compared to the 2025 periods, primarily reflects the impact of lower income taxes and noncontrolling interests in the 2026 periods associated with a higher contribution of operating income from our U.S. copper mines. The first six months of 2026 also include the recognition of a gain for the insurance settlement related to the September 2025 external mud rush incident. Refer to “Consolidated Results” and “Business Divisions and Segments” for further discussion.

At June 30, 2026, we had consolidated debt of $9.4 billion and consolidated cash and cash equivalents of $4.1 billion. Net debt totaled $2.1 billion, excluding $3.2 billion of debt for PTFI’s downstream processing facilities. Refer to “Net Debt” for a reconciliation of consolidated debt and consolidated cash and cash equivalents to net debt.

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At June 30, 2026, we had $3.0 billion of availability under our revolving credit facility, and PTFI and Cerro Verde had $1.5 billion and $350 million, respectively, of availability under their revolving credit facilities.

During the first six months of 2026, we acquired 3.4 million shares of our common stock for a total cost of $203 million ($59.30 average cost per share). As of July 31, 2026, T4we have acquired a total of 55.4 million shares ($39.80 average cost per share) and have $2.8 billion available under our $5.0 billion share repurchase program.

Refer to Note 4 and “Capital Resources and Liquidity” for further discussion.

OUTLOOK

Our financial results vary as a result of fluctuations in metals market prices primarily for copper, gold and, to a lesser extent, molybdenum, as well as other factors. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. Refer to “Markets” below, and “Risk Factors” in Part I, Item 1A. of our 2025 Form 10-K and Part II, Item 1A. herein for further discussion. Because we cannot control the prices of our products, the key measures that management focuses on in operating our business are sales volumes, unit net cash costs, operating cash flows and capital expenditures.

The forward-looking statements below and elsewhere in this Form 10-Q are based on current market conditions, are as of the filing date of this Form 10-Q, are based on several assumptions and are subject to significant risks and uncertainties. Refer to “Cautionary Statement” below.

Consolidated Sales Volumes

Following are our projected consolidated sales volumes for the year 2026:

Copper (millions of recoverable pounds):

U.S. copper mines

South America operations

Indonesia operations

Total

Gold (thousands of recoverable ounces)

Molybdenum (millions of recoverable pounds)

a

a.Includes 60 million pounds produced by our U.S. copper mines and Cerro Verde mine, and 33 million pounds produced by our primary molybdenum mines.

Projected consolidated sales volumes for third-quarter 2026 are expected to approximate 750 million pounds of copper, 160 thousand ounces of gold and 22 million pounds of molybdenum. We expect an increase in second-half 2026 copper sales volumes, compared to first-half 2026, primarily as a result of the continued phased ramp-up of the Grasberg Block Cave underground mine and at our U.S. copper mines associated with incremental production from leaching initiatives.

Consolidated copper and gold production volumes for the year 2026 are expected to exceed sales volumes, reflecting deferrals of approximately 100 million pounds of copper and 50 thousand ounces of gold associated with inventory held at PTFI’s smelting operations.

Projected sales volumes are dependent on operational performance; the phased ramp-up of the Grasberg Block Cave underground mine at PTFI; weather-related conditions; timing of shipments and other factors detailed in the “Cautionary Statement” below.

Consolidated Unit Net Cash Costs

Based on achievement of current sales volume and cost estimates and assuming average prices of $4,000 per ounce of gold and $30.00 per pound of molybdenum for the second half of 2026, T5consolidated unit net cash costs (net of by-product credits and excluding idle facility and restoration costs) for our copper mines are expected to average $1.90 per pound of copper for the year 2026 (including $2.00 per pound of copper in third-quarter 2026). The impact of price changes on consolidated unit net cash costs for the second half of 2026 would approximate $0.02 per pound of copper for each $100 per ounce change in the average price of gold and $0.03 per pound of copper for each $2 per pound change in the average price of molybdenum.

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During the phased ramp-up period of the Grasberg Block Cave underground mine and until PTFI’s operations return to normal capacity, a portion of PTFI's production and delivery costs will be recognized as idle facility costs, which are non-inventoriable. Idle facility and restoration costs are expected to approximate $1.2 billion for the year 2026 (including $0.3 billion in third-quarter 2026). Refer to “Operations – Indonesia” for further discussion.

Projected unit net cash costs for the year 2026 are dependent on operational performance; the phased ramp-up of the Grasberg Block Cave underground mine at PTFI; impacts related to the conflict in the Middle East, including changes in energy costs and other consumables; weather-related conditions; timing of shipments and other factors detailed in the “Cautionary Statement” below.

Consolidated Operating Cash Flows

Our consolidated operating cash flows vary with sales volumes; prices realized from copper, gold and molybdenum sales; production costs; income taxes; other working capital changes; and other factors, such as the phased ramp-up of the Grasberg Block Cave underground mine at PTFI and impacts related to the conflict in the Middle East, including changes in energy costs and other consumables.

Consolidated operating cash flows are expected to approximate $8.3 billion for the year 2026, net of $0.3 billion of working capital and other uses, based on current sales volume and cost estimates, and assuming average prices of $6.00 per pound of copper, $4,000 per ounce of gold and $30.00 per pound of molybdenum for the second half of 2026. Estimated consolidated operating cash flows for the year 2026 include a projected income tax provision of $2.6 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate for the year 2026). The impact of price changes on consolidated operating cash flows for the second half of 2026 would approximate $150 million for each $0.10 per pound change in the average price of copper, $40 million for each $100 per ounce change in the average price of gold and $45 million for each $2 per pound change in the average price of molybdenum.

Consolidated Capital Expenditures

Following is a summary of expected capital expenditures for the year 2026 (in billions):

Major projects

$

a

Sustaining capital and other

Total

$

a.Includes $1.4 billion for planned projects, primarily associated with underground mine development and supporting mill and power capital costs in the Grasberg minerals district and a leaching project at El Abra, and $1.6 billion for discretionary growth projects, primarily in the Grasberg minerals district for the continued development of Kucing Liar and at Bagdad for tailings infrastructure.

Expected capital expenditures for the year 2026 do not include project capital costs associated with the expansion project at Bagdad, which we are preparing for a potential investment decision during the second half of 2026. Refer to “Operations – United States” for further discussion.

