<PAGE> 1
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
(Date of earliest event reported) February 11, 1994
FORD MOTOR CREDIT COMPANY
------------------------------------------------------
(Exact name of registrant as specified in its charter)
INCORPORATED IN DELAWARE 1-6368 38-1612444
- ------------------------ ----------------------- -------------
(State of other juris- (Commission File Number) (IRS Employer
diction of incorporation) 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
<PAGE> 2
ITEM 5. OTHER EVENTS
Consolidated Financial Statements of Ford Motor Credit
Company ("Ford Credit") and Subsidiaries for the year ended
December 31, 1993 together with the Report of Independent
Accountants of Coopers & Lybrand, independent certified public
accountants, and the Ford Credit news release announcing 1993
financial results, filed as Exhibits 20.1 and 20.2, respectively,
to this Current Report on Form 8-K, are incorporated by reference
herein.
Ford Motor Company news release announcing 1993 financial
results, filed as Exhibit 20.3 to this Current Report on Form
8-K, is incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
EXHIBITS
<TABLE>
<CAPTION>
DESIGNATION DESCRIPTION METHOD OF FILING
- ----------- ----------- ----------------
<S> <C> <C>
Exhibit 20.1 1993 Audit of Consolidated Filed with
Financial Statements of Ford this Report
Credit and Subsidiaries together
with the Report of Independent
Accountants of Coopers & Lybrand,
independent certified public
accountants.
Exhibit 20.2 Ford Credit news release dated Filed with
February 9, 1994. this Report
Exhibit 20.3 Ford Motor Company news release Filed with
dated February 9, 1994. this Report
Exhibit 23 Consent of Coopers & Lybrand. Filed with
this Report
</TABLE>
<PAGE> 3
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 CREDIT COMPANY
(Registrant)
Date: February 11, 1994 By: /s/ R. P.Conrad
-------------------
R. P. Conrad
Assistant Secretary
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
DESIGNATION DESCRIPTION
- ----------- --------------------------
<S> <C>
Exhibit 20.1 1993 Audit of Consolidated
Financial Statements of Ford
Credit and Subsidiaries together
with the Report of Independent
Accountants of Coopers & Lybrand,
independent certified public
accountants.
Exhibit 20.2 Ford Credit news release dated
February 9, 1994.
Exhibit 20.3 Ford Motor Company news release
dated February 9, 1994.
Exhibit 23 Consent of Coopers & Lybrand.
</TABLE>
<PAGE> 1
Exhibit 20.1
FORD MOTOR CREDIT COMPANY
AND SUBSIDIARIES
1993 AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS
<PAGE> 2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Ford Motor Credit Company:
We have audited the consolidated balance sheet of Ford Motor Credit Company and
Subsidiaries at December 31, 1993 and 1992, and the related consolidated
statements of income and of earnings retained for use in the business and cash
flows for each of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Ford Motor Credit
Company and Subsidiaries at December 31, 1993 and 1992, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1993 in conformity with generally accepted
accounting principles.
As discussed in Notes 2, 3 and 10 to the consolidated financial statements, the
Company changed its methods of accounting for postretirement health care
benefits and income taxes in 1992.
Detroit, Michigan
February 1, 1994
2
<PAGE> 3
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME AND OF EARNINGS
RETAINED FOR USE IN THE BUSINESS
(in millions)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
---------------------------------------------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Financing revenue
Retail $ 3,676.3 $ 3,633.2 $ 3,772.6
Rental revenue on operating leases 3,218.9 2,062.9 1,266.4
Wholesale 679.6 712.4 1,101.9
Diversified 156.5 204.2 270.7
Other 221.1 221.2 289.4
--------- --------- ---------
Total financing revenue 7,952.4 6,833.9 6,701.0
Investment and other income 386.0 239.4 301.3
------------- ------------- -------------
Total revenue 8,338.4 7,073.3 7,002.3
Expenses
Interest expense 2,919.3 3,076.5 3,791.8
Depreciation on operating leases (Note 5) 2,675.7 1,652.6 1,030.5
Operating expenses 796.5 758.2 718.0
Provision for credit losses (Note 6) 270.2 418.0 577.9
------------- ------------- -------------
Total expenses 6,661.7 5,905.3 6,118.2
------------- ------------- -------------
Equity in net income of affiliated companies
(Notes 1 and 2) 198.3 155.2 191.0
------------- ------------- -------------
Income before income taxes and cumulative
effects of changes in accounting principles 1,875.0 1,323.2 1,075.1
Provision for income taxes (Note 3) 673.3 424.9 324.0
------------- ------------- -------------
Income before minority interest and cumulative
effects of changes in accounting principles 1,201.7 898.3 751.1
Minority interest in net income of subsidiaries 7.9 6.1 2.3
------------ ------------ ------------
Income before cumulative effects of
changes in accounting principles 1,193.8 892.2 748.8
Cumulative effects of changes in
accounting principles (Notes 2, 3 and 10) - 146.5 -
------------ ------------ ------------
Net income 1,193.8 1,038.7 748.8
Earnings retained for use in the business
Beginning of year 3,956.1 3,717.4 3,934.6
Dividends
Cash (250.0) (600.0) (650.0)
Stock of Ford Holdings, Inc. (Note 2) - (200.0) (316.0)
------------ ------------ ------------
End of year $ 4,899.9 $ 3,956.1 $ 3,717.4
------------- ------------ ------------
------------- ------------ ------------
</TABLE>
The accompanying notes are part of the financial statements.
