CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2015

Environmental Loss Contingency Disclosure

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



	2015			2014			2013
Balance at beginning of year	$	1,174		$	1,167		$	1,222
Accretion expense^a	78			77			79
Additions	33			16			73
Reductions^b	(3		)	(6		)	(77		)
Spending	(67		)	(80		)	(130		)
Balance at end of year	1,215			1,174			1,167
Less current portion	(100		)	(105		)	(121		)
Long-term portion	$	1,115		$	1,069		$	1,046


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:



	2015			2014				2013
Balance at beginning of year	$	2,769		$	2,328			$	1,146
Liabilities assumed in the acquisitions of PXP and MMR^a	—			—				1,028
Liabilities incurred	98			430			^b	45
Settlements and revisions to cash flow estimates, net	(66		)	65				123
Accretion expense	131			117				95
Dispositions	—			(61		)		—
Spending	(133		)	(99		)		(107		)
Other	(3		)	(11		)		(2		)
Balance at end of year	2,796			2,769				2,328
Less current portion	(172		)	(191		)		(115		)
Long-term portion	$	2,624		$	2,578			$	2,213


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 updates 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	$	53	$	69
2006	7		47		54
2007	12		18		30
2008	21		13		34
2009	56		48		104
2010	66		89		155
2014	5		—		5
2015	4		—		4
	$	187	$	268	$	455

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