EXHIBIT 12
CHEMED CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
2000 2001 2002 2003 2004
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Pretax income/(loss) from continuing operations before equity
in earnings/(loss) of affiliate $ 27,358 $(15,478) $ 17,140 $ 16,446 $ 37,087
Additions:
Fixed charges 11,891 12,642 5,621 4,801 28,597
Amortization of capitalized interest 71 -- -- -- 1
Deductions:
Capitalized interest (500) -- -- -- (72)
-------- -------- -------- -------- --------
Adjusted income/ (loss) $ 38,820 $ (2,836) $ 22,761 $ 21,247 $ 65,613
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Fixed Charges:
Interest expense $ 7,933 $ 6,537 $ 4,007 $ 3,211 $ 21,167
Capitalized interest 500 -- -- -- 72
Interest component of rental expense 3,458 3,488 1,614 1,590 4,028
Loss on extinguishment of debt (a), (b) -- 2,617 -- -- 3,330
-------- -------- -------- -------- --------
Fixed charges $ 11,891 $ 12,642 $ 5,621 $ 4,801 $ 28,597
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Ratio of earnings to fixed charges (c) 3.3 x n.a. 4.0 x 4.4 x 2.3 x
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Additional earnings needed to achieve 1:1 ratio coverage (d) n.a. 15,478 n.a. n.a. n.a.
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(a) The year ended December 31, 2001 includes interest penalties related
to the prepayment of the Company's 8.15% senior notes due 2002 through
2004 and its 10.67% senior notes due 2002 through 2003.
(b) 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. Refer to Note 12 in the Notes to Financial Statements for
further discussion.
(c) 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.
(d) In the year ended December 31, 2001 earnings were insufficient to
cover fixed charges. Additional earnings of $15,478,000 must be
generated to achieve a coverage ratio of 1:1.