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, 1995 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, 1995,
the Registrant had outstanding 956,037,244 shares of Common
Stock and 70,852,076 shares of Class B Stock.
Page 1 of 21
Exhibit index located on sequential page number 16
1Q-95
<PAGE>
Ford Motor Company and Subsidiaries
HIGHLIGHTS
-----------
First Quarter
---------------------
1995 1994
-------- --------
Worldwide vehicle unit sales of
cars and trucks (in thousands)
- - United States 1,087 1,067
- - Outside United States 683 650
----- -----
Total 1,770 1,717
===== =====
Sales and revenues (in millions)
- - Automotive $28,601 $26,070
- - Financial Services 6,182 4,332
------- -------
Total $34,783 $30,402
======= =======
Net income (in millions)- Automotive $ 1,141 $ 973
- - Financial Services 409 (69)*
------- -------
Total $ 1,550 $ 904
======= =======
Capital expenditures (in millions)
- - Automotive $ 2,131 $ 1,641
- - Financial Services 67 59
------- -------
Total $ 2,198 $ 1,700
======= =======
Stockholders' equity at March 31
- - Total (in millions) $23,552 $16,633
- - After-tax return on Common and
Class B stockholders' equity 30.9% 26.3%
Automotive cash, cash equivalents,
and marketable securities at
March 31 (in millions) $13,254 $11,573
Automotive debt at March 31
(in millions) $ 7,102 $ 7,919
Automotive after-tax return on sales 4.0% 3.8%
Shares of Common and Class B Stock
(in millions)
- - Average number outstanding 1,025 1,000
- - Number outstanding at March 31 1,027 1,002
AMOUNTS PER SHARE OF COMMON AND
CLASS B STOCK AFTER PREFERRED
STOCK DIVIDENDS
Income/(loss)
- - Automotive $ 1.04 $ 0.90
- - Financial Services 0.40 (0.07)
------- -------
Total $ 1.44 $ 0.83
======= =======
Income assuming full dilution $ 1.28 $ 0.75
Cash dividends per share of Common
and Class B Stock $ 0.26 $ 0.20
- - - - - -
*Includes a loss of $440 million related to the disposition of Granite
Savings Bank (formerly First Nationwide Bank)
Segment results for 1994 have been adjusted to reflect reclassification
of certain tax amounts to conform with the 1995 presentation.
-2-
<PAGE>
Ford Motor Company and Subsidiaries
VEHICLE UNIT SALES
------------------
For the Periods Ended March 31, 1995 and 1994
(in thousands)
First Quarter
------------------------
1995 1994
------- --------
[S] [C] [C]
North America
United States
Cars 509 509
Trucks 578 558
----- -----
Total United States 1,087 1,067
Canada 65 64
Mexico 11 20
----- -----
Total North America 1,163 1,151
Europe
Germany 118 110
Britain 104 122
Italy 52 54
Spain 48 37
France 44 43
Other countries 77 71
----- -----
Total Europe 443 437
Other international
Brazil 62 34
Australia 31 25
Taiwan 28 32
Japan 16 13
Argentina 10 10
Other countries 17 15
----- -----
Total other international 164 129
----- -----
Total worldwide vehicle unit sales 1,770 1,717
===== =====
Vehicle unit sales are reported worldwide on a "where sold" basis and
include sales of all Ford-badged units, as well as units manufactured
by Ford and sold by other manufacturers.
First Quarter 1994 unit sales have been restated to reflect the country
where sold and to include sales of all Ford-badged units. Previously,
factory unit sales were reported in North America on a "where sold" basis
and overseas on a "where produced" basis. Also, Ford-badged unit sales
of certain unconsolidated subsidiaries (primarily Autolatina in Brazil
and Argentina) were not reported previously.
