INCOME TAXES

Variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate. FCX’s consolidated effective income tax rate was 35 percent for the first six months of 2018 and 38 percent for the first six months of 2017. Geographic sources of FCX’s (provision for) benefit from income taxes follow (in millions):



	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2018				2017				2018				2017
U.S. operations	$	5		^a	$	29		^b	$	8		^a	$	22		^b
International operations	(520		)		(215		)		(1,029		)		(382		)
Total	$	(515	)		$	(186	)		$	(1,021	)		$	(360	)


a.	Includes a tax credit of $5 million in second-quarter 2018 and for the first six months of 2018 associated with the settlement of a state income tax examination.


b.	Includes net tax credits of $32 million in second-quarter 2017 and $31 million for the first six months of 2017 associated with anticipated recovery of alternative minimum tax credit carryforwards.

The December 2017 Tax Cuts and Jobs Act (the Act) included significant modifications to then-existing U.S. tax laws and created many new complex tax provisions. As of December 31, 2017, FCX recorded provisional impacts of the tax effects related to specific provisions and continues to evaluate other provisions of the Act. During the first six months of 2018, no adjustments were made to the provisional amounts recorded at December 31, 2017, as FCX has not fully completed its analysis of the Act, and the provisional amounts continue to represent FCX’s best estimates. FCX’s current analysis of the Act indicates that there may be adjustments to tax receivables associated with minimum tax credit refunds resulting from an ongoing review of tax positions taken in prior years and impacts from the Act’s Global Intangible Low-Taxed Income provisions resulting in use of net operating loss (NOL) carryforwards against income that would not generate a net tax liability absent the availability of NOLs. FCX continues to carry a valuation allowance against all U.S. federal NOLs. During the remainder of 2018, FCX will continue to refine its calculations, including quantifying potential impacts discussed above, as it completes its analysis of the Act.