Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2011

Condensed Financial Information of Registrant [Abstract]

Condensed Financial Information of Registrant

Schedule I — Condensed Financial Information of Registrant

Condensed Balance Sheets

Schedule I includes the condensed financial statements of the parent company only, LSB Industries, Inc.


	December 31,
	2011		2010
	(In Thousands)
Assets
Current assets:
Cash and cash equivalents	$	35,302	$	7,491
Accounts receivable, net		15		12
Supplies, prepaid items and other		5,833		275
Due from subsidiaries		28,785		5,174
Notes receivable from a subsidiary		10,000		10,000

Total current assets		79,935		22,952

Property, plant and equipment, net		229		274
Investments in and due from subsidiaries		290,303		222,615
Other assets, net		2,253		2,445

	$	372,720	$	248,286


Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	291	$	275
Short-term financing		5,646		—
Accrued and other liabilities		1,036		1,038
Redeemable, noncumulative, convertible preferred stock		44		45
Current portion of long-term debt		—		8

Total current liabilities		7,017		1,366

Long-term debt		—		26,900
Due to subsidiaries		56,243		24,536
Noncurrent accrued and other liabilities		5,349		5,273

Stockholders’ equity:
Preferred stock		3,000		3,000
Common stock		2,664		2,548
Capital in excess of par value		162,092		131,845
Retained earnings		153,888		70,351

		321,644		207,744
Less treasury stock		17,533		17,533

Total stockholders’ equity		304,111		190,211

	$	372,720	$	248,286

See accompanying notes.

Condensed Statements of Income


	Year ended December 31,
	2011			2010			2009
	(In Thousands)
Fees under service, tax sharing and management agreements with subsidiaries	$	5,406		$	3,531		$	3,531

Selling, general and administrative expense		5,661			5,388			5,321
Other expense (income), net		453			(25	)		82


Operating loss		(708	)		(1,832	)		(1,872	)

Interest expense		1,730			3,062			3,513
Loss (gain) on extinguishment of debt		—			52			(1,783	)
Interest and other non-operating income, net		(1,264	)		(973	)		(2,328	)


Loss from continuing operations		(1,174	)		(3,973	)		(1,274	)

Equity in earnings of subsidiaries		85,158			33,688			23,123
Net loss from discontinued operations		(142	)		(141	)		(265	)


Net income	$	83,842		$	29,574		$	21,584

See accompanying notes.

Condensed Statements of Cash Flows


	Year ended December 31,
	2011			2010			2009
	(In Thousands)
Net cash flows used by operating activities	$	(5,558	)	$	(3,074	)	$	(4,899	)

Cash flows from investing activities:
Capital expenditures		—			(51	)		(99	)
Payments received on notes receivable from a subsidiary		—			—			21,400
Other assets		(283	)		(439	)		(283	)

Net cash provided (used) by investing activities		(283	)		(490	)		21,018

Cash flows from financing activities:
Proceeds from short-term financing		6,775			—			—
Payments on short-term financing		(1,129	)		—			—
Payments associated with induced conversion of 5.5% convertible debentures		(558	)		—			—
Acquisition of 5.5% convertible debentures		—			(2,494	)		(8,938	)
Payments on other long-term debt		—			—			(1	)
Payments on loans secured by cash value of life insurance policies		—			(380	)		—
Net change in due to/from subsidiaries		26,512			(7,430	)		(7,738	)
Purchases of treasury stock		—			(2,421	)		(3,200	)
Proceeds from exercise of stock options		1,197			829			609
Excess income tax benefit associated with stock-based compensation		1,160			185			806
Dividends paid on preferred stocks		(305	)		(305	)		(306	)

Net cash provided (used) by financing activities		33,652			(12,016	)		(18,768	)

Net increase (decrease) in cash and cash equivalents		27,811			(15,580	)		(2,649	)

Cash and cash equivalents at the beginning of year		7,491			23,071			25,720


Cash and cash equivalents at the end of year	$	35,302		$	7,491		$	23,071

See accompanying notes.

Notes to Condensed Financial Statements

1. Basis of Presentation — The accompanying condensed financial statements of the parent company include the accounts of LSB Industries, Inc. (“LSB”) only. LSB’s investments in subsidiaries are stated at cost plus equity in undistributed earnings (losses) of subsidiaries since date of acquisition. These condensed financial statements should be read in conjunction with LSB’s consolidated financial statements.

2. Commitments and Contingencies — LSB has guaranteed the payment of principal and interest under the terms of various debt agreements of its subsidiaries. Subsidiaries’ long-term debt outstanding at December 31, 2011, which is guaranteed by LSB, is as follows (in thousands):


Secured Term Loan	$	72,188
Other, most of which is collateralized by real estate		6,585

	$	78,773

In addition, LSB has guaranteed approximately $44.3 million of its subsidiaries’ credit terms with vendors (primarily relating to purchases of natural gas) and approximately $12.2 million of its subsidiaries’ insurance bonds.

See Notes 9 and 11 of the notes to LSB’s consolidated financial statements for discussion of the long-term debt and commitments and contingencies.

3. Preferred Stock and Stockholders’ Equity — At December 31, 2011 and 2010, a subsidiary of LSB owns 2,451,527 shares of LSB’s common stock, which shares have been considered as issued and outstanding in the accompanying Condensed Balance Sheets included in this Schedule I — Condensed Financial Information of Registrant. See Notes 13 and 14 of the notes to LSB’s consolidated financial statements for discussion of matters relating to preferred stock and other stockholders’ equity matters.

4. Extinguishment of Debt — In previous years, LSB acquired a certain portion of the 2007 Debentures, with each purchase being negotiated. During 2011, the remaining 2007 Debentures were converted into shares of LSB common stock including the portion of 2007 debentures held by the Golsen Group as discussed in Note 9 of the notes to LSB’s consolidated financial statements. In addition for financial reporting purposes, one of the conversion transactions with an unrelated third party was considered an induced conversion. The following is a summary of transactions relating to the 2007 Debentures for each respective year:


	2011		2010		2009
	(Dollars In Thousands)
Principal amounts converted or acquired	$	26,900	$	2,500	$	11,100
Cash paid for acquisitions	$	—	$	2,494	$	8,938
Shares of LSB common stock issued		979,160		—		—

5. Interest Expense and Income — During 2011, 2010 and 2009, LSB incurred interest expense from subsidiaries of $1,200,000, $1,173,000 and $1,271,000, respectively. During 2011, 2010, and 2009, LSB earned interest income from subsidiaries of $1,262,000, $956,000 and $2,317,000, respectively.

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

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