EX-12 2 dex12.htm COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

EXHIBIT 12

ANADARKO PETROLEUM CORPORATION

CONSOLIDATED STATEMENT OF COMPUTATION OF RATIOS OF

EARNINGS TO FIXED CHARGES AND EARNINGS TO

COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

 

     Years Ended December 31,  
     (Unaudited)  

millions except ratio amounts

   2010     2009     2008     2007     2006  

Income (loss) from continuing operations before income taxes(a)

    $ 1,641     $ (108 )    $ 5,368     $ 6,329     $ 3,737  

Equity (income) adjustment

     (74 )      (76 )      (134 )      (158 )      —   

Fixed charges

      1,289        1,077        1,355        1,632        858  

Distributed income of equity investees

      11       49       136       104       (21 ) 

Amortization of capitalized interest

      41        46        28        14        —   

Capitalized interest

     (128 )      (69 )      (123 )      (122 )      (80 ) 

Non-controlling interest in pre-tax income of subsidiaries that have not incurred fixed charges

      (6 )      (8 )      —        —        —   
                                        

Total Earnings

   $ 2,774      $ 911     $ 6,630     $ 7,799     $ 4,494  
                                        

Interest expense including capitalized interest

     999       758       876       1,214       730  

Interest expense included in other (income) expense

     39       57       123       102       —   

Estimated interest portion of rental expenditures(b)

      251       262       356       316       128  
                                        

Total Fixed Charges

   $ 1,289     $ 1,077     $ 1,355     $ 1,632     $ 858  
                                        

Preferred Stock Dividends

     —        —        2       5       5  
                                        

Combined Fixed Charges and Preferred Stock Dividends

   $   1,289     $   1,077     $   1,357     $   1,637     $ 863  
                                        

Ratio of Earnings to Fixed Charges(c)

      2.15        0.85       4.89       4.78       5.24  
                                        

Ratio of Earnings to Combined Fixed Charges and

          

Preferred Stock Dividends(c)

      2.15        0.85       4.89       4.76       5.21  
                                        

 

(a)

Income from continuing operations before income taxes for the year ended December 31, 2007, includes gains on asset divestitures of $4.7 billion. (Gains) losses on divestitures, net for other periods presented did not have a significant effect on the corresponding ratios of earnings to fixed charges and to combined fixed charges and preferred stock dividends.

(b)

Estimated interest component of rental expenditures reflects a portion of rental expenditures representative of an interest factor, whether such rentals are expensed, or capitalized when incurred. For the years ended December 31, 2010, 2009 and 2008, the estimated interest component in rentals includes $178 million, $185 million and $270 million, respectively, associated with the Company’s drilling rig leases.

(c)

As a result of the Company’s net loss in 2009, Anadarko’s earnings did not cover fixed charges, nor combined fixed charges by $166 million.

These ratios were computed by dividing earnings by either fixed charges or combined fixed charges and preferred stock dividends. For this purpose, earnings include income from continuing operations before income taxes, adjusted for: income or loss from equity investees, fixed charges to the extent they affect current year earnings, amortization of capitalized interest, distributed income of equity investees, and interest capitalized during the year. Fixed charges include interest expensed and capitalized, amortized premiums, discounts and capitalized expenses related to indebtedness, and estimates of interest within rental expenses. Preferred stock dividends are adjusted to reflect the amount of pretax earnings required for payment