Business Segments (Unaudited)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Business Segments

BUSINESS SEGMENTS

FCX has organized its continuing mining operations into four primary divisions – North America copper mines, South America mining, Indonesia mining and Molybdenum mines, and operating segments that meet certain thresholds are reportable segments. For oil and gas operations, FCX determines its operating segments on a country-by-country basis. Separately disclosed in the following table are FCX's reportable segments, which include the Morenci, Cerro Verde and Grasberg copper mines, the Rod & Refining operations, the Atlantic Copper Smelting & Refining operation and U.S. Oil & Gas operations.

FCX's reportable segments previously included Africa mining, which consisted of the Tenke mine located in the DRC. As discussed in Note 2, FCX has entered into a definitive agreement to sell its interest in TFHL, and as a result, Tenke has been removed from continuing operations and reported as discontinued operations for all periods presented.

On May 31, 2016, FCX completed the sale of an additional 13 percent undivided interest in the Morenci unincorporated joint venture. As a result, FCX's undivided interest in Morenci was prospectively reduced from 85 percent to 72 percent.    

Intersegment sales between FCX’s mining operations are based on similar arms-length transactions with third parties at the time of the sale. Intersegment sales may not be reflective of the actual prices ultimately realized because of a variety of factors, including additional processing, timing of sales to unaffiliated customers and transportation premiums. In addition, intersegment sales from Tenke to FCX's other consolidated subsidiaries have been eliminated in discontinued operations (refer to Note 2).

FCX defers recognizing profits on sales from its mines to other divisions, including Atlantic Copper (FCX's wholly owned smelter and refinery in Spain) and on 25 percent of PT-FI's sales to PT Smelting (PT-FI's 25 percent-owned smelter and refinery in Indonesia), until final sales to third parties occur. Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices result in variability in FCX's net deferred profits and quarterly earnings.

FCX allocates certain operating costs, expenses and capital expenditures to its operating divisions and individual segments. However, not all costs and expenses applicable to an operation are allocated. U.S. federal and state income taxes are recorded and managed at the corporate level (included in Corporate, Other & Eliminations), whereas foreign income taxes are recorded and managed at the applicable country level. In addition, most mining exploration and research activities are managed on a consolidated basis, and those costs, along with some selling, general and administrative costs, are not allocated to the operating divisions or individual segments. Accordingly, the following segment information reflects management determinations that may not be indicative of what the actual financial performance of each operating division or segment would be if it was an independent entity.

Financial Information by Business Segments

(In millions)	Mining Operations
	North America Copper Mines								South America								Indonesia
																										Atlantic		Other											Corporate,
																				Molyb-						Copper		Mining							U.S.				Other
									Cerro											denum				Rod &		Smelting		& Elimi-				Total			Oil & Gas				& Elimi-				FCX
	Morenci		Other				Total		Verde		Other				Total		Grasberg			Mines				Refining		& Refining		nations				Mining			Operations				nations				Total
Three Months Ended September 30, 2016
Revenues:
Unaffiliated customers	$	115	$	112			$	227	$	505	$	112			$	617	$	984	a	$	—			$	930	$	445	$	247		b	$	3,450		$	427			$	—			$	3,877
Intersegment	358		499				857		54		—				54		2			46				7		—		(966		)		—			—				—				—
Production and delivery	275		458				733		333		91				424		478		c	51				931		416		(777		)		2,256			231			d	22			d	2,509
Depreciation, depletion and amortization	51		78				129		109		25				134		110			15				2		7		19				416			223				4				643
Impairment of oil and gas properties	—		—				—		—		—				—		—			—				—		—		—				—			238				1				239
Metals inventory adjustments	—		6				6		—		—				—		—			6				—		—		8				20			—				—				20
Selling, general and administrative expenses	1		—				1		1		1				2		24			—				—		5		3				35			31				44				110
Mining exploration and research expenses	—		1				1		—		—				—		—			—				—		—		12				13			—				—				13
Environmental obligations and
shutdown credits	—		—				—		—		—				—		—			—				—		—		(3		)		(3		)	—				—				(3		)
Net loss (gain) on sales of assets	1		—				1		—		—				—		—			—				—		—		—				1			(7		)		(7		)		(13		)
Operating income (loss)	145		68				213		116		(5		)		111		374			(26		)		4		17		19				712			(289		)		(64		)		359
Interest expense, net	1		—				1		21		—				21		—			—				—		3		21				46			102				39				187
Provision for (benefit from) income taxes	—		—				—		36		(4		)		32		158			—				—		—		—				190			—				(304		)		(114		)
Total assets at September 30, 2016	2,881		4,540				7,421		9,139		1,551				10,690		9,830			1,953				238		565		6,170			e	36,867			3,462				1,071				41,400			e
Capital expenditures	6		5				11		38		1				39		256			1				—		5		21			e	333			160				1				494
Three Months Ended September 30, 2015
Revenues:
Unaffiliated customers	$	165	$	58			$	223	$	238	$	187			$	425	$	557	a	$	—			$	946	$	438	$	267		b	$	2,856		$	525		f	$	1			$	3,382
Intersegment	332		614				946		13		—				13		52			83				5		1		(1,100		)		—			—				—				—
Production and delivery	357		616			c	973		177		167			c	344		417			83			c	946		410		(873		)	c	2,300			293			d	2			c	2,595
Depreciation, depletion and amortization	51		85				136		57		32				89		90			26				2		10		16				369			450				4				823
Impairment of oil and gas properties	—		—				—		—		—				—		—			—				—		—		—				—			3,480				172			g	3,652
Metals inventory adjustments	—		55				55		—		—				—		—			3				—		—		33				91			—				—				91
Selling, general and administrative expenses	1		—				1		1		—				1		24			—				—		4		5				35			37				50				122
Mining exploration and research expenses	—		1				1		—		—				—		—			—				—		—		25				26			—				—				26
Environmental obligations and shutdown costs	—		3				3		—		—				—		—			—				—		—		33				36			—				1				37
Operating income (loss)	88		(88		)		—		16		(12		)		4		78			(29		)		3		15		(72		)		(1		)	(3,735		)		(228		)		(3,964		)
Interest expense, net	1		—				1		—		—				—		—			—				—		3		19				23			51				83				157
Provision for (benefit from) income taxes	—		—				—		—		2				2		21			—				—		—		—				23			—				(372		)		(349		)
Total assets at September 30, 2015	3,720		5,159				8,879		9,136		1,843				10,979		8,965			2,017				235		699		6,426			e	38,200			11,911				272				50,383			e
Capital expenditures	61		33				94		421		16				437		222			3				1		10		78			e	845			635			h	47				1,527

