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 June 30, 2017, and December 31, 2016, and the related condensed consolidating statements of comprehensive income (loss) for the three and six months ended June 30, 2017 and 2016, and the condensed consolidating statements of cash flows for the six months ended June 30, 2017 and 2016 (in millions), which should be read in conjunction with FCX’s notes to the consolidated financial statements.

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2017



	FCX			FM O&G LLC			Non-guarantor					Consolidated
	Issuer			Guarantor			Subsidiaries		Eliminations			FCX
ASSETS
Current assets	$	212		$	738		$	10,246	$	(779	)	$	10,417
Property, plant, equipment and mine development costs, net	16			15			23,047		(11		)	23,067
Oil and gas properties, subject to amortization, less accumulated amortization and impairments	—			—			48		—			48
Investments in consolidated subsidiaries	20,379			—			—		(20,379		)	—
Other assets	508			37			3,458		(492		)	3,511
Total assets	$	21,115		$	790		$	36,799	$	(21,661	)	$	37,043

LIABILITIES AND EQUITY
Current liabilities	$	2,497		$	129		$	3,183	$	(865	)	$	4,944
Long-term debt, less current portion	11,028			6,397			5,613		(9,900		)	13,138
Deferred income taxes	859		^a	—			3,011		—			3,870
Environmental and asset retirement obligations, less current portion	—			204			3,308		—			3,512
Investments in consolidated subsidiaries	—			870			10,152		(11,022		)	—
Other liabilities	59			3,342			1,671		(3,486		)	1,586
Total liabilities	14,443			10,942			26,938		(25,273		)	27,050

Equity:
Stockholders’ equity	6,672			(10,152		)	7,186		2,967			6,673
Noncontrolling interests	—			—			2,675		645			3,320
Total equity	6,672			(10,152		)	9,861		3,612			9,993
Total liabilities and equity	$	21,115		$	790		$	36,799	$	(21,661	)	$	37,043


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	$	230		$	1,790		$	11,675	$	(3,260	)	$	10,435
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	$	3,895		$	308		$	3,306	$	(3,244	)	$	4,265
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 June 30, 2017
	FCX			FM O&G LLC			Non-guarantor						Consolidated
	Issuer			Guarantor			Subsidiaries			Eliminations			FCX
Revenues	$	—		$	12		$	3,699		$	—		$	3,711
Total costs and expenses	14			11			3,007			10			3,042
Operating (loss) income	(14		)	1			692			(10		)	669
Interest expense, net	(117		)	(55		)	(74		)	84			(162		)
Other income (expense), net	80			—			10			(84		)	6
(Loss) income before income taxes and equity in affiliated companies’ net earnings (losses)	(51		)	(54		)	628			(10		)	513
(Provision for) benefit from income taxes	(72		)	19			(136		)	3			(186		)
Equity in affiliated companies’ net earnings (losses)	391			(26		)	(62		)	(304		)	(1		)
Net income (loss) from continuing operations	268			(61		)	430			(311		)	326
Net income from discontinued operations	—			—			9			—			9
Net income (loss)	268			(61		)	439			(311		)	335
Net income attributable to noncontrolling interests:
Continuing operations	—			—			(46		)	(20		)	(66		)
Discontinued operations	—			—			(1		)	—			(1		)
Net income (loss) attributable to common stockholders	$	268		$	(61	)	$	392		$	(331	)	$	268

Other comprehensive income (loss)	81			—			81			(81		)	81
Total comprehensive income (loss)	$	349		$	(61	)	$	473		$	(412	)	$	349




Three Months Ended June 30, 2016
	FCX			FM O&G LLC				Non-guarantor							Consolidated
	Issuer			Guarantor				Subsidiaries				Eliminations			FCX
Revenues	$	—		$	106			$	3,228			$	—		$	3,334
Total costs and expenses	17			964			^a	2,335			^a	—			3,316
Operating (loss) income	(17		)	(858		)		893				—			18
Interest expense, net	(141		)	(15		)		(124		)		84			(196		)
Other income (expense), net	107			—				28				(71		)	64
(Loss) income before income taxes and equity in affiliated companies’ net (losses) earnings	(51		)	(873		)		797				13			(114		)
(Provision for) benefit from income taxes	(345		)	306				(69		)		(8		)	(116		)
Equity in affiliated companies’ net (losses) earnings	(90		)	(280		)		(853		)		1,224			1
Net (loss) income from continuing operations	(486		)	(847		)		(125		)		1,229			(229		)
Net income (loss) from discontinued operations	5			—				(175		)		(11		)	(181		)
Net (loss) income	(481		)	(847		)		(300		)		1,218			(410		)
Net income and preferred dividends attributable to noncontrolling interests:
Continuing operations	—			—				(50		)		(7		)	(57		)
Discontinued operations	—			—				(12		)		—			(12		)
Net (loss) income attributable to common stockholders	$	(481	)	$	(847	)		$	(362	)		$	1,211		$	(479	)

Other comprehensive income (loss)	15			—				15				(15		)	15
Total comprehensive (loss) income	$	(466	)	$	(847	)		$	(347	)		$	1,196		$	(464	)


a.	Includes charges totaling $0.2 billion at the FM O&G LLC guarantor and $0.1 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 COMPREHENSIVE INCOME (LOSS)



