Portions of our proxy statement for our 2020 annual meeting of stockholders are incorporated by reference into Part III (Items 10, 11, 12, 13 and 14) of this report.

Entity Central Index Key

0000831259

Current Fiscal Year End Date

--12-31

Document Fiscal Year Focus

2019

Document Fiscal Period Focus

FY

Amendment Flag

false

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions		3 Months Ended								12 Months Ended
	Dec. 18, 2019	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Revenues		$ 3,911	$ 3,153	$ 3,546	$ 3,792	$ 3,684	$ 4,908	$ 5,168	$ 4,868	$ 14,402	$ 18,628	$ 16,403
Cost of sales:
Production and delivery										11,514	11,687	10,258
Cost, Depreciation, Amortization and Depletion										1,412	1,754	1,714
Total cost of sales										13,105	13,445	11,980
Selling, general and administrative expenses										414	443	477
Exploration Expense										104	105	93
Environmental obligations and shutdown costs										105	89	244
Net gain on sales of assets						(82)	(70)	(45)	(11)	(417)	(208)	(81)
Total costs and expenses										13,311	13,874	12,713
Operating income		775	(38)	33	321	316	1,315	1,664	1,459	1,091	4,754	3,690
Interest expense, net										(620)	(945)	(801)
Net (loss) gain on early extinguishment of debt										(27)	7	21
Other (expense) income, net										(138)	76	(8)
Income from continuing operations before income taxes and equity in affiliated companies’ net earnings										306	3,892	2,902
Provision for (benefit from) income taxes										(510)	(991)	(883)
Equity in affiliated companies’ net earnings										12	8	10
Net (loss) income from continuing operations		42	(235)	(74)	75	374	668	1,039	828	(192)	2,909	2,029
Net income (loss) from discontinued operations		1	1	0	1	4	(4)	(4)	(11)	3	(15)	66
Net (loss) income		43	(234)	(74)	76	378	664	1,035	817	(189)	2,894	2,095
Net income from continuing operations attributable to noncontrolling interests										(50)	(292)	(274)
Net income attributable to noncontrolling interests: Discontinued Operations										0	0	(4)
Net (loss) income attributable to common stockholders		$ 9	$ (207)	$ (72)	$ 31	$ 485	$ 556	$ 869	$ 692	$ (239)	$ 2,602	$ 1,817
Basic net income (loss) per share attributable to common stockholders:
Income (Loss) from Continuing Operations, Per Basic Share						$ 0.33	$ 0.38	$ 0.60	$ 0.48	$ (0.17)	$ 1.80	$ 1.21
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic Share										0	(0.01)	0.04
Earnings per share, basic (in dollars per share)		$ 0	$ (0.15)	$ (0.05)	$ 0.02	0.33	0.38	0.60	0.47	(0.17)	1.79	1.25
Diluted net income (loss) per share attributable to common stockholders:
Income (Loss) from Continuing Operations, Per Diluted Share						0.33	0.38	0.59	0.48	(0.17)	1.79	1.21
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Diluted Share						0	0	0	(0.01)	0	(0.01)	0.04
Earnings Per Share, Diluted		$ 0	$ (0.15)	$ (0.05)	$ 0.02	$ 0.33	$ 0.38	$ 0.59	$ 0.47	$ (0.17)	$ 1.78	$ 1.25
Weighted Average Number of Shares Outstanding, Basic		1,452,000,000	1,452,000,000	1,451,000,000	1,451,000,000	1,450,000,000	1,450,000,000	1,449,000,000	1,449,000,000	1,451,000,000	1,449,000,000	1,447,000,000
Weighted Average Number of Shares Outstanding, Diluted		1,457,000,000	1,452,000,000	1,451,000,000	1,457,000,000	1,457,000,000	1,458,000,000	1,458,000,000	1,458,000,000	1,451,000,000	1,458,000,000	1,454,000,000
Dividends declared per share of common stock (in dollars per share)	$ 0.05									$ 0.20	$ 0.20	$ 0

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (189)	$ 2,894	$ 2,095
Other comprehensive income (loss), net of taxes:
Unrealized gains on securities	0	0	1
Defined benefit plans:
Actuarial (losses) gains arising during the period, net of taxes	(116)	(77)	14
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), after Tax	0	4	0
Amortization or curtailment of unrecognized amounts included in net periodic benefit costs	47	48	54
Foreign exchange gains (losses)	1	(1)	0
Other comprehensive (loss) income	(68)	(34)	69
Total comprehensive (loss) income	(257)	2,860	2,164
Total comprehensive income attributable to noncontrolling interests	(53)	(291)	(286)
Total comprehensive (loss) income attributable to common stockholders	$ (310)	$ 2,569	$ 1,878

CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Millions	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Millions	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Proceeds from (Payments to) Noncontrolling Interests	$ 165	$ 0	$ 0
Cash flow from operating activities:
Net (loss) income	(189)	2,894	2,095
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, depletion and amortization	1,412	1,754	1,714
Tax Cuts and Jobs Act of 2017, provisional income tax expense (benefit)	0	(123)	(393)
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount	0	(504)	0
Net gain on sales of assets	(417)	(208)	(81)
Stock-based compensation	63	76	71
Net charges for environmental and asset retirement obligations, including accretion	221	262	383
Payments for environmental and asset retirement obligations	244	239	131
Pension and Other Postretirement Benefits Expense (Reversal of Expense), Noncash	108	81	120
Payment for Pension and Other Postretirement Benefits	(75)	(75)	(174)
Net loss (gain) on early extinguishment of debt	27	(7)	(21)
Deferred income taxes	29	100	76
Loss on disposal of discontinued operations	3	(15)	57
Proceeds from Dividends Received			0
PT-FI Surface Water Tax, Withholding Tax and Environmental Matters, Expense	30	162	0
PT-FI Surface Water Tax, Withholding Tax and Environmental Matters, Payments	(67)	0	0
Other Operating Activities, Cash Flow Statement	141	12	(43)
Changes in working capital and other, excluding disposition amounts:
Accounts receivable	119	649	427
Inventories	259	(537)	(169)
Other current assets	60	(28)	(28)
Accounts payable and accrued liabilities	(60)	(106)	110
Accrued income taxes and timing of other tax payments	(29)	(634)	457
Net cash provided by operating activities	1,482	3,863	4,666
Cash flow from investing activities:
Capital expenditures	(2,652)	(1,971)	(1,410)
Acquisition of PT Rio Tinto Indonesia	0	(3,500)	0
Proceeds from sales of:
Other assets	109	93	72
Other, net	(12)	(97)	17
Net cash used in investing activities	(2,103)	(5,018)	(1,321)
Cash flow from financing activities:
Proceeds from debt	1,879	632	955
Repayments of debt	(3,197)	(2,717)	(3,812)
Proceeds from sale of PT-FI shares	0	3,500	0
Net proceeds from sale of common stock		3,500
Cash dividends and distributions paid:
Common stock	(291)	(218)	(2)
Noncontrolling interests	(82)	(278)	(174)
Other, net	(30)	(19)	(22)
Net cash (used in) provided by financing activities	(1,556)	900	(3,055)
Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents			290
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect	(2,177)	(255)	290
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	2,278	4,455	4,710
Metals inventory adjustments	179	4	8
PT Indonesia Papua Metal dan Mineral
Proceeds from sales of:
Proceeds from sales		457
Timok and a portion of Freeport Cobalt [Member]
Proceeds from sales of:
Proceeds from sales	452	0
North America copper mines
Cash flow from investing activities:
Capital expenditures	(877)	(601)	(167)
South America
Cash flow from investing activities:
Capital expenditures	(256)	(237)	(115)
Indonesia
Cash flow from investing activities:
Capital expenditures	(1,369)	(1,001)	(875)
Molybdenum mines
Cash flow from investing activities:
Capital expenditures	(19)	(9)	(5)
Other
Cash flow from investing activities:
Capital expenditures	(131)	(123)	(248)
PT-FI
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount	0	(504)	0
Cerro Verde Royalty Dispute
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Settlement expense	65	371	355
Payments for Legal Settlements	(187)	$ (56)	$ (53)
PT Smelting
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Proceeds from Dividends Received	$ 40

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 2,020	$ 4,217
Trade accounts receivable	741	829
Income and other tax receivables	426	493
Inventories:
Total materials and supplies, net	1,649	1,528
Mill and leach stockpiles	1,143	1,197
Product	1,281	1,778
Other current assets	655	422
Total current assets	7,915	10,464
Property, plant, equipment and mine development costs, net	29,584	28,010
Long-term mill and leach stockpiles	1,425	1,570
Other assets	1,885	2,172
Total assets	40,809	42,216
Current liabilities:
Accounts payable and accrued liabilities	2,576	2,625
Accrued income taxes	119	165
Current portion of environmental and asset retirement obligations	436	449
Dividends Payable, Current	73	73
Current portion of debt	5	17
Total current liabilities	3,209	3,329
Long-term debt, less current portion	9,821	11,124
Deferred income taxes	4,210	4,032
Environmental and asset retirement obligations, less current portion	3,630	3,609
Other liabilities	2,491	2,230
Total liabilities	23,361	24,324
Stockholders’ equity:
Common stock, par value $0.10, 1,582 shares and 1,579 shares issued, respectively	158	158
Capital in excess of par value	25,830	26,013
Accumulated deficit	(12,280)	(12,041)
Accumulated other comprehensive loss	(676)	(605)
Common stock held in treasury – 131 shares and 130 shares, respectively, at cost	(3,734)	(3,727)
Total stockholders’ equity	9,298	9,798
Noncontrolling interests	8,150	8,094
Total equity	17,448	17,892
Total liabilities and equity	$ 40,809	$ 42,216

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions	Dec. 31, 2019	Dec. 31, 2018
Stockholders’ equity:
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares issued (in shares)	1,582	1,579
Common stock hold in treasury (in shares)	131	130

CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Capital in Excess of Par Value	Accumulated Deficit	Accumulated Other Comprehensive Loss	Common Stock Held in Treasury	Total Stockholders’ Equity	Noncontrolling Interests
Balance (in shares) at Dec. 31, 2016		1,574				129
Balance at Dec. 31, 2016	$ 9,257	$ 157	$ 26,690	$ (16,540)	$ (548)	$ (3,708)	$ 6,051	$ 3,206
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercised and issued stock-based awards (in shares)		4
Exercised and issued stock-based awards	6	$ 1	5				6
Stock-based compensation, including tax benefit and the tender of shares	42		56			$ (15)	41	1
Stock-based compensation, including tax benefit and the tender of shares (in shares)						1
Dividends	(173)			1			1	(174)
Net loss attributable to common stockholders	1,817			1,817			1,817
Net income attributable to noncontrolling interests, including discontinued operations	278							278
Other comprehensive (loss) income	69				61		61	8
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	2,164
Balance (in shares) at Dec. 31, 2017		1,578				130
Balance at Dec. 31, 2017	11,296	$ 158	26,751	(14,722)	(487)	$ (3,723)	7,977	3,319
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercised and issued stock-based awards (in shares)		1
Exercised and issued stock-based awards	8		8				8
Stock-based compensation, including tax benefit and the tender of shares	66		70			$ (4)	66	0
Dividends	(569)		(291)				(291)	(278)
Net loss attributable to common stockholders	2,602			2,602			2,602
Net income attributable to noncontrolling interests, including discontinued operations	292							292
Other comprehensive (loss) income	(34)				(33)		(33)	(1)
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	2,860
Balance (in shares) at Dec. 31, 2018		1,579				130
Balance at Dec. 31, 2018	17,892	$ 158	26,013	(12,041)	(605)	$ (3,727)	9,798	8,094
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Noncontrolling Interest, Increase from Subsidiary Equity Issuance	4,231		(525)		(6)		(531)	4,762
Cumulative Effect of New Accounting Principle in Period of Adoption				79	(79)
Exercised and issued stock-based awards (in shares)		3
Exercised and issued stock-based awards	1		1				1
Stock-based compensation, including tax benefit and the tender of shares	44		50			$ (7)	43	1
Stock-based compensation, including tax benefit and the tender of shares (in shares)						1
Dividends	(364)		(291)				(291)	(73)
Changes in noncontrolling interests	(12)		(1)				(1)	(11)
Net loss attributable to common stockholders	(239)			(239)			(239)
Net income attributable to noncontrolling interests, including discontinued operations	50							50
Other comprehensive (loss) income	(68)				(71)		(71)	3
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	(257)
Balance (in shares) at Dec. 31, 2019		1,582				131
Balance at Dec. 31, 2019	17,448	$ 158	25,830	$ (12,280)	$ (676)	$ (3,734)	9,298	8,150
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustments to Additional Paid in Capital, Other	(22)		(22)				(22)
Proceeds from (Payments to) Noncontrolling Interests	$ 166		$ 80				$ 80	$ 86

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Notes)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation. The consolidated financial statements of Freeport-McMoRan Inc. (FCX) include the accounts of those subsidiaries where it directly or indirectly has more than 50 percent of the voting rights and/or has control over the subsidiary. As of December 31, 2019, the most significant entities that FCX consolidates include its 48.76 percent-owned subsidiary PT Freeport Indonesia (PT-FI), and the following wholly owned subsidiaries: Freeport Minerals Corporation (FMC) and Atlantic Copper, S.L.U. (Atlantic Copper). Refer to Notes 2 and 3 for further discussion, including FCX’s conclusion to consolidate PT-FI.

FCX’s unincorporated joint ventures are reflected using the proportionate consolidation method (refer to Note 3 for further discussion). Investments in unconsolidated companies owned 20 percent or more are recorded using the equity method. Investments in unconsolidated companies owned less than 20 percent, and for which FCX does not exercise significant influence, are recorded at (i) fair value for those that have a readily determinable fair value or (ii) cost, less any impairment, for those that do not have a readily determinable fair value. All significant intercompany transactions have been eliminated. Dollar amounts in tables are stated in millions, except per share amounts.

Business Segments. FCX has organized its mining operations into four primary divisions – North America copper mines, South America mining, Indonesia mining and Molybdenum mines, and operating segments that meet certain thresholds are reportable segments. FCX’s reportable segments include the Morenci, Bagdad, Cerro Verde and Grasberg (Indonesia mining) copper mines, the Rod & Refining operations and Atlantic Copper Smelting & Refining. Refer to Note 16 for further discussion.

Use of Estimates. The preparation of FCX’s financial statements in conformity with accounting principles generally accepted in the United States (U.S.) requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates include minerals reserve estimation; asset lives for depreciation, depletion and amortization; environmental obligations; asset retirement obligations; estimates of recoverable copper in mill and leach stockpiles; deferred taxes and valuation allowances; reserves for contingencies and litigation; asset acquisitions and impairment, including estimates used to derive future cash flows associated with those assets; pension benefits; and valuation of derivative instruments. Actual results could differ from those estimates.

Functional Currency. The functional currency for the majority of FCX’s foreign operations is the U.S. dollar. For foreign subsidiaries whose functional currency is the U.S. dollar, monetary assets and liabilities denominated in the local currency are translated at current exchange rates, and non-monetary assets and liabilities, such as inventories, property, plant, equipment and mine development costs, are translated at historical rates. Gains and losses resulting from translation of such account balances are included in other (expense) income, net, as are gains and losses from foreign currency transactions. Foreign currency gains (losses) totaled $24 million in 2019, $14 million in 2018 and $(5) million in 2017.

Cash Equivalents. Highly liquid investments purchased with maturities of three months or less are considered cash equivalents.

Restricted Cash and Restricted Cash Equivalents. FCX’s restricted cash and restricted cash equivalents are primarily related to PT-FI’s commitment for the development of a new smelter in Indonesia; and guarantees and commitments for certain mine closure and reclamation obligations, and customs duty taxes. Restricted cash and restricted cash equivalents are classified as a current or long-term asset based on the timing and nature of when or how the cash is expected to be used or when the restrictions are expected to lapse. Restricted cash and restricted cash equivalents are comprised of time deposits and money market funds.

Inventories. Inventories include materials and supplies, mill and leach stockpiles, and product inventories. Inventories are stated at the lower of weighted-average cost or net realizable value (NRV).

Mill and Leach Stockpiles. Mill and leach stockpiles are work-in-process inventories for FCX’s mining operations. Mill and leach stockpiles contain ore that has been extracted from an ore body and is available for metal recovery. Mill stockpiles contain sulfide ores, and recovery of metal is through milling, concentrating and smelting and refining or, alternatively, by concentrate leaching. Leach stockpiles contain oxide ores and certain secondary sulfide ores and recovery of metal is through exposure to acidic solutions that dissolve contained copper and deliver it in solution to extraction processing facilities (i.e., solution extraction and electrowinning (SX/EW)). The recorded cost of mill and leach stockpiles includes mining and haulage costs incurred to deliver ore to stockpiles, depreciation, depletion, amortization and site overhead costs. Material is removed from the stockpiles at a weighted-average cost per pound.

Because it is impracticable to determine copper contained in mill and leach stockpiles by physical count, reasonable estimation methods are employed. The quantity of material delivered to mill and leach stockpiles is based on surveyed volumes of mined material and daily production records. Sampling and assaying of blasthole cuttings determine the estimated copper grade of the material delivered to mill and leach stockpiles.

Expected copper recovery rates for mill stockpiles are determined by metallurgical testing. The recoverable copper in mill stockpiles, once entered into the production process, can be produced into copper concentrate almost immediately.

Expected copper recovery rates for leach stockpiles are determined using small-scale laboratory tests, small- to large-scale column testing (which simulates the production process), historical trends and other factors, including mineralogy of the ore and rock type. Total copper recovery in leach stockpiles can vary significantly from a low percentage to more than 90 percent depending on several variables, including processing methodology, processing variables, mineralogy and particle size of the rock. For newly placed material on active stockpiles, as much as 80 percent of the total copper recovery may occur during the first year, and the remaining copper may be recovered over many years.

Processes and recovery rates for mill and leach stockpiles are monitored regularly, and recovery rate estimates are adjusted periodically as additional information becomes available and as related technology changes. Adjustments to recovery rates will typically result in a future impact to the value of the material removed from the stockpiles at a revised weighted-average cost per pound of recoverable copper.

Product. Product inventories include raw materials, work-in-process and finished goods. Raw materials are primarily unprocessed concentrate at Atlantic Copper’s smelting and refining operations. Work-in-process inventories are primarily copper concentrate at various stages of conversion into anode and cathode at Atlantic Copper’s operations. Atlantic Copper’s in-process inventories are valued at the weighted-average cost of the material fed to the smelting and refining process plus in-process conversion costs. Finished goods for mining operations represent salable products (e.g., copper and molybdenum concentrate, copper anode, copper cathode, copper rod, copper wire, molybdenum oxide, and high-purity molybdenum chemicals and other metallurgical products). Finished goods are valued based on the weighted-average cost of source material plus applicable conversion costs relating to associated process facilities. Costs of finished goods and work-in-process (i.e., not raw materials) inventories include labor and benefits, supplies, energy, depreciation, depletion, amortization, site overhead costs and other necessary costs associated with the extraction and processing of ore, such as mining, milling, smelting, leaching, SX/EW, refining, roasting and chemical processing. Corporate general and administrative costs are not included in inventory costs.

Property, Plant, Equipment and Mine Development Costs. Property, plant, equipment and mine development costs are carried at cost. Mineral exploration costs, as well as drilling and other costs incurred for the purpose of converting mineral resources to proven and probable reserves or identifying new mineral resources at development or production stage properties, are charged to expense as incurred. Development costs are capitalized beginning after proven and probable mineral reserves have been established. Development costs include costs incurred resulting from mine pre-production activities undertaken to gain access to proven and probable reserves, including shafts, adits, drifts, ramps, permanent excavations, infrastructure and removal of overburden. For underground mines certain costs related to panel development, such as undercutting and drawpoint development, are also capitalized as mine development costs until production reaches sustained design capacity for the mine. After reaching design capacity, the mine transitions to the production phase and panel development costs are allocated to inventory and then included as a component of cost of goods sold. Additionally, interest expense allocable to the cost of developing mining properties and to constructing new facilities is capitalized until assets are ready for their intended use.