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MARKETS

Prices for copper, gold and molybdenum are affected by numerous factors beyond our control and can fluctuate significantly (for further discussion refer to “Risk Factors” contained in Part I, Item 1A. of our 2025 Form 10-K and Part II, Item 1A. herein).

This graph presents London Metal Exchange (LME) and Commodity Exchange Inc. (COMEX) copper settlement prices and the combined reported stocks of copper at the LME, COMEX and the Shanghai Futures Exchange from January 2016 through June 2026. LME and COMEX copper prices are market-driven and subject to change based on current and future tariff rates, additional changes in trade policies, domestic inventory levels, supply and demand, and other factors.

Copper sales from our South America and Indonesia operations are generally based on quoted LME monthly average copper settlement prices. During second-quarter 2026, LME copper settlement prices averaged $6.05 per pound (ranging from a low of $5.51 per pound to a high of $6.39 per pound) and closed at $6.05 per pound on June 30, 2026. The LME copper settlement price was $6.28 per pound on July 31, 2026, and on August 6, 2026, the LME copper settlement price closed at an all-time high of $6.56 per pound.

Copper sales from our U.S. copper mines are generally based on prevailing COMEX monthly average copper settlement prices. During second-quarter 2026, COMEX copper settlement prices averaged $6.16 per pound (ranging from a low of $5.54 per pound to a high of $6.65 per pound) and closed at $6.19 per pound on June 30, 2026. The COMEX copper settlement price was $6.44 per pound on July 31, 2026, and on August 5, 2026, the COMEX copper settlement price closed at an all-time high of $6.70 per pound.

The conflict in the Middle East continues to contribute to copper price volatility. While direct impacts on copper demand have been limited, secondary effects, including higher energy prices and freight costs, are weighing on global manufacturing activity and delaying demand recovery, particularly in energy-importing regions.

We believe long-term fundamentals for copper are favorable with growing demand supported by copper’s critical role in electrification initiatives, continued urbanization in developing countries, data center and AI growth and growing connectivity globally.

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This graph presents London Bullion Market Association (London) PM gold prices from January 2016 through June 2026. During second-quarter 2026, gold prices retreated from all-time highs reached at the beginning of 2026, as macroeconomic conditions tightened, driven by a stronger U.S. dollar, higher U.S. treasury yields and rising energy costs stemming from the conflict in the Middle East.

During second-quarter 2026, London PM gold prices averaged $4,506 per ounce (ranging from a low of $4,002 per ounce to a high of $4,871 per ounce) and closed at $4,026 per ounce on June 30, 2026. The London PM gold price closed at $4,027 per ounce on July 31, 2026.

This graph presents the Platts Metals Daily Molybdenum Dealer Oxide weekly average prices from January 2016 through June 2026. Overall global demand for molybdenum is driven by energy, power generation, aerospace and construction sectors. We believe fundamentals for molybdenum are positive with favorable demand drivers and limited supply.

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During second-quarter 2026, the weekly average prices for molybdenum averaged $29.40 per pound (ranging from a low of $26.67 per pound to a high of $31.29 per pound) and closed at $31.29 per pound on June 30, 2026. The Platts Metals Daily Molybdenum Dealer Oxide weekly average price closed at $32.61 per pound on July 31, 2026.

CONSOLIDATED RESULTS

Three Months Ended June 30,

Six Months Ended June 30,

SUMMARY FINANCIAL DATA

(in millions, except per share amounts)

Revenuesa,b

$

$

$

$

Operating incomea,c

$

$

$

$

Net income attributable to common stockb,c

$

d

$

e

$

d

$

e

Diluted net income per share of common stockb,c

$

d

$

e

$

d

$

e

Diluted weighted-average shares of common stock outstanding

Operating cash flowsf

$

$

$

$

Capital expenditures

$

$

$

$

Cash and cash equivalents

$

$

$

$

Total debt, including current portion

$

$

$

$

a.Refer to “Business Divisions and Segments” for a summary of revenues and operating income by operating division.

b.Includes favorable (unfavorable) adjustments to prior period provisionally priced concentrate and cathode copper sales totaling $98 million ($35 million to net income attributable to common stock or $0.02 per share) in second-quarter 2026, $(35) million ($(10) million to net income attributable to common stock or $(0.01) per share) in second-quarter 2025, $58 million ($24 million to net income attributable to common stock or $0.02 per share) for the first six months of 2026 and $63 million ($21 million to net income attributable to common stock or $0.01 per share) for the first six months of 2025. Refer to Note 5 for further discussion.

c.We defer recognizing profits on intercompany sales until final sales to third parties occur. Changes in these deferrals attributable to variability in intercompany volumes resulted in net (reductions) additions to operating income totaling $(18) million ($(6) million to net income attributable to common stock or less than $0.01 per share) in second-quarter 2026, $34 million ($9 million to net income attributable to common stock or $0.01 per share) in second-quarter 2025, $52 million ($17

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million to net income attributable to common stock or $0.01 per share) for the first six months of 2026 and $148 million ($44 million to net income attributable to common stock or $0.03 per share) for the first six months of 2025.

d.Net income attributable to common stock (i.e., net of any taxes and noncontrolling interests) includes net charges totaling $96 million ($0.06 per share) in second-quarter 2026 and $45 million ($0.03 per share) for the first six months of 2026, primarily reflecting idle facility and restoration costs associated with PTFI’s September 2025 external mud rush incident. Net charges for the first six months of 2026 were partially offset by a gain on the insurance settlement associated with the September 2025 external mud rush incident.

e.Net income attributable to common stock (i.e., net of any taxes and noncontrolling interests) includes net charges totaling $18 million ($0.01 per share) in second-quarter 2025, primarily associated with adjustments to environmental obligations and related litigation reserves and oil and gas impairments, and $24 million ($0.02 per share) for the first six months of 2025, primarily associated with remediation costs related to the October 2024 fire incident at PTFI’s smelter, charges for the reversal of previously capitalized land lease costs associated with PTFI’s downstream processing facilities and oil and gas impairments.

f.Cash used for working capital, including tax payments, totaled $596 million in second-quarter 2026, $45 million in second-quarter 2025, $457 million for the first six months of 2026 and $342 million for the first six months of 2025.

