SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-3950
Ford Motor Company
(Exact name of registrant as specified in its charter)
Incorporated in Delaware 38-0549190
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
The American Road, Dearborn, Michigan 48121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 313-322-3000
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X . No .
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date: As of March 31, 1994, the Registrant had outstanding
465,366,362 shares of Common Stock and 35,426,038 shares of Class B Stock.
Page 1 of 19
Exhibit index located on sequential page number 16
1Q-94
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
HIGHLIGHTS
-----------
<CAPTION>
First Quarter
-------------------------
1994 1993
-------- --------
<S> <C> <C>
Worldwide factory sales of cars
and trucks (in thousands)
- - - United States 1,084 922
- - - Outside United States 588 609
----- -----
Total 1,672 1,531
===== =====
Sales and revenues (in millions)
- - - Automotive $26,070 $22,686
- - - Financial Services 4,332 4,077
------- -------
Total $30,402 $26,763
======= =======
Net income/(loss) (in millions)
- - - Automotive $ 955 $ 176
- - - Financial Services (51)* 396
------- -------
Total $ 904 $ 572
======= =======
Capital expenditures (in millions)
- - - Automotive $ 1,641 $ 1,270
- - - Financial Services 59 19
------- -------
Total $ 1,700 $ 1,289
======= =======
Stockholders' equity at March 31
- - - Total (in millions) $16,633 $15,258
- - - After-tax return on Common and
Class B stockholders' equity 26.3% 17.3%
Automotive cash, cash equivalents,
and marketable securities at
March 31 (in millions) $11,573 $ 9,286
Automotive debt at March 31
(in millions) $ 7,919 $ 8,115
After-tax returns on sales
- - - Automotive 3.7% 0.8%
- - - Total Company 3.1% 2.2%
Shares of Common and Class B Stock
(in millions)
- - - Average number outstanding 500 490
- - - Number outstanding at March 31 501 491
AMOUNTS PER SHARE OF COMMON AND
CLASS B STOCK AFTER PREFERRED
STOCK DIVIDENDS
Income/(loss)
- - - Automotive $ 1.76 $ 0.21
- - - Financial Services (0.10) 0.81
------- -------
Total $ 1.66 $ 1.02
======= =======
Income assuming full dilution $ 1.51 $ 0.95
Cash dividends per share of Common
and Class B Stock $ 0.40 $ 0.40
- - - - - - -
*Includes a charge of $440 million related to the disposition of First Nationwide
Financial Corporation.
</TABLE>
-2-
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
VEHICLE FACTORY SALES
---------------------
For the Periods Ended March 31, 1994 and 1993
<CAPTION>
First Quarter
--------------------------
1994 1993
--------- ---------
<S> <C> <C>
North America
Cars - U.S. 521,808 486,257
- Canada 33,305 25,322
- Mexico 11,655 19,643
--------- ---------
Total cars 566,768 531,222
Trucks - U.S. 562,503 436,204
- Canada 30,044 24,458
- Mexico 8,171 12,200
--------- ---------
Total trucks 600,718 472,862
--------- ---------
Total North America 1,167,486 1,004,084
Outside North America
Germany 242,675 236,777
Britain 108,696 118,036
Spain 76,731 81,309
Taiwan 29,322 36,824
Australia 26,995 27,758
Japan 12,152 17,886
Other countries 8,375 8,737
--------- ---------
Total outside North America 504,946 527,327
--------- ---------
Total worldwide vehicle
factory sales 1,672,432 1,531,411
========= =========
Includes units manufactured by other companies and sold by Ford. Factory sales
are shown by source of manufacture, except within North America. In North
America, U.S. sales include exports from Canada, Mexico, and Australia.
Canadian sales include exports from the U.S. and Mexico. Mexican sales include
exports from the U.S. and Canada.
</TABLE>
-3-
<PAGE>
FORD MOTOR COMPANY AND SUBSIDIARIES
Part I. Financial Information
- - ------------------------------
Item 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
(the "10-K Report") for the year ended December 31, 1993. For
purposes hereof, "Ford" or the "Company" means Ford Motor Company and
its majority-owned subsidiaries unless the context requires otherwise.
