EXHIBIT 12
CHEMED CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratios)
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratios)
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
Pretax income/ (loss) from continuing operations before equity in earnings/ (loss) of affiliate | $ | 16,446 | $ | 36,936 | $ | 54,656 | $ | 90,284 | $ | 101,838 | ||||||||||
Additions: | ||||||||||||||||||||
Fixed charges | 4,800 | 28,597 | 30,738 | 24,055 | 31,720 | |||||||||||||||
Amortization of capitalized interest | — | 1 | 2 | 4 | 4 | |||||||||||||||
Deductions: | ||||||||||||||||||||
Capitalized interest | — | (72 | ) | (380 | ) | (751 | ) | (951 | ) | |||||||||||
Adjusted income/ (loss) | $ | 21,246 | $ | 65,462 | $ | 85,016 | $ | 113,592 | $ | 132,611 | ||||||||||
Fixed Charges: | ||||||||||||||||||||
Interest expense | $ | 3,211 | $ | 21,167 | $ | 21,264 | $ | 17,468 | $ | 11,244 | ||||||||||
Capitalized interest | — | 72 | 380 | 751 | 951 | |||||||||||||||
Interest component of rental expense | 1,589 | 4,028 | 5,123 | 5,406 | 5,727 | |||||||||||||||
Loss on extinguishment of debt (a), (b), (c), (d) | — | 3,330 | 3,971 | 430 | 13,798 | |||||||||||||||
Fixed charges | $ | 4,800 | $ | 28,597 | $ | 30,738 | $ | 24,055 | $ | 31,720 | ||||||||||
Ratio of earnings to fixed charges (e) | 4.4 | x | 2.3 | x | 2.8 | x | 4.7 | x | 4.2 | x | ||||||||||
(a) | The year ended December 31, 2004 includes interest penalties related to the retirement of the Company’s 7.31% senior notes due 2005 through 2009. | |
(b) | The year ended December 31, 2005 includes interest penalties related to the retirement of the Company’s floating rate notes due 2010. | |
(c) | The year ended December 31, 2006 includes interest penalties related to the retirement of the Company’s $84.4 million term loan due 2009 . Refer to Note 2 in the Notes to Consolidated Financial Statements for further discussion. | |
(d) | The year ended December 31, 2007 includes interest penalties related to the retirement of the Company’s $150 million fixed rate notes due 2011. Refer to Note 2 in the Notes to Consolidated Financial Statements for further discussion. | |
(e) | For purposes of computing the ratio of earnings to fixed charges, pretax income/ (loss) from continuing operations before equity in earnings/ (loss) of affiliate has been added to fixed charges and adjusted for capitalized interest to derive adjusted income/ (loss). Fixed charges consist of interest expense on debt (including the amortization of deferred financing costs), capitalized interest, prepayment penalties on the early extinguishment of debt and one-third (the proportion deemed representative of the interest component) of rental expense. Fixed charge amounts include interest from both continuing and discontinued operations. |