3
<PAGE> 4
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------
ASSETS 1993 1992
------------- -------------
<S> <C> <C>
Cash and cash equivalents (Note 1) $ 992.3 $ 295.0
Investments in securities (Notes 12 and 14) 1,441.3 1,363.6
Finance receivables, net (Notes 4 and 6) 51,162.7 46,611.1
Notes and accounts receivable from affiliated
companies 384.4 420.5
Equity in net assets of affiliated companies
(Notes 1 and 2) 1,201.9 1,004.8
Net investment, operating leases (Notes 5 and 6) 12,600.9 7,747.2
Other assets (Note 7) 1,816.8 1,525.1
------------ ------------
Total assets $ 69,600.3 $ 58,967.3
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Accounts payable
Trade and other $ 953.2 $ 685.3
Affiliated companies 261.9 339.5
------------ ------------
Total accounts payable 1,215.1 1,024.8
Debt (Note 8) 58,870.2 49,909.4
Deferred income taxes (Note 3) 2,129.9 1,563.2
Other liabilities and deferred income (Note 10) 1,313.4 1,260.4
------------ ------------
Total liabilities 63,528.6 53,757.8
Minority interest in net assets of subsidiaries 297.0 326.6
STOCKHOLDER'S EQUITY
Capital stock, par value $100 a share, 250,000
shares authorized, issued and outstanding 25.0 25.0
Paid-in surplus (contributions by stockholder) 917.3 917.3
Unrealized gain on marketable equity
securities, net of taxes (Note 1) 17.8 18.6
Foreign currency translation adjustments (Note 1) (85.3) (34.1)
Earnings retained for use in the business 4,899.9 3,956.1
------------ ------------
Total stockholder's equity 5,774.7 4,882.9
------------ ------------
Total liabilities and stockholder's equity $ 69,600.3 $ 58,967.3
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are part of the financial statements.
4
<PAGE> 5
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
------------------------------------------------
1993 1992 1991
------------- ------------- ---------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income $ 1,193.8 $ 1,038.7 $ 748.8
Adjustments to reconcile net income to
net cash provided by operating
activities
Cumulative effects of changes in accounting
principles - (146.5) -
Provision for credit losses 270.2 418.0 577.9
Depreciation and amortization 2,745.8 1,732.7 1,109.0
Gain on sales of finance receivables (92.5) (0.1) (85.9)
Equity in net income of affiliates (198.3) (155.2) (191.0)
Deferred income taxes 565.3 328.2 145.7
Changes in the following items
Other assets (327.0) (169.3) (301.7)
Other liabilities 238.9 20.3 104.7
Other 17.6 (67.9) 62.8
------------- ------------- -------------
Net cash provided by
operating activities 4,413.8 2,998.9 2,170.3
------------- ------------- -------------
Cash flows from investing activities
Purchase of finance receivables (113,424.9) (88,295.2) (84,528.5)
Collection of finance receivables 105,933.6 83,956.9 85,117.7
Proceeds from sales of finance receivables 2,521.3 3,349.6 4,695.1
Purchase of operating lease vehicles (9,908.0) (6,464.0) (3,584.9)
Liquidation of operating lease vehicles 2,317.8 1,324.7 692.1
Other 53.9 (97.2) (92.6)
------------- ------------- -------------
Net cash (used in) provided by
investing activities (12,506.3) (6,225.2) 2,298.9
------------- ------------- -------------
Cash flows from financing activities
Proceeds from issuance of long-term debt 12,934.9 6,517.0 7,439.4
Principal payments on long-term debt (6,326.2) (7,348.1) (5,174.9)
Change in short-term debt, net 2,568.4 3,232.9 (4,923.3)
Cash dividends paid (250.0) (600.0) (650.0)
Other (132.8) (143.3) 412.7
------------- ------------- -------------
Net cash provided by (used in)
financing activities 8,794.3 1,658.5 (2,896.1)
Effect of exchange rate changes on
cash and cash equivalents (4.5) (9.9) (0.5)
------------- ------------- -------------
Net change in cash and cash equivalents 697.3 (1,577.7) 1,572.6
Cash and cash equivalents, beginning of year 295.0 1,872.7 300.1
------------- ------------- -------------
Cash and cash equivalents, end of year $ 992.3 $ 295.0 $ 1,872.7
------------- ------------- -------------
------------- ------------- -------------
Supplementary cash flow information
Interest paid $ 2,871.6 $ 3,198.2 $ 3,760.2
Taxes paid 101.2 4.0 121.1
</TABLE>
The accompanying notes are part of the financial statements.
5
<PAGE> 6
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Ford Motor Credit
Company ("Ford Credit") and its majority-owned domestic and foreign
subsidiaries and joint ventures. Affiliates that are 20-50 percent owned,
principally Ford Holdings, Inc. ("Ford Holdings"), are included in the
consolidated financial statements on an equity basis. Ford Credit is a wholly
owned subsidiary of Ford Motor Company ("Ford").
Net unrealized gains on marketable equity securities reported in a separate
component of stockholder's equity relate to Ford Credit's equity interest in
Ford Holdings' insurance investment portfolio.
Revenue Recognition
Revenue from finance receivables is recognized using the interest (actuarial)
method. Certain loan origination costs are deferred and amortized to financing
revenue over the life of the related loans using the interest method. Rental
revenue on operating leases is recognized as scheduled payments become due.
Allowance for Credit Losses
Allowances for estimated credit losses are established as required based on
historical experience. Other factors that affect collectibility also are
evaluated and additional amounts may be provided. Finance receivables and
lease investments are charged to the allowance for credit losses when an
account is deemed to be uncollectible taking into consideration the financial
condition of the borrower or lessee, the value of the collateral, recourse to
guarantors and other factors. Collateral held for resale included in other
assets is carried at the lower of the recorded investment in the receivable or
its estimated fair value at the date of repossession. Any difference between
the recorded investment in the receivable or lease and the actual sales price
of the underlying collateral is charged to the allowance for credit losses.
Recoveries on finance receivables and lease investments previously charged off
as uncollectible are credited to the allowance for credit losses.