Expenditures for replacements and improvements are capitalized. Costs related to periodic scheduled maintenance (i.e., turnarounds) are charged to expense as incurred. Depreciation for mining and milling life-of-mine assets, infrastructure and other common costs is determined using the unit-of-production (UOP) method based on total estimated recoverable proven and probable copper reserves (for primary copper mines) and proven and probable molybdenum reserves (for primary molybdenum mines). Development costs and acquisition costs for proven and probable mineral reserves that relate to a specific ore body are depreciated using the UOP method based on estimated recoverable proven and probable mineral reserves for the ore body benefited. Depreciation, depletion and amortization using the UOP method is recorded upon extraction of the recoverable copper or molybdenum from the ore body, at which time it is allocated to inventory cost and then included as a component of cost of goods sold. Other assets are depreciated on a straight-line basis over estimated useful lives for the related assets of up to 50 years for buildings and 3 to 50 years for machinery and equipment, and mobile equipment.

Included in property, plant, equipment and mine development costs is value beyond proven and probable mineral reserves (VBPP), primarily resulting from FCX’s acquisition of FMC in 2007. The concept of VBPP may be interpreted differently by different mining companies. FCX’s VBPP is attributable to (i) mineralized material, which includes measured and indicated amounts, that FCX believes could be brought into production with the establishment or modification of required permits and should market conditions and technical assessments warrant, (ii) inferred mineral resources and (iii) exploration potential.

Carrying amounts assigned to VBPP are not charged to expense until the VBPP becomes associated with additional proven and probable mineral reserves and the reserves are produced or the VBPP is determined to be impaired. Additions to proven and probable mineral reserves for properties with VBPP will carry with them the value assigned to VBPP at the date acquired, less any impairment amounts. Refer to Note 5 for further discussion.

Impairment of Long-Lived Mining Assets. FCX assesses the carrying values of its long-lived mining assets for impairment when events or changes in circumstances indicate that the related carrying amounts of such assets may not be recoverable. In evaluating long-lived mining assets for recoverability, estimates of pre-tax undiscounted future cash flows of FCX’s individual mines are used. An impairment is considered to exist if total estimated undiscounted future cash flows are less than the carrying amount of the asset. Once it is determined that an impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. The estimated undiscounted cash flows used to assess recoverability of long-lived assets and to measure the fair value of FCX’s mining operations are derived from current business plans, which are developed using near-term price forecasts reflective of the current price environment and management’s projections for long-term average metal prices. In addition to near- and long-term metal price assumptions, other key assumptions include estimates of commodity-based and other input costs; proven and probable mineral reserves estimates, including the timing and cost to develop and produce the reserves; VBPP estimates; and the use of appropriate discount rates in the measurement of fair value. FCX believes its estimates and models used to determine fair value are similar to what a market participant would use. As quoted market prices are unavailable for FCX’s individual mining operations, fair value is determined through the use of after-tax discounted estimated future cash flows (i.e., Level 3 measurement).

Deferred Mining Costs. Stripping costs (i.e., the costs of removing overburden and waste material to access mineral deposits) incurred during the production phase of an open-pit mine are considered variable production costs and are included as a component of inventory produced during the period in which stripping costs are incurred. Major development expenditures, including stripping costs to prepare unique and identifiable areas outside the current mining area for future production that are considered to be pre-production mine development, are capitalized and amortized using the UOP method based on estimated recoverable proven and probable reserves for the ore body benefited. However, where a second or subsequent pit or major expansion is considered to be a continuation of existing mining activities, stripping costs are accounted for as a current production cost and a component of the associated inventory.

Environmental Obligations. Environmental expenditures are charged to expense or capitalized, depending upon their future economic benefits. Accruals for such expenditures are recorded when it is probable that obligations have been incurred and the costs can be reasonably estimated. Environmental obligations attributed to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) or analogous state programs are considered probable when a claim is asserted, or is probable of assertion, and FCX, or any of its subsidiaries, have been associated with the site. Other environmental remediation obligations are considered probable based on specific facts and circumstances. FCX’s estimates of these costs are based on an evaluation of various factors, including currently available facts, existing technology, presently enacted laws and regulations, remediation experience, whether or not FCX is a potentially responsible party (PRP) and the ability of other PRPs to pay their allocated portions. With the exception of those obligations assumed in the acquisition of FMC that were initially recorded at estimated fair values (refer to Note 12 for further discussion), environmental obligations are recorded on an undiscounted basis. Where the available information is sufficient to estimate the amount of the obligation, that estimate has been used. Where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range has been used. Possible recoveries of some of these costs from other parties are not recognized in the consolidated financial statements until they become probable. Legal costs associated with environmental remediation (such as fees to third-party legal firms for work relating to determining the extent and type of remedial actions and the allocation of costs among PRPs) are included as part of the estimated obligation.

Environmental obligations assumed in the acquisition of FMC, which were initially recorded at fair value and estimated on a discounted basis, are accreted to full value over time through charges to interest expense. Adjustments arising from changes in amounts and timing of estimated costs and settlements may result in increases and decreases in these obligations and are calculated in the same manner as they were initially estimated. Unless these adjustments qualify for capitalization, changes in environmental obligations are charged to operating income when they occur.

FCX performs a comprehensive review of its environmental obligations annually and also reviews changes in facts and circumstances associated with these obligations at least quarterly.

Asset Retirement Obligations. FCX records the fair value of estimated asset retirement obligations (AROs) associated with tangible long-lived assets in the period incurred. Retirement obligations associated with long-lived assets are those for which there is a legal obligation to settle under existing or enacted law, statute, written or oral contract or by legal construction. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to cost of sales. In addition, asset retirement costs (ARCs) are capitalized as part of the related asset’s carrying value and are depreciated over the asset’s respective useful life.

For mining operations, reclamation costs for disturbances are recognized as an ARO and as a related ARC in the period of the disturbance and depreciated primarily on a UOP basis. FCX’s AROs for mining operations consist primarily of costs associated with mine reclamation and closure activities. These activities, which are site specific, generally include costs for earthwork, revegetation, water treatment and demolition.

For oil and gas properties, the fair value of the legal obligation is recognized as an ARO and as a related ARC in the period in which the well is drilled or acquired and is amortized on a UOP basis together with other capitalized costs. Substantially all of FCX’s oil and gas leases require that, upon termination of economic production, the working interest owners plug and abandon non-producing wellbores; remove platforms, tanks, production equipment and flow lines; and restore the wellsite.

For non-operating properties without reserves, changes to the ARO are recorded in earnings.

At least annually, FCX reviews its ARO estimates for changes in the projected timing of certain reclamation and closure/restoration costs, changes in cost estimates and additional AROs incurred during the period. Refer to Note 12 for further discussion.

Revenue Recognition. FCX recognizes revenue for all of its products upon transfer of control in an amount that reflects the consideration it expects to receive in exchange for those products. Transfer of control is in accordance with the terms of customer contracts, which is generally upon shipment or delivery of the product. While payment terms vary by contract, terms generally include payment to be made within 30 days, but not longer than 60 days. Certain of FCX’s concentrate and cathode sales contracts also provide for provisional pricing, which is accounted for as an embedded derivative (refer to Note 14 for further discussion). For provisionally priced sales, 90 percent to 100 percent of the provisional payment is made upon shipment or within 20 days, and final balances are settled in a contractually specified future month (generally one to four months from the shipment date) based on quoted monthly average copper settlement prices on the London Metal Exchange (LME) or the Commodity Exchange Inc. (COMEX), a division of the New York Mercantile Exchange, and quoted monthly average London Bullion Market Association (LBMA) gold settlement prices.

FCX’s product revenues are also recorded net of treatment charges, royalties and export duties. Moreover, because a portion of the metals contained in copper concentrate is unrecoverable as a result of the smelting process, FCX’s revenues from concentrate sales are also recorded net of allowances based on the quantity and value of these unrecoverable metals. These allowances are a negotiated term of FCX’s contracts and vary by customer. Treatment and refining charges represent payments or price adjustments to smelters and refiners that are generally fixed. Refer to Note 16 for a summary of revenue by product type.

Gold sales are priced according to individual contract terms, generally the average LBMA gold settlement price for a specified month near the month of shipment.

The majority of FCX’s molybdenum sales are priced based on the average published Metals Week price, plus conversion premiums for products that undergo additional processing, such as ferromolybdenum and molybdenum chemical products, for the month prior to the month of shipment.

Stock-Based Compensation. Compensation costs for share-based payments to employees are measured at fair value and charged to expense over the requisite service period for awards that are expected to vest. The fair value of stock options is determined using the Black-Scholes-Merton option valuation model. The fair value for stock-settled restricted stock units (RSUs) is based on FCX’s stock price on the date of grant. Shares of common stock are issued at the vesting date for stock-settled RSUs. The fair value of performance share units (PSUs) are determined using FCX’s stock price and a Monte-Carlo simulation model. The fair value for liability-classified awards (i.e., cash-settled RSUs) is remeasured each reporting period using FCX’s stock price. FCX has elected to recognize compensation costs for stock option awards that vest over several years on a straight-line basis over the vesting period, and for RSUs on the graded-vesting method over the vesting period. Refer to Note 10 for further discussion.

Earnings Per Share. FCX calculates its basic net (loss) income per share of common stock under the two-class method and calculates its diluted net (loss) income per share of common stock using the more dilutive of the two-class method or the treasury-stock method. Basic net (loss) income per share of common stock was computed by dividing net (loss) income attributable to common stockholders (after deducting accumulated dividends and undistributed earnings to participating securities) by the weighted-average shares of common stock outstanding during the year. Diluted net (loss) income per share of common stock was calculated by including the basic weighted-average shares of common stock outstanding adjusted for the effects of all potential dilutive shares of common stock, unless their effect would be anti-dilutive.

Reconciliations of net (loss) income and weighted-average shares of common stock outstanding for purposes of calculating basic and diluted net (loss) income per share for the years ended December 31 follow:



	2019				2018				2017
Net (loss) income from continuing operations	$	(192	)		$	2,909			$	2,029
Net income from continuing operations attributable to noncontrolling interests	(50		)		(292		)		(274		)
Accumulated dividends and undistributed earnings allocated to participating securities	(3		)		(4		)		(4		)
Net (loss) income from continuing operations attributable to common stockholders	(245		)		2,613				1,751

Net income (loss) from discontinued operations	3				(15		)		66
Net income from discontinued operations attributable to noncontrolling interests	—				—				(4		)
Net income (loss) from discontinued operations attributable to common stockholders	3				(15		)		62

Net (loss) income attributable to common stockholders	$	(242	)		$	2,598			$	1,813

Basic weighted-average shares of common stock outstanding (millions)	1,451				1,449				1,447
Add shares issuable upon exercise or vesting of dilutive stock options and RSUs (millions)	—			^a	9			^a	7
Diluted weighted-average shares of common stock outstanding (millions)	1,451				1,458				1,454

Basic net (loss) income per share attributable to common stockholders:
Continuing operations	$	(0.17	)		$	1.80			$	1.21
Discontinued operations	—				(0.01		)		0.04
	$	(0.17	)		$	1.79			$	1.25

Diluted net (loss) income per share attributable to common stockholders:
Continuing operations	$	(0.17	)		$	1.79			$	1.21
Discontinued operations	—				(0.01		)		0.04
	$	(0.17	)		$	1.78			$	1.25


a.	Excludes approximately 11 million shares of common stock in 2019 and 1 million in 2018 associated with outstanding stock options with exercise prices less than the average market price of FCX’s common stock and RSUs that were anti-dilutive.

