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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
Geographic sources of (losses) income before income taxes and equity in affiliated companies’ net earnings for the years ended December 31 follow:
 202420232022
U.S.$(547)$68 $840 
Foreign7,454 5,938 5,875 
Total$6,907 $6,006 $6,715 

Income taxes are provided on the earnings of FCX’s material foreign subsidiaries under the assumption that these earnings will be distributed. FCX has not provided deferred income taxes for other differences between the book and tax carrying amounts of its investments in material foreign subsidiaries as FCX considers its ownership positions to be permanent in duration, and quantification of the related deferred tax liability is not practicable. 

FCX’s provision for income taxes for the years ended December 31 follows:
 202420232022
Current income taxes:   
Federal$36 $5 $— 
State(1)(6)1 
Foreign(2,635)(2,087)(2,232)
Total current(2,600)(2,088)(2,231)
Deferred income taxes:   
Federal1 (50)(149)
State(1)(3)(6)
Foreign74 (320)(144)
Total deferred74 (373)(299)
Adjustments— 6 1 

Operating loss carryforwards3 185 262 
Provision for income taxes$(2,523)$(2,270)$(2,267)
A reconciliation of the U.S. federal statutory tax rate to FCX’s effective income tax rate for the years ended December 31 follows:
 202420232022
 Amount%Amount%Amount%
U.S. federal statutory tax rate$(1,450)(21)%$(1,261)(21)%$(1,410)(21)%
Foreign tax credit expiration/ limitationa
(1,053)(15)(289)(5)(50)(1)
Valuation allowancea
898 13 119 2 65 — 
Withholding and other impacts on
foreign earnings(753)(11)(615)(10)(673)(10)
Effect of foreign rates different than the U.S.
federal statutory rate(373)(6)(313)(5)(314)(5)
PT-FI historical tax disputesb
185 2 — — (8)— 
Percentage depletion123 2 183 3 189 3 
State income taxes(52)(1)3 — (41)— 
Non-deductible permanent differences(41)— (68)(1)(29)— 
Uncertain tax positions5 — (28)(1)(17)— 
Other items, net(12)— (1)— 21 — 
Provision for income taxes$(2,523)(37)%$(2,270)(38)%$(2,267)(34)%
a.Refer to “Valuation Allowances” below.
b.Refer to “Indonesia Tax Matters” below.

FCX paid federal, state and foreign income taxes totaling $2.8 billion in 2024, $2.1 billion in 2023 and $3.1 billion in 2022. FCX received refunds of federal, state and foreign income taxes totaling $248 million in 2024, less than $1 million in 2023 and $46 million in 2022.

The components of deferred taxes follow:
 December 31,
 20242023
Deferred tax assets:  
Net operating losses$1,814 $1,761 
Accrued expenses1,657 1,390 
Foreign tax credits184 1,228 
Employee benefit plans76 78 
Other214 215 
Deferred tax assets3,945 4,672 
Valuation allowances(2,984)(3,894)
Net deferred tax assets961 778 
Deferred tax liabilities:  
Property, plant, equipment and mine development costs(4,193)(4,118)
Undistributed earnings(981)(911)
Other(155)(195)
Total deferred tax liabilities(5,329)(5,224)
Net deferred tax liabilities$(4,368)$(4,446)

Tax Attributes. At December 31, 2024, FCX had (i) U.S. foreign tax credits of $0.2 billion that will expire between 2025 and 2034, (ii) U.S. federal net operating losses (NOLs) of $6.0 billion, of which $0.7 billion can be carried forward indefinitely, with the remainder primarily expiring between 2036 and 2037, (iii) U.S. state NOLs of $10.6 billion, of which $3.5 billion can be carried forward indefinitely, with the remainder primarily expiring between 2025 and 2044, and (iv) Atlantic Copper NOLs of $0.5 billion that can be carried forward indefinitely.

Valuation Allowances. On the basis of available information at December 31, 2024, including positive and negative evidence, FCX has provided valuation allowances for certain of its deferred tax assets where it believes it is more-likely-than-not that some portion or all of such assets will not be realized. Valuation allowances totaled $3.0 billion at December 31, 2024, and covered all of FCX’s U.S. foreign tax credits and U.S. federal NOLs, substantially all of its U.S. state and foreign NOLs, as well as a portion of its U.S. federal, state and foreign deferred tax assets.
The valuation allowance related to FCX’s U.S. foreign tax credits totaled $0.2 billion at December 31, 2024. FCX has operations in tax jurisdictions where statutory income taxes and withholding taxes are in excess of the U.S. federal income tax rate. Valuation allowances are recognized on foreign tax credits for which no benefit is expected to be realized.

The valuation allowance related to FCX’s U.S. federal, state and foreign NOLs totaled $1.8 billion and other deferred tax assets totaled $1.0 billion at December 31, 2024. NOLs and deferred tax assets represent future deductions for which a benefit will only be realized to the extent these deductions offset future income. FCX develops an estimate of which future tax deductions will be realized and recognizes a valuation allowance to the extent these deductions are not expected to be realized in future periods.

