Exhibit 12.1
Rosetta Resources Inc.
Ratio of Earnings to Fixed Charges
| Year Ended December 31, | ||||||||||||||||||||
| 2007 | 2008(1) | 2009(1) | 2010 | 2011 | ||||||||||||||||
| (amounts in thousands, except ratios) | ||||||||||||||||||||
Earnings: | ||||||||||||||||||||
Income (loss) before provision for income tax | $ | 91,237 | $ | (300,937 | ) | $ | (345,003 | ) | $ | 45,591 | $ | 156,259 | ||||||||
Add: Fixed charges | 22,873 | 19,427 | 24,279 | 34,955 | 29,763 | |||||||||||||||
Amortization of capitalized interest | 372 | 753 | 1,042 | 1,137 | 1,054 | |||||||||||||||
Distributions from equity investee | — | — | — | — | — | |||||||||||||||
Less: Equity income (loss) | 275 | 513 | (42 | ) | 16 | 79 | ||||||||||||||
Interest capitalized | 2,407 | 1,422 | 1,174 | 4,017 | 5,511 | |||||||||||||||
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Earnings | $ | 111,800 | $ | (282,692 | ) | $ | (320,814 | ) | $ | 77,650 | $ | 181,486 | ||||||||
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Fixed charges: | ||||||||||||||||||||
Interest expense | $ | 17,734 | $ | 14,688 | $ | 19,258 | $ | 27,073 | $ | 21,291 | ||||||||||
Interest capitalized | 2,407 | 1,422 | 1,174 | 4,017 | 5,511 | |||||||||||||||
Interest component of lease expense | 2,732 | 3,317 | 3,847 | 3,865 | 2,961 | |||||||||||||||
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Fixed charges | $ | 22,873 | $ | 19,427 | $ | 24,279 | $ | 34,955 | $ | 29,763 | ||||||||||
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Ratio of earnings to fixed charges(1) | 4.9 | — | — | 2.2 | 6.1 | |||||||||||||||
Coverage deficiency | $ | (302,119 | ) | $ | (345,093 | ) | ||||||||||||||
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| (1) | Due to non-cash impairment charges of oil and gas properties resulting in our loss for the years ended December 31, 2008 and 2009, the ratio coverage was less than 1:1. We would have needed additional earnings of $302.1 million and $345.1 million for the years ended December 31, 2008 and 2009, respectively, to achieve coverage of 1:1. The term “fixed charge” means the sum of the following: interest expensed and capitalized, amortized premiums, discounts and capitalized expenses related to indebtedness and an estimate of interest within rental expense (equal to one-third of rental expense). Management believes this is a reasonable approximation of the interest factor. |
We had no preferred stock outstanding for any period presented, and accordingly, the ratio of earnings to combined fixed charges and preferred stock dividends is the same as the ratio of earnings to fixed charges.