Outstanding stock options with exercise prices greater than the average market price of FCX’s common stock during the year are excluded from the computation of diluted net (loss) income per share of common stock. Stock options for 42 million shares of common stock in 2019, 37 million shares in 2018 and 41 million shares in 2017 were excluded.

New Accounting Standards. Following is a discussion of new accounting standards.

Income Taxes. In December 2019, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. FCX adopted this ASU effective December 31, 2019, and the adoption of this ASU did not have a material impact on its consolidated financial statements.

Financial Instruments. In June 2016, FASB issued an ASU that requires entities to estimate all expected credit losses for most financial assets held at the reporting date based on an expected loss model, which requires consideration of historical experience, current conditions, and reasonable and supportable forecasts. This ASU also requires enhanced disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. FCX adopted this ASU effective January 1, 2020, and the adoption of this ASU did not have a material impact on its consolidated financial statements.

Leases. In February 2016, FASB issued an ASU that requires lessees to recognize most leases on the balance sheet. FCX adopted this ASU effective January 1, 2019, and elected the practical expedients allowing it to (i) apply the provisions of the updated lease guidance at the effective date, without adjusting the comparative periods presented and (ii) not reassess lease contracts, lease classification and initial direct costs of leases existing at adoption. FCX also elected an accounting policy to not recognize a lease asset and liability for leases with a term of 12 months or less and a purchase option that is not expected to be exercised. Nearly all of FCX’s leases were considered operating leases under the new ASU. Adoption of this ASU resulted in the recognition of $243 million in lease right-of-use assets and lease liabilities as of January 1, 2019.

Reclassifications. For comparative purposes, certain prior year amounts have been reclassified to conform with the current year presentation. The reclassifications relate to a change in methodology for determining current leach stockpiles (refer to Note 4) and a revision to FCX’s presentation of business segments to include a new reportable segment (refer to Note 16).

DISPOSITIONS AND ACQUISITIONS DISPOSITIONS AND ACQUISITIONS

12 Months Ended

Dec. 31, 2019

Dispositions And Acquisitions [Abstract]

DISPOSITIONS AND ACQUISITIONS

DISPOSITIONS

PT-FI Divestment. On December 21, 2018, FCX completed the transaction with the Indonesia government regarding PT-FI’s long-term mining rights and share ownership.

Pursuant to the previously announced divestment agreement and related documents, PT Indonesia Asahan Aluminium (Persero) (PT Inalum), an Indonesia state-owned enterprise, acquired for cash consideration of $3.85 billion all of Rio Tinto plc's (Rio Tinto) interests associated with its joint venture with PT-FI (the former Rio Tinto Joint Venture) and 100 percent of FCX's interests in PT Indonesia Papua Metal Dan Mineral (PTI - formerly known as PT Indocopper Investama), which at the time owned 9.36 percent of PT-FI. Of the $3.85 billion in cash consideration, Rio Tinto received $3.5 billion and FCX received $350 million. In addition, Rio Tinto paid FCX $107 million for its share of the 2018 joint venture cash flows.

In connection with the transaction, an aggregate 40 percent share ownership in PT-FI was issued to PT Inalum and PTI (which is expected to be owned by PT Inalum and the provincial/regional government in Papua). Based on a subscription of PT Inalum’s rights to acquire for cash consideration of $3.5 billion all of Rio Tinto’s interests in the former Rio Tinto Joint Venture, PT-FI acquired all of the common stock of the entity (PT Rio Tinto Indonesia) that held Rio Tinto’s interest. After the transaction, PT Inalum’s (26.24 percent) and PTI’s (25.00 percent) collective share ownership of PT-FI totals 51.24 percent and FCX's share ownership totals 48.76 percent. The arrangements provide for FCX and the other pre-transaction PT-FI shareholders (i.e., PT Inalum and PTI) to retain the economics of the revenue and cost sharing arrangements under the former Rio Tinto Joint Venture. As a result, FCX’s economic interest in PT-FI is expected to approximate 81 percent from 2019 through 2022.

The divestment agreement provides that FCX will indemnify PT Inalum and PTI from any losses (reduced by receipts) arising from any tax disputes of PT-FI disclosed to PT Inalum in a Jakarta, Indonesia tax court letter limited to PTI’s respective percentage share at the time the loss is finally incurred. Any net obligations arising from any tax settlement would be paid on December 21, 2025. As of December 31, 2019, FCX had accrued $33 million (included in other liabilities in the consolidated balance sheet at December 31, 2019) related to this indemnification.

FCX, PT-FI, PTI and PT Inalum entered into a shareholders agreement (the PT-FI Shareholders Agreement), which includes provisions related to the governance and management of PT-FI. FCX considered the terms of the PT-FI Shareholders Agreement and related governance structure, including whether PT Inalum has substantive participating rights, and concluded that it has retained control and would continue to consolidate PT-FI in its financial statements following the transaction. Among other terms, the governance arrangements under the PT-FI Shareholders Agreement transfers control over the management of PT-FI’s mining operations to an operating committee, which is controlled by FCX. Additionally, as discussed above, the existing PT-FI shareholders will retain the economics of the revenue and cost sharing arrangements under the former Rio Tinto Joint Venture, so that FCX’s economic interest in the project through 2041 will not be significantly affected by the transaction. FCX believes its conclusion to continue to consolidate PT-FI in its financial statements is in accordance with the U.S. Securities and Exchange Commission Regulation S-X, Rule 3A-02 (a), which provides for situations in which consolidation of an entity, notwithstanding the lack of majority ownership, is necessary to present fairly the financial position and results of operations of the registrant, because of the existence of a parent-subsidiary relationship by means other than record ownership of voting stock.

FCX also analyzed PT-FI’s acquisition of the Rio Tinto Joint Venture interests and concluded the transaction should be accounted for as an asset acquisition as substantially all of the fair value of the gross assets acquired is concentrated in mineral reserves and related long-lived mining assets. The acquisition was a single asset because substantially all of the acquired assets are linked to each other and cannot be physically removed without causing a significant diminution to the fair value of the other assets. PT-FI allocated the $3.5 billion purchase price to the assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. The fair value estimates were based on, but not limited to, long-term metal price assumptions of $3.00 per pound of copper and $1,300 per ounce of gold; expected future cash flows based on estimated reserve quantities; costs to produce and develop the related reserves; current replacement cost for similar capacity for certain fixed assets; and appropriate discount rates using an estimated international cost of capital of 14 percent. The estimates were primarily based on significant inputs not observable in the market (as discussed above) and thus represent Level 3 measurements.

The following table summarizes the allocation of the purchase price:



Current assets	$	25
Property, plant, equipment and mine development costs:
Mineral reserves	3,056
Mine development, infrastructure and other	1,559
Liabilities other than taxes	(77		)
Deferred income taxes, net	(1,063		)	^a
Total purchase price	$	3,500


a.	Deferred income taxes have been recognized on the fair value adjustments to net assets using an Indonesia corporate income tax rate of 25 percent.

Under applicable accounting guidance, changes in ownership that do not result in a change in control are accounted for as equity transactions with no impact on net income. The following table summarizes the consolidated impact of the transaction discussed above on FCX’s consolidated balance sheet as of December 21, 2018:



Cash	$	458
Other current assets	23
Property, plant, equipment and mine development costs:
Mineral reserves	3,056
Mine development, infrastructure and other	1,559
Liabilities other than taxes	(77		)
Deferred income taxes, net	(788		)
Noncontrolling interests	(4,762		)	^a
Capital in excess of par value	531


a.	Primarily reflects the approximate 40 percent economic interest in the former Rio Tinto Joint Venture for the period from 2023 through 2041, which was acquired by PTI and PT Inalum.

FCX considered if the adjustment to capital in excess of par value was an indicator of impairment and after considering other factors, such as PT-FI’s historical results and projected undiscounted cash flows, concluded that it did not indicate a potential impairment at PT-FI.

Attribution of PT-FI Net Income or Loss. FCX has concluded that the attribution of PT-FI’s net income or loss from December 21, 2018 (the date of the divestment transaction), through December 31, 2022 (the Initial Period), should be based on the economics replacement agreement, as previously discussed. The economics replacement agreement entitles FCX to approximately 81 percent of PT-FI dividends paid during the Initial Period, with the remaining 19 percent paid to the noncontrolling interests. PT-FI’s net loss for 2019 totaled $203 million, of which $165 million was attributed to FCX. PT-FI’s cumulative net loss since December 21, 2018, through December 31, 2019, totaled $339 million, of which $276 million was attributed to FCX.

The above-described attribution of PT-FI’s net income or loss applies only through the Initial Period. Beginning January 1, 2023, the attribution of PT-FI’s net income or loss will be based on equity ownership percentages (48.76 percent for FCX, 26.24 percent for PT Inalum and 25.00 percent for PTI). For all of its other partially owned consolidated subsidiaries, FCX attributes net income or loss based on equity ownership percentages.

Cobalt Business. In fourth-quarter 2019, FCX completed the sale of its cobalt refinery in Kokkola, Finland, and related cobalt cathode precursor business (consisting of approximately $271 million of assets and $63 million of liabilities at the time of closing) to Umicore for total cash consideration of approximately $200 million, including approximately $50 million of working capital. Under the terms of the agreement, FCX separated its cobalt business, and Umicore acquired the refinery and cathode precursor business. FCX and the current noncontrolling interest partners in Freeport Cobalt will retain the remaining cobalt business, which is a producer of cobalt fine powders, chemicals, catalysts, ceramics and pigments. Lundin Mining Corporation, one of the noncontrolling interest partners, received 30 percent of the proceeds from this transaction. FCX recorded a gain of $59 million in 2019 associated with this transaction.

