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OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS (Tables) | 12 Months Ended
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Dec. 31, 2017
Other Liabilities, Including Employee Benefits [Abstract] |
Components of Other Liabilities | The components of other liabilities follow:
| December 31,
| 2017 |  | 2016
Pension, postretirement, postemployment and other employment benefits a | $ | 1,154 |  |  | $ | 1,345 |
Cerro Verde royalty dispute | 368 |  |  | — |
Provision for tax positions | 291 |  |  | 167 |
Legal matters | 81 |  |  | 77 |
Insurance claim reserves | 47 |  |  | 51 |
Accrued oil and gas contract commitments | — |  |  | 43 |
Other | 71 |  |  | 62 |
Total other liabilities | $ | 2,012 |  |  | $ | 1,745 |
a. | Refer to Note 7 for current portion.
Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets | FCX uses a measurement date of December 31 for its plans. Information for those plans where the accumulated benefit obligations exceed the fair value of plan assets follows:
| December 31,
| 2017 |  | 2016
Projected benefit obligation | $ | 2,287 |  |  | $ | 2,127 |
Accumulated benefit obligation | 2,163 |  |  | 2,014 |
Fair value of plan assets | 1,521 |  |  | 1,312 |
Schedule of Changes Benefit Obligation, Fair Value of Plan Assets, and Funded Status of Plan | Information on the FCX (FMC and SERP plans) and PT-FI plans as of December 31 follows:
| FCX |  | PT-FI
| 2017 |  | 2016 |  | 2017 |  | 2016
Change in benefit obligation: |  |  |  |  |  |  |
Benefit obligation at beginning of year | $ | 2,135 |  |  | $ | 2,104 |  |  | $ | 374 |  |  | $ | 318 |
Service cost | 44 |  |  | 27 |  |  | 20 |  |  | 27 |
Interest cost | 91 |  |  | 93 |  |  | 23 |  |  | 29 |
Actuarial losses (gains) | 188 |  |  | 92 |  |  | (61 | ) |  | 2 |
Foreign exchange losses (gains) | 3 |  |  | (4 | ) |  | (2 | ) |  | 8 |
Curtailment a | — |  |  | — |  |  | (62 | ) |  | — |
Benefits and administrative expenses paid | (118 | ) |  | (177 | ) |  | (52 | ) |  | (10 | )
Benefit obligation at end of year | 2,343 |  |  | 2,135 |  |  | 240 |  |  | 374 |
Change in plan assets: |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | 1,329 |  |  | 1,379 |  |  | 284 |  |  | 204 |
Actual return on plan assets | 230 |  |  | 88 |  |  | 11 |  |  | 47 |
Employer contributions b | 145 |  |  | 42 |  |  | 28 |  |  | 38 |
Foreign exchange gains (losses) | 2 |  |  | (3 | ) |  | (2 | ) |  | 5 |
Benefits and administrative expenses paid | (118 | ) |  | (177 | ) |  | (52 | ) |  | (10 | )
Fair value of plan assets at end of year | 1,588 |  |  | 1,329 |  |  | 269 |  |  | 284 |
Funded status | $ | (755 | ) |  | $ | (806 | ) |  | $ | 29 |  |  | $ | (90 | )
Accumulated benefit obligation | $ | 2,218 |  |  | $ | 2,022 |  |  | $ | 194 |  |  | $ | 225 |
Weighted-average assumptions |  |  |  |  |  |  |
used to determine benefit obligations: |  |  |  |  |  |  |
Discount rate | 3.70 | % |  | 4.40 | % |  | 6.75 | % |  | 8.25 | %
Rate of compensation increase | 3.25 | % |  | 3.25 | % |  | 4.00 | % |  | 8.00 | %
Balance sheet classification of funded status: |  |  |  |  |  |  |
Other assets | $ | 11 |  |  | $ | 9 |  |  | $ | 29 |  |  | $ | — |
Accounts payable and accrued liabilities | (4 | ) |  | (4 | ) |  | — |  |  | — |
Other liabilities | (762 | ) |  | (811 | ) |  | — |  |  | (90 | )
Total | $ | (755 | ) |  | $ | (806 | ) |  | $ | 29 |  |  | $ | (90 | )
a. | Resulted from the 2017 PT-FI reductions in workforce (refer to Restructuring Charges in this note for further discussion).
b. | Employer contributions for 2018 are expected to approximate $75 million for the FCX plans and $17 million for the PT-FI plan (based on a December 31, 2017, exchange rate of 13,480 Indonesian rupiah to one U.S. dollar).
