EXHIBIT 12

 

CB RICHARD ELLIS GROUP, INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS

(Dollars in thousands)

 

     CB Richard Ellis Group, Inc.
    Predecessor Company
    

Year Ended

December 31,

   

Period From

February 20

(inception) to

December 31,

2001

   

Period From

January 1 to

July 20,

2001

    

Year Ended

December 31,

2000

     2004
    2003
     2002
        

Income (loss) before provision for income taxes

    $ 108,254    $ (40,980 )   $ 48,833    $ 35,442    $ (32,910 )   $ 68,139

Less: Equity income from unconsolidated subsidiaries

      20,977      14,929       8,968      1,661      2,854       7,112

Add: Distributed earnings of unconsolidated subsidiaries

      11,502      11,140       10,417      2,408      2,844       8,389

Fixed charges

      123,528      111,144       83,019      38,618      31,063       59,985
    
  
 
  
  
 

Total earnings (loss) before fixed charges

    $ 222,307    $ 66,375     $ 133,301    $ 74,807    $ (1,857 )   $ 129,401
    
  
 
  
  
 

Fixed charges:

                                            

Portion of rent expense representative of the interest factor (1)

    $ 37,035    $ 26,409     $ 22,518    $ 8,901    $ 10,760     $ 18,285

Interest expense

      65,418      71,256       60,501      29,717      20,303       41,700

Loss on extinguishment of debt

      21,075      13,479       —        —        —         —  
    
  
 
  
  
 

Total fixed charges

    $ 123,528    $ 111,144     $ 83,019    $ 38,618    $ 31,063     $ 59,985
    
  
 
  
  
 

Ratio of earnings to fixed charges

      1.80      n/a (2)     1.61      1.94      n/a (3)     2.16
    
  
 
  
  
 
(1) Represents one-third of operating lease costs, which approximates the portion that relates to the interest portion.
(2) The ratio of earnings to fixed charges was negative for the year ended December 31, 2003. Additional earnings of $44.8 million would be needed to have a one-to-one ratio of earnings to fixed charges.
(3) The ratio of earnings to fixed charges was negative for the period from January 1, 2001 to July 20, 2001. Additional earnings of $32.9 million would be needed to have a one-to-one ratio of earnings to fixed charges.