FAIR VALUE MEASUREMENT (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

A summary of the changes in the fair value of FCX's Level 3 instruments follows:



	Crude Oil				Plains Offshore
	Options				Warrants
Fair value at December 31, 2012	$	—			$	—
Derivative financial instruments assumed in the PXP acquisition	(83		)		(10		)
Net realized losses	(38		)	^a	—
Net unrealized (losses) gains included in earnings related to assets and liabilities still held at the end of the period	(230		)	^b	8			^c
Settlement payments	42				—
Fair value at December 31, 2013	$	(309	)		$	(2	)


a.	Included net realized losses of $37 million recorded in revenues and $1 million of interest expense associated with the deferred premiums for the seven month period from June 1, 2013, to December 31, 2013.


b.	Included unrealized losses of $228 million recorded in revenues and $2 million of interest expense associated with the deferred premiums.


c.	Recorded in other (expense) income, net.

Fair Value Measurement Inputs Disclosure

A summary of the carrying amount and fair value of FCX’s financial instruments other than cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and dividends payable follows:



	At December 31, 2013
	Carrying		Fair Value
	Amount		Total		Level 1		Level 2		Level 3
Assets
Investment securities (current and long-term):^a,b
U.S. core fixed income fund	$	21	$	21	$	—	$	21	$	—
Money market funds	18		18		18		—		—
Equity securities	5		5		5		—		—
Total	44		44		23		21		—

Legally restricted funds (long-term):^a,b,c
U.S. core fixed income fund	48		48		—		48		—
Government mortgage-backed securities	34		34		—		34		—
Corporate bonds	28		28		—		28		—
Government bonds and notes	28		28		—		28		—
Money market funds	28		28		28		—		—
Asset-backed securities	15		15		—		15		—
Municipal bonds	1		1		—		1		—
Total	182		182		28		154		—



Derivatives:^a,d
Embedded derivatives in provisional sales/purchase
contracts in a gross asset position	63		63		—		63		—
Copper futures and swap contracts	6		6		5		1		—
Total	69		69		5		64		—

Total assets			$	295	$	56	$	239	$	—

Liabilities
Derivatives:^a
Embedded derivatives in provisional sales/purchase
contracts in a gross liability position^d	$	16	$	16	$	—	$	16	$	—
Crude oil options^d	309		309		—		—		309
Natural gas swaps	4		4		—		4		—
Copper forward contracts^d	1		1		1		—		—
Plains Offshore warrants^e	2		2		—		—		2
Total	332		332		1		20		311

Long-term debt, including current portion^f	20,706		20,487		—		20,487		—

Total liabilities			$	20,819	$	1	$	20,507	$	311



	At December 31, 2012
	Carrying		Fair Value
	Amount		Total		Level 1		Level 2		Level 3
Assets
Investment securities (current and long-term):
MMR investment^g	$	446	$	539	$	—	$	539	$	—
U.S. core fixed income fund^a,b	22		22		—		22		—
Money market funds^a,b	16		16		16		—		—
Equity securities^a,b	8		8		8		—		—
Total	492		585		24		561		—

Legally restricted funds (long-term):^a,b
U.S. core fixed income fund	50		50		—		50		—
Government mortgage-backed securities	36		36		—		36		—
Corporate bonds	30		30		—		30		—
Government bonds and notes	24		24		—		24		—
Asset-backed securities	15		15		—		15		—
Money market funds	7		7		7		—		—
Municipal bonds	1		1		—		1		—
Total	163		163		7		156		—

Derivatives:^a,d
Embedded derivatives in provisional sales/purchase
contracts in a gross asset position	36		36		—		36		—
Copper futures and swap contracts	5		5		5		—		—
Total	41		41		5		36		—

Total assets			$	789	$	36	$	753	$	—

Liabilities
Derivatives:^a,d
Embedded derivatives in provisional sales/purchase
contracts in a gross liability position	$	27	$	27	$	—	$	27	$	—
Copper futures and swap contracts	1		1		1		—		—
Total	28		28		1		27		—

Long-term debt, including current portion^f	3,527		3,589		—		3,589		—

Total liabilities			$	3,617	$	1	$	3,616	$	—


a.	Recorded at fair value.


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


c.	Legally restricted funds excluded $210 million of time deposits (which approximated fair value) at December 31, 2013, associated with the Cerro Verde royalty dispute (refer to Note 12 for further discussion).


d.	Refer to Note 14 for further discussion and balance sheet classifications. At December 31, 2013, crude oil options are net of $444 million for deferred premiums and accrued interest.


e.	Included in other liabilities. Refer to Note 2 for further discussion.


f.	Recorded at cost except for debt assumed in the PXP and FMC acquisitions, which were recorded at fair value at the respective acquisition dates.


g.	Recorded at cost and included in other assets.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), 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); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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