Exhibit 12
CRC Health Corporation
Ratio of Earnings to Fixed Charges
(In thousands, except ratios)
Year Ended 2007 | Eleven Months Ended December 31, 2006 | One Month Ended January 31, 2006 | Three Months Ended March 31, 2005 | Years Ended December 31, | ||||||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||||||||||
(Successor) | (Successor) | (Predecessor) | (Predecessor) | (Predecessor) | (Predecessor) | (Predecessor) | (Predecessor) | (Predecessor) | ||||||||||||||||||||||
Earnings (loss) from continuing operations: | ||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 4,796 | $ | 6,495 | $ | (51,437 | ) | $ | 6,401 | $ | 28,917 | $ | 23,210 | $ | (4,637 | ) | $ | (12,981 | ) | $ | 4,011 | |||||||||
Add: Fixed Charges | 75,715 | 48,293 | 2,955 | 4,525 | 24,464 | 17,726 | 9,115 | 6,488 | 2,418 | |||||||||||||||||||||
Earnings, as adjusted | $ | 80,511 | $ | 54,788 | $ | (48,482 | ) | $ | 10,926 | $ | 53,381 | $ | 40,936 | $ | 4,478 | $ | (6,493 | ) | $ | 6,429 | ||||||||||
Computation of fixed charges: | ||||||||||||||||||||||||||||||
Total interest expense, including interest expensed and amortization of capitalized financing costs and debt discount | $ | 60,261 | $ | 41,456 | $ | 2,509 | $ | 3,489 | $ | 19,817 | $ | 13,965 | $ | 6,564 | $ | 4,967 | $ | 1,716 | ||||||||||||
Interest portion of rent expense | 15,454 | 6,837 | 446 | 1,036 | 4,647 | 3,761 | 2,551 | 1,521 | 702 | |||||||||||||||||||||
Total fixed charges | $ | 75,715 | $ | 48,293 | $ | 2,955 | $ | 4,525 | $ | 24,464 | $ | 17,726 | $ | 9,115 | $ | 6,488 | $ | 2,418 | ||||||||||||
Ratio of earnings to fixed charges (1) | 1.06 | 1.13 | -16.41 | 2.41 | 2.18 | 2.31 | 0.49 | -1.00 | 2.66 | |||||||||||||||||||||
Ratio of earnings to fixed charges (1) | 1.06x | 1.13x | — | 2.41x | 2.18x | 2.31x | — | — | 2.66x |
(1) | The ratio of earnings to fixed charges is completed by dividing earnings by fixed charges. “Earnings” consist of earnings before income taxes plus fixed charges. Fixed charges include (i) interest expense on borrowings and amortization of capitalized financing costs and debt discount and (ii) a reasonable approximation of the interest factor deemed to be included in rental expense. Earnings, as adjusted were not sufficient to cover fixed charges by approximately $51.1 million for one month ended January 31, 2006 and $4.6 million and $12.9 million for the fiscal years ended December 31, 2003 and 2002, respectively. |