Exhibit 12.1
Computation of Ratio of Earnings to Combined Fixed Charges and Preference Dividends
Three Months Ended March 31 | ||||||||
2007 | 2006 | |||||||
Earnings: | ||||||||
Pretax income | $ | 33,374 | $ | 78,587 | ||||
Fixed charges, net of capitalized interest | 18,784 | 17,476 | ||||||
Earnings before taxes and fixed charges | $ | 52,158 | $ | 96,063 | ||||
Fixed charges: | ||||||||
Interest expense | $ | 17,258 | $ | 16,072 | ||||
Capitalized interest | 5,101 | 2,783 | ||||||
Preferred dividends | 44 | 63 | ||||||
Arch Western Resources LLC dividends on preferred membership interest | 24 | 24 | ||||||
Portions of rent which represent an interest factor | 1,458 | 1,317 | ||||||
Total fixed charges | $ | 23,885 | $ | 20,259 | ||||
Ratio of earnings to fixed charges (1) | 2.18 | x | 4.74 | x | ||||
(1) | Ratio of earnings to combined fixed charges and preference dividends is computed on a total enterprise basis including our consolidated subsidiaries. Earnings consist of income from continuing operations before income taxes and are adjusted to include fixed charges (excluding capitalized interest). Fixed charges consist of interest incurred on indebtedness, the portion of operating lease rentals deemed representative of the interest factor and the amortization of debt expense. Preference dividends are the amount of pre-tax earnings required to pay dividends on our outstanding preferred stock and Arch Western Resources, LLC’s preferred membership interest. |