SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 10, 1994
FORD MOTOR COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-3950 38-0549190
(Commission File Number) (IRS Employer Identification No.)
The American Road, Dearborn, Michigan 48121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 313-322-3000
<PAGE>
Item 5. Other Events.
Consolidated Financial Statements of Ford Motor Company and
Subsidiaries for the year ended December 31, 1993 together with the
Report on Examination thereof by Coopers & Lybrand, independent
certified public accountants, filed as Exhibit 20 to this Current
Report on Form 8-K, are incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
EXHIBITS
Designation Description Method of Filing
Exhibit 20 Consolidated Financial Statements Filed with this
of Ford and Subsidiaries for the Report.
year ended December 31, 1993
together with the Report on
Examination thereof by Coopers
& Lybrand, independent certified
public accountants.
Exhibit 23 Consent of Experts. Filed with this
Report.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized on the date indicated.
FORD MOTOR COMPANY
(Registrant)
Dated: February 16, 1994 By:/s/T. J. DeZure
T. J. DeZure
Assistant Secretary
<PAGE>
EXHIBIT INDEX
DESIGNATION DESCRIPTION PAGE
Exhibit 20 Consolidated Financial Statements
of Ford and Subsidiaries for the
year ended December 31, 1993
together with the Report on
Examination thereof by Coopers
& Lybrand, independent certified
public accountants.
Exhibit 23 Consent of Experts.
<PAGE>
Coopers & Lybrand certified public accountants
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Ford Motor Company
We have audited the consolidated balance sheet of Ford Motor Company and
Subsidiaries at December 31, 1993 and 1992, and the related consolidated
statements of income, stockholders' equity and cash flows for each of
the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Ford Motor
Company and Subsidiaries at December 31, 1993 and 1992, and the consolidated
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1993, in conformity with generally
accepted accounting principles.
As discussed in Notes 6 and 8 to the consolidated financial statements, the
company changed its methods of accounting for postretirement benefits
other than pensions and income taxes in 1992.
COOPERS & LYBRAND
400 Renaissance Center
Detroit, Michigan 48243
313-446-7100
February 1, 1994
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
HIGHLIGHTS
-----------
<CAPTION>
Fourth Quarter Full Year
--------------------------------- --------------------------------
<S> <C> <C> <C> <C>
Worldwide factory sales of cars
and trucks (in thousands)
- - United States 942 873 3,826 3,361
- - Outside United States 512 529 2,138 2,403
------- ------- -------- -------
Total 1,454 1,402 5,964 5,764
======= ======= ======== ========
Sales and revenues (in millions)
- - Automotive $23,511 $21,498 $ 91,568 $ 84,407
- - Financial Services 4,330 3,908 16,953 15,725
------- ------- -------- --------
Total $27,841 $25,406 $108,521 $100,132
======= ======= ======== ========
Income/(loss) before cumulative effects
of changes in accounting principles
(in millions)
- - Automotive $ 297 $(1,037) $ 940 $ (1,534)
- - Financial Services 422 197 1,589 1,032
------- -------- -------- -------
Total $ 719 $ (840) $ 2,529 $ (502)
======= ======= ======== ========
Net income/(loss) (in millions)
- - Automotive $ 297 $(1,037) $ 940 $ (8,628)
- - Financial Services 422 197 1,589 1,243
------- -------- -------- -------
Total $ 719 $ (840) $ 2,529 $ (7,385)
======= ======= ======== ========
Capital expenditures (in millions)
- - Automotive $ 1,985 $ 1,747 $ 6,714 $ 5,697
- - Financial Services 32 41 100 93
------- ------- --------- -------
Total $ 2,017 $ 1,788 $ 6,814 $ 5,790
======= ======= ======== ========
Stockholders' equity at December 31
- - Total (in millions) $15,574 $14,753 $ 15,574 $ 14,753
- - After-tax return on Common and
Class B stockholders' equity 21.1% * 18.6% *
Automotive cash, cash equivalents,
and marketable securities at
December 31 (in millions) $ 9,752 $ 9,035 $ 9,752 $ 9,035
Automotive debt at December 31
(in millions) $ 8,016 $ 8,317 $ 8,016 $ 8,317
After-tax returns on sales
- - Automotive 1.3% * 1.1% *
- - Total Company 2.6% * 2.4% *
Shares of Common and Class B Stock
(in millions)
- - Average number outstanding 498 488 493 486
- - Number outstanding at December 31 499 489 499 489
AMOUNTS PER SHARE OF COMMON AND
CLASS B STOCK AFTER PREFERRED
STOCK DIVIDENDS
Income/(loss) before cumulative
effects of changes in accounting
principles
- - Automotive $ 0.45 $ (2.25) $ 1.33 $ (3.58)
- - Financial Services 0.85 0.40 3.22 2.12
Total $ 1.30 $ (1.85) $ 4.55 $ (1.46)
======= ======= ======== ========
Income/(loss)
- - Automotive $ 0.45 $ (2.25) $ 1.33 $ (18.16)
- - Financial Services 0.85 0.40 3.22 2.55
Total $ 1.30 $ (1.85) $ 4.55 $ (15.61)
======= ======= ======== ========
Income/(loss) assuming full dilution $ 1.19 $ (1.85) $ 4.20 $ (15.61)
Cash dividends per share of Common
and Class B Stock $ 0.40 $ 0.40 $ 1.60 $ 1.60
- - - - - -
*Results in this period were a loss.
FS-1
</TABLE>
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
VEHICLE FACTORY SALES
----------------------
For the Periods Ended December 31, 1993 and 1992
<CAPTION>
Fourth Quarter Full Year
------------------------- ---------------------------
1993 1992 1993 1992
------- ------- -------- -------
<S> <C> <C> <C> <C>
U.S. and Canada
Cars - U.S. 458,253 446,772 1,950,238 1,841,248
- Canada 34,668 28,978 126,297 123,551
Total cars 492,921 475,750 2,076,535 1,964,799
Trucks - U.S. 483,623 426,166 1,875,711 1,520,049
- Canada 42,571 34,938 125,906 109,161
Total trucks 526,194 461,104 2,001,617 1,629,210
Total U.S. and Canada 1,019,115 936,854 4,078,152 3,594,009
Outside U.S. and Canada
Germany 192,563 201,851 831,216 923,763
Britain 98,146 82,302 421,939 473,178
Spain 48,208 70,739 211,413 310,957
Taiwan 18,881 23,923 113,861 113,966
Mexico 22,429 31,577 90,710 126,334
Australia 33,527 32,092 126,753 120,017
Japan 10,725 13,855 52,805 66,654
Other countries 10,562 9,177 36,737 35,496
Total overseas 435,041 465,516 1,885,434 2,170,365
Total worldwide vehicle
factory sales 1,454,156 1,402,370 5,963,586 5,764,374
========= ========= ========= =========
Includes units manufactured by other companies and sold by Ford. Factory sales
are shown by source of manufacture, except that Canadian, Mexican and
Australian exports to the United States are included as U.S. vehicle sales,
and U.S. exports to Canada are included as Canadian vehicle sales.
FS-2
</TABLE>
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
For the Years Ended December 31, 1993, 1992 and 1991
(in millions)
<CAPTION>
1993 1992 1991
------ ------- --------
<C> <S> <S> <S>
AUTOMOTIVE
Sales (Note 1) $91,568 $84,407 $72,051
Costs and expenses (Note 1)
Costs of sales 85,168 81,748 71,827
Selling, administrative, and other expenses 4,968 4,434 3,993
Total costs and expenses 90,136 86,182 75,820
Operating income/(loss) 1,432 (1,775) (3,769)
Interest income 563 653 677
Interest expense 807 860 903
Net interest expense (244) (207) (226)
Equity in net income/(loss) of affiliated
companies (Note 1) 127 15 (29)
Net (expense)/revenue from transactions with
Financial Services (Note 16) (24) 15 (28)
Income/(loss) before income taxes
and cumulative effects of changes
in accounting principles -
Automotive 1,291 (1,952) (4,052)
FINANCIAL SERVICES
Revenues (Note 1) 16,953 15,725 16,235
Costs and expenses (Note 1)
Interest expense 6,482 7,056 8,317
Operating and other expenses 3,196 2,945 2,822
Provision for credit and insurance losses 1,523 1,795 2,159
Depreciation 3,064 2,089 1,500
Total costs and expenses 14,265 13,885 14,798
Net revenue/(expense) from
transactions with
Automotive (Note 16) 24 (15) 28
Income before income taxes and cumulative
effects of changes in accounting
principles -
Financial Services 2,712 1,825 1,465
TOTAL COMPANY
Income/(loss) before income taxes and
cumulative effects of changes in
accounting principles 4,003 (127) (2,587)
Provision/(credit) for
income taxes (Note 6) 1,350 295 (395)
Income/(loss) before minority
interests and cumulative effects
of changes in accounting
principles 2,653 (422) (2,192)
Minority interests in net
income of subsidiaries 124 80 66
Income/(loss) before cumulative effects of
changes in accounting principles 2,529 (502) (2,258)
Cumulative effects of changes in accounting
principles (Notes 6 and 8) - (6,883) -
Net income/(loss) 2,529 (7,385) (2,258)
Preferred stock dividend requirements 288 209 22
Income/(loss) attributable to Common
and Class B Stock $ 2,241 $(7,594) $(2,280)
======= ======= =======
FS-3
</TABLE>
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
---------------------------------
For the Years Ended December 31, 1993, 1992, and 1991
(in millions)
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Average number of shares of
Common and Class B Stock
outstanding 493 486 476
AMOUNTS PER SHARE OF COMMON
STOCK AND CLASS B STOCK
AFTER PREFERRED STOCK DIVIDENDS (Note 1)
Income/(loss) before cumulative
effects of changes in
accounting principles $ 4.55 $ (1.46) $(4.79)
Cumulative effects of changes
in accounting principles - (14.15) -
Income/(loss) $ 4.55 $(15.61) $(4.79)
====== ======= ======
Income/(loss) assuming full dilution $ 4.20 $(15.61) $(4.79)
Cash dividends $ 1.60 $ 1.60 $ 1.95
The accompanying notes are part of the financial statements.