<PAGE>
Part I. Financial Information
------------------------------
Item 1. Financial Statements
- ----------------------------
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
For the Periods Ended March 31, 1995 and 1994
(in millions)
<TABLE>
<capition>
First Quarter
---------------------
1995 1994
------- ------
(unaudited)
<S> <C> <C>
AUTOMOTIVE
Sales $28,601 $26,070
Costs and expenses (Note 2)
Costs of sales 25,605 23,352
Selling, administrative, and other
expenses 1,214 1,159
------- -------
Total costs and expenses 26,819 24,511
Operating income 1,782 1,559
Interest income 207 128
Interest expense 166 176
------- -------
Net interest income/(expense) 41 (48)
Equity in net income of affiliated
companies 20 67
Net expense from transactions with
Financial Services (23) (8)
------- -------
Income before income taxes -
Automotive 1,820 1,570
FINANCIAL SERVICES
Revenues 6,182 4,332
Costs and expenses
Interest expense 2,167 1,598
Depreciation 1,521 903
Operating and other expenses 1,336 824
Provision for credit and insurance
losses 422 344
Loss on disposition of Granite Savings
Bank (formerly First Nationwide Bank)
(Note 4) - 475
------- -------
Total costs and expenses 5,446 4,144
Net revenue from transactions with
Automotive 23 8
------- -------
Income before income taxes
- Financial Services 759 196
------- -------
TOTAL COMPANY
Income before income taxes 2,579 1,766
Provision for income taxes 988 825
------- -------
Income before minority interests 1,591 941
Minority interests in net income of
subsidiaries 41 37
------- -------
Net income 1,550 904
Preferred stock dividend requirements 72 72
------- -------
Income attributable to Common and
Class B Stock $ 1,478 $ 832
======= =======
Average number of shares of Common and
Class B Stock outstanding 1,025 1,000
AMOUNTS PER SHARE OF COMMON STOCK AND CLASS B
STOCK AFTER PREFERRED STOCK DIVIDENDS
Income $ 1.44 $ 0.83
======= =======
Income assuming full dilution $ 1.28 $ 0.75
Cash dividends $ 0.26 $ 0.20
</TABLE>
The accompanying notes are part of the financial statements.
-4-
<PAGE>
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
--------------------------
(in millions)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------- --------------
ASSETS (unaudited)
<S> <C> <C>
Automotive
Cash and cash equivalents $ 9,933 $ 4,481
Marketable securities 3,321 7,602
-------- --------
Total cash, cash equivalents,
and marketable securities 13,254 12,083
Receivables 3,105 2,548
Inventories (Note 3) 7,331 6,487
Deferred income taxes 3,080 3,062
Other current assets 1,861 2,006
Net current receivable from
Financial Services 360 677
-------- --------
Total current assets 28,991 26,863
Equity in net assets of affiliated
companies 3,580 3,554
Net property 28,428 27,048
Deferred income taxes 4,426 4,146
Other assets 6,837 6,760
-------- --------
Total Automotive assets 72,262 68,371
Financial Services (Note 4)
Cash and cash equivalents 1,795 1,739
Investments in securities 6,384 6,105
Net receivables and lease investments 138,185 130,356
Other assets 13,399 12,783
-------- --------
Total Financial Services assets 159,763 150,983
-------- --------
Total assets $232,025 $219,354
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $ 11,925 $ 10,777
Other payables 1,972 2,624
Accrued liabilities 12,743 11,599
Income taxes payable 1,062 316
Debt payable within one year 341 155
-------- --------
Total current liabilities 28,043 25,471
Long-term debt 6,761 7,103
Other liabilities 25,440 24,920
Deferred income taxes 1,239 948
-------- --------
Total Automotive liabilities 61,483 58,442
Financial Services (Note 4)
Payables 2,815 2,361
Debt 130,713 123,713
Deferred income taxes 3,234 2,958
Other liabilities and deferred income 7,993 7,669
Net payable to Automotive 360 677
-------- --------
Total Financial Services liabilities 145,115 137,378
Preferred stockholders' equity in a
subsidiary company 1,875 1,875
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
(957 and 952 million shares issued) 957 952
Class B Stock, par value $1.00 per share
(71 million shares issued) 71 71
Capital in excess of par value of stock 5,364 5,273
Foreign currency translation
adjustments and other 774 189
Earnings retained for use in business 16,386 15,174
-------- --------
Total stockholders' equity 23,552 21,659
-------- --------
Total liabilities and
stockholders' equity $232,025 $219,354
======== ========
- - - - - -
*Less than $1 million
The accompanying notes are part of the financial statements.
