OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS (Tables)

12 Months Ended

Dec. 31, 2017

Other Liabilities, Including Employee Benefits [Abstract]

The components of other liabilities follow:



	December 31,
	2017		2016
Pension, postretirement, postemployment and other employment benefits^a	$	1,154	$	1,345
Cerro Verde royalty dispute	368		—
Provision for tax positions	291		167
Legal matters	81		77
Insurance claim reserves	47		51
Accrued oil and gas contract commitments	—		43
Other	71		62
Total other liabilities	$	2,012	$	1,745


a.	Refer to Note 7 for current portion.

Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets

FCX uses a measurement date of December 31 for its plans. Information for those plans where the accumulated benefit obligations exceed the fair value of plan assets follows:



	December 31,
	2017		2016
Projected benefit obligation	$	2,287	$	2,127
Accumulated benefit obligation	2,163		2,014
Fair value of plan assets	1,521		1,312

Schedule of Changes Benefit Obligation, Fair Value of Plan Assets, and Funded Status of Plan

Information on the FCX (FMC and SERP plans) and PT-FI plans as of December 31 follows:



	FCX						PT-FI
	2017			2016			2017			2016
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,135		$	2,104		$	374		$	318
Service cost	44			27			20			27
Interest cost	91			93			23			29
Actuarial losses (gains)	188			92			(61		)	2
Foreign exchange losses (gains)	3			(4		)	(2		)	8
Curtailment^a	—			—			(62		)	—
Benefits and administrative expenses paid	(118		)	(177		)	(52		)	(10		)
Benefit obligation at end of year	2,343			2,135			240			374

Change in plan assets:
Fair value of plan assets at beginning of year	1,329			1,379			284			204
Actual return on plan assets	230			88			11			47
Employer contributions^b	145			42			28			38
Foreign exchange gains (losses)	2			(3		)	(2		)	5
Benefits and administrative expenses paid	(118		)	(177		)	(52		)	(10		)
Fair value of plan assets at end of year	1,588			1,329			269			284
Funded status	$	(755	)	$	(806	)	$	29		$	(90	)

Accumulated benefit obligation	$	2,218		$	2,022		$	194		$	225

Weighted-average assumptions
used to determine benefit obligations:
Discount rate	3.70		%	4.40		%	6.75		%	8.25		%
Rate of compensation increase	3.25		%	3.25		%	4.00		%	8.00		%

Balance sheet classification of funded status:
Other assets	$	11		$	9		$	29		$	—
Accounts payable and accrued liabilities	(4		)	(4		)	—			—
Other liabilities	(762		)	(811		)	—			(90		)
Total	$	(755	)	$	(806	)	$	29		$	(90	)


a.	Resulted from the 2017 PT-FI reductions in workforce (refer to Restructuring Charges in this note for further discussion).


b.	Employer contributions for 2018 are expected to approximate $75 million for the FCX plans and $17 million for the PT-FI plan (based on a December 31, 2017, exchange rate of 13,480 Indonesian rupiah to one U.S. dollar).

Schedule of Assumptions Used

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s pension plans for the years ended December 31 follow:



	2017			2016			2015
Weighted-average assumptions:^a
Discount rate	4.40		%	4.60		%	4.10		%
Expected return on plan assets	7.00		%	7.25		%	7.25		%
Rate of compensation increase	3.25		%	3.25		%	3.25		%

Service cost	$	44		$	27		$	36
Interest cost	91			93			87
Expected return on plan assets	(93		)	(96		)	(102		)
Amortization of net actuarial losses	49			42			45
Special retirement benefits^b	—			—			22
Net periodic benefit cost	$	91		$	66		$	88


a.	The assumptions shown relate only to the FMC plans.


b.	Resulted from FMC’s 2015 revised mine operating plans and reductions in the workforce (refer to Note 5 for further discussion).