FS-4
</TABLE>
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
--------------------------
(in millions)
<CAPTION>
December 31, December 31,
1993 1992
------------- -----------
<S> <C> <C>
ASSETS
Automotive
Cash and cash equivalents $ 5,667 $ 3,504
Marketable securities, at cost
and accrued interest
(approximates market, Note 2) 4,085 5,531
Total cash, cash equivalents,
and marketable securities 9,752 9,035
Receivables 2,302 2,204
Inventories (Note 4) 5,538 5,451
Deferred income taxes 2,830 2,480
Other current assets 1,226 1,298
Net current receivable from
Financial Services (Note 16) 834 1,368
Total current assets 22,482 21,836
Equity in net assets of affiliated companies (Note 1) 3,002 2,751
Net property (Note 5) 23,059 22,160
Deferred income taxes 5,427 5,015
Other assets (Notes 1 and 8) 7,691 5,339
Net noncurrent receivable from
Financial Services (Note 16) 76 69
Total Automotive assets 61,737 57,170
Financial Services
Cash and cash equivalents 2,555 3,182
Investments in securities (Note 2) 8,219 6,874
Net receivables and lease investments (Note 3) 119,535 106,144
Other assets (Note 1) 6,892 7,175
Total Financial Services assets 137,201 123,375
Total assets $198,938 $180,545
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $ 8,769 $ 7,944
Other payables 1,976 1,631
Accrued liabilities (Note 7) 10,815 9,983
Income taxes payable 160 318
Debt payable within one year (Note 9) 932 1,249
Total current liabilities 22,652 21,125
Long-term debt (Note 9) 7,084 7,068
Other liabilities (Note 7) 25,911 21,866
Deferred income taxes 1,089 1,333
Total Automotive liabilities 56,736 51,392
Financial Services
Payables 1,881 1,514
Debt (Note 9) 103,960 90,188
Deposit accounts (Note 10) 10,549 14,030
Deferred income taxes 2,287 1,616
Other liabilities and deferred income 5,583 4,532
Net payable to Automotive (Note 16) 910 1,437
Total Financial Services liabilities 125,170 113,317
Preferred stockholders' equity in a
subsidiary company (Note 1) 1,458 1,083
Stockholders' equity
Capital stock (Notes 11 and 14)
Preferred Stock, par value $1.00 per share (aggregate
liquidation preference of $3.4 billion) * *
Common Stock, par value $1.00 per share
(464 and 454 million shares issued) 464 454
Class B Stock, par value $1.00 per share
(35 million shares issued) 35 35
Capital in excess of par value of stock 5,082 4,698
Foreign currency translation adjustments
and other (Note 1) (678) (62)
Minimum pension liability adjustment (400) -
Earnings retained for use in business 11,071 9,628
Total stockholders' equity 15,574 14,753
Total liabilities and stockholders' equity $198,938 $180,545
======== ========
- - - - - -
*Less than $1 million
The accompanying notes are part of the financial statements.
Certain amounts for 1992 have been reclassified to conform with presentations
adopted in 1993.
FS-5
</TABLE>
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
-----------------------------------------------
For the Years Ended December 31, 1993, 1992, and 1991
(in millions)
<CAPTION>
1993 1992 1991
------ --------- ---------
<S> <C> <C> <C>
CAPITAL STOCK (Note 11)
Common Stock
Balance at beginning of year $ 454 $ 448 $ 438
Issued for employee benefit
plans and other 10 6 10
Balance at end of year 464 454 448
Class B Stock 35 35 35
Series A Preferred Stock
Balance at beginning of year * * -
Sale of Series A Preferred Stock 0 0 *
Balance at end of year * * *
Series B Preferred Stock
Balance at beginning of year * - -
Sale of Series B Preferred Stock 0 * -
Balance at end of year * * -
CAPITAL IN EXCESS OF PAR VALUE OF STOCK
Balance at beginning of year 4,698 3,379 766
Issued for employee benefit
plans and other 384 215 361
Sale of Series A Preferred Stock 0 0 2,252
Sale of Series B Preferred Stock 0 1,104 -
Balance at end of year 5,082 4,698 3,379
FOREIGN CURRENCY TRANSLATION
ADJUSTMENTS AND OTHER (Note 1)
Balance at beginning of year (62) 838 823
Translation adjustments during year (508) (975) 8
Minimum pension liability adjustment (400) - -
Other (108) 75 7
Balance at end of year (1,078) (62) 838
EARNINGS RETAINED FOR USE IN THE
BUSINESS
Balance at beginning of year 9,628 17,990 21,175
Net income/(loss) 2,529 (7,385) (2,258)
Cash dividends (1,086) (977) (927)
Balance at end of year 11,071 9,628 17,990
Total stockholders' equity $15,574 $14,753 $22,690
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Common Class B Preferred Preferred
SHARES OF CAPITAL STOCK Stock Stock Stock Stock
--------- -------- ---------- ---------
<S> <C> <C> <C> <C>
Issued at December 31, 1990 438 35 - -
Additions
1991 10 0 0.046 -
1992 6 0 0 0.023
1993 10 0 0 0
Net additions 26 0 0.046 0.023
Issued at December 31, 1993 464 35 0.046 0.023
====== ====== ======= =======
- - - - - -
*Less than 1 million
The accompanying notes are part of the financial statements.
FS-7
</TABLE>
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
-------------------------------------
For the Years Ended December 31, 1993, 1992, and 1991
(in millions)
<CAPTION>
1993 1992 1991
----------------------- ------------------------ ------------------------
Financial Financial Financial
Automotive Services Automotive Services Automotive Services
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents at
January 1 $ 3,504 $ 3,182 $ 4,958 $ 3,175 $ 4,599 $ 2,168
Cash flows from operating
activities (Note 15) 6,862 7,145 5,753 5,762 3,341 4,780
Cash flows from investing
activities
Capital expenditures (6,714) (100) (5,697) (93) (5,723) (124)
Proceeds from sale and
leaseback of fixed assets 884 - 263 - 619 -
Acquisitions of other companies 0 (336) 0 (461) 0 (860)
Proceeds from sales of subsidiaries 173 0 52 0 273 0
Acquisitions of receivables and
lease investments - (163,858) - (134,619) - (124,606)
Collections of receivables and
lease investments - 142,844 - 123,144 - 117,581
Purchases of securities (100,493) (13,741) (50,437) (12,877) (56,141) (11,876)
Sales of securities 101,927 12,426 49,629 12,169 52,795 14,450
Proceeds from sales of receivables - 4,794 - 6,465 - 4,533
Loans originated net of principal
payments - (1,466) - (938) - (321)
Investing activity with Financial
Services (117) - 709 - 837 -
Other (69) 389 (492) 372 (175) 555
Net cash used in investing
activities (4,409) (19,048) (5,973) (6,838) (7,515) (668)
Cash flows from financing activities
Cash dividends (1,086) - (977) - (927) -
Sale of Preferred Stock 0 - 1,104 - 2,252 -
Issuance of Common Stock 394 - 221 - 371 -
Changes in short-term debt (66) 6,065 (426) 2,739 117 (3,931)
Proceeds from issuance of other debt 424 22,128 1,865 13,382 4,808 13,889
Principal payments on other debt (376) (13,791) (1,598) (13,122) (2,477) (9,981)
Financing activity with Automotive - 117 - (709) - (837)
Changes in customers' deposits,
excluding interest credited - (3,861) - (3,418) - (1,875)
Receipts from annuity contracts - 821 - 703 - 46
Issuance of subsidiary company
preferred stock - 375 - 283 - 0
Other (124) (76) 79 (10) 3 12
Net cash (used in)/provided by
financing activities (834) 11,778 268 (152) 4,147 (2,677)
Effect of exchange rate changes
on cash 17 25 (220) (47) (35) (7)
Net transactions with Automotive/
Financial Services 527 (527) (1,282) 1,282 421 (421)
Net increase/(decrease) in
cash and cash equivalents 2,163 (627) (1,454) 7 359 1,007
Cash and cash equivalents at
December 31 $ 5,667* $ 2,555 $ 3,504* $ 3,182 $ 4,958* $ 3,175
======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Total cash and cash equivalents $8,222 $6,686 $8,133
- - - - - -
*Automotive cash, cash equivalents, and marketable securities on December 31
were as follows (in millions): 1993 - $9,752 ; 1992 - $9,035; 1991 - $9,753
The accompanying notes are part of the financial statements.
FS-6
</TABLE>
<PAGE>
[TEXT]
Ford Motor Company and Subsidiaries
Notes to Financial Statements
NOTE 1. Accounting Policies
- ----------------------------
Principles of Consolidation
- ---------------------------
The consolidated financial statements include all significant
majority-owned subsidiaries and reflect the operating results, assets,
liabilities and cash flows for two business segments: Automotive and
Financial Services. The assets and liabilities of the Automotive
segment are classified as current or noncurrent, and those of the
Financial Services segment are unclassified. Affiliates that are
20% to 50% owned, principally Mazda Motor Corporation, Autolatina and
AutoAlliance International Inc., and subsidiaries where control is
expected to be temporary, principally investments in certain
dealerships, are generally accounted for on an equity basis. For
purposes of Notes to Financial Statements, "Ford" or "the company"
means Ford Motor Company and its majority-owned subsidiaries unless
the context requires otherwise.
