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 January 27, 1998
----------------
(Date of earliest event reported)
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
------------
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Item 5. Other Events.
- ---------------------
News release dated January 27, 1998, filed as Exhibit 20 to this Current
Report on Form 8-K, is incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
- ---------------------------------------------------------------------------
EXHIBITS
--------
Designation Description Method of Filing
- ----------- ----------- ----------------
Exhibit 20 News release dated Filed with this Report
January 27, 1998
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 on the date indicated.
FORD MOTOR COMPANY
------------------
(Registrant)
Date: January 27, 1998 By/s/Peter Sherry, Jr.
------------------
Peter Sherry, Jr.
Assistant Secretary
<PAGE>
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EXHIBIT INDEX
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DESIGNATION DESCRIPTION PAGE
- ----------- ----------- ----
Exhibit 20 News release dated
January 27, 1998
<PAGE>
FORD NEWS
Global News, Public Affairs, World Headquarters, Dearborn, Michigan 48121
Telephone: (313) 322-9600; Fax: (313) 845-0570
Internet: http://media.ford.com
Contact: Media Inquiries Institutional Investors Shareholder Inquiries
Mel Stephens Mike Holland (800) 555-5259 or
(313) 323-8220 (313) 323-8221 (313) 845-8540
FOR RELEASE AT 7:30 A.M. (EASTERN STANDARD)
FORD EARNS A RECORD $6.9 BILLION IN 1997, UP 56%;
GLOBAL COMPETITIVE POSITION STRENGTHENED BY
LOWER TOTAL COSTS, IMPROVED PRODUCT QUALITY
DEARBORN, Mich., January 27, 1998 -- Ford Motor Company [NYSE: F] earned a
record $6.9 billion in 1997, an increase of 56 percent over earnings of $4.4
billion in 1996. Earnings per diluted share of common and Class B stock were
$5.62, compared with $3.64 in 1996. Total revenues grew 4.5 percent to $154
billion.
Fourth-quarter earnings, also a record, were $1.8 billion, up 49 percent and the
seventh consecutive quarter of year-to-year improvement.
"It was a very good year," said Chairman and Chief Executive Officer Alex
Trotman. "We exceeded all of our financial goals for 1997 and delivered a 57
percent total return to our shareholders. Revenues grew, automotive returns were
up, quality improved sharply, customer satisfaction was up and total costs came
down." At constant volume and mix, total automotive costs declined $3 billion in
1997.
"Our cost improvement came from the fundamental reprocessing of our business
that we call Ford 2000," Trotman said. "A continued strong focus on total cost
reductions, quality improvements, and efficiencies -- using best practices and
economies of scale throughout the organization -- contributed to the excellent
results."
<PAGE>
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"We're replacing low-margin, slow-selling products with higher margin products
that are in hot demand," he said. In North America and Europe, Ford took steps
in 1997 to rebalance its manufacturing capacity to produce a richer product mix.
New products in 1997 included Jaguar XK8, Puma, Courier, Lincoln Town Car and
Navigator, Grand Marquis, Crown Victoria, and Ka in Brazil. Five vehicle lines
were discontinued, and the heavy truck business was sold.
AUTOMOTIVE OPERATIONS SET NEW RECORDS
Full-year net income from automotive operations was a record $4.7 billion, up
from $1.6 billion earned in 1996. Worldwide automotive return on sales was 3.9
percent, up 2.5 points from 1996 and the best since 1989.
In the U.S., Ford earned a record $3.7 billion in 1997, up from $2 billion
earned in 1996. Outside the U.S., Ford earned $1 billion, compared with a loss
of $352 million in 1996. Ford's European automotive operations earned $273
million, compared with a loss of $291 million in 1996. Greater efficiencies and
lower separation costs more than accounted for the improvement. In South
America, Ford earned $40 million, compared with a loss of $642 million in 1996.
The improvement stemmed from the strong acceptance of new products, growth in
unit sales of 41 percent in Brazil and Argentina and lower costs from higher
efficiencies and rebalancing manufacturing capacity.
"In Europe, Ford made real progress in 1997," Trotman noted, "but the European
market is still a struggle for everyone. In South America, we made great strides
with new products, greater efficiencies and increases in quality. We'll continue
to build on this momentum in 1998, but the present economic environment means
that breaking even will be difficult."
