DOCUMENT AND ENTITY INFORMATION - USD ($) $ in Billions	12 Months Ended
DOCUMENT AND ENTITY INFORMATION - USD ($) $ in Billions	Dec. 31, 2018	Jan. 31, 2019	Jun. 30, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	FREEPORT-MCMORAN INC
Entity Central Index Key	0000831259
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 22.4
Entity Common Stock, Shares Outstanding		1,449,058,885
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Period End Date	Dec. 31, 2018

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Revenues	$ 3,684	$ 4,908	$ 5,168	$ 4,868	$ 5,041	$ 4,310	$ 3,711	$ 3,341	$ 18,628	$ 16,403	$ 14,830
Cost of sales:
Production and delivery									11,691	10,266	10,687
Cost, Depreciation, Amortization and Depletion									1,754	1,714	2,530
Impairment of Oil and Gas Properties									0	0	4,317
Total cost of sales									13,445	11,980	17,534
Selling, general and administrative expenses									443	477	597
Exploration Expense									105	93	63
Environmental obligations and shutdown costs									89	244	14
Net gain on sales of assets	(82)	(70)	(45)	(11)	(15)	(33)	(10)	(23)	(208)	(81)	(649)
Total costs and expenses									13,874	12,713	17,559
Operating income (loss)	316	1,315	1,664	1,459	1,479	928	686	597	4,754	3,690	(2,729)
Interest expense, net									(945)	(801)	(755)
Net gain on early extinguishment and exchanges of debt									7	21	26
Other income (expense), net									76	(8)	(14)
Income (loss) from continuing operations before income taxes and equity in affiliated companies’ net earnings									3,892	2,902	(3,472)
Provision for (benefit from) income taxes									(991)	(883)	(371)
Equity in affiliated companies’ net earnings									8	10	11
Net income (loss) from continuing operations	374	668	1,039	828	1,193	242	326	268	2,909	2,029	(3,832)
Net (loss) income from discontinued operations	4	(4)	(4)	(11)	16	3	9	38	(15)	66	(193)
Net income (loss)	378	664	1,035	817	1,209	245	335	306	2,894	2,095	(4,025)
Net income from continuing operations attributable to noncontrolling interests									(292)	(274)	(227)
Net income attributable to noncontrolling interests: Discontinued Operations					0	0	(1)	(3)	0	(4)	(63)
Gain on redemption and preferred dividends attributable to redeemable noncontrolling interest									0	0	161
Net income (loss) attributable to common stockholders	$ 485	$ 556	$ 869	$ 692	$ 1,041	$ 280	$ 268	$ 228	$ 2,602	$ 1,817	$ (4,154)
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	$ 0.71	$ 0.19	$ 0.18	$ 0.13	$ 1.80	$ 1.21	$ (2.96)
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share	0.00	0.00	0.00	(0.01)	0.01	0.00	0.00	0.03	(0.01)	0.04	(0.20)
Earnings Per Share, Basic	0.33	0.38	0.60	0.47	0.72	0.19	0.18	0.16	1.79	1.25	(3.16)
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	0.70	0.19	0.18	0.13	1.79	1.21	(2.96)
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Diluted Share	0.00	0.00	0.00	(0.01)	0.01	0.00	0.00	0.03	(0.01)	0.04	(0.20)
Earnings Per Share, Diluted	$ 0.33	$ 0.38	$ 0.59	$ 0.47	$ 0.71	$ 0.19	$ 0.18	$ 0.16	$ 1.78	$ 1.25	$ (3.16)
Weighted Average Number of Shares Outstanding, Basic	1,450,000,000	1,450,000,000	1,449,000,000	1,449,000,000	1,448,000,000	1,448,000,000	1,447,000,000	1,446,000,000	1,449,000,000	1,447,000,000	1,318,000,000
Weighted Average Number of Shares Outstanding, Diluted	1,457,000,000.00	1,458,000,000.00	1,458,000,000.00	1,458,000,000.00	1,455,000,000	1,454,000,000	1,453,000,000	1,454,000,000	1,458,000,000.00	1,454,000,000	1,318,000,000
Dividends declared per share of common stock (in dollars per share)									$ 0.2	$ 0	$ 0

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 2,894	$ 2,095	$ (4,025)
Other comprehensive income (loss), net of taxes:
Unrealized gains on securities	0	1	2
Defined benefit plans:
Actuarial (losses) gains arising during the period, net of taxes	77	(14)	88
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), after Tax	4	0	0
Amortization or curtailment of unrecognized amounts included in net periodic benefit costs	48	54	44
Foreign exchange losses	(1)	0	(1)
Other comprehensive (loss) income	(34)	69	(43)
Total comprehensive income (loss)	2,860	2,164	(4,068)
Total comprehensive income attributable to noncontrolling interests	(291)	(286)	(292)
Gain on redemption and preferred dividends attributable to noncontrolling interests	0	0	161
Total comprehensive income (loss) attributable to common stockholders	$ 2,569	$ 1,878	$ (4,199)

CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Millions	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Millions	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Cash flow from operating activities:
Net income (loss)	$ 2,894	$ 2,095	$ (4,025)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	1,754	1,714	2,610
Tax Cuts and Jobs Act of 2017, provisional income tax expense (benefit)	(123)	(393)	0
Litigation Settlement, Expense	371	355	0
Payments for Legal Settlements	(56)	(53)	(30)
Impairment of Oil and Gas Properties	0	0	4,317
Oil and gas noncash drillship settlement costs and other adjustments	0	(33)	803
Net gain on sales of assets	(208)	(81)	(649)
Stock-based compensation	76	71	86
Net charges for environmental and asset retirement obligations, including accretion	262	383	191
Payments for environmental and asset retirement obligations	239	131	242
Pension and Other Postretirement Benefits Expense (Reversal of Expense), Noncash	81	120	113
Payment for Pension and Other Postretirement Benefits	(75)	(174)	(57)
Net gain on early extinguishment and exchanges of debt	(7)	(21)	(26)
Deferred income taxes	(404)	76	239
Loss on disposal of discontinued operations	(15)	57	(198)
Decrease in long-term mill and leach stockpiles	94	224	10
Other Operating Activities, Cash Flow Statement	16	(2)	112
Changes in working capital and other tax payments, excluding disposition amounts:
Accounts receivable	649	427	(175)
Inventories	(631)	(393)	117
Other current assets	(28)	(28)	37
Accounts payable and accrued liabilities	(106)	110	(28)
Accrued income taxes and timing of other tax payments	(472)	457	136
Net cash provided by operating activities	3,863	4,666	3,737
Cash flow from investing activities:
Capital expenditures	(1,971)	(1,410)	(2,813)
Acquisition of PT Rio Tinto Indonesia	(3,500)	0	0
Proceeds from sales of:
Other assets	93	72	423
Other, net	(97)	17	11
Net cash (used in) provided by investing activities	(5,018)	(1,321)	3,553
Cash flow from financing activities:
Proceeds from debt	632	955	3,681
Repayments of debt	(2,717)	(3,812)	(7,625)
Proceeds from sale of PT Freeport Indonesia shares	3,500	0	0
Net proceeds from sale of common stock	0	0	1,515
Cash dividends and distributions paid:
Common stock	(218)	(2)	(6)
Noncontrolling interests, including redemption	(278)	(174)	(693)
Other, net	(19)	(22)	(38)
Net cash provided by (used in) financing activities	900	(3,055)	(3,166)
Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents			4,124
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect	(255)	290	4,124
Increase in cash and cash equivalents in assets held for sale	0	0	(45)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	4,455	4,710	4,420
PT Indonesia Papua Metal dan Mineral
Proceeds from sales of:
Proceeds from sales	457	0	0
Tenke Fungurume mine
Proceeds from sales of:
Proceeds from sales	0	0	2,664
Deepwater Gulf of Mexico and onshore California oil and gas properties
Proceeds from sales of:
Proceeds from sales	0	0	2,272
Morenci
Proceeds from sales of:
Proceeds from sales	0	0	996
North America copper mines
Cash flow from investing activities:
Capital expenditures	(601)	(167)	(102)
South America
Cash flow from investing activities:
Capital expenditures	(237)	(115)	(382)
Indonesia
Cash flow from investing activities:
Capital expenditures	(1,001)	(875)	(1,025)
Molybdenum mines
Cash flow from investing activities:
Capital expenditures	(9)	(5)	(2)
Other, including oil and gas operations
Cash flow from investing activities:
Capital expenditures	$ (123)	$ (248)	$ (1,302)