Revenue Recognition - Automotive
- --------------------------------
Sales are recorded by the company when products are shipped to
dealers. Provisions for approved sales incentive programs normally
are recognized as sales reductions at the time of sale. Sales
incentive programs approved subsequent to the time that related sales
were recorded are recognized when the programs are approved.
Revenue Recognition - Financial Services
- ----------------------------------------
Revenue from finance receivables is recognized over the term of the
receivable using the interest method. Certain loan origination costs
are deferred and amortized over the term of the related receivable as
a reduction in financing revenue. Revenue from operating leases is
recognized as scheduled payments become due. Agreements between
Automotive operations and certain Financial Services operations
provide for interest supplements and other support to be paid by
Automotive operations on certain financing and leasing transactions.
Financial Services operations recognize this revenue in income over
the period that the related receivables and leases are outstanding;
these interest supplements and other support costs are recorded as
sales reductions by the Automotive operations at the time of sale of
the related vehicle.
Other Costs
- -----------
Advertising and sales promotion costs are expensed as incurred.
Anticipated costs related to product warranty are accrued at the time
of sale.
Research and development costs are expensed as incurred and were
$5,021 million in 1993, $4,332 million in 1992 and $3,728 million in
1991.
Income/(Loss) Per Share of Common and Class B Stock
- ---------------------------------------------------
Income/(loss) per share of Common and Class B Stock is calculated by
dividing income/(loss) attributable to Common and Class B Stock by the
average number of shares of Common Stock and Class B Stock outstanding
during the applicable period.
The company has outstanding securities, primarily Series A Preferred
Stock and certain convertible debt of subsidiary companies, which
could be converted to Common Stock. Other obligations, such as stock
options, are considered to be common stock equivalents. The
calculation of income/(loss) per share of Common and Class B Stock
assuming full dilution takes into account the effect of these
convertible securities and common stock equivalents when the effect is
material and dilutive.
Foreign-Currency Translation
- ----------------------------
Revenues, costs and expenses of foreign subsidiaries are translated to
U.S. dollars at average-period exchange rates. The effect of changes
in foreign exchange rates on revenues and costs was generally
unfavorable in 1993, particularly in Europe.
Assets and liabilities of foreign subsidiaries are translated to U.S.
dollars at end-of-period exchange rates. The effects of this
translation for most foreign subsidiaries and certain other foreign
currency transactions are reported in a separate component of
stockholders' equity. Translation gains and losses for foreign
subsidiaries that are located in highly inflationary countries or
conduct a major portion of their business with the company's U.S.
operations are included in income. Also included in income are gains
and losses arising from transactions denominated in a currency other
than the functional currency of the entity involved.
The effect of changes in foreign exchange rates on assets and
liabilities, as described above, increased net income by $419 million
in 1993 and decreased the net loss by $132 million in 1992 and by $81
million in 1991. These amounts included net transaction and
translation gains before taxes of $988 million in 1993, $557 million
in 1992 and $662 million in 1991. These gains were offset
substantially by costs of sales that reflected historical exchange
rates for costs associated with inventories in countries with high
inflation rates.
Goodwill
- --------
Goodwill represents the excess of the purchase price over the fair
value of the net assets of acquired companies and is being amortized
using the straight-line method principally over 40 years. Total
goodwill included in Automotive and Financial Services other assets at
December 31, 1993 was $2.6 billion and $2.9 billion, respectively.
Preferred Stockholders' Equity in a Subsidiary Company
- ------------------------------------------------------
Preferred stockholders' equity in a subsidiary company refers to the
outstanding preferred stock of Ford Holdings, Inc. ("Ford Holdings"),
a subsidiary of Ford. All the outstanding common stock of Ford
Holdings, representing 75% of the combined voting power of all classes
of capital stock of Ford Holdings, is owned directly or indirectly by
Ford. The balance of the capital stock and voting power is owned by
persons other than Ford.
<PAGE>
NOTE 2. Marketable and Other Securities
- ----------------------------------------
Automotive
- ----------
Automotive marketable securities are recorded at cost plus accrued
interest, which approximates fair value.
Financial Services
- ------------------
Investments in debt securities are recorded at amortized cost because
of the ability to hold such securities until maturity and the intent
to hold them for the foreseeable future. If market conditions change,
however, certain of these securities may be sold prior to maturity.
Marketable equity securities are recorded at fair value.
Investments in debt securities at December 31 were as follows (in
millions):
<TABLE>
<CAPTION>
1993 1992
------------------------------------ -----------------------------------------
Gross Gross Gross Gross
Book Unrealized Unrealized Fair Book Unrealized Unrealized Fair
Value Gains Losses Value Value Gains Losses Value
------ ------- -------- ------ ------ -------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Debt securities issued
by the U.S. government
and agencies $ 974 $ 27 $ 1 $1,000 $ 964 $17 $ 1 $ 980
Municipal securities 126 3 0 129 35 1 0 36
Debt securities
issued by foreign
governments 88 4 1 91 35 1 0 36
Corporate securities 1,779 48 19 1,808 1,107 28 10 1,125
Mortgage-backed
securities (including
derivatives) 2,588 39 82 2,545 1,851 17 140 1,728
Other debt securities 192 0 1 191 407 1 3 405
Total $5,747 $121 $104 $5,764 $4,399 $65 $154 $4,310
====== ==== ==== ====== ====== === ==== ======
</TABLE>
The fair value of most securities was estimated based on quoted
market prices for those securities. For those securities for
which there were no quoted market prices, the estimate of fair
value was based on similar types of securities that are traded in
the market.
The book value and fair value of investments in debt securities
at December 31, by contractual maturity, are shown below (in
millions). Expected maturities may differ from contractual
maturities because borrowers may have the right to call or prepay
obligations with or without penalty.
<TABLE>
<CAPTION>
1993 1992
----------------- -----------------
Book Fair Book Fair
Value Value Value Value
<S> <C> <C> <C> <C>
Due in one year or less $ 96 $ 96 $ 280 $ 281
Due after one year through five 1,023 1,035 1,119 1,126
Due after five years through ten years 563 580 434 443
Due after ten years 1,477 1,508 715 732
Mortgage-backed securities
(including derivatives) 2,588 2,545 1,851 1,728
Total $5,747 $5,764 $4,399 $4,310
====== ====== ====== ======
</TABLE>
Proceeds from sales of investments in debt securities were $11.2
billion in 1993, $10.5 billion in 1992 and $13.9 billion in 1991.
In 1993, gross gains of $113 million and gross losses of $20
million were realized on those sales; gross gains of $142 million
and gross losses of $86 million were realized in 1992, and gross
gains of $141 million and gross losses of $22 million were
realized in 1991.
Investments in securities other than debt securities totaled
$2,472 million at December 31, 1993 and $2,475 million at
December 31, 1992. The estimated fair value in excess of book
value of those securities which were practicable to value was $59
million at December 31, 1993 and $2 million at December 31, 1992.
It was not practicable to calculate the fair value of certain
securities totaling $660 million at December 31, 1993 and
$740 million at December 31, 1992 because they represented
preferred stocks of non-traded companies with whom the company
does business and for which similar market-traded securities were
not available for comparison.
<PAGE>
NOTE 3. Net Receivables and Lease Investments - Financial
Services
- ----------------------------------------------------------
Included in net receivables and lease investments at December 31
were net finance receivables, investments in direct financing
leases and investments in operating leases. The investments in
direct financing and operating leases relate to the leasing of
motor vehicles and various types of transportation and other
equipment and facilities.
Net finance receivables at December 31 were as follows (in
millions):
1993 1992
--------- --------
Automotive $ 58,738 $54,807
Real estate, mainly residential 24,152 24,421
Other 24,968 19,945
--------- ------
Total finance receivables 107,858 99,173
Loan origination costs 124 158
Unearned income (9,037) (8,325)
Allowance for credit losses (2,017) (1,948)
Unearned insurance premiums and
unpaid insurance claims related
to finance receivables (139) (199)
Net finance receivables $ 96,789 $88,859
======== =======
Fair value $ 98,505 $90,992
Included in finance receivables was a total of $1.5 billion for
1993 and $1.9 billion for 1992 owed by three customers with the
largest receivable balances. Other finance receivables consisted
primarily of commercial and consumer loans, collateralized loans,
credit card receivables, general corporate obligations and
accrued interest. Also included in other finance receivables at
December 31, 1993 and 1992 were $2,430 million and
$1,767 million, respectively, of accounts receivable purchased by
certain Financial Services operations from Automotive operations.
Contractual maturities of automotive and other finance
receivables are as follows (in millions): 1994 - $41,376;
1995 - $16,316; 1996 - $11,321; thereafter - $14,693. Experience
indicates that a substantial portion of the portfolio generally
is repaid before contractual maturity dates.
The fair value of most receivables was estimated by discounting
future cash flows using an estimated discount rate which
reflected the credit, interest rate and prepayment risks
associated with similar types of instruments. For receivables
with short maturities, the book value approximated fair value.
Sales of finance receivables increased net income by $60 million
in 1993, $7 million in 1992 and $84 million in 1991. Allowances
for anticipated credit losses are made where limited guarantee
provisions of the sales contracts exist.
