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 before adjustment for 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 deferred loan costs and an estimate of interest within rent expense.
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| | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, |
| | 2015 (1) | | 2014 (2) | | 2013 | | 2012 | | 2011 |
| | | | | | | | | | |
| | (Dollars in thousands) |
| Earnings: | | | | | | | | | |
| (Loss) income before income taxes before adjustment for income or loss from equity method investees | $ | (216,268 | ) | | $ | (29,802 | ) | | $ | 47,737 |
| | $ | 43,679 |
| | $ | 38,646 |
|
| Add (deduct): | | | | | | | | | |
| Fixed charges | 63,262 |
| | 53,859 |
| | 28,543 |
| | 15,794 |
| | 6,579 |
|
| Distributions from equity method investees | 34,641 |
| | 2,992 |
| | — |
| | — |
| | — |
|
| Capitalized interest | (3,372 | ) | | (4,646 | ) | | (6,690 | ) | | (2,784 | ) | | (3,362 | ) |
| Total earnings | $ | (121,737 | ) | | $ | 22,403 |
| | $ | 69,590 |
| | $ | 56,689 |
| | $ | 41,863 |
|
| Fixed Charges: | | | | | | | | | |
| Interest expense | $ | 59,092 |
| | $ | 48,586 |
| | $ | 21,314 |
| | $ | 12,766 |
| | $ | 3,054 |
|
| Capitalized interest | 3,372 |
| | 4,646 |
| | 6,690 |
| | 2,784 |
| | 3,362 |
|
| Estimate of interest within rent expense | 798 |
| | 627 |
| | 539 |
| | 244 |
| | 163 |
|
| Total fixed charges | $ | 63,262 |
| | $ | 53,859 |
| | $ | 28,543 |
| | $ | 15,794 |
| | $ | 6,579 |
|
| | | | | | | | | | |
| Ratio of earnings to fixed charges | — |
| | 0.42 | x | | 2.44 | x | | 3.59 | x | | 6.36 | x |
(1) 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.
(2) 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 a goodwill impairment of $54.2 million.
