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. |