UNITED STATES | ||
SECURITIES AND EXCHANGE COMMISSION | ||
Washington, D.C. 20549 | ||
FORM 10-Q | ||
(Mark One) | ||
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the quarterly period ended March 31, 2017 | ||
OR | ||
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the transition period from | to | |
Commission File Number: 001-11307-01 |
Delaware | 74-2480931 |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) |
incorporation or organization) | |
333 North Central Avenue | |
Phoenix, AZ | 85004-2189 |
(Address of principal executive offices) | (Zip Code) |
(602) 366-8100 | |
(Registrant’s telephone number, including area code) | |
Large accelerated filer þ | Accelerated filer ¨ | ||
Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ | ||
Emerging growth company ¨ |
Page | |
Part I. | FINANCIAL INFORMATION |
Item 1. | Financial Statements. |
March 31, 2017 | December 31, 2016 | ||||||
(In millions) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 4,001 | $ | 4,245 | |||
Trade accounts receivable | 734 | 1,126 | |||||
Income and other tax receivables | 665 | 879 | |||||
Inventories: | |||||||
Materials and supplies, net | 1,275 | 1,306 | |||||
Mill and leach stockpiles | 1,355 | 1,338 | |||||
Product | 1,133 | 998 | |||||
Other current assets | 196 | 199 | |||||
Assets held for sale | 408 | 344 | |||||
Total current assets | 9,767 | 10,435 | |||||
Property, plant, equipment and mine development costs, net | 23,117 | 23,219 | |||||
Oil and gas properties, subject to amortization, less accumulated amortization and impairments | 57 | 74 | |||||
Long-term mill and leach stockpiles | 1,625 | 1,633 | |||||
Other assets | 2,010 | 1,956 | |||||
Total assets | $ | 36,576 | $ | 37,317 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 1,780 | $ | 2,393 | |||
Current portion of debt | 2,228 | 1,232 | |||||
Current portion of environmental and asset retirement obligations | 388 | 369 | |||||
Accrued income taxes | 190 | 66 | |||||
Liabilities held for sale | 256 | 205 | |||||
Total current liabilities | 4,842 | 4,265 | |||||
Long-term debt, less current portion | 13,135 | 14,795 | |||||
Deferred income taxes | 3,786 | 3,768 | |||||
Environmental and asset retirement obligations, less current portion | 3,507 | 3,487 | |||||
Other liabilities | 1,719 | 1,745 | |||||
Total liabilities | 26,989 | 28,060 | |||||
Equity: | |||||||
Stockholders’ equity: | |||||||
Common stock | 158 | 157 | |||||
Capital in excess of par value | 26,725 | 26,690 | |||||
Accumulated deficit | (16,311 | ) | (16,540 | ) | |||
Accumulated other comprehensive loss | (537 | ) | (548 | ) | |||
Common stock held in treasury | (3,717 | ) | (3,708 | ) | |||
Total stockholders’ equity | 6,318 | 6,051 | |||||
Noncontrolling interests | 3,269 | 3,206 | |||||
Total equity | 9,587 | 9,257 | |||||
Total liabilities and equity | $ | 36,576 | $ | 37,317 |
Three Months Ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
(In millions, except per share amounts) | |||||||
Revenues | $ | 3,341 | $ | 3,242 | |||
Cost of sales: | |||||||
Production and delivery | 2,200 | 2,499 | |||||
Depreciation, depletion and amortization | 389 | 662 | |||||
Impairment of oil and gas properties | — | 3,787 | |||||
Total cost of sales | 2,589 | 6,948 | |||||
Selling, general and administrative expenses | 153 | 138 | |||||
Mining exploration and research expenses | 15 | 18 | |||||
Environmental obligations and shutdown costs | 27 | 10 | |||||
Net gain on sales of assets | (23 | ) | — | ||||
Total costs and expenses | 2,761 | 7,114 | |||||
Operating income (loss) | 580 | (3,872 | ) | ||||
Interest expense, net | (167 | ) | (191 | ) | |||
Other income, net | 25 | 36 | |||||
Income (loss) from continuing operations before income taxes and equity in affiliated companies’ net earnings | 438 | (4,027 | ) | ||||
Provision for income taxes | (174 | ) | (77 | ) | |||
Equity in affiliated companies’ net earnings | 4 | 7 | |||||
Net income (loss) from continuing operations | 268 | (4,097 | ) | ||||
Net income (loss) from discontinued operations | 38 | (4 | ) | ||||
Net income (loss) | 306 | (4,101 | ) | ||||
Net income attributable to noncontrolling interests: | |||||||
Continuing operations | (75 | ) | (62 | ) | |||
Discontinued operations | (3 | ) | (10 | ) | |||
Preferred dividends attributable to redeemable noncontrolling interest | — | (11 | ) | ||||
Net income (loss) attributable to common stockholders | $ | 228 | $ | (4,184 | ) | ||
Basic and diluted net income (loss) per share attributable to common stockholders: | |||||||
Continuing operations | $ | 0.13 | $ | (3.34 | ) | ||
Discontinued operations | 0.03 | (0.01 | ) | ||||
$ | 0.16 | $ | (3.35 | ) | |||
Weighted-average common shares outstanding: | |||||||
Basic | 1,446 | 1,251 | |||||
Diluted | 1,454 | 1,251 | |||||
Three Months Ended | ||||||||
March 31, | ||||||||
2017 | 2016 | |||||||
(In millions) | ||||||||
Net income (loss) | $ | 306 | $ | (4,101 | ) | |||
Other comprehensive income (loss), net of taxes: | ||||||||
Unrealized gains on securities | 1 | — | ||||||
Defined benefit plans: | ||||||||
Amortization of unrecognized amounts included in net periodic benefit costs | 11 | 8 | ||||||
Foreign exchange losses | (1 | ) | (9 | ) | ||||
Other comprehensive income (loss) | 11 | (1 | ) | |||||
Total comprehensive income (loss) | 317 | (4,102 | ) | |||||
Total comprehensive income attributable to noncontrolling interests | (78 | ) | (71 | ) | ||||
Preferred dividends attributable to redeemable noncontrolling interest | — | (11 | ) | |||||
Total comprehensive income (loss) attributable to common stockholders | $ | 239 | $ | (4,184 | ) |
Three Months Ended | ||||||||
March 31, | ||||||||
2017 | 2016 | |||||||
(In millions) | ||||||||
Cash flow from operating activities: | ||||||||
Net income (loss) | $ | 306 | $ | (4,101 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation, depletion and amortization | 389 | 722 | ||||||
Impairment of oil and gas properties | — | 3,787 | ||||||
Net gain on sales of assets | (23 | ) | — | |||||
Stock-based compensation | 34 | 30 | ||||||
Net charges for environmental and asset retirement obligations, including accretion | 71 | 57 | ||||||
Payments for environmental and asset retirement obligations | (33 | ) | (90 | ) | ||||
Deferred income taxes | 20 | 152 | ||||||
Gain on disposal of discontinued operations | (32 | ) | — | |||||
Decrease (increase) in long-term mill and leach stockpiles | 8 | (53 | ) | |||||
Oil and gas contract settlement payments | (70 | ) | — | |||||
Other, net | (56 | ) | 48 | |||||
Changes in working capital and other tax payments, excluding amounts from dispositions: | ||||||||
Accounts receivable | 623 | 93 | ||||||
Inventories | (135 | ) | 114 | |||||
Other current assets | (13 | ) | (68 | ) | ||||
Accounts payable and accrued liabilities | (433 | ) | 9 | |||||
Accrued income taxes and changes in other tax payments | 136 | 40 | ||||||
Net cash provided by operating activities | 792 | 740 | ||||||
Cash flow from investing activities: | ||||||||
Capital expenditures: | ||||||||
North America copper mines | (28 | ) | (34 | ) | ||||
South America | (15 | ) | (157 | ) | ||||
Indonesia | (244 | ) | (222 | ) | ||||
Molybdenum mines | (1 | ) | (1 | ) | ||||
Other, including oil and gas operations | (56 | ) | (568 | ) | ||||
Other, net | (21 | ) | 2 | |||||
Net cash used in investing activities | (365 | ) | (980 | ) | ||||
Cash flow from financing activities: | ||||||||
Proceeds from debt | 157 | 1,796 | ||||||
Repayments of debt | (815 | ) | (1,442 | ) | ||||
Net proceeds from sale of common stock | — | 32 | ||||||
Cash dividends paid: | ||||||||
Common stock | (1 | ) | (4 | ) | ||||
Noncontrolling interests | (15 | ) | (18 | ) | ||||
Stock-based awards net payments | (5 | ) | (4 | ) | ||||
Debt financing costs and other, net | — | (13 | ) | |||||
Net cash (used in) provided by financing activities | (679 | ) | 347 | |||||
Net (decrease) increase in cash and cash equivalents | (252 | ) | 107 | |||||
Decrease (increase) in cash and cash equivalents in assets held for sale | 8 | (53 | ) | |||||
Cash and cash equivalents at beginning of year | 4,245 | 177 | ||||||
Cash and cash equivalents at end of period | $ | 4,001 | $ | 231 |
Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
Common Stock | Accum-ulated Deficit | Accumu- lated Other Compre- hensive Loss | Common Stock Held in Treasury | Total Stock-holders’ Equity | |||||||||||||||||||||||||||||||||
Number of Shares | At Par Value | Capital in Excess of Par Value | Number of Shares | At Cost | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2016 | 1,574 | $ | 157 | $ | 26,690 | $ | (16,540 | ) | $ | (548 | ) | 129 | $ | (3,708 | ) | $ | 6,051 | $ | 3,206 | $ | 9,257 | ||||||||||||||||
Exercised and issued stock-based awards | 2 | 1 | 4 | — | — | — | — | 5 | — | 5 | |||||||||||||||||||||||||||
Stock-based compensation | — | — | 31 | — | — | — | — | 31 | — | 31 | |||||||||||||||||||||||||||
Tender of shares for stock-based awards | — | — | — | — | — | — | (9 | ) | (9 | ) | — | (9 | ) | ||||||||||||||||||||||||
Dividends on common stock | — | — | — | 1 | — | — | — | 1 | — | 1 | |||||||||||||||||||||||||||
Dividends to noncontrolling interests | — | — | — | — | — | — | — | — | (15 | ) | (15 | ) | |||||||||||||||||||||||||
Net income attributable to common stockholders | — | — | — | 228 | — | — | — | 228 | — | 228 | |||||||||||||||||||||||||||
Net income attributable to noncontrolling interests, including discontinued operations | — | — | — | — | — | — | — | — | 78 | 78 | |||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 11 | — | — | 11 | — | 11 | |||||||||||||||||||||||||||
Balance at March 31, 2017 | 1,576 | $ | 158 | $ | 26,725 | $ | (16,311 | ) | $ | (537 | ) | 129 | $ | (3,717 | ) | $ | 6,318 | $ | 3,269 | $ | 9,587 |
Three Months Ended | ||||||||
March 31, | ||||||||
2017 | 2016 | |||||||
Revenuesa | $ | 9 | $ | 285 | ||||
Costs and expenses: | ||||||||
Production and delivery costs | — | 226 | ||||||
Depreciation, depletion and amortization | — | 60 | ||||||
Interest expense allocated from parent | — | 10 | b | |||||
Income (loss) before income taxes and estimated loss on disposal | 9 | (11 | ) | |||||
Net gain on disposal | 32 | c | — | |||||
Net income (loss) before income taxes | 41 | (11 | ) | |||||
(Provision for) benefit from income taxes | (3 | ) | 7 | |||||
Net income (loss) from discontinued operations | $ | 38 | $ | (4 | ) |
a. | In accordance with accounting guidance, amounts are net of recognition (eliminations) of intercompany sales totaling $9 million in first-quarter 2017 and $(32) million in first-quarter 2016. |
b. | In accordance with accounting guidance, interest associated with FCX’s term loan that was required to be repaid as a result of the sale of TFHL has been allocated to discontinued operations. |
c. | Includes a $36 million gain associated with the change in the fair value of contingent consideration. |
Net cash provided by operating activities | $ | 89 | ||
Net cash used in investing activities | (36 | ) | ||
Net cash used in financing activities | (3 | ) | ||
Increase in cash and cash equivalents in assets held for sale | $ | 50 |
Three Months Ended | |||||||||
March 31, | |||||||||
2017 | 2016 | ||||||||
Net income (loss) from continuing operations | $ | 268 | $ | (4,097 | ) | ||||
Net income from continuing operations attributable to noncontrolling interests | (75 | ) | (62 | ) | |||||
Preferred dividends on redeemable noncontrolling interest | — | (11 | ) | ||||||
Undistributed earnings allocated to participating securities | (3 | ) | (3 | ) | |||||
Net income (loss) from continuing operations attributable to common stockholders | $ | 190 | $ | (4,173 | ) | ||||
Net income (loss) from discontinued operations | $ | 38 | $ | (4 | ) | ||||
Net income from discontinued operations attributable to noncontrolling interests | (3 | ) | (10 | ) | |||||
Net income (loss) from discontinued operations attributable to common stockholders | $ | 35 | $ | (14 | ) | ||||
Net income (loss) attributable to common stockholders | $ | 225 | $ | (4,187 | ) | ||||
Basic weighted-average shares of common stock outstanding | 1,446 | 1,251 | |||||||
Add shares issuable upon exercise or vesting of dilutive stock options and restricted stock units | 8 | — | a | ||||||
Diluted weighted-average shares of common stock outstanding | 1,454 | 1,251 | |||||||
Basic and diluted net income (loss) per share attributable to common stockholders: | |||||||||
Continuing operations | $ | 0.13 | $ | (3.34 | ) | ||||
Discontinued operations | 0.03 | (0.01 | ) | ||||||
$ | 0.16 | $ | (3.35 | ) | |||||
