Fair Value Measurement (Unaudited) (Tables)

6 Months Ended

Jun. 30, 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	(6		)	^a	—
Net unrealized (losses) gains included in earnings related to assets and liabilities still held at the end of the period	(100		)	^b	2			^c
Settlement payments	117				—
Fair value at June 30, 2014	$	(298	)		$	—


a.	Recorded in revenues.


b.	Included net unrealized losses of $98 million recorded in revenues and $2 million of interest expense associated with the deferred premiums.


c.	Recorded in other (expense) income, 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 June 30, 2014
	Carrying		Fair Value
	Amount		Total		Level 1		Level 2		Level 3
Assets
Investment securities:^a,b
Money market funds^c	$	434	$	434	$	434	$	—	$	—
U.S. core fixed income fund	22		22		—		22		—
Equity securities	4		4		4		—		—
Total	460		460		438		22		—

Legally restricted funds:^a,b,d
U.S. core fixed income fund	50		50		—		50		—
Government bonds and notes	35		35		—		35		—
Government mortgage-backed securities	31		31		—		31		—
Corporate bonds	29		29		—		29		—
Asset-backed securities	16		16		—		16		—
Money market funds	6		6		6		—		—
Municipal bonds	1		1		—		1		—
Total	168		168		6		162		—

Derivatives:^a,e
Embedded derivatives in provisional sales/purchase
contracts in a gross asset position	55		55		—		55		—
Copper futures and swap contracts	6		6		6		—		—
Copper forward contracts	2		2		2		—		—
Total	63		63		8		55		—

Total assets			$	691	$	452	$	239	$	—

Liabilities
Derivatives:^a,e
Embedded derivatives in provisional sales/purchase
contracts in a gross liability position	$	12	$	12	$	—	$	12	$	—
Crude oil options	298		298		—		—		298
Natural gas swaps	7		7		—		7		—
Copper futures and swap contracts	1		1		1		—		—
Total	318		318		1		19		298

Long-term debt, including current portion^f	20,296		20,607		—		20,607		—

Total liabilities			$	20,925	$	1	$	20,626	$	298



	At December 31, 2013
	Carrying		Fair Value
	Amount		Total		Level 1		Level 2		Level 3
Assets
Investment securities:^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:^a,b,d
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,e
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^e	$	16	$	16	$	—	$	16	$	—
Crude oil options^e	309		309		—		—		309
Natural gas swaps^e	4		4		—		4		—
Copper forward contracts^e	1		1		1		—		—
Plains Offshore warrants^g	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.	Included $414 million held in an escrow account for future oil and gas property acquisitions (refer to Note 2 for further discussion).


d.	Excluded $225 million of time deposits (which approximated fair value) at June 30, 2014 (included in other current assets), and at December 31, 2013 ($15 million included in other current assets and $210 million in other assets), associated with the Cerro Verde royalty dispute.


e.	Refer to Note 7 for further discussion and balance sheet classifications. Crude oil options are net of $329 million at June 30, 2014, and $444 million at December 31, 2013, for deferred premiums and accrued interest.


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


g.	Included in other liabilities.

- 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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