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BUSINESS SEGMENTS
 12 Months Ended
Dec. 31, 2014
Business Segments [Abstract]  
Business Segments
BUSINESS SEGMENT INFORMATION
Product Revenue. FCX revenues attributable to the products it produced for the years ended December 31 follow:
 
2014
 
2013
 
2012
Refined copper products
$
9,451

 
$
9,178

 
$
9,699

Copper in concentratesa
3,366

 
5,328

 
4,589

Gold
1,584

 
1,656

 
1,741

Molybdenum
1,207

 
1,110

 
1,187

Oil
4,233

 
2,310

 
—

Other
1,597

 
1,339

 
794

Total
$
21,438

 
$
20,921

 
$
18,010

a.
Amounts are net of treatment and refining charges totaling $374 million for 2014, $400 million for 2013 and $311 million for 2012.

Geographic Area. Information concerning financial data by geographic area follows:
 
December 31,
 
2014
 
2013
 
2012
Long-lived assets:a
 
 
 
 
 
United States
$
29,468

 
$
32,969

b 
$
8,689

Indonesia
6,961

 
5,799

 
5,127

Peru
6,848

 
5,181

 
3,933

Democratic Republic of Congo
4,071

 
3,994

 
3,926

Chile
1,542

c 
2,699

 
2,587

Other
522

 
562

 
327

Total
$
49,412

 
$
51,204

 
$
24,589


a.
Long-lived assets exclude deferred tax assets, intangible assets and goodwill.
b.
Increased from 2012 primarily because of the PXP and MMR acquisitions.
c.
Decreased from 2013 primarily because of the sale of Candelaria/Ojos.
 
Years Ended December 31,
 
2014
 
2013
 
2012
Revenues:a
 
 
 
 
 
United States
$
10,311

 
$
9,418

 
$
6,285

Indonesia
1,792

 
1,651

 
2,054

Japan
1,573

 
2,141

 
2,181

Spain
1,208

 
1,223

 
1,581

China
968

 
1,078

 
579

Switzerland
800

 
1,098

 
731

Chile
687

 
754

 
704

Turkey
484

 
341

 
345

Korea
383

 
297

 
525

Other
3,232

 
2,920

 
3,025

Total
$
21,438

 
$
20,921

 
$
18,010


a.
Revenues are attributed to countries based on the location of the customer.

Major Customers. Copper concentrate sales to PT Smelting totaled $1.8 billion (8 percent of FCX's consolidated revenues) in 2014, $1.7 billion (8 percent of FCX's consolidated revenues) in 2013 and $2.1 billion (11 percent of FCX's consolidated revenues) in 2012. Additionally, oil and gas sales to Phillips 66 Company totaled $2.5 billion (12 percent of FCX's consolidated revenues) in 2014. No other customer accounted for 10 percent or more of FCX's consolidated revenues. Refer to Note 6 for further discussion of FCX’s investment in PT Smelting.

Labor Matters. As of December 31, 2014, 48 percent of FCX's labor force was covered by collective bargaining agreements, and 28 percent of FCX's labor force is covered by agreements that will expire within one year.

Business Segments. FCX has organized its operations into six primary divisions – North America copper mines, South America mining, Indonesia mining, Africa mining, Molybdenum mines and U.S. oil and gas operations. FCX's U.S. oil and gas operations reflect the results of FM O&G beginning June 1, 2013. Operating segments that meet certain thresholds are reportable segments, which are disclosed separately in the following tables, and include the Morenci (included in North America copper mines), Cerro Verde (included in South America mining), Grasberg (Indonesia mining) and Tenke Fungurume (Africa mining) copper mines, the Rod & Refining operations and the U.S. oil and gas operations.

Intersegment sales between FCX’s mining operations are based on similar arm's-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, timing of sales to unaffiliated customers and transportation premiums.

FCX defers recognizing profits on sales from its mines to other divisions, including Atlantic Copper and on 25 percent of PT-FI's sales to PT Smelting, 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 and eliminations), whereas foreign income taxes are recorded and managed at the applicable country level. In addition, most mining exploration and research activities are managed on a consolidated basis, and those costs along with 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.

North America Copper Mines. FCX has seven operating copper mines in North America – Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Tyrone and Chino in New Mexico. The North America copper mines include open-pit mining, sulfide ore concentrating, leaching and SX/EW operations. A majority of the copper produced at the North America copper mines is cast into copper rod by FCX’s Rod & Refining operations. In addition to copper, certain of FCX's North America copper mines also produce molybdenum concentrates and silver.