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In the rest of the world, Ford earned $695 million, reflecting strong results in
Australia, Canada and Mexico. In Canada, Ford achieved truck leadership for the
second year in a row and sales growth for the third year in a row.
FINANCIAL SERVICES EARN $2.2 BILLION
Ford's financial services businesses earned $2.2 billion in 1997, compared with
a record $2.8 billion in 1996.
Ford Credit earned $1 billion, compared with $1.4 billion in 1996. The decline
reflects primarily depreciation expenses on leased vehicles and higher credit
losses, partly offset by lower operating costs and higher financing volumes.
The Associates [NYSE: AFS] earned a record $1 billion, the 23rd consecutive year
of increased earnings, compared with $857 million a year ago. Ford's full-year
share was $832 million. Hertz [NYSE: HRZ] earned a record $202 million, the
fifth year of increased earnings. In 1996, Hertz earned $159 million. Ford's
full-year share was $168 million.
FOURTH QUARTER
Ford earned a record $1.8 billion in the fourth quarter, or $1.45 per diluted
share of common and Class B stock. The 1997 results compare with $1.2 billion or
99 cents in 1996.
U.S. automotive operations earned a record $1.2 billion, compared with $628
million a year ago. Outside the U.S., automotive operations earned $148 million,
compared with a loss of $238 million in 1996.
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Ford's financial services businesses earned $455 million in the fourth quarter,
compared with $814 million a year ago. The fourth quarter of 1996 included a
one-time favorable impact of $204 million from the Budget Rent a Car
transaction.
Ford Credit earned $218 million, compared with $385 million in 1996. The
Associates earned an all-time record of $278 million, compared with $234
million. Ford's fourth-quarter share was $224 million. Hertz earned $35 million,
compared with $36 million in 1996. Ford's fourth-quarter share was $28 million.
DELIVERING VALUE TO SHAREHOLDERS
A number of steps were taken in 1997 to increase shareholder value. Both
earnings and cash flow set records. The dividend was increased, an initial
public offering of Hertz was completed, and Ford's automotive components
businesses were organized as a new entity, Visteon. Ford also announced that it
would distribute its remaining 80.6 percent interest in The Associates to Ford
shareholders. The plan is before the Internal Revenue Service to determine that
the distribution will be free of U.S. income taxes. A ruling is expected in the
first quarter of 1998.
"Our Ford 2000 strategy is working," Trotman said. "We've improved our global
competitiveness -- better quality, lower costs and faster speed to market. In
1998, we'll continue to focus on these same fundamentals to drive the business."
# # #
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SUMMARY OF 1997 COMPARED WITH 1996
Overview
- --------
* Total earnings were a record $6.9 billion, up 56 percent from earnings of
$4.4 billion in 1996.
* Diluted earnings per share were $5.62, compared with $3.64 a share.
* Worldwide sales and revenues were $154 billion, compared with $147
billion.
* Stockholders' equity at year-end was $30.7 billion, compared with $26.8
billion.
Automotive
- ----------
* Net income from worldwide automotive operations was a record $4.7 billion,
compared with $1.6 billion in 1996.
* Net income from U.S. automotive operations was a record $3.7 billion,
compared with $2 billion.
* Automotive operations outside the U.S. earned $1 billion, compared with a
loss of $352 million in 1996. In Europe, Ford earned $273 million,
compared with a loss of $291 million in 1996. In South America, Ford
earned $40 million, compared with a loss of $642 million last year.
* Worldwide return on sales was 3.9 percent, compared with 1.4 percent in
1996. In the U.S., return on sales was 4.6 percent, compared with 2.7
percent.
* Worldwide vehicle unit sales were 6,943,000 in 1997, compared with
6,653,000 in 1996.
* Combined full-year car and truck market share in the U.S. was 25 percent,
compared with 25.2 percent. In the fourth quarter, U.S. market share was
24.9 percent, compared with 26.2 percent in 1996.
* Combined car and truck share in Europe was 11.4 percent, compared with
11.8 percent.
Financial Services
- ------------------
* Financial services earned $2.2 billion, compared with a record $2.8
billion in 1996.
* Ford Credit earned $1 billion, compared with $1.4 billion.
* The Associates earned a record $1 billion, compared with $857 million.