Investments in direct financing leases at December 31 were as
follows (in millions):
1993 1992
Minimum lease rentals $ 7,382 $ 7,673
Estimated residual values 2,764 2,395
Lease origination costs 69 47
Unearned income (2,010) (2,169)
Allowance for credit losses (133) (154)
Net investments in direct
financing leases $ 8,072 $ 7,792
======= =======
Minimum direct financing lease rentals (including executory costs
of $68 million) are as follows (in millions): 1994 - $2,485;
1995 - $1,731; 1996 - $1,031; 1997 - $576; thereafter - $1,627.
Investments in operating leases at December 31 were as follows
(in millions):
1993 1992
Vehicles and other equipment, at cost $18,589 $12,231
Lease origination costs 23 8
Accumulated depreciation (3,736) (2,591)
Allowance for credit losses (202) (155)
Net investments in operating leases $14,674 $ 9,493
======= =======
Future minimum rentals on operating leases are as follows (in
millions): 1994 - $3,719; 1995 - $1,837; 1996 - $387; 1997 -
$77; thereafter - $118.
Depreciation expense on operating leases reflects primarily the
straight-line method over the term of the leases and was as
follows (in millions): 1993 - $2,984; 1992 - $2,000; 1991 -
$1,400.
Allowances For Credit Losses
- ----------------------------
Allowances for credit losses are established as required based on
historical experience. Other factors that affect collectibility
also are evaluated, and additional amounts may be provided.
Finance receivables and lease investments are charged to the
allowances for credit losses when an account is deemed to be
uncollectible, taking into consideration the financial condition
of the borrower, the value of the collateral, recourse to
guarantors and other factors. Recoveries on finance receivables
and lease investments previously charged off as uncollectible are
credited to the allowances for credit losses.
Changes in the allowances for credit losses were as follows (in
millions):
1993 1992 1991
Beginning Balance $2,257 $2,078 $1,847
Additions 1,019 1,218 1,485
Net losses (903) (993) (1,304)
Other changes (21) (46) 50
Ending Balance $2,352 $2,257 $2,078
====== ====== ======
NOTE 4. Inventories - Automotive
- ---------------------------------
Inventories are stated at the lower of cost or market. The cost
of most U.S. inventories is determined by the last-in, first-out
("LIFO") method. The cost of the remaining inventories is
determined substantially by the first-in, first-out ("FIFO")
method.
If FIFO was the only method of inventory accounting used by the
company, inventories would have been $1,342 million and $1,365
million higher than reported at December 31, 1993 and 1992,
respectively.
The major classes of inventories at December 31 were as follows
(in millions):
1993 1992
Raw materials, work in process and supplies $2,937 $2,959
Finished products 2,601 2,492
Total Inventories $5,538 $5,451
====== ======
Inventories - U.S. Automotive $2,575 $2,401
<PAGE>
NOTE 5. Net Property, Depreciation and Amortization - Automotive
- -----------------------------------------------------------------
Net property, at cost, at December 31 was as follows (in millions):
1993 1992
Land $ 360 $ 362
Buildings and land improvements 5,923 6,059
Machinery, equipment and other 29,655 28,294
Construction in progress 1,551 1,493
Total land, plant and equipment 37,489 36,208
Accumulated depreciation (20,691) (19,991)
Net land, plant and equipment 16,798 16,217
Unamortized special tools 6,261 5,943
Net Property $ 23,059 $ 22,160
======== ========
Assets placed in service before January 1, 1993 are depreciated using
an accelerated method that results in accumulated depreciation of
approximately two-thirds of asset cost during the first half of the
asset's estimated useful life. Assets placed in service after
December 31, 1992 are depreciated using the straight-line method of
depreciation. This change in accounting principle was made to reflect
improvements in the design and flexibility of manufacturing machinery
and equipment and improvements in maintenance practices. These
improvements have resulted in more uniform productive capacities and
maintenance costs over the useful life of an asset, and straight-line
depreciation is preferable in these circumstances. The effect of this
change was not significant in 1993.
On average, buildings and land improvements are depreciated based on a
30-year life; automotive machinery and equipment are depreciated based
on a 14-year life.
When plant and equipment are retired, the general policy is to charge
the cost of those assets, reduced by net salvage proceeds, to
accumulated depreciation. All maintenance, repair and rearrangement
costs are expensed as incurred. Expenditures that increase the value
or productive capacity of assets are capitalized. Special tools are
amortized over periods of time representing the productive use of
those tools. Preproduction costs related to new facilities are
expensed as incurred.
Depreciation and amortization expenses were as follows (in millions):
1993 1992 1991
Depreciation $2,392 $2,569 $2,456
Amortization 2,012 2,097 1,822
- ------------------
Total $4,404 $4,666 $4,278
====== ====== ======
<PAGE>
NOTE 6. Income Taxes
- ---------------------
The provision/(credit) for income taxes was as follows (in millions):
1993 1992 1991
Currently payable/(refundable)
U.S. federal $1,259 $(122) $ 92
Foreign 169 427 445
State and local 123 104 82
Total currently payable 1,551 409 619
Deferred tax liability/(benefit)
U.S. federal (161) 434 (742)
Foreign (106) (499) (272)
State and local 66 (49) 0
Total deferred (201) (114) (1,014)
Total provision/(credit) $1,350 $ 295* $ (395)
====== ===== =======
- - - - - -
*Excludes cumulative effects of changes in accounting principles
The provision/(credit) includes estimated taxes payable on that
portion of retained earnings of subsidiaries expected to be received
by the company. No provision was made with respect to $4.9 billion of
retained earnings at December 31, 1993 which have been invested by
foreign subsidiaries. These retained earnings have incurred foreign
income taxes that would have the effect of reducing substantially
income tax liabilities that could result from their distribution.
The company adopted Statement of Financial Accounting Standards No.
109 ("SFAS 109"), "Accounting for Income Taxes," as of January 1,
1992. The cumulative effect of this change in accounting principle
decreased the net loss in 1992 by $657 million. Financial statements
for prior years were not restated to apply the provisions of SFAS 109.
The adoption of SFAS 109 changes the method of accounting for income
taxes from the deferred method using Accounting Principles Board
Opinion No. 11 ("APB 11") to an asset and liability approach.
Under SFAS 109, deferred income taxes reflect the estimated tax effect
of temporary differences between assets and liabilities for financial
reporting purposes and those amounts as measured by tax laws and
regulations.
The components of deferred income tax assets and liabilities at
December 31 were as follows (in millions):
<TABLE>
<CAPTION>
1993 1992
---------------------------------- -----------------------------
Deferred Tax Deferred Tax Deferred Tax Deferred Tax
Assets Liabilities Assets Liabilities
<C> <S> <S> <S> <S>
Employee benefit plans $ 5,839 $ 697 $ 5,376 $ 576
Dealer and customer allowances
and claims 3,243 - 2,864 -
Net operating loss carryforwards 1,378 - 909 -
Allowance for credit losses 858 - 840 -
Alternative minimum tax 129 - 426 -
Depreciation and amortization
(excludes leasing transactions) 30 2,574 27 2,694
Leasing transactions - 3,166 - 2,437
All other 1,093 1,157 732 882
Subtotal 12,570 7,594 11,174 6,589
Valuation allowances (174) - (181) -
Total deferred taxes $12,396 $7,594 $10,993 $6,589
======= ====== ======= ======
</TABLE>
Net foreign operating loss carryforwards for tax purposes were $3.7
billion at December 31, 1993. A significant portion of these losses
have an indefinite carryforward period; the remaining losses have
expiration dates beginning in 1995. For financial statement purposes,
the tax benefit of operating losses is recognized as a deferred tax
asset, subject to appropriate valuation allowances.
Deferred income taxes for 1991 were derived using the guidelines in
APB 11. Under APB 11, deferred income taxes result from timing
differences in the recognition of revenues and expenses between
financial statements and tax returns. The principal sources of these
differences and the related effect of each on the provision for income
taxes were as follows (in millions):
1991
Depreciation and amortization (excludes
leasing transactions) $ 191
Dealer and customer allowances and claims (542)
Employee benefit plans (442)
Net operating loss carryforwards - foreign (399)
Leasing transactions 377
Alternative minimum tax (26)
Income/(loss) before income taxes and cumulative effects of changes in
accounting principles for U.S. and foreign operations, excluding
equity in net income/(loss) of affiliated companies, was as follows
(in millions):
1993 1992 1991
------ ------- -------
U.S. $4,152 $ 889 $(2,049)
Foreign (276) (1,031) (509)
Total income/(loss) before
income taxes $3,876 $ (142)* $(2,558)
====== ======= =======
- - - - - -
*Excludes cumulative effects of changes in accounting principles
A reconciliation of the provision/(credit) for income taxes compared
with the amounts at the U.S. statutory tax rate is shown below (in
millions):
1993 1992 1991
----- ----- ----
Tax provision/(credit) at U.S.
statutory rate of 35% for 1993
and 34% for 1992 and 1991 $1,357 $ (48) $(870)
Effect of:
Foreign taxes over U.S. tax rate 219 263 345
State and local income taxes 118 36 54
Rate adjustments on U.S. and
foreign deferred taxes (199) - -
Income not subject to tax or
subject to tax at reduced rates (70) (112) (121)
Other (75) 156 197
Provision/(credit) for
income taxes $1,350 $ 295* $(395)
====== ===== =====
Effective Tax Rate 34.8% - 15.4%
- - - - - -
*Excludes cumulative effects of changes in accounting principles
<PAGE>
NOTE 7. Liabilities - Automotive
- ---------------------------------
Current Liabilities
- -------------------
Included in accrued liabilities at December 31 were the following (in
millions):
1993 1992
------- ------
Dealer and customer allowances and claims $ 6,645 $6,266
Employee benefit plans 1,415 1,471
Salaries, wages, and employer taxes 594 562
Postretirement benefits other than pensions 674 595
Other 1,487 1,089
Total accrued liabilities $10,815 $9,983
======= ======
Noncurrent Liabilities
- ----------------------
Included in other liabilities at December 31 were the following (in
millions):
1993 1992
------- -------
Postretirement benefits other than pensions $13,288 $12,744
Dealer and customer allowances and claims 5,170 4,348
Employee benefit plans 2,353 2,241
Minority interests in net assets of
subsidiaries 161 144
Unfunded pension obligation 2,873 136
Other 2,066 2,253
Total other liabilities $25,911 $21,866
======= =======
- - - - - -
Certain amounts for 1992 have been reclassified to conform with
presentations adopted in 1993.