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for PT-FI’s pension plan for the years ended December 31 follow:



	2017			2016			2015
Weighted-average assumptions:
Discount rate	8.25		%	9.00		%	8.25		%
Expected return on plan assets	7.75		%	7.75		%	7.75		%
Rate of compensation increase	8.00		%	9.40		%	9.00		%

Service cost	$	20		$	27		$	26
Interest cost	23			29			23
Expected return on plan assets	(21		)	(17		)	(14		)
Amortization of prior service cost	2			3			3
Amortization of net actuarial loss	—			5			6
Curtailment loss	4			—			—
Net periodic benefit cost	$	28		$	47		$	44

Schedule of Net Periodic Benefit Cost Not yet Recognized

Included in accumulated other comprehensive loss are the following amounts that have not been recognized in net periodic pension cost as of December 31:



	2017				2016
	Before Taxes		After Taxes and Noncontrolling Interests		Before Taxes		After Taxes and Noncontrolling Interests
Net actuarial loss	$	620	$	412	$	722	$	466
Prior service costs	10		6		21		11
	$	630	$	418	$	743	$	477

Schedule of Allocation of Plan Assets

A summary of the fair value for pension plan assets, including those measured at net asset value (NAV) as a practical expedient, associated with the FCX plans follows:



	Fair Value at December 31, 2017
	Total			NAV		Level 1		Level 2		Level 3
Commingled/collective funds:
Global equity	$	404		$	404	$	—	$	—	$	—
Fixed income securities	154			154		—		—		—
Global fixed income securities	115			115		—		—		—
Emerging markets equity	87			87		—		—		—
International small-cap equity	72			72		—		—		—
U.S. small-cap equity	67			67		—		—		—
Real estate property	50			50		—		—		—
U.S. real estate securities	45			45		—		—		—
Short-term investments	12			12		—		—		—
Fixed income:
Government bonds	208			—		—		208		—
Corporate bonds	168			—		—		168		—
Global large-cap equity securities	119			—		119		—		—
Private equity investments	20			20		—		—		—
Other investments	62			—		19		43		—
Total investments	1,583			$	1,026	$	138	$	419	$	—

Cash and receivables	21
Payables	(16		)
Total pension plan net assets	$	1,588



	Fair Value at December 31, 2016
	Total			NAV		Level 1		Level 2		Level 3
Commingled/collective funds:
Global equity	$	420		$	420	$	—	$	—	$	—
Fixed income securities	129			129		—		—		—
Global fixed income securities	107			107		—		—		—
Real estate property	72			72		—		—		—
Emerging markets equity	66			66		—		—		—
U.S. small-cap equity	60			60		—		—		—
International small-cap equity	51			51		—		—		—
U.S. real estate securities	42			42		—		—		—
Short-term investments	17			17		—		—		—
Fixed income:
Government bonds	160			—		—		160		—
Corporate bonds	141			—		—		141		—
Private equity investments	25			25		—		—		—
Other investments	36			—		1		35		—
Total investments	1,326			$	989	$	1	$	336	$	—

Cash and receivables	4
Payables	(1		)
Total pension plan net assets	$	1,329

A summary of the fair value hierarchy for pension plan assets associated with the PT-FI plan follows:



	Fair Value at December 31, 2017
	Total		Level 1		Level 2		Level 3
Government bonds	$	81	$	81	$	—	$	—
Common stocks	78		78		—		—
Mutual funds	16		16		—		—
Total investments	175		$	175	$	—	$	—

Cash and receivables^a	94
Total pension plan net assets	$	269



	Fair Value at December 31, 2016
	Total			Level 1		Level 2		Level 3
Government bonds	$	78		$	78	$	—	$	—
Common stocks	72			72		—		—
Mutual funds	16			16		—		—
Total investments	166			$	166	$	—	$	—

Cash and receivables^a	119
Payables	(1		)
Total pension plan net assets	$	284


a.	Cash consists primarily of short-term time deposits.

Schedule of Expected Benefit Payments

The expected benefit payments for FCX’s and PT-FI’s pension plans follow:



	FCX		PT-FI^a
2018	$	111	$	48
2019	151		8
2020	116		15
2021	118		20
2022	120		23
2023 through 2027	635		166


a.	Based on a December 31, 2017, exchange rate of 13,480 Indonesian rupiah to one U.S. dollar.