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EXHIBIT 12.1
CONOCO
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
YEAR ENDED DECEMBER 31
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1998 1997 1996 1995 1994
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Net income..................................... $ 450 $1,097 $ 863 $ 575 $ 422
Provision for income taxes..................... 244 1,010 1,038 774 551
Equity in earnings of investees................ (22) (40) 25 (22) (25)
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Pre-tax income before adjustment for minority
interests in consolidated subsidiaries or
income or loss from equity investees...... 672 2,067 1,926 1,327 948
Fixed charges (see below)...................... 337 174 188 210 160
Amortization of capitalized interest........... 40 46 53 53 49
Distributed income of equity investees......... 105 58 85 42 75
Capitalized interest........................... (72) (94) (75) (95) (59)
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Total adjusted earnings available for payment
of fixed charges(a)(b).................... $1,082 $2,251 $2,177 $1,537 $1,173
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Ratio of earnings to fixed charges............. 3.2x 12.9x 11.6x 7.3x 7.3x
Fixed charges:
Interest and debt expense -- borrowings...... $ 199 $ 36 $ 74 $ 74 $ 63
Capitalized interest......................... 72 94 75 95 59
Rental expense representative of interest
factor.................................... 66 44 39 41 38
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Total fixed charges.................. $ 337 $ 174 $ 188 $ 210 $ 160
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Ratio of earnings before special items to fixed
charges:
Total adjusted earnings available for payment
of fixed charges(a)(b).................... $1,082 $2,251 $2,177 $1,537 $1,173
Special items (pre-tax)(c)................... 454 (91) (22) 71 113
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Earnings adjusted for special items.......... $1,536 $2,160 $2,155 $1,608 $1,286
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Fixed charges................................ $ 337 $ 174 $ 188 $ 210 $ 160
====== ====== ====== ====== ======
Ratio of earnings before special items to
fixed charges............................. 4.6x 12.4x 11.5x 7.7x 8.0x
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(a) No pre-tax losses of equity investees for which charges arising from
guarantees are included in fixed charges.
(b) No fixed charges in subsidiaries with minority interests.
(c) Special items are material nonrecurring items and generally consist of asset
sales, property impairments, tax rate changes, employee separation costs,
inventory write-downs, environmental insurance litigation recoveries,
environmental litigation charges and, in 1998, stock option provision. See
Item 7 of the Annual Report of Conoco Inc. on Form 10-K for the year ended
December 31, 1998.