EXHIBIT 12 CARRIAGE SERVICES, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED AND IN THOUSANDS) NINE MONTHS ENDED SEPTEMBER 30, ------- 1994* 1995* 1996* 1997 1998 1999 ------- ------- ------- ------ ------- ------- Fixed charges: Interest expense ......... $ 2,671 $3,684 $4,347 $ 5,889 $ 9,720 $12,256 Amortization of capitalized expenses related to debt .......... 30 50 150 200 150 150 Rental expense ........... 245 317 308 629 720 677 ------- ------- ------- ------ ------- ------- Total fixed charges before capitalized interest and preferred stock dividends 2,946 4,051 4,805 6,718 10,590 13,083 Capitalized interest ........... 100 175 250 450 600 473 ------- ------- ------- ------ ------- ------- Total fixed charges .... 3,046 4,226 5,055 7,168 11,190 13,556 Preferred stock dividends ...... -- -- 1,037 1,627 1,082 137 ------- ------- ------- ------ ------- ------- Total fixed charges plus preferred dividends 3,046 4,226 6,092 8,795 12,272 13,693 ------- ------- ------- ------ ------- ------- Earnings available for fixed charges: Earnings (loss) before income taxes and extraordinary item ........................ (923) (1,800) 345 8,217 17,023 16,160 Add fixed charges before capitalized interest and preferred stock dividends 2,946 4,051 4,805 6,718 10,590 13,083 ------- ------- ------- ------ ------- ------- Total earnings available for fixed charges ........... $ 2,023 $ 2,251 $ 5,150 $14,935 $27,613 $29,243 ======= ======= ======= ======= ======= ======= Ratio of earnings to fixed charges (1) ........... 0.66 0.53 1.02 2.08 2.47 2.16 ------- ------- ------- ------ ------- ------- Ratio of earnings to fixed charges plus dividends (1)... 0.66 0.53 0.85 1.70 2.25 2.14 ------- ------- ------- ------ ------- ------- (1) For purposes of computing the ratios of earnings to fixed charges and earnings to fixed charges plus dividends: (i) earnings consist of income before provision for income taxes plus fixed charges (excluding capitalized interest) and (ii) "fixed charges" consist of interest expensed and capitalized, amortization of debt discount and expense relating to indebtedness and the portion of rental expense representative of the interest factor attributable to leases for rental property. There were no dividends paid or accrued on the Company's Common Stock during the periods presented above. * Earnings were inadequate to cover fixed charges. The coverage deficiency was $1,023,000, $1,975,000 and $942,000 for 1994, 1995 and 1996 respectively.