EX-12 3 d280574dex12.htm STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Statement of Computation of Ratio of Earnings to Fixed Charges

Exhibit 12

CRC Health Corporation

Ratio of Earnings to Fixed Charges

(In thousands, except ratios)

 

    2011     2010     2009     2008     2007  

Earnings (loss) from operations:

         

Income (loss) from continuing operations before income taxes

  $ 23,796      $ (31,816   $ (12,917   $ (127,788   $ (4,980

Add: Fixed Charges

    60,929        59,404        61,012        71,530        75,943   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings, as adjusted

  $ 84,725      $ 27,588      $ 48,095      $ (56,258   $ 70,963   

Computation of fixed charges:

         

Total interest expense, including interest expensed and amortization of capitalized financing costs and debt discount

  $ 45,324      $ 43,340      $ 45,419      $ 54,156      $ 60,401   

Interest portion of rent expense

    15,605        16,064        15,593        17,374        15,542   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Fixed Charges

  $ 60,929      $ 59,404      $ 61,012      $ 71,530      $ 75,943   

Ratio of earnings to fixed charges(1)

    1.39        0.46        0.79        —          0.93   

 

(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 sufficient to cover fixed charges by $23.8 million for the year ended December 31, 2011, and were not sufficient to cover fixed charges by $31.8 million, $12.9 million, $127.8 million and $5.0 million for the years ended December 31, 2010, 2009, 2008 and 2007, respectively.