a. Includes PT-FI’s sales to PT Smelting totaling $348 million in third-quarter2016 and $61 million in third-quarter2015.

b. Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North and South America copper mines.

c. Third-quarter 2016 includes asset retirement charges of $17 million at Indonesia mining. Third-quarter 2015 includes asset impairment and restructuring charges totaling $75 million at other North America copper mines, and restructuring charges totaling $11 million at other South America copper mines, $2 million at Molybdenum mines, $2 million at Other Mining & Eliminations and $2 million at Corporate, Other & Eliminations.

d. Includes net charges for oil and gas operations totaling $50 million in third-quarter2016 and $21 million in third-quarter2015, primarily for idle rig costs, inventory adjustments, asset impairments and other net charges.

e. Includes (i) assets held for sale totaling $4.7 billion at September 30, 2016, and $4.9 billion at September 30, 2015, and (ii) capital expenditures totaling $15 million in third-quarter2016 and $69 million in third-quarter2015 associated with discontinued operations. Refer to Note 2 for a summary of the results of discontinued operations.

f. Includes net mark-to-market gains of $29 million associated with crude oil derivative contracts.

g. Reflects impairment charges for international oil and gas properties primarily in Morocco.

h. Excludes international oil and gas capital expenditures totaling $37 million, primarily related to the Morocco oil and gas properties, which are included in Corporate, Other & Eliminations.

