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 April 7, 1998
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(Date of earliest event reported)
FORD MOTOR COMPANY
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-3950 38-0549190
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(Commission File Number) (IRS Employer Identification No.)
The American Road, Dearborn, Michigan 48121
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 313-322-3000
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Item 2. Acquisition or Disposition of Assets.
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(a) On March 2, 1998, the Board of Directors of Ford Motor Company (the
"Company" or "Ford ") approved the spin-off of Associates First Capital
Corporation ("The Associates") by declaring a dividend on Ford's outstanding
shares of Common and Class B Stock consisting of Ford's 80.7% interest (279.5
million shares) in The Associates. The Board of Directors also declared a
dividend in cash on shares of Company stock held in U.S. employee savings plans
equal to the market value of The Associates stock to be distributed per share of
the Company's Common and Class B Stock. Both the spin-off dividend and the cash
dividend were paid on April 7, 1998 to stockholders of record on March 12, 1998.
Holders of Ford Common and Class B Stock on the record date received
0.262085 shares of The Associates common stock for each share of Ford stock, and
participants in U.S. employee savings plans who held Ford stock in such plans on
the record date received $22.12 in cash per share of Ford stock, which amount
was based on the volume-weighted average price of The Associates stock of
$84.3849 per share on the New York Stock Exchange on April 7, 1998. The total
value of the distribution (including the aggregate $3.2 billion cash dividend)
was $26.8 billion or $22.12 per share of Ford stock.
As a result of the spin-off of The Associates, Ford realized a gain of
$15,955 million in first quarter 1998 based on the fair value of The Associates
as of the record date, March 12, 1998. Ford has received a ruling from the U.S.
Internal Revenue Service that the distribution qualifies as a tax-free
transaction for U.S. federal income tax purposes. The Company's results in first
quarter 1998 include Ford's share of The Associates' earnings through the March
12 record date ($177 million). Ford's consolidated balance sheet at March 31,
1998, included in its Current Report on Form 8-K dated April 16, 1998, does not
include The Associates. "Other payables" includes a $3.2 billion dividend
payable generated by the cash dividend to participants in U.S. employee savings
plans.
(b) Not Applicable.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements of Business Acquired. Not Applicable.
(b) Pro Forma Financial Information. Pro forma condensed statements of
income of Ford and its consolidated subsidiaries for the year ended December 31,
1997 and the quarter ended March 31, 1998, reflecting Ford's results of
operations without The Associates for those periods, are filed as exhibits.
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(c) Exhibits.
Designation Description Method of Filing
- ----------- ----------- ----------------
Exhibit 99.1 Pro Forma Condensed Consolidated Filed with this Report
Statement of Income for the year
ended December 31, 1997
Exhibit 99.2 Pro Forma Condensed Consolidated Filed with this Report
Statement of Income for the
quarter ended March 31, 1998
SIGNATURES
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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 hereunto duly authorized.
FORD MOTOR COMPANY
(Registrant)
By:/s/Peter Sherry, Jr.
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Peter Sherry, Jr.
Assistant Secretary
Date: April 21, 1998
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EXHIBIT INDEX
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Designation Description Page
- ----------- ----------- ----
Exhibit 99.1 Pro Forma Condensed Consolidated
Statement of Income for the year
ended December 31, 1997
Exhibit 99.2 Pro Forma Condensed Consolidated
Statement of Income for the
quarter ended March 31, 1998
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<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 1997
(Unaudited)
(mils)
Pro Forma
Historical Adjustments Pro Forma
Balances Associates Results
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<S> <C> <C> <C>
AUTOMOTIVE
Sales $ 122,935 $122,935
Costs and expenses
Costs of sales 108,907 108,907
Selling, administrative, and other expenses 7,082 7,082
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Total costs and expenses 115,989 - 115,989
Operating income 6,946 6,946
Interest income 1,116 1,116
Interest expense 788 788
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Net interest income 328 - 328
Equity in net loss of affiliated companies (88) (88)
Net expense from transactions with Financial Services (104) (104)
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Income before income taxes - Automotive 7,082 - 7,082
FINANCIAL SERVICES
Revenues $ 30,692 $(8,279) $ 22,413
Costs and expenses
Interest expense 9,712 (2,775) 6,937
Depreciation 7,645 (88) 7,557
Operating and other expenses 6,621 (2,288) 4,333
Provision for credit and insurance losses 3,230 (1,524) 1,706
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Total costs and expenses 27,208 (6,675) 20,533
Net revenue from transactions with Automotive 104 - 104
Gain on sale of Common Stock of a subsidiary 269 - 269
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Income before income taxes - Financial Services 3,857 (1,604) 2,253
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TOTAL COMPANY
Income before income taxes 10,939 (1,604) 9,335
Provision for income taxes 3,741 (608) 3,133
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Income before minority interests 7,198 (996) 6,202
Minority interests in net income of subsidiaries 278 (200) 78
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Net income $ 6,920 $ (796) $ 6,124
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Income attributable to Common and Class B Stock
after preferred stock dividends $ 6,866 $ (796) $ 6,070
Average number of shares of Common and Class B
Stock outstanding 1,195 - 1,195
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic income $ 5.75 $ (0.67) $ 5.08
Diluted income $ 5.62 $ (0.65) $ 4.97
</TABLE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Period Ended March 31, 1998
(Unaudited)
(mils)
Pro Forma
Historical Adjustments Pro Forma
Balances Associates Results
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<S> <C> <C> <C>
AUTOMOTIVE
Sales $ 29,076 $ 29,076
Costs and expenses
Costs of sales 25,584 25,584
Selling, administrative, and other expenses 1,686 1,686
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Total costs and expenses 27,270 - 27,270
Operating income 1,806 1,806
Interest income 322 322
Interest expense 199 199
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Net interest income 123 - 123
Equity in net loss of affiliated companies (10) (10)
Net expense from transactions with Financial Services (48) (48)
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Income before income taxes - Automotive 1,871 - 1,871
FINANCIAL SERVICES
Revenues $ 7,508 $ (1,750) $ 5,758
Costs and expenses
Interest expense 2,370 (598) 1,772
Depreciation 2,037 (17) 2,020
Operating and other expenses 1,583 (508) 1,075
Provision for credit and insurance losses 708 (278) 430
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Total costs and expenses 6,698 (1,401) 5,297
Net revenue from transactions with Automotive 48 - 48
Gain on spin-off of The Associates 15,955 (15,955) -
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Income before income taxes - Financial Services 16,813 (16,304) 509
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TOTAL COMPANY
Income before income taxes 18,684 (16,304) 2,380
Provision for income taxes 972 (129) 843
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Income before minority interests 17,712 (16,175) 1,537
Minority interests in net income of subsidiaries 66 (43) 23
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Net income $ 17,646 $(16,132) $ 1,514
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Income attributable to Common and Class B Stock
after preferred stock dividends $ 17,551 $(16,132) $ 1,419
Average number of shares of Common and Class B
Stock outstanding 1,210 - 1,210
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic income $ 14.48 $ (13.31) $ 1.17
Diluted income $ 14.23 $ (13.08) $ 1.15
</TABLE>
