FAIR VALUE MEASUREMENT (Tables)

9 Months Ended

Sep. 30, 2019

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, restricted cash, restricted cash equivalents, accounts receivable, accounts payable and accrued liabilities, and dividends payable (refer to Note 6) follows (in millions):



	At September 30, 2019
	Carrying		Fair Value
	Amount		Total		NAV		Level 1		Level 2		Level 3
Assets
Investment securities:^a,b
U.S. core fixed income fund	$	27	$	27	$	27	$	—	$	—	$	—
Equity securities	4		4		—		4		—		—
Total	31		31		27		4		—		—

Legally restricted funds:^a
U.S. core fixed income fund	59		59		59		—		—		—
Government mortgage-backed securities	41		41		—		—		41		—
Government bonds and notes	38		38		—		—		38		—
Corporate bonds	35		35		—		—		35		—
Asset-backed securities	12		12		—		—		12		—
Collateralized mortgage-backed securities	6		6		—		—		6		—
Money market funds	4		4		—		4		—		—
Municipal bonds	1		1		—		—		1		—
Total	196		196		59		4		133		—

Derivatives:
Embedded derivatives in provisional copper, gold and cobalt sales/purchase contracts in a gross asset position^c	6		6		—		—		6		—
Contingent consideration for the sales of TFHL
and onshore California oil and gas properties^a	67		67		—		—		67		—
Total	$	73	$	73	$	—	$	—	$	73	$	—

Contingent consideration for the sale of the
Deepwater GOM oil and gas properties^a	128		110		—		—		—		110

Liabilities
Derivatives:^c
Embedded derivatives in provisional copper, gold and cobalt sales/purchase contracts in a gross liability position	$	36	$	36	$	—	$	—	$	36	$	—
Copper futures and swap contracts	6		6		—		5		1		—
Total	42		42		—		5		37		—

Long-term debt, including current portion^d	9,919		9,872		—		—		9,872		—



	At December 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	4		4		—		4		—		—
Total	29		29		25		4		—		—

Legally restricted funds:^a
U.S. core fixed income fund	55		55		55		—		—		—
Government mortgage-backed securities	38		38		—		—		38		—
Government bonds and notes	36		36		—		—		36		—
Corporate bonds	28		28		—		—		28		—
Asset-backed securities	11		11		—		—		11		—
Collateralized mortgage-backed securities	7		7		—		—		7		—
Money market funds	5		5		—		5		—		—
Municipal bonds	1		1		—		—		1		—
Total	181		181		55		5		121		—

Derivatives:
Embedded derivatives in provisional copper, gold and cobalt sales/purchase contracts in a gross asset position^c	23		23		—		—		23		—
Contingent consideration for the sales of TFHL
and onshore California oil and gas properties^a	73		73		—		—		73		—
Total	96		96		—		—		96		—

Contingent consideration for the sale of the
Deepwater GOM oil and gas properties^a	143		127		—		—		—		127

Liabilities
Derivatives:^c
Embedded derivatives in provisional copper, gold and cobalt sales/purchase contracts in a gross liability position	$	39	$	39	$	—	$	—	$	39	$	—
Copper futures and swap contracts	9		9		—		7		2		—
Total	48		48		—		7		41		—

Long-term debt, including current portion^d	11,141		10,238		—		—		10,238		—


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 $100 million at September 30, 2019, and $109 million at December 31, 2018, and (ii) other assets of $164 million at September 30, 2019, and $126 million at December 31, 2018, primarily associated with an assurance bond to support PT-FI’s commitment for the development of a new smelter in Indonesia and PT-FI’s closure and reclamation guarantees.


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


d.	Recorded at cost except for debt assumed in acquisitions, which are recorded at fair value at the respective acquisition dates.

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 nine months of 2019 follows (in millions):



Fair value at January 1, 2019	$	127
Net unrealized loss related to assets still held at the end of the period	(1		)
Settlements	(16		)
Fair value at September 30, 2019	$	110