FAIR VALUE MEASUREMENT (Tables)

12 Months Ended

Dec. 31, 2011

Fair Value Measurement Inputs Disclosure

A summary of FCX’s financial assets and liabilities measured at fair value on a recurring basis follows:



	Fair Value at December 31, 2011
	Total		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	4,007	$	4,007	$	—	$	—

Trust assets:
Government mortgage-backed securities	47		—		47		—
U.S. core fixed income fund	46		—		46		—
Government bonds and notes	21		—		21		—
Corporate bonds	19		—		19		—
Money market funds	9		9		—		—
Asset-backed securities	9		—		9		—
Municipal bonds	1		—		1		—
Total trust assets	152		9		143		—

Available-for-sale securities:
Equity securities	9		9		—		—
Money market funds	2		2		—		—
Total available-for-sale securities	11		11		—		—



Derivatives:
Embedded derivatives in provisional sales/purchases
contracts	72			—			72			—
Copper futures and swap contracts	3			3			—			—
Copper forward contracts	2			1			1			—
Total derivative assets	77			4			73			—

Total assets	$	4,247		$	4,031		$	216		$	—

Liabilities
Derivatives:
Embedded derivatives in provisional sales/purchases
contracts	$	(82	)	$	—		$	(82	)	$	—
Copper futures and swap contracts	(13		)	(11		)	(2		)	—
Total derivative liabilities	$	(95	)	$	(11	)	$	(84	)	$	—



	Fair Value at December 31, 2010
	Total			Level 1			Level 2			Level 3
Assets
Cash equivalents:
Money market funds	$	3,584		$	3,584		$	—		$	—

Trust assets:
U.S. core fixed income fund	42			—			42			—
Government mortgage-backed securities	35			—			35			—
Corporate bonds	23			—			23			—
Asset-backed securities	22			—			22			—
Money market funds	15			15			—			—
Government bonds and notes	10			—			10			—
Municipal bonds	1			—			1			—
Total trust assets	148			15			133			—

Available-for-sale securities:^a
Equity securities	9			9			—			—
Money market funds	6			6			—			—
Total available-for-sale securities	15			15			—			—

Derivatives:
Embedded derivatives in provisional sales/purchases
contracts^b	357			—			357			—
Copper futures and swap contracts	18			18			—			—
Total derivative assets	375			18			357			—

Total assets	$	4,122		$	3,632		$	490		$	—

Liabilities
Derivatives:
Embedded derivatives in provisional sales/purchases
contracts^b	$	(115	)	$	—		$	(115	)	$	—
Copper forward contracts	(10		)	(1		)	(9		)	—
Total derivative liabilities	$	(125	)	$	(1	)	$	(124	)	$	—


a.	Excluded were $19 million of time deposits.

At the end of 2011, FCX reevaluated its level determination for its embedded derivatives in provisional sales/purchases contracts, including those reported at December 31, 2010. Although the critical input in these measurements are quoted market prices for copper, gold and molybdenum, the contracts themselves are not traded on an exchange and, therefore, are more appropriately classified within Level 2 of the fair value hierarchy.

Carrying amount and fair value of other financial instruments

. A summary of the carrying amount and fair value of FCX’s other financial instruments as of December 31 follows:



	2011						2010
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Cash and cash equivalents^a	$	4,822		$	4,822		$	3,738		$	3,738
MMR cost investment^b	475			507			500			623
Net embedded derivatives included in accounts
receivable or payable	(10		)	(10		)	242			242
Trust assets (current and long-term)^{a, c}	152			152			148			148
Available-for-sale securities (current and
long-term)^{a, c}	11			11			34			34
Derivative assets^{a, d}	5			5			18			18
Derivative liabilities^{a, e}	(13		)	(13		)	(10		)	(10		)
Debt (including amounts due within one year)^f	(3,537		)	(3,797		)	(4,755		)	(5,146		)


a.	Recorded at fair value.


b.	Recorded at cost and included in other assets. At December 31, 2011, these securities were not actively trading; as such, fair value was based on a pricing simulation model using MMR's publicly traded common stock as the most significant observable input. At December 31, 2010, fair value was based on a bid evaluation, which is an estimated price at which a dealer would pay for a security.


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


d.	Included in other current assets.


e.	Included in accounts payable and accrued liabilities.


f.	Recorded at cost except for long-term debt acquired in the FMC acquisition, which was recorded at fair value at the acquisition date. Fair value of substantially all of FCX’s long-term debt is estimated based on quoted market price

- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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- Definition

Tabular disclosure of the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods. Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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