BUSINESS SEGMENTS (Notes)

12 Months Ended

Dec. 31, 2015

Business Segments [Abstract]

Business Segments

BUSINESS SEGMENT INFORMATION

Product Revenue. FCX revenues attributable to the products it produced for the years ended December 31 follow:

	2015		2014		2013
Refined copper products	$	6,699	$	8,187	$	7,751
Copper in concentratea	2,869		3,366		5,328
Gold	1,538		1,584		1,656
Molybdenum	783		1,207		1,110
Oil	1,694		4,233		2,310
Other	1,024		1,424		1,176
Total	$	14,607	$	20,001	$	19,331

a. Amounts are net of treatment and refining charges totaling $485 million in 2015, $374 million in 2014 and $400 million in 2013.

Geographic Area. Information concerning financial data by geographic area follows:

	December 31,
	2015			2014			2013
Long-lived assets:a
U.S.	$	16,569	b	$	29,468		$	32,969
Indonesia	7,701			6,961			5,799
Peru	8,432			6,848			5,181
Chile	1,387			1,542		c	2,699
Otherd	4,706			4,593			4,556
Total	$	38,795		$	49,412		$	51,204

a. Long-lived assets exclude deferred tax assets, intangible assets and goodwill.

b. Decreased from 2014 primarily because of impairment charges related to oil and gas properties (refer to Note 1 for further discussion).

c. Decreased from 2013 primarily because of the sale of the Candelaria and Ojos del Salado mines.

d. Includes long-lived assets held for sale totaling $4.1 billion at December 31, 2015, $4.0 billion at December 31, 2014, and $3.9 billion at December 31, 2013, associated with discontinued operations. Refer to Note 2 for further discussion.

	Years Ended December 31,
	2015		2014		2013
Revenues:a
U.S.	$	6,842	$	10,307	$	8,825
Japan	1,246		1,573		2,125
Indonesia	1,054		1,792		1,651
Spain	960		1,020		1,056
China	688		790		983
Switzerland	618		658		816
India	532		286		429
Chile	397		687		754
Turkey	200		327		231
Korea	177		203		198
Singapore	130		225		119
Other	1,763		2,133		2,144
Total	$	14,607	$	20,001	$	19,331

a. Revenues are attributed to countries based on the location of the customer.

Major Customers and Affiliated Companies. Oil and gas sales to Phillips 66 Company totaled $1.1 billion (7 percent of FCX's consolidated revenues) in 2015 and $2.5 billion (12 percent of FCX's consolidated revenues) in 2014. No other customer accounted for 10 percent or more of FCX's consolidated revenues during the three years ended December 31, 2015.

Consolidated revenues include sales to the noncontrolling interest owners of FCX's South America mining operations totaling $1.0 billion in 2015, $1.6 billion in 2014 and $2.0 billion in 2013, and PT-FI's sales to PT Smelting totaling $1.1 billion in 2015, $1.8 billion in 2014 and $1.7 billion in 2013.

Labor Matters. As of December 31, 2015, 48 percent of FCX's labor force was covered by collective bargaining agreements, and 4 percent of FCX's labor force is covered by agreements that expired and are currently being negotiated or will expire within one year.

Business Segments. FCX has organized its continuing 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. For oil and gas operations, FCX determines its operating segments on a country-by-country basis. Separately disclosed in the following tables are FCX's reportable segments, which include the Morenci, Cerro Verde and Grasberg copper mines, the Rod & Refining operations, the Atlantic Copper Smelting & Refining operation and U.S. Oil & Gas operations. FCX's U.S. Oil & Gas operations reflect the results of FM O&G beginning June 1, 2013.

FCX's reportable segments previously included Africa mining, which consisted of the Tenke mine located in the DRC. As discussed in Note 2, FCX has entered into a definitive agreement to sell its interest in TFHL, and as a result, Tenke has been removed from continuing operations and reported as discontinued operations for all periods presented.

Intersegment sales between FCX’s mining operations are based on similar arm's-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. In addition, intersegment sales from Tenke to FCX's other consolidated subsidiaries have been eliminated in discontinued operations (refer to Note 2).

