Exhibit 12.1
Mohawk Industries, Inc.
Statement Regarding Computation of Earnings to Fixed Charges
(In Thousands, Except Ratio Data)
December 31, | ||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | ||||||
Fixed rent expense | $123,095 | 139,103 | 130,227 | 105,976 | 103,416 | |||||
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Principal | 82,063 | 92,735 | 86,818 | 70,651 | 68,944 | |||||
Interest | 41,032 | 46,368 | 43,409 | 35,325 | 34,472 | |||||
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Total | $123,095 | 139,103 | 130,227 | 105,976 | 103,416 | |||||
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Fixed charges: | ||||||||||
Portion of rent expense representative of interest | $41,032 | 46,368 | 43,409 | 35,325 | 34,472 | |||||
Capitalized interest | 4,446 | 6,419 | 4,469 | 4,240 | 6,197 | |||||
Interest expensed | 154,469 | 127,050 | 127,031 | 133,151 | 101,617 | |||||
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Total fixed charges (1) | $199,947 | 179,837 | 174,909 | 172,716 | 142,286 | |||||
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Earnings: | ||||||||||
Earnings (loss) before income taxes | $611,716 | (1,272,472) | (77,713) | 192,648 | 199,874 | |||||
Fixed charges | 199,947 | 179,837 | 174,909 | 172,716 | 142,286 | |||||
Amortization of capitalized interest | 4,395 | 5,043 | 5,377 | 5,178 | 5,607 | |||||
less: | ||||||||||
Capitalized interest | (4,446) | (6,419) | (4,469) | (4,240) | (6,197) | |||||
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Total earnings | $811,612 | (1,094,011) | 98,104 | 366,302 | 341,570 | |||||
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Ratio of earnings to fixed charges | 4.1 | * | ** | 2.1 | 2.4 |
(1) Earnings are defined as the sum of earnings before income taxes, fixed charges and amortization of capitalized interest less capitalized interest. Fixed charges are defined as interest expensed and capitalized plus interest within rent expense, which is estimated to be one-third of rent expense.
* Due to a loss resulting from impairment of goodwill and intangible assets in 2008, the ratio was less than 1:1. The Company would need to generate additional earnings before income taxes of $1,273,848 to achieve a ratio of 1:1.
** Due to warrranty claims related to the performance of certain commercial carpet tile, the ratio was less than 1:1. The Company would need to generate additional earnings before income taxes of $76,805 to achieve a ratio of 1:1.