Three Months Ended June 30,

Six Months Ended June 30,

SUMMARY OPERATING DATA

Copper (millions of recoverable pounds)

Production

Sales, excluding purchases

Average realized price per pound

$

$

$

$

Site production and delivery costs per pounda

$

b

$

$

b

$

Unit net cash costs per pounda

$

b

$

$

b

$

Gold (thousands of recoverable ounces)

Production

Sales, excluding purchases

Average realized price per ounce

$

$

$

$

Molybdenum (millions of recoverable pounds)

Production

Sales, excluding purchases

Average realized price per pound

$

$

$

$

a.Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs. For reconciliations of per pound unit net cash costs (credits) by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.”

b.Excludes $0.40 per pound in second-quarter 2026 and $0.50 per pound for the first six months of 2026 of idle facility and restoration costs associated with PTFI’s September 2025 external mud rush incident. Refer to “Operations – Indonesia” for further discussion.

Revenues

Consolidated revenues totaled $7.0 billion in second-quarter 2026, $7.6 billion in second-quarter 2025 and $13.3 billion for both the first six months of 2026 and 2025. Our revenues primarily include the sale of copper cathode, copper rod and copper concentrate, as well as gold and molybdenum products in various forms. Refer to Note 8 for a summary of product revenues.

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

Three Months Ended June 30

Six Months Ended June 30

Consolidated revenues – 2025 period

$

$

(Lower) higher sales volumes:

Copper

Gold

Molybdenum

Higher average realized prices:

Copper

Gold

Molybdenum

Adjustments for prior period provisionally priced copper sales

(5)

Higher Atlantic Copper revenues

Lower revenues from purchased copper

(9)

Lower treatment charges

8

Lower export duties

Lower royalties

Silver and other, including intercompany eliminations

Consolidated revenues – 2026 period

$

$

Sales Volumes. Consolidated copper and gold sales volumes decreased in the 2026 periods, compared to the 2025 periods, primarily reflecting lower operating rates at PTFI during the phased ramp-up of the Grasberg Block Cave underground mine. Refer to “Operations” for further discussion of sales volumes at our mining operations.

Realized Prices. Our consolidated revenues can vary significantly as a result of fluctuations in the market prices of copper, gold and molybdenum. T6Our average realized prices in second-quarter 2026, compared with second-quarter 2025, were 36% higher for copper, 37% higher for gold and 36% higher for molybdenum. Average realized prices for the first six months of 2026, compared with the first six months of 2025, were 35% higher for copper, 44% higher for gold and 26% higher for molybdenum.

Average realized copper prices include net favorable adjustments to current period provisionally priced copper sales totaling $40 million in second-quarter 2026, $69 million in second-quarter 2025, $59 million for the first six months of 2026 and $87 million for the first six months of 2025. As discussed in Note 5, certain sales contracts for copper and gold provide final pricing in a specified future month (generally one to four months from the shipment date). We record revenues and invoice customers at the time of shipment based on then-current LME prices for copper or London PM prices for gold, which results in an embedded derivative on provisionally priced sales that is adjusted to fair value through earnings each period, using the period-end forward prices, until final pricing on the date of settlement.

To the extent final prices are higher or lower than what was recorded on a provisional basis, an increase or decrease to revenues is recorded each reporting period until the date of final pricing. Accordingly, in times of rising copper and gold prices, our revenues benefit from adjustments to the final pricing of provisionally priced sales pursuant to contracts entered into in prior periods; in times of falling copper and gold prices, the opposite occurs.

Prior Period Provisionally Priced Copper Sales. Net favorable (unfavorable) adjustments to prior periods’ provisionally priced copper sales (i.e., provisionally priced sales at March 31, 2026 and 2025, and December 31,

2025 and 2024) recorded in consolidated revenues totaled $98 million in second-quarter 2026, $(35) million in second-quarter 2025, $58 million for the first six months of 2026 and $63 million for the first six months of 2025. Refer to Notes 5 and 8 for a summary of total adjustments to prior period and current period provisionally priced copper sales.

At June 30, 2026, we had provisionally priced copper sales totaling 202 million pounds (99 million pounds net of intercompany sales and noncontrolling interests) recorded at an average price of $6.07 per pound, subject to final LME copper settlement prices over the next several months. We estimate that each $0.05 change in the price realized from the June 30, 2026, recorded provisional price would have an approximate $9 million effect on 2026 revenues ($3 million to 2026 net income attributable to common stock). The LME copper settlement price closed at $6.28 per pound on July 31, 2026.

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Atlantic Copper Revenues. Revenues at Atlantic Copper, our wholly owned smelter and refinery in Huelva, Spain, totaled $1.0 billion in second-quarter 2026, $0.8 billion in second-quarter 2025, $2.0 billion for the first six months of 2026 and $1.6 billion for the first six months of 2025. Higher revenues in the 2026 periods, compared to the 2025 periods, primarily reflect higher metals prices, partly offset by lower copper and gold sales volumes.

Sales of Purchased Copper. We purchase copper cathode primarily for processing by our U.S. Rod & Refining operations. The volumes of copper purchases vary depending on cathode production from our operations and totaled 37 million pounds in second-quarter 2026, 35 million pounds in second-quarter 2025, 47 million pounds for the first six months of 2026 and 101 million pounds for the first six months of 2025. Revenues associated with the sale of purchased copper vary with the volume of copper purchases and changes in copper prices.

Treatment Charges. Revenues from our copper concentrate sales are recorded net of treatment charges, which will vary with market conditions, sales volumes and the price of copper. Treatment charges totaled $8 million in second-quarter 2026, $16 million in second-quarter 2025, $10 million for the first six months of 2026 and $43 million for the first six months of 2025. The 2026 periods primarily reflect lower treatment charge rates as a result of favorable market conditions and the lack of copper concentrate sales volumes in Indonesia as PTFI is now a fully integrated producer of refined copper, gold and silver.

Export Duties. Prior to the expiration of its export license in September 2025, PTFI was assessed export duties on copper concentrate sales at a rate of 7.5%. PTFI incurred export duties totaling $146 million in second-quarter 2025 and $202 million for the first six months of 2025. Refer to Note 11 of our 2025 Form 10-K for further discussion.

Royalties. PTFI pays royalties on all copper and gold sales, the amount of which varies with sales volumes and metal prices. Royalties totaled $60 million in second-quarter 2026, $135 million in second-quarter 2025, $113 million for the first six months of 2026 and $203 million for the first six months of 2025.

