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DEBT | 12 Months Ended
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Dec. 31, 2013
Debt Disclosure [Abstract] |
Debt | DEBT As of December 31, 2013, debt included $653 million of fair value adjustments related to the debt assumed in the acquisition of PXP. The components of debt follow:
| December 31,
| 2013 |  | 2012
Revolving credit facility | $ | — |  |  | $ | — |
Lines of credit | — |  |  | — |
Bank term loan | 4,000 |  |  | — |
Senior notes and debentures: |  |  |
Issued by FCX: |  |  |
1.40% Senior Notes due 2015 | 500 |  |  | 500 |
2.15% Senior Notes due 2017 | 500 |  |  | 500 |
2.375% Senior Notes due 2018 | 1,500 |  |  | — |
3.100% Senior Notes due 2020 | 999 |  |  | — |
3.55% Senior Notes due 2022 | 1,996 |  |  | 1,995 |
3.875% Senior Notes due 2023 | 1,999 |  |  | — |
5.450% Senior Notes due 2043 | 1,991 |  |  | — |
Issued by FM O&G: |  |  |
6.125% Senior Notes due 2019 | 817 |  |  | — |
8.625% Senior Notes due 2019 | 447 |  |  | — |
7.625% Senior Notes due 2020 | 336 |  |  | — |
6½% Senior Notes due 2020 | 1,647 |  |  | — |
6.625% Senior Notes due 2021 | 659 |  |  | — |
6.75% Senior Notes due 2022 | 1,111 |  |  | — |
6⅞% Senior Notes due 2023 | 1,686 |  |  | — |
Issued by FMC: |  |  |
7 1/8% Debentures due 2027 | 115 |  |  | 115 |
9½% Senior Notes due 2031 | 130 |  |  | 130 |
6 1/8% Senior Notes due 2034 | 115 |  |  | 115 |
Other (including equipment capital leases and short-term borrowings) | 158 |  |  | 172 |
Total debt | 20,706 |  |  | 3,527 |
Less current portion of debt | (312 | ) |  | (2 | )
Long-term debt | $ | 20,394 |  |  | $ | 3,525 |
Revolving Credit Facility. In 2013, FCX and PT-FI entered into a new senior unsecured $3.0 billion revolving credit facility, which replaced FCX's existing revolving credit facility (scheduled to mature on March 30, 2016) upon completion of the acquisition of PXP on May 31, 2013. In connection with the PXP acquisition, Freeport-McMoRan Oil & Gas LLC (FM O&G LLC, a wholly owned subsidiary of FM O&G and the successor entity of PXP) joined the revolving credit facility as a borrower. The new revolving credit facility is available until May 31, 2018, with $500 million available to PT-FI. At December 31, 2013, there were no borrowings and $46 million of letters of credit issued under the revolving credit facility, resulting in availability of approximately $3.0 billion, of which $1.5 billion could be used for additional letters of credit. Interest on the new revolving credit facility (currently London Interbank Offered Rate (LIBOR) plus 1.50 percent or the alternate base rate (ABR) plus 0.50 percent) is determined by reference to FCX's credit ratings. Lines of Credit. During third-quarter 2013, FCX entered into uncommitted lines of credit totaling $450 million with three financial institutions. These unsecured lines of credit allow FCX to borrow at a spread over LIBOR or the respective financial institution's cost of funds with terms and pricing that are more favorable than FCX's revolving credit facility. As of December 31, 2013, there were no borrowings drawn on these lines of credit. Bank Term Loan. In February 2013, FCX entered into an agreement for a $4.0 billion unsecured term loan in connection with the acquisitions of PXP and MMR. Upon closing the PXP acquisition, FCX borrowed $4.0 billion under the Term Loan, and FM O&G LLC joined the Term Loan as a borrower. The Term Loan amortizes in equal quarterly installments during the second, third and fourth years of the loan in annual amounts equal to 10 percent, 15 percent and 20 percent, respectively, of the original aggregate principal amount, and the remainder will mature on May 31, 2018. At FCX's option, the Term Loan bears interest at either an adjusted LIBOR or an ABR (as defined under the Term Loan agreement) plus a spread determined by reference to FCX's credit ratings (currently LIBOR plus 1.50 percent or ABR plus 0.50 percent). The effective interest rate on the Term Loan was 1.67 percent at December 31, 2013. Senior Notes issued by FCX. In March 2013, in connection with the financing of FCX's acquisitions of PXP and MMR, FCX issued $6.5 billion of unsecured senior notes in four tranches. FCX sold $1.5 billion of 2.375% Senior Notes due March 2018, $1.0 billion of 3.100% Senior Notes due March 2020, $2.0 billion of 3.875% Senior Notes due March 2023 and $2.0 billion of 5.450% Senior Notes due March 2043 for total net proceeds of $6.4 billion. The 2.375% Senior Notes and the 3.100% Senior Notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price. The 3.875% Senior Notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price prior to December 15, 2022, and thereafter at 100 percent of principal. The 5.450% Senior Notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price prior to September 15, 2042, and thereafter at 100 percent of principal. In February 2012, FCX sold $500 million of 1.40% Senior Notes due 2015, $500 million of 2.15% Senior Notes due 2017 and $2.0 billion of 3.55% Senior Notes due 2022 for total net proceeds of $2.97 billion. The 1.40% Senior Notes and the 2.15% Senior Notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price prior to the redemption date. The 3.55% Senior Notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price prior to December 1, 2021, and thereafter at 100 percent of principal. These senior notes rank equally with FCX's other existing and future unsecured and unsubordinated indebtedness. Senior Notes issued by FM O&G. In May 2013, in connection with the acquisition of PXP, FCX assumed unsecured senior notes with a stated value of $6.4 billion, which was increased by $716 million to reflect the acquisition-date fair market value of these senior notes. The fair value adjustments are being amortized over the term of the senior notes and recorded as a reduction of interest expense. These senior notes are redeemable in whole or in part, at the option of FM O&G LLC, at make-whole redemption prices prior to the dates stated below, and beginning on the dates stated below at specified redemption prices. In addition, up to 35 percent of the principal amount of certain of these senior notes may be redeemed at specified redemption prices with all or a portion of the proceeds of an equity issuance by FM O&G LLC. Upon completion of the acquisition of PXP, FCX guaranteed these senior notes resulting in an investment grade rating for these senior notes.
