Exhibit 12
CHESAPEAKE ENERGY CORPORATION
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
(dollars in 000's)
Year Six Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended
June 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1997 1997 1998 1999 2000 2001 2002
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Income before income taxes and
extraordinary item $ (180,330) $ (31,574) $ (920,520) $ 35,030 $ 196,162 $ 438,365 $ 67,140
Interest 18,550 17,448 68,249 81,052 86,256 98,321 111,280
Amortization of capitalized interest 8,772 4,386 12,240 1,047 1,226 1,784 1,804
Bond discount amortization (a) - - - - - - -
Loan cost amortization 1,455 794 2,516 3,338 3,669 4,022 4,962
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Earnings $ (151,553) $ (8,946) $ (837,515) $ 120,467 $ 287,313 $ 542,492 $ 185,186
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Interest expense $ 18,550 $ 17,448 $ 68,249 $ 81,052 $ 86,256 $ 98,321 $ 111,280
Capitalized interest
12,935 5,087 6,470 3,356 2,452 4,719 4,976
Bond discount amortization (a) - - - - - - -
Loan cost amortization 1,455 794 2,516 3,338 3,669 4,022 4,962
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Fixed Charges $ 32,940 $ 23,329 $ 77,235 $ 87,746 $ 92,377 $ 107,062 $ 121,218
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Preferred Stock Dividends
Preferred Dividend Requirements $ - $ - $ 12,077 $ 16,711 $ 8,484 $ 2,050 $ 10,117
Ratio of income before provision for
taxes to Net Income (b) - - N/A 1.05 N/A 1.66 1.67
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Subtotal - Preferred $ - $ - $ 12,077 $ 17,597 $ 8,484 $ 3,411 $ 16,861
Dividends
Combined Fixed Charges and Preferred
Dividends $ 32,940 $ 23,329 $ 89,312 $ 105,343 $ 100,861 $ 110,473 $ 138,079
Ratio of Earnings to Fixed Charges - - - 1.4 3.1 5.1 1.5
Insufficient coverage $ 184,493 $ 32,275 $ 914,750 $ - $ - $ - $ -
Ratio of Earnings to Combined Fixed
Charges and Preferred Dividends - - - 1.1 2.8 4.9 1.3
Insufficient coverage $ 184,493 $ 32,275 $ 926,827 $ - $ - $ - $ -
(a) Bond discount excluded since its included in interest expense
(b) Represents income (loss) before income taxes and extraordinary item divided
by income (loss) before extraordinary item, which adjusts dividends on
preferred stock to a pre-tax basis.
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