EX-12.1 3 d410667dex121.htm STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES Statement of Computation of Ratios of Earnings to Fixed Charges

EXHIBIT 12.1

CONCHO RESOURCES INC.

STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND

EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

 

                                                                                                                             
     Six Months
Ended June 30,
2012		      Years Ended December 31,  
        2011      2010      2009      2008      2007  
     (in thousands, except ratios)  

Income (loss) from continuing operations before income taxes

    $ 567,094       $ 746,451       $ 285,926       $ (35,901)       $ 429,469       $ 32,950   

Interest expense

      77,736         118,360         60,087         28,292         29,039         36,042   

Rental expense attributable to interest

      450         1,193         932         505         338         96   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Earnings

    $ 645,280       $ 866,004       $ 346,945       $ (7,104)       $ 458,846       $ 69,088   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Interest expense

    $ 77,736       $ 118,360       $ 60,087       $ 28,292       $ 29,039       $ 36,042   

Capitalized interest

      —         73         184         66         1,233         2,647   

Rental expense attributable to interest

      450         1,193         932         505         338         96   

Preferred stock dividends

      —         —         —         —         —         45   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Fixed charges and preferred stock dividends

    $ 78,186       $ 119,626       $ 61,203       $ 28,863       $ 30,610       $ 38,830   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ratio of earnings to fixed charges(a)

      8.25         7.24         5.67         (0.25)         14.99         1.78   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Insufficient coverage

    $ —       $ —       $ —       $ (35,967)       $ —       $ —   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ratio of earnings to fixed charges and preferred stock dividends(b)

      8.25         7.24         5.67         (0.25)         14.99         1.78   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Insufficient coverage

    $ —       $ —       $ —       $ (35,967)       $ —       $ —   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

 

(a) The ratio has been computed by dividing earnings by fixed charges. For purposes of computing the ratio:

 

  —  

earnings include income (loss) from continuing operations before income taxes, adjusted for interest expense and the portion of rental expense deemed to be representative of the interest component of rental expense; and

 

  —  

fixed charges consist of interest expense, capitalized interest and the portion of rental expense deemed to be representative of the interest component of rental expense.

 

(b) The ratio has been computed by dividing earnings by fixed charges and preferred stock dividends. For purposes of computing the ratio:

 

  —  

earnings include income (loss) from continuing operations before income taxes, adjusted for interest expense and the portion of rental expense deemed to be representative of the interest component of rental expense; and

 

  —  

fixed charges and preferred stock dividends consist of interest expense, capitalized interest, the portion of rental expense deemed to be representative of the interest component of rental expense and preferred stock dividends.