Fair Value Measurement (Unaudited) (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

A summary of the changes in the fair value of FCX's Level 3 instruments follows (in millions):



	Crude Oil				Plains Offshore
	Options				Warrants
Fair value at December 31, 2013	$	(309	)		$	(2	)
Net realized losses	(1		)	^a	—
Net unrealized (losses) gains included in earnings related to assets and liabilities still held at the end of the period	(36		)	^b	1			^c
Settlement payments	58				—
Fair value at March 31, 2014	$	(288	)		$	(1	)


a.	Recorded in revenues.


b.	Included net unrealized losses of $35 million recorded in revenues and $1 million of interest expense associated with the deferred premiums.


c.	Recorded in other income (expense), net.

Carrying Amount and Fair Value of Other Financial Instruments

A summary of the carrying amount and fair value of FCX’s financial instruments, other than cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and dividends payable (refer to Note 7), follows (in millions):



	At March 31, 2014
	Carrying		Fair Value
	Amount		Total		Level 1		Level 2		Level 3
Assets
Investment securities (current and long-term):^a,b
U.S. core fixed income fund	$	22	$	22	$	—	$	22	$	—
Money market funds	18		18		18		—		—
Equity securities	4		4		4		—		—
Total	44		44		22		22		—

Legally restricted funds (long-term):^a,b,c
U.S. core fixed income fund	49		49		—		49		—
Government bonds and notes	34		34		—		34		—
Government mortgage-backed securities	32		32		—		32		—
Corporate bonds	27		27		—		27		—
Money market funds	26		26		26		—		—
Asset-backed securities	15		15		—		15		—
Municipal bonds	1		1		—		1		—
Total	184		184		26		158		—

Derivatives:^{a, d}
Embedded derivatives in provisional sales/purchase
contracts in a gross asset position	13		13		—		13		—
Copper futures and swap contracts	2		2		1		1		—
Total	15		15		1		14		—

Total assets			$	243	$	49	$	194	$	—

Liabilities
Derivatives:^a
Embedded derivatives in provisional sales/purchase
contracts in a gross liability position^d	$	99	$	99	$	—	$	99	$	—
Crude oil options^d	288		288		—		—		288
Natural gas swaps^d	10		10		—		10		—
Copper futures and swap contracts^d	8		8		7		1		—
Plains Offshore warrants^e	1		1		—		—		1
Total	406		406		7		110		289

Long-term debt, including current portion^f	20,850		20,741		—		20,741		—

Total liabilities			$	21,147	$	7	$	20,851	$	289



	At December 31, 2013
	Carrying		Fair Value
	Amount		Total		Level 1		Level 2		Level 3
Assets
Investment securities (current and long-term):^a,b
U.S. core fixed income fund	$	21	$	21	$	—	$	21	$	—
Money market funds	18		18		18		—		—
Equity securities	5		5		5		—		—
Total	44		44		23		21		—

Legally restricted funds (long-term):^a,b,c
U.S. core fixed income fund	48		48		—		48		—
Government mortgage-backed securities	34		34		—		34		—
Corporate bonds	28		28		—		28		—
Government bonds and notes	28		28		—		28		—
Money market funds	28		28		28		—		—
Asset-backed securities	15		15		—		15		—
Municipal bonds	1		1		—		1		—
Total	182		182		28		154		—

Derivatives:^{a, d}
Embedded derivatives in provisional sales/purchase
contracts in a gross asset position	63		63		—		63		—
Copper futures and swap contracts	6		6		5		1		—
Total	69		69		5		64		—

Total assets			$	295	$	56	$	239	$	—

Liabilities
Derivatives:^a
Embedded derivatives in provisional sales/purchase
contracts in a gross liability position^d	$	16	$	16	$	—	$	16	$	—
Crude oil options^d	309		309		—		—		309
Natural gas swaps^d	4		4		—		4		—
Copper forward contracts^d	1		1		1		—		—
Plains Offshore warrants^e	2		2		—		—		2
Total	332		332		1		20		311

Long-term debt, including current portion^f	20,706		20,487		—		20,487		—

Total liabilities			$	20,819	$	1	$	20,507	$	311


a.	Recorded at fair value.


b.	Current portion included in other current assets and long-term portion included in other assets.


c.	Legally restricted funds excluded $210 million of time deposits (which approximated fair value) at March 31, 2014, and December 31, 2013, associated with the Cerro Verde royalty dispute.


d.	Refer to Note 7 for further discussion and balance sheet classifications. Crude oil options are net of $387 million at March 31, 2014, and $444 million at December 31, 2013, for deferred premiums and accrued interest.


e.	Included in other liabilities.


f.	Recorded at cost except for debt assumed in acquisitions, which were recorded at fair value at the respective acquisition dates.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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