FREEPORT MCMORAN : s 7. and 7A. Management's Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk. (form 10-K)

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 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. Throughout MD&A, all references
to earnings or losses per share are on a diluted basis.

This section of our Form 10-K generally discusses the results of operations for
the years 2020 and 2019 and comparisons between these years. Discussion of the
results of operations for the year 2018 and comparisons between the years 2019
and 2018 are not included in this Form 10-K and can be found in "Management's
Discussion and Analysis of Financial Condition and Results of Operations and
Quantitative and Qualitative Disclosures About Market Risk" in Part II, Items 7.
and 7A. of our Annual Report on Form 10-K for the fiscal year ended December 31,
2019.

OVERVIEW

We are a leading international mining company with headquarters in Phoenix,
Arizona. We operate large, long-lived, geographically diverse assets with
significant proven and probable 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 mining operations in North
America and South America, including the large-scale Morenci minerals district
in Arizona and the Cerro Verde operation in Peru.

Protecting the health of our workforce and communities where we operate is a top
priority and we continue to focus on safeguarding our business in an uncertain
public health and economic environment. Our operating sites successfully
executed our April 2020 revised operating plans implemented in response to the
global COVID-19 pandemic and resulting negative impact on the global economy.

We believe that we have a high-quality portfolio of long-lived copper assets
positioned to generate long-term value. The ramp-up of underground mining at PT
Freeport Indonesia (PT-FI) and production from the Lone Star copper leach
project are both advancing on schedule. Cerro Verde is continuing to increase
milling rates while operating under strict COVID-19 restrictions and protocols
that remain in place. Refer to "Operations" for further discussion. We are also
pursuing other opportunities to enhance our mines' net present values, and we
continue to advance studies for future development of our resources, the timing
of which will depend on market conditions. We plan to prioritize long-term
development opportunities during 2021 while focusing on the continued execution
of our strategic objectives of maintaining a strong balance sheet, increasing
cash returns to shareholders and advancing opportunities for future growth.

Our 2020 results reflect strong cash flows and effective cost and capital
expenditure management. Net income (loss) attributable to common stock totaled
$599 million in 2020 and $(239) million in 2019. Our results in 2020, compared
to 2019, primarily reflect higher copper and gold prices and lower production
and delivery costs. Refer to "Consolidated Results" for discussion of items
impacting our consolidated results for the two years ended December 31, 2020.

At December 31, 2020, we had $3.7 billion in consolidated cash and cash equivalents, $9.7 billion in total debt, and no borrowings and $3.5 billion available under our revolving credit facility.

In connection with our financing activities in 2019 and 2020, we issued a total
of $4.0 billion in new senior notes and used most of the net proceeds to
purchase and redeem outstanding senior notes. As a result, we have extended our
debt maturities and strengthened our financial flexibility. We have no
significant scheduled debt maturities in 2021. Refer to Note 8 and "Capital
Resources and Liquidity" for further discussion.

We have significant mineral reserves, resources and future development
opportunities within our portfolio of mining assets. At December 31, 2020, our
estimated consolidated recoverable proven and probable mineral reserves totaled
113.2 billion pounds of copper, 28.9 million ounces of gold and 3.71 billion
pounds of molybdenum. Refer to "Critical Accounting Estimates - Mineral
Reserves" and Note 17 for further discussion.
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During 2020, production from our mines totaled 3.2 billion pounds of copper, 0.9
million ounces of gold and 76 million pounds of molybdenum. Following is an
allocation of our consolidated copper, gold and molybdenum production in 2020 by
geographic location:
                   Copper      Gold       Molybdenum
North America        44  %       1  %           75  % a
South America        31          -              25
Indonesia            25         99               -
                    100  %     100  %          100  %

a.Our North America copper mines produced 43 percent of consolidated molybdenum production, and our Henderson and Climax molybdenum mines produced 32 percent.

Copper production from the Morenci mine in North America, Cerro Verde mine in
Peru and the Grasberg minerals district in Indonesia together totaled 73 percent
of our consolidated copper production in 2020.

OUTLOOK

Despite volatile market conditions and global economic uncertainty as a result
of the ongoing COVID-19 pandemic, we continue to view the long-term outlook for
our business positively, supported by limitations on supplies of copper and by
the requirements for copper in the world's economy. Our financial results vary
as a result of fluctuations in 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" for further discussion. Because
we cannot control the price 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.

Sales Volumes Following are our projected consolidated sales volumes for 2021 and actual consolidated sales volumes for 2020:

                                                   2021             2020
                                               (Projected)        (Actual)
Copper (millions of recoverable pounds):
North America copper mines                           1,465          1,422
South America mining                                 1,035            976
Indonesia mining                                     1,320            804
Total                                                3,820          3,202


Gold (thousands of recoverable ounces)               1,325            855
Molybdenum (millions of recoverable pounds)             85    a        80

a.Includes 25 million pounds from our Molybdenum mines and 60 million pounds from our North America and South America copper mines.

Consolidated sales for first-quarter 2021 are expected to approximate 825
million pounds of copper, 275 thousand ounces of gold and 20 million pounds of
molybdenum. Projected sales volumes are dependent on operational performance,
continued progress of the ramp-up of underground mining at PT-FI, impacts and
duration of the COVID-19 pandemic, timing of shipments, the Indonesia
government's extension of PT-FI's export license beyond March 15, 2021, and
other factors. For other important factors that could cause results to differ
materially from projections, refer to "Cautionary Statement" and "Risk Factors"
contained in Part I, Item 1A. of our annual report on Form 10-K for the year
ended December 31, 2020.

Consolidated Unit Net Cash Costs
Assuming average prices of $1,850 per ounce of gold and $9.00 per pound of
molybdenum and achievement of current sales volume and cost estimates,
consolidated unit net cash costs (net of by-product credits) for our copper
mines are expected to average $1.25 per pound of copper in 2021. The impact of
price changes on 2021 consolidated unit net cash costs would approximate $0.03
per pound for each $100 per ounce change in the average price of gold and $0.01
per pound for each $2 per pound change in the average price of molybdenum.
Quarterly unit net cash costs vary with fluctuations in sales volumes and
realized prices, primarily for gold and molybdenum.
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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. Based on current sales volume and
cost estimates, and assuming average prices of $3.50 per pound of copper, $1,850
per ounce of gold and $9.00 per pound of molybdenum, our consolidated operating
cash flows are estimated to approximate $5.5 billion (including $0.4 billion
from working capital and other sources) for the year 2021. Estimated
consolidated operating cash flows in 2021 also reflect a projected income tax
provision of $1.8 billion (refer to "Consolidated Results - Income Taxes" for
further discussion of our projected income tax rate for the year 2021). The
impact of price changes during 2021 on operating cash flows would approximate
$380 million for each $0.10 per pound change in the average price of copper,
$120 million for each $100 per ounce change in the average price of gold and $80
million for each $2 per pound change in the average price of molybdenum.

Consolidated Capital Expenditures
Consolidated capital expenditures are expected to approximate $2.3 billion in
2021, including $1.4 billion for major projects primarily associated with
underground development activities in the Grasberg minerals district and exclude
estimates associated with the new smelter in Indonesia.

We expect capital expenditures for the development of the new smelter in
Indonesia to approximate $0.1 billion in 2021, of which approximately 49 percent
will be attributable to our equity interest. PT-FI expects these amounts to be
funded by a new bank loan.
MARKETS

World prices for copper, gold and molybdenum can fluctuate significantly. During
the period from January 2011 through December 2020, the London Metal Exchange
(LME) copper settlement price varied from a low of $1.96 per pound in 2016 to a
record high of $4.60 per pound in 2011; the London Bullion Market Association
(London) PM gold price fluctuated from a low of $1,049 per ounce in 2015 to a
record high of $2,067 per ounce in 2020, and the Metals Week Molybdenum Dealer
Oxide weekly average price ranged from a low of $4.46 per pound in 2015 to a
high of $17.88 per pound in 2011. Copper, gold and molybdenum prices are
affected by numerous factors beyond our control as described further in our
"Risk Factors" contained in Part I, Item 1A. of our annual report on Form 10-K
for the year ended December 31, 2020.



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[[Image Removed: fcx-20201231_g16.jpg]]
This graph presents LME copper settlement prices and the combined reported
stocks of copper at the LME, Commodity Exchange Inc., and the Shanghai Futures
Exchange from January 2011 through December 2020. For the year 2020, LME copper
settlement prices ranged from a low of $2.09 per pound to a high of $3.61 per
pound, averaged $2.80 per pound and closed at $3.51 per pound on December 31,
2020. During 2020, copper prices were initially negatively impacted by economic
uncertainty associated with the COVID-19 pandemic, but began to rise in
second-quarter 2020 and continued to rise through the end of 2020 as a result of
a positive economic outlook lead by China's continued recovery, decreasing
inventories and supply curtailments related to the COVID-19 pandemic. The LME
copper settlement price was $3.57 per pound on January 29, 2021.

While we acknowledge the global economic turmoil associated with the ongoing
COVID-19 pandemic, we continue to believe the underlying long-term fundamentals
of the copper business remain positive, supported by the significant role of
copper in the global economy and a challenging long-term supply environment
attributable to difficulty in replacing existing large mines' output with new
production sources. Future copper prices are expected to be volatile and are
likely to be influenced by the ongoing COVID-19 pandemic, demand from China and
emerging markets, as well as economic activity in the United States (U.S.) and
other industrialized countries, the timing of the development of new supplies of
copper and production levels of mines and copper smelters.

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[[Image Removed: fcx-20201231_g17.jpg]]

This graph presents London PM gold prices from January 2011 through December
2020. Concerns about the global economy related to the COVID-19 pandemic,
historically low U.S. interest rates and the anticipated effects of global
stimulus efforts have driven increased demand for gold. For the year 2020,
London PM gold prices ranged from a low of $1,474 per ounce to a record high of
$2,067 per ounce, averaged $1,770 per ounce and closed at $1,888 per ounce on
December 30, 2020 (there was no London PM gold price quote on December 31,
2020). The London PM gold price was $1,864 per ounce on January 29, 2021.

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[[Image Removed: fcx-20201231_g18.jpg]]
This graph presents the Metals Week Molybdenum Dealer Oxide weekly average price
from January 2011 through December 2020. Molybdenum prices were negatively
impacted by economic uncertainty associated with the COVID-19 pandemic in early
2020, but began to improve in the second half of 2020 as a result of increases
in spot sale activity in Europe and China. For the year 2020, the weekly average
price for molybdenum ranged from a low of $7.01 per pound to a high of $10.79
per pound, averaged $8.69 per pound and was $9.86 per pound on December 31,
2020. The Metals Week Molybdenum Dealer Oxide weekly average price was $10.38
per pound on January 29, 2021.

CRITICAL ACCOUNTING ESTIMATES

MD&A is based on our consolidated financial statements, which have been prepared
in conformity with generally accepted accounting principles (GAAP) in the U.S.
The preparation of these statements requires that we make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses. We base these estimates on historical experience and on
assumptions that we consider reasonable under the circumstances; however,
reported results could differ from those based on the current estimates under
different assumptions or conditions. The areas requiring the use of management's
estimates are also discussed in Note 1 under the subheading "Use of Estimates."
Management has reviewed the following discussion of its development and
selection of critical accounting estimates with the Audit Committee of our Board
of Directors (the Board).

Taxes

In preparing our consolidated financial statements, we estimate the actual
amount of income taxes currently payable or receivable as well as deferred
income tax assets and liabilities attributable to temporary differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred income tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which these temporary differences are expected to be recovered or
settled. The effect on deferred income tax assets and liabilities of a change in
tax rates or laws is recognized in income in the period in which such changes
are enacted.

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Our operations are in multiple jurisdictions where uncertainties arise in the
application of complex tax regulations. Some of these tax regimes are defined by
contractual agreements with the local government, while others are defined by
general tax laws and regulations. We and our subsidiaries are subject to reviews
of our income tax filings and other tax payments, and disputes can arise with
the taxing authorities over the interpretation of our contracts or laws. Final
taxes paid may be dependent upon many factors, including negotiations with
taxing authorities. In certain jurisdictions, we pay a portion of the disputed
amount before formally appealing an assessment. Such payment is recorded as a
receivable if we believe the amount is collectible.

A valuation allowance is provided for those deferred income tax assets for which
the weight of available evidence suggests that the related benefits will not be
realized. In determining the amount of the valuation allowance, we consider
estimated future taxable income or loss as well as feasible tax planning
strategies in each jurisdiction. If we determine that we will not realize all or
a portion of our deferred income tax assets, we will increase our valuation
allowance. Conversely, if we determine that we will ultimately be able to
realize all or a portion of the related benefits for which a valuation allowance
has been provided, all or a portion of the related valuation allowance will be
reduced.

Our valuation allowances totaled $4.7 billion at December 31, 2020, which covered all of our U.S. foreign tax credits, U.S. federal net operating losses, foreign net operating losses, and substantially all of our U.S. state net operating losses. Refer to Note 11 for further discussion.

Environmental Obligations
Our current and historical operating activities are subject to various national,
state and local environmental laws and regulations that govern the protection of
the environment, and compliance with those laws requires significant
expenditures. Environmental expenditures are charged to expense or capitalized,
depending upon their future economic benefits. The guidance provided by U.S.
GAAP requires that liabilities for contingencies be recorded when it is probable
that obligations have been incurred, and the cost can be reasonably estimated.
At December 31, 2020, environmental obligations recorded in our consolidated
balance sheet totaled $1.6 billion, which reflect obligations for environmental
liabilities attributed to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA) or analogous state programs and
for estimated future costs associated with environmental matters. Refer to Notes
1 and 12 for further discussion of environmental obligations, including a
summary of changes in our estimated environmental obligations for the three
years ended December 31, 2020.

Accounting for environmental obligations represents a critical accounting
estimate because (i) changes to environmental laws and regulations and/or
circumstances affecting our operations could result in significant changes to
our estimates, which could have a significant impact on our results of
operations, (ii) we will not incur most of these costs for a number of years,
requiring us to make estimates over a long period, (iii) calculating the
discounted cash flows for certain of our environmental obligations requires
management to estimate projected cash flows and make long-term assumptions about
inflation rates and (iv) changes in estimates used in determining our
environmental obligations could have a significant impact on our results of
operations.

We perform a comprehensive annual review of our environmental obligations and
also review changes in facts and circumstances associated with these obligations
at least quarterly. Judgments and estimates are based upon currently available
facts, existing technology, presently enacted laws and regulations, remediation
experience, whether or not we are a potentially responsible party (PRP), the
ability of other PRPs to pay their allocated portions and take into
consideration reasonably possible outcomes. Our cost estimates can change
substantially as additional information becomes available regarding the nature
or extent of site contamination, updated cost assumptions (including increases
and decreases to cost estimates), changes in the anticipated scope and timing of
remediation activities, the settlement of environmental matters, required
remediation methods and actions by or against governmental agencies or private
parties.

