News Release
Contact: Media Inquiries Securities Analysts Shareholder Inquiries
Karen Hampton Mike Holland 800-555-5259 or
313-594-4410 313-323-8221 313-845-8540
FOR RELEASE AT 7 A.M. (EASTERN DAYLIGHT)
FORD EARNS $2.7 BILLION BEFORE CHARGES IN SECOND QUARTER
17th Consecutive Quarter Of Operating Earnings Improvement
New Records For Operating Profits, Revenues And Vehicle Sales
DEARBORN, Mich., July 19, 2000 -- Ford Motor Company [NYSE: F] posted its 17th
consecutive quarter of improved operating earnings in the second quarter with a
record $2.7 billion, or $2.20 per diluted share of common and Class B stock, up
10 percent. The results compare with second quarter operating earnings in 1999
of $2.48 billion, or $2.00 per diluted share.
As previously announced, Ford posted after-tax one-time charges in the second
quarter for asset impairments and restructuring costs in Europe totaling $1
billion (83 cents per share) and the spin-off of Visteon totaling $2.3 billion
($1.84 per share). Including these charges, Ford's after-tax net result was a
loss of $577 million, or 47 cents per share. During the same period in 1999,
Ford took an after-tax one-time charge of $146 million, or 11 cents a share,
related to the acquisition of Volvo Car. Including this charge, Ford's second
quarter 1999 net income totaled $2.34 billion or $1.89 a share.
Second-quarter revenues were a record $44.5 billion, up 6 percent from $41.9
billion in the second quarter of 1999.
______________________________________________________________________________
Financial News, The American Road, Dearborn, MI 48121-1899
Telephone: 313-594-4410; Fax: 313-594-3494
E-Mail: [email protected]; Internet: http://media.ford.com
<PAGE>
-2-
"A strong overall product lineup and new hit products are driving our strong
operating earnings momentum," said Jac Nasser, Ford Motor Company president and
chief executive officer. "In addition, we are accelerating the transformation of
Ford Motor Company, evidenced by the deployment of consumer-driven Six Sigma,
our many e-business initiatives, our purchase of Land Rover, the difficult but
decisive actions in Europe and the spin-off of Visteon Corporation."
On June 28, Visteon Corporation [NYSE: VC] became an independent company through
a 100 percent distribution of Visteon stock to Ford shareholders. Visteon's
second quarter earnings were reported separately yesterday and are included in
Ford Motor Company's overall results as a discontinued operation, but excluded
from the company's automotive results.
AUTOMOTIVE OPERATIONS
Ford Motor Company's worldwide automotive operating earnings were $2.1 billion
in the second quarter, up 15 percent from the same period a year ago. Worldwide
automotive revenues in the second quarter were $37.4 billion, up 5 percent
compared with a year ago. Operating after-tax return on sales (ROS) was 5.6
percent, up half a point from last year's second quarter.
Worldwide vehicle unit sales were a record 1.99 million, compared with 1.93
million a year ago. Automotive cash was a record $25.6 billion at the end of the
quarter, up $3.2 billion from the same period last year, excluding Visteon. Net
cash was $14.8 billion, up $3.5 billion from a year ago.
North America: Automotive operations in North America earned an operating record
$1.8 billion in the second quarter of 2000, up $127 million from the same period
a year ago. After-tax ROS was 6.7 percent.
<PAGE>
-3-
Total Ford Motor Company factory unit sales in the United States during the
second quarter were up 5 percent from the same period a year ago to a record
1.19 million units. The strong sales pace was aided by the continued strong
performance of the Ford Focus, Ford F-Series, Ford Explorer, Ford Expedition,
Lincoln LS, Jaguar S-Type, Volvo S40 and Volvo V70.
Overseas Operations: Second quarter automotive operating earnings in Ford Motor
Company's overseas operations, including Europe, South America and Asia-Pacific,
totaled $228 million, up $147 million from the same period a year ago.
