Income Taxes (Unaudited)

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate. FCX’s consolidated effective income tax rate was 40 percent for first-quarter2017 and (2) percent for first-quarter2016. Geographic sources of FCX’s provision for income taxes follow (in millions):

	Three Months Ended
	March 31,
	2017			2016
U.S. operations	$	(7	)	$	11
International operations	(167		)	(88		)
Total	$	(174	)	$	(77	)

Applicable accounting standards require that FCX estimate an annual effective tax rate and apply that rate to each year-to-date interim period. However, an exception is provided to exclude tax jurisdictions from the annual effective tax rate where losses are expected to be generated for which no tax benefit will be realized. Accordingly, U.S. operations have been excluded from the calculation of the estimated annual effective tax rate used to determine FCX’s income tax provision at March 31, 2017.

As a result of the impairment to U.S. oil and gas properties, FCX recorded tax charges of $1.4 billion in first-quarter2016 to establish a valuation allowance primarily against U.S. federal and state deferred tax assets that will not generate a future benefit. FCX’s consolidated effective income tax rate was 34 percent in first-quarter2016 excluding these tax charges.