Business Segments

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Business Segments

BUSINESS SEGMENTS

FCX has organized its mining operations into four primary divisions – North America copper mines, South America operations, Indonesia operations and Molybdenum mines, and operating segments that meet certain thresholds are reportable segments. Separately disclosed in the following tables are FCX’s reportable segments, which include the Morenci and Cerro Verde copper mines, the Indonesia operations (including the Grasberg minerals district and PT-FI’s new downstream processing facilities), the Rod & Refining operations and Atlantic Copper Smelting & Refining.

For comparative purposes, the 2023 tables have been adjusted to conform with the current year presentation, primarily for the combination of the Grasberg minerals district and PT-FI’s new downstream processing facilities. PT-FI substantially completed construction of the new smelter in June 2024 and has commenced commissioning operations. PT-FI’s new downstream processing facilities will exclusively receive concentrate from the Grasberg minerals district, which reflects PT-FI’s integrated and dependent operations within Indonesia (i.e., Indonesia operations). The PMR will receive anode slimes from the smelter and from PT Smelting. FCX's Chief Executive Officer, identified as its chief operating decision maker under business segment accounting guidance, makes executive management decisions, including resource allocation and mine planning, for the Indonesia operations as a single business segment.

Intersegment sales between FCX’s business segments are based on terms similar to arms-length transactions with third parties at the time of the sale. Intersegment sales may not be reflective of the actual prices ultimately realized because of a variety of factors, including additional processing, the timing of sales to unaffiliated customers and transportation premiums.

FCX defers recognizing profits on intercompany sales to Atlantic Copper until final sales to third parties occur. Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices result in variability in FCX’s net deferred profits and quarterly earnings.

FCX allocates certain operating costs, expenses and capital expenditures to its operating divisions and individual segments. However, not all costs and expenses applicable to an operation are allocated. U.S. federal and state income taxes are recorded and managed at the corporate level (included in Corporate, Other & Eliminations), whereas foreign income taxes are recorded and managed at the applicable country level. In addition, some selling, general and administrative costs are not allocated to the operating divisions or individual segments. Accordingly, the following segment information reflects management determinations that may not be indicative of what the actual financial performance of each operating division or segment would be if it was an independent entity.

Product Revenues. FCX’s revenues attributable to the products it sold for the second quarter and first six months of 2024 and 2023 follow:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2024		2023			2024		2023
Copper:
Cathode	$	2,237	$	1,670		$	4,178	$	3,181
Concentrate	1,595		1,873			3,413		3,276
Rod and other refined copper products	974		884			1,927		1,805
Purchased coppera	300		72			466		276
Gold	935		999			2,103		1,530
Molybdenum	476		491			897		1,083
Silver and other	139		171			288		303
Adjustments to revenues:
Royalty expenseb	(93)		(94)			(213)		(154)
Treatment charges	(90)		(142)			(219)		(243)
PT-FI export dutiesc	(75)		3		d	(231)		(14)		d
Revenues from contracts with customers	6,398		5,927			12,609		11,043
Embedded derivativese	226		(190)			336		83
Total consolidated revenues	$	6,624	$	5,737		$	12,945	$	11,126

a.FCX purchases copper cathode primarily for processing by its Rod & Refining operations.

b.Reflects royalties on sales from PT-FI and Cerro Verde that will vary with the volume of metal sold and prices.

c.Export duties of 2.5% were eliminated effective March 29, 2023, upon verification that construction progress of the new smelter exceeded 50% and reinstated at a rate of 7.5% in July 2023 under a revised regulation. As discussed in Note 7, PT-FI will continue to pay export duties of 7.5% on copper concentrates during the smelter ramp-up period pursuant to Indonesia regulations.

d.Includes credits associated with adjustments to prior-period export duties.

e.Refer to Note 5 for discussion of embedded derivatives related to FCX’s provisionally priced copper concentrate and cathode sales contracts.