Six Months Ended June 30, 2017
	FCX			FM O&G LLC			Non-guarantor						Consolidated
	Issuer			Guarantor			Subsidiaries			Eliminations			FCX
Revenues	$	—		$	25		$	7,027		$	—		$	7,052
Total costs and expenses	23			61			5,707			12			5,803
Operating (loss) income	(23		)	(36		)	1,320			(12		)	1,249
Interest expense, net	(239		)	(108		)	(145		)	163			(329		)
Other income (expense), net	159			—			35			(163		)	31
(Loss) income before income taxes and equity in affiliated companies’ net earnings (losses)	(103		)	(144		)	1,210			(12		)	951
(Provision for) benefit from income taxes	(132		)	50			(282		)	4			(360		)
Equity in affiliated companies’ net earnings (losses)	731			(6		)	(98		)	(624		)	3
Net income (loss) from continuing operations	496			(100		)	830			(632		)	594
Net income from discontinued operations	—			—			47			—			47
Net income (loss)	496			(100		)	877			(632		)	641
Net income attributable to noncontrolling interests:
Continuing operations	—			—			(111		)	(30		)	(141		)
Discontinued operations	—			—			(4		)	—			(4		)
Net income (loss) attributable to common stockholders	$	496		$	(100	)	$	762		$	(662	)	$	496

Other comprehensive income (loss)	92			—			92			(92		)	92
Total comprehensive income (loss)	$	588		$	(100	)	$	854		$	(754	)	$	588



Six Months Ended June 30, 2016
	FCX			FM O&G LLC				Non-guarantor							Consolidated
	Issuer			Guarantor				Subsidiaries				Eliminations			FCX
Revenues	$	—		$	184			$	6,392			$	—		$	6,576
Total costs and expenses	44			2,593			^a	7,787			^a	6			10,430
Operating loss	(44		)	(2,409		)		(1,395		)		(6		)	(3,854		)
Interest expense, net	(278		)	(19		)		(238		)		148			(387		)
Other income (expense), net	157			—				68				(125		)	100
(Loss) income before income taxes and equity in affiliated companies’ net (losses) earnings	(165		)	(2,428		)		(1,565		)		17			(4,141		)
(Provision for) benefit from income taxes	(2,128		)	922				1,019				(6		)	(193		)
Equity in affiliated companies’ net (losses) earnings	(2,376		)	(2,984		)		(4,483		)		9,851			8
Net (loss) income from continuing operations	(4,669		)	(4,490		)		(5,029		)		9,862			(4,326		)
Net income (loss) from discontinued operations	5			—				(169		)		(21		)	(185		)
Net (loss) income	(4,664		)	(4,490		)		(5,198		)		9,841			(4,511		)
Net income and preferred dividends attributable to noncontrolling interests:
Continuing operations	—			—				(117		)		(13		)	(130		)
Discontinued operations	—			—				(22		)		—			(22		)
Net (loss) income attributable to common stockholders	$	(4,664	)	$	(4,490	)		$	(5,337	)		$	9,828		$	(4,663	)

Other comprehensive income (loss)	15			—				15				(15		)	15
Total comprehensive (loss) income	$	(4,649	)	$	(4,490	)		$	(5,322	)		$	9,813		$	(4,648	)


a.	Includes charges totaling $1.5 billion at the FM O&G LLC guarantor and $2.6 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



Six Months Ended June 30, 2017	FCX			FM O&G LLC			Non-guarantor						Consolidated
	Issuer			Guarantor			Subsidiaries			Eliminations			FCX
Net cash (used in) provided by operating activities	$	(96	)	$	(284	)	$	2,209		$	—		$	1,829

Cash flow from investing activities:
Capital expenditures	—			(23		)	(683		)	—			(706		)
Intercompany loans	(427		)	—			—			427			—
Dividends from (investments in) consolidated subsidiaries	1,032			(16		)	62			(1,078		)	—
Asset sales and other, net	—			(5		)	1			—			(4		)
Net cash provided by (used in) investing activities	605			(44		)	(620		)	(651		)	(710		)

Cash flow from financing activities:
Proceeds from debt	—			—			606			—			606
Repayments of debt	(499		)	—			(751		)	—			(1,250		)
Intercompany loans	—			337			90			(427		)	—
Cash dividends paid and contributions received, net	(2		)	—			(1,064		)	1,025			(41		)
Other, net	(8		)	(9		)	(55		)	53			(19		)
Net cash (used in) provided by financing activities	(509		)	328			(1,174		)	651			(704		)

Net increase in cash and cash equivalents	—			—			415			—			415
Decrease in cash and cash equivalents in assets held for sale	—			—			7			—			7
Cash and cash equivalents at beginning of period	—			3			4,242			—			4,245
Cash and cash equivalents at end of period	$	—		$	3		$	4,664		$	—		$	4,667



Six Months Ended June 30, 2016	FCX			FM O&G LLC			Non-guarantor						Consolidated
	Issuer			Guarantor			Subsidiaries			Eliminations			FCX
Net cash (used in) provided by operating activities	$	(173	)	$	(90	)	$	1,875		$	2		$	1,614

Cash flow from investing activities:
Capital expenditures	—			(433		)	(1,380		)	(2		)	(1,815		)
Intercompany loans	(994		)	(493		)	—			1,487			—
Dividends from (investments in) consolidated subsidiaries	1,935			(41		)	78			(1,972		)	—
Asset sales and other, net	—			91			1,189			—			1,280
Net cash provided by (used in) investing activities	941			(876		)	(113		)	(487		)	(535		)

Cash flow from financing activities:
Proceeds from debt	1,505			—			1,306			—			2,811
Repayments of debt	(2,282		)	—			(1,367		)	—			(3,649		)
Intercompany loans	—			1,018			469			(1,487		)	—
Net proceeds from sale of common stock	32			—			42			(42		)	32
Cash dividends paid and contributions received, net	(5		)	—			(1,989		)	1,950			(44		)
Other, net	(18		)	(52		)	(17		)	64			(23		)
Net cash (used in) provided by financing activities	(768		)	966			(1,556		)	485			(873		)

Net increase in cash and cash equivalents	—			—			206			—			206
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	$	—		$	—		$	330		$	—		$	330