FREEPORT-MCMORAN INC (FCX)

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 (PTFI) 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. We 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. We 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, we 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:

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, consolidated 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):

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

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Items 7. and 7A.  Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk.

In Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk (MD&A), “we,” “us” and “our” refer to Freeport-McMoRan Inc. and its consolidated subsidiaries. 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” below for further discussion). References to “Notes” are Notes included in our Notes to Consolidated Financial Statements. Throughout MD&A, all references to income or losses per share are on a diluted basis.

This section of our Form 10-K discusses the results of operations for the years 2025 and 2024 and comparisons between these years. Discussion of the results of operations for the year 2023 and comparisons between the years 2024 and 2023 are not included in this Form 10-K and can be found in Items 7. and 7A. “Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk” contained in Part II of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

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 United States (U.S.) and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru.

We believe fundamentals for copper are favorable with growing demand supported by copper’s critical role in electrification initiatives, continued urbanization in developing countries, data centers and artificial intelligence (AI) growth, increased defense spending and growing connectivity globally.

We believe that we are well positioned for the future as a leading producer of copper with significant copper reserves and resources and a high-quality portfolio of growth projects to provide additional supplies of copper to a growing market. Our experienced team is committed to value creation through solid execution of our plans, operational excellence and advancing opportunities for long-term organic growth.

We continue to evaluate and advance potential expansion opportunities at certain of our copper mines in the U.S. and South America. Across our U.S. and South America operations, we are incorporating new applications, technologies and data analytics into our leaching processes. In late 2025, we achieved an annual run rate of approximately 240 million pounds of copper. We are targeting annual production of 300 million pounds of copper in 2026 from these initiatives and believe there is potential for further significant increases in recoverable metal beyond the current annual target. Refer to “Operations – United States” and “Operations – South America” for further discussion.

Our 2025 operations and results were impacted by the September 2025 mud rush incident at the Grasberg minerals district in Central Papua, Indonesia. In late October 2025, PT Freeport Indonesia (PTFI) restarted operations at the unaffected Deep Mill Level Zone (DMLZ) and Big Gossan underground mines. During fourth-quarter 2025, investigations and remedial plans were completed and a phased restart and ramp-up of the Grasberg Block Cave underground mine is anticipated to begin in second-quarter 2026. Refer to “Operations – Indonesia” for further discussion.

Higher net income attributable to common stock of $2.2 billion in 2025, compared to $1.9 billion in 2024, primarily reflects higher operating income from our U.S. and South America copper mining operations resulting from higher average realized copper prices, partly offset by lower financial results from Indonesia operations as a result of the September 2025 mud rush incident. Refer to “Consolidated Results” for discussion of items impacting our consolidated results for the years ended December 31, 2025 and 2024.

At December 31, 2025, we had consolidated debt of $9.4 billion and consolidated cash and cash equivalents of $3.8 billion. Net debt totaled $2.3 billion, excluding $3.2 billion of debt for PTFI’s smelter and precious metals refinery

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(PMR) (collectively, PTFI’s downstream processing facilities). Refer to “Net Debt” for a reconciliation of consolidated debt and consolidated cash and cash equivalents to net debt.

At December 31, 2025, 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. Refer to Note 6 and “Capital Resources and Liquidity” for further discussion of our debt.

We have significant mineral reserves, mineral resources and future development opportunities within our portfolio of mining assets. At December 31, 2025, our estimated consolidated recoverable proven and probable mineral reserves totaled 112.3 billion pounds of copper, 20.6 million ounces of gold and 3.5 billion pounds of molybdenum. Refer to Note 15 for further discussion.

During 2025, production from our mines totaled 3.4 billion pounds of copper, 1.0 million ounces of gold and 92 million pounds of molybdenum. Following is the allocation of our consolidated copper, gold and molybdenum production in 2025 by geographic location:

a.Our U.S. copper mines produced 37% of consolidated molybdenum production, and our Henderson and Climax molybdenum mines produced 40%.

Copper production from three of our mines (the Morenci mine in the U.S., the Cerro Verde mine in Peru and the Grasberg minerals district in Indonesia) together totaled 70% of our consolidated copper production in 2025.

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,” and Item 1A. “Risk Factors” contained in Part I of our annual report on Form 10-K for the year ended December 31, 2025, 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 in the below section and elsewhere in this annual report on Form 10-K are based on current market conditions, speak only as of the filing date of this annual report on Form 10-K, 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:

a.Includes 56 million pounds produced by our U.S. copper mines and Cerro Verde mine and 34 million pounds produced by our primary molybdenum mines.

Based on current estimates, approximately 60% of consolidated copper sales and 75% of consolidated gold sales in 2026 are expected to occur in the second half of the year. For the year 2026, copper and gold production volumes are expected to exceed sales volumes, reflecting deferrals of approximately 100 million pounds of copper and 100 thousand ounces of gold associated with inventory held at PTFI’s smelting operations.

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Projected sales volumes are dependent on operational performance; the timing of restarting and ramping up the Grasberg Block Cave underground mine at PTFI, which is currently expected to begin in second-quarter 2026; weather-related conditions; timing of shipments and other factors. For further discussion of other important factors that could cause results to differ materially from projections, refer to Item 1A. “Risk Factors” contained in Part I of our annual report on Form 10-K for the year ended December 31, 2025.

Consolidated Unit Net Cash Costs

Consolidated unit net cash costs (net of by-product credits and excluding idle facility costs and restoration expenses associated with the September 2025 mud rush incident at PTFI) for our copper mines are expected to average $1.75 per pound of copper for the year 2026, based on achievement of current sales volume estimates and cost estimates and assuming average prices of $4,000 per ounce of gold and $20.00 per pound of molybdenum for the year 2026. The impact of price changes on consolidated unit net cash costs for the year 2026 would approximate $0.03 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.

Quarterly unit net cash costs vary with fluctuations in sales volumes by region and realized prices, primarily for gold and molybdenum, and are expected to improve throughout 2026 as PTFI’s operations and smelting activities are restarted.

Following the September 2025 mud rush incident and until PTFI operations return to normal capacity, a portion of PTFI's production and delivery costs will be recognized as idle facility, which are non-inventoriable costs. Idle facility costs and restoration expenses are expected to total $0.9 billion for the year 2026 (including $0.4 billion in first-quarter 2026). Refer to “Operations” for further discussion.

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, including the timing of restarting and ramping up the Grasberg Block Cave underground mine at PTFI, which is currently expected to begin in second-quarter 2026.

Consolidated operating cash flows are estimated to approximate $8 billion for the year 2026, including $1 billion of working capital and other sources, based on current sales volume and cost estimates, and assuming average prices of $5.00 per pound of copper, $4,000 per ounce of gold and $20.00 per pound of molybdenum for the year 2026. Estimated consolidated operating cash flows in 2026 also reflect a projected income tax provision of $2.7 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate). The impact of price changes on operating cash flows for the year 2026 would approximate $330 million for each $0.10 per pound change in the average price of copper, $75 million for each $100 per ounce change in the average price of gold and $160 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):

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