FAIR VALUE MEASUREMENT (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Measurement Inputs Disclosure

A summary of the carrying amount and fair value of FCX’s financial instruments (including those measured at net asset value (NAV) as a practical expedient), other than cash and cash equivalents, accounts receivable, restricted cash, restricted cash equivalents, and accounts payable and accrued liabilities (refer to Note 6) follows (in millions):



	At March 31, 2018
	Carrying		Fair Value
	Amount		Total		NAV		Level 1		Level 2		Level 3
Assets
Investment securities:^a,b
U.S. core fixed income fund	$	25	$	25	$	25	$	—	$	—	$	—
Equity securities	5		5		—		5		—		—
Total	30		30		25		5		—		—

Legally restricted funds:^a
U.S. core fixed income fund	54		54		54		—		—		—
Government bonds and notes	42		42		—		—		42		—
Corporate bonds	29		29		—		—		29		—
Government mortgage-backed securities	25		25		—		—		25		—
Asset-backed securities	13		13		—		—		13		—
Money market funds	8		8		—		8		—		—
Collateralized mortgage-backed securities	7		7		—		—		7		—
Municipal bonds	1		1		—		—		1		—
Total	179		179		54		8		117		—

Derivatives:
Embedded derivatives in provisional sales/
purchase contracts in a gross asset position^c	11		11		—		—		11		—
Copper futures and swap contracts^c	2		2		—		1		1		—
Contingent consideration for the sales of
TF Holdings Limited (TFHL) and onshore
California oil and gas properties^a	110		110		—		—		110		—
Total	123		123		—		1		122		—

Contingent consideration for the sale of the
Deepwater GOM oil and gas properties^a	150		132		—		—		—		132

Liabilities
Derivatives:^c
Embedded derivatives in provisional sales/
purchase contracts in a gross liability position^d	$	48	$	48	$	—	$	—	$	48	$	—
Copper futures and swap contracts	5		5		—		4		1		—
Total	53		53		—		4		49		—

Long-term debt, including current portion^e	11,606		11,406		—		—		11,406		—



	At December 31, 2017
	Carrying		Fair Value
	Amount		Total		NAV		Level 1		Level 2		Level 3
Assets
Investment securities:^a,b
U.S. core fixed income fund	$	25	$	25	$	25	$	—	$	—	$	—
Equity securities	5		5		—		5		—		—
Total	30		30		25		5		—		—

Legally restricted funds:^a
U.S. core fixed income fund	55		55		55		—		—		—
Government bonds and notes	40		40		—		—		40		—
Corporate bonds	32		32		—		—		32		—
Government mortgage-backed securities	27		27		—		—		27		—
Asset-backed securities	15		15		—		—		15		—
Money market funds	11		11		—		11		—		—
Collateralized mortgage-backed securities	8		8		—		—		8		—
Municipal bonds	1		1		—		—		1		—
Total	189		189		55		11		123		—

Derivatives:
Embedded derivatives in provisional sales/
purchase contracts in a gross asset position^c	155		155		—		—		155		—
Copper futures and swap contracts^c	11		11		—		9		2		—
Copper forward contracts^c	1		1		—		—		1		—
Contingent consideration for the sales of TFHL
and onshore California oil and gas properties^a	108		108		—		—		108		—
Total	275		275		—		9		266		—

Contingent consideration for the sale of the
Deepwater GOM oil and gas properties^a	150		134		—		—		—		134

Liabilities
Derivatives:^c
Embedded derivatives in provisional sales/
purchase contracts in a gross liability position^d	$	31	$	31	$	—	$	—	$	31	$	—
Copper forward contracts	2		2		—		1		1		—
Total	33		33		—		1		32		—

Long-term debt, including current portion^e	13,117		13,269		—		—		13,269		—


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

Excludes time deposits (which approximated fair value) included in (i) other current assets of $123 million at March 31, 2018, and $52 million at December 31, 2017, primarily associated with PT-FI’s mine closure and reclamation guarantees and its disputed incremental export duty and (ii) other assets of $125 million at March 31, 2018, and $123 million at December 31, 2017, primarily associated with an assurance bond to support PT-FI’s commitment for smelter development in Indonesia.


c.	Refer to Note 6 for further discussion and balance sheet classifications.


d.	Excludes embedded derivatives in provisional cobalt purchase contracts of $30 million at March 31, 2018, and $24 million at December 31, 2017 (refer to Note 6 for further discussion).


e.	Recorded at cost except for debt assumed in acquisitions, which were recorded at fair value at the respective acquisition dates. In addition, debt excludes $112 million at March 31, 2018, and December 31, 2017, related to assets held for sale (which approximated fair value).

Summary of Unobservable Input Reconciliation

A summary of the changes in the fair value of FCX’s Level 3 instrument, contingent consideration for the sale of the Deepwater GOM oil and gas properties, during the first three months of 2018 follows (in millions):



Fair value at January 1, 2018	$	134
Net unrealized loss related to assets still held at the end of the period	(2		)
Fair value at March 31, 2018	$	132