BUSINESS SEGMENTS INFORMATION

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Business Segment Information

BUSINESS SEGMENT INFORMATION

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

	2016		2015		2014
Refined copper products	$	5,888	$	6,699	$	8,187
Copper in concentratea	4,502		2,869		3,366
Gold	1,512		1,538		1,584
Molybdenum	651		783		1,207
Oil	1,304		1,694		4,233
Other	973		1,024		1,424
Total	$	14,830	$	14,607	$	20,001

a. Amounts are net of treatment and refining charges totaling $652 million in 2016, $485 million in 2015 and $374 million in 2014.

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

	December 31,
	2016			2015			2014
Long-lived assets:a
U.S.	$	8,282	b	$	16,569	b	$	29,468
Indonesia	8,794			7,701			6,961
Peru	7,981			8,432			6,848
Chile	1,269			1,387			1,542
Otherc	248			4,706			4,593
Total	$	26,574		$	38,795		$	49,412

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

b. Decrease in 2016 is primarily because of impairment charges related to oil and gas properties and asset dispositions, and decrease in 2015 is primarily because of impairment charges related to oil and gas properties (refer to Notes 1 and 2 for further discussion).

c. Includes long-lived assets held for sale totaling $4.4 billion at December 31, 2015, and $4.3 billion at December 31, 2014, primarily associated with discontinued operations. Refer to Note 2 for further discussion.

	Years Ended December 31,
	2016		2015		2014
Revenues:a
U.S.	$	5,896	$	6,842	$	10,307
Indonesia	1,402		1,054		1,792
Japan	1,350		1,246		1,573
Switzerland	1,147		618		658
China	1,125		688		790
Spain	878		960		1,020
India	553		532		286
Bermuda	273		159		76
Philippines	261		169		—
Chile	250		397		687
Korea	219		177		203
United Kingdom	204		83		142
Other	1,272		1,682		2,467
Total	$	14,830	$	14,607	$	20,001

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

Major Customers and Affiliated Companies. No customer accounted for 10 percent or more of FCX's consolidated revenues during the years ended December 31, 2016 and 2015. Oil and gas sales to Phillips 66 Company totaled $2.5 billion (12 percent of FCX's consolidated revenues) during the year ended December 31, 2014.

Consolidated revenues include sales to the noncontrolling interest owners of FCX's South America mining operations totaling $1.0 billion in both 2016 and 2015 and $1.6 billion in 2014, and PT-FI's sales to PT Smelting totaling $1.4 billion in 2016, $1.1 billion in 2015 and $1.8 billion in 2014.

Labor Matters. As of December 31, 2016, approximately half of FCX's global labor force was covered by collective bargaining agreements, and approximately one-third of FCX's global 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 and the U.S. Oil & Gas operations.

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 2016.

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 83 percent of FCX’s South America copper during 2016.

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 2016, Atlantic Copper purchased approximately 13 percent of its concentrate requirements from the North America copper mines, approximately 7 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. As of December 31, 2016, FCX's U.S. Oil & Gas operations include oil and natural gas production onshore in South Louisiana and on the GOM shelf, oil production offshore California and natural gas production from the Madden area in central Wyoming. In January 2017, FCX entered into an agreement to sell its property interests in the Madden area. 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
										Cerro												denum			Rod &		Smelting		& Elimi-				Total			Oil & Gas				& Elimi-				FCX
	Morenci			Other			Total			Verde			Other				Total		Grasberg			Mines			Refining		& Refining		nations				Mining			Operationsa				nations				Total
Year Ended December 31, 2016
Revenues:
Unaffiliated customers	$	444		$	240		$	684		$	2,241		$	510			$	2,751	$	3,233		$	—		$	3,833	$	1,825	$	991		b	$	13,317		$	1,513		c	$	—			$	14,830
Intersegment	1,511			2,179			3,690			187			—				187		62			186			29		5		(4,159		)		—			—				—				—
Production and delivery	1,169			1,763			2,932			1,351		d	407				1,758		1,794		d	199			3,836		1,712		(3,388		)		8,843			1,801			e	53				10,697
Depreciation, depletion and amortization	217			313			530			443			110				553		384			68			10		29		73				1,647			869				14				2,530
Impairment of oil and gas properties	—			—			—			—			—				—		—			—			—		—		—				—			4,299				18			f	4,317
Metals inventory adjustments	—			1			1			—			—				—		—			15			—		—		20				36			—				—				36
Selling, general and administrative expenses	2			3			5			8			1				9		90			—			—		17		15				136			254			g	217				607
Mining exploration and research expenses	—			3			3			—			—				—		—			—			—		—		61				64			—				—				64
Environmental obligations and shutdown costs	—			—			—			—			—				—		—			—			—		—		19				19			—				1				20
Net (gain) loss on sales of assets	(576		)	—			(576		)	—			—				—		—			—			—		—		(67		)		(643		)	1				(7		)		(649		)
Operating income (loss)	1,143			336			1,479			626			(8		)		618		1,027			(96		)	16		72		99				3,215			(5,711		)		(296		)		(2,792		)
Interest expense, net	3			1			4			82			—				82		—			—			—		15		80				181			369				205				755
Provision for (benefit from) income taxes	—			—			—			222			(6		)		216		442			—			—		—		—				658			—				(287		)		371
Total assets at December 31, 2016	2,863			4,448			7,311			9,076			1,533				10,609		10,954			1,934			220		658		1,444				33,130			467				3,720				37,317
Capital expenditures	77			25			102			380			2				382		1,025			2			1		17		109			h	1,638			1,127			i	48				2,813
Year Ended December 31, 2015
Revenues:
Unaffiliated customers	$	558		$	351		$	909		$	1,065		$	808			$	1,873	$	2,617		$	—		$	4,125	$	1,955	$	1,133		b	$	12,612		$	1,994		c	$	1			$	14,607
Intersegment	1,646			2,571			4,217			68			(7		)	j	61		36			348			29		15		(4,706		)		—			—				—				—
Production and deliveryd	1,523			2,276			3,799			815			623				1,438		1,808			312			4,129		1,848		(3,851		)		9,483			1,211			e	(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			f	13,144
Metals 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		9,357			1,999			219		612		6,417			h	38,155			8,141				281				46,577
Capital expenditures	253			102			355			1,674			48				1,722		901			13			4		23		277			h	3,295			2,948			i	110				6,353

