EX-12 12 exhibit_12-10k.htm EXHIBIT 12

Exhibit 12

HealthSouth Corporation and Subsidiaries

 

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

 

In computing the ratio of earnings to fixed charges: (1) earnings have been based on income from continuing operations before income taxes, fixed charges (exclusive of interest capitalized), and distributed income of equity investees and (2) fixed charges consist of interest and amortization of debt discounts and fees expense (including amounts capitalized), the estimated interest portion of rents, and dividends on our convertible perpetual preferred stock.

 

 

For the Year Ended December 31,

 

2008

 

2007

 

2006

 

2005

 

2004

 

(In Millions)

COMPUTATION OF FIXED CHARGES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expensed and capitalized in continuing operations,

 

 

 

 

 

 

 

 

 

including amortization of debt discounts and fees

$        159.7

 

$        229.8

 

$        234.7

 

$        234.8

 

$        211.0

 

 

 

 

 

 

 

 

 

 

Interest expensed and capitalized in discontinued operations,

 

 

 

 

 

 

 

 

 

including amortization of debt discounts and fees

1.7

 

45.5

 

103.0

 

107.8

 

103.1

 

 

 

 

 

 

 

 

 

 

Interest element of rentals (1)

22.6

 

23.1

 

23.3

 

22.9

 

25.0

 

 

 

 

 

 

 

 

 

 

Total fixed charges

184.0

 

298.4

 

361.0

 

365.5

 

339.1

 

 

 

 

 

 

 

 

 

 

Dividend requirements on convertible perpetual preferred stock (2)

36.2

 

35.7

 

23.2

 

–

 

–

 

 

 

 

 

 

 

 

 

 

Total combined fixed charges and preferred stock dividends

$        220.2

 

$        334.1

 

$        384.2

 

$        365.5

 

$        339.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPUTATION OF EARNINGS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income (loss) from continuing operations before

 

 

 

 

 

 

 

 

 

adjustments for minority interests in earnings of consolidated

 

 

 

 

 

 

 

 

 

affiliates or equity in net income of nonconsolidated affiliates

$        183.9

 

$       (103.0)

 

$       (498.6)

 

$       (338.0)

 

$        (50.3)

 

 

 

 

 

 

 

 

 

 

Fixed charges

184.0

 

298.4

 

361.0

 

365.5

 

339.1

 

 

 

 

 

 

 

 

 

 

Distributed income of equity investees

10.9

 

5.3

 

6.1

 

11.4

 

6.9

 

 

 

 

 

 

 

 

 

 

Interest capitalized

–

 

–

 

–

 

–

 

(8.4)

 

 

 

 

 

 

 

 

 

 

Total earnings

$        378.8

 

$        200.7

 

$       (131.5)

 

$         38.9

 

$        287.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RATIO OF EARNINGS TO FIXED CHARGES

2.06

 

*

 

*

 

*

 

*

 

 

 

 

 

 

 

 

 

 

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND

 

 

 

 

 

 

 

 

 

PREFERRED STOCK DIVIDENDS

1.72

 

**

 

**

 

**

 

**

 

(1) Management has determined the interest component of rent expense to be 33%.

 

(2) Grossed up to pre-tax based on 39.1%, 37.3%, and 4.4% effective tax rates for the years ended December 31, 2008, 2007, and 2006, respectively.

 

* For the years ended December 31, 2007, 2006, 2005, and 2004, the Company had an earnings-to-fixed charges coverage deficiency of approximately $97.7 million, $492.5 million, $326.6 million, and $51.8 million, respectively.

 

** For the years ended December 31, 2007, 2006, 2005, and 2004, the Company had an earnings-to-combined fixed charges and preferred stock dividends coverage deficiency of approximately $133.4 million, $515.7 million, $326.6 million, and $51.8 million, respectively.