EX-12.1 16 h65809exv12w1.htm EX-12.1 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)   2008     2007     2006     2005     2004  
EARNINGS
                                        
Pretax income from continuing operations before preferred interests of subsidiaries (5)
   $ 932,392     $ 4,672,612     $ 4,009,595     $ 4,206,254     $ 2,663,083  
Add: Fixed charges excluding capitalized interest and preferred interests requirements of consolidated subsidiaries (5)
     214,288       258,221       178,399       138,399       134,797  
 
                              
 
                                        
Adjusted Earnings
   $ 1,146,680     $ 4,930,833     $ 4,187,994     $ 4,344,653     $ 2,797,880  
 
                              
 
                                        
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
                                        
Interest expense including capitalized interest (1)
   $ 280,457     $ 308,235     $ 217,454     $ 175,419     $ 168,090  
Amortization of debt expense
     3,689       3,310       2,048       3,748       2,471  
Interest component of lease rental expenditures (2)
     24,306       22,424       20,198       16,220       14,984  
 
                              
Fixed charges
     308,452       333,969       239,700       195,387       185,545  
 
                                        
Preferred stock dividend requirements (4)
     7,438       9,437       8,922       9,105       9,058  
 
                              
 
                                        
Combined Fixed Charges and Preferred Stock Dividends
   $ 315,890     $ 343,406     $ 248,622     $ 204,492     $ 194,603  
 
                              
 
                                        
Ratio of Earnings to Fixed Charges
     3.72       14.76       17.47       22.24       15.08  
 
                              
 
                                        
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
     3.63       14.36       16.84       21.25       14.38  
 
                              
 
(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.