XML 84 R40.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2011

Income before income taxes and equity in affiliated companies' net earnings

Geographic sources of income before income taxes and equity in affiliated companies’ net earnings for the years ended December 31 consist of the following:



	2011		2010		2009
United States	$	2,112	$	1,307	$	98
Foreign	6,706		7,205		5,718
Total	$	8,818	$	8,512	$	5,816

Provision for (benefit from) income taxes

FCX’s provision for income taxes for the years ended December 31 consists of the following:



	2011			2010			2009
Current income taxes:
Federal	$	394		$	207		$	19
State	21			27			7
Foreign	1,948			2,500			2,172
Total current	2,363			2,734			2,198

Deferred income taxes (benefits):
Federal	82			20			(70		)
State	(19		)	(10		)	79
Foreign	661			239			100
Total deferred	724			249			109

Provision for income taxes	$	3,087		$	2,983		$	2,307

Reconciliation of the U.S. federal statutory tax rate to effective income tax rate

A reconciliation of the U.S. federal statutory tax rate to FCX’s effective income tax rate for the years ended December 31 follows:



	2011					2010					2009
	Amount			Percent		Amount			Percent		Amount			Percent
U.S. federal statutory tax rate	$	3,086		35	%	$	2,979		35	%	$	2,036		35	%
Foreign tax credit limitation	163			2		93			1		112			2
Percentage depletion	(283		)	(3	)	(263		)	(3	)	(168		)	(3	)
Withholding taxes	170			2		174			2		228			4
Valuation allowance on minimum
tax credits	(47		)	(1	)	18			—		104			2
State income taxes	—			—		17			—		(2		)	—
Other items, net	(2		)	—		(35		)	—		(3		)	—
Provision for income taxes	$	3,087		35	%	$	2,983		35	%	$	2,307		40	%

Components of deferred tax assets and liabilities

The components of deferred taxes follow:



	December 31,
	2011			2010
Deferred tax assets:
Foreign tax credits	$	2,011		$	1,837
Net operating loss carryforwards	356			442
Minimum tax credits	406			413
Accrued expenses	962			931
Employee benefit plans	245			215
Inventory	161			164
Other	276			224
Deferred tax assets	4,417			4,226
Valuation allowances	(2,393		)	(2,226		)
Net deferred tax assets	2,024			2,000

Deferred tax liabilities:
Property, plant, equipment and development costs	(4,227		)	(3,874		)
Undistributed earnings	(1,010		)	(917		)
Other	(72		)	(28		)
Total deferred tax liabilities	(5,309		)	(4,819		)
Net deferred tax liabilities	$	(3,285	)	$	(2,819	)

Reserve for unrecognized tax benefits, interest and penalties

A summary of the activities associated with FCX’s reserve for unrecognized tax benefits, interest and penalties follows:



	Unrecognized Tax Benefits			Interest			Penalties
Balance at January 1, 2010	$	253		$	34		$	—
Additions:
Prior year tax positions	9			*			*
Current year tax positions	24			*			*
Interest and penalties	—			2			—
Decreases:
Prior year tax positions	(26		)	*			*
Current year tax positions	—			*			*
Lapse of statute of limitations	(60		)	*			*
Interest and penalties	—			(3		)	—
Balance at December 31, 2010	200			33			—
Additions:
Prior year tax positions	25			*			*
Current year tax positions	16			*			*
Interest and penalties	—			7			—
Decreases:
Prior year tax positions	(34		)	*			*
Current year tax positions	(8		)	*			*
Lapse of statute of limitations	(53		)	*			*
Interest and penalties	—			(6		)	—
Balance at December 31, 2011	$	146		$	34		$	—

* Amounts not allocated.

Summary of income tax examinations

The tax years for FCX and its significant subsidiaries that remain subject to examination are as follows:



Jurisdiction	Years Under Examination	Additional Open Years
U.S. Federal	Short Year Ending December 31, 2007 2008-2010	2011



Indonesia	2005-2008	2009-2011
Peru	2007-2008	2002-2006, 2009-2011
Chile	2010	2011
Arizona	2003-2007	2008-2011
New Mexico	—	2003-2011

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References+ Details

- Definition

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

+ References+ Details