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EXHIBIT 12.1
PARKER & PARSLEY PETROLEUM COMPANY
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
PRO FORMA PRO FORMA
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NINE MONTHS NINE MONTHS YEAR ENDED DECEMBER 31, NINE MONTHS YEAR ENDED
ENDED ENDED -------------------------------------------------- ENDED DECEMBER 31,
SEP. 30, 1997 SEP. 30, 1996 1996 1995 1994 1993 1992 SEP. 30, 1997 1996
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PRETAX EARNINGS 23,478 163,031 200,348 (150,007) (20,491) 48,403 30,146 (35,076) 78,808
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ADJUSTMENTS:
ADD FIXED CHARGES
AND PREFERRED
STOCK DIVIDENDS:
INTEREST:
EXPENSED 44,264 36,105 46,155 65,449 50,552 23,338 14,708 106,406 138,580
CAPITALIZED 0 0 0 0 0 733 0 157
RENTAL EXPENSE
ATTRIBUTABLE TO
INTEREST 724 724 965 1,200 500 567 367 724 965
PREFERRED STOCK
DIVIDENDS OF
SUBSIDIARY 0 0 0 0 0 0 0 0 0
PREFERRED STOCK
DIVIDENDS OF THE
COMPANY 0 0 0 0 0 0 0 0 0
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TOTAL FIXED
CHARGES AND
PREFERRED
STOCK DIVIDENDS 44,988 36,829 47,120 66,649 51,052 23,905 15,808 107,130 139,702
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DEDUCT:
INTEREST CAPITALIZED 0 0 0 0 0 0 733 0 157
PREFERRED STOCK
DIVIDENDS OF
SUBSIDIARY 0 0 0 0 0 0 0 0 0
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TOTAL DEDUCTS 0 0 0 0 0 0 733 0 157
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ADJUSTED EARNINGS 68,466 199,860 247,468 (83,358) 30,561 72,306 45,221 72,054 218,353
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RATIO OF EARNINGS
TO FIXED CHARGES 1.52 5.43 5.25 (1.25) 0.60 3.02 2.86 0.67 1.56
RATIO OF EARNINGS
TO FIXED CHARGES
AND PREFERRED
STOCK DIVIDENDS (C) 1.52 5.43 5.25 (1.25) 0.60 3.02 2.86 0.67 1.56
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RATIO OF EARNINGS TO
FIXED CHARGES
DISCLOSURE 1.5 5.4 5.3 (b) (b) 3.0 2.9 (b) 1.6
DEFICIENCY,
IF ANY 150,007 20,491 35,076
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(A) FOR PURPOSES OF COMPUTING SUCH RATIO, ADJUSTED EARNINGS CONSIST OF INCOME
BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE PLUS FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS, NET OF PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY AND INTEREST CAPITALIZED. FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS CONSIST OF INTEREST EXPENSE, INTEREST CAPITALIZED, THE PORTION OF
RENTAL EXPENSE ATTRIBUTABLE TO INTEREST, PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY AND PREFERRED STOCK DIVIDENDS OF THE COMPANY. THE DIVIDENDS ON THE
MIPS ARE RECORDED AS INTEREST EXPENSE FOR FINANCIAL REPORTING PURPOSES.
(B) THE RATIO INDICATES A LESS THAN ONE-TO-ONE COVERAGE BECAUSE THE EARNINGS
ARE INADEQUATE TO COVER THE FIXED CHARGES FOR THE PERIOD. PRO FORMA COMBINED
EARNINGS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997, AND THE COMPANY'S
HISTORICAL EARNINGS FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994, WERE
INSUFFICIENT TO COVER ITS FIXED CHARGES. THE AMOUNTS OF THE DEFICIENCIES WERE
$27.6 MILLION, $150 MILLION AND $20.5 MILLION, RESPECTIVELY.
(C) FOR PURPOSES OF COMPUTING THE RATIO, ADJUSTED EARNINGS CONSIST OF INCOME
BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE PLUS FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS, NET OF PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY AND INTEREST CAPITALIZED, AND FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS CONSIST OF INTEREST EXPENSE, INTEREST CAPITALIZED, THE PORTION OF
RENTAL EXPENSE ATTRIBUTABLE TO INTEREST, PREFERRED STOCK DIVIDENDS OF
SUBSIDIARY, AND PREFERRED STOCK DIVIDENDS. THE DIVIDENDS ON THE 6 1/4%
CUMULATIVE GUARANTEED MONTHLY INCOME CONVERTIBLE PREFERRED SHARES OF PARKER &
PARSLEY CAPITAL LLC, A SUBSIDIARY OF PARKER & PARSLEY, WERE RECORDED AS INTEREST
EXPENSE FOR FINANCIAL REPORTING PURPOSES UNTIL THOSE SHARES WERE CONVERTED INTO
COMMON STOCK OF PARKER & PARSLEY ON JULY 28, 1997.