While underlying earnings were down 9% on 2013, it beat the consensus figure of $8.9 billion.
Iron ore accounted for $8.1 billion of the result, while aluminium was most-improved, with earnings soaring by 124% to $1.2 billion.
Net earnings jumped by 78% to $6.5 billion, while net cash from operating activities was down 5% to $14.3 billion.
Underlying earnings before interest, tax, depreciation and amortisation fell 9% to $19.9 billion, with iron ore EBITDA dropping by 18% to $14.2 billion.
Aluminium EBITDA jumped 55% to $2.9 billion, while copper EBITDA rose 33% to $2.3 billion.
Despite lower commodity prices, the company maintained an EBITDA margin of 39%, the same as 2013.
Capital expenditure dropped 37% to $8.1 billion.
Capex is expected to drop to less than $7 billion this year and remain at around $7 billion in 2016 and 2017.
Rio is expecting to realise a further $750 million in cash cost improvements, after realising $1.5 billion in savings in 2014.
“Free cashflow was assisted by a further reduction in capital expenditure and a successful program to release working capital,” Rio CEO Sam Walsh said.
“As a consequence, we have reduced net debt by $5.6 billion to $12.5 billion.”
Gearing dropped from 25% to 19%.
UBS had tipped net debt to drop to $15.4 billion from $17.6 billion and gearing to fall to 20.3% from 24.8%.
As expected, Rio announced materially increased shareholder returns via a 12% rise in dividends to $2.15 per share.
It beat analyst consensus of a $2.12 return per share.
Rio also announced a proposed $2 billion buy-back, of which around $400 million will be conducted on the Australian Securities Exchange, with the remainder in London.
“These represent a total cash return to shareholders, in respect of 2014, of almost $6 billion,” Walsh said.
Walsh said lower commodity prices and uncertain global economic trends had created a tough operating environment.
"However, in these conditions Rio Tinto’s qualities and competitive advantages deliver superior value," he said.
"Our combination of world-class assets, disciplined capital allocation, balance sheet strength, operating and commercial excellence, and a culture of safety and integrity gives me confidence in our ability to continue to generate sustainable returns for our shareholders.”