Production and Delivery Costs

Consolidated production and delivery costs totaled $4.3 billion in both second-quarter 2026 and 2025, $8.4 billion for the first six months of 2026 and $8.0 billion for the first six months of 2025. The 2026 periods, compared with the 2025 periods, primarily reflect higher costs of copper purchases at Atlantic Copper and higher costs for supplies, diesel fuel and other consumables at our mining operations, partly offset by the impact of reduced operating rates at PTFI following the September 2025 external mud rush incident. The first six months of 2025 also included charges totaling $73 million associated with a planned maintenance turnaround at the Miami smelter.

Mining Unit Site Production and Delivery Costs Per Pound. Site production and delivery costs for our copper mining operations primarily include labor, energy and other commodity-based inputs, such as sulfuric acid, steel, reagents, liners, tires and explosives. Consolidated unit site production and delivery costs (before net noncash and other costs) for our copper mines averaged $3.28 per pound of copper in second-quarter 2026 and for the first six months of 2026, compared to $2.71 per pound of copper in second-quarter 2025 and $2.65 per pound of copper for the first six months of 2025.

During the phased ramp-up period of the Grasberg Block Cave underground mine and until PTFI’s operations return to normal capacity, a portion of PTFI's production and delivery costs will be recognized as idle facility costs, which are non-inventoriable. Idle facility and restoration costs totaled $284 million ($0.40 per pound of copper) in second-quarter 2026 and $690 million ($0.50 per pound of copper) for the first six months of 2026, which were excluded from consolidated net cash costs.

Refer to “Operations” for further discussion of unit net cash costs associated with our operating divisions, and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated statements of income.

Depreciation, Depletion and Amortization

Depreciation will vary under the unit-of-production (UOP) method as a result of changes in sales volumes and the related UOP rates at our mining operations. Consolidated depreciation, depletion and amortization (DD&A) totaled $523 million in second-quarter 2026, $668 million in second-quarter 2025, $1.0 billion for the first six months of 2026 and $1.1 billion for the first six months of 2025. The decrease in DD&A in the 2026 periods, compared to the 2025 periods, primarily reflects lower UOP depreciation as a result of lower operating rates at PTFI, partly offset by higher depreciation associated with placing assets into service at our U.S. copper mines and at PTFI in 2025.

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Based on current sales volume estimates, consolidated DD&A is estimated to approximate $2.3 billion for the year 2026, including $0.3 billion recognized as idle facility costs associated with the September 2025 external mud rush incident. Refer to Note 7 for further discussion of idle facility costs.

Environmental Obligations and Shutdown Costs

Environmental obligations reflect net revisions to our long-term environmental obligations, which vary from period to period because of changes to environmental laws and regulations, the settlement of environmental matters and/or circumstances affecting our operations that could result in significant changes in our estimates. Shutdown costs include care-and-maintenance costs and any litigation, remediation or related expenditures associated with closed facilities or operations.

Net charges for environmental obligations and shutdown costs totaled $13 million in second-quarter 2026, $27 million in second-quarter 2025, $30 million for the first six months of 2026 and $37 million for the first six months of 2025.

Gain on PTFI Mud Rush Incident Insurance Settlement

In first-quarter 2026, PTFI recognized a gain of $0.7 billion ($0.2 billion after taxes and noncontrolling interests) for an insurance settlement associated with the September 2025 external mud rush incident under its property and business interruption policies. PTFI collected the proceeds from this settlement in April 2026.

Interest Expense, Net

Consolidated interest expense, net totaled $95 million in second-quarter 2026, $82 million in second-quarter 2025, $209 million for the first six months of 2026 and $152 million for the first six months of 2025. Higher interest expense, net for the 2026 periods, primarily reflects the placement of assets in service at our U.S. copper mines and at PTFI in 2025, which reduced the amount of interest eligible for capitalization in 2026.

Refer to Note 4 for further discussion of consolidated interest costs (before capitalization) and capitalized interest.

Other Income, Net

Other income, net, primarily includes amounts associated with interest income, currency exchange gains and losses, and mark-to-market impacts associated with investments and trust assets used to satisfy financial assurance obligations for our New Mexico mining operations.

Other income, net, which totaled $22 million in second-quarter 2026, $41 million in second-quarter 2025, $33 million for the first six months of 2026 and $99 million for the first six months of 2025, was lower in the 2026 periods reflecting mark-to-market impacts associated with equity investments. Lower other income, net, in the first six months of 2026, also reflects net currency exchange losses, compared to net currency exchange gains for the first six months of 2025.

Income Taxes

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

Six Months Ended June 30,

Incomea

Effective

Tax Rate

Income Tax (Provision) Benefit

Income (Loss)a

Effective

Tax Rate

Income Tax (Provision) Benefit

U.S.b

$

6%

$

c

$

(2)

—%

$

2

South America

Indonesia

Eliminations and other

9

N/A

3

N/A

Rate adjustmentd

—

N/A

—

N/A

Consolidated FCX

$

$

$

$

a.Represents income (loss) before income taxes, equity in affiliated companies' net earnings and noncontrolling interests.

b.In addition to our U.S. copper and molybdenum mines, the U.S. jurisdiction reflects non-operating sites and corporate-level expenses, which include interest expense associated with our senior notes and general and administrative expenses. Refer to “Business Divisions and Segments” for additional information.

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c.The U.S. income tax provision primarily relates to the U.S. Corporate Alternative Minimum Tax (CAMT) provisions, which do not benefit from regular tax U.S. net operating loss carryforwards.

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

Assuming achievement of current sales volume and cost estimates and prices of $6.00 per pound for copper, $4,000 per ounce for gold and $30.00 per pound for molybdenum for the second half of 2026, we estimate our consolidated effective tax rate for the year 2026 would approximate 30%, including estimated effective tax rates of 40% for Peru, 36% for Indonesia and 7% for the U.S. (associated with CAMT provisions). Changes in projected sales volumes, commodity prices, and the relative proportion of jurisdictional income during the second half of 2026 could impact our consolidated effective tax rate for the year 2026.

