OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS (Tables)

12 Months Ended

Dec. 31, 2018

Other Liabilities, Including Employee Benefits [Abstract]

The components of other liabilities follow:



	December 31,
	2018		2017
Pension, postretirement, postemployment and other employment benefits^a	$	1,174	$	1,154
Cerro Verde royalty dispute	631		368
Provision for tax positions	230		291
Other	195		199
Total other liabilities	$	2,230	$	2,012


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 projected benefit obligations and the accumulated benefit obligations exceed the fair value of plan assets follows:



	December 31,
	2018		2017
Projected benefit obligation	$	2,177	$	2,287
Accumulated benefit obligation	2,048		2,163
Fair value of plan assets	1,373		1,521

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
	2018			2017			2018			2017
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,343		$	2,135		$	240		$	374
Service cost	44			44			13			20
Interest cost	84			91			14			23
Actuarial (gains) losses	(124		)	188			(19		)	(61		)
Plan amendments	4			—			—			—
Foreign exchange (gains) losses	(1		)	3			(15		)	(2		)
Curtailment^a	—			—			—			(62		)
Benefits and administrative expenses paid	(120		)	(118		)	(13		)	(52		)
Benefit obligation at end of year	2,230			2,343			220			240

Change in plan assets:
Fair value of plan assets at beginning of year	1,588			1,329			269			284
Actual return on plan assets	(104		)	230			(5		)	11
Employer contributions^b	70			145			4			28
Foreign exchange (losses) gains	(1		)	2			(17		)	(2		)
Benefits and administrative expenses paid	(120		)	(118		)	(13		)	(52		)
Fair value of plan assets at end of year	1,433			1,588			238			269
Funded status	$	(797	)	$	(755	)	$	18		$	29

Accumulated benefit obligation	$	2,101		$	2,218		$	181		$	194

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

Balance sheet classification of funded status:
Other assets	$	7		$	11		$	18		$	29
Accounts payable and accrued liabilities	(4		)	(4		)	—			—
Other liabilities	(800		)	(762		)	—			—
Total	$	(797	)	$	(755	)	$	18		$	29


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


b.	Employer contributions for 2019 are expected to approximate $74 million for the FCX plans and $2 million for the PT-FI plan (based on a December 31, 2018, exchange rate of 14,409 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:



	2018			2017			2016
Weighted-average assumptions:^a
Discount rate	3.70		%	4.40		%	4.60		%
Expected return on plan assets	6.50		%	7.00		%	7.25		%
Rate of compensation increase	3.25		%	3.25		%	3.25		%

Service cost	$	44		$	44		$	27
Interest cost	84			91			93
Expected return on plan assets	(101		)	(93		)	(96		)
Amortization of net actuarial losses	49			49			42
Net periodic benefit cost	$	76		$	91		$	66


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

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:



	2018			2017			2016
Weighted-average assumptions:
Discount rate	6.75		%	8.25		%	9.00		%
Expected return on plan assets	6.75		%	7.75		%	7.75		%
Rate of compensation increase	4.00		%	8.00		%	9.40		%

Service cost	$	13		$	20		$	27
Interest cost	14			23			29
Expected return on plan assets	(19		)	(21		)	(17		)
Amortization of prior service cost	2			2			3
Amortization of net actuarial (gain) loss	(1		)	—			5
Curtailment loss	—			4			—
Net periodic benefit cost	$	9		$	28		$	47

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:



	2018				2017
	Before Taxes		After Taxes and Noncontrolling Interests		Before Taxes		After Taxes and Noncontrolling Interests
Net actuarial loss	$	659	$	539	$	620	$	412
Prior service costs	13		8		10		6
	$	672	$	547	$	630	$	418

Schedule of Allocation of Plan Assets

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



	Fair Value at December 31, 2018
	Total			Level 1		Level 2		Level 3
Government bonds	$	72		$	72	$	—	$	—
Common stocks	72			72		—		—
Mutual funds	20			20		—		—
Total investments	164			$	164	$	—	$	—

Cash and receivables^a	75
Payables	(1		)
Total pension plan net assets	$	238



	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


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

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, 2018
	Total			NAV		Level 1		Level 2		Level 3
Commingled/collective funds:
Global equity	$	291		$	291	$	—	$	—	$	—
Fixed income securities	144			144		—		—		—
Global fixed income securities	108			108		—		—		—
Emerging markets equity	71			71		—		—		—
Real estate property	55			55		—		—		—
U.S. small-cap equity	54			54		—		—		—
International small-cap equity	47			47		—		—		—
U.S. real estate securities	41			41		—		—		—
Short-term investments	15			15		—		—		—
Fixed income:
Government bonds	224			—		—		224		—
Corporate bonds	211			—		—		211		—
Global large-cap equity securities	94			—		94		—		—
Private equity investments	15			15		—		—		—
Other investments	61			—		16		45		—
Total investments	1,431			$	841	$	110	$	480	$	—

Cash and receivables	32
Payables	(30		)
Total pension plan net assets	$	1,433



	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

Schedule of Expected Benefit Payments

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



	FCX		PT-FI^a
2019	$	117	$	45
2020	160		11
2021	123		19
2022	126		22
2023	128		30
2024 through 2028	664		160


a.	Based on a December 31, 2018, exchange rate of 14,409 Indonesian rupiah to one U.S. dollar.