Timok Transaction. In 2016, FCX sold an interest in the upper zone of the Timok exploration project in Serbia (the 2016 Transaction).

In December 2019, FCX completed the sale of its interest in the lower zone of the Timok exploration project to an affiliate of the purchaser in the 2016 Transaction, for cash consideration of $240 million at closing plus the right to future contingent payments of up to $150 million. These future contingent payments will be based on the future sale of products (as defined in the agreement) from the Timok lower zone. For a period of 12 months after the third anniversary of the initial sale of products from the Timok lower zone, the purchaser can settle, or FCX can demand payment of, such deferred payment obligation, in each case, for a total of $60 million. As these deferred payments are contingent upon future production (the Timok project is still in the exploration phase) and would result in gain recognition, no amounts were recorded upon the closing of the transaction. Subsequent recognition will be based on the gain contingency model, in which the consideration would be recorded in the period in which all contingencies are resolved and the gain is realized. This is expected to be when FCX (i) is provided periodic product sales information by the purchaser or (ii) gives notice to the purchaser or receives notice from the purchaser regarding the settlement of the deferred payments for $60 million. In addition, in lieu of such payment upon achievement of defined development milestones, the purchaser agreed to pay the $107 million contingent consideration provided for in the 2016 Transaction in three installment payments of $45 million by July 31, 2020, $50 million by December 31, 2021, and $12 million by March 31, 2022. As a result of this transaction, FCX recorded a gain of $343 million, consisting of the cash consideration ($240 million) and the aggregate discounted amount of the three installment payments ($103 million).

Oil and Gas Operations. In 2016, FCX sold the majority of its oil and gas assets held by its wholly owned subsidiary, FCX Oil & Gas LLC (FM O&G). In 2019, FM O&G sold certain property interests for cash consideration of $36 million (before closing adjustments), which resulted in the recognition of a gain of $20 million. In 2018, FM O&G disposed of certain property interests that resulted in the recognition of a gain of $27 million, primarily associated with the abandonment obligations that were assumed by the acquirer. In 2017, FM O&G sold certain property interests for cash consideration of $80 million (before closing adjustments), which resulted in the recognition of gains of $49 million.

TF Holdings Limited - Discontinued Operations. In November 2016, FCX completed the sale of its 70 percent interest in TF Holdings Limited (TFHL) to China Molybdenum Co., Ltd. for $2.65 billion in cash (before closing adjustments) and contingent consideration of up to $120 million in cash, consisting of $60 million if the average copper price exceeds $3.50 per pound and $60 million if the average cobalt price exceeds $20 per pound, both during the 24-month period ending December 31, 2019.

The contingent consideration was considered a derivative, and the fair value was adjusted through December 31, 2019. FCX realized and collected in January 2020 contingent consideration of $60 million because the average cobalt price exceeded $20 per pound during the 24-month period ending December 31, 2019 (no amount was realized associated with the copper price), and was included in other current assets in the consolidated balance sheet at December 31, 2019. The fair value of the contingent consideration derivative was $57 million at December 31, 2018 (included in other assets). Gains (losses) resulting from changes in the fair value of the contingent consideration derivative totaling $3 million in 2019, $(17) million in 2018 and $61 million in 2017 were included in net income (loss) from discontinued operations and primarily resulted from fluctuations in cobalt and copper prices.

In accordance with accounting guidance, FCX reported the results from TFHL as discontinued operations in the consolidated statements of operations because the disposal represented a strategic shift that had a major effect on operations. The consolidated statements of comprehensive (loss) income were not impacted by discontinued operations as TFHL did not have any other comprehensive income (loss), and the consolidated statements of cash flows are reported on a combined basis without separately presenting discontinued operations.

Net income (loss) from discontinued operations in the consolidated statements of operations consists of the following:



	Years Ended December 31,
	2019		2018			2017
Income before income taxes and net gain (loss) on disposal	$	—	$	—		$	13		^a
Net gain (loss) on disposal^b	3		(15		)	57
Net income (loss) before income taxes	3		(15		)	70
Provision for income taxes	—		—			(4		)
Net income (loss) from discontinued operations	$	3	$	(15	)	$	66


a.	In accordance with accounting guidance, reflects the recognition of intercompany sales.

b.

Primarily includes gains (losses) associated with the change in the fair value of contingent consideration.

OWNERSHIP IN SUBSIDIARIES AND JOINT VENTURES	12 Months Ended
OWNERSHIP IN SUBSIDIARIES AND JOINT VENTURES	Dec. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]
Ownership In Subsidiaries And Joint Ventures	OWNERSHIP IN SUBSIDIARIES AND JOINT VENTURES Ownership in Subsidiaries. FMC produces copper and molybdenum, with mines in North America and South America. At December 31, 2019, FMC’s operating mines in North America were Morenci, Bagdad, Safford, Sierrita and Miami located in Arizona; Tyrone and Chino located in New Mexico; and Henderson and Climax located in Colorado. FCX has a 72 percent interest in Morenci (refer to “Joint Ventures – Sumitomo and SMM Morenci, Inc.”) and owns 100 percent of the other North America mines. At December 31, 2019, operating mines in South America were Cerro Verde (53.56 percent owned) located in Peru and El Abra (51 percent owned) located in Chile. At December 31, 2019, FMC’s net assets totaled $14.5 billion and its accumulated deficit totaled $16.0 billion. FCX had no loans outstanding to FMC at December 31, 2019. FCX’s direct share ownership in PT-FI totaled 81.28 percent through December 21, 2018, and 48.76 percent thereafter. PTI owned 9.36 percent of PT-FI and FCX owned 100 percent of PTI through December 21, 2018. Refer to Note 2 for a discussion of the PT-FI divestment. Refer to “Joint Ventures - Former Rio Tinto Joint Venture” for discussion of PT-FI’s unincorporated joint venture. At December 31, 2019, PT-FI’s net assets totaled $10.4 billion and its retained earnings totaled $6.4 billion. FCX had $973 million in intercompany loans to PT-FI outstanding at December 31, 2019. FCX owns 100 percent of the outstanding Atlantic Copper common stock. At December 31, 2019, Atlantic Copper’s net assets totaled $38 million and its accumulated deficit totaled $411 million. FCX had $324 million in intercompany loans to Atlantic Copper outstanding at December 31, 2019. Joint Ventures. FCX has the following unincorporated joint ventures. Former Rio Tinto Joint Venture. On December 21, 2018, PT-FI acquired Rio Tinto’s interest in the joint venture and is consolidating 100 percent of the Indonesia operations (refer to Note 2 for discussion of the PT-FI divestment). Pursuant to Rio Tinto’s previous joint venture agreement with PT-FI, Rio Tinto had a 40 percent interest in certain assets and future production exceeding specified annual amounts of copper, gold and silver through 2022 in Block A of PT-FI’s former Contract of Work (COW), and, after 2022, a 40 percent interest in all production from Block A. Sumitomo and SMM Morenci, Inc. FMC owns a 72 percent undivided interest in Morenci via an unincorporated joint venture. The remaining 28 percent is owned by Sumitomo (15 percent) and SMM Morenci, Inc. (13 percent). Each partner takes in kind its share of Morenci’s production. FMC purchased 147 million pounds of Morenci’s copper cathode from Sumitomo and SMM Morenci, Inc. at market prices for $397 million during 2019. FMC had receivables from Sumitomo and SMM Morenci, Inc. totaling $19 million at December 31, 2019, and $13 million at December 31, 2018.

INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

12 Months Ended

Dec. 31, 2019

Inventory Disclosure [Abstract]

Inventories, Including Long-Term Mill And Leach Stockpiles

INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

The components of inventories follow:



	December 31,
	2019		2018
Current inventories:
Total materials and supplies, net^a	$	1,649	$	1,528

Mill stockpiles	$	220	$	282
Leach stockpiles	923		915		^b
Total current mill and leach stockpiles	$	1,143	$	1,197	^b

Raw materials (primarily concentrate)	$	318	$	260
Work-in-process	124		192
Finished goods	839		1,326
Total product	$	1,281	$	1,778

Long-term inventories:
Mill stockpiles	$	181	$	265
Leach stockpiles	1,244		1,305		^b
Total long-term mill and leach stockpiles^c	$	1,425	$	1,570	^b


a.	Materials and supplies inventory was net of obsolescence reserves totaling $24 million at December 31, 2019 and 2018.


b.	In fourth-quarter 2019, FCX changed its method of estimating the current portion of its leach stockpiles and revised its December 31, 2018, balances to conform with the new methodology resulting in a $256 million decrease in the current balance and a corresponding increase in the long-term balance.


c.	Estimated metals in stockpiles not expected to be recovered within the next 12 months.

FCX recorded charges to adjust metals inventory carrying values to NRV totaling $179 million in 2019, associated with molybdenum inventories ($84 million), cobalt inventories ($58 million) and copper inventories ($37 million), primarily because of lower market prices; $4 million in 2018; and $8 million in 2017. Refer to Note 16 for metals inventory adjustments by business segment.

PROPERTY, PLANT, EQUIPMENT AND MINING DEVELOPMENT COSTS, NET

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment, Net [Abstract]

Property, Plant, Equipment and Mining Development Costs, Net

PROPERTY, PLANT, EQUIPMENT AND MINE DEVELOPMENT COSTS, NET

The components of net property, plant, equipment and mine development costs follow:



	December 31,
	2019			2018
Proven and probable mineral reserves	$	7,087		$	7,089
VBPP	465			477
Mine development and other	8,180			8,195
Buildings and infrastructure	8,435			8,051
Machinery and equipment	13,312			12,985
Mobile equipment	4,320			4,010
Construction in progress	4,265			3,006
Oil and gas properties	27,293			27,292
Total	73,357			71,105
Accumulated depreciation, depletion, and amortization^a	(43,773		)	(43,095		)
Property, plant, equipment and mine development costs, net	$	29,584		$	28,010


a.	Includes accumulated amortization for oil and gas properties of $27.3 billion at December 31, 2019 and 2018.

FCX recorded $1.7 billion for VBPP in connection with the FMC acquisition in 2007 (excluding $544 million associated with mining operations that were subsequently sold) and transferred $811 million to proven and probable mineral reserves through 2019 (none in 2019 and $59 million in 2018). Cumulative impairments of and adjustments to VBPP total $497 million, which were primarily recorded in 2008.

