Chesapeake Energy (CHK) 10-Q 2016 Q1 Quarterly report

10-Q

EXHIBIT 12

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES

RATIOS OF EARNINGS TO FIXED CHARGES AND COMBINED FIXED CHARGES

AND PREFERRED DIVIDENDS

	Years Ended December 31,													Three Months Ended March 31,
	2011			2012			2013		2014		2015			2016
EARNINGS:
Income (loss) before income taxes and cumulative effect of accounting change	$	2,880		$	(974	)	$	1,442	$	3,200	$	(19,098	)	$	(921	)
Interest expense(a)	94			142			207		172		322			60
(Gain)/loss on investment in equity investees in excess of distributed earnings	(154		)	108			219		75		96			—
Amortization of capitalized interest	297			402			440		438		483			181
Loan cost amortization	28			43			37		32		31			2
Earnings	$	3,145		$	(279	)	$	2,345	$	3,917	$	(18,166	)	$	(678	)
FIXED CHARGES:
Interest Expense	$	94		$	142		$	207	$	172	$	322		$	60
Capitalized interest	727			976			815		604		410			66
Loan cost amortization	28			43			37		32		31			2
Fixed Charges	$	849		$	1,161		$	1,059	$	808	$	763		$	128
PREFERRED STOCK DIVIDENDS:
Preferred dividend requirements	$	172		$	171		$	171	$	171	$	171		$	43
Ratio of income (loss) before provision for taxes to net income (loss)(b)	1.65			1.64			1.61		1.56		1.30			1.00
Preferred Dividends	$	284		$	280		$	275	$	266	$	222		$	43
COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS	$	1,131		$	1,441		$	1,334	$	1,074	$	985		$	171
RATIO OF EARNINGS TO FIXED CHARGES	3.7			(0.2		)	2.2		4.8		(23.8		)	(5.3		)
INSUFFICIENT COVERAGE	$	—		$	1,440		$	—	$	—	$	18,929		$	806
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS	2.8			(0.2		)	1.8		3.6		(18.4		)	(4.0		)
INSUFFICIENT COVERAGE	$	—		$	1,720		$	—	$	—	$	19,151		$	849

(a) Excludes the effect of unrealized gains or losses on interest rate derivatives and includes amortization of bond discount.

(b) Amounts of income (loss) before provision for taxes and of net income (loss) exclude the cumulative effect of accounting change.