EX-12.1 4 h54173exv12w1.htm STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES exv12w1
 

EXHIBIT 12.1
APACHE CORPORATION
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND COMBINED FIXED CHARGES, PREFERRED STOCK DIVIDENDS
AND PREFERRED INTERESTS OF SUBSIDIARIES
(In thousands, except ratio data)
                                         
(Unaudited)   2007     2006     2005     2004     2003  
EARNINGS
                                        
Pretax income from continuing operations before preferred interests of subsidiaries (5)
   $ 4,672,612     $ 4,009,595     $ 4,206,254     $ 2,663,083     $ 1,930,925  
Add: Fixed charges excluding capitalized interest and preferred interests requirements of consolidated subsidiaries (5)
     258,221       178,399       138,399       134,797       132,820  
 
                              
Adjusted Earnings
   $ 4,930,833     $ 4,187,994     $ 4,344,653     $ 2,797,880     $ 2,063,745  
 
                              
 
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
                                        
Interest expense including capitalized interest (1)
   $ 308,235     $ 217,454     $ 175,419     $ 168,090     $ 173,045  
Amortization of debt expense
     3,310       2,048       3,748       2,471       2,163  
Interest component of lease rental expenditures (2)
     22,424       20,198       16,220       14,984       14,458  
Preferred interest requirements of consolidated subsidiaries (3)
     —       —       —       —       11,805  
 
                              
Fixed charges
     333,969       239,700       195,387       185,545       201,471  
Preferred stock dividend requirements (4)
     9,437       8,922       9,105       9,058       9,968  
 
                              
Combined Fixed Charges and Preferred Stock Dividends
   $ 343,406     $ 248,622     $ 204,492     $ 194,603     $ 211,439  
 
                              
 
Ratio of Earnings to Fixed Charges
     14.76       17.47       22.24       15.08       10.24  
 
                              
 
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
     14.36       16.84       21.25       14.38       9.76  
 
                              
 
(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 has been 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 of rental payments applies 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.
 
(5)   Interest expense on our FIN 48 liability is a component of income tax expense and it is not included in the calculation of earnings to fixed charges.