EX-12 7 a11-2345_1ex12.htm EX-12

Exhibit 12

 

NCO Group, Inc.

Ratio of Earnings to Fixed Charges

(in thousands, except for ratios)

 

 

 

For the Years Ended

 

 

 

December 31,

 

 

 

2010(1)(2)

 

2009(1)(3)

 

2008(1)(4)

 

Earnings:

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

Loss before income taxes and noncontrolling interest

 

$

(148,841

)

$

(89,308

)

$

(427,303

)

Fixed charges

 

114,751

 

121,673

 

117,602

 

Amortization of capitalized interest

 

1

 

12

 

11

 

 

 

(34,089

)

32,377

 

(309,689

)

Subtract:

 

 

 

 

 

 

 

Interest capitalized

 

415

 

—

 

25

 

Distributions to noncontrolling interest holders

 

4,733

 

7,855

 

12,242

 

 

 

5,148

 

7,855

 

12,267

 

Earnings

 

$

(39,237

)

$

24,522

 

$

(321,957

)

 

 

 

 

 

 

 

 

Fixed Charges:

 

 

 

 

 

 

 

Interest expense

 

$

90,344

 

$

99,212

 

$

94,831

 

Interest capitalized

 

415

 

—

 

25

 

Portion of rentals deemed to be interest

 

23,992

 

22,461

 

22,746

 

 

 

$

114,751

 

$

121,673

 

$

117,602

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

(0.3

)

0.2

x

(2.7

)x

 

(1)         For the years ended December 31, 2010, 2009 and 2008, 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 $154.0 million, $97.2 million and $439.6 million, respectively, less than fixed charges.

(2)         Loss before income taxes and minority interest includes intangible asset impairment charges of $57.0 million and restructuring charges of $18.3 million.

(3)         Loss before income taxes and minority interest includes intangible asset impairment charges of $30.0 million and restructuring charges of $10.9 million.

(4)         Loss before income taxes and minority interest includes intangible asset impairment charges of $289.5 million and restructuring charges of $11.6 million.