EX-12.1 5 exhibit121-ratioofearnings.htm EXHIBIT 12.1
EXHIBIT 12.1
SM ENERGY COMPANY AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES

| For the Years Ended December 31,
| 2016 |  | 2015 |  | 2014 |  | 2013 |  | 2012
| (in thousands, except ratios)
Pre-tax income (loss) from continuing operations | $ | (1,201,916 | ) |  | $ | (722,861 | ) |  | $ | 1,064,699 |  |  | $ | 278,611 |  |  | $ | (83,517 | )
Add: Fixed charges | 167,600 |  |  | 155,510 |  |  | 117,147 |  |  | 102,758 |  |  | 77,841 |
Add: Amortization of capitalized interest | 13,905 |  |  | 9,116 |  |  | 11,448 |  |  | 11,784 |  |  | 9,095 |
Less: Capitalized interest | (17,004 | ) |  | (25,051 | ) |  | (16,165 | ) |  | (10,952 | ) |  | (12,135 | )
Earnings before fixed charges | $ | (1,037,415 | ) |  | $ | (583,286 | ) |  | $ | 1,177,129 |  |  | $ | 382,201 |  |  | $ | (8,716 | )
Fixed charges: |  |  |  |  |  |  |  |  |
Interest expense (1) | $ | 148,685 |  |  | $ | 128,149 |  |  | $ | 98,554 |  |  | $ | 89,711 |  |  | $ | 63,720 |
Capitalized interest | 17,004 |  |  | 25,051 |  |  | 16,165 |  |  | 10,952 |  |  | 12,135 |
Interest expense component of rent (2) | 1,911 |  |  | 2,310 |  |  | 2,428 |  |  | 2,095 |  |  | 1,986 |
Total fixed charges | $ | 167,600 |  |  | $ | 155,510 |  |  | $ | 117,147 |  |  | $ | 102,758 |  |  | $ | 77,841 |
Ratio of earnings to fixed charges | — |  |  | — |  |  | 10.0 |  |  | 3.7 |  |  | — |
Insufficient coverage | $ | 1,205,015 |  |  | $ | 738,796 |  |  | $ | — |  |  | $ | — |  |  | $ | 86,557 |

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(1) | Includes amortization of deferred financing costs and discount. 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.