Exhibit 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Alaska Air Group, Inc.
For the six months ended June 30, | For the year ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
(in thousands, except ratios) | ||||||||||||||||||||||||||||
Earnings: | ||||||||||||||||||||||||||||
Income (loss) before income tax expense (benefit) and accounting change | $ | 42,100 | $ | 57,200 | $ | 125,000 | $ | (87,800 | ) | $ | 137,200 | $ | (20,600 | ) | $ | 29,000 | ||||||||||||
Less: Capitalized interest | (12,600 | ) | (13,800 | ) | (27,800 | ) | (24,700 | ) | (8,900 | ) | (1,700 | ) | (2,300 | ) | ||||||||||||||
Add: | ||||||||||||||||||||||||||||
Interest on indebtedness | 48,400 | 43,500 | 86,099 | 76,056 | 61,698 | 49,801 | 47,508 | |||||||||||||||||||||
Amortization of debt expense | 983 | 983 | 1,901 | 1,944 | 1,308 | 1,220 | 1,103 | |||||||||||||||||||||
Amortization of capitalized interest | 3,143 | 2,749 | 5,783 | 4,872 | 4,785 | 4,855 | 4,990 | |||||||||||||||||||||
Portion of rent under long-term operating leases representative of an interest factor | 53,798 | 54,869 | 111,181 | 106,874 | 108,283 | 102,514 | 96,026 | |||||||||||||||||||||
Earnings Available for Fixed Charges | $ | 135,824 | $ | 145,501 | $ | 302,164 | $ | 77,246 | $ | 304,374 | $ | 136,090 | $ | 176,327 | ||||||||||||||
Fixed Charges: | ||||||||||||||||||||||||||||
Interest | 48,400 | 43,500 | 86,099 | 76,056 | 61,698 | 49,801 | 47,508 | |||||||||||||||||||||
Amortization of debt expense | 983 | 1,007 | 1,901 | 1,944 | 1,308 | 1,220 | 1,103 | |||||||||||||||||||||
Portion of rent under long-term operating leases representative of an interest factor | 53,798 | 54,869 | 111,181 | 106,874 | 108,283 | 102,514 | 96,026 | |||||||||||||||||||||
Total Fixed Charges | $ | 103,181 | $ | 99,376 | $ | 199,181 | $ | 184,874 | $ | 171,289 | $ | 153,535 | $ | 144,637 | ||||||||||||||
Ratio of Earnings to Fixed Charges | 1.32 | 1.46 | 1.52 | 0.42 | 1.78 | 0.89 | 1.22 | |||||||||||||||||||||
Coverage Deficiency | $ | — | $ | — | $ | — | $ | 107,628 | $ | — | $ | 17,445 | $ | — | ||||||||||||||
(1) | The ratios of earnings to fixed charges were computed by dividing earnings by fixed charges. For this purpose, “earnings” consist of income before taxes plus fixed charges and amortization of capitalized interest, less capitalized interest. “Fixed charges” consist of interest expense, capitalized interest and the portion of rent expense (estimated to be one-third) on operating leases deemed representative of interest. Our earnings were insufficient to cover fixed charges by approximately $107.6 million and $17.4 million for the years ended December 31, 2006 and 2004, respectively. |