EX-12.1 4 dex121.htm COMPUTATION OF RATIOS Computation of Ratios
EXHIBIT 12.1
 
PINNACLE ENTERTAINMENT, INC.
 
RATIO OF EARNINGS TO FIXED CHARGES
$ in thousands
 
    
Years ended December 31,
     
Six months ended
June 30,
  
    
1997
     
1998
     
1999
     
2000
     
2001
     
2001
     
2002
  
Earnings:
                                                               
Pre-tax income (loss)
   
$
14,520
 
   
$
21,611
 
   
$
84,973
 
   
$
131,888
 
   
$
(50,555
)
   
$
(7,408
)
   
$
(8,713
)
Add fixed charges
   
 
8,094
 
   
 
26,751
 
   
 
69,531
 
   
 
63,903
 
   
 
53,467
 
   
 
26,501
 
   
 
26,827
 
Less capitalized interest
   
 
(425
)
   
 
(2,142
)
   
 
(1,359
)
   
 
(8,148
)
   
 
(481
)
   
 
(482
)
   
 
(256
)
    
  
  
  
  
  
  
Total earnings
   
$
22,189
 
   
$
46,220
 
   
$
153,145
 
   
$
187,643
 
   
$
2,431
 
   
$
18,611
 
   
$
17,858
 
    
  
  
  
  
  
  
Fixed charges:
                                                               
Interest expense—inclusive of the amortization of debt issuance costs
   
$
7,302
 
   
$
22,518
 
   
$
64,573
 
   
$
52,620
 
   
$
49,853
 
   
$
24,618
 
   
$
24,952
 
Capitalized interest
   
 
425
 
   
 
2,142
 
   
 
1,359
 
   
 
8,148
 
   
 
481
 
   
 
482
 
   
 
256
 
Estimated interest portion in rent expense
   
 
367
 
   
 
2,091
 
   
 
3,599
 
   
 
3,135
 
   
 
3,133
 
   
 
1,401
 
   
 
1,619
 
    
  
  
  
  
  
  
Total fixed charges
   
$
8,094
 
   
$
26,751
 
   
$
69,531
 
   
$
63,903
 
   
$
53,467
 
   
$
26,501
 
   
$
26,827
 
Dividend on convertible preferred stock
   
$
1,520
 
   
$
—  
 
   
$
—  
 
   
$
—  
 
   
$
—  
 
   
$
—  
 
   
$
—  
 
    
  
  
  
  
  
  
Total fixed charges and preferred stock dividend
   
$
9,614
 
   
$
26,751
 
   
$
69,531
 
   
$
63,903
 
   
$
53,467
 
   
$
26,501
 
   
$
26,827
 
    
  
  
  
  
  
  
Ratio of earnings to fixed charges (1)
   
 
2.74 x
 
   
 
1.73 x
 
   
 
2.20 x
 
   
 
2.94 x
 
   
 
.05 x
 
   
 
.70 x
 
   
 
.67 x
 
Ratio of earnings to combined fixed charges and preferred dividend (2)
   
 
2.31 x
 
   
 
1.73 x
 
   
 
2.20 x
 
   
 
2.94 x
 
   
 
.05 x
 
   
 
.70 x
 
   
 
.67 x
 
(1)
 
In computing the ratio of earnings to fixed charges: (i) earnings were calculated from income from continuing operations, before income taxes, and fixed charges, and excluding capitalized interest; and (ii) fixed charges were computed from interest expense, amortization of debt issuance costs, capitalized interest, and the estimated interest included in rental expense. Earnings were insufficient to cover fixed charges by $51 million for the year ended December 31, 2001 and $7.9 million and $9.0 million for the six months ended June 30, 2001 and 2002, respectively.
(2)
 
The ratio of earnings to combined fixed charges and preferred dividend is computed similar to (1) except for the preferred dividend paid in 1997.