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 4,217	$ 4,526
Trade accounts receivable	829	1,322
Income and other tax receivables	493	343
Inventories:
Total materials and supplies, net	1,528	1,323
Mill and leach stockpiles	1,453	1,422
Product	1,778	1,404
Other current assets	422	286
Total current assets	10,720	10,626
Property, plant, equipment and mine development costs, net	28,010	22,994
Long-term mill and leach stockpiles	1,314	1,409
Other assets	2,172	2,273
Total assets	42,216	37,302
Current liabilities:
Accounts payable and accrued liabilities	2,625	2,497
Accrued income taxes	165	583
Current portion of environmental and asset retirement obligations	449	420
Dividends Payable, Current	73	0
Current portion of debt	17	1,414
Total current liabilities	3,329	4,914
Long-term debt, less current portion	11,124	11,815
Deferred income taxes	4,032	3,663
Environmental and asset retirement obligations, less current portion	3,609	3,602
Other liabilities	2,230	2,012
Total liabilities	24,324	26,006
Stockholders’ equity:
Common stock, par value $0.10, 1,579 shares and 1,578 shares issued, respectively	158	158
Capital in excess of par value	26,013	26,751
Accumulated deficit	(12,041)	(14,722)
Accumulated other comprehensive loss	(605)	(487)
Common stock held in treasury – 130 shares, at cost	(3,727)	(3,723)
Total stockholders’ equity	9,798	7,977
Noncontrolling interests	8,094	3,319
Total equity	17,892	11,296
Total liabilities and equity	$ 42,216	$ 37,302

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions	Dec. 31, 2018	Dec. 31, 2017
Stockholders’ equity:
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares issued (in shares)	1,579	1,578
Common stock hold in treasury (in shares)	130	129

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, 2015		1,374				128
Balance at Dec. 31, 2015	$ 12,044	$ 137	$ 24,283	$ (12,387)	$ (503)	$ (3,702)	$ 7,828	$ 4,216
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, New Issues		197
Issuance of common stock	2,366	$ 20	2,346				2,366
Exercised and issued stock-based awards (in shares)		3
Exercised and issued stock-based awards	0		0				0
Stock-based compensation, including tax benefit and the tender of shares	55		61			$ (6)	55	0
Stock-based compensation, including tax benefit and the tender of shares (in shares)						1
Dividends	(89)			1			1	(90)
Changes in noncontrolling interests	(6)		0				0	(6)
Sale of Candelaria and Ojos del Salado mines	(1,206)							(1,206)
Net loss attributable to common stockholders	(4,154)			(4,154)			(4,154)
Net income attributable to noncontrolling interests, including discontinued operations	290							290
Other comprehensive (loss) income	(43)				(45)		(45)	2
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	(4,068)
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
Tender of shares for stock based awards shares		0				0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercised and issued stock-based awards (in shares)		1				0
Exercised and issued stock-based awards	8	$ 0	8	0	0	$ 0	8	0
Stock-based compensation, including tax benefit and the tender of shares	66	0	70	0	0	$ (4)	66	0
Stock-based compensation, including tax benefit and the tender of shares (in shares)						0
Dividends	(569)	0	(291)	0	0	$ 0	(291)	(278)
Net loss attributable to common stockholders	2,602	0		2,602		0	2,602	0
Net income attributable to noncontrolling interests, including discontinued operations	(292)	0				0	0	(292)
Noncontrolling Interest, Change in Redemption Value			0	0	0
Other comprehensive (loss) income	(34)	$ 0	0		(33)	$ 0	(33)	(1)
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	2,860			0
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 Sale of Parent Equity Interest	4,231		(525)		(6)		(531)	$ 4,762
Adjustment to Additional Paid in Capital, Income Tax Effect from Share-based Compensation, Net			$ 0		0
Cumulative Effect of New Accounting Principle in Period of Adoption	$ 0			$ 79	$ (79)		$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Notes)

12 Months Ended

Dec. 31, 2018

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, 2018, 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.

During 2016, FCX completed sales of its Africa mining operation held by FMC and substantially all of its oil and gas operations. Refer to Note 2 for further discussion.

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 companies owned less than 20 percent, and for which FCX does not exercise significant influence, are recorded using the cost method. 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, 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 income, net, as are gains and losses from foreign currency transactions. Foreign currency gains (losses) totaled $14 million in 2018, $(5) million in 2017 and $32 million in 2016.

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; guarantees and commitments for certain mine closure and reclamation obligations, and customs duty taxes; and funds held as cash collateral for surety bonds related to plugging and abandonment obligations of certain oil and gas properties. 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, including, depending on the process, mining, haulage, milling, concentrating, smelting, leaching, solution extraction, 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. 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 of up to 40 years for buildings and three to 30 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).

Oil and Gas Properties. FCX follows the full cost method of accounting specified by the U.S. Securities and Exchange Commission’s (SEC) rules whereby all costs associated with oil and gas property acquisition, exploration and development activities are capitalized into a cost center on a country-by-country basis. Such costs include internal general and administrative costs, such as payroll and related benefits and costs directly attributable to employees engaged in acquisition, exploration and development activities. General and administrative costs associated with production, operations, marketing and general corporate activities are charged to expense as incurred. Capitalized costs, along with estimated future costs to develop proved reserves and asset retirement costs that are not already included in oil and gas properties, net of related salvage value, are amortized to expense under the UOP method using engineers’ estimates of the related, by-country proved oil and natural gas reserves.

The costs of unproved oil and gas properties were excluded from amortization until the properties were evaluated. Costs were transferred into the amortization base on an ongoing basis as the properties were evaluated and proved oil and natural gas reserves were established or if impairment was determined. Unproved oil and gas properties were assessed periodically, at least annually, to determine whether impairment had occurred. FCX assessed unproved oil and gas properties for impairment on an individual basis or as a group if properties were individually insignificant. The assessment considered the following factors, among others: intent to drill, remaining lease term, geological and geophysical evaluations, drilling results and activity, the assignment of proved reserves, the economic viability of development if proved reserves were assigned and other current market conditions. During any period in which these factors indicated an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs were transferred to the full cost pool and were then subject to amortization. Including amounts determined to be impaired, FCX transferred $4.9 billion of costs associated with unevaluated properties to the full cost pool in 2016. The transfer of costs into the amortization base involved a significant amount of judgment. Costs not subject to amortization consisted primarily of capitalized costs incurred for undeveloped acreage and wells in progress pending determination, together with capitalized interest for these projects. Following the completion of the sales of oil and gas properties discussed in Note 2, FCX had no unproved oil and gas properties in the consolidated balance sheets at December 31, 2018 or 2017. Interest costs totaling $7 million in 2016 were capitalized on oil and gas properties not subject to amortization and in the process of development.

