Black Hills (BKH) 10-Q 2018 Q2 Quarterly report

EXHIBIT 12

BLACK HILLS CORPORATION

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(In thousands of dollars)

	Six Months Ended
	June 30						Year Ended December 31
	2018			2017			2017			2016			2015			2014		2013
Earnings:
Income of consolidated group from continuing operations (a)	$	166,144		$	107,642		$	208,375		$	146,793		$	141,548		$	132,462	$	113,311
Income taxes	(19,261		)	45,040			73,367			59,101			78,657			67,336		61,225
(Income) loss from equity investee	—			—			—			—			—			—		—
Dividends received from unconsolidated affiliates	—			—			—			—			—			—		—
Fixed charges	71,685			71,162			143,232			141,787			87,820			74,425		116,312
Noncontrolling interest	(6,453		)	(6,739		)	(14,242		)	(9,661		)	—			—		—
Interest capitalized	(77		)	(133		)	(223		)	(356		)	(326		)	—		—
Total earnings	$	212,038		$	216,972		$	410,509		$	337,664		$	307,699		$	274,223	$	290,848
Fixed charges:
Interest expense of consolidated group	$	70,803		$	69,997		$	140,533		$	139,091		$	85,900		$	72,858	$	114,675
Interest capitalized	77			133			223			356			326			—		—
Portion of rental charges deemed to be interest	805			1,032			2,476			2,340			1,594			1,567		1,637
Total fixed charges	$	71,685		$	71,162		$	143,232		$	141,787		$	87,820		$	74,425	$	116,312
Ratio of earnings to fixed charges	2.96			3.05			2.87			2.38			3.50			3.68		2.50

EXHIBIT 12

(a) On November 1, 2017, our Board of Directors approved a complete divestiture of our Oil and Gas segment. The Oil and Gas segment assets and liabilities have been classified as held for sale and the results of operations are shown in income (loss) from discontinued operations, other than certain general and administrative costs and interest expense which do not meet the criteria for income (loss) from discontinued operations. As a result, prior period earnings have been restated.

The table above sets forth our ratio of earnings to fixed charges for each of the periods indicated. For this purpose, earnings consist of income or loss from continuing operations (before adjustment for income taxes, income attributable to noncontrolling interests or income or loss from equity investees), plus fixed charges and distributed income of equity investees and less interest capitalized. Fixed charges consist of interest expensed and capitalized, amortization of debt issuance costs and an estimate of the interest within rental expense.