EX-12.1 2 arex-ex121_7.htm EX-12.1 arex-ex121_7.htm

Exhibit 12.1

APPROACH RESOURCES INC.

STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

 

 

 

Years Ended December 31,

 

 

(in thousands, except per-share data)

 

2014

 

 

2015

 

 

 

2016

 

 

 

2017

 

 

 

2018

 

 

COMPUTATION OF EARNINGS (LOSS):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

$

89,864

 

 

$

(267,509

)

 

 

$

(76,661

)

 

 

$

(112,359

)

 

 

$

(19,911

)

 

Fixed charges

 

 

21,670

 

 

 

25,089

 

 

 

 

27,301

 

 

 

 

21,090

 

 

 

 

25,194

 

 

 

 

$

111,534

 

 

$

(242,420

)

 

 

$

(49,360

)

 

 

$

(91,269

)

 

 

$

5,283

 

 

COMPUTATION OF EARNINGS (LOSS):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense(1)

 

$

21,656

 

 

$

25,066

 

 

 

$

27,262

 

 

 

$

21,053

 

 

 

$

25,138

 

 

Implicit interest in rent

 

 

14

 

 

 

23

 

 

 

 

39

 

 

 

 

37

 

 

 

 

56

 

 

 

 

$

21,670

 

 

$

25,089

 

 

 

$

27,301

 

 

 

$

21,090

 

 

 

$

25,194

 

 

Ratio of earnings (loss) to fixed charges(2)

 

 

5.15

x

 

 

-

 

(3)

 

 

-

 

(3)

 

 

-

 

(3)

 

 

0.21

x

 

 

__________________

(1)

For purposes of computing this ratio, we have excluded interest income from interest expense amounts reported on the consolidated statement of operations.

(2)

The ratio has been computed by dividing earnings (loss) by fixed charges. For purposes of computing the ratio, the numerator consists of the sum of (i) earnings (loss), which includes income before income taxes, and (ii) fixed charges. The denominator consists of fixed charges, which includes interest expense and a portion of rentals representative of an implicit interest factor for such rentals.

(3)

Due to our net losses for the years ended December 31, 2015, 2016, and 2017, the coverage ratio for each of these periods was less than 1:1. To achieve a coverage ratio of 1:1, we would have needed additional earnings of approximately $242.4 million, $49.4 million and $91.3 million for the years ended December 31, 2015, 2016 and 2017, respectively.