EX-12 2 ex12_10k.htm EXHIBIT COMPUTATION OF RATIO EARNINGS TO COMBINED FIXED CHARGES
EXHIBIT 12
FLOTEK INDUSTRIES, INC.
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(unaudited, in thousands, except for ratio)

| Year ended December 31,
| 2008 |  | 2009 |  | 2010 |  | 2011 |  | 2012
COMPUTATION OF EARNINGS: |  |  |  |  |  |  |  |  |
Income (loss) from continuing operations before income taxes | $ | (44,741 | ) |  | $ | (48,317 | ) |  | $ | (49,010 | ) |  | $ | 39,270 |  |  | $ | 45,458 |
Add: |  |  |  |  |  |  |  |  |
Fixed charges less capitalized interest | 14,377 |  |  | 16,164 |  |  | 20,073 |  |  | 16,691 |  |  | 8,952 |
Subtract: |  |  |  |  |  |  |  |  |
Minority interest in pretax income of subsidiaries that have not incurred fixed charges | — |  |  | — |  |  | — |  |  | — |  |  | — |
Earnings (loss), as defined | $ | (30,364 | ) |  | $ | (32,153 | ) |  | $ | (28,937 | ) |  | $ | 55,961 |  |  | $ | 54,410 |
COMPUTATION OF FIXED CHARGES AND PREFERRED STOCK DIVIDENDS: |  |  |  |  |  |  |  |  |
Interest expense including capitalized interest | $ | 13,894 |  |  | $ | 15,524 |  |  | $ | 19,399 |  |  | $ | 16,019 |  |  | $ | 8,194 |
Estimate of interest within rental expense (1) | 483 |  |  | 640 |  |  | 674 |  |  | 731 |  |  | 849 |
Fixed charges, as defined | 14,377 |  |  | 16,164 |  |  | 20,073 |  |  | 16,750 |  |  | 9,043 |
Dividends on preferred stock and accretion of discount(2) | — |  |  | 2,231 |  |  | 6,543 |  |  | 6,086 |  |  | — |
Combined fixed charges, preferred stock dividends and accretion of discount | $ | 14,377 |  |  | $ | 18,395 |  |  | $ | 26,616 |  |  | $ | 22,836 |  |  | $ | 9,043 |
Ratio of earnings to fixed charges | N/A |  |  | N/A |  |  | N/A |  |  | 3.34 |  |  | 6.02 |
Deficiency of earnings to cover fixed charges | $ | (44,741 | ) |  | $ | (48,317 | ) |  | $ | (49,010 | ) |  | N/A |  |  | N/A |
Ratio of earnings to fixed charges and preferred stock dividends | N/A |  |  | N/A |  |  | N/A |  |  | 2.45 |  |  | 6.02 |
Deficiency of earnings to cover combined fixed charges and preferred stock dividends | $ | (44,741 | ) |  | $ | (50,548 | ) |  | $ | (55,553 | ) |  | N/A |  |  | N/A |

(1) | One third of rental expense is deemed to be representative of interest.

(2) | Includes amount of pre-tax earnings required to cover dividends on preferred stock and accretion of discount. Amount has not been grossed up to a pre-tax amount in years in which losses occurred due to a negative effective tax rate.