6
<PAGE> 7
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 1. ACCOUNTING POLICIES (continued)
Foreign Currency Translation
Assets and liabilities of foreign subsidiaries are translated at year-end
exchange rates with the effects of these translation adjustments being reported
in a separate component of stockholder's equity. The change in this account
results from translation adjustments recorded during the year.
Cash Equivalents
Ford Credit considers investments purchased with a maturity of three months or
less to be cash equivalents.
Financial Statement Reclassifications
Certain amounts in prior year financial statements have been reclassified to
conform with presentations adopted in 1993.
NOTE 2. EQUITY INVESTMENT IN FORD HOLDINGS
Ford Holdings' primary activities consist of consumer and commercial financing
operations, insurance underwriting, and equipment leasing through its wholly
owned subsidiaries, Associates First Capital Corporation, The American Road
Insurance Company, and USL Capital Corporation (formerly United States Leasing
International, Inc.).
In 1992 and 1991, Ford Credit transferred $200 million and $316 million,
respectively, of Ford Holdings' common stock to Ford as dividends.
At December 31, 1993 and 1992, Ford Credit owned 45% of the common stock
representing 33.8% of the voting power of Ford Holdings. Ford owns the
remaining common stock representing 41.2% of the voting power. The balance of
the voting power is represented by preferred stock owned by persons other than
Ford or Ford Credit. At December 31, 1991, Ford Credit owned 54 percent of
Ford Holdings' common stock.
7
<PAGE> 8
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 2. EQUITY INVESTMENT IN FORD HOLDINGS (continued)
Condensed financial information of Ford Holdings as of December 31 was as
follows:
<TABLE>
<CAPTION>
1993 1992 1991
------------ ------------- -------------
(in millions)
<S> <C> <C> <C>
INCOME STATEMENT
Revenue $ 5,291.8 $ 4,816.8 $ 4,814.5
Income before income taxes and
cumulative effects of changes
in accounting principles 830.6 588.0 591.9
Cumulative effects of changes in
accounting principles - 25.8* -
Net income 511.4 382.9 384.4
Preferred stock dividend requirements 74.9 50.8 47.1
Income available for common stockholders 436.5 332.1 337.3
BALANCE SHEET
Assets
Cash and investments in securities $ 5,100.7 $ 3,659.6
Finance receivables, net 24,376.6 20,749.8
Accounts receivable (including affiliated
companies) and other assets 9,121.5 8,321.3
------------ -------------
Total assets $ 38,598.8 $ 32,730.7
------------ -------------
------------ -------------
Liabilities
Accounts payable (including affiliated
companies) and other liabilities $ 4,738.3 $ 3,466.5
Debt payable within one year 13,802.1 12,255.6
Long-term debt 15,767.7 13,511.1
------------ -------------
Total liabilities 34,308.1 29,233.2
Stockholders' equity 4,290.7 3,497.5
------------ -------------
Total liabilities and stockholders'
equity $ 38,598.8 $ 32,730.7
------------ -------------
------------ -------------
</TABLE>
Ford Credit's equity in the net assets of Ford Holdings at December 31, 1993
and 1992 was $ 1,199 million and $1,002.6 million, respectively.
*Ford Credit's equity in Ford Holdings' cumulative effects of changes in
accounting principles related to postretirement benefits and income taxes in
the amount of $11.6 million is included in Ford Credit's 1992 cumulative
effects of changes in accounting principles.
8
<PAGE> 9
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 3. INCOME TAXES
Ford Credit and certain of its domestic subsidiaries join Ford in filing
consolidated United States federal and state income tax returns. Pursuant to
an arrangement with Ford, United States income tax liabilities or credits are
allocated to Ford Credit in accordance with the contribution of Ford Credit and
its subsidiaries to Ford's consolidated tax position.
The provision for income taxes consisted of the following:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
(in millions)
<S> <C> <C> <C>
Currently payable/(refundable)
U. S. Federal $ 30.8 $ 21.5 $ 130.1
Foreign 33.0 38.4 32.9
State and local 39.7 30.3 (2.9)
-------- --------- ---------
Total currently payable 103.5 90.2 160.1
Deferred tax liability/(benefit)
U. S. Federal 518.0 309.0 96.4
Foreign (6.5) 0.2 8.0
State and local 58.3 25.5 59.5
-------- --------- ---------
Total deferred 569.8 334.7 163.9
-------- --------- ---------
Total provision for income taxes $ 673.3 $ 424.9* $324.0
-------- --------- ------
-------- --------- ------
</TABLE>
* Excludes the tax provision related to cumulative effects of changes in
accounting principles.
Ford Credit adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS No. 109"), as of January 1, 1992. The
cumulative effect of this change in accounting principle increased 1992 net
income by $216.6 million. Financial statements for prior years were not
restated to apply the provisions of SFAS No. 109.
9
<PAGE> 10
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 3. INCOME TAXES (continued)
Under SFAS No. 109, deferred income taxes reflect the estimated tax effect of
temporary differences between assets and liabilities for financial reporting
purposes and those amounts as measured by tax laws and regulations. The
components of deferred income tax assets and liabilities as of December 31 were
as follows:
<TABLE>
<CAPTION>
1993 1992
----------------------------- -----------------------------
DEFERRED DEFERRED DEFERRED DEFERRED
TAX TAX TAX TAX
ASSETS LIABILITIES ASSETS LIABILITIES
------------ ------------ ------------ -------------
(in millions) (in millions)
<S> <C> <C> <C> <C>
Leasing transactions $ - $ 2,403.7 $ - $ 2,037.0
Provision for credit losses 434.0 - 403.6 -
Purchased tax benefits - 303.2 - 300.5
Employee benefit plans 88.8 - 84.6 -
Loan origination costs - 56.8 - 41.4
Alternative minimum tax 53.7 - 247.3 -
Retail contract earnings method 50.1 - 48.8 -
Interest supplements 40.4 - 35.7 -
Other 47.7 80.9 43.1 47.4
------------ ------------ ------------ -------------
Total deferred income taxes $ 714.7 $ 2,844.6 $ 863.1 $ 2,426.3
------------ ------------ ------------ -------------
------------ ------------ ------------ -------------
</TABLE>
Deferred income taxes for 1991 were derived using the guidelines in Accounting
Principles Board Opinion No. 11, "Accounting for Income Taxes" ("APB No. 11").
