EXHIBIT 12
TEXAS OLEFINS COMPANY, SUBSIDIARIES AND AFFILIATE
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIO)
(UNAUDITED)
FOR THE FISCAL YEAR ENDED MAY 31, TWELVE ONE MONTH
------------------------------------------ MONTHS ENDED ENDED
1992 1993 1994 1995 MAY 31, 1996 JUNE 30, 1996
--------- --------- --------- --------- ------------- --------------
Income (loss) before income taxes and
minority interest.................. $ 63,498 $ 41,081 $ 52,303 $ 49,268 $24,508 $1,988
Interest expense..................... 1,145 1,087 663 475 2,343 98
Interest portion of rental expense... 1,670 1,630 1,430 1,470 1,600 140
--------- --------- --------- --------- ------------- --------------
Earnings....................... $ 66,313 $ 43,798 $ 54,396 $ 51,213 $28,451 $2,226
========= ========= ========= ========= ============= ==============
Fixed Charges:
Interest expense................... $ 1,145 $ 1,087 $ 663 $ 475 $ 2,343 $ 98
Interest portion of rental
expense.......................... 1,670 1,630 1,430 1,470 1,600 140
--------- --------- --------- --------- ------------- --------------
Total fixed charges............ $ 2,815 $ 2,717 $ 2,093 $ 1,945 $ 3,943 $ 238
========= ========= ========= ========= ============= ==============
Ratio of earnings to fixed
charges.......................... 23.6x 16.1x 26.0x 26.3x 7.2x(2) 9.4x
SIX MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, 1995 DECEMBER 31, 1996
------------------ ------------------
Income (loss) before income taxes and
minority interest.................. $ 24,342 $ (5,772)
Interest expense..................... 1,565 17,367
Interest portion of rental expense... 800 750
-------- --------
Earnings....................... $ 26,707 $ 12,345
======== ========
Fixed Charges:
Interest expense................... $ 1,565 $ 17,367
Interest portion of rental
expense.......................... 800 750
-------- --------
Total fixed charges............ $ 2,365 $ 18,117
======== ========
Ratio of earnings to fixed
charges.......................... 11.3x -- (1)
PRO FORMA PRO FORMA PRO FORMA
TWELVE ONE MONTH SIX MONTHS
MONTHS ENDED ENDED ENDED
MAY 31, 1996 JUNE 30, 1996 DECEMBER 31, 1996
------------- -------------- ------------------
Loss before income taxes and minority
interest........................... $ (10,400) $ (1,700) $ (6,100)
Interest expense..................... 32,700 2,700 17,700
Interest portion of rental expense... 1,600 140 750
------------- -------------- ------------------
Earnings...................... $ 23,900 $ 1,140 $ 12,350
============= ============== ==================
Fixed Charges:
Interest expense................... $ 32,700 $ 2,700 $ 17,700
Interest portion of rental
expense......................... 1,600 140 750
------------- -------------- ------------------
Total fixed charges........... $ 34,300 $ 2,840 $ 18,450
============= ============== ==================
Ratio of earnings to fixed
charges......................... -- (1) -- (1) -- (1)
============= ============== ==================
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(1) For the six months ended December 31, 1996, the pro forma twelve months
ended May 31, 1996, the pro forma one month ended June 30, 1996 and the pro
forma six months ended December 31, 1996, earnings were insufficient to
cover fixed charges in the amount of $(5.8) million, $(10.4) million, $(1.7)
million and $(6.1) million, respectively.
(2) For the twelve months ended May 31, 1996, income before taxes and minority
interest includes a $12.6 million non-cash provision for the impairment of
certain non-strategic properties which TPC intends to sell.