Capitalized interest, which primarily related to FCX’s mining operations’ capital projects, totaled $149 million in 2019, $96 million in 2018 and $121 million in 2017.

During 2018 and 2019, FCX concluded there were no events or changes in circumstances that would indicate that the carrying amount of its long-lived mining assets might not be recoverable.

OTHER ASSETS

12 Months Ended

Dec. 31, 2019

Other Assets [Abstract]

Other Assets Disclosure

OTHER ASSETS

The components of other assets follow:



	December 31,
	2019		2018
Disputed tax assessments:^a
PT-FI	$	178	$	493
Cerro Verde	187		183
Long-term receivable for taxes^b	290		260
Intangible assets^c	402		398
Investments:
Assurance bond^d	157		126
PT Smelting^e	80		125
Fixed income, equity securities and other	66		65
Legally restricted funds^f	196		181
Contingent consideration associated with sales of assets^g	115		189
Timok transaction receivable (refer to Note 2)	58		—
Long-term employee receivables	22		20
Other	134		132
Total other assets	$	1,885	$	2,172


a.	Refer to Note 12 for further discussion.


b.	Includes tax overpayments and refunds not expected to be realized within the next 12 months (primarily associated with U.S. tax reform, refer to Note 11).


c.	Indefinite-lived intangible assets totaled $215 million at December 31, 2019 and 2018. Accumulated amortization of definite-lived intangible assets totaled $54 million at December 31, 2019, and $51 million at December 31, 2018.


d.	Relates to PT-FI’s commitment for the development of a new smelter in Indonesia (refer to Note 13 for further discussion).

e.

PT-FI’s 25 percent ownership in PT Smelting (smelter and refinery in Gresik, Indonesia) is recorded using the equity method. Amounts were reduced by unrecognized profits on sales from PT-FI to PT Smelting totaling $29 million at December 31, 2019, and $11 million at December 31, 2018. Trade accounts receivable from PT Smelting totaled $261 million at December 31, 2019, and $176 million at December 31, 2018.


f.	Includes $196 million at December 31, 2019, and $180 million at December 31, 2018, held in trusts for AROs related to properties in New Mexico (refer to Note 12 for further discussion).

g.

Refer to Note 15 for further discussion.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

12 Months Ended

Dec. 31, 2019

Accounts Payable and Accrued Liabilities, Current [Abstract]

Accounts Payable and Accrued Liabilities

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The components of accounts payable and accrued liabilities follow:



	December 31,
	2019		2018
Accounts payable	$	1,654	$	1,661
Salaries, wages and other compensation	249		273
Accrued interest^a	178		183
PT-FI contingencies^b	115		162
Legal matters	88		16
Accrued taxes, other than income taxes	79		109
Pension, postretirement, postemployment and other employee benefits^c	69		78
Leases^d	44		—
Other	100		143
Total accounts payable and accrued liabilities	$	2,576	$	2,625


a.	Third-party interest paid, net of capitalized interest, was $591 million in 2019, $500 million in 2018 and $565 million in 2017.


b.	Refer to Note 12 for further discussion.


c.	Refer to Note 9 for long-term portion.

d.

Refer to Note 13 for further discussion.

DEBT

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Debt

DEBT

FCX’s debt at December 31, 2019, included additions of $11 million ($58 million at December 31, 2018) for unamortized fair value adjustments, and is net of reductions of $66 million ($69 million at December 31, 2018) for unamortized net discounts and unamortized debt issuance costs. The components of debt follow:



	December 31,
	2019			2018
Revolving credit facility	$	—		$	—
Cerro Verde credit facility	826			1,023
Senior notes and debentures:
Issued by FCX:
3.100% Senior Notes due 2020	—			999
4.00% Senior Notes due 2021	194			597
3.55% Senior Notes due 2022	1,876			1,886
6.875% Senior Notes due 2023	—			768
3.875% Senior Notes due 2023	1,917			1,915
4.55% Senior Notes due 2024	846			845
5.00% Senior Notes due 2027	592			—
5.25% Senior Notes due 2029	592			—
5.40% Senior Notes due 2034	741			741
5.450% Senior Notes due 2043	1,844			1,843
Issued by FMC:
7¹/₈% Debentures due 2027	115			115
9½% Senior Notes due 2031	125			126
6¹/₈% Senior Notes due 2034	117			117
Other	41			166
Total debt	9,826			11,141
Less current portion of debt	(5		)	(17		)
Long-term debt	$	9,821		$	11,124

Revolving Credit Facility. At December 31, 2019, FCX had no borrowings outstanding and $13 million in letters of credit issued under its revolving credit facility, resulting in availability of approximately $3.5 billion, of which approximately $1.5 billion could be used for additional letters of credit. For PT-FI, $500 million of the revolving credit facility is available.

In May 2019, FCX, PT-FI and Freeport-McMoRan Oil & Gas LLC (FM O&G LLC) amended the $3.5 billion, five-year, unsecured revolving credit facility to extend $3.26 billion of the facility by one year to April 20, 2024, with the remaining $240 million maturing on April 20, 2023. In November 2019, the revolving credit facility was amended to allow flexibility during ongoing transition to underground mining at Grasberg. The November 2019 amendment modified (i) the total leverage ratio from 3.75x to 5.25x through June 30, 2021 and (ii) the calculation of the total debt component used to determine the total leverage ratio by adjusting the amount of unrestricted cash that may be applied to reduce the amount of total debt from $2.5 billion to $1.25 billion through June 30, 2021.

Interest on loans made under the new revolving credit facility is, at the option of FCX, determined based on the adjusted London Interbank Offered rate (LIBOR) or the alternate base rate (each as defined in the revolving credit facility) plus a spread to be determined by reference to FCX’s credit ratings.

Cerro Verde Credit Facility. In March 2014, Cerro Verde entered into a five-year, $1.8 billion senior unsecured credit facility that is nonrecourse to FCX and the other shareholders of Cerro Verde. In June 2017, Cerro Verde’s credit facility was amended (balance outstanding at the time of amendment was $1.275 billion) to increase the commitment by $225 million to $1.5 billion, to modify the amortization schedule and to extend the maturity date to June 19, 2022. The amended credit facility amortizes in four installments, with $225 million due on December 31, 2020 (which was fully prepaid during 2018), $225 million due on June 30, 2021 (which was fully prepaid during 2018), $525 million due on December 31, 2021 (of which $200 million was prepaid during 2019 and $20 million was prepaid during 2018), and the remaining balance due on the maturity date of June 19, 2022. All other terms, including the interest rates, remain the same. Interest under the term loan is based on LIBOR plus a spread based on Cerro Verde’s total net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio as defined in the agreement. The interest rate on Cerro Verde’s credit facility was 3.70 percent at December 31, 2019.

Cerro Verde Shareholder Loans. In December 2014, Cerro Verde entered into loan agreements with three of its shareholders for borrowings up to $800 million. No amounts were outstanding at December 31, 2019 and 2018, and availability under these agreements totals $200 million at December 31, 2019.

Senior Notes issued by FCX. In August 2019, FCX sold $600 million of 5.00% Senior Notes due 2027 and $600 million of 5.25% Senior Notes due 2029 for total net proceeds of $1.187 billion. Interest on these senior notes is payable semiannually on March 1 and September 1 of each year. FCX used the net proceeds from this offering to fund the make-whole redemption of all of its outstanding 6.875% Senior Notes due 2023, and the concurrent tender offers to purchase a portion of its 4.00% Senior Notes due 2021 and its 3.55% Senior Notes due 2022, and the payment of accrued and unpaid interest, premiums, fees and expenses in connection with these transactions.

The 4.00% Senior Notes due 2021 are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price. The 5.00% Senior Notes due 2027 are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price prior to September 1, 2022, and at specified redemption prices thereafter. The 5.25% Senior Notes due 2029 are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price prior to September 1, 2024, and at specified redemption prices thereafter. The senior notes listed below are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price prior to the dates stated below, and beginning on the dates stated below at 100 percent of principal.



Debt Instrument		Date
3.55% Senior Notes due 2022		December 1, 2021
3.875% Senior Notes due 2023		December 15, 2022
4.55% Senior Notes due 2024		August 14, 2024
5.40% Senior Notes due 2034		May 14, 2034
5.450% Senior Notes due 2043		September 15, 2042

These senior notes rank equally with FCX’s other existing and future unsecured and unsubordinated indebtedness.

Early Extinguishment of Debt. During 2019, 2018 and 2017, FCX redeemed in full or purchased a portion of the following senior notes.




	Principal Amount		Net Adjustments			Book Value		Redemption/Tender Value		Loss/(Gain)
Year Ended December 31, 2019
FCX 3.100% Senior Notes due 2020	$	1,000	$	(2	)	$	998	$	1,003	$	5
FCX 6.875% Senior Notes due 2023	728		34			762		768		6
FCX 4.00% Senior Notes due 2021	405		(2		)	403		418		15
FCX 3.55% Senior Notes due 2022	12		—			12		12		—
Total	$	2,145	$	30		$	2,175	$	2,201	$	26



Year Ended December 31, 2018
FCX 6.75% Senior Notes due 2022	$	404	$	22	$	426	$	418	$	(8	)
FM O&G LLC 6⁷/₈% Senior Notes due 2023	50		4		54		52		(2		)
Total	$	454	$	26	$	480	$	470	$	(10	)



Year Ended December 31, 2017
FCX 2.375% Senior Notes due 2018	$	74	$	—	$	74	$	74	$	—
FCX 6.125% Senior Notes due 2019	179		5		184		182		(2		)
FM O&G LLC 6.125% Senior Notes due 2019	58		2		60		59		(1		)
FCX 6½% Senior Notes due 2020	552		23		575		562		(13		)
FM O&G LLC 6½% Senior Notes due 2020	65		3		68		66		(2		)
FCX 6.625% Senior Notes due 2021	228		12		240		234		(6		)
FM O&G LLC 6.625% Senior Notes due 2021	33		2		35		34		(1		)
FM O&G LLC 6.750% Senior Notes due 2022	45		2		47		46		(1		)
Total	$	1,234	$	49	$	1,283	$	1,257	$	(26	)

In addition, FCX recorded net losses of $1 million in 2019, $3 million in 2018 and $5 million in 2017, primarily associated with Cerro Verde’s prepayments on its credit facility and the modification of Cerro Verde’s credit facility in 2017.

