EX-12.1 15 q414exhibit121.htm EXHIBIT 12.1 Q414 Exhibit 12.1


Exhibit 12.1
FREEPORT-McMoRan INC.

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(in millions except ratios)
 
For the years ended December 31,
 
 
2014
 
2013
 
2012
 
2011
 
2010
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income before income taxes and equity in affiliated companies' net earnings
$
(424
)
 
4,913

 
5,486

 
8,818

 
8,512

 
Amortization of previously capitalized interest
55

 
45

 
41

 
36

 
34

 
Less: capitalized interest
(235
)
 
(174
)
 
(81
)
 
(109
)
 
(66
)
 
Less: preferred dividends of a consolidated subsidiary
(53
)
 
(31
)
 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
(Losses) earnings from continuing operations before fixed charges
$
(657
)
 
4,753

 
5,446

 
8,745

 
8,480

 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges:
 
 
 
 
 
 
 
 
 
 
Interest expense, net of capitalized interest
$
673

 
550

 
180

 
301

 
448

 
Capitalized interest
235

 
174

 
81

 
109

 
66

 
Amortization of debt expenses, premiums and and discounts
(42
)
 
(32
)
 
7

 
11

 
14

 
Interest portion of rental expense
27

 
23

 
22

 
23

 
26

 
Preferred dividends of a consolidated subsidiary
53

 
31

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
Total fixed charges
$
946

 
746

 
290

 
444

 
554

 
 
 
 
 
 
 
 
 
 
 
 
Adjusted earnings
289

 
5,499

 
5,736

 
9,189

 
9,034

 
 

 

 

 

 

 
Ratio of earnings to fixed chargesa
$
—

b 
7.4

 
19.8

 
20.7

 
16.3

 
 
 
 
 
 
 
 
 
 
 
 
Preferred dividend requirements:
 
 
 
 
 
 
 
 
 
 
Total fixed charges
$
946

 
746

 
290

 
444

 
554

 
Preferred stock dividends
—

 
—

 
—

 
—

 
96

 
 
 
 
 
 
 
 
 
 
 
 
Combined fixed charges and preferred stock dividends
946

 
746

 
290

 
444

 
650

 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to combined fixed charges and preferred stock dividendsa
$
—

b 
7.4

 
19.8

 
20.7

 
13.9

 

a.
For purposes of computing the consolidated ratio of earning 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 stock 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 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.