-4-
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
---------------------------------
For the Periods Ended March 31, 1994 and 1993
(in millions)
<CAPTION>
First Quarter
-------------------------
1994 1993
-------- --------
(unaudited)
<S> <C> <C>
AUTOMOTIVE
Sales $26,070 $22,686
Costs and expenses (Note 1)
Costs of sales 23,352 21,084
Selling, administrative, and other expenses 1,159 1,097
------- -------
Total costs and expenses 24,511 22,181
Operating income 1,559 505
Interest income 128 131
Interest expense 176 234
------- -------
Net interest expense (48) (103)
Equity in net income of affiliated companies 67 1
Net expense from transactions with Financial Services (8) (7)
------- -------
Income before income taxes - Automotive 1,570 396
FINANCIAL SERVICES
Revenues 4,332 4,077
Costs and expenses
Interest expense 1,598 1,622
Operating and other expenses 824 724
Provision for credit and insurance losses 344 394
Depreciation 903 674
Loss on disposition of First Nationwide Financial Corp. (Note 3) 475 -
------- -------
Total costs and expenses 4,144 3,414
Net revenue from transactions with Automotive 8 7
------- -------
Income before income taxes - Financial Services 196 670
------- -------
TOTAL COMPANY
Income before income taxes 1,766 1,066
Provision for income taxes 825 468
------- -------
Income before minority interests 941 598
Minority interests in net income of subsidiaries 37 26
------- -------
Net income 904 572
Preferred stock dividend requirements 72 72
------- -------
Income attributable to Common and Class B Stock $ 832 $ 500
======= =======
Average number of shares of Common and Class B Stock outstanding 500 490
AMOUNTS PER SHARE OF COMMON STOCK AND CLASS B STOCK
AFTER PREFERRED STOCK DIVIDENDS
Income $ 1.66 $ 1.02
======= =======
Income assuming full dilution $ 1.51 $ 0.95
Cash dividends $ 0.40 $ 0.40
- - - - - - -
The accompanying notes are part of the financial statements.
</TABLE>
-5-
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
---------------------------
(in millions)
<CAPTION>
March 31, December 31,
1994 1993
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
Automotive
Cash and cash equivalents $ 5,646 $ 5,667
Marketable securities 5,927 4,085
-------- --------
Total cash, cash equivalents, and marketable securities 11,573 9,752
Receivables 2,386 2,302
Inventories (Note 2) 5,976 5,538
Deferred income taxes 2,923 2,830
Other current assets 1,235 1,226
Net current receivable from Financial Services 1,039 834
-------- --------
Total current assets 25,132 22,482
Equity in net assets of affiliated companies 3,089 3,002
Net property 23,692 23,059
Deferred income taxes 5,120 5,427
Other assets 7,683 7,691
Net noncurrent receivable from Financial Services 78 76
-------- --------
Total Automotive assets 64,794 61,737
Financial Services (Note 3)
Cash and cash equivalents 1,617 2,555
Investments in securities 5,369 8,219
Net receivables and lease investments 118,493 119,535
Other assets 8,160 6,892
-------- --------
Total Financial Services assets 133,639 137,201
-------- --------
Total assets $198,433 $198,938
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $ 9,953 $ 8,769
Other payables 2,000 1,976
Accrued liabilities 10,894 10,815
Income taxes payable 510 160
Debt payable within one year 835 932
-------- --------
Total current liabilities 24,192 22,652
Long-term debt 7,084 7,084
Other liabilities 26,372 25,911
Deferred income taxes 974 1,089
-------- --------
Total Automotive liabilities 58,622 56,736
Financial Services (Note 3)
Payables 2,153 1,881
Debt 109,296 103,960
Deposit accounts 0 10,549
Deferred income taxes 2,599 2,287
Other liabilities and deferred income 6,451 5,583
Net payable to Automotive 1,117 910
-------- --------
Total Financial Services liabilities 121,616 125,170
Preferred stockholders' equity in subsidiary companies 1,562 1,458
Stockholders' equity
Capital stock
Preferred Stock, par value $1.00 per share (aggregate
liquidation preference of $3.4 billion) * *
Common Stock, par value $1.00 per share
(466 and 464 million shares issued) 466 464
Class B Stock, par value $1.00 per share
(35 million shares issued) 35 35
Capital in excess of par value of stock 5,165 5,082
Foreign currency translation adjustments and other (331) (678)
Minimum pension liability adjustment (406) (400)
Earnings retained for use in business 11,704 11,071
-------- --------
Total stockholders' equity 16,633 15,574
-------- --------
Total liabilities and stockholders' equity $198,433 $198,938
======== ========
- - - - - - -
*Less than $1 million
The accompanying notes are part of the financial statements.