a. | Excludes 10 million shares associated with outstanding stock options with exercise prices less than the average market price of FCX’s common stock and restricted stock units that were anti-dilutive. |
March 31, 2017 | December 31, 2016 | |||||||
Current inventories: | ||||||||
Total materials and supplies, neta | $ | 1,275 | $ | 1,306 | ||||
Mill stockpiles | $ | 301 | $ | 259 | ||||
Leach stockpiles | 1,054 | 1,079 | ||||||
Total current mill and leach stockpiles | $ | 1,355 | $ | 1,338 | ||||
Raw materials (primarily concentrate) | $ | 194 | $ | 255 | ||||
Work-in-process | 177 | 114 | ||||||
Finished goods | 762 | 629 | ||||||
Total product inventories | $ | 1,133 | $ | 998 | ||||
Long-term inventories: | ||||||||
Mill stockpiles | $ | 488 | $ | 487 | ||||
Leach stockpiles | 1,137 | 1,146 | ||||||
Total long-term mill and leach stockpilesb | $ | 1,625 | $ | 1,633 |
a. | Materials and supplies inventory was net of obsolescence reserves totaling $30 million at March 31, 2017, and $29 million at December 31, 2016. |
b. | Estimated metals in stockpiles not expected to be recovered within the next 12 months. |
Three Months Ended | ||||||||
March 31, | ||||||||
2017 | 2016 | |||||||
U.S. operations | $ | (7 | ) | $ | 11 | |||
International operations | (167 | ) | (88 | ) | ||||
Total | $ | (174 | ) | $ | (77 | ) |
March 31, 2017 | December 31, 2016 | |||||||
Senior notes and debentures: | ||||||||
Issued by FCX | $ | 13,242 | $ | 13,745 | ||||
Issued by Freeport-McMoRan Oil & Gas LLC (FM O&G LLC) | 267 | 267 | ||||||
Issued by FMC | 358 | 359 | ||||||
Cerro Verde credit facility | 1,267 | 1,390 | ||||||
Cerro Verde shareholder loans | 224 | 261 | ||||||
Other | 5 | 5 | ||||||
Total debta | 15,363 | 16,027 | ||||||
Less current portion of debt | (2,228 | ) | (1,232 | ) | ||||
Long-term debt | $ | 13,135 | $ | 14,795 |
a. | Includes additions for unamortized fair value adjustments totaling $171 million at March 31, 2017 ($179 million at December 31, 2016), and is net of reductions for unamortized net discounts and unamortized debt issuance costs totaling $95 million at March 31, 2017 ($100 million at December 31, 2016). |
Three Months Ended | ||||||||
March 31, | ||||||||
2017 | 2016 | |||||||
Copper futures and swap contracts: | ||||||||
Unrealized (losses) gains: | ||||||||
Derivative financial instruments | $ | (2 | ) | $ | 7 | |||
Hedged item – firm sales commitments | 2 | (7 | ) | |||||
Realized gains (losses): | ||||||||
Matured derivative financial instruments | 8 | (4 | ) |
Open Positions | Average Price Per Unit | Maturities Through | ||||||||||
Contract | Market | |||||||||||
Embedded derivatives in provisional sales contracts: | ||||||||||||
Copper (millions of pounds) | 443 | $ | 2.61 | $ | 2.64 | August 2017 | ||||||
Gold (thousands of ounces) | 50 | 1,222 | 1,246 | May 2017 | ||||||||
Embedded derivatives in provisional purchase contracts: | ||||||||||||
Copper (millions of pounds) | 109 | 2.64 | 2.65 | July 2017 |
Three Months Ended | ||||||||
March 31, | ||||||||
2017 | 2016 | |||||||
Embedded derivatives in provisional copper and gold | ||||||||
sales contractsa | $ | 126 | $ | 72 | ||||
Copper forward contractsb | (1 | ) | 7 |
a. | Amounts recorded in revenues. |
b. | Amounts recorded in cost of sales as production and delivery costs. |
March 31, 2017 | December 31, 2016 | |||||||
Commodity Derivative Assets: | ||||||||
Derivatives designated as hedging instruments: | ||||||||
Copper futures and swap contracts | $ | 6 | $ | 9 | ||||
Derivatives not designated as hedging instruments: | ||||||||
Embedded derivatives in provisional copper and gold | ||||||||
sales/purchase contracts | 24 | 137 | ||||||
Total derivative assets | $ | 30 | $ | 146 | ||||
Commodity Derivative Liabilities: | ||||||||
Derivatives designated as hedging instruments: | ||||||||
Copper futures and swap contracts | $ | 1 | $ | 2 | ||||
Derivatives not designated as hedging instruments: | ||||||||
Embedded derivatives in provisional copper and gold | ||||||||
sales/purchase contracts | 7 | 56 | ||||||
Total derivative liabilities | $ | 8 | $ | 58 |
Assets | Liabilities | |||||||||||||||
March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | |||||||||||||
Gross amounts recognized: | ||||||||||||||||
Commodity contracts: | ||||||||||||||||
Embedded derivatives in provisional | ||||||||||||||||
sales/purchase contracts | $ | 24 | $ | 137 | $ | 7 | $ | 56 | ||||||||
Copper derivatives | 6 | 9 | 1 | 2 | ||||||||||||
30 | 146 | 8 | 58 | |||||||||||||
Less gross amounts of offset: | ||||||||||||||||
Commodity contracts: | ||||||||||||||||
Embedded derivatives in provisional | ||||||||||||||||
sales/purchase contracts | 3 | 12 | 3 | 12 | ||||||||||||
Copper derivatives | 1 | 2 | 1 | 2 | ||||||||||||
4 | 14 | 4 | 14 | |||||||||||||
Net amounts presented in balance sheet: | ||||||||||||||||
Commodity contracts: | ||||||||||||||||
Embedded derivatives in provisional | ||||||||||||||||
sales/purchase contracts | 21 | 125 | 4 | 44 | ||||||||||||
Copper derivatives | 5 | 7 | — | — | ||||||||||||
$ | 26 | $ | 132 | $ | 4 | $ | 44 | |||||||||
Balance sheet classification: | ||||||||||||||||
Trade accounts receivable | $ | 20 | $ | 119 | $ | 1 | $ | 13 | ||||||||
Other current assets | 6 | 7 | — | — | ||||||||||||
Accounts payable and accrued liabilities | — | 6 | 3 | 31 | ||||||||||||
$ | 26 | $ | 132 | $ | 4 | $ | 44 |
At March 31, 2017 | |||||||||||||||||||||||
Carrying | Fair Value | ||||||||||||||||||||||
Amount | Total | NAV | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Investment securities:a,b | |||||||||||||||||||||||
U.S. core fixed income fund | $ | 24 | $ | 24 | $ | 24 | $ | — | $ | — | $ | — | |||||||||||
Money market funds | 22 | 22 | — | 22 | — | — | |||||||||||||||||
Equity securities | 5 | 5 | — | 5 | — | — | |||||||||||||||||
Total | 51 | 51 | 24 | 27 | — | — | |||||||||||||||||
Legally restricted funds:a | |||||||||||||||||||||||
U.S. core fixed income fund | 54 | 54 | 54 | — | — | — | |||||||||||||||||
Government bonds and notes | 36 | 36 | — | — | 36 | — | |||||||||||||||||
Corporate bonds | 32 | 32 | — | — | 32 | — | |||||||||||||||||
Government mortgage-backed securities | 24 | 24 | — | — | 24 | — | |||||||||||||||||
Asset-backed securities | 18 | 18 | — | — | 18 | — | |||||||||||||||||
Money market funds | 12 | 12 | — | 12 | — | — | |||||||||||||||||
Collateralized mortgage-backed securities | 7 | 7 | — | — | 7 | — | |||||||||||||||||
Municipal bonds | 1 | 1 | — | — | 1 | — | |||||||||||||||||
Total | 184 | 184 | 54 | 12 | 118 | — | |||||||||||||||||
Derivatives: | |||||||||||||||||||||||
Embedded derivatives in provisional sales/ | |||||||||||||||||||||||
purchase contracts in a gross asset positionc | 24 | 24 | — | — | 24 | — | |||||||||||||||||
Copper futures and swap contractsc | 6 | 6 | — | 5 | 1 | — | |||||||||||||||||
Contingent consideration for the sales of TFHL | |||||||||||||||||||||||
and onshore California oil and gas propertiesa | 72 | 72 | — | — | 72 | — | |||||||||||||||||
Total | 102 | 102 | — | 5 | 97 | — | |||||||||||||||||
Contingent consideration for the sale of the | |||||||||||||||||||||||
Deepwater GOM oil and gas propertiesa | 150 | 135 | — | — | — | 135 | |||||||||||||||||
Total assets | $ | 472 | $ | 78 | $ | 44 | $ | 215 | $ | 135 | |||||||||||||
Liabilities | |||||||||||||||||||||||
Derivatives:c | |||||||||||||||||||||||
Embedded derivatives in provisional sales/ | |||||||||||||||||||||||
purchase contracts in a gross liability position | 7 | $ | 7 | $ | — | $ | — | $ | 7 | $ | — | ||||||||||||
Copper futures and swap contracts | 1 | 1 | — | 1 | — | — | |||||||||||||||||
Total | 8 | 8 | — | 1 | 7 | — | |||||||||||||||||
Contingent payments for the settlements of | |||||||||||||||||||||||
drilling rig contractsd | 10 | 10 | — | — | 10 | — | |||||||||||||||||
Long-term debt, including current portione | 15,363 | 14,624 | — | — | 14,624 | — | |||||||||||||||||
Total liabilities | $ | 14,642 | $ | — | $ | 1 | $ | 14,641 | $ | — |
At December 31, 2016 | |||||||||||||||||||||||
Carrying | Fair Value | ||||||||||||||||||||||
Amount | Total | NAV | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Investment securities:a,b | |||||||||||||||||||||||
U.S. core fixed income fund | $ | 23 | $ | 23 | $ | 23 | $ | — | $ | — | $ | — | |||||||||||
Money market funds | 22 | 22 | — | 22 | — | — | |||||||||||||||||
Equity securities | 5 | 5 | — | 5 | — | — | |||||||||||||||||
Total | 50 | 50 | 23 | 27 | — | — | |||||||||||||||||
Legally restricted funds:a | |||||||||||||||||||||||
U.S. core fixed income fund | 53 | 53 | 53 | — | — | — | |||||||||||||||||
Government bonds and notes | 36 | 36 | — | — | 36 | — | |||||||||||||||||
Corporate bonds | 32 | 32 | — | — | 32 | — | |||||||||||||||||
Government mortgage-backed securities | 25 | 25 | — | — | 25 | — | |||||||||||||||||
Asset-backed securities | 16 | 16 | — | — | 16 | — | |||||||||||||||||
Money market funds | 12 | 12 | — | 12 | — | — | |||||||||||||||||
Collateralized mortgage-backed securities | 8 | 8 | — | — | 8 | — | |||||||||||||||||
Municipal bonds | 1 | 1 | — | — | 1 | — | |||||||||||||||||
Total | 183 | 183 | 53 | 12 | 118 | — | |||||||||||||||||
Derivatives: | |||||||||||||||||||||||
Embedded derivatives in provisional sales/ | |||||||||||||||||||||||
purchase contracts in a gross asset positionc | 137 | 137 | — | — | 137 | — | |||||||||||||||||
Copper futures and swap contractsc | 9 | 9 | — | 8 | 1 | — | |||||||||||||||||
Contingent consideration for the sales of TFHL | |||||||||||||||||||||||
and onshore California oil and gas propertiesa | 46 | 46 | — | — | 46 | — | |||||||||||||||||
Total | 192 | 192 | — | 8 | 184 | — | |||||||||||||||||
Contingent consideration for the sale of the | |||||||||||||||||||||||
Deepwater GOM oil and gas propertiesa | 150 | 135 | — | — | — | 135 | |||||||||||||||||
Total assets | $ | 560 | $ | 76 | $ | 47 | $ | 302 | $ | 135 | |||||||||||||
Liabilities | |||||||||||||||||||||||
Derivatives:c | |||||||||||||||||||||||
Embedded derivatives in provisional sales/ | |||||||||||||||||||||||
purchase contracts in a gross liability position | 56 | $ | 56 | $ | — | $ | — | $ | 56 | $ | — | ||||||||||||
Copper futures and swap contracts | 2 | 2 | — | 2 | — | — | |||||||||||||||||
Total | 58 | 58 | — | 2 | 56 | — | |||||||||||||||||
Contingent payments for the settlements of | |||||||||||||||||||||||
drilling rig contractsd | 23 | 23 | — | — | 23 | — | |||||||||||||||||
Long-term debt, including current portione | 16,027 | 15,196 | — | — | 15,196 | — | |||||||||||||||||
Total liabilities | $ | 15,277 | $ | — | $ | 2 | $ | 15,275 | $ | — |
a. | Current portion included in other current assets and long-term portion included in other assets. |
b. | Excludes time deposits (which approximated fair value) included in (i) other current assets of $32 million at March 31, 2017, and $28 million at December 31, 2016, and (ii) other assets of $122 million at both March 31, 2017, and December 31, 2016, primarily associated with an assurance bond to support PT Freeport Indonesia’s (PT-FI) commitment for smelter development in Indonesia. |
c. | Refer to Note 7 for further discussion and balance sheet classifications. |
d. | Included in accounts payable and accrued liabilities. |
e. | Recorded at cost except for debt assumed in acquisitions, which were recorded at fair value at the respective acquisition dates. |
(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 | nationsa | Total | ||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Unaffiliated customers | $ | 66 | $ | 50 | $ | 116 | $ | 640 | $ | 112 | $ | 752 | $ | 534 | b | $ | — | $ | 1,107 | $ | 458 | $ | 374 | c | $ | 3,341 | |||||||||||||||||||||
Intersegment | 416 | 563 | 979 | 116 | — | 116 | — | 63 | 8 | — | (1,166 | ) | — | ||||||||||||||||||||||||||||||||||
Production and delivery | 260 | d | 413 | 673 | 391 | 82 | 473 | 273 | d | 52 | 1,110 | 436 | (817 | ) | e | 2,200 | |||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 47 | 69 | 116 | 112 | 21 | 133 | 83 | 19 | 2 | 7 | 29 | 389 | |||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | — | 1 | 1 | 2 | — | 2 | 30 | — | — | 5 | 115 | f | 153 | ||||||||||||||||||||||||||||||||||
Mining exploration and research expenses | — | 1 | 1 | — | — | — | — | — | — | — | 14 | 15 | |||||||||||||||||||||||||||||||||||
Environmental obligations and shutdown costs | — | — | — | — | — | — | — | — | — | — | 27 | 27 | |||||||||||||||||||||||||||||||||||
Net gain on sales of assets | — | — | — | — | — | — | — | — | — | — | (23 | ) | (23 | ) | |||||||||||||||||||||||||||||||||
Operating income (loss) | 175 | 129 | 304 | 251 | 9 | 260 | 148 | (8 | ) | 3 | 10 | (137 | ) | 580 | |||||||||||||||||||||||||||||||||
Interest expense, net | 1 | — | 1 | 16 | — | 16 | — | — | — | 4 | 146 | 167 | |||||||||||||||||||||||||||||||||||