-5-
<PAGE>
</TABLE>
<TABLE>
Ford Motor Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
For the Periods Ended March 31, 1995 and 1994
(in millions)
<CAPTION>
First Quarter 1995 First Quarter 1994
---------------------- ----------------------
Financial Financial
Automotive Services Automotive Services
----------- --------- ---------- ---------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Cash and cash equivalents at January 1 $ 4,481 $ 1,739 $ 5,667 $ 2,555
Cash flows from operating activities before securities trading 3,650 3,284 3,814 2,228
Net sales/(purchases) of trading securities 4,289 324 (1,924) 39
-------- -------- ------- --------
Net cash flows from operating activities 7,939 3,608 1,890 2,267
Cash flows from investing activities
Capital expenditures (2,131) (67) (1,641) (59)
Acquisitions of receivables and lease investments - (52,172) - (47,560)
Collections of receivables and lease investments - 44,068 - 39,806
Net acquisitions of daily rental vehicles - (826) - -
Purchases of securities (18) (1,818) (112) (3,607)
Sales and maturities of securities 9 1,337 198 3,594
Proceeds from sales of receivables - - - 390
Loans originated net of principal payments - (2) - (204)
Investing activity with Financial Services (174) - 0 -
Other (442) (125) 162 (252)
-------- -------- ------- --------
Net cash used in investing activities (2,756) (9,605) (1,393) (7,892)
Cash flows from financing activities
Cash dividends (338) - (272) -
Issuance of Common Stock 96 - 84 -
Changes in short-term debt 217 2,408 (52) 2,373
Proceeds from issuance of other debt 0 6,674 0 6,051
Principal payments on other debt (207) (3,239) 0 (3,826)
Changes in customers' deposits, excluding interest credited - - - (422)
Receipts from annuity contracts - 165 - 185
Financing activity with Automotive - 174 - 0
Other 6 25 25 31
------- -------- ------- --------
Net cash (used in)/provided by financing activities (226) 6,207 (215) 4,392
Effect of exchange rate changes on cash 178 163 (96) 88
Net transactions with Automotive/Financial Services 317 (317) (207) 207
------- -------- ------- --------
Net increase/(decrease) in cash and cash equivalents 5,452 56 (21) (938)
------- -------- ------- --------
Cash and cash equivalents at March 31 $ 9,933 $ 1,795 $ 5,646 $ 1,617
======== ======== ======= ========
The accompanying notes are part of the financial statements.
</TABLE>
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(unaudited)
1. Financial Statements - The financial data presented
herein are unaudited, but in the opinion of management
reflect those adjustments necessary for a fair
presentation of such information. Results for interim
periods should not be considered indicative of results
for a full year. Reference should be made to the
financial statements contained in the registrant's
Annual Report on Form 10-K (the "10-K Report") for the
year ended December 31, 1994. For purposes hereof,
"Ford" or the "Company" means Ford Motor Company and its
majority-owned subsidiaries unless the context requires
otherwise.
2. Selected Automotive costs and expenses are summarized as
follows (in millions):
First Quarter
--------------------------
1995 1994
----------- ------------
Depreciation $ 589 $ 581
Amortization 712 542
3. Automotive inventories are summarized as follows (in
millions):
March 31, December 31,
1995 1994
---------- ------------
Raw materials, work in process
and supplies $3,518 $3,192
Finished products 3,813 3,295
------ ------
Total Inventories $7,331 $6,487
====== ======
U.S. Inventories $3,302 $2,917
4. Sale of First Nationwide Bank
-----------------------------
On September 30, 1994, substantially all of the assets of
First Nationwide Bank, since known as Granite Savings
Bank (the "Bank"), were sold to, and substantially all of
the Bank's liabilities were assumed by, First Madison
Bank, FSB. The Bank is a wholly-owned subsidiary of
Granite Management Corporation (formerly First Nationwide
Financial Corporation) ("Granite"), which in turn is a
wholly-owned subsidiary of Ford. The Company recognized
in First Quarter 1994 earnings a pre-tax charge of $475
million ($440 million after taxes) related to the
disposition of the Bank, reflecting the nonrecovery of
goodwill and reserves for estimated losses on assets not
included in the sale. The Company's income statement
includes the results of operations of Granite through
March 31, 1994.
5. Acquisition of The Hertz Corporation
------------------------------------
In April 1994, Hertz became a wholly-owned subsidiary of
Ford. In the First Quarter of 1994, Hertz had been
accounted for on an equity basis as part of the
Automotive segment. Hertz' operating results, assets,
liabilities, and cash flows have subsequently been
consolidated as part of the Financial Services segment.
-7-
<PAGE>
Coopers & Lybrand L.L.P.
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, 1995 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, 1995.
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, 1994 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
January 27, 1995, we expressed an unqualified opinion on
those consolidated financial statements.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
April 19, 1995
-8-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
- ----------------------------------------------------------
RESULTS OF OPERATIONS: FIRST QUARTER 1995 COMPARED WITH
FIRST QUARTER 1994
Overview
- --------
Ford Motor Company earned $1,550 million, or $1.44 per share
of Common and Class B Stock, in the first quarter of 1995.
