SM Energy (SM) 10-Q 2018 Q2 Quarterly report

EXHIBIT 12.1

SM ENERGY COMPANY AND SUBSIDIARIES

RATIO OF EARNINGS TO FIXED CHARGES

	For the Six Months Ended June 30,			For the Years Ended December 31,
	2018			2017			2016			2015			2014			2013
	(in thousands, except ratios)
Income (loss) before income taxes	$	432,688		$	(343,813	)	$	(1,201,916	)	$	(722,861	)	$	1,064,699		$	278,611
Fixed charges	96,078			193,587			167,600			155,510			117,147			102,758
Amortization of capitalized interest	5,017			11,623			13,905			9,116			11,448			11,784
Capitalized interest	(10,536		)	(12,607		)	(17,004		)	(25,051		)	(16,165		)	(10,952		)
Earnings before fixed charges	$	523,247		$	(151,210	)	$	(1,037,415	)	$	(583,286	)	$	1,177,129		$	382,201
Fixed charges:
Interest expense (1)	$	84,739		$	179,257		$	148,685		$	128,149		$	98,554		$	89,711
Capitalized interest	10,536			12,607			17,004			25,051			16,165			10,952
Interest expense component of rent (2)	803			1,723			1,911			2,310			2,428			2,095
Total fixed charges	$	96,078		$	193,587		$	167,600		$	155,510		$	117,147		$	102,758
Ratio of earnings to fixed charges	5.4			—			—			—			10.0			3.7
Insufficient coverage	$	—		$	344,797		$	1,205,015		$	738,796		$	—		$	—

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⁽¹⁾ Includes amortization of deferred financing costs and debt discount. Interest expense for the year ended December 31, 2016, excludes the $10.0 million paid to terminate a second lien facility that was no longer necessary to fund acquisition activity.

⁽²⁾ Represents a reasonable approximation of the portion of rental expense assumed to be attributable to the interest factor.