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BUSINESS SEGMENTS | 3 Months Ended
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Mar. 31, 2020
Segment Reporting [Abstract] |
Business Segment | BUSINESS SEGMENTS FCX has organized its mining operations into four primary divisions – North America copper mines, South America mining, Indonesia mining 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, Bagdad, Cerro Verde and Grasberg (Indonesia Mining) copper mines, the Rod & Refining operations and Atlantic Copper Smelting & Refining. Beginning in fourth-quarter 2019, Bagdad became a reportable segment. As a result, FCX revised its segment disclosure for the three months ended March 31, 2019, to conform with the current year presentation. 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, timing of sales to unaffiliated customers and transportation premiums. FCX defers recognizing profits on sales from its mines to other segments, including Atlantic Copper Smelting & Refining, 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 & 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 Financial Information by Business Segment 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 first quarters of 2020 and 2019 follow (in millions):
| Three Months Ended
| March 31,
| 2020 |  | 2019
Copper: |  |  |
Concentrate | $ | 849 |  |  | $ | 1,165 |
Cathode | 837 |  |  | 859 |
Rod and other refined copper products | 542 |  |  | 507 |
Purchased coppera | 235 |  |  | 337 |
Gold | 270 |  |  | 391 |
Molybdenum | 243 |  |  | 288 |
Otherb | 157 |  |  | 277 |
Adjustments to revenues: |  |  |
Treatment charges | (80 | ) |  | (105 | )
Royalty expensec | (20 | ) |  | (30 | )
Export dutiesd | (4 | ) |  | (17 | )
Revenues from contracts with customers | 3,029 |  |  | 3,672 |
Embedded derivativese | (231 | ) |  | 120 |
Total consolidated revenues | $ | 2,798 |  |  | $ | 3,792 |
a. | FCX purchases copper cathode primarily for processing by its Rod & Refining operations.
b. | Primarily includes revenues associated with cobalt and silver.
c. | Reflects royalties on sales from PT-FI and Cerro Verde that will vary with the volume of metal sold and prices.
d. | Reflects PT-FI export duties.
e. Refer to Note 6 for discussion of embedded derivatives related to FCX’s provisionally priced concentrate and cathode sales contracts. Financial Information by Business Segment
(In millions) |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Atlantic |  | Corporate, |  |
| North America Copper Mines |  | South America Mining |  |  |  |  |  |  |  | Copper |  | Other |  |
|  |  |  |  |  |  |  |  | Cerro |  |  |  |  |  | Indonesia |  | Molybdenum |  | Rod & |  | Smelting |  | & Elimi- |  | FCX
| Morenci |  | Bagdad |  | Other |  | Total |  | Verde |  | Other |  | Total |  | Mining |  | Mines |  | Refining |  | & Refining |  | nations |  | Total
Three Months Ended March 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unaffiliated customers | $ | 2 |  |  | $ | — |  |  | $ | 7 |  |  | $ | 9 |  |  | $ | 376 |  |  | $ | 98 |  |  | $ | 474 |  |  | $ | 445 |  | a | $ | — |  |  | $ | 1,115 |  |  | $ | 429 |  |  | $ | 326 |  | b | $ | 2,798 |
Intersegment | 442 |  |  | 159 |  |  | 375 |  |  | 976 |  |  | 38 |  |  | — |  |  | 38 |  |  | — |  |  | 71 |  |  | 8 |  |  | 11 |  |  | (1,104 | ) |  | — |
Production and delivery | 349 |  |  | 126 |  |  | 385 |  |  | 860 |  |  | 424 |  |  | 110 |  |  | 534 |  |  | 343 |  |  | 66 |  |  | 1,119 |  |  | 411 |  |  | (788 | ) |  | 2,545 |
Depreciation, depletion and amortization | 44 |  |  | 14 |  |  | 34 |  |  | 92 |  |  | 93 |  |  | 15 |  |  | 108 |  |  | 101 |  |  | 16 |  |  | 2 |  |  | 7 |  |  | 15 |  |  | 341 |
Metals inventory adjustments | 4 |  |  | — |  |  | 141 |  |  | 145 |  |  | — |  |  | 60 |  |  | 60 |  |  | — |  |  | 4 |  |  | — |  |  | — |  |  | 13 |  |  | 222 |
Selling, general and administrative expenses | 1 |  |  | — |  |  | — |  |  | 1 |  |  | 2 |  |  | — |  |  | 2 |  |  | 28 |  |  | — |  |  | — |  |  | 5 |  |  | 74 |  |  | 110 |
