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)
For the Years Ended December 31
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1998 1997 1996 1995 1994
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Earnings
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Income/(Loss) before income taxes
and cumulative effects of changes
in accounting principles $25,396 $10,939 $ 6,793 $ 6,705 $ 8,789
Equity in net loss/(income) of
affiliates plus dividends from
affiliates 78 121 36 179 (182)
Adjusted fixed charges a/ 9,215 10,911 10,801 10,556 8,122
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Earnings $34,689 $21,971 $17,630 $17,440 $16,729
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Combined Fixed Charges and
Preferred Stock Dividends
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Interest expense b/ $ 8,919 $10,570 $10,464 $10,121 $ 7,787
Interest portion of rental expense c/ 245 309 300 396 265
Preferred stock dividend requirements
of majority owned subsidiaries and
trusts d/ 55 55 55 199 160
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Fixed charges 9,219 10,934 10,819 10,716 8,212
Ford preferred stock dividend
requirements e/ 122 82 95 459 472
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Total combined fixed charges
and preferred stock dividends $ 9,341 $11,016 $10,914 $11,175 $ 8,684
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Ratios
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Ratio of earnings to fixed charges f/ 3.8 2.0 1.6 1.6 2.0
Ratio of earnings to combined fixed
charges and preferred stock dividends f/ 3.7 2.0 1.6 1.6 1.9
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a/ Fixed charges, as shown above, 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. (1995 - 1993),
increased to an amount representing the pre-tax earnings which would be
required to cover such dividend requirements based on Ford Motor Company's
effective income tax rates. Beginning in the fourth quarter of 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 Motor Company's effective income
tax rates.
f/ Earnings used in calculation of the 1998 ratio include the $15,955 million
gain on the spin-off of The Associates. Excluding this gain, the ratio
is 2.0.