EXHIBIT 12.1
APACHE CORPORATION
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(IN THOUSANDS)
NINE MONTHS ENDED
SEPTEMBER 30,
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2003 2002 2002 2001 2000 1999 1998
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EARNINGS
Pretax income (loss)
from continuing
operations before
preferred interests
of subsidiaries..................... $1,479,190 $ 613,396 $ 915,194 $1,206,863 $1,203,681 $ 344,573 $ (187,563)
Add: Fixed charges
excluding capitalized interest
and preferred interest
requirements of consolidated
subsidiaries........................ 99,810 97,397 128,730 134,484 116,190 90,398 78,728
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Adjusted Earnings.................... $1,579,000 $ 710,793 $1,043,924 $1,341,347 $1,319,871 $ 434,971 $ (108,835)
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FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
Interest expense including
capitalized interest(1)............ $ 131,910 $ 117,120 $ 155,667 $ 178,915 $ 168,121 $ 132,986 $ 119,703
Amortization of debt expense......... 1,624 1,330 1,859 2,460 2,726 4,854 4,496
Interest component of lease rental
expenditures(2).................... 8,350 9,440 11,895 9,858 7,343 5,789 3,808
Preferred interest requirements
of consolidated subsidiaries(3).... 11,842 15,179 19,581 8,608 - - -
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Fixed charges........................ 153,726 143,069 189,002 199,841 178,190 143,629 128,007
Preferred stock dividend
requirements(4).................... 7,515 15,112 17,540 32,495 33,386 24,788 2,905
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Combined Fixed Charges and
Preferred Stock Dividends.......... $ 161,241 $ 158,181 $ 206,542 $ 232,336 $ 211,576 $ 168,417 $ 130,912
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Ratio of Earnings to Fixed Charges...... 10.27 4.97 5.52 6.71 7.41 3.03 -(5)
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Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends............................. 9.79 4.49 5.05 5.77 6.24 2.58 -(5)
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(1) The Company does not receive a tax benefit for the $5 million of
transaction costs written off to interest expense when the Company retired
its preferred interests of subsidiaries in September 2003. Given the
non-deductibility of the charge, $9 million of pre-tax income is required
to cover the $5 million write-off. Accordingly, interest expense has been
grossed up by $4 million.
(2) Represents the portion of rental expense assumed to be attributable to
interest factors of related rental obligations determined at interest
rates appropriate for the period during which the rental obligations were
incurred. Approximately 32 to 34 percent applies for all periods
presented.
(3) The Company does not receive a tax benefit for a portion of its preferred
interests of consolidated subsidiaries. This amount represents the pre-tax
earnings that would be required to cover preferred interests requirements
of consolidated subsidiaries. In September 2003, the Company retired its
preferred interests of subsidiaries.
(4) The Company does not receive a tax benefit for its preferred stock
dividends. This amount represents the pre-tax earnings that would be
required to cover its preferred stock dividends.
(5) Earnings in 1998 were inadequate to cover fixed charges and combined fixed
charges and preferred stock dividends by $237 million and $240 million,
respectively.