EX-12.1 3 dex121.htm RATIO OF EARNINGS TO FIXED CHARGES Ratio of earnings to fixed charges

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. Fixed charges include debt expense (interest expense and the amortization of financing costs), the estimated interest component of rental expense on operating leases, and capitalized interest.

 

    

Three months

ended

March 31,

2003


 

Year ended December 31,


      

2002


 

2001


 

2000


 

1999


    

1998


    

(dollars in thousands)

Earnings adjusted for fixed charges:

                                       

Income (loss) before income taxes, extraordinary items and cumulative effect of a change in accounting principle

  

$

60,663

 

$

316,187

 

$

240,938

 

$

44,935

 

$

(181,826

)

  

$

48,641

Add:

                                       

Debt expense

  

 

19,456

 

 

71,636

 

 

72,438

 

 

116,637

 

 

110,797

 

  

 

84,003

Interest portion of rental expense

  

 

5,448

 

 

20,336

 

 

18,116

 

 

17,140

 

 

17,501

 

  

 

12,992

    

 

 

 

 


  

    

 

24,904

 

 

91,972

 

 

90,554

 

 

133,777

 

 

128,298

 

  

 

96,995

    

 

 

 

 


  

Earnings (loss) before income taxes, extraordinary items, cumulative effect of a change in accounting principle and fixed charges

  

$

85,567

 

$

408,159

 

$

331,492

 

$

178,712

 

$

(53,528

)

  

$

145,636

    

 

 

 

 


  

Fixed charges:

                                       

Debt expense

  

 

19,456

 

 

71,636

 

 

72,438

 

 

116,637

 

 

110,797

 

  

 

84,003

Interest portion of rental expense

  

 

5,448

 

 

20,336

 

 

18,116

 

 

17,140

 

 

17,501

 

  

 

12,992

Capitalized interest

  

 

514

 

 

1,888

 

 

751

 

 

1,125

 

 

709

 

  

 

804

    

 

 

 

 


  

Total fixed charges

  

$

25,418

 

$

93,860

 

$

91,305

 

$

134,902

 

$

129,007

 

  

$

97,799

    

 

 

 

 


  

Ratio of earnings to fixed charges

  

 

3.37

 

 

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.