EX-12.1 3 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 30,
2007
    December 31,
2006
    December 31,
2005
   December 26,
2004
   December 28,
2003
 

Earnings:

            

(Loss) income before income taxes and before income from equity investees

   $ (32,256 )   $ (50,655 )   $ 30,094    $ 48,358    $ (16,703 )

Fixed charges:

            

Interest expense and amortization of debt issuance costs

     6,105       5,931       1,571      3,454      10,547  

Rental expense interest factor (1)

     3,601       3,503       3,047      3,083      4,122  
                                      

Total fixed charges

     9,706       9,434       4,618      6,537      14,669  
                                      

Earnings (loss) available to cover fixed charges

   $ (22,550 )   $ (41,221 )   $ 34,712    $ 54,895    $ (2,034 )
                                      

Ratio of earnings to fixed charges (2)

     —         —         7.5x      8.4x      —    
                                      

 

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.

 

(1) 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.
(2) Earnings were inadequate to cover fixed charges by $32.3 million, $50.7 million and $16.7 million for fiscal years ended December 30, 2007, December 31, 2006 and December 28, 2003 respectively.