Exhibit 12.1
HUGHES SATELLITE SYSTEMS CORPORATION
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands)
| | For the Years | | For the Nine Months | |
| | Ended December 31, | | Ended September 30, | |
| | 2010 | | 2009 | | 2008 | | 2011 | | 2010 | |
Earnings: | | | | | | | | | | | |
Income (loss) before income taxes | | $ | 67,244 | | $ | (3,224 | ) | $ | (271,939 | ) | $ | (9,658 | ) | $ | 48,366 | |
Equity in earnings of affiliates | | (196 | ) | — | | — | | (1,500 | ) | — | |
Interest expense, net of amounts capitalized | | 23,640 | | 23,567 | | 30,836 | | 50,904 | | 19,527 | |
Amortization of capitalized interest (estimate) | | 3,719 | | 5,407 | | 5,375 | | 2,788 | | 2,788 | |
Interest component of rent expense (1) | | 1,051 | | 120 | | 376 | | 794 | | 578 | |
Earnings before fixed charges | | $ | 95,458 | | $ | 25,870 | | $ | (235,352 | ) | $ | 43,328 | | $ | 71,259 | |
Fixed Charges: | | | | | | | | | | | |
Interest expense, net of amounts capitalized | | 23,640 | | 23,567 | | 30,836 | | 50,904 | | 19,527 | |
Capitalized interest | | 17,996 | | 8,197 | | 716 | | 27,638 | | 12,126 | |
Interest component of rent expense (1) | | 1,051 | | 120 | | 376 | | 794 | | 578 | |
Total fixed charges | | $ | 42,687 | | $ | 31,884 | | $ | 31,928 | | $ | 79,336 | | $ | 32,231 | |
Ratio of earnings to fixed charges (2) | | 2.24x | | — | | — | | — | | 2.21x | |
Deficiency of earnings to fixed charges (2) | | | | $ | (6,014 | ) | $ | (267,280 | ) | $ | (36,008 | ) | — | |
(1) The interest component of rent expense has been estimated by taking the difference between our gross rent expense and the net present value of our rent expense using the weighted average cost of debt for our senior notes and capital lease obligations during each respective period. The rates applied are approximately 9% for the years ended December 31, 2008 through December 31, 2010 and for the nine months ended September 30, 2010 and 2011.
(2) For purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings before income taxes, plus fixed charges. Fixed charges consist of interest incurred on all indebtedness, including capitalized interest and the imputed interest component of rental expense under noncancelable operating leases.
