1
Exhibit 12.1
Manor Care, Inc.
Computation of Ratio of Earnings to Fixed Charges
(In thousands, except ratios)
Years ended December 31,
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Adjusted
2000 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ----
EARNINGS AVAILABLE TO COVER FIXED
CHARGES:
Income (loss) from continuing
operations before income taxes
and minority interests ........... $ 60,635 $ 61,669 $(102,396) $ (24,565) $ 227,110 $ 180,647
Less:
Equity in earnings of affiliates,
excluding affiliate with
guaranteed debt........... (2,016) (2,016) (2,276) (5,376) (2,806) (1,500)
Add:
Dividends received from equity
affiliate................. 6,000 6,000 -- -- -- --
Fixed charges deducted from
earnings (see below) 76,545 75,511 67,838 62,613 88,279 75,744
--------- --------- --------- --------- --------- ---------
Earnings available to cover fixed
charges....................... $ 141,164 $ 141,164 $ (36,834) $ 32,672 $ 312,583 $ 254,891
========= ========= ========= ========= ========= =========
FIXED CHARGES:
Interest expense, including amounts
in operating expense................ $ 66,460 $ 66,460 $ 60,646 $ 55,340 $ 79,309 $ 68,915
Interest within rent expense.......... 9,051 9,051 7,192 7,273 8,970 6,829
Adjusted interest expense and
amortization of financing costs .. 1,034 -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Fixed charges deducted from
earnings....................... 76,545 75,511 67,838 62,613 88,279 75,744
Interest expense on guaranteed debt
of affiliate..................... 4,309 4,309 922 -- -- --
Interest capitalized............... 4,457 4,457 3,235 8,623 4,887 5,657
--------- --------- --------- --------- --------- ---------
Fixed charges..................... $ 85,311 $ 84,277 $ 71,995 $ 71,236 $ 93,166 $ 81,401
========= ========= ========= ========= ========= =========
RATIO OF EARNINGS TO FIXED
CHARGES (1)................... 1.7x 1.7x 3.4x 3.1x
========= ========= ========= =========
(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.