Exhibit 12
CHEAPEAKE ENERGY CORPORATION
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
(dollars in 000’s)
Year Ended December 31, 1998 | Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | Nine Months Ended September 30, 2003 | ||||||||||||||
EARNINGS: | |||||||||||||||||||
Income before income taxes and extraordinary item | $ | (920,520 | ) | $ | 35,030 | $ | 196,162 | $ | 361,698 | $ | 67,140 | $ | 389,060 | ||||||
Interest | 68,249 | 81,052 | 86,256 | 98,321 | 111,280 | 110,557 | |||||||||||||
Amortization of capitalized interest | 12,240 | 1,047 | 1,226 | 1,784 | 1,804 | 1,769 | |||||||||||||
Bond discount amortization | — | — | — | — | — | — | |||||||||||||
Loan cost amortization | 2,516 | 3,338 | 3,669 | 4,022 | 4,962 | 5,300 | |||||||||||||
Earnings | $ | (837,515 | ) | $ | 120,467 | $ | 287,313 | $ | 465,825 | $ | 185,186 | $ | 506,686 | ||||||
Interest expense | $ | 68,249 | $ | 81,052 | $ | 86,256 | $ | 98,321 | $ | 111,280 | $ | 110,557 | |||||||
Capitalized interest | 6,470 | 3,356 | 2,452 | 4,719 | 4,976 | 8,753 | |||||||||||||
Bond discount amortization | — | — | — | — | — | — | |||||||||||||
Loan cost amortization | 2,516 | 3,338 | 3,669 | 4,022 | 4,962 | 5,300 | |||||||||||||
Fixed Changes | $ | 77,235 | $ | 87,746 | $ | 92,377 | $ | 107,062 | $ | 121,218 | $ | 124,610 | |||||||
Preferred Stock Dividends | |||||||||||||||||||
Preferred Dividend Requirements | $ | 12,077 | $ | 16,711 | $ | 8,484 | $ | 2,050 | $ | 10,117 | $ | 15,484 | |||||||
Ratio of income before provision for taxes to Net income | N/A | 1.05 | N/A | 1.66 | 1.67 | 1.61 | |||||||||||||
Subtotal – Preferred Dividends | $ | 12,077 | $ | 17,597 | $ | 8,484 | $ | 3,411 | $ | 16,861 | $ | 24,975 | |||||||
Combined Fixed Charges and Preferred Dividends | $ | 89,312 | $ | 105,343 | $ | 100,861 | $ | 110,473 | $ | 138,079 | $ | 149,585 | |||||||
Ratio of Earnings to Fixed Charges | — | 1.4 | 3.1 | 4.4 | 1.5 | 4.1 | |||||||||||||
Insufficient coverage | $ | 914,750 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||
Ratio of Earnings to Combined Fixed Charges and Preferred Dividends | — | 1.1 | 2.8 | 4.2 | 1.3 | 3.4 | |||||||||||||
Insufficient coverage | $ | 926,824 | $ | — | $ | — | $ | — | $ | — | $ | — |