Financial Instruments (Unaudited) (Tables)

9 Months Ended

Sep. 30, 2013

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						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Copper futures and swap contracts:
Unrealized (losses) gains:
Derivative financial instruments	$	16		$	13		$	(2	)	$	20
Hedged item	(16		)	(13		)	2			(20		)
Realized (losses) gains:
Matured derivative financial instruments	(3		)	1			(17		)	(3		)

Schedule of Derivative Instruments

At September 30, 2013, the outstanding crude oil option contracts, all of which settle monthly, follow:

			Average Price (per Bbl)a
Period	Instrument Type	Daily Volumes (MBbls)	Ceiling		Floor		Floor Limit		Average Deferred Premium  (per Bbl)		Index
2013
Oct - Dec	Three-way collarsb	25	$	124.29	$	100	$	80	$	—	Brent
Oct - Dec	Put optionsc	17	N/A		90		70		6.25		Brent
Oct - Dec	Put optionsc	13	N/A		100		80		6.80		Brent
Oct - Dec	Three-way collarsb	5	126.08		90		70		—		Brent
2014
Jan - Dec	Put optionsc	75	N/A		90		70		5.74		Brent
Jan - Dec	Put optionsc	30	N/A		95		75		6.09		Brent
Jan - Dec	Put optionsc	5	N/A		100		80		7.11		Brent
2015
Jan - Dec	Put optionsc	84	N/A		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. FCX pays the difference between the index price and the per barrel ceiling if the index price is greater than the per barrel ceiling. If the index price is at or above the per barrel floor and at or below the per barrel ceiling, no cash settlement is required.

c. 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 September 30, 2013, follows:

	Open Positions	Average Price Per Unit				Maturities Through
		Contract		Market
Embedded derivatives in provisional sales contracts:
Copper (millions of pounds)	555	$	3.22	$	3.31	February 2014
Gold (thousands of ounces)	161	1,356		1,332		January 2014
Embedded derivatives in provisional purchase contracts:
Copper (millions of pounds)	52	3.17		3.31		January 2014

At September 30, 2013, the outstanding crude oil and natural gas swap contracts, all of which settle monthly, follow:

	Daily	Weighted-Average			Maturities
	Volumes	Fixed Price		Index	Through
2013 crude oil swaps (MBbls)a	40	$	109.23	Brent	December 2013
2013 natural gas swaps (MMBtu)a	110,000	4.27		Henry Hub	December 2013
2014 natural gas swaps (MMBtu)a	100,000	4.09		Henry Hub	December 2014

a. If the index price is less than the fixed price, FCX receives the difference between the fixed price and the index price. FCX pays the difference between the index price and the fixed price if the index price is greater than the fixed price.

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 (losses) for commodity contracts that do not qualify or are not designated as hedge transactions, including embedded derivatives, follows (in millions):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2013			2012		2013			2012
Embedded derivatives in provisional copper and gold
sales contractsa	$	141		$	164	$	(147	)	$	188
Crude oil options and swapsa	(173		)	—		(227		)	—
Natural gas swapsa	3			—		22			—
Copper forward contractsb	—			5		3			17

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 these unsettled commodity contracts that are offset in the balance sheet follows (in millions):

	Assets				Liabilities
	September 30, 2013		December 31, 2012		September 30, 2013		December 31, 2012
Gross amounts recognized:
Commodity contracts:
Embedded derivatives on provisional
sales/purchase contracts	$	51	$	36	$	13	$	27
Crude oil and natural gas derivatives	24		—		218		—
Copper derivatives	3		5		2		1
	78		41		233		28
Less gross amounts of offset:
Commodity contracts:
Embedded derivatives on provisional
sales/purchase contracts	4		8		4		8
Crude oil and natural gas derivatives	20		—		20		—
Copper derivatives	1		—		1		—
	25		8		25		8
Net amounts presented in balance sheet:
Commodity contracts:
Embedded derivatives on provisional
sales/purchase contracts	47		28		9		19
Crude oil and natural gas derivatives	4		—		198		—
Copper derivatives	2		5		1		1
	$	53	$	33	$	208	$	20
Balance sheet classification:
Trade accounts receivable	$	46	$	24	$	1	$	9
Other current assets	6		5		—		—
Other assets	—		—		—		—
Accounts payable and accrued liabilities	1		4		116		11
Other liabilities	—		—		91		—
	$	53	$	33	$	208	$	20

A summary of the fair values of unsettled commodity derivative financial instruments follows (in millions):

	September 30, 2013		December 31, 2012
Commodity Derivative Assets:
Derivatives designated as hedging instruments:
Copper futures and swap contracts:a	$	3	$	5
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional copper and gold
sales/purchase contracts	51		36
Crude oil and natural gas swaps	24		—
Total derivative assets	$	78	$	41
Commodity Derivative Liabilities:
Derivatives designated as hedging instruments:
Copper futures and swap contractsa	$	1	$	1
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional copper and gold
sales/purchase contracts	13		27
Crude oil options	218		—
Copper forward contracts	1		—
Total derivative liabilities	$	233	$	28

a. FCX paid $3 million to brokers at September 30, 2013, and $7 million at December 31, 2012, for margin requirements (recorded in other current assets).