Proceeds from the sale of oil and gas properties are accounted for as reductions to capitalized costs unless the reduction causes a significant change in proved reserves, which, absent other factors, is generally described as a 25 percent or greater change, and significantly alters the relationship between capitalized costs and proved reserves attributable to a cost center, in which case a gain or loss is recognized.

Impairment of Oil and Gas Properties. Under the SEC full cost accounting rules, FCX reviewed the carrying value of its oil and gas properties in the full cost pool for impairment each quarter on a country-by-country basis. Under these rules, capitalized costs of oil and gas properties (net of accumulated depreciation, depletion, amortization and impairment, and related deferred income taxes) for each cost center may not exceed a “ceiling” equal to:


•	the present value, discounted at 10 percent, of estimated future net cash flows from the related proved oil and natural gas reserves, net of estimated future income taxes; plus


•	the cost of the related unproved properties not being amortized; plus


•	the lower of cost or estimated fair value of the related unproved properties included in the costs being amortized (net of related tax effects).

These rules require that FCX price its future oil and gas production at the twelve-month average of the first-day-of-the-month historical reference prices as adjusted for location and quality differentials. FCX’s reference prices are West Texas Intermediate (WTI) for oil and the Henry Hub price for natural gas. Such prices are utilized except where different prices are fixed and determinable from applicable contracts for the remaining term of those contracts. The reserve estimates exclude the effect of any crude oil and natural gas derivatives FCX has in place. The estimated future net cash flows also exclude future cash outflows associated with settling asset retirement obligations included in the net book value of the oil and gas properties. The rules require an impairment if the capitalized costs exceed this “ceiling.”

In 2016, net capitalized costs with respect to FCX’s proved oil and gas properties exceeded the related ceiling test limitation; therefore, impairment charges of $4.3 billion were recorded primarily because of the lower twelve-month average of the first-day-of-the-month historical reference oil price and reserve revisions.

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 a 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 outside law 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. Effective January 1, 2018, FCX adopted the new revenue recognition accounting standard, which did not result in any financial statement impacts or changes to FCX’s revenue recognition policies or processes as revenue is primarily derived from arrangements in which the transfer of control coincides with the fulfillment of performance obligations.

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 stock appreciation rights (SARs), cash-settled RSUs and cash-settled PSUs) is remeasured each reporting period using the Black-Scholes-Merton option valuation model for SARs and FCX’s stock price for cash-settled RSUs and cash-settled PSUs. FCX has elected to recognize compensation costs for stock option awards and SARs that vest over several years on a straight-line basis over the vesting period, and for RSUs and cash-settled PSUs on the graded-vesting method over the vesting period. Refer to Note 10 for further discussion.

Earnings Per Share. FCX calculates its basic net income (loss) per share of common stock under the two-class method and calculates its diluted net income (loss) per share of common stock using the more dilutive of the two-class method or the treasury-stock method. Basic net income (loss) per share of common stock was computed by dividing net income (loss) 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 income (loss) 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 income (loss) and weighted-average shares of common stock outstanding for purposes of calculating basic and diluted net income (loss) per share for the years ended December 31 follow:



	2018				2017			2016
Net income (loss) from continuing operations	$	2,909			$	2,029		$	(3,832	)
Net income from continuing operations attributable to noncontrolling interests	(292		)		(274		)	(227		)
Gain on redemption and preferred dividends attributable to redeemable noncontrolling interest	—				—			161
Accumulated dividends and undistributed earnings allocated to participating securities	(4		)		(4		)	(3		)
Net income (loss) from continuing operations attributable to common stockholders	2,613				1,751			(3,901		)

Net (loss) income from discontinued operations	(15		)		66			(193		)
Net income from discontinued operations attributable to noncontrolling interests	—				(4		)	(63		)
Net (loss) income from discontinued operations attributable to common stockholders	(15		)		62			(256		)

Net income (loss) attributable to common stockholders	$	2,598			$	1,813		$	(4,157	)

Basic weighted-average shares of common stock outstanding (millions)	1,449				1,447			1,318
Add shares issuable upon exercise or vesting of dilutive stock options and RSUs (millions)	9			^a	7			—			^a
Diluted weighted-average shares of common stock outstanding (millions)	1,458				1,454			1,318

Basic net income (loss) per share attributable to common stockholders:
Continuing operations	$	1.80			$	1.21		$	(2.96	)
Discontinued operations	(0.01		)		0.04			(0.20		)
	$	1.79			$	1.25		$	(3.16	)

Diluted net income (loss) per share attributable to common stockholders:
Continuing operations	$	1.79			$	1.21		$	(2.96	)
Discontinued operations	(0.01		)		0.04			(0.20		)
	$	1.78			$	1.25		$	(3.16	)


a.	Excludes approximately 1 million in 2018 and 12 million in 2016 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 income (loss) per share of common stock. Stock options for 37 million shares of common stock were excluded in 2018, 41 million in 2017 and 46 million in 2016.

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

Revenue Recognition. In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) related to revenue recognition. FCX adopted this standard effective January 1, 2018, under the modified retrospective approach applied to contracts that remain in force at the adoption date. The adoption of this standard did not result in any financial statement impacts or changes to FCX’s revenue recognition policies or processes as revenue is primarily derived from arrangements in which the transfer of control coincides with the fulfillment of performance obligations (refer to Revenue Recognition policy in this note). In connection with the adoption of the standard and consistent with FCX’s policy prior to adoption of the standard, FCX has elected to account for shipping and handling activities performed after control of goods has been transferred to a customer as a fulfillment cost recorded in production and delivery costs on the consolidated statements of operations.

Financial Instruments. In January 2016, FASB issued an ASU that amends the guidance on the classification and measurement of financial instruments. This ASU makes limited changes to prior guidance and amends certain disclosure requirements. FCX adopted this ASU effective January 1, 2018, and adoption did not have a material impact on its financial statements.

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. For public companies, this ASU is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. FCX is currently evaluating the impact this ASU will have on its financial statements.

Leases. In February 2016, FASB issued an ASU that will require lessees to recognize most leases on the balance sheet. FCX adopted this ASU effective January 1, 2019, and elected the practical expedient allowing it to apply the provisions of the updated lease guidance at the January 1, 2019, effective date, without adjusting the comparative periods presented. 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. FCX completed an assessment of its lease portfolio, implemented a new information technology system, and designed processes and controls to account for its leases in accordance with the new standard. FCX has concluded that the adoption of this ASU did not have a material impact on its financial statements. FCX will begin making the required lease disclosures under the ASU beginning with its March 31, 2019, quarterly report on Form 10-Q.

Statement of Cash Flows. In November 2016, FASB issued an ASU that changes the classification and presentation of restricted cash and restricted cash equivalents on the statement of cash flows. The ASU requires that a statement of cash flows include the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. FCX adopted this ASU effective January 1, 2018, and adjusted its consolidated statement of cash flows for the years ended December 31, 2017 and 2016, to include restricted cash and restricted cash equivalents with cash and cash equivalents.

