BUSINESS SEGMENTS

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Business Segment

BUSINESS SEGMENTS

FCX has organized its 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. Separately disclosed in the following tables are FCX’s reportable segments, which include the Morenci, Cerro Verde and Grasberg (Indonesia Mining) copper mines, the Rod & Refining operations and Atlantic Copper Smelting & Refining.

FCX’s reportable segments previously included U.S. Oil & Gas operations. During 2016, FCX completed the sales of its Deepwater Gulf of Mexico, onshore California and Haynesville oil and gas properties, and in first-quarter 2017, completed the sale of its Madden property interests. The results of FCX’s U.S. oil and gas operations no longer qualify as a reportable segment, and oil and gas results for all periods presented have been included in Corporate, Other & Eliminations in the following tables. Refer to Note 2 of FCX’s annual report on Form 10-K for the year ended December 31, 2016, for additional information.

Intersegment sales between FCX’s business segments are based on terms similar to 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.

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)
																									Atlantic			Corporate,
	North America Copper Mines								South America																Copper			Other
									Cerro							Indonesia				Molybdenum			Rod &		Smelting			& Elimi-				FCX
	Morenci			Other		Total			Verde		Other			Total		Mining				Mines			Refining		& Refining			nationsa				Total
Three Months Ended June 30, 2017
Revenues:
Unaffiliated customers	$	45		$	32	$	77		$	567	$	111		$	678	$	1,065		b	$	—		$	1,046	$	400		$	445		c	$	3,711
Intersegment	478			593		1,071			57		—			57		—				71			6		—			(1,205		)		—
Production and delivery	268			457		725			376		87			463		554			d	59			1,048		400			(754		)	e	2,495
Depreciation, depletion and amortization	49			69		118			104		21			125		153				19			3		7			25				450
Selling, general and administrative expenses	1			—		1			3		—			3		30			d	—			—		4			69				107
Mining exploration and research expenses	—			1		1			—		—			—		—				—			—		—			18				19
Environmental obligations and shutdown costs	—			—		—			—		—			—		—				—			—		—			(19		)		(19		)
Net gain on sales of assets	—			—		—			—		—			—		—				—			—		—			(10		)		(10		)
Operating income (loss)	205			98		303			141		3			144		328				(7		)	1		(11		)	(89		)		669
Interest expense, net	—			1		1			15		—			15		—				—			—		4			142				162
Provision for (benefit from) income taxes	—			—		—			56		2			58		135				—			—		3			(10		)		186
Total assets at June 30, 2017	2,830			4,314		7,144			8,828		1,479			10,307		11,154				1,900			253		739			5,546			f	37,043
Capital expenditures	29			10		39			29		1			30		213				1			1		17			61			g	362
Three Months Ended June 30, 2016
Revenues:
Unaffiliated customers	$	79		$	43	$	122		$	494	$	123		$	617	$	532		b	$	—		$	919	$	493		$	651		c	$	3,334
Intersegment	404			534		938			60		—			60		(1		)	h	45			7		2			(1,051		)		—
Production and delivery	298			428		726			303		103			406		356				50			919		466			33			e	2,956
Depreciation, depletion and amortization	57			77		134			109		27			136		93				17			3		7			242				632
Impairment of oil and gas properties	—			—		—			—		—			—		—				—			—		—			291				291
Selling, general and administrative expenses	1			1		2			2		—			2		22				—			—		4			130			i	160
Mining exploration and research expenses	—			—		—			—		—			—		—				—			—		—			15				15
Environmental obligations and shutdown costs	—			—		—			—		—			—		—				—			—		—			11				11
Net gain on sales of assets	(577		)	—		(577		)	—		—			—		—				—			—		—			(172		)		(749		)
Operating income (loss)	704			71		775			140		(7		)	133		60				(22		)	4		18			(950		)		18
Interest expense, net	—			1		1			20		—			20		—				—			—		4			171				196
Provision for (benefit from) income taxes	—			—		—			45		(2		)	43		18				—			—		1			54				116
Total assets at June 30, 2016	2,960			4,676		7,636			9,330		1,609			10,939		9,499				1,969			217		607			10,429			f	41,296
Capital expenditures	37			5		42			135		1			136		231				—			—		5			419			g	833

a. Includes U.S. oil and gas operations, which were previously a reportable segment.

b. Includes PT-FI's sales to PT Smelting totaling $536 million in second-quarter2017 and $287 million in second-quarter2016.

