EX-12.1 6 exhibit121-ratioofearnings.htm EXHIBIT 12.1 Exhibit 12.1 - Ratio of Earnings to Fixed Charges


EXHIBIT 12.1

SM Energy Company
Ratio of Earnings to Fixed Charges

 
Year Ended December 31,
 
2011
2010
2009
2008
2007
 
(in thousands, except ratios)
 
 
 
 
 
 
Pretax income from continuing operations
$
339,001

$
314,896

$
(159,464
)
$
144,736

$
296,111

 
 
 
 
 
 
Add: Fixed charges
58,030

29,558

31,702

32,604

31,473

Add: Amortization of capitalized interest
5,107

2,991

2,697

2,387

1,768

Less: Capitalized interest
(10,785
)
(4,337
)
(1,902
)
(4,668
)
(6,672
)
     Earnings before fixed charges
$
391,353

$
343,108

$
(126,967
)
$
175,059

$
322,680

 
 
 
 
 
 
Fixed charges:
 
 
 
 
 
     Interest expense (1)
45,849

24,196

28,856

26,950

24,046

    Capitalized interest
10,785

4,337

1,902

4,668

6,672

     Interest expense component of rent (2)
1,396

1,025

944

986

755

Total fixed charges
$
58,030

$
29,558

$
31,702

$
32,604

$
31,473

 
 
 
 
 
 
Ratio of earnings to fixed charges
6.7

11.6

—

5.4

10.3

Insufficient coverage
$
—

$
—

$
158,669

$
—

$
—


(1) Includes amortization of discount and deferred financing costs.
(2) Represents a reasonable approximation of the rental factor.