This compares with $904 million, or $0.83 per share, in the
first quarter of 1994. Ford's results a year ago included a
charge of $440 million related to the disposition of First
Nationwide Bank. Fully diluted earnings per share were
$1.28 in the first quarter of 1995, compared with $0.75 a
year ago. The Company's worldwide sales and revenues were
$34.8 billion, up $4.4 billion from a year ago. Vehicle
unit sales of cars and trucks were 1,770,000, up 53,000
units or 3%. Stockholders' equity was $23.6 billion at
March 31, 1995.
On June 6, 1994, a 2-for-1 stock split in the form of a 100%
stock dividend on the Company's outstanding Common and Class
B stock became effective. Earnings per share for prior
periods have been restated to reflect the stock split.
In January 1995, the Company put into effect the
reorganization of its Automotive operations, called "Ford
2000". Ford 2000 is a fundamental change intended to
provide customers with a wider array of vehicles in more
markets, assure full competitiveness in vehicle design,
quality and value, and substantially reduce the cost of
operating Ford's automotive business. The new structure
reduces duplication of effort and facilitates best practices
around the world by merging Ford's North American Automotive
Operations, European Automotive Operations, and Automotive
Components Group into a single organization, Ford Automotive
Operations.
Automotive Operations
- ---------------------
Net income from Ford's worldwide Automotive operations was
$1,141 million in the first quarter of 1995 on sales of
$28.6 billion, compared with $973 million in the first
quarter of 1994 on sales of $26.1 billion.
In the U.S., Ford's Automotive operations earned $825
million in the first quarter of 1995 on sales of $19.6
billion, compared with $816 million a year ago on sales of
$18 billion. The improvement reflected primarily higher
volume resulting from higher market share and favorable
product mix, largely offset by unfavorable exchange rates
(primarily the German Mark and Japanese Yen) and higher
product costs. Changes in exchange rates also are expected
to influence earnings unfavorably in the balance of the
year.
In the first quarter of 1995, the seasonally-adjusted annual
selling rate for the U.S. car and truck industry was
15.2 million units, compared with 15.8 million in the first
quarter of 1994. The Company expects U.S. car and truck industry
sales to total 15.1 million units in the full year, compared with
15.4 million units in 1994. Ford's car market share was 22.3% in the
first quarter of 1995, up 7/10 of a point from a year ago,
more than explained by sales for Contour and Mystique.
Ford's truck share was 32.3%, up 2.9 points from a year ago,
reflecting primarily higher sales for Windstar and F-Series
trucks. Ford's combined car and truck share was 26.6%, up
1.8 points from a year ago.
Outside the U.S., Automotive operations earned $316 million
in the first quarter of 1995 on sales of $9 billion,
compared with $157 million a year ago on sales of $8.1
billion. The improvement reflected primarily higher
earnings in Europe, where Automotive operations earned $165
million in the first quarter of 1995, compared with
$53 million a year ago.
In the first quarter of 1995, the seasonally-adjusted annual
selling rate for the European car and truck industry was
13.4 million units, compared with 13.2 million a year ago.
Ford's car share was 12% in the first quarter of 1995, equal
to a year ago. Ford's truck share was 15.9%, up 1.4 points
from a year ago. Ford's combined car and truck share was
12.5%, up 3/10 of a point from 1994.
-9-<PAGE>
Ford and Volkswagen AG have agreed on a separation process
leading toward dissolution of their Autolatina joint venture
in Brazil and Argentina by year-end 1995. It is believed
the effect, if any, of the dissolution of Autolatina on
Ford's future earnings is not likely to be material.
Historically, earnings in Brazil and Argentina have
represented a significant portion of Ford's Automotive
earnings outside the U.S. and Europe.
Financial Services Operations
- -----------------------------
The Company's Financial Services operations earned
$409 million in the first quarter of 1995, compared with a
loss of $69 million in the first quarter of 1994. The
improvement was explained by the nonrecurrence of the $440
million charge to net income in the first quarter of 1994
for the disposition of First Nationwide Bank, as well as
increased earnings from ongoing operations of $38 million.
Ford Credit's consolidated net income was $288 million in
the first quarter of 1995, compared with $299 million a year
ago. Ford Credit's financing operations earned $229 million
in the first quarter of 1995, compared with $245 million a
year ago. The decrease reflected lower net interest margins
and higher credit losses, partially offset by higher levels
of earning assets. Depreciation costs increased as a result
of continued growth in operating leases; the related lease
revenues more than offset the increased depreciation. Ford
Credit's results also included $59 million from equity in
the net income of affiliated companies, primarily Ford
Holdings. Ford Holdings is a holding company that owns
primarily The Associates, American Road, and USL Capital.