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.

North America Copper Mines. FCX has seven operating copper mines in North America – Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Tyrone and Chino in New Mexico. The North America copper mines include open-pit mining, sulfide ore concentrating, leaching and SX/EW operations. A majority of the copper produced at the North America copper mines is cast into copper rod by FCX’s Rod & Refining operations. In addition to copper, certain of FCX's North America copper mines also produce molybdenum concentrate and silver.

The Morenci open-pit mine, located in southeastern Arizona, produces copper cathode and copper concentrate. In addition to copper, the Morenci mine also produces molybdenum concentrate. The Morenci mine produced 46 percent of FCX’s North America copper during 2015.

South America Mining. South America mining includes two operating copper mines – Cerro Verde in Peru and El Abra in Chile. These operations include open-pit mining, sulfide ore concentrating, leaching and SX/EW operations.

On November 3, 2014, FCX completed the sale of its 80 percent ownership interests in the Candelaria mine and the Ojos del Salado mine, both reported as components of other South America mines. South America mining includes the results of the Candelaria and Ojos del Salado mines through the sale date. Refer to Note 2 for further discussion.

The Cerro Verde open-pit copper mine, located near Arequipa, Peru, produces copper cathode and copper concentrate. In addition to copper, the Cerro Verde mine also produces molybdenum concentrate and silver. The Cerro Verde mine produced 63 percent of FCX’s South America copper during 2015.

Indonesia Mining. Indonesia mining includes PT-FI’s Grasberg minerals district that produces copper concentrate, which contains significant quantities of gold and silver.

Molybdenum Mines.  Molybdenum mines include the wholly owned Henderson underground mine and Climax open-pit mine in Colorado. The Henderson and Climax mines produce high-purity, chemical-grade molybdenum concentrate, which is typically further processed into value-added molybdenum chemical products.

Rod & Refining. The Rod & Refining segment consists of copper conversion facilities located in North America, and includes a refinery, three rod mills and a specialty copper products facility, which are combined in accordance with segment reporting aggregation guidance. These operations process copper produced at FCX’s North America copper mines and purchased copper into copper cathode, rod and custom copper shapes. At times these operations refine copper and produce copper rod and shapes for customers on a toll basis. Toll arrangements require the tolling customer to deliver appropriate copper-bearing material to FCX’s facilities for processing into a product that is returned to the customer, who pays FCX for processing its material into the specified products.

Atlantic Copper Smelting & Refining. Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes. During 2015, Atlantic Copper purchased approximately 23 percent of its concentrate requirements from the North America copper mines, approximately 3 percent from the South America mining operations and approximately 3 percent from the Indonesia mining operations at market prices, with the remainder purchased from third parties.

Other Mining & Eliminations. Other Mining & Eliminations include the Miami smelter (a smelter at FCX's Miami, Arizona, mining operation), Freeport Cobalt (a cobalt chemical refinery in Kokkola, Finland), molybdenum conversion facilities in the U.S. and Europe, four non-operating copper mines in North America (Ajo, Bisbee and Tohono in Arizona, and Cobre in New Mexico) and other mining support entities.

U.S. Oil & Gas Operations. FCX's U.S. Oil & Gas operations include oil and natural gas assets in the Deepwater GOM, onshore and offshore California, the Haynesville shale in Louisiana, the Madden area in central Wyoming and a position in the Inboard Lower Tertiary/Cretaceous natural gas trend onshore in South Louisiana. All of the U.S. operations are considered one operating and reportable segment.