</TABLE>
-6-
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
For the Periods Ended March 31, 1994 and 1993
(in millions)
<CAPTION>
First Quarter 1994 First Quarter 1993
---------------------- ----------------------
Financial Financial
Automotive Services Automotive Services
---------- --------- ---------- ---------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Cash and cash equivalents at January 1 $ 5,667 $ 2,555 $ 3,504 $ 3,182
Cash flows from operating activities before securities trading 3,814 2,228 3,062 1,602
Net (purchases)/sales of trading securities (Note 4) (1,924) 39 - -
-------- -------- -------- --------
Net cash flows from operating activities 1,890 2,267 3,062 1,602
Cash flows from investing activities
Capital expenditures (1,641) (59) (1,270) (19)
Acquisitions of receivables and lease investments - (47,560) - (37,874)
Collections of receivables and lease investments - 39,806 - 32,744
Purchases of securities (Note 4) (112) (3,607) (21,233) (4,270)
Sales of securities (Note 4) 198 3,594 22,285 3,332
Proceeds from sales of receivables - 390 - 1,947
Loans originated net of principal payments - (204) - (174)
Other 162 (252) (45) 348
-------- -------- -------- --------
Net cash used in investing activities (1,393) (7,892) (263) (3,966)
Cash flows from financing activities
Cash dividends (272) - (276) -
Issuance of Common Stock 84 - 69 -
Changes in short-term debt (52) 2,373 (117) (575)
Proceeds from issuance of other debt 0 6,051 65 5,977
Principal payments on other debt 0 (3,826) (57) (2,738)
Changes in customers' deposits, excluding
interest credited - (422) - (979)
Receipts from annuity contracts - 185 - 221
Issuance of subsidiary company preferred stock - 0 - 173
Other 25 31 21 11
-------- -------- -------- --------
Net cash (used in)/provided by financing
activities (215) 4,392 (295) 2,090
Effect of exchange rate changes on cash (96) 88 (42) 62
Net transactions with Automotive/
Financial Services (207) 207 (1,158) 1,158
-------- -------- -------- --------
Net (decrease)/increase in cash and cash
equivalents (21) (938) 1,304 946
-------- -------- -------- --------
Cash and cash equivalents at March 31 $ 5,646* $ 1,617 $ 4,808* $ 4,128
======== ======== ======== ========
<S> <C> <C>
Total cash and cash equivalents $7,263 $8,936
====== ======
- - - - - - -
*Automotive cash, cash equivalents, and marketable securities at March 31 were
as follows (in millions): 1994 - $11,573; 1993 - $9,286
The accompanying notes are part of the financial statements.
</TABLE>
-7-
<PAGE>
<TABLE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(unaudited)
1. Selected Automotive costs and expenses are summarized as follows (in millions):
--------------------------------------
<CAPTION>
First Quarter
-----------------------
1994 1993
------ ------
<S> <C> <C>
Depreciation $ 581 $ 610
Amortization 542 534
</TABLE>
<TABLE>
<CAPTION>
2.Inventories are summarized as follows (in millions):
-----------
March 31, December 31,
1994 1993
--------- ------------
<S> <C> <C>
Raw materials, work in process and supplies $3,082 $2,937
Finished products 2,894 2,601
------ ------
Inventories - Automotive $5,976 $5,538
====== ======
Inventories - U.S. Automotive $2,782 $2,575
</TABLE>
3. Sale of First Nationwide Bank
-----------------------------
On April 14, 1994, an agreement was entered into between First
Nationwide Bank, a Federal Savings Bank (the "Bank") and First
Madison Bank, FSB ("First Madison") for the sale of substantially
all of the Bank's assets to, and the assumption of substantially
all of the Bank's liabilities by, First Madison. The Bank is a
wholly-owned subsidiary of First Nationwide Financial Corporation
("FNFC"), which in turn is a wholly-owned sub-sidiary of Ford.
The transaction, which is subject to federal regulatory approvals,
is expected to be completed in about six months.
The company recognized in First Quarter 1994 earnings a pre-tax
charge of $475 million and an after-tax charge of $440 million
related to the disposition of FNFC, reflecting the non-recovery of
goodwill and reserves for estimated losses on assets to be
retained or repurchased by FNFC. These assets will be liquidated
over time as market conditions permit. The tax effect of this
transaction takes into account differences between the book and
tax basis of certain assets for which deferred taxes were not
required to be provided under Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes". The
company's income statement includes the results of operations of
FNFC through March 31, 1994. The net assets of FNFC at March 31,
1994 are included in the balance sheet under Financial Services -
Other Assets. Historically, FNFC (including the Bank) has not had
a significant effect on Ford's operating results.