The international operations managed by Ford Credit, but not
included in its consolidated results, earned $65 million in
the first quarter of 1995, compared with $63 million a year
ago, reflecting primarily higher levels of earning assets
and lower credit losses.
The Associates earned a record $152 million in the U.S. in
the first quarter of 1995, compared with $128 million a year
ago. The increase reflected higher levels of earning
assets. The international operations managed by The
Associates, but not included in its consolidated results,
earned $22 million in the first quarter of 1995, compared
with $18 million a year ago, reflecting primarily higher
levels of earning assets.
USL Capital earned a record $26 million in the first quarter
of 1995, compared with $21 million a year ago. The increase
reflected higher levels of earning assets and cost
improvements. American Road earned $5 million in the first
quarter of 1995, compared with $17 million in the same
period in 1994. The decrease was more than explained by
lower underwriting results in extended service plan and
floor plan products, and lower results for the annuities
business.
LIQUIDITY AND CAPITAL RESOURCES
Automotive Operations
- ---------------------
Cash and marketable securities of the Company's Automotive
operations were $13.3 billion at March 31, 1995, up
$1.2 billion from December 31, 1994. The Company paid
$338 million in cash dividends on its Common Stock, Class B
Stock, and Preferred Stock during the first three months of
1995.
Automotive capital expenditures were $2.1 billion in the
first three months of 1995, up $490 million from the same
period a year ago. Automotive capital spending is projected
to increase during 1995 as a result of increases in both
product and nonproduct spending. The higher product
spending reflects a record pace of new-model introductions
and increased capacity for selected components and vehicles,
while the higher nonproduct spending reflects continuing
efforts to improve efficiency and quality.
-10-
<PAGE>
Automotive debt at March 31, 1995 totaled $7.1 billion,
which was 23% of total capitalization (stockholders' equity
and Automotive debt), compared with $7.3 billion, or 25% of
total capitalization, at December 31, 1994. The decrease in
Automotive debt reflected primarily a transfer of debt to a
Financial Services subsidiary.
At March 31, 1995, Ford (parent company only) had long-term
contractually committed credit agreements in the U.S. under
which $5.9 billion is available from various banks at least
through June 30, 1999. The entire $5.9 billion may be used,
at Ford's option, by either Ford or Ford Credit. These
facilities were unused at March 31, 1995.
Outside the U.S., Ford had additional long-term
contractually committed credit-line agreements of $2.6
billion. These facilities are available in varying amounts
from 1995 through 1999; less than 1% were in use at March
31, 1995.
Financial Services Operations
- -----------------------------
Financial Services' cash and investments in securities
totaled $8.2 billion at March 31, 1995, up
$335 million from December 31, 1994.
Net receivables and lease investments were $138.2 billion at
March 31, 1995, up $7.8 billion from December 31, 1994. The
increase reflected continued growth in earning assets at
Ford Credit and The Associates.
Total debt was $130.7 billion at March 31, 1995, up $7
billion from December 31, 1994. The increase resulted from
higher debt levels required to finance growth in earning
assets at Ford Credit and The Associates.
At March 31, 1995, Financial Services had $34 billion of
contractually committed support facilities (including the
$5.9 billion of the Ford credit agreements) for use in the
U.S.; less than 2% of these facilities, excluding the Ford
credit agreements, were in use. An additional $9.3 billion
of contractually committed support facilities were available
outside the U.S. at March 31, 1995; $1.9 billion of these
were in use.
OTHER FINANCIAL INFORMATION
Coopers & Lybrand L.L.P., Ford's independent public
accountants, performed a limited review of the financial
data presented on pages 4 through 7 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 L.L.P. did not express an
opinion on the aforementioned data. The financial data
include any material adjustments or disclosures proposed by
Coopers & Lybrand L.L.P. as a result of their review.
-11-
<PAGE>
Part II. Other Information
---------------------------
Item 1. Legal Proceedings
- --------------------------
Product Matters
- ---------------
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 second paragraph
on page 23 of the 10-K Report, the damages specified by the
plaintiffs in these actions, including both actual and
punitive damages, aggregated approximately $947 million at
March 31, 1995.
With respect to the lawsuits for damages involving the
alleged propensity of Bronco II utility vehicles to roll
over, referred to in the third paragraph on page 23 of the
10-K Report, the damages specified by the plaintiffs in
these actions, including both actual and punitive damages,
aggregated approximately $1.1 billion at March 31, 1995.
With respect to the lawsuits for damages involving asbestos,
referred to in the fifth paragraph on page 23 of the 10-K
Report, the damages specified by the plaintiffs in these
actions, including both actual and punitive damages,
aggregated approximately $204 million at March 31, 1995.
