EX-12.1 3 exhibit121-ratioofearnings.htm EXHIBIT 12.1 Exhibit


EXHIBIT 12.1

SM ENERGY COMPANY AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES

 
For the Six Months Ended June 30,
 
For the Years Ended December 31,
 
2018
 
2017
 
2016
 
2015
 
2014
 
2013
 
(in thousands, except ratios)
Income (loss) before income taxes
$
432,688

 
$
(343,813
)
 
$
(1,201,916
)
 
$
(722,861
)
 
$
1,064,699

 
$
278,611

Fixed charges
96,078

 
193,587

 
167,600

 
155,510

 
117,147

 
102,758

Amortization of capitalized interest
5,017

 
11,623

 
13,905

 
9,116

 
11,448

 
11,784

Capitalized interest
(10,536
)
 
(12,607
)
 
(17,004
)
 
(25,051
)
 
(16,165
)
 
(10,952
)
Earnings before fixed charges
$
523,247

 
$
(151,210
)
 
$
(1,037,415
)
 
$
(583,286
)
 
$
1,177,129

 
$
382,201

 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges:
 
 
 
 
 
 
 
 
 
 
 
Interest expense (1)
$
84,739

 
$
179,257

 
$
148,685

 
$
128,149

 
$
98,554

 
$
89,711

Capitalized interest
10,536

 
12,607

 
17,004

 
25,051

 
16,165

 
10,952

Interest expense component of rent (2)
803

 
1,723

 
1,911

 
2,310

 
2,428

 
2,095

Total fixed charges
$
96,078

 
$
193,587

 
$
167,600

 
$
155,510

 
$
117,147

 
$
102,758

 
 
 

 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges
5.4

 
—

 
—

 
—

 
10.0

 
3.7

Insufficient coverage
$
—

 
$
344,797

 
$
1,205,015

 
$
738,796

 
$
—

 
$
—

___________________________________________
(1)
Includes amortization of deferred financing costs and debt discount. Interest expense for the year ended December 31, 2016, excludes the $10.0 million paid to terminate a second lien facility that was no longer necessary to fund acquisition activity.
(2)
Represents a reasonable approximation of the portion of rental expense assumed to be attributable to the interest factor.