Guarantees. Refer to Note 17 for a discussion of FCX’s senior notes guaranteed by FM O&G LLC.

Restrictive Covenants. FCX’s revolving credit facility contains customary affirmative covenants and representations, and also contains a number of negative covenants that, among other things, restrict, subject to certain exceptions, the ability of FCX’s subsidiaries that are not borrowers or guarantors to incur additional indebtedness (including guarantee obligations) and FCX’s or its subsidiaries’ abilities to: create liens on assets; enter into sale and leaseback transactions; engage in mergers, liquidations and dissolutions; and sell assets. FCX’s revolving credit facility also contains financial ratios governing maximum total leverage and minimum interest expense coverage. FCX’s leverage ratio (ratio of total debt to consolidated EBITDA, as defined in the credit agreement) cannot exceed 5.25x during the quarterly periods ending December 31, 2019, through and including June 30, 2021, and cannot exceed 3.75x for the quarterly periods ending on or after September 30, 2021, and the minimum interest expense coverage ratio (ratio of consolidated EBITDA to consolidated cash interest expense, as defined in the credit agreement) is 2.25x. FCX’s senior notes contain limitations on liens. At December 31, 2019, FCX was in compliance with all of its covenants.

Maturities. Maturities of debt instruments based on the principal amounts and terms outstanding at December 31, 2019, total $12 million in 2020, $507 million in 2021, $2.4 billion in 2022, $1.9 billion in 2023, $850 million in 2024 and $4.2 billion thereafter.

OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS

12 Months Ended

Dec. 31, 2019

Other Liabilities, Including Employee Benefits [Abstract]

Other Liabilities

OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS

The components of other liabilities follow:



	December 31,
	2019		2018
Pension, postretirement, postemployment and other employment benefits^a	$	1,318	$	1,174
Cerro Verde royalty dispute	502		631
Provision for tax positions	255		230
Leases^b	204		—
Other	212		195
Total other liabilities	$	2,491	$	2,230


a.	Refer to Note 7 for current portion.


b.	Refer to Note 13 for further discussion.

Pension Plans. Following is a discussion of FCX’s pension plans.

FMC Plans. FMC has U.S. trusteed, non-contributory pension plans covering substantially all of its U.S. employees and some employees of its international subsidiaries hired before 2007. The applicable FMC plan design determines the manner in which benefits are calculated for any particular group of employees. Benefits are calculated based on final average monthly compensation and years of service or based on a fixed amount for each year of service. Non-bargained FMC employees hired after December 31, 2006, are not eligible to participate in the FMC U.S. pension plan.

FCX’s funding policy for these plans provides that contributions to pension trusts shall be at least equal to the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended, for U.S. plans; or, in the case of international plans, the minimum legal requirements that may be applicable in the various countries. Additional contributions also may be made from time to time.

FCX’s policy for determining asset-mix targets for the FMC plan assets held in a master trust (Master Trust) includes the periodic development of asset allocation studies and review of the liabilities to determine expected long-term rates of return and expected risk for various investment portfolios. FCX’s retirement plan administration and investment committee considers these studies in the formal establishment of asset-mix targets defined in the investment policy. FCX’s investment objective emphasizes diversification through both the allocation of the Master Trust assets among various asset classes and the selection of investment managers whose various styles are fundamentally complementary to one another and serve to achieve satisfactory rates of return. Diversification, by asset class and by investment manager, is FCX’s principal means of reducing volatility and exercising prudent investment judgment. FCX’s present target asset allocation approximates 42 percent equity investments (primarily global equities), 50 percent fixed income (primarily long-term treasury STRIPS or “separate trading or registered interest and principal securities”; long-term U.S. treasury/agency bonds; global fixed income securities; long-term, high-credit quality corporate bonds; high-yield and emerging markets fixed income securities; and fixed income debt securities) and 8 percent alternative investments (private real estate, real estate investment trusts and private equity).

The expected rate of return on plan assets is evaluated at least annually, taking into consideration asset allocation, historical and expected future performance on the types of assets held in the Master Trust, and the current economic environment. Based on these factors, FCX expects the pension assets will earn an average of 6.25 percent per annum beginning January 1, 2020, which was based on the target asset allocation and long-term capital market return expectations.

For estimation purposes, FCX assumes the long-term asset mix for these plans generally will be consistent with the current mix. Changes in the asset mix could impact the amount of recorded pension costs, the funded status of the plans and the need for future cash contributions. A lower-than-expected return on assets also would decrease plan assets and increase the amount of recorded pension costs in future years. When calculating the expected return on plan assets, FCX uses the market value of assets.

Among the assumptions used to estimate the pension benefit obligation is a discount rate used to calculate the present value of expected future benefit payments for service to date. The discount rate assumption for FCX’s U.S. plans is designed to reflect yields on high-quality, fixed-income investments for a given duration. The determination of the discount rate for these plans is based on expected future benefit payments for service to date together with the Mercer Pension Discount Curve - Above Mean Yield. The Mercer Pension Discount Curve - Above Mean Yield is constructed from the bonds in the Mercer Pension Discount Curve that have a yield higher than the regression mean yield curve. The Mercer Pension Discount Curve consists of spot (i.e., zero coupon) interest rates at one-half-year increments for each of the next 30 years and is developed based on pricing and yield information for high-quality corporate bonds. Changes in the discount rate are reflected in FCX’s benefit obligation and, therefore, in future pension costs.

SERP Plan. FCX has an unfunded Supplemental Executive Retirement Plan (SERP) for its chief executive officer. The SERP provides for retirement benefits payable in the form of a joint and survivor annuity, life annuity or an equivalent lump sum, which is determined on January 1 of the year in which the participant completed 25 years of credited service. The annuity will equal a percentage of the participant’s highest average compensation for any consecutive three-year period during the five years immediately preceding the completion of 25 years of credited service. The SERP benefit will be reduced by the value of all benefits from current and former retirement plans (qualified and nonqualified) sponsored by FCX, by FM Services Company, FCX’s wholly owned subsidiary, or by any predecessor employer (including FCX’s former parent company), except for benefits produced by accounts funded exclusively by deductions from the participant’s pay.

PT-FI Plan. PT-FI has a defined benefit pension plan denominated in Indonesia rupiah covering substantially all of its Indonesia national employees. PT-FI funds the plan and invests the assets in accordance with Indonesia pension guidelines. The pension obligation was valued at an exchange rate of 13,832 rupiah to one U.S. dollar on December 31, 2019, and 14,409 rupiah to one U.S. dollar on December 31, 2018. Indonesia labor laws require that companies provide a minimum level of benefits to employees upon employment termination based on the reason for termination and the employee’s years of service. PT-FI’s pension benefit obligation includes benefits determined in accordance with this law. PT-FI’s expected rate of return on plan assets is evaluated at least annually, taking into consideration its long-range estimated return for the plan based on the asset mix. Based on these factors, PT-FI expects its pension assets will earn an average of 7.75 percent per annum beginning January 1, 2020. The discount rate assumption for PT-FI’s plan is based on the Mercer Indonesia zero coupon bond yield curve derived from the Indonesia Government Security Yield Curve. Changes in the discount rate are reflected in PT-FI’s benefit obligation and, therefore, in future pension costs.

Plan Information. FCX uses a measurement date of December 31 for its plans. Information for those plans where the projected benefit obligations and the accumulated benefit obligations exceed the fair value of plan assets follows:



	December 31,
	2019		2018
Projected benefit obligation	$	2,522	$	2,177
Accumulated benefit obligation	2,361		2,048
Fair value of plan assets	1,615		1,373

Information on the FCX (FMC and SERP plans) and PT-FI plans as of December 31 follows:



	FCX						PT-FI
	2019			2018			2019			2018
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,230		$	2,343		$	220		$	240
Service cost	42			44			12			13
Interest cost	95			84			17			14
Actuarial losses (gains)	328			(124		)	(27		)	(19		)
Plan amendments	—			4			—			—
Foreign exchange losses (gains)	1			(1		)	8			(15		)
Benefits and administrative expenses paid	(120		)	(120		)	(13		)	(13		)
Benefit obligation at end of year	2,576			2,230			217			220

Change in plan assets:
Fair value of plan assets at beginning of year	1,433			1,588			238			269
Actual return on plan assets	289			(104		)	19			(5		)
Employer contributions^a	74			70			—			4
Foreign exchange gains (losses)	1			(1		)	10			(17		)
Benefits and administrative expenses paid	(120		)	(120		)	(13		)	(13		)
Fair value of plan assets at end of year	1,677			1,433			254			238
Funded status	$	(899	)	$	(797	)	$	37		$	18

Accumulated benefit obligation	$	2,414		$	2,101		$	175		$	181

Weighted-average assumptions used to determine benefit obligations:
Discount rate	3.40		%	4.40		%	7.25		%	8.25		%
Rate of compensation increase	3.25		%	3.25		%	4.00		%	4.00		%

Balance sheet classification of funded status:
Other assets	$	8		$	7		$	37		$	18
Accounts payable and accrued liabilities	(4		)	(4		)	—			—
Other liabilities	(903		)	(800		)	—			—
Total	$	(899	)	$	(797	)	$	37		$	18


a.	Employer contributions for 2020 are expected to approximate $132 million for the FCX plans and $2 million for the PT-FI plan (based on a December 31, 2019, exchange rate of 13,832 Indonesia rupiah to one U.S. dollar).

During 2019, the actuarial loss of $328 million for the FCX pension plans primarily resulted from the decrease in the discount rate from 4.40 percent to 3.40 percent. During 2018, the actuarial gain of $124 million for the FCX pension plans primarily resulted from the increase in the discount rate from 3.70 percent to 4.40 percent ($205 million), partially offset by new census data incorporated into the valuations ($33 million) and updated demographic assumptions ($49 million) mainly resulting from mortality updates.