Schedule of Assumptions Used | The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s pension plans for the years ended December 31 follow:
| 2017 |  | 2016 |  | 2015
Weighted-average assumptions:a |  |  |  |  |
Discount rate | 4.40 | % |  | 4.60 | % |  | 4.10 | %
Expected return on plan assets | 7.00 | % |  | 7.25 | % |  | 7.25 | %
Rate of compensation increase | 3.25 | % |  | 3.25 | % |  | 3.25 | %
Service cost | $ | 44 |  |  | $ | 27 |  |  | $ | 36 |
Interest cost | 91 |  |  | 93 |  |  | 87 |
Expected return on plan assets | (93 | ) |  | (96 | ) |  | (102 | )
Amortization of net actuarial losses | 49 |  |  | 42 |  |  | 45 |
Special retirement benefits b | — |  |  | — |  |  | 22 |
Net periodic benefit cost | $ | 91 |  |  | $ | 66 |  |  | $ | 88 |
a. | The assumptions shown relate only to the FMC plans.
b. | Resulted from FMC’s 2015 revised mine operating plans and reductions in the workforce (refer to Note 5 for further discussion).
The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for PT-FI’s pension plan for the years ended December 31 follow:
| 2017 |  | 2016 |  | 2015
Weighted-average assumptions: |  |  |  |  |
Discount rate | 8.25 | % |  | 9.00 | % |  | 8.25 | %
Expected return on plan assets | 7.75 | % |  | 7.75 | % |  | 7.75 | %
Rate of compensation increase | 8.00 | % |  | 9.40 | % |  | 9.00 | %
Service cost | $ | 20 |  |  | $ | 27 |  |  | $ | 26 |
Interest cost | 23 |  |  | 29 |  |  | 23 |
Expected return on plan assets | (21 | ) |  | (17 | ) |  | (14 | )
Amortization of prior service cost | 2 |  |  | 3 |  |  | 3 |
Amortization of net actuarial loss | — |  |  | 5 |  |  | 6 |
Curtailment loss | 4 |  |  | — |  |  | — |
Net periodic benefit cost | $ | 28 |  |  | $ | 47 |  |  | $ | 44 |
Schedule of Net Periodic Benefit Cost Not yet Recognized | Included in accumulated other comprehensive loss are the following amounts that have not been recognized in net periodic pension cost as of December 31:
| 2017 |  | 2016
| Before Taxes |  | After Taxes and Noncontrolling Interests |  | Before Taxes |  | After Taxes and Noncontrolling Interests
Net actuarial loss | $ | 620 |  |  | $ | 412 |  |  | $ | 722 |  |  | $ | 466 |
Prior service costs | 10 |  |  | 6 |  |  | 21 |  |  | 11 |
| $ | 630 |  |  | $ | 418 |  |  | $ | 743 |  |  | $ | 477 |
Schedule of Allocation of Plan Assets | A summary of the fair value for pension plan assets, including those measured at net asset value (NAV) as a practical expedient, associated with the FCX plans follows:
| Fair Value at December 31, 2017
| Total |  | NAV |  | Level 1 |  | Level 2 |  | Level 3
Commingled/collective funds: |  |  |  |  |  |  |  |  |
Global equity | $ | 404 |  |  | $ | 404 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Fixed income securities | 154 |  |  | 154 |  |  | — |  |  | — |  |  | — |
Global fixed income securities | 115 |  |  | 115 |  |  | — |  |  | — |  |  | — |
Emerging markets equity | 87 |  |  | 87 |  |  | — |  |  | — |  |  | — |
International small-cap equity | 72 |  |  | 72 |  |  | — |  |  | — |  |  | — |
U.S. small-cap equity | 67 |  |  | 67 |  |  | — |  |  | — |  |  | — |
Real estate property | 50 |  |  | 50 |  |  | — |  |  | — |  |  | — |
U.S. real estate securities | 45 |  |  | 45 |  |  | — |  |  | — |  |  | — |
Short-term investments | 12 |  |  | 12 |  |  | — |  |  | — |  |  | — |
Fixed income: |  |  |  |  |  |  |  |  |
Government bonds | 208 |  |  | — |  |  | — |  |  | 208 |  |  | — |
