EXHIBIT 12 PENNZOIL PRODUCTS COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES For the nine months ended September 30, ---------------------------------- 1998 1997 ------------- ------------- (Dollar amounts expressed in thousands) Income from continuing operations before equity income from partnerships $ (17,142) $ (8,395) Distribution of income from partnerships 24,427 2,804 Amortization of capitalized interest 1,349 1,431 Income tax provision 8,334 8,483 Interest charges 66,997 57,622 ------------- ------------- Income before income tax provision and interest charges $ 83,965 $ 61,945 ============= ============= Fixed charges $ 67,252 $ 64,640 ============= ============= Amount by which fixed charges exceeds earnings - $ 2,695 ============= ============= Ratio of earnings to fixed charges 1.25 - ============= ============= DETAIL OF INTEREST AND FIXED CHARGES For the nine months ended September 30, ---------------------------------- 1998 1997 ------------- ------------- (Expressed in thousands) Interest charges per Combined Statement of Income which includes amortization of debt discount, expense and premium $ 51,645 $ 51,147 Add: portion of rental expense representative of interest factor <F1> 15,607 13,493 ------------- ------------- Total fixed charges $ 67,252 $ 64,640 Less: interest capitalized per Combined Statement of Income 255 7,018 ------------- ------------- Total interest charges $ 66,997 $ 57,622 ============= ============= <FN> <F1> Interest factor based on management's estimates and approximates one-third of rental expense. </FN>