1st Quarter Results
Ford Motor Co
17 April 2000
Contacts:
Media Inquiries Securities Analysts Shareholder Inquiries
Christian Vinyard Mike Holland 800-555-5259 or
313-323-7045 313-323-8221 313-845-8540
FORD EARNS $2.1 BILLION IN FIRST QUARTER;
NEW RECORDS FOR OPERATING EARNINGS, REVENUES
DEARBORN, Mich., April 17, 2000 - Ford Motor Company ( NYSE:F ) earned a record
$2.1 billion in the first quarter, or $1.70 per diluted share of common and
Class B stock, and posted the 16th consecutive quarter of improved
year-over-year operating results. The results compare with first-quarter
earnings in 1999 of $2 billion, or $1.60 per diluted share, which included a
one-time gain of $165 million, or 14 cents a share, from the dissolution of
AutoEuropa. Excluding AutoEuropa, first-quarter earnings rose $265 million or
15 percent.
'Our earnings momentum is as strong as ever,' said Jacques A. Nasser, president
and chief executive officer. 'We are transforming our car and truck business,
and we have positioned the company for profitable growth in financial services,
automotive consumer services, Hertz, and e-business. We have a strong product
line-up, and as the year unfolds, important new products will continue to be
introduced in North America and Europe. In addition, the independence of
Visteon will only accelerate our transformation.'
On April 14, Ford announced that the goal to make Visteon Corporation an
independent company would be realized through a 100 percent distribution of
stock to Ford shareholders, expected to be completed by this summer.
Visteon's earnings are now reported separately and are treated as a discontinued
operation in Ford Motor Company's financial statements.
'An independent Visteon will be a stronger competitor in a growing industry
segment,' Nasser said, 'and at the same time it will allow us at Ford to focus
even more strongly on our car and truck business.'
Excluding Visteon, first-quarter revenues were a record $43 billion, up $5
billion or 14 percent over the first quarter of 1999. Unit sales were a record
1.9 million, compared with 1.8 million a year ago. Luxury vehicle sales, also a
record, were 190,000, an increase of 50 percent from a year ago.
AUTOMOTIVE OPERATIONS: Excluding Visteon, Ford's earnings from worldwide
automotive operations were $1.6 billion, up $271 million or 21 percent from the
same period a year ago, excluding the sale of AutoEuropa. Worldwide automotive
revenues in the first quarter were a record $36 billion, up 14 percent compared
with a year ago. After-tax return on sales was 4.3 percent, up two-tenths of a
point from last year's first quarter, excluding AutoEuropa.
Automotive cash was $23 billion at the end of the quarter, virtually unchanged
from the same period last year. Net cash was $12 billion, up $450 million from
a year ago.
New products coming later this year include the Ford Escape sport utility, the
Volvo S60, a new Ford Explorer and Mercury Mountaineer and a new Mondeo in
Europe.
North America: Automotive operations in North America, excluding Visteon, earned
a record $1.7 billion in the first quarter of 2000, up $288 million from the
same period a year ago. After-tax return on sales was 6.2 percent, up
four-tenths of a point. 'The real driver behind our North American results is
the strong demand for hit products,' Nasser said. 'And more will be coming,' he
added. 'At the same time, our automotive business structure continues to
transform. Total costs are down $6 billion in three years, and the acquisitions
of Volvo, Kwik-Fit, and the planned acquisition of Land Rover have strengthened
and broadened our consumer focus,' Nasser said.
Total vehicle sales in the United States set a new first-quarter record of 1.2
million cars and trucks. Strong sales were aided by the new Ford Focus, Ford
Taurus, Ford F150 SuperCrew, the Ford Explorer Sport Trac and Sport, Jaguar
S-Type and the Volvo 70.
Other Markets: In Europe, South America and other overseas markets, Ford lost
$115 million, about even with last year's first quarter.
FORD CREDIT: Ford Credit earned $353 million in the first quarter, up $53
million or 18 percent in the first quarter of 1999. Return on equity was 12.7
percent, up 1.4 points from a year ago. Ford Credit is on track to meet its
full-year financial milestones to increase earnings by 10 percent and improve
returns.
