Exhibit 12
Delco Remy International, Inc.
Statement of Computation of Ratio of Earnings to Fixed Charges
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| | Year Ended July 31,
| | Five Months Ended December 31,
| | Year Ended December 31,
| | | Three Months Ended March 31,
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| | 1999
| | | | 2000
| | | | 1999
| | | | 2000
| | | | 2001
| | | 2002
| | | | 2003
| | | 2003
| | | 2004
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Earnings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes (benefit), minority interest, loss (income) from unconsolidated joint ventures and cumulative effect of change in accounting principle | | $ | 37,385 | | | | $ | 32,717 | | | | $ | 20,552 | | | | $ | 20,336 | | | | $ | (36,287 | ) | | $ | 18,483 | | | | $ | (140,917 | ) | | $ | (41,992 | ) | | $ | 7,845 | | |
Fixed charges | | | 43,411 | | | | | 45,627 | | | | | 18,122 | | | | | 20,748 | | | | | 53,739 | | | | 57,967 | | | | | 67,486 | | | | 15,450 | | | | 17,453 | | |
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Total Earnings | | $ | 80,796 | | | | $ | 78,344 | | | | $ | 38,674 | | | | $ | 41,084 | | | | $ | 17,452 | | | $ | 76,450 | | | | $ | (73,431 | ) | | $ | (26,542 | ) | | $ | 25,298 | | |
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Fixed Charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense (a) | | $ | 40,915 | | | | $ | 42,726 | | | | $ | 17,082 | | | | $ | 19,458 | | | | $ | 50,800 | | | $ | 54,786 | | | | $ | 62,151 | | | $ | 14,116 | | | $ | 16,202 | | |
Implicit interest in rent expense (b) | | | 2,496 | | | | | 2,901 | | | | | 1,040 | | | | | 1,290 | | | | | 2,939 | | | | 3,181 | | | | | 5,335 | | | | 1,334 | | | | 1,251 | | |
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Total Fixed Charges | | $ | 43,411 | | | | $ | 45,627 | | | | $ | 18,122 | | | | $ | 20,748 | | | | $ | 53,739 | | | $ | 57,967 | | | | $ | 67,486 | | | $ | 15,450 | | | $ | 17,453 | | |
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Ratio of Earnings to Fixed Charges (c) | | | 1.9 | | x | | | 1.7 | | x | | | 2.1 | | x | | | 2.0 | | x | | | — | | | | 1.3 | | x | | | — | | | | — | | | | 1.4 | | x |
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(a) | Includes interest expense, amortization of debt issuance costs and discount on indebtedness. |
(b) | One-third of rental expense is deemed to be interest. |
(c) | The deficiency of earnings to fixed charges was $36.3 million and $140.9 million during the years ended December 31, 2001 and 2003, respectively, and $42.0 million during the three months ended March 31, 2003. On a pro forma basis, to show the effect of the application of the proceeds from the offering of the old notes, the ratio of earnings to fixed charges for the three months ended March 31, 2004 and the deficiency of earnings to fixed charges for the year ended December 31, 2003 each changed by less than 10 percent as compared with the amounts reported. |