The impact of adopting this ASU for the years ended December 31 follows:



	2017
	Previously Reported			Impact of Adoption			After Adoption^a
Accrued income taxes and changes in other tax payments included in cash flow from operating activities	$	473		$	(16	)	$	457
Net cash provided by operating activities	4,682			(16		)	4,666
Other, net included in cash flow from investing activities	(25		)	42			17
Net cash used in investing activities	(1,363		)	42			(1,321		)
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents	264			26			290
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year	4,245			158			4,403
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	4,447			184			4,631



	2016
	Previously Reported		Impact of Adoption		After Adoption^a
Other, net included in cash flow from operating activities	$	48	$	8	$	56
Net cash provided by operating activities	3,729		8		3,737
Other, net included in cash flow from investing activities	8		3		11
Net cash provided by investing activities	3,550		3		3,553
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents	4,113		11		4,124
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year	177		147		324
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	4,245		158		4,403


a.	Excludes the reclassification of assets held for sale and other adjustments to conform with the current year presentation.

Net Periodic Pension and Postretirement Benefit Cost. In March 2017, FASB issued an ASU that changes how entities with defined benefit pension or other postretirement benefit plans present net periodic benefit cost in the income statement. This ASU requires the service cost component of net periodic benefit cost to be presented in the same income statement line item or items as other compensation costs for those employees who are receiving the benefit. In addition, only the service cost component is eligible for capitalization when applicable (i.e., as a cost of inventory or an internally constructed asset). The other components of net periodic benefit cost are required to be presented separately from the service cost component and outside of operating income. These other components of net periodic benefit cost are not eligible for capitalization, and FCX elected to include these other components in other income (expense), net. FCX adopted this ASU effective January 1, 2018, and adjusted its presentation in the consolidated statements of operations for the years ended December 31, 2017 and 2016, to conform with the new guidance. The impact of adopting this ASU for the years ended December 31 follows:



	2017
	Previously Reported			Impact of Adoption			Current Presentation
Production and delivery	$	10,308	^a	$	(42	)	$	10,266
Total cost of sales	12,022			(42		)	11,980
Selling, general and administrative expenses	484			(7		)	477
Mining exploration and research expenses	94			(1		)	93
Environmental obligations and shutdown costs	251			(7		)	244
Total costs and expenses	12,770			(57		)	12,713
Operating income	3,633			57			3,690
Other income (expense), net	49			(57		)	(8		)



	2016
	Previously Reported				Impact of Adoption			Current Presentation
Production and delivery	$	10,733		^a	$	(46	)	$	10,687
Total cost of sales	17,580				(46		)	17,534
Selling, general and administrative expenses	607				(10		)	597
Mining exploration and research expenses	64				(1		)	63
Environmental obligations and shutdown costs	20				(6		)	14
Total costs and expenses	17,622				(63		)	17,559
Operating loss	(2,792		)		63			(2,729		)
Other income (expense), net	49				(63		)	(14		)


a.	Includes $8 million for metals inventory adjustments in 2017 and $36 million in 2016.

Tax Reform Reclassification. In February 2018, FASB issued an ASU that allows entities to elect to reclassify the stranded income tax effects caused by the December 2017 Tax Cuts and Jobs Act (the Act) in accumulated other comprehensive income (AOCI) to retained earnings. This election applies to the U.S. federal income tax rate change from 35 percent to 21 percent. FCX elected to early adopt this standard effective July 1, 2018, which resulted in a one-time reclassification totaling $79 million from AOCI to retained earnings in third-quarter 2018. FCX has not elected to reclassify other “indirect” income tax effects of the Act stranded in AOCI. Any additional income tax effects stranded in AOCI will continue to pass through earnings in future periods as specific classes of AOCI items are reversed.

Fair Value Measurement. In August 2018, FASB issued an ASU in connection with the disclosure framework project that modifies the disclosure requirements on fair value measurements. FCX early adopted this ASU in third-quarter 2018, which did not have a material impact on its financial statements.

Defined Benefit Plans. In August 2018, FASB issued an ASU in connection with the disclosure framework project that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. FCX early adopted this ASU in fourth-quarter 2018, which did not have a material impact on its financial statements.

Reclassifications. As a result of adopting new accounting standards in 2018 (refer to New Accounting Standards in this Note) and the reclassification of assets held for sale (refer to Note 2), certain prior year amounts have been reclassified to conform with the current year presentation.

DISPOSITIONS AND ACQUISITIONS DISPOSITIONS AND ACQUISITIONS

12 Months Ended

Dec. 31, 2018

Dispositions And Acquisitions [Abstract]

DISPOSITIONS AND ACQUISITIONS

DISPOSITIONS

PT-FI Divestment. On December 21, 2018, FCX completed the transaction with the Indonesian 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 Indonesian 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.

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 SEC 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.

TF Holdings Limited - Discontinued Operations. On November 16, 2016, FCX completed the sale of its 70 percent interest in TF Holdings Limited (TFHL) to China Molybdenum Co., Ltd. (CMOC) 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 beginning January 1, 2018. One-half of the proceeds from this transaction was used to repay borrowings under FCX’s unsecured bank term loan.

The contingent consideration is considered a derivative, and the fair value will be adjusted through December 31, 2019. The fair value of the contingent consideration derivative (included in other assets in the consolidated balance sheets) was $57 million at December 31, 2018, and $74 million at December 31, 2017. (Losses) gains resulting from changes in the fair value of the contingent consideration derivative ($(17) million in 2018, $61 million in 2017 and $13 million in 2016) are included in net (loss) income from discontinued operations and primarily resulted from fluctuations in cobalt and copper prices. Future changes in the fair value of the contingent consideration derivative will continue to be recorded in discontinued operations.

In accordance with accounting guidance, FCX reported the results of operations of TFHL as discontinued operations in the consolidated statements of operations because the disposal represents a strategic shift that had a major effect on operations. The consolidated statements of comprehensive income (loss) 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 (loss) income from discontinued operations in the consolidated statements of operations consists of the following:



	Years Ended December 31,
	2018				2017				2016
Revenues^a	$	—			$	13			$	959
Costs and expenses:
Production and delivery costs	—				—				833
Depreciation, depletion and amortization	—				—				80			^b
Interest expense allocated from parent	—				—				39			^c
Other costs and expenses, net	—				—				10
Income (loss) before income taxes and net (loss) gain on disposal	—				13				(3		)
Net (loss) gain on disposal	(15		)	^d	57			^d	(198		)	^e
Net (loss) income before income taxes	(15		)		70				(201		)
(Provision for) benefit from income taxes	—				(4		)		8
Net (loss) income from discontinued operations	$	(15	)		$	66			$	(193	)


a.	In accordance with accounting guidance, amounts are net of recognition (eliminations) of intercompany sales totaling $13 million in 2017 and $(157) million in 2016.


b.	In accordance with accounting guidance, depreciation, depletion and amortization was suspended subsequent to classification as assets held for sale, which occurred in May 2016.


c.	In accordance with accounting guidance, interest associated with FCX’s unsecured bank term loan that was required to be repaid as a result of the sale of TFHL has been allocated to discontinued operations.


d.	Includes a (loss) gain of $(17) million in 2018 and $61 million in 2017 associated with the change in the fair value of contingent consideration.


e.	Includes a charge of $33 million associated with the settlement agreement entered into with Gécamines, partly offset by a gain of $13 million for the fair value of contingent consideration.

