Freeport-McMoRan 2014 Annual Report Download - page 100

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
98
NOTE 6. OTHER ASSETS
The components of other assets follow:
December 31, 2014 2013
Disputed tax assessments:
a
PT-FI $ 279 $ 255
Cerro Verde 232 72
Intangible assets
b
334 380
Investments:
Assurance bond
c
115 —
PT Smelting
d
107 71
Available-for-sale securities 46 44
Other 60 63
Legally restricted funds
e
172 392
Loan to a DRC public electric utility 164 152
Debt issue costs 141 107
Deferred drillship costs 113 —
Long-term receivable for income tax refunds 63 77
Loan to Gécamines (related party) 37 34
Other 214 151
Total other assets $ 2 , 07 7 $ 1, 7 9 8
a. Refer to Note 12 for further discussion.
b. Intangible assets were net of accumulated amortization totaling $62 million at December 31,
2014, and $57 million at December 31, 2013.
c. Relates to PT-FI’s commitment for smelter development in Indonesia at December 31, 2014
(refer to Note 13 for further discussion).
d. FCX’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 $24 million at December 31, 2014, and $58 million
at December 31, 2013.
e. Includes $168 million for AROs related to properties in New Mexico at December 31, 2014,
and a $210 million time deposit that secured a bank guarantee (until the time deposit
was released as security for the bank guarantee in 2014) associated with the Cerro Verde
royalty dispute and $158 million for AROs related to properties in New Mexico at
December 31, 2013 (refer to Note 12 for further discussion).
NOTE 7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Additional information regarding accounts payable and accrued
liabilities follows:
December 31, 2014 2013
Accounts payable $ 2,439 $ 2,14 4
Salaries, wages and other compensation 373 352
Accrued interest
a
166 210
Other accrued taxes 137 142
Pension, postretirement, postemployment
and other employee benefits
b
106 161
Deferred revenue 105 115
Oil and gas royalty and revenue payable 76 169
Commodity derivative contracts 43 205
Rio Tinto’s share of joint venture cash flows 29 33
Other 179 177
Total accounts payable and accrued liabilities $ 3,653 $ 3,70 8
a. Third-party interest paid, net of capitalized interest, was $637 million in 2014, $397 million
in 2013 and $111 million in 2012.
b. Refer to Note 9 for long-term portion.
NOTE 8. DEBT
Debt included $226 million of fair value adjustments related
to the debt assumed in the acquisition of PXP at December 31,
2014, and $653 million at December 31, 2013. The components
of debt follow:
December 31, 2014 2013
Bank term loan $ 3,050 $ 4,000
Revolving credit facility — —
Lines of credit 474 —
Subsidiary credit facility 425 —
Senior notes and debentures:
Issued by FCX:
1.40% Senior Notes due 2015 — 500
2.15% Senior Notes due 2017 500 500
2.30% Senior Notes due 2017 749 —
2.375% Senior Notes due 2018 1,500 1,500
3.100% Senior Notes due 2020 1,000 999
4.00% Senior Notes due 2021 598 —
3.55% Senior Notes due 2022 1,996 1,996
3.875% Senior Notes due 2023 1,999 1,999
4.55% Senior Notes due 2024 849 —
5.40% Senior Notes due 2034 796 —
5.450% Senior Notes due 2043 1,991 1,991
Issued by FM O&G:
6.125% Senior Notes due 2019 255 817
8.625% Senior Notes due 2019 — 447
7.625% Senior Notes due 2020 — 336
61/2% Senior Notes due 2020 670 1,647
6.625% Senior Notes due 2021 284 659
6.75% Senior Notes due 2022 493 1,111
67/8% Senior Notes due 2023 866 1,686
Issued by FMC:
71/8% Debentures due 2027 115 115
91/2% Senior Notes due 2031 129 130
61/8% Senior Notes due 2034 116 115
Other (including equipment capital leases and
other short-term borrowings) 115 158
Total debt 18,970 20,706
Less current portion of debt (478) (312)
Long-term debt $ 18,492 $ 20,394
Bank Term Loan. In February 2013, FCX entered into an agreement
for a $4.0 billion unsecured bank term loan (Term Loan) in
connection with the acquisitions of PXP and MMR. Upon closing
the PXP acquisition, FCX borrowed $4.0 billion under the Term
Loan, and Freeport-McMoRan Oil & Gas LLC (FM O&G LLC, a
wholly owned subsidiary of FM O&G and the successor entity of
PXP) joined the Term Loan as a borrower. In November 2014,
FCX prepaid $750 million of the Term Loan scheduled quarterly
payments of which $100 million was applied to fourth-quarter
2014, $550 million to 2015 and $100 million to first-quarter 2016.
Therefore, as of December 31, 2014, the Term Loan’s scheduled
payments total $650 million of quarterly installments in 2016 and
$200 million in first-quarter 2017, with the final payment of
$2.2 billion due on May 31, 2018. At FCX’s option, the Term Loan
bears interest at either an adjusted London Interbank Offered
Rate (LIBOR) or an alternate base rate (ABR) (as defined under the