Excluding one-time charges, automotive operating earnings in Europe in the
second quarter were $156 million, compared with $206 million in the same period
a year ago.
"With our plan in place to improve efficiency, reduce capacity and fixed costs,
and accelerate our product offensive with 45 significant new products over the
next five years, we are confident our European operations are driving toward
sustained profitable growth," said Nasser.
FORD CREDIT: Ford Credit earned $388 million in the second quarter, up 16
percent from the second quarter of 1999. Return on equity was 13.4 percent, up
1.1 percentage points from a year ago.
HERTZ: On July 14, the Hertz Corporation [NYSE: HRZ] announced record earnings
of $104 million in the second quarter, up 18 percent. Ford Motor Company's share
of Hertz' second-quarter earnings was $84 million.
<PAGE>
-4-
DELIVERING SHAREHOLDER VALUE: "We have laid the groundwork for continued growth
and success with our consumer focus, major product initiatives and restructuring
actions," said Nasser. "This along with our strong earnings and cash flow
momentum will allow the Company to continue to reward its shareholders."
In August, Ford Motor Company shareholders will vote on the company's Value
Enhancement Plan (VEP). Under the VEP, Ford shareholders will exchange their
current Ford common or Class B shares for new common or Class B shares, plus
additional new Ford shares or cash up to $10 billion total.
# # #
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
HIGHLIGHTS
----------
Second Quarter First Half
---------------------------- ---------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Worldwide vehicle unit sales of
cars and trucks (in thousands)
- North America 1,304 1,237 2,613 2,457
- Outside North America 687 691 1,289 1,246
----- ----- ----- -----
Total 1,991 1,928 3,902 3,703
===== ===== ===== =====
Sales and revenues (in millions)
- Automotive $ 37,366 $ 35,546 $ 73,541 $ 67,143
- Financial Services 7,153 6,361 13,872 12,313
--------- --------- --------- ---------
Total $ 44,519 $ 41,907 $ 87,413 $ 79,456
========= ========= ========= =========
Net income (loss) (in millions)
- Automotive $ 1,052 $ 1,651 $ 2,604 $ 3,097
- Financial Services 461 407 841 735
--------- --------- --------- ---------
Income from continuing operations 1,513 2,058 3,445 3,832
- Discontinued operation (Visteon) 162 280 309 485
- Loss on spin-off of Visteon (2,252) - (2,252) -
--------- --------- --------- ---------
Total $ (577) $ 2,338 $ 1,502 $ 4,317
========= ========= ========= =========
Capital expenditures (in millions)
- Automotive $ 1,453 $ 1,566 $ 2,952 $ 2,709
- Financial Services 158 140 464 284
--------- --------- --------- ---------
Total $ 1,611 $ 1,706 $ 3,416 $ 2,993
========= ========= ========= =========
Automotive capital expenditures as a
percentage of sales 3.9% 4.4% 4.0% 4.0%
Stockholders' equity at June 30
- Total (in millions) $ 24,643 $ 26,327 $ 24,643 $ 26,327
- Annualized after-tax return on Common
and Class B stockholders' equity 26.6% 38.7% 22.0% 35.0%
Automotive net cash at June 30
(in millions)
- Cash and marketable securities $ 25,557 $ 22,395 $ 25,557 $ 22,395
- Debt 10,804 11,177 10,804 11,177
--------- --------- --------- ---------
Automotive net cash $ 14,753 $ 11,218 $ 14,753 $ 11,218
========= ========= ========= =========
After-tax return on sales
- North American Automotive 6.7% 6.7% 6.4% 6.2%
- Total Automotive 2.9% 4.7% 3.6% 4.7%
Shares of Common and Class B Stock
(in millions)
- Average number outstanding 1,205 1,211 1,206 1,211
- Number outstanding at June 30 1,205 1,210 1,205 1,210
Common Stock price (per share)
(adjusted to reflect Visteon spin-off)