Provision for income taxes | — | — | — | 98 | 3 | 101 | 67 | — | — | — | 6 | 174 | |||||||||||||||||||||||||||||||||||
Total assets at March 31, 2017 | 2,814 | 4,361 | 7,175 | 9,081 | 1,525 | 10,606 | 10,879 | 1,917 | 261 | 652 | 5,086 | g | 36,576 | ||||||||||||||||||||||||||||||||||
Capital expenditures | 23 | 5 | 28 | 14 | 1 | 15 | 244 | 1 | 1 | 8 | 47 | h | 344 | ||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Unaffiliated customers | $ | 162 | $ | 56 | $ | 218 | $ | 486 | $ | 144 | $ | 630 | $ | 498 | b | $ | — | $ | 971 | $ | 422 | $ | 503 | c | $ | 3,242 | |||||||||||||||||||||
Intersegment | 357 | 561 | 918 | 41 | — | 41 | 58 | 45 | 8 | 1 | (1,071 | ) | — | ||||||||||||||||||||||||||||||||||
Production and delivery | 340 | 448 | 788 | 291 | 119 | 410 | 394 | 52 | 970 | 393 | (508 | ) | e | 2,499 | |||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 62 | 82 | 144 | 101 | 31 | 132 | 81 | 19 | 2 | 8 | 276 | 662 | |||||||||||||||||||||||||||||||||||
Impairment of oil and gas properties | — | — | — | — | — | — | — | — | — | — | 3,787 | 3,787 | |||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | — | 1 | 1 | 2 | — | 2 | 14 | — | — | 4 | 117 | 138 | |||||||||||||||||||||||||||||||||||
Mining exploration and research expenses | — | 1 | 1 | — | — | — | — | — | — | — | 17 | 18 | |||||||||||||||||||||||||||||||||||
Environmental obligations and shutdown costs | — | — | — | — | — | — | — | — | — | — | 10 | 10 | |||||||||||||||||||||||||||||||||||
Operating income (loss) | 117 | 85 | 202 | 133 | (6 | ) | 127 | 67 | (26 | ) | 7 | 18 | (4,267 | ) | (3,872 | ) | |||||||||||||||||||||||||||||||
Interest expense, net | 1 | — | 1 | 22 | — | 22 | — | — | — | 4 | 164 | 191 | |||||||||||||||||||||||||||||||||||
Provision for (benefit from) income taxes | — | — | — | 45 | (6 | ) | 39 | 36 | — | — | — | 2 | 77 | ||||||||||||||||||||||||||||||||||
Total assets at March 31, 2016 | 3,490 | 4,751 | 8,241 | 9,495 | 1,623 | 11,118 | 9,306 | 1,983 | 236 | 653 | 11,127 | g | 42,664 | ||||||||||||||||||||||||||||||||||
Capital expenditures | 28 | 6 | 34 | 156 | 1 | 157 | 222 | 1 | 1 | 2 | 565 | h | 982 |
a. | Includes U.S. oil and gas operations that was previously a reportable segment. |
b. | Includes PT-FI’s sales to PT Smelting totaling $258 million in first-quarter 2017 and $277 million in first-quarter 2016. |
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 $19 million for asset impairments at Morenci and $21 million at PT-FI for costs charged directly to cost of sales as a result of the impact of regulatory restrictions on its concentrate exports. |
e. | Includes net credits (charges) for oil and gas operations totaling $20 million in first-quarter 2017 and $(200) million in first-quarter 2016, primarily for drillship settlement/idle rig costs, asset impairment and inventory adjustments. |
f. | Includes $21 million for other oil and gas contract termination costs. |
g. | Includes assets held for sale totaling $408 million at March 31, 2017, primarily associated with Freeport Cobalt and the Kisanfu exploration project, and $5.3 billion at March 31, 2016, which also included discontinued operations. Also includes $331 million at March 31, 2017, and $4.4 billion at March 31, 2016, associated with oil and gas operations. |
h. | Includes $19 million in first-quarter 2017 and $523 million in first-quarter 2016 associated with oil and gas operations. First-quarter 2016 also includes $35 million associated with discontinued operations. |
FCX | FM O&G LLC | Non-guarantor | Consolidated | ||||||||||||||||
Issuer | Guarantor | Subsidiaries | Eliminations | FCX | |||||||||||||||
ASSETS | |||||||||||||||||||
Current assets, other than assets held for sale | $ | 176 | $ | 717 | $ | 9,176 | $ | (710 | ) | $ | 9,359 | ||||||||
Current assets held for sale | — | — | 408 | — | 408 | ||||||||||||||
Property, plant, equipment and mine development costs, net | 17 | 15 | 23,086 | (1 | ) | 23,117 | |||||||||||||
Oil and gas properties, subject to amortization, less accumulated amortization and impairments | — | — | 57 | — | 57 | ||||||||||||||
Investments in consolidated subsidiaries | 19,865 | — | — | (19,865 | ) | — | |||||||||||||
Other assets | 542 | 37 | 3,578 | (522 | ) | 3,635 | |||||||||||||
Total assets | $ | 20,600 | $ | 769 | $ | 36,305 | $ | (21,098 | ) | $ | 36,576 | ||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Current liabilities, other than liabilities held for sale | $ | 2,360 | $ | 171 | $ | 2,842 | $ | (787 | ) | $ | 4,586 | ||||||||
Current liabilities held for sale | — | — | 256 | — | 256 | ||||||||||||||
Long-term debt, less current portion | 11,032 | 6,297 | 5,576 | (9,770 | ) | 13,135 | |||||||||||||
Deferred income taxes | 829 | a | — | 2,957 | — | 3,786 | |||||||||||||
Environmental and asset retirement obligations, less current portion | — | 201 | 3,306 | — | 3,507 | ||||||||||||||
Investments in consolidated subsidiaries | — | 844 | 10,090 | (10,934 | ) | — | |||||||||||||
Other liabilities | 61 | 3,346 | 1,798 | (3,486 | ) | 1,719 | |||||||||||||
Total liabilities | 14,282 | 10,859 | 26,825 | (24,977 | ) | 26,989 | |||||||||||||
Equity: | |||||||||||||||||||
Stockholders’ equity | 6,318 | (10,090 | ) | 6,828 | 3,262 | 6,318 | |||||||||||||
Noncontrolling interests | — | — | 2,652 | 617 | 3,269 | ||||||||||||||
Total equity | 6,318 | (10,090 | ) | 9,480 | 3,879 | 9,587 | |||||||||||||
Total liabilities and equity | $ | 20,600 | $ | 769 | $ | 36,305 | $ | (21,098 | ) | $ | 36,576 |
a. | All U.S.-related deferred income taxes are recorded at the parent company. |
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, 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 | ||||||||||||||
Investment 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. |
Three Months Ended March 31, 2017 | |||||||||||||||||||
FCX | FM O&G LLC | Non-guarantor | Consolidated | ||||||||||||||||
Issuer | Guarantor | Subsidiaries | Eliminations | FCX | |||||||||||||||
Revenues | $ | — | $ | 13 | $ | 3,328 | $ | — | $ | 3,341 | |||||||||
Total costs and expenses | 9 | 50 | 2,700 | 2 | 2,761 | ||||||||||||||
Operating (loss) income | (9 | ) | (37 | ) | 628 | (2 | ) | 580 | |||||||||||
Interest expense, net | (122 | ) | (53 | ) | (71 | ) | 79 | (167 | ) | ||||||||||
Other income (expense), net | 79 | — | 25 | (79 | ) | 25 | |||||||||||||
(Loss) income before income taxes and equity in affiliated companies’ net earnings (losses) | (52 | ) | (90 | ) | 582 | (2 | ) | 438 | |||||||||||
(Provision for) benefit from income taxes | (60 | ) | 31 | (146 | ) | 1 | (174 | ) | |||||||||||
Equity in affiliated companies’ net earnings (losses) | 340 | 20 | (36 | ) | (320 | ) | 4 | ||||||||||||
Net income (loss) from continuing operations | 228 | (39 | ) | 400 | (321 | ) | 268 | ||||||||||||
Net income from discontinued operations | — | — | 38 | — | 38 | ||||||||||||||
Net income (loss) | 228 | (39 | ) | 438 | (321 | ) | 306 | ||||||||||||
Net income attributable to noncontrolling interests: | |||||||||||||||||||
Continuing operations | — | — | (65 | ) | (10 | ) | (75 | ) | |||||||||||
Discontinued operations | — | — | (3 | ) | — | (3 | ) | ||||||||||||
Net income (loss) attributable to common stockholders | $ | 228 | $ | (39 | ) | $ | 370 | $ | (331 | ) | $ | 228 | |||||||
Other comprehensive income (loss) | 11 | — | 11 | (11 | ) | 11 | |||||||||||||
Total comprehensive income (loss) | $ | 239 | $ | (39 | ) | $ | 381 | $ | (342 | ) | $ | 239 |
Three Months Ended March 31, 2016 | |||||||||||||||||||
FCX | FM O&G LLC | Non-guarantor | Consolidated | ||||||||||||||||
Issuer | Guarantor | Subsidiaries | Eliminations | FCX | |||||||||||||||
Revenues | $ | — | $ | 78 | $ | 3,164 | $ | — | $ | 3,242 | |||||||||
Total costs and expenses | 27 | 1,629 | a | 5,452 | a | 6 | 7,114 | ||||||||||||
Operating loss | (27 | ) | (1,551 | ) | (2,288 | ) | (6 | ) | (3,872 | ) | |||||||||
Interest expense, net | (137 | ) | (4 | ) | (114 | ) | 64 | (191 | ) | ||||||||||
Other income (expense), net | 50 | — | 40 | (54 | ) | 36 | |||||||||||||
(Loss) income before income taxes and equity in affiliated companies’ net (losses) earnings | (114 | ) | (1,555 | ) | (2,362 | ) | 4 | (4,027 | ) | ||||||||||
(Provision for) benefit from income taxes | (1,784 | ) | 616 | 1,088 | 3 | (77 | ) | ||||||||||||
Equity in affiliated companies’ net (losses) earnings | (2,286 | ) | (2,704 | ) | (3,630 | ) | 8,627 | 7 | |||||||||||
Net (loss) income from continuing operations | (4,184 | ) | (3,643 | ) | (4,904 | ) | 8,634 | (4,097 | ) | ||||||||||
Net income (loss) from discontinued operations | — | — | 6 | (10 | ) | (4 | ) | ||||||||||||
Net (loss) income | (4,184 | ) | (3,643 | ) | (4,898 | ) | 8,624 | (4,101 | ) | ||||||||||
Net income and preferred dividends attributable to noncontrolling interests: | |||||||||||||||||||
Continuing operations | — | — | (67 | ) | (6 | ) | (73 | ) | |||||||||||
Discontinued operations | — | — | (10 | ) | — | (10 | ) | ||||||||||||
Net (loss) income attributable to common stockholders | $ | (4,184 | ) | $ | (3,643 | ) | $ | (4,975 | ) | $ | 8,618 | $ | (4,184 | ) | |||||
Other comprehensive income (loss) | — | — | — | — | — | ||||||||||||||
Total comprehensive (loss) income | $ | (4,184 | ) | $ | (3,643 | ) | $ | (4,975 | ) | $ | 8,618 | $ | (4,184 | ) |
a. | Includes charges totaling $1.3 billion at the FM O&G LLC guarantor and $2.5 billion at the non-guarantor subsidiaries related to impairment of FCX’s oil and gas properties pursuant to full cost accounting rules. |
Three Months Ended March 31, 2017 | FCX | FM O&G LLC | Non-guarantor | Consolidated | |||||||||||||||
Issuer | Guarantor | Subsidiaries | Eliminations | FCX | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (112 | ) | $ | (200 | ) | $ | 1,104 | $ | — | $ | 792 | |||||||
Cash flow from investing activities: | |||||||||||||||||||
Capital expenditures | — | (10 | ) | (334 | ) | — | (344 | ) | |||||||||||
Intercompany loans | (277 | ) | — | — | 277 | — | |||||||||||||
Dividends from (investments in) consolidated subsidiaries | 894 | — | 26 | (920 | ) | — | |||||||||||||
Asset sales and other, net | — | (23 | ) | 2 | — | (21 | ) | ||||||||||||
Net cash provided by (used in) investing activities | 617 | (33 | ) | (306 | ) | (643 | ) | (365 | ) | ||||||||||
Cash flow from financing activities: | |||||||||||||||||||
Proceeds from debt | — | — | 157 | — | 157 | ||||||||||||||
Repayments of debt | (499 | ) | — | (316 | ) | — | (815 | ) | |||||||||||
Intercompany loans | — | 236 | 41 | (277 | ) | — | |||||||||||||
Cash dividends paid and contributions received, net | (1 | ) | — | (895 | ) | 880 | (16 | ) | |||||||||||
Other, net | (5 | ) | (6 | ) | (34 | ) | 40 | (5 | ) | ||||||||||
Net cash (used in) provided by financing activities | (505 | ) | 230 | (1,047 | ) | 643 | (679 | ) | |||||||||||
Net decrease in cash and cash equivalents | — | (3 | ) | (249 | ) | — | (252 | ) | |||||||||||
Decrease in cash and cash equivalents in assets held for sale | — | — | 8 | — | 8 | ||||||||||||||
Cash and cash equivalents at beginning of period | — | 3 | 4,242 | — | 4,245 | ||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | — | $ | 4,001 | $ | — | $ | 4,001 |
Three Months Ended March 31, 2016 | FCX | FM O&G LLC | Non-guarantor | Consolidated | |||||||||||||||
Issuer | Guarantor | Subsidiaries | Eliminations | FCX | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (117 | ) | $ | (32 | ) | $ | 884 | $ | 5 | $ | 740 | |||||||
Cash flow from investing activities: | |||||||||||||||||||
Capital expenditures | — | (244 | ) | (736 | ) | (2 | ) | (982 | ) | ||||||||||
Intercompany loans | (561 | ) | (377 | ) | — | 938 | — | ||||||||||||
Dividends from (investments in) consolidated subsidiaries | 358 | (41 | ) | 35 | (352 | ) | — | ||||||||||||
Other, net | — | 2 | — | — | 2 | ||||||||||||||
Net cash (used in) provided by investing activities | (203 | ) | (660 | ) | (701 | ) | 584 | (980 | ) | ||||||||||
Cash flow from financing activities: | |||||||||||||||||||
Proceeds from debt | 1,060 | — | 736 | — | 1,796 | ||||||||||||||
Repayments of debt | (750 | ) | — | (692 | ) | — | (1,442 | ) | |||||||||||
Intercompany loans | — | 716 | 222 | (938 | ) | — | |||||||||||||
Net proceeds from sale of common stock | 32 | — | 42 | (42 | ) | 32 | |||||||||||||
Cash dividends paid and contributions received, net | (4 | ) | — | (373 | ) | 355 | (22 | ) | |||||||||||
Other, net | (18 | ) | (24 | ) | (11 | ) | 36 | (17 | ) | ||||||||||
Net cash provided by (used in) financing activities | 320 | 692 | (76 | ) | (589 | ) | 347 | ||||||||||||
Net increase in cash and cash equivalents | — | — | 107 | — | 107 | ||||||||||||||
