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Financial Instruments (Unaudited) (Tables)
 3 Months Ended
Mar. 31, 2014
Financial Instruments [Abstract]  
Unrealized gains (losses) for derivative financial instruments that are designated and qualify as fair value hedge transactions and for the related hedged item

A summary of gains (losses) recognized in revenues for derivative financial instruments related to commodity contracts that are designated and qualify as fair value hedge transactions, along with the unrealized gains (losses) on the related hedged item follows (in millions):
 
Three Months Ended
 
 
March 31,
 
 
2014
 
2013
 
Copper futures and swap contracts:
 
 
 
 
Unrealized (losses) gains:
 
 
 
 
Derivative financial instruments
$
(12
)
 
$
(12
)
 
Hedged item – firm sales commitments
12

 
12

 
 
 
 
 
 
Realized losses:
 
 
 
 
Matured derivative financial instruments
(2
)
 
(2
)
 
Schedule of Derivative Instruments

A summary of FCX’s embedded commodity derivatives at March 31, 2014, follows:
 
Open Positions
 
Average Price
Per Unit
 
Maturities Through
 
 
Contract
 
Market
 
Embedded derivatives in provisional sales contracts:
 
 
 
 
 
 
 
Copper (millions of pounds)
487

 
$
3.21

 
$
3.01

 
August 2014
Gold (thousands of ounces)
55

 
1,314

 
1,293

 
June 2014
Embedded derivatives in provisional purchase contracts:
 
 
 
 
 
 
 
Copper (millions of pounds)
66

 
3.15

 
3.02

 
July 2014
At March 31, 2014, the outstanding crude oil option contracts, all of which settle monthly, follow:

 
 
 
 
 
 
Average Strike Price (per barrel)a
 
 
 
 
Period
 
Instrument Type
 
Daily Volumes (thousand barrels)
 
Floor
 
Floor Limit
 
Average Deferred Premium
 (per barrel)
 
Index
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
Apr - Dec
 
Put optionsb
 
75

 
$
90

 
$
70

 
$
5.74

 
Brent
Apr - Dec
 
Put optionsb
 
30

 
95

 
75

 
6.09

 
Brent
Apr - Dec
 
Put optionsb
 
5

 
100

 
80

 
7.11

 
Brent
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
Jan - Dec
 
Put optionsb
 
84

 
90

 
70

 
6.89

 
Brent
 
 
 
 
 
 
 
 
 
 
 
 
 
a.
The average strike prices do not reflect any premiums to purchase the put options.
b.
If the index price is less than the per barrel floor, FCX receives the difference between the per barrel floor and the index price up to a maximum of $20 per barrel less the option premium. If the index price is at or above the per barrel floor, FCX pays the option premium and no cash settlement is received.
Realized and unrealized gains (losses) for derivative financial instruments that do not qualify as hedge transactions
A summary of the realized and unrealized gains (losses) recognized in income before income taxes and equity in affiliated companies’ net earnings for commodity contracts that do not qualify as hedge transactions, including embedded derivatives, follows (in millions):
 
Three Months Ended
 
 
March 31,
 
 
2014
 
2013
 
Embedded derivatives in provisional copper and gold
 
 
 
 
sales contractsa
$
(169
)
 
$
(83
)
 
Crude oil optionsa
(36
)
 
—

 
Natural gas swapsa
(14
)
 
—

 
Copper forward contractsb
1

 
3

 
a.
Amounts recorded in revenues. 
b.
Amounts recorded in cost of sales as production and delivery costs.
Fair Values of Unsettled Derivative Financial Instruments
A summary of the fair values of unsettled commodity derivative financial instruments follows (in millions):
 
 
March 31,
2014
 
December 31, 2013
Commodity Derivative Assets:
 
 
 
 
Derivatives designated as hedging instruments:
 
 
 
 
Copper futures and swap contracts:a
 
$
2

 
$
6

Derivatives not designated as hedging instruments:
 
 
 
 
Embedded derivatives in provisional copper and gold
 
 
 
 
sales/purchase contracts
 
13

 
63

Total derivative assets
 
$
15

 
$
69

 
 
 
 
 
Commodity Derivative Liabilities:
 
 
 
 
Derivatives designated as hedging instruments:
 
 
 
 
Copper futures and swap contractsa
 
$
8

 
$
—

Derivatives not designated as hedging instruments:
 
 
 
 
Embedded derivatives in provisional copper and gold
 
 
 
 
sales/purchase contracts
 
99

 
16

Crude oil optionsb
 
288

 
309

Natural gas swaps
 
10

 
4

Copper forward contracts
 
—

 
1

Total derivative liabilities
 
$
405

 
$
330

a.
FCX paid $11 million to brokers at March 31, 2014, and $1 million at December 31, 2013, for margin requirements (recorded in other current assets).
b.
Included $387 million at March 31, 2014, and $444 million at December 31, 2013, for deferred premiums and accrued interest.
A summary of these unsettled commodity contracts that are offset in the balance sheet follows (in millions):
 
 
Assets
 
Liabilities
 
 
March 31, 2014
 
December 31, 2013
 
March 31, 2014
 
December 31, 2013
 
 
 
 
 
 
 
 
 
Gross amounts recognized:
 
 
 
 
 
 
 
 
Commodity contracts:
 
 
 
 
 
 
 
 
Embedded derivatives on provisional
 
 
 
 
 
 
 
 
sales/purchase contracts
 
$
13

 
$
63

 
$
99

 
$
16

Crude oil and natural gas derivatives
 
—

 
—

 
298

 
313

Copper derivatives
 
2

 
6

 
8

 
1

 
 
15

 
69

 
405

 
330

 
 
 
 
 
 
 
 
 
Less gross amounts of offset:
 
 
 
 
 
 
 
 
Commodity contracts:
 
 
 
 
 
 
 
 
Embedded derivatives on provisional
 
 
 
 
 
 
 
 
sales/purchase contracts
 
2

 
10

 
2

 
10

Crude oil and natural gas derivatives
 
—

 
—

 
—

 
—

Copper derivatives
 
2

 
—

 
2

 
—

 
 
4

 
10

 
4

 
10

 
 
 
 
 
 
 
 
 
Net amounts presented in balance sheet:
 
 
 
 
 
 
 
 
Commodity contracts:
 
 
 
 
 
 
 
 
Embedded derivatives on provisional
 
 
 
 
 
 
 
 
sales/purchase contracts
 
11

 
53

 
97

 
6

Crude oil and natural gas derivatives
 
—

 
—

 
298

 
313

Copper derivatives
 
—

 
6

 
6

 
1

 
 
$
11

 
$
59

 
$
401

 
$
320

 
 
 
 
 
 
 
 
 
Balance sheet classification:
 
 
 
 
 
 
 
 
Trade accounts receivable
 
$
7

 
$
53

 
$
—

 
$
—

Other current assets
 
—

 
6

 
—

 
—

Accounts payable and accrued liabilities
 
4

 
—

 
302

 
205

Other liabilities
 
—

 
—

 
99

 
115

 
 
$
11

 
$
59

 
$
401

 
$
320