- High $55 $65-1/4 $55 $65-1/4
- Low 40-3/8 50-1/2 39-3/8 50-1/2
AMOUNTS PER SHARE OF COMMON AND
CLASS B STOCK AFTER PREFERRED
STOCK DIVIDENDS
Income assuming dilution
- Automotive $ 0.86 $ 1.33 $ 2.12 $ 2.50
- Financial Services 0.38 0.33 0.69 0.59
--------- --------- --------- ---------
Subtotal 1.24 1.66 2.81 3.09
- Discontinued operation (Visteon) 0.13 0.23 0.25 0.39
- Loss on spin-off of Visteon (1.84) - (1.84) -
--------- --------- --------- ---------
Total $ (0.47) $ 1.89 $ 1.22 $ 3.48
========= ========= ========= =========
Cash dividends $ 0.50 $ 0.46 $ 1.00 $ 0.92
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
VEHICLE UNIT SALES
------------------
For the Periods Ended June 30, 2000 and 1999
(in thousands)
Second Quarter First Half
------------------------ --------------------------
2000 1999 2000 1999
-------- -------- -------- --------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
North America
United States
Cars 445 448 925 852
Trucks 742 679 1,464 1,419
----- ----- ----- -----
Total United States 1,187 1,127 2,389 2,271
Canada 80 80 159 137
Mexico 37 30 65 49
----- ----- ----- -----
Total North America 1,304 1,237 2,613 2,457
Europe
Britain 139 136 254 262
Germany 83 111 174 201
Italy 58 61 107 111
Spain 54 54 94 97
France 41 53 83 91
Other countries 168 154 308 253
----- ----- ----- -----
Total Europe 543 569 1,020 1,015
Other international
Brazil 35 34 63 56
Australia 37 33 61 64
Taiwan 19 15 41 32
Argentina 12 14 27 29
Japan 8 9 17 16
Other countries 33 17 60 34
----- ----- ----- -----
Total other international 144 122 269 231
----- ----- ----- -----
Total worldwide vehicle unit sales 1,991 1,928 3,902 3,703
===== ===== ===== =====
</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.
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
For the Periods Ended June 30, 2000 and 1999
(in millions)
Second Quarter First Half
-------------------------- --------------------------
2000 1999 2000 1999
---------- ----------- ----------- ----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
AUTOMOTIVE
Sales $37,366 $35,546 $73,541 $67,143
Costs and expenses (Notes 5 & 6)
Costs of sales 33,515 30,796 65,093 58,533
Selling, administrative and other expenses 2,458 2,296 4,723 4,073
------- ------- ------- -------
Total costs and expenses 35,973 33,092 69,816 62,606
Operating income 1,393 2,454 3,725 4,537
Interest income 389 346 757 685
Interest expense 327 337 645 622
------- ------- ------- -------
Net interest income 62 9 112 63
Equity in net income (loss) of affiliated companies 29 (12) (3) 22
Net revenue (expense) from transactions with
Financial Services 20 (17) 10 (45)
------- ------- ------- -------
Income before income taxes - Automotive 1,504 2,434 3,844 4,577
FINANCIAL SERVICES
Revenues 7,153 6,361 13,872 12,313
Costs and expenses
Interest expense 2,311 1,825 4,524 3,713
Depreciation 2,398 2,391 4,606 4,548
Operating and other expenses 1,249 1,101 2,460 2,098
Provision for credit and insurance losses 411 372 865 763
------- ------- ------- -------
Total costs and expenses 6,369 5,689 12,455 11,122
Net revenue (expense) from transactions with
Automotive (20) 17 (10) 45
------- ------- ------- -------
Income before income taxes - Financial Services 764 689 1,407 1,236
------- ------- ------- -------
TOTAL COMPANY
Income before income taxes 2,268 3,123 5,251 5,813
Provision for income taxes 728 1,034 1,750 1,927
------- ------- ------- -------
Income before minority interests 1,540 2,089 3,501 3,886
Minority interests in net income of subsidiaries 27 31 56 54
------- ------- ------- -------
Net income from continuing operations 1,513 2,058 3,445 3,832