Under APB No. 11, deferred income taxes result from timing differences in the
recognition of revenues and expenses between financial statements and tax
returns. The principal sources of these differences and the related effect of
each on Ford Credit's provision for income taxes were as follows:
<TABLE>
<CAPTION>
1991
----------
(in millions)
<S> <C>
Leasing transactions $ 330.7
Interest supplements 67.3
Purchased tax benefits 34.0
Loan origination costs 1.2
Alternative minimum tax (197.9)
Provision for credit losses (28.8)
Retail contract earnings method (18.2)
Sales of receivables (17.3)
Interest rate swap agreements (5.2)
State taxes (0.1)
Other (1.8)
---------
Total $ 163.9
---------
---------
</TABLE>
10
<PAGE> 11
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 3. INCOME TAXES (continued)
A reconciliation of the provision for income taxes as a percentage of income
before income taxes, excluding equity in net income of affiliated companies,
with the United States statutory tax rate for the last three years is shown
below:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
U. S. statutory tax rate 35.0% 34.0% 34.0%
Effect of (in percentage points)
State and local income taxes 3.8 3.2 4.2
Rate adjustments on U.S. and foreign
deferred taxes 1.7 - -
Investment income not subject to tax or
subject to tax at reduced rates (1.0) (2.0) (3.5)
Other 0.8 1.4 1.9
----- ----- -----
Effective tax rate 40.3% 36.6%* 36.6%
----- ----- -----
----- ----- -----
</TABLE>
*Excludes cumulative effects of changes in accounting principles.
11
<PAGE> 12
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 4. FINANCE RECEIVABLES
Finance receivables at December 31 were as follows:
<TABLE>
<CAPTION>
1993 1992
----------- -----------
(in millions)
<S> <C> <C>
Retail $ 38,609.3 $ 35,600.7
Wholesale 11,698.5 10,056.9
Diversified 3,084.0 3,550.2
Other 3,626.5 3,279.0
------------- ------------
Total finance receivables 57,018.3 52,486.8
Add: Loan origination costs, net 125.4 101.8
Less: Unearned income (5,263.3) (5,212.5)
Allowance for credit losses (717.7) (765.0)
------------- ------------
Finance receivables, net $ 51,162.7 $ 46,611.1
------------ ------------
------------ ------------
</TABLE>
Included in finance receivables is a total of $1.5 billion owed by three
customers with the largest receivable balances. During 1993, Ford Credit
issued irrevocable standby letters of credit in the amount of $223.5 million on
behalf of one of these customers. A major portion of these amounts are
guaranteed by Ford.
At December 31, 1993, other finance receivables primarily consisted of capital
and other dealer loans.
The majority of retail receivables, a portion of diversified receivables and
certain other finance receivables include finance charges that represent income
to be earned in future periods. The remaining finance receivables only include
principal.
The maturities of finance receivables outstanding at December 31, 1993 were as
follows:
<TABLE>
<CAPTION>
DUE IN YEAR
ENDING DECEMBER 31 DUE
------------------------------------------ AFTER
1994 1995 1996 1996 TOTAL
------------- ------------ ------------ ------------ ------------
(in millions)
<S> <C> <C> <C> <C> <C>
Retail $ 14,418.3 $ 10,507.0 $ 7,834.0 $ 5,850.0 $ 38,609.3
Wholesale 11,698.5 - - - 11,698.5
Diversified 258.4 208.1 115.3 2,502.2 3,084.0
Other 2,238.8 136.5 79.2 1,172.0 3,626.5
------------- ------------- ----------- ----------- -------------
Total $ 28,614.0 $ 10,851.6 $ 8,028.5 $ 9,524.2 $ 57,018.3
------------- ------------- ------------ ----------- -------------
------------- ------------- ------------ ----------- -------------
</TABLE>
It is Ford Credit's experience that a substantial portion of finance
receivables are repaid before contractual maturity dates. The above table,
therefore, is not to be regarded as a forecast of future cash collections.
12
<PAGE> 13
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 4. FINANCE RECEIVABLES (continued)
Installments, including interest, past-due 60 days or more and the aggregate
receivable balances related to such past-due installments were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1993 DECEMBER 31, 1992
----------------------- -----------------------
INSTALLMENTS BALANCES INSTALLMENTS BALANCES
------------ -------- ------------ --------
(in millions)
<S> <C> <C> <C> <C>
Retail $ 10.2 $ 97.7 $ 11.5 $ 97.1
Diversified 12.9 56.1 10.5 94.3
Other 112.3 207.6 89.2 194.5
-------- -------- -------- --------
Total $ 135.4 $ 361.4 $ 111.2 $ 385.9
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
Installments past-due less than 60 days included in finance receivables at
December 31, 1993 and 1992 were $314.6 million and $244.9 million,
respectively.
The average yield on net earning finance receivables and operating leases was
as follows: 1993 - 13.4%; 1992 - 13.2%; 1991 - 13.0%.
