TOTAL RENAL CARE HOLDINGS, INC.
EXHIBIT 12.1
RATIO OF EARNINGS TO FIXED CHARGES
SEVEN MONTHS ENDED NINE MONTHS ENDED
YEARS ENDED MAY 31, DECEMBER 31, (1) YEARS ENDED DECEMBER 31, SEPTEMBER 30,
----------------------- ------------------- ------------------------ ------------------------------
1993 1994 1995 1994 1995 1995 1996 1997 1997 1998 1998
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(IN THOUSANDS, EXCEPT FOR RATIO (SUPPLEMENTAL)
DATA)
(2)
Income before
income taxes,
minority
interest,
extraordinary
items and
cumulative
effect of a
charge in
accounting
principle....... $15,932 $18,753 $24,323 $14,174 $26,436 $39,685 $60,945 $ 99,741 $71,744 $29,641 $132,299
Minority
Interest........ 775 1,046 1,593 878 1,784 2,544 3,578 4,502 3,193 4,817 4,817
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15,157 17,707 22,730 13,296 24,652 37,141 57,367 95,239 68,551 24,824 127,482
------- ------- ------- --------- --------- ------- ------- -------- ------- ------- --------
Fixed Charges:
Interest expense
and amortization
of debt issuance
costs and
discounts on all
indebtedness.... 1,442 1,575 9,087 4,676 8,007 13,375 14,075 30,289 18,512 61,869 52,046
Preferred
dividends....... 2,075
Interest portion
of rental
expense......... 1,352 1,926 2,475 1,438 1,950 3,347 5,301 8,196 5,761 9,531 9,531
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Total fixed
charges......... 4,869 3,501 11,562 6,114 9,957 16,722 19,376 38,485 24,273 71,400 61,577
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Earnings before
income taxes,
minority
interest,
extraordinary
items,
cumulative
effect of a
change in
accounting
principle and
fixed charges... $20,026 $21,208 $34,292 $19,410 $34,609 $53,863 $76,743 $133,202 $92,824 $96,224 $189,059
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Ratio of
earnings to
fixed charges... 4.11 6.06 2.97 3.17 3.48 3.22 3.96 3.47 3.82 1.35 3.07
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(1) In 1995, we changed our fiscal year end to December 31 from May 31.
(2) A supplemental calculation of the ratio of earnings to fixed charges is
presented to exclude nonrecurring merger costs and interest rate swap
termination costs. During the nine months ended September 30, 1998, we
recorded $92.8 million of fees and expenses related to the Merger and to
the integration of the combined companies. In April 1998, we recorded $9.8
million related to interest rate swap termination costs.
The ratio of earnings to fixed charges is computed by dividing fixed charges
into earnings. Earnings is defined as pretax income from continuing
operations adjusted by adding fixed charges and excluding interest
capitalized during the period. Fixed charges means the total of interest
expenses and amortization of financing costs, the estimated interest
component of rental expense on operating leases and preferred stock
dividends.