Financial Information by Business Segment

	Mining Operations
	North America Copper Mines								South America								Indonesia
																								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		Mines			Refining		& Refining			nations				Mining			Operationsb				nations				Total
Year Ended December 31, 2015
Revenues:
Unaffiliated customers	$	558	$	351		$	909		$	1,065	$	808			$	1,873	$	2,617	$	—		$	4,125	$	1,955		$	1,133		c	$	12,612		$	1,994		d	$	1			$	14,607
Intersegment	1,646		2,571			4,217			68		(7		)	e	61		36		348			29		15			(4,706		)		—			—				—				—
Production and deliveryf,g	1,523		2,276			3,799			815		623				1,438		1,808		312			4,129		1,848			(3,851		)		9,483			1,211				(1		)		10,693
Depreciation, depletion and amortization	217		343			560			219		133				352		293		97			9		39			72				1,422			1,804				14				3,240
Impairment of oil and gas properties	—		—			—			—		—				—		—		—			—		—			—				—			12,980				164			h	13,144
Copper and molybdenum inventory adjustments	—		142			142			—		73				73		—		11			—		—			112				338			—				—				338
Selling, general and administrative expenses	3		3			6			3		1				4		103		—			—		16			20				149			188				221				558
Mining exploration and research expenses	—		7			7			—		—				—		—		—			—		—			100				107			—				—				107
Environmental obligations and shutdown costs	—		3			3			—		—				—		—		—			—		—			74				77			—				1				78
Net gain on sales of assets	—		(39		)	(39		)	—		—				—		—		—			—		—			—				(39		)	—				—				(39		)
Operating income (loss)	461		187			648			96		(29		)		67		449		(72		)	16		67			(100		)		1,075			(14,189		)		(398		)		(13,512		)
Interest expense, net	2		2			4			16		—				16		—		—			—		10			75				105			186				326				617
Provision for (benefit from) income taxes	—		—			—			13		(9		)		4		195		—			—		—			—				199			—				(2,150		)		(1,951		)
Total assets at December 31, 2015	3,567		4,878			8,445			9,445		1,661				11,106		9,402		1,999			219		612			6,372			i	38,155			8,141				281				46,577
Capital expenditures	253		102			355			1,674		48				1,722		913		13			4		23			265			i	3,295			2,948			j	110				6,353
Year Ended December 31, 2014
Revenues:
Unaffiliated customers	$	364	$	336		$	700		$	1,282	$	1,740			$	3,022	$	2,848	$	—		$	4,626	$	2,391		$	1,704		c	$	15,291		$	4,710		d	$	—			$	20,001
Intersegment	1,752		3,164			4,916			206		304				510		223		587			29		21			(6,286		)		—			—				—				—
Production and delivery	1,287		2,153			3,440			741		1,198				1,939		1,988		328			4,633		2,356			(4,807		)		9,877			1,237				2				11,116
Depreciation, depletion and amortization	168		316			484			159		208				367		266		92			10		41			70				1,330			2,291				14				3,635
Impairment of oil and gas properties	—		—			—			—		—				—		—		—			—		—			—				—			3,737				—				3,737
Copper and molybdenum inventory adjustments	—		—			—			—		—				—		—		—			—		—			6				6			—				—				6
Selling, general and administrative expenses	2		3			5			3		3				6		98		—			—		17			25				151			207				222				580
Mining exploration and research expenses	—		8			8			—		—				—		—		—			—		—			98				106			—				—				106
Environmental obligations and shutdown costs	—		(5		)	(5		)	—		—				—		—		—			—		—			123				118			—				1				119
Goodwill impairment	—		—			—			—		—				—		—		—			—		—			—				—			1,717				—				1,717
Net gain on sales of assets	—		(14		)	(14		)	—		—				—		—		—			—		—			(703		)	k	(717		)	—				—				(717		)
Operating income (loss)	659		1,039			1,698			585		635				1,220		719		167			12		(2		)	606				4,420			(4,479		)		(239		)		(298		)
Interest expense, net	3		1			4			1		—				1		—		—			—		13			84				102			241				263				606
Provision for (benefit from) income taxes	—		—			—			265		266				531		293		—			—		—			221			k	1,045			—				(820		)		225
Total assets at December 31, 2014	3,780		5,611			9,391			7,490		1,993				9,483		8,626		2,095			235		898			6,392			i	37,120			20,834				720				58,674
Capital expenditures	826		143			969			1,691		94				1,785		948		54			4		17			204			i	3,981			3,205			j	29				7,215

a. Includes the results of the Candelaria and Ojos del Salado mines prior to their sale in November 2014.

b. Includes the results of Eagle Ford prior to its sale in June 2014.

