EX-12.1 2 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,
 
2017
 
2016
 
2015
 
2014
 
2013
 
2012
 
(in thousands, except ratios)
Income (loss) before income taxes
$
(72,028
)
 
$
(1,201,916
)
 
$
(722,861
)
 
$
1,064,699

 
$
278,611

 
$
(83,517
)
Add: Fixed charges
97,609

 
167,600

 
155,510

 
117,147

 
102,758

 
77,841

Add: Amortization of capitalized interest
6,497

 
13,905

 
9,116

 
11,448

 
11,784

 
9,095

Less: Capitalized interest
(5,112
)
 
(17,004
)
 
(25,051
)
 
(16,165
)
 
(10,952
)
 
(12,135
)
Earnings before fixed charges
$
26,966

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

 
$
382,201

 
$
(8,716
)
 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges:
 
 
 
 
 
 
 
 
 
 
 
Interest expense (1)
$
91,548

 
$
148,685

 
$
128,149

 
$
98,554

 
$
89,711

 
$
63,720

Capitalized interest
5,112

 
17,004

 
25,051

 
16,165

 
10,952

 
12,135

Interest expense component of rent (2)
949

 
1,911

 
2,310

 
2,428

 
2,095

 
1,986

Total fixed charges
$
97,609

 
$
167,600

 
$
155,510

 
$
117,147

 
$
102,758

 
$
77,841

 
 
 

 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges
0.3

 
—

 
—

 
10.0

 
3.7

 
—

Insufficient coverage
$
70,643

 
$
1,205,015

 
$
738,796

 
$
—

 
$
—

 
$
86,557

____________________________________________
(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.