EX-12.1 5 d359498dex121.htm EX-12.1 EX-12.1

Exhibit 12.1

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(in millions except ratios)

 

     For the three
months ended
March 31,		     For the years ended December 31,  
     2017     2016     2015     2014     2013     2012  

Income (loss) from continuing operations before income taxes and equity in affiliated companies’ net earnings (losses)

      438     $ (3,472 )      (14,128 )      (800 )      4,390       4,961  

Amortization of previously capitalized interest

      22       84       71       55       45       41  

Less capitalized interest

      (28 )      (99 )      (215 )      (235 )      (174 )      (81 ) 

Less preferred dividends of a consolidated subsidiary

      —         (38 )      (47 )      (53 )      (31 )      —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Losses) earnings from continuing operations before fixed charges

      432     $ (3,525 )      (14,319 )      (1,033 )      4,230       4,921  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Fixed charges:

             

Interest expense, net of capitalized interest

      167       726       618       648       533       179  

Capitalized interest

      28       99       215       235       174       81  

Amortization of debt expenses, premiums and discounts

      —         29       (1 )      (42 )      (32 )      7  

Interest portion of rental expense

      4       18       18       21       18       17  

Preferred dividends of a consolidated subsidiary

      —         38       47       53       31       —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total fixed charges

      199       910       897       915       724       284  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted earnings

      631     $ (2,615 )      (13,422 )      (118 )      4,954       5,205  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ratio of earnings to fixed charges (a)

      3.2       —   b      —   c      —   d      6.8       18.3  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(a) For purposes of computing the consolidated ratio of earnings to fixed charges, earnings consist of income (loss) before income taxes and equity in affiliated companies’ net earnings (losses). 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. The ratio of earnings to combined fixed charges and preferred stock dividends is the same as the ratio of earnings to fixed charges for the years presented because no shares of preferred stock were outstanding during these years.
(b) As a result of the loss recorded in 2016, the ratio coverage was less than 1:1. FCX would have needed to generate additional earnings of $3.5 billion to achieve coverage of 1:1 in 2016.
(c) As a result of the loss recorded in 2015, the ratio coverage was less than 1:1. FCX would have needed to generate additional earnings of $14.3 billion to achieve coverage of 1:1 in 2015.
(d) 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 $1.0 billion to achieve coverage of 1:1 in 2014.