DEBT AND EQUITY

Debt. The components of debt follow (in millions):



	June 30, 2016			December 31, 2015
Term Loan	$	2,446		$	3,032
Revolving credit facility	—			—
Cerro Verde credit facility	1,784			1,781
Cerro Verde shareholder loans	261			259
Lines of credit	192			442
Senior notes and debentures:
Issued by FCX	11,648			11,908
Issued by Freeport-McMoRan Oil & Gas LLC (FM O&G LLC)	2,524			2,539
Issued by FMC	359			359
Other (including equipment capital leases and other short-term borrowings)	105			108
Total debt^a	19,319			20,428
Less current portion of debt	(770		)	(649		)
Long-term debt	$	18,549		$	19,779


a.	Includes additions for unamortized fair value adjustments totaling $195 million at June 30, 2016, and $210 million at December 31, 2015, and net reductions for unamortized debt issuance costs and unamortized discounts of $120 million at June 30, 2016, and $129 million at December 31, 2015.

On February 26, 2016, FCX amended its revolving credit facility and Term Loan. The amendments included (i) modification of the maximum leverage ratio and the minimum interest expense coverage ratio, and (ii) the addition of a springing collateral and guarantee trigger. In addition, the commitment under the revolving credit facility was reduced from $4.0 billion to $3.5 billion, and the mandatory prepayment provision was modified under the Term Loan. Refer to Note 18 of FCX's annual report on Form 10-K for the year ended December 31, 2015, for further discussion of these amendments.

In second-quarter 2016, FCX prepaid $568 million on the Term Loan with a portion of the proceeds from the sale of the 13 percent undivided interest in Morenci.

With closed and pending asset sales exceeding the required $3 billion threshold under FCX's revolving credit facility and Term Loan, the springing collateral requirement under these agreements was not triggered on June 30, 2016. Since the TFHL transaction is not expected to close until fourth-quarter 2016, FCX was required to pledge its shares in FMC on June 30, 2016, which will be released upon closing of this transaction. If $3 billion in asset sale transactions have not been completed by December 31, 2016, the springing collateral requirement will be triggered.

At June 30, 2016, there were no borrowings outstanding and $40 million in letters of credit issued under FCX's revolving credit facility, resulting in availability of approximately $3.5 billion, of which approximately $1.5 billion could be used for additional letters of credit.

Early Extinguishment of Debt

During second-quarter 2016, FCX redeemed certain senior notes in exchange for its common stock (refer to the discussion under "Equity" in this note). A summary of these debt extinguishments follows (in millions):



	Principal Amount		Discounts/Deferred Debt Issuance Costs		Book Value		Gain
3.55% Senior Notes due 2022	$	85	$	—	$	85	$	9
3.875% Senior Notes due 2023	52		—		52		6
5.40% Senior Notes due 2034	50		1		49		8
5.450% Senior Notes due 2043	81		1		80		16
Total	$	268	$	2	$	266	$	39

In addition, FCX recorded a loss on early extinguishment of debt totaling $3 million associated with the modifications to its Term Loan and revolving credit facility in first-quarter 2016.

Interest Expense, Net

Consolidated interest expense from continuing operations (excluding capitalized interest) totaled $218 million in second-quarter 2016, $208 million in second-quarter 2015, $436 million for the first six months of 2016 and $411 million for the first six months of 2015. Capitalized interest added to property, plant, equipment and mining development costs, net, totaled $22 million in second-quarter 2016, $47 million in second-quarter 2015, $42 million for the first six months of 2016 and $92 million for the first six months of 2015. Capitalized interest added to oil and gas properties not subject to amortization totaled $19 million in second-quarter 2015 (none in second-quarter 2016), $7 million for the first six months of 2016 and $38 million for the first six months of 2015.

Equity. In 2015 and through January 5, 2016, FCX generated approximately $2 billion in gross proceeds (proceeds of $1.97 billion net of $20 million of commissions and expenses) through the sale of 210 million shares of common stock (206 million shares through December 31, 2015, and 4 million shares (with a value of $32 million) in January 2016) under its at-the-market equity programs. At July 29, 2016, FCX has approximately $12 million remaining under these at-the-market equity programs.

During second-quarter 2016, FCX issued 48 million shares of its common stock (with a value of $540 million, excluding $5 million of commissions paid by FCX) in connection with the settlement of two drilling rig contracts (refer to Note 9 for further discussion).

During second-quarter 2016, FCX negotiated private exchange transactions exempt from registration under the Securities Act of 1933, as amended, whereby 17 million shares of FCX's common stock were issued, with an additional 3 million shares that settled in early July 2016 (with an aggregate value of $226 million), in exchange for $268 million principal amount of FCX’s senior notes. From July 1, 2016, through August 4, 2016, an additional 8 million shares of FCX’s common stock (with a value of $85 million) were issued in exchange for $101 million principal amount of FCX’s senior notes. The timing of future exchanges is dependent upon many factors including FCX’s operating results, cash flow and financial position, the market price of FCX's common stock, and general economic and market conditions.