Noncontrolling Interests

Net income attributable to noncontrolling interests, which is primarily associated with PTFI, Cerro Verde and El Abra, totaled $407 million in second-quarter 2026, $775 million in second-quarter 2025, $0.9 billion for the first six months of 2026 and $1.2 billion for the first six months of 2025. Refer to "Business Divisions and Segments” below for net income attributable to noncontrolling interests for each of our business segments.

In May 2026, we increased our ownership interest in Cerro Verde from 55.08% to 55.66%.

Based on achievement of current sales volume and cost estimates and assuming average prices of $6.00 per pound of copper, $4,000 per ounce of gold and $30.00 per pound of molybdenum for the second half of 2026, we estimate that net income attributable to noncontrolling interests will approximate $2.0 billion for the year 2026, which would represent approximately 24% of our consolidated income before income taxes. The actual amount will depend on many factors, including relative performance of each business segment, commodity prices, costs and other factors.

BUSINESS DIVISIONS AND SEGMENTS

We have organized our mining operations into four primary divisions – U.S. copper mines, South America operations, Indonesia operations and Molybdenum mines. Refer to “Operations” below for discussion of our mining operations.

U.S. Rod & Refining consists of copper conversion facilities, including a refinery and two rod mills. These operations process copper produced at our U.S. copper mines and purchased copper into copper cathode and rod. At times, these operations refine copper and produce copper rod for customers on a toll basis.

Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes. For the first six months of 2026, Atlantic Copper purchased 82% of its concentrate from third parties and 18% from our South America operations.

Corporate, Other & Eliminations consist of our other mining operations, exploration activities, corporate and elimination items. Other mining operations include the Miami smelter, molybdenum conversion facilities in the U.S. and in Europe, five non-operating mines in the U.S. and other mining support entities.

Intersegment sales are based on terms similar to arm’s-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, the timing of sales to unaffiliated customers and transportation premiums.

We allocate certain operating costs, expenses and capital expenditures to our business divisions and 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 in the below tables), whereas foreign income taxes are recorded and managed at the applicable country level. In addition, some selling, general and administrative costs are not allocated to the business divisions and segments. Accordingly, the following information reflects management determinations that may not be indicative of what the actual financial performance of each business division and segment would be if it was an independent entity.

Refer to Note 8 for a summary of our reportable segments as determined under generally accepted accounting principles (GAAP) in the U.S.

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Financial Information by Business Division and Segment

Atlantic

Corporate,

U.S. Copper Mines

South America Operations

U.S.

Copper

Other

Cerro

Indonesia

Molybdenum

Rod &

Smelting

& Elimi-

FCX

Morenci

Other

Total

Verde

Other

Total

Operations

Mines

Refining

& Refining

nations

Total

Revenues:

Unaffiliated customers

$

$

$

$

$

$

$

$

—

$

$

$

a

$

Intersegment

—

1

6

—

Production and delivery

b

DD&A

c

2

7

Selling, general and administrative expenses

1

—

1

1

—

1

—

—

8

Exploration and research expenses

9

4

2

6

—

—

—

—

Environmental obligations and shutdown costs

—

—

—

—

—

—

—

—

—

—

Gain on sale of assets

—

—

—

—

—

—

—

—

—

—

Operating income (loss)

Interest expense, net

(1)

—

(1)

(6)

—

(6)

(6)

—

—

Other income (expense), net

—

1

1

1

—

(1)

6

Provision for income taxes

—

—

—

—

—

(4)

Equity in affiliated companies’ net earnings

—

—

—

—

—

—

5

—

—

—

—

5

Net (income) loss attributable to noncontrolling interests

—

—

—

—

—

—

Net income attributable to common stockholders

Capital expenditures

Revenues:

Unaffiliated customers

$

$

$

$

$

$

$

$

—

$

$

$

a

$

Intersegment

(2)

d

9

3

—

Production and delivery

DD&A

1

7

Selling, general and administrative expenses

1

—

1

1

1

2

—

—

7

Exploration and research expenses

8

5

4

—

4

1

1

—

—

Environmental obligations and shutdown costs

—

—

—

—

—

—

—

—

—

—

Operating income (loss)

7

Interest expense, net

—

(1)

(1)

(4)

—

(4)

—

—

(7)

Other (expense) income, net

(1)

1

—

2

(1)

(1)

Provision for income taxes

—

—

—

—

—

(2)

Equity in affiliated companies’ net earnings

—

—

—

—

—

—

6

—

—

—

—

6

Net income attributable to noncontrolling interests

—

—

—

(4)

—

—

—

Net income attributable to common stockholders

Capital expenditures

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Financial Information by Business Division and Segment (continued)

Atlantic

Corporate,

U.S. Copper Mines

South America Operations

U.S.

Copper

Other

Cerro

Indonesia

Molybdenum

Rod &

Smelting

& Elimi-

FCX

Morenci

Other

Total

Verde

Other

Total

Operations

Mines

Refining

& Refining

nations

Total

Revenues:

Unaffiliated customers

$

$

$

$

$

$

$

$

—

$

$

$

a

$

Intersegment

—

1

9

—

Production and delivery

b

DD&A

c

3

Selling, general and administrative expenses

1

1

2

3

—

3

—

—

Exploration and research expenses

8

3

—

—

—

—

Environmental obligations and shutdown costs

—

—

—

—

—

—

—

—

—

—

Gain on PTFI mud rush incident insurance settlement

—

—

—

—

—

—

—

—

—

—

Gain on sale of assets

—

—

—

—

—

—

—

—

—

—

Operating income (loss)

Interest expense, net

(2)

—

(2)

—

—

—

Other (expense) income, net

(1)

—

(1)

5

—

(1)

7

Provision for income taxes

—

—

—

—

—

(7)

Equity in affiliated companies’ net earnings

—

—

—

—

—

—

—

—

—

1

Net income attributable to noncontrolling interests

—

—

—

—

—

—

(2)

Net income attributable to common stockholders

Capital expenditures

Revenues:

Unaffiliated customers

$

$

$

$

$

$

$

$

—

$

$

$

a

$

Intersegment

4

6

—

Production and delivery

e

DD&A

2

Selling, general and administrative expenses

1

1

2

3

1

4

—

—

Exploration and research expenses

6

2

8

3

1

—

—

Environmental obligations and shutdown costs

(7)

—

(7)

—

—

—

—

—

—

—

Operating income (loss)

Interest expense, net

—

(1)

(1)

(8)

—

(8)