(In millions)	Mining Operations
	North America Copper Mines										South America								Indonesia
																												Atlantic		Other											Corporate,
																						Molyb-						Copper		Mining							U.S.				Other
											Cerro											denum				Rod &		Smelting		& Elimi-				Total			Oil & Gas				& Elimi-				FCX
	Morenci			Other				Total			Verde		Other				Total		Grasberg			Mines				Refining		& Refining		nations				Mining			Operations				nations				Total
Nine Months Ended September 30, 2016
Revenues:
Unaffiliated customers	$	356		$	211			$	567		$	1,485	$	379			$	1,864	$	2,014	a	$	—			$	2,820	$	1,360	$	696		b	$	9,321		$	1,132			$	—			$	10,453
Intersegment	1,119			1,594				2,713			155		—				155		59			136				22		3		(3,088		)		—			—				—				—
Production and delivery	913			1,334				2,247			927		313				1,240		1,228		c	147				2,820		1,275		(2,562		)		6,395			1,527			d	35			d	7,957
Depreciation, depletion and amortization	170			237				407			319		83				402		284			51				7		22		57				1,230			696				11				1,937
Impairment of oil and gas properties	—			—				—			—		—				—		—			—				—		—		—				—			4,299				18			e	4,317
Metals inventory adjustments	—			6				6			—		—				—		—			12				—		—		9				27			—				—				27
Selling, general and administrative expenses	2			2				4			5		1				6		60			—				—		13		9				92			161			f	155				408
Mining exploration and research expenses	—			2				2			—		—				—		—			—				—		—		44				46			—				—				46
Environmental obligations and shutdown costs	—			—				—			—		—				—		—			—				—		—		17				17			—				1				18
Net gain on sales of assets	(576		)	—				(576		)	—		—				—		—			—				—		—		(172		)		(748		)	(7		)		(7		)		(762		)
Operating income (loss)	966			224				1,190			389		(18		)		371		501			(74		)		15		53		206				2,262			(5,544		)		(213		)		(3,495		)
Interest expense, net	2			1				3			63		—				63		—			—				—		11		60				137			266				171				574
Provision for (benefit from) income taxes	—			—				—			126		(12		)		114		212			—				—		—		—				326			—				(247		)		79
Capital expenditures	71			16				87			329		3				332		715			2				1		12		84			g	1,233			1,028			h	48				2,309
Nine Months Ended September 30, 2015
Revenues:
Unaffiliated customers	$	451		$	265			$	716		$	681	$	639			$	1,320	$	1,969	a	$	—			$	3,097	$	1,473	$	921		b	$	9,496		$	1,594		i	$	1			$	11,091
Intersegment	1,209			1,984				3,193			64		(7		)	j	57		37			298				20		12		(3,617		)		—			—				—				—
Production and delivery	1,117			1,750			c	2,867			540		464			c	1,004		1,311			247			c	3,097		1,397		(2,925		)	c	6,998			857			d	7			c	7,862
Depreciation, depletion and amortization	157			251				408			134		102				236		238			77				7		29		51				1,046			1,465				11				2,522
Impairment of oil and gas properties	—			—				—			—		—				—		—			—				—		—		—				—			9,270				172			e	9,442
Metals inventory adjustments	—			66				66			—		—				—		—			6				—		—		82				154			—				—				154
Selling, general and administrative expenses	2			2				4			2		1				3		74			—				—		13		16				110			140				171				421
Mining exploration and research expenses	—			6				6			—		—				—		—			—				—		—		77				83			—				—				83
Environmental obligations and shutdown costs	—			3				3			—		—				—		—			—				—		—		57				60			—				1				61
Net gain on sales of assets	—			(39		)		(39		)	—		—				—		—			—				—		—		—				(39		)	—				—				(39		)
Operating income (loss)	384			210				594			69		65				134		383			(32		)		13		46		(54		)		1,084			(10,138		)		(361		)		(9,415		)
Interest expense, net	2			1				3			1		—				1		—			—				—		8		57				69			129				240				438
Provision for (benefit from) income taxes	—			—				—			—		32				32		145			—				—		—		—				177			—				(1,939		)		(1,762		)
Capital expenditures	224			84				308			1,296		43				1,339		660			10				2		18		197			g	2,534			2,430			h	91				5,055

a. Includes PT-FI's sales to PT Smelting totaling $912 million for the first nine months of 2016 and $704 million for the first nine months of 2015.

b. Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North and South America copper mines.

c. The first nine months of 2016 include asset retirement charges of $17 million at Indonesia mining. The first nine months of 2015 includes asset impairment and restructuring charges totaling $75 million at other North America copper mines, and restructuring charges totaling $11 million at other South America copper mines, $2 million at Molybdenum mines, $2 million at Other Mining & Eliminations and $2 million at Corporate, Other & Eliminations.

d. Includes charges for oil and gas operations totaling $942 million for the first nine months of 2016 and $59 million for the first nine months of 2015, primarily for drillship settlement/idle rig costs, inventory adjustments, asset impairments and other net charges.

e. Reflects impairment charges for international oil and gas properties primarily in Morocco.

f. Includes $38 million for net restructuring-related charges.

g. Includes capital expenditures of $70 million for the first nine months of 2016 and $166 million for the first nine months of 2015 associated with discontinued operations. Refer to Note 2 for a summary of the results of discontinued operations.

h. Excludes international oil and gas capital expenditures totaling $47 million for the first nine months of 2016 and $81 million for the first nine months of 2015, primarily related to the Morocco oil and gas properties, which are included in Corporate, Other & Eliminations.

i. Includes net mark-to-market gains of $87 million associated with crude oil derivative contracts.

j. Reflects net reductions for provisional pricing adjustments to prior period open sales. There were no intersegment sales from El Abra for the first nine months of 2015.