FREEPORT-MCMORAN INCFCX
FREEPORT-MCMORAN INC Fair Value Disclosure
FAIR VALUE MEASUREMENT
Fair value accounting guidance includes a 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) and the lowest priority to unobservable inputs (Level 3). FCX does not have any significant Level 3 assets or liabilities.
FCX’s financial instruments are recorded on the consolidated balance sheets at fair value except for debt. A summary of the carrying amount and fair value of FCX’s financial instruments (including those measured at NAV as a practical expedient), other than cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, accrued income taxes and dividends payable (refer to Note 12), follows:
| At December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Carrying | Fair Value | ||||||||||||||||||||||||||||||||||
| Amount | Total | NAV | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
Investment securities:a,b | |||||||||||||||||||||||||||||||||||
| Equity securities | $ | 36 | $ | 36 | $ | — | $ | 36 | $ | — | $ | — | |||||||||||||||||||||||
| U.S. core fixed income fund | 29 | 29 | 29 | — | — | — | |||||||||||||||||||||||||||||
| Total | 65 | 65 | 29 | 36 | — | — | |||||||||||||||||||||||||||||
Legally restricted funds:a | |||||||||||||||||||||||||||||||||||
| U.S. core fixed income fund | 71 | 71 | 71 | — | — | — | |||||||||||||||||||||||||||||
| Government mortgage-backed securities | 56 | 56 | — | — | 56 | — | |||||||||||||||||||||||||||||
| Government bonds and notes | 37 | 37 | — | — | 37 | — | |||||||||||||||||||||||||||||
| Corporate bonds | 34 | 34 | — | — | 34 | — | |||||||||||||||||||||||||||||
| Money market funds | 22 | 22 | — | 22 | — | — | |||||||||||||||||||||||||||||
| Asset-backed securities | 11 | 11 | — | — | 11 | — | |||||||||||||||||||||||||||||
| Collateralized mortgage-backed securities | 1 | 1 | — | — | 1 | — | |||||||||||||||||||||||||||||
| Total | 232 | 232 | 71 | 22 | 139 | — | |||||||||||||||||||||||||||||
Derivatives:c | |||||||||||||||||||||||||||||||||||
| Embedded derivatives in provisional sales/purchase contracts in a gross asset position | 217 | 217 | — | — | 217 | — | |||||||||||||||||||||||||||||
| Copper futures and swap contracts | 72 | 72 | — | 50 | 22 | — | |||||||||||||||||||||||||||||
| Total | 289 | 289 | — | 50 | 239 | — | |||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
Derivatives:c | |||||||||||||||||||||||||||||||||||
| Embedded derivatives in provisional sales/purchase contracts in a gross liability position | 84 | 84 | — | — | 84 | — | |||||||||||||||||||||||||||||
| Copper forward contracts | 23 | 23 | — | 11 | 12 | — | |||||||||||||||||||||||||||||
| Total | 107 | 107 | — | 11 | 96 | — | |||||||||||||||||||||||||||||
Debtd | 9,379 | 9,493 | — | — | 9,493 | — | |||||||||||||||||||||||||||||
| At December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Carrying | Fair Value | ||||||||||||||||||||||||||||||||||
| Amount | Total | NAV | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
Investment securities:a,b | |||||||||||||||||||||||||||||||||||
| U.S. core fixed income fund | $ | 27 | $ | 27 | $ | 27 | $ | — | $ | — | $ | — | |||||||||||||||||||||||
| Equity securities | 9 | 9 | — | 9 | — | — | |||||||||||||||||||||||||||||
| Total | 36 | 36 | 27 | 9 | — | — | |||||||||||||||||||||||||||||
Legally restricted funds:a | |||||||||||||||||||||||||||||||||||
| U.S. core fixed income fund | 66 | 66 | 66 | — | — | — | |||||||||||||||||||||||||||||
| Government mortgage-backed securities | 54 | 54 | — | — | 54 | — | |||||||||||||||||||||||||||||
| Government bonds and notes | 34 | 34 | — | — | 34 | — | |||||||||||||||||||||||||||||
| Corporate bonds | 31 | 31 | — | — | 31 | — | |||||||||||||||||||||||||||||
| Money market funds | 19 | 19 | — | 19 | — | — | |||||||||||||||||||||||||||||
| Asset-backed securities | 12 | 12 | — | — | 12 | — | |||||||||||||||||||||||||||||
| Collateralized mortgage-backed securities | 1 | 1 | — | — | 1 | — | |||||||||||||||||||||||||||||
| Total | 217 | 217 | 66 | 19 | 132 | — | |||||||||||||||||||||||||||||
