Exhibit 12.1 | |||||||||||||||
FREEPORT-McMoRan COPPER & GOLD INC. | |||||||||||||||
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES | |||||||||||||||
(in millions except ratios) | |||||||||||||||
For the years ended December 31, | |||||||||||||||
2010 | 2009 | 2008 | 2007a | 2006 | |||||||||||
Income (loss) from continuing operations before | |||||||||||||||
income taxes and equity in affiliated | |||||||||||||||
companies' net earnings | $ | 8,512 | $ | 5,816 | $ | (13,309 | ) | $ | 6,111 | $ | 2,820 | ||||
Amortization of previously capitalized interest | 34 | 31 | 25 | 17 | 18 | ||||||||||
Less: capitalized interest | (66 | ) | (78 | ) | (122 | ) | (147 | ) | (11 | ) | |||||
Earnings (losses) from continuing operations | |||||||||||||||
before fixed charges | $ | 8,480 | $ | 5,769 | $ | (13,406 | ) | $ | 5,981 | $ | 2,827 | ||||
Fixed charges: | |||||||||||||||
Interest expense, net of capitalized interest | 448 | 568 | 567 | 496 | 71 | ||||||||||
Capitalized interest | 66 | 78 | 122 | 147 | 11 | ||||||||||
Amortization of debt expenses, premiums and | |||||||||||||||
discounts | 14 | 18 | 17 | 17 | 5 | ||||||||||
Interest portion of rental expense | 26 | 32 | 18 | 12 | 1 | ||||||||||
Total fixed charges | 554 | 696 | 724 | 672 | 88 | ||||||||||
Adjusted earnings (losses) | $ | 9,034 | $ | 6,465 | $ | (12,682 | ) | $ | 6,653 | $ | 2,915 | ||||
Ratio of earnings to fixed chargesa | 16.3 | 9.3 | - | b | 9.9 | 33.1 | |||||||||
Preferred dividend requirements: | |||||||||||||||
Total fixed charges | $ | 554 | $ | 696 | $ | 724 | $ | 672 | $ | 88 | |||||
Preferred stock dividends | 96 | 370 | 347 | 340 | 116 | ||||||||||
Combined fixed charges and preferred stock dividends | $ | 650 | $ | 1,066 | $ | 1,071 | $ | 1,012 | $ | 204 | |||||
Ratio of earnings to combined fixed charges and preferred | |||||||||||||||
stock dividendsa | 13.9 | 6.1 | - | c | 6.6 | 14.3 | |||||||||
a. For purposes of computing the consolidated ratio of earnings to fixed charges, earnings consist of income (loss) from continuing | |||||||||||||||
operations before income taxes, equity in affiliated companies' net earnings and cumulative effect of accounting changes. | |||||||||||||||
Noncontrolling interests were not deducted from earnings as all such subsidiaries had fixed charges. Fixed charges from | |||||||||||||||
continuing operations consist of interest (including capitalized interest) of all indebtedness; amortization of debt discounts, | |||||||||||||||
premiums and expenses; and that portion of rental expense that FCX believes to be representative of interest. 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 2008, the ratio coverage was less than 1:1. FCX would have needed to generate additional | |||||||||||||||
earnings of $13.4 billion to achieve coverage of 1:1 in 2008. | |||||||||||||||
c. As a result of the loss recorded in 2008, the ratio coverage was less than 1:1. FCX would have needed to generate additional | |||||||||||||||
earnings of $13.8 billion to achieve coverage of 1:1 in 2008. | |||||||||||||||
Freeport-McMoRan (FCX) 10-K2010 FY Annual report
Filed: 25 Feb 11, 12:00am