Valuation allowances will continue to be carried on U.S. foreign tax credits, U.S. federal, state and foreign NOLs and U.S. federal, state and foreign deferred tax assets, until such time that (i) FCX generates taxable income against which any of the assets, credits or NOLs can be used, (ii) forecasts of future income provide sufficient positive evidence to support reversal of the valuation allowances or (iii) FCX identifies a prudent and feasible means of securing the benefit of the assets, credits or NOLs that can be implemented.

The $0.9 billion net decrease in the valuation allowances during 2024 is primarily related to a decrease for expirations of U.S. foreign tax credits.

U.S. Inflation Reduction Act of 2022. The provisions of the U.S. Inflation Reduction Act of 2022 (the Act) became applicable to FCX on January 1, 2023. The Act includes, among other provisions, a new Corporate Alternative Minimum Tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with average annual AFSI exceeding $1.0 billion over a three-year period.

In September 2024, the Internal Revenue Service (IRS) issued proposed regulations that provide guidance on the application of CAMT, which are not final and subject to change. Based on the proposed guidance released by the IRS, FCX determined that the provisions of the Act did not impact its financial results for the years 2024 or 2023.

Pillar Two of the Global Anti-Base Erosion Rules. In 2021, the Organisation for Economic Co-operation and Development (OECD) published a framework for Pillar Two of the Global Anti-Base Erosion Rules, which was designed to coordinate participating jurisdictions in updating the international tax system to ensure that large multinational companies pay a minimum level of income tax. Recommendations from the OECD regarding a global minimum income tax and other changes are being considered and/or implemented in jurisdictions where FCX operates. At current metals market prices, FCX does not expect enactment of the recommended framework in jurisdictions where it operates to materially impact its financial results.

Indonesia Tax Matters. During 2024, in conjunction with closure of PT-FI’s 2021 corporate income tax audit and resolution of Indonesia disputed tax matters, PT-FI recorded credits to net income of $215 million, including $199 million to provision for income taxes, $8 million to production and delivery and $8 million to interest expense, net.

Peru Tax Matters. Cerro Verde’s current mining stability agreement subjects it to a stable income tax rate of 32% through the expiration of the agreement on December 31, 2028. The enacted tax rate on dividend distributions, which is not stabilized by the agreement, is 5%.

Chile Tax Matters. Under the US-Chilean Tax Treaty, which became effective in 2024, FCX’s share of income from El Abra is subject to an income tax rate of 35%.

Effective January 1, 2024, mining royalty taxes in Chile consist of two main components: (i) profitability-based mining royalty rates on a sliding scale of 8% to 26% (depending on a defined operational margin) and (ii) an additional ad valorem royalty tax based on 1% of sales.

Uncertain Tax Positions. Tax positions reflected in the consolidated financial statements are, based on their technical merits, more-likely-than-not to be sustained upon examination by taxing authorities or have otherwise been effectively settled. Such tax positions reflect the largest amount of benefit, determined on a cumulative probability basis, that is more-likely-than-not to be realized upon settlement with the applicable taxing authority with full knowledge of all relevant information. FCX’s policy associated with uncertain tax positions is to record accrued
interest in interest expense and accrued penalties in other income, net, rather than in the provision for income taxes.

A summary of the activities associated with FCX’s reserve for unrecognized tax benefits for the years ended December 31 follows.
202420232022
Balance at beginning of year$720 $810 $808 
Additions:
Prior year tax positions13 27 26 
Current year tax positions10 28 25 
Decreases:
Prior year tax positions(54)(13)(12)
Settlements with taxing authorities(492)(132)(37)
Lapse of statute of limitations(36)— — 
Balance at end of year$161 $720 $810 

The total amount of accrued interest and penalties associated with unrecognized tax benefits was $264 million at December 31, 2024, primarily relating to unrecognized tax benefits associated with royalties and the timing of advance payments, $536 million at December 31, 2023, and $551 million at December 31, 2022. Amounts include unpaid items on the consolidated balance sheet of $26 million at December 31, 2024, $33 million at December 31, 2023, and $36 million at December 31, 2022. Benefits (charges) for interest and penalties related to unrecognized tax benefits totaled $8 million in 2024, $(153) million in 2023 and $(7) million in 2022.

The reserve for unrecognized tax benefits of $161 million at December 31, 2024, included $153 million ($52 million net of income tax benefits and valuation allowances) that, if recognized, would reduce FCX’s provision for income taxes. Changes in the reserve for unrecognized tax benefits associated with current and prior-year tax positions were primarily related to uncertainties associated with FCX’s tax treatment of cost recovery methods, various non-deductible costs, and royalties and other mining taxes. There continues to be uncertainty related to the timing of settlements with taxing authorities, but if additional settlements are agreed upon during the year 2025, FCX could experience a change in its reserve for unrecognized tax benefits.

FCX or its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The tax years for FCX’s major tax jurisdictions that remain subject to examination are as follows:
JurisdictionYears Subject to ExaminationAdditional Open Years
U.S. Federal—2021-2024
Indonesia 2017, 20202022-2024
Peru2020-20212017-2019, 2022-2024
Chile20232021-2022, 2024