EX-12.2 3 d816881dex122.htm EX-12.2 EX-12.2

Exhibit 12.2

Freeport-McMoRan Inc.

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

(in millions, except ratios)

 

     For the nine
months ended
September 30,
2014		     For the years ended December 31,  
       2013     2012     2011     2010     2009  

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

    $ 3,024        4,913       5,486       8,818       8,512       5,816  

Amortization of previously capitalized interest

      41        45       41       36       34       31  

Less: capitalized interest

      (178 )      (174 )     (81 )     (109 )     (66 )     (78 )

Less: preferred dividends of a consolidated subsidiary

      (45 )      (31 )     —         —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Earnings from continuing operations before fixed charges

    $ 2,842        4,753       5,446       8,745       8,480       5,769  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Fixed charges:

             

Interest expense, net of capitalized interest

    $ 707        550       180       301       448       568  

Capitalized interest

      178        174       81       109       66       78  

Amortization of debt expenses, premiums and discounts

      (225 )      (32 )     7       11       14       18  

Interest portion of rental expense

      20        23       22       23       26       32  

Preferred dividends of a consolidated subsidiary

      45        31       —          —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total fixed charges

    $ 725        746       290       444       554       696  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted earnings

    $ 3,567        5,499       5,736       9,189       9,034       6,465  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ratio of earnings to fixed charges (a)

      4.9        7.4       19.8       20.7       16.3       9.3  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Preferred dividend requirements:

             

Total fixed charges

    $ 725        746       290       444       554       696  

Preferred stock dividends

      —          —          —          —          96       370  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Combined fixed charges and preferred stock dividends

    $ 725        746       290       444       650       1,066  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ratio of earnings to combined fixed charges and preferred stock dividends (a)

      4.9        7.4       19.8       20.7       13.9       6.1  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(a)

For purposes of computing the consolidated ratio of earnings to fixed charges, earnings consist of income 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.