Cash flows from discontinued operations included in the consolidated statements of cash flows for the year ended December 31, 2016, follow:




Net cash provided by operating activities	$	241
Net cash used in investing activities	(73		)
Net cash used in financing activities	(123		)
Increase in cash and cash equivalents	$	45

Assets Held for Sale. As a result of the 2016 sale of TFHL, FCX planned to sell its effective 56 percent interest in Freeport Cobalt and its wholly owned Kisanfu exploration project. Freeport Cobalt includes the large-scale cobalt refinery in Kokkola, Finland, and the related sales and marketing business. Kisanfu is a copper and cobalt exploration project, located near Tenke in the Democratic Republic of Congo (DRC). The assets and liabilities of Freeport Cobalt and Kisanfu were previously classified as held for sale in the consolidated balance sheet at December 31, 2017, and a $110 million estimated loss on disposal was recognized in 2016 when these assets were classified as held for sale (included in net gain on sales of assets in the consolidated statements of operations).

FCX is continuing to assess opportunities for its Kisanfu copper and cobalt exploration project, including development of the project on its own or a sale of all or a minority stake in the project. In 2017, a gain of $13 million was recorded to adjust the Kisanfu assets to their carrying value when they were initially classified as held for sale. In second-quarter 2018, management concluded it no longer believes that it is probable an outright sale will occur in the near term and the related assets and liabilities should no longer be classified as held for sale. Because of this conclusion, revisions to the consolidated balance sheet as of December 31, 2017, included a $90 million increase to property, plant, equipment and mine development costs, net, with an offsetting reduction in current assets held for sale, and a $27 million increase to deferred income taxes, with an offsetting reduction in current liabilities held for sale.

FCX continues to market the Freeport Cobalt assets, but concluded that they no longer qualified as held for sale as of December 31, 2018. In accordance with applicable accounting guidance, during 2018, FCX recorded a gain of $97 million to adjust the Freeport Cobalt assets to their carrying value when they were initially classified as held for sale. During fourth-quarter 2018, FCX also recorded $48 million of depreciation, depletion and amortization expense that was suspended while the assets were held for sale from December 2016 through September 2018. The carrying amounts of Freeport Cobalt’s major classes of assets and liabilities, which were reclassified from held for sale in the consolidated balance sheet at December 31, 2017, follow:



Assets
Cash and cash equivalents	$	79
Trade receivables	76
Inventories	256
Other receivables and current assets	20
Property, plant, equipment and mine development costs, net	60
Other assets	3
Total previously included in current assets held for sale	$	494

Liabilities
Accounts payable and accrued liabilities	$	176
Accrued income taxes	18
Long-term debt	112
Deferred income taxes and asset retirement obligations	17
Total previously included in current liabilities held for sale	$	323

Morenci. In May 2016, FCX sold a 13 percent undivided interest in its Morenci unincorporated joint venture to SMM Morenci, Inc. for $1.0 billion in cash. FCX recorded a $576 million gain on the transaction and used losses to offset cash taxes on the transaction. A portion of the proceeds from the transaction was used to repay borrowings under FCX’s unsecured bank term loan and revolving credit facility.

The Morenci unincorporated joint venture was owned 85 percent by FCX and 15 percent by Sumitomo Metal Mining Arizona, Inc. (Sumitomo). As a result of the transaction, the unincorporated joint venture is owned 72 percent by FCX, 15 percent by Sumitomo and 13 percent by SMM Morenci, Inc. (an affiliate of Sumitomo Metal Mining Co, Ltd.).

Timok. In May 2016, FMC sold an interest in the Timok exploration project in Serbia to Global Reservoir Minerals Inc. (now known as Nevsun Resources, Ltd.) for consideration of $135 million in cash and contingent consideration of up to $107 million payable to FCX in stages upon achievement of defined development milestones. As a result of this transaction, FCX recorded a gain of $133 million in 2016, and no amounts were recorded for contingent consideration under the loss recovery approach. A portion of the proceeds from the transaction was used to repay borrowings under FCX’s unsecured bank term loan.

Oil and Gas Operations. In 2018, FCX Oil & Gas LLC (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). Under the full cost accounting rules, the sales resulted in the recognition of gains of $49 million in 2017.

In December 2016, FM O&G completed the sale of its onshore California oil and gas properties to Sentinel Peak Resources California LLC (Sentinel) for cash consideration of $592 million (before closing adjustments from the July 1, 2016, effective date) and contingent consideration of up to $150 million, consisting of $50 million per year for 2018, 2019 and 2020 if the price of Brent crude oil averages over $70 per barrel in each of these calendar years. The contingent consideration is considered a derivative, and the fair value will be adjusted through the year 2020. The fair value of the contingent consideration derivative (included in other assets in the consolidated balance sheets) was $16 million at December 31, 2018, and $34 million at December 31, 2017. The contingent consideration of $50 million for 2018 was realized because the average Brent crude oil price exceeded $70 per barrel for the year and was included in other current assets in the consolidated balance sheet at December 31, 2018. Future changes in the fair value of the contingent consideration derivative will continue to be recorded in operating income. Sentinel assumed abandonment obligations associated with the properties.

In December 2016, FM O&G completed the sale of its Deepwater Gulf of Mexico (GOM) oil and gas properties to Anadarko Petroleum Corporation (Anadarko) for cash consideration of $2.0 billion (before closing adjustments from the August 1, 2016, effective date) and up to $150 million in contingent payments. The contingent payments were recorded under the loss recovery approach, whereby contingent gains are recorded up to the amount of any loss on the sale, and reduced the loss on the sale in 2016. The contingent payments were included in other current assets ($27 million) and other assets ($116 million) at December 31, 2018, and in other current assets ($24 million) and other assets ($126 million) at December 31, 2017, in the consolidated balance sheets. The contingent payments will be received over time ($7 million was collected in 2018) as Anadarko realizes future cash flows in connection with a third-party production handling agreement for an offshore platform. Anadarko assumed abandonment obligations associated with these properties. A portion of the proceeds from this transaction was used to repay FCX’s remaining outstanding borrowings under its unsecured bank term loan.

Under the full cost accounting rules, the sales of the Deepwater GOM and onshore California oil and gas properties required gain (loss) recognition (net loss of $9 million in 2016, which was net of $150 million for contingent payments associated with the Deepwater GOM sale and $33 million for the fair value of contingent consideration from the onshore California sale) because of their significance to the full cost pool.

In connection with the sale of the Deepwater GOM oil and gas properties, FM O&G entered into an agreement to amend the terms of the Plains Offshore Operations Inc. Preferred Stock that was reported as redeemable noncontrolling interest on FCX’s financial statements. The amendment provided FM O&G the right to call these securities for $582 million. FM O&G exercised this option in December 2016 and recorded a $199 million gain on redemption to retained earnings.

In July 2016, FM O&G sold its Haynesville shale assets for cash consideration of $87 million, before closing adjustments. In June 2016, FM O&G sold certain oil and gas royalty interests to Black Stone Minerals, L.P. for cash consideration of $102 million, before closing adjustments. Under the full cost accounting rules, the proceeds from these transactions were recorded as a reduction of capitalized oil and gas properties, with no gain or loss recognition in 2016 because the reserves were not significant to the full cost pool.

