GUARANTOR FINANCIAL STATEMENTS

All of the senior notes issued by FCX are fully and unconditionally guaranteed on a senior basis jointly and severally by FM O&G LLC, as guarantor, which is a 100-percent-owned subsidiary of 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 FCX’s 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 may be released or terminated for certain obligations under the following circumstances: (i) all or substantially all of the equity interests or assets of FM O&G LLC are sold to a third party; or (ii) FM O&G LLC no longer has any obligations under any FM O&G senior notes or any refinancing thereof and no longer guarantees any obligations of FCX under the revolving credit facility or any other senior debt or, in each case, any refinancing thereof.

The following condensed consolidating financial information includes information regarding FCX, as issuer, FM O&G LLC, as guarantor, and all other non-guarantor subsidiaries of FCX. Included are the condensed consolidating balance sheets at March 31, 2017, and December 31, 2016, and the related condensed consolidating statements of comprehensive income (loss) and the condensed consolidating statements of cash flows for the three months ended March 31, 2017 and 2016 (in millions), which should be read in conjunction with FCX’s notes to the consolidated financial statements.

CONDENSED CONSOLIDATING BALANCE SHEET

March 31, 2017



	FCX			FM O&G LLC			Non-guarantor					Consolidated
	Issuer			Guarantor			Subsidiaries		Eliminations			FCX
ASSETS
Current assets, other than assets held for sale	$	176		$	717		$	9,176	$	(710	)	$	9,359
Current assets held for sale	—			—			408		—			408
Property, plant, equipment and mine development costs, net	17			15			23,086		(1		)	23,117
Oil and gas properties, subject to amortization, less accumulated amortization and impairments	—			—			57		—			57
Investments in consolidated subsidiaries	19,865			—			—		(19,865		)	—
Other assets	542			37			3,578		(522		)	3,635
Total assets	$	20,600		$	769		$	36,305	$	(21,098	)	$	36,576

LIABILITIES AND EQUITY
Current liabilities, other than liabilities held for sale	$	2,360		$	171		$	2,842	$	(787	)	$	4,586
Current liabilities held for sale	—			—			256		—			256
Long-term debt, less current portion	11,032			6,297			5,576		(9,770		)	13,135
Deferred income taxes	829		^a	—			2,957		—			3,786
Environmental and asset retirement obligations, less current portion	—			201			3,306		—			3,507
Investments in consolidated subsidiaries	—			844			10,090		(10,934		)	—
Other liabilities	61			3,346			1,798		(3,486		)	1,719
Total liabilities	14,282			10,859			26,825		(24,977		)	26,989

Equity:
Stockholders’ equity	6,318			(10,090		)	6,828		3,262			6,318
Noncontrolling interests	—			—			2,652		617			3,269
Total equity	6,318			(10,090		)	9,480		3,879			9,587
Total liabilities and equity	$	20,600		$	769		$	36,305	$	(21,098	)	$	36,576


a.	All U.S.-related deferred income taxes are recorded at the parent company.

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2016



	FCX			FM O&G LLC			Non-guarantor					Consolidated
	Issuer			Guarantor			Subsidiaries		Eliminations			FCX
ASSETS
Current assets, other than assets held for sale	$	230		$	1,790		$	11,331	$	(3,260	)	$	10,091
Current assets held for sale	—			—			344		—			344
Property, plant, equipment and mine development costs, net	19			24			23,176		—			23,219
Oil and gas properties, subject to amortization, less accumulated amortization and impairments	—			—			74		—			74
Investments in consolidated subsidiaries	21,110			—			—		(21,110		)	—
Other assets	1,985			47			3,522		(1,965		)	3,589
Total assets	$	23,344		$	1,861		$	38,447	$	(26,335	)	$	37,317

LIABILITIES AND EQUITY
Current liabilities, other than liabilities held for sale	$	3,895		$	308		$	3,101	$	(3,244	)	$	4,060
Current liabilities held for sale	—			—			205		—			205
Long-term debt, less current portion	12,517			6,062			11,297		(15,081		)	14,795
Deferred income taxes	826		^a	—			2,942		—			3,768
Environmental and asset retirement obligations, less current portion	—			200			3,287		—			3,487
Investment in consolidated subsidiary	—			893			8,995		(9,888		)	—
Other liabilities	55			3,393			1,784		(3,487		)	1,745
Total liabilities	17,293			10,856			31,611		(31,700		)	28,060

Equity:
Stockholders’ equity	6,051			(8,995		)	4,237		4,758			6,051
Noncontrolling interests	—			—			2,599		607			3,206
Total equity	6,051			(8,995		)	6,836		5,365			9,257
Total liabilities and equity	$	23,344		$	1,861		$	38,447	$	(26,335	)	$	37,317


a.	All U.S.-related deferred income taxes are recorded at the parent company.

