Exhibit 12
LSB Industries, Inc.
Unaudited Computation of Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Stock Dividends
(Dollars in thousands)
Year ended December 31, | Six months ended | ||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 6/30/2008 | 6/30/2009 |
Income from continuing operations before provisions for income taxes and equity in earnings of affiliate | $ | 77 | $ | 5,007 | $ | 15,848 | $ | 48,197 | $ | 54,399 | $ | 45,798 | $ | 32,800 | |||||||
Add: | |||||||||||||||||||||
Fixed charges | 11,955 | 15,431 | 15,971 | 15,674 | 12,042 | 6,216 | 4,565 | ||||||||||||||
Share of distributed income of 50% owned affiliate | 250 | 488 | 875 | 765 | 735 | 280 | 350 | ||||||||||||||
Adjusted Earnings | $ | 12,282 | $ | 20,926 | $ | 32,694 | $ | 64,636 | $ | 67,176 | $ | 52,294 | $ | 37,715 | |||||||
Fixed Charges: | |||||||||||||||||||||
Interest expense (1) | $ | 7,393 | $ | 11,245 | $ | 12,028 | $ | 11,723 | $ | 8,510 | $ | 4,428 | $ | 3,097 | |||||||
Estimate of interest in rental expense | 4,562 | 4,186 | 3,943 | 3,951 | 3,532 | 1,788 | 1,468 | ||||||||||||||
Fixed Charges | 11,955 | 15,431 | 15,971 | 15,674 | 12,042 | 6,216 | 4,565 | ||||||||||||||
Preferred stock dividends: | 2,322 | 2,337 | 2,783 | 5,912 | 463 | 491 | 497 | ||||||||||||||
Combined fixed charges and preferred stock dividends | $ | 14,277 | $ | 17,768 | $ | 18,754 | $ | 21,586 | $ | 12,505 | $ | 6,707 | $ | 5,062 | |||||||
Ratio of earnings to fixed charges | 1.0 | 1.4 | 2.0 | 4.1 | 5.6 | 8.4 | 8.3 | ||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends (2) | - | 1.2 | 1.7 | 3.0 | 5.4 | 7.8 | 7.5 | ||||||||||||||
Deficiency (2) | $ | 1,995 |
(1) | Interest expense includes amortization of deferred debt issuance costs and excludes realized and unrealized gains or losses on interest rate financial instruments that are reported as interest expense. |
(2) | Earnings were insufficient to cover fixed charges and preferred dividends by $1,995,000 in the year ended December 31, 2004. |