Adaptec 2004 Annual Report Download - page 95

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Exhibit 12.1
PMC−SIERRA, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
Year Ended December 31 (2)
2004 2003 2002 2001 2000
Earnings:
Income (loss) before income taxes and before
income from equity investees $ 48,358 $ (16,703) $ (83,865) $ (656,817) $ 177,136
Fixed charges:
Interest expense and amortization of debt
issuance costs 3,454 10,547 12,104 4,987 808
Rental expense interest factor (3) 3,083 4,122 4,122 5,300 2,741
Total fixed charges 6,537 14,669 16,226 10,287 3,549
Earnings (loss) available to cover fixed
charges $ 54,895 $ (2,034) $ (67,639) $ (646,530) $ 180,685
Ratio of earnings to fixed charges (4) 8.4x — — — 50.9x
(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.