XML 81 R40.htm IDEA: XBRL DOCUMENT
v3.8.0.1

INCOME TAXES (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income before income taxes and equity in affiliated companies' net earnings | Geographic sources of income (losses) before income taxes and equity in affiliated companies’ net earnings (losses) for the years ended December 31 consist of the following:
| 2017 |  | 2016 |  | 2015
U.S. | $ | 20 |  |  | $ | (5,179 | ) |  | $ | (14,589 | )
Foreign | 2,882 |  | a | 1,707 |  |  | 461 |
Total | $ | 2,902 |  |  | $ | (3,472 | ) |  | $ | (14,128 | )
a. | As a result of the unfavorable Peruvian Supreme Court ruling on the Cerro Verde royalty dispute, FCX incurred pre-tax charges of $348 million to income from continuing operations and $7 million of net tax expense for the year 2017.
Schedule of Benefit from (Provision for) income taxes | FCX’s (provision for) benefit from income taxes for the years ended December 31 consist of the following:
| 2017 |  | 2016 |  | 2015 |
Current income taxes: |  |  |  |  |  |
Federal | $ | (3 | ) |  | $ | 164 |  |  | $ | 89 |  |
State | (10 | ) |  | 17 |  |  | 2 |  |
Foreign | (1,426 | ) |  | (352 | ) |  | (160 | ) |
Total current | (1,439 | ) |  | (171 | ) |  | (69 | ) |
Deferred income taxes: |  |  |  |  |  |
Federal | 64 |  |  | 137 |  |  | 3,403 |  |
State | 10 |  |  | 41 |  |  | 154 |  |
Foreign | 89 |  |  | (451 | ) |  | (163 | ) |
Total deferred | 163 |  |  | (273 | ) |  | 3,394 |  |
Adjustments | 393 |  | a | 13 |  | b | (1,374 | ) | c
Operating loss carryforwards | — |  |  | 60 |  |  | — |  |
(Provision for) benefit from income taxes | $ | (883 | ) |  | $ | (371 | ) |  | $ | 1,951 |  |
a. | Reflects provisional tax credits associated with the Tax Cuts and Jobs Act (the Act), including reversal of valuation allowances associated with anticipated refunds of alternative minimum tax (AMT) credits ($272 million, net of reserves) and a decrease in corporate income tax rates ($121 million). Refer to “Tax Reform” below for further discussion.
b. | Benefit related to changes in Peruvian tax rules.
c. | Adjustments include net provisions of $1.2 billion associated with an increase in the beginning of the year valuation allowance related to the impairment of U.S. oil and gas properties and $0.2 billion resulting from the termination of PT-FI’s Delaware domestication.
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:
| 2017 |  | 2016 |  | 2015
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
U.S. federal statutory tax rate | $ | (1,016 | ) |  | (35 | )% |  | $ | 1,215 |  |  | (35 | )% |  | $ | 4,945 |  |  | (35 | )%
Valuation allowance, net | 28 |  | a | 1 |  |  | (1,680 | ) | b | 48 |  |  | (2,955 | ) | b | 21 |
Foreign tax credit limitation | (159 | ) |  | (5 | ) |  | (598 | ) |  | 17 |  |  | (228 | ) |  | 2 |
Tax reform | 393 |  |  | 14 |  |  | — |  |  | — |  |  | — |  |  | — |
Mining royalty dispute | (129 | ) |  | (5 | ) |  | — |  |  | — |  |  | — |  |  | — |
Impairment of oil and gas properties | — |  |  | — |  |  | 520 | c | (15 | ) |  | — |  |  | — |
Percentage depletion | 227 |  |  | 8 |  |  | 211 |  |  | (6 | ) |  | 186 |  |  | (1 | )
Withholding and other impacts on |  |  |  |  |  |  |  |  |  |  |
foreign earnings | (216 | ) |  | (7 | ) |  | (93 | ) |  | 3 |  |  | (193 | ) |  | 1 |
Effect of foreign rates different than the U.S. |  |  |  |  |  |  |  |  |  |  |
federal statutory rate | 17 |  |  | 1 |  |  | 45 |  |  | (1 | ) |  | 12 |  |  | — |
State income taxes | (5 | ) |  | (1 | ) |  | 46 |  | b | (1 | ) |  | 105 |  | b | (1 | )
Other items, net | (23 | ) |  | (1 | ) |  | (37 | ) |  | 1 |  |  | 79 |  |  | (1 | )
(Provision for) benefit from income taxes | $ | (883 | ) | d | (30 | )% |  | $ | (371 | ) | e | 11 | % |  | $ | 1,951 |  |  | (14 | )%
a. | Refer to “Valuation Allowance” below for further discussion of current year changes.
b. | Includes tax charges totaling $1.6 billion in 2016 and $3.3 billion in 2015 as a result of the impairment to U.S. oil and gas properties to establish valuation allowances against U.S. federal and state deferred tax assets that will not generate a future benefit.
c. | Reflects a loss under U.S. federal income tax law related to the impairment of investments in oil and gas properties.
d. | Includes net charges of $7 million associated with the Cerro Verde mining royalties dispute, consisting of tax charges of $136 million for disputed royalties and other related mining taxes for the period October 2011 through the year 2013 (when royalties were determined based on operating income), mostly offset by a tax benefit of $129 million associated with disputed royalties and other related mining taxes for the period December 2006 through the year 2013. Refer to Note 12 for further discussion.
e. | Includes a net tax benefit related to changes in Peruvian tax rules of $13 million.