Asset Retirement Obligations
We record the fair value of our estimated asset retirement obligations (AROs)
associated with tangible long-lived assets in the period incurred. Fair value is
measured as the present value of cash flow estimates after considering inflation
and a market risk premium. Our cost estimates are reflected on a third-party
cost basis and comply with our legal obligation to retire tangible long-lived
assets in the period incurred. These cost estimates may differ from financial
assurance cost estimates for reclamation activities because of a variety of
factors, including obtaining updated cost estimates for reclamation activities,
the timing of reclamation activities, changes in scope and the exclusion of
certain costs not considered reclamation and closure costs. At December 31,
2020, AROs recorded in our consolidated balance sheet totaled $2.5 billion,
including $0.4 billion associated with our remaining oil and gas
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operations. Refer to Notes 1 and 12 for further discussion of reclamation and
closure costs, including a summary of changes in our AROs for the three years
ended December 31, 2020.

Generally, ARO activities are specified by regulations or in permits issued by
the relevant governing authority, and management's judgment is required to
estimate the extent and timing of expenditures. Accounting for AROs represents a
critical accounting estimate because (i) we will not incur most of these costs
for a number of years, requiring us to make estimates over a long period, (ii)
reclamation and closure laws and regulations could change in the future and/or
circumstances affecting our operations could change, either of which could
result in significant changes to our current plans, (iii) the methods used or
required to plug and abandon non-producing oil and gas wellbores, remove
platforms, tanks, production equipment and flow lines, and restore the wellsite
could change, (iv) calculating the fair value of our AROs requires management to
estimate projected cash flows, make long-term assumptions about inflation rates,
determine our credit-adjusted, risk-free interest rates and determine market
risk premiums that are appropriate for our operations and (v) given the
magnitude of our estimated reclamation, mine closure and wellsite abandonment
and restoration costs, changes in any or all of these estimates could have a
significant impact on our results of operations.

Mineral Reserves
Recoverable proven and probable reserves are the part of a mineral deposit that
can be economically and legally extracted or produced at the time of the reserve
determination. The determination of reserves involves numerous uncertainties
with respect to the ultimate geology of the ore bodies, including quantities,
grades and recovery rates. Estimating the quantity and grade of mineral reserves
requires us to determine the size, shape and depth of our ore bodies by
analyzing geological data, such as samplings of drill holes, tunnels and other
underground workings. In addition to the geology of our mines, assumptions are
required to determine the economic feasibility of mining these reserves,
including estimates of future commodity prices and demand, the mining methods we
use and the related costs incurred to develop and mine our reserves. Our
estimates of recoverable proven and probable mineral reserves are prepared by
and are the responsibility of our employees. These estimates are reviewed and
verified regularly by independent experts in mining, geology and reserve
determination.

Our consolidated estimated recoverable proven and probable reserves shown below
were assessed using long-term prices of $2.50 per pound for copper, $1,200 per
ounce of gold and $10 per pound of molybdenum. The following table summarizes
changes in our estimated consolidated recoverable proven and probable copper,
gold and molybdenum reserves during 2020 and 2019:
                                                  Coppera         Gold          Molybdenum
                                                 (billion       (million         (billion
                                                  pounds)        ounces)         pounds)
Consolidated reserves at December 31, 2018       119.6           30.8             3.78

Net revisions                                     (0.4)          (0.3)           (0.11)
Production                                        (3.2)          (0.9)           (0.09)
Consolidated reserves at December 31, 2019       116.0           29.6             3.58
Net additions                                      0.4            0.2             0.21
Production                                        (3.2)          (0.9)           (0.08)
Consolidated reserves at December 31, 2020       113.2           28.9       

3.71

a.Includes estimated recoverable metals contained in stockpiles. See below for additional discussion of recoverable copper in stockpiles.

Refer to Note 17 and "Risk Factors" contained in Part I, Item 1A. of our annual report on Form 10-K for the year ended December 31, 2020, for further information regarding, and risks associated with, our estimated recoverable proven and probable mineral reserves.

As discussed in Note 1, we depreciate our life-of-mine mining and milling assets
and values assigned to proven and probable mineral reserves using the
unit-of-production (UOP) method based on our estimated recoverable proven and
probable mineral reserves. Because the economic assumptions used to estimate
mineral reserves may change from period to period and additional geological data
is generated during the course of operations, estimates of reserves may change,
which could have a significant impact on our results of operations, including
changes to prospective depreciation rates and impairments of long-lived asset
carrying values. Based on projected copper sales volumes, if estimated copper
reserves at our mines were 10 percent higher at December 31, 2020, we estimate
that our annual depreciation, depletion and amortization (DD&A) expense for 2021
would decrease by $84 million ($44 million to net income attributable to common
stock), and a 10 percent decrease in copper reserves
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would increase DD&A expense by $103 million ($53 million to net income
attributable to common stock). We perform annual assessments of our existing
assets in connection with the review of mine operating and development plans. If
it is determined that assigned asset lives do not reflect the expected remaining
period of benefit, any change could affect prospective DD&A rates.

As discussed below and in Note 1, we review and evaluate our long-lived assets
for impairment when events or changes in circumstances indicate that the related
carrying amount of such assets may not be recoverable, and changes to our
estimates of recoverable proven and probable mineral reserves could have an
impact on our assessment of asset recoverability.

Recoverable Copper in Stockpiles
We record, as inventory, applicable costs for copper contained in mill and leach
stockpiles that are expected to be processed in the future based on proven
processing technologies. Mill and leach stockpiles are evaluated periodically to
ensure that they are stated at the lower of weighted-average cost or net
realizable value (refer to Note 4 and "Consolidated Results" for further
discussion of inventory adjustments recorded for the three years ended
December 31, 2020). Accounting for recoverable copper from mill and leach
stockpiles represents a critical accounting estimate because (i) it is
impracticable to determine copper contained in mill and leach stockpiles by
physical count, thus requiring management to employ reasonable estimation
methods and (ii) recovery rates from leach stockpiles can vary significantly.
Refer to Note 1 for further discussion of our accounting policy for recoverable
copper in stockpiles.

At December 31, 2020, estimated consolidated recoverable copper was 1.7 billion pounds in leach stockpiles (with a carrying value of $2.0 billion) and 0.3 billion pounds in mill stockpiles (with a carrying value of $0.4 billion).

Impairment of Long-Lived Assets
As discussed in Note 1, we assess the carrying values of our long-lived mining
assets when events or changes in circumstances indicate that the related
carrying amounts of such assets may not be recoverable. In evaluating our
long-lived mining assets for recoverability, we use estimates of pre-tax
undiscounted future cash flows of our mines. Estimates of future cash flows are
derived from current business plans, which are developed using near-term metal
price forecasts reflective of the current price environment and management's
projections for long-term average metal prices. In addition to near- and
long-term metal price assumptions, other key assumptions include estimates of
commodity-based and other input costs; proven and probable mineral reserves
estimates, including the timing and cost to develop and produce the reserves;
value beyond proven and probable mineral reserve estimates (refer to Note 1);
and the use of appropriate discount rates in the measurement of fair value. We
believe our estimates and models used to determine fair value are similar to
what a market participant would use. As quoted market prices are unavailable for
our individual mining operations, fair value is determined through the use of
after-tax discounted estimated future cash flows.

For the two years ended December 31, 2020, our evaluation of our long-lived mining assets did not result in any material impairments.

In addition to decreases in future metal price assumptions, other events that
could result in future impairment of our long-lived mining assets include, but
are not limited to, decreases in estimated recoverable proven and probable
mineral reserves and any event that might otherwise have a material adverse
effect on mine site production levels or costs. Refer to "Risk Factors"
contained in Part I, Item 1A. of our annual report on Form 10-K for the year
ended December 31, 2020.
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CONSOLIDATED RESULTS
                                                                            Years Ended December 31,
                                                                           2020                   2019
                                                                          (in millions, except per share
SUMMARY FINANCIAL DATA                                                              amounts)
Revenuesa,b                                                           $     14,198    c       $   14,402    d
Operating incomea,e,f,g                                               $      2,437    h       $    1,091
Net income (loss) from continuing operationsi,j,k                     $     

865 c,l $ (192) m,n,o

Net income (loss) attributable to common stock                        $        599            $     (239)

Diluted net income (loss) per share attributable to common stock $

   0.41            $    (0.17)

Diluted weighted-average common shares outstanding                           1,461                 1,451
Operating cash flowsp                                                 $      3,017            $    1,482
Capital expenditures                                                  $      1,961            $    2,652
At December 31:
Cash and cash equivalents                                             $      3,657            $    2,020
Total debt, including current portion                                 $      9,711            $    9,826


a.Refer to Note 16 for a summary of revenues and operating income by operating
division.
b.Includes adjustments to embedded derivatives for provisionally priced
concentrate and cathode sales (refer to Note 14).
c.Includes net charges totaling $62 million ($24 million to net income
attributable to common stock or $0.02 per share), primarily associated with
Cerro Verde tax matters and asset impairments, partly offset by net credits
primarily associated with the sale of royalty assets. These net (charges)
credits were recorded in revenues ($(7) million), production and delivery ($(48)
million), interest expense ($(55) million) and in other expenses, net ($48
million).
d.Includes charges totaling $166 million ($91 million to net loss attributable
to common stock or $0.06 per share), primarily associated with an unfavorable
Indonesia Supreme Court ruling related to certain disputed PT-FI export duties
(refer to Note 12).
e.Includes net gains on sales of assets totaling $473 million ($337 million to
net income attributable to common stock or $0.23 per share) in 2020 and $417
million ($339 million to net loss attributable to common stock or $0.23 per
share) in 2019. Refer to Note 2 and "Net Gain on Sales of Assets" below for
further discussion.
f.The year 2020 includes net charges for adjustments to environmental
obligations and related litigation reserves of $113 million ($113 million to net
income attributable to common stock or $0.08 per share), primarily associated
with a framework for the resolution of all current and future potential
talc-related litigation ($132 million), partly offset by net favorable
adjustments to environmental reserves ($19 million). The year 2019 includes net
charges for adjustments to environmental obligations and related litigation
reserves of $68 million ($68 million to net loss attributable to common stock or
$0.05 per share).
g.Includes unfavorable metals inventory adjustments totaling $96 million ($94
million to net income attributable to common stock or $0.06 per share) for the
year 2020 and $179 million ($144 million to net loss attributable to common
stock or $0.10 per share) for the year 2019.
h.Includes charges totaling $258 million ($178 million to net income
attributable to common stock or $0.12 per share) associated with (i) idle
facility costs (Cerro Verde), contract cancellation and other charges directly
related to the COVID-19 pandemic and (ii) our April 2020 revised operating plans
(including employee separation costs) recorded in production and delivery ($202
million), depreciation, depletion and amortization ($32 million), selling,
general and administrative ($16 million), and mining exploration and research
($8 million).
i.Includes after-tax net losses on early extinguishment and exchanges of debt
totaling $100 million ($0.07 per share) in 2020 and $26 million ($0.02 per
share) in 2019. Refer to Note 8 for further discussion.
j.Includes net tax credits (charges) of $15 million ($27 million net of
noncontrolling interests or $0.02 per share) in 2020 and $(1) million ($34
million net of noncontrolling interests or $0.02 per share) in 2019. Refer to
"Income Taxes" below for further discussion.
k.We defer recognizing profits on intercompany sales until final sales to third
parties occur. Refer to "Operations - Smelting & Refining" for a summary of net
impacts from changes in these deferrals.
l.Includes charges at PT-FI totaling $65 million ($47 million to net income
attributable to common stock or $0.03 per share) associated with historical
contested tax audits ($50 million) and currency exchange adjustments to value
added tax receivables ($15 million). These charges were recorded in interest
expense, net ($35 million) and other expenses, net ($30 million).
m.Includes net charges associated with disputed Cerro Verde royalties for prior
years of $7 million to net loss attributable to common stock (less than $0.01
per share) in 2019. Net charges for the year 2019 consist of charges to
production and delivery costs ($6 million) and interest expense ($10 million).
Refer to Note 12 for further discussion.
n.Includes charges at PT-FI of $294 million ($288 million to net loss
attributable to common stock or $0.20 per share) consisting of $234 million
associated with PT-FI's historical contested tax disputes, $32 million for a
currency exchange
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adjustment to value-added tax receivables and $28 million for an adjustment to
the settlement of the historical surface water tax matters with the local
regional tax authority in Papua, Indonesia.
o.Includes net charges totaling $59 million ($26 million to net loss
attributable to common stock or $0.02 per share), primarily associated with
weather-related issues at El Abra, adjustments to Cerro Verde's deferred profit
sharing and mining asset impairments, partly offset by net credits mostly for
asset retirement obligation adjustments.
p.Working capital and other sources totaled $665 million in 2020 and $349
million in 2019.
                                                        Years Ended December 31,
                                                           2020                  2019
 SUMMARY OPERATING DATA

Copper (millions of recoverable pounds)

 Production                                              3,206              

3,247

 Sales, excluding purchases                              3,202              

3,292

 Average realized price per pound                $        2.95

$ 2.73

 Site production and delivery costs per pounda   $        1.88

$ 2.15

 Unit net cash costs per pounda                  $        1.48

$ 1.74

Gold (thousands of recoverable ounces)

 Production                                                857              

882

 Sales, excluding purchases                                855              

991

 Average realized price per ounce                $       1,832

$ 1,415

Molybdenum (millions of recoverable pounds)

 Production                                                 76              

90

 Sales, excluding purchases                                 80              

90

 Average realized price per pound                $       10.20

$ 12.61

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 the per pound unit costs by operating
division to production and delivery costs applicable to sales reported in our
consolidated financial statements, refer to "Product Revenues and Production
Costs."

Revenues

Consolidated revenues totaled $14.2 billion in 2020 and $14.4 billion in 2019.
Our revenues primarily include the sale of copper concentrate, copper cathode,
copper rod, gold in concentrate and molybdenum. Following is a summary of
changes in our consolidated revenues from 2019 to 2020 (in millions):
Consolidated revenues - 2019                                   $ 14,402
Mining operations:
Lower sales volumes:
Copper                                                             (246)
Gold                                                               (193)
Molybdenum                                                         (124)
Higher (lower) averaged realized prices:
Copper                                                              704
Gold                                                                356
Molybdenum                                                         (194)

Adjustments for prior year provisionally priced copper sales (160) Lower revenues from sales of purchased copper

                      (239)
Lower cobalt revenues                                              (301)
Lower Atlantic Copper revenues                                      (31)
Lower treatment and refining charges                                 42
Lower royalties and export duties                                    77

Other, including intercompany eliminations                          105
Consolidated revenues - 2020                                   $ 14,198



Sales Volumes. Copper sales volumes were slightly lower in 2020, compared to
2019, primarily reflecting lower mining rates in South America associated with
COVID-19 restrictions and our April 2020 revised operating plans, partly offset
by higher ore grades in Indonesia. Lower gold sales volumes in 2020, compared to
2019, primarily
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Lower molybdenum sales volumes in 2020, compared with 2019, primarily reflect
lower by-product production from Cerro Verde associated with lower mining rates
as a result of COVID-19 restrictions.

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. In 2020, our
average realized prices were 8 percent higher for copper, 29 percent higher for
gold and 19 percent lower for molybdenum, compared with 2019.

