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                                                                    Exhibit 12.1
 
                    SDW HOLDINGS CORPORATION AND SUBSIDIARY
 
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
                                 (IN MILLIONS)
 
<TABLE>   
<CAPTION>
                                                                SEPTEMBER 25,   DECEMBER 21,                                
                                    YEAR        NINE MONTHS         1994           1994          YEAR           YEAR
                                    ENDED           ENDED         THROUGH        THROUGH         ENDED          ENDED      
                                DECEMBER 25,    SEPTEMBER 24,   DECEMBER 20,   SEPTEMBER 27,   OCTOBER 2,     OCTOBER 1,    
                                    1993            1994            1994           1995           1996           1997       
                               --------------- --------------- --------------- -------------  -------------  -------------  
                                 S.D. WARREN     S.D. WARREN     S.D. WARREN                                                
                                 COMPANY AND     COMPANY AND     COMPANY AND   CONSOLIDATED   CONSOLIDATED   CONSOLIDATED   
                               CERTAIN RELATED CERTAIN RELATED CERTAIN RELATED SDW HOLDINGS   SDW HOLDINGS   SDW HOLDINGS   
                                 AFFILIATES      AFFILIATES      AFFILIATES     CORPORATION    CORPORATION    CORPORATION   
                                (PREDECESSOR)   (PREDECESSOR)   (PREDECESSOR)   (SUCCESSOR)    (SUCCESSOR)    (SUCCESSOR)   
                               --------------- --------------- --------------- -------------  -------------  -------------  
<S>                            <C>             <C>             <C>             <C>            <C>            <C>            
Income (loss)                                                                                                               
 before taxes                                                                                                               
 and other                                                                                                                  
 items..........                    $ 1.9           $28.0           $24.9         $ 70.8         $ 12.0         $ 47.4      
Adjustments:                                                                                                                
 Capitalized                                                                                                                
  interest......                      --             (1.4)            --            (0.9)          (1.9)          (3.7)     
 Dividends and                                                                                                              
  accretion on                                                                                                              
  subsidiary's                                                                                                              
  preferred                                                                                                                 
  stock.........                      --              --              --           (15.8)         (23.5)         (25.5)     
 Total fixed                                                                                                                
  charges, net..                     15.8            12.5             3.4          125.8          138.1          131.6      
                                    -----           -----           -----         ------         ------         ------
Excess of                                                                                                                   
 earnings to                                                                                                                
 cover fixed                                                                                                                
 charges and                                                                                                                
 preferred stock                                                                                                            
 dividends......                    $17.7           $39.1           $28.3         $179.9         $124.7         $149.8      
                                    =====           =====           =====         ======         ======         ======
Ratio of                                                                                                                    
 earnings to                                                                                                                
 cover fixed                                                                                                                
 charges and                                                                                                                
 preferred stock                                                                                                            
 dividends......                      1.1x            3.1x            8.3x           1.4x            *             1.1x      
                                    =====           =====           =====         ======         ======         ======
Fixed charges                                                                                                               
 and preferred                                                                                                              
 stock                                                                                                                      
 dividends:                                                                                                                 
 Interest                                                                                                                   
  expense.......                    $ 8.5           $ 6.4           $ 2.3         $106.0         $108.9         $ 99.0      
 Interest                                                                                                                   
  portion of                                                                                                                
  Biomass                                                                                                                   
  contract......                      4.6             3.2             0.9            2.4            2.7            2.0      
 Interest                                                                                                                   
  portion of                                                                                                                
  rent(1).......                      2.7             1.5             0.2            0.7            1.1            1.4      
 Dividends and                                                                                                              
  accretion on                                                                                                              
  subsidiary's                                                                                                              
  preferred                                                                                                                 
  stock.........                      --              --              --            15.8           23.5           25.5      
 Capitalized                                                                                                                
  interest......                      --              1.4             --             0.9            1.9            3.7      
                                    -----           -----           -----         ------         ------         ------
Total fixed                                                                                                                 
 charges and                                                                                                                
 preferred stock                                                                                                            
 dividends......                    $15.8           $12.5           $ 3.4         $125.8         $138.1         $131.6      
                                    =====           =====           =====         ======         ======         ======
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*  Ratio is less than 1 to 1 for period presented.
(1) Interest expense component of rent is 30% of rental expense.