Business Segments

9 Months Ended

Sep. 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’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 third quarter and first nine months of 2024 and 2023 follow:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Copper:
Cathode	$	2,070	$	1,731	$	6,248	$	4,912
Concentrate	1,786		1,965		5,199		5,241
Rod and other refined copper products	1,012		992		2,939		2,797
Purchased coppera	154		71		620		347
Gold	1,394		854		3,497		2,384
Molybdenum	454		479		1,351		1,562
Silver and other	169		136		457		439
Adjustments to revenues:
Royalty expenseb	(131)		(80)		(344)		(234)
Treatment charges	(99)		(151)		(318)		(394)
PT-FI export dutiesc	(129)		(133)		(360)		(147)		d
Revenues from contracts with customers	6,680		5,864		19,289		16,907
Embedded derivativese	110		(40)		446		43
Total consolidated revenues	$	6,790	$	5,824	$	19,735	$	16,950

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 were reinstated at a rate of 7.5% in July 2023 under a revised regulation. As discussed in Note 7, PT-FI is continuing to pay export duties of 7.5% on copper concentrates.

d.Includes credits totaling $18 million 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 September 30, 2024
Revenues:
Unaffiliated customers	$	40	$	12	$	52	$	886		$	237	$	1,123	$	2,856		$	—	$	1,560	$	759	$	440	a	$	6,790
Intersegment	553		986		1,539		193			—		193		126			132		11		6		(2,007)			—
Production and delivery	492		811		1,303		630		b	187		817		918			140		1,562		754		(1,417)			4,077
Depreciation, depletion and amortization (DD&A)	47		62		109		92			18		110		340			19		2		6		14			600
Selling, general and administrative expenses	—		1		1		2			—		2		32			—		—		6		76			117
Exploration and research expenses	4		4		8		3			(1)		2		2			—		—		—		26			38
Environmental obligations and shutdown costs	—		—		—		—			—		—		—			—		—		—		20			20
Operating income (loss)	50		120		170		352			33		385		1,690			(27)		7		(1)		(286)			1,938
Interest expense, net	—		—		—		6			—		6		10			—		—		10		46		c	72
Other (expense) income, net	(1)		10		9		22			(2)		20		42			—		(1)		(7)		34			97
Provision for (benefit from) income taxes	—		—		—		148			10		158		625			—		—		1		(47)			737
Equity in affiliated companies’ net earnings	—		—		—		—			—		—		6			—		—		—		4			10
Net income (loss) attributable to noncontrolling interests	—		—		—		114		d	12		126		601		e	—		—		—		(17)			710
Total assets at September 30, 2024	3,172		6,647		9,819		8,276			2,013		10,289		27,474			1,955		294		1,491		4,078			55,400
Capital expenditures	48		215		263		82			18		100		713			25		7		28		63			1,199
Three Months Ended September 30, 2023
Revenues:
Unaffiliated customers	$	17	$	22	$	39	$	822		$	203	$	1,025	$	2,030		$	—	$	1,566	$	692	$	472	a	$	5,824
Intersegment	624		994		1,618		219			—		219		65			147		12		8		(2,069)			—
Production and delivery	480		799		1,279		649			178		827		672			120		1,566		680		(1,591)			3,553
DD&A	47		63		110		94			17		111		271			14		2		7		18			533
Selling, general and administrative expenses	—		1		1		3			—		3		32			—		—		6		76			118
Exploration and research expenses	2		4		6		2			—		2		—			—		—		—		22			30
Environmental obligations and shutdown costs	—		4		4		—			—		—		—			—		—		—		94			98
Operating income (loss)	112		145		257		293			8		301		1,120			13		10		7		(216)			1,492
Interest expense, net	—		1		1		(10)		f	—		(10)		9			—		—		8		88			96
Net gain on early extinguishment of debt	—		—		—		—			—		—		—			—		—		—		5			5
Other (expense) income, net	(2)		(9)		(11)		(9)			13		4		30			—		—		5		43			71
Provision for (benefit from) income taxes	—		—		—		119			12		131		419			—		—		—		(42)			508
Equity in affiliated companies’ net (losses) earnings	—		—		—		—			—		—		(2)			—		—		—		2			—
Net income attributable to noncontrolling interests	—		—		—		84		d	14		98		392		e	—		—		—		20			510
Total assets at September 30, 2023	3,171		5,799		8,970		8,227			1,893		10,120		24,438			1,747		288		1,176		4,909			51,648
Capital expenditures	53		114		167		61			15		76		854			21		2		20		38			1,178