Average realized copper prices include net favorable (unfavorable) adjustments
to current year provisionally priced copper sales (i.e., provisionally priced
sales for the years 2020 and 2019) totaling $361 million for 2020 and $(24)
million for 2019. Refer to Note 14 for a summary of total adjustments to prior
period and current period provisionally priced sales. As discussed below and in
"Disclosures About Market Risks-Commodity Price Risk", substantially all of our
copper concentrate and cathode sales contracts provide final copper 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, which results in an embedded derivative on
provisionally priced concentrate and cathode 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 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 prices, the
opposite occurs. Average realized prices in 2020 also included reductions
totaling $24 million related to forward sales contracts (refer to Note 14).

Prior Year Provisionally Priced Copper Sales. Net (unfavorable) favorable
adjustments to prior years' provisionally priced copper sales (i.e.,
provisionally priced copper sales at December 31, 2019 and 2018) recorded in
consolidated revenues totaled $(102) million in 2020 and $58 million in 2019.
Refer to "Disclosures About Market Risks-Commodity Price Risk" for further
discussion of our provisionally priced copper sales, and to Note 14 for a
summary of total adjustments to prior period and current period provisionally
priced copper sales.

Cobalt Revenues. Lower cobalt revenues in 2020, compared with 2019, primarily
reflect the sale of our cobalt refinery and related cobalt cathode precursor
business in fourth-quarter 2019.

Purchased Copper. We purchase copper cathode primarily for processing by our Rod
& Refining operations. Purchased copper volumes totaled 290 million pounds in
2020 and 379 million pounds in 2019.

Atlantic Copper Revenues. Atlantic Copper revenues totaled $2.0 billion in 2020
and $2.1 billion in 2019. Lower Atlantic Copper revenues in 2020, compared with
2019, primarily reflect lower gold sales volumes.

Treatment and Refining Charges. Revenues from our concentrate sales are recorded
net of treatment charges (i.e., fees paid to smelters that are generally
negotiated annually), which will vary with the sales volumes and the price of
copper.

Royalties and Export Duties. Royalties are primarily for sales from PT-FI and
vary with the volume of metal sold and the prices of copper and gold. PT-FI will
continue to pay export duties until development progress for the new smelter in
Indonesia exceeds 50 percent. The year 2019 included charges totaling $166
million, primarily associated with an unfavorable Indonesia Supreme Court ruling
related to certain disputed PT-FI export duties (refer to Note 12 for further
discussion). Refer to Note 13 for a summary of PT-FI's royalties and export
duties.

Production and Delivery Costs
Consolidated production and delivery costs totaled $10.0 billion in 2020,
compared with $11.5 billion in 2019. Lower consolidated production and delivery
costs in 2020 primarily reflect lower mining and milling rates related to (i)
the ramp-up of underground mining at PT-FI, (ii) our April 2020 revised
operating plans in North America and South America and (iii) COVID-19
restrictions at our Cerro Verde mine in South America. Refer to Note 16 for
details of production and delivery costs by operating segment.

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Charges in 2020 include $202 million associated with the COVID-19 pandemic and
revised operating plans (including employee separation costs).

Mining Unit Site Production and Delivery Costs
Site production and delivery costs for our copper mining operations primarily
include labor, energy and commodity-based inputs, such as sulphuric acid,
reagents, liners, tires and explosives. Consolidated unit site production and
delivery costs (before net noncash and other costs) for our copper mines
averaged $1.88 per pound of copper in 2020 and $2.15 per pound in 2019.
Consolidated site production and delivery costs per pound of copper exclude
certain charges associated with the COVID-19 pandemic and implementation of our
April 2020 revised operating plans totaling $0.06 per pound of copper in 2020.
Lower consolidated unit site production and delivery costs in 2020, compared
with 2019, primarily reflect lower costs in Indonesia, North America and South
America (for the same reasons discussed in the paragraph above). Refer to
"Operations - Unit Net Cash Costs" 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
financial statements.

Our copper mining operations require significant amounts of energy, principally
diesel, electricity, coal and natural gas, most of which is obtained from third
parties under long-term contracts. Our take-or-pay contractual obligations for
electricity totaled approximately $301 million at December 31, 2020. We do not
have take-or-pay contractual obligations for other energy commodities. Energy
represented approximately 16 percent of our copper mine site operating costs in
2020, including purchases of approximately 180 million gallons of diesel fuel;
7,500 gigawatt hours of electricity at our North America and South America
copper mining operations (we generate all of our power at our Indonesia mining
operation); 700 thousand metric tons of coal for our coal power plant in
Indonesia; and 1 million MMBtu (million British thermal units) of natural gas at
certain of our North America mines. Based on current cost estimates, energy will
also approximate 18 percent of our copper mine site operating costs for 2021.

Depreciation, Depletion and Amortization
Depreciation will vary under the UOP method as a result of changes in sales
volumes and the related UOP rates at our mining operations. Consolidated DD&A
totaled $1.5 billion in 2020 and $1.4 billion in 2019. Higher DD&A in 2020,
compared with 2019, primarily relates to assets placed in service associated
with the ramp-up of underground mining at PT-FI.

Metals Inventory Adjustments
Unfavorable net realizable value metals inventory adjustments totaled $96
million in 2020 and $179 million in 2019. Metals inventory adjustments in 2020
were related to volatility in copper and molybdenum prices. Metals inventory
adjustments in 2019 were mostly related to volatility in copper and cobalt
prices.

Selling, General and Administrative expenses
Selling, general and administrative expenses totaled $370 million in 2020 and
$394 million in 2019. During second-quarter 2020, we implemented a series of
actions to reduce administrative and centralized support costs in conjunction
with our April 2020 revised operating plans, including a temporary reduction in
certain employee benefits, furloughs and an employee separation program, and
reductions in third party service costs, facilities costs, travel and other
expenses. As part of the cost savings initiatives, the Board approved a 25
percent reduction in the salary of each of our Chief Executive Officer (CEO) and
Chief Financial Officer (CFO) through the end of 2020. Our CEO and CFO also
agreed to forgo substantially all of their reduced cash salary during 2020,
which was substituted with an award of restricted stock units that vested at the
end of 2020.

Mining Exploration and Research Expenses
Consolidated exploration and research expenses for our mining operations totaled
$50 million in 2020 and $104 million in 2019. Lower consolidated exploration and
research expenses in 2020, compared to 2019, reflect a significant reduction in
exploration and research activities associated with our April 2020 revised
operating plans. Exploration spending is expected to approximate $34 million in
2021, consistent with 2020.

Environmental Obligations and Shutdown Costs
Environmental obligation costs 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 (refer to "Critical Accounting Estimates -
Environmental Obligations" for further discussion). Shutdown costs include care-
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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 $159
million in 2020 and $105 million in 2019. The year 2020 includes talc-related
litigation charges of $132 million, primarily associated with a framework for
the resolution of all current and future potential talc-related litigation,
partly offset by $19 million of net favorable adjustments to environmental
reserves. Refer to Note 12 for environmental obligations and litigation matters.

Net Gain on Sales of Assets
Net gain on sales of assets totaled $473 million in 2020, primarily associated
with the sale of our interests in the Kisanfu undeveloped exploration project
located in the Democratic Republic of Congo (DRC), and $417 million in 2019,
primarily including $343 million associated with the sale of our interest in the
lower zone of the Timok exploration project in Serbia and $59 million associated
with the sale of our cobalt refinery in Kokkola, Finland, and related cobalt
cathode precursor business.

Refer to Note 2 for further discussion of dispositions.

Interest Expense, Net
Consolidated interest costs (before capitalization and excluding interest
expense associated with international tax matters) totaled $655 million in 2020
and $675 million in 2019. Refer to Note 8 for further discussion of our 2020
debt transactions. Interest expense associated with PT-FI's historical contested
tax disputes totaled $35 million in 2020 and $78 million in 2019. Interest
expense associated with South America tax matters totaled $61 million in 2020
and $10 million in 2019.

Capitalized interest varies with the level of expenditures for our development
projects and average interest rates on our borrowings, and totaled $147 million
in 2020 and $149 million in 2019. Refer to "Operations" and "Capital Resources
and Liquidity - Investing Activities" for further discussion of current
development projects.

Other Income (Expense), Net
Other income (expense), net, totaled $59 million in 2020 and $(138) million in
2019. The year 2020 included the sale of royalty interests and other net
credits. The year 2019 included charges at PT-FI totaling $188 million
associated with historical contested tax disputes (refer to Note 11) and a
currency exchange adjustment to value-added tax receivables.

Income Taxes
Following is a summary of the approximate amounts used in the calculation of our
consolidated income tax provision from continuing operations for the years ended
December 31 (in millions, except percentages):
                                                     2020                                                          2019
                                                                     Income Tax                                                     Income Tax
                              Income            Effective            (Provision)             Income            Effective            (Provision)
                              (Loss)a            Tax Rate              Benefit              (Loss)a             Tax Rate              Benefit
U.S.b                       $   (532)              11%             $         60    c      $    (277)              N/A             $          -    d,e
South America                    466               51%                     (239)   f            497               48%                     (241)
Indonesia                      1,342               45%                     (608)   g            340               44%                     (149)   h
Gain on sale of Kisanfu          486               N/A                     (135)                  -               N/A                        -
PT-FI historical contested
tax disputesi                    (44)               5%                        2                (201)             (39)%                     (78)
PT-FI export duty matter           -               N/A                        -                (155)       j      31%                       48

Adjustment to deferred                                                                                                                            k
taxes                              -               N/A                        -                   -               N/A                      (49)

Cerro Verde royalty dispute        -               N/A                        -                 (16)              N/A                        2    l

Eliminations and other            79               N/A                      (24)                118               N/A                      (43)

Consolidated                $  1,797               53%         m   $       (944)          $     306              (167)%           $       (510)


a.Represents income (loss) from continuing operations by geographic location
before income taxes and equity in affiliated companies' net earnings.
b.In addition to our North America mining operations, the U.S. jurisdiction
reflects corporate-level expenses, which include interest expense associated
with senior notes, general and administrative expenses, and environmental
obligations and shutdown costs.
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c.Includes tax credits of $53 million associated with the reversal of the tax
charge discussed in footnote e below and $6 million associated with the removal
of a valuation allowance on deferred tax assets.
d.Includes tax credits of $29 million associated with adjustments to the
calculation of transition tax related to U.S. tax reform and $24 million
associated with state law changes and the settlement of state income tax
examinations.
e.Includes a tax charge of $53 million associated with the sale of our interest
in the lower zone of the Timok exploration project in Serbia.
f.Includes tax charges at Cerro Verde of $15 million ($8 million net of
noncontrolling interest) primarily associated with adjustments to profit sharing
for prior years.
g.Includes tax charges of $21 million ($17 million net of noncontrolling
interests) associated with establishing a tax reserve related to the treatment
of prior year contractor support costs and $8 million ($7 million net of
noncontrolling interest) associated with an unfavorable 2012 Indonesia Supreme
Court ruling.
h.Includes a tax charge of $5 million ($4 million net of noncontrolling
interests) primarily for non-deductible penalties related to PT-FI's surface
water tax settlement.
i.Refer to Note 11 for further discussion of a framework for resolution of these
historical contested tax disputes.
j.Refer to Note 12 for further discussion of the unfavorable Indonesia Supreme
Court ruling related to certain disputed PT-FI export duties.
k.Includes net tax charges totaling $49 million ($15 million net of
noncontrolling interests) primarily to adjust deferred taxes on historical
balance sheet items in accordance with tax accounting principles.
l.Refer to Note 12 for a summary of charges related to Cerro Verde's disputed
royalties for prior years.
m.Our consolidated effective income tax rate is a function of the combined
effective tax rates for the jurisdictions in which we operate, excluding
the U.S. jurisdiction.

Assuming achievement of current sales volume and cost estimates and average
prices of $3.50 per pound for copper, $1,850 per ounce for gold and $9.00 per
pound for molybdenum for 2021, we estimate our consolidated effective tax rate
for the year 2021 would approximate 35 percent. Changes in projected sales
volumes and average prices during 2021 would incur tax impacts at estimated
effective rates of 38 percent for Indonesia, 39 percent for Peru and 0 percent
for the U.S.

Variations in the relative proportions of jurisdictional income result in
fluctuations to our consolidated effective income tax rate. Because of our U.S.
tax position, we do not record a financial statement impact for income or losses
generated in the U.S.

Refer to Note 11 for further discussion of income taxes.

OPERATIONS

During 2020, we announced our commitment to the Copper Mark. The Copper Mark is
a new, comprehensive assurance framework that demonstrates the industry's
responsible production practices and contribution to the United Nations
Sustainable Development Goals. It is the first and only framework developed
specifically for the copper industry and enables each site to demonstrate to
customers, investors and other stakeholders their responsible production
performance. Four of our sites were awarded the Copper Mark in 2020 (Cerro
Verde, El Abra, Miami and the Atlantic Copper smelter). We have future plans to
validate all of our remaining copper operating sites against the Copper Mark
requirements.

During 2020, we continued to advance innovation initiatives designed to enhance
productivity, expand margins and reduce the capital intensity of our business
through the utilization of new technology applications in combination with a
more interactive operating structure. We were successful in implementing and
embedding many of these initiatives across our operations by utilizing data
science, machine learning and integrated cross-functional agile teams to
identify opportunities and drive improved overall performance.

North America Copper Mines We operate seven open-pit copper mines in North America - Morenci, Bagdad, Safford (including Lone Star), Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. All of the North America mining operations are wholly owned, except for Morenci. We record our 72 percent undivided joint venture interest in Morenci using the proportionate consolidation method.

The North America copper mines include open-pit mining, sulfide ore concentrating, leaching and solution extraction/electrowinning (SX/EW) operations. A majority of the copper produced at our North America copper mines

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is cast into copper rod by our Rod & Refining segment. The remainder of our
North America copper production is sold as copper cathode or copper concentrate,
a portion of which is shipped to Atlantic Copper (our wholly owned smelter).
Molybdenum concentrate, gold and silver are also produced by certain of our
North America copper mines.

Operating and Development Activities. Our North America operating sites continue
to focus on strong execution of operating plans. Production from the Lone Star
ore body at Safford where we completed development in 2020 continues to ramp-up
on schedule and is expected to exceed 200 million pounds of copper for the year
2021. Our plan is to advance studies for potential expansions and long-term
development options for the large-scale sulfide resources at Lone Star.
After shutting down mining activities in accordance with our April 2020 revised
operating plans, in January 2021, we restarted mining activities at the Chino
mine at a reduced rate of approximately 100 million pounds of copper per year
(approximately 50 percent of capacity).
We have substantial resources in the U.S., primarily associated with existing
mining operations, and will continue to assess options for further growth.
Operating Data. Following is summary operating data for the North America copper
mines for the years ended December 31:
                                                          2020            

2019

Operating Data, Net of Joint Venture Interests
Copper (millions of recoverable pounds)
Production                                                 1,418           

1,457

Sales, excluding purchases                                 1,422           

1,442

Average realized price per pound                       $    2.82    a  $    

2.74

Molybdenum (millions of recoverable pounds)
Productionb                                                   33              32

100% Operating Data
Leach operations
Leach ore placed in stockpiles (metric tons per day)     714,300         750,900
Average copper ore grade (percent)                          0.27            

0.23

Copper production (millions of recoverable pounds)         1,047            

993

Mill operations
Ore milled (metric tons per day)                         279,700         326,100
Average ore grade (percent):
Copper                                                      0.35            0.34
Molybdenum                                                  0.02            0.02
Copper recovery rate (percent)                              84.1            

87.0

Copper production (millions of recoverable pounds)           647            

748

a.Includes reductions to average realized prices of $0.02 per pound of copper
related to forward sales contracts covering 150 million pounds of copper sales
for May and June 2020 at a fixed price of $2.34 per pound. There are no
remaining forward sales contracts.
b.Refer to "Consolidated Results" for our consolidated molybdenum sales volumes,
which include sales of molybdenum produced at the North America copper mines.