a. Includes the results of the Deepwater GOM and onshore California oil and gas properties prior to their sale in December 2016.

b. 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.

c. Includes net mark-to-market (losses) gains of $(35) million in 2016 and $87 million in 2015 associated with oil derivative contracts. The 2016 oil derivative contracts were entered into as part of the terms to sell the onshore California oil and gas properties.

d. The year 2016 includes charges of $16 million at Cerro Verde for social commitments and $17 million at Indonesia for asset impairment. The year 2015 includes asset impairment and restructuring charges totaling $145 million, including $99 million at other North America copper mines, and restructuring charges totaling $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 at Corporate, Other & Eliminations.

e. Includes net charges for oil and gas operations totaling $1.0 billion in 2016 and $188 million in 2015, primarily for drillship settlements/idle rig and contract termination costs, inventory adjustments other asset impairments and net charges.

f. Reflects impairment charges for international oil and gas properties primarily in Morocco.

g. Includes $85 million for net restructuring charges at oil and gas operations.

h. Includes (i) assets held for sale totaling $4.9 billion at December 31, 2015, and (ii) capital expenditures totaling $73 million in 2016 and $229 million in 2015 associated with discontinued operations. Refer to Note 2 for a summary of the results of discontinued operations.

i. Excludes international oil and gas capital expenditures totaling $47 million in 2016 and $100 million in 2015, primarily related to the Morocco oil and gas properties, which are included in Corporate, Other & Eliminations.

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

	Mining Operations
	North America Copper Mines								South America						Indonesia
																					Atlantic			Other											Corporate,
																	Molyb-				Copper			Mining							U.S.				Other
									Cerro								denum		Rod &		Smelting			& Elimi-				Total			Oil & Gas				& Elimi-			FCX
	Morenci		Other			Total			Verde		Othera		Total		Grasberg		Mines		Refining		& Refining			nations				Mining			Operationsb				nations			Total
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			e	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
Metals 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		)	f	(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 income taxes	—		—			—			265		266		531		293		—		—		—			221			f	1,045			—				(820		)	225
Total assets at December 31, 2014	3,780		5,611			9,391			7,490		1,993		9,483		8,592		2,095		235		898			6,426			g	37,120			20,834				720			58,674
Capital expenditures	826		143			969			1,691		94		1,785		935		54		4		17			217			g	3,981			3,205			h	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 shale assets prior to their sale in June 2014.

c. 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.

d. Includes net mark-to-market gains associated with crude oil and natural gas derivative contracts totaling $505 million.

e. Includes charges at U.S. Oil & Gas operations totaling $46 million primarily for idle/terminated rig costs and inventory adjustments.

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

g. Includes (i) assets held for sale totaling $4.8 billion and (ii) capital expenditures totaling $159 million associated with discontinued operations. Refer to Note 2 for a summary of the results of discontinued operations.

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