—

—

Other (expense) income, net

(2)

4

2

1

(1)

(1)

Provision for income taxes

—

—

—

—

—

Equity in affiliated companies’ net earnings (losses)

—

—

—

—

—

—

9

—

—

—

(1)

8

Net income attributable to noncontrolling interests

—

—

—

—

—

—

Net income attributable to common stockholders

Capital expenditures

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Financial Information by Business Division and Segment (continued)

a.Includes revenues from our molybdenum sales company, which includes sales of molybdenum produced by our primary molybdenum mines and certain of the U.S. copper mines and the Cerro Verde mine.

b.Includes idle facility and restoration costs associated with the September 2025 external mud rush incident totaling $284 million in second-quarter 2026 and $690 million for the first six months of 2026. Refer to Note 7 for further discussion.

c.Includes idle facility costs associated with the September 2025 external mud rush incident totaling $79 million in second-quarter 2026 and $172 million for the first six months of 2026. Refer to Note 7 for further discussion.

d.Represents a volume adjustment on concentrate shipped to Atlantic Copper in a prior period.

e.Includes charges totaling $73 million associated with planned maintenance turnaround costs at the Miami smelter.

OPERATIONS

Leaching and Technology Innovation Initiatives

We are incorporating new applications, technologies and data analytics into our leaching processes across our U.S. and South America operations to strengthen long-term cost competitiveness and unlock significant value. Incremental copper production from these initiatives totaled 47 million pounds in second-quarter 2026 and 101 million pounds for the first six months of 2026.

We continue to apply operational enhancements on a larger scale and are advancing testing of innovative technologies to target significant increases in incremental production from leaching initiatives. We are targeting reaching an annual run rate of 300 million pounds of copper from these initiatives by the end of 2026, with potential for further significant increases in recoverable metal in future years. We are deploying large-scale testing of an internally developed additive product at our Morenci operations with encouraging early results. In addition, we plan to field-test two additional additives which, together with the application of heat to our stockpiles, could further enhance recoveries. Continued success with these initiatives would be expected to contribute to additions in recoverable copper in leach stockpiles and favorably impact average unit net cash costs.

In addition to our innovative leaching initiatives, we are pursuing opportunities to leverage new technologies and analytic tools in automation and operating practices with a goal of improving operating efficiencies and reducing costs and capital intensity of our current operations and future development projects. We believe our innovative leaching and technology initiatives will strengthen our operational performance and enhance opportunities for profitable growth.

Responsible Production

The Copper Mark. We demonstrate our responsible production performance through the Copper Mark, a comprehensive assurance framework developed specifically for the copper industry, and extended to other metals, including molybdenum. To achieve the Copper Mark and Molybdenum Mark, as applicable, each site is required to complete an independent external assurance process to assess conformance with various environmental, social and governance criteria. Awarded sites must be revalidated every three years. In June 2026, PTFI’s downstream processing facilities achieved their initial Copper Mark validation. We have achieved, and are committed to maintaining, the Copper Mark and Molybdenum Mark, as applicable, at all of our operating sites globally.

Feasibility and Optimization Studies

We are engaged in various studies associated with potential future expansion projects primarily at our mining operations. We are also undertaking optimization projects at our current mining operations to enhance efficiencies and reduce costs. The costs for these studies are charged to production and delivery costs as incurred and totaled $33 million in second-quarter 2026, $52 million in second-quarter 2025, $64 million for the first six months of 2026 and $88 million for the first six months of 2025. We estimate the costs of these studies will total $200 million for the year 2026, subject to market conditions and other factors.

U.S. Tariffs

T7Government action related to tariffs and other controls on imports and exports or trade agreements or policies of the U.S. and other countries are difficult to predict and have and may in the future cause significant volatility in our financial performance and in the trading prices of our common stock. Refer to “Risk Factors” in Part I, Item 1A. of our 2025 Form 10-K and Part II, Item 1A. herein for further discussion.

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Section 232 Tariffs. Effective in August 2025, a 50% tariff was imposed under Section 232 of the Trade Expansion Act, targeting U.S. imports of semi-finished copper products and copper-intensive derivative products. However, refined copper, including cathodes, concentrates and scrap, was exempted from the tariff, and the U.S. government indicated it would reassess the potential for a refined copper tariff of 15% beginning in January 2027 and rising to 30% in 2028. The evaluation remains open.

Additionally, the U.S. Secretary of Commerce was directed to impose requirements that 25% of copper cathode and concentrate produced in the U.S. be sold domestically in 2027, potentially increasing to 30% in 2028 and 40% in 2029. Because of our integrated operations, these requirements are not expected to negatively impact our business.

We are the leading copper supplier in the U.S., providing approximately 70% of total U.S. refined copper production through our integrated domestic mining and processing facilities, most of which is sold domestically. For the six months ended June 30, 2026, copper from our U.S. mining operations was sold 75% as rod and 25% as cathode. We are well positioned in the U.S. with sizeable resources and opportunities to leverage existing infrastructure through brownfield expansions.

United States

We manage seven copper operations in the U.S. – Morenci, Bagdad, Safford (including Lone Star), Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. We also operate a copper smelter and rod mill in Miami, Arizona, and a copper refinery and rod mill in El Paso, Texas. All of our U.S. operations are wholly owned, except for Morenci. We record our 72% undivided joint venture interest in Morenci using the proportionate consolidation method.

Our U.S. copper operations include open-pit mining, sulfide-ore concentrating, leaching and solution extraction/electrowinning (SX/EW) facilities. A majority of the copper produced at our U.S. copper operations is cast into copper rod by our U.S. Rod & Refining segment. The remainder of our U.S. copper production is sold as copper cathode or copper concentrate. Molybdenum concentrate, gold and silver are also produced by certain of our U.S. copper operations.

Development Activities. We have substantial reserves, resources and future opportunities for organic growth in the U.S. associated with existing operations. Several initiatives are underway to target significant future growth in our U.S. copper operations, including the leaching and technology innovation initiatives discussed above.

