1
EXHIBIT 12.1
COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1993 1994 1995 1996 1997
------- -------- -------- -------- --------
Pretax income.......................... $26,983 $211,983 $253,327 $379,039 $269,302
Fixed charges:
Interest expense..................... 30,506 28,721 50,379 49,858 46,850
Preferred stock dividends of a
subsidiary........................ 1,681
Capitalized debt cost................ 1,536 1,452 1,486 1,332 1,226
Interest portion of rent expense..... 2,777 3,170 3,126 2,928 3,270
------- -------- -------- -------- --------
Total fixed charges.......... 36,500 33,343 54,991 54,118 51,346
Less: Capitalized interest, net........ 4,623 1,464 4,845 8,690 27,270
------- -------- -------- -------- --------
31,877 31,879 50,146 45,428 24,076
Earnings before fixed charges.......... $58,860 $243,862 $303,473 $424,467 $293,378
======= ======== ======== ======== ========
Ratio of earnings to fixed charges..... 1.61(1) 7.31 5.52 7.84 5.71(2)
- ---------------
(1) During 1993, the Company recorded a non-cash charge to depreciation,
depletion and amortization of $103 million pretax ($48 million after-tax)
for the write-down of its investment in the U.K. North Sea's Piper field.
Excluding the effect of the piper write-down, the ratio of earnings to fixed
charges for 1993 would have been 4.45.
(2) The 1997 pro forma ratio of earnings to fixed charges would be 4.96 as
calculated below:
1997 fixed charges per above................................ $51,346
Pro forma adjustments
Bond interest requirements............................. 10,946
Estimated decrease in interest expense due to
refinancing........................................... (3,200)
-------
Total pro forma fixed charges............................. $59,092
=======
Pro forma ratio of earnings to fixed charges.............. 4.96
=======
The pro forma adjustments give effect to the issuance of bonds at an
annual effective interest rate of 7.3956% and the application of a portion
of the proceeds to the reduction of debt under the uncommitted and
unsecured lines of credit, as if such transaction had taken place January
1, 1997.
2
COMPUTATION OF
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN THOUSANDS)
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1993 1994 1995 1996 1997
------- -------- -------- -------- --------
Pretax income............................ $26,983 $211,983 $253,327 $379,039 $269,302
Fixed charges
Interest expense....................... 30,506 28,721 50,379 49,858 46,850
Preferred stock dividends of
subsidiary.......................... 1,681
Capitalized debt cost.................. 1,536 1,452 1,486 1,332 1,226
Interest portion of rent expense....... 2,777 3,170 3,126 2,928 3,270
------- -------- -------- -------- --------
Total fixed charges............ 36,500 33,343 54,991 54,118 51,346
Less: Capitalized interest, net........ 4,623 1,464 4,845 8,690 27,270
------- -------- -------- -------- --------
31,877 31,879 50,146 45,428 24,076
Earnings before fixed charges............ $58,860 $243,862 $303,473 $424,467 $293,378
======= ======== ======== ======== ========
Ratio of earnings to fixed charges....... 1.61(1) 7.31 5.52 7.84 5.71(2)
- ---------------
(1) During 1993, the Company recorded a non-cash charge to depreciation,
depletion and amortization of $103 million pretax ($48 million after-tax)
for the write-down of its investment in the U.K. North Sea's Piper Field.
Excluding the effect of the piper write-down, the ratio of earnings to fixed
charges for 1993 would have been 4.45.
(2) The 1997 pro form a ratio of earnings to combined fixed charges and
preferred stock dividends would be 3.49 as calculated below:
1997 fixed charges per above................................ $51,346
Pro forma adjustments
Preferred stock dividend requirements.................. 12,495
Ratio of 1997 pretax income to net income.............. 2.0
------
Preferred stock dividend factor........................ 24,990
Bond interest requirements............................. 10,946
Estimated decrease in interest expense due to
refinancing........................................... (3,200)
-------
Total pro forma combined fixed charges and preferred stock
dividends.............................................. $84,082
=======
Pro forma ratio of earnings to combined fixed charges and
preferred stock dividends.............................. 3.49
=======
The pro forma adjustments give effect to preferred stock dividends as a
result of the issuance of $175 million of the preferred stock at an annual
dividend rate of 7.14% and the issuance of bonds at an annual effective
interest rate of 7.3956% and the application of a portion of the proceeds
to the reduction of debt under the revolving credit facility and the
uncommitted and unsecured lines of credit, as if such transactions had
taken place January 1, 1997.