Exhibit 12
NCO Group, Inc.
Ratio of Earnings to Fixed Charges
(in thousands, except for ratios)
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For the Years Ended |
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December 31, |
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2009(1)(2) |
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2008(1)(3) |
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2007(1) |
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Earnings: |
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Add: |
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Loss before income taxes and noncontrolling interest |
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$ |
(89,308 |
) |
$ |
(427,303 |
) |
$ |
(45,091 |
) |
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Fixed charges |
|
121,673 |
|
117,602 |
|
107,534 |
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Amortization of capitalized interest |
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12 |
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11 |
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11 |
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32,377 |
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(309,689 |
) |
62,454 |
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Subtract: |
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Interest capitalized |
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— |
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25 |
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— |
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Distributions to noncontrolling interest holders |
|
7,855 |
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12,242 |
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6,934 |
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7,855 |
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12,267 |
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6,934 |
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Earnings |
|
$ |
24,522 |
|
$ |
(321,957 |
) |
$ |
55,520 |
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Fixed Charges: |
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Interest expense |
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$ |
99,212 |
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$ |
94,831 |
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$ |
95,294 |
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Interest capitalized |
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— |
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25 |
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— |
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Portion of rentals deemed to be interest |
|
22,461 |
|
22,746 |
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12,240 |
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$ |
121,673 |
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$ |
117,602 |
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$ |
107,534 |
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Ratio of earnings to fixed charges |
|
0.2 |
|
(2.7 |
)x |
0.5 |
x |
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(1) |
For the years ended December 31, 2009, 2008 and 2007, the Company’s ratio of earnings to fixed charges indicated a less than one-to-one coverage. The deficiency was a result of earnings that were $97.2 million, $439.6 million and $52.0 million, respectively, less than fixed charges. |
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(2) |
Loss before income taxes and minority interest includes intangible asset impairment charges of $30.0 million and restructuring charges of $10.9 million. |
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(3) |
Loss before income taxes and minority interest includes intangible asset impairment charges of $289.5 million and restructuring charges of $11.6 million. |