We have defined an opportunity to more than double the concentrator capacity of the Bagdad operation in northwest Arizona. Bagdad’s reserve life currently exceeds 80 years and supports an expanded operation. We completed technical and economic studies in late 2023 and have advanced these studies in preparation for a potential investment decision during the second half of 2026. These studies indicate the opportunity to construct new concentrating facilities to increase copper production by 200 to 250 million pounds per year and increase molybdenum production by 10 to 12 million pounds per year. Expanded operations would position Bagdad as the second largest copper mine in the U.S. (behind our flagship Morenci mine) and among the lowest cost mines in our U.S. portfolio, and Bagdad would benefit from improved efficiency and lower unit net cash costs through economies of scale.

Capital cost estimates for the Bagdad expansion are being finalized, taking into account current estimates, including for materials, equipment and labor. Current estimates, which continue to be reviewed, indicate project capital costs of approximately $4.5 billion, approximately 30% above the prior $3.5 billion estimate prepared in 2023. The revisions incorporate the impact of cost escalation, revisions in project scope and revised estimates associated with additional engineering. Taking into account higher capital cost estimates and enhanced operational plans, the project economics continue to be supported at an incentive copper price of approximately $4.00 per pound and would require three to four years to complete, with no expected major permitting hurdles. The decision to proceed with and timing of the potential expansion will take into account overall copper market conditions and other factors.

We continue to advance pre-feasibility studies in the Safford/Lone Star district to define a potential significant expansion opportunity. Positive drilling conducted in recent years indicates a large, mineralized district with opportunities to pursue a significant expansion project. We expect to complete these studies during 2026. The decision to proceed with and timing of the potential expansion will take into account results of technical and economic studies, overall copper market conditions and other factors.

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Operating Data. Following is summary consolidated operating data for our U.S. copper mines:

Three Months Ended June 30,

Six Months Ended June 30,

Operating Data, Net of Joint Venture Interests

Copper (millions of recoverable pounds)

Production

Sales, excluding purchases

Average realized price per pound

$

$

$

$

Molybdenum (millions of recoverable pounds)

Productiona

9

Leach operations

Leach ore placed in stockpiles (metric tons per day)

Average copper ore grade (%)

Copper production (millions of recoverable pounds)

Mill operations

Ore milled (metric tons per day)

Average ore grade (%):

Copper

Molybdenum

Copper recovery rate (%)

Copper production (millions of recoverable pounds)

a.Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at our U.S. copper mines.

Our consolidated copper sales volumes from the U.S. copper mines totaled 312 million pounds in second-quarter 2026, 308 million pounds in second-quarter 2025, 639 million pounds for the first six months of 2026 and 615 million pounds for the first six months of 2025.

Consolidated copper sales from our U.S. mines are expected to approximate 1.4 billion pounds for the year 2026. Refer to “Outlook” for projected molybdenum sales volumes.

Unit Net Cash Costs. We believe unit net cash costs per pound of copper is a measure that provides investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

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Gross Profit per Pound of Copper and Molybdenum

The following table summarizes unit net cash costs and gross profit per pound at our U.S. copper mines for the second quarters and first six months of 2026 and 2025. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

Three Months Ended June 30,

By- Product Method

Co-Product Method

By- Product Method

Co-Product Method

Copper

Molyb-

denuma

Copper

Molyb-

denuma

Revenues, excluding adjustments

$

$

$

$

$

$

Site production and delivery, before net noncash

and other costs shown below

By-product credits

—

—

—

—

Treatment charges

—

—

Unit net cash costs

DD&A

Noncash and other costs, net

b

b

Total unit costs

Other revenue adjustments, primarily for pricing

on prior period open sales

—

—

Gross profit per pound

$

$

$

$

$

$

Copper sales (millions of recoverable pounds)

Molybdenum sales (millions of recoverable pounds)a

9

Six Months Ended June 30,

By- Product Method

Co-Product Method

By- Product Method

Co-Product Method

Copper

Molyb-

denuma

Copper

Molyb-

denuma

Revenues, excluding adjustments

$

$

$

$

$

$

Site production and delivery, before net noncash

and other costs shown below

By-product credits

—

—

—

—

Treatment charges

—

—

Unit net cash costs

DD&A

Noncash and other costs, net

b

b

Total unit costs

Other revenue adjustments, primarily for pricing

on prior period open sales

—

—

Gross profit per pound

$

$

$

$

$

$

Copper sales (millions of recoverable pounds)

Molybdenum sales (millions of recoverable pounds)a

a.Reflects sales of molybdenum produced by certain of our U.S. copper mines to our molybdenum sales company at market-based pricing.

b.Includes charges for feasibility and optimization studies totaling $0.06 per pound of copper in second-quarter 2026, $0.09 per pound of copper in second-quarter 2025, $0.05 per pound of copper for the first six months of 2026 and $0.07 per pound of copper for the first six months of 2025.

Our U.S. copper mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors. Average unit net cash costs (net of by-product credits) for our U.S. copper mines totaled $2.94 per pound of copper in second-quarter 2026, $3.04 per pound of copper in second-quarter 2025, $2.93 per pound of copper for the first six months of 2026 and $3.08 per pound of copper for the first six months of 2025. Lower average unit net cash costs in the 2026 periods, compared to the 2025 periods, primarily reflects higher by-product credits, partly offset by higher costs for supplies, diesel fuel and other consumables.

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Because certain assets are depreciated on a straight-line basis, the average unit depreciation rate for our U.S. copper mines may vary with asset additions and the level of copper production and sales.

Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods. Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales.

Based on achievement of current sales volume and cost estimates, and assuming an average price of $30.00 per pound of molybdenum for the second half of 2026, average unit net cash costs (net of by-product credits) for our U.S. copper mines are expected to approximate $2.96 per pound of copper for the year 2026. Our U.S. copper mines’ average unit net cash costs for the year 2026 would change by approximately $0.03 per pound for each $2 per pound change in the average price of molybdenum for the second half of 2026.

South America

We manage two copper operations in South America – Cerro Verde in Peru (55.66%-owned) and El Abra in Chile (51%-owned). These operations are consolidated in our financial statements. In addition to copper, the Cerro Verde mine produces molybdenum concentrate and silver.

Development Activities. At the El Abra operations in Chile, we have an attractive opportunity to expand the operation to include a major mill facility similar to the large-scale concentrator at Cerro Verde. The project could result in the addition of over 700 million pounds of copper production per year. In March 2026, El Abra submitted an environmental impact study to Chile regulatory authorities. Preliminary estimates, which remain under review, indicate that project capital costs would approximate $7.5 billion based on estimates prepared in 2024 and that the project economics would be supported using an incentive copper price of less than $4.00 per pound. The decision to proceed with and timing of the potential project will take into account required permitting, market conditions and other factors.