<PAGE>
NOTE 8. Employee Retirement Benefits
- -------------------------------------
Employee Retirement Plans
- -------------------------
The company has two principal retirement plans in the U.S. The Ford-
UAW Retirement Plan covers hourly employees represented by the UAW,
and the General Retirement Plan covers substantially all other
employees of the company and several finance subsidiaries in the U.S.
The hourly plan provides noncontributory benefits related to employee
service. The salaried plan provides similar noncontributory benefits
and contributory benefits related to pay and service. Other U.S. and
non-U.S. subsidiaries have separate plans which generally provide
similar types of benefits covering their employees. The company and
its subsidiaries also have defined benefit plans applicable to certain
executives that provide unfunded benefits.
The company's policy for funded plans is to contribute annually, at a
minimum, amounts required by applicable law, regulations and union
agreements. Plan assets consist principally of investments in stocks,
government and other fixed income securities and real estate. The
various plans generally are funded, except in Germany where this has
not been the custom, and as such, an unfunded liability is recorded.
The company's pension expense, including Financial Services, reflected
the following (in millions):
<TABLE>
<CAPTION>
1993 1992 1991
-------------------------- ----------------------- ---------------------
Non- Non- Non-
U.S. Plans U.S. Plans U.S. Plans U.S. Plans U.S. Plans U.S. Plans
<S> <C> <C> <C> <C> <C> <C>
Benefits attributed to
employees' service $ 419 $ 181 $ 342 $ 213 $ 311 $ 204
Interest on projected
benefit obligations 1,517 667 1,437 698 1,413 619
Return on assets:
Actual (gain) (2,264) (1,370) (1,465) (865) (3,909) (877)
Deferred gain/(loss) 389 677 (204) 190 2,497 188
Recognized (gain) (1,875) (693) (1,669) (675) (1,412) (689)
Net amortization and other 259 169 228 180 331 84
Net pension expense $ 320 $ 324 $ 338 $ 416 $ 643 $ 218
======= ======= ======= ====== ======== ======
</TABLE>
Costs associated with amendments made in 1993 to the Ford-UAW
Retirement Plan and to the General Retirement Plan were more than
offset by an increased return on assets that decreased net pension
expense in 1993 compared with 1992. Non-U.S. pension expense also
decreased in 1993, reflecting the result of restructuring actions in
Europe.
The status of these plans at December 31 was as follows (in millions):
<TABLE>
<CAPTION>
1993 1992
---------------------------- ------------------------------
Assets Accum. Assets Accum.
Exceed Benefits Exceed Benefits
Accum. Exceed Total Accum. Exceed Total
Benefits Assets Plans Benefits Assets Plans
<S> <C> <C> <C> <C> <C> <C>
U.S. Plans
Plan assets at fair value $12,122 $10,779 $22,901 $11,776 $ 9,441 $21,217
Actuarial present value of:
Vested benefits $ 8,708 $ 9,962 $18,670 $ 7,546 $ 7,757 $15,303
Accumulated benefits 9,700 12,603 22,303 8,248 9,691 17,939
Projected benefits 10,896 12,767 23,663 9,222 9,759 18,981
Plan assets in excess
of/(less than)
projected benefits $ 1,226 $(1,988) $ (762) $ 2,554 $ (318) $ 2,236
Unamortized
(net asset)/net
transition obligation a/ (760) 563 (197) (861) 640 (221)
Unamortized prior service
cost b/ 538 2,053 2,591 347 1,174 1,521
Unamortized net
(gains)/losses c/ (159) 297 138 (1,333) (817) (2,150)
Prepaid pension
asset/(liability) 845 925 1,770 707 679 1,386
Adjustment required to
recognize
minimum liability d/ - (2,771) (2,771) - (950) (950)
Prepaid pension asset/
(liability) recognized in
the balance sheet $ 845 $(1,846) $(1,001) $ 707 $ (271) $ 436
======= ======= ======= ======= ======= =======
Plan assets in excess
of/(less than)
accumulated benefits $ 2,422 $(1,824) $ 598 $ 3,528 $ (250) $ 3,278
Assumptions:
Discount rate 7.0% 8. 0%
Average rate of increase
in compensation 5.5% 5.5%
Long-term rate of return on assets 9.5% 9.5%
Non-U.S. Plans
- --------------
Plan assets at fair value $ 5,806 $ 1,815 $ 7,621 $ 6,037 $ 617 $ 6,654
Actuarial present value of:
Vested benefits $ 4,538 $ 3,888 $ 8,426 $ 4,608 $ 2,124 $ 6,732
Accumulated benefits 4,619 4,092 8,711 4,685 2,264 6,949
Projected benefits 5,333 4,484 9,817 5,573 2,435 8,008
Plan assets in excess
of/(less than)
projected benefits $ 473 $(2,669) $(2,196) $ 464 $(1,818) $(1,354)
Unamortized (net asset)/net
transition obligation a/ (209) 461 252 42 253 295
Unamortized prior service cost b/ 267 232 499 303 36 339
Unamortized net (gains)/losses c/ (88) 863 775 (105) 7 (98)
Prepaid pension asset/(liability) 443 (1,113) (670) 704 (1,522) (818)
Adjustment required to recognize
minimum liability d/ - (1,164) (1,164) - (126) (126)
Prepaid pension asset/(liability)
recognized in the
balance sheet $ 443 $(2,277) $(1,834) $ 704 $(1,648) $ (944)
======= ======= ======= ======= ======= =======
Plan assets in excess
of/(less than)
accumulated benefits $ 1,187 $(2,277) $(1,090) $ 1,352 $(1,647) $ (295)
Assumptions:
Discount rate 7.2% 8.6%
Average rate of increase
in compensation 5.1% 6.0%
Long-term rate of return on assets 9.5% 9.6%
- - - - - -
a/The balance of the initial difference between assets and obligation
deferred for recognition over a 15 year period.
b/The prior service effect of plan amendments deferred for recognition over
remaining service.
c/The deferred gain or loss resulting from investments, other experience and
changes in assumptions.
d/An adjustment to reflect the unfunded accumulated benefit obligation in the
balance sheet for plans whose benefits exceed the assets -- in 1993 the
unfunded liability in excess of $3,250 million of unamortized prior service
cost and net transition obligation is recorded net of deferred taxes as a $400
million reduction in stockholders' equity.
</TABLE>
Postretirement Health Care and Life Insurance Benefits
- ------------------------------------------------------
The company and certain of its subsidiaries sponsor unfunded plans to
provide selected health care and life insurance benefits for retired
employees. The company's U.S. and Canadian employees may become
eligible for those benefits if they retire while working for the
company; however, benefits and eligibility rules may be modified from
time to time. Prior to 1992, the expense recognized for
postretirement health care benefits was based on actual expenditures
for the year. Beginning in 1992, the estimated cost for
postretirement health care benefits is accrued on an actuarially
determined basis, in accordance with the requirements of Statement of
Financial Accounting Standards No. 106 ("SFAS 106"), "Employer's
Accounting for Postretirement Benefits Other Than Pensions".
Implementation of SFAS 106 has not increased the company's cash
expenditures for postretirement benefits. The company elected to
recognize immediately the prior-year unaccrued accumulated
postretirement benefit obligation, resulting in an adverse effect on
income of $7,540 million in the first quarter of 1992. The charge
reflected an unaccrued retiree benefit obligation liability of
$12 billion, offset partially by projected tax benefits of
$4.5 billion. In addition, the loss in 1992 was increased by
$455 million ($723 million before taxes) for the ongoing effect of
adopting SFAS 106.
Net postretirement benefit expense included the following (in
millions):
1993 1992
Benefits attributed to employees' service $ 240 $ 235
Interest on accumulated benefit obligation 1,207 1,129
Net postretirement benefit expense $1,447 $1,364
====== ======
Retiree benefit payments were as follows (in millions): 1993 - $654;
1992 - $641; 1991 - $628.
The status of these plans, reconciled with the amounts recognized in
the company's balance sheet at December 31, was as follows (in
millions):
1993 1992
Accumulated postretirement
benefit obligation:
Retirees $ 8,147 $ 7,035
Active employees eligible to retire 2,725 2,269
Other active employees 5,984 5,091
- --------------
Total accumulated obligation 16,856 14,395
Unamortized amendments 387 0
Unamortized net (loss) (2,880) (807)
- --------------
Accrued liability $14,363 $13,588
======= =======
Assumptions:
Discount rate at year-end 7.5% 8.5%
Present health care cost trend rate 9.7% 10.3%
Ultimate trend rate in ten years 5.5% 5.5%
Weighted-average trend rate 6.8% 6.9%
Changing the assumed health care cost trend rates by one percentage
point would change the aggregate service and interest cost components
of net periodic postretirement benefit cost for 1993 by $240 million
and the accumulated postretirement benefit obligation at December 31,
1993 by $2.4 billion.
