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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2005 2004 2004 2003 2002 2001 2000
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EARNINGS
Pretax income from continuing operations
before preferred interests of
subsidiaries .......................... $2,993,054 $1,836,090 $2,663,083 $1,930,925 $ 915,194 $1,206,863 $1,203,681
Add: Fixed charges excluding capitalized
interest and preferred interest
requirements of consolidated
subsidiaries .......................... 106,035 96,510 134,797 132,820 128,730 134,484 116,190
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Adjusted Earnings ........................ $3,099,089 1,932,600 $2,797,880 $2,063,745 $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) .......................... $ 133,590 $ 122,495 $ 168,090 $ 173,045 $ 155,667 $ 178,915 $ 168,121
Amortization of debt expense ............. 3,226 1,814 2,471 2,163 1,859 2,460 2,726
Interest component of lease rental
expenditures (2) ...................... 11,872 11,152 14,984 14,458 11,895 9,858 7,343
Preferred interest requirements of
consolidated subsidiaries (3) ......... -- -- -- 11,805 19,581 8,608 --
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Fixed charges ............................ 148,688 135,461 185,545 201,471 189,002 199,841 178,190
Preferred stock dividend requirements
(4) ................................... 6,946 6,741 9,058 9,968 17,540 32,495 33,386
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Combined Fixed Charges and Preferred
Stock Dividends ....................... $ 155,634 $ 142,202 $ 194,603 $ 211,439 $ 206,542 $ 232,336 $ 211,576
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Ratio of Earnings to Fixed Charges .......... 20.84 14.27 15.08 10.24 5.52 6.71 7.41
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Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends ............ 19.91 13.59 14.38 9.76 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.