HERTZ: The Hertz Corporation ( NYSE: HRZ ) earned a record $56 million in the
first quarter, up $7 million or 14 percent. Ford Motor Company's share of
Hertz' first-quarter earnings was $46 million.
DELIVERING SHAREHOLDER VALUE: On April 14, Ford Motor Company also announced a
Shareholder Value Enhancement Plan that offers Ford shareholders new Ford shares
and a choice of accepting $20 per share in cash or additional new Ford shares
equivalent to the cash value. 'This plan reflects our transformational
thinking,' Nasser said, 'as well as our strong earnings and cash flow. It also
underscores management's confidence and our commitment to delivering superior
shareholder value over time.'
Ford Motor Company and Subsidiaries
HIGHLIGHTS a/
First Quarter
2000 1999
(unaudited)
Worldwide vehicle unit sales of cars and trucks
(in thousands)
- North America 1,309 1,220
- Outside North America 602 554
Total 1,911 1,774
Sales and revenues (in millions)
- Automotive $36,175 $31,597
- Financial Services 6,719 5,952
Total $42,894 $37,549
Net income (in millions)
- Automotive $ 1,552 $ 1,446
- Financial Services 380 328
Total continuing operations 1,932 1,774
- Discontinued operation - Visteon 147 205
Total $ 2,079 $ 1,979
Capital expenditures (in millions)
- Automotive $ 1,500 $ 1,142
- Financial Services 306 144
Total $ 1,806 $ 1,286
Automotive capital expenditures as a
percentage of sales 4.1% 3.6%
Stockholders' equity at March 31
- Total (in millions) $28,419 $24,814
- After-tax return on Common and
Class B stockholders' equity 25.3% 29.6%
Automotive net cash at March 31
(in millions)
- Cash and marketable securities $22,848 $22,899
- Debt 10,753 11,254
Automotive net cash $12,095 $11,645
After-tax return on sales
- North American Automotive 6.2% 5.8%
- Total Automotive 4.3% 4.6%
Shares of Common and Class B Stock
(in millions)
- Average number outstanding 1,206 1,211
- Number outstanding at March 31 1,205 1,211
Common Stock price (per share)
- High $54-5/8 $66-1/2
- Low 41 55-1/4
AMOUNTS PER SHARE OF COMMON AND CLASS B
STOCK AFTER PREFERRED STOCK DIVIDENDS
Income assuming dilution
- Automotive $ 1.27 $ 1.16
- Financial Services 0.31 0.27
Total continuing operations 1.58 1.43
- Discontinued operation - Visteon 0.12 0.17
Total $ 1.70 $ 1.60
Cash dividends $ 0.50 $ 0.46
- - - - -
a/ Visteon is reflected as a discontinued operation. Visteon's results and
financial condition have been excluded from all amounts except total net income
and total earnings per share.
Ford Motor Company and Subsidiaries
VEHICLE UNIT SALES
For the Periods Ended March 31, 2000 and 1999
(in thousands)
First Quarter
2000 1999
(unaudited)
North America
United States
Cars 480 404
Trucks 722 739
Total United States 1,202 1,143
Canada 79 58
Mexico 28 19
Total North America 1,309 1,220
Europe
Britain 115 126
Germany 91 90
Italy 49 50
France 42 38
Spain 40 43
Other countries 140 99
Total Europe 477 446
Other International
Brazil 28 22
Australia 24 30
Taiwan 22 17
Argentina 15 14
Japan 9 7
Other countries 27 18
Total other international 125 108
Total worldwide vehicle unit sales 1,911 1,774
Vehicle unit sales generally are reported worldwide on a 'where sold' basis and
include sales of all Ford-badged units, as well as units manufactured by Ford
and sold to other manufacturers.