Increase in cash and cash equivalents in assets held for sale | — | — | (53 | ) | — | (53 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | — | — | 177 | — | 177 | ||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | — | $ | 231 | $ | — | $ | 231 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Copper (millions of recoverable pounds): | |||
North America copper mines | 1,490 | ||
South America mining | 1,240 | ||
Indonesia mining | 1,135 | ||
Total | 3,865 | ||
Gold (thousands of recoverable ounces) | 1,917 | ||
Molybdenum (millions of recoverable pounds) | 93 | a |
a. | Projected molybdenum sales include 35 million pounds produced by our Molybdenum mines and 58 million pounds produced by our North America and South America copper mines. |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
SUMMARY FINANCIAL DATA | (in millions, except per share amounts) | |||||||
Revenuesa,b | $ | 3,341 | $ | 3,242 | ||||
Operating income (loss)a,c,d | $ | 580 | e,f | $ | (3,872 | ) | g | |
Net income (loss) from continuing operationsh | $ | 268 | $ | (4,097 | ) | |||
Net income (loss) from discontinued operations | $ | 38 | i | $ | (4 | ) | ||
Net income (loss) attributable to common stock | $ | 228 | $ | (4,184 | ) | |||
Diluted net income (loss) per share of common stock: | ||||||||
Continuing operations | $ | 0.13 | $ | (3.34 | ) | |||
Discontinued operations | 0.03 | (0.01 | ) | |||||
$ | 0.16 | $ | (3.35 | ) | ||||
Diluted weighted-average common shares outstanding | 1,454 | 1,251 | ||||||
Operating cash flowsj | $ | 792 | $ | 740 | ||||
Capital expenditures | $ | 344 | $ | 982 | ||||
At March 31: | ||||||||
Cash and cash equivalents | $ | 4,001 | $ | 231 | ||||
Total debt, including current portion | $ | 15,363 | $ | 20,675 | ||||
Three Months Ended March 31, | |||||||
Revenues | 2017 | 2016 | |||||
North America copper mines | $ | 1,095 | $ | 1,136 | |||
South America mining | 868 | 671 | |||||
Indonesia mining | 534 | 556 | |||||
Molybdenum mines | 63 | 45 | |||||
Rod & Refining | 1,115 | 979 | |||||
Atlantic Copper Smelting & Refining | 458 | 423 | |||||
Corporate, other & eliminations | (792 | ) | (568 | ) | |||
Total revenues | $ | 3,341 | $ | 3,242 | |||
Operating income (loss) | |||||||
North America copper mines | $ | 304 | $ | 202 | |||
South America mining | 260 | 127 | |||||
Indonesia mining | 148 | 67 | |||||
Molybdenum mines | (8 | ) | (26 | ) | |||
Rod & Refining | 3 | 7 | |||||
Atlantic Copper Smelting & Refining | 10 | 18 | |||||
Corporate, other & eliminations | (137 | ) | (4,267 | ) | |||
Total operating income (loss) | $ | 580 | $ | (3,872 | ) |
b. | Includes favorable adjustments to provisionally priced concentrate and cathode copper sales recognized in prior periods totaling $91 million ($39 million to net income attributable to common stock from continuing operations or $0.03 per share) in first-quarter 2017 and $9 million ($5 million to net loss attributable to common stock from continuing operations or less than $0.01 per share) in first-quarter 2016. Refer to “Revenues” for further discussion. |
c. | Includes net charges at oil and gas operations totaling $1 million ($1 million to net income attributable to common stock or less than $0.01 per share) in first-quarter 2017 for contract termination costs, mostly offset by adjustments to drillship settlements, and $200 million ($200 million to net loss attributable to common stock or $0.16 per share) in first-quarter 2016, primarily for idle rig costs, inventory adjustments and asset impairments. |
d. | Includes net charges to environmental obligations and related litigation reserves totaling $19 million ($19 million to net income attributable to common stock or $0.01 per share) in first-quarter 2017 and $1 million ($1 million to net loss attributable to common stock or less than $0.01 per share) in first-quarter 2016. |
e. | Includes charges at mining operations totaling $40 million ($30 million to net income attributable to common stock or $0.02 per share) in first-quarter 2017 for costs charged directly to cost of sales as a result of the impact of regulatory restrictions on PT-FI’s concentrate exports and for asset impairments at Morenci. |
f. | Includes net gains on sales of assets totaling $23 million ($23 million to net income attributable to common stock or $0.01 per share) in first-quarter 2017 reflecting gains related to the sale of our Madden property interests and for adjustments to the December 2016 Deepwater Gulf of Mexico (GOM) sale, partly offset by adjustments to the fair value of potential contingent consideration related to the December 2016 onshore California sale, which in accordance with accounting guidelines will continue to be adjusted through December 31, 2020. |
g. | Includes charges to reduce the carrying value of oil and gas properties pursuant to full cost accounting rules totaling $3.8 billion ($3.8 billion to net loss attributable to common stock or $3.03 per share) in first-quarter 2016. |
h. | We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations – Smelting & Refining” for a summary of net impacts from changes in these deferrals. |
i. | Primarily reflects adjustments to the fair value of the potential contingent consideration related to the November 2016 sale of our interest in TFHL, which in accordance with accounting guidelines will continue to be adjusted through December 31, 2019. Refer to Note 2 for a summary of the components of net income (loss) from discontinued operations. |
j. | Includes net working capital sources and changes in other tax payments of $178 million in first-quarter 2017 and $188 million in first-quarter 2016. |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
SUMMARY OPERATING DATA | ||||||||
Copper (millions of recoverable pounds)a | ||||||||
Production | 851 | 987 | ||||||
Sales, excluding purchases | 809 | 1,000 | ||||||
Average realized price per pound | $ | 2.67 | $ | 2.18 | ||||
Site production and delivery costs per poundb | $ | 1.60 | $ | 1.49 | ||||
Unit net cash costs per poundb | $ | 1.39 | $ | 1.38 | ||||
Gold (thousands of recoverable ounces) | ||||||||
Production | 239 | 184 | ||||||
Sales, excluding purchases | 182 | 201 | ||||||
Average realized price per ounce | $ | 1,229 | $ | 1,227 | ||||
Molybdenum (millions of recoverable pounds) | ||||||||
Production | 23 | 20 | ||||||
Sales, excluding purchases | 24 | 17 | ||||||
Average realized price per pound | $ | 8.71 | $ | 7.61 | ||||
Oil Equivalents | ||||||||
Sales volumes | ||||||||
Oil (millions of barrels (MMBbls)) | 0.5 | 8.3 | ||||||
Natural gas (billion cubic feet (Bcf)) | 6.0 | 19.6 | ||||||
Natural gas liquids (MMBbls) | 0.1 | 0.6 | ||||||
Million barrels of oil equivalent (MMBOE) | 1.6 | 12.1 | ||||||
Thousand BOE (MBOE) per day | 17 | 133 |
a. | Excludes production and sales volumes from the Tenke mine, which was sold in November 2016 and is reported as a discontinued operation. Copper sales volumes from Tenke totaled 123 million pounds in first-quarter 2016. |
b. | Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs. For reconciliations of per pound unit costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.” |
Three Months Ended March 31 | |||
Revenues - 2016 period | $ | 3,242 | |
(Lower) higher sales volumes: | |||
Copper | (418 | ) | |
Gold | (23 | ) | |
Molybdenum | 53 | ||
Oil and gas | (262 | ) | |
Higher average realized prices: | |||
Copper | 396 | ||
Gold | — | ||
Molybdenum | 26 | ||
Net adjustments for prior period provisionally priced copper sales | 82 | ||
Lower treatment charges | 33 | ||
Higher revenues from purchased copper | 98 | ||
Higher Atlantic Copper revenues | 35 | ||
Other, including intercompany eliminations | 79 | ||
Revenues - 2017 period | $ | 3,341 | |
Three Months Ended March 31, | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
Incomea | Effective Tax Rate | Income Tax Benefit (Provision) | Income (Loss)a | Effective Tax Rate | Income Tax Benefit (Provision) | |||||||||||||||
U.S. | $ | 10 | 70% | $ | (7 | ) | $ | (454 | ) | 4% | $ | 16 | ||||||||
South America | 260 | 39% | (101 | ) | 113 | 35% | (39 | ) | ||||||||||||
Indonesia | 152 | 44% | (67 | ) | 91 | 40% | (36 | ) | ||||||||||||
Impairment of oil and gas properties | — | N/A | — | (3,787 | ) | 38% | 1,435 | |||||||||||||
Valuation allowance, net | — | N/A | — | — | N/A | (1,435 | ) | b | ||||||||||||
Eliminations and other | 16 | N/A | (1 | ) | 10 | N/A | (3 | ) | ||||||||||||
Rate adjustmentc | — | N/A | 2 | — | N/A | (15 | ) | |||||||||||||
Consolidated FCX | $ | 438 | 40% | d | $ | (174 | ) | $ | (4,027 | ) | (2)% | $ | (77 | ) |
a. | Represents income (loss) from continuing operations by geographic location before income taxes and equity in affiliated companies’ net earnings. |
b. | As a result of the impairment to U.S. oil and gas properties, we recorded tax charges to establish valuation allowances against U.S. federal and state deferred tax assets that will not generate a future benefit. |
c. | We adjust our interim provision for income taxes in accordance with applicable accounting rules. |
d. | The consolidated effective income tax rate is a function of the combined effective tax rates for the jurisdictions in which we operate. Accordingly, variations in the relative proportions of jurisdictional income result in fluctuations to our consolidated effective income tax rate. Assuming achievement of current sales volume and cost estimates and average prices of $2.50 per pound for copper, $1,250 per ounce for gold and $9 per pound for molybdenum for the remainder of 2017, we estimate our consolidated effective tax rate related to continuing operations for the year 2017 will approximate 45 percent and would decrease with higher prices. |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Operating Data, Net of Joint Venture Interests | ||||||||
Copper | ||||||||
Production (millions of recoverable pounds) | 392 | 487 | ||||||
Sales (millions of recoverable pounds) | 375 | 503 | ||||||
Average realized price per pound | $ | 2.68 | $ | 2.16 | ||||
Molybdenum | ||||||||
Production (millions of recoverable pounds)a | 9 | 8 | ||||||
100% Operating Data | ||||||||
SX/EW operations | ||||||||
Leach ore placed in stockpiles (metric tons per day) | 700,600 | 833,400 | ||||||
Average copper ore grade (percent) | 0.28 | 0.31 | ||||||
Copper production (millions of recoverable pounds) | 277 | 302 | ||||||
Mill operations | ||||||||
Ore milled (metric tons per day) | 303,800 | 298,600 | ||||||
Average ore grade (percent): | ||||||||
Copper | 0.41 | 0.50 | ||||||
Molybdenum | 0.03 | 0.03 | ||||||
Copper recovery rate (percent) | 86.4 | 84.7 | ||||||
Copper production (millions of recoverable pounds) | 186 | 226 |
a. | Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at the North America copper mines. |
Three Months Ended March 31, | ||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
By- Product Method | Co-Product Method | By- Product Method | Co-Product Method | |||||||||||||||||||||
Copper | Molyb- denuma | Copper | Molyb- denuma | |||||||||||||||||||||
Revenues, excluding adjustments | $ | 2.68 | $ | 2.68 | $ | 7.00 | $ | 2.16 | $ | 2.16 | $ | 5.27 | ||||||||||||
Site production and delivery, before net noncash and other costs shown below | 1.52 | 1.43 | 5.19 | 1.40 | 1.35 | 4.29 | ||||||||||||||||||
By-product credits | (0.15 | ) | — | — | (0.08 | ) | — | — | ||||||||||||||||
Treatment charges | 0.11 | 0.11 | — | 0.10 | 0.10 | — | ||||||||||||||||||
Unit net cash costs | 1.48 | 1.54 | 5.19 | 1.42 | 1.45 | 4.29 | ||||||||||||||||||
DD&A | 0.31 | 0.29 | 0.52 | 0.28 | 0.27 | 0.54 | ||||||||||||||||||
Noncash and other costs, net | 0.09 | b | 0.09 | 0.07 | 0.05 | 0.05 | (0.05 | ) | ||||||||||||||||
Total unit costs | 1.88 | 1.92 | 5.78 | 1.75 | 1.77 | 4.78 | ||||||||||||||||||
Revenue adjustments, primarily for pricing on prior period open sales | 0.02 | 0.02 | — | — | — | — | ||||||||||||||||||
Gross profit per pound | $ | 0.82 | $ | 0.78 | $ | 1.22 | $ | 0.41 | $ | 0.39 | $ | 0.49 | ||||||||||||
Copper sales (millions of recoverable pounds) | 374 | 374 | 502 | 502 | ||||||||||||||||||||
Molybdenum sales (millions of recoverable pounds)a | 9 | 8 |
a. | Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. |
b. | Includes $19 million ($0.05 per pound of copper) for other asset impairment charges at Morenci. |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Copper | ||||||||
Production (millions of recoverable pounds) | 304 | 335 | ||||||
Sales (millions of recoverable pounds) | 309 | 323 | ||||||
Average realized price per pound | $ | 2.66 | $ | 2.19 | ||||
Molybdenum | ||||||||
Production (millions of recoverable pounds)a | 6 | 5 | ||||||
SX/EW operations | ||||||||
Leach ore placed in stockpiles (metric tons per day) | 125,900 | 140,700 | ||||||
