CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2014

Environmental Loss Contingency Disclosure

A summary of changes in environmental obligations for the years ended December 31 follows:



	2014			2013			2012
Balance at beginning of year	$	1,167		$	1,222		$	1,453
Accretion expense^a	77			79			80
Additions	16			73			70
Reductions^b	(6		)	(77		)	(182		)
Spending	(80		)	(130		)	(199		)
Balance at end of year	1,174			1,167			1,222
Less current portion	(105		)	(121		)	(186		)
Long-term portion	$	1,069		$	1,046		$	1,036


a.	Represents accretion of the fair value of environmental obligations assumed in the 2007 acquisition of FMC, which were determined on a discounted cash flow basis.


b.	Reductions primarily reflect revisions for changes in the anticipated scope and timing of projects and other noncash adjustments.

Asset Retirement Obligation Disclosure

A summary of changes in FCX’s AROs for the years ended December 31 follows:



	2014				2013			2012
Balance at beginning of year	$	2,328			$	1,146		$	921
Liabilities assumed in the acquisitions of PXP and MMR^a	—				1,028			—
Liabilities incurred	430			^b	45			6
Settlements and revisions to cash flow estimates, net	65				123			211
Accretion expense	117				95			55
Dispositions	(61		)		—			—
Spending	(99		)		(107		)	(47		)
Other	(11		)		(2		)	—
Balance at end of year	2,769				2,328			1,146
Less current portion	(191		)		(115		)	(55		)
Long-term portion	$	2,578			$	2,213		$	1,091


a.	The fair value of AROs assumed in the acquisitions of PXP and MMR ($741 million and $287 million, respectively) were estimated based on projected cash flows, an estimated long-term annual inflation rate of 2.5 percent, and discount rates based on FCX's estimated credit-adjusted, risk-free interest rates ranging from 1.3 percent to 6.3 percent.


b.	Primarily reflects revisions to the closure approach to reclaim an overburden stockpile in Indonesia.

Summary of Income Tax Contingencies [Table Text Block]

A summary of these assessments follows:



Tax Year	Tax Assessment		Penalty and Interest Assessment		Total
2002 to 2005	$	16	$	49	$	65
2006	7		45		52
2007	12		18		30
2008	21		13		34
2009	59		49		108
2010	63		85		148		^a
2014	5		—		5
	$	183	$	259	$	442


a.	The tax assessment for the year 2010 was issued in February 2015.

PT-FI has received assessments from the Indonesian tax authorities for additional taxes and interest related to various audit exceptions for income and other taxes. PT-FI has filed objections to the assessments because it believes it has properly determined and paid its taxes. A summary of these assessments follows:



Tax Year	Tax Assessment		Interest Assessment		Total
2005	$	103	$	49	$	152
2006	22		10		32
2007	91		44		135
2008	62		52		114
2011	56		13		69
2012	137		—		137
	$	471	$	168	$	639

- Definition

The entire disclosure for environmental loss contingencies, such as presence of hazardous waste, relevant information from reports issued by regulators, and estimated costs to achieve compliance with regulatory requirements. This element may be used for all of an entity's disclosures about environmental loss contingencies.

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