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)
SIX MONTHS ENDED
JUNE 30,
----------------------
2005 2004 2004 2003
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EARNINGS
Pretax income from continuing operations before preferred interests
of subsidiaries............................................................ $1,833,542 $1,097,534 $2,663,083 $1,930,925
Add: Fixed charges excluding capitalized interest and preferred interest
requirements of consolidated subsidiaries.................................. 73,122 62,901 134,797 132,820
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Adjusted Earnings............................................................ $1,906,664 $1,160,435 $2,797,880 $2,063,745
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FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Interest expense including capitalized interest (1).......................... $ 90,073 $ 80,742 $ 168,090 $ 173,045
Amortization of debt expense................................................. 2,705 1,162 2,471 2,163
Interest component of lease rental expenditures (2).......................... 8,007 7,355 14,984 14,458
Preferred interest requirements of consolidated subsidiaries (3)............. - - - 11,805
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Fixed charges................................................................ 100,785 89,259 185,545 201,471
Preferred stock dividend requirements (4).................................... 4,534 4,271 9,058 9,968
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Combined Fixed Charges and Preferred Stock Dividends......................... $ 105,319 $ 93,530 $ 194,603 $ 211,439
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Ratio of Earnings to Fixed Charges.............................................. 18.92 13.00 15.08 10.24
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Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends....... 18.10 12.41 14.38 9.76
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2002 2001 2000
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EARNINGS
Pretax income from continuing operations before preferred interests
of subsidiaries............................................................ $ 915,194 $1,206,863 $1,203,681
Add: Fixed charges excluding capitalized interest and preferred interest
requirements of consolidated subsidiaries.................................. 128,730 134,484 116,190
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Adjusted Earnings............................................................ $1,043,924 $1,341,347 $1,319,871
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FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Interest expense including capitalized interest (1).......................... $ 155,667 $ 178,915 $ 168,121
Amortization of debt expense................................................. 1,859 2,460 2,726
Interest component of lease rental expenditures (2).......................... 11,895 9,858 7,343
Preferred interest requirements of consolidated subsidiaries (3)............. 19,581 8,608 -
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Fixed charges................................................................ 189,002 199,841 178,190
Preferred stock dividend requirements (4).................................... 17,540 32,495 33,386
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Combined Fixed Charges and Preferred Stock Dividends......................... $ 206,542 $ 232,336 $ 211,576
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Ratio of Earnings to Fixed Charges.............................................. 5.52 6.71 7.41
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Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends....... 5.05 5.77 6.24
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(1) The Company did not receive a tax benefit for $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 was required
to cover the $5 million write-off. Accordingly, interest expense for the
2003 period was 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 to rental payments for
all periods presented.
(3) The Company did 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.