Net income from discontinued operation (Note 2) 162 280 309 485
Loss on spin-off of discontinued operation (Note 2) 2,252 - 2,252 -
------- ------- ------- -------
Net income (loss) $ (577) $ 2,338 $ 1,502 $ 4,317
======= ======= ======= =======
Income (loss) attributable to Common and Class B
Stock after preferred stock dividends $ (580) $ 2,335 $1,495 $ 4,310
Average number of shares of Common and Class B
Stock outstanding 1,205 1,211 1,206 1,211
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic Income (Note 10)
Net income (loss) from continuing operations $ 1.26 $ 1.70 $ 2.87 $ 3.17
Net income (loss) (0.48) 1.93 1.25 3.57
Diluted Income (Note 10)
Net income (loss) from continuing operations $ 1.24 $ 1.66 $ 2.81 $ 3.09
Net income (loss) (0.47) 1.89 1.22 3.48
Cash dividends $ 0.50 $ 0.46 $ 1.00 $ 0.92
</TABLE>
The accompanying notes are part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
--------------------------
(in millions)
June 30, December 31,
2000 1999
-------------- ---------------
(unaudited)
<S> <C> <C>
ASSETS
Automotive
Cash and cash equivalents $ 6,989 $ 2,793
Marketable securities 18,568 18,943
-------- --------
Total cash and marketable securities 25,557 21,736
Receivables 3,897 5,267
Inventories (Note 7) 6,251 5,684
Deferred income taxes 2,886 3,762
Other current assets 5,022 3,831
Current receivable from Financial Services 1,869 2,304
-------- --------
Total current assets 45,482 42,584
Equity in net assets of affiliated companies (Note 3) 5,349 2,539
Net property 34,677 36,528
Deferred income taxes 3,587 2,454
Net assets of discontinued operation (Note 2) - 1,566
Other assets 12,262 13,530
-------- --------
Total Automotive assets 101,357 99,201
Financial Services
Cash and cash equivalents 1,675 1,588
Investments in securities 582 733
Finance receivables, net 121,217 113,298
Net investment in operating leases 46,385 42,471
Other assets 10,919 11,123
Receivable from Automotive 2,445 1,835
-------- --------
Total Financial Services assets 183,223 171,048
-------- --------
Total assets $284,580 $270,249
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $ 14,840 $ 14,292
Other payables 3,933 3,778
Accrued liabilities 21,372 18,488
Income taxes payable 2,240 1,709
Debt payable within one year 862 1,338
-------- --------
Total current liabilities 43,247 39,605
Long-term debt 9,942 10,398
Other liabilities 31,906 29,283
Deferred income taxes 684 1,223
Payable to Financial Services 2,445 1,835
-------- --------
Total Automotive liabilities 88,224 82,344
Financial Services
Payables 5,054 3,550
Debt 149,063 139,919
Deferred income taxes 8,137 7,078
Other liabilities and deferred income 6,916 6,775
Payable to Automotive 1,869 2,304
-------- --------
Total Financial Services liabilities 171,039 159,626
Company-obligated mandatorily redeemable preferred securities of a subsidiary
trust holding solely junior subordinated debentures of the Company (Note 8) 674 675
Stockholders' equity
Capital stock
Preferred Stock, par value $1.00 per share (aggregate liquidation preference
of $177 million) * *
Common Stock, par value $1.00 per share (1,151 million shares issued) 1,151 1,151
Class B Stock, par value $1.00 per share (71 million shares issued) 71 71
Capital in excess of par value of stock 4,936 5,049
Accumulated other comprehensive income (2,934) (1,856)
ESOP loan and treasury stock (1,404) (1,417)
Earnings retained for use in business 22,823 24,606
-------- --------
Total stockholders' equity 24,643 27,604
-------- --------
Total liabilities and stockholders' equity $284,580 $270,249
======== ========
- - - -
</TABLE>
*Less than $1 million
The accompanying notes are part of the financial statements.