4. Consolidated Statement of Cash Flows
------------------------------------
Effective January 1, 1994, the company adopted SFAS No. 115,
"Accounting for Certain investments in Debt and Equity
Securities". Accordingly, the purchases and sales of trading
securities are included in cash flows from operating activities.
Financial statements for the prior period were not restated.
-8-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Ford Motor Company
We have reviewed the consolidated balance sheet of Ford Motor
Company and Subsidiaries at March 31, 1994 and the related
consolidated statement of income and condensed consolidated
statement of cash flows for the periods set forth in
Form 10-Q for the quarter ended March 31, 1994.
These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A review
of interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the financial statements referred to above for
them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet at
December 31, 1993 and the related consolidated statements of
income, stockholders' equity and cash flows for the year then ended
(not presented herein); and in our report dated February 1, 1994,
we expressed an unqualified opinion on those consolidated financial
statements.
COOPERS & LYBRAND
Detroit, Michigan
April 27, 1994
-9-
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
- - --------
Ford Motor Company earned $904 million, or $1.66 per share of
Common and Class B Stock, in the first quarter of 1994. Results
included a charge to net income of $440 million related to the sale of
First Nationwide Bank to First Madison Bank (discussed below). In the
first quarter of 1993, the Company earned $572 million, or $1.02 per
share. Worldwide sales and revenues in the first quarter of 1994 were
$30.4 billion, up $3.6 billion from the first quarter of 1993. Worldwide
factory unit sales of cars and trucks were 1,672,000, up 141,000 units,
or 9%, from a year ago. Stockholders' equity was $16.6 billion at the
end of the first quarter of 1994.
Sale of First Nationwide Bank
- - -----------------------------
On April 14, 1994, an agreement was entered into between First
Nationwide Bank, a Federal Savings Bank (the "Bank") and First
Madison Bank, FSB ("First Madison") for the sale of substantially all of
the Bank's assets to, and the assumption of substantially all of the
Bank's liabilities by, First Madison. The Bank is a wholly-owned
subsidiary of First Nationwide Financial Corporation ("FNFC"), which in
turn is a wholly-owned subsidiary of Ford. The transaction, which is
subject to federal regulatory approvals, is expected to be completed in
about six months.
The stated sale price for the Bank is $1.1 billion, slightly higher than
tangible net book value at December 31, 1993. The final settlement,
depending on the actual closing date, is expected to consist of about
$750 million of cash and retention of about $350 million of assets and
tax benefits that are not included in the sale. In total, Ford will retain,
through FNFC, approximately $1.2 billion of commercial real estate and
other assets as of the closing date. These retained assets generally
are of lower quality than those included in the sale. In addition, for the
three-year period ending in November 1996, First Madison has the
option of requiring FNFC to repurchase up to $500 million of the loans
included in the sale that become nonperforming. This repurchase
obligation will be guaranteed by Ford.
The sale resulted in an after-tax charge of $440 million against Ford's
earnings in the first quarter of 1994, reflecting the non-recovery of
goodwill and reserves for estimated losses on the assets to be
retained or repurchased by FNFC. These assets will be liquidated
over time as market conditions permit. Historically, FNFC (including
the Bank) has not had a significant effect on Ford's operating results.
RESULTS OF OPERATIONS: FIRST QUARTER 1994 COMPARED
WITH FIRST QUARTER 1993
Automotive Operations
- - ---------------------
Ford's worldwide Automotive operations earned $955 million in the first
quarter of 1994 on sales of $26.1 billion, compared with $176 million
on sales of $22.7 billion a year ago.
In the U.S., Ford's Automotive operations earned $835 million,
compared with $113 million a year ago. The increase reflected
primarily higher unit volume resulting from higher industry sales.
In the first quarter of 1994, the seasonally-adjusted annual selling rate
for the U.S. car and truck industry was 15.8 million units (9.3 million
cars and 6.5 million trucks), compared with 13.4 million (8.1 million
cars and 5.3 million trucks) in the first quarter of 1993. Ford's car
share was 21.6% in the first quarter of 1994, down 1.9 points from the
first quarter of 1993. The decline from a year ago reflected lower
shares for Tempo and Topaz. Ford's truck share was 29.4% in the
first quarter of 1994, up 3/10 of a point from the first quarter of 1993.
Higher shares for F-Series, Villager and Aerostar contributed to the
improvement. The combined car and truck share in the first quarter of
1994 was 24.8%, down 9/10 of a point from a year ago.
