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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income before income taxes and equity in affiliated companies' net earnings | Geographic sources of income before income taxes and equity in affiliated companies’ net earnings for the years ended December 31 consist of the following:
| 2013 |  | 2012 |  | 2011
United States | $ | 1,104 |  |  | $ | 1,539 |  |  | $ | 2,112 |
Foreign | 3,809 |  |  | 3,948 |  |  | 6,706 |
Total | $ | 4,913 |  |  | $ | 5,487 |  |  | $ | 8,818 |
Provision for (benefit from) income taxes | FCX’s provision for income taxes for the years ended December 31 consists of the following:
| 2013 |  | 2012 |  | 2011 |
Current income taxes: |  |  |  |  |  |
Federal | $ | 203 |  |  | $ | 238 |  |  | $ | 394 |  |
State | 9 |  |  | 7 |  |  | 21 |  |
Foreign | 1,081 |  |  | 1,002 |  |  | 1,934 |  |
Total current | 1,293 |  |  | 1,247 |  |  | 2,349 |  |
Deferred income taxes (benefits): |  |  |  |  |  |
Federal | 234 |  |  | 87 |  |  | 82 |  |
State | (35 | ) |  | 18 |  |  | (19 | ) |
Foreign | 346 |  |  | 363 |  |  | 622 |  |
Total deferred | 545 |  |  | 468 |  |  | 685 |  |
Adjustments | (199 | ) | a | (205 | ) | b,c | 53 |  | d
Federal operating loss carryforwards | (164 | ) | e | — |  |  | — |  |
Provision for income taxes | $ | 1,475 |  |  | $ | 1,510 |  |  | $ | 3,087 |  |
a. | As a result of the oil and gas acquisitions, FCX recognized a net tax benefit of $199 million consisting of income tax benefits of $190 million associated with net reductions in FCX's valuation allowances, $69 million related to the release of the deferred tax liability on PXP's investment in MMR common stock and $16 million associated with the revaluation of state deferred tax liabilities, partially offset by income tax expense of $76 million associated with the write off of deferred tax assets related to environmental liabilities.
b. | In 2012, Sociedad Minera Cerro Verde S.A.A. (Cerro Verde) signed a new 15-year mining stability agreement with the Peruvian government, which became effective January 1, 2014. In connection with the new mining stability agreement, Cerro Verde's income tax rate increased from 30 percent to 32 percent, and FCX recognized additional deferred tax expense of $29 million.
c. | With the exception of TFM, FCX has not elected to permanently reinvest earnings from its foreign subsidiaries and has recorded deferred tax liabilities for foreign earnings that are available to be repatriated to the U.S. Cerro Verde previously recorded deferred Peruvian income tax liabilities for income taxes that would become payable if the reinvested profits used to fund the initial Cerro Verde sulfide expansion were distributed prior to the expiration of Cerro Verde's 1998 stability agreement on December 31, 2013. Because reinvested profits at Cerro Verde were not expected to be distributed prior to December 31, 2013, a net deferred income tax liability of $234 million was reversed and recognized as an income tax benefit in 2012.
d. | In September 2011, Peru enacted a new mining tax and royalty regime and also created a special mining burden that companies with stability agreements could elect to pay. Cerro Verde elected to pay this special mining burden during the remaining term of its 1998 stability agreement, which expired on December 31, 2013. As a result, Cerro Verde recognized additional tax expense of $53 million in 2011.
e. | Benefit from the use of federal operating loss carryforwards acquired as part of the oil and gas acquisitions.
Reconciliation of the U.S. federal statutory tax rate to effective income tax rate | A reconciliation of the U.S. federal statutory tax rate to FCX’s effective income tax rate for the years ended December 31 follows:
| 2013 |  | 2012 |  | 2011
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
U.S. federal statutory tax rate | $ | 1,720 |  |  | 35 | % |  | $ | 1,920 |  |  | 35 | % |  | $ | 3,086 |  |  | 35 | %
Foreign tax credit limitation | 117 |  |  | 2 |  |  | 110 |  |  | 2 |  |  | 163 |  |  | 2 |
Percentage depletion | (223 | ) |  | (5 | ) |  | (263 | ) |  | (5 | ) |  | (283 | ) |  | (3 | )
Withholding and other impacts on |  |  |  |  |  |  |  |  |  |  |
foreign earnings | 83 |  |  | 2 |  |  | (221 | ) | b | (4 | ) |  | 170 |  |  | 2 |
Valuation allowance on minimum |  |  |  |  |  |  |  |  |  |  |
tax credits | (190 | ) | a | (4 | ) |  | (9 | ) |  | — |  |  | (47 | ) |  | (1 | )
State income taxes | (43 | ) |  | — |  |  | 17 |  |  | — |  |  | — |  |  | — |
Other items, net | 11 |  | a | — |  |  | (44 | ) |  | — |  |  | (2 | ) |  | — |
Provision for income taxes | $ | 1,475 |  |  | 30 | % |  | $ | 1,510 |  |  | 28 | % |  | $ | 3,087 |  |  | 35 | %
a. | Included a net tax benefit of $199 million as a result of the oil and gas acquisitions.