Included in retail and diversified receivables are investments in direct
financing and leveraged leases related to the leasing of motor vehicles and
various types of transportation and other equipment:
<TABLE>
<CAPTION>
1993 1992
----------- ------------
(in millions)
<S> <C> <C>
Investment in direct financing leases
Minimum lease rentals $ 1,752.6 $ 1,713.3
Estimated residual values 1,383.8 1,051.3
Lease origination costs 2.9 1.4
Less: Unearned income (471.4) (451.3)
Allowance for credit losses (47.0) (51.3)
----------- ------------
Net investment in direct
financing leases $ 2,620.9 $ 2,263.4
----------- ------------
----------- ------------
</TABLE>
Minimum direct financing lease rentals (including executory costs of $50.5
million) for each of the five succeeding years are as follows (in millions):
1994 - $842.3; 1995 - $533.3; 1996 - $261.8; 1997 - $94.0; 1998 - $16.4;
thereafter - $55.3.
13
<PAGE> 14
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 4. FINANCE RECEIVABLES (continued)
<TABLE>
<CAPTION>
1993 1992
------------- ------------
(in millions)
<S> <C> <C>
Investment in leveraged leases
Rentals receivable (net of principal
and interest on nonrecourse debt) $ 1,417.4 $ 1,448.1
Estimated residual values 479.7 481.4
Lease origination costs 3.2 4.6
Less: Unearned income (388.9) (414.0)
Allowance for credit losses (18.9) (18.5)
------------ ------------
Investment in leveraged leases 1,492.5 1,501.6
Less deferred income taxes arising
from leveraged leases (1,398.2) (1,297.9)
------------ ------------
Net investment in leveraged leases $ 94.3 $ 203.7
------------- ------------
------------- ------------
</TABLE>
NOTE 5. NET INVESTMENT, OPERATING LEASES
Operating leases at December 31 were as follows:
<TABLE>
<CAPTION>
1993 1992
------------- ------------
(in millions)
<S> <C> <C>
Investment in operating leases
Vehicles and other equipment, at cost $ 15,752.7 $ 9,814.5
Lease origination costs 20.3 5.5
Less: Accumulated depreciation (2,974.3) (1,922.3)
Allowance for credit losses (197.8) (150.5)
------------ ------------
Net investment in operating leases $ 12,600.9 $ 7,747.2
------------ ------------
------------ ------------
</TABLE>
Future minimum rentals on operating leases are as follows (in millions):
1994 - $3,346.2; 1995 - $1,632.6; 1996 - $226.4; 1997 - $7.1.
Depreciation expense on operating leases is provided for on a straight-line
basis over the term of the lease and includes gains or losses upon disposal or
impairment of the vehicle.
14
<PAGE> 15
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 6. ALLOWANCE FOR CREDIT LOSSES
Following is an analysis of the allowance for credit losses relating to finance
receivables and operating leases for the past three years:
<TABLE>
<CAPTION>
1993 1992 1991
----------- ---------- -----------
(in millions)
<S> <C> <C> <C>
Balance, beginning of year $ 915.5 $ 825.4 $ 894.9
Additions 270.2 418.0 577.9
Deductions
Losses 391.8 476.5 673.9
Recoveries (163.4) (133.9) (145.0)
----------- ---------- -----------
Net losses 228.4 342.6 528.9
Other changes, including reclassifications
and amounts related to finance
receivables sold 41.8 (14.7) 118.5
----------- ---------- -----------
Net deductions 270.2 327.9 647.4
----------- ---------- -----------
Balance, end of year $ 915.5 $ 915.5 $ 825.4
----------- ---------- -----------
----------- ---------- -----------
</TABLE>
NOTE 7. OTHER ASSETS
Other assets consist of:
<TABLE>
<CAPTION>
DECEMBER 31
----------------------------
1993 1992
------------ ------------
(in millions)
<S> <C> <C>
Investment in used vehicles held for
resale (Note 12) $ 1,085.8 $ 870.9
Deferred charges and other assets 359.6 266.8
Collateral held for resale 299.9 315.8
Property and equipment, at cost less
accumulated depreciation of $48.2
in 1993 and $41.7 in 1992 71.5 71.6
------------ ------------
Total $ 1,816.8 $ 1,525.1
------------ ------------
------------ ------------
</TABLE>
15
<PAGE> 16
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 8. DEBT
Debt at December 31 was as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1993
-------------------
WEIGHTED
AVERAGE DECEMBER 31
INTEREST ------------------------
RATES MATURITIES 1993 1992
---------- ---------- ------------ ------------
(in millions)
<S> <C> <C> <C> <C>
PAYABLE WITHIN ONE YEAR
Commercial paper $ 24,506.1 $ 21,210.5
Other short-term debt* 1,001.0 1,785.2
------------ ------------
Total short-term debt 25,507.1 22,995.7
Senior and subordinated
notes and debentures
payable within one year 7,882.6 5,476.2
------------ ------------
Total payable within
one year 33,389.7 28,471.9
------------ ------------
PAYABLE AFTER ONE YEAR
Unsecured senior notes
Notes 6.77% 1995-2048 25,526.8 21,416.2
Unamortized (discount)/premium (46.8) 7.9
------------- ------------
Total unsecured senior
notes 25,480.0 21,424.1
Unsecured subordinated
convertible debentures 4.5% 1995-1996 0.5 2.0
Other - 11.4
---------- ---------
Total payable after one year 25,480.5 21,437.5
------------ ------------
Total debt $ 58,870.2 $ 49,909.4
------------ ------------
------------ ------------
</TABLE>
* Includes $150 million and $800 million with an affiliated company at
December 31, 1993 and 1992, respectively.
16
<PAGE> 17
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 8. DEBT (continued)
Rates were variable on approximately 11.6 percent of the debt payable after one
year including the effects of interest rate swap agreements.
The average amount of commercial paper outstanding during the past three years
was as follows (in millions): 1993 - $22,683; 1992 - $19,358; 1991 - $19,078.
The weighted average commercial paper interest rates per annum for these years
were as follows: 1993 - 3.2%; 1992 - 4.2%; 1991 - 6.9%. The average remaining
term of commercial paper was 28 days at December 31, 1993 and 1992.
