NOTE 5. DEBT AND EQUITY

The components of debt follow (in millions):



	September 30, 2018			December 31, 2017
Senior notes and debentures:
Issued by FCX	$	9,594		$	11,429
Issued by Freeport Minerals Corporation (FMC)	358			358
Issued by Freeport-McMoRan Oil & Gas LLC (FM O&G LLC)	—			54
Cerro Verde credit facility	1,171			1,269
Other	4			7
Total debt^a	11,127			13,117
Less current portion of debt	(4		)	(1,414		)
Long-term debt	$	11,123		$	11,703


a.	Includes additions for unamortized fair value adjustments totaling $60 million at September 30, 2018 ($97 million at December 31, 2017), and is net of reductions for unamortized net discounts and unamortized debt issuance costs totaling $73 million at September 30, 2018 ($85 million at December 31, 2017).

Revolving Credit Facility. At September 30, 2018, there were no borrowings outstanding and $13 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.

In April 2018, FCX, PT Freeport Indonesia (PT-FI) and FM O&G LLC entered into a new $3.5 billion, five-year, unsecured revolving credit facility, which replaced FCX’s prior revolving credit facility (scheduled to mature on May 31, 2019). The new revolving credit facility is available until April 20, 2023, with $500 million available to PT-FI, and up to $1.5 billion available in letters of credit, and has a substantially similar structure and terms as the prior revolving credit facility. Interest on loans made under the new revolving credit facility will, at the option of FCX, be determined based on the adjusted London Interbank Offered rate or the alternate base rate (each as defined in the new revolving credit facility) plus a spread to be determined by reference to FCX’s credit ratings. The new revolving credit facility contains customary affirmative covenants and representations, and also contains a number of negative covenants that, among other things, restrict, subject to certain exceptions, the ability of FCX's subsidiaries that are not borrowers or guarantors to incur additional indebtedness (including guarantee obligations) and FCX's or its subsidiaries’ ability to: create liens on assets; enter into sale and leaseback transactions; engage in mergers, liquidations and dissolutions; and sell assets. FCX’s new revolving credit facility also contains financial ratios governing maximum total leverage and minimum interest expense coverage. FCX’s total leverage ratio (ratio of total debt to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA), as defined in the credit agreement) cannot exceed 3.75x, and the minimum interest expense coverage ratio (ratio of consolidated EBITDA to consolidated cash interest expense, as defined in the credit agreement) is 2.25x.

Senior Notes. In March 2018, FCX’s 2.375% Senior Notes matured, and the $1.4 billion outstanding principal balance was repaid.

On April 4, 2018, FCX redeemed $454 million of aggregate principal amount of outstanding senior notes (as discussed in Early Extinguishment of Debt).

Cerro Verde Credit Facility. In March 2018, Cerro Verde prepaid $100 million of its credit facility.

Early Extinguishment of Debt. During second-quarter 2018, FCX redeemed in full certain senior notes, and holders received the principal amounts together with the redemption premiums and accrued and unpaid interest up to the redemption date. A summary of these redemptions follows (in millions):




	Principal Amount		Net Adjustments		Book Value		Redemption Value		Gain
FCX 6.75% Senior Notes due 2022	$	404	$	22	$	426	$	418	$	8
FM O&G LLC 6⁷/₈% Senior Notes due 2023	50		4		54		52		2
	$	454	$	26	$	480	$	470	$	10

Partially offsetting the $10 million gain were losses of $2 million for the first nine months of 2018, primarily associated with entering into the new revolving credit facility.

During third-quarter 2017 and for the first nine months of 2017, FCX redeemed in full certain senior notes, which resulted in gains of $11 million. Partially offsetting the gain on early extinguishment of debt for the first nine months of 2017 was a net loss of $3 million, primarily associated with the modification of Cerro Verde’s credit facility in second-quarter 2017.

Interest Expense, Net. Consolidated interest costs (before capitalized interest and excluding interest expense associated with disputed Cerro Verde royalties totaling $1 million in third-quarter 2018, $7 million for the first nine months of 2018 and $141 million in third-quarter 2017 and for the first nine months of 2017) totaled $166 million in third-quarter 2018, $196 million in third-quarter 2017, $501 million for the first nine months of 2018 and $583 million for the first nine months of 2017. Capitalized interest added to property, plant, equipment and mine development costs, net, totaled $24 million in third-quarter 2018, $33 million in third-quarter 2017, $72 million for the first nine months of 2018 and $91 million for the first nine months of 2017.

Common Stock. In February 2018, FCX’s Board of Directors (the Board) reinstated a cash dividend on FCX’s common stock. On September 26, 2018, the Board declared a quarterly cash dividend of $0.05 per share, which was paid on November 1, 2018, to common stockholders of record as of October 15, 2018.