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
For the Periods Ended March 31, 2000 and 1999
(in millions)
First Quarter
2000 1999
(unaudited)
AUTOMOTIVE (Note 4)
Sales $36,175 $31,597
Costs and expenses (Note 3)
Costs of sales 31,578 27,737
Selling, administrative and other expenses 2,265 1,777
Total costs and expenses 33,843 29,514
Operating income 2,332 2,083
Interest income 368 339
Interest expense 318 285
Net interest income 50 54
Equity in net income/(loss) of affiliated companies (32) 34
Net expense from transactions with
Financial Services (10) (28)
Income before income taxes - Automotive 2,340 2,143
FINANCIAL SERVICES
Revenues 6,719 5,952
Costs and expenses
Interest expense 2,213 1,888
Depreciation 2,208 2,157
Operating and other expenses 1,211 997
Provision for credit and insurance losses 454 391
Total costs and expenses 6,086 5,433
Net revenue from transactions with Automotive 10 28
Income before income taxes - Financial Services 643 547
TOTAL COMPANY
Income before income taxes 2,983 2,690
Provision for income taxes 1,022 893
Income before minority interests 1,961 1,797
Minority interests in net income of subsidiaries 29 23
Net income from continuing operations $ 1,932 $ 1,774
Net income from discontinued operation - Visteon
(Note 2) 147 205
Net income $ 2,079 $ 1,979
Income attributable to Common and Class B Stock
after preferred stock dividends $ 2,075 $ 1,975
Average number of shares of Common and Class B
Stock outstanding 1,206 1,211
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic income from continuing operations (Note 5) $ 1.61 $ 1.47
Diluted income from continuing operations (Note 5) $ 1.58 $ 1.43
Basic income (Note 5) $ 1.73 $ 1.64
Diluted income (Note 5) $ 1.70 $ 1.60
Cash dividends $ 0.50 $ 0.46
The accompanying notes are part of the financial statements.
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions)
March 31, December 31,
2000 1999
(unaudited)
ASSETS
Automotive
Cash and cash equivalents $ 3,875 $ 2,793
Marketable securities 18,973 18,943
Total cash and marketable securities 22,848 21,736
Receivables 4,406 4,570
Inventories (Note 6) 6,557 5,684
Deferred income taxes 2,816 3,762
Other current assets 4,501 4,528
Current receivable from Financial Services 1,807 2,304
Total current assets 42,935 42,584
Equity in net assets of affiliated companies 2,716 2,539
Net property 35,831 36,528
Deferred income taxes 2,562 2,454
Net assets of discontinued operations
- Visteon (Note 2) 1,644 1,566
Other assets 13,421 13,530
Total Automotive assets 99,109 99,201
Financial Services
Cash and cash equivalents 1,883 1,588
Investments in securities 488 733
Finance receivables, net 116,626 113,298
Net investment in operating leases 43,890 42,471
Other assets 10,745 11,123
Receivable from Automotive 2,283 1,835
Total Financial Services assets 175,915 171,048
Total assets $275,024 $270,249
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $ 14,570 $ 14,292
Other payables 3,537 4,158
Accrued liabilities 18,891 18,110
Income taxes payable 1,821 1,709
Debt payable within one year 1,107 1,338
Current payable to Financial Services 0 0
Total current liabilities 39,926 39,605
Long-term debt 9,646 10,398
Other liabilities 29,444 29,283
Deferred income taxes 439 1,223
Payable to Financial Services 2,283 1,835
Total Automotive liabilities 81,738 82,344
Financial Services
Payables 4,191 3,550
Debt 143,951 139,919
Deferred income taxes 7,731 7,078
Other liabilities and deferred income 6,512 6,775
Payable to Automotive 1,807 2,304
Total Financial Services liabilities 164,192 159,626
Company-obligated mandatorily redeemable
preferred securities of a subsidiary trust holding
solely junior subordinated debentures of the
Company (Note 7) 675 675
Stockholders' equity
Capital stock
Preferred Stock, par value $1.00 per share
(aggregate liquidation preference of $177 million) * *
Common Stock, par value $1.00 per share
(1,151 million shares issued) 1,151 1,151
Class B Stock, par value $1.00 per share
(71 million shares issued) 71 71
Capital in excess of par value of stock 4,971 5,049
Accumulated other comprehensive income (2,453) (1,856)
ESOP loan and treasury stock (1,399) (1,417)
Earnings retained for use in business 26,078 24,606
Total stockholders' equity 28,419 27,604
Total liabilities and stockholders' equity $275,024 $270,249
- - - - -
*Less than $1 million
The accompanying notes are part of the financial statements.
