Business Segments (Unaudited)

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Business Segments

BUSINESS SEGMENTS

FCX has organized its mining operations into five primary divisions – North America copper mines, South America mining, Indonesia mining, Africa mining and Molybdenum mines. Notwithstanding this structure, FCX internally reports information on a mine-by-mine basis for its mining operations. Therefore, FCX concluded that its operating segments include individual mines or operations relative to its mining operations. For oil and gas operations, FCX determines its operating segments on a country-by-country basis. Operating segments that meet certain thresholds are reportable segments, which are separately disclosed in the following table.

Intersegment Sales. Intersegment sales between FCX’s mining operations are based on similar 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.

Allocations. 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)	Mining Operations
	North America Copper Mines									South America								Indonesia			Africa
																													Atlantic		Other											Corporate,
																							Molyb-						Copper		Mining							U.S.				Other
			Other							Cerro		Other											denum				Rod &		Smelting		& Elimi-				Total			Oil & Gas				& Elimi-				FCX
	Morenci		Mines			Total				Verde		Minesa				Total		Grasberg			Tenke		Mines				Refining		& Refining		nations				Mining			Operations				nations				Total
Three Months Ended September 30, 2015
Revenues:
Unaffiliated customers	$	165	$	58		$	223			$	238	$	187			$	425	$	557	b	$	299	$	—			$	946	$	438	$	267		c	$	3,155		$	525		d	$	1			$	3,681
Intersegment	332		614			946				13		—				13		52			29		83				5		1		(1,129		)		—			—				—				—
Production and delivery	357		671			1,028			e	177		167			e	344		417			209		86			e	946		410		(842		)	e	2,598			293				2			e	2,893
Depreciation, depletion and amortization	51		85			136				57		32				89		90			65		26				2		10		16				434			450				4				888
Impairment of oil and gas properties	—		—			—				—		—				—		—			—		—				—		—		—				—			3,480				172			f	3,652
Selling, general and administrative expenses	1		—			1				1		—				1		24			2		—				—		4		5				37			37				50				124
Mining exploration and research expenses	—		1			1				—		—				—		—			—		—				—		—		31				32			—				—				32
Environmental obligations and shutdown costs	—		3			3				—		—				—		—			—		—				—		—		33				36			—				1				37
Operating income (loss)	88		(88		)	—				16		(12		)		4		78			52		(29		)		3		15		(105		)		18			(3,735		)		(228		)		(3,945		)
Interest expense, net	1		—			1				—		—				—		—			—		—				—		3		19				23			51				89				163
Provision for (benefit from) income taxes	—		—			—				—		2				2		21			6		—				—		—		—				29			—				(389		)		(360		)
Total assets at September 30, 2015	3,720		5,159			8,879				9,136		1,843				10,979		8,965			5,100		2,017				235		699		1,326				38,200			11,911				272				50,383
Capital expenditures	61		33			94				421		16				437		222			69		3				1		10		10				846			635			g	46				1,527
Three Months Ended September 30, 2014
Revenues:
Unaffiliated customers	$	140	$	79		$	219			$	295	$	441			$	736	$	1,086	b	$	379	$	—			$	1,219	$	597	$	470		c	$	4,706		$	990		d	$	—			$	5,696
Intersegment	428		843			1,271				63		48				111		167			49		173				8		4		(1,783		)		—			—				—				—
Production and delivery	341		561			902				178		293				471		700			206		86				1,220		578		(1,283		)		2,880			273				(1		)		3,152
Depreciation, depletion and amortization	51		82			133				41		61				102		92			58		25				2		11		15				438			504				3				945
Impairment of oil and gas properties	—		—			—				—		—				—		—			—		—				—		—		—				—			308				—				308
Selling, general and administrative expenses	—		1			1				—		1				1		27			3		—				—		4		7				43			55				60				158
Mining exploration and research expenses	—		2			2				—		—				—		—			—		—				—		—		27				29			—				—				29
Environmental obligations and shutdown costs	—		(5		)	(5		)		—		—				—		—			—		—				—		—		23				18			—				—				18
Net gain on sales of assets	—		(14		)	(14		)		—		—				—		—			—		—				—		—		(32		)		(46		)	—				—				(46		)
Operating income (loss)	176		295			471				139		134				273		434			161		62				5		8		(70		)		1,344			(150		)		(62		)		1,132
Interest expense, net	1		—			1				1		—				1		—			—		—				—		3		19				24			51				83				158
Provision for (benefit from) income taxes	—		—			—				47		95				142		181			36		—				—		—		—				359			—				(10		)		349
Total assets at September 30, 2014	3,689		5,742			9,431				7,006		3,721				10,727		8,537			5,010		2,089				282		948		1,025				38,049			25,328				498				63,875
Capital expenditures	158		30			188				416		23				439		243			40		12				1		3		11				937			908			g	8				1,853

a. Third-quarter 2014 includes the results of the Candelaria and Ojos del Salado mining operations, which were sold in November 2014.

b. Includes PT-FI’s sales to PT Smelting totaling $61 million in third-quarter2015 and $628 million in third-quarter2014.

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 and South America copper mines.

d. Includes net mark-to-market gains associated with crude oil and natural gas derivative contracts totaling $29 million in third-quarter2015 and $64 million in third-quarter2014.

e. Includes charges totaling $133 million at North America copper mines for inventory adjustments, impairments and restructuring, $11 million at other South America mines for restructuring, $5 million at Molybdenum mines and $35 million at other mining & eliminations for inventory adjustments and restructuring, and $2 million for restructuring at corporate, other & eliminations.

f. Primarily includes impairment charges for Morocco oil and gas properties.

g. Excludes capital expenditures totaling $37 million in third-quarter2015 and $7 million in third-quarter2014 primarily related to the Morocco oil and gas properties, which are included in corporate, other & eliminations.

