Exhibit 12
ORBCOMM Inc.
Computation of Ratio of Earnings to Fixed Charges and to Combined Fixed Charges and Preference Dividends
(Amounts in thousands, except the ratio)
Fiscal Year Ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Earnings (A): | ||||||||||||||||||||
Pre-tax income (loss) from continuing operations | (61,604 | ) | (22,709 | ) | (11,774 | ) | (4,117 | ) | $ | 6,054 | ||||||||||
Add: | ||||||||||||||||||||
Fixed charges | 1,283 | 1,909 | 7,277 | 5,657 | 5,471 | |||||||||||||||
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(60,321 | ) | (20,800 | ) | (4,497 | ) | 1,540 | 11,525 | |||||||||||||
Less: | ||||||||||||||||||||
Interest capitalized | 0 | 744 | 1,138 | 4,713 | 4,562 | |||||||||||||||
Noncontrolling interest in pre-tax income (loss) of a subsidiary that has not incurred fixed charges | 89 | 285 | 252 | 159 | 160 | |||||||||||||||
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Total earnings | (60,410 | ) | (21,829 | ) | (5,887 | ) | (3,332 | ) | $ | 6,803 | ||||||||||
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Fixed Charges (B): | ||||||||||||||||||||
Fixed charges included in earnings (G) | 149 | 149 | 5242 | 149 | $ | 58 | ||||||||||||||
Interest portion of rent expense (F) | 1,134 | 1,016 | 897 | 795 | 851 | |||||||||||||||
Capitalized interest | 0 | 744 | 1,138 | 4,713 | 4,562 | |||||||||||||||
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Total fixed charges | 1,283 | 1,909 | 7,277 | 5,657 | $ | 5,471 | ||||||||||||||
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Preference Security Dividend (C): | 12 | 14 | 36 | 37 | $ | 59 | ||||||||||||||
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Ratio of Earnings to Fixed Charges | N/A | (D) | N/A | (D) | N/A | (D) | N/A | (D) | 1.2 | |||||||||||
Ratio of Earnings to Combined Fixed Charges and Preference Security Dividends | N/A | (E) | N/A | (E) | N/A | (E) | N/A | (E) | 1.2 |
(A) | “Earnings” are defined as pre-tax income from continuing operations, adjusted for fixed charges, interest capitalized and income from non-controlling interest of subsidiaries that have not incurred fixed charges. |
(B) | “Fixed charges” are defined as interest on borrowings (whether expensed or capitalized). |
(C) | “Preference Security Dividend” is defined as the amount of pre-tax earnings that is required to pay the dividends on outstanding preferred stock. |
(D) | The ratio coverage was less than 1:1 for fiscal years 2017, 2016, 2015 and 2014. The Company would have needed to generate additional pre-tax earnings of $61,693, $23,738, $13,164 and $8,989 to achieve coverage of 1:1 for fiscal years 2017, 2016, 2015 and 2014, respectively. |
(E) | The ratio coverage was less than 1:1 for fiscal years 2017, 2016, 2015 and 2014. The Company would have needed to generate additional pre-tax earnings of $61,705, $23,752, $13,200 and $9,026 to achieve coverage of 1:1 for fiscal years 2017, 2016, 2015 and 2014, respectively. |
(F) | One-third of net rent expense is the portion deemed representative of the interest factor. |
(G) | Represents interest expense recorded. |