EX-12.1 8 q417exhibit121.htm EXHIBIT 12.1 Exhibit


Exhibit 12.1
FREEPORT-McMoRan INC.

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(in millions except ratios)
 
For the years ended December 31,
 
 
2017
 
2016
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes and equity in affiliated companies' net earnings (losses)
$
2,902

 
(3,472
)
 
(14,128
)
 
(800
)
 
4,390

 
Amortization of previously capitalized interest
91

 
84

 
71

 
55

 
45

 
Less capitalized interest
(121
)
 
(99
)
 
(215
)
 
(235
)
 
(174
)
 
Less preferred dividends of a consolidated subsidiary
—

 
(38
)
 
(47
)
 
(53
)
 
(31
)
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (losses) from continuing operations before fixed charges
$
2,872

 
(3,525
)
 
(14,319
)
 
(1,033
)
 
4,230

 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges:
 
 
 
 
 
 
 
 
 
 
Interest expense, net of capitalized interest
$
807

 
726

 
618

 
648

 
533

 
Capitalized interest
121

 
99

 
215

 
235

 
174

 
Amortization of debt expenses, premiums and and discounts
(6
)
 
29

 
(1
)
 
(42
)
 
(32
)
 
Interest portion of rental expense
16

 
18

 
18

 
21

 
18

 
Preferred dividends of a consolidated subsidiary
—

 
38

 
47

 
53

 
31

 
 
 
 
 
 
 
 
 
 
 
 
Total fixed charges
$
938

 
910

 
897

 
915

 
724

 
 
 
 
 
 
 
 
 
 
 
 
Adjusted earnings
3,810

 
(2,615
)
 
(13,422
)
 
(118
)
 
4,954

 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed chargesa
$
4.1

 
—

b 
—

c 
—

d 
6.8

 
 
 
 
 
 
 
 
 
 
 
 

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