Income Taxes (Unaudited)

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Geographic sources of FCX’s benefit from (provision for) income taxes follow (in millions):

	Six Months Ended
	June 30,
	2020				2019
U.S. operations	$	58		a	$	20		b
International operations	(94		)		(110		)
Total	$	(36	)		$	(90	)

a. Includes a tax credit of $53 million associated with the reversal of a year-end 2019 tax charge related to the sale of FCX’s interest in the lower zone of the Timok exploration project in Serbia.

b. Includes a tax credit of $18 million primarily associated with state law changes.

FCX’s consolidated effective income tax rate was (9) percent for the first six months of 2020 and 101 percent for the first six months of 2019. Because FCX's U.S. jurisdiction generated net losses in the first six months of 2020 and 2019 that will not result in a realized tax benefit, applicable accounting rules require FCX to adjust its estimated annual effective tax rate to exclude the impact of U.S. net losses. Variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate.

In connection with the negative impacts of the COVID-19 pandemic on the global economy, governments throughout the world are announcing measures that are intended to provide tax and other financial relief. Such measures include the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law by President Trump on March 27, 2020. None of these measures, including the CARES Act, resulted in material impacts to FCX’s provision for income taxes for the six months ended June 30, 2020. Some of these measures will provide FCX with the opportunity to accelerate the timing of cash collections, primarily those associated with the U.S. alternative minimum tax credit refunds. FCX collected $221 million of U.S. alternative minimum tax credit refunds in July 2020, and expects to collect the outstanding balance ($47 million) within the next 12 months. FCX continues to evaluate income tax accounting considerations of additional measures as they develop, including any impact on its measurement of existing deferred tax assets and deferred tax liabilities. FCX will recognize any impact from COVID-19 related changes to tax laws in the period in which the new legislation is enacted.