Exhibit 12
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Plains Resources Inc.
Computation of Ratios
(In Thousands)
Nine Months
Ended
September 30,
--------------------
1995 1996 1997 1998 1999 2000 1999
-------- -------- -------- ---------- -------- -------- ----------
(restated) (restated)
RATIO OF EARNINGS TO FIXED CHARGES
Earnings
Net income (loss) before income taxes,
minority interest and extraordinary item $ 2,652 $ 17,754 $ 22,586 $ (106,565) $(85,469) $100,568 $ (76,803)
Fixed charges 18,190 22,415 27,276 48,826 73,952 73,615 52,103
Less capitalized interest (3,093) (3,613) (3,280) (3,683) (4,409) (3,236) (3,203)
-------- -------- -------- ---------- -------- -------- ----------
Total earnings available for fixed charges $ 17,749 $ 36,556 $ 46,582 $ (61,422) $(15,926) $170,947 $ (27,903)
======== ======== ======== ========== ======== ======== ==========
Fixed charges
Interest expense $ 13,606 $ 17,286 $ 22,012 $ 35,730 $ 46,378 $ 41,912 $ 32,668
Capitalized interest 3,093 3,613 3,280 3,683 4,409 3,236 3,203
Interest portion on rentals 363 340 367 443 2,803 1,848 2,102
Amortization of debt issue costs 1,128 1,176 1,350 1,163 3,926 8,412 2,119
Pre-tax preferred dividend requirement -- -- 267 7,807 16,436 18,207 12,011
-------- -------- -------- ---------- -------- -------- ----------
Total fixed charges $ 18,190 $ 22,415 $ 27,276 $ 48,826 $ 73,952 $ 73,615 $ 52,103
======== ======== ======== ========== ======== ======== ==========
Earnings in excess of
(required to cover) fixed charges $ (441) $ 14,141 $ 19,306 $ (110,248) $(89,878) $ 97,332 $ (80,006)
Earnings to fixed charges 1.0 1.6 1.7 -- (A) -- (B) 2.3 -- (C)
(A) The available earnings failed to cover charges by $110.2 million. Included
in earnings for 1998 was a nonrecurring gain of $60.8 million before income
taxes relating to the formation of Plains All American, a noncash full cost
ceiling writedown of $173.9 million before income taxes and $7.1 million in
unauthorized trading losses. If such events had not occurred, the ratio of
earnings to fixed charges would have been 1.2.
(B) The available earnings failed to cover fixed charges by $89.9 million.
Included in earnings for 1999 was $166.4 million in unauthorized trading
losses, a $16.5 million gain on the sale of linefill, a $9.8 million gain
related to the sale of units by Plains All American, and restructuring
expenses of $1.4 million. If such events had not occurred, the ratio of
earnings to fixed charges would have been 1.7.
(C) The available earnings failed to cover fixed charges by $80.0 million.
Included in earnings for the nine months ended September 30, 1999 was
$114.9 million in unauthorized trading losses and restructuring expenses of
$1.4 million. If such events had not occurred, the ratio of earnings to
fixed charges would have been 1.7.
Plains Resources Inc. Page 2
Pro Forma Computation of Ratios
(In Thousands)
Nine Months
Year Ended Ended
December 31, September 30,
1999 2000
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PRO FORMA RATIO OF EARNINGS TO
FIXED CHARGES
Earnings
Net income (loss) before income taxes,
minority interest and extraordinary item $(85,469) $ 100,568
Fixed charges 60,116 63,308
Less capitalized interest (4,409) (3,236)
-------- ----------
Total earnings available for fixed charges $(29,762) $ 160,640
======== ==========
Fixed charges
Interest expense $ 46,378 $ 41,912
Capitalized interest 4,409 3,236
Interest portion on rentals 2,803 1,848
Amortization of debt issue costs 3,926 8,412
Pre-tax preferred dividend requirement 2,600 7,900
-------- ----------
Total fixed charges $ 60,116 $ 63,308
======== ==========
Earnings in excess of
(required to cover) fixed charges $(89,878) $ 97,332
Earnings to fixed charges - (A) 2.5
(A) The available earnings failed to cover fixed charges by $89.9 million.
Included in earnings for 1999 was $166.4 million in unauthorized trading
losses, a $16.5 million gain on the sale of linefill, a $9.8 million gain
related to the sale of units by Plains All American, and restructuring
expenses of $1.4 million. If such events had not occurred,the ratio of
earnings to fixed charges would have been 1.9.