Exhibit 12.1
ChipPAC Inc.
Computation of Ratio of Earnings to Fixed Charges
(in thousands)
Nine Months
Years Ended December 31, Ended September 30,
-------------------------------------------------- -------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- --------- --------- -------- ---------
Pre-tax income
(loss) from continuing
operations (A) $ 3,879 $ 2,075 $ (2,742) $ (55,789) $ 52,867 $ 47,081 $ (3,690)
======== ======== ========= ========== ========= ========= =========
Fixed Charges:
Capitalized interest (B) - 152 510 1,122 - - -
Interest expense 2,423 3,151 5,780 10,972 13,340 10,037 12,089
Rentals:
Rental expenses (C) 1,619 1,730 1,667 1,445 2,532 1,526 3,138
Preferred stock dividend
accretion (A) - - - - - - 2,787
-------- -------- --------- ---------- --------- --------- ---------
Total fixed charges $ 4,042 $ 5,003 $ 7,957 $ 13,539 $ 15,872 $ 11,563 $ 18,014
======== ======== ========= ========== ========= ========= =========
Pre-tax income
(loss) from continuing
charges, dividend
accretion $ 7,921 $ 7,108 $ 5,215 $ (42,250) $ 68,739 $ 58,644 $ 11,537
======== ======== ========= ========== ========= ========= =========
Ratio of earnings
to fixed charges 2.0x 1.4x (D) (D) 4.3x 5.1x (D)(E)
======== ======== ========= ========== ========= ========= =========
(A) The mandatorily redeemable preferred stock dividend accretion is excluded
from the numerator of the ratio calculation for the nine months ended September
30, 1999 because such amount was not deducted in arriving at ChipPAC's pre-tax
Income (loss) from continuing operations.
(B) Capitalized interest relates to the costs of plant and building improvements
in China and building improvements in Korea.
(C) Amounts represented one-third operating lease rental expense as a reasonable
approximation of the interest portion thereof.
(D) Due to ChipPAC's losses in the twelve months ended December 31, 1996 and
1997 and the nine months ended September 30, 1999, the ratio coverage was less
than 1:1. In order to achieve a coverage ratio of 1:1 for those periods, ChipPAC
had to generate additional earnings of $2,742, $55,789, and $6,477,
respectively. The amount of additional earnings for the nine months ended
September 30, 1999 differs from the pre-tax loss from continuing operations of
$3,690 because the preferred stock dividend accretion requirement was not
deducted in arriving at such amount.
(E) Included in earnings for the nine months ended September 30, 1999 was a
non-recurring loss of $11,842 before income taxes relating to the change of
control expenses. If these expenses had not occurred, the ratio of earnings to
fixed charges would have been 1.5x.