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

Three Months Ended June 30,

Six Months Ended June 30,

Copper (millions of recoverable pounds)

Production

Sales

Average realized price per pound

$

$

$

$

Molybdenum (millions of recoverable pounds)

Productiona

5

4

Leach operations

Leach ore placed in stockpiles (metric tons per day)

Average copper ore grade (%)

Copper production (millions of recoverable pounds)

Mill operations

Ore milled (metric tons per day)

Average ore grade (%):

Copper

Molybdenum

Copper recovery rate (%)

Copper production (millions of recoverable pounds)

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

Our consolidated copper sales volumes from South America operations totaled 245 million pounds in second-quarter 2026, 265 million pounds in second-quarter 2025, 493 million pounds for the first six months of 2026, and 540 million pounds for the first six months of 2025. Lower copper sales volumes in the 2026 periods, compared to the 2025 periods, primarily reflect lower leach production and the processing of lower grade stockpile ore as a result of mine sequencing.

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Copper sales from South America operations are expected to approximate 1.0 billion pounds for the year 2026. Refer to “Outlook” for projected molybdenum sales volumes.

Unit Net Cash Costs. We believe unit net cash costs per pound of copper is a measure that provides investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

Gross Profit per Pound of Copper

The following table summarizes unit net cash costs and gross profit per pound of copper at our South America operations for the second quarters and first six months of 2026 and 2025. Unit net cash costs per pound of copper are reflected under the by-product and co-product methods as the South America operations also had sales of molybdenum and silver. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

Three Months Ended June 30,

By-Product

Method

Co-Product

Method

By-Product

Method

Co-Product

Method

Revenues, excluding adjustments

$

$

$

$

Site production and delivery, before net noncash

and other costs shown below

By-product credits

—

—

Treatment charges

Royalty on metals

Unit net cash costs

DD&A

Noncash and other costs, net

a

a

Total unit costs

Other revenue adjustments, primarily for pricing

on prior period open sales

Gross profit per pound

$

$

$

$

Copper sales (millions of recoverable pounds)

Six Months Ended June 30,

By-Product

Method

Co-Product

Method

By-Product

Method

Co-Product

Method

Revenues, excluding adjustments

$

$

$

$

Site production and delivery, before net noncash

and other costs shown below

By-product credits

—

—

Treatment charges

Royalty on metals

Unit net cash costs

DD&A

Noncash and other costs, net

a

a

Total unit costs

Other revenue adjustments, primarily for pricing

on prior period open sales

Gross profit per pound

$

$

$

$

Copper sales (millions of recoverable pounds)

a.Includes charges for feasibility and optimization studies totaling $0.04 per pound of copper in the second quarter and for the first six months of 2026, $0.07 per pound of copper in second-quarter 2025 and $0.06 per pound of copper for the first six

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months of 2025. Also includes charges for inventory write-offs totaling $0.04 per pound of copper in second-quarter 2026 and $0.02 per pound of copper for the first six months of 2026.

Average unit net cash costs (net of by-product credits) for South America operations totaled $2.48 per pound of copper in second-quarter 2026, $2.46 per pound of copper in second-quarter 2025 and $2.43 per pound of copper for both the first six months of 2026 and 2025. Average unit net cash costs in the 2026 periods, compared to the 2025 periods, reflect lower copper volumes and higher labor and energy costs, partially offset by higher by-product credits.

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

Because certain assets are depreciated on a straight-line basis, South America’s unit depreciation rate may vary with asset additions and the level of copper production and sales.

Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods. Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales.

Based on achievement of current sales volume and cost estimates and assuming an average price of $30.00 per pound of molybdenum for the second half of 2026, average unit net cash costs (net of by-product credits) for our South America operations are expected to approximate $2.56 per pound of copper for the year 2026. Our South America operations’ average unit net cash costs for the year 2026 would change by approximately $0.04 per pound for each $2 per pound change in the average price of molybdenum for the second half of 2026.

Indonesia

PTFI operates one of the world’s largest copper and gold mines at the Grasberg minerals district in Central Papua, Indonesia. In addition to copper and gold, the Grasberg minerals district also produces silver. With the completion of its downstream processing facilities, PTFI is a fully integrated producer of refined copper, gold and silver. We have a 48.76% ownership interest in PTFI and manage its operations. PTFI's results are consolidated in our financial statements.

Operating, Development and Exploration Activities. Over a multi-year investment period, PTFI has successfully commissioned three large-scale underground mines in the Grasberg minerals district (Grasberg Block Cave, Deep Mill Level Zone (DMLZ) and Big Gossan) and completed related expansion of the milling facilities. At normal operating rates, PTFI’s underground operations produce approximately 1.7 billion pounds of copper and 1.3 million ounces of gold per year and are among the lowest cost copper mining operations in the world.

PTFI has identified additional exploration targets to leverage its infrastructure in the Grasberg minerals district, including a potential extension below the DMLZ underground mine, which requires further drilling and evaluation.

Kucing Liar. Since 2022, PTFI has conducted long-term mine development activities at its Kucing Liar deposit in the Grasberg minerals district. PTFI’s long-term mine plans include a ramp-up of Kucing Liar, commencing in the 2030 timeframe, to a design capacity of approximately 130,000 metric tons of ore per day. Average annual Kucing Liar production at full rates would approximate 750 million pounds of copper and 735 thousand ounces of gold and would enable continuity of large-scale production in the Grasberg minerals district.

At June 30, 2026, PTFI had incurred approximately $1.4 billion for Kucing Liar development, and capital investments are estimated to approximate an additional $4 billion through 2033 (averaging approximately $0.5 billion per year).

Long-Term Mining Rights. In February 2026, T8we and PTFI entered into a Memorandum of Understanding (MOU) with the Indonesia government for a life of resource extension of operating rights in the Grasberg minerals district beyond the current expiration in 2041. Under the terms of the MOU, we would maintain our current ownership interest in PTFI of 48.76% through 2041 and hold approximately 37% beginning in 2042. The existing governance and operating structure, and terms of the existing shareholder agreement, special mining business license (IUPK) and other agreements in effect will continue over the life of the resource.

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