EX-12.1 6 dex121.htm RATIO OF EARNINGS Ratio of earnings

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.

 

    

Six months
ended
June 30,

2003


   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

   $ 124,858    $ 267,257    $  242,567     $  39,223    $ (181,826 )   $ 28,229

Add:

                                           

Debt expense

     38,951      71,636      72,438       116,637      110,797       84,003

Debt refinancing charges

            48,930      (1,629 )     5,712              20,412

Interest portion of rental expense

     11,033      20,336      18,116       17,140      17,501       12,992
    

  

  


 

  


 

       49,984      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

   $ 174,842    $ 408,159    $ 331,492     $ 178,712    $ (53,528 )   $ 145,636
    

  

  


 

  


 

Fixed charges:

                                           

Debt expense

     38,951      71 636      72,438       116,637      110,797       84,003

Interest portion of rental expense

     11,033      20,336      18,116       17,140      17,501       12,992

Capitalized interest

     964      1,888      751       1,125      709       804
    

  

  


 

  


 

Total fixed charges

   $  50,948    $ 93,860    $ 91,305     $ 134,902    $ 129,007     $ 97,799
    

  

  


 

  


 

Ratio of earnings to fixed charges

     3.43      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.