Debt Instrument |  | Date
6.125% Senior Notes due 2019 |  | June 15, 2016
8.625% Senior Notes due 2019 |  | October 15, 2014
7.625% Senior Notes due 2020 |  | April 1, 2015
6½% Senior Notes due 2020 |  | November 15, 2015
6.625%% Senior Notes due 2021 |  | May 1, 2016
6.75% Senior Notes due 2022 |  | February 1, 2017
6⅞% Senior Notes due 2023 |  | February 15, 2018
Additionally, in connection with the acquisition of MMR, FCX assumed MMR's 11.875% Senior Notes due 2014, 4% Convertible Senior Notes due 2017 and 5¼% Convertible Senior Notes due 2013 with a total stated value of $558 million, which was increased by $62 million to reflect the acquisition-date fair market value of these obligations. During 2013, all of the 11.875% Senior Notes due 2014 were redeemed, and holders of 4% Convertible Senior Notes due 2017 and 5¼% Convertible Senior Notes due 2013 converted their notes into merger consideration totaling $306 million, including cash payments of $270 million and 21.0 million royalty trust units with a fair value of $36 million at the acquisition date. At December 31, 2013, there were no outstanding amounts in connection with MMR’s senior notes. At December 31, 2013, the outstanding principal amount of the FM O&G senior notes totaled $6.1 billion, and fair value adjustments totaled $653 million. Debentures and Senior Notes issued by FMC. In March 2007, in connection with the acquisition of FMC, FCX assumed the 7⅛% Debentures due November 2027, the 9½% Senior Notes due 2031 and the 6⅛% Senior Notes due March 2034 with a total stated value of $462 million. These debentures and senior notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price. The carrying value of these senior notes and debentures were increased by a net $32 million to reflect the acquisition-date fair market value of these obligations. The net increase in value is being amortized over the term of these debentures and senior notes and recorded as a net reduction to interest expense. At December 31, 2013, the outstanding principal amount of these senior notes and debentures was $346 million. Early Extinguishment of Debt. In 2013, FCX completed the following transactions that resulted in a net loss on early extinguishment of debt of $35 million: (i) the termination of its $9.5 billion acquisition bridge loan facility, which was entered into in December 2012 to provide interim financing for the acquisitions of PXP and MMR but was replaced with other financing, that resulted in a loss of $45 million; (ii) the repayment of the $3.9 billion outstanding under PXP’s amended credit facility and the redemption of all of PXP’s 7⅝% Senior Notes due 2018 for $415 million, which did not result in a gain or loss; partially offset by (iii) the redemption of MMR’s remaining outstanding 11.875% Senior Notes due 2014 for $299 million, which resulted in a gain of $10 million. In 2012, FCX redeemed the remaining $3.0 billion of its outstanding 8.375% Senior Notes due 2017 for which holders received 104.553 percent of the principal amount together with the accrued and unpaid interest. As a result of this redemption, FCX recorded a loss on early extinguishment of debt of $168 million during 2012. In 2011, FCX redeemed all its remaining $1.1 billion of outstanding 8.25% Senior Notes for which holders received 104.125 percent of the principal amount together with accrued and unpaid interest; purchased in an open-market transaction $35 million of the 9½% Senior Notes due 2031 for $49 million; and entered into a senior unsecured revolving credit facility that replaced an existing revolving credit facility. As a result of these transactions, FCX recognized losses on early extinguishment of debt totaling $68 million during 2011. Guarantees. In connection with the acquisition of PXP, FCX guaranteed the PXP senior notes, and the guarantees by certain PXP subsidiaries were released. Refer to Note 17 for a discussion of FCX’s senior notes guaranteed by FM O&G LLC. Restrictive Covenants. FCX's term loan and revolving credit facility contain customary affirmative covenants and representations, and also contain a number of negative covenants that, among other things, restrict, subject to certain exceptions, the ability of FCX’s subsidiaries that are not borrowers or guarantors to incur additional indebtedness (including guarantee obligations) and FCX’s ability or the ability of FCX’s subsidiaries to: create liens on assets; enter into sale and leaseback transactions; engage in mergers, liquidations and dissolutions; and sell all or substantially all of the assets of FCX and its subsidiaries, taken as a whole. FCX's term loan and revolving credit facility also contain financial ratios governing maximum total leverage and minimum interest coverage. FCX’s senior notes contain limitations on liens that are generally typical for investment grade companies. At December 31, 2013, FCX was in compliance with all of its covenants. Maturities. Maturities of debt instruments based on the amounts and terms outstanding at December 31, 2013, total $312 million in 2014, $1.1 billion in 2015, $751 million in 2016, $700 million in 2017, $3.7 billion in 2018 and $13.5 billion thereafter.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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