Mining exploration and research expenses | — |  |  | — |  |  | 1 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 15 |  |  | 16 |
Environmental obligations and shutdown costs | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | 25 |  |  | 26 |
Net loss on sales of assets | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11 |  |  | 11 |
Operating income (loss) | 46 |  |  | 19 |  |  | (179 | ) |  | (114 | ) |  | (105 | ) |  | (87 | ) |  | (192 | ) |  | (27 | ) |  | (15 | ) |  | 1 |  |  | 17 |  |  | (143 | ) |  | (473 | )
Interest expense, net | 1 |  |  | — |  |  | — |  |  | 1 |  |  | 28 |  |  | — |  |  | 28 |  |  | 1 |  |  | — |  |  | — |  |  | 3 |  |  | 94 |  |  | 127 |
(Benefit from) provision for income taxes | — |  |  | — |  |  | — |  |  | — |  |  | (52 | ) |  | (26 | ) |  | (78 | ) |  | 12 |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | (60 | )
Total assets at March 31, 2020 | 2,814 |  |  | 800 |  |  | 4,293 |  |  | 7,907 |  |  | 8,471 |  |  | 1,655 |  |  | 10,126 |  |  | 16,711 |  |  | 1,788 |  |  | 231 |  |  | 635 |  |  | 2,821 |  |  | 40,219 |
Capital expenditures | 44 |  |  | 25 |  |  | 115 |  |  | 184 |  |  | 59 |  |  | 15 |  |  | 74 |  |  | 326 |  |  | 7 |  |  | 2 |  |  | 6 |  |  | 11 |  |  | 610 |
Three Months Ended March 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unaffiliated customers | $ | 12 |  |  | $ | — |  |  | $ | 95 |  |  | $ | 107 |  |  | $ | 727 |  |  | $ | 98 |  |  | $ | 825 |  |  | $ | 705 |  | a | $ | — |  |  | $ | 1,128 |  |  | $ | 571 |  |  | $ | 456 |  | b | $ | 3,792 |
Intersegment | 458 |  |  | 178 |  |  | 291 |  |  | 927 |  |  | 126 |  |  | — |  |  | 126 |  |  | 58 |  |  | 91 |  |  | 6 |  |  | 5 |  |  | (1,213 | ) |  | — |
Production and delivery | 295 |  |  | 120 |  |  | 328 |  |  | 743 |  |  | 439 |  |  | 100 |  |  | 539 |  |  | 556 |  |  | 71 |  |  | 1,133 |  |  | 552 |  |  | (675 | ) |  | 2,919 |
Depreciation, depletion and amortization | 40 |  |  | 10 |  |  | 33 |  |  | 83 |  |  | 100 |  |  | 14 |  |  | 114 |  |  | 105 |  |  | 16 |  |  | 2 |  |  | 7 |  |  | 20 |  |  | 347 |
Metals inventory adjustments | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 57 |  |  | 57 |
Selling, general and administrative expenses | 1 |  |  | — |  |  | 1 |  |  | 2 |  |  | 2 |  |  | — |  |  | 2 |  |  | 30 |  |  | — |  |  | — |  |  | 5 |  |  | 73 |  |  | 112 |
Mining exploration and research expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 27 |  |  | 27 |
Environmental obligations and shutdown costs | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 42 |  |  | 42 |
Net gain on sales of assets | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (33 | ) |  | (33 | )
Operating income (loss) | 134 |  |  | 48 |  |  | 24 |  |  | 206 |  |  | 312 |  |  | (16 | ) |  | 296 |  |  | 72 |  |  | 4 |  |  | (1 | ) |  | 12 |  |  | (268 | ) |  | 321 |
Interest expense, net | 1 |  |  | — |  |  | — |  |  | 1 |  |  | 29 |  |  | — |  |  | 29 |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | 110 |  |  | 146 |
Provision for (benefit from) income taxes | — |  |  | — |  |  | — |  |  | — |  |  | 110 |  |  | (5 | ) |  | 105 |  |  | 26 |  |  | — |  |  | — |  |  | 1 |  |  | (27 | ) |  | 105 |
Total assets at March 31, 2019 | 2,904 |  |  | 709 |  |  | 4,051 |  |  | 7,664 |  |  | 8,674 |  |  | 1,720 |  |  | 10,394 |  |  | 15,792 |  |  | 1,785 |  |  | 232 |  |  | 771 |  |  | 4,421 |  |  | 41,059 |
Capital expenditures | 62 |  |  | 25 |  |  | 123 |  |  | 210 |  |  | 56 |  |  | 5 |  |  | 61 |  |  | 319 |  |  | 4 |  |  | 1 |  |  | 4 |  |  | 23 |  |  | 622 |
a. | Includes PT-FI's sales to PT Smelting totaling $380 million in first-quarter 2020 and $409 million in first-quarter 2019.
b. 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 and South America copper mines.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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