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)
2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||
Pretax income/ (loss) from continuing operations before equity in earnings/ (loss) of affiliate | $ | 36,936 | $ | 54,656 | $ | 90,284 | $ | 101,838 | $ | 122,345 | ||||||||||
Additions: | ||||||||||||||||||||
Fixed charges | 28,597 | 30,738 | 24,055 | 31,675 | 8,637 | |||||||||||||||
Amortization of capitalized interest | 1 | 2 | 2 | 4 | 5 | |||||||||||||||
Deductions: | ||||||||||||||||||||
Capitalized interest | (72 | ) | (380 | ) | (751 | ) | (951 | ) | (659 | ) | ||||||||||
Adjusted income/ (loss) | $ | 65,462 | $ | 85,016 | $ | 113,590 | $ | 132,566 | $ | 130,328 | ||||||||||
Fixed Charges: | ||||||||||||||||||||
Interest expense | $ | 21,167 | $ | 21,264 | $ | 17,468 | $ | 11,244 | $ | 5,985 | ||||||||||
Capitalized interest | 72 | 380 | 751 | 951 | 659 | |||||||||||||||
Interest component of rental expense | 4,028 | 5,123 | 5,406 | 5,682 | 6,201 | |||||||||||||||
Loss/(Gain) on extinguishment of debt (a), (b), (c), (d), (e) | 3,330 | 3,971 | 430 | 13,798 | (4,208 | ) | ||||||||||||||
Fixed charges | $ | 28,597 | $ | 30,738 | $ | 24,055 | $ | 31,675 | $ | 8,637 | ||||||||||
Ratio of earnings to fixed charges (f) | 2.3 | x | 2.8 | x | 4.7 | x | 4.2 | x | 15.1 | 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 . | |
(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) | The year ended December 31, 2008 includes a gain related to the repurchase of $13 million of the Company’s $200 million convertible debt. Refer to Note 2 in the Notes to Consolidated Financial Statements for further discussion. | |
(f) | 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. |