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EXHIBIT 12.1
Duke Energy Field Services, LLC
Calculation of Ratio of Earnings to Fixed Charges
(Dollars in Thousands)
Predecessor Company Historical (1) (2) Nine
-------------------------------------------------------- months
Years Ended ended
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1995 1996 1997 1998 1999 2000
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Earnings:
Pretax income from continuing operations before
equity earnings $69,254 $117,277 $ 74,834 $ (6,528) $ 51,856 $238,815
Add:
Fixed charges 22,320 14,663 54,177 54,791 55,021 108,222
Distributed income of equity investees 1,660 2,997 9,784 11,845 22,502 19,225
Subtract:
Interest capitalized 1,694 1,405 2,254 1,565 930 85
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Income as adjusted $91,540 $133,532 $136,541 $ 58,543 $128,449 $365,177
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Fixed charges:
Interest and Debt expense per Statement of Income $20,115 $ 12,747 $ 51,113 $ 52,403 $ 52,915 $106,194
Capitalized Interest 1,694 1,405 2,254 1,565 930 85
Amortized expenses related to indebtedness 390
Portion of rents representative of the interest
factor 511 511 810 823 1,176 1,553
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TOTAL FIXED CHARGES $22,320 $ 14,663 $ 54,177 $ 54,791 $ 55,021 $108,222
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RATIO OF EARNINGS TO FIXED CHARGES 4.10 9.11 2.52 1.07 2.33 3.38
(1) From a financial reporting perspective, we are the successor to Duke Energy
Corporation's North American midstream natural gas business. The
subsidiaries of Duke Energy that conducted this business were contributed
to us in March 2000 immediately prior to the combination of these
subsidiaries with the North American midstream natural gas business of
Phillips Petroleum Company. For periods prior to the March 31, 2000
combination, Duke Energy Field Services, LLC and these former subsidiaries
of Duke Energy collectively are referred to as the "Predecessor Company."
(2) Interest expense on a historical basis was primarily from intercompany
debt. In addition, the historical advance accounts from the parent
companies were non-interest bearing. As a result the historical capital
structure is not indicative of the current capital structure.
For purposes of calculating the ratios of earnings to fixed charges: (1)
"earnings" means income before extraordinary changes plus income taxes and fixed
charges, and (2) "fixed charges" include interest on indebtedness, amortization
of deferred financing costs, and that portion of lease expense that is deemed to
be representative of an interest factor. The ratio includes amounts from our
company, all of our majority-owned subsidiaries and our proportionate share of
distributed amounts from 50% owned investments accounted for using the equity
method.