Copper sales volumes from our North America copper mines totaled 1.4 billion
pounds in 2020 and 2019. North America copper sales are estimated to approximate
1.5 billion pounds in 2021. Refer to "Outlook" for projected molybdenum sales
volumes.

Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure
intended to provide 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 of
copper at our North America copper mines for the two years ended December 31,
2020. 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.
                                                                    2020                                                    2019
                                                By-                   Co-Product Method                  By-                  Co-Product Method
                                              Product                                  Molyb-          Product                                 Molyb-
                                               Method              Copper              denuma           Method             Copper              denuma
Revenues, excluding adjustments              $  2.82      b   $     2.82              $ 8.62          $  2.74          $    2.74             $ 11.51
Site production and delivery, before net
noncash
and other costs shown below                     1.90                1.78                6.84             2.05               1.88                9.29
By-product credits                             (0.19)                  -                   -            (0.24)                 -                   -
Treatment charges                               0.10                0.10                   -             0.11               0.11                   -
Unit net cash costs                             1.81                1.88                6.84             1.92               1.99                9.29
DD&A                                            0.25                0.23                0.56             0.24               0.21                0.72
Metals inventory adjustments                    0.03                0.03                   -             0.02               0.02                   -
Noncash and other costs, net                    0.10      c         0.10                0.09             0.08               0.07                0.29
Total unit costs                                2.19                2.24                7.49             2.26               2.29               10.30
Revenue adjustments, primarily for pricing
on prior period open sales                     (0.02)              (0.02)                  -                -                  -                   -
Gross profit per pound                       $  0.61          $     0.56              $ 1.13          $  0.48          $    0.45             $  1.21

Copper sales (millions of recoverable
pounds)                                        1,420               1,420                                1,441              1,441
Molybdenum sales (millions of recoverable
pounds)a                                                                                  33                                                      32


a.Reflects sales of molybdenum produced by certain of the North America copper
mines to our molybdenum sales company at market-based pricing.
b.Includes reductions to average realized prices of $0.02 per pound of copper
related to forward sales contracts covering 150 million pounds of copper sales
for May and June 2020 at a fixed price of $2.34 per pound. There are no
remaining forward sales contracts.
c.Includes charges totaling $0.02 per pound of copper, primarily associated with
our April 2020 revised operating plans (including employee separation costs) and
the COVID-19 pandemic (including health and safety costs).

Our North America copper mines have varying cost structures because of
differences in ore grades and characteristics, processing costs, by-product
credits and other factors. During 2020, average unit net cash costs (net of
by-product credits) for the North America copper mines ranged from $1.61 per
pound to $2.28 per pound at the individual mines and averaged $1.81 per pound.
Lower average unit net cash costs (net of by-product credits) of $1.81 in 2020,
compared with $1.92 per pound in 2019, primarily reflect the impact of our April
2020 revised operating plans, partly offset by lower by-product credits because
of lower molybdenum prices.

Average unit net cash costs (net of by-product credits) for our North America
copper mines are expected to approximate $1.86 per pound of copper in 2021,
based on achievement of current sales volume and cost estimates and assuming an
average molybdenum price of $9.00 per pound for the year 2021. The impact of
price changes during 2021 on North America's average unit net cash costs for the
year 2021 would approximate $0.05 per pound for each $2 per pound change in the
average price of molybdenum.

South America Mining
We operate two copper mines in South America - Cerro Verde in Peru (in which we
own a 53.56 percent interest) and El Abra in Chile (in which we own a 51 percent
interest), which are consolidated in our financial statements.

South America mining includes open-pit mining, sulfide ore concentrating,
leaching and SX/EW operations. Production from our South America mines is sold
as copper concentrate or cathode under long-term contracts. Our South America
mines also sell a portion of their copper concentrate production to Atlantic
Copper. In addition to copper, the Cerro Verde mine produces molybdenum
concentrate and silver.

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Operating and Development Activities. During fourth-quarter 2020, Cerro Verde
continued to increase milling rates to an average of 373,200 metric tons of ore
per day while operating consistent with our April 2020 revised operating plans
and under strict COVID-19 restrictions and protocols. We expect Cerro Verde's
mill rates to average approximately 360,000 metric tons of ore per day in 2021
with the potential to ramp-up to pre-COVID-19 levels approximating 400,000
metric tons of ore per day as COVID-19 restrictions are lifted.

El Abra plans to increase operating rates during 2021 to pre-COVID-19 levels,
subject to ongoing monitoring of public health conditions in Chile. Incremental
copper production associated with increasing El Abra's stacking rates from
65,000 metric tons of ore per day to over 100,000 metric tons of ore per day,
approximates 70 million pounds per year beginning in 2022.

We continue to evaluate a large-scale expansion at El Abra to process additional
sulfide material and to achieve higher recoveries. El Abra's large sulfide
resource could potentially support a major mill project similar to facilities
constructed at Cerro Verde. Technical and economic studies continue to be
evaluated to determine the optimal scope and timing for the project in parallel
with extending the life of the current leaching operation.

Operating Data. Following is summary operating data for our South America mining operations for the years ended December 31.

                                                          2020            

2019

Copper (millions of recoverable pounds)
Production                                                   979           

1,183

Sales                                                        976           

1,183

Average realized price per pound                       $    3.05       $    

2.71

Molybdenum (millions of recoverable pounds)
Productiona                                                   19            

29

Leach operations
Leach ore placed in stockpiles (metric tons per day)     160,300         205,900
Average copper ore grade (percent)                          0.35            

0.37

Copper production (millions of recoverable pounds)           241            

268

Mill operations
Ore milled (metric tons per day)                         331,600    b    393,100
Average ore grade (percent):
Copper                                                      0.34            0.36

Molybdenum                                                  0.01            0.02
Copper recovery rate (percent)                              84.3            

83.5

Copper production (millions of recoverable pounds)           738            

916

a.Refer to "Consolidated Results" for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde. b.Cerro Verde mill operations were negatively impacted by COVID-19 restrictions.

Lower consolidated copper sales volumes from South America of 1.0 billion pounds
in 2020, compared with 1.2 billion pounds in 2019, primarily reflect lower ore
grades and mining rates associated with COVID-19 protocols at Cerro Verde and
our April 2020 revised operating plans at El Abra, partly offset by higher
recovery rates.

Copper sales from South America mines are expected to approximate 1.0 billion
pounds in 2021, consistent with the year 2020. Refer to "Outlook" for projected
molybdenum sales volumes.

Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure
intended to provide 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
The following table summarizes unit net cash costs and gross profit per pound of
copper at our South America mining operations for the two years ended December
31, 2020. Unit net cash costs per pound of copper are reflected under the
by-product and co-product methods as the South America mining 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.
                                                              2020                                      2019
                                                 By-Product           Co-Product           By-Product           Co-Product
                                                   Method               Method               Method               Method
Revenues, excluding adjustments                $      3.05          $      3.05          $      2.71          $      2.71
Site production and delivery, before net
noncash
and other costs shown below                           1.86                 1.74                 1.85                 1.68
By-product credits                                   (0.17)                   -                (0.27)                   -
Treatment charges                                     0.15                 0.15                 0.18                 0.18
Royalty on metals                                     0.01                 0.01                 0.01                 0.01
Unit net cash costs                                   1.85                 1.90                 1.77                 1.87
DD&A                                                  0.43                 0.41                 0.40                 0.36

Noncash and other costs, net                          0.13    a            0.12                 0.08                 0.07
Total unit costs                                      2.41                 2.43                 2.25                 2.30
Revenue adjustments, primarily for pricing on
prior period open sales                              (0.07)               (0.07)                0.03                 0.03
Gross profit per pound                         $      0.57          $      0.55          $      0.49          $      0.44

Copper sales (millions of recoverable pounds)          976                  976                1,183                1,183


a.Includes charges totaling $0.09 per pound of copper, primarily associated with
idle facility (Cerro Verde) and contract cancellation costs related to the
COVID-19 pandemic, and employee separation costs associated with our April 2020
revised operating plans.

Our South America mines have varying cost structures because of differences in
ore grades and characteristics, processing costs, by-product credits and other
factors. Higher average unit net cash costs (net of by-product credits) of $1.85
per pound of copper in 2020, compared with $1.77 per pound in 2019, primarily
reflected lower sales volumes and by-product credits, partly offset by lower
mining rates.

Revenues from Cerro Verde's concentrate sales are recorded net of treatment charges, which will vary with Cerro Verde's 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. DD&A per pound of copper under the by-product method was
$0.43 in 2020, compared with $0.40 in 2019, primarily reflecting lower sales
volumes.

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.

Average unit net cash costs (net of by-product credits) for our South America
mines are expected to approximate $1.92 per pound of copper in 2021, based on
current sales volume and cost estimates and assuming average prices of $9.00 per
pound of molybdenum for the year 2021.

Indonesia Mining
PT-FI's assets include one of the world's largest copper and gold deposits at
the Grasberg minerals district in Papua, Indonesia. PT-FI produces copper
concentrate that contains significant quantities of gold and silver. We have a
48.76 percent interest in PT-FI and manage its mining operations. As further
discussed in Note 2, under the terms of the shareholders agreement, our economic
interest in PT-FI approximates 81 percent through 2022. PT-FI's results are
consolidated in our financial statements.

Substantially all of PT-FI's copper concentrate is sold under long-term contracts. During 2020, 50 percent of PT-FI's copper concentrate was sold to PT Smelting (PT-FI's 25-percent-owned smelter and refinery in Gresik, Indonesia).

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As noted below, PT-FI is discussing the potential expansion of the capacity at
PT Smelting, which is expected to result in an increase in PT-FI's ownership
interest in PT Smelting.

Operating and Development Activities. The ramp-up of underground production at
the Grasberg minerals district in Indonesia continues to advance on schedule.
During 2020, a total of 206 new drawbells were added at the Grasberg Block Cave
and DMLZ underground mines, bringing cumulative open drawbells to over 370.
Combined average production from the Grasberg Block Cave and DMLZ mines
approximated 85,000 metric tons of ore per day during fourth-quarter 2020
(including approximately 95,000 metric tons of ore per day during the month of
December). According to the current ramp-up schedule, average production rates
at the Grasberg Block Cave and DMLZ are expected to continue to accelerate, with
combined average production rates expected to reach approximately 172,000 metric
tons of ore per day in 2022 and 200,000 metric tons of ore per day in 2023.
PT-FI expects production for the year 2021 to approximate 1.4 billion pounds of
copper and 1.4 million ounces of gold, which is nearly double 2020 levels.

The successful completion of this ramp-up is expected to enable PT-FI to
generate average annual production for the next several years of 1.55 billion
pounds of copper and 1.6 million ounces of gold at an attractive unit net cash
cost, providing significant margins and cash flows.

PT-FI's estimated annual capital spending on underground mine development
projects is expected to average approximately $0.9 billion per year for the
two-year period 2021 through 2022, net of scheduled contributions from PT
Indonesia Asahan Aluminium (Persero) (PT Inalum, also known as MIND ID). In
accordance with applicable accounting guidance, aggregate costs (before
scheduled contributions from PT Inalum), which are expected to average $1.1
billion per year for the two-year period 2021 through 2022, will be reflected as
an investing activity in FCX's cash flow statement, and contributions from PT
Inalum will be reflected as a financing activity.

Indonesia Smelter. In connection with the extension of PT-FI's mining rights
from 2031 to 2041, PT-FI committed to construct a new smelter in Indonesia by
December 21, 2023 (an extension of which has been requested as a result of the
COVID-19 pandemic). A potential site for the new smelter has been selected in
East Java, and ground preparation is advancing. Engineering and front-end
engineering and design for the selected process technology are in progress.

As a result of COVID-19 mitigation measures, there have been disruptions to work
and travel schedules of international contractors and restrictions on access to
the proposed physical site of the new smelter in East Java. PT-FI continues to
discuss with the Indonesia government a deferred schedule for the new smelter as
well as other alternatives in light of the ongoing COVID-19 pandemic and
volatile global economic conditions. On January 7, 2021, the Indonesia
government levied an administrative fine of $149 million on PT-FI for failing to
achieve physical development progress on the new smelter as of July 31, 2020.
PT-FI does not believe an administrative fine is warranted. Refer to Note 12 and
Item 1A. "Risk Factors" for further discussion.

PT-FI and PT Inalum have been discussing with the Indonesia government
alternatives to PT-FI's commitment to build a new smelter. In connection with
exploring alternatives to its commitment to develop additional smelter capacity
in Indonesia, PT-FI has advanced discussions with the majority owner of PT
Smelting regarding an expansion of the smelter to increase smelter concentrate
treatment capacity by approximately 30 percent (300,000 metric tons of
concentrate per year). Commercial and financial arrangements for this potential
project are being advanced and engineering is in progress. The initial estimate
for the cost of the expansion of PT Smelting is $250 million, which is expected
to be funded by PT-FI as a convertible loan.

An expansion of PT Smelting is expected to reduce PT-FI's smelter development
commitment from 2.0 million metric tons of concentrate per year to 1.7 million
metric tons per year.

While PT-FI continues to evaluate the new greenfield smelter project in East
Java, it is also advancing discussions in parallel with a third party to develop
the new smelter capacity at an alternate location in partnership with PT-FI.

The preliminary capital cost estimate for the new smelter in East Java
approximates $3 billion, pending completion of final engineering. PT-FI had
capitalized costs for the new smelter totaling $216 million as of December 31,
2020. Estimated related capital expenditures for 2021 approximate $0.1 billion.
PT-FI plans to arrange financing for the project and debt service will be shared
by PT-FI's shareholders according to their respective equity ownership
percentages. As a result, our future distributions from PT-FI will incorporate
approximately 49 percent of the smelter debt service.
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Operating Data. Following is summary operating data for our Indonesia mining
operations for the years ended December 31.
                                            2020           2019
Operating Data
Copper (millions of recoverable pounds)
Production                                    809            607
Sales                                         804            667

Average realized price per pound $ 3.08 $ 2.72

Gold (thousands of recoverable ounces)
Production                                    848            863
Sales                                         842            973

Average realized price per ounce $ 1,832 $ 1,416

100% Operating Data
Ore milled (metric tons per day):
Grasberg Block Cave underground minea      30,800          8,600
DMLZ underground minea                     28,600          9,800
DOZ underground minea                      20,900         25,500
Big Gossan underground minea                7,000          6,100
Grasberg open pitb                            400         60,100
Total                                      87,700        110,100

Average ore grade:
Copper (percent)                             1.32           0.84
Gold (grams per metric ton)                  1.10           0.93
Recovery rates (percent):
Copper                                       91.9           88.4
Gold                                         78.1           75.0
Production (recoverable):
Copper (millions of pounds)                   809            607
Gold (thousands of ounces)                    848            863


a.Reflects ore extracted, including ore from development activities that result
in metal production.
b.Includes ore from related stockpiles.

