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EXHIBIT 12
PENNZOIL COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
FOR THE YEAR ENDED DECEMBER 31,
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1997 1996 1995 1994 1993
-------- -------- --------- --------- --------
(DOLLAR AMOUNTS EXPRESSED IN THOUSANDS)
Income (loss) from continuing
operations.......................... $180,255 $133,898 $(305,142) $(283,739) $160,236
-------- -------- --------- --------- --------
Income tax provision (benefit)
Federal and foreign................. 117,740 27,563 (164,125) (226,388) 52,737
State............................... 6,400 7,665 (8,408) 5,033 6,468
-------- -------- --------- --------- --------
Total income tax provision
(benefit)................. 124,140 35,228 (172,533) (221,355) 59,205
Interest charges...................... 187,271 200,086 217,689 497,799 199,410
-------- -------- --------- --------- --------
Income (loss) before income tax
provision (benefit) and interest
charges............................. $491,666 $369,212 $(259,986) $ (7,295) $418,851
======== ======== ========= ========= ========
Fixed charges......................... $200,356 $210,821 $ 221,920 $ 506,826 $210,830
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Ratio of earnings to fixed charges.... 2.45 1.75 -- -- 1.99
======== ======== ========= ========= ========
Amount by which fixed charges exceed
earnings............................ $ -- $ -- $ 481,906 $ 514,121 $ --
======== ======== ========= ========= ========
DETAIL OF INTEREST AND FIXED CHARGES
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
(DOLLAR AMOUNTS EXPRESSED IN THOUSANDS)
Interest charges per consolidated
statement of income which includes
amortization of debt discount, expense
and premium........................... $176,891 $188,155 $198,579 $485,668 $190,968
Add portion of rental expense
representative of interest
factor(1)............................. 23,465 22,666 23,341 21,158 19,862
-------- -------- -------- -------- --------
Total fixed charges........... 200,356 210,821 221,920 506,826 210,830
Less interest capitalized per
consolidated statement of income...... 13,085 10,735 4,231 9,027 11,420
-------- -------- -------- -------- --------
Total interest charges........ $187,271 $200,086 $217,689 $497,799 $199,410
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(1) Interest factor based on management's estimates and approximates one-third
of rental expense.