Exhibit 12.1
FIVE STAR QUALITY CARE, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands except ratios)
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| Nine Months Ended |
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| September 30, |
| Year Ended December 31, |
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| 2015 |
| 2014 |
| 2013 |
| 2012 |
| 2011 |
| 2010 |
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Earnings |
| $ | 54,472 |
| $ | 105,541 |
| $ | 133,878 |
| $ | 138,136 |
| $ | 193,239 |
| $ | 191,077 |
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Fixed Charges |
| 88,641 |
| 128,593 |
| 128,847 |
| 120,764 |
| 176,212 |
| 166,062 |
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Ratio of earnings to fixed charges |
| — | (1) | — | (1) | 1.0x |
| 1.1x |
| 1.1x |
| 1.2x |
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Deficiency |
| $ | (34,169 | ) | $ | (23,052 | ) | — |
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Calculation of earnings: |
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Income (loss) from continuing operations before income tax expense |
| $ | (34,099 | ) | $ | (22,965 | ) | $ | 5,365 |
| $ | 17,688 |
| $ | 17,166 |
| $ | 25,014 |
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Equity in (earnings) losses of AIC |
| (70 | ) | (87 | ) | (334 | ) | (316 | ) | (139 | ) | 1 |
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Fixed charges |
| 88,641 |
| 128,593 |
| 128,847 |
| 120,764 |
| 176,212 |
| 166,062 |
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Adjusted Earnings |
| $ | 54,472 |
| $ | 105,541 |
| $ | 133,878 |
| $ | 138,136 |
| $ | 193,239 |
| $ | 191,077 |
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Calculation of Fixed Charges: |
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Interest expense (2) |
| 3,597 |
| 5,131 |
| 5,892 |
| 6,703 |
| 4,377 |
| 3,045 |
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Estimated interest component of rent expense |
| 85,044 |
| 123,462 |
| 122,955 |
| 114,061 |
| 171,835 |
| 163,017 |
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Fixed Charges |
| $ | 88,641 |
| $ | 128,593 |
| $ | 128,847 |
| $ | 120,764 |
| $ | 176,212 |
| $ | 166,062 |
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(1) Earnings were insufficient to cover fixed charges by approximately $34.2 million and $23.1 million for the nine months ended September 30, 2015 and the year ended December 31, 2014, respectively; accordingly, no ratio is presented for such periods.
(2) Interest expense represents interest charges from continuing and discontinued operations and includes net amortization of debt discounts, premiums and deferred financing fees.