The Morenci open-pit mine, located in southeastern Arizona, produces copper cathodes and copper concentrates. In addition to copper, the Morenci mine also produces molybdenum concentrates. The Morenci mine produced 41 percent of FCX’s North America copper during 2014.

South America Mining. South America mining includes two operating copper mines – Cerro Verde in Peru and El Abra in Chile. These operations include open-pit mining, sulfide ore concentrating, leaching and SX/EW operations.

On November 3, 2014, FCX completed the sale of its 80 percent ownership interests in the Candelaria mine and the Ojos del Salado mine, both reported as components of other South America mines. South America mining includes the results of the the Candelaria and Ojos del Salado mines through the sale date. Refer to Note 2 for further discussion.

The Cerro Verde open-pit copper mine, located near Arequipa, Peru, produces copper cathodes and copper concentrates. In addition to copper, the Cerro Verde mine also produces molybdenum concentrates and silver. The Cerro Verde mine produced 43 percent of FCX’s South America copper during 2014.

Indonesia Mining. Indonesia mining includes PT-FI’s Grasberg minerals district that produces copper concentrates, which contain significant quantities of gold and silver.

Africa Mining. Africa mining includes the Tenke minerals district. The Tenke operation includes surface mining, leaching and SX/EW operations and produces copper cathodes. In addition to copper, the Tenke operation produces cobalt hydroxide.
 
Molybdenum Mines.  Molybdenum mines include the wholly owned Henderson underground mine and Climax open-pit mine in Colorado. The Henderson and Climax mines produce high-purity, chemical-grade molybdenum concentrates, which are typically further processed into value-added molybdenum chemical products.

Rod & Refining. The Rod & Refining segment consists of copper conversion facilities located in North America, and includes a refinery, three rod mills and a specialty copper products facility. These operations process copper produced at FCX’s North America copper mines and purchased copper into copper cathode, rod and custom copper shapes. At times these operations refine copper and produce copper rod and shapes for customers on a toll basis. Toll arrangements require the tolling customer to deliver appropriate copper-bearing material to FCX’s facilities for processing into a product that is returned to the customer, who pays FCX for processing its material into the specified products.

Atlantic Copper Smelting & Refining. Atlantic Copper smelts and refines copper concentrates and markets refined copper and precious metals in slimes. During 2014, Atlantic Copper purchased approximately 21 percent of its concentrate requirements from the North America copper mines, approximately 21 percent from the South America mining operations and approximately 8 percent from the Indonesia mining operations at market prices, with the remainder purchased from third parties.

Other Mining & Eliminations. Other mining and eliminations include the Miami smelter (a smelter at FCX's Miami, Arizona, mining operation), Freeport Cobalt (a cobalt chemical refinery in Kokkola, Finland), molybdenum conversion facilities in the U.S. and Europe, four non-operating copper mines in North America (Ajo, Bisbee and Tohono in Arizona, and Cobre in New Mexico) and other mining support entities.

U.S. Oil & Gas Operations. FCX's U.S. oil and gas operations include oil production facilities in the Deepwater GOM, oil production facilities onshore and offshore California, onshore natural gas resources in the Haynesville shale play in Louisiana, natural gas production from the Madden area in central Wyoming, and a position in the shallow-water Inboard Lower Tertiary/Cretaceous natural gas trend on the Shelf of the GOM and onshore in South Louisiana. All of the U.S. operations are considered one operating and reportable segment.
Financial Information by Business Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mining Operations
 
 
 
 
 
 
 
North America Copper Mines
 
South America
 
Indonesia
 
Africa
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Atlantic
 
Other
 
 
 
 
 
Corporate,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Molyb-
 
 
 
Copper
 
Mining
 
 
 
U.S.
 
Other
 
 
 
 
 
Other
 
 
 
Cerro
 
Other
 
 
 
 
 
 
 
denum
 
Rod &
 
Smelting
 
& Elimi-
 
Total
 
Oil & Gas
 
& Elimi-
 
FCX
 
Morenci
 
Mines
 
Total
 
Verde
 
Mines
 
Total
 
Grasberg
 
Tenke
 
Mines
 
Refining
 
& Refining
 
nations
 
Mining
 
Operations
 
nations
 
Total
Year Ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaffiliated customers
$
364

 
$
336

 
$
700

 
$
1,282

 
$
1,740

 
$
3,022

 
$
2,848

a 
$
1,437

 
$
—

 
$
4,626

 
$
2,391

 
$
1,704

b 
$
16,728

 
$
4,710

c 
$
—

 
$
21,438

Intersegment
1,752

 
3,164

 
4,916

 
206

 
304

 
510

 
223

 
121

 
587

 
29

 
21

 
(6,407
)
 
