EX-12.1 14 ex12-1.htm EXHIBIT 12-1 ex12-1.htm

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,
  
 
2008
  
2007a
  
2006
  
2005
  
2004
  
     
(Loss) income from continuing operations before
                              
income taxes, minority interests in consolidated
                              
companies, equity in affiliated companies' net
                              
earnings and cumulative effect of accounting
                              
changes
$
(13,309
)
$
6,111
  
$
2,820
  
$
2,028
  
$
572
  
Amortization of previously capitalized interest
  
25
    
17
    
18
    
18
    
18
  
Less: capitalized interest
  
(122
)
  
(147
)
  
(11
)
  
(4
)
  
(3
)
                               
(Losses) earnings from continuing operations before fixed charges
 
 
 
 
 
  
 
 
  
 
 
  
 
 
  
before adjustments for fixed charges
 $ (13,406
) 
  $ 5,981   $ 2,827   $ 2,042   $ 587  
                               
Fixed charges:
                              
Interest expense, net of capitalized interest
  
567
    
496
    
71
    
124
    
140
  
Capitalized interest
  
122
    
147
    
11
    
4
    
3
  
Amortization of debt expenses, premiums and
                              
discounts
  
17
    
17
    
5
    
8
    
8
  
Interest portion of rental expense
  
18
    
12
    
1
    
1
    
1
  
                               
Total fixed charges
  
724
    
672
    
88
    
137
    
152
  
                               
Adjusted (losses) earnings
$
(12,682
)
$
6,653
  
$
2,915
  
$
2,179
  
$
739
  
                               
Ratio of earnings to fixed charges a
  
-
b
  
9.9
    
33.1
    
15.9
    
4.9
  
                               
Preferred dividend requirements:
                              
Total fixed charges
$
724
  
$
672
  
$
88
  
$
137
  
$
152
  
Preferred stock dividends
  
347
    
340
    
116
    
128
    
103
  
Combined fixed charges and preferred stock dividends
$
1,071
  
$
1,012
  
$
204
  
$
265
  
$
255
  
                               
Ratio of earnings to combined fixed charges and preferred
                              
stock dividends a
  
-
c
  
6.6
    
14.3
    
8.2
    
2.9
  
                               
a. 
For purposes of computing the consolidated ratio of earnings to fixed charges, earnings consist of (loss) income from continuing operations before income taxes, minority interests in consolidated subsidiaries, equity in affiliated companies' net earnings and cumulative effect of accounting changes. Minority interests in majority-owned subsidiaries 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.