The aggregate principal amounts of notes with terms of more than one year from
dates of issue, maturing for each of the five succeeding years are as follows
(in millions): 1994 - $7,882.6; 1995 - $4,662.6; 1996 - $6,260.6; 1997 -
$2,065.6; 1998 - $6,561.1; thereafter - $5,977.4.
Included in debt at December 31, 1993 were obligations payable in foreign
currencies: $2,348.6 million in Canadian dollars; $840.6 million in Australian
dollars; $517.9 million in Japanese yen; $377.6 million in German deutsche
marks; $220.7 million in Luxembourg francs; $156.4 million in Italian lire;
$147.4 million in European currency units; and $136.6 million in Swiss francs.
Certain of these obligations are denominated in currencies other than the
currency of the country of the issuer. Foreign currency forward contracts are
purchased and currency swaps are used to hedge exposure to changes in exchange
rates of such obligations. These obligations are translated in the financial
statements at the rates of exchange established under the related foreign
currency forward contracts and currency swaps and would have been $64.7 million
lower if translated at current exchange rates as of December 31, 1993.
The convertible subordinated debentures are convertible into common stock of
Ford. Ford Credit has entered into an agreement with Ford to purchase from
Ford the common stock required to effect conversion.
17
<PAGE> 18
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 9. SUPPORT FACILITIES
Support facilities represent additional sources of funds, if required. At
January 1, 1994, Ford Credit had approximately $15.7 billion of contractually
committed facilities for use in the United States, 83 percent of which are
available through June 1998. These facilities included $12.8 billion of
revolving credit agreements with banks (which included $4.8 billion of Ford
bank lines that may be used either by Ford or Ford Credit at Ford's option) and
$2.9 billion of agreements to sell retail receivables. At January 1, 1994, all
of these U. S. facilities were unused.
Outside of the United States, an additional $1,185 million of facilities
support borrowing operations in Canada, Australia and Puerto Rico, of which 82
percent are contractually committed and available through June 1998. Canadian
facilities of $759 million included $210 million of Ford Motor Company of
Canada Limited and Ford Ensite International Inc. lines which are available to
Ford Credit Canada Limited at the option of these two companies. Australian
facilities of $401 million included $155 million of Ford Motor Company of
Australia Limited lines which are available to Ford Credit Australia Limited at
the option of Ford Motor Company of Australia Limited. Ford Motor Credit
Company of Puerto Rico, Inc. had $25 million in support facilities at January
1, 1994. Substantially all of these facilities were unused at January 1, 1994.
NOTE 10. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
Ford Credit and certain of its subsidiaries provide selected health care and
life insurance benefits for retired employees under unfunded plans sponsored by
Ford and certain of its subsidiaries. Ford Credit's U.S. and Canadian
employees may become eligible for those benefits if they retire while working
for Ford Credit; however, benefits and eligibility rules may be modified from
time to time. Prior to 1992, the expense recognized for postretirement health
care benefits was based on actual expenditures for the year. Beginning in
1992, the estimated cost for postretirement health care benefits is accrued on
an actuarially determined basis, in accordance with the requirements of
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" ("SFAS No. 106"). Implementation
of SFAS No. 106 has not increased Ford Credit's cash expenditures for
postretirement benefits. Ford Credit elected to recognize immediately the
prior-year unaccrued accumulated postretirement benefit obligation, resulting
in an adverse effect on income of $81.7 million in the first quarter of 1992.
The charge reflected an unaccrued retiree benefit obligation liability of
$131.6 million, offset partially by projected tax benefits of $49.9 million.
18
<PAGE> 19
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 10. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS (continued)
Net postretirement benefit expense included the following (in millions):
<TABLE>
<CAPTION>
1993 1992
----------- ----------
<S> <C> <C>
Benefits attributed to employees' service $ 7.0 $ 12.1
Interest on accumulated benefit obligation 13.1 10.0
----------- ----------
Net postretirement benefit expense $ 20.1 $ 22.1
------------ ----------
------------ ----------
Retiree benefit payments $ 3.2 4.5
</TABLE>
The status of these plans, reconciled with the amounts recognized in Ford
Credit's balance sheet at December 31, was as follows (in millions):
<TABLE>
<CAPTION>
1993 1992
----------- ----------
<S> <C> <C>
Accumulated Postretirement Benefit Obligation:
- ---------------------------------------------
Retirees $ 53.0 $ 43.4
Active employees eligible to retire 23.4 22.0
Other active employees 120.2 112.5
---------- ----------
Total accumulated obligation $ 196.6 $ 177.9
Unamortized amendments 2.1 -
Unamortized net loss (11.4) (9.7)
--------- ---------
Accrued liability $ 187.3 $ 168.2
---------- ----------
---------- ----------
Assumptions:
Discount rate at year-end 7.5 % 8.5%
Present health care cost trend rate 9.7 10.3
Ultimate trend rate in ten years 5.5 5.5
Weighted-average trend rate 6.8 6.9
</TABLE>
Changing the assumed health care cost trend rates by one percentage point would
change the aggregate service and interest cost components of net periodic
postretirement benefit cost for 1993 by $3.5 million and the accumulated
postretirement benefit obligation at December 31, 1993 by $29.3 million.
19
<PAGE> 20
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 11. INDUSTRY SEGMENTS AND FOREIGN OPERATIONS
Ford Credit, its subsidiaries and affiliates operate in two industry segments -
financing and insurance. Financing operations primarily consist of: the
purchase from franchised Ford vehicle dealers of retail installment sale
contracts and retail leases; wholesale financing and capital loans to
franchised Ford vehicle dealers and other dealers associated with such dealers;
loans to vehicle leasing companies; and diversified financing. In addition, a
wholly owned subsidiary of Ford Credit provides these financing services in the
U.S. to other vehicle dealers. Insurance operations conducted through Ford
Credit's equity investment in Ford Holdings consist of: the issuance of single
premium deferred annuities; property and casualty insurance relating to
extended service plan contracts for new and used vehicles manufactured by
affiliated and nonaffiliated companies, primarily originating from Ford
dealers; credit life and credit disability insurance for retail purchasers of
vehicles and equipment; and physical damage insurance covering vehicles and
equipment financed at wholesale by Ford Credit and its subsidiaries.
