EXHIBIT 12.1
MASSEY ENERGY COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except ratios)
Year Ended December 31, | Six Months Ended June 30, | ||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2008 | 2007 | |||||||||||||||||||
Earnings: | |||||||||||||||||||||||||
Income (Loss) before taxes | $ | 129,503 | $ | 45,024 | $ | (75,410 | ) | $ | (5,643 | ) | $ | (60,651 | ) | $ | (72,555 | ) | $ | 84,846 | |||||||
Fixed charges | 86,568 | 100,591 | 80,351 | 74,502 | 67,501 | 49,399 | 49,200 | ||||||||||||||||||
Capitalized interest | — | — | — | — | — | — | — | ||||||||||||||||||
Amortization of capitalized interest | 20 | 20 | 20 | 20 | 20 | 10 | 10 | ||||||||||||||||||
Earnings (Loss) before taxes and fixed charges | $ | 216,091 | $ | 145,635 | $ | 4,961 | $ | 68,729 | $ | 6,870 | $ | (23,146 | ) | $ | 134,056 | ||||||||||
Fixed charges: | |||||||||||||||||||||||||
Interest expense | $ | 74,145 | $ | 86,076 | $ | 67,064 | $ | 60,660 | $ | 48,259 | $ | 41,763 | $ | 43,067 | |||||||||||
Capitalized interest | — | — | — | — | — | — | — | ||||||||||||||||||
Interest portion of rental expense | 12,423 | 14,515 | 13,287 | 13,842 | 19,242 | 7,636 | 6,133 | ||||||||||||||||||
Total fixed charges | $ | 86,568 | $ | 100,591 | $ | 80,351 | $ | 74,502 | $ | 67,501 | $ | 49,399 | $ | 49,200 | |||||||||||
Ratio of earnings to fixed charges(1)(2) | 2.5x | 1.4x | (1 | ) | (1 | ) | (1 | ) | (1 | ) | 2.7x |
(1) | For purposes of computing the ratio of earnings to fixed charges, “earnings” consist of income from operations before income taxes plus fixed charges. “Fixed charges” consist of interest and debt expense, capitalized interest and a portion of rent expense we believe to be representative of interest. Earnings for the for the years ended December 31, 2005, 2004 and 2003 and for the six months ended June 30, 2008, were inadequate to cover fixed charges, with a deficiency of $75.4 million, $5.6 million, $60.6 million and $72.5 million, respectively. |
(2) | There were no preferred stock dividends during any of the periods presented above. As a result, the ratio of earnings to fixed charges and preferred stock dividends is the same as the ratio of earnings to fixed charges. |