In most of the actions described in the foregoing
paragraphs, no dollar amount of damages is specified or the
specific amount referred to is only the jurisdictional
minimum. It has been Ford's experience that in cases that
allege a specific amount of damages in excess of the
jurisdictional minimum, such amounts, on average, bear
little relation to the actual amounts of damages paid by
Ford in such cases, which generally are, on average,
substantially less than the amounts originally claimed.
Other Matters
- -------------
With respect to the private purported class action lawsuits
seeking economic damages on behalf of Bronco II owners
relating to the alleged propensity of such vehicles to roll
over, referred to in the fourth full paragraph on page 24 of
the 10-K Report, the court rejected the proposed settlements
that had been reached and dissolved the class established
for settlement purposes. The Company will proceed with its
defense of the actions.
Item 5. Other Information
- --------------------------
Governmental Standards
- ----------------------
Mobile Source Emissions Control -- With respect to the
discussion on pages 16 and 17 of the 10-K Report regarding
the adoption by New York and Massachusetts of the California
low emission vehicle or LEV standards, Connecticut also has
adopted such standards (but without the zero emission
vehicle or ZEV requirements), effective beginning with 1998
model-year vehicles.
The Clean Air Act generally prohibits the introduction
of new fuel additives unless a waiver is granted by EPA. In
April 1995, the D.C. Court of Appeals ordered EPA to grant
such a waiver to Ethyl Corporation for the additive MMT,
over the objections of EPA and U.S. automobile
manufacturers, including Ford. Although other issues must
be resolved before MMT can be marketed, this decision
greatly increases the likelihood that MMT will be sold as a
fuel additive in the near future. Ford and other
manufacturers believe that the use of MMT will impair the
performance of current emissions systems and onboard
diagnostics systems. If MMT becomes available as a fuel
additive, this could increase the Company's future warranty
costs and necessitate changes in the Company's warranties
for emission control devices.
-12-<PAGE>
Motor Vehicle Fuel Economy -- With respect to fuel
economy measures in Europe discussed on page 19 of the 10-K
Report, on March 23, 1995, the German Automobile
Manufacturers Association (of which Ford Germany is a
member) undertook an industry-wide voluntary agreement with
the German government for reducing the average fuel
consumption of new cars sold in Germany by 25% from 1990
levels by 2005, and the German government has agreed to
improve traffic management systems, eliminate infrastructure
bottlenecks, integrate transport modes, promote alternative
fuels and improved drive systems, and introduce an emission-
based road tax system. The need for and feasibility of
potential changes to the undertaking, including subsequent
further reductions in average fuel consumption, will be
reviewed before 2000.
Japan has adopted automobile fuel consumption goals
that manufacturers must attempt to achieve by the 2000 model
year. The consumption levels apply only to gasoline-powered
vehicles, vary by vehicle weight, and range from 5.8 km/l to
19.2 km/l. To achieve these target fuel consumption levels
for the vehicles it exports to Japan, Ford may have to take
costly actions that could have substantial adverse effects
on its sales volume and profits in Japan.
Water Pollution Control -- With respect to EPA's
proposed regulations under the Great Lakes Critical Programs
Act of 1990 discussed on page 20 of the 10-K Report, the EPA
has now adopted such regulations, which impose more
restrictive standards for discharges into waters that impact
the Great Lakes and which will require Ford to add costly
pollution control equipment to its facilities.
-13-
<PAGE>
<TABLE>
<CAPTION>
Supplemental Schedule
Ford Motor Company
CONDENSED FINANCIAL INFORMATION OF SUBSIDIARY
---------------------------------------------
(in millions)
March 31, December 31,
Ford Capital B.V. 1995 1994
- ----------------- ------------ ------------
(unaudited)
<S> <C> <C>
Current assets $1,275 $1,048
Noncurrent assets 4,667 4,845
------ ------
Total assets $5,942 $5,893
====== ======
Current liabilities $ 637 $ 486
Noncurrent liabilities 4,748 4,909
Minority interests in net
assets of subsidiaries 2 12
Stockholder's equity 555 486
------ ------
Total liabilities and
stockholder's equity $5,942 $5,893
====== ======
First Quarter First Quarter
1995 1994
------------- -------------
(unaudited)
Sales and other revenue $ 656 $ 563
Operating income 77 47
Income before income taxes 64 45
Net income 56 39
</TABLE>
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. Under a
reorganization in December 1990, Ford Motor Company
contributed all of its shares of the capital stock of Ford
Nederland B.V., Ford Motor Company (Belgium) B.V., and Ford
Motor Company A/S (Denmark) to Ford Capital B.V. This
reorganization of entities under common control has been
accounted for at historical cost in a manner similar to a
pooling-of-interests combination from January 1, 1990
forward. Substantially all of the assets of Ford Capital
B.V. represent receivables from Ford Motor Company or its
consolidated subsidiaries.
