EX-12.1 3 d838912dex121.htm EX-12.1

Exhibit 12.1

LSB Industries, Inc.

Unaudited Computation of Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Stock Dividends

(Dollars in Thousands)

|  | 2010 |  |  | 2011 |  |  | 2012 |  |  | 2013 |  |  | 2014 |
Income from continuing operations before provisions for income taxes and equity in earnings of affiliate |  | $ | 48,499 |  |  | $ | 129,649 |  |  | $ | 91,699 |  |  | $ | 90,126 |  |  | $ | 32,044 |
Add: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed charges |  |  | 7,254 |  |  |  | 6,548 |  |  |  | 5,365 |  |  |  | 19,027 |  |  |  | 37,166 |
Amortization of capitalized interest |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 26 |  |  |  | 79 |
Share of distributed income of 50% owned affiliate |  |  | 825 |  |  |  | 1,649 |  |  |  | 1,782 |  |  |  | 1,719 |  |  |  | 590 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest capitalized (1) |  |  | — |  |  |  | — |  |  |  | (398 | ) |  |  | (3,959 | ) |  |  | (14,104 | )
Adjusted earnings |  | $ | 56,578 |  |  | $ | 137,846 |  |  | $ | 98,449 |  |  | $ | 106,939 |  |  | $ | 55,775 |
Fixed charges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net (2) |  | $ | 5,900 |  |  | $ | 4,733 |  |  | $ | 3,715 |  |  | $ | 13,953 |  |  | $ | 21,528 |
Interest capitalized |  |  | — |  |  |  | — |  |  |  | 398 |  |  |  | 3,959 |  |  |  | 14,104 |
Estimate of interest in rental expense |  |  | 1,354 |  |  |  | 1,815 |  |  |  | 1,252 |  |  |  | 1,115 |  |  |  | 1,534 |
Fixed charges |  |  | 7,254 |  |  |  | 6,548 |  |  |  | 5,365 |  |  |  | 19,027 |  |  |  | 37,166 |
Preferred stock dividends |  |  | 509 |  |  |  | 473 |  |  |  | 472 |  |  |  | 493 |  |  |  | 489 |
Combined fixed charges and preferred stock dividends |  | $ | 7,763 |  |  | $ | 7,021 |  |  | $ | 5,837 |  |  | $ | 19,520 |  |  | $ | 37,655 |
Ratio of earnings to fixed charges |  |  | 7.8 |  |  |  | 21.1 |  |  |  | 18.4 |  |  |  | 5.6 |  |  |  | 1.5 |
Ratio of earnings to combined fixed charges and preferred stock dividends |  |  | 7.3 |  |  |  | 19.6 |  |  |  | 16.9 |  |  |  | 5.5 |  |  |  | 1.5 |

(1) | Interest capitalized during the period is deducted because fixed charges include all interest, whether capitalized or expensed. Only fixed charges that were deducted from income from continuing operations before income taxes should be added back in the earnings computation.

(2) | 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.