Exhibit 12.1
COMPUTATION OF RATIO OF DEBT TO ADJUSTED EBITDA
CONTINENTAL RESOURCES, INC.
YEAR ENDED DECEMBER 31,
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1999 2000 2001 2002 2003
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NET INCOME (LOSS) 3,920 37,780 11,667 (20,032) 2,340
INCOME TAXES - - - - -
INTEREST EXPENSE 17,370 16,514 15,674 18,401 20,258
DD&A 19,549 19,552 27,731 31,380 42,367
ACCRETION EXPENSE - - - - 1,151
PROPERTY IMPAIRMENTS 5,154 5,631 10,113 25,686 8,975
EXPLORATION EXPENSE 3,191 9,965 15,863 10,229 17,221
LITIGATION SETTLEMENT - - - - -
CHANGE IN ACCOUNTING PRINCIPLE - - - - (2,162)
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ADJUSTED EBITDA <F1> 49,184 89,442 81,048 65,664 90,150
TOTAL DEBT <F2> 170,637 140,350 183,395 235,205 277,093
TOTAL DEBT TO ADJUSTED EBITDA 3.5 1.6 2.3 3.6 3.1
<FN>
<F1>
Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation,
depletion, amortization, property impairments and exploration expense, excluding proceeds from
litigation settlements. Adjusted 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'
ability to meet future debt service requirements, if any.
<F2>
Total debt excludes capital leases of $13.8 million in 2003 and $12.0 million in 2002.
</FN>