EX-12 145 dex12.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)

 

     Proforma
Three
Months
Ended
March 31,
2006		    

Proforma

Year Ended

December 31,

2005

    Two
Months
Ended
March 31,
2006		    One Month
Ended
January 31,
2006		     Three
Months
Ended
March 31,
2005		    Years Ended December 31,
                  2005    2004    2003     2002     2001
                (Successor)    (Predecessor)          (Predecessor)

Earnings (loss) from continuing operations:

                          

Income (loss) from continuing operations before income taxes

    $ (51,113 )   $ 10,220    $ 1,743    $ (51,437 )   $ 6,401    $ 28,917    $ 23,210    $ (4,637 )   $ (12,981 )   $ 4,011

Add: Fixed Charges

      11,166       46,806      7,215      2,955       4,525      24,461      17,726      9,115       6,488       2,418
                                                                         

Earnings, as adjusted

    $ (39,947 )   $ 57,026    $ 8,958    $ (48,482 )   $ 10,926    $ 53,378    $ 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

    $ 9,829     $ 42,086    $ 6,324    $ 2,509     $ 3,489    $ 19,814    $ 13,965    $ 6,564     $ 4,967     $ 1,716

Interest portion of rent expense

      1,337       4,720      891      446       1,036      4,647      3,761      2,551       1,521       702
                                                                         

Total fixed charges

    $ 11,166     $ 46,806    $ 7,215    $ 2,955     $ 4,525    $ 24,461    $ 17,726    $ 9,115     $ 6,488     $ 2,418

Ratio of earnings to fixed charges(1)

      —         1.22x      1.24x      —         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, which we deemed to be 80%, is included in rental expense. Earnings, as adjusted were not sufficient to cover fixed charges by approximately $51.1 million and $51.4 million for proforma three months ended March 31, 2006 and one month ended January 31, 2006, respectively and $4.6 million and $12.9 million for the fiscal years ended December 31, 2003 and 2002, respectively.