GUARANTOR FINANCIAL STATEMENTS

All of the senior notes issued by FCX and discussed in Note 8 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 the revolving credit facility. The guarantee ranks senior in right of payment to all of FM O&G LLC's existing and future subordinated indebtedness and is effectively subordinated in right of payment to (i) FM O&G LLC's future secured indebtedness to the extent of the value of the assets securing the indebtedness and (ii) any debt of FM O&G LLC's subsidiaries. The indentures governing the senior notes 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 December 31, 2016 and 2015, and the related condensed consolidating statements of comprehensive (loss) income and the condensed consolidating statements of cash flows for the years ended December 31, 2016, 2015 and 2014, which should be read in conjunction with FCX's notes to the consolidated financial statements:

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2016



	FCX			FM O&G LLC			Non-guarantor					Consolidated
	Issuer			Guarantor			Subsidiaries		Eliminations			FCX
ASSETS
Current assets, other than assets held for sale	$	230		$	1,790		$	11,331	$	(3,260	)	$	10,091
Current assets held for sale	—			—			344		—			344
Property, plant, equipment and mine development costs, net	19			24			23,176		—			23,219
Oil and gas properties, net - full cost method:
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, other than liabilities held for sale	$	3,895		$	308		$	3,101	$	(3,244	)	$	4,060
Current liabilities held for sale	—			—			205		—			205
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
Investments 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 BALANCE SHEET

December 31, 2015



	FCX			FM O&G LLC			Non-guarantor					Consolidated
	Issuer			Guarantor			Subsidiaries		Eliminations			FCX
ASSETS
Current assets, other than assets held for sale	$	181		$	3,831		$	10,062	$	(7,532	)	$	6,542
Current assets held for sale	—			—			920		—			920
Property, plant, equipment and mine development costs, net	26			57			23,903		—			23,986
Oil and gas properties, net - full cost method:
Subject to amortization, less accumulated amortization and impairments	—			710			1,552		—			2,262
Not subject to amortization	—			1,393			3,432		6			4,831
Investments in consolidated subsidiaries	24,311			—			—		(24,311		)	—
Other assets	5,038			1,826			3,584		(6,798		)	3,650
Assets held for sale	—			—			4,386		—			4,386
Total assets	$	29,556		$	7,817		$	47,839	$	(38,635	)	$	46,577

LIABILITIES AND EQUITY
Current liabilities, other than liabilities held for sale	$	6,012		$	666		$	5,024	$	(7,526	)	$	4,176
Current liabilities held for sale	—			—			131		—			131
Long-term debt, less current portion	14,735			5,883			11,490		(12,433		)	19,675
Deferred income taxes	941		^a	—			2,626		—			3,567
Environmental and asset retirement obligations, less current portion	—			305			3,409		—			3,714
Investment in consolidated subsidiary	—			—			2,397		(2,397		)	—
Other liabilities	40			3,360			1,732		(3,491		)	1,641
Liabilities held for sale	—			—			865		—			865
Total liabilities	21,728			10,214			27,674		(25,847		)	33,769

Redeemable noncontrolling interest	—			—			764		—			764

Equity:
Stockholders' equity	7,828			(2,397		)	15,725		(13,328		)	7,828
Noncontrolling interests	—			—			3,676		540			4,216
Total equity	7,828			(2,397		)	19,401		(12,788		)	12,044
Total liabilities and equity	$	29,556		$	7,817		$	47,839	$	(38,635	)	$	46,577


a.	All U.S. related deferred income taxes are recorded at the parent company.