Higher consolidated copper sales of 0.8 billion pounds in 2020, compared with
0.7 billion pounds in 2019, primarily reflect higher copper ore grades, partly
offset by lower mining rates as underground mining ramps up. Lower consolidated
gold sales of 0.8 million ounces of gold in 2020, compared with 1.0 million
ounces of gold in 2019, primarily reflect lower mining rates as underground
mining ramps up, partly offset by higher gold ore grades.

Consolidated sales volumes from PT-FI are expected to approximate 1.3 billion pounds of copper and 1.3 million ounces of gold in 2021.

Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure
intended to provide 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 metal 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 per Ounce of Gold
The following table summarizes the unit net cash costs and gross profit per
pound of copper and per ounce of gold at our Indonesia mining operations for the
two years ended December 31, 2020. Refer to "Product Revenues and Production
Costs" for an explanation of "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.
                                                                   2020                                                    2019
                                                By-                                                     By-
                                              Product                Co-Product Method                Product                Co-Product Method
                                               Method             Copper               Gold            Method             Copper               Gold
Revenues, excluding adjustments              $  3.08          $    3.08             $ 1,832          $  2.72          $    2.72             $ 1,416
Site production and delivery, before net
noncash
and other costs shown below                     1.88               1.13                 674             2.91               1.63                 849
Gold and silver credits                        (2.03)                 -                   -            (2.13)                 -                   -
Treatment charges                               0.27               0.17                  98             0.26               0.14                  75
Export duties                                   0.12               0.07                  41             0.08               0.05                  25
Royalty on metals                               0.19               0.11                  72             0.16               0.09                  49
Unit net cash costs                             0.43               1.48                 885             1.28               1.91                 998
DD&A                                            0.72               0.43                 259             0.61               0.34                 178
Metals inventory adjustments                       -                  -                   -             0.01               0.01                   -
Noncash and other costs, net                    0.11      a        0.07                  41             0.37      b        0.20                 110
Total unit costs                                1.26               1.98               1,185             2.27               2.46               1,286
Revenue adjustments, primarily for pricing
on
prior period open sales                        (0.03)             (0.03)                  5             0.03               0.03                   2
PT Smelting intercompany loss                  (0.01)             (0.01)                 (5)           (0.02)             (0.02)                 (8)
Gross profit per pound/ounce                 $  1.78          $    1.06             $   647          $  0.46          $    0.27             $   124

Copper sales (millions of recoverable
pounds)                                          804                804                                  667                667
Gold sales (thousands of recoverable ounces)                                            842                                                     973


a.Includes COVID-19 related costs (including one-time incremental employee
benefits and health and safety costs) totaling $0.02 per pound of copper.
b.Includes charges in revenues totaling $0.25 per pound of copper primarily
associated with an unfavorable Indonesia Supreme Court ruling related to certain
disputed PT-FI export duties, partly offset by adjustments to prior year
treatment charges totaling $0.03 per pound of copper. Also includes charges of
$0.04 per pound of copper associated with adjustments to the settlement of the
historical surface water tax disputes with the local regional tax authority in
Papua, Indonesia.

A significant portion of PT-FI's costs are fixed and unit costs vary depending
on volumes and other factors. PT-FI's unit net cash costs (including gold and
silver credits) of $0.43 per pound of copper in 2020, were lower than unit net
cash credits of $1.28 per pound in 2019, primarily reflecting higher copper
sales volumes and lower mining costs.

Treatment charges vary with the volume of metals sold and the price of copper,
and royalties vary with the volume of metals sold and the prices of copper and
gold.

PT-FI's export duties totaled $93 million in 2020 and $56 million in 2019, and
PT-FI's royalties totaled $153 million in 2020 and $107 million in 2019. PT-FI
will continue to pay export duties until development progress for the new
smelter in Indonesia exceeds 50 percent. Refer to Note 13 for further discussion
of PT-FI's export duties and royalties.

Because certain assets are depreciated on a straight-line basis, PT-FI's unit
depreciation rate may vary with asset additions and the level of copper
production and sales. DD&A per pound of copper under they by-product method was
$0.72 in 2020, compared with $0.61 in 2019, primarily reflecting underground
development assets placed in service.

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.

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Table of Contents PT Smelting intercompany loss represents the change in the deferral of 25 percent of PT-FI's profit on sales to PT Smelting. Refer to "Operations - Smelting & Refining" below for further discussion.

Assuming an average gold price of $1,850 per ounce for 2021 and achievement of
current sales volume and cost estimates, unit net cash costs (including gold and
silver credits) for PT-FI are expected to approximate $0.06 per pound of copper
for the year 2021. The impact of price changes during 2021 on PT-FI's average
unit net cash costs would approximate $0.09 per pound for each $100 per ounce
change in the average price of gold.

PT-FI's projected sales volumes and unit net cash costs for the year 2021 are
dependent on a number of factors, including continued progress of the ramp-up of
underground mining, operational performance, timing of shipments and the
Indonesia government's extension of PT-FI's export permit. In March 2020, PT-FI
received a one-year extension of its export license through March 15, 2021.
Refer to Note 12 and Item 1A. "Risk Factors" for a discussion of the
administrative fine levied by the Indonesia government on PT-FI for failing to
achieve physical development progress on the new smelter and ongoing discussions
with the Indonesia government regarding a deferred schedule for the completion
of the new smelter project as well as other alternatives in light of the ongoing
COVID-19 pandemic and volatile global economic conditions

Molybdenum Mines
We have two wholly owned molybdenum mines in Colorado - the Henderson
underground mine and the Climax open-pit mine. The Henderson and Climax mines
produce high-purity, chemical-grade molybdenum concentrate, which is typically
further processed into value-added molybdenum chemical products. The majority of
the molybdenum concentrate produced at the Henderson and Climax mines, as well
as from our North America and South America copper mines, is processed at our
own conversion facilities.

Operating and Development Activities. Production from the Molybdenum mines
totaled 24 million pounds of molybdenum in 2020 and 29 million pounds in 2019.
The decrease in 2020, compared with 2019, primarily reflected lower operating
rates pursuant to our April 2020 revised operating plans in response to market
conditions. Refer to "Consolidated Results" for our consolidated molybdenum
operating data, which includes sales of molybdenum produced at our Molybdenum
mines, and from our North America and South America copper mines, and refer to
"Outlook" for projected consolidated molybdenum sales volumes.

Unit Net Cash Costs Per Pound of Molybdenum. Unit net cash costs per pound of
molybdenum is a measure intended to provide 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.

Unit net cash costs for our Molybdenum mines of $9.50 per pound of molybdenum in
2020 were lower than $10.80 per pound in 2019, primarily reflecting lower mining
and input costs associated with our April 2020 revised operating plans. Average
unit net cash costs for our Molybdenum mines do not include noncash and other
costs, which include charges totaling $0.29 per pound of molybdenum primarily
associated with our April 2020 revised operating plans (including employee
separation costs) and contract cancellation costs related to the COVID-19
pandemic. Based on current sales volume and cost estimates, average unit net
cash costs for the Molybdenum mines are expected to approximate $9.80 per pound
of molybdenum for the year 2021. Refer to "Product Revenues and Production
Costs" for a reconciliation of unit net cash costs per pound to production and
delivery costs applicable to sales reported in our consolidated financial
statements.

Smelting & Refining
We wholly own and operate a smelter in Arizona (Miami smelter), a refinery in
Texas (El Paso refinery) and a smelter and refinery in Spain (Atlantic Copper).
Additionally, PT-FI owns 25 percent of a smelter and refinery in Gresik,
Indonesia (PT Smelting), which is expected to increase in connection with the
potential expansion of PT Smelting. See "Indonesia Smelter" for additional
information regarding the potential PT Smelting expansion. Treatment charges for
smelting and refining copper concentrate consist of a base rate per pound of
copper and per ounce of gold and are generally fixed. Treatment charges
represent a cost to our mining operations and income to Atlantic Copper and PT
Smelting. Thus, higher treatment charges benefit our smelter operations and
adversely affect our mining operations. Our North America copper mines are less
significantly affected by changes in
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treatment charges because these operations are largely integrated with our Miami
smelter and El Paso refinery. Through this form of downstream integration, we
are assured placement of a significant portion of our concentrate production.

During 2019, we incurred charges totaling $38 million for a maintenance
turnaround at the Miami smelter. The next major maintenance turnaround at the
Miami smelter is scheduled for first-quarter 2021, for which we expect to incur
charges of approximately $60 million.

Atlantic Copper smelts and refines copper concentrate and markets refined copper
and precious metals in slimes. Following is an allocation of Atlantic Copper's
concentrate purchases from unaffiliated third parties and our copper mining
operations for the two years ended December 31, 2020:
                              2020       2019
Third parties                  79  %      73  %
North America copper mines     10         22
South America mining            7          2
Indonesia mining                4          3
                              100  %     100  %

During 2019, we incurred charges totaling $16 million for a short-term maintenance turnaround at the Atlantic Copper smelter. The next major maintenance turnaround at the Atlantic Copper smelter is scheduled for second-quarter 2022.

Atlantic Copper has take-or-pay contractual obligations for the procurement of
copper concentrate totaling $2.9 billion at December 31, 2020, that provide for
deliveries of specified volumes at market-based prices.

PT-FI's contract with PT Smelting provides for PT-FI to supply 100 percent of
the copper concentrate requirements (subject to a minimum or maximum treatment
charge rate) necessary for PT Smelting to produce 205,000 metric tons of copper
annually on a priority basis. PT-FI may also sell copper concentrate to PT
Smelting at market rates for quantities in excess of 205,000 metric tons of
copper annually. PT-FI supplied 74 percent of PT Smelting's concentrate
requirements in 2020 and 90 percent in 2019. PT Smelting processed 50 percent of
PT-FI's concentrate production in 2020 and 64 percent of such production in 2019
.

PT Smelting produced 276,900 metric tons of copper anode from its smelter and
273,000 metric tons of copper cathode from its refinery in 2020; and 246,100
metric tons of copper anode from its smelter and 241,200 metric tons of copper
cathode from its refinery in 2019.

In January 2021, PT Smelting received a six-month extension of its anodes slimes export license, which currently expires July 18, 2021.

PT Smelting's maintenance turnarounds (which range from two weeks to a month to
complete) typically are expected to occur approximately every two years, with
short-term maintenance turnarounds in the interim. PT Smelting completed a
30-day maintenance turnaround during December 2020, and the next major
turnaround is scheduled for the second half of 2022.

We defer recognizing profits on sales from our mining operations to Atlantic
Copper and on 25 percent of PT-FI's sales to PT Smelting 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 $(7) million ($1 million to net income attributable to common stock) in
2020 and $(22) million ($(18) million to net loss attributable to common stock)
in 2019. Our net deferred profits on our inventories at Atlantic Copper and PT
Smelting to be recognized in future periods' net income attributable to common
stock totaled $54 million at December 31, 2020. Quarterly variations in ore
grades, the timing of intercompany shipments and changes in product prices will
result in variability in our net deferred profits and quarterly earnings. We
currently expect first-quarter 2021 results to reflect an increase in net
deferred profits, totaling an approximate $50 million reduction to net income,
associated with an anticipated increase in sales to Atlantic Copper as a result
of the major maintenance turnaround at the Miami smelter noted above, which will
be recognized in future periods as Atlantic Copper sells final refined products
to third parties.

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CAPITAL RESOURCES AND LIQUIDITY

During second-quarter 2020, we announced revised operating plans in response to the global COVID-19 pandemic and resulting negative impact on the global economy. The revised operating plans allowed us to maximize cash flow and protect liquidity and to preserve asset values in an uncertain economic environment.

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. A large component of our production
costs are related to energy. See "Consolidated Results" for further discussion
of our energy requirements and related costs. We believe that we have a
high-quality portfolio of long-lived copper assets positioned to generate
long-term value. We recently completed the Lone Star copper leach project at our
Safford operation in southeastern Arizona, and PT-FI has several projects in the
Grasberg minerals district related to the development of its large-scale,
long-lived, high-grade underground ore bodies. We are also evaluating other
opportunities to enhance net present values, and we continue to consider future
development of our copper resources, the timing of which will be dependent on
market conditions. We believe that our cash generating capability and financial
condition, together with our credit facility, will be adequate to meet our
operating, investing and financing needs.

Subject to future commodity prices for copper, gold, and molybdenum, we expect
estimated consolidated operating cash flows of $5.5 billion in 2021, plus
available cash, to be sufficient to fund our capital expenditures of $2.3
billion in 2021, as well as projected spending on the new smelter in Indonesia
and other cash requirements for the year, including common stock dividends and
approximately $0.6 billion of noncontrolling interest distributions. Refer to
"Outlook" for further discussion of projected operating cash flows and capital
expenditures for 2021.

At December 31, 2020, we had $7.2 billion in liquidity, comprised of $3.7 billion in consolidated cash and $3.5 billion of availability under our revolving credit facility.

In connection with our financing activities in 2019 and 2020, we issued a total
of $4.0 billion in new senior notes and used most of the net proceeds to
purchase and redeem outstanding senior notes. As a result, we have extended our
debt maturities and strengthened our financial flexibility. We have no
significant scheduled debt maturities in 2021.

In February 2021, the Board reinstated a cash dividend on our common stock at an
annual rate of $0.30 per share. The Board intends to declare a quarterly
dividend of $0.075 per share, with the initial quarterly dividend expected to be
paid on May 3, 2021. The Board also adopted a new financial policy for the
allocation of cash flows aligned with our strategic objectives of maintaining a
strong balance sheet, increasing cash returns to shareholders and advancing
opportunities for future growth. Under the new policy, up to 50 percent of
available cash flows generated after planned capital spending and distributions
to noncontrolling interests would be allocated to shareholder returns and the
balance to debt reduction and investments in value enhancing growth projects.
The new payout policy will be implemented following achievement of a net debt
(total consolidated debt less total consolidated cash and cash equivalents)
target in the range of $3 billion to $4 billion, excluding project debt for
additional smelter capacity in Indonesia. Under current market conditions and
with continued strong execution of our plans, we currently expect to reach this
target in early 2022 (refer to "Cautionary Statement").

Cash

Following is a summary of the U.S. and international components of consolidated
cash and cash equivalents available to the parent company, net of noncontrolling
interests' share, taxes and other costs at December 31, 2020 (in billions):
Cash at domestic companies                      $ 2.9
Cash at international operations                  0.8

Total consolidated cash and cash equivalents 3.7 Noncontrolling interests' share

                  (0.4)

Cash, net of noncontrolling interests' share $ 3.3 Withholding taxes

                                   -    a
Net cash available                              $ 3.3


a.Rounds to less than $0.1 billion.
Cash held at our international operations is generally used to support our
foreign operations' capital expenditures, operating expenses, debt repayments,
working capital or other cash needs. Management believes that sufficient
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liquidity is available in the U.S. from cash balances and availability from our
revolving credit facility. We have not elected to permanently reinvest earnings
from our foreign subsidiaries, and we have recorded deferred tax liabilities for
foreign earnings that are available to be repatriated to the U.S. From time to
time, our foreign subsidiaries distribute earnings to the U.S. through dividends
that are subject to applicable withholding taxes and noncontrolling interests'
share.

