EX-12.1 4 apaexhibit121201610-k.htm EXHIBIT 12.1 Exhibit
EXHIBIT 12.1

APACHE CORPORATION
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(In millions, except ratio data)

(Unaudited)
2016
 
2015*
 
2014*
 
2013*
 
2012*
 
 
 
 
 
 
 
 
 
 
EARNINGS
 
 
 
 
 
 
 
 
 
Pretax income (loss) from continuing operations
$
(1,682
)
 
$
(12,169
)
 
$
(6,830
)
 
$
947

 
$
2,712

Add:Fixed charges excluding capitalized interest
470

 
540

 
466

 
538

 
525

Adjusted Earnings
$
(1,212
)
 
$
(11,629
)
 
$
(6,364
)
 
$
1,485

 
$
3,237

 
 
 
 
 
 
 
 
 
 
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
 
 
 
 
 
 
 
 
 
Interest expense including capitalized interest (1)
$
464

 
$
486

 
$
499

 
$
560

 
$
500

Amortization of debt expense
8

 
11

 
6

 
8

 
7

Interest component of lease rental expenditures (2)
47

 
57

 
45

 
69

 
62

Fixed charges
519

 
554

 
550

 
637

 
569

Preferred stock dividend requirements (3)
—

 
—

 
—

 
6,526

 
368

      Noncontrolling interest
132

 
(315
)
 
341

 
56

 
—

Combined Fixed Charges and Preferred Stock Dividends (1)
$
651

 
$
239

 
$
891

 
$
7,219

 
$
937

Ratio of Earnings to Fixed Charges (4)
—

 
—

 
—

 
2.33

 
5.69

Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (5)(6)
—

 
—

 
—

 
—

 
3.45

*Financial information for all prior year periods has been recast to reflect retrospective application of the successful efforts method of accounting. See Note 1 to consolidated financial statements.

(1)
Interest expense related to the provisions for uncertainty in income taxes under ASC Topic 740, “Income Taxes” is not included in the computation of ratios of earnings to fixed charges and combined fixed charges and preferred stock dividends.

(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 applies for all periods presented.

(3)
The Company does not receive a tax benefit for its preferred stock dividends. This amount represents the pre-tax earnings, which is calculated using the effective tax rate, that would be required to cover its preferred stock dividends.

(4)
The Company’s 2016, 2015, and 2014 earnings are inadequate to cover fixed charges, with a deficit of $1.7 billion, $12.2 billion, and $6.9 billion, respectively.

(5)
The Company’s 2016, 2015, and 2014 earnings are inadequate to cover fixed charges and noncontrolling interest, with a deficit of $1.9 billion, $11.9 billion, and $7.3 billion, respectively.

(6)
The Company's 2013 earnings are inadequate to cover fixed charges, preferred stock dividend requirements, and noncontrolling interest, with a deficit of $5.7 billion.