EX-12 2 chk-ex_12x20160930x10q.htm RATIOS OF EARNINGS TO FIXED CHARGES AND COMBINED FIXED CHARGES Exhibit

EXHIBIT 12
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
RATIOS OF EARNINGS TO FIXED CHARGES AND COMBINED FIXED CHARGES
AND PREFERRED DIVIDENDS
 
 
 
Years Ended
December 31,
 
Nine Months
Ended
September 30,
 
 
2011
 
2012
 
2013
 
2014
 
2015
 
2016
 
 
 
 
 
 
EARNINGS:
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes and cumulative effect of accounting change
 
$
2,880

 
$
(974
)
 
$
1,442

 
$
3,200

 
$
(19,098
)
 
$
(3,825
)
Interest expense(a)
 
94

 
142

 
207

 
172

 
322

 
190

(Gain)/loss on investment in equity investees in excess of distributed earnings
 
(154
)
 
108

 
219

 
75

 
96

 
4

Amortization of capitalized interest
 
297

 
402

 
440

 
438

 
483

 
584

Loan cost amortization
 
28

 
43

 
37

 
32

 
31

 
18

Earnings
 
$
3,145

 
$
(279
)
 
$
2,345

 
$
3,917

 
$
(18,166
)
 
$
(3,029
)
FIXED CHARGES:
 
 
 
 
 
 
 
 
 
 
 
 
Interest Expense
 
$
94

 
$
142

 
$
207

 
$
172

 
$
322

 
$
190

Capitalized interest
 
727

 
976

 
815

 
604

 
410

 
184

Loan cost amortization
 
28

 
43

 
37

 
32

 
31

 
18

Fixed Charges
 
$
849

 
$
1,161

 
$
1,059

 
$
808

 
$
763

 
$
392

PREFERRED STOCK DIVIDENDS:
 
 
 
 
 
 
 
 
 
 
 
 
Preferred dividend requirements
 
$
172

 
$
171

 
$
171

 
$
171

 
$
171

 
$
127

Ratio of income (loss) before provision for taxes to net income (loss)(b)
 
1.65

 
1.64

 
1.61

 
1.56

 
1.30

 
1.00

Preferred Dividends
 
$
284

 
$
280

 
$
275

 
$
266

 
$
222

 
$
127

COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
 
$
1,131

 
$
1,441

 
$
1,334

 
$
1,074

 
$
985

 
$
519

RATIO OF EARNINGS TO FIXED CHARGES
 
3.7

 
(0.2
)
 
2.2

 
4.8

 
(23.8
)
 
(7.7
)
INSUFFICIENT COVERAGE
 
$
—

 
$
1,440

 
$
—

 
$
—

 
$
18,929

 
$
3,421

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
 
2.8

 
(0.2
)
 
1.8

 
3.6

 
(18.4
)
 
(5.8
)
INSUFFICIENT COVERAGE
 
$
—

 
$
1,720

 
$
—

 
$
—

 
$
19,151

 
$
3,548

 
(a)
Excludes the effect of unrealized gains or losses on interest rate derivatives and includes amortization of bond discount.
(b)
Amounts of income (loss) before provision for taxes and of net income (loss) exclude the cumulative effect of accounting change.