-10-
<PAGE>
Outside the U.S., Automotive operations earned $120 million in the first
quarter of 1994, compared with $63 million a year ago. Ford's
European Automotive operations (excluding Jaguar) earned
$108 million in the first quarter of 1994, compared with $19 million in
the first quarter of 1993. The increase from a year ago reflected
primarily improved margins.
In the first quarter of 1994, the seasonally-adjusted annual selling rate
for the European car and truck industry was 13.2 million units,
compared with 12.6 million in the first quarter of 1993. The increase
from a year ago reflected primarily higher industry sales in Britain (up
17%). Ford's car share was 12.0% in the first quarter of 1994, up 1/10
of a point from the first quarter of 1993. Ford's truck share was 14.4%
in the first quarter of 1994, down 8/10 of a point from the first quarter
of 1993.
Financial Services Operations
- - -----------------------------
The Company's Financial Services operations lost $51 million in the
first quarter of 1994, including the charge to net income of $440 million
related to the sale of First Nationwide Bank (discussed above). In the
first quarter of 1993, Financial Services operations earned $396 million.
Ford Credit's consolidated net income was $299 million in the first
quarter of 1994, down $16 million from the first quarter of 1993, and
included income from its financing operations and its equity in the net
income of affiliated companies, primarily Ford Holdings. Ford Credit's
financing operations earned $245 million in the first quarter of 1994,
down $21 million from a year ago. Results declined as a result of
lower net interest margins and the non-recurrence of a gain on the
sale of receivables, offset partially by higher levels of earning assets
and favorable credit loss performance. In addition, international
operations managed by Ford Credit earned $63 million in the first
quarter of 1994, compared with $47 million a year ago.
The Associates earned $128 million in the U.S. in the first quarter of
1994, up $17 million from the first quarter of 1993. The improvement
resulted primarily from higher levels of earning assets and improved
net interest margins. In addition, international operations managed by
The Associates earned $18 million in the first quarter of 1994,
compared with $10 million a year ago.
First Nationwide incurred a loss of $484 million in the first quarter of
1994, compared with a loss of $17 million in the first quarter of 1993.
The decline reflected primarily the charge to net income of $440 million
related to the sale of First Nationwide Bank.
American Road earned $17 million in the first quarter of 1994,
compared with $24 million in the first quarter of 1993. The decrease
resulted primarily from lower investment income, partially offset by
improved underwriting experience in extended service plan, floorplan
and dealer plan products. USL Capital earned $21 million in the first
quarter of 1994, compared with $17 million a year ago. The
improvement resulted primarily from higher earning assets and
continued operating cost reductions.
LIQUIDITY AND CAPITAL RESOURCES
Automotive Operations
- - ---------------------
Cash and marketable securities of the Company's Automotive
operations were $11.6 billion at March 31, 1994, up $1.8 billion from
December 31, 1993. The Company paid $272 million in cash
dividends on its Common Stock, Class B Stock, and Preferred Stock
during the first three months of 1994.
Automotive capital expenditures were $1.6 billion in the first three
months of 1994, compared with $1.3 billion for the same period a year
ago.
-11-
<PAGE>
At March 31, 1994, Automotive debt totaled $7.9 billion, which was
32% of total capitalization (stockholders' equity and Automotive debt),
compared with $8 billion or 34% of total capitalization at year-end
1993. The decrease in total debt is primarily the result of lower levels
of short-term borrowings.
At March 31, 1994, Ford 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. As of
March 31, 1994, these facilities were unused.
Outside the U.S., Ford has additional long-term contractually
committed credit-line facilities of approximately $2.4 billion. These
facilities are available in varying amounts from 1994 through 1998; less
than 1% had been utilized at March 31, 1994.
Financial Services Operations
- - -----------------------------
During the first quarter of 1994, Financial Services' cash and
investments in securities decreased by $3.8 billion, primarily reflecting
the reclassification of the net assets of FNFC to "other assets" as a
result of the pending sale of First Nationwide Bank. Total debt in the
first quarter of 1994 increased by $5.3 billion, primarily to fund higher
receivables levels at Ford Credit.
At March 31, 1994, Financial Services had approximately $26.7 billion
of support facilities (including $4.8 billion of Ford bank lines that may
be used by Ford Credit at Ford's option) available for use in the U.S.,
all of which were contractually committed; less than 2% of these
facilities were in use at that date. At March 31, 1994, an additional
$17 billion of support facilities were available outside the U.S., 48% of
which were contractually committed; approximately $6.4 billion of these
support facilities were in use at March 31, 1994.