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE (LOSS) INCOME



Year Ended December 31, 2016
	FCX			FM O&G LLC				Non-guarantor							Consolidated
	Issuer			Guarantor				Subsidiaries				Eliminations			FCX
Revenues	$	—		$	379			$	14,451			$	—		$	14,830
Total costs and expenses	75			3,074			^a	14,463			^a	10			17,622
Operating loss	(75		)	(2,695		)		(12		)		(10		)	(2,792		)
Interest expense, net	(534		)	(56		)		(498		)		333			(755		)
Other income (expense), net	271			—				70				(292		)	49
Net gain on exchanges and early extinguishment of debt	26			—				—				—			26
(Loss) income before income taxes and equity in affiliated companies' net (losses) earnings	(312		)	(2,751		)		(440		)		31			(3,472		)
(Provision for) benefit from income taxes	(2,233		)	1,053				821				(12		)	(371		)
Equity in affiliated companies' net (losses) earnings	(1,609		)	(3,101		)		(4,790		)		9,511			11
Net (loss) income from continuing operations	(4,154		)	(4,799		)		(4,409		)		9,530			(3,832		)
Net loss from discontinued operations	—			—				(154		)		(39		)	(193		)
Net (loss) income	(4,154		)	(4,799		)		(4,563		)		9,491			(4,025		)
Net income, and gain on redemption and preferred dividends attributable to noncontrolling interests:
Continuing operations	—			—				—				(66		)	(66		)
Discontinued operations	—			—				(63		)		—			(63		)
Net (loss) income attributable to common stockholders	$	(4,154	)	$	(4,799	)		$	(4,626	)		$	9,425		$	(4,154	)

Other comprehensive (loss) income	(45		)	—				(45		)		45			(45		)
Total comprehensive (loss) income	$	(4,199	)	$	(4,799	)		$	(4,671	)		$	9,470		$	(4,199	)


a.	Includes charges totaling $1.5 billion at the FM O&G LLC Guarantor and $2.8 billion at the non-guarantor subsidiaries related to impairment of FCX's oil and gas properties pursuant to full cost accounting rules.



Year Ended December 31, 2015
	FCX			FM O&G LLC				Non-guarantor							Consolidated
	Issuer			Guarantor				Subsidiaries				Eliminations			FCX
Revenues	$	—		$	613			$	13,994			$	—		$	14,607
Total costs and expenses	60			5,150			^a	22,920			^a	(11		)	28,119
Operating (loss) income	(60		)	(4,537		)		(8,926		)		11			(13,512		)
Interest expense, net	(489		)	(8		)		(272		)		152			(617		)
Other income (expense), net	225			1				(86		)		(139		)	1
(Loss) income before income taxes and equity in affiliated companies' net (losses) earnings	(324		)	(4,544		)		(9,284		)		24			(14,128		)
(Provision for) benefit from income taxes	(3,227		)	1,718				3,469				(9		)	1,951
Equity in affiliated companies' net (losses) earnings	(8,685		)	(9,976		)		(12,838		)		31,496			(3		)
Net (loss) income from continuing operations	(12,236		)	(12,802		)		(18,653		)		31,511			(12,180		)
Net income from discontinued operations	—			—				91				—			91
Net (loss) income	(12,236		)	(12,802		)		(18,562		)		31,511			(12,089		)
Net income and preferred dividends attributable to noncontrolling interests:
Continuing operations	—			—				(35		)		(33		)	(68		)
Discontinued operations	—			—				(79		)		—			(79		)
Net (loss) income attributable to common stockholders	$	(12,236	)	$	(12,802	)		$	(18,676	)		$	31,478		$	(12,236	)

Other comprehensive income (loss)	41			—				41				(41		)	41
Total comprehensive (loss) income	$	(12,195	)	$	(12,802	)		$	(18,635	)		$	31,437		$	(12,195	)


a.	Includes impairment charges totaling $4.2 billion at the FM O&G LLC Guarantor and $8.9 billion at the non-guarantor subsidiaries related to FCX's oil and gas properties pursuant to full cost accounting rules.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME



Year Ended December 31, 2014
	FCX			FM O&G LLC				Non-guarantor							Consolidated
	Issuer			Guarantor				Subsidiaries				Eliminations			FCX
Revenues	$	—		$	2,356			$	17,645			$	—		$	20,001
Total costs and expenses	59			3,498			^a	16,720			^a	22			20,299
Operating (loss) income	(59		)	(1,142		)		925				(22		)	(298		)
Interest expense, net	(382		)	(139		)		(165		)		80			(606		)
Net (loss) gain on early extinguishment of debt	(5		)	78				—				—			73
Other income (expense), net	72			3				36				(80		)	31
(Loss) income before income taxes and equity in affiliated companies' net earnings (losses)	(374		)	(1,200		)		796				(22		)	(800		)
Benefit from (provision for) income taxes	96			281				(610		)		8			(225		)
Equity in affiliated companies' net (losses) earnings	(1,007		)	(3,429		)		(4,633		)		9,072			3
Net (loss) income from continuing operations	(1,285		)	(4,348		)		(4,447		)		9,058			(1,022		)
Net (loss) income from discontinued operations	(23		)	—				300				—			277
Net (loss) income	(1,308		)	(4,348		)		(4,147		)		9,058			(745		)
Net income and preferred dividends attributable to noncontrolling interests:
Continuing operations	—			—				(354		)		(44		)	(398		)
Discontinued operations	—			—				(165		)		—			(165		)
Net (loss) income attributable to common stockholders	$	(1,308	)	$	(4,348	)		$	(4,666	)		$	9,014		$	(1,308	)

