EXHIBIT 12.1
MTR GAMING GROUP, INC.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in thousands)
| | Pro Forma (1) | | | | | | | | | | | | | | | |
| | Nine Months
Ended
September 30, | | Year
Ended
December 31, | | Nine Months Ended
September 30, | | Years Ended December 31, | |
| | 2009 | | 2008 | | 2009 | | 2008 | | 2008 | | 2007 | | 2006 | | 2005 | | 2004 | |
EARNINGS: | | | | | | | | | | | | | | | | | | | |
Income (loss) before income taxes, cumulative effect of accounting change and noncontrolling interest | | $ | (10,669 | ) | $ | (19,366 | ) | $ | 314 | | $ | 575 | | $ | (6,093 | ) | $ | (7,358 | ) | $ | 14,392 | | $ | 14,963 | | $ | 22,707 | |
Fixed charges | | 45,532 | | 57,906 | | 34,550 | | 34,295 | | 44,633 | | 36,934 | | 23,098 | | 14,835 | | 14,944 | |
Capitalized interest | | — | | — | | — | | — | | — | | (2,200 | ) | (6,000 | ) | (1,300 | ) | — | |
Noncontrolling interest in pre-tax loss | | — | | — | | — | | — | | — | | — | | — | | — | | — | |
TOTAL EARNINGS | | $ | 34,863 | | $ | 38,540 | | $ | 34,864 | | $ | 34,870 | | $ | 38,540 | | $ | 27,376 | | $ | 31,490 | | $ | 28,498 | | $ | 37,651 | |
| | | | | | | | | | | | | | | | | | | |
FIXED CHARGES: | | | | | | | | | | | | | | | | | | | |
Interest expense | | 40,205 | | 50,949 | | 27,982 | | 27,749 | | 36,451 | | 31,728 | | 14,651 | | 11,813 | | 13,235 | |
Capitalized interest | | — | | — | | — | | — | | — | | 2,200 | | 6,000 | | 1,300 | | — | |
Amortized premiums, discounts and capitalized expenses related to indebtedness (2) | | 5,279 | | 6,894 | | 3,747 | | 3,143 | | 4,299 | | 2,957 | | 2,391 | | 1,645 | | 1,639 | |
Loss on debt modification | | — | | — | | 2,773 | | 3,356 | | 3,820 | | — | | — | | — | | — | |
Interest portion of rental expense | | 48 | | 63 | | 48 | | 47 | | 63 | | 49 | | 56 | | 77 | | 70 | |
TOTAL FIXED CHARGES | | $ | 45,532 | | $ | 57,906 | | $ | 34,550 | | $ | 34,295 | | $ | 44,633 | | $ | 36,934 | | $ | 23,098 | | $ | 14,835 | | $ | 14,944 | |
| | | | | | | | | | | | | | | | | | | |
RATIO OF EARNINGS TO FIXED CHARGES | | 0.8x | | 0.7x | | 1.0x | | 1.0x | | 0.9x | | 0.7x | | 1.4x | | 1.9x | | 2.5x | |
DEFICIENCY | | $ | 10,669 | | 19,366 | | | | | | $ | 6,093 | | $ | 9,558 | | | | | | | |
(1) The pro forma ratio of earnings to fixed charges gives effect to the pro rata increase in interest expense and deferred financing costs resulting from the issuance of the $260 million Senior Secured Notes and the use of the proceeds of approximately $130.7 million to purchase the 9.75% Senior Unsecured Notes and approximately $100.2 million to repay the amounts outstanding under the Amended and Restated Credit Facility.
(2) Includes the amortization of original issue discount and the amortization of deferred financing costs.
