EX-12 7 ex_12.htm CALCULATION OF RATIOS ex_12.htm 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.