Exhibit 12
Ford Motor Company and Subsidiaries
CALCULATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
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(in millions)
First For the Years Ended December 31
Half --------------------------------------------------------------
1996 1995 1994 1993 1992 1991
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Earnings
Income/(loss) before income taxes
and cumulative effects of changes
in accounting principles $3,725 $ 6,705 $ 8,789 $ 4,003 $ (127) $(2,587)
Equity in net (income)/loss of
affiliates plus dividends from
affiliates (2) 179 (182) (98) 26 69
Adjusted fixed charges a/ 5,493 10,556 8,122 7,648 8,113 9,360
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Earnings $9,216 $17,440 $16,729 $11,553 $8,012 $ 6,842
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Combined Fixed Charges and
Preferred Stock Dividends
Interest expense b/ $5,273 $10,121 $ 7,787 $ 7,351 $7,987 $ 9,326
Interest portion of rental expense c/ 198 396 265 266 185 124
Preferred stock dividend requirements of
majority owned subsidiaries and trusts d/ 28 199 160 115 77 56
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Fixed charges 5,499 10,716 8,212 7,732 8,249 9,506
Ford preferred stock dividend
requirements e/ 50 459 472 442 317 26
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Total combined fixed charges
and preferred stock dividends $5,549 $11,175 $ 8,684 $ 8,174 $8,566 $ 9,532
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Ratios
Ratio of earnings to fixed charges 1.7 1.6 2.0 1.5 f/ g/
Ratio of earnings to combined fixed
charges and preferred stock dividends 1.7 1.6 1.9 1.4 h/ i/
- - - - - -
a/ Fixed charges, as shown below, adjusted to exclude the amount of interest
capitalized during the period and preferred stock dividend requirements of
majority owned subsidiaries and trusts.
b/ Includes interest, whether expensed or capitalized, and amortization of
debt expense and discount or premium relating to any indebtedness.
c/ One-third of all rental expense is deemed to be interest.
d/ Preferred stock dividend requirements of Ford Holdings, Inc. (applicable
for 1991 through 1995) increased to an amount representing the pre-tax
earnings which would be required to cover such dividend requirements based
on Ford's effective income tax rates for all periods except 1992. The U.S.
statutory rate of 34% was used for 1992.
e/ Preferred stock dividend requirements of Ford Motor Company, increased to
an amount representing the pre-tax earnings which would be required to
cover such dividend requirements based on Ford's effective income tax
rates for all periods except 1992. The U.S. statutory rate of 34% was
used for 1992.
f/ Earnings inadequate to cover fixed charges by $237 million.
g/ Earnings inadequate to cover fixed charges by $2,664 million.
h/ Earnings inadequate to cover combined fixed charges and preferred stock
dividends by $554 million.
i/ Earnings inadequate to cover combined fixed charges and preferred stock
dividends by $2,690 million.
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