EXHIBIT 12.1
Encore Capital Group, Inc.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(in thousands)
| Year ended December 31, | Quarter ended | |||||||||||||||||
| 2005 | 2006 | 2007 | 2008 | 2009 | March 31, 2010 | |||||||||||||
| Earnings: |
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| Net income (loss) before income taxes |
$ | 51,083 | $ | 36,910 | $ | 18,729 | $ | 23,546 | $ | 53,743 | $ | 17,351 | ||||||
| Add: |
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| Fixed charges |
34,475 | 36,213 | 35,636 | 21,708 | 17,592 | 4,903 | ||||||||||||
| Total earnings and fixed charges |
$ | 85,558 | $ | 73,123 | $ | 54,365 | $ | 45,254 | $ | 71,335 | $ | 22,254 | ||||||
| Fixed Charges: |
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| Interest expense |
$ | 32,717 | $ | 31,032 | $ | 29,760 | $ | 15,629 | $ | 13,259 | $ | 3,860 | ||||||
| Amortized debt discount and loan cost |
1,143 | 4,278 | 4,744 | 4,943 | 2,901 | 678 | ||||||||||||
| Estimated interest portion of rental expense |
615 | 903 | 1,132 | 1,136 | 1,432 | 365 | ||||||||||||
| Total fixed charges |
$ | 34,475 | $ | 36,213 | $ | 35,636 | $ | 21,708 | $ | 17,592 | $ | 4,903 | ||||||
| Ratio of Earnings to Fixed Charges(1) |
2.48 | 2.02 | 1.53 | 2.08 | 4.05 | 4.54 | ||||||||||||
| (1) | The ratio of earnings to fixed charges is computed by dividing earnings before taxes plus fixed charges by fixed charges. Fixed charges means the sum of the following: (i) interest expense (including interest expense from capital leases), (ii) amortized premiums, discounts and capitalized expenses related to indebtedness, and (iii) the estimated portion of rental expense deemed by us to be representative of the interest factor of rental payments under operating leases. |