Visteon is reflected as a discontinued operation (Note 2)
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
For the Periods Ended June 30, 2000 and 1999
(in millions)
First Half 2000 First Half 1999
--------------------------- --------------------------
Financial Financial
Automotive Services Automotive Services
------------- ----------- ------------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Cash and cash equivalents at January 1 $ 2,793 $ 1,588 $ 3,143 $ 1,151
Cash flows from operating activities before securities trading 9,181 9,466 8,572 4,074
Net sales (purchases) of trading securities 419 60 762 (86)
------- -------- ------- --------
Net cash flows from operating activities 9,600 9,526 9,334 3,988
Cash flows from investing activities
Capital expenditures (2,952) (464) (2,709) (284)
Acquisitions of receivables and lease investments - (44,986) - (39,237)
Collections of receivables and lease investments - 22,211 - 25,292
Net acquisitions of daily rental vehicles - (2,469) - (1,901)
Purchases of securities (2,261) (302) (878) (533)
Sales and maturities of securities 2,217 312 669 609
Proceeds from sales of receivables and lease investments - 7,704 - 5,005
Net investing activity with Financial Services 45 - (100) -
Cash paid for acquisitions (Note 3) (2,060) (76) (5,834) -
Other - 190 (57) (6)
------- -------- ------- -------
Net cash used in investing activities (5,011) (17,880) (8,909) (11,055)
Cash flows from financing activities
Cash dividends (1,578) - (1,122) (2)
Issuance (purchases) of Common Stock (192) - (246) -
Changes in short-term debt (707) (5,588) 84 6,263
Proceeds from issuance of other debt 205 22,321 1,619 13,874
Principal payments on other debt (424) (7,574) (117) (13,596)
Net debt repayments (new debt) with discontinued operations 650 - (961) -
Net cash distribution (to) from discontinued operations (85) - 232 -
Net financing activity with Automotive - (45) - 100
Other 694 517 539 (26)
------- -------- ------- --------
Net cash (used in)/provided by financing activities (1,437) 9,631 28 6,613
Effect of exchange rate changes on cash (1) (145) (43) (187)
Net transactions with Automotive/Financial Services 1,045 (1,045) (717) 717
------- -------- ------- --------
Net increase (decrease) in cash and cash equivalents 4,196 87 (307) 76
------- -------- ------- --------
Cash and cash equivalents at June 30 $ 6,989 $ 1,675 $ 2,836 $ 1,227
======= ======== ======= ========
</TABLE>
Visteon is reflected as a discontinued operation (Note 2)
The accompanying notes are part of the financial statements.
<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,
1999. For purposes of Notes to Financial Statements, "Ford" or the
"Company" means Ford Motor Company and its majority owned subsidiaries
unless the context requires otherwise. Certain amounts for prior periods
were reclassified to conform with present period presentation.
2. Discontinued Operation - On April 12, 2000, the Ford Board of Directors
approved a plan for the complete separation of Visteon Corporation from
Ford by means of a tax-free spin-off in the form of a dividend on Ford
Common and Class B Stock consisting of all shares of Visteon common stock.
On June 28, 2000, Ford distributed 130 million shares of Visteon, which
represented its 100% ownership interest, to Ford Common and Class B
shareholders.
Holders of Ford Common and Class B Stock on the record date received
0.130933 shares of Visteon common stock for each share of Ford stock, and
participants in U.S. employee savings plans on the record date received
$1.72 in cash per share of Ford stock, based on the volume-weighted average
price of Visteon stock of $13.1326 per share on June 28, 2000. The total
value of the distribution (including the $365 million cash dividend) was
$2.1 billion or $1.72 per diluted share of Ford stock.
As a result of the spin-off of Visteon, Ford recorded an after-tax loss of
$2.3 billion. This represents the excess of the carrying value of Ford's
net investment in Visteon over the market value of Visteon on the
distribution date. Our financial statements have been restated to reflect
Visteon as a "discontinued operation" for all periods shown. The balance
sheet at June 30, 2000 no longer includes Visteon.
