EXHIBIT 12.1
PLAINS EXPLORATION & PRODUCTION COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (a)
(Dollar Amounts in Thousands)
Year Ended December 31, | ||||||||||||||||||||||||
Proforma 2004 (b) | 2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||||
Net Income | $ | 1,053 | $ | 8,840 | $ | 59,411 | $ | 26,237 | $ | 53,171 | $ | 28,749 | ||||||||||||
Cumulative effect of accounting change | — | — | (12,324 | ) | — | 1,522 | — | |||||||||||||||||
Provision for income taxes | (5,036 | ) | (6,817 | ) | 33,452 | 16,732 | 34,388 | 16,765 | ||||||||||||||||
Fixed charges (see below) | 55,239 | 45,398 | 27,618 | 21,994 | 20,707 | 19,806 | ||||||||||||||||||
Interest capitalized | (11,164 | ) | (6,985 | ) | (3,232 | ) | (2,387 | ) | (3,145 | ) | (3,818 | ) | ||||||||||||
Total adjusted earnings available for payment of fixed charges | $ | 40,092 | $ | 40,436 | $ | 104,925 | $ | 62,576 | $ | 106,643 | $ | 61,502 | ||||||||||||
Fixed Charges | ||||||||||||||||||||||||
Interest expense | $ | 42,356 | $ | 37,294 | $ | 23,778 | $ | 19,377 | $ | 17,411 | $ | 15,885 | ||||||||||||
Interest capitalized | 11,164 | 6,985 | 3,232 | 2,387 | 3,145 | 3,818 | ||||||||||||||||||
Rental expense representative of interest factor | 1,719 | 1,119 | 608 | 230 | 151 | 103 | ||||||||||||||||||
Total fixed charges | $ | 55,239 | $ | 45,398 | $ | 27,618 | $ | 21,994 | $ | 20,707 | $ | 19,806 | ||||||||||||
Ratio of earnings to fixed charges | 0.7 | (c) | 0.9 | (d) | 3.8 | 2.8 | 5.2 | 3.1 |
(a) | For each of the periods presented, there were no outstanding shares of preferred stock. |
(b) | Adjusted to give effect to (1) the acquisition of Nuevo Energy Company effective May 14, 2004; (2) the sale of $250.0 million of 7.125% senior notes and the application of the net proceeds thereof and borrowings under our credit facility for the termination of Nuevo’s credit facility and certain other recapitalization transactions; and (3) the sale of Nuevo’s operations in The Republic of Congo, which was completed on July 30, 2004. |
(c) | Total fixed charges exceed total adjusted earnings available for payment of fixed charges by $15.1 million. Total adjusted earnings available for payment of fixed charges includes a $168.2 million loss on derivatives that do not qualify for hedge accounting. |
(d) | Total fixed charges exceed total adjusted earnings available for payment of fixed charges by $5.0 million. Total adjusted earnings available for payment of fixed charges includes a $150.3 million loss on derivatives that do not qualify for hedge accounting. |