EX-12.1 3 smlp-ex121_136.htm RATIO OF EARNINGS TO FIXED CHARGES smlp-ex121_136.htm

EXHIBIT 12.1

SUMMIT MIDSTREAM PARTNERS, LP

RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth our ratio of earnings to fixed charges for the periods indicated on a consolidated historical basis. For purposes of computing the ratio of earnings to fixed charges, "earnings" are defined as income or loss before income taxes and income or loss from equity method investees plus fixed charges and distributions from equity method investees less capitalized interest. "Fixed charges" consist of interest expensed and capitalized, amortization of debt issuance costs, net income attributable to Series A Preferred unitholders and an estimate of interest within rent expense.

 

Year ended December 31,

 

 

2017 (1)

 

 

2016

 

 

2015 (2)

 

 

2014 (3)

 

 

2013

 

 

(Dollars in thousands)

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income

    taxes and loss from equity

    method investees

$

88,614

 

 

$

(7,768

)

 

$

(216,268

)

 

$

(29,802

)

 

$

47,737

 

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges

 

75,530

 

 

 

68,473

 

 

 

63,262

 

 

 

53,859

 

 

 

28,543

 

Distributions from equity

    method investees

 

40,220

 

 

 

44,991

 

 

 

34,641

 

 

 

2,992

 

 

 

—

 

Capitalized interest

 

(2,579

)

 

 

(3,709

)

 

 

(3,372

)

 

 

(4,646

)

 

 

(6,690

)

Total earnings

$

201,785

 

 

$

101,987

 

 

$

(121,737

)

 

$

22,403

 

 

$

69,590

 

Fixed Charges (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

$

68,131

 

 

$

63,810

 

 

$

59,092

 

 

$

48,586

 

 

$

21,314

 

Net income attributable to

    Series A Preferred

    unitholders

 

3,563

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Capitalized interest

 

2,579

 

 

 

3,709

 

 

 

3,372

 

 

 

4,646

 

 

 

6,690

 

Estimate of interest within rent

    expense

 

1,257

 

 

 

954

 

 

 

798

 

 

 

627

 

 

 

539

 

Total fixed charges

$

75,530

 

 

$

68,473

 

 

$

63,262

 

 

$

53,859

 

 

$

28,543

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed

    charges

2.67x

 

 

1.49x

 

 

 

—

 

 

0.42x

 

 

2.44x

 

_________

(1)  The ratio of earnings to fixed charges does not include $22.0 million associated with our early extinguishment of debt relating to the redemption and call premiums on the 7.5% Senior Notes that occurred during the three months ended March 31, 2017.

(2)  The ratio of earnings to fixed charges was negative for the year ended December 31, 2015. To achieve a ratio of earnings to fixed charges of 1:1, we would have had to generate an additional $185.0 million of earnings for the year ended December 31, 2015. Loss before income taxes for the year ended December 31, 2015 included $248.9 million of goodwill impairments.

(3)  The ratio of earnings to fixed charges was less than 1:1 for the year ended December 31, 2014. To achieve a ratio of earnings to fixed charges of 1:1, we would have had to generate an additional $31.5 million of earnings for the year ended December 31, 2014. Loss before income taxes for the year ended December 31, 2014 included $54.2 million of goodwill impairment.

(4)  Fixed charges do not include any portion of the expense associated with our Deferred Purchase Price Obligation that we owe pursuant to the terms of that certain Contribution Agreement, dated February 25, 2016, between us and Summit Midstream Partners Holdings, LLC.

 

EX 12.1-1