Sales and selected income data for Visteon were (in millions):
<TABLE>
<CAPTION>
Second Quarter First Half
------------------------- --------------------------
2000 1999 2000 1999
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales to Ford $4,571 $4,614 $9,047 $8,969
Sales to non-Ford customers 738 449 1,487 866
------ ------ ------- ------
Total Sales $5,309 $5,063 $10,534 $9,835
====== ====== ======= ======
Income before income taxes $ 266 $ 449 $ 503 $ 762
Provision for income taxes (96) (164) (182) (276)
Minority interest in net income of
subsidiaries (8) (5) (12) (1)
------ ------ ------ ------
Net income $ 162 $ 280 $ 309 $ 485
====== ====== ====== ======
</TABLE>
3. Purchase of BMW's Land Rover business - On June 30, 2000, we purchased the
Land Rover business from the BMW Group for a purchase price of
approximately 2.8 billion euros. Approximately two-thirds of the purchase
price (equivalent of $1.9 billion at June 30) was paid at time of closing.
The remainder will be paid in 2005. The acquisition involves the entire
Land Rover line of products, and related assembly and engineering
facilities. It does not include Rover's passenger car business or financial
services business.
The acquisition will be accounted for as a purchase. The assets purchased,
liabilities assumed and the results of operations of Land Rover will be
included in our financial statements on a consolidated basis beginning in
the third quarter of 2000. Our investment in Land Rover at June 30, 2000 is
included in Equity in net assets of affiliated companies.
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(unaudited)
4. Value Enhancement Plan - In April, 2000, our Board of Directors approved in
principle a recapitalization of the Company, known as the Value Enhancement
Plan. The recapitalization will be effected through the merger of Ford
Value Corporation, a wholly owned subsidiary of the Company, with and into
the Company pursuant to a Recapitalization Agreement and Plan of Merger,
dated as of June 27, 2000 (the "Agreement"). On June 27, 2000, our Board of
Directors approved the Agreement. The recapitalization is subject to
shareholder approval; shareholders of record on June 27, 2000 will be
eligible to vote on the recapitalization at a special meeting of
shareholders scheduled for August 2, 2000.
In the recapitalization, holders of the Company's Common and Class B Stock
will exchange each share of Common or Class B Stock for one share of a new
class of Common or Class B Stock (depending on the class owned before the
recapitalization) and, at the holders' option, one of the following: (1)
$20 in cash, subject to adjustment, (2) a fraction of a share of a new
class of common stock with a value of $20, calculated as provided in the
Agreement, or (3) a combination of cash and a new class of common stock,
with an aggregate value of $20, also calculated as provided in the
Agreement, with the relative cash and stock portions determined pursuant to
a formula intended to result in a stockholder maintaining approximately 99%
of his or her percentage ownership interest in the Company. The total cash
distributed in the recapitalization will be limited to $10 billion.
5. Selected Automotive costs and expenses are summarized as follows (in
millions):
<TABLE>
<CAPTION>
Second Quarter First Half
--------------------- ---------------------
2000 1999 2000 1999
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Depreciation $718 $668 $1,412 $1,284
Amortization 628 572 1,202 1,133
</TABLE>
6. European Charges - Following an extensive business review of the Ford Brand
operations in Europe, the Company recorded a pre-tax charge in Automotive
cost of sales of $1,568 million in the second quarter of 2000. This charge
included $1.1 billion for asset impairments and $468 million for
restructuring costs. The effect on after-tax earnings was $1,019 million.
The asset impairment charge, attributable to excess capacity related to
Ford's performance in the competitive and regulatory environment in Europe,
reflected the write-down of certain long-lived assets from their carrying
value to their estimated fair value, as determined by an independent
valuation of Automotive Ford Brand operations in Europe.
The restructuring charge included separation costs of $426 million and
other exit-related costs of $42 million. Separation includes a workforce
reduction of about 3,300 employees (2,900 hourly and 400 salaried) related
to the planned cessation of vehicle production at the Dagenham (U.K.) Body
and Assembly Plant, which will occur in two phases (in the third quarter
2000 and by first quarter 2002).