—

 
—

 
—

 
—

Production and delivery
1,287

 
2,153

 
3,440

 
741

 
1,198

 
1,939

 
1,988

 
770

 
328

 
4,633

 
2,356

 
(4,789
)
 
10,665

 
1,237

 
2

 
11,904

Depreciation, depletion and amortization
168

 
316

 
484

 
159

 
208

 
367

 
266

 
228

 
92

 
10

 
41

 
70

 
1,558

 
2,291

 
14

 
3,863

Impairment of oil and gas properties
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
3,737

 
—

 
3,737

Selling, general and administrative expenses
2

 
3

 
5

 
3

 
3

 
6

 
98

 
12

 
—

 
—

 
17

 
25

 
163

 
207

 
222

 
592

Mining exploration and research expenses
—

 
8

 
8

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
118

 
126

 
—

 
—

 
126

Environmental obligations and shutdown costs
—

 
(5
)
 
(5
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
123

 
118

 
—

 
1

 
119

Goodwill impairment
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
1,717

 
—

 
1,717

Net gain on sales of assets
—

 
(14
)
 
(14
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(703
)
d 
(717
)
 
—

 
—

 
(717
)
Operating income (loss)
659

 
1,039

 
1,698

 
585

 
635

 
1,220

 
719

 
548

 
167

 
12

 
(2
)

453

 
4,815

 
(4,479
)
 
(239
)
 
97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
3

 
1

 
4

 
1

 
—

 
1

 
—

 
—

 
—

 
—

 
13

 
84

 
102

 
241

 
287

 
630

Provision for (benefit from) income taxes
—

 
—

 
—

 
265

 
266

 
531

 
293

 
116

 
—

 
—

 
—

 
221

d 
1,161

 
—

 
(837
)

324

Total assets at December 31, 2014
3,780

 
5,611

 
9,391

 
7,513

 
1,993

 
9,506

 
8,626

 
5,073

 
2,095

 
235

 
898

 
1,319

 
37,143

 
20,834

 
818

 
58,795

Capital expenditures
826

 
143

 
969

 
1,691

 
94

 
1,785

 
948

 
159

 
54

 
4

 
17

 
52

 
3,988

 
3,205

 
22

 
7,215

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaffiliated customers
$
244

 
$
326

 
$
570

 
$
1,473

 
$
2,379

 
$
3,852

 
$
3,751

a 
$
1,590

 
$
—

 
$
4,995

 
$
2,027

 
$
1,516

b 
$
18,301

 
$
2,616

c 
$
4

 
$
20,921

Intersegment
1,673

 
2,940

 
4,613

 
360

 
273

 
633

 
336

 
47

 
522

 
27

 
14

 
(6,192
)
 
—

 
—

 
—

 
—

Production and delivery
1,233

 
2,033

 
3,266

 
781

 
1,288

 
2,069

 
2,309

 
754

 
317

 
4,990

 
2,054

 
(4,608
)
 
11,151

 
682

 
7

 
11,840

Depreciation, depletion and amortization
133

 
269

 
402

 
152

 
194

 
346

 
247

 
246

 
82

 
9

 
42

 
48

 
1,422

 
1,364

 
11

 
2,797

Selling, general and administrative expenses
2

 
3

 
5

 
3

 
4

 
7

 
110

 
12

 
—

 
—

 
20

 
29

 
183

 
120

 
354

 
657

Mining exploration and research expenses
—

 
5

 
5

 
—

 
—

 
—

 
1

 
—

 
—

 
—

 
—

 
193

 
199

 
—

 
11

 
210

Environmental obligations and shutdown costs
—

 
(1
)
 
(1
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
67

 
66

 
—

 
—

 
66

Operating income (loss)
549

 
957

 
1,506

 
897

 
1,166

 
2,063

 
1,420

 
625

 
123

 
23

 
(75
)
e 
(405
)
 
5,280

 
450

 
(379
)
 