Derivatives:c | |||||||||||||||||||||||||||||||||||
| Embedded derivatives in provisional sales/purchase contracts in a gross asset position | 10 | 10 | — | — | 10 | — | |||||||||||||||||||||||||||||
| Copper forward contracts | 10 | 10 | — | 4 | 6 | — | |||||||||||||||||||||||||||||
| Total | 20 | 20 | — | 4 | 16 | — | |||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
Derivatives:c | |||||||||||||||||||||||||||||||||||
| Embedded derivatives in provisional sales/purchase contracts in a gross liability position | 60 | 60 | — | — | 60 | — | |||||||||||||||||||||||||||||
| Copper futures and swap contracts | 28 | 28 | — | 17 | 11 | — | |||||||||||||||||||||||||||||
| Copper forward contracts | 1 | 1 | — | 1 | — | — | |||||||||||||||||||||||||||||
| Total | 89 | 89 | — | 18 | 71 | — | |||||||||||||||||||||||||||||
Debtd | 8,948 | 8,807 | — | — | 8,807 | — | |||||||||||||||||||||||||||||
a.Current portion included in other current assets and long-term portion included in other assets.
b.Excludes amounts included in restricted cash and cash equivalents (which approximated fair value), primarily associated with talc-related litigation at December 31, 2025, and PTFI’s export proceeds at December 31, 2024. Refer to Note 12.
c.Refer to Note 12 for further discussion.
d.Recorded at cost except for debt assumed in the 2007 acquisition of FMC, which was recorded at fair value at the acquisition date.
Valuation Techniques. Equity securities 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 U.S. core fixed income fund is valued at NAV. The fund strategy seeks total return consisting of income and capital appreciation primarily by investing in a broad range of investment-grade debt securities, including U.S. government obligations, corporate bonds, mortgage-backed securities, asset-backed securities and money market instruments. There are no restrictions on redemptions (which are usually within one business day of notice).
Fixed income securities (government securities, corporate bonds, asset-backed securities and collateralized mortgage-backed securities) are valued using a bid-evaluation price or a mid-evaluation price. These evaluations are based on quoted prices, if available, or models that use observable inputs and, as such, are classified within Level 2 of the fair value hierarchy.
Money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.
FCX’s embedded derivatives on provisional copper concentrate, copper cathode and gold purchases and sales are valued using quoted monthly LME copper forward prices and the adjusted London PM gold prices at each reporting
date based on the month of maturity (refer to Note 12 for further discussion); however, FCX’s contracts themselves are not traded on an exchange. As a result, these derivatives are classified within Level 2 of the fair value hierarchy.
FCX’s derivative financial instruments for copper futures and swap contracts and copper forward contracts that are traded on the respective exchanges are classified within Level 1 of the fair value hierarchy because they are valued using quoted monthly COMEX or LME prices at each reporting date based on the month of maturity (refer to Note 12 for further discussion). Certain of these contracts are traded on the over-the-counter market and are classified within Level 2 of the fair value hierarchy based on COMEX and LME forward prices.
Debt is primarily valued using available market quotes and, as such, is classified within Level 2 of the fair value hierarchy.
The techniques described above may produce a fair value 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 other market participants, the use of different techniques or assumptions to determine fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There have been no changes in the techniques used at December 31, 2025, as compared to those techniques used at December 31, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 15, 2023 | |
| 2021 | Feb 15, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 20, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.