EX-12.1 5 d00955exv12w1.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12.1 CHESAPEAKE ENERGY CORPORATION RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS (DOLLARS IN 000'S)
Year Six Months Year Year Year Year Nine Months Ended Ended Ended Ended Ended Ended Ended June 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, September 30, 1997 1997 1998 1999 2000 2001 2002 --------- ---------- --------- --------- --------- --------- ------------- Income before income taxes and extraordinary item $(180,330) $ (31,574) $(920,520) $ 35,030 $ 196,162 $ 438,365 $ 23,413 Interest 18,550 17,448 68,249 81,052 86,256 98,321 79,966 Amortization of capitalized interest 8,772 4,386 12,240 1,047 1,226 1,784 1,312 Bond discount amortization (a) -- -- -- -- -- -- -- Loan cost amortization 1,455 794 2,516 3,338 3,669 4,022 3,626 --------- --------- --------- --------- --------- --------- --------- Earnings $(151,553) $ (8,946) $(837,515) $ 120,467 $ 287,313 $ 542,492 $ 108,317 ========= ========= ========= ========= ========= ========= ========= Interest expense $ 18,550 $ 17,448 $ 68,249 $ 81,052 $ 86,256 $ 98,321 $ 79,966 Capitalized interest 12,935 5,087 6,470 3,356 2,452 4,719 3,592 Bond discount amortization (a) -- -- -- -- -- -- -- Loan cost amortization 1,455 794 2,516 3,338 3,669 4,022 3,626 --------- --------- --------- --------- --------- --------- --------- Fixed Charges $ 32,940 $ 23,329 $ 77,235 $ 87,746 $ 92,377 $ 107,062 $ 87,184 ========= ========= ========= ========= ========= ========= ========= Preferred Stock Dividends Preferred Dividend Requirements $ -- $ -- $ 12,077 $ 16,711 $ 8,484 $ 2,050 $ 7,588 Ratio of income before provision for taxes to Net Income (b) -- -- N/A 1.05 N/A 1.66 1.67 --------- --------- --------- --------- --------- --------- --------- Subtotal - Preferred Dividends $ -- $ -- $ 12,077 $ 17,597 $ 8,484 $ 3,411 $ 12,696 Combined Fixed Charges and Preferred Dividends $ 32,940 $ 23,329 $ 89,312 $ 105,343 $ 100,861 $ 110,473 $ 99,880 Ratio of Earnings to Fixed Charges -- -- -- 1.4 3.1 5.1 1.2 Insufficient coverage $ 184,493 $ 32,275 $ 914,750 -- -- -- -- Ratio of Earnings to Combined Fixed Charges and Preferred Dividends -- -- -- 1.1 2.8 4.9 1.1 Insufficient coverage $ 184,493 $ 32,275 $ 926,827 -- -- -- --
(a) Bond discount excluded since its included in interest expense (b) Represents income (loss) before income taxes and extraordinary item divided by income (loss) before extraordinary item, which adjusts dividends on preferred stock to a pre-tax basis. Page 1