<PAGE>
NOTE 9. Debt
- -------------
Automotive
- ----------
Debt at December 31 was as follows (in millions):
<TABLE>
<CAPTION>
1993
------------------------------ Book Value
Weighted Average -----------------
Interest Rate* Maturity 1993 1992
------------------------------- ----- -----
<S> <C> <C> <C> <C>
Debt payable within one year
Short-term debt $ 887 $1,200
Long-term debt payable within
one year 45 49
Total debt payable within
one year 932 1,249
Long-term debt
Notes and other debt 9.0% 1995-2043 7,084 7,020
Short-term obligations
issued under long-term
borrowing agreements 0 48
Total long-term debt 7,084 7,068
Total debt $8,016 $8,317
Fair value $9,044 $8,855
- - - - - -
*Excludes the effect of interest-rate swap agreements
</TABLE>
The fair value of debt was estimated based on quoted market prices or
current rates for similar debt with the same remaining maturities.
Long-term debt at December 31, 1993 included maturities as follows (in
millions): 1994 - $45 (included in current liabilities); 1995 - $44;
1996 - $998; 1997 - $599; 1998 - $1,738; thereafter - $3,705.
Included in debt at December 31, 1993 and December 31, 1992 were
obligations payable in foreign currencies of $970 million and $957
million, respectively.
Financial Services
- ------------------
Debt at December 31 was as follows (in millions):
<TABLE>
<CAPTION>
1993
---------------------------- Book Value
Weighted Average -------------
Interest Rate* Maturity 1993 1992
-------------------------------- ------ -------
<S> <C> <C> <C> <C>
Debt payable within one year
Unsecured short-term debt $ 2,722 $ 2,944
Commercial paper 38,218 32,192
Other short-term debt 2,816 2,213
-------- -------
Total short-term debt 43,756 37,349
Long-term debt payable
within one year 12,304 10,470
-------- -------
Total debt payable
within one year 56,060 47,819
Long-term debt
Secured indebtedness 8.0% 1995-2016 1,821 2,292
Unsecured senior indebtedness
Notes and bank debt 7.1% 1995-2048 41,471 36,884
Debentures 9.4% 1995-2010 916 798
Unamortized
premium/(discount) (55) 1
------- --------
Total unsecured senior
indebtedness 42,332 37,683
Unsecured subordinated
indebtedness
Notes 8.9% 1995-2022 3,634 2,077
Debentures 8.1% 1995-2009 141 333
Convertible debentures 4.5% 1995-1996 1 2
Unamortized (discount) (29) (18)
------ ---------
Total unsecured
subordinated indebtedness 3,747 2,394
----- ----------
Total long-term debt 47,900 42,369
------ ---------
Total debt $103,960 $90,188
Fair value $107,233 $92,409
- - - - - -
*Excludes the effect of interest-rate swap agreements
</TABLE>
The fair value of debt was estimated based on quoted market prices or
current rates for similar debt with the same remaining maturities.
Information concerning short-term borrowings (excluding long-term debt
payable within one year) is as follows (in millions):
1993 1992 1991
------- ------- -------
Average amount of short-term
borrowings $38,353 $33,993 $32,568
Weighted average short-term
interest rates per annum 3.8% 5.2% 7.7%
Average remaining term of
commercial paper at December 31 29 days 29 days 33 days
Secured indebtedness is collateralized by pledges of real estate
loans, mortgage-backed certificates and municipal securities having an
aggregate carrying amount of $5,926 million at December 31, 1993.
Long-term debt at December 31, 1993 included maturities as follows (in
millions): 1994 - $12,304; 1995 - $9,362; 1996 - $11,042; 1997 -
$5,810; 1998 - $8,502; thereafter - $13,184.
Included in debt at December 31, 1993 and December 31, 1992 were
obligations payable in foreign currencies of $12.9 billion and
$14.7 billion, respectively. These obligations were issued primarily
to fund foreign business operations.
Support Facilities
- ------------------
At December 31, 1993, Ford (parent company only) had long-term
contractually committed credit agreements in the U.S. under which
$4.8 billion is available from various banks at least through
June 30, 1998. The entire $4.8 billion may be used, at Ford's option,
by either Ford or Ford Credit. These facilities were unused at
December 31, 1993.
Outside the U.S., Ford had additional long-term contractually
committed credit-line facilities of $2.4 billion. These facilities
are available in varying amounts from 1994 through 1998; these
facilities were unused at December 31, 1993.
At December 31, 1993, Financial Services had $24.9 billion of support
facilities (including the $4.8 billion of the Ford credit agreements)
for use in the U.S., all of which were contractually committed. At
December 31, 1993, less than 1% of these facilities, excluding the
Ford credit agreements, were in use. At that date, an additional
$14.5 billion of support facilities were available outside the U.S.,
of which $6.4 billion were contractually committed. At
December 31, 1993, $6 billion of these support facilities outside the
U.S. were in use.
NOTE 10. Deposit Accounts and Annuity Contracts - Financial
Services
- ------------------------------------------------------------
Deposit accounts by category at December 31 were as follows (in
millions):
<TABLE>
<CAPTION>
1993 1992
--------------------------- ---------------------------
Weighted Average Weighted Average
Interest Rate Amount Interest Rate Amount
<S> <C> <C> <C> <C>
Term accounts 5.16% $ 5,417 5.80% $ 8,008
Money market deposit
accounts 2.51% 2,786 2.95% 3,342
Passbook accounts 2.14% 840 2.98% 1,313
NOW accounts and other 0.53% 1,506 1.82% 1,367
Total deposit accounts $10,549 $14,030
======= =======
Fair value $10,650 $14,208
</TABLE>
The fair value of demand deposits, savings accounts, and certain money
market deposits was the amount payable on demand at December 31, 1993.
The fair value of fixed-maturity certificates of deposit was estimated
using the rate currently offered for deposits with similar remaining
maturities.
At December 31, 1993, term accounts included scheduled maturities as
follows (in millions): 1994 - $3,846; 1995 - $596; 1996 - $596; 1997 -
$214; 1998 - $145; thereafter - $20.
The liability for annuity contracts, included in other liabilities,
was $1,598 million at December 31, 1993 and $777 million at December
31, 1992, and reflected deposits received and interest credited, less
related withdrawals. The weighted-average interest rate on annuity
contracts outstanding at December 31, 1993 and 1992 was 6.2% and 7.3%,
respectively. Interest rates offered are initially guaranteed for
periods of either one or five years. Interest credited to annuity
account balances is recognized as expense; surrender charges are
recognized as a reduction of interest credited to annuitants. The
fair value of annuity contracts at December 31, 1993 and 1992
approximated book value because the contractual interest rate due
holders is reset annually for more than 97% of contracts outstanding.
<PAGE>
NOTE 11. Capital Stock
- -----------------------
The authorized capital stock of the company consists of Common Stock,
Class B Stock and Preferred Stock. Authorized shares of stock at
December 31, 1993 were as follows: 1 billion shares of Common Stock;
88.4 million shares of Class B Stock; and 30 million shares of
Preferred Stock.
At December 31, 1993, all general voting power was vested in the
holders of Common Stock and the holders of Class B Stock, voting
together without regard to class. At that date, the holders of Common
Stock were entitled to one vote per share and, in the aggregate, had
60% of the general voting power; the holders of Class B Stock were
entitled to such number of votes per share as would give them, in the
aggregate, the remaining 40% of the general voting power, as provided
in the company's Certificate of Incorporation.
The Certificate provides that all shares of Common Stock and Class B
Stock share equally in dividends (other than dividends declared with
respect to any outstanding Preferred Stock), except that any stock
dividends are payable in shares of Common Stock to holders of that
class and in Class B Stock to holders of that class. Upon
liquidation, all shares of Common Stock and Class B Stock are entitled
to share equally in the assets of the company available for
distribution to the holders of such shares.
In 1991, the company sold 46,000,000 Depositary Shares, each
representing 1/1,000 of a share of Series A Cumulative Convertible
Preferred Stock ("Series A Preferred Stock"), for a total public
offering price of $2.3 billion. As a result, 46,000 shares of Series
A Preferred Stock were issued. The Series A Preferred Stock has a
liquidation preference equivalent to $50 per Depositary Share and
dividends accumulate on the Series A Preferred Stock at a rate
equivalent to $4.20 per year per Depositary Share. The Series A
Preferred Stock is convertible at the option of the holder at any time
into shares of Common Stock of the company at a rate equivalent to
1.6327 shares of Common Stock for each Depositary Share (equivalent to
a conversion price of $30.625 per share of Common Stock). The Series
A Preferred Stock and the Depositary Shares representing such stock
are not redeemable prior to December 7, 1997. On and after December
7, 1997, the Series A Preferred Stock is redeemable for cash at the
company's option, in whole or in part, initially at an amount
equivalent to $51.68 per Depositary Share and thereafter at prices
declining to $50 per Depositary Share on and after
December 1, 2001, plus, in each case, an amount equal to the sum of
all accrued and unpaid dividends. At December 31, 1993, the
liquidation preference of Series A Preferred Stock was
$2.3 billion, and 45,994 shares were outstanding.