7. Automotive Inventories are summarized as follows (in millions):
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- ------------
<S> <C> <C>
Raw materials, work in process and supplies $2,159 $2,035
Finished products 4,092 3,649
------ ------
Total inventories $6,251 $5,684
====== ======
U.S. inventories $1,944 $1,811
</TABLE>
8. Company-Obligated Mandatorily Redeemable Preferred Securities of a
Subsidiary Trust - The sole asset of Ford Motor Company Capital Trust I
(the "Trust"), which is the obligor on the Preferred Securities of such
Trust, is $632 million principal amount of 9% Junior Subordinated
Debentures due 2025 of Ford Motor Company.
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(unaudited)
9. Comprehensive Income - Other comprehensive income includes foreign currency
translation adjustments, minimum pension liability adjustments, and net
unrealized gains and losses on investments in equity securities. Total
comprehensive income is summarized as follows (in millions):
<TABLE>
<CAPTION>
Second Quarter First Half
------------------------ -------------------------
2000 1999 2000 1999
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Net income (loss) $ (577) $2,338 $ 1,502 $ 4,317
Other comprehensive income (481) (335) (1,078) (443)
------- ------ ------- -------
Total comprehensive income $(1,058) $2,003 $ 424 $ 3,874
======= ====== ======= =======
</TABLE>
Effective January 1, 2000, the functional currency for Ford's automotive
operations in Brazil was changed from the U.S. dollar to the Brazilian real
in recognition of the primary currency of the environment in which Ford
will operate. The lower translated value of fixed assets and inventories in
the first quarter reduced other comprehensive income by about $350 million.
10. Income (loss) Per Share of Common and Class B Stock - Basic income per
share of Common and Class B Stock is calculated by dividing the income
attributable to Common and Class B Stock by the average number of shares of
Common and Class B Stock outstanding during the applicable period, adjusted
for shares issuable under employee savings and compensation plans.
The calculation of diluted income per share of Common and Class B Stock
takes into account the effect of dilutive potential common stock, such as
stock options.
Income (loss) per share of Common and Class B Stock was as follows (in
millions, except per share amounts):
<TABLE>
<CAPTION>
Second Quarter 2000 Second Quarter 1999
--------------------- ----------------------
Income Shares Income Shares
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Net income from continuing operations $1,513 1,205 $2,058 1,211
Preferred stock dividend requirements (3) - (3) -
Issuable and uncommitted ESOP shares - (9) - (3)
------ ----- ------ -----
Basic income and shares from continuing operations $1,510 1,196 $2,055 1,208
Basic income per share from continuing operations $ 1.26 $ 1.70
Basic income per share from discontinued operation 0.14 0.23
Basic loss per share on spin-off of discontinued operation (1.88) -
------ ------
Basic income (loss) per share $(0.48) $ 1.93
Basic income and shares from continuing operations $1,510 1,196 $2,055 1,208
Net dilutive effect of options - 26 - 29
------ ----- ------ -----
Diluted income and shares from continuing operations $1,510 1,222 $2,055 1,237
Diluted income per share from continuing operations $ 1.24 $ 1.66
Diluted income per share from discontinued operation 0.13 0.23
Diluted loss per share on spin-off of discontinued operation (1.84) -
------ ------
Diluted income (loss) per share $(0.47) $ 1.89
</TABLE>
<TABLE>
<CAPTION>
First Half 2000 First Half 1999
--------------------- ----------------------
Income Shares Income Shares
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Net income from continuing operations $3,445 1,206 $3,832 1,211