Components of deferred tax assets and liabilities | The components of deferred taxes follow:
| December 31,
| 2017 |  | 2016
Deferred tax assets: |  |  |
Foreign tax credits | $ | 2,129 |  |  | $ | 2,094 |
Accrued expenses | 789 |  |  | 923 |
Oil and gas properties | 236 |  |  | 346 |
AMT credits | — |  |  | 444 |
Net operating losses | 2,043 |  |  | 2,898 |
Employee benefit plans | 248 |  |  | 403 |
Other | 259 |  |  | 485 |
Deferred tax assets | 5,704 |  |  | 7,593 |
Valuation allowances | (4,575 | ) |  | (6,058 | )
Net deferred tax assets | 1,129 |  |  | 1,535 |
Deferred tax liabilities: |  |  |
Property, plant, equipment and mine development costs | (3,710 | ) |  | (4,326 | )
Undistributed earnings | (811 | ) |  | (779 | )
Other | (226 | ) |  | (195 | )
Total deferred tax liabilities | (4,747 | ) |  | (5,300 | )
Net deferred tax liabilities | $ | (3,618 | ) |  | $ | (3,765 | )
Reserve for unrecognized tax benefits, interest and penalties | A summary of the activities associated with FCX’s reserve for unrecognized tax benefits for the years ended December 31 follows:
| 2017 |  | 2016 |  | 2015
Balance at beginning of year | $ | 101 |  |  | $ | 110 |  |  | $ | 104 |
Additions: |  |  |  |  |
Prior year tax positions | 302 |  |  | 5 |  |  | 7 |
Current year tax positions | 6 |  |  | 28 |  |  | 11 |
Decreases: |  |  |  |  |
Prior year tax positions | (1 | ) |  | (3 | ) |  | (6 | )
Settlements with taxing authorities | (17 | ) |  | — |  |  | — |
Lapse of statute of limitations | (1 | ) |  | (39 | ) |  | (6 | )
Balance at end of year | $ | 390 |  |  | $ | 101 |  |  | $ | 110 |
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 |  | N/A |  | 2014-2017
Indonesia |  | 2008, 2011-2016 |  | 2017
Peru |  | 2012 |  | 2013-2017
Chile |  | 2015-2016 |  | 2017
Excluding surface water and withholding tax assessments discussed below and the Indonesian government’s imposition of a 7.5 percent export duty (refer to Note 13), a summary of these assessments follows:
Tax Year |  | Tax Assessment |  | Interest Assessment |  | Total
2005 |  | $ | 77 |  |  | $ | 37 |  |  | $ | 114 |
2007 |  | 48 |  |  | 24 |  |  | 72 |
2008, 2010 to 2011 |  | 56 |  |  | 37 |  |  | 93 |
2012 |  | 125 |  |  | 1 |  |  | 126 |
2013 |  | 160 |  |  | 80 |  |  | 240 |
2014 |  | 160 |  |  | 7 |  |  | 167 |
2015 |  | 169 |  |  | — |  |  | 169 |
|  | $ | 795 |  |  | $ | 186 |  |  | $ | 981 |
A summary of these assessments follows:
Tax Year |  | Tax Assessment |  | Penalty and Interest Assessment |  | Total |
2003 to 2005 |  | $ | 16 |  |  | $ | 54 |  |  | $ | 70 |  |
2006 |  | 7 |  |  | 59 |  |  | 66 |  |
2007 to 2008 |  | 33 |  |  | 31 |  |  | 64 |  |
2009 |  | 59 |  |  | 49 |  |  | 108 |  |
2010 |  | 66 |  |  | 107 |  |  | 173 |  |
2011, 2014 to 2017 |  | 72 |  |  | 64 |  |  | 136 |  |
|  | $ | 253 |  |  | $ | 364 |  |  | $ | 617 |  |

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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=84230637&loc=d3e32639-109319 + Details
Name: | us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32537-109319 + Details
Name: | us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- 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=84230637&loc=d3e32687-109319 + Details
Name: | us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of income before income tax between domestic and foreign jurisdictions. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)(1)(i)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 + Details
Name: | us-gaap_ScheduleOfIncomeBeforeIncomeTaxDomesticAndForeignTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the change in unrecognized tax benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI http://asc.fasb.org/extlink&oid=96868398&loc=d3e36027-109320 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=84230637&loc=SL6600010-109319 + Details
Name: | us-gaap_ScheduleOfUnrecognizedTaxBenefitsRollForwardTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded. + 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=84230637&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI http://asc.fasb.org/extlink&oid=96868398&loc=d3e36027-109320 + Details
Name: | us-gaap_SummaryOfIncomeTaxExaminationsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration