EX-12.1 5 d87630dex121.htm EX-12.1 EX-12.1

Exhibit 12.1

FREEPORT-McMoRan INC.

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

 

     For the six
months
ended
June 30,
2015		    

 

 

 

For the years ended December 31,

  
       2014     2013     2012     2011     2010  
     (in millions except ratios)  

(Loss) income before income taxes and equity in affiliated companies’ net earnings

    $ (5,588 )    $ (424 )    $ 4,913      $ 5,486      $ 8,818      $ 8,512   

Amortization of previously capitalized interest

      35        55        45        41        36        34   

Less: capitalized interest

      (130 )      (235 )      (174 )      (81 )      (109 )      (66 ) 

Less: preferred dividends of a consolidated subsidiary

      (27 )      (53 )      (31 )      —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Losses) earnings from continuing operations before fixed charges

    $ (5,710 )    $ (657 )    $ 4,753      $ 5,446      $ 8,745      $ 8,480   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Fixed charges:

             

Interest expense, net of capitalized interest

      295        673        550        180        301        448   

Capitalized interest

      130        235        174        81        109        66   

Amortization of debt expenses, premiums and discounts

      —          (42 )      (32 )      7        11        14   

Interest portion of rental expense

      13        27        23        22        23        26   

Preferred dividends of a consolidated subsidiary

      27        53        31        —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total fixed charges

      465        946        746        290        444        554   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted (losses) earnings

    $ (5,245 )    $ 289      $ 5,499      $ 5,736      $ 9,189      $ 9,034   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ratio of earnings to fixed chargesa

      —   b      —   c      7.4        19.8        20.7        16.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Preferred dividend requirements:

             

Total fixed charges

    $ 465      $ 946      $ 746      $ 290      $ 444      $ 554   

Preferred stock dividends

      —          —          —          —          —          96   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Combined fixed charges and preferred stock dividends

    $ 465      $ 946      $ 746      $ 290      $ 444      $ 650   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ratio of earnings to combined fixed charges and preferred stock dividendsa

      —   b      —   c      7.4        19.8        20.7        13.9   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

a. For purposes of computing the consolidated ratio of earnings to fixed charges, earnings consist of (loss) income before income taxes and equity in affiliated companies’ net earnings. Noncontrolling interests were not deducted from earnings as all such subsidiaries had fixed charges. Fixed charges consist of interest (including capitalized interest) of all indebtedness; amortization of debt discounts, premiums and expenses; the portion of rental expense that FCX believes to be representative of interest; and preferred dividends of a consolidated subsidiary. For purposes of calculating the ratio of earnings to combined fixed charges and preferred stock dividends, the preferred stock dividend requirements were assumed to be equal to the pre-tax earnings that would be required to cover such dividend requirements. The amount of pre-tax earnings required to cover such preferred stock dividends was computed using the effective tax rate for each applicable year.
b. As a result of the loss recorded for the six months ended June 30, 2015, the ratio coverage was less than 1:1. FCX would have needed to generate additional earnings of $5.7 billion to achieve coverage of 1:1 for the six months ended June 30, 2015.
c. As a result of the loss recorded in 2014, the ratio coverage was less than 1:1. FCX would have needed to generate additional earnings of $657 million to achieve coverage of 1:1 in 2014.