EXHIBIT 12.1
QR ENERGY, LP
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERENCE SECURITIES DISTRIBUTIONS
(in thousands, except ratios)
| QR Energy, LP | Predecessor | |||||||||||||||||||||||||||
| Nine Months Ended September 30, | Year ended December 31, | Year ended December 31, | December 22 - December 31, | January 1 - December 21, | Year ended December 31, | Year ended December 31, | ||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
Earnings: | ||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 34,036 | $ | 80,279 | $ | 89,145 | $ | (12,103 | ) | $ | 32,021 | $ | (115,232 | ) | $ | (268,384 | ) | |||||||||||
Equity losses (earnings) included in income (loss) before income taxes | — | — | — | — | (3,782 | ) | (2,675 | ) | 3,010 | |||||||||||||||||||
Add: | ||||||||||||||||||||||||||||
Fixed charges | 37,461 | 53,625 | 25,839 | 675 | 19,890 | 7,078 | 11,419 | |||||||||||||||||||||
Subtract: | ||||||||||||||||||||||||||||
Noncontrolling interest in subsidiaries that have not incurred fixed charges | 240 | — | — | — | — | — | — | |||||||||||||||||||||
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Earnings | 71,257 | 133,904 | 114,984 | (11,428 | ) | 48,129 | (110,829 | ) | (253,955 | ) | ||||||||||||||||||
Fixed charges: | ||||||||||||||||||||||||||||
Interest expense | 34,657 | 50,071 | 23,478 | 614 | 16,927 | 6,066 | 10,548 | |||||||||||||||||||||
Amortization of debt expense | 2,303 | 3,200 | 2,101 | 59 | 2,681 | 636 | 554 | |||||||||||||||||||||
Interest component of rent expense | 501 | 354 | 260 | 2 | 282 | 376 | 317 | |||||||||||||||||||||
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Fixed charges | 37,461 | 53,625 | 25,839 | 675 | 19,890 | 7,078 | 11,419 | |||||||||||||||||||||
Ratio of earnings to fixed charges (a) | 1.90 | 2.50 | 4.45 | (b | ) | 2.42 | (c | ) | (c | ) | ||||||||||||||||||
Ratio of earnings to combined fixed charges and preferred unit distributions (d) | 1.49 | 1.98 | 3.93 | — | — | — | — | |||||||||||||||||||||
Distributions on outstanding preferred units | 10,500 | 14,000 | 3,424 | — | — | — | — | |||||||||||||||||||||
| (a) | The ratio has been computed by dividing the earnings by fixed charges. For purposes of computing the ratio: |
| • | Earnings consist of income from continuing operations before income taxes plus fixed charges; and |
| • | Fixed charges consist of interest expense, amortized expenses related to indebtedness, and estimated interest related to rental expense. |
| (b) | Due to the Partnership’s loss for the period, the ratio coverage was less than 1:1. The Partnership would have needed to generate additional earnings of $12.1 million to achieve coverage of 1:1 for the period from December 22 to December 31, 2010. |
| (c) | Due to the Predecessor’s loss for the period, the ratio coverage was less than 1:1. The Predecessor would have needed to generate additional earnings of $117.9 million and $265.4 million to achieve coverage of 1:1for the years ended December 31, 2009 and 2008, respectively. |
| (d) | Because no preferred units were outstanding for the Partnership’s period December 22, 2010 to December 31, 2010 or for the Predecessor’s period January 1, 2010 to December 21, 2010 and the years ended December 31, 2009 and 2008, no historical ratio of earnings to combined fixed charges and preferred distributions are presented. |