Debt

At December 31, 2020, consolidated debt totaled $9.7 billion, with a related
weighted-average interest rate of 4.6 percent. We had no borrowings, $10 million
in letters of credit issued and approximately $3.5 billion available under our
revolving credit facility at December 31, 2020. Refer to "Financing Activities"
below and Note 8 for further discussion of debt.
In December 2020, Cerro Verde prepaid $0.3 billion on its Term Loan that was
scheduled to mature in December 2021. The remaining balance of $0.5 billion
matures in June 2022 (refer to Note 8).

In June 2020, we amended our revolving credit facility to provide additional
flexibility on certain financial covenants. The key changes under the amendment
include a suspension of the total leverage ratio through June 30, 2021, and a
reduction in the interest expense coverage ratio to a minimum of 2.0x through
December 31, 2021. We also agreed to a minimum liquidity covenant of $1 billion
(consisting of consolidated unrestricted cash and availability under the
revolving credit facility) applicable to each quarter through June 30, 2021, and
additional restrictions on priority debt and liens, and on the payment of
dividends through December 31, 2021. At December 31, 2020, we were in compliance
with our revolving credit facility covenants.

As further discussed in Note 10, in February 2021, the Board reinstated a cash
dividend on our common stock. Prior to the Board's declaration of the initial
quarterly dividend, we will deliver a covenant reversion notice, at which time
the financial covenants and other restrictions, including the dividend
restriction, will revert to the limits applicable prior to the June 2020
amendment.

During 2020, we completed the sale of $2.8 billion of senior notes and used most
of the net proceeds to purchase and redeem senior notes maturing in 2021, 2022,
2023 and 2024. The remaining net proceeds were used for general corporate
purposes.

In August 2019, we completed the sale of $1.2 billion of senior notes and used
the net proceeds to fund the make-whole redemption of all of our outstanding
senior notes maturing in 2023, and the concurrent tender offers to purchase a
portion of our senior notes maturing in 2021 and 2022.

For additional information regarding our debt arrangements, refer to Note 8.

Operating Activities
We generated consolidated operating cash flows of $3.0 billion in 2020
(including $0.7 billion from working capital and other sources) and $1.5 billion
in 2019 (including $0.3 billion from working capital and other sources).

Higher operating cash flows for 2020, compared with 2019, primarily reflect higher copper prices, lower production and delivery costs associated with lower mining rates, and cost reductions associated with our April 2020 revised operating plans.

Investing Activities
Capital Expenditures. Capital expenditures, including capitalized interest,
totaled $2.0 billion for the year 2020, including $1.2 billion for major
projects primarily associated with underground development activities in the
Grasberg minerals district and the now complete Lone Star copper leach project.
Capital expenditures, including capitalized interest, totaled $2.7 billion for
the year 2019, including $1.5 billion for major projects.

A large portion of the capital expenditures relate to projects that are expected
to add significant production and cash flow in future periods, enabling us to
continue to generate operating cash flows exceeding capital expenditures in
future years. Refer to "Outlook" for further discussion of projected capital
expenditures for 2021.

Proceeds from Sales of Assets. Proceeds from sales of assets totaled $0.7 billion for the year 2020, primarily related to the sale of Kisanfu, our undeveloped exploration project in the DRC ($550 million), contingent consideration associated with the 2016 sale of the Tenke Fungurume Mining assets in the DRC ($60 million), the

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collection of proceeds related to the 2019 sale of the Timok exploration assets
in Serbia ($45 million) and the sale of royalty assets ($31 million).

Proceeds from sales of assets totaled $0.6 billion for the year 2019, primarily
associated with sales of (i) our interest in the lower zone of the Timok
exploration project in Serbia, (ii) our cobalt refinery in Kokkola, Finland, and
related cobalt cathode precursor business and (iii) interests in oil and gas
properties, including $50 million in contingent consideration associated with
the 2016 sale of onshore California oil and gas properties.
Refer to Note 2 for further discussion of acquisitions and dispositions.

Financing Activities Debt Transactions. Net repayments of debt in 2020 totaled $0.2 billion, primarily reflecting the repayment of $0.3 billion under Cerro Verde's Term Loan.

Net repayments of debt in 2019 totaled $1.3 billion, primarily consisting of the
redemption of $1.0 billion aggregate principal amount of our senior notes
maturing in 2020 and the repayment of $200 million under the Cerro Verde Term
Loan. Additionally, during 2019, we issued $1.2 billion in new senior notes and
used the net proceeds to redeem and purchase senior notes maturing in 2021, 2022
and 2023.

Refer to Note 8 for further discussion of debt transactions.

Cash Dividends and Distributions Paid. We paid dividends on our common stock
totaling $73 million in 2020 (associated with the $0.05 per share common stock
cash dividend declared in December 2019) and $291 million in 2019.

As further discussed in Note 10, in February 2021, the Board reinstated a cash
dividend on our common stock and also adopted a new financial policy for the
allocation of cash flows aligned with our strategic objectives of maintaining a
strong balance sheet, increasing cash returns to shareholders and advancing
opportunities for future growth. The declaration and payment of future dividends
is at the discretion of the Board and will be assessed on an ongoing basis,
taking into account our financial results, cash requirements, future prospects,
global economic conditions, and other factors deemed relevant by the Board.

There were no cash dividends or distributions paid to noncontrolling interests
in 2020 and $82 million in 2019. These payments will vary based on the operating
results and cash requirements of our consolidated subsidiaries.

Contributions from Noncontrolling Interests. We received equity contributions
from PT Inalum for their share of capital spending on PT-FI underground mine
development projects and costs for the new smelter in Indonesia totaling $156
million in 2020 and $165 million in 2019.

CONTINGENCIES

Environmental

The cost of complying with environmental laws is a fundamental and substantial
cost of our business. At December 31, 2020, we had $1.6 billion recorded in our
consolidated balance sheet for environmental obligations attributed to CERCLA or
analogous state programs and for estimated future costs associated with
environmental obligations that are considered probable based on specific facts
and circumstances.

We incurred environmental capital expenditures and other environmental costs
(including our joint venture partners' shares) to comply with applicable
environmental laws and regulations that affect our operations totaling $0.3
billion in 2020 and $0.4 billion in 2019. For 2021, we expect to incur
approximately $0.4 billion of aggregate environmental capital expenditures and
other environmental costs. The timing and amount of estimated payments could
change as a result of changes in regulatory requirements, changes in scope and
timing of reclamation and plug and abandonment activities, the settlement of
environmental matters and the rate at which actual spending occurs on continuing
matters.

In August 2020, the co-conveners of the Global Tailings Review, which included
the International Council on Mining and Metals (ICMM), an industry group of
which we are a founding member, published the first Global Industry Standard on
Tailings Management (the Tailings Standard). The Tailings Standard includes 77
requirements across 6 key areas including the design, construction, operation
and monitoring of tailings facilities, management and governance, emergency
response and long-term recovery, and public disclosure. ICMM has committed that
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members will implement the Tailings Standard within three years for certain
facilities and within five years for all others. ICMM members have prepared a
guidance document focused on practices that drive safe tailings management and
prepared a conformance protocol document to be used by companies on
demonstrating implementation of the Tailings Standard; both documents are
expected to be published in early 2021. As a member of ICMM, which has endorsed
the Tailings Standard, we are moving toward implementation and have begun
undertaking an extensive, multi-year analysis of our tailings facilities to
ensure conformance with the Tailings Standard. We are assessing the costs of
complying with the new Tailings Standard.

Refer to Note 12 and "Risk Factors" contained in Part I, Item 1A. of our annual
report on Form 10-K for the year ended December 31, 2020, for further
information about environmental regulation, including significant environmental
matters.

Asset Retirement Obligations
We recognize AROs as liabilities when incurred, with the initial measurement at
fair value. These obligations, which are initially estimated based on discounted
cash flow estimates, are accreted to full value over time through charges to
cost of sales. Mine reclamation costs for disturbances are recorded as an ARO
and as a related asset retirement cost (ARC) (included in property, plant,
equipment and mine development costs) in the period of disturbance. Oil and gas
plugging and abandonment costs are recognized as an ARO and as a related ARC
(included in oil and gas properties) in the period in which the well is drilled
or acquired. For non-operating properties without reserves, changes to the ARO
are recorded in earnings. Our cost estimates are reflected on a third-party cost
basis and comply with our legal obligation to retire tangible, long-lived
assets. At December 31, 2020, we had $2.5 billion recorded in our consolidated
balance sheet for AROs, including $0.4 billion related to our oil and gas
properties. Spending on AROs totaled $156 million in 2020 and $170 million in
2019 (including $38 million in 2020 and $77 million in 2019 for our oil and gas
operations). For 2021, we expect to incur approximately $0.3 billion in
aggregate ARO payments (including $0.1 billion for our oil and gas operations).
Refer to Note 12 for further discussion.

Litigation and Other Contingencies
Refer to Notes 2 and 12, and "Legal Proceedings" contained in Part I, Item 3. of
our annual report on Form 10-K for the year ended December 31, 2020, for further
discussion of contingencies associated with legal proceedings and other matters.

DISCLOSURES ABOUT MARKET RISKS

Commodity Price Risk
Our consolidated revenues from our mining operations include the sale of copper
concentrate, copper cathode, copper rod, gold, molybdenum and other metals by
our North America and South America mines, the sale of copper concentrate (which
also contains significant quantities of gold and silver) by our Indonesia mining
operations, the sale of molybdenum in various forms by our molybdenum
operations, and the sale of copper cathode, copper anode and gold in anode and
slimes by Atlantic Copper. Our financial results will vary with fluctuations in
the market prices of the commodities we produce, primarily copper and gold, and
to a lesser extent molybdenum and silver. For projected sensitivities of our
operating cash flow to changes in commodity prices, refer to "Outlook." World
market prices for these commodities have fluctuated historically and are
affected by numerous factors beyond our control. Refer to "Risk Factors"
contained in Part I, Item 1A. of our annual report on Form 10-K for the year
ended December 31, 2020, for further discussion of financial risks associated
with fluctuations in the market prices of the commodities we sell.

During 2020, our mined copper was sold 51 percent in concentrate, 28 percent as
cathode and 21 percent as rod from North America operations. Substantially all
of our copper concentrate and cathode sales contracts provide final copper
pricing in a specified future month (generally one to four months from the
shipment date) based primarily on quoted LME monthly average copper settlement
prices. We receive market prices based on prices in the specified future period,
which results in price fluctuations recorded through revenues until the date of
settlement. We record revenues and invoice customers at the time of shipment
based on then-current LME prices, which results in an embedded derivative on our
provisionally priced concentrate and cathode 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 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 prices, the
opposite occurs.
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Following are the (unfavorable) favorable impacts of net adjustments to the
prior years' provisionally priced copper sales for the years ended December 31
(in millions, except per share amounts):
                                                      2020          2019
Revenues                                            $  (102)      $   58
Net income attributable to common stock             $   (42)      $   24

Net income per share attributable to common stock $ (0.03) $ 0.02

At December 31, 2020, we had provisionally priced copper sales at our copper
mining operations totaling 320 million pounds of copper (net of intercompany
sales and noncontrolling interests) recorded at an average price of $3.52 per
pound, subject to final pricing over the next several months. We estimate that
each $0.05 change in the price realized from the December 31, 2020, provisional
price recorded would have an approximate $10 million effect on 2021 net income
attributable to common stock. The LME copper settlement price closed at $3.57
per pound on January 29, 2021.

Foreign Currency Exchange Risk
The functional currency for most of our operations is the U.S. dollar.
Substantially all of our revenues and a significant portion of our costs are
denominated in U.S. dollars; however, some costs and certain asset and liability
accounts are denominated in local currencies, including the Indonesia rupiah,
Australian dollar, Peruvian sol, Chilean peso and euro. We recognized foreign
currency translation gains on balances denominated in foreign currencies
totaling $34 million in 2020 and $24 million in 2019. Generally, our operating
results are positively affected when the U.S. dollar strengthens in relation to
those foreign currencies and are adversely affected when the U.S. dollar weakens
in relation to those foreign currencies.

Following is a summary of estimated annual payments and the impact of changes in foreign currency rates on our annual operating costs:

                                                                                                                                                           10% Change in
                                                                                                                                                           Exchange Rate
                                           Exchange Rate per $1                                                                                        (in millions of U.S.
                                             at December 31,                               Estimated Annual Payments                                         dollars)a
                                                                                                                                   (in millions of
                                    2020                   2019                               (in local currency)                  U.S. dollars)b              Increase          Decrease
Indonesia
Rupiah                             14,034                 13,832                                        11.9 trillion             $          848             $     (77)         $     94
Australian dollar                    1.30                   1.43                                          195 million             $          150             $     (14)         $     17
South America
Peruvian sol                         3.62                   3.32                                          2.1 billion             $          573             $     (52)         $     64
Chilean peso                          711                    749                                          175 billion             $          246             $     (22)         $     27
Atlantic Copper
Euro                                 0.82                   0.89                                          138 million             $          169             $     (15)         $     19

a.Reflects the estimated impact on annual operating costs assuming a 10 percent increase or decrease in the exchange rate reported at December 31, 2020. b.Based on exchange rates at December 31, 2020.

Interest Rate Risk
At December 31, 2020, we had total debt maturities based on principal amounts of
$9.8 billion, of which approximately 6 percent was variable-rate debt with
interest rates primarily based on the London Interbank Offered Rate. The table
below presents average interest rates for our scheduled maturities of principal
for our outstanding debt and the related fair values at December 31, 2020 (in
millions, except percentages):
                         2021        2022        2023        2024       2025      Thereafter       Fair Value
Fixed-rate debt         $  4       $ 524       $ 996       $ 730       $ -  

$ 6,963 $ 10,428 Average interest rate - % 3.6 % 3.9 % 4.6 % - %

           5.1  %          4.9  %

Variable-rate debt $ 32 $ 529 $ - $ - $ -

$ 8 $ 566 Average interest rate 1.2 % 2.0 % - % - % - %

           3.8  %          2.0  %



NEW ACCOUNTING STANDARDS

Refer to Note 1 for discussion of a recently adopted accounting standard.

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PRODUCT REVENUES AND PRODUCTION COSTS

Mining Product Revenues and Unit Net Cash Costs
Unit net cash costs per pound of copper and molybdenum are measures intended to
provide investors with information about the cash-generating capacity of our
mining operations expressed on a basis relating to the primary metal product for
the 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. These measures are
presented by other metals mining companies, although our measures may not be
comparable to similarly titled measures reported by other companies.

We present gross profit per pound of copper in the following tables using both a
"by-product" method and a "co-product" method. We use the by-product method in
our presentation of gross profit per pound of copper because (i) the majority of
our revenues are copper revenues, (ii) we mine ore, which contains copper, gold,
molybdenum and other metals, (iii) it is not possible to specifically assign all
of our costs to revenues from the copper, gold, molybdenum and other metals we
produce, (iv) it is the method used to compare mining operations in certain
industry publications and (v) it is the method used by our management and the
Board to monitor operations and to compare mining operations in certain industry
publications. In the co-product method presentations, shared costs are allocated
to the different products based on their relative revenue values, which will
vary to the extent our metals sales volumes and realized prices change.