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 $87 million in 2015 and $505 million in 2014.

e. Reflects net reductions for provisional pricing adjustments to prior period open sales.

f. Includes impairment, restructuring and other net charges for mining operations totaling $145 million, including $99 million at North America copper mines, $13 million at South America mines, $7 million at Molybdenum mines, $3 million at Rod & Refining, $20 million at Other Mining & Eliminations and $3 million for restructuring at Corporate, Other & Eliminations.

g. Includes charges at U.S. Oil & Gas operations totaling $188 million in 2015 primarily for other asset impairments and inventory write-downs, idle/terminated rig costs and prior year non-income tax assessments at the California properties and $46 million in 2014 primarily for idle/terminated rig costs and inventory write-downs.

h. Reflects impairment charges for international oil and gas properties primarily related to Morocco.

i. Includes (i) assets held for sale totaling $4.9 billion at December 31, 2015, and $4.8 billion at December 31, 2014, and (ii) capital expenditures totaling $229 million in 2015 and $159 million in 2014 associated with discontinued operations. Refer to Note 2 for a summary of the results of discontinued operations.

j. Excludes international oil and gas capital expenditures totaling $100 million in 2015 and $19 million in 2014, primarily related to the Morocco oil and gas properties, which are included in Corporate, Other & Eliminations.

k. Includes the gain and related income tax provision associated with the sale of the Candelaria and Ojos del Salado mines.

	Mining Operations
	North America Copper Mines								South America						Indonesia
																					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		Mines		Total		Grasberg		Mines		Refining		& Refining				nations				Mining		Operations			nations				Total
Year Ended December 31, 2013
Revenues:
Unaffiliated customers	$	244	$	326		$	570		$	1,473	$	2,379	$	3,852	$	3,751	$	—	$	4,995	$	2,027			$	1,516		a	$	16,711	$	2,616	b	$	4			$	19,331
Intersegment	1,673		2,940			4,613			360		273		633		336		522		27		14				(6,145		)		—		—			—				—
Production and delivery	1,233		2,033			3,266			781		1,288		2,069		2,309		317		4,990		2,054				(4,616		)		10,389		682			7				11,078
Depreciation, depletion and amortization	133		269			402			152		194		346		247		82		9		42				48				1,176		1,364			11				2,551
Copper and molybdenum inventory adjustments	—		—			—			—		—		—		—		—		—		—				3				3		—			—				3
Selling, general and administrative expenses	2		3			5			3		4		7		110		—		—		20				29				171		120			354				645
Mining exploration and research expenses	—		5			5			—		—		—		1		—		—		—				151				157		—			11				168
Environmental obligations and shutdown costs	—		(1		)	(1		)	—		—		—		—		—		—		—				67				66		—			—				66
Operating income (loss)	549		957			1,506			897		1,166		2,063		1,420		123		23		(75		)	c	(311		)		4,749		450			(379		)		4,820
Interest expense, net	3		1			4			2		1		3		12		—		—		16				80				115		181			205				501
Provision for income taxes	—		—			—			316		404		720		603		—		—		—				—				1,323		—			17			d	1,340
Total assets at December 31, 2013	3,110		5,810			8,920			6,584		3,996		10,580		7,437		2,107		239		1,039				5,852			e	36,174		26,252			959				63,385
Capital expenditures	737		329			1,066			960		185		1,145		1,030		164		4		67				318			e	3,794		1,436			56				5,286

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

b. Includes net mark-to-market losses associated with crude oil and natural gas derivative contracts totaling $334 million for the period from June 1, 2013, to December 31, 2013

c. Includes $50 million for shutdown costs associated with Atlantic Copper's scheduled 68-day maintenance turnaround, which was completed in fourth-quarter 2013.

d. Includes $199 million of net benefits resulting from oil and gas acquisitions.

e. Includes (i) assets held for sale totaling $4.6 billion at December 31, 2013, and (ii) capital expenditures totaling $205 million in 2013 associated with discontinued operations. Refer to Note 2 for a summary of the results of discontinued operations.