EX-12.1 3 y52600exv12w1.htm EX-12.1: STATEMENT RE: COMPUTATION OF RATIOS EX-12.1
 

Exhibit 12.1
 
LORAL SPACE & COMMUNICATIONS INC.
COMPUTATION OF EARNINGS (DEFICIENCY OF EARNINGS) TO COVER FIXED CHARGES
 
                                                   
    Successor Registrant       Predecessor Registrant  
                For the Period
 		      For the Period
 		             
                October 2,
 		      January 1,
 		             
    Year Ended
 		    Year Ended
 		    2005 to
 		      2005 to
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		      October 1,
 		    December 31,
 		    December 31,
 		 
    2007(1)     2006     2005       2005(2)     2004     2003  
Income (loss) from continuing operations before income taxes, equity income (losses) in affiliates and minority interest
  $ 52,844     $ 30,117     $ (5,395 )     $ (65,570 )   $ (207,852 )   $ (368,355 )
Plus fixed charges:
                                                 
Interest expense
    11,845       25,961       4,408         3,982       3,904       28,223  
Interest component of rent expense(3)
    6,557       6,824       1,625         4,949       9,059       10,402  
Less: capitalized interest
    (9,533 )     (2,512 )     —         —       (957 )     (14.143 )
                                                   
Earnings available to cover fixed charges
  $ 61,713     $ 60,390     $ 638       $ (56,639 )   $ (195,846 )   $ (343,873 )
                                                   
Fixed charges(4)
  $ (90,588 )   $ (73,767 )   $ (8,700 )     $ (8,931 )   $ (12,963 )   $ (45,345 )
                                                   
Deficiency of earnings to cover fixed charges
  $ 28,875     $ 13,377     $ 8,062       $ 65,570     $ 208,809     $ 389,218  
                                                   
 
 
(1) Does not reflect the gain on the contribution of Loral Skynet as a result of the Telesat Canada transaction, and the interest expense on FIN 48 liabilities which is recorded as a component of the income tax provision.
 
(2) Does not reflect the effect of the gain on the discharge of pre-petition obligations and fresh-start adjustments, and the interest expense and income tax benefit recognized in connection with the Plan of Reorganization.
 
(3) The interest component of rent expense is deemed to be approximately 25% of total rent expense.
 
(4) Fixed charges are as follows:
 
                                                   
    Successor Registrant       Predecessor Registrant  
                For the Period
 		      For the Period
 		             
                October 2,
 		      January 1,
 		             
    Year Ended
 		    Year Ended
 		    2005 to
 		      2005 to
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		      October 1,
 		    December 31,
 		    December 31,
 		 
    2007     2006     2005       2005     2004     2003  
Pre tax preferred dividends(5)
  $ 72,186     $ 40,982     $ 2,667       $ —     $ —     $ 6,719  
Interest expense
    11,845       25,961       4,408         3,982       3,904       28,224  
Interest component of rent expense
    6,557       6,824       1,625         4,949       9,059       10,402  
                                                   
Fixed charges
  $ 90,588     $ 73,767     $ 8,700       $ 8,931     $ 12,963     $ 45,345  
                                                   
                                                   
 
 
(5) For 2007 and 2006, dividends on Loral Series A-1 and Series B-1 Preferred Stock and Loral Skynet Preferred Stock have been grossed-up using a normalized effective tax rate of 40.96% and 39.5%, respectively.