Other comprehensive (loss) income	(139		)	—				(139		)		139			(139		)
Total comprehensive (loss) income	$	(1,447	)	$	(4,348	)		$	(4,805	)		$	9,153		$	(1,447	)


a.	Includes impairment charges totaling $1.9 billion at the FM O&G LLC Guarantor and $3.5 billion at the non-guarantor subsidiaries related to ceiling test impairment charges for FCX's oil and gas properties pursuant to full cost accounting rules and a goodwill impairment charge.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Year Ended December 31, 2016



	FCX			FM O&G LLC			Non-guarantor						Consolidated
	Issuer			Guarantor			Subsidiaries			Eliminations			FCX
Cash flow from operating activities:
Net (loss) income	$	(4,154	)	$	(4,799	)	$	(4,563	)	$	9,491		$	(4,025	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation, depletion and amortization	5			192			2,430			(17		)	2,610
Impairment of oil and gas properties	—			1,531			2,765			21			4,317
Non-cash oil and gas drillship settlements	—			689			—			—			689
Net gain on sales of assets	—			(86		)	(567		)	4			(649		)
Equity in losses (earnings) of consolidated subsidiaries	1,609			3,101			4,790			(9,511		)	(11		)
Other, net	(95		)	30			807			(1		)	741
Changes in working capital and other tax payments, excluding amounts from dispositions	2,498			(929		)	(1,527		)	15			57
Net cash (used in) provided by operating activities	(137		)	(271		)	4,135			2			3,729

Cash flow from investing activities:
Capital expenditures	—			(567		)	(2,248		)	2			(2,813		)
Intercompany loans	481			(346		)	—			(135		)	—
Dividends from (investments in) consolidated subsidiaries	1,469			(45		)	176			(1,600		)	—
Proceeds from sales of assets	2			1,670			4,687			(4		)	6,355
Other, net	—			3			5			—			8
Net cash provided by (used in) investing activities	1,952			715			2,620			(1,737		)	3,550

Cash flow from financing activities:
Proceeds from debt	1,721			—			1,960			—			3,681
Repayments of debt	(5,011		)	—			(2,614		)	—			(7,625		)
Intercompany loans	—			(332		)	197			135			—
Net proceeds from sale of common stock	1,515			—			3,388			(3,388		)	1,515
Cash dividends and distributions paid, including redemption	(6		)	(107		)	(5,555		)	4,969			(699		)
Other, net	(34		)	(3		)	(20		)	19			(38		)
Net cash (used in) provided by financing activities	(1,815		)	(442		)	(2,644		)	1,735			(3,166		)

Net increase in cash and cash equivalents	—			2			4,111			—			4,113
Increase in cash and cash equivalents in assets held for sale	—			—			(45		)	—			(45		)
Cash and cash equivalents at beginning of year	—			—			177			—			177
Cash and cash equivalents at end of year	$	—		$	2		$	4,243		$	—		$	4,245

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Year Ended December 31, 2015



	FCX			FM O&G LLC			Non-guarantor						Consolidated
	Issuer			Guarantor			Subsidiaries			Eliminations			FCX
Cash flow from operating activities:
Net (loss) income	$	(12,236	)	$	(12,802	)	$	(18,562	)	$	31,511		$	(12,089	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation, depletion and amortization	5			370			3,195			(73		)	3,497
Impairment of oil and gas properties	—			4,220			8,862			62			13,144
Metals inventory adjustments	—			—			338			—			338
Other asset impairments, oil and gas inventory adjustments, and restructuring	—			11			245			—			256
Net gains on crude oil and natural gas derivative contracts	—			(87		)	—			—			(87		)
Equity in losses (earnings) of consolidated subsidiaries	8,685			9,976			12,838			(31,496		)	3
Other, net	(2,127		)	2			(90		)	—			(2,215		)
Changes in working capital and other tax payments	5,506			(1,428		)	(3,714		)	9			373
Net cash (used in) provided by operating activities	(167		)	262			3,112			13			3,220

