Exhibit 12.1
FREEPORT-McMoRan INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
| For the six months ended June 30, 2015 |
For the years ended December 31, | |||||||||||||||||||||||
| 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||||||
| (in millions except ratios) | ||||||||||||||||||||||||
(Loss) income before income taxes and equity in affiliated companies’ net earnings | $ | (5,588 | ) | $ | (424 | ) | $ | 4,913 | $ | 5,486 | $ | 8,818 | $ | 8,512 | ||||||||||
Amortization of previously capitalized interest | 35 | 55 | 45 | 41 | 36 | 34 | ||||||||||||||||||
Less: capitalized interest | (130 | ) | (235 | ) | (174 | ) | (81 | ) | (109 | ) | (66 | ) | ||||||||||||
Less: preferred dividends of a consolidated subsidiary | (27 | ) | (53 | ) | (31 | ) | — | — | — | |||||||||||||||
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(Losses) earnings from continuing operations before fixed charges | $ | (5,710 | ) | $ | (657 | ) | $ | 4,753 | $ | 5,446 | $ | 8,745 | $ | 8,480 | ||||||||||
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Fixed charges: | ||||||||||||||||||||||||
Interest expense, net of capitalized interest | 295 | 673 | 550 | 180 | 301 | 448 | ||||||||||||||||||
Capitalized interest | 130 | 235 | 174 | 81 | 109 | 66 | ||||||||||||||||||
Amortization of debt expenses, premiums and discounts | — | (42 | ) | (32 | ) | 7 | 11 | 14 | ||||||||||||||||
Interest portion of rental expense | 13 | 27 | 23 | 22 | 23 | 26 | ||||||||||||||||||
Preferred dividends of a consolidated subsidiary | 27 | 53 | 31 | — | — | — | ||||||||||||||||||
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Total fixed charges | 465 | 946 | 746 | 290 | 444 | 554 | ||||||||||||||||||
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Adjusted (losses) earnings | $ | (5,245 | ) | $ | 289 | $ | 5,499 | $ | 5,736 | $ | 9,189 | $ | 9,034 | |||||||||||
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Ratio of earnings to fixed chargesa | — | b | — | c | 7.4 | 19.8 | 20.7 | 16.3 | ||||||||||||||||
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Preferred dividend requirements: | ||||||||||||||||||||||||
Total fixed charges | $ | 465 | $ | 946 | $ | 746 | $ | 290 | $ | 444 | $ | 554 | ||||||||||||
Preferred stock dividends | — | — | — | — | — | 96 | ||||||||||||||||||
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Combined fixed charges and preferred stock dividends | $ | 465 | $ | 946 | $ | 746 | $ | 290 | $ | 444 | $ | 650 | ||||||||||||
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Ratio of earnings to combined fixed charges and preferred stock dividendsa | — | b | — | c | 7.4 | 19.8 | 20.7 | 13.9 | ||||||||||||||||
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| a. | For purposes of computing the consolidated ratio of earnings 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 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 for the six months ended June 30, 2015, the ratio coverage was less than 1:1. FCX would have needed to generate additional earnings of $5.7 billion to achieve coverage of 1:1 for the six months ended June 30, 2015. |
| c. | 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. |
