Exhibit 12.3
COMPUTATION OF RATIO OF ADJUSTED EBITDA TO INTEREST EXPENSE
CONTINENTAL RESOURCES, INC.
YEAR ENDED DECEMBER 31,
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1996 1997 1998 1999 2000
---- ---- ---- ---- ----
NET INCOME 13,325 26,197 (17,980) 3,920 37,780
INCOME TAXES 8,238 (8,941) -- -- --
INTEREST EXPENSE 4,550 4,804 12,248 16,534 15,786
DD&A 22,876 33,354 38,716 20,385 21,945
EXPLORATION EXPENSE 4,513 6,807 7,106 7,750 13,321
LITIGATION SETTLEMENT -- 0 (7,500) --
------ ------ ------- ------- -------
ADJUSTED EBITDA <F1> 53,502 54,721 40,090 48,589 88,832
TOTAL ADJUSTED EBITDA TO
INTEREST EXPENSE 11.8 11.4 3.3 3.0 5.6
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<FN>
<F1> ADJUSTED EBITDA represents earnings before interest expense, income taxes,
depreciation, depletion, amortization and exploration expense, excluding
proceeds from litigation settlements. EBITDA is not a measure of cash flow
as determined by generally accepted accounting principles ("GAAP").
Adjusted EBITDA should not be considered as an alternative to, or more
meaningful than, net income or cash flow as determined in accordance with
GAAP or as an indicator of a company's operating performance or liquidity.
Certain items excluded from Adjusted EBITDA are significant components in
understanding and assessing a company's financial performance, such as a
company's cost of capital and tax structure, as well as historic costs of
depreciable assets, none of which are components of Adjusted EBITDA. The
Company's computations of Adjusted EBITDA may not be comparable to other
similarly titled measures of other companies. The Company believes that
Adjusted EBITDA is a widely followed measure of operating performance and
may also be used by investors to measure the Company's ability to meet
future debt service requirements, if any.
</FN>