FAIR VALUE MEASUREMENT (Tables)

12 Months Ended

Dec. 31, 2016

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, restricted cash, and accounts payable and accrued liabilities follows. FCX's financial instruments are recorded on the consolidated balance sheets at fair value except for contingent consideration associated with the sale of the Deepwater GOM oil and gas properties (which was recorded under the loss recovery approach) and debt.



	At December 31, 2016
	Carrying		Fair Value
	Amount		Total		NAV		Level 1		Level 2		Level 3
Assets
Investment securities:^a,b
U.S. core fixed income fund	$	23	$	23	$	23	$	—	$	—	$	—
Money market funds	22		22		—		22		—		—
Equity securities	5		5		—		5		—		—
Total	50		50		23		27		—		—

Legally restricted funds:^a
U.S. core fixed income fund	53		53		53		—		—		—
Government bonds and notes	36		36		—		—		36		—
Corporate bonds	32		32		—		—		32		—
Government mortgage-backed securities	25		25		—		—		25		—
Asset-backed securities	16		16		—		—		16		—
Money market funds	12		12		—		12		—		—
Collateralized mortgage-backed securities	8		8		—		—		8		—
Municipal bonds	1		1		—		—		1		—
Total	183		183		53		12		118		—

Derivatives:
Embedded derivatives in provisional sales/purchase
contracts in a gross asset position^c	137		137		—		—		137		—
Copper futures and swap contracts^c	9		9		—		8		1		—
Contingent consideration for the sales of TFHL
and onshore California oil and gas properties^a	46		46		—		—		46		—
Total	192		192		—		8		184		—

Contingent consideration for the sale of the Deepwater GOM oil and gas properties^a	150		135		—		—		—		135

Total assets			$	560	$	76	$	47	$	302	$	135




Liabilities
Derivatives:^c
Embedded derivatives in provisional sales/purchase
contracts in a gross liability position	$	56	$	56	—		$	—	$	56	$	—
Copper futures and swap contracts	2		2		—		2		—		—
Total	58		58		—		2		56		—

Contingent payments for the settlements of drilling rig contracts^d	23		23		—		—		23		—

Long-term debt, including current portion^e	16,027		15,196		—		—		15,196		—

Total liabilities			$	15,277	$	—	$	2	$	15,275	$	—



	At December 31, 2015
	Carrying		Fair Value
	Amount		Total		NAV		Level 1		Level 2		Level 3
Assets
Investment securities:^a,b
U.S. core fixed income fund	$	23	$	23	$	23	$	—	$	—	$	—
Money market funds	21		21		—		21		—		—
Equity securities	3		3		—		3		—		—
Total	47		47		23		24		—		—

Legally restricted funds:^a
U.S. core fixed income fund	52		52		52		—		—		—
Government bonds and notes	37		37		—		—		37		—
Government mortgage-backed securities	28		28		—		—		28		—
Corporate bonds	26		26		—		—		26		—
Asset-backed securities	13		13		—		—		13		—
Collateralized mortgage-backed securities	7		7		—		—		7		—
Money market funds	7		7		—		7		—		—
Municipal bonds	1		1		—		—		1		—
Total	171		171		52		7		112		—

Derivatives:^c
Embedded derivatives in provisional sales/purchase
contracts in a gross asset position	19		19		—		—		19		—
Copper futures and swap contracts	1		1		—		1		—		—
Total	20		20		—		1		19		—

Total assets			$	238	$	75	$	32	$	131	$	—

Liabilities
Derivatives:^c
Embedded derivatives in provisional sales/purchase
contracts in a gross liability position	$	81	$	81	$	—	$	—	$	81	$	—
Copper futures and swap contracts	11		11		—		7		4		—
Total	92		92		—		7		85		—

Long-term debt, including current portion^e	20,428		13,987		—		—		13,987		—

Total liabilities			$	14,079	$	—	$	7	$	14,072	$	—


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


b.	Excludes time deposits (which approximated fair value) included in (i) other current assets of $28 million at December 31, 2016 and 2015, and (ii) other assets of $122 million at December 31, 2016, and $118 million at December 31, 2015, primarily associated with an assurance bond to support PT-FI's commitment for smelter development in Indonesia (refer to Note 13 for further discussion).


c.	Refer to Note 14 for further discussion and balance sheet classifications.


d.	Included in accounts payable and accrued liabilities.


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

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

A summary of the changes in the fair value of FCX's Level 3 instruments for the years ended December 31 follows:



	Contingent Consideration			Crude Oil Options
	2016			2015				2014
Balance at beginning of year	$	—		$	316			$	(309	)
Net realized gains (losses)	—			86			^a	(42		)	^a
Net unrealized gains related to assets and liabilities still held at the end of the year	135		^b	—				430			^c
Net settlements	—			(402		)	^d	237			^d
Balance at the end of the year	$	135		$	—			$	316


a.	Includes net realized gains (losses) of $87 million recorded in revenues in 2015 and $(41) million in 2014, and $1 million of interest expense associated with deferred premiums in both 2015 and 2014.


b.	Reflects contingent consideration associated with the sale of the Deepwater GOM oil and gas properties in December 2016 (see Note 2 for further discussion).


c.	Includes unrealized gains recorded in revenues of $432 million and $2 million of interest expense associated with deferred premiums.


d.	Includes interest payments of $4 million in 2015 and $5 million in 2014.