Exhibit 12.1
Hanover Compressor Company
Computation of Ratio of Earnings to Fixed Charges
(Amounts in thousands of dollars, except ratio amounts)
| Three Months Ended | ||||||||||||||||||||||||||||
| March 31, | Year Ended December 31, | |||||||||||||||||||||||||||
| 2004 (1) | 2003 (2) | 2003 (3) | 2002 (4) | 2001 | 2000 | 1999 | ||||||||||||||||||||||
| Earnings: | ||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes | $ | (1,721 | ) | $ | (37,375 | ) | $ | (107,766 | ) | $ | (92,419 | ) | $ | 112,000 | $ | 74,948 | $ | 60,463 | ||||||||||
| Add: | ||||||||||||||||||||||||||||
| Interest on indebtedness and amortization of capitalized interest, debt expense and discount | 35,372 | 10,306 | 85,524 | 40,453 | 31,760 | 15,110 | 9,115 | |||||||||||||||||||||
| Leasing expense and the estimated interest factor attributable to rents | 920 | 25,160 | 49,881 | 96,863 | 71,347 | 46,132 | 22,486 | |||||||||||||||||||||
| Equity in income of non-consolidated affiliates in excess of distributions of income | (4,288 | ) | (2,880 | ) | (4,637 | ) | (2,223 | ) | (9,350 | ) | (3,518 | ) | (1,188 | ) | ||||||||||||||
| Earnings (loss) as adjusted | $ | 30,283 | $ | (4,789 | ) | $ | 23,002 | $ | 42,674 | $ | 205,757 | $ | 132,672 | $ | 90,876 | |||||||||||||
| Fixed charges: | ||||||||||||||||||||||||||||
| Interest on indebtedness, amortization of debt expense and discount and capitalized interest | $ | 35,524 | $ | 10,362 | $ | 86,033 | $ | 42,577 | $ | 34,250 | $ | 16,871 | $ | 10,597 | ||||||||||||||
| Leasing expense and the estimated interest factor attributable to rents | 920 | 25,160 | 49,881 | 96,863 | 71,347 | 46,132 | 22,486 | |||||||||||||||||||||
| Total fixed charges | $ | 36,444 | $ | 35,522 | $ | 135,914 | $ | 139,440 | $ | 105,597 | $ | 63,003 | $ | 33,083 | ||||||||||||||
| Ratio of earnings to fixed charges | — | — | — | — | 1.95 | 2.11 | 2.75 | |||||||||||||||||||||
| (1) | Due to Hanover’s loss for the three months ended March 31, 2004, the ratio was less than 1:1. Hanover would have had to generate additional pre-tax earnings of $6.2 million to achieve coverage of 1:1. | |
| (2) | Due to Hanover’s loss for the three months ended March 31, 2003, the ratio was less than 1:1. Hanover would have had to generate additional pre-tax earnings of $40.3 million to achieve coverage of 1:1. During the first quarter 2003, we recorded $42.1 million in pre-tax charges related to the settlement of shareholder litigation. For a description of these pre-tax charges, see footnote 7 in the notes to the consolidated financial statements included in Hanover’s Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2003. | |
| (3) | Due to Hanover’s loss for the year ended December 31, 2003, the ratio was less than 1:1. Hanover would have had to generate additional pre-tax earnings of $112.9 million to achieve coverage of 1:1. During the year, we recorded $250.6 million in pre-tax charges. For a description of these pre-tax charges, see footnote 21 in the notes to the consolidated financial statements included in Hanover’s Annual Report on Form 10-K for the year ended December 31, 2003. | |
| (4) | Due to Hanover’s loss for the year ended December 31, 2002, the ratio was less than 1:1. Hanover would have had to generate additional pre-tax earnings of $96.8 million to achieve coverage of 1:1. During 2002, we recorded $182.7 million in pre-tax charges. For a description of these pre-tax charges, see footnote 27 in the notes to the consolidated financial statements included in Hanover’s Annual Report on Form 10-K for the year ended December 31, 2002. |