Income Taxes (Unaudited)

6 Months Ended

Jun. 30, 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 38 percent for the first six months of 2017 and (5) percent for first six months of 2016. Geographic sources of FCX’s provision for income taxes follow (in millions):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
U.S. operationsa	$	29		$	(49	)	$	22		$	(38	)
International operations	(215		)	(67		)	(382		)	(155		)
Total	$	(186	)	$	(116	)	$	(360	)	$	(193	)

a. Includes net tax credits of $32 million for second-quarter 2017 and $31 million for the first six months of 2017 associated with anticipated recovery of alternative minimum tax credit carryforwards. The second quarter and first six months of 2016 include net tax charges of $36 million associated with net operating loss carryback claims, partly offset by alternative minimum tax credits.

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 June 30, 2017.

As a result of the impairment to U.S. oil and gas properties, FCX recorded tax charges of $1.5 billion for the first six months of 2016 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 33 percent for the first six months of 2016 excluding these tax charges.