Ford Motor Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Periods Ended March 31, 2000 and 1999
(in millions)
First Quarter 2000 First Quarter 1999
Financial Financial
Automotive Services Automotive Services
(unaudited) (unaudited)
Cash and cash
equivalents at January 1 $ 2,793 $ 1,588 $ 3,143 $ 1,151
Cash flows from operating
activities before securities trading 3,443 5,342 2,480 1,830
Net sales of trading securities 22 73 922 99
Net cash flows from operating
activities 3,465 5,415 3,402 1,929
Cash flows from investing activities
Capital expenditures (1,500) (306) (1,142) (144)
Acquisitions of receivables and
lease investments - (24,585) - (18,304)
Collections of receivables and
lease investments - 15,389 - 12,859
Net acquisitions of daily rental vehicles - (1,035) - (768)
Purchases of securities (1,133) (142) (392) (309)
Sales and maturities of securities 1,100 123 321 367
Proceeds from sales of receivables
and lease investments - 2,807 - 2,045
Net investing activities with
Financial Services 35 - 39 -
Cash paid for acquisitions (Note 4) (206) (49) (2,966) -
Other (56) 240 282 (3)
Net cash used in investing
activities (1,760) (7,558) (3,858) (4,257)
Cash flows from financing activities
Cash dividends (607) - (561) (1)
Net purchases of Common Stock (78) - (136) -
Changes in short-term debt (736) (3,891) 121 (968)
Proceeds from issuance of other debt 156 11,610 1,632 9,097
Changes in other debt (389) - 91 -
Principal payments on other debt - (3,672) (151) (5,282)
Net financing activity with Automotive - (35) - (39)
Net cash distribution to Ford from
discontinued operation 17 - 70 -
Other 21 (549) 178 5
Net cash (used in)/provided by
financing activities (1,616) 3,463 1,244 2,812
Effect of exchange rate changes
on cash 48 (80) (87) (106)
Net transactions with Automotive/
Financial Services 945 (945) (214) 214
Net increase in cash and cash
equivalents 1,082 295 487 592
Cash and cash equivalents
at March 31 $ 3,875 $ 1,883 $ 3,630 $ 1,743
Visteon is reflected as a discontinued operation (Note 2).
The accompanying notes are part of the financial statements.
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Financial Statements - The financial data presented herein are unaudited,
but in the opinion of management reflect those adjustments necessary for a fair
presentation of such information. Results for interim periods should not be
considered indicative of results for a full year. Reference should be made to
the financial statements contained in the registrant's Annual Report on Form
10-K Report') for the year ended December 31, 1999. For purposes of this
report, 'Ford', the 'Company', 'we', 'our', 'us' or similar references means
Ford Motor Company and its majority owned subsidiaries unless the context
requires otherwise. Certain amounts for prior periods were reclassified to
conform with present period presentation.
2. Discontinued Operation - On April 13, 2000, the Ford Board of Directors
approved a plan for the complete separation of Visteon Corporation from Ford by
means of a tax-free spin-off in the form of a dividend on Ford Common and Class
B Stock consisting of all shares of Visteon Common Stock. Specific record and
distribution dates will be established after Securities and Exchange Commission
clearance. Consistent with this approved plan and to aid in comparisons, our
financial statements reflect Visteon's reported net income and net assets as a
'discontinued operation' for all periods shown.
Visteon, a wholly-owned subsidiary of Ford, is a global provider of integrated
systems, modules and components to automotive manufacturers and other automotive
suppliers. Visteon operates in three business segments: Comfort, Communication
& Safety; Dynamics & Energy Conversion; and Glass.
