EX-12.1 5 dex121.htm CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES Calculation of Ratio of Earnings to Fixed Charges

Exhibit 12.1

 

                       Predecessor(1)  
     Three
Months
Ended
March 31,		    

Year

Ended
December 31,

     Period from
October 1,
2009 through
December 31,		     Period from
January 1,
2009 through
September 30,		     Year Ended December 31,  
     2011     2010     2009     2009     2008      2007      2006  

EARNINGS(2)

                 

Pre-tax income from continuing operations before non controlling interest and income from equity investees

    $ 39,746      $ 197,658      $ 51,331      $ (11,033 )    $ 104,008       $ 82,957       $ 53,149   

add: Fixed charges

      8,332        27,047        6,095        21,619        19,016         8,766         4,566   

add: Distributed income of equity investees

      —          —          —          —          —           —           —     

add: Amortization of capitalized interest

      129        147        —          —          —           —           —     

less: Capitalized interest

      (1,984 )      (2,631 )      (257 )      (3,782 ) (5)      —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

Total Earnings

    $ 46,223      $ 222,221      $ 57,169      $ 6,804      $ 123,024       $ 91,723       $ 57,715   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

FIXED CHARGES(2)

                 

Interest expensed and capitalized

    $ 2,605      $ 5,490      $ 877      $ 4,129      $ 1,871       $ —         $ —     

Amortization of debt expense

      820        4,876        1,321        1,427        513         —           —     

Portion of rent expense related to interest (33.33%)

      4,907        16,681        3,897        16,063        16,632         8,766         4,566   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

Total Fixed Charges

    $ 8,332      $ 27,047      $ 6,095      $ 21,619      $ 19,016       $ 8,766       $ 4,566   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

RATIO OF EARNINGS TO FIXED CHARGES(3)

      5.55x        8.22x        9.38x        —   (4)      6.47x         10.46x         12.64x   

 

(1) Represents data from our predecessor, Chesapeake Midstream Development, L.P. before the formation of the joint venture between Chesapeake and GIP on September 30, 2009. For further discussion, please see Note 1 to the consolidated financial statements included in CHKM’s Annual Report on Form 10-K for the year ended December 31, 2010.
(2) For purposes of computing the ratio of earnings to fixed charges, “earnings” consists of pre-tax income from continuing operations before income from equity investees plus fixed charges (excluding capitalized interest), distributed income of equity investees and amortization of capitalized interest. “Fixed charges” represents interest incurred (whether expensed or capitalized), amortization of debt expense (including discounts and premiums related to indebtedness) and the portion of rental expense on operating leases deemed to be the equivalent of interest.
(3) Ratios may not recalculate due to rounding.
(4) During the period noted, our coverage ratio was less than 1:1. We would have needed to generate additional earnings of approximately $14.8 million during the period from January 1, 2009 through September 30, 2009 to achieve a coverage ratio of 1:1.
(5) During the period noted, our capitalized interest per form S-1 was $6.5MM. This included capitalized interest transferred from predecessor of $2.7MM. This amount had no impact on earnings and has been excluded from capitalized interest as reported above.