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 -----------------------------------------------------------
1997 1996 1995 1994 1993 1992
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Earnings
Income/(loss) before income taxes
and cumulative effects of changes
in accounting principles $ 6,208 $ 6,793 $ 6,705 $ 8,789 $ 4,003 $ (127)
Equity in net (income)/loss of
affiliates plus dividends from
affiliates 98 36 179 (182) (98) 26
Adjusted fixed charges a/ 5,379 10,801 10,556 8,122 7,648 8,113
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Earnings $11,685 $17,630 $17,440 $16,729 $11,553 $8,012
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Combined Fixed Charges and
Preferred Stock Dividends
Interest expense b/ $5,211 $10,464 $10,121 $ 7,787 $ 7,351 $7,987
Interest portion of rental expense c/ 150 300 396 265 266 185
Preferred stock dividend requirements of
majority owned subsidiaries and trusts d/ 27 55 199 160 115 77
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Fixed charges 5,388 10,819 10,716 8,212 7,732 8,249
Ford preferred stock dividend
requirements e/ 42 95 459 472 442 317
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Total combined fixed charges
and preferred stock dividends $5,430 $10,914 $11,175 $ 8,684 $ 8,174 $8,566
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Ratios
Ratio of earnings to fixed charges 2.2 1.6 1.6 2.0 1.5 f/
Ratio of earnings to combined fixed
charges and preferred stock dividends 2.2 1.6 1.6 1.9 1.4 g/
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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.
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
1992 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. Beginning in Fourth Quarter 1995, includes
requirements related to Company-obligated mandatorily redeemable preferred
securities of a subsidiary trust.
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 combined fixed charges and preferred stock
dividends by $554 million.
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