Exhibit 12.1
Manor Care, Inc.
Computation of Ratio of Earnings to Fixed Charges
(In thousands, except ratios)
3 MONTHS ENDED MARCH 31, YEARS ENDED DECEMBER 31,
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2003 2002 2002 2001 2000 1999 1998
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EARNINGS AVAILABLE TO COVER FIXED
CHARGES:
Income (loss) from continuing
operations before income taxes and
minority interests................ $50,206 $54,418 $212,684 $129,992 $ 61,669 $(102,396) $(24,565)
Less:
Equity in earnings of affiliates,
excluding affiliate with
guaranteed debt.................. (1,541) (736) (4,761) (4,543) (2,016) (2,276) (5,376)
Add:
Dividends received from equity
affiliate........................ 1,971 2,182 3,026 11,574 6,000 -- --
Fixed charges deducted from
earnings (see below)............. 11,968 12,454 51,173 64,751 75,511 67,838 62,613
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Earnings available to cover fixed
charges........................... $62,604 $68,318 $262,122 $201,774 $141,164 $ (36,834) $ 32,672
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FIXED CHARGES:
Interest expense, including amounts
in operating expense.............. $ 9,463 $ 9,949 $ 41,395 $ 55,458 $ 66,460 $ 60,646 $ 55,340
Interest within rent expense........ 2,505 2,505 9,778 9,293 9,051 7,192 7,273
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Fixed charges deducted from
earnings.......................... 11,968 12,454 51,173 64,751 75,511 67,838 62,613
Interest expense on guaranteed debt
of affiliate...................... -- -- -- 2,272 4,309 922 --
Interest capitalized................ 182 287 721 1,933 4,457 3,235 8,623
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Fixed charges....................... $12,150 $12,741 $ 51,894 $ 68,956 $ 84,277 $ 71,995 $ 71,236
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RATIO OF EARNINGS TO FIXED
CHARGES (1)....................... 5.2x 5.4x 5.1x 2.9x 1.7x -- --
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(1) We do not show a ratio for 1998 and 1999 because earnings were insufficient
to cover fixed charges by $38.6 million in 1998 and $108.8 million in 1999.