EX-12.1 5 d598823dex121.htm EX-12.1 EX-12.1

Exhibit 12.1

FREEPORT-MCMORAN INC.

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

(in millions except ratios)

 

     For the six
months ended
June 30,
2018		    

 

For the years ended December 31,

  
    2017     2016     2015     2014     2013  

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

    $ 2,887       2,902       (3,472 )      (14,128 )      (800 )      4,390  

Amortization of previously capitalized interest

      49       91       84       71       55       45  

Less capitalized interest

      (48 )      (121 )      (99 )      (215 )      (235 )      (174 ) 

Less preferred dividends of a consolidated subsidiary

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Earnings (losses) from continuing operations before fixed charges

    $ 2,888       2,872       (3,525 )      (14,319 )      (1,033 )      4,230  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Fixed charges:

             

Interest expense, net of capitalized interest

      290       807       726       618       648       533  

Capitalized interest

      48       121       99       215       235       174  

Amortization of debt expenses, premiums and discounts

      3       (6 )      29       (1 )      (42 )      (32 ) 

Interest portion of rental expense

      8       16       18       18       21       18  

Preferred dividends of a consolidated subsidiary

      —         —         38       47       53       31  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total fixed charges

      349       938       910       897       915       724  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted earnings

    $ 3,237       3,810       (2,615 )      (13,422 )      (118 )      4,954  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ratio of earnings to fixed charges (a)

      9.3       4.1       —   b       —   c       —   d       6.8  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(a)

For purposes of computing the consolidated ratio of earnings to fixed charges, earnings consist of income (loss) from continuing operations 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 periods presented because no shares of preferred stock were outstanding during these periods.

(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.