(In millions)	Mining Operations
	North America Copper Mines									South America								Indonesia			Africa
																													Atlantic			Other											Corporate,
																							Molyb-						Copper			Mining							U.S.				Other
			Other							Cerro		Other											denum				Rod &		Smelting			& Elimi-				Total			Oil & Gas				& Elimi-				FCX
	Morenci		Mines			Total				Verde		Minesa				Total		Grasberg			Tenke		Mines				Refining		& Refining			nations				Mining			Operationsb				nations				Total
Nine Months Ended September 30, 2015
Revenues:
Unaffiliated customers	$	451	$	265		$	716			$	681	$	639			$	1,320	$	1,969	c	$	991	$	—			$	3,097	$	1,473		$	921		d	$	10,487		$	1,594		e	$	1			$	12,082
Intersegment	1,209		1,984			3,193				64		(7		)	f	57		37			98		298				20		12			(3,715		)		—			—				—				—
Production and delivery	1,117		1,816			2,933			g	540		464			g	1,004		1,311			634		253			g	3,097		1,397			(2,840		)	g	7,789			857				7			g	8,653
Depreciation, depletion and amortization	157		251			408				134		102				236		238			195		77				7		29			51				1,241			1,465				11				2,717
Impairment of oil and gas properties	—		—			—				—		—				—		—			—		—				—		—			—				—			9,270				172			h	9,442
Selling, general and administrative expenses	2		2			4				2		1				3		74			8		—				—		13			16				118			140				171				429
Mining exploration and research expenses	—		6			6				—		—				—		—			—		—				—		—			95				101			—				—				101
Environmental obligations and shutdown costs	—		3			3				—		—				—		—			—		—				—		—			57				60			—				1				61
Net gain on sales of assets	—		(39		)	(39		)		—		—				—		—			—		—				—		—			—				(39		)	—				—				(39		)
Operating income (loss)	384		210			594				69		65				134		383			252		(32		)		13		46			(173		)		1,217			(10,138		)		(361		)		(9,282		)
Interest expense, net	2		1			3				1		—				1		—			—		—				—		8			57				69			129				260				458
Provision for (benefit from) income taxes	—		—			—				—		32				32		145			59		—				—		—			—				236			—				(1,978		)		(1,742		)
Capital expenditures	224		84			308				1,296		43				1,339		660			166		10				2		18			37				2,540			2,430			i	85				5,055
Nine Months Ended September 30, 2014
Revenues:
Unaffiliated customers	$	215	$	195		$	410			$	996	$	1,387			$	2,383	$	2,071	c	$	1,071	$	—			$	3,599	$	1,808		$	1,374		d	$	12,716		$	3,487		e	$	—			$	16,203
Intersegment	1,346		2,489			3,835				150		243				393		175			102		469				24		15			(5,013		)		—			—				—				—
Production and delivery	936		1,622			2,558				538		939				1,477		1,594			556		243				3,601		1,784			(3,753		)		8,060			913				(2		)		8,971
Depreciation, depletion and amortization	128		240			368				120		164				284		194			172		71				7		31			51				1,178			1,736				10				2,924
Impairment of oil and gas properties	—		—			—				—		—				—		—			—		—				—		—			—				—			308				—				308
Selling, general and administrative expenses	1		2			3				2		3				5		73			9		—				—		13			20				123			171				163				457
Mining exploration and research expenses	—		6			6				—		—				—		—			—		—				—		—			87				93			—				—				93
Environmental obligations and shutdown costs	—		(5		)	(5		)		—		—				—		—			—		—				—		—			105				100			—				—				100
Net gain on sales of assets	—		(14		)	(14		)		—		—				—		—			—		—				—		—			(32		)		(46		)	—				—				(46		)
Operating income (loss)	496		833			1,329				486		524				1,010		385			436		155				15		(5		)	(117		)		3,208			359				(171		)		3,396
Interest expense, net	2		1			3				1		—				1		—			—		—				—		10			55				69			201				213				483
Provision for (benefit from) income taxes	—		—			—				177		232				409		166			93		—				—		—			—				668			—				366				1,034
Capital expenditures	691		124			815				1,207		71				1,278		722			100		45				3		9			38				3,010			2,392			i	13				5,415

a. For the first nine months of 2014 Other South America Mines include the results of the Candelaria and Ojos del Salado mining operations, which were sold in November 2014.

b. The first nine months of 2014 include the results from Eagle Ford, which was sold in June 2014.

c. Includes PT-FI’s sales to PT Smelting totaling $704 million for the first nine months of 2015 and $1.5 billion for the first nine months of 2014.

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

e. Includes net mark-to-market gains (losses) associated with crude oil and natural gas derivative contracts totaling $87 million for the first nine months2015 and $(56) million for the first nine months of 2014.

f. Includes net reductions for provisional pricing adjustments to prior period open sales. There were no intersegment sales from El Abra for the first nine months of 2015.

g. Includes charges totaling $144 million at North America copper mines for inventory adjustments, impairments and restructuring, $11 million at other South America mines for restructuring, $8 million at Molybdenum mines and $84 million at other mining & eliminations for inventory adjustments and restructuring, and $2 million for restructuring at corporate, other & eliminations.

h. Primarily includes impairment charges for Morocco oil and gas properties.

i. Excludes capital expenditures totaling $81 million for the first nine months of 2015 and $7 million for the first nine months of 2014 primarily related to the Morocco oil and gas properties, which are included in corporate, other & eliminations.