* Hertz earned a record $202 million, compared with $159 million in 1996.
Automotive Balance Sheet
- ------------------------
* Net cash was a record $12.7 billion, compared with $7.3 billion.
* Cash and marketable securities was a record $20.8 billion, compared with
$15.4 billion.
* Debt was $8.1 billion, compared with $8.1 billion.
* Capital spending was $8.1 billion, compared with $8.2 billion.
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
HIGHLIGHTS
----------
Fourth Quarter Full Year
---------------------------- -----------------------------
1997 1996 1997 1996
--------- ---------- ---------- ----------
(unaudited)
<S> <C> <C>
Worldwide vehicle unit sales of
cars and trucks (in thousands)
- - United States 987 1,006 4,016 3,897
- - Outside United States 804 747 2,927 2,756
----- ----- ----- -----
Total 1,791 1,753 6,943 6,653
===== ===== ===== =====
Sales and revenues (in millions)
- - Automotive $31,897 $31,505 $122,935 $118,023
- - Financial Services 8,055 7,328 30,692 28,968
------- ------- -------- --------
Total $39,952 $38,833 $153,627 $146,991
======= ======= ======== ========
Net income (in millions)
- - Automotive $ 1,341 $ 390 $ 4,714 $ 1,655
- - Financial Services 455 814 2,206 2,791
------- ------- -------- --------
Total $ 1,796 $ 1,204 $ 6,920 $ 4,446
======= ======= ======== ========
Capital expenditures (in millions)
- - Automotive $ 2,389 $ 2,413 $ 8,142 $ 8,209
- - Financial Services 162 93 575 442
------- ------- -------- --------
Total $ 2,551 $ 2,506 $ 8,717 $ 8,651
======= ======= ======== ========
Automotive capital expenditures as a
percentage of sales 7.5% 7.7% 6.6% 7.0%
Stockholders' equity at December 31
- - Total (in millions) $30,734 $26,762 $ 30,734 $ 26,762
- - After-tax return on Common and
Class B stockholders' equity 24.1% 18.4% 24.4% 17.6%
Automotive net cash at December 31
(in millions)
- - Cash and marketable securities $20,835 $15,414 $ 20,835 $ 15,414
- - Debt 8,176 8,156 8,176 8,156
------- ------- -------- --------
Automotive net cash $12,659 $ 7,258 $ 12,659 $ 7,258
======= ======= ======== ========
After-tax return on sales
- - U.S. Automotive 5.8% 3.2% 4.6% 2.7%
- - Total Automotive 4.2% 1.3% 3.9% 1.4%
Shares of Common and Class B Stock
(in millions)
- - Average number outstanding 1,201 1,187 1,195 1,179
- - Number outstanding at December 31 1,202 1,188 1,202 1,188
Common Stock price (per share)
- - High $50-1/4 $33-7/8 $ 50-1/4 $ 37-1/4
- - Low 41-1/2 30-3/8 30 27-1/4
AMOUNTS PER SHARE OF COMMON AND
CLASS B STOCK AFTER PREFERRED
STOCK DIVIDENDS
Income assuming dilution
- - Automotive $ 1.08 $ 0.32 $ 3.82 $ 1.33
- - Financial Services 0.37 0.67 1.80 2.31
------- ------- -------- --------
Total $ 1.45 $ 0.99 $ 5.62 $ 3.64
======= ======= ======== ========
Cash dividends $ 0.420 $ 0.385 $ 1.645 $ 1.47
</TABLE>
FS-1
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
VEHICLE UNIT SALES
------------------
For the Periods Ended December 31, 1997 and 1996
(in thousands)
Fourth Quarter Full Year
------------------------- -------------------------
1997 1996 1997 1996
-------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C>
North America
United States
Cars 409 428 1,614 1,656
Trucks 578 578 2,402 2,241
----- ----- ----- -----
Total United States 987 1,006 4,016 3,897
Canada 91 84 319 258
Mexico 40 28 97 67
----- ----- ----- -----
Total North America 1,118 1,118 4,432 4,222
Europe
Britain 124 140 466 516
Germany 137 106 460 436
Italy 70 51 248 180
Spain 43 41 155 155
France 41 47 153 194
Other countries 91 103 318 339
----- ----- ----- -----
Total Europe 506 488 1,800 1,820
Other international
Brazil 49 48 214 190
Argentina 35 21 143 64
Australia 31 31 132 138
Taiwan 17 14 79 86
Japan 10 11 40 52
Other countries 25 22 103 81
----- ----- ----- -----
Total other international 167 147 711 611
----- ----- ----- -----
Total worldwide vehicle unit sales 1,791 1,753 6,943 6,653
===== ===== ===== =====
</TABLE>
Vehicle unit sales generally are reported worldwide on a "where sold" basis and
include sales of all Ford-badged units, as well as units manufactured by Ford
and sold to other manufacturers.
