EXHIBIT 12.1
DAVITA INC.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. Earnings for this purpose is defined as pretax income from operations adjusted by adding back fixed charges expensed during the period and debt refinancing charges. Fixed charges include debt expense (interest expense and the amortization of deferred financing costs), the estimated interest component of rental expense on operating leases, and capitalized interest.
Nine months ended | Year ended December 31, | |||||||||||||||||||
2002 | 2001 | 2000 | 1999 | 1998 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Earnings adjusted for fixed charges: | ||||||||||||||||||||
Income (loss) before income taxes, and cumulative effect of a change in accounting principle | $ | 187,768 | $ | 267,257 | $ | 242,567 | $ | 39,223 | $ | (181,826 | ) | $ | 28,229 | |||||||
Add: | ||||||||||||||||||||
Debt expense | 55,062 | 71,636 | 72,438 | 116,637 | 110,797 | 84,003 | ||||||||||||||
Debt refinancing charges | 17,240 | 48,930 | (1,629 | ) | 5,712 | 20,412 | ||||||||||||||
Interest portion of rental expense | 16,839 | 20,336 | 18,116 | 17,140 | 17,501 | 12,992 | ||||||||||||||
89,141 | 140,902 | 88,925 | 139,489 | 128,298 | 117,407 | |||||||||||||||
Earnings (loss) before income taxes, debt refinancing charges, cumulative effect of a change in accounting principle and fixed charges | $ | 276,909 | $ | 408,159 | $ | 331,492 | $ | 178,712 | $ | (53,528 | ) | $ | 145,636 | |||||||
Fixed charges: | ||||||||||||||||||||
Debt expense | 55,062 | 71 636 | 72,438 | 116,637 | 110,797 | 84,003 | ||||||||||||||
Interest portion of rental expense | 16,839 | 20,336 | 18,116 | 17,140 | 17,501 | 12,992 | ||||||||||||||
Capitalized interest | 1,326 | 1,888 | 751 | 1,125 | 709 | 804 | ||||||||||||||
Total fixed charges | $ | 73,227 | $ | 93,860 | $ | 91,305 | $ | 134,902 | $ | 129,007 | $ | 97,799 | ||||||||
Ratio of earnings to fixed charges | 3.78 | 4.35 | 3.63 | 1.32 | (a | ) | 1.49 | |||||||||||||
(a) | Due to the Company’s loss in 1999, the ratio coverage was less than 1:1. The Company would have had to generate additional earnings of $182,535 to achieve a coverage of 1:1. |