Average copper ore grade (percent) | 0.42 | 0.41 | ||||||
Copper production (millions of recoverable pounds) | 66 | 90 | ||||||
Mill operations | ||||||||
Ore milled (metric tons per day) | 338,900 | 339,400 | ||||||
Average ore grade (percent): | ||||||||
Copper | 0.44 | 0.43 | ||||||
Molybdenum | 0.02 | 0.02 | ||||||
Copper recovery rate (percent) | 84.5 | 86.2 | ||||||
Copper production (millions of recoverable pounds) | 238 | 245 |
a. | Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde. |
Three Months Ended March 31, | |||||||||||||||
2017 | 2016 | ||||||||||||||
By-Product Method | Co-Product Method | By-Product Method | Co-Product Method | ||||||||||||
Revenues, excluding adjustments | $ | 2.66 | $ | 2.66 | $ | 2.19 | $ | 2.19 | |||||||
Site production and delivery, before net noncash and other costs shown below | 1.48 | 1.38 | 1.23 | 1.19 | |||||||||||
By-product credits | (0.18 | ) | — | (0.07 | ) | — | |||||||||
Treatment charges | 0.22 | 0.22 | 0.23 | 0.23 | |||||||||||
Royalty on metals | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||
Unit net cash costs | 1.53 | 1.61 | 1.40 | 1.43 | |||||||||||
DD&A | 0.43 | 0.40 | 0.40 | 0.39 | |||||||||||
Noncash and other costs, net | 0.01 | 0.01 | 0.02 | 0.02 | |||||||||||
Total unit costs | 1.97 | 2.02 | 1.82 | 1.84 | |||||||||||
Revenue adjustments, primarily for pricing on prior period open sales | 0.16 | 0.16 | 0.03 | 0.03 | |||||||||||
Gross profit per pound | $ | 0.85 | $ | 0.80 | $ | 0.40 | $ | 0.38 | |||||||
Copper sales (millions of recoverable pounds) | 309 | 309 | 323 | 323 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Operating Data, Net of Joint Venture Interest | ||||||||
Copper | ||||||||
Production (millions of recoverable pounds) | 155 | 165 | ||||||
Sales (millions of recoverable pounds) | 125 | 174 | ||||||
Average realized price per pound | $ | 2.63 | $ | 2.20 | ||||
Gold | ||||||||
Production (thousands of recoverable ounces) | 232 | 178 | ||||||
Sales (thousands of recoverable ounces) | 177 | 195 | ||||||
Average realized price per ounce | $ | 1,229 | $ | 1,228 | ||||
100% Operating Data | ||||||||
Ore milled (metric tons per day):a | ||||||||
Grasberg open pit | 53,600 | 105,800 | ||||||
DOZ underground mineb | 26,100 | 44,200 | ||||||
DMLZ underground mine | 3,200 | 4,100 | ||||||
Grasberg Block Cave | 2,600 | 2,300 | ||||||
Big Gossan underground mine | 1,700 | 200 | ||||||
Total | 87,200 | 156,600 | ||||||
Average ore grades: | ||||||||
Copper (percent) | 1.15 | 0.69 | ||||||
Gold (grams per metric ton) | 1.17 | 0.53 | ||||||
Recovery rates (percent): | ||||||||
Copper | 92.2 | 89.3 | ||||||
Gold | 84.8 | 80.6 | ||||||
Production: | ||||||||
Copper (millions of recoverable pounds) | 172 | 183 | ||||||
Gold (thousands of recoverable ounces) | 241 | 190 |
a. | Amounts represent the approximate average daily throughput processed at PT-FI’s mill facilities from each producing mine and from development activities that result in metal production. |
b. | Ore milled from the DOZ underground mine is expected to ramp up to 60,000 metric tons of ore per day in 2017. |
Three Months Ended March 31, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
By-Product Method | Co-Product Method | By-Product Method | Co-Product Method | ||||||||||||||||||||
Copper | Gold | Copper | Gold | ||||||||||||||||||||
Revenues, excluding adjustments | $ | 2.63 | $ | 2.63 | $ | 1,229 | $ | 2.20 | $ | 2.20 | $ | 1,228 | |||||||||||
Site production and delivery, before net noncash and other costs shown below | 2.15 | 1.28 | 596 | 2.24 | 1.36 | 760 | |||||||||||||||||
Gold and silver credits | (1.88 | ) | — | — | (1.52 | ) | — | — | |||||||||||||||
Treatment charges | 0.28 | 0.17 | 77 | 0.31 | 0.19 | 106 | |||||||||||||||||
Export duties | 0.11 | 0.07 | 31 | 0.08 | 0.05 | 26 | |||||||||||||||||
Royalty on metals | 0.16 | 0.09 | 45 | 0.13 | 0.07 | 49 | |||||||||||||||||
Unit net cash costs | 0.82 | 1.61 | 749 | 1.24 | 1.67 | 941 | |||||||||||||||||
DD&A | 0.66 | 0.39 | 184 | 0.47 | 0.28 | 158 | |||||||||||||||||
Noncash and other costs, net | 0.26 | a | 0.15 | 72 | 0.06 | 0.04 | 23 | ||||||||||||||||
Total unit costs | 1.74 | 2.15 | 1,005 | 1.77 | 1.99 | 1,122 | |||||||||||||||||
Revenue adjustments, primarily for pricing on prior period open sales | 0.33 | 0.33 | 51 | (0.01 | ) | (0.01 | ) | 87 | |||||||||||||||
PT Smelting intercompany profit | 0.21 | 0.13 | 59 | 0.05 | 0.03 | 16 | |||||||||||||||||
Gross profit per pound/ounce | $ | 1.43 | $ | 0.94 | $ | 334 | $ | 0.47 | $ | 0.23 | $ | 209 | |||||||||||
Copper sales (millions of recoverable pounds) | 125 | 125 | 174 | 174 | |||||||||||||||||||
Gold sales (thousands of recoverable ounces) | 177 | 195 |
a. | Includes $21 million ($0.17 per pound of copper) of costs charged directly to cost of sales as a result of the impact of regulatory restrictions on PT-FI’s concentrate exports. |
Cash at domestic companies | $ | 3.4 | |
Cash at international operations | 0.6 | ||
Total consolidated cash and cash equivalents | 4.0 | ||
Noncontrolling interests’ share | (0.2 | ) | |
Cash, net of noncontrolling interests’ share | 3.8 | ||
Withholding taxes and other | (0.1 | ) | |
Net cash available | $ | 3.7 |
Weighted- | |||||
Average | |||||
Interest Rate | |||||
Senior Notes | $ | 13.9 | 4.4% | ||
Cerro Verde Credit Facility | 1.3 | 2.9% | |||
Other FCX debt | 0.2 | 2.9% | |||
Total debt | $ | 15.4 | 4.3% | ||
Three Months Ended March 31, 2017 | |||||||||||||||||||||
(In millions) | By-Product | Co-Product Method | |||||||||||||||||||
Method | Copper | Molybdenuma | Otherb | Total | |||||||||||||||||
Revenues, excluding adjustments | $ | 1,005 | $ | 1,005 | $ | 59 | $ | 20 | $ | 1,084 | |||||||||||
Site production and delivery, before net noncash | |||||||||||||||||||||
and other costs shown below | 568 | 536 | 44 | 10 | 590 | ||||||||||||||||
By-product credits | (57 | ) | — | — | — | — | |||||||||||||||
Treatment charges | 42 | 41 | — | 1 | 42 | ||||||||||||||||
Net cash costs | 553 | 577 | 44 | 11 | 632 | ||||||||||||||||
DD&A | 116 | 110 | 4 | 2 | 116 | ||||||||||||||||
Noncash and other costs, net | 34 | c | 33 | 1 | — | 34 | |||||||||||||||
Total costs | 703 | 720 | 49 | 13 | 782 | ||||||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||||||
on prior period open sales | 5 | 5 | — | — | 5 | ||||||||||||||||
Gross profit | $ | 307 | $ | 290 | $ | 10 | $ | 7 | $ | 307 | |||||||||||
Copper sales (millions of recoverable pounds) | 374 | 374 | |||||||||||||||||||
Molybdenum sales (millions of recoverable pounds)a | 9 | ||||||||||||||||||||
Gross profit per pound of copper/molybdenum: | |||||||||||||||||||||
Revenues, excluding adjustments | $ | 2.68 | $ | 2.68 | $ | 7.00 | |||||||||||||||
Site production and delivery, before net noncash | |||||||||||||||||||||
and other costs shown below | 1.52 | 1.43 | 5.19 | ||||||||||||||||||
By-product credits | (0.15 | ) | — | — | |||||||||||||||||
Treatment charges | 0.11 | 0.11 | — | ||||||||||||||||||
Unit net cash costs | 1.48 | 1.54 | 5.19 | ||||||||||||||||||
DD&A | 0.31 | 0.29 | 0.52 | ||||||||||||||||||
Noncash and other costs, net | 0.09 | c | 0.09 | 0.07 | |||||||||||||||||
Total unit costs | 1.88 | 1.92 | 5.78 | ||||||||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||||||
on prior period open sales | 0.02 | 0.02 | — | ||||||||||||||||||
Gross profit per pound | $ | 0.82 | $ | 0.78 | $ | 1.22 | |||||||||||||||
Reconciliation to Amounts Reported | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Production | |||||||||||||||||||||
Revenues | and Delivery | DD&A | |||||||||||||||||||
Totals presented above | $ | 1,084 | $ | 590 | $ | 116 | |||||||||||||||
Treatment charges | — | 42 | — | ||||||||||||||||||
Noncash and other costs, net | — | 34 | — | ||||||||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||||||
on prior period open sales | 5 | — | — | ||||||||||||||||||
Eliminations and other | 6 | 7 | — | ||||||||||||||||||
North America copper mines | 1,095 | 673 | 116 | ||||||||||||||||||
Other miningd | 3,038 | 2,344 | 244 | ||||||||||||||||||
Corporate, other & eliminations | (792 | ) | (817 | ) | 29 | ||||||||||||||||
As reported in FCX’s consolidated financial statements | $ | 3,341 | $ | 2,200 | $ | 389 | |||||||||||||||
a. | Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. |
b. | Includes gold and silver product revenues and production costs. |
c. | Includes $19 million ($0.05 per pound of copper) for other asset impairment charges at Morenci. |
d. | Represents the combined total for our other mining operations, including South America mining, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10. |
Three Months Ended March 31, 2016 | |||||||||||||||||||||
(In millions) | By-Product | Co-Product Method | |||||||||||||||||||
Method | Copper | Molybdenuma | Otherb | Total | |||||||||||||||||
Revenues, excluding adjustments | $ | 1,086 | $ | 1,086 | $ | 41 | $ | 20 | $ | 1,147 | |||||||||||
Site production and delivery, before net noncash | |||||||||||||||||||||
and other costs shown below | 702 | 678 | 33 | 10 | 721 | ||||||||||||||||
By-product credits | (42 | ) | — | — | — | — | |||||||||||||||
Treatment charges | 54 | 52 | — | 2 | 54 | ||||||||||||||||
Net cash costs | 714 | 730 | 33 | 12 | 775 | ||||||||||||||||
DD&A | 143 | 137 | 4 | 2 | 143 | ||||||||||||||||
Noncash and other costs, net | 26 | 26 | — | — | 26 | ||||||||||||||||
Total costs | 883 | 893 | 37 | 14 | 944 | ||||||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||||||
on prior period open sales | 2 | 2 | — | — | 2 | ||||||||||||||||
Gross profit | $ | 205 | $ | 195 | $ | 4 | $ | 6 | $ | 205 | |||||||||||
Copper sales (millions of recoverable pounds) | 502 | 502 | |||||||||||||||||||
Molybdenum sales (millions of recoverable pounds)a | 8 | ||||||||||||||||||||
Gross profit per pound of copper/molybdenum: | |||||||||||||||||||||
Revenues, excluding adjustments | $ | 2.16 | $ | 2.16 | $ | 5.27 | |||||||||||||||
Site production and delivery, before net noncash | |||||||||||||||||||||
and other costs shown below | 1.40 | 1.35 | 4.29 | ||||||||||||||||||
By-product credits | (0.08 | ) | — | — | |||||||||||||||||
Treatment charges | 0.10 | 0.10 | — | ||||||||||||||||||
Unit net cash costs | 1.42 | 1.45 | 4.29 | ||||||||||||||||||
DD&A | 0.28 | 0.27 | 0.54 | ||||||||||||||||||
Noncash and other costs, net | 0.05 | 0.05 | (0.05 | ) | |||||||||||||||||
Total unit costs | 1.75 | 1.77 | 4.78 | ||||||||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||||||
on prior period open sales | — | — | — | ||||||||||||||||||
Gross profit per pound | $ | 0.41 | $ | 0.39 | $ | 0.49 | |||||||||||||||
Reconciliation to Amounts Reported | |||||||||||||||||||||
(In millions) | Production | ||||||||||||||||||||
Revenues | and Delivery | DD&A | |||||||||||||||||||
Totals presented above | $ | 1,147 | $ | 721 | $ | 143 | |||||||||||||||
Treatment charges | — | 54 | — | ||||||||||||||||||
Noncash and other costs, net | — | 26 | — | ||||||||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||||||
on prior period open sales | 2 | — | — | ||||||||||||||||||
Eliminations and other | (13 | ) | (13 | ) | 1 | ||||||||||||||||
North America copper mines | 1,136 | 788 | 144 | ||||||||||||||||||
Other miningc | 2,674 | 2,219 | 242 | ||||||||||||||||||
Corporate, other & eliminations | (568 | ) | (508 | ) | 276 | ||||||||||||||||
As reported in FCX’s consolidated financial statements | $ | 3,242 | $ | 2,499 | $ | 662 | |||||||||||||||
a. | Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing. |
b. | Includes gold and silver product revenues and production costs. |
c. | Represents the combined total for FCX's other mining operations, including South America mining, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10. |
Three Months Ended March 31, 2017 | |||||||||||||||||
(In millions) | By-Product | Co-Product Method | |||||||||||||||
Method | Copper | Othera | Total | ||||||||||||||
Revenues, excluding adjustments | $ | 821 | $ | 821 | $ | 68 | $ | 889 | |||||||||
Site production and delivery, before net noncash | |||||||||||||||||
and other costs shown below | 457 | 426 | 43 | 469 | |||||||||||||
By-product credits | (56 | ) | — | — | — | ||||||||||||
Treatment charges | 68 | 68 | — | 68 | |||||||||||||
Royalty on metals | 2 | 2 | — | 2 | |||||||||||||
Net cash costs | 471 | 496 | 43 | 539 | |||||||||||||
DD&A | 133 | 123 | 10 | 133 | |||||||||||||
Noncash and other costs, net | 5 | 5 | — | 5 | |||||||||||||
Total costs | 609 | 624 | 53 | 677 | |||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||
on prior period open sales | 49 | 49 | — | 49 | |||||||||||||
Gross profit | $ | 261 | $ | 246 | $ | 15 | $ | 261 | |||||||||
Copper sales (millions of recoverable pounds) | 309 | 309 | |||||||||||||||