During 2019, the actuarial gain of $27 million for the PT-FI pension plan primarily resulted from a change in estimated plan administration costs, partially offset by a decrease in the discount rate from 8.25 percent to 7.25 percent. During 2018, the actuarial gain of $19 million for the PT-FI pension plan primarily resulted from the increase in the discount rate from 6.75 percent to 8.25 percent and demographic experience gains.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s pension plans for the years ended December 31 follow:



	2019			2018			2017
Weighted-average assumptions:^a
Discount rate	4.40		%	3.70		%	4.40		%
Expected return on plan assets	6.50		%	6.50		%	7.00		%
Rate of compensation increase	3.25		%	3.25		%	3.25		%

Service cost	$	42		$	44		$	44
Interest cost	95			84			91
Expected return on plan assets	(90		)	(101		)	(93		)
Amortization of net actuarial losses	48			49			49
Net periodic benefit cost	$	95		$	76		$	91


a.	The assumptions shown relate only to the FMC plans.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for PT-FI’s pension plan for the years ended December 31 follow:



	2019			2018			2017
Weighted-average assumptions:
Discount rate	8.25		%	6.75		%	8.25		%
Expected return on plan assets	8.25		%	6.75		%	7.75		%
Rate of compensation increase	4.00		%	4.00		%	8.00		%

Service cost	$	12		$	13		$	20
Interest cost	17			14			23
Expected return on plan assets	(17		)	(19		)	(21		)
Amortization of prior service cost	1			2			2
Amortization of net actuarial gains	(1		)	(1		)	—
Curtailment loss	—			—			4
Net periodic benefit cost	$	12		$	9		$	28

The service cost component of net periodic benefit cost is included in operating income, and the other components are included in other (expense) income, net in the consolidated statements of operations.

Included in accumulated other comprehensive loss are the following amounts that have not been recognized in net periodic pension cost as of December 31:



	2019				2018
	Before Taxes		After Taxes and Noncontrolling Interests		Before Taxes		After Taxes and Noncontrolling Interests
Net actuarial losses	$	710	$	604	$	659	$	539
Prior service costs	11		6		13		8
	$	721	$	610	$	672	$	547

Plan assets are classified within a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1), then to significant observable inputs (Level 2) and the lowest priority to significant unobservable inputs (Level 3).

A summary of the fair value for pension plan assets, including those measured at net asset value (NAV) as a practical expedient, associated with the FCX plans follows:



	Fair Value at December 31, 2019
	Total			NAV		Level 1		Level 2		Level 3
Commingled/collective funds:
Global equity	$	425		$	425	$	—	$	—	$	—
Fixed income securities	239			239		—		—		—
U.S. small-cap equity	67			67		—		—		—
Real estate property	58			58		—		—		—
International small-cap equity	55			55		—		—		—
U.S. real estate securities	53			53		—		—		—
Short-term investments	16			16		—		—		—
Fixed income:
Government bonds	279			—		—		279		—
Corporate bonds	256			—		—		256		—
Global large-cap equity securities	107			—		107		—		—
Private equity investments	11			11		—		—		—
Other investments	64			—		14		50		—
Total investments	1,630			$	924	$	121	$	585	$	—

Cash and receivables	86
Payables	(39		)
Total pension plan net assets	$	1,677



	Fair Value at December 31, 2018
	Total			NAV		Level 1		Level 2		Level 3
Commingled/collective funds:
Global equity	$	291		$	291	$	—	$	—	$	—
Fixed income securities	144			144		—		—		—
Global fixed income securities	108			108		—		—		—
Emerging markets equity	71			71		—		—		—
Real estate property	55			55		—		—		—
U.S. small-cap equity	54			54		—		—		—
International small-cap equity	47			47		—		—		—
U.S. real estate securities	41			41		—		—		—
Short-term investments	15			15		—		—		—
Fixed income:
Government bonds	224			—		—		224		—
Corporate bonds	211			—		—		211		—
Global large-cap equity securities	94			—		94		—		—
Private equity investments	15			15		—		—		—
Other investments	61			—		16		45		—
Total investments	1,431			$	841	$	110	$	480	$	—

Cash and receivables	32
Payables	(30		)
Total pension plan net assets	$	1,433

Following is a description of the pension plan asset categories and the valuation techniques used to measure fair value. There have been no changes to the techniques used to measure fair value.

Commingled/collective funds are managed by several fund managers and are valued at the NAV per unit of the fund. For most of these funds, the majority of the underlying assets are actively traded securities. These funds (except the real estate property fund) require up to a 15-calendar-day notice for redemptions. The real estate property fund is valued at NAV using information from independent appraisal firms, who have knowledge and expertise about the current market values of real property in the same vicinity as the investments. Redemptions of the real estate property fund are allowed once per quarter, subject to available cash.

Fixed income investments include government and corporate bonds held directly by the Master Trust. Fixed income securities are valued using a bid-evaluation price or a mid-evaluation price and, as such, are classified within Level 2 of the fair value hierarchy. A bid-evaluation price is an estimated price at which a dealer would pay for a security. A mid-evaluation price is the average of the estimated price at which a dealer would sell a security and the estimated price at which a dealer would pay for a security. These evaluations are based on quoted prices, if available, or models that use observable inputs.

Common stocks included in global large-cap equity securities and preferred stocks included in other investments are valued at the closing price reported on the active market on which the individual securities are traded and, as such, are classified within Level 1 of the fair value hierarchy.

Private equity investments are valued at NAV using information from general partners and have inherent restrictions on redemptions that may affect the ability to sell the investments at their NAV in the near term.

A summary of the fair value hierarchy for pension plan assets associated with the PT-FI plan follows:



	Fair Value at December 31, 2019
	Total			Level 1		Level 2		Level 3
Government bonds	$	93		$	93	$	—	$	—
Common stocks	80			80		—		—
Mutual funds	17			17		—		—
Total investments	190			$	190	$	—	$	—

Cash and receivables^a	65
Payables	(1		)
Total pension plan net assets	$	254



	Fair Value at December 31, 2018
	Total			Level 1		Level 2		Level 3
Government bonds	$	72		$	72	$	—	$	—
Common stocks	72			72		—		—
Mutual funds	20			20		—		—
Total investments	164			$	164	$	—	$	—

Cash and receivables^a	75
Payables	(1		)
Total pension plan net assets	$	238


a.	Cash consists primarily of short-term time deposits.

Following is a description of the valuation techniques used for pension plan assets measured at fair value associated with the PT-FI plan. There have been no changes to the techniques used to measure fair value.

Government bonds, common stocks and mutual funds are valued at the closing price reported on the active market on which the individual securities are traded and, as such, are classified within Level 1 of the fair value hierarchy.

The techniques described above may produce a fair value calculation that may not be indicative of NRV or reflective of future fair values. Furthermore, while FCX believes its valuation techniques are appropriate and consistent with those used by other market participants, the use of different techniques or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The expected benefit payments for FCX’s and PT-FI’s pension plans follow:



	FCX		PT-FI^a
2020	$	120	$	12
2021	166		19
2022	127		22
2023	129		30
2024	131		32
2025 through 2029	679		155


a.	Based on a December 31, 2019, exchange rate of 13,832 Indonesia rupiah to one U.S. dollar.

Postretirement and Other Benefits. FCX also provides postretirement medical and life insurance benefits for certain U.S. employees and, in some cases, employees of certain international subsidiaries. These postretirement benefits vary among plans, and many plans require contributions from retirees. The expected cost of providing such postretirement benefits is accrued during the years employees render service.

The benefit obligation (funded status) for the postretirement medical and life insurance benefit plans consisted of a current portion of $13 million (included in accounts payable and accrued liabilities) and a long-term portion of $112 million (included in other liabilities) at December 31, 2019, and a current portion of $13 million and a long-term portion of $115 million at December 31, 2018. The discount rate used to determine the benefit obligation for these plans, which was determined on the same basis as FCX’s pension plans, was 3.00 percent at December 31, 2019, and 4.20 percent at December 31, 2018. Expected benefit payments for these plans total $13 million for 2020, $12 million for 2021, $11 million for 2022, $11 million for 2023, $10 million for 2024 and $42 million for 2025 through 2029.

The net periodic benefit cost charged to operations for FCX’s postretirement benefits (primarily for interest costs) totaled $4 million in 2019 and $5 million in each of 2018 and 2017. The discount rate used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s postretirement benefits was 4.20 percent in 2019, 3.50 percent in 2018 and 3.80 percent in 2017. The medical-care trend rates assumed the first year trend rate was 7.75 percent at December 31, 2019, which declines over the next 15 years with an ultimate trend rate of 4.25 percent.

FCX has a number of postemployment plans covering severance, long-term disability income, continuation of health and life insurance coverage for disabled employees or other welfare benefits. The accumulated postemployment benefit obligation consisted of a current portion of $7 million (included in accounts payable and accrued liabilities) and a long-term portion of $44 million (included in other liabilities) at December 31, 2019, and a current portion of $6 million and a long-term portion of $39 million at December 31, 2018.

FCX also sponsors savings plans for the majority of its U.S. employees. The plans allow employees to contribute a portion of their pre-tax income in accordance with specified guidelines. These savings plans are principally qualified 401(k) plans for all U.S. salaried and non-bargained hourly employees. In these plans, participants exercise control and direct the investment of their contributions and account balances among various investment options. FCX contributes to these plans at varying rates and matches a percentage of employee pre-tax deferral contributions up to certain limits, which vary by plan. For employees whose eligible compensation exceeds certain levels, FCX provides an unfunded defined contribution plan, which had a liability balance of $46 million at December 31, 2019, and $45 million at December 31, 2018, all of which was included in other liabilities.

The costs charged to operations for employee savings plans totaled $85 million in 2019, $75 million in 2018 and $65 million in 2017. FCX has other employee benefit plans, certain of which are related to FCX’s financial results, which are recognized in operating costs.

Restructuring Charges. As a result of the first-quarter 2017 regulatory restrictions and uncertainties regarding long-term investment stability, PT-FI took actions to adjust its cost structure, reduce its workforce and slow investments in its underground development projects and new smelter. These actions included workforce reductions through furlough and voluntary retirement programs. Following the furlough and voluntary retirement programs, a significant number of employees and contractors elected to participate in an illegal strike action beginning in May 2017, and were subsequently deemed to have voluntarily resigned under the existing Indonesia laws and regulations. As a result, PT-FI recorded charges in 2017 to production costs of $120 million, and selling, general and administrative costs of $5 million for employee severance and related costs, and a pension curtailment loss of $4 million in production costs.

Employee Benefits

OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS

The components of other liabilities follow:



	December 31,
	2019		2018
Pension, postretirement, postemployment and other employment benefits^a	$	1,318	$	1,174
Cerro Verde royalty dispute	502		631
Provision for tax positions	255		230
Leases^b	204		—
Other	212		195
Total other liabilities	$	2,491	$	2,230


a.	Refer to Note 7 for current portion.


b.	Refer to Note 13 for further discussion.