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

d. Includes net charges at PT-FI associated with workforce reductions totaling $82 million in production and delivery costs and $5 million in selling, general and administrative expenses.

e. Includes net credits (charges) for oil and gas operations totaling $6 million in second-quarter2017, primarily associated with adjustments to the fair value of contingent payments for the 2016 drillship settlements and $(692) million in second-quarter2016 for drillship settlements, inventory adjustments and asset impairment.

f. Includes assets held for sale totaling $463 million at June 30, 2017, primarily associated with Freeport Cobalt and the Kisanfu exploration project, and $5.1 billion at June 30, 2016, which also included discontinued operations. Also includes assets associated with oil and gas operations of $316 million at June 30, 2017, and $3.9 billion at June 30, 2016.

g. Includes $14 million in second-quarter2017 and $392 million in second-quarter2016 associated with oil and gas operations. Second-quarter2016 also includes $20 million associated with discontinued operations.

h. Reflects net reductions for provisional pricing adjustments to prior period open sales. There were no intersegment sales from Grasberg in second-quarter 2016.

i. Includes other oil and gas net charges of $37 million in second-quarter2016 for net restructuring.

(In millions)
																									Atlantic			Corporate,
	North America Copper Mines									South America Mining															Copper			Other
										Cerro							Indonesia			Molybdenum			Rod &		Smelting			& Elimi-				FCX
	Morenci				Other		Total			Verde		Other			Total		Mining			Mines			Refining		& Refining			nationsa				Total
Six Months Ended June 30, 2017
Revenues:
Unaffiliated customers	$	111			$	82	$	193		$	1,207	$	223		$	1,430	$	1,599	b	$	—		$	2,153	$	858		$	819		c	$	7,052
Intersegment	894				1,156		2,050			173		—			173		—			134			14		—			(2,371		)		—
Production and delivery	528			d	870		1,398			767		169			936		827		e	111			2,158		836			(1,571		)	f	4,695
Depreciation, depletion and amortization	96				138		234			216		42			258		236			38			5		14			54				839
Selling, general and administrative expenses	1				1		2			5		—			5		60		e	—			—		9			184			g	260
Mining exploration and research expenses	—				2		2			—		—			—		—			—			—		—			32				34
Environmental obligations and shutdown costs	—				—		—			—		—			—		—			—			—		—			8				8
Net gain on sales of assets	—				—		—			—		—			—		—			—			—		—			(33		)		(33		)
Operating income (loss)	380				227		607			392		12			404		476			(15		)	4		(1		)	(226		)		1,249
Interest expense, net	1				1		2			31		—			31		—			—			—		8			288				329
Provision for (benefit from) income taxes	—				—		—			154		5			159		202			—			—		3			(4		)		360
Capital expenditures	52				15		67			43		2			45		457			2			2		25			108			h	706
Six Months Ended June 30, 2016
Revenues:
Unaffiliated customers	$	241			$	99	$	340		$	980	$	267		$	1,247	$	1,030	b	$	—		$	1,890	$	915		$	1,154		c	$	6,576
Intersegment	761				1,095		1,856			101		—			101		57			90			15		3			(2,122		)		—
Production and delivery	638				876		1,514			594		222			816		750			102			1,889		859			(475		)	f	5,455
Depreciation, depletion and amortization	119				159		278			210		58			268		174			36			5		15			518				1,294
Impairment of oil and gas properties	—				—		—			—		—			—		—			—			—		—			4,078				4,078
Selling, general and administrative expenses	1				2		3			4		—			4		36			—			—		8			247			g	298
Mining exploration and research expenses	—				1		1			—		—			—		—			—			—		—			32				33
Environmental obligations and shutdown costs	—				—		—			—		—			—		—			—			—		—			21				21
Net gain on sales of assets	(577		)		—		(577		)	—		—			—		—			—			—		—			(172		)		(749		)
Operating income (loss)	821				156		977			273		(13		)	260		127			(48		)	11		36			(5,217		)		(3,854		)
Interest expense, net	1				1		2			42		—			42		—			—			—		8			335				387
Provision for (benefit from) income taxes	—				—		—			90		(8		)	82		54			—			—		1			56				193
Capital expenditures	65				11		76			291		2			293		453			1			1		7			984			h	1,815

a. Includes U.S. oil and gas operations, which were previously a reportable segment.

b. Includes PT-FI’s sales to PT Smelting totaling $794 million for the first six months of 2017 and $564 million for the first six months of 2016.

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

d. Includes asset impairment charges totaling $21 million.

e. Includes net charges at PT-FI associated with workforce reductions totaling $103 million in production and delivery costs and $5 million in selling, general and administrative expenses.

f. Includes net credits (charges) for oil and gas operations totaling $26 million for the first six months of 2017, primarily associated with adjustments to the fair value of the contingent payments for the 2016 drillship settlements and $(892) million for the first six months of 2016 for drillship settlement/idle rig costs, inventory adjustments and asset impairment.

g. Includes other oil and gas charges of $17 million for the first six months of 2017 for other contract termination charges and $39 million for the first six months of 2016 for net restructuring charges.

h. Includes $33 million for the first six months of 2017 and $915 million for the first six months of 2016 associated with oil and gas operations. The first six months of 2016 also includes $55 million associated with discontinued operations.