We show revenue adjustments for prior period open sales as separate line items.
Because these adjustments do not result from current period sales, these amounts
have been reflected separately from revenues on current period sales. Noncash
and other costs, which are removed from site production and delivery costs in
the calculation of unit net cash costs, consist of items such as stock-based
compensation costs, start-up costs, inventory adjustments, long-lived asset
impairments, restructuring and/or unusual charges. As discussed above, gold,
molybdenum and other metal revenues at copper mines are reflected as credits
against site production and delivery costs in the by-product method. The
following schedules are presentations under both the by-product and co-product
methods together with reconciliations to amounts reported in our consolidated
financial statements.




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North America Copper Mines Product Revenues, Production Costs and Unit Net Cash
Costs
Year Ended December 31, 2020
(In millions)                                   By-Product                                      Co-Product Method
                                                  Method               Copper              Molybdenuma             Otherb             Total
Revenues, excluding adjustments               $     4,005      c   $      4,005          $        281          $        83          $ 4,369
Site production and delivery, before
net noncash
and other costs shown below                         2,700                 2,529                   223                   44            2,796
By-product credits                                   (268)                    -                     -                    -                -
Treatment charges                                     139                   136                     -                    3              139
Net cash costs                                      2,571                 2,665                   223                   47            2,935
DD&A                                                  355                   330                    18                    7              355
Metals inventory adjustments                           52                    49                     -                    3               52
Noncash and other costs, net                          138      d            133                     3                    2              138
Total costs                                         3,116                 3,177                   244                   59            3,480
Other revenue adjustments, primarily
for pricing
on prior period open sales                            (22)                  (22)                    -                    -              (22)
Gross profit                                  $       867          $        806          $         37          $        24          $   867

Copper sales (millions of recoverable
pounds)                                             1,420                 1,420
Molybdenum sales (millions of
recoverable pounds)a                                                                               33

Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments               $      2.82      c   $       2.82          $       8.62
Site production and delivery, before
net noncash
and other costs shown below                          1.90                  1.78                  6.84
By-product credits                                  (0.19)                    -                     -
Treatment charges                                    0.10                  0.10                     -
Unit net cash costs                                  1.81                  1.88                  6.84
DD&A                                                 0.25                  0.23                  0.56
Metals inventory adjustments                         0.03                  0.03                     -
Noncash and other costs, net                         0.10      d           0.10                  0.09
Total unit costs                                     2.19                  2.24                  7.49
Other revenue adjustments, primarily
for pricing
on prior period open sales                          (0.02)                (0.02)                    -
Gross profit per pound                        $      0.61          $       0.56          $       1.13

Reconciliation to Amounts Reported

                                                                                                                   Metals
                                                                     Production                                  Inventory
                                                 Revenues           and Delivery              DD&A              Adjustments
Totals presented above                        $     4,369          $      2,796          $        355          $        52
Treatment charges                                     (15)                  124                     -                    -
Noncash and other costs, net                            -                   138                     -                    -
Other revenue adjustments, primarily
for pricing
on prior period open sales                            (22)                    -                     -                    -
Eliminations and other                                 32                    42                     -                    -
North America copper mines                          4,364                 3,100                   355                   52
Other mininge                                      13,642                10,595                 1,103                   16

Corporate, other & eliminations                    (3,808)               (3,664)                   70                   28
As reported in our consolidated               $    14,198          $     10,031          $      1,528          $        96
financial statements


a.Reflects sales of molybdenum produced by certain of the North America copper
mines to our molybdenum sales company at market-based pricing.
b.Includes gold and silver product revenues and production costs.
c.Includes reductions to revenues and average realized prices totaling
$24 million ($0.02 per pound of copper) related to forward sales contracts
covering 150 million pounds of copper sales for May and June 2020 at a fixed
price of $2.34 per pound.
d.Includes charges totaling $32 million ($0.02 per pound of copper) primarily
associated with our April 2020 revised operating plans (including employee
separation costs) and the COVID-19 pandemic (including health and safety costs).
e.Represents the combined total for our other mining operations as presented in
Note 16.



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North America Copper Mines Product Revenues, Production Costs and Unit Net Cash
Costs
Year Ended December 31, 2019
(In millions)                                    By-Product                                      Co-Product Method
                                                   Method               Copper              Molybdenuma             Otherb              Total
Revenues, excluding adjustments                $     3,950          $      3,950          $        370          $         84          $ 4,404
Site production and delivery, before net
noncash
and other costs shown below                          2,957                 2,711                   299                    53            3,063
By-product credits                                    (348)                    -                     -                     -                -
Treatment charges                                      161                   155                     -                     6              161
Net cash costs                                       2,770                 2,866                   299                    59            3,224
DD&A                                                   348                   318                    23                     7              348
Metals inventory adjustments                            30                    30                     -                     -               30
Noncash and other costs, net                           110                    98                     9                     3              110
Total costs                                          3,258                 3,312                   331                    69            3,712
Other revenue adjustments, primarily for
pricing
on prior period open sales                               4                     4                     -                     -                4
Gross profit                                   $       696          $        642          $         39          $         15          $   696

Copper sales (millions of recoverable
pounds)                                              1,441                 1,441
Molybdenum sales (millions of
recoverable pounds)a                                                                                32

Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments                $      2.74          $       2.74          $      11.51
Site production and delivery, before net
noncash
and other costs shown below                           2.05                  1.88                  9.29
By-product credits                                   (0.24)                    -                     -
Treatment charges                                     0.11                  0.11                     -
Unit net cash costs                                   1.92                  1.99                  9.29
DD&A                                                  0.24                  0.21                  0.72
Metals inventory adjustments                          0.02                  0.02                     -
Noncash and other costs, net                          0.08                  0.07                  0.29
Total unit costs                                      2.26                  2.29                 10.30
Other revenue adjustments, primarily for
pricing
on prior period open sales                               -                     -                     -
Gross profit per pound                         $      0.48          $       0.45          $       1.21

Reconciliation to Amounts Reported

                                                                                                                    Metals
                                                                      Production                                   Inventory
                                                  Revenues           and Delivery              DD&A               Adjustments
Totals presented above                         $     4,404          $      3,063          $        348          $         30
Treatment charges                                      (60)                  101                     -                     -
Noncash and other costs, net                             -                   110                     -                     -
Other revenue adjustments, primarily for
pricing
on prior period open sales                               4                     -                     -                     -
Eliminations and other                                  38                    45                     1                     -
North America copper mines                           4,386                 3,319                   349                    30
Other miningc                                       13,054                11,126                   979                    57

Corporate, other & eliminations                     (3,038)               (2,911)                   84                    92
As reported in our consolidated                $    14,402          $     

11,534 $ 1,412 $ 179 financial statements

a.Reflects sales of molybdenum produced by certain of the North America copper
mines to our molybdenum sales company at market-based pricing.
b.Includes gold and silver product revenues and production costs.
c.Represents the combined total for our other mining operations as presented in
Note 16.






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South America Mining Product Revenues, Production Costs and Unit Net Cash Costs
Year Ended December 31, 2020
(In millions)                                  By-Product                            Co-Product Method
                                                 Method               Copper               Othera               Total
Revenues, excluding adjustments              $     2,976          $      2,976          $      209          $     3,185
Site production and delivery, before net
noncash
and other costs shown below                        1,816                 1,701                 158                1,859
By-product credits                                  (166)                    -                   -                    -
Treatment charges                                    152                   152                   -                  152
Royalty on metals                                      6                     6                   -                    6
Net cash costs                                     1,808                 1,859                 158                2,017
DD&A                                                 421                   391                  30                  421
Metals inventory adjustments                           3                     3                   -                    3
Noncash and other costs, net                         122    b              115                   7                  122
Total costs                                        2,354                 2,368                 195                2,563
Other revenue adjustments, primarily for
pricing
on prior period open sales                           (70)                  (70)                  -                  (70)
Gross profit                                 $       552          $        538          $       14          $       552

Copper sales (millions of recoverable
pounds)                                              976                   

976

Gross profit per pound of copper:

Revenues, excluding adjustments              $      3.05          $       

3.05

Site production and delivery, before net
noncash
and other costs shown below                         1.86                  1.74
By-product credits                                 (0.17)                    -
Treatment charges                                   0.15                  0.15
Royalty on metals                                   0.01                  0.01
Unit net cash costs                                 1.85                  1.90
DD&A                                                0.43                  0.41
Metals inventory adjustments                           -                    

-

Noncash and other costs, net                        0.13    b             

0.12

Total unit costs                                    2.41                  

2.43

Other revenue adjustments, primarily for
pricing
on prior period open sales                         (0.07)                (0.07)
Gross profit per pound                       $      0.57          $       0.55

Reconciliation to Amounts Reported

                                                                                                                Metals
                                                                    Production                                Inventory
                                                Revenues           and Delivery             DD&A             Adjustments
Totals presented above                       $     3,185          $      1,859          $      421          $         3
Treatment charges                                   (152)                    -                   -                    -
Royalty on metals                                     (6)                    -                   -                    -
Noncash and other costs, net                           -                   122                   -                    -
Other revenue adjustments, primarily for
pricing
on prior period open sales                           (70)                    -                   -                    -
Eliminations and other                                (2)                   (3)                  -                    -
South America mining                               2,955                 1,978                 421                    3
Other miningc                                     15,051                11,717               1,037                   65

Corporate, other & eliminations                   (3,808)               (3,664)                 70                   28

As reported in our consolidated financial $ 14,198 $ 10,031 $ 1,528 $ 96 statements

a.Includes silver sales of 3.4 million ounces ($21.86 per ounce average realized
price). Also reflects sales of molybdenum produced by Cerro Verde to our
molybdenum sales company at market-based pricing.
b.Includes charges totaling $91 million ($0.09 per pound of copper) primarily
associated with idle facility (Cerro Verde) and contract cancellation costs
related to the COVID-19 pandemic, and employee separation costs associated with
our April 2020 revised operating plans.
c.Represents the combined total for our other mining operations as presented in
Note 16.


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South America Mining Product Revenues, Production Costs and Unit Net Cash Costs
Year Ended December 31, 2019
(In millions)                                  By-Product                            Co-Product Method
                                                 Method               Copper               Othera               Total
Revenues, excluding adjustments              $     3,213          $      3,213          $      358          $     3,571
Site production and delivery, before net
noncash
and other costs shown below                        2,185                 1,991                 245                2,236
By-product credits                                  (307)                    -                   -                    -
Treatment charges                                    212                   212                   -                  212
Royalty on metals                                      7                     6                   1                    7
Net cash costs                                     2,097                 2,209                 246                2,455
DD&A                                                 474                   427                  47                  474
Metals inventory adjustments                           2                     2                   -                    2
Noncash and other costs, net                          94                    90                   4                   94
Total costs                                        2,667                 2,728                 297                3,025
Other revenue adjustments, primarily for
pricing
on prior period open sales                            37                    37                   -                   37
Gross profit                                 $       583          $        522          $       61          $       583

Copper sales (millions of recoverable
pounds)                                            1,183                 

1,183

Gross profit per pound of copper:

Revenues, excluding adjustments              $      2.71          $       

2.71

Site production and delivery, before net
noncash
and other costs shown below                         1.85                  1.68
By-product credits                                 (0.27)                    -
Treatment charges                                   0.18                  0.18
Royalty on metals                                   0.01                  0.01
Unit net cash costs                                 1.77                  1.87
DD&A                                                0.40                  0.36
Metals inventory adjustments                           -                    

-

Noncash and other costs, net                        0.08                  

0.07

Total unit costs                                    2.25                  

2.30

Other revenue adjustments, primarily for
pricing
on prior period open sales                          0.03                  0.03
Gross profit per pound                       $      0.49          $       0.44

Reconciliation to Amounts Reported

                                                                                                                Metals
                                                                    Production                                Inventory
                                                Revenues           and Delivery             DD&A             Adjustments
Totals presented above                       $     3,571          $      2,236          $      474          $         2
Treatment charges                                   (212)                    -                   -                    -
Royalty on metals                                     (7)                    -                   -                    -
Noncash and other costs, net                           -                    94                   -                    -
Other revenue adjustments, primarily for
pricing
on prior period open sales                            37                     -                   -                    -
Eliminations and other                                (1)                   (4)                  -                    -
South America mining                               3,388                 2,326                 474                    2
Other miningb                                     14,052                12,119                 854                   85

Corporate, other & eliminations                   (3,038)               (2,911)                 84                   92
As reported in our consolidated financial    $    14,402          $     11,534          $    1,412
statements                                                                                                  $       179


a.Includes silver sales of 4.7 million ounces ($16.57 per ounce average realized
price). Also reflects sales of molybdenum produced by Cerro Verde to our
molybdenum sales company at market-based pricing.
b.Represents the combined total for our other mining operations as presented in
Note 16.