Ford Credit, through certain of its subsidiaries, operates in several foreign
countries, the most significant of which are Canada and Australia. Total
revenue, income before income taxes and cumulative effects of changes in
accounting principles, and assets identifiable with United States and foreign
operations were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
------------- ------------- ------------
(in millions)
<S> <C> <C> <C>
Total revenue
United States operations $ 7,694.8 $ 6,339.2 $ 6,170.6
Foreign operations 643.6 734.1 831.7
------------- ------------ ------------
Total revenue $ 8,338.4 $ 7,073.3 $ 7,002.3
------------- ------------- ------------
------------- ------------- ------------
Income before income taxes and cumulative
effects of changes in accounting principles
United States operations $ 1,610.3 $ 1,084.4 $ 788.3
Foreign operations 66.4 83.6 95.8
Equity in net income of affiliated
companies 198.3 155.2 191.0
------------- ------------ ------------
Total income before income taxes
and cumulative effects of
changes in accounting principles $ 1,875.0 $ 1,323.2 $ 1,075.1
------------- ------------- ------------
------------- ------------- ------------
Assets at December 31
United States operations $ 64,027.3 $ 53,655.2
Foreign operations 4,371.1 4,307.3
Equity in net assets of affiliated
companies 1,201.9 1,004.8
------------- -------------
Total assets $ 69,600.3 $ 58,967.3
------------- -------------
------------- -------------
</TABLE>
20
<PAGE> 21
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 12. TRANSACTIONS WITH AFFILIATED COMPANIES
An agreement with Ford provides for payments by Ford to Ford Credit that would
maintain Ford Credit's consolidated income before income taxes and net income
at specified minimum levels. No payments were required under the agreement
during 1993, 1992, or 1991.
Ford Credit and its subsidiaries, from time to time, purchase accounts
receivable of certain divisions and subsidiaries of Ford. The amount of such
receivables outstanding was $1,076.9 million at December 31, 1993 and $948.0
million at December 31, 1992. Agreements with Ford also provide for payment to
Ford Credit for interest supplements and other support costs on certain
financing and leasing transactions. Amounts included in total revenue from
these and other transactions with Ford were as follows (in millions): 1993 -
$583.0; 1992 - $622.8; 1991 - $618.9. Ford Credit and its subsidiaries
purchase from Ford and affiliates certain vehicles which were previously
acquired by Ford principally from its fleet and rental car customers. The cost
of these vehicles held for resale and included in other assets at December 31
was as follows (in millions): 1993 - $456.5; 1992 - $368.1. Ford Credit also
has entered into a sale/leaseback agreement with Ford for vehicles leased to
employees of Ford and its subsidiaries. The net investment in these lease
vehicles included in operating leases at December 31 was as follows (in
millions): 1993 - $562.3; 1992 - $501.3.
Investments in securities include preferred stock of a nonaffiliate ($324
million) and of an affiliate ($335.9 million) which were acquired from Ford.
Investments in these securities are recorded at cost. Ford has provided Ford
Credit with certain guarantees related to Ford Credit's initial investment and
return on investment in this preferred stock, and for certain related finance
receivables. Amounts related to these transactions included in investment and
other income were as follows (in millions): 1993 - $52.7; 1992 - $47.2; 1991
- - $57.2.
Ford Credit and its subsidiaries receive technical and administrative advice
and services from Ford and its subsidiaries, occupy office space furnished by
Ford and its subsidiaries and utilize data processing facilities maintained by
Ford. Payments to Ford and its subsidiaries for such services are charged to
operating expenses and were as follows (in millions): 1993 - $57.1; 1992 -
$53.6; 1991 - $59.4.
21
<PAGE> 22
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 12. TRANSACTIONS WITH AFFILIATED COMPANIES (continued)
Retirement benefits are provided under defined benefit plans for employees of
Ford Credit and its subsidiaries in the United States by the Ford General
Retirement Plan and for employees of the foreign subsidiaries in Australia and
Canada by the respective Ford retirement plans. Employee retirement plan costs
allocated to Ford Credit and its subsidiaries from Ford and charged to
operating expenses were as follows (in millions): 1993 - $5.8; 1992 - $6.1;
1991 - $11.0.
At December 31, 1993 and 1992, Ford Credit had guaranteed $94.6 million and
$81.0 million of debt outstanding of other subsidiaries of Ford.
See other notes for additional information regarding transactions with
affiliated companies.
NOTE 13. LITIGATION AND CLAIMS
Various legal actions, governmental proceedings and other claims are pending or
may be instituted or asserted in the future against Ford Credit and its
subsidiaries. Certain of the pending legal actions are, or purport to be,
class actions. Some of these matters involve or may involve compensatory,
punitive or antitrust or other treble damage claims in very significant amounts
or other relief which, if granted, would require very significant expenditures.
Litigation is subject to many uncertainties, the outcome of individual
litigated matters is not predictable with assurance and it is reasonably
possible that some of the foregoing matters could be decided unfavorably to
Ford Credit or the subsidiary involved. Although the amount of liability at
December 31, 1993 with respect to these matters cannot be ascertained, Ford
Credit believes that any resulting liability should not materially affect the
consolidated financial position of Ford Credit and its subsidiaries at December
31, 1993.
