EXHIBIT 12.1
WESTERN GAS EQUITY PARTNERS, LP
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED UNIT DISTRIBUTIONS
Year Ended December 31, | ||||||||||||||||||||
thousands | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
Earnings: | ||||||||||||||||||||
Income (loss) before income taxes | $ | 578,068 | $ | 605,352 | $ | 56,630 | $ | 492,550 | $ | 288,945 | ||||||||||
Add: | ||||||||||||||||||||
Fixed charges | 153,214 | 123,807 | 123,680 | 87,892 | 64,806 | |||||||||||||||
Distributions from equity investments | 110,465 | 103,423 | 98,298 | 81,022 | 22,136 | |||||||||||||||
Amortization of capitalized interest | 2,572 | 3,491 | 2,375 | 2,095 | 934 | |||||||||||||||
Less: | ||||||||||||||||||||
Equity income, net – affiliates | 85,194 | 78,717 | 71,251 | 57,836 | 22,948 | |||||||||||||||
Capitalized interest | 6,826 | 5,562 | 8,318 | 9,832 | 11,945 | |||||||||||||||
Net income before taxes attributable to noncontrolling interests | 198,607 | 252,117 | (152,508 | ) | 166,410 | 121,585 | ||||||||||||||
Earnings | $ | 553,692 | $ | 499,677 | $ | 353,922 | $ | 429,481 | $ | 220,343 | ||||||||||
Fixed charges: | ||||||||||||||||||||
Interest expense, excluding capitalized interest | $ | 151,441 | $ | 122,190 | $ | 122,190 | $ | 86,598 | $ | 63,742 | ||||||||||
Interest component of rent expense | 1,773 | 1,617 | 1,490 | 1,294 | 1,064 | |||||||||||||||
Fixed charges | $ | 153,214 | $ | 123,807 | $ | 123,680 | $ | 87,892 | $ | 64,806 | ||||||||||
Preferred unit distributions (1) | $ | 7,453 | $ | 45,784 | $ | — | $ | — | $ | — | ||||||||||
Combined fixed charges and preferred unit distributions | $ | 160,667 | $ | 169,591 | $ | 123,680 | $ | 87,892 | $ | 64,806 | ||||||||||
Ratio of earnings to fixed charges (2) | 3.6x | 4.0x | 2.9x | 4.9x | 3.4x | |||||||||||||||
Ratio of earnings to combined fixed charges and preferred unit distributions (2) (3) | 3.4x | 2.9x | 2.9x | 4.9x | 3.4x |
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(1) | Represents the distributions associated with WES’s Series A Preferred units issued in 2016. WES’s Series A Preferred units converted into WES common units on a one-for-one basis in 2017. |
(2) | These ratios were computed by dividing earnings by fixed charges and by combined fixed charges and preferred unit distributions, respectively. For this purpose, earnings include pre-tax income, plus fixed charges to the extent they affect current year earnings, amortization of capitalized interest and distributed income of equity investments, less equity income, noncontrolling interests in pre-tax income from subsidiaries that did not incur fixed charges, and interest capitalized during the year. Fixed charges include interest expensed and capitalized, amortized premiums, discounts and capitalized expenses related to indebtedness, and estimates of interest within rental expenses. |
(3) | No preferred units were outstanding during the years ended December 31, 2015, 2014 and 2013. |