Analysis of Debt
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Net Profit Margin since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Total Debt (Carrying Amount)
Freeport-McMoRan Inc., balance sheet: debt
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Current portion of debt | ||||||
| Long-term debt, less current portion | ||||||
| Total long-term debt, including current portion (carrying amount) |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The carrying amount of total long-term debt exhibited fluctuations over the five-year period. Initially, an increase was observed, followed by a decline and subsequent stabilization with a slight increase in the final year.
- Overall Trend
- Total long-term debt, including the current portion, increased from US$9,450 million in 2021 to US$10,620 million in 2022, representing a growth of approximately 12.4%. This was followed by a decrease to US$9,422 million in 2023, a reduction of around 11.3%. A further decrease to US$8,948 million occurred in 2024, representing a decline of 5.1%. Finally, the amount rose slightly to US$9,379 million in 2025, an increase of approximately 4.8%.
- Current Portion of Debt
- The current portion of debt demonstrated significant volatility. It increased substantially from US$372 million in 2021 to US$1,037 million in 2022, more than doubling. A subsequent decrease to US$766 million was noted in 2023. A substantial reduction occurred in 2024, falling to US$41 million, before increasing again to US$466 million in 2025.
- Long-Term Debt (Excluding Current Portion)
- Long-term debt, excluding the current portion, remained relatively stable throughout the period. It began at US$9,078 million in 2021 and increased to US$9,583 million in 2022. A decrease to US$8,656 million was observed in 2023. The amount then increased slightly to US$8,907 million in 2024 and remained nearly constant at US$8,913 million in 2025.
The fluctuations in the current portion of debt appear to be the primary driver of the changes in total long-term debt. While long-term debt remained relatively consistent, the shifting amounts categorized as current liabilities contributed to the overall variability observed in the total debt figure.
Total Debt (Fair Value)
| Dec 31, 2025 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Total long-term debt, including current portion (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2025-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Freeport-McMoRan Inc., interest costs incurred
US$ in millions
| 12 months ended: | Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest expense, net | |||||||||||
| Capitalized interest | |||||||||||
| Interest costs |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Interest expense, net, decreased from US$602 million in 2021 to US$515 million in 2023, before increasing to US$369 million in 2025. Capitalized interest exhibited a substantial increase from US$72 million in 2021 to US$391 million in 2024, followed by a slight decrease to US$342 million in 2025. Total interest costs initially rose from US$674 million in 2021 to US$782 million in 2023, then declined to US$711 million in 2025.
- Net Interest Expense
- A declining trend in net interest expense is apparent between 2021 and 2023. This decrease could be attributable to debt reduction, refinancing at lower rates, or a combination of both. However, the increase in 2024 and 2025 suggests a potential reversal of these factors, or the impact of new debt issuances.
- Capitalized Interest
- Capitalized interest demonstrates a significant upward trajectory from 2021 through 2024. This indicates increased spending on projects qualifying for interest capitalization, such as construction or development activities. The slight decrease in 2025 may suggest a slowing in these capital-intensive projects.
- Total Interest Costs
- Total interest costs initially increased, peaking in 2023, then stabilized and slightly decreased in the subsequent two years. The initial increase likely reflects the combined effect of higher net interest expense and rising capitalized interest. The stabilization in 2024 and 2025 suggests a balancing effect between these two components.
The relationship between net interest expense and capitalized interest is noteworthy. While net interest expense decreased between 2021 and 2023, capitalized interest increased substantially, contributing to the overall rise in total interest costs during that period. The recent trends suggest a potential shift in the company’s financing and investment strategies.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense, net
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs
= ÷ =
The interest coverage ratios demonstrate fluctuating performance over the five-year period. While both metrics initially decline, a subsequent improvement is observed, though with differing magnitudes and trajectories.
- Interest Coverage Ratio (without capitalized interest)
- This ratio begins at 13.73 in 2021 and experiences a gradual decrease to 12.69 by 2023. A significant increase is then noted in 2024, reaching 22.70, before moderating to 18.27 in 2025. This indicates a strengthening ability to meet interest obligations from earnings before interest and taxes (EBIT) as the period progresses, with a particularly strong showing in 2024.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted ratio, which incorporates the effect of capitalized interest, exhibits a more pronounced downward trend initially. Starting at 12.26 in 2021, it declines to a low of 8.36 in 2023. A recovery begins in 2024, rising to 10.20, but the improvement is less substantial than that seen in the unadjusted ratio, concluding at 9.48 in 2025. This suggests that while earnings are improving, the impact of capitalized interest continues to exert a noticeable influence on the company’s ability to cover its interest expense.
The divergence between the two ratios highlights the significance of capitalized interest. The larger decline in the adjusted ratio, and its comparatively slower recovery, suggests that changes in the amount of interest capitalized have a material effect on the company’s reported interest coverage. The substantial increase in the unadjusted ratio in 2024, coupled with a more modest increase in the adjusted ratio, implies a potential rise in capitalized interest during that year.
Overall, the trend suggests improving interest coverage, particularly when excluding capitalized interest. However, the adjusted ratio indicates a continued sensitivity to the accounting treatment of interest costs, warranting further investigation into the factors driving capitalized interest levels.