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Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs
Year Ended December 31, 2020
(In millions)                             By-Product                        

Co-Product Method

                                            Method               Copper               Gold             Silvera           Total

Revenues, excluding adjustments $ 2,475 $ 2,475

        $  1,545          $     81          $ 4,101
Site production and delivery, before
net noncash
and other costs shown below                   1,508                   910               568                30            1,508
Gold and silver credits                      (1,630)                    -                 -                 -                -
Treatment charges                               219                   132                83                 4              219
Export duties                                    93                    56                35                 2               93
Royalty on metals                               153                    90                60                 3              153
Net cash costs                                  343                 1,188               746                39            1,973
DD&A                                            580                   350               219                11              580

Noncash and other costs, net                     93      b             56                35                 2               93
Total costs                                   1,016                 1,594             1,000                52            2,646
Other revenue adjustments, primarily
for pricing
on prior period open sales                      (20)                  (20)                4                 -              (16)
PT Smelting intercompany loss                   (11)                   (7)               (4)                -              (11)
Gross profit                            $     1,428          $        854          $    545          $     29          $ 1,428

Copper sales (millions of recoverable
pounds)                                         804                   804
Gold sales (thousands of recoverable
ounces)                                                                                 842

Gross profit per pound of copper/per ounce of gold:

Revenues, excluding adjustments $ 3.08 $ 3.08

        $  1,832
Site production and delivery, before
net noncash
and other costs shown below                    1.88                  1.13               674
Gold and silver credits                       (2.03)                    -                 -
Treatment charges                              0.27                  0.17                98
Export duties                                  0.12                  0.07                41
Royalty on metals                              0.19                  0.11                72
Unit net cash costs                            0.43                  1.48               885
DD&A                                           0.72                  0.43               259

Noncash and other costs, net                   0.11      b           0.07                41
Total unit costs                               1.26                  1.98   

1,185

Other revenue adjustments, primarily
for pricing
on prior period open sales                    (0.03)                (0.03)                5
PT Smelting intercompany loss                 (0.01)                (0.01)               (5)
Gross profit per pound/ounce            $      1.78          $       1.06          $    647

Reconciliation to Amounts Reported

                                                               Production
                                           Revenues           and Delivery            DD&A
Totals presented above                  $     4,101          $      1,508          $    580
Treatment charges                              (219)                    -                 -
Export duties                                   (93)                    -                 -
Royalty on metals                              (153)                    -                 -
Noncash and other costs, net                     (6)                   87                 -
Other revenue adjustments, primarily
for pricing
on prior period open sales                      (16)                    -                 -
PT Smelting intercompany loss                     -                    11                 -
Indonesia mining                              3,614                 1,606               580
Other miningc                                14,392                12,089               878

Corporate, other & eliminations              (3,808)               (3,664)               70

As reported in our consolidated $ 14,198 $ 10,031 financial statements

$ 1,528

a.Includes silver sales of 3.6 million ounces ($22.40 per ounce average realized
price).
b.Includes COVID-19 related costs (including one-time incremental employee
benefits and health and safety costs) of $14 million ($0.02 per pound of
copper).
c.Represents the combined total for our other mining operations as presented in
Note 16.
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Indonesia Mining Product Revenues, Production Costs and Unit Net Cash Costs
Year Ended December 31, 2019
(In millions)                            By-Product                                     Co-Product Method
                                           Method               Copper                Gold               Silvera             Total

Revenues, excluding adjustments $ 1,814 $ 1,814

       $   1,378          $         40          $ 3,232
Site production and delivery, before
net noncash
and other costs shown below                  1,938                 1,088                826                    24            1,938
Gold and silver credits                     (1,419)                    -                  -                     -                -
Treatment charges                              171                    96                 73                     2              171
Export duties                                   56                    31                 24                     1               56
Royalty on metals                              107                    58                 48                     1              107
Net cash costs                                 853                 1,273                971                    28            2,272
DD&A                                           406                   228                173                     5              406
Metals inventory adjustments                     5                     5                  -                     -                5
Noncash and other costs, net                   246      b            136                107                     3              246
Total costs                                  1,510                 1,642              1,251                    36            2,929
Other revenue adjustments, primarily
for pricing
on prior period open sales                      18                    18                  1                     -               19
PT Smelting intercompany loss                  (17)                  (10)                (7)                    -              (17)
Gross profit                           $       305          $        180          $     121          $          4          $   305

Copper sales (millions of recoverable
pounds)                                        667                   667
Gold sales (thousands of recoverable
ounces)                                                                                 973

Gross profit per pound of copper/per ounce of gold:

Revenues, excluding adjustments $ 2.72 $ 2.72

       $   1,416
Site production and delivery, before
net noncash
and other costs shown below                   2.91                  1.63                849
Gold and silver credits                      (2.13)                    -                  -
Treatment charges                             0.26                  0.14                 75
Export duties                                 0.08                  0.05                 25
Royalty on metals                             0.16                  0.09                 49
Unit net cash costs                           1.28                  1.91                998
DD&A                                          0.61                  0.34                178
Metals inventory adjustments                  0.01                  0.01                  -
Noncash and other costs, net                  0.37      b           0.20                110
Total unit costs                              2.27                  2.46    

1,286

Other revenue adjustments, primarily
for pricing
on prior period open sales                    0.03                  0.03                  2
PT Smelting intercompany loss                (0.02)                (0.02)                (8)
Gross profit per pound/ounce           $      0.46          $       0.27          $     124

Reconciliation to Amounts Reported

                                                                                                         Metals
                                                              Production                                Inventory
                                          Revenues           and Delivery             DD&A             Adjustments
Totals presented above                 $     3,232          $      1,938          $     406          $          5
Treatment charges                             (171)                    -                  -                     -
Export duties                                  (56)                    -                  -                     -
Royalty on metals                             (107)                    -                  -                     -
Noncash and other costs, net                  (146)                  100                  -                     -
Other revenue adjustments, primarily
for pricing
on prior period open sales                      19                     -                  -                     -
PT Smelting intercompany loss                    -                    17                  -                     -
Indonesia mining                             2,771                 2,055                406                     5
Other miningc                               14,669                12,390                922                    82

Corporate, other & eliminations             (3,038)               (2,911)                84                    92

As reported in our consolidated $ 14,402 $ 11,534

      $   1,412
financial statements                                                                                 $        179


a.Includes silver sales of 2.5 million ounces ($16.15 per ounce average realized
price).
b.Includes charges in revenues totaling $166 million ($0.25 per pound of
copper), primarily associated with an unfavorable Indonesia Supreme Court ruling
related to certain disputed PT-FI export duties, partly offset by adjustments to
prior year treatment charges totaling $20 million ($0.03 per pound of copper).
Also includes charges of $28 million ($0.04 per pound of copper) associated with
adjustments to the settlement of the historical surface water tax disputes with
the local regional tax authority in Papua, Indonesia.
c.Represents the combined total for our other mining operations as presented in
Note 16.
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Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs
                                                                      Years Ended December 31,
(In millions)                                                         2020                  2019
Revenues, excluding adjustmentsa                                $          243          $      369
Site production and delivery, before net
noncash
and other costs shown below                                                211                 293
Treatment charges and other                                                 21                  25
Net cash costs                                                             232                 318
DD&A                                                                        57                  62
Metals inventory adjustments                                                10                  50
Noncash and other costs, net                                                19    b              6
Total costs                                                                318                 436
Gross loss                                                      $          (75)         $      (67)

Molybdenum sales (millions of recoverable
pounds)a                                                                    24                  29

Gross loss per pound of molybdenum:

Revenues, excluding adjustmentsa                                $         9.94          $    12.51
Site production and delivery, before net
noncash
and other costs shown below                                               8.65                9.95
Treatment charges and other                                               0.85                0.85
Unit net cash costs                                                       9.50               10.80
DD&A                                                                      2.34                2.11
Metals inventory adjustments                                              0.42                1.69
Noncash and other costs, net                                              0.75    b           0.20
Total unit costs                                                         13.01               14.80
Gross loss                                                      $        (3.07)         $    (2.29)

Reconciliation to Amounts Reported

                                                                                                                 Metals
                                                                   Production                                  Inventory
Year Ended December 31, 2020                   Revenues           and Delivery              DD&A              Adjustments
Totals presented above                       $     243          $          211          $       57          $          10
Treatment charges and other                        (21)                      -                   -                      -
Noncash and other costs, net                         -                      19                   -                      -
Molybdenum mines                                   222                     230                  57                     10
Other miningc                                   17,784                  13,465               1,401                     58

Corporate, other & eliminations                 (3,808)                 (3,664)                 70                     28
As reported in our consolidated financial    $  14,198          $       10,031          $    1,528          $          96
statements

Year Ended December 31, 2019
Totals presented above                       $     369          $          293          $       62          $          50
Treatment charges and other                        (25)                      -                   -                      -
Noncash and other costs, net                         -                       6                   -                      -

Molybdenum mines                                   344                     299                  62                     50
Other miningc                                   17,096                  14,146               1,266                     37

Corporate, other & eliminations                 (3,038)                 (2,911)                 84                     92

As reported in our consolidated financial $ 14,402 $ 11,534 $ 1,412 $ 179 statements

a.Reflects sales of the Molybdenum mines' production to the molybdenum sales
company at market-based pricing. On a consolidated basis, realizations are based
on the actual contract terms for sales to third parties; as a result, our
consolidated average realized price per pound of molybdenum will differ from the
amounts reported in this table.
b.Includes charges totaling $7 million ($0.29 per pound of molybdenum) primarily
associated with contract cancellation costs related to the COVID-19 pandemic and
employee separation costs associated with April 2020 revised operating plans.
c.Represents the combined total for our other mining operations as presented in
Note 16. Also includes amounts associated with the molybdenum sales company,
which includes sales of molybdenum produced by the Molybdenum mines and by
certain of the North America and South America copper mines.

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GUARANTOR SUMMARIZED FINANCIAL INFORMATION

All of the senior notes issued by Freeport-McMoRan Inc. (FCX) are fully and
unconditionally guaranteed on a senior basis jointly and severally by
Freeport-McMoRan Oil & Gas LLC (FM O&G LLC), as guarantor, which is a
100-percent-owned subsidiary of FCX Oil & Gas LLC (FM O&G) and FCX. The
guarantee is an unsecured obligation of the guarantor and ranks equal in right
of payment with all existing and future indebtedness of FM O&G LLC, including
indebtedness under our revolving credit facility. The guarantee ranks senior in
right of payment with all of FM O&G LLC's future subordinated obligations and is
effectively subordinated in right of payment to any debt of FM O&G LLC's
subsidiaries. The indentures provide that FM O&G LLC's guarantee obligations may
be released or terminated upon: (i) the sale of all or substantially all of the
equity interests or assets of FM O&G LLC to a third party that is not our
subsidiary or our affiliate; (ii) FM O&G LLC no longer having any obligations
under any FM O&G senior notes or any refinancing thereof and no longer being a
co-borrower or guarantor of any of our obligations under the revolving credit
facility or any other senior debt or, in each case, any refinancing thereof; or
(iii) the discharge of our obligations under the indentures in accordance with
their terms.

The following summarized financial data includes information regarding FCX, as
issuer, FM O&G LLC, as guarantor, and all our other non-guarantor subsidiaries
at December 31, 2020, and 2019, and for the year ended December 31, 2020.
                                                  FCX            FM O&G LLC           Non-guarantor                                 Consolidated
                                                 Issuer           Guarantor           Subsidiaries           Eliminations               FCX
December 31, 2020
Current assets                                 $    65          $      697          $        9,287          $       (746)         $       9,303
Noncurrent assets                                  785                   6                  32,806                  (756)                32,841
Current liabilities                                187                  31                   3,964                  (765)                 3,417
Noncurrent liabilities                           9,433              11,208                  15,075               (15,657)                20,059

December 31, 2019
Current assets                                 $   154          $      657          $        7,778          $       (674)         $       7,915
Noncurrent assets                                1,620                  22                  32,692                (1,440)                32,894
Current liabilities                                323                  42                   3,550                  (706)                 3,209
Noncurrent liabilities                           9,180              10,892                  15,975               (15,895)                20,152

Year Ended December 31, 2020
Revenues                                       $     -          $       26          $       14,172          $          -          $      14,198
Operating (loss) income                            (30)                (10)                  2,489                   (12)                 2,437
Net income (loss)                                  599    a           (302)   a                865                  (297)                   865


a.Net income (loss) equals net income (loss) attributable to common stockholders
because net income attributable to noncontrolling interests is zero for issuer
and guarantor.
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                              CAUTIONARY STATEMENT

Our discussion and analysis contains forward-looking statements in which we
discuss our potential future performance. Forward-looking statements are all
statements other than statements of historical facts, such as plans,
projections, or expectations relating to ore grades and milling rates; business
outlook; production and sales volumes; unit net cash costs; cash flows; capital
expenditures; liquidity; operating costs; operating plans; our financial policy;
our expectations regarding PT-FI's ramp-up of underground mining activities and
future cash flows through 2022; PT-FI's development, financing, construction and
completion of a new smelter in Indonesia and possible expansion of the smelter
at PT Smelting; our commitments to deliver responsibly produced copper,
including plans to implement and validate all of our operating sites under
specific frameworks; improvements in operating procedures and technology;
exploration efforts and results; development and production activities, rates
and costs; tax rates; export quotas and duties; the impact of copper, gold and
molybdenum price changes; the impact of deferred intercompany profits on
earnings; mineralization and reserve estimates; execution of the settlement
agreements associated with the Louisiana coastal erosion cases and talc-related
litigation; descriptions of our objectives, strategies, plans, goals or targets,
including our net debt target, anticipated improvements in energy efficiency at
certain operating sites, and environmental, social and governance (ESG) targets;
and future dividend payments, share purchases and sales, including under the
Board's financial policy. The words "anticipates," "may," "can," "plans,"
"believes," "estimates," "expects," "projects," "targets," "intends," "likely,"
"will," "should," "could," "to be," "potential," "assumptions," "guidance,"
"future" and any similar expressions are intended to identify those assertions
as forward-looking statements. The declaration and payment of future dividends
is at the discretion of the Board and will depend on our financial results, cash
requirements, future prospects, global economic conditions, and other factors
deemed relevant by the Board. In accordance with the June 2020 amendment to the
revolving credit facility, we are currently restricted from declaring or paying
common stock dividends through December 31, 2021. Prior to the Board's
declaration of the initial quarterly dividend, we will deliver a covenant
reversion notice, which would eliminate the restriction on the declaration or
payment of common stock dividends.

We caution readers that forward-looking statements are not guarantees of future
performance and actual results may differ materially from those anticipated,
expected, projected or assumed in the forward-looking statements. Important
factors that can cause our actual results to differ materially from those
anticipated in the forward-looking statements include, but are not limited to,
changes in our credit rating; changes in our cash requirements, financial
position, financing plans or investment plans; changes in general market,
economic, tax, regulatory or industry conditions; the duration and scope of and
uncertainties associated with the COVID-19 pandemic, and the impact thereof on
commodity prices, our business and the global economy and any related actions
taken by governments and businesses; our ability to contain and mitigate the
risk of spread or major outbreak of COVID-19 at our operating sites, including
at PT-FI's remote operating site in Papua; supply of and demand for, and prices
of, copper, gold and molybdenum; mine sequencing; changes in mine plans or
operational modifications, delays, deferrals or cancellations; production rates;
timing of shipments; results of feasibility studies; potential inventory
adjustments; potential impairment of long-lived mining assets; the potential
effects of violence in Indonesia generally and in the province of Papua; the
Indonesia government's extension of PT-FI's export license after March 15, 2021;
risks associated with underground mining; satisfaction of requirements in
accordance with PT-FI's special mining license to extend mining rights from 2031
through 2041; the Indonesia government's approval of a deferred schedule for
completion of the new smelter in Indonesia; expected results from improvements
in operating procedures and technology, including innovation initiatives;
industry risks; regulatory changes; political and social risks; labor relations,
including labor-related work stoppages; weather- and climate-related risks;
environmental risks; our plans and ability to implement ESG practices;
litigation; cybersecurity incidents; changes in general market, economic and
industry conditions; financial condition of our customers, suppliers, vendors,
partners and affiliates, particularly during weak economic conditions and
extended periods of volatile commodity prices; reductions in liquidity and
access to capital; our ability to comply with our responsible production
commitments under specific frameworks and any changes to such frameworks; and
other factors described in more detail in Part I, Item 1A. "Risk Factors" of our
annual report on Form 10-K for the year ended December 31, 2020.

Investors are cautioned that many of the assumptions upon which our
forward-looking statements are based are likely to change after the
forward-looking statements are made, including for example commodity prices,
which we cannot control, and production volumes and costs, some aspects of which
we may not be able to control. Further, we may make changes to our business
plans that could affect our results. We caution investors that we do not intend
to update forward-looking statements more frequently than quarterly
notwithstanding any changes in our assumptions, changes in business plans,
actual experience or other changes, and we undertake no obligation to update any
forward-looking statements.
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This annual report on Form 10-K for the year ended December 31, 2020, also
contains the financial measure unit net cash costs per pound of copper and
molybdenum, which is not recognized under U.S. GAAP. Refer to "Operations - Unit
Net Cash Costs" 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 financial
statements.

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