OTHER FINANCIAL INFORMATION
Coopers & Lybrand, Ford's independent public accountants,
performed a limited review of the financial data presented on pages 5
through 8 inclusive. The review was performed in accordance with
standards for such reviews established by the American Institute of
Certified Public Accountants. The review did not constitute an audit;
accordingly, Coopers & Lybrand did not express an opinion on the
aforementioned data. The financial data include any material
adjustments or disclosures proposed by Coopers & Lybrand as a
result of their review.
-12-
<PAGE>
Part II. Other Information
- - ---------------------------
Item 1. Legal Proceedings
- - --------------------------
Product Matters
- - -----------------------
With respect to the three private purported class action lawsuits
involving the alleged tendency of vehicles to slip from park to reverse,
referred to in the second paragraph on page 27 of the 10-K Report,
the first such suit, filed in the Superior Court for the District of
Columbia, recently was dismissed at the plaintiff's request and the
court is reviewing the Company's petition for reimbursement of
attorney fees. The second such suit, filed in the Court of Common
Pleas in Philadelphia, Pennsylvania, had been stayed pending the
entry of a final order in the first suit. A motion by the Company to lift
the stay is now pending before the court.
With respect to the lawsuits for damages arising out of automobile
accidents where plaintiffs claim that the injuries resulted from (or were
aggravated by) alleged defects in the occupant restraint systems in
vehicle lines of various model years, referred to in the third paragraph
on page 27 of the 10-K Report, the damages specified by the plaintiffs
in these actions, including both actual and punitive damages,
aggregated approximately $1 billion at April 1, 1994.
With respect to the lawsuits for damages involving the alleged
propensity of Bronco II utility vehicles to roll over, referred to in the
fourth paragraph on page 27 of the 10-K Report, the damages
specified in these actions, including both actual and punitive damages,
aggregated approximately $794 million at April 1, 1994.
With respect to the lawsuits for damages involving asbestos, referred
to in the sixth paragraph on page 27 of the 10-K Report, the damages
specified by plaintiffs in these actions, including both actual and
punitive damages, aggregated approximately $165 million at April 1,
1994.
Environmental Matters
- - ---------------------
With respect to the notices from two government environmental
enforcement agencies, each potentially involving monetary sanctions
exceeding $100,000, referred to in the first full paragraph on page 28
of the 10-K Report, Ford has settled the matters. In a separate matter
potentially involving monetary sanctions exceeding $100,000, Ford has
received a notice that a government environmental enforcement
agency believes a Ford facility may violate or have violated limits
established by regulations or permits for emissions or discharges.
Other Matters
- - -------------
With respect to the private purported class action lawsuit relating to
allegations of paint peeling on unspecified vehicles, referred to in the
first paragraph on page 29 of the 10-K Report, in February 1994,
plaintiffs amended their petition to cover a purported class of persons
who purchased certain new or used Ford vehicles in Texas and who
allegedly experienced paint delamination as a result of Ford's use of a
high build electrocoat paint primer process.
Item 5. Other Information
- - --------------------------
Governmental Standards
- - ----------------------
Mobile Source Emissions Control -- With respect to the European
motor vehicle emissions standards discussed in the first paragraph on
page 21 of the 10-K Report, the European Parliament adopted
Directive 94/12/EC which applies more stringent motor vehicle
emission standards to vehicle homologations beginning
January 1, 1996 and to new vehicle registrations beginning
January 1, 1997. These standards are of generally equivalent
numerical stringency to those which began to apply in the U.S. for the
1994 model year. The Directive also provides for the European
Commission to propose by the end of 1994 supplementary reductions
in motor vehicle emissions that would take effect beginning
January 1, 2000. These supplementary reductions would be a
function of technical progress achieved between now and 2000.
Motor Vehicle Fuel Economy -- With respect to the light truck CAFE
standards discussed in the third full paragraph on page 22 of the
10-K Report, the Safety Administration has set the light truck CAFE
standard at 20.7 mpg for both model years 1996 and 1997.
