EX-12.1 18 dex121.htm EXHIBIT 12.1 Exhibit 12.1

Exhibit 12.1

CALCULATION OF RATIOS OF EARNINGS TO FIXED CHARGES

ITC^DeltaCom’s ratios of earnings to fixed charges for the fiscal periods shown below were as follows:

 

    Year Ended December 31,     Three Months
Ended

March  31,
   Pro Forma
Year Ended
December 31,
2009
    Pro Forma
Three Months
Ended
March 31,
2010
 
    2005     2006     2007     2008     2009     2009     2010     
    (in thousands)  

Earnings:

                  

Income (loss) before income taxes

  $ (50,849   $ (53,459   $ (177,026   $ (22,897   $ (10,975   $ (2,596   $ 2,389    $ (17,659   $ (1,300

Plus: Fixed Charges (see below)

    46,482        64,185        57,232        39,978        34,153        9,409        6,557      40,837        10,246   

Amortization of capitalized interest

    1,049        1,049        1,049        1,022        942        249        222      942        222   
                                                                      

Total Earnings

  $ (3,318   $ 11,775      $ (118,745   $ 18,103      $ 24,120      $ 7,062      $ 9,168    $ 24,120      $ 9,168   
                                                                      

Fixed Charges:

                  

Interest expense, including amortization of debt issuance costs and debt discounts

  $ 40,508      $ 57,625      $ 50,598      $ 32,538      $ 27,441      $ 7,539      $ 4,842    $ 34,125      $ 8,531   

Portion of rental expense deemed to represent interest

    5,974        6,560        6,634        7,440        6,712        1,870        1,715      6,712        1,715   
                                                                      

Total Fixed Charges

  $ 46,482      $ 64,185      $ 57,232      $ 39,978      $ 34,153      $ 9,409      $ 6,557    $ 40,837      $ 10,246   
                                                                      

Ratio of earnings to fixed charges

    *        *        *        *        *        *        1.4      **        **   
                                                                      

Coverage deficiency

  $ (49,800   $ (52,410   $ (175,977   $ (21,875   $ (10,033   $ (2,347   $ —      $ (16,717   $ (1,078
                                                                      

 

* There were insufficient earnings available to cover fixed charges for the years ended December 31, 2005 through December 31, 2009 and the three months ended March 31, 2009. As a result, the ratio of earnings to fixed charges was less than 1.0 for each of such periods.
** ITC^DeltaCom’s pro forma ratio of earnings to fixed charges gives effect to the company’s use of proceeds from its sale on April 9, 2010 of $325 million aggregate principal amount of its 10.5% Senior Secured Notes due 2016 to repay $305.5 million aggregate amount of indebtedness, including all principal and accrued and unpaid interest, outstanding under its first lien and second lien senior secured credit facilities and its revolving credit facility, which were terminated upon repayment. ITC^DeltaCom used approximately $9.5 million of the proceeds from that offering to pay offering fees and expenses and used or expects to use the remainder of the proceeds from that offering for general corporate purposes. On such pro forma basis, there were insufficient earnings available to cover fixed charges for the year ended December 31, 2009 and the three months ended March 31, 2010. As a result, the ratio of earnings to fixed charges was less than 1.0 for each of such periods.