Credit Derivative, Maximum Exposure, Undiscounted

[Table of Contents](#i43d04c9d26874e33802bdf64c458414a_7)A summary of these unsettled commodity contracts that are offset in the balance sheet follows (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Assets at December 31, |  | Liabilities at December 31, |
|  |  | 2021 |  | 2020 |  | 2021 |  | 2020 |
|  |  |  |  |  |  |  |  |  |
| Gross amounts recognized: |  |  |  |  |  |  |  |  |
| Commodity contracts: |  |  |  |  |  |  |  |  |
| Embedded derivatives in provisional  |  |  |  |  |  |  |  |  |
| sales/purchase contracts |  | $ | 64  |  |  | $ | 169  |  |  | $ | 27  |  |  | $ | 21  |  |
|  |  |  |  |  |  |  |  |  |
| Copper derivatives |  | 13  |  |  | 15  |  |  | 1  |  |  | —  |  |
|  |  | 77  |  |  | 184  |  |  | 28  |  |  | 21  |  |
|  |  |  |  |  |  |  |  |  |
| Less gross amounts of offset: |  |  |  |  |  |  |  |  |
| Commodity contracts: |  |  |  |  |  |  |  |  |
| Embedded derivatives in provisional  |  |  |  |  |  |  |  |  |
| sales/purchase contracts |  | 3  |  |  | 1  |  |  | 3  |  |  | 1  |  |
|  |  |  |  |  |  |  |  |  |
| Copper derivatives |  | 1  |  |  | —  |  |  | 1  |  |  | —  |  |
|  |  | 4  |  |  | 1  |  |  | 4  |  |  | 1  |  |
|  |  |  |  |  |  |  |  |  |
| Net amounts presented in balance sheet: |  |  |  |  |  |  |  |  |
| Commodity contracts: |  |  |  |  |  |  |  |  |
| Embedded derivatives in provisional  |  |  |  |  |  |  |  |  |
| sales/purchase contracts |  | 61  |  |  | 168  |  |  | 24  |  |  | 20  |  |
|  |  |  |  |  |  |  |  |  |
| Copper derivatives |  | 12  |  |  | 15  |  |  | —  |  |  | —  |  |
|  |  | $ | 73  |  |  | $ | 183  |  |  | $ | 24  |  |  | $ | 20  |  |
|  |  |  |  |  |  |  |  |  |
| Balance sheet classification: |  |  |  |  |  |  |  |  |
| Trade accounts receivable |  | $ | 51  |  |  | $ | 168  |  |  | $ | 14  |  |  | $ | —  |  |
| Other current assets |  | 12  |  |  | 15  |  |  | —  |  |  | —  |  |
|  |  |  |  |  |  |  |  |  |
| Accounts payable and accrued liabilities |  | 10  |  |  | —  |  |  | 10  |  |  | 20  |  |
|  |  |  |  |  |  |  |  |  |
|  |  | $ | 73  |  |  | $ | 183  |  |  | $ | 24  |  |  | $ | 20  |  |

  
Credit Risk. FCX is exposed to credit loss when financial institutions with which it has entered into derivative transactions (commodity, foreign exchange and interest rate swaps) are unable to pay. To minimize the risk of such losses, FCX uses counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties. As of December 31, 2021, the maximum amount of credit exposure associated with derivative transactions was $77 million.  
Other Financial Instruments. Other financial instruments include cash and cash equivalents, restricted cash, restricted cash equivalents, accounts receivable, investment securities, legally restricted funds, accounts payable and accrued liabilities, dividends payable and debt. The carrying value for cash and cash equivalents (which included time deposits of $0.2 billion at December 31, 2021, and $0.3 billion at December 31, 2020), restricted cash, restricted cash equivalents, accounts receivable, accounts payable and accrued liabilities, and dividends payable approximates fair value because of their short-term nature and generally negligible credit losses (refer to Note 15 for the fair values of investment securities, legally restricted funds and debt).  
In addition, as of December 31, 2021, FCX has contingent consideration assets related to the sales of certain oil and gas properties (refer to Note 15 for the related fair values).  
  
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