In 1992, the company sold 45,600,000 Depositary Shares, each
representing 1/2,000 of a share of Series B Cumulative Preferred Stock
("Series B Preferred Stock"), for a total public offering price of
$1.1 billion. As a result, 22,800 shares of Series B Preferred Stock
were issued. The Series B Preferred Stock has a liquidation
preference equivalent to $25 per Depositary Share and dividends
accumulate at a rate equivalent to $2.0625 per year per Depositary
Share. The Series B Preferred Stock and the Depositary Shares
representing such stock are not redeemable prior to December 1, 2002.
On and after December 1, 2002 and upon satisfaction of certain
conditions, the Series B Preferred Stock is redeemable for cash at the
option of Ford, in whole or in part, at a redemption price equivalent
to $25 per Depositary Share, plus an amount equal to the sum of all
accrued and unpaid dividends. The Series B Preferred Stock does not
have any sinking fund and is not convertible into any other
securities. At December 31, 1993, the liquidation preference of the
Series B Preferred Stock was $1.1 billion, and 22,800 shares were
outstanding.
The Series A Preferred Stock and Series B Preferred Stock rank (and
any other outstanding Preferred Stock of the company would rank)
senior to the Common Stock and Class B Stock in respect of dividends
and liquidation rights.
<PAGE>
NOTE 12. Stock Options
- -----------------------
The company has stock options outstanding under the 1985 Stock Option
Plan and the 1990 Long-term Incentive Plan. These plans were approved
by the stockholders.
Information concerning stock options for the last three years is shown
below (shares in millions):
1993 1992 1991
------ ------ ------
Option price of new grants a/ $57.69 $37.00 $30.00
and
$24.13
Shares subject to option
- ----------------------
Outstanding at beginning of period 20.6 16.5 13.3
New grants 3.6 4.8 3.6
Exercised b/ (3.4) (0.5) (0.1)
Surrendered upon exercise of stock
appreciation rights (1.9) (0.2) (0.1)
Terminated and expired (0.1) * (0.2)
- -----------------
Outstanding at end of period 18.8 c/ 20.6 16.5
Outstanding but not exercisable (9.7) (9.8) (8.1)
- -----------------
Exercisable at end of period 9.1 10.8 8.4
===== ====== ======
Shares authorized for future grants
(as of December 31)d/ 0 0 0.9
- - - - - -
* Less than 50,000 shares.
a/ Fair market value of Common Stock at dates of grant.
b/ At option prices ranging from $18.19 to $51.69 during 1993, from
$7.03 to $30.69 during 1992, and from 4.25 to $26.84 during 1991.
c/ Including 6.0 and 12.8 million shares under the 1985 and 1990
Plans, respectively, at option prices ranging from $18.19 to
$57.69 per share.
d/ In addition, up to 1% of the issued Common Stock as of December 31
of any year may be made available for stock options and other plan
awards in the next succeeding calendar year. That limit may be
increased up to 2% in any year, with a corresponding reduction in
shares available for grants in future years.
No further grants may be made under the 1985 Plan. Grants may be made
under the 1990 Plan through April 2000. In general, options granted
under the 1985 Plan and options granted to date under the 1990 Plan
become exercisable 25% after one year from the date of grant, 50%
after two years, 75% after three years and in full after four years.
Options under both Plans expire after 10 years. Certain options
outstanding under the plans were granted with an equal number of
accompanying stock appreciation rights which may be exercised in lieu
of the options. Under the Plans, a stock appreciation right entitles
the holder to receive, without payment, the excess of the fair market
value of the Common Stock on the date of exercise over the option
price, either in Common Stock or cash or a combination. In addition,
grants of Contingent Stock Rights were made with respect to
1,163,600 shares in 1993, 632,400 shares in 1992 and 1,015,500 shares
in 1991 under the 1990 Long-Term Incentive Plan (not included in the
table above). The number of shares ultimately awarded will depend on
the extent to which the Performance Target specified in each Right is
achieved, the individual performances of the recipients and other
factors.
<PAGE>
NOTE 13. Litigation and Claims
- -------------------------------
Various legal actions, governmental investigations and proceedings and
claims are pending or may be instituted or asserted in the future
against the company and its subsidiaries, including those arising out
of alleged defects in the company's products, governmental regulations
relating to safety, emissions and fuel economy, financial services,
intellectual property rights, product warranties and environmental
matters. Certain of the pending legal actions are, or purport to be,
class actions. Some of the foregoing matters involve or may involve
compensatory, punitive, or antitrust or other treble damage claims in
very large amounts, or demands for recall campaigns, environmental
remediation programs, sanctions, or other relief which, if granted,
would require very large expenditures.
Litigation is subject to many uncertainties, the outcome of individual
litigated matters is not predictable with assurance, and it is
reasonably possible that some of the foregoing matters could be
decided unfavorably to the company or the subsidiary involved.
Although the amount of the ultimate liability at December 31, 1993
with respect to these matters cannot be ascertained, the company
believes that any resulting liability should not materially affect the
consolidated financial position of the company at December 31, 1993.
<PAGE>
NOTE 14. Commitments and Contingencies
- ---------------------------------------
At December 31, 1993, the company had the following minimum rental
commitments under non-cancelable operating leases (in millions):
1994 - $509; 1995 - $573; 1996 - $501; 1997 - $463;
1998 - $201; thereafter - $708.
These amounts include rental commitments related to the sales and
leasebacks of certain Automotive machinery and equipment.
During 1993, the company and certain of its subsidiaries entered into
agreements with various banks to introduce credit card programs that
offer rebates which can be applied against the purchase or lease of
Ford cars or trucks. The maximum amount of rebates available to
qualified cardholders at December 31, 1993 was $1.7 billion. The
company has provided for the estimated net cost of these programs as a
vehicle marketing cost based on the estimated number of participants
who will ultimately purchase vehicles.
The company and many of its subsidiaries have entered into foreign
exchange agreements to manage exposure to foreign exchange rate
fluctuations. These exchange agreements hedge primarily debt, firm
commitments and dividends that are denominated in foreign currencies
and net investments in foreign subsidiaries. Agreements entered into
to manage these exposures include foreign currency forward contracts,
currency swaps and foreign currency options. Gains or losses on the
various agreements are either recognized during the period or included
in the bases of the related transactions.
The fair value of these foreign exchange agreements generally was
estimated using current market prices provided by outside quotation
services. The fair value was estimated to be a net receivable of
$124 million at December 31, 1993 and $302 million at December 31,
1992. In the unlikely event that a counterparty fails to meet the
terms of a foreign exchange agreement, the company's market risk is
limited to the currency rate differential. In the case of currency
swaps, the company's market risk also may include an interest rate
differential. At December 31, 1993 and 1992, the total amount of the
company's foreign currency forward contracts, option contracts and
currency swaps outstanding was $8.6 billion and $11.3 billion,
respectively, maturing primarily through 1995.
The company and many of its subsidiaries have entered into
arrangements to manage exposure to fluctuations in interest rates.
These arrangements include primarily interest-rate swap agreements
and, to a lesser extent, interest-rate futures contracts. The
differential paid or received on interest-rate swap agreements is
recognized as an adjustment to interest expense. Realized and
unrealized gains and losses on interest-rate futures contracts are
deferred and recognized as adjustments to interest income or expense.
The fair value of interest-rate swaps is the estimated amount the
company would receive or pay to terminate the swap agreement. The
fair value is calculated using information provided by outside
quotation services, taking into account current interest rates and the
current credit-worthiness of the swap counterparties. The fair value
was estimated to be a net receivable of $585 million at December 31,
1993 and $371 million at December 31, 1992. In the unlikely event
that a counterparty fails to meet the terms of an interest-rate swap
agreement, the company's exposure is limited to the interest rate
differential. The underlying principal amounts on which the company
has interest-rate swap agreements and futures contracts outstanding
aggregated $36.5 billion at December 31, 1993 and $21.1 billion at
December 31, 1992.
Certain Financial Services subsidiaries make credit lines available to
holders of their credit cards. At December 31, 1993 and 1992, the
unused portion of available credit was approximately $9.9 billion and
$5.5 billion, respectively, and is revocable under specified
conditions. The fair value of unused credit lines and the potential
risk of loss was not considered to be significant.
In addition, the company and its subsidiaries have entered into a
variety of other financial agreements which contain potential risk of
loss. These agreements include limited guarantees under sales of
receivables agreements, financial guarantees, letters of credit,
interest rate caps and floors and government security repurchase
agreements. The fair value of these agreements and the potential risk
of loss was not considered to be significant.
<PAGE>
NOTE 15. Cash Flows
- --------------------
The reconciliation of net income/(loss) to cash flows from operating
activities is as follows (in millions):
<TABLE>
<CAPTION>
1993 1992 1991
------------------- --------------------- -----------------------
Financial Financial Financial
Automotive Services Automotive Services Automotive Services
----------- ----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net income/(loss) $ 940 $1,589 $(8,628) $1,243 $(3,186) $ 927
Adjustments to reconcile net
income/(loss) to cash flows
from operating activities:
Cumulative effects of changes in
accounting principles - - 7,094 (211) - -
Depreciation and amortization 4,404 3,064 4,666 2,089 4,278 1,500
(Earnings)/losses of affiliated
companies in excess of dividends
remitted (21) (9) 16 51 83 61
Provision for credit and
insurance losses - 1,523 - 1,795 - 2,159
Foreign currency adjustments (650) - (362) - (331) -
(Credit)/provision for deferred
income taxes (796) 595 (447) 333 (1,122) 108
Gain on sales of receivables - (98) - (9) - (113)
Interest credited to deposit accounts - 380 - 571 - 873
Changes in assets and liabilities:
(Increase)/decrease in accounts
receivable and other current
assets 34 - 103 - 673 -
(Increase)/decrease in inventory (275) - 380 - 78 -
Increase in accounts payable and
accrued and other liabilities 3,735 594 2,617 295 3,006 142
Changes in unearned premiums - (65) - (281) - (288)
Other (509) (428) 314 (114) (138) (589)
Cash flows from operating
activities $6,862 $7,145 $ 5,753 $5,762 $ 3,341 $4,780
======= ======= ======= ======= ======= =======
</TABLE>
The company considers all highly-liquid investments purchased with a
maturity of three months or less to be cash equivalents. The book
value of these investments approximates fair value because of the
short maturity. Cash flows resulting from futures contracts,
forward contracts and options that are accounted for as hedges of
identifiable transactions are classified in the same category as the
item being hedged.