-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,
1995:
Current Report on Form 8-K dated
February 1, 1995 included information relating
to Ford's 1994 financial results.
Current Report on Form 8-K dated
February 7, 1995 included the consolidated
financial statements of Ford and its
subsidiaries for the year ended
December 31, 1994.
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 11, 1995
------------------- By: /s/ M. L. Reichenstein
----------------------------
M. L. Reichenstein
Vice President -Controller,
Ford Automotive Operations
(principal accounting officer)
-15-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
-------------
Sequential
Page Number
Designation Description at Which Found
- ------------ ---------------------------------------------------------- --------------
<S> <C> <C>
Exhibit 10.1 Amendment to Ford Motor Company Supplemental Compensation 17
Plan, effective as of March 8, 1995.*
Exhibit 10.2 Amendment to Ford Motor Company 1990 Long-Term Incentive 18
Plan, effective as of March 8, 1995.*
Exhibit 11 Ford Motor Company and Subsidiaries Computation of Primary 19
and Fully Diluted Earnings Per Share in Accordance with
Opinion 15 of the Accounting Principles Board.
Exhibit 12 Ford Motor Company and Subsidiaries Calculation of Ratio of 20
Earnings to Combined Fixed Charges and Preferred Stock
Dividends.
Exhibit 15 Letter of Coopers & Lybrand L.L.P., Independent Public 21
Accountants, dated May 10, 1995 relating to Financial
Information.
</TABLE>
- - - - - -
*Management contract or compensatory plan or arrangement
-16-
Exhibit 10.1
AMENDMENTS TO SUPPLEMENTAL COMPENSATION PLAN
--------------------------------------------
(Effective as of March 8, 1995)
A new Paragraph 6f is hereby added to the Plan to read as
follows:
"6f. Anything in this Plan to the contrary notwithstanding, the
maximum amount of any award of supplemental compensation to be
made to any individual for any year commencing with 1995 under
this Plan is 2% of the maximum amount creditable to the Reserve
for that year. The Compensation and Option Committee may in its
discretion make individual awards of supplemental compensation
that are lower than, but not greater than, such maximum amount.
Anything in this Plan to the contrary notwithstanding, this Plan
shall be interpreted in a manner consistent with the requirements
for performance-based compensation plans under Section 162(m) of
the Internal Revenue Code of 1986, as amended."
Paragraph 16 of the Plan is hereby amended by adding the
following new sentence at the end of such paragraph:
"Any such rules adopted pursuant to this paragraph shall be
deemed part of this Plan."
-17-
Exhibit 10.2
AMENDMENTS TO 1990 LONG-TERM INCENTIVE PLAN
-------------------------------------------
(Effective as of March 8, 1995)
The third sentence of paragraph (a) of Article 3 of the Plan is
hereby amended to read as follows:
"Notwithstanding the foregoing, (i) the aggregate number of
shares that may be issued upon exercise of "incentive stock
options" (as defined in paragraph (a)(1) of Article 5 hereof)
shall not exceed 2% of the number of shares authorized under the
Company's Certificate of Incorporation at the date of adoption of
the Plan (subject to adjustment in accordance with the provisions
of Article 11 hereof) and (ii) the maximum number of shares
subject to Options (as hereinafter defined), with or without any
related Stock Appreciation Rights (as hereinafter defined), that
may be granted pursuant to Article 5 hereof to any Participant
during any calendar year during any part of which the Plan is in
effect shall be 2.5% of the maximum number of shares of Stock
with respect to which Plan Awards may be granted during such year
under the Plan determined in accordance with this paragraph (a)
of this Article 3, subject to adjustment in accordance with the
provisions of Article 11 hereof."
