Business Segments (Tables)

6 Months Ended

Jun. 30, 2018

Revenue from External Customers by Products and Services

FCX’s revenues attributable to the products it sold for the second quarters and first six months of 2018 and 2017 follow (in millions):



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Copper:
Concentrate	$	1,703		$	1,241		$	3,350		$	2,222
Cathode	1,465			954			2,888			1,995
Rod and other refined copper products	668			590			1,338			1,214
Gold	933			571			1,741			839
Molybdenum	310			239			596			448
Other^a	400			281			798			512
Adjustments to revenue:
Treatment charges	(139		)	(128		)	(271		)	(231		)
Royalty expense^b	(73		)	(44		)	(142		)	(66		)
Export duties^c	(55		)	(27		)	(101		)	(41		)
Revenue from contracts with customers	5,212			3,677			10,197			6,892
Embedded derivatives^d	(44		)	34			(161		)	160
Total consolidated revenues	$	5,168		$	3,711		$	10,036		$	7,052


a.	Primarily includes revenues associated with cobalt, silver, oil, gas and natural gas liquids.


b.	Reflects royalties for sales from PT-FI and Cerro Verde that will vary with the volume of metal sold and the prices of copper and gold.


c.	Reflects PT-FI export duties.


d.	Refer to Note 6 for discussion of embedded derivatives related to FCX’s provisionally priced concentrate and cathode sales contracts.

Schedule of financial information by business segment

Financial Information by Business Segment




(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			nations^a				Total
Three Months Ended June 30, 2018
Revenues:
Unaffiliated customers	$	25	$	13	$	38	$	719	$	171	$	890	$	1,639	^b	$	—		$	1,387	$	602		$	612		^c	$	5,168
Intersegment	568		641		1,209		100		—		100		1			111			8		—			(1,429		)		—
Production and delivery	298		491		789		445		133		578		425			71			1,389		579			(916		)		2,915
Depreciation, depletion and amortization	44		48		92		109		24		133		172			21			3		7			14				442
Selling, general and administrative expenses	1		—		1		2		—		2		28			—			—		5			73				109
Mining exploration and research expenses	—		—		—		—		—		—		—			—			—		—			24				24
Environmental obligations and shutdown costs	—		—		—		—		—		—		—			—			—		—			59				59
Net gain on sales of assets	—		—		—		—		—		—		—			—			—		—			(45		)		(45		)
Operating income (loss)	250		115		365		263		14		277		1,015			19			3		11			(26		)		1,664

Interest expense, net	1		—		1		16		—		16		—			—			—		6			119				142
Provision for (benefit from) income taxes	—		—		—		102		6		108		429			—			—		—			(22		)		515
Total assets at June 30, 2018	2,819		4,374		7,193		8,630		1,715		10,345		10,911			1,820			278		931			5,550			^d	37,028
Capital expenditures	41		99		140		68		3		71		246			1			1		3			20				482

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	266		454		720		376		87		463		547		^e	58			1,047		400			(755		)		2,480			^f
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		^e	—			—		4			69				107
Mining exploration and research expenses	—		1		1		—		—		—		—			—			—		—			18				19
Environmental obligations and shutdown costs	—		—		—		—		—		—		—			—			—		—			(21		)		(21		)
Net gain on sales of assets	—		—		—		—		—		—		—			—			—		—			(10		)		(10		)
Operating income (loss)	207		101		308		141		3		144		335			(6		)	2		(11		)	(86		)		686

Interest expense, net	—		1		1		15		—		15		—			—			—		4			142				162
Provision for (benefit from) income taxes	—		—		—		56		2		58		135			—			—		2			(9		)		186
Total assets at June 30, 2017	2,830		4,314		7,144		8,828		1,479		10,307		10,769			1,900			253		739			5,931			^d	37,043
Capital expenditures	29		10		39		29		1		30		213			1			1		17			61				362


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


b.	Includes PT-FI's sales to PT Smelting totaling $649 million in second-quarter 2018 and $536 million in second-quarter 2017.


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 assets held for sale, primarily Freeport Cobalt, totaling $625 million at June 30, 2018, and $373 million at June 30, 2017.


e.	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.


f.	Includes a $15 million decrease related to the adoption of the new guidance for the presentation of net periodic benefit cost for pension and other postretirement benefit plans (refer to Note 11 for further discussion).




(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			nations^a				Total
Six Months Ended June 30, 2018
Revenues:
Unaffiliated customers	$	28	$	28	$	56	$	1,344	$	321	$	1,665	$	3,160	^b	$	—		$	2,772	$	1,179		$	1,204		^c	$	10,036
Intersegment	1,169		1,330		2,499		202		—		202		53			206			16		2			(2,978		)		—
Production and delivery	588		992		1,580		872		249		1,121		882			138			2,777		1,135			(1,910		)		5,723
Depreciation, depletion and amortization	90		96		186		214		46		260		353			40			5		14			35				893
Selling, general and administrative expenses	2		2		4		4		—		4		67			—			—		11			154				240
Mining exploration and research expenses	—		1		1		—		—		—		—			—			—		—			44				45
Environmental obligations and shutdown costs	—		—		—		—		—		—		—			—			—		—			68				68
Net gain on sales of assets	—		—		—		—		—		—		—			—			—		—			(56		)		(56		)
Operating income (loss)	517		267		784		456		26		482		1,911			28			6		21			(109		)		3,123

Interest expense, net	2		—		2		33		—		33		—			—			—		11			247				293
Provision for income taxes	—		—		—		170		10		180		830			—			—		1			10				1,021
Capital expenditures	88		144		232		131		7		138		449			2			2		7			54				884

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	523		863		1,386		767		169		936		817		^d	110			2,156		836			(1,573		)		4,668			^e
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		^d	—			—		9			182				258
Mining exploration and research expenses	—		2		2		—		—		—		—			—			—		—			31				33
Environmental obligations and shutdown costs	—		—		—		—		—		—		—			—			—		—			4				4
Net gain on sales of assets	—		—		—		—		—		—		—			—			—		—			(33		)		(33		)
Operating income (loss)	385		234		619		392		12		404		486			(14		)	6		(1		)	(217		)		1,283

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				706


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


b.	Includes PT-FI’s sales to PT Smelting totaling $1.3 billion for the first six months of 2018 and $794 million for the first six months of 2017.


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 $103 million in production and delivery costs and $5 million in selling, general and administrative expenses.


e.	Includes a $27 million decrease related to the adoption of the new guidance for the presentation of net periodic benefit cost for pension and other postretirement benefit plans (refer to Note 11 for further discussion).