OWNERSHIP IN SUBSIDIARIES AND JOINT VENTURES	12 Months Ended
OWNERSHIP IN SUBSIDIARIES AND JOINT VENTURES	Dec. 31, 2018
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, 2018, 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 (subsequent to the sale of a 13 percent undivided interest on May 31, 2016) in Morenci (refer to “Joint Ventures – Sumitomo and SMM Morenci, Inc.”) and owns 100 percent of the other North America mines. At December 31, 2018, 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, 2018, FMC’s net assets totaled $16.0 billion and its accumulated deficit totaled $14.0 billion. FCX had no loans outstanding to FMC at December 31, 2018. 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 through December 21, 2018, 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, 2018, PT-FI’s net assets totaled $10.5 billion and its retained earnings totaled $6.6 billion. FCX had $76 million in intercompany loans to PT-FI outstanding at December 31, 2018. FCX owns 100 percent of the outstanding Atlantic Copper common stock. At December 31, 2018, Atlantic Copper’s net liabilities totaled $23 million and its accumulated deficit totaled $436 million. FCX had $434 million in intercompany loans to Atlantic Copper outstanding at December 31, 2018. FCX owns 100 percent of FM O&G, which, as of December 31, 2018, has oil and gas assets that primarily include natural gas production onshore in South Louisiana and oil production offshore California. At December 31, 2018, FM O&G’s net liabilities totaled $14.2 billion and its accumulated deficit totaled $25.8 billion. FCX had $10.6 billion in intercompany loans to FM O&G outstanding at December 31, 2018, which were fully impaired. 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. The amount due Rio Tinto for its share of joint venture cash flows was $30 million at December 31, 2017. 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 178 million pounds of Morenci’s copper cathode from Sumitomo and SMM Morenci, Inc. at market prices for $519 million during 2018. FMC had receivables from Sumitomo and SMM Morenci, Inc. totaling $13 million at December 31, 2018, and $18 million at December 31, 2017.

INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

12 Months Ended

Dec. 31, 2018

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,
	2018		2017
Current inventories:
Total materials and supplies, net^a	$	1,528	$	1,323

Mill stockpiles	$	282	$	360
Leach stockpiles	1,171		1,062
Total current mill and leach stockpiles	$	1,453	$	1,422

Raw materials (primarily concentrate)	$	260	$	265
Work-in-process	192		154
Finished goods	1,326		985
Total product inventories	$	1,778	$	1,404

Long-term inventories:
Mill stockpiles	$	265	$	300
Leach stockpiles	1,049		1,109
Total long-term inventories^b	$	1,314	$	1,409


a.	Materials and supplies inventory was net of obsolescence reserves totaling $24 million at December 31, 2018, and $29 million at December 31, 2017.


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

FCX recorded charges for adjustments to metals inventory carrying values of $4 million in 2018, $8 million in 2017 and $36 million in 2016 (primarily for molybdenum inventories).

PROPERTY, PLANT, EQUIPMENT AND MINING DEVELOPMENT COSTS, NET

12 Months Ended

Dec. 31, 2018

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,
	2018			2017
Proven and probable mineral reserves	$	7,089		$	3,974
VBPP	477			536
Mine development and other	8,195			6,213
Buildings and infrastructure	8,051			7,553
Machinery and equipment	12,985			12,330
Mobile equipment	4,010			3,766
Construction in progress	3,006			2,971
Oil and gas properties	27,292			27,453
Total	71,105			64,796
Accumulated depreciation, depletion, and amortization^a	(43,095		)	(41,802		)
Property, plant, equipment and mine development costs, net	$	28,010		$	22,994


a.	Includes accumulated amortization of $27.3 billion and $27.4 billion for oil and gas properties at December 31, 2018 and 2017, respectively.

In 2018, FCX recorded $4.6 billion for proven and probable mineral reserves and other property, plant, equipment and mine development costs associated with the acquisition of PT Rio Tinto Indonesia (refer to Note 2 for further discussion).

FCX recorded $1.7 billion for VBPP in connection with the FMC acquisition in 2007 (excluding $544 million associated with mining operations that were sold) and transferred $59 million to proven and probable mineral reserves during 2018 and $752 million prior to 2018 ($112 million in 2017). Cumulative impairments of VBPP total $485 million, which were primarily recorded in 2008.

Capitalized interest, which primarily related to FCX’s mining operations’ capital projects, totaled $96 million in 2018, $121 million in 2017 and $92 million in 2016.

During 2017 and 2018, 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, 2018

Other Assets [Abstract]

Other Assets Disclosure

OTHER ASSETS

The components of other assets follow:



	December 31,
	2018		2017
Disputed tax assessments:^a
PT-FI	$	493	$	417
Cerro Verde	183		185
Long-term receivable for taxes^b	260		445
Intangible assets^c	398		307
Investments:
Assurance bond^d	126		123
PT Smelting^e	125		61
Fixed income and equity securities	29		30
Other	36		48
Contingent consideration associated with sales of assets^f	189		234
Legally restricted funds^g	181		189
Rio Tinto’s share of ARO	—		68
Long-term employee receivables	20		20
Other	132		146
Total other assets	$	2,172	$	2,273


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, 2018 and 2017. Accumulated amortization of definite-lived intangible assets totaled $51 million at December 31, 2018, and $46 million at December 31, 2017.


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 $11 million at December 31, 2018, and $68 million at December 31, 2017. Trade accounts receivable from PT Smelting totaled $176 million at December 31, 2018, and $308 million at December 31, 2017.


f.	Refer to Note 2 for further discussion.


g.	Includes $180 million at December 31, 2018 and 2017, held in trusts for AROs related to properties in New Mexico (refer to Note 12 for further discussion).

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

12 Months Ended

Dec. 31, 2018

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,
	2018		2017
Accounts payable	$	1,661	$	1,546
Salaries, wages and other compensation	273		241
Accrued interest^a	183		168
PT-FI contingencies^b	162		—
Accrued taxes, other than income taxes	109		129
Pension, postretirement, postemployment and other employee benefits^c	78		114
Deferred revenue	35		91
Accrued mining royalties	29		68
Other	95		140
Total accounts payable and accrued liabilities	$	2,625	$	2,497


a.	Third-party interest paid, net of capitalized interest, was $500 million in 2018, $565 million in 2017 and $743 million in 2016.


b.	Refer to Note 12 for further discussion.


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

DEBT

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Debt

DEBT

FCX’s debt at December 31, 2018, included additions of $58 million ($97 million at December 31, 2017) for unamortized fair value adjustments (primarily from the 2013 oil and gas acquisitions), and is net of reductions of $69 million ($85 million at December 31, 2017) for unamortized net discounts and unamortized debt issuance costs. The components of debt follow:



	December 31,
	2018			2017
Revolving credit facility	$	—		$	—
Cerro Verde credit facility	1,023			1,269
Senior notes and debentures:
Issued by FCX:
2.375% Senior Notes due 2018	—			1,408
3.100% Senior Notes due 2020	999			997
4.00% Senior Notes due 2021	597			596
6.75% Senior Notes due 2022	—			427
3.55% Senior Notes due 2022	1,886			1,884
6⁷/₈% Senior Notes due 2023	768			776
3.875% Senior Notes due 2023	1,915			1,914
4.55% Senior Notes due 2024	845			845
5.40% Senior Notes due 2034	741			740
5.450% Senior Notes due 2043	1,843			1,842
Issued by FMC:
7¹/₈% Debentures due 2027	115			115
9½% Senior Notes due 2031	126			127
6¹/₈% Senior Notes due 2034	117			116
Issued by Freeport-McMoRan Oil & Gas LLC (FM O&G LLC):
6⁷/₈% Senior Notes due 2023	—			54
Other	166			119
Total debt	11,141			13,229
Less current portion of debt	(17		)	(1,414		)
Long-term debt	$	11,124		$	11,815

Revolving Credit Facility. At December 31, 2018, there were no borrowings outstanding and $13 million in letters of credit issued under FCX’s 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.