Cash paid for interest and income taxes was as follows (in
millions):
1993 1992 1991
------ ------ ------
Interest $6,969 $8,255 $9,458
Income taxes 1,522 31 356
<PAGE>
NOTE 16. Segment Information
- ----------------------------
The company operates in two principal business segments: Automotive
and Financial Services. The Automotive segment consists of the
manufacture, assembly and sale of cars, trucks and related parts and
accessories. The Financial Services segment consists primarily of
financing operations, insurance operations, savings and loan
operations, and vehicle and equipment leasing operations.
Intersegment transactions represent principally transactions
occurring in the ordinary course of business, borrowings and related
transactions between entities in the Financial Services and
Automotive segments, and interest and other support under special
vehicle financing programs. These arrangements are reflected in the
respective business segments.
Intercompany sales among geographic areas consist primarily of
vehicles, parts and components manufactured by the company and
various subsidiaries and sold to different entities within the
consolidated group. Transfer prices for these transactions are
established through negotiations between the affected entities.
Financial information segregated by major geographic area is as
follows (in millions):
Automotive
- ----------
1993 1992 1991
-------- ------- --------
Sales to unaffiliated customers
United States $ 61,559 $ 51,918 $ 40,627
Europe* 18,507 21,579 21,012
All other 11,502 10,910 10,412
- ------------------------
Total $ 91,568 $ 84,407 $ 72,051
======== ======== ========
Intercompany sales among
geographic areas
United States $ 8,721 $ 6,978 $ 7,094
Europe* 1,690 1,717 1,619
All other 9,791 10,120 8,644
- ------------------------
Total $ 20,202 $ 18,815 $ 17,357
======== ======== ========
Total sales
United States $ 70,280 $ 58,896 $ 47,721
Europe* 20,197 23,296 22,631
All other 21,293 21,030 19,056
Elimination of intercompany
sales (20,202) (18,815) (17,357)
- ------------------------
Total $ 91,568 $ 84,407 $ 72,051
======== ======== ========
Operating income/(loss)
United States $ 1,677 $ (582) $ (3,238)
Europe* (402) (924) (280)
All Other 157 (269) (251)
- ------------------------
Total $ 1,432 $ (1,775) $ (3,769)
======== ======== ========
Net income/(loss) before
cumulative effects of changes
in accounting principles
United States $ 1,482 $ (405) $ (2,215)
Europe* (407) (647) (478)
All other (135) (482) (492)
- ------------------------
Total $ 940 $ (1,534) $ (3,185)
======== ======== ========
Assets at December 31
United States $ 39,666 $ 34,334 $ 26,728
Europe* 13,452 13,414 15,950
All Other 18,248 17,534 17,938
Net receivables from
Financial Services 910 1,437 156
Elimination of intercompany
receivables (10,539) (9,549) (8,375)
- ------------------------
Total $ 61,737 $ 57,170 $ 52,397
======== ======== ========
Capital expenditures (facilities,
machinery and equipment and
tooling)
United States $ 4,289 $ 3,018 $ 3,042
Europe* 1,376 1,857 1,979
All Other 1,049 822 702
- ------------------------
Total $ 6,714 $ 5,697 $ 5,723
======== ======== ========
- - - - - -
*Excludes Jaguar
Certain amounts for 1992 and 1991 have been reclassified to conform
with presentations adopted in 1993.
Financial Services
- ------------------
1993 1992 1991
------- -------- ------
Revenues
United States $ 14,102 $ 12,514 $ 13,182
Europe 1,673 2,051 1,847
All other 1,178 1,160 1,206
-------- -------- --------
Total $ 16,953 $ 15,725 $ 16,235
======== ======== ========
Income before income taxes and
cumulative effects of changes
in accounting principles**
United States $ 2,311 $ 1,452 $ 1,163
Europe 285 266 184
All other 116 107 118
- ------------------------
Total $ 2,712 $ 1,825 $ 1,465
======== ======== ========
- - - - - -
** Financial Services activities do not report operating income;
income before income taxes is representative of operating
income.
Net income before cumulative
effects of changes in accounting
principles
United States $ 1,340 $ 919 $ 768
Europe 187 68 118
All other 62 45 41
-------- -------- --------
Total $ 1,589 $ 1,032 $ 927
======== ======== ========
Assets at December 31
United States $117,290 $104,749 $100,730
Europe 12,132 11,512 13,662
All other 7,779 7,114 7,640
-------- -------- --------
Total $137,201 $123,375 $122,032
======== ======== ========
Financial Services revenues included $72 million in 1993,
$221 million in 1992 and $310 million in 1991 from the Federal
Savings and Loan Insurance Corporation Resolution Fund in connection
with the acquisition by First Nationwide of certain savings and loan
institutions. During 1992, First Nationwide entered into a
settlement agreement with the Resolution Trust Corporation which
substantially terminated these assistance agreements.
<PAGE>
Note 17. Summary Quarterly Financial Data (Unaudited)
- -----------------------------------------------------
(in millions except amounts per share)
<TABLE>
<CAPTION>
1993 1992
--------------------------------------------- --------------------------------------
First Second Third Fourth First Second Third Fourth
Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Automotive
Sales $22,686 $25,264 $20,107 $23,511 $20,636 $22,903 $19,370 $21,498
Operating income/
(loss) 505 787 (242) 382 243 551 (964) (1,605)
Financial Services
Revenues 4,077 4,155 4,391 4,330 3,922 3,940 3,955 3,908
Income before income
taxes 670 654 732 656 420 483 501 421
Total Company
Income/(loss) before
cumulative effects of
changes in accounting
principles $ 572 $ 775 $ 463a/ $ 719b/ $ 223c/ $ 387 $ (272) $ (840)d/
Cumulative effects of
changes in accounting
principles - - - - (6,883) - - -
Net income/(loss) 572 775 463 719 (6,660) 387 (272) (840)
Preferred stock dividend
requirements 72 72 72 72 48 48 48 65
Income/(loss)
attributable
to Common and
Class B Stock $ 500 $ 703 $ 391 $ 647 $(6,708) $ 339 $ (320) $ (905)
======= ======= ======= ======= ======== ======= ======== ========
AMOUNTS PER SHARE OF
COMMON AND CLASS B
STOCK AFTER PREFERRED
STOCK DIVIDENDSe/
Income/(loss) before
cumulative effects of
changes in accounting
principles $ 1.02 $ 1.43 $ 0.79 $ 1.30 $ 0.36 $ 0.70 $ (0.66) $ (1.85)
Cumulative effects of
changes in accounting
principles - - - - (14.21) - - -
Income/(loss) $ 1.02 $ 1.43 $ 0.79 $ 1.30 $(13.85) $ 0.70 $ (0.66) $ (1.85)
Income/(loss) assuming
full dilution $ 0.95 $ 1.30 $ 0.76 $ 1.19 $(13.85) $ 0.68 $ (0.66) $ (1.85)
Dividends $ 0.40 $ 0.40 $ 0.40 $ 0.40 $ 0.40 $ 0.40 $ 0.40 $ 0.40
- - - - - -
a/ Includes a one-time tax reduction of $140 million to reflect revaluation
of U.S. deferred tax balances, offset partially by restructuring
charges at Jaguar ($65 million).
b/ Includes restructuring charges at Jaguar ($109 million) and Ford of Australia
($57 million), partially offset by the favorable one-time effect
of a reduction in German tax rates ($59 million) and a gain on the sale of
part of Ford's North American automotive seating and seat trim business
($73 million).
c/ Includes a gain of $61 million on the sale of the U.S. portion of Ford's
Dealer Computer Services business.
d/ Includes $419 million of one-time charges principally associated with
restructuring actions in Europe.
e/ The sum of the per-share amounts in 1993 and 1992 is different than the
amounts reported for the full year because of the effect that sales
of the company's stock had on average shares for those periods.
</TABLE>
<PAGE>
Ford Motor Company
The American Road
Dearborn, Michigan
CONSENT OF COOPERS & LYBRAND
Re: Ford Motor Company Registration Statements Nos. 2-71847,
2-95018, 2-95020, 33-9722, 33-14951, 33-19036, 33-36043,
33-36061, 33-39402, 33-50087, 33-50194, 33-50238, 33-54304,
33-54344 and 33-54348 on Form S-8, and 2-42133, 33-32641,
33-40638, 33-43085, 33-45887, 33-49927 and 33-55474 on
Form S-3
We consent to the incorporation by reference in the above
Registration Statements of our report dated February 1, 1994 to
the Board of Directors and Stockholders of Ford Motor Company
accompanying the financial statements of Ford Motor Company and
Subsidiaries included in the Ford Motor Company Current Report on
Form 8-K dated February 10, 1994.
COOPERS & LYBRAND
400 Renaissance Center
Detroit, Michigan 48243
February 14, 1994