Gross profit per pound of copper: | |||||||||||||||||
Revenues, excluding adjustments | $ | 2.66 | $ | 2.66 | |||||||||||||
Site production and delivery, before net noncash | |||||||||||||||||
and other costs shown below | 1.48 | 1.38 | |||||||||||||||
By-product credits | (0.18 | ) | — | ||||||||||||||
Treatment charges | 0.22 | 0.22 | |||||||||||||||
Royalty on metals | 0.01 | 0.01 | |||||||||||||||
Unit net cash costs | 1.53 | 1.61 | |||||||||||||||
DD&A | 0.43 | 0.40 | |||||||||||||||
Noncash and other costs, net | 0.01 | 0.01 | |||||||||||||||
Total unit costs | 1.97 | 2.02 | |||||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||
on prior period open sales | 0.16 | 0.16 | |||||||||||||||
Gross profit per pound | $ | 0.85 | $ | 0.80 | |||||||||||||
Reconciliation to Amounts Reported | |||||||||||||||||
(In millions) | Production | ||||||||||||||||
Revenues | and Delivery | DD&A | |||||||||||||||
Totals presented above | $ | 889 | $ | 469 | $ | 133 | |||||||||||
Treatment charges | (68 | ) | — | — | |||||||||||||
Royalty on metals | (2 | ) | — | — | |||||||||||||
Noncash and other costs, net | — | 5 | — | ||||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||
on prior period open sales | 49 | — | — | ||||||||||||||
Eliminations and other | — | (1 | ) | — | |||||||||||||
South America mining | 868 | 473 | 133 | ||||||||||||||
Other miningb | — | 3,265 | 2,544 | 227 | |||||||||||||
Corporate, other & eliminations | — | (792 | ) | (817 | ) | 29 | |||||||||||
As reported in FCX’s consolidated financial statements | $ | 3,341 | $ | 2,200 | $ | 389 | |||||||||||
a. | Includes silver sales of 964 thousand ounces ($16.06 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. |
b. | Represents the combined total for FCX's other mining operations, including North America copper mines, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10. |
Three Months Ended March 31, 2016 | |||||||||||||||||
(In millions) | By-Product | Co-Product Method | |||||||||||||||
Method | Copper | Othera | Total | ||||||||||||||
Revenues, excluding adjustments | $ | 709 | $ | 709 | $ | 29 | $ | 738 | |||||||||
Site production and delivery, before net noncash | |||||||||||||||||
and other costs shown below | 398 | 385 | 20 | 405 | |||||||||||||
By-product credits | (22 | ) | — | — | — | ||||||||||||
Treatment charges | 75 | 75 | — | 75 | |||||||||||||
Royalty on metals | 1 | 1 | — | 1 | |||||||||||||
Net cash costs | 452 | 461 | 20 | 481 | |||||||||||||
DD&A | 131 | 126 | 5 | 131 | |||||||||||||
Noncash and other costs, net | 7 | 7 | — | 7 | |||||||||||||
Total costs | 590 | 594 | 25 | 619 | |||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||
on prior period open sales | 9 | 9 | — | 9 | |||||||||||||
Gross profit | $ | 128 | $ | 124 | $ | 4 | $ | 128 | |||||||||
Copper sales (millions of recoverable pounds) | 323 | 323 | |||||||||||||||
Gross profit per pound of copper: | |||||||||||||||||
Revenues, excluding adjustments | $ | 2.19 | $ | 2.19 | |||||||||||||
Site production and delivery, before net noncash | |||||||||||||||||
and other costs shown below | 1.23 | 1.19 | |||||||||||||||
By-product credits | (0.07 | ) | — | ||||||||||||||
Treatment charges | 0.23 | 0.23 | |||||||||||||||
Royalty on metals | 0.01 | 0.01 | |||||||||||||||
Unit net cash costs | 1.40 | 1.43 | |||||||||||||||
DD&A | 0.40 | 0.39 | |||||||||||||||
Noncash and other costs, net | 0.02 | 0.02 | |||||||||||||||
Total unit costs | 1.82 | 1.84 | |||||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||
on prior period open sales | 0.03 | 0.03 | |||||||||||||||
Gross profit per pound | $ | 0.40 | $ | 0.38 | |||||||||||||
Reconciliation to Amounts Reported | |||||||||||||||||
(In millions) | Production | ||||||||||||||||
Revenues | and Delivery | DD&A | |||||||||||||||
Totals presented above | $ | 738 | $ | 405 | $ | 131 | |||||||||||
Treatment charges | (75 | ) | — | — | |||||||||||||
Royalty on metals | (1 | ) | — | — | |||||||||||||
Noncash and other costs, net | — | 7 | — | ||||||||||||||
Revenue adjustments, primarily for pricing | |||||||||||||||||
on prior period open sales | 9 | — | — | ||||||||||||||
Eliminations and other | — | (2 | ) | 1 | |||||||||||||
South America mining | 671 | 410 | 132 | ||||||||||||||
Other miningb | 3,139 | 2,597 | 254 | ||||||||||||||
Corporate, other & eliminations | (568 | ) | (508 | ) | 276 | ||||||||||||
As reported in FCX’s consolidated financial statements | $ | 3,242 | $ | 2,499 | $ | 662 | |||||||||||
a. | Includes silver sales of 899 thousand ounces ($14.54 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing. |
b. | Represents the combined total for FCX's other mining operations, including North America copper mines, Indonesia mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10. |
Three Months Ended March 31, 2017 | ||||||||||||||||||||
(In millions) | By-Product | Co-Product Method | ||||||||||||||||||
Method | Copper | Gold | Silvera | Total | ||||||||||||||||
Revenues, excluding adjustments | $ | 327 | $ | 327 | $ | 218 | $ | 7 | $ | 552 | ||||||||||
Site production and delivery, before net noncash | ||||||||||||||||||||
and other costs shown below | 268 | 159 | 106 | 3 | 268 | |||||||||||||||
Gold and silver credits | (234 | ) | — | — | — | — | ||||||||||||||
Treatment charges | 35 | 21 | 14 | — | 35 | |||||||||||||||
Export duties | 14 | 8 | 6 | — | 14 | |||||||||||||||
Royalty on metals | 19 | 11 | 8 | — | 19 | |||||||||||||||
Net cash costs | 102 | 199 | 134 | 3 | 336 | |||||||||||||||
DD&A | 83 | 49 | 33 | 1 | 83 | |||||||||||||||
Noncash and other costs, net | 32 | b | 19 | 13 | — | 32 | ||||||||||||||
Total costs | 217 | 267 | 180 | 4 | 451 | |||||||||||||||
Revenue adjustments, primarily for pricing on | ||||||||||||||||||||
prior period open sales | 41 | 41 | 9 | — | 50 | |||||||||||||||
PT Smelting intercompany profit | 27 | 16 | 11 | — | 27 | |||||||||||||||
Gross profit | $ | 178 | $ | 117 | $ | 58 | $ | 3 | $ | 178 | ||||||||||
Copper sales (millions of recoverable pounds) | 125 | 125 | ||||||||||||||||||
Gold sales (thousands of recoverable ounces) | 177 | |||||||||||||||||||
Gross profit per pound of copper/per ounce of gold: | ||||||||||||||||||||
Revenues, excluding adjustments | $ | 2.63 | $ | 2.63 | $ | 1,229 | ||||||||||||||
Site production and delivery, before net noncash | ||||||||||||||||||||
and other costs shown below | 2.15 | 1.28 | 596 | |||||||||||||||||
Gold and silver credits | (1.88 | ) | — | — | ||||||||||||||||
Treatment charges | 0.28 | 0.17 | 77 | |||||||||||||||||
Export duties | 0.11 | 0.07 | 31 | |||||||||||||||||
Royalty on metals | 0.16 | 0.09 | 45 | |||||||||||||||||
Unit net cash costs | 0.82 | 1.61 | 749 | |||||||||||||||||
DD&A | 0.66 | 0.39 | 184 | |||||||||||||||||
Noncash and other costs, net | 0.26 | b | 0.15 | 72 | ||||||||||||||||
Total unit costs | 1.74 | 2.15 | 1,005 | |||||||||||||||||
Revenue adjustments, primarily for pricing on | ||||||||||||||||||||
prior period open sales | 0.33 | 0.33 | 51 | |||||||||||||||||
PT Smelting intercompany profit | 0.21 | 0.13 | 59 | |||||||||||||||||
Gross profit per pound/ounce | $ | 1.43 | $ | 0.94 | $ | 334 | ||||||||||||||
Reconciliation to Amounts Reported | ||||||||||||||||||||
(In millions) | Production | |||||||||||||||||||
Revenues | and Delivery | DD&A | ||||||||||||||||||
Totals presented above | $ | 552 | $ | 268 | $ | 83 | ||||||||||||||
Treatment charges | (35 | ) | — | — | ||||||||||||||||
Export duties | (14 | ) | — | — | ||||||||||||||||
Royalty on metals | (19 | ) | — | — | ||||||||||||||||
Noncash and other costs, net | — | 32 | — | |||||||||||||||||
Revenue adjustments, primarily for pricing on | ||||||||||||||||||||
prior period open sales | 50 | — | — | |||||||||||||||||
PT Smelting intercompany profit | — | (27 | ) | — | ||||||||||||||||
Indonesia mining | 534 | 273 | 83 | |||||||||||||||||
Other miningc | 3,599 | 2,744 | 277 | |||||||||||||||||
Corporate, other & eliminations | (792 | ) | (817 | ) | 29 | |||||||||||||||
As reported in FCX’s consolidated financial statements | $ | 3,341 | $ | 2,200 | $ | 389 | ||||||||||||||
b. | Includes $21 million ($0.17 per pound of copper) of costs charged directly to cost of sales as a result of the impact of regulatory restrictions on PT-FI’s concentrate exports. |
c. | Represents the combined total for FCX's other mining operations, including North America copper mines, South America mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10. |
Three Months Ended March 31, 2016 | |||||||||||||||||||||
(In millions) | By-Product | Co-Product Method | |||||||||||||||||||
Method | Copper | Gold | Silvera | Total | |||||||||||||||||
Revenues, excluding adjustments | $ | 384 | $ | 384 | $ | 239 | $ | 8 | $ | 631 | |||||||||||
Site production and delivery, before net noncash | |||||||||||||||||||||
and other costs shown below | 390 | 238 | 148 | 4 | 390 | ||||||||||||||||
Gold and silver credits | (264 | ) | — | — | — | — | |||||||||||||||
Treatment charges | 55 | 33 | 21 | 1 | 55 | ||||||||||||||||
Export duties | 13 | 8 | 5 | — | 13 | ||||||||||||||||
Royalty on metals | 23 | 13 | 9 | 1 | 23 | ||||||||||||||||
Net cash costs | 217 | 292 | 183 | 6 | 481 | ||||||||||||||||
DD&A | 81 | 49 | 31 | 1 | 81 | ||||||||||||||||
Noncash and other costs, net | 12 | 7 | 5 | — | 12 | ||||||||||||||||
Total costs | 310 | 348 | 219 | 7 | 574 | ||||||||||||||||
Revenue adjustments, primarily for pricing on | |||||||||||||||||||||
prior period open sales | (1 | ) | (1 | ) | 17 | — | 16 | ||||||||||||||
PT Smelting intercompany profit | 8 | 5 | 3 | — | 8 | ||||||||||||||||
Gross profit | $ | 81 | $ | 40 | $ | 40 | $ | 1 | $ | 81 | |||||||||||
Copper sales (millions of recoverable pounds) | 174 | 174 | |||||||||||||||||||
Gold sales (thousands of recoverable ounces) | 195 | ||||||||||||||||||||
Gross profit per pound of copper/per ounce of gold: | |||||||||||||||||||||
Revenues, excluding adjustments | $ | 2.20 | $ | 2.20 | $ | 1,228 | |||||||||||||||
Site production and delivery, before net noncash | |||||||||||||||||||||
and other costs shown below | 2.24 | 1.36 | 760 | ||||||||||||||||||
Gold and silver credits | (1.52 | ) | — | — | |||||||||||||||||
Treatment charges | 0.31 | 0.19 | 106 | ||||||||||||||||||
Export duties | 0.08 | 0.05 | 26 | ||||||||||||||||||
Royalty on metals | 0.13 | 0.07 | 49 | ||||||||||||||||||
Unit net cash costs | 1.24 | 1.67 | 941 | ||||||||||||||||||
DD&A | 0.47 | 0.28 | 158 | ||||||||||||||||||
Noncash and other costs, net | 0.06 | 0.04 | 23 | ||||||||||||||||||
Total unit costs | 1.77 | 1.99 | 1,122 | ||||||||||||||||||
Revenue adjustments, primarily for pricing on | |||||||||||||||||||||
prior period open sales | (0.01 | ) | (0.01 | ) | 87 | ||||||||||||||||
PT Smelting intercompany profit | 0.05 | 0.03 | 16 | ||||||||||||||||||
Gross profit per pound/ounce | $ | 0.47 | $ | 0.23 | $ | 209 | |||||||||||||||
Reconciliation to Amounts Reported | |||||||||||||||||||||
(In millions) | Production | ||||||||||||||||||||
Revenues | and Delivery | DD&A | |||||||||||||||||||
Totals presented above | $ | 631 | $ | 390 | $ | 81 | |||||||||||||||
Treatment charges | (55 | ) | — | — | |||||||||||||||||
Export duties | (13 | ) | — | — | |||||||||||||||||
Royalty on metals | (23 | ) | — | — | |||||||||||||||||
Noncash and other costs, net | — | 12 | — | ||||||||||||||||||
Revenue adjustments, primarily for pricing on | |||||||||||||||||||||
prior period open sales | 16 | — | — | ||||||||||||||||||
PT Smelting intercompany profit | — | (8 | ) | — | |||||||||||||||||
Indonesia mining | 556 | 394 | 81 | ||||||||||||||||||
Other miningb | 3,254 | 2,613 | 305 | ||||||||||||||||||
Corporate, other & eliminations | (568 | ) | (508 | ) | 276 | ||||||||||||||||
As reported in FCX’s consolidated financial statements | $ | 3,242 | $ | 2,499 | $ | 662 | |||||||||||||||
a. | Includes silver sales of 510 thousand ounces ($15.00 per ounce average realized price). |
b. | Represents the combined total for FCX's other mining operations, including North America copper mines, South America mining, Molybdenum mines, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10. |
Three Months Ended March 31, | ||||||||||||||||
(In millions) | 2017 | 2016 | ||||||||||||||
Revenues, excluding adjustmentsa | $ | 70 | $ | 51 | ||||||||||||
Site production and delivery, before net noncash and other costs shown below | 51 | 48 | ||||||||||||||
Treatment charges and other | 7 | 6 | ||||||||||||||
Net cash costs | 58 | 54 | ||||||||||||||
DD&A | 19 | 19 | ||||||||||||||
Noncash and other costs, net | 1 | 4 | ||||||||||||||
Total costs | 78 | 77 | ||||||||||||||
Gross loss | $ | (8 | ) | $ | (26 | ) | ||||||||||
Molybdenum sales (millions of recoverable pounds)a | 8 | 7 | ||||||||||||||
