EX-12.1 2 dex121.htm STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Statement of Computation of Ratio of Earnings to Fixed Charges

Exhibit 12.1

PMC-SIERRA, INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

 

     Year Ended December 31 (2)  
     2005     2004     2003     2002     2001  

Earnings:

          

Income (loss) before income taxes and before income from equity investees

   $ 30,094     $ 48,358     $ (16,703 )   $ (83,865 )   $ (656,817 )

Fixed charges:

          

Interest expense and amortization of debt issuance costs

     1,571       3,454       10,547       12,104       4,987  

Rental expense interest factor (3)

     3,047       3,083       4,122       4,122       5,300  
                                        

Total fixed charges

     4,618       6,537       14,669       16,226       10,287  
                                        

Earnings (loss) available to cover fixed charges

   $ 34,712     $ 54,895     $ (2,034 )   $ (67,639 )   $ (646,530 )
                                        

Ratio of earnings to fixed charges (4)

     7.5 x     8.4 x     —         —         —    
                                        

 

(1) The ratio of earnings to fixed charges was computed by dividing earnings by fixed charges for the periods indicated. Earnings consist of income (loss) before provision for income taxes less income from equity investees plus fixed charges. Fixed charges consist of interest charges, amortization of debt issuance costs, and that portion of rental expense that the Company believes to be a reasonable approximation of the interest factor included in rental expense.

 

(2) The Company’s fiscal year ends on the last Sunday of the calendar year. The reference to December 31 has been used as the fiscal year end for ease of presentation.

 

(3) The portion of operating lease rental expense that the Company believes to be a reasonable approximation of the interest factor is deemed to be one-third of total operating lease rental expense.

 

(4) Earnings were inadequate to cover fixed charges by $16.7 million, $83.9 million and $656.8 million for the fiscal years ended December 31, 2003, 2002 and 2001, respectively.