Preferred stock dividend requirements (7) - (7) -
Issuable and uncommitted ESOP shares - (8) - (4)
------ ----- ------ -----
Basic income and shares from continuing operations $3,438 1,198 $3,825 1,207
Basic income per share from continuing operations $ 2.87 $ 3.17
Basic income per share from discontinued operation 0.26 0.40
Basic loss per share on spin-off of discontinued operation (1.88) -
------ ------
Basic income per share $ 1.25 $ 3.57
Basic income and shares from continuing operations $3,438 1,198 $3,825 1,207
Net dilutive effect of options - 25 - 30
------ ----- ------ -----
Diluted income and shares from continuing operations $3,438 1,223 $3,825 1,237
Diluted income per share from continuing operations $ 2.81 $ 3.09
Diluted income per share from discontinued operation 0.25 0.39
Diluted loss per share on spin-off of discontinued operation (1.84) -
------ ------
Diluted income per share $ 1.22 $ 3.48
</TABLE>
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(unaudited)
11. Segment Information - Ford's business is divided into two business
sectors - Automotive and Financial Services (including Ford Credit and
Hertz); detail is summarized as follows (in millions):
<TABLE>
<CAPTION>
Financial Services Sector
---------------------------------
Second Auto Ford Other Elims/
Quarter Sector Credit Hertz Fin Svcs Other Total
----------- ----------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
2000
----
Revenues
External customer $ 37,366 $ 5,778 $ 1,271 $ 84 $ 20 $ 44,519
Intersegment 1,338 41 7 62 (1,448) -
-------- -------- ------- ------ ------- --------
Total Revenues $ 38,704 $ 5,819 $ 1,278 $ 146 $(1,428) $ 44,519
======== ======== ======= ====== ======= ========
Net income from continuing
operations $ 1,052 $ 388 $ 104 $ (18) $ (13) $ 1,513
1999
----
Revenues
External customer $ 35,546 $ 4,961 $ 1,162 $ 247 $ (9) $ 41,907
Intersegment 1,398 58 8 46 (1,510) -
-------- -------- ------- ------ ------- --------
Total Revenues $ 36,944 $ 5,019 $ 1,170 $ 293 $(1,519) $ 41,907
======== ======== ======= ====== ======= ========
Net income from continuing
operations $ 1,651 $ 335 $ 88 $ 2 $ (18) $ 2,058
</TABLE>
<TABLE>
<CAPTION>
Financial Services Sector
---------------------------------
First Auto Ford Other Elims/
Half Sector Credit Hertz Fin Svcs Other Total
----------- ---------------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
2000
----
Revenues
External customer $ 73,541 $ 11,269 $ 2,402 $ 182 $ 19 $ 87,413
Intersegment 2,496 80 15 104 (2,695) -
-------- -------- ------- ------ ------- --------
Total Revenues $ 76,037 $ 11,349 $ 2,417 $ 286 $(2,676) $ 87,413
======== ======== ======= ====== ======= ========
Net income from continuing
operations $ 2,604 $ 741 $ 160 $ (29) $ (31) $ 3,445
Total assets $104,363 $167,821 $11,451 $8,002 $(7,057) $284,580
1999
----
Revenues
External customer $ 67,143 $ 9,824 $ 2,189 $ 303 $ (3) $ 79,456
Intersegment 2,467 115 16 93 (2,691) -
-------- -------- ------- ------ ------- --------
Total Revenues $ 69,610 $ 9,939 $ 2,205 $ 396 $(2,694) $ 79,456
======== ======== ======= ====== ======== ========
Net income from continuing
operations $ 3,097 $ 635 $ 137 $ (10) $ (27) $ 3,832
Total assets a/ $ 96,843 $147,996 $10,123 $7,684 $(6,481) $256,165
- - - - -
</TABLE>
a/ Net assets of discontinued operation of $1,938 as of June 30, 1999 is
included in Auto Sector total assets.
"Other Financial Services" data is an aggregation of miscellaneous smaller
Financial Services Sector business components, including Ford Motor Land
Development Corporation, Ford Leasing Development Company, Ford Leasing
Corporation and Granite Management Corporation.
"Eliminations/Other" data includes intersegment eliminations and minority
interests. Interest income for the operating segments in the Financial
Services Sector is reported as "Revenue".