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EXHIBIT 12.1
TESORO PETROLEUM CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS
<Table>
<Caption>
PRO FORMA
AS ADJUSTED
PRO FORMA FOR THE
AS CALIFORNIA
ADJUSTED ACQUISITION PRO FORMA
FOR THE AND THE AS ADJUSTED
CALIFORNIA FINANCING FOR THE
ACQUISITION TRANSACTIONS TESORO FINANCING
TESORO HISTORICAL (a) (a) HISTORICAL TRANSACTIONS
------------------------------------------ ----------- ------------ ---------- ------------
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------- THREE MONTHS ENDED
1998 1999 2000 2001 2002 2002 2002 MARCH 31, 2003
----- ------ ------ ------ ------- ----------- ------------ -------------------------
(DOLLARS IN MILLIONS)
EARNINGS:
Earnings (Loss) from
continuing operations
before income taxes and
extraordinary loss...... $12.1 $ 51.2 $123.5 $146.9 $(181.3) $(258.6) $(248.7) $32.5 $36.5
Interest expense, net of
capitalized
interest(b)............. 24.8 36.7 31.7 51.6 157.8 179.8 166.9 44.0 39.2
Amortization of debt
discount................ 0.1 0.2 0.2 0.3 6.3 10.0 10.8 2.6 2.8
Amortization of debt
issuance costs.......... 0.3 0.7 0.8 0.9 2.0 2.2 4.4 0.6 1.2
Estimated interest portion
of rents(c)............. 17.4 22.4 19.8 17.0 27.5 28.8 28.8 7.4 7.4
----- ------ ------ ------ ------- ------- ------- ----- -----
Total Earnings.......... $54.7 $111.2 $176.0 $216.7 $ 12.3 $ (37.8) $ (37.8) $87.1 $87.1
----- ------ ------ ------ ------- ------- ------- ----- -----
FIXED CHARGES:
Interest expense whether
expensed or
capitalized(b).......... $24.9 $ 37.3 $ 32.4 $ 56.7 $ 160.3 $ 182.3 $ 169.4 $45.3 $40.5
Amortization of debt
discount................ 0.1 0.2 0.2 0.3 6.3 10.0 10.8 2.6 2.8
Amortization of debt
issuance costs.......... 0.3 0.7 0.8 0.9 2.0 2.2 4.4 0.6 1.2
Estimated interest portion
of rents(c)............. 17.4 22.4 19.8 17.0 27.5 28.8 28.8 7.4 7.4
----- ------ ------ ------ ------- ------- ------- ----- -----
Total Fixed Charges..... $42.7 $ 60.6 $ 53.2 $ 74.9 $ 196.1 $ 223.3 $ 213.4 $55.9 $51.9
----- ------ ------ ------ ------- ------- ------- ----- -----
Ratio of Earnings to Fixed
Charges................... 1.28x 1.83x 3.31x 2.89x (d) (e) (f) 1.56x 1.68x
----- ------ ------ ------ ------- ------- ------- ----- -----
</Table>
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(a) The pro forma information giving effect to the California Acquisition is
based on historical data and we believe it is not indicative of the results
of future operations. A major turnaround at our California refinery,
including the refinery's fluid coker, was completed in March 2002, and a
turnaround of the larger crude unit was completed in the second quarter of
2002. The inclusion of the results of our California Acquisition prior to
May 17, 2002, the date of the consummation of that acquisition, in our pro
forma as adjusted results for the year ended December 31, 2002 resulted in
a $46 million increase in our net loss from our historical results (a) for
the same period. The next scheduled turnaround at our California refinery
is for the hydrocracker in the fourth quarter of 2004.
(b) Includes interest expense and other financing costs.
(c) For a majority of the marine charter leases, the interest portion of rents
was estimated by using our incremental borrowing rate in effect at the
inception of the leases. For the remaining leases, interest expense was
estimated by using one third of the rental payments. Total rental expense,
including marine
charters, was approximately $54 million, $64 million, $60 million, $66
million and $92 million for the years ended 1998, 1999, 2000, 2001 and
2002, respectively, and $25 million for the three months ended March
31, 2003.
(d) For the year ended December 31, 2002, fixed charges exceeded earnings by
$183.8 million.
(e) For the year ended December 31, 2002, fixed charges exceeded earnings by
$261.1 million on a pro forma basis as adjusted for the California
Acquisition. See footnote (a) above.
(f) For the year ended December 31, 2002, fixed charges exceeded earnings by
$251.2 million on a pro forma basis as adjusted for the California
Acquisition and the Financing Transactions. See footnote (a) above.
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