-18-
Exhibit 11
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
-----------------------------------------------------------
IN ACCORDANCE WITH OPINION 15 OF THE ACCOUNTING PRINCIPLES BOARD
----------------------------------------------------------------
First Quarter 1995 First Quarter 1994
------------------------------- -------------------------------
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 1,025 $1,478 $1.44 1,000 $832 $0.83
I. Primary Earnings Per Share
--------------------------
. Assuming exercise of options 34 44
. Assuming purchase of shares with proceeds of options (20) (24)
. Assuming issuance of shares contingently issuable 2 2
. Uncommitted ESOP shares (4) (6)
----- -----
Net Common Stock Equivalents 12 16
----- -----
Primary Earnings Per Share Calculation 1,037 $1,478 $1.43 a/ 1,016 $832 $0.82 a/
===== ====== ===== ===== ==== =====
II. Fully Diluted Earnings Per Share
--------------------------------
Primary Earnings Per Share Calculation 1,037 $1,478 $1.43 1,016 $832 $0.82
. Assuming conversion of convertible preferred stock 150 48 b/ 150 48 b/
. Reduction in shares assumed to be purchased
with option proceeds c/ 1 0
----- ------ ----- ----
Fully Diluted Earnings Per Share Calculation 1,188 $1,526 $1.28 1,166 $880 $0.75
===== ====== ===== ===== ==== =====
</TABLE>
- - - - - -
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.
Share data have been restated to reflect the 2-for-1 stock split
that became effective June 6, 1994.
-19-
Exhibit 12
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
CALCULATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
- ----------------------------------------------------------------------------------------
(in millions)
First
Quarter For the Years Ended December 31
---------------------------------------------------
1995 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Earnings
- --------
Income/(loss) before income taxes and
cumulative effects of changes in accounting
principles $2,579 $ 8,789 $ 4,003 $ (127) $(2,587) $ 1,495
Equity in net (income)/loss of affiliates
plus dividends from affiliates (14) (182) (98) 26 69 171
Adjusted fixed charges a/ 2,433 8,122 7,648 8,113 9,360 9,690
------ ------- ------- ------- ------- -------
Earnings $4,998 $16,729 $11,553 $ 8,012 $ 6,842 $11,356
====== ======= ======= ======= ======= =======
Combined Fixed Charges and
Preferred Stock Dividends
- --------------------------
Interest expense b/ $2,351 $ 7,787 $ 7,351 $ 7,987 $ 9,326 $ 9,647
Interest portion of rental expense c/ 67 265 266 185 124 105
Preferred stock dividend requirements of
majority-owned subsidiaries d/ 51 160 115 77 56 83
------ ------- ------- ------- ------- -------
Fixed charges 2,469 8,212 7,732 8,249 9,506 9,835
Ford preferred stock dividend requirements e/ 117 472 442 317 26 0
------ ------- ------- ------- ------- -------
Total combined fixed charges and
preferred stock dividends $2,586 $ 8,684 $ 8,174 $ 8,566 $ 9,532 $ 9,835
====== ======= ======= ======= ======= =======
Ratios
- ------
Ratio of earnings to fixed charges 2.0 2.0 1.5 f/ g/ 1.2
Ratio of earnings to combined fixed
charges and preferred stock dividends 1.9 1.9 1.4 h/ i/ 1.2
</TABLE>
- - - - - -
a/ Fixed charges, as shown below, adjusted to exclude the
amount of interest capitalized during the period
and preferred stock dividend requirements of majority-owned
subsidiaries.
b/ Includes interest, whether expensed or capitalized, and
amortization of debt expense and discount or premium
relating to any indebtedness.
c/ One-third of all rental expense is deemed to be interest.
d/ Preferred stock dividend requirements of Ford Holdings,
Inc., 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 increased to an amount representing the pre-tax
earnings which would be required to cover such dividend
requirements based on Ford's effective income tax
rates for all periods except 1992. The U.S. statutory
rate of 34% was used for 1992.
f/ Earnings inadequate to cover fixed charges by $237 million.
g/ Earnings inadequate to cover fixed charges by $2,664 million.
h/ Earnings inadequate to cover combined fixed charges and
preferred stock dividends by $554 million.
i/ Earnings inadequate to cover combined fixed charges and
preferred stock dividends by $2,690 million.
-20-
EXHIBIT 15
Coopers & Lybrand L.L.P.
REPORT OF INDEPENDENT ACCOUNTANTS
Ford Motor Company
The American Road
Dearborn, Michigan
Re: Ford Motor Company Registration Statement Nos. 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,
33-54348, 33-54275, 33-54283, 33-54735, 33-54737, 33-55847,
33-56785 and 33-58255 on Form S-8, and 2-42133, 33-32641,
33-40638, 33-43085, 33-45887, 33-55474 and 33-55171 on
Form S-3.
We are aware that our report dated April 19, 1995 accompanying
the unaudited interim financial information of Ford Motor Company
for the periods ended March 31, 1995 and 1994 and included in the
Ford Motor Company Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995 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 L.L.P.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
May 10, 1995