Gross loss per pound of molybdenum: | ||||||||||||||||
Revenues, excluding adjustmentsa | $ | 8.57 | $ | 7.11 | ||||||||||||
Site production and delivery, before net noncash and other costs shown below | 6.25 | 6.57 | ||||||||||||||
Treatment charges and other | 0.85 | 0.86 | ||||||||||||||
Unit net cash costs | 7.10 | 7.43 | ||||||||||||||
DD&A | 2.37 | 2.61 | ||||||||||||||
Noncash and other costs, net | 0.15 | 0.58 | ||||||||||||||
Total unit costs | 9.62 | 10.62 | ||||||||||||||
Gross loss per pound | $ | (1.05 | ) | $ | (3.51 | ) | ||||||||||
Reconciliation to Amounts Reported | ||||||||||||||||
(In millions) | ||||||||||||||||
Production | ||||||||||||||||
Three Months Ended March 31, 2017 | Revenues | and Delivery | DD&A | |||||||||||||
Totals presented above | $ | 70 | $ | 51 | $ | 19 | ||||||||||
Treatment charges and other | (7 | ) | — | — | ||||||||||||
Noncash and other costs, net | — | 1 | — | |||||||||||||
Molybdenum mines | 63 | 52 | 19 | |||||||||||||
Other miningb | 4,070 | 2,965 | 341 | |||||||||||||
Corporate, other & eliminations | (792 | ) | (817 | ) | 29 | |||||||||||
As reported in FCX’s consolidated financial statements | $ | 3,341 | $ | 2,200 | $ | 389 | ||||||||||
Three Months Ended March 31, 2016 | ||||||||||||||||
Totals presented above | $ | 51 | $ | 48 | $ | 19 | ||||||||||
Treatment charges and other | (6 | ) | — | — | ||||||||||||
Noncash and other costs, net | — | 4 | — | |||||||||||||
Molybdenum mines | 45 | 52 | 19 | |||||||||||||
Other miningb | 3,765 | 2,955 | 367 | |||||||||||||
Corporate, other & eliminations | (568 | ) | (508 | ) | 276 | |||||||||||
As reported in FCX’s consolidated financial statements | $ | 3,242 | $ | 2,499 | $ | 662 | ||||||||||
a. | Reflects sales of the Molybdenum mines’ production to our molybdenum sales company at market-based pricing. On a consolidated basis, realizations are based on the actual contract terms for sales to third parties; as a result, our consolidated average realized price per pound of molybdenum will differ from the amounts reported in this table. |
b. | Represents the combined total for FCX's other mining operations, including North America copper mines, South America mining, Indonesia mining, Rod & Refining and Atlantic Copper Smelting & Refining, as presented in Note 10. Also includes amounts associated with our 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. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. | Controls and Procedures. |
(a) | Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer, with the participation of management, have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report on Form 10-Q. Based on their evaluation, they have concluded that our disclosure controls and procedures are effective as of March 31, 2017. |
(b) | Changes in internal control over financial reporting. There has been no change in our internal control over financial reporting that occurred during the quarter ended March 31, 2017, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. |
Part II. | OTHER INFORMATION |
Item 1. | Legal Proceedings. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Item 4. | Mine Safety Disclosures. |
Item 6. | Exhibits. |
FREEPORT-McMoRan INC. | ||
By: | /s/ C. Donald Whitmire, Jr. | |
C. Donald Whitmire, Jr. | ||
Vice President and | ||
Controller - Financial Reporting | ||
(authorized signatory | ||
and Principal Accounting Officer) |
FREEPORT-McMoRan INC. | |||||
EXHIBIT INDEX | |||||
Filed | |||||
Exhibit | with this | Incorporated by Reference | |||
Number | Exhibit Title | Form 10-Q | Form | File No. | Date Filed |
3.1 | Amended and Restated Certificate of Incorporation of FCX, effective as of June 8, 2016. | 8-K | 001-11307-01 | 6/9/2016 | |
3.2 | Amended and Restated By-Laws of FCX, effective as of June 8, 2016. | 8-K | 001-11307-01 | 6/9/2016 | |
4.1 | Indenture dated as of February 13, 2012, between FCX and U.S. Bank National Association, as Trustee (relating to the 2.15% Senior Notes due 2017, the 3.55% Senior Notes due 2022, the 2.30% Senior Notes due 2017, the 4.00% Senior Notes due 2021, the 4.55% Senior Notes due 2024, and the 5.40% Senior Notes due 2034). | 8-K | 001-11307-01 | 2/13/2012 | |
4.2 | Second Supplemental Indenture dated as of February 13, 2012, between FCX and U.S. Bank National Association, as Trustee (relating to the 2.15% Senior Notes due 2017). | 8-K | 001-11307-01 | 2/13/2012 | |
4.3 | Third Supplemental Indenture dated as of February 13, 2012, between FCX and U.S. Bank National Association, as Trustee (relating to the 3.55% Senior Notes due 2022). | 8-K | 001-11307-01 | 2/13/2012 | |
4.4 | Fourth Supplemental Indenture dated as of May 31, 2013, among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 2.15% Senior Notes due 2017, the 3.55% Senior Notes due 2022, the 2.30% Senior Notes due 2017, the 4.00% Senior Notes due 2021, the 4.55% Senior Notes due 2024, and the 5.40% Senior Notes due 2034). | 8-K | 001-11307-01 | 6/3/2013 | |
4.5 | Fifth Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 2.30% Senior Notes due 2017). | 8-K | 001-11307-01 | 11/14/2014 | |
4.6 | Sixth Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 4.00% Senior Notes due 2021). | 8-K | 001-11307-01 | 11/14/2014 | |
4.7 | Seventh Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as (relating to the 4.55% Senior Notes due 2024). | 8-K | 001-11307-01 | 11/14/2014 | |
4.8 | Eighth Supplemental Indenture dated as of November 14, 2014 among FCX, Freeport-McMoRan Oil & Gas LLC and U.S. Bank National Association, as Trustee (relating to the 5.40% Senior Notes due 2034). | 8-K | 001-11307-01 | 11/14/2014 | |
4.9 | Indenture dated as of March 7, 2013, between FCX and U.S. Bank National Association, as Trustee (relating to the 2.375% Senior Notes due 2018, the 3.100% Senior Notes due 2020, the 3.875% Senior Notes due 2023, and the 5.450% Senior Notes due 2043). | 8-K | 001-11307-01 | 3/7/2013 | |
4.10 | Indenture dated as of December 13, 2016, among FCX, Freeport-McMoRan Oil & Gas LLC, as guarantor, and U.S. Bank National Association, as Trustee (relating to the 6.125% Senior Notes due 2019, the 6.50% Senior Notes due 2020, the 6.625% Senior Notes due 2021, the 6.75% Senior Notes due 2022, and the 6.875% Senior Notes due 2023). | 8-K | 001-11307-01 | 12/13/2016 | |
FREEPORT-McMoRan INC. | |||||
EXHIBIT INDEX | |||||
Filed | |||||
Exhibit | with this | Incorporated by Reference | |||
Number | Exhibit Title | Form 10-Q | Form | File No. | Date Filed |
4.11 | Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.625% Senior Notes due 2021, the 6.75% Senior Notes due 2022, the 6.125% Senior Notes due 2019, the 6.5% Senior Notes due 2020, and the 6.875% Senior Notes due 2023). | 8-K | 001-31470 | 3/13/2007 | |
4.12 | Twelfth Supplemental Indenture dated as of March 29, 2011 to the Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto and Wells Fargo Bank, N.A., as Trustee (relating to the 6.625% Senior Notes due 2021). | 8-K | 001-31470 | 3/29/2011 | |
4.13 | Thirteenth Supplemental Indenture dated as of November 21, 2011 to the Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto and Wells Fargo Bank, N.A., as Trustee (relating to the 6.75% Senior Notes due 2022). | 8-K | 001-31470 | 11/22/2011 | |
4.14 | Fourteenth Supplemental Indenture dated as of April 27, 2012 to the Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto and Wells Fargo Bank, N.A., as Trustee (relating to the 6.125% Senior Notes due 2019). | 8-K | 001-31470 | 4/27/2012 | |
4.15 | Sixteenth Supplemental Indenture dated as of October 26, 2012 to the Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto and Wells Fargo Bank, N.A., as Trustee (relating to the 6.5% Senior Notes due 2020). | 8-K | 001-31470 | 10/26/2012 | |
4.16 | Seventeenth Supplemental Indenture dated as of October 26, 2012 to the Indenture dated as of March 13, 2007, among Plains Exploration & Production Company, the Subsidiary Guarantors parties thereto and Wells Fargo Bank, N.A., as Trustee (relating to the 6.875% Senior Notes due 2023). | 8-K | 001-31470 | 10/26/2012 | |
4.17 | Eighteenth Supplemental Indenture dated as of May 31, 2013 to the Indenture dated as of March 13, 2007, among Freeport-McMoRan Oil & Gas LLC, as Successor Issuer, FCX Oil & Gas Inc., as Co-Issuer, FCX, as Parent Guarantor, Plains Exploration & Production Company, as Original Issuer, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.625% Senior Notes due 2021, the 6.75% Senior Notes due 2022, the 6.125% Senior Notes due 2019, the 6.5% Senior Notes due 2020, and the 6.875% Senior Notes due 2023). | 8-K | 001-11307-01 | 6/3/2013 | |
4.18 | Nineteenth Supplemental Indenture dated as of September 30, 2016 to the Indenture dated as of March 13, 2007, among Freeport-McMoRan Oil & Gas LLC, as Successor Issuer, FCX Oil & Gas Inc., as Co-Issuer, FMSTP Inc., as Additional Co-Issuer, FCX, as Parent Guarantor, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.125% Senior Notes due 2019, the 6.50% Senior Notes due 2020, the 6.625% Senior Notes due 2021, the 6.75% Senior Notes due 2022 and the 6.875% Senior Notes due 2023). | 10-Q | 001-11307-01 | 11/9/2016 | |
FREEPORT-McMoRan INC. | |||||
EXHIBIT INDEX | |||||
Filed | |||||
Exhibit | with this | Incorporated by Reference | |||
Number | Exhibit Title | Form 10-Q | Form | File No. | Date Filed |
4.19 | Twentieth Supplemental Indenture dated as of December 13, 2016 to the Indendture dated as of March 13, 2007, among Freeport-McMoRan Oil & Gas LLC, as Successor Issuer, FCX Oil & Gas LLC, as Co-Issuer, FMSTP Inc., as Additional Co-Issuer, FCX, as Parent Guarantor, and Wells Fargo Bank, N.A., as Trustee (relating to the 6.125% Senior Notes due 2019, the 6.50% Senior Notes due 2020, the 6.625% Senior Notes due 2021, the 6.75% Senior Notes due 2022 and the 6.875% Senior Notes due 2023). | 8-K | 001-11307-01 | 12/13/2016 | |
4.20 | Form of Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and The Chase Manhattan Bank, as Trustee (relating to the 7.125% Senior Notes due 2027, the 9.50% Senior Notes due 2031, and the 6.125% Senior Notes due 2034). | S-3 | 333-36415 | 9/25/1997 | |
4.21 | Form of 7.125% Debenture due November 1, 2027 of Phelps Dodge Corporation issued on November 5, 1997, pursuant to the Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and The Chase Manhattan Bank, as Trustee (relating to the 7.125% Senior Notes due 2027). | 8-K | 01-00082 | 11/3/1997 | |
4.22 | Form of 9.5% Note due June 1, 2031 of Phelps Dodge Corporation issued on May 30, 2001, pursuant to the Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and First Union National Bank, as successor Trustee (relating to the 9.50% Senior Notes due 2031). | 8-K | 01-00082 | 5/30/2001 | |
4.23 | Form of 6.125% Note due March 15, 2034 of Phelps Dodge Corporation issued on March 4, 2004, pursuant to the Indenture dated as of September 22, 1997, between Phelps Dodge Corporation and First Union National Bank, as successor Trustee (relating to the 6.125% Senior Notes due 2034). | 10-K | 01-00082 | 3/7/2005 | |
4.24 | Supplemental Indenture dated as of April 4, 2007 to the Indenture dated as of September 22, 1997, among Phelps Dodge Corporation, as Issuer, Freeport-McMoRan Copper & Gold Inc., as Parent Guarantor, and U.S. Bank National Association, as Trustee (relating to the 7.125% Senior Notes due 2027, the 9.50% Senior Notes due 2031, and the 6.125% Senior Notes due 2034). | 10-K | 001-11307-01 | 2/26/2016 | |
4.25 | Indenture dated as of December 13, 2016, among FCX, Freeport-McMoRan Oil & Gas LLC, as guarantor, and U.S. Bank National Association, as Trustee (relating to the 6.125% Senior Notes due 2019, the 6.50% Senior Notes due 2020, the 6.625% Senior Notes due 2021, the 6.75% Senior Notes due 2022, and the 6.875% Senior Notes due 2023). | 8-K | 001-11307-01 | 12/13/2016 | |
4.26 | Registration Rights Agreement dated as of December 13, 2016 among FCX, Freeport-McMoRan Oil & Gas LLC, as Guarantor, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Managers, relating to the 6.125% Senior Notes due 2019. | 8-K | 001-11307-01 | 12/13/2016 | |
4.27 | Registration Rights Agreement dated as of December 13, 2016 among FCX, Freeport-McMoRan Oil & Gas LLC, as Guarantor, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Managers, relating to the 6.50% Senior Notes due 2020. | 8-K | 001-11307-01 | 12/13/2016 | |
FREEPORT-McMoRan INC. | |||||
EXHIBIT INDEX | |||||
Filed | |||||
Exhibit | with this | Incorporated by Reference | |||
Number | Exhibit Title | Form 10-Q | Form | File No. | Date Filed |
4.28 | Registration Rights Agreement dated as of December 13, 2016 among FCX, Freeport-McMoRan Oil & Gas LLC, as Guarantor, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Managers, relating to the 6.625% Senior Notes due 2021. | 8-K | 001-11307-01 | 12/13/2016 | |