b. | Included the reversal of Cerro Verde's deferred income tax liability of $234 million.
Components of deferred tax assets and liabilities | The components of deferred taxes follow:
| December 31,
| 2013 |  | 2012
Deferred tax assets: |  |  |
Foreign tax credits | $ | 2,144 |  |  | $ | 2,022 |
Accrued expenses | 1,098 |  |  | 819 |
Minimum tax credits | 603 |  |  | 474 |
Net operating loss carryforwards | 925 |  |  | 343 |
Employee benefit plans | 443 |  |  | 315 |
Other | 557 |  |  | 374 |
Deferred tax assets | 5,770 |  |  | 4,347 |
Valuation allowances | (2,487 | ) |  | (2,443 | )
Net deferred tax assets | 3,283 |  |  | 1,904 |
Deferred tax liabilities: |  |  |
Property, plant, equipment and mining development costs | (4,887 | ) |  | (4,462 | )
Oil and gas properties | (4,708 | ) |  | — |
Undistributed earnings | (936 | ) |  | (884 | )
Other | (34 | ) |  | (70 | )
Total deferred tax liabilities | (10,565 | ) |  | (5,416 | )
Net deferred tax liabilities | $ | (7,282 | ) |  | $ | (3,512 | )
Reserve for unrecognized tax benefits, interest and penalties | A summary of the activities associated with FCX’s reserve for unrecognized tax benefits, interest and penalties follows:
| Unrecognized Tax Benefits |  | Interest |  | Penalties
Balance at January 1, 2012 | $ | 146 |  |  | $ | 34 |  |  | $ | — |
Additions: |  |  |  |  |
Prior year tax positions | 17 |  |  | * |  |  | * |
Current year tax positions | 24 |  |  | * |  |  | * |
Interest and penalties | — |  |  | 3 |  |  | — |
Decreases: |  |  |  |  |
Prior year tax positions | (37 | ) |  | * |  |  | * |
Current year tax positions | — |  |  | * |  |  | * |
Settlements with tax authorities | (11 | ) |  | * |  |  | * |
Lapse of statute of limitations | (1 | ) |  | * |  |  | * |
Interest and penalties | — |  |  | (6 | ) |  | — |
Balance at December 31, 2012 | 138 |  |  | 31 |  |  | — |
Additions: |  |  |  |  |
Prior year tax positions | 18 |  |  | * |  |  | * |
Current year tax positions | 14 |  |  | * |  |  | * |
Acquisition of PXP | 5 |  |  | * |  |  | * |
Interest and penalties | — |  |  | 7 |  |  | — |
Decreases: |  |  |  |  |
Prior year tax positions | (37 | ) |  | * |  |  | * |
Current year tax positions | — |  |  | * |  |  | * |
Settlements with tax authorities | — |  |  | * |  |  | * |
Lapse of statute of limitations | (28 | ) |  | * |  |  | * |
Interest and penalties | — |  |  | (17 | ) |  | — |
Balance at December 31, 2013 | $ | 110 |  |  | $ | 21 |  |  | $ | — |
* Amounts not allocated.
Summary of income tax examinations | The tax years for FCX's major tax jurisdictions that remain subject to examination are as follows:
Jurisdiction |  | Years Subject to Examination |  | Additional Open Years
U.S. Federal |  | 2007-2012 |  | 2013
Indonesia |  | 2005-2008, 2011-2012 |  | 2009-2010, 2013
Peru |  | 2009-2010 |  | 2011-2013
Chile |  | 2011-2012 |  | 2013
Africa |  | 2010-2012 |  | 2013

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 + Details
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