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Financial Instruments (Unaudited) (Tables)
 6 Months Ended
Jun. 30, 2011
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 (firm sales commitments) follows (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Copper futures and swap contracts:
 
 
 
 
 
 
 
Unrealized gains (losses):
 
 
 
 
 
 
 
Derivative financial instruments
$
5


 
$
(20
)
 
$
(10
)
 
$
(18
)
Hedged item
(5
)
 
20


 
10


 
18


 
 
 
 
 
 
 
 
Realized gains (losses):
 
 
 
 
 
 
 
Matured derivative financial instruments
(6
)
 
(9
)
 
6


 
1
Schedule of Derivative Instruments
A summary of FCX’s embedded derivatives at June 30, 2011, follows:
 
Open
 
Average Price
Per Unit
 
Maturities
 
Positions
 
Contract
 
Market
 
Through
Embedded derivatives in provisional sales contracts:
 
 
 
 
 
 
 
Copper (millions of pounds)
646


 
$
4.16


 
$
4.27


 
December 2011
Gold (thousands of ounces)
163


 
1,522


 
1,508


 
September 2011
Embedded derivatives in provisional purchase contracts:
 
 
 
 
 
 
 
Copper (millions of pounds)
196


 
4.14


 
4.28


 
October 2011
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,
 
2011
 
2010
 
2011
 
2010
Embedded derivatives in provisional sales
     contractsa
$
26


 
$
(330
)
 
$
(18
)
 
$
(199
)
Embedded derivatives in provisional purchase
     contractsb
—


 
1


 
—


 
(1
)
Copper forward contractsb
(6
)
 
1


 
(6
)
 
2


Copper futures and swap contractsa
—


 
(1
)
 
—


 
(1
)
 
 
 
 
 
 
 
 
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 derivative financial instruments recorded on the consolidated balance sheets follows (in millions):
 
June 30, 2011
 
December 31, 2010
Derivatives designated as hedging instruments
 
 
 
Commodity contracts:
 
 
 
Copper futures and swap contracts:a
 
 
 
Asset positionb
$
10


 
$
18


Liability positionc
(2
)
 
—


 
 
 
 
Derivatives not designated as hedging instruments
 
 
 
Commodity contracts:
 
 
 
Embedded derivatives in provisional sales/purchases contracts:d
 
 
 
Asset position
$
85


 
$
357


Liability position
(43
)
 
(115
)
Copper forward contracts:
 
 
 
Liability positionc
(9
)
 
(10
)
 
 
 
 
a.
FCX had paid $4 million at June 30, 2011, and $3 million at December 31, 2010, for margin requirements (recorded in other current assets). In addition, FCX had received $8 million from a broker associated with margin requirements (recorded in accounts payable and accrued liabilities) at December 31, 2010.
b.
Amounts recorded in other current assets. 
c.
Amounts recorded in accounts payable and accrued liabilities. 
d.
Amounts recorded either as a net accounts receivable or a net accounts payable.