Exhibit 12
Ford Motor Company and Subsidiaries
CALCULATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
----------------------------------------------------------------------------------------
(in millions)
Nine For the Years Ended December 31
Months ------------------------------------------------------------
1996 1995 1994 1993 1992 1991
------ -------- -------- -------- -------- --------
Earnings
- --------
Income/(loss) before income taxes
and cumulative effects of changes
in accounting principles $ 4,952 $ 6,705 $ 8,789 $ 4,003 $ (127) $(2,587)
Equity in net loss/(income) of
affiliates plus dividends from
affiliates 69 179 (182) (98) 26 69
Adjusted fixed charges a/ 8,229 10,556 8,122 7,648 8,113 9,360
------- ------- ------- ------- ------ -------
Earnings $13,250 $17,440 $16,729 $11,553 $8,012 $ 6,842
======= ======= ======= ======= ====== =======
Combined Fixed Charges and
Preferred Stock Dividends
Interest expense b/ $ 7,814 $10,121 $ 7,787 $ 7,351 $7,987 $ 9,326
Interest portion of rental expense c/ 297 396 265 266 185 124
Preferred stock dividend requirements of
majority owned subsidiaries and
trusts d/ 41 199 160 115 77 56
------- ------- ------- ------- ------ -------
Fixed charges 8,152 10,716 8,212 7,732 8,249 9,506
Ford preferred stock dividend
requirements e/ 75 459 472 442 317 26
------- ------- ------- ------- ------ -------
Total combined fixed charges
and preferred stock dividends $ 8,227 $11,175 $ 8,684 $ 8,174 $8,566 $ 9,532
======= ======= ======= ======= ====== =======
Ratios
Ratio of earnings to fixed charges 1.6 1.6 2.0 1.5 f/ g/
Ratio of earnings to combined fixed
charges and preferred stock dividends 1.6 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) were 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 were 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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