FS-2
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
For the Periods Ended December 31, 1997, 1996 and 1995
(in millions, except amounts per share)
1997 1996 1995
------------ ----------- -------------
<S> <C> <C> <C>
AUTOMOTIVE
Sales $122,935 $118,023 $110,496
Costs and expenses:
Costs of sales 108,907 108,882 101,171
Selling, administrative and other expenses 7,082 6,625 6,044
-------- -------- --------
Total costs and expenses 115,989 115,507 107,215
Operating income 6,946 2,516 3,281
Interest income 1,116 841 800
Interest expense 788 695 622
-------- -------- --------
Net interest income 328 146 178
Equity in net loss of affiliated companies (88) (6) (154)
Net expense from transactions with
Financial Services (104) (85) (139)
-------- -------- --------
Income before income taxes - Automotive 7,082 2,571 3,166
FINANCIAL SERVICES
Revenues 30,692 28,968 26,641
Costs and expenses:
Interest expense 9,712 9,704 9,424
Depreciation 7,645 6,875 6,500
Operating and other expenses 6,621 6,217 5,499
Provision for credit and insurance losses 3,230 2,564 1,818
Asset write-downs and dispositions - 121 -
-------- -------- --------
Total costs and expenses 27,208 25,481 23,241
Net revenue from transactions with Automotive 104 85 139
Gain on sale of Common Stock of a subsidiary 269 650 -
-------- -------- --------
Income before income taxes - Financial Services 3,857 4,222 3,539
-------- -------- --------
TOTAL COMPANY
Income before income taxes 10,939 6,793 6,705
Provision for income taxes 3,741 2,166 2,379
-------- -------- --------
Income before minority interests 7,198 4,627 4,326
Minority interests in net income of subsidiaries 278 181 187
-------- -------- --------
Net income $ 6,920 $ 4,446 $ 4,139
======== ======== ========
Income attributable to Common and Class B Stock
after preferred stock dividends $ 6,866 $ 4,381 $ 3,839
Average number of shares of Common and Class B
Stock outstanding 1,195 1,179 1,071
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic $ 5.75 $ 3.73 $ 3.58
Diluted $ 5.62 $ 3.64 $ 3.33
Cash dividends $ 1.645 $ 1.47 $ 1.23
</TABLE>
FS-3
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
--------------------------
(in millions)
December 31, December 31,
1997 1996
---------------- --------------
<S> <C> <C>
ASSETS
Automotive
Cash and cash equivalents $ 6,316 $ 3,578
Marketable securities 14,519 11,836
-------- --------
Total cash and marketable securities 20,835 15,414
Receivables 3,097 3,133
Inventories 5,468 6,656
Deferred income taxes 3,249 3,296
Other current assets 3,782 3,193
Net current receivable from Financial Services 416 0
-------- --------
Total current assets 36,847 31,692
Equity in net assets of affiliated companies 1,951 2,483
Net property 34,594 33,527
Deferred income taxes 3,712 4,429
Other assets 7,975 7,527
-------- --------
Total Automotive assets 85,079 79,658
Financial Services
Cash and cash equivalents 1,618 3,689
Investments in securities 2,207 2,307
Net receivables and lease investments 176,416 163,030
Other assets 13,777 13,710
Net receivable from Automotive 0 473
-------- --------
Total Financial Services assets 194,018 183,209
-------- --------
Total assets $279,097 $262,867
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $ 11,997 $ 11,735
Other payables 2,557 2,206
Accrued liabilities 16,250 16,587
Income taxes payable 1,358 508
Debt payable within one year 1,129 1,661
Net current payable to Financial Services 0 473
-------- --------
Total current liabilities 33,291 33,170
Long-term debt 7,047 6,495
Other liabilities 28,899 26,793
Deferred income taxes 1,210 1,225
-------- --------
Total Automotive liabilities 70,447 67,683
Financial Services
Payables 4,539 4,695
Debt 160,071 150,205
Deferred income taxes 4,347 4,338
