Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratio data)
The table below sets forth the calculation of Ratios of Earnings to Fixed Charges for the periods indicated.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | TEP (1) | | | TEP Pre-Predecessor |
| | Six Months Ended June 30, 2016 | | Year Ended December 31, 2015 | | Year Ended December 31, 2014 | | Year Ended December 31, 2013 | | Period from November 12, 2012 to December 31, 2012 | | | Period from January 1, 2012 to November 12, 2012 | | Year Ended December 31, 2011 |
| Earnings from continuing operations before fixed charges: | | | | | | | | | | | | | | |
| Pre-tax income from continuing operations before earnings from unconsolidated affiliates | $ | 114,948 |
| | $ | 184,814 |
| | $ | 58,612 |
| | $ | 7,624 |
| | $ | (2,618 | ) | | | $ | 51,775 |
| | $ | 77,803 |
|
| Fixed charges | 21,931 |
| | 25,437 |
| | 11,626 |
| | 13,360 |
| | 3,450 |
| | | 69 |
| | 83 |
|
| Amortization of capitalized interest | 31 |
| | 66 |
| | 35 |
| | — |
| | — |
| | | — |
| | — |
|
| Distributed earnings from unconsolidated affiliates | 23,321 |
| | — |
| | 717 |
| | — |
| | — |
| | | — |
| | — |
|
| less: Capitalized interest | (146 | ) | | (811 | ) | | (1,025 | ) | | (242 | ) | | — |
| | | — |
| | — |
|
| Earnings from continuing operations before fixed charges | $ | 160,085 |
| | $ | 209,506 |
| | $ | 69,965 |
| | $ | 20,742 |
| | $ | 832 |
| | | $ | 51,844 |
| | $ | 77,886 |
|
| Fixed charges: | | | | | | | | | | | | | | |
| Interest expense, net of capitalized interest | 15,231 |
| | 14,226 |
| | 7,648 |
| | 11,264 |
| | 3,040 |
| | | — |
| | — |
|
| Capitalized interest | 146 |
| | 811 |
| | 1,025 |
| | 242 |
| | — |
| | | — |
| | — |
|
| Estimate of interest within rental expense (33.3%) | 5,031 |
| | 8,615 |
| | 1,574 |
| | 109 |
| | 14 |
| | | 69 |
| | 83 |
|
| Amortization of debt costs | 1,523 |
| | 1,785 |
| | 1,379 |
| | 1,745 |
| | 396 |
| | | — |
| | — |
|
| Total fixed charges | $ | 21,931 |
| | $ | 25,437 |
| | $ | 11,626 |
| | $ | 13,360 |
| | $ | 3,450 |
| | | $ | 69 |
| | $ | 83 |
|
Ratio of earnings to fixed charges (2) | 7.30 |
| | 8.24 |
| | 6.02 |
| | 1.55 |
| | — |
| (3) | | 751.36 |
| | 938.39 |
|
| |
(1) | TEP closed the acquisition of Trailblazer on April 1, 2014 and the acquisition of a controlling 33.3% membership interest in Pony Express effective September 1, 2014. As the acquisitions of Trailblazer and the initial 33.3% of Pony Express were considered transactions between entities under common control, and changes in reporting entity, financial information presented subsequent to November 13, 2012 and prior to the respective acquisition dates has been recast to include Trailblazer and the initial 33.3% of Pony Express. TEP closed the acquisitions of an additional 33.3% and 31.3% membership interests in Pony Express effective March 1, 2015 and January 1, 2016, respectively, which represent transactions between entities under common control and acquisitions of noncontrolling interests. As a result, financial information for periods prior to March 1, 2015 and January 1, 2016 has not been recast to reflect the additional 33.3% and 31.3% membership interests. |
| |
(2) | For purposes of determining the ratio of earnings to fixed charges, earnings are defined as pretax income or loss from continuing operations before earnings from unconsolidated affiliates, plus fixed charges, plus distributed earnings from unconsolidated affiliates, less capitalized interest. Fixed charges consist of interest expensed, capitalized interest, amortization of deferred loan costs, and an estimate of the interest within rental expense. |
| |
(3) | As a result of the net loss for the period from November 12, 2012 to December 31, 2012, the ratio of earnings to fixed charges was less than 1:1. TEP would have needed to generate additional earnings of $2.6 million to achieve an earnings to fixed charges ratio of 1:1 for the period from November 12, 2012 to December 31, 2012. |
