Exhibit 12.1
LORAL SPACE & COMMUNICATIONS INC.
COMPUTATION OF EARNINGS (DEFICIENCY OF EARNINGS) TO COVER FIXED CHARGES
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 LoralSeries A-1 andSeries B-1 Preferred Stock and Loral Skynet Preferred Stock have beengrossed-up using a normalized effective tax rate of 40.96% and 39.5%, respectively. |