Other liabilities and deferred income 7,865 8,504
Net payable to Automotive 416 0
-------- --------
Total Financial Services liabilities 177,238 167,742
Company-obligated mandatorily redeemable preferred securities of a subsidiary
trust holding solely junior subordinated debentures of the Company 678 680
Stockholders' equity
Capital stock
Preferred Stock, par value $1.00 per share (aggregate liquidation preference
of $637 million and $694 million) * *
Common Stock, par value $1.00 per share (1,132 and 1,118 million shares issued) 1,132 1,118
Class B Stock, par value $1.00 per share (71 million shares issued) 71 71
Capital in excess of par value of stock 5,564 5,268
Foreign currency translation adjustments and other (1,267) (29)
Earnings retained for use in business 25,234 20,334
-------- --------
Total stockholders' equity 30,734 26,762
-------- --------
Total liabilities and stockholders' equity $279,097 $262,867
======== ========
- - - - -
*Less than $500,000
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
For the Periods Ended December 31, 1997, 1996 and 1995
(in millions)
1997 1996 1995
---------------------------- ---------------------------- ---------------------------
Financial Financial Financial
Automotive Services Automotive Services Automotive Services
-------------- ------------ -------------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents at
January 1 $ 3,578 $ 3,689 $ 5,750 $ 2,690 $ 4,481 $ 1,739
Cash flows from operating activities 13,984 13,728 6,576 12,681 8,849 12,322
Cash flows from investing activities
Capital expenditures (8,142) (576) (8,209) (442) (8,676) (321)
Purchase of leased assets (332) - (195) - 0 -
Acquisitions of other companies 0 (40) 0 (166) 0 0
Acquisitions of receivables and
lease investments - (119,191) - (109,087) - (99,967)
Collections of receivables and lease
investments - 86,802 - 82,398 - 71,149
Net acquisitions of daily rental
vehicles - (958) - (1,759) - (1,459)
Net proceeds from USL Capital
asset sales - - - 1,157 - -
Purchases of securities (43) (3,067) (6) (8,020) (51) (6,274)
Sales and maturities of securities 13 3,520 7 9,863 325 5,052
Proceeds from sales of receivables and
lease investments - 5,197 - 2,867 - 4,360
Net investing activity with
Financial Services 258 - 416 - (19) -
Other (285) (557) (586) (45) 558 (184)
------- -------- ------- -------- -------- -------
Net cash used in investing
activities (8,531) (28,870) (8,573) (23,234) (7,863) (27,644)
Cash flows from financing activities
Cash dividends (2,020) - (1,800) - (1,559) -
Issuance of Common Stock 311 - 192 - 601 -
Issuance of Common Stock of a
subsidiary - 453 - 1,897 - -
Changes in short-term debt (430) 7,470 151 3,474 413 5,884
Proceeds from issuance of other debt 1,100 23,075 1,688 22,342 300 23,854
Principal payments on other debt (668) (18,367) (1,031) (14,428) (177) (11,489)
Net financing activity with Automotive - (258) - (416) - 19
Receipts from annuity contracts - - - - - 283
Net redemption of subsidiary
company preferred stock - - - - - (1,875)
Other 0 (211) 37 (528) 121 102
------- -------- ------- -------- ------- -------
Net cash (used in)/provided by
financing activities (1,707) 12,162 (763) 12,341 (301) 16,778
Effect of exchange rate changes on
cash (119) 20 (85) (116) 107 (28)
Net transactions with Automotive/
Financial Services (889) 889 673 (673) 477 (477)
------- -------- ------- ------- ------- -------
Net (decrease)/increase in cash
and cash equivalents 2,738 (2,071) (2,172) 999 1,269 951
------- -------- ------- -------- -------- -------
Cash and cash equivalents at $ 6,316 $ 1,618 $ 3,578 $ 3,689 $ 5,750 $ 2,690
December 31 ======= ======== ======= ======= ======= =======
</TABLE>
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