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)



Three Months Ended March 31, 2017
	FCX			FM O&G LLC			Non-guarantor						Consolidated
	Issuer			Guarantor			Subsidiaries			Eliminations			FCX
Revenues	$	—		$	13		$	3,328		$	—		$	3,341
Total costs and expenses	9			50			2,700			2			2,761
Operating (loss) income	(9		)	(37		)	628			(2		)	580
Interest expense, net	(122		)	(53		)	(71		)	79			(167		)
Other income (expense), net	79			—			25			(79		)	25
(Loss) income before income taxes and equity in affiliated companies’ net earnings (losses)	(52		)	(90		)	582			(2		)	438
(Provision for) benefit from income taxes	(60		)	31			(146		)	1			(174		)
Equity in affiliated companies’ net earnings (losses)	340			20			(36		)	(320		)	4
Net income (loss) from continuing operations	228			(39		)	400			(321		)	268
Net income from discontinued operations	—			—			38			—			38
Net income (loss)	228			(39		)	438			(321		)	306
Net income attributable to noncontrolling interests:
Continuing operations	—			—			(65		)	(10		)	(75		)
Discontinued operations	—			—			(3		)	—			(3		)
Net income (loss) attributable to common stockholders	$	228		$	(39	)	$	370		$	(331	)	$	228

Other comprehensive income (loss)	11			—			11			(11		)	11
Total comprehensive income (loss)	$	239		$	(39	)	$	381		$	(342	)	$	239



Three Months Ended March 31, 2016
	FCX			FM O&G LLC				Non-guarantor							Consolidated
	Issuer			Guarantor				Subsidiaries				Eliminations			FCX
Revenues	$	—		$	78			$	3,164			$	—		$	3,242
Total costs and expenses	27			1,629			^a	5,452			^a	6			7,114
Operating loss	(27		)	(1,551		)		(2,288		)		(6		)	(3,872		)
Interest expense, net	(137		)	(4		)		(114		)		64			(191		)
Other income (expense), net	50			—				40				(54		)	36
(Loss) income before income taxes and equity in affiliated companies’ net (losses) earnings	(114		)	(1,555		)		(2,362		)		4			(4,027		)
(Provision for) benefit from income taxes	(1,784		)	616				1,088				3			(77		)
Equity in affiliated companies’ net (losses) earnings	(2,286		)	(2,704		)		(3,630		)		8,627			7
Net (loss) income from continuing operations	(4,184		)	(3,643		)		(4,904		)		8,634			(4,097		)
Net income (loss) from discontinued operations	—			—				6				(10		)	(4		)
Net (loss) income	(4,184		)	(3,643		)		(4,898		)		8,624			(4,101		)
Net income and preferred dividends attributable to noncontrolling interests:
Continuing operations	—			—				(67		)		(6		)	(73		)
Discontinued operations	—			—				(10		)		—			(10		)
Net (loss) income attributable to common stockholders	$	(4,184	)	$	(3,643	)		$	(4,975	)		$	8,618		$	(4,184	)

Other comprehensive income (loss)	—			—				—				—			—
Total comprehensive (loss) income	$	(4,184	)	$	(3,643	)		$	(4,975	)		$	8,618		$	(4,184	)


a.	Includes charges totaling $1.3 billion at the FM O&G LLC guarantor and $2.5 billion at the non-guarantor subsidiaries related to impairment of FCX’s oil and gas properties pursuant to full cost accounting rules.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



Three Months Ended March 31, 2017	FCX			FM O&G LLC			Non-guarantor						Consolidated
	Issuer			Guarantor			Subsidiaries			Eliminations			FCX
Net cash (used in) provided by operating activities	$	(112	)	$	(200	)	$	1,104		$	—		$	792

Cash flow from investing activities:
Capital expenditures	—			(10		)	(334		)	—			(344		)
Intercompany loans	(277		)	—			—			277			—
Dividends from (investments in) consolidated subsidiaries	894			—			26			(920		)	—
Asset sales and other, net	—			(23		)	2			—			(21		)
Net cash provided by (used in) investing activities	617			(33		)	(306		)	(643		)	(365		)

Cash flow from financing activities:
Proceeds from debt	—			—			157			—			157
Repayments of debt	(499		)	—			(316		)	—			(815		)
Intercompany loans	—			236			41			(277		)	—
Cash dividends paid and contributions received, net	(1		)	—			(895		)	880			(16		)
Other, net	(5		)	(6		)	(34		)	40			(5		)
Net cash (used in) provided by financing activities	(505		)	230			(1,047		)	643			(679		)

Net decrease in cash and cash equivalents	—			(3		)	(249		)	—			(252		)
Decrease in cash and cash equivalents in assets held for sale	—			—			8			—			8
Cash and cash equivalents at beginning of period	—			3			4,242			—			4,245
Cash and cash equivalents at end of period	$	—		$	—		$	4,001		$	—		$	4,001



Three Months Ended March 31, 2016	FCX			FM O&G LLC			Non-guarantor						Consolidated
	Issuer			Guarantor			Subsidiaries			Eliminations			FCX
Net cash (used in) provided by operating activities	$	(117	)	$	(32	)	$	884		$	5		$	740

Cash flow from investing activities:
Capital expenditures	—			(244		)	(736		)	(2		)	(982		)
Intercompany loans	(561		)	(377		)	—			938			—
Dividends from (investments in) consolidated subsidiaries	358			(41		)	35			(352		)	—
Other, net	—			2			—			—			2
Net cash (used in) provided by investing activities	(203		)	(660		)	(701		)	584			(980		)

Cash flow from financing activities:
Proceeds from debt	1,060			—			736			—			1,796
Repayments of debt	(750		)	—			(692		)	—			(1,442		)
Intercompany loans	—			716			222			(938		)	—
Net proceeds from sale of common stock	32			—			42			(42		)	32
Cash dividends paid and contributions received, net	(4		)	—			(373		)	355			(22		)
Other, net	(18		)	(24		)	(11		)	36			(17		)
Net cash provided by (used in) financing activities	320			692			(76		)	(589		)	347

Net increase in cash and cash equivalents	—			—			107			—			107
Increase in cash and cash equivalents in assets held for sale	—			—			(53		)	—			(53		)
Cash and cash equivalents at beginning of period	—			—			177			—			177
Cash and cash equivalents at end of period	$	—		$	—		$	231		$	—		$	231