Exhibit 12
TOWN SPORTS INTERNATIONAL HOLDINGS, INC.
COMPUTATION OF EARNINGS TO FIXED CHARGES
ALL FIGURES $’000, EXCEPT COVERAGE RATIOS
Year ended December 31, | ||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | ||||||||||||||||
Earnings available for fixed charges: | ||||||||||||||||||||
Income (loss) before income taxes | $ | 10,227 | $ | 14,429 | $ | 21,672 | $ | 12,966 | $ | (2,815 | ) | |||||||||
Less: income from investments accounted for by the equity method | (512 | ) | (695 | ) | (796 | ) | (755 | ) | (706 | ) | ||||||||||
Add: Cash distributions from investments accounted for by the equity method | 420 | 809 | 720 | 840 | 773 | |||||||||||||||
Add: Fixed charges, net of capitalized interest | 24,790 | 28,176 | 31,756 | 40,588 | 57,296 | |||||||||||||||
Total | $ | 34,925 | $ | 42,719 | $ | 53,352 | $ | 53,639 | $ | 54,548 | ||||||||||
Fixed Charges | ||||||||||||||||||||
Interest (includes amortization of issuance costs) | $ | 14,300 | $ | 14,918 | $ | 16,559 | $ | 23,670 | $ | 39,343 | ||||||||||
Interest portion of rent expense | 10,490 | 13,258 | 15,197 | 16,918 | 17,953 | |||||||||||||||
Capitalized interest | 660 | 907 | 354 | 322 | 429 | |||||||||||||||
Total | $ | 25,450 | $ | 29,083 | $ | 32,110 | $ | 40,910 | $ | 57,725 | ||||||||||
Coverage: | ||||||||||||||||||||
Earnings to fixed charges (deficiency) | 1.4 | 1.5 | 1.7 | 1.3 | (3,177 | ) |
Note: Accreted dividends on Town Sports International, Inc. (“TSI”) preferred stock have been excluded from the fixed charge coverage ratio calculation of Town Sports International Holdings, Inc., the newly formed parent company in 2004. During the periods that the TSI preferred stock dividends were accreted, TSI was the existing parent company of the consolidated group.