Exhibit 12
NCO Group, Inc.
Ratio of Earnings to Fixed Charges
(in thousands, except for ratios)
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| Successor |
| Predecessor |
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| Period from |
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| July 13, 2006 |
| Period from |
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| (date of inception) |
| January 1 |
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| For the Years Ended |
| through |
| through |
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| December 31, |
| December 31, |
| November 15, |
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| 2008(1)(2) |
| 2007(1) |
| 2006(1)(3) |
| 2006 |
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Earnings: |
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Add: |
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(Loss) income before income taxes and minority interest |
| $ | (427,303 | ) | $ | (45,091 | ) | $ | (79,470 | ) | $ | 39,666 |
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Fixed charges |
| 117,602 |
| 107,534 |
| 16,563 |
| 37,465 |
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Amortization of capitalized interest |
| 11 |
| 11 |
| 1 |
| 10 |
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| (309,689) |
| 62,454 |
| (62,906 | ) | 77,141 |
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Subtract: |
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Interest capitalized |
| 25 |
| — |
| — |
| — |
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Distributions to minority holders |
| 12,242 |
| 6,934 |
| 579 |
| 3,574 |
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| 12,267 |
| 6,934 |
| 579 |
| 3,574 |
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Earnings |
| $ | (321,957 | ) | $ | 55,520 |
| $ | (63,485 | ) | $ | 73,567 |
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Fixed Charges: |
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Interest expense |
| $ | 94,831 |
| $ | 95,294 |
| $ | 14,978 |
| $ | 26,643 |
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Interest capitalized |
| 25 |
| — |
| — |
| — |
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Amortization of deferred financing charges not included in interest expense |
| — |
| — |
| — |
| 230 |
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Portion of rentals deemed to be interest |
| 22,746 |
| 12,240 |
| 1,585 |
| 10,592 |
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| $ | 117,602 |
| $ | 107,534 |
| $ | 16,563 |
| $ | 37,465 |
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Ratio of earnings to fixed charges |
| (2.7 | )x | 0.5 | x | (3.8 | )x | 2.0 | x | ||||
(1) For the years ended December 31, 2008 and 2007 and for the period from July 13, 2006 through December 31, 2006, 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 $439.6 million, $52.0 million and $80.0 million, respectively, less than fixed charges.
(2) Loss before income taxes and minority interest includes intangible asset impairment charges of $289.5 million and restructuring charges of $11.6 million.
(3) Loss before income taxes and minority interest includes intangible asset impairment charges of $89.9 million.