In April 2018, FCX, PT-FI and FM O&G LLC entered into a new $3.5 billion, five-year, unsecured revolving credit facility, which replaced FCX’s prior revolving credit facility (scheduled to mature on May 31, 2019). The new revolving credit facility is available until April 20, 2023, with $500 million available to PT-FI, and up to $1.5 billion available in letters of credit, and has a substantially similar structure and terms as the prior revolving credit facility. 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 new 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 (of which $5 million was prepaid during 2018 and $220 million was prepaid during 2017), $225 million due on June 30, 2021 (which was fully prepaid during 2018), $525 million due on December 31, 2021 (of which $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 4.42 percent at December 31, 2018.

Cerro Verde Shareholder Loans. In December 2014, Cerro Verde entered into loan agreements with three of its shareholders for borrowings up to $800 million. In June 2017, Cerro Verde used the proceeds from its amended credit facility plus available cash to repay the balance of its outstanding shareholder loans. The remaining availability for borrowings under these agreements totals $200 million.

Senior Notes issued by FCX. In December 2016, FCX completed an exchange offer and consent solicitation associated with FM O&G LLC senior notes. Holders representing 89 percent of the outstanding FM O&G LLC senior notes tendered their notes and received new FCX senior notes. Each series of newly issued FCX senior notes have an interest rate that is identical to the interest rate of the applicable series of FM O&G LLC senior notes. The newly issued FCX senior notes are senior unsecured obligations of FCX and rank equally in right of payment with all other existing and future senior unsecured indebtedness of FCX. A summary of the tenders follows:



	Principal Amount Outstanding		Principal Amount Tendered		Book Value of New FCX Senior Notes
6.125% Senior Notes due 2019	$	237	$	179	$	186
6½% Senior Notes due 2020	617		552		583
6.625% Senior Notes due 2021	261		228		242
6.75% Senior Notes due 2022	449		404		432
6⁷/₈% Senior Notes due 2023	778		728		785
	$	2,342	$	2,091	$	2,228

The principal amounts were increased by $151 million to reflect the remaining unamortized acquisition-date fair market value adjustments associated with the 2013 oil and gas acquisitions. In addition, FCX paid $14 million in cash consideration for FM O&G LLC’s senior notes that were tendered, which reduced the book value of the new FCX senior notes. All of these senior notes, except the 6.75% Senior Notes due 2022 and the 6⁷/₈% Senior Notes due 2023, were redeemed during 2017 and the 6.75% Senior Notes due 2022 were redeemed during 2018 (refer to Early Extinguishment and Exchanges of Debt in this note). The 6⁷/₈% Senior Notes due 2023 are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price prior to February 15, 2020, and at a specified redemption price thereafter. As of December 31, 2018, the book value of these senior notes totaled $768 million, which reflects the remaining unamortized acquisition-date fair market value adjustments ($46 million) and the cash consideration ($6 million) that are being amortized over the term of these senior notes and recorded as a net reduction of interest expense.

In November 2014, FCX sold $750 million of 2.30% Senior Notes due 2017 (which matured and were repaid in 2017), $600 million of 4.00% Senior Notes due 2021, $850 million of 4.55% Senior Notes due 2024 and $800 million of 5.40% Senior Notes due 2034 for total net proceeds of $2.97 billion.

In March 2013, in connection with the financing of the 2013 oil and gas acquisitions, FCX issued $6.5 billion of unsecured senior notes in four tranches. FCX sold $1.5 billion of 2.375% Senior Notes due March 2018 (which matured and were repaid in 2018), $1.0 billion of 3.100% Senior Notes due March 2020, $2.0 billion of 3.875% Senior Notes due March 2023 and $2.0 billion of 5.450% Senior Notes due March 2043 for total net proceeds of $6.4 billion.

In February 2012, FCX sold $500 million of 2.15% Senior Notes due 2017 (which matured and were repaid in 2017) and $2.0 billion of 3.55% Senior Notes due 2022 for total net proceeds of $2.47 billion.

The 3.100% Senior Notes due 2020 and 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 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 and Exchanges of Debt. During 2018, FCX redeemed in full certain senior notes, and holders received the principal amounts together with the redemption premiums and accrued and unpaid interest up to the redemption date. A summary of these redemptions follows:




	Principal Amount		Net Adjustments		Book Value		Redemption Value		Gain
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
	$	454	$	26	$	480	$	470	$	10

Partially offsetting the $10 million gain were losses of $3 million, primarily associated with Cerro Verde’s prepayments in 2018 and entering into the new revolving credit facility in April 2018.

During 2017, FCX redeemed in full or purchased in open-market transactions certain senior notes. A summary of these debt extinguishments follows:



	Principal Amount		Net Adjustments		Book Value		Redemption Value		Gain
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
	$	1,234	$	49	$	1,283	$	1,257	$	26

Partially offsetting the $26 million gain was a net loss of $5 million, primarily associated with the modification of Cerro Verde’s credit facility in June 2017 and Cerro Verde’s prepayment in December 2017.

During 2016, FCX redeemed certain senior notes in exchange for its common stock (refer to Note 10 for further discussion) and purchased certain senior notes in open-market transactions. A summary of these transactions follows:



	Principal Amount		Net Adjustments			Book Value		Redemption Value		Gain

2.30% Senior Notes due 2017	$	20	$	—		$	20	$	20	$	—
2.375% Senior Notes due 2018	18		—			18		18		—
3.55% Senior Notes due 2022	108		(1		)	107		96		11
3.875% Senior Notes due 2023	77		—			77		68		9
5.40% Senior Notes due 2034	50		(1		)	49		41		8
5.450% Senior Notes due 2043	134		(2		)	132		106		26
	$	407	$	(4	)	$	403	$	349	$	54

Partially offsetting the $54 million gain was $28 million in losses, primarily related to deferred debt issuance costs for an unsecured bank term loan that was repaid and costs associated with the December 2016 senior note exchange offer and consent solicitation.

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 3.75x, 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, 2018, 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, 2018, total $17 million in 2019, $1.0 billion in 2020, $1.1 billion in 2021, $2.4 billion in 2022, $2.7 billion in 2023 and $3.9 billion thereafter.

OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS

12 Months Ended

Dec. 31, 2018

Other Liabilities, Including Employee Benefits [Abstract]

Other Liabilities

OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS

The components of other liabilities follow:



	December 31,
	2018		2017
Pension, postretirement, postemployment and other employment benefits^a	$	1,174	$	1,154
Cerro Verde royalty dispute	631		368
Provision for tax positions	230		291
Other	195		199
Total other liabilities	$	2,230	$	2,012


a.	Refer to Note 7 for current portion.

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 41 percent equity investments (primarily global equities), 51 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 6.5 percent per annum beginning January 1, 2019. The 6.5 percent estimation was based on a passive return on a compound basis of 6.0 percent and a premium for active management of 0.5 percent reflecting the target asset allocation and current investment array.