5,351

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
3

 
1

 
4

 
2

 
1

 
3

 
12

 
2

 
—

 
—

 
16

 
80

 
117

 
181

 
220

 
518

Provision for income taxes
—

 
—

 
—

 
316


404

 
720

 
603

 
131

 
—

 
—

 
—

 
—

 
1,454

 
—

 
21

f 
1,475

Total assets at December 31, 2013
3,110

 
5,810

 
8,920

 
6,584

 
3,996

 
10,580

 
7,437

 
4,849

 
2,107

 
239

 
1,039

 
1,003

 
36,174

 
26,252

 
1,047

 
63,473

Capital expenditures
737

 
329

 
1,066

 
960

 
185

 
1,145

 
1,030

 
205

 
164

 
4

 
67

 
113

 
3,794

 
1,436

 
56

 
5,286

a.
Includes PT-FI's sales to PT Smelting totaling $1.8 billion in 2014 and $1.7 billion in 2013.
b.
Includes revenues from FCX's molybdenum sales company, which included sales of molybdenum produced by the molybdenum mines and by certain of the North and South America copper mines.
c.
Includes net mark-to-market gains (losses) associated with crude oil and natural gas derivative contracts totaling $505 million in 2014 and $(334) million for the period from June 1, 2013, to December 31, 2013.
d.
Includes a gain of $671 million for the sale of Candelaria/Ojos and related provision for income taxes of $221 million.
e.
Includes $50 million for shutdown costs associated with Atlantic Copper's scheduled 68-day maintenance turnaround, which was completed in fourth-quarter 2013.
f.
Includes $199 million of net benefits resulting from oil and gas acquisitions.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mining Operations
 
 
 
 
 
 
 
North America Copper Mines
 
South America
 
Indonesia
 
Africa
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Atlantic
 
Other
 
 
 
 
 
Corporate,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Molyb-
 
 
 
Copper
 
Mining
 
 
 
U.S.
 
Other
 
 
 
 
 
Other
 
 
 
Cerro
 
Other
 
 
 
 
 
 
 
denum
 
Rod &
 
Smelting
 
& Elimi-
 
Total
 
Oil & Gas
 
& Elimi-
 
FCX
 
Morenci
 
Mines
 
Total
 
Verde
 
Mines
 
Total
 
Grasberg
 
Tenke
 
Mines
 
Refining
 
& Refining
 
nations
 
Mining
 
Operations
 
nations
 
Total
Year Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaffiliated customers
$
156

 
$
46

 
$
202

 
$
1,767

 
$
2,143

 
$
3,910

 
$
3,611

a 
$
1,349

 
$
—

 
$
4,989

 
$
2,683

 
$
1,259

b 
$
18,003

 
$
—

 
$
7

 
$
18,010

Intersegment
1,846

 
3,438

 
5,284

 
388

 
430

 
818

 
310

 
10

 
529

 
27

 
26

 
(7,004
)
 
—

 
—

 
—

 
—

Production and delivery
1,076

 
1,857

 
2,933

 
813

 
1,301

 
2,114

 
2,349

 
615

 
320

 
4,993

 
2,640

 
(5,585
)
 
10,379

 
—

 
3

 
10,382

Depreciation, depletion and amortization
122

 
238

 
360

 
139

 
148

 
287

 
212

 
176

 
59

 
9

 
42

 
27

 
1,172

 
—

 
7

 
1,179

Selling, general and administrative expenses
2

 
2

 
4

 
3

 
3

 
6

 
121

 
6

 
—

 
—

 
19

 
18

 
174

 
—

 
257

 
431

Mining exploration and research expenses
1

 
—

 
1

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
272

 
273

 
—

 
12

 
285

Environmental obligations and shutdown costs
(11
)
 
(5
)
 
(16
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(3
)
 
(19
)
 
—

 
(3
)
 
(22
)
Gain on insurance settlement
—

 
—

 
—

 
—

 
—

 
—

 
(59
)
 
—

 
—

 
—

 
—

 
—

 
(59
)
 
—

 
—

 
(59
)
Operating income (loss)
812

 
1,392

 
2,204

 
1,200

 
1,121

 
2,321

 
1,298

 
562

 
150

 
14

 
8

 
(474
)
 
6,083

 
—

 
(269
)
 
5,814

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
1

 
—

 
1

 
7

 
—

 
7

 
5

 
1

 
—

 
—

 
12

 
81

 
107

 
—

 
79

 
186

Provision for income taxes
—

 
—

 
—

 
228

c 
329

 
557

 
497

 
112

 
—

 
—

 
—

 
—

 
1,166

 
—

 
344

 
1,510

Total assets at December 31, 2012
2,445

 
5,703

 
8,148

 
5,821

 
4,342

 
10,163

 
6,591

 
4,622

 
2,018

 
242

 
992

 
614

 
33,390

 
—

 
2,050

 
35,440

Capital expenditures
266

 
559

 
825

 
558

 
373

 
931

 
843

 
539

 
245

 
6

 
16

 
69

 
3,474

 
—

 
20

 
3,494


a.
Includes PT-FI's sales to PT Smelting totaling $2.1 billion in 2012.
b.
Includes revenues from FCX's molybdenum sales company, which included sales of molybdenum produced by the molybdenum mines and by certain of the North and South America copper mines.
c.
Includes a credit of $234 million for the reversal of a net deferred tax liability.