Financial Information by Business Segment

																					Atlantic		Corporate,
	North America Copper Mines						South America Operations														Copper		Other
							Cerro							Indonesia			Molybdenum		Rod &		Smelting		& Elimi-			FCX
	Morenci		Other		Total		Verde			Other		Total		Operations			Mines		Refining		& Refining		nations			Total
Three Months Ended June 30, 2024
Revenues:
Unaffiliated customers	$	13	$	10	$	23	$	1,075		$	254	$	1,329	$	2,185		$	—	$	1,693	$	898	$	496	a	$	6,624
Intersegment	587		926		1,513		182			—		182		83			138		11		2		(1,929)			—
Production and delivery	438		713		1,151		679		b	181		860		672			134		1,692		859		(1,493)			3,875
DD&A	45		61		106		97			17		114		248			16		1		7		17			509
Selling, general and administrative expenses	1		—		1		2			—		2		30			—		—		6		84			123
Exploration and research expenses	5		9		14		3			2		5		4			—		—		—		17			40
Environmental obligations and shutdown costs	—		—		—		—			—		—		—			—		—		—		28			28
Operating income (loss)	111		153		264		476			54		530		1,314			(12)		11		28		(86)			2,049
Interest expense, net	—		1		1		5			—		5		6			—		—		8		68			88
Other income, net	—		1		1		5			—		5		30			—		—		2		31			69
Provision for income taxes	—		—		—		191			23		214		490			—		—		1		49			754
Equity in affiliated companies’ net earnings	—		—		—		—			—		—		3			—		—		—		1			4
Net income attributable to noncontrolling interests	—		—		—		142			22		164		463		c	—		—		—		37			664
Total assets at June 30, 2024	3,182		6,508		9,690		8,368			1,988		10,356		26,501			1,915		273		1,410		4,490			54,635
Capital expenditures	47		196		243		67			23		90		648			36		11		37		51			1,116
Three Months Ended June 30, 2023
Revenues:
Unaffiliated customers	$	26	$	14	$	40	$	783		$	190	$	973	$	2,039		$	—	$	1,463	$	744	$	478	a	$	5,737
Intersegment	570		980		1,550		175			—		175		198			150		10		4		(2,087)			—
Production and delivery	423		744		1,167		609			174		783		861		d	105		1,465		725		(1,557)			3,549
DD&A	42		57		99		117			15		132		275			14		1		7		19			547
Selling, general and administrative expenses	1		—		1		2			—		2		30			—		—		7		75			115
Exploration and research expenses	3		15		18		3			1		4		—			—		—		—		20			42
Environmental obligations and shutdown costs	—		1		1		—			—		—		—			—		—		—		73			74
Operating income (loss)	127		177		304		227			—		227		1,071			31		7		9		(239)			1,410
Interest expense, net	—		—		—		55		e	—		55		12			—		—		8		96			171
Net gain on early extinguishment of debt	—		—		—		—			—		—		—			—		—		—		5			5
Other (expense) income, net	(1)		(2)		(3)		(45)			4		(41)		28			(1)		—		—		41			24
Provision for income taxes	—		—		—		113			—		113		410			—		—		—		16			539
Equity in affiliated companies’ net earnings	—		—		—		—			—		—		—			—		—		—		2			2
Net income attributable to noncontrolling interests	—		—		—		18			2		20		368		c	—		—		—		—			388
Total assets at June 30, 2023	3,167		5,754		8,921		8,444			1,890		10,334		23,446			1,717		280		1,127		5,082			50,907
Capital expenditures	67		115		182		57			26		83		841			13		2		11		31			1,163

Financial Information by Business Segment (continued)

