Exhibit 12
PHILLIPS PETROLEUM COMPANY AND CONSOLIDATED SUBSIDIARIES
TOTAL ENTERPRISE
Computation of Ratio of Earnings to Fixed Charges
Millions of Dollars
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Nine Months Ended
September 30
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1998 1997
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(Unaudited)
Earnings Available for Fixed Charges
Income before income taxes $ 879 1,501
Distributions in excess of (less than) equity
in earnings of less-than-fifty-percent-owned
companies (5) (16)
Fixed charges, excluding capitalized
interest and the portion of the
preferred dividend requirements of a
subsidiary not previously deducted
from income* 230 265
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$1,104 1,750
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Fixed Charges
Interest and expense on indebtedness,
excluding capitalized interest $ 149 166
Capitalized interest 38 34
Preferred dividend requirements of
subsidiary and capital trusts 40 86
One-third of rental expense, net of
subleasing income, for operating leases 29 27
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$ 256 313
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Ratio of Earnings to Fixed Charges 4.3 5.6
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*Includes amortization of capitalized interest totaling approximately
$12 million and $10 million in 1998 and 1997, respectively.
Earnings available for fixed charges include, if any, the company's equity
in losses of companies owned less than fifty percent and having debt for
which the company is contingently liable. Fixed charges include the
company's proportionate share, if any, of interest relating to the
contingent debt.
In 1990 and 1988, respectively, the company guaranteed a $400 million bank
loan and $250 million of notes payable for the Long-Term Stock Savings Plan
(LTSSP), an employee benefit plan. In 1994, the notes payable were
refinanced with a $131 million term loan, which was repaid in June 1998.
The $400 million loan was amended in 1994, 1995, and again in 1997.
Consolidated interest expense included a minimal amount of interest related
to LTSSP borrowings for the first nine months of 1998 and 1997.