Fair Value Measurement (Unaudited) (Tables)

3 Months Ended

Mar. 31, 2015

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 most significant Level 3 instruments, crude oil options, follows (in millions):



	Crude Oil
	Options
Fair value at December 31, 2014	$	316
Net realized gains	3			^a
Net unrealized gains included in earnings related to assets and liabilities still held at the end of the period	48
Net settlement receipts	(99		)	^b
Fair value at March 31, 2015	$	268


a.	Includes net realized gains of $4 million, partially offset by $1 million of interest expense associated with the deferred premiums.


b.	Includes interest payments of $1 million.

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, restricted cash, accounts payable and accrued liabilities, and dividends payable (refer to Note 6), follows (in millions):



	At March 31, 2015
	Carrying		Fair Value
	Amount		Total		Level 1		Level 2		Level 3
Assets
Investment securities:^a,b,c
U.S. core fixed income fund	$	23	$	23	$	—	$	23	$	—
Money market funds	22		22		22		—		—
Equity securities	3		3		3		—		—
Total	48		48		25		23		—

Legally restricted funds:^a,b,d
U.S. core fixed income fund	52		52		—		52		—
Government bonds and notes	39		39		—		39		—
Government mortgage-backed securities	29		29		—		29		—
Corporate bonds	28		28		—		28		—
Asset-backed securities	16		16		—		16		—
Money market funds	10		10		10		—		—
Municipal bonds	1		1		—		1		—
Total	175		175		10		165		—

Derivatives:^a,e
Embedded derivatives in provisional sales/purchase
contracts in a gross asset position	46		46		—		46		—
Crude oil options	268		268		—		—		268
Copper futures and swap contracts	4		4		4		—		—
Copper forward contracts	3		3		2		1		—
Total	321		321		6		47		268

Total assets			$	544	$	41	$	235	$	268

Liabilities
Derivatives:^a,e
Embedded derivatives in provisional sales/purchase
contracts in a gross liability position	$	60	$	60	$	—	$	60	$	—
Copper futures and swap contracts	5		5		4		1		—
Total	65		65		4		61		—

Long-term debt, including current portion^f	20,312		19,866		—		19,866		—

Total liabilities			$	19,931	$	4	$	19,927	$	—



	At December 31, 2014
	Carrying		Fair Value
	Amount		Total		Level 1		Level 2		Level 3
Assets
Investment securities:^a,b,c
U.S. core fixed income fund	$	23	$	23	$	—	$	23	$	—
Money market funds	20		20		20		—		—
Equity securities	3		3		3		—		—
Total	46		46		23		23		—

Legally restricted funds:^a,b,d
U.S. core fixed income fund	52		52		—		52		—
Government bonds and notes	39		39		—		39		—
Corporate bonds	27		27		—		27		—
Government mortgage-backed securities	25		25		—		25		—
Asset-backed securities	17		17		—		17		—
Money market funds	11		11		11		—		—
Municipal bonds	1		1		—		1		—
Total	172		172		11		161		—

Derivatives:^a,e
Embedded derivatives in provisional sales/purchase
contracts in a gross asset position	15		15		—		15		—
Crude oil options	316		316		—		—		316
Total	331		331		—		15		316

Total assets			$	549	$	34	$	199	$	316

Liabilities
Derivatives:^a,e
Embedded derivatives in provisional sales/purchase
contracts in a gross liability position	$	93	$	93	$	—	$	93	$	—
Copper futures and swap contracts	7		7		6		1		—
Total	100		100		6		94		—

Long-term debt, including current portion^f	18,849		18,735		—		18,735		—

Total liabilities			$	18,835	$	6	$	18,829	$	—


a.	Recorded at fair value.


b.	Current portion included in other current assets and long-term portion included in other assets.


c.	Excludes time deposits of $116 million (which approximated fair value) included in other assets at March 31, 2015, and $115 million at December 31, 2014, associated with an assurance bond to support PT Freeport Indonesia's (PT-FI) commitment for smelter development in Indonesia.

Excludes time deposits of $18 million (which approximated fair value) included in other current assets at March 31, 2015, and $17 million at December 31, 2014, associated with a customs audit assessment and a reclamation guarantee at PT-FI. Also, excludes $115 million (which approximated fair value) included in other current assets at March 31, 2015, associated with a restricted escrow account for the shareholder derivative litigation (refer to Note 8).


e.	Refer to Note 6 for further discussion and balance sheet classifications. Crude oil options are net of $159 million at March 31, 2015, and $210 million at December 31, 2014, 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.

- 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.

+ References+ Details

- 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.

+ References+ Details