4.29 | Registration Rights Agreement dated as of December 13, 2016 among FCX, Freeport-McMoRan Oil & Gas LLC, as Guarantor, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Managers, relating to the 6.75% Senior Notes due 2022. | 8-K | 001-11307-01 | 12/13/2016 | |
4.30 | Registration Rights Agreement dated as of December 13, 2016 among FCX, Freeport-McMoRan Oil & Gas LLC, as Guarantor, and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer Managers, relating to the 6.875% Senior Notes due 2023. | 8-K | 001-11307-01 | 12/13/2016 | |
10.1 | FCX Executive Services Program | 10-K | 001-11307-01 | 02/24/2017 | |
10.2 | Form of Notice of Grant of Restricted Stock Units (for grants made to non-management directors). | 10-K | 001-11307-01 | 02/24/2017 | |
Letter from Ernst & Young LLP regarding unaudited interim financial statements. | X | ||||
Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d – 14(a). | X | ||||
Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d – 14(a). | X | ||||
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350. | X | ||||
Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350. | X | ||||
Mine Safety and Health Administration Safety Data. | X | ||||
Memorandum of Understanding between the Minister of Energy and Mineral Resources on behalf of the Government of the Republic of Indonesia with PT Freeport Indonesia dated March 31, 2017. | X | ||||
101.INS | XBRL Instance Document. | X | |||
101.SCH | XBRL Taxonomy Extension Schema. | X | |||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase. | X | |||
101.DEF | XBRL Taxonomy Extension Definition Linkbase. | X | |||
101.LAB | XBRL Taxonomy Extension Label Linkbase. | X | |||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase. | X |
1) | Registration Statement (Form S-8 No. 333-85803) pertaining to the Freeport-McMoRan Copper & Gold Inc. |
2) | Registration Statement (Form S-8 No. 333-105535) pertaining to the Freeport-McMoRan Copper & Gold Inc. 2003 Stock Incentive Plan, |
3) | Registration Statement (Form S-8 No. 333-115292) pertaining to the Freeport-McMoRan Copper & Gold Inc. 2004 Director Compensation Plan, |
4) | Registration Statement (Form S-8 No. 333-136084) pertaining to the Freeport-McMoRan Copper & Gold Inc. 2006 Stock Incentive Plan, |
5) | Registration Statement (Form S-8 No. 333-141358) pertaining to the Phelps Dodge 2003 Stock Option and Restricted Stock Plan and the Phelps Dodge 1998 Stock Option and Restricted Stock Plan, |
6) | Registration Statement (Form S-8 No. 333-147413) pertaining to the Amended and Restated Freeport-McMoRan Copper & Gold Inc. 2006 Stock Incentive Plan, |
7) | Registration Statement (Form S-8 No. 333-189047) pertaining to the Plains Exploration & Production Company 2010 Incentive Award Plan; the Plains Exploration & Production 2004 Stock Incentive Plan; the McMoRan Exploration Co. Amended and Restated 2008 Stock Incentive Plan; the McMoRan Exploration Co. 2005 Stock Incentive Plan, as amended and restated; the McMoRan Exploration Co. 2004 Director Compensation Plan, as amended and restated; the McMoRan Exploration Co. 2003 Stock Incentive Plan, as amended and restated; the McMoRan Exploration Co. 2001 Stock Incentive Plan, as amended and restated; the McMoRan Exploration Co. 2000 Stock Incentive Plan, as amended and restated; the McMoRan Exploration Co. 1998 Stock Option Plan, as amended and restated; and the McMoRan Exploration Co. 1998 Stock Option Plan for Non-Employee Directors, as amended and restated, |
8) | Registration Statement (Form S-3 No. 333-206257) pertaining to the Freeport-McMoRan Inc. 2015 Automatic Shelf Registration Statement, and |
9) | Registration Statement (Form S-8 No. 333-212523) pertaining to the Freeport-McMoRan Inc. 2016 Stock Incentive Plan; |
1. | I have reviewed this quarterly report on Form 10-Q of Freeport-McMoRan Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: /s/ Richard C. Adkerson | |
Richard C. Adkerson | |
Vice Chairman, | |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Freeport-McMoRan Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: /s/ Kathleen L. Quirk | |
Kathleen L. Quirk | |
Executive Vice President, | |
Chief Financial Officer and Treasurer |
By: /s/ Richard C. Adkerson | |
Richard C. Adkerson | |
Vice Chairman, | |
President and Chief Executive Officer |
By: /s/ Kathleen L. Quirk | |
Kathleen L. Quirk | |
Executive Vice President, | |
Chief Financial Officer and Treasurer |
• | Section 104 S&S Citations: Citations issued by MSHA under Section 104(a) of the Mine Act for violations of health or safety standards that could significantly and substantially contribute to a serious injury if left unabated. |
• | Section 104(b) Orders: Orders issued under Section 104(b) of the Mine Act, which represent a failure to abate a citation under Section 104(a) within the period prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated. |
• | Section 104(d) Citations and Orders: Citations and orders issued by MSHA under Section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards. These types of violations could significantly and substantially contribute to a serious injury; however, the conditions do not cause imminent danger (refer to discussion of imminent danger orders below). |
• | Section 110(b)(2) Violations: Flagrant violations identified by MSHA under Section 110(b)(2) of the Mine Act. The term flagrant with respect to a violation is defined as “a reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory health or safety standard that substantially and proximately caused, or reasonably could have expected to cause, death or serious bodily injury.” |
• | Section 107(a) Orders: Orders issued by MSHA under Section 107(a) of the Mine Act for situations in which MSHA determined an imminent danger existed. Orders issued under Section 107(a) of the Mine Act require the operator of the mine to cause all persons (except authorized persons) to be withdrawn from the mine until the imminent danger and the conditions that caused such imminent danger cease to exist. |
Potential | |||||||||||||||||||||||||||
to Have | |||||||||||||||||||||||||||
Pattern of | Pattern of | ||||||||||||||||||||||||||
Section | Violations | Violation | |||||||||||||||||||||||||
Section | Section | 104(d) | Section | Section | Mining | Under | Under | ||||||||||||||||||||
104 S&S | 104(b) | Citations | 110(b)(2) | 107(a) | Proposed | Related | Section | Section | |||||||||||||||||||
Citations | Orders | and Orders | Violations | Orders | Assessments(2) | Fatalities | 104(e) | 104(e) | |||||||||||||||||||
Mine ID(1) | Mine or Operation Name | (#) | (#) | (#) | (#) | (#) | ($) | (#) | (yes/no) | (yes/no) | |||||||||||||||||
0200137 | Freeport-McMoRan Bagdad Inc. (Bagdad) | 41 | — | — | — | — | 85,623 | — | No | No | |||||||||||||||||
2900708 | Freeport-McMoRan Chino Mines Company (Chino) | 2 | — | — | — | — | 1,226 | — | No | No | |||||||||||||||||
0200112 | Freeport-McMoRan Miami Inc (Miami) | — | — | — | — | — | — | — | No | No | |||||||||||||||||
0200024 | Freeport-McMoRan Morenci Inc (Morenci) | 38 | — | — | — | — | 148,171 | — | No | No | |||||||||||||||||
0203131 | Freeport-McMoRan Safford Inc (Safford) | — | — | — | — | — | — | — | No | No | |||||||||||||||||
0200144 | Freeport-McMoRan Sierrita Inc (Sierrita) | — | — | — | — | — | — | — | No | No | |||||||||||||||||
2900159 | Tyrone Mine (Tyrone) | — | — | — | — | — | 1,206 | — | No | No | |||||||||||||||||
0500790 | Henderson Operations (Henderson) | 2 | — | — | — | — | — | — | No | No | |||||||||||||||||
0502256 | Climax Mine (Climax) | 5 | 3 | — | — | — | 10,931 | — | No | No | |||||||||||||||||
Freeport-McMoRan Cobre Mining Company: | |||||||||||||||||||||||||||
2900725 | Open Pit & Continental Surf Comp | — | — | — | — | — | — | — | No | No | |||||||||||||||||
2900731 | Continental Mill Complex | — | — | — | — | — | — | No | No | ||||||||||||||||||
0201656 | Copper Queen Branch | — | — | — | — | — | — | — | No | No | |||||||||||||||||
0202579 | Cyprus Tohono Corporation | — | — | — | — | — | — | — | No | No | |||||||||||||||||
0203262 | Twin Buttes Mine | — | — | — | — | — | — | — | No | No | |||||||||||||||||
2902395 | Chieftain 2100 Screening Plant | — | — | — | — | — | — | — | No | No | |||||||||||||||||
0203254 | Warrior 1800 Screening Plant | — | — | — | — | — | — | — | No | No |
(1) | MSHA assigns an identification number to each mine or operation and may or may not assign separate identification numbers to related facilities. |
(2) | Amounts represent the total dollar value of proposed assessments received on or before April 28, 2017, for citations or orders issued by MSHA during the three months ended March 31, 2017. FCX is not currently contesting any of these proposed assessments. |
• | Contest Proceedings - A contest proceeding may be filed by an operator to challenge the issuance of a citation or order issued by MSHA. |
• | Civil Penalty Proceedings - A civil penalty proceeding may be filed by an operator to challenge a civil penalty MSHA has proposed for a violation contained in a citation or order. FCX does not institute civil penalty proceedings based solely on the assessment amount of proposed penalties. Any initiated adjudications described in the table below address substantive matters of law and policy instituted on conditions that are alleged to be in violation of mandatory standards or the Mine Act. |
• | Discrimination Proceedings - Involves a miner's allegation that he or she has suffered adverse employment action because he or she engaged in activity protected under the Mine Act, such as making a safety complaint. Also includes temporary reinstatement proceedings involving cases in which a miner has filed a complaint with MSHA stating that he or she has suffered discrimination and the miner has lost his or her position. |
• | Compensation Proceedings - A compensation proceeding may be filed by miners entitled to compensation when a mine is closed by certain closure orders issued by MSHA. The purpose of the proceeding is to determine the amount of compensation, if any, due to miners idled by the orders. |
• | Temporary Relief - Applications for temporary relief are applications filed under section 105(b)(2) of the Mine Act for temporary relief from any modification or termination of any order. |
• | Appeals - An appeal may be filed by an operator to challenge judges decisions or orders to the commission, including petitions for discretionary review and review by the commission on its own motion. |
Legal Actions Pending at March 31, 2017 | ||||||||||||||||||||||||||||
Contest | Civil Penalty | Discrimination | Compensation | Temporary | Legal Actions | Legal Actions | ||||||||||||||||||||||
Proceedings | Proceedings | Proceedings | Proceedings | Relief | Appeals | Total | Instituted(2) | Resolved(3) | ||||||||||||||||||||
Mine ID(1) | (#) | (#) | (#) | (#) | (#) | (#) | (#) | (#) | (#) | |||||||||||||||||||
0200137 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
2900708 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
0200112 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
0200024 | — | 1 | — | — | — | — | 1 | — | 3 | |||||||||||||||||||
0203131 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
0200144 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
2900159 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
0500790 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
0502256 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
2900725 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
2900731 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
0201656 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
0202579 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
0203262 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
2902395 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
0203254 | — | — | — | — | — | — | — | — | — |
(1) | MSHA assigns an identification number to each mine or operation and may or may not assign separate identification numbers to related facilities. Refer to "Mine Safety Data" table for related mine or operation name. |
(2) | Legal actions pending at March 31, 2017, and legal actions instituted during the three month period are based on the date that a docket number was assigned to the proceeding. |
(3) | Legal actions resolved during the three month period are based on the date that the settlement motion resolving disputed matters is filed with the Commission and the matter is effectively closed by MSHA. |
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