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Financial Instruments (Unaudited) (Tables)
 6 Months Ended
Jun. 30, 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
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Copper futures and swap contracts:
 
 
 
 
 
 
 
Unrealized gains (losses):
 
 
 
 
 
 
 
Derivative financial instruments
$
12

 
$
(6
)
 
$
—

 
$
(18
)
Hedged item – firm sales commitments
(12
)
 
6

 
—

 
18

 
 
 
 
 
 
 
 
Realized losses:
 
 
 
 
 
 
 
Matured derivative financial instruments
(2
)
 
(13
)
 
(4
)
 
(14
)
Schedule of Derivative Instruments
At June 30, 2014, the outstanding crude oil option contracts, which settle monthly and cover approximately 20 million barrels in 2014 and approximately 31 million barrels in 2015, follow:
 
 
 
 
 
 
Average Strike Price (per barrel)a
 
 
 
 
Period
 
Instrument Type
 
Daily Volumes (thousand barrels)
 
Floor
 
Floor Limit
 
Average Deferred Premium
 (per barrel)
 
Index
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
Jul - Dec
 
Put optionsb
 
75

 
$
90

 
$
70

 
$
5.74

 
Brent
Jul - Dec
 
Put optionsb
 
30

 
95

 
75

 
6.09

 
Brent
Jul - 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.


A summary of FCX’s embedded commodity derivatives at June 30, 2014, follows:
 
Open Positions
 
Average Price
Per Unit
 
Maturities Through
 
 
Contract
 
Market
 
Embedded derivatives in provisional sales contracts:
 
 
 
 
 
 
 
Copper (millions of pounds)
496

 
$
3.08

 
$
3.18

 
November 2014
Gold (thousands of ounces)
85

 
1,273

 
1,314

 
August 2014
Embedded derivatives in provisional purchase contracts:
 
 
 
 
 
 
 
Copper (millions of pounds)
84

 
3.07

 
3.19

 
October 2014
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
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Embedded derivatives in provisional copper and gold
 
 
 
 
 
 
 
sales contractsa
$
84

 
$
(205
)
 
$
(85
)
 
$
(288
)
Crude oil optionsa
(68
)
 
(54
)
 
(104
)
 
(54
)
Natural gas swapsa
(2
)
 
19

 
(16
)
 
19

Copper forward contractsb
4

 
—

 
5

 
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):
 
 
June 30,
2014
 
December 31, 2013
Commodity Derivative Assets:
 
 
 
 
Derivatives designated as hedging instruments:
 
 
 
 
Copper futures and swap contractsa
 
$
6

 
$
6

Derivatives not designated as hedging instruments:
 
 
 
 
Embedded derivatives in provisional copper and gold
 
 
 
 
sales/purchase contracts
 
55

 
63

Copper forward contracts
 
2

 
—

Total derivative assets
 
$
63

 
$
69

 
 
 
 
 
Commodity Derivative Liabilities:
 
 
 
 
Derivatives designated as hedging instruments:
 
 
 
 
Copper futures and swap contractsa
 
$
1

 
$
—

Derivatives not designated as hedging instruments:
 
 
 
 
Embedded derivatives in provisional copper and gold
 
 
 
 
sales/purchase contracts
 
12

 
16

Crude oil optionsb
 
298

 
309

Natural gas swaps
 
7

 
4

Copper forward contracts
 
—

 
1

Total derivative liabilities
 
$
318

 
$
330

a.
FCX paid $1 million to brokers at June 30, 2014, and at December 31, 2013, for margin requirements (recorded in other current assets).
b.
Included $329 million at June 30, 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
 
 
June 30,
2014
 
December 31, 2013
 
June 30,
 2014
 
December 31, 2013
 
 
 
 
 
 
 
 
 
Gross amounts recognized:
 
 
 
 
 
 
 
 
Commodity contracts:
 
 
 
 
 
 
 
 
Embedded derivatives on provisional
 
 
 
 
 
 
 
 
sales/purchase contracts
 
$
55

 
$
63

 
$
12

 
$
16

Crude oil and natural gas derivatives
 
—

 
—

 
305

 
313

Copper derivatives
 
8

 
6

 
1

 
1

 
 
63

 
69

 
318

 
330

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

 
10

 
—

 
10

Crude oil and natural gas derivatives
 
—

 
—

 
—

 
—

Copper derivatives
 
1

 
—

 
1

 
—

 
 
1

 
10

 
1

 
10

 
 
 
 
 
 
 
 
 
Net amounts presented in balance sheet:
 
 
 
 
 
 
 
 
Commodity contracts:
 
 
 
 
 
 
 
 
Embedded derivatives on provisional
 
 
 
 
 
 
 
 
sales/purchase contracts
 
55

 
53

 
12

 
6

Crude oil and natural gas derivatives
 
—

 
—

 
305

 
313

Copper derivatives
 
7

 
6

 
—

 
1

 
 
$
62

 
$
59

 
$
317

 
$
320

 
 
 
 
 
 
 
 
 
Balance sheet classification:
 
 
 
 
 
 
 
 
Trade accounts receivable
 
$
55

 
$
53

 
$
—

 
$
—

Other current assets
 
7

 
6

 
—

 
—

Accounts payable and accrued liabilities
 
—

 
—

 
232

 
205

Other liabilities
 
—

 
—

 
85

 
115

 
 
$
62

 
$
59

 
$
317

 
$
320