EX-12.1 5 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,
2006
    December 31,
2005
    December 26,
2004
    December 28,
2003
    December 29,
2002
Restated (4)
 

Earnings:

          

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

   $ (50,655 )   $ 30,094     $ 48,358     $ (16,703 )   $ (122,524 )

Fixed charges:

          

Interest expense and amortization of debt issuance costs

     5,931       1,571       3,454       10,547       12,104  

Rental expense interest factor (2)

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

Total fixed charges

     9,434       4,618       6,537       14,669       16,226  
                                        

Earnings (loss) available to cover fixed charges

   $ (41,221 )   $ 34,712     $ 54,895     $ (2,034 )   $ (106,298 )
                                        

Ratio of earnings to fixed charges (3)

     —         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 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.

 

(3) Earnings were inadequate to cover fixed charges by $50.7 million, $16.7 million and $122.5 million for fiscal years ended December 31, 2006, December 28, 2003 and December 29, 2002 respectively.

 

(4) See Note 2 to the Consolidated Financial Statements.