Exhibit 12.1
First Mercury Financial Corporation
Ratio of Earnings to Fixed Charges
Ratio of Earnings to Fixed Charges
Successor | Predecessor | |||||||||||||||||||||||||||
Three Months | August 17, | January 1, | ||||||||||||||||||||||||||
Ended | 2005 to | 2005 to | Year Ended | |||||||||||||||||||||||||
March 31, | Year Ended December 31, | December 31, | August 16, | December 31, | ||||||||||||||||||||||||
( $ in thousands ) | 2009 | 2008 | 2007 | 2006 | 2005 | 2005 | 2004 | |||||||||||||||||||||
Earnings(a) | ||||||||||||||||||||||||||||
Income from continuing operations before income taxes | $ | 12,749 | $ | 24,150 | $ | 56,593 | $ | 27,414 | $ | 7,822 | $ | 21,985 | $ | 24,647 | ||||||||||||||
Add: Fixed charges | 1,610 | 6,484 | 4,720 | 16,745 | 4,045 | 1,558 | 1,751 | |||||||||||||||||||||
Total earnings | $ | 14,359 | $ | 30,634 | $ | 61,313 | $ | 44,159 | $ | 11,867 | $ | 23,543 | $ | 26,398 | ||||||||||||||
Fixed charges(b) | ||||||||||||||||||||||||||||
Interest expense | $ | 1,357 | $ | 5,583 | $ | 4,278 | $ | 8,733 | $ | 3,684 | $ | 1,464 | $ | 1,633 | ||||||||||||||
Amortization of debt issuance costs | 59 | 237 | 175 | 667 | 296 | 55 | 58 | |||||||||||||||||||||
Write-off of debt issuance costs | — | — | — | 3,965 | — | — | — | |||||||||||||||||||||
Prepayment penalty | — | — | — | 3,250 | — | — | — | |||||||||||||||||||||
Estimate of interest expense in rental expense(c) | 194 | 664 | 267 | 130 | 65 | 39 | 60 | |||||||||||||||||||||
Total fixed charges | $ | 1,610 | $ | 6,484 | $ | 4,720 | $ | 16,745 | $ | 4,045 | $ | 1,558 | $ | 1,751 | ||||||||||||||
Preferred share dividends | $ | — | $ | — | $ | — | $ | 12,487 | $ | — | $ | — | $ | — | ||||||||||||||
Ratio of earnings to fixed charges | 8.92 | 4.72 | 12.99 | 2.64 | 2.93 | 15.11 | 15.08 | |||||||||||||||||||||
Ratio of earnings to fixed charges and preferred share dividends | 8.92 | 4.72 | 12.99 | 1.51 | 2.93 | 15.11 | 15.08 | |||||||||||||||||||||
(a) Earnings means (i) income from continuing operations before income taxes, plus (ii) fixed charges. | ||||||||||||||||||||||||||||
(b) Fixed charges means the amounts resulting from the following: (i) interest expenses (interest expense, amortization of debt issuance costs, write-off of debt issuance costs, and prepayment penalty), plus (ii) an estimate of interest included in rental expense. | ||||||||||||||||||||||||||||
(c) Total rental expense | $ | 582 | $ | 1,991 | $ | 801 | $ | 389 | $ | 195 | $ | 117 | $ | 181 | ||||||||||||||
Interest factor — one third of rental expense | 194 | 664 | 267 | 130 | 65 | 39 | 60 |