(In Millions)
																					Atlantic		Corporate,
	North America Copper Mines						South America Operations														Copper		Other
							Cerro							Indonesia			Molybdenum		Rod &		Smelting		& Elimi-			FCX
	Morenci		Other		Total		Verde			Other		Total		Operations			Mines		Refining		& Refining		nations			Total
Six Months Ended June 30, 2024
Revenues:
Unaffiliated customers	$	50	$	50	$	100	$	1,901		$	462	$	2,363	$	4,833		$	—	$	3,182	$	1,571	$	896	a	$	12,945
Intersegment	1,127		1,811		2,938		284			—		284		260			283		21		2		(3,788)			—
Production and delivery	897		1,478		2,375		1,282		b	351		1,633		1,533			253		3,179		1,509		(2,763)			7,719
DD&A	93		125		218		189			33		222		583			32		2		14		33			1,104
Selling, general and administrative expenses	1		1		2		4			—		4		61			—		—		15		185			267
Exploration and research expenses	9		17		26		6			3		9		6			—		—		—		36			77
Environmental obligations and shutdown costs	—		—		—		—			—		—		—			—		—		—		95			95
Operating income (loss)	177		240		417		704			75		779		2,910			(2)		22		35		(478)			3,683
Interest expense, net	—		1		1		10			—		10		7			—		—		18		141			177
Other (expense) income, net	—		(1)		(1)		16			13		29		68			—		—		8		94			198
Provision for (benefit from) income taxes	—		—		—		282			35		317		899		f	—		—		(12)		62			1,266
Equity in affiliated companies’ net earnings	—		—		—		—			—		—		1			—		—		—		3			4
Net income attributable to noncontrolling interests	—		—		—		218			36		254		1,063		c	—		—		—		36			1,353
Capital expenditures	91		389		480		127			45		172		1,490			63		16		60		89			2,370
Six Months Ended June 30, 2023
Revenues:
Unaffiliated customers	$	58	$	111	$	169	$	1,741		$	424	$	2,165	$	3,238		$	—	$	2,986	$	1,493	$	1,075	a	$	11,126
Intersegment	1,163		1,928		3,091		419			—		419		367			373		16		11		(4,277)			—
Production and delivery	804		1,525		2,329		1,229			361		1,590		1,199		d	201		2,992		1,459		(3,056)			6,714
DD&A	85		117		202		208			31		239		423			34		2		14		32			946
Selling, general and administrative expenses	1		1		2		4			—		4		58			—		—		15		162			241
Exploration and research expenses	6		31		37		4			2		6		—			—		—		—		30			73
Environmental obligations and shutdown costs	—		22		22		—			—		—		—			—		—		—		119			141
Operating income (loss)	325		343		668		715			30		745		1,925			138		8		16		(489)			3,011
Interest expense, net	—		—		—		84		e	—		84		19			—		—		14		205			322
Net gain on early extinguishment of debt	—		—		—		—			—		—		—			—		—		—		5			5
Other (expense) income, net	(2)		1		(1)		(27)			(2)		(29)		60			(1)		(1)		(5)		89			112
Provision for (benefit from) income taxes	—		—		—		300			7		307		740			—		—		—		(9)			1,038
Equity in affiliated companies’ net earnings	—		—		—		—			—		—		11			—		—		—		1			12
Net income (loss) attributable to noncontrolling interests	—		—		—		158			20		178		639		c	—		—		—		(43)			774
Capital expenditures	123		255		378		118			65		183		1,613			22		7		23		58			2,284

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 copper mines and South America operations.

b.Includes non-recurring costs totaling $65 million associated with labor-related charges at Cerro Verde.

c.Refer to Note 1 for further discussion of the attribution of PT-FI’s net income or loss.

d.Includes a $55 million charge for a potential administrative fine. Refer to Note 12 of FCX’s 2023 Form 10-K for further discussion.

e.Includes interest expense associated with contested tax rulings issued by the Peruvian Supreme Court totaling $50 million in the second quarter and $74 million for the first six months of 2023.

f.Includes a net benefit to income taxes totaling $182 million associated with the closure of PT-FI’s 2021 corporate income tax audit and resolution of the framework for disputed tax matters.