-13-
<PAGE>
<TABLE>
Supplemental Schedule
Ford Motor Company
CONDENSED FINANCIAL INFORMATION OF SUBSIDIARY
---------------------------------------------
(in millions)
<CAPTION>
March 31, December 31,
Ford Capital B.V. 1994 1993
- - ----------------- ---------- ------------
(unaudited)
<S> <C> <C>
Current assets $1,015 $ 919
Noncurrent assets 5,202 5,205
------ ------
Total assets $6,217 $6,124
====== ======
Current liabilities $ 487 $ 434
Noncurrent liabilities 5,240 5,245
Minority's interest in net
assets of subsidiaries 11 7
Stockholder's equity 479 438
------ ------
Total liabilities and
stockholder's equity $6,217 $6,124
====== ======
</TABLE>
<TABLE>
<CAPTION>
First Quarter First Quarter
1994 1993
------------- ------------
(unaudited)
<S> <C> <C>
Sales and other revenue $563 $529
Operating income/(loss) 47 (3)
Income before income taxes 45 0
Net income/(loss) 39 (2)
Ford Capital B.V., a wholly-owned subsidiary of Ford Motor Company, was
established on February 2, 1990 primarily for the purpose of raising
funds through the issuance of commercial paper and debt securities. It
also holds Ford Motor Company's ownership interest in Ford Nederland B.V.
(Netherlands), Ford Motor Company (Belgium) N.V., Ford Motor Company A/S
(Denmark), Ford Motor Norge A/S (Norway), and Ford Poland. Substantially all
of the assets of Ford Capital B.V., other than its ownership interest in
subsidiaries, represent receivables from Ford Motor Company or its
consolidated subsidiaries.
</TABLE>
-14-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Please refer to the Exhibit Index on page 16.
(b) Reports on Form 8-K
The Registrant filed the following Current Reports on Form 8-K during
the quarter ended March 31, 1994:
Current Report on Form 8-K dated February 9, 1994 included
information relating to Ford's 1993 financial results.
Current Report on Form 8-K dated February 10, 1994 included the
consolidated financial statements of Ford and its subsidiaries for the
year ended December 31, 1993.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FORD MOTOR COMPANY
(Registrant)
Date: May 13, 1994 By: /s/ M. L. Reichenstein
------------------------------
M. L. Reichenstein
Vice President - Controller,
Ford Automotive Operations
(principal accounting officer)
-15-
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Sequential
Page Number
Designation Description at Which Found
- - ----------- ---------------------------------------- --------------
<S> <C> <C>
Exhibit 11 Ford Motor Company and Subsidiaries 17
Computation of Primary and Fully Diluted
Earnings Per Share in Accordance with
Opinion 15 of the Accounting Principles
Board
Exhibit 12 Ford Motor Company and Subsidiaries 18
Calculation of Ratio of Earnings to
Combined Fixed Charges and Preferred Stock
Dividends
Exhibit 15 Letter of Coopers & Lybrand, Independent 19
Public Accountants, dated May 13, 1994
relating to Financial Information
</TABLE>
-16-
<PAGE>
<TABLE>
Exhibit 11
Ford Motor Company and Subsidiaries
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
IN ACCORDANCE WITH OPINION 15 OF THE ACCOUNTING PRINCIPLES BOARD
----------------------------------------------------------------
<CAPTION>
First Quarter 1994 First Quarter 1993
----------------------------- -------------------------------
Income Income
Avg. Shares Attributable Avg. Shares Attributable
of Common to Common of Common to Common
and Class B and Class B Stock and Class B and Class B Stock
Stock Per Stock Per
Outstanding Total Share Outstanding Total Share
----------- --------- ------- ----------- --------- -------
(Mils.) (Mils.) (Mils.) (Mils.)
<S> <C> <C> <C> <C> <C> <C>
Preliminary Earnings Per Share Calculation 500 $832 $1.66 490 $500 $1.02
I. Primary Earnings Per Share
--------------------------
. Assuming exercise of options 22 18
. Assuming purchase of shares with proceeds
of options (12) (11)
. Assuming issuance of shares contingently
issuable 1 1
. Uncommitted ESOP shares (3) -
--- ---
Net Common Stock Equivalents 8 8
--- ---
Primary Earnings Per Share Calculation 508 $832 $1.64a/ 498 $500 $1.00a/
=== ==== ===== === ==== =====
II. Fully Diluted Earnings Per Share
--------------------------------
Primary Earnings Per Share Calculation 508 $832 $1.64 498 $500 $1.00
. Assuming conversion of convertible
preferred stock 75 48b/ 75 48b/
. Reduction in shares assumed to be
purchased with option proceedsc/ 0 1
--- ---- --- ----
Fully Diluted Earnings Per Share
Calculation 583 $880 $1.51 574 $548 $0.95
=== ==== ===== === ==== =====
- - - - - - -
a/ The effect of common stock equivalents and/or other dilutive securities was
not material in this period; therefore, the amount presented on the
income statement is the Preliminary Earnings Per Share Calculation.
b/ Reflects the elimination of preferred dividends upon conversion.
c/ Incremental effect of dividing assumed option proceeds by the ending price,
rather than the average price, of Common Stock for each period when the
ending price exceeds the average price.
