FAIR VALUE MEASUREMENT (Tables)

6 Months Ended

Jun. 30, 2017

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 (refer to Note 7) follows (in millions):



	At June 30, 2017
	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	$	—	$	—	$	—
Money market funds	22		22		—		22		—		—
Equity securities	5		5		—		5		—		—
Total	52		52		25		27		—		—

Legally restricted funds:^a
U.S. core fixed income fund	55		55		55		—		—		—
Government bonds and notes	36		36		—		—		36		—
Corporate bonds	32		32		—		—		32		—
Government mortgage-backed securities	28		28		—		—		28		—
Asset-backed securities	17		17		—		—		17		—
Money market funds	11		11		—		11		—		—
Collateralized mortgage-backed securities	8		8		—		—		8		—
Municipal bonds	1		1		—		—		1		—
Total	188		188		55		11		122		—

Derivatives:
Embedded derivatives in provisional sales/
purchase contracts in a gross asset position^c	62		62		—		—		62		—
Copper futures and swap contracts^c	6		6		—		5		1		—
Contingent consideration for the sales of TFHL
and onshore California oil and gas properties^a	76		76		—		—		76		—
Total	144		144		—		5		139		—

Contingent consideration for the sale of the
Deepwater GOM oil and gas properties^a	150		137		—		—		—		137

Total assets			$	521	$	80	$	43	$	261	$	137

Liabilities
Derivatives:^c
Embedded derivatives in provisional sales/
purchase contracts in a gross liability position	14		$	14	$	—	$	—	$	14	$	—
Copper forward contracts	4		4		—		3		1		—
Total	18		18		—		3		15		—

Long-term debt, including current portion^d	15,354		14,744		—		—		14,744		—

Total liabilities			$	14,762	$	—	$	3	$	14,759	$	—



	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^e	23		23		—		—		23		—

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

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


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 $34 million at June 30, 2017, and $28 million at December 31, 2016, and (ii) other assets of $122 million at both June 30, 2017, and December 31, 2016, primarily associated with an assurance bond to support PT-FI’s commitment for smelter development in Indonesia.


c.	Refer to Note 7 for further discussion and balance sheet classifications.


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


e.	Included in accounts payable and accrued liabilities.

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 six months of 2017 follows (in millions):



Fair value at January 1, 2017	$	135
Net unrealized gain related to assets still held at the end of the period	2
Fair value at June 30, 2017	$	137