Financial Information by Business Segment (continued)

																					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
Nine Months Ended September 30, 2024
Revenues:
Unaffiliated customers	$	90	$	62	$	152	$	2,787		$	699	$	3,486	$	7,689		$	—	$	4,742	$	2,330	$	1,336	a	$	19,735
Intersegment	1,680		2,797		4,477		477			—		477		386			415		32		8		(5,795)			—
Production and delivery	1,389		2,289		3,678		1,912		b	538		2,450		2,451			393		4,741		2,263		(4,180)			11,796
DD&A	140		187		327		281			51		332		923			51		4		20		47			1,704
Selling, general and administrative expenses	1		2		3		6			—		6		93			—		—		21		261			384
Exploration and research expenses	13		21		34		9			2		11		8			—		—		—		62			115
Environmental obligations and shutdown costs	—		—		—		—			—		—		—			—		—		—		115			115
Operating income (loss)	227		360		587		1,056			108		1,164		4,600			(29)		29		34		(764)			5,621
Interest expense, net	—		1		1		16			—		16		17			—		—		28		187		c	249
Other (expense) income, net	(1)		9		8		38			11		49		110			—		(1)		1		128			295
Provision for (benefit from) income taxes	—		—		—		430			45		475		1,524		g	—		—		(11)		15			2,003
Equity in affiliated companies’ net earnings	—		—		—		—			—		—		7			—		—		—		7			14
Net income attributable to noncontrolling interests	—		—		—		332		d	48		380		1,664		e	—		—		—		19			2,063
Capital expenditures	139		604		743		209			63		272		2,203			88		23		88		152			3,569
Nine Months Ended September 30, 2023
Revenues:
Unaffiliated customers	$	75	$	133	$	208	$	2,563		$	627	$	3,190	$	5,268		$	—	$	4,552	$	2,185	$	1,547	a	$	16,950
Intersegment	1,787		2,922		4,709		638			—		638		432			520		28		19		(6,346)			—
Production and delivery	1,284		2,324		3,608		1,878			539		2,417		1,871		h	321		4,558		2,139		(4,647)			10,267
DD&A	132		180		312		302			48		350		694			48		4		21		50			1,479
Selling, general and administrative expenses	1		2		3		7			—		7		90			—		—		21		238			359
Exploration and research expenses	8		35		43		6			2		8		—			—		—		—		52			103
Environmental obligations and shutdown costs	—		26		26		—			—		—		—			—		—		—		213			239
Operating income (loss)	437		488		925		1,008			38		1,046		3,045			151		18		23		(705)			4,503
Interest expense, net	—		1		1		74		f	—		74		28			—		—		22		293			418
Net gain on early extinguishment of debt	—		—		—		—			—		—		—			—		—		—		10			10
Other (expense) income, net	(4)		(8)		(12)		(36)			11		(25)		90			(1)		(1)		—		132			183
Provision for (benefit from) income taxes	—		—		—		419			19		438		1,159			—		—		—		(51)			1,546
Equity in affiliated companies’ net earnings	—		—		—		—			—		—		9			—		—		—		3			12
Net income (loss) attributable to noncontrolling interests	—		—		—		242		d	34		276		1,031		e	—		—		—		(23)			1,284
Capital expenditures	176		369		545		179			80		259		2,467			43		9		43		96			3,462

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 nonrecurring labor-related charges totaling $34 million in third-quarter 2024 and $99 million for the first nine months of 2024 associated with Cerro Verde’s new collective labor agreements with its two unions.

c.The third quarter and first nine months of 2024 include an $11 million credit associated with the closure of FCX’s 2017 and 2018 U.S. federal income tax exams.

d.Beginning in September 2024, FCX's interest in Cerro Verde is 55.08%, and prior to September 2024 was 53.56%.

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

f.The third quarter and first nine months of 2023 include a $13 million credit for the settlement of interest on Cerro Verde’s historical profit sharing liability. The first nine months of 2023 also includes $74 million of interest charges associated with contested tax rulings issued by the Peruvian Supreme Court.

g.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 Indonesia disputed tax matters.

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