</TABLE>
-17-
<PAGE>
<TABLE>
Exhibit 12
Ford Motor Company and Subsidiaries
CALCULATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
- - ----------------------------------------------------------------------------------------
(in millions)
<CAPTION>
First
Quarter For the Years Ended December 31
----------------------------------------------------------
1994 1993 1992 1991 1990 1989
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Earnings
Income/(loss) before income taxes
and cumulative effects of changes
in accounting principles $ 1,766 $ 4,003 $ (127) $(2,587) $ 1,495 $ 6,030
Equity in net (income)/loss of
affiliates plus dividends from
affiliates 9 (98) 26 69 171 (137)
Adjusted fixed charges a/ 1,874 7,648 8,113 9,360 9,690 9,032
------- ------- ------- ------- ------- -------
Earnings $ 3,649 $11,553 $ 8,012 $ 6,842 $11,356 $14,925
======= ======= ======= ======= ======= =======
Combined Fixed Charges and
Preferred Stock Dividends
- - --------------------------
Interest expense b/ $ 1,784 $ 7,351 $ 7,987 $ 9,326 $ 9,647 $ 8,624
Interest portion of rental expense c/ 67 266 185 124 105 103
Preferred stock dividend requirements
of majority-owned subsidiaries d/ 42 115 77 56 83 16
------- ------- ------- ------- ------- -------
Fixed charges 1,893 7,732 8,249 9,506 9,835 8,743
Ford preferred stock dividend
requirements e/ 140 442 317 26 0 0
------- ------- ------- ------- ------- -------
Total combined fixed charges
and preferred stock dividends $ 2,033 $ 8,174 $ 8,566 $ 9,532 $ 9,835 $ 8,743
======= ======= ======= ======= ======= =======
Ratios
Ratio of earnings to fixed charges 1.9 1.5 f/ g/ 1.2 1.7
Ratio of earnings to combined fixed
charges and preferred stock dividends 1.8 1.4 h/ i/ 1.2 1.7
- - - - - - -
a/ Fixed charges, as shown below, have been adjusted to exclude the amount of
interest capitalized during the period and preferred stock dividend
requirements of majority-owned subsidiaries.
b/ Includes interest, whether expensed or capitalized, and amortization of debt
expense and discount or premium relating to any indebtedness.
c/ One-third of all rental expense is deemed to be interest.
d/ Preferred stock dividend requirements of Ford Holdings, Inc., have been
increased to an amount representing the pre-tax earnings which would
be required to cover such dividend requirements based on Ford's effective
income tax rates for all periods except 1992. The U.S. statutory rate of
34% was used for 1992.
e/ Preferred stock dividend requirements of Ford Motor Company, have been
increased to an amount representing the pre-tax earnings which would be
required to cover such dividend requirements based on Ford's effective
income tax rates for all periods except 1992. The U.S. statutory rate of
34% was used for 1992.
f/ Earnings were inadequate to cover fixed charges by $237 million.
g/ Earnings were inadequate to cover fixed charges by $2,664 million.
h/ Earnings were inadequate to cover combined fixed charges and preferred stock
dividends by $554 million.
i/ Earnings were inadequate to cover combined fixed charges and preferred stock
dividends by $2,690 million.
</TABLE>
-18-
<PAGE>
Exhibit 15
Coopers & Lybrand
Ford Motor Company
The American Road
Dearborn, Michigan
Re: Ford Motor Company Registration Statement 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,
and 33-55474 on Form S-3
We are aware that our report dated April 27, 1994 accompanying the
unaudited interim financial information of Ford Motor Company for the
periods ended March 31, 1994 and 1993 and included in the Ford Motor
Company Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994 will be incorporated by reference in the Registration
Statements. Pursuant to Rule 436(c) under the Securities Act of 1933, this
report should not be considered a part of the Registration Statements
prepared or certified by us within the meaning of Sections 7 and 11 of that
Act.
/s/COOPERS & LYBRAND
COOPERS & LYBRAND
Detroit, Michigan
May 13, 1994
-19-
<PAGE>