Cash flow from investing activities:
Capital expenditures	(7		)	(847		)	(5,486		)	(13		)	(6,353		)
Intercompany loans	(1,812		)	(1,310		)	—			3,122			—
Dividends from (investments in) consolidated subsidiaries	852			(71		)	130			(913		)	(2		)
Other, net	(21		)	(2		)	111			21			109
Net cash (used in) provided by investing activities	(988		)	(2,230		)	(5,245		)	2,217			(6,246		)

Cash flow from financing activities:
Proceeds from debt	4,503			—			3,769			—			8,272
Repayments of debt	(4,660		)	—			(2,017		)	—			(6,677		)
Intercompany loans	—			2,038			1,084			(3,122		)	—
Net proceeds from sale of common stock	1,936			—			—			—			1,936
Cash dividends and distributions paid	(605		)	—			(924		)	804			(725		)
Other, net	(19		)	(71		)	(18		)	88			(20		)
Net cash provided by (used in) financing activities	1,155			1,967			1,894			(2,230		)	2,786

Net decrease in cash and cash equivalents	—			(1		)	(239		)	—			(240		)
Decrease in cash and cash equivalents in assets held for sale	—			—			119			—			119
Cash and cash equivalents at beginning of year	—			1			297			—			298
Cash and cash equivalents at end of year	$	—		$	—		$	177		$	—		$	177

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Year Ended December 31, 2014



	FCX			FM O&G LLC			Non-guarantor						Consolidated
	Issuer			Guarantor			Subsidiaries			Eliminations			FCX
Cash flow from operating activities:
Net (loss) income	$	(1,308	)	$	(4,348	)	$	(4,147	)	$	9,058		$	(745	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation, depletion and amortization	4			806			3,077			(24		)	3,863
Impairment of oil and gas properties and goodwill	—			1,922			3,486			46			5,454
Net gains on crude oil and natural gas derivative contracts	—			(504		)	—			—			(504		)
Equity in losses (earnings) of consolidated subsidiaries	1,007			3,429			4,633			(9,072		)	(3		)
Other, net	(882		)	(113		)	(807		)	—			(1,802		)
Changes in working capital and other tax payments, excluding amounts from dispositions	723			(1,750		)	395			—			(632		)
Net cash (used in) provided by operating activities	(456		)	(558		)	6,637			8			5,631

Cash flow from investing activities:
Capital expenditures	—			(2,143		)	(5,072		)	—			(7,215		)
Acquisition of Deepwater GOM interests	—			—			(1,426		)	—			(1,426		)
Intercompany loans	(1,328		)	704			—			624			—
Dividends from (investments in) consolidated subsidiaries	1,221			(130		)	(2,408		)	1,317			—
Proceeds from sale of Eagle Ford shale assets	—			2,910			—			—			2,910
Proceeds from sale of Candelaria and Ojos del Salado mines	—			—			1,709			—			1,709
Other, net	—			41			180			—			221
Net cash (used in) provided by investing activities	(107		)	1,382			(7,017		)	1,941			(3,801		)

Cash flow from financing activities:
Proceeds from debt	7,464			—			1,246			—			8,710
Repayments of debt	(5,575		)	(3,994		)	(737		)	—			(10,306		)
Intercompany loans	—			810			(186		)	(624		)	—
Cash dividends and distributions paid	(1,305		)	2,364			(1,463		)	(1,325		)	(1,729		)
Other, net	(21		)	(3		)	(2		)	—			(26		)
Net cash provided by (used in) financing activities	563			(823		)	(1,142		)	(1,949		)	(3,351		)

Net increase (decrease) in cash and cash equivalents	—			1			(1,522		)	—			(1,521		)
Increase in cash and cash equivalents in assets held for sale	—			—			(45		)	—			(45		)
Cash and cash equivalents at beginning of year	—			—			1,864			—			1,864
Cash and cash equivalents at end of year	$	—		$	1		$	297		$	—		$	298