Corporate bonds | 168 |  |  | — |  |  | — |  |  | 168 |  |  | — |
Global large-cap equity securities | 119 |  |  | — |  |  | 119 |  |  | — |  |  | — |
Private equity investments | 20 |  |  | 20 |  |  | — |  |  | — |  |  | — |
Other investments | 62 |  |  | — |  |  | 19 |  |  | 43 |  |  | — |
Total investments | 1,583 |  |  | $ | 1,026 |  |  | $ | 138 |  |  | $ | 419 |  |  | $ | — |
Cash and receivables | 21 |  |  |  |  |  |  |  |  |
Payables | (16 | ) |  |  |  |  |  |  |  |
Total pension plan net assets | $ | 1,588 |  |  |  |  |  |  |  |  |
| Fair Value at December 31, 2016
| Total |  | NAV |  | Level 1 |  | Level 2 |  | Level 3
Commingled/collective funds: |  |  |  |  |  |  |  |  |
Global equity | $ | 420 |  |  | $ | 420 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Fixed income securities | 129 |  |  | 129 |  |  | — |  |  | — |  |  | — |
Global fixed income securities | 107 |  |  | 107 |  |  | — |  |  | — |  |  | — |
Real estate property | 72 |  |  | 72 |  |  | — |  |  | — |  |  | — |
Emerging markets equity | 66 |  |  | 66 |  |  | — |  |  | — |  |  | — |
U.S. small-cap equity | 60 |  |  | 60 |  |  | — |  |  | — |  |  | — |
International small-cap equity | 51 |  |  | 51 |  |  | — |  |  | — |  |  | — |
U.S. real estate securities | 42 |  |  | 42 |  |  | — |  |  | — |  |  | — |
Short-term investments | 17 |  |  | 17 |  |  | — |  |  | — |  |  | — |
Fixed income: |  |  |  |  |  |  |  |  |
Government bonds | 160 |  |  | — |  |  | — |  |  | 160 |  |  | — |
Corporate bonds | 141 |  |  | — |  |  | — |  |  | 141 |  |  | — |
Private equity investments | 25 |  |  | 25 |  |  | — |  |  | — |  |  | — |
Other investments | 36 |  |  | — |  |  | 1 |  |  | 35 |  |  | — |
Total investments | 1,326 |  |  | $ | 989 |  |  | $ | 1 |  |  | $ | 336 |  |  | $ | — |
Cash and receivables | 4 |  |  |  |  |  |  |  |  |
Payables | (1 | ) |  |  |  |  |  |  |  |
Total pension plan net assets | $ | 1,329 |  |  |  |  |  |  |  |  |
A summary of the fair value hierarchy for pension plan assets associated with the PT-FI plan follows:
| Fair Value at December 31, 2017
| Total |  | Level 1 |  | Level 2 |  | Level 3
Government bonds | $ | 81 |  |  | $ | 81 |  |  | $ | — |  |  | $ | — |
Common stocks | 78 |  |  | 78 |  |  | — |  |  | — |
Mutual funds | 16 |  |  | 16 |  |  | — |  |  | — |
Total investments | 175 |  |  | $ | 175 |  |  | $ | — |  |  | $ | — |
Cash and receivables a | 94 |  |  |  |  |  |  |
Total pension plan net assets | $ | 269 |  |  |  |  |  |  |
| Fair Value at December 31, 2016
| Total |  | Level 1 |  | Level 2 |  | Level 3
Government bonds | $ | 78 |  |  | $ | 78 |  |  | $ | — |  |  | $ | — |
Common stocks | 72 |  |  | 72 |  |  | — |  |  | — |
Mutual funds | 16 |  |  | 16 |  |  | — |  |  | — |
Total investments | 166 |  |  | $ | 166 |  |  | $ | — |  |  | $ | — |
Cash and receivables a | 119 |  |  |  |  |  |  |
Payables | (1 | ) |  |  |  |  |  |
Total pension plan net assets | $ | 284 |  |  |  |  |  |  |
a. | Cash consists primarily of short-term time deposits.
Schedule of Expected Benefit Payments | The expected benefit payments for FCX’s and PT-FI’s pension plans follow:
| FCX |  | PT-FI a
2018 | $ | 111 |  |  | $ | 48 |
2019 | 151 |  |  | 8 |
2020 | 116 |  |  | 15 |
2021 | 118 |  |  | 20 |
2022 | 120 |  |  | 23 |
2023 through 2027 | 635 |  |  | 166 |
a. | Based on a December 31, 2017, exchange rate of 13,480 Indonesian rupiah to one U.S. dollar.

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