Sales and selected income data for Visteon were (in millions):
First Quarter
2000 1999
Sales to Ford $ 4,476 $ 4,356
Sales to non-Ford customers 749 416
Total sales $ 5,225 $ 4,772
Income before income taxes $ 237 $ 313
Provision for income taxes (86) (112)
Minority interests in net income of subsidiaries (4) 4
Net income $ 147 $ 205
The net assets of Visteon were (in millions):
March 31, December 31,
2000 1999
Cash and marketable securities $ 943 $ 1,849
Inventories 743 751
Other current assets 2,986 2,596
Total current assets 4,672 5,196
Net property 5,730 5,789
Other assets 1,388 1,464
Total assets 11,790 12,449
Current liabilities (4,778) (5,475)
Long-term debt (1,426) (1,358)
Other liabilities (4,046) (4,117)
Total liabilities (10,250) (10,950)
Accumulated other comprehensive income 104 67
Net assets $ 1,644 $ 1,566
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
(unaudited)
3. Selected Automotive costs and expenses are summarized as follows (in
millions):
First Quarter
2000 1999
Depreciation $694 $616
Amortization 574 561
Dissolution of AutoEuropa Joint Venture - Effective January 1, 1999, our joint
venture for the production of minivans with Volkswagen AG in Portugal
(AutoEuropa) was dissolved resulting in a $255 million pre-tax gain ($165
million after-tax) in the first quarter of 1999.
4. Acquisitions
Purchase of AB Volvo's Worldwide Passenger Car Business ('Volvo Car') - On March
31, 1999, we purchased Volvo Car for approximately $6.45 billion. The
acquisition price consisted of a cash payment of approximately $2 billion on
March 31, 1999, a deferred payment obligation to AB Volvo of approximately $1.6
billion due March 31, 2001, and Volvo Car automotive net indebtedness of
approximately $2.9 billion. Most automotive indebtedness was repaid on April
12, 1999. The purchase price payment and automotive debt repayments were funded
from our cash reserves.
Purchase of Kwik-Fit Holdings plc - During the third quarter of 1999, we
completed the purchase of all the outstanding stock of Kwik-Fit Plc
('Kwik-Fit'). Kwik-Fit is Europe's largest independent vehicle maintenance and
light repair chain, with over 1,900 outlets in the United Kingdom, Ireland, and
continental Europe. The acquisition price was approximately $1.6 billion and
consisted of cash payments of approximately $1.4 billion and loan notes to
certain Kwik-Fit shareholders of approximately $0.2 billion redeemable beginning
on April 30, 2000 and on any subsequent interest payment date. The purchase
price payments were funded from our cash reserves.
Assuming these two acquisitions had taken place on January 1, 1999, Ford
Automotive unaudited pro forma revenue for the first quarter ended March 31,
1999 would have been $35.2 billion. Net income and earnings per share for this
period would not be materially affected.
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
(unaudited)
5. Income Per Share of Common and Class B Stock - Basic income per share of
Common and Class B Stock is calculated by dividing the income attributable to
Common and Class B Stock by the average number of shares of Common and Class B
Stock outstanding during the applicable period, adjusted for shares issuable
under employee savings and compensation plans.
The calculation of diluted income per share of Common and Class B Stock takes
into account the effect of dilutive potential common stock, such as stock
options.