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 Indonesian rupiah covering substantially all of its Indonesian national employees. PT-FI funds the plan and invests the assets in accordance with Indonesian pension guidelines. The pension obligation was valued at an exchange rate of 14,409 rupiah to one U.S. dollar on December 31, 2018, and 13,480 rupiah to one U.S. dollar on December 31, 2017. Indonesian 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 related to 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, 2019. The discount rate assumption for PT-FI’s plan is based on the Mercer Indonesian zero coupon bond yield curve derived from the Indonesian 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,
	2018		2017
Projected benefit obligation	$	2,177	$	2,287
Accumulated benefit obligation	2,048		2,163
Fair value of plan assets	1,373		1,521

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



	FCX						PT-FI
	2018			2017			2018			2017
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,343		$	2,135		$	240		$	374
Service cost	44			44			13			20
Interest cost	84			91			14			23
Actuarial (gains) losses	(124		)	188			(19		)	(61		)
Plan amendments	4			—			—			—
Foreign exchange (gains) losses	(1		)	3			(15		)	(2		)
Curtailment^a	—			—			—			(62		)
Benefits and administrative expenses paid	(120		)	(118		)	(13		)	(52		)
Benefit obligation at end of year	2,230			2,343			220			240

Change in plan assets:
Fair value of plan assets at beginning of year	1,588			1,329			269			284
Actual return on plan assets	(104		)	230			(5		)	11
Employer contributions^b	70			145			4			28
Foreign exchange (losses) gains	(1		)	2			(17		)	(2		)
Benefits and administrative expenses paid	(120		)	(118		)	(13		)	(52		)
Fair value of plan assets at end of year	1,433			1,588			238			269
Funded status	$	(797	)	$	(755	)	$	18		$	29

Accumulated benefit obligation	$	2,101		$	2,218		$	181		$	194

Weighted-average assumptions used to determine benefit obligations:
Discount rate	4.40		%	3.70		%	8.25		%	6.75		%
Rate of compensation increase	3.25		%	3.25		%	4.00		%	4.00		%

Balance sheet classification of funded status:
Other assets	$	7		$	11		$	18		$	29
Accounts payable and accrued liabilities	(4		)	(4		)	—			—
Other liabilities	(800		)	(762		)	—			—
Total	$	(797	)	$	(755	)	$	18		$	29


a.	Resulted from the 2017 PT-FI reductions in workforce (refer to Restructuring Charges in this note for further discussion).


b.	Employer contributions for 2019 are expected to approximate $74 million for the FCX plans and $2 million for the PT-FI plan (based on a December 31, 2018, exchange rate of 14,409 Indonesian rupiah to one U.S. dollar).

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 2017, the actuarial loss of $188 million for the FCX pension plans primarily resulted from the decrease in the discount rate from 4.40 percent to 3.70 percent and the update to the actuarial basis for lump sum conversions.

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. During 2017, the actuarial gain of $61 million resulted primarily because of the workforce reduction during 2017, experience gains and a decline in the rate of compensation increase, partially offset by the decrease in the discount rate from 8.25 percent to 6.75 percent.

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:



	2018			2017			2016
Weighted-average assumptions:^a
Discount rate	3.70		%	4.40		%	4.60		%
Expected return on plan assets	6.50		%	7.00		%	7.25		%
Rate of compensation increase	3.25		%	3.25		%	3.25		%

Service cost	$	44		$	44		$	27
Interest cost	84			91			93
Expected return on plan assets	(101		)	(93		)	(96		)
Amortization of net actuarial losses	49			49			42
Net periodic benefit cost	$	76		$	91		$	66


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:



	2018			2017			2016
Weighted-average assumptions:
Discount rate	6.75		%	8.25		%	9.00		%
Expected return on plan assets	6.75		%	7.75		%	7.75		%
Rate of compensation increase	4.00		%	8.00		%	9.40		%

Service cost	$	13		$	20		$	27
Interest cost	14			23			29
Expected return on plan assets	(19		)	(21		)	(17		)
Amortization of prior service cost	2			2			3
Amortization of net actuarial (gain) loss	(1		)	—			5
Curtailment loss	—			4			—
Net periodic benefit cost	$	9		$	28		$	47

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



	2018				2017
	Before Taxes		After Taxes and Noncontrolling Interests		Before Taxes		After Taxes and Noncontrolling Interests
Net actuarial loss	$	659	$	539	$	620	$	412
Prior service costs	13		8		10		6
	$	672	$	547	$	630	$	418

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, 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



	Fair Value at December 31, 2017
	Total			NAV		Level 1		Level 2		Level 3
Commingled/collective funds:
Global equity	$	404		$	404	$	—	$	—	$	—
Fixed income securities	154			154		—		—		—
Global fixed income securities	115			115		—		—		—
Emerging markets equity	87			87		—		—		—
International small-cap equity	72			72		—		—		—
U.S. small-cap equity	67			67		—		—		—
Real estate property	50			50		—		—		—
U.S. real estate securities	45			45		—		—		—
Short-term investments	12			12		—		—		—
Fixed income:
Government bonds	208			—		—		208		—
Corporate bonds	168			—		—		168		—
Global large-cap equity securities	119			—		119		—		—
Private equity investments	20			20		—		—		—
Other investments	62			—		19		43		—
Total investments	1,583			$	1,026	$	138	$	419	$	—

Cash and receivables	21
Payables	(16		)
Total pension plan net assets	$	1,588

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 60-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, 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



	Fair Value at December 31, 2017
	Total		Level 1		Level 2		Level 3
Government bonds	$	81	$	81	$	—	$	—
Common stocks	78		78		—		—
Mutual funds	16		16		—		—
Total investments	175		$	175	$	—	$	—

Cash and receivables^a	94
Total pension plan net assets	$	269


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.

Common stocks, government bonds 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
2019	$	117	$	45
2020	160		11
2021	123		19
2022	126		22
2023	128		30
2024 through 2028	664		160


a.	Based on a December 31, 2018, exchange rate of 14,409 Indonesian 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 $115 million (included in other liabilities) at December 31, 2018, and a current portion of $14 million and a long-term portion of $129 million at December 31, 2017. 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 4.20 percent at December 31, 2018, and 3.50 percent at December 31, 2017. Expected benefit payments for these plans total $13 million for 2019, $13 million for 2020, $13 million for 2021, $12 million for 2022, $11 million for 2023 and $47 million for 2024 through 2028.

The net periodic benefit cost charged to operations for FCX’s postretirement benefits (primarily for interest costs) totaled $5 million in 2018, $5 million in 2017 and $4 million in 2016. The discount rate used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s postretirement benefits was 3.50 percent in 2018, 3.80 percent in 2017 and 4.10 percent in 2016. The medical-care trend rates assumed the first year trend rate was 7.75 percent at December 31, 2018, 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 consisted of a current portion of $6 million (included in accounts payable and accrued liabilities) and a long-term portion of $39 million (included in other liabilities) at December 31, 2018, and a current portion of $5 million and a long-term portion of $38 million at December 31, 2017.

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 $45 million at December 31, 2018, and $46 million at December 31, 2017, all of which was included in other liabilities.

The costs charged to operations for employee savings plans totaled $75 million in 2018 (none of which was capitalized), $65 million in 2017 (none of which was capitalized) and $78 million in 2016 (of which $4 million was capitalized to oil and gas properties). 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 Indonesian 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.

In early 2016, FCX restructured its oil and gas business to reduce costs and in late 2016, FCX sold substantially all of its remaining oil and gas properties. As a result, FCX recorded charges of $85 million to selling, general and administrative expenses and $6 million to production costs for net restructuring-related costs in 2016.

Employee Benefits

OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS

The components of other liabilities follow:



	December 31,
	2018		2017
Pension, postretirement, postemployment and other employment benefits^a	$	1,174	$	1,154
Cerro Verde royalty dispute	631		368
Provision for tax positions	230		291
Other	195		199
Total other liabilities	$	2,230	$	2,012


a.	Refer to Note 7 for current portion.