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Transparency of Government Payments

Freeport-McMoRan has endorsed and committed to support the Extractive Industries Transparency Initiative (EITI) since 2008. EITI is a global standard to promote transparent and accountable management of natural resources. The initiative is a commitment by governments to disclose revenues received, and by oil, gas and mining companies to disclose natural resource payments to governments in an annual EITI report. In implementing countries, the initiative is led by governments, extractives companies and civil society working together in a multi-stakeholder group forum.

Today, Freeport-McMoRan maintains significant mining operations in Indonesia, Peru and the United States, all EITI implementing countries. Senior-level Freeport-McMoRan employees are representatives on these countries’ multi-stakeholder groups or are actively supporting the in-country processes. A company executive also serves on the EITI International Board of Directors. To help support a successful seventh EITI Global Conference in Lima, Peru in February 2016, the company provided financial sponsorship, and multiple employees from across our global operations attended as delegates.

The payments our company makes to host governments via taxes, royalties and other obligations are a significant contribution to national, regional and local development. We believe that increased transparency of natural resource revenues and payments promotes better governance and accountability regarding the distribution of natural resource revenues. In addition to our country-level EITI commitments, our practice is to report annual cash payments to governments, including sub-national payments, in all countries where we conduct business, as presented below.

Cash Payments to Governmentsa
For the year ended
December 31, 2016
($ millions)
U.S.
Chile
Peru
Indonesia
DRC
Other    
Countriesb
Total
Corporate Income Taxes, Net of Refunds
$ (163)
$   11
$ 16
$     60
$  33
$     12
$    (31)
Withholding Taxes on Foreign Dividends
-
9
-
-
-
9
Employee Payroll Taxesc
372
9
31
37
37
27
513
Royalties and Net Severance Taxes
156
4
14
116
21
-
311
Property Taxes
163
-
-
31
-
2
196
Other Taxes and Fees
51
8
77
191
113
(10)
430
Total
$    579
$ 41
$ 138
$ 435
$ 204
$ 31
$ 1,428
a. This schedule reflects a voluntary effort by Freeport-McMoRan to capture its cash payments to governments (net of refunds). Schedule includes sub-national payments.
b. Represents cash payments to governments by Freeport-McMoRan’s other business groups that are located outside of the countries where Freeport-McMoRan conducts its primary operations.
c. Includes payroll taxes collected on behalf of employees and paid to governments.

Click here for a reconciliation of payments to governments presented in the 2016 Key Economic Contributions by Operating Region table and 2016 Cash Payments to Governments tables.



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