EX-12.1 13 h05116exv12w1.txt STATEMENT OF COMPUTATION OF RATIO OF EARNINGS . . . EXHIBIT 12.1 TESORO PETROLEUM CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS
PRO FORMA AS ADJUSTED PRO FORMA FOR THE AS CALIFORNIA ADJUSTED ACQUISITION PRO FORMA FOR THE AND THE AS ADJUSTED CALIFORNIA FINANCING FOR THE ACQUISITION TRANSACTIONS TESORO FINANCING TESORO HISTORICAL (a) (a) HISTORICAL TRANSACTIONS ------------------------------------------ ----------- ------------ ---------- ------------ YEARS ENDED DECEMBER 31, ----------------------------------------------------------------------- THREE MONTHS ENDED 1998 1999 2000 2001 2002 2002 2002 MARCH 31, 2003 ----- ------ ------ ------ ------- ----------- ------------ ------------------------- (DOLLARS IN MILLIONS) EARNINGS: Earnings (Loss) from continuing operations before income taxes and extraordinary loss...... $12.1 $ 51.2 $123.5 $146.9 $(181.3) $(258.6) $(248.7) $32.5 $36.5 Interest expense, net of capitalized interest(b)............. 24.8 36.7 31.7 51.6 157.8 179.8 166.9 44.0 39.2 Amortization of debt discount................ 0.1 0.2 0.2 0.3 6.3 10.0 10.8 2.6 2.8 Amortization of debt issuance costs.......... 0.3 0.7 0.8 0.9 2.0 2.2 4.4 0.6 1.2 Estimated interest portion of rents(c)............. 17.4 22.4 19.8 17.0 27.5 28.8 28.8 7.4 7.4 ----- ------ ------ ------ ------- ------- ------- ----- ----- Total Earnings.......... $54.7 $111.2 $176.0 $216.7 $ 12.3 $ (37.8) $ (37.8) $87.1 $87.1 ----- ------ ------ ------ ------- ------- ------- ----- ----- FIXED CHARGES: Interest expense whether expensed or capitalized(b).......... $24.9 $ 37.3 $ 32.4 $ 56.7 $ 160.3 $ 182.3 $ 169.4 $45.3 $40.5 Amortization of debt discount................ 0.1 0.2 0.2 0.3 6.3 10.0 10.8 2.6 2.8 Amortization of debt issuance costs.......... 0.3 0.7 0.8 0.9 2.0 2.2 4.4 0.6 1.2 Estimated interest portion of rents(c)............. 17.4 22.4 19.8 17.0 27.5 28.8 28.8 7.4 7.4 ----- ------ ------ ------ ------- ------- ------- ----- ----- Total Fixed Charges..... $42.7 $ 60.6 $ 53.2 $ 74.9 $ 196.1 $ 223.3 $ 213.4 $55.9 $51.9 ----- ------ ------ ------ ------- ------- ------- ----- ----- Ratio of Earnings to Fixed Charges................... 1.28x 1.83x 3.31x 2.89x (d) (e) (f) 1.56x 1.68x ----- ------ ------ ------ ------- ------- ------- ----- -----
--------------- (a) The pro forma information giving effect to the California Acquisition is based on historical data and we believe it is not indicative of the results of future operations. A major turnaround at our California refinery, including the refinery's fluid coker, was completed in March 2002, and a turnaround of the larger crude unit was completed in the second quarter of 2002. The inclusion of the results of our California Acquisition prior to May 17, 2002, the date of the consummation of that acquisition, in our pro forma as adjusted results for the year ended December 31, 2002 resulted in a $46 million increase in our net loss from our historical results (a) for the same period. The next scheduled turnaround at our California refinery is for the hydrocracker in the fourth quarter of 2004. (b) Includes interest expense and other financing costs. (c) For a majority of the marine charter leases, the interest portion of rents was estimated by using our incremental borrowing rate in effect at the inception of the leases. For the remaining leases, interest expense was estimated by using one third of the rental payments. Total rental expense, including marine charters, was approximately $54 million, $64 million, $60 million, $66 million and $92 million for the years ended 1998, 1999, 2000, 2001 and 2002, respectively, and $25 million for the three months ended March 31, 2003. (d) For the year ended December 31, 2002, fixed charges exceeded earnings by $183.8 million. (e) For the year ended December 31, 2002, fixed charges exceeded earnings by $261.1 million on a pro forma basis as adjusted for the California Acquisition. See footnote (a) above. (f) For the year ended December 31, 2002, fixed charges exceeded earnings by $251.2 million on a pro forma basis as adjusted for the California Acquisition and the Financing Transactions. See footnote (a) above. 2