Income per share of Common and Class B Stock from continuing operations was as
follows (in millions, except per share amounts):
First Quarter 2000 First Quarter 1999
Income Shares Income Shares
Net Income from continuing operations $1,932 1,206 $1,774 1,211
Preferred stock dividend requirements (4) - (4) -
Issuable and uncommitted ESOP shares - (7) - (5)
Basic income and shares from continuing
operations $1,928 1,199 $1,770 1,206
Basic income per share from continuing
operations $ 1.61 $ 1.47
Basic income per share from
discontinued operation 0.12 0.17
Basic income per share $ 1.73 $ 1.64
Basic income and shares from
continuing operations $1,928 1,199 $1,770 1,206
Net dilutive effect of options - 23 - 31
Diluted income and shares from
continuing operations $1,928 1,222 $1,770 1,237
Diluted income per share from
continuing operations $ 1.58 $ 1.43
Diluted income per share from
discontinued operation 0.12 0.17
Diluted income per share $ 1.70 $ 1.60
6. Automotive Inventories are
summarized as follows (in millions ):
March 31, December 31,
2000 1999
Raw materials, work in process and
supplies $2,442 $2,035
Finished products 4,115 3,649
Total inventories $6,557 $5,684
U.S. inventories $2,287 $1,811
7. Company-Obligated Mandatorily Redeemable Preferred Securities of a Subsidiary
Trust - The sole asset of Ford Motor Company Capital Trust I (the 'Trust'),
which is the obligor on the Preferred Securities of such Trust, is $632 million
principal amount of 9% Junior Subordinated Debentures due 2025 of Ford Motor
Company.
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
(unaudited)
8. Comprehensive Income - Other comprehensive income includes foreign currency
translation adjustments, minimum pension liability adjustments, and net
unrealized gains and losses on investments in equity securities.
Total comprehensive income is summarized as follows (in millions):
First Quarter
2000 1999
Net income $2,079 $1,979
Other comprehensive income (596) (108)
Total comprehensive income $1,483 $1,871
Effective January 1, 2000, the functional currency for Ford's automotive
operations in Brazil was changed from the U.S. dollar to the Brazilian real in
recognition of the primary currency of the environment in which Ford will
operate. The lower translated value of fixed assets and inventories in the
first quarter reduced other comprehensive income by about $350 million.
9. Segment Information - Ford's business is divided into two business sectors-
Automotive and Financial Services (including Ford Credit and Hertz); detail is
summarized as follows (in millions):
Financial Services Sector
First Quarter Auto Ford Other Elims/
Sector Credit Hertz Fin Svcs Other Total
2000
Revenues
External customer $ 36,175 $ 5,491 $ 1,131 $ 98 $ (1) $ 42,894
Intersegment 1,158 39 8 42 (1,247) 0
Total Revenues $ 37,333 $ 5,530 $ 1,139 $ 140 $(1,248) $ 42,894
Net income a/ $ 1,552 $ 353 $ 56 $ (11) $ 129 $ 2,079
Total assets a/ $102,146 $161,735 $ 10,360 $8,108 $(7,325) $275,024
1999
Revenues
External Customer $ 31,597 $ 4,863 $ 1,027 $ 56 $ 6 $ 37,549
Intersegment 1,069 57 8 47 (1,181) 0
Total Revenues $ 32,666 $ 4,920 $ 1,035 $ 103 $(1,175) $ 37,549
Net Income a/ $ 1,446 $ 300 $ 49 $ (12) $ 196 $ 1,979
Total assets a/ $ 91,366 $140,643 $ 9,293 $6,258 $(5,527) $242,033
a/ Net income from discontinued operations of $147 million and $205 million for
the three months ended March 31, 2000 and 1999 is included in Elims/Other.
Net assets from discontinued operations of $1,644 million and $1,817 million as
of March 31, 2000 and 1999 is included in Auto Sector total assets.
'Other Financial Services' data is an aggregation of miscellaneous smaller
Financial Services Sector business components, including Ford Motor Land
Development Corporation, Ford Leasing Development Company, Ford Leasing
Corporation and Granite Management Corporation.
'Eliminations/Other' data includes intersegment eliminations and minority
interests. Interest income for the operating segments in the Financial Services
Sector is reported as 'Revenue'.
10. Value Enhancement Plan - On April 13, 2000, the Ford Board of Directors
approved a plan that will offer Ford shareholders an exchange of old shares of
the company's stock for new shares of the company's Common Stock, plus either
$20 cash per share or new shares of equivalent value. Specific details,
including record and effective dates of the plan, will be announced later 2000.
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