22
<PAGE> 23
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 14. FINANCIAL INSTRUMENTS
Book and Estimated Fair Value of Financial Instruments
The estimated fair value of financial instruments held by Ford Credit and its
subsidiaries at December 31, and the valuation techniques used to estimate the
fair value, were as follows:
<TABLE>
<CAPTION>
1993 1992
------------------------------- ------------------------------
ESTIMATED ESTIMATED
BOOK FAIR BOOK FAIR
VALUE VALUE VALUE VALUE
--------------- --------------- -------------- --------------
(in millions) (in millions)
<S> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ 992.3 $ 992.3 $ 295.0 $ 295.0
Investments in securities 1,441.3 1,499.8 1,363.6 1,363.6
Finance receivables 46,133.9 46,605.1 42,109.6 42,380.0
Liabilities
Debt payable after one year $ 25,480.5 $ 26,853.5 $ 21,437.5 $ 22,553.0
</TABLE>
CASH AND CASH EQUIVALENTS. The book value approximates fair value because of
the short maturity of these instruments.
INVESTMENTS IN SECURITIES. Investments in securities include common stock of a
nonaffiliate, preferred stock of an affiliate and a nonaffiliate which were
acquired from Ford, and subordinated retained interests in receivable sales.
At December 31, 1993, the formula determined fair value of the common stock
exceeded its book value by $58.5 million. Preferred stock is recorded at cost,
which approximates fair value, as Ford provides Ford Credit with certain
guarantees related to Ford Credit's initial investment and return on
investment. Subordinated retained interests in receivable sales are recorded
at the present value of estimated future cash flows discounted at rates
commensurate with this type of instrument, which approximates fair value.
FINANCE RECEIVABLES. The fair value of most receivables is estimated by
discounting future cash flows using an estimated discount rate which reflects
the credit, interest rate and prepayment risks associated with similar types of
instruments. For receivables with short maturities, the book values
approximate fair values. Finance receivables excluded from fair market
valuation include direct financing and leveraged lease investments, and other
miscellaneous accounts receivable.
DEBT. The fair value is estimated based on quoted market prices or on current
rates for similar debt with the same remaining maturities.
23
<PAGE> 24
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 14. FINANCIAL INSTRUMENTS (continued)
Financial Instruments With Off-Balance-Sheet Risk
The following sections describe the various off-balance-sheet financial
instruments that Ford Credit held as of December 31, 1993 and 1992. Also
included is a brief discussion of the fair value of those contracts and certain
risks associated with holding those contracts through maturity.
FOREIGN EXCHANGE INSTRUMENTS. Ford Credit and certain of its subsidiaries have
entered into foreign exchange agreements to manage exposure to foreign exchange
rate fluctuations. These exchange agreements hedge principal and interest
payments on debt that are denominated in foreign currencies. Agreements
entered into to manage these exposures include foreign currency forward
contracts and currency swaps.
Foreign currency forward contracts and currency swaps involve agreements to
purchase or sell specified amounts of foreign currencies at specified rates on
specific future dates. The fair value of these foreign exchange agreements was
estimated using current market rates. The fair value was estimated to be a net
receivable of $54.1 million at December 31, 1993 and $107.2 million at December
31, 1992.
In the unlikely event that a counterparty fails to meet the terms of the
contract, Ford Credit's market risk is limited to the currency rate
differential. In the case of currency swaps, Ford Credit's market risk also
may include an interest rate differential. At December 31, 1993 and 1992, the
total notional amount of Ford Credit's foreign currency forward contracts and
currency swaps outstanding was $2.1 billion.
INTEREST RATE INSTRUMENTS. Ford Credit and certain of its subsidiaries have
entered into arrangements to manage exposure to fluctuations in interest rates.
These arrangements include primarily interest rate swap agreements and, to a
lesser extent, interest rate options.
24
<PAGE> 25
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 14. FINANCIAL INSTRUMENTS (continued)
Interest rate swap agreements involve the exchange of interest obligations on
fixed and floating interest rate debt without the exchange of the underlying
principal amounts. The differential paid or received on interest rate swap
agreements is recognized as an adjustment to interest expense over the term of
the underlying debt agreement.
Interest rate option contracts allow the holder of the option to purchase or
sell a financial instrument at a specified price and within a specified period
of time.
The fair value of interest rate instruments is the estimated amount Ford Credit
would receive or pay to terminate the agreement or contract. The fair value is
calculated using current market rates and the remaining terms of the agreements
or contracts. At December 31, 1993 and 1992, the fair value of these interest
rate instruments was estimated to be $458.2 million and $273.4 million,
respectively, including unrealized gains of $410.6 million and $221.5 million,
respectively.
In the unlikely event that a counterparty fails to meet the terms of an
interest rate instrument, Ford Credit's exposure is limited to the interest
rate differential. The underlying notional amount on which Ford Credit has
interest rate swap and option agreements outstanding aggregated $31.1 billion
at December 31, 1993 and $16.9 billion at December 31, 1992.
Concentrations of Credit Risk
Ford Credit controls its credit risk through credit standards, limits on
exposure and by monitoring the financial conditions of other parties. The
majority of Ford Credit's finance receivables are geographically diversified
throughout the United States. Foreign finance receivables are concentrated in
Canada and Australia.
25
<PAGE> 26
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 15. SELECTED QUARTERLY FINANCIAL DATA
(UNAUDITED)
Selected financial data by calendar quarter for the past two years were as
follows:
<TABLE>
<CAPTION>
TOTAL INTEREST PROVISION FOR NET
REVENUE EXPENSE CREDIT LOSSES INCOME
------- ------- ------------- ------
(in millions)
<S> <C> <C> <C> <C>
1993
First Quarter $ 1,960.1 $ 718.2 $ 84.4 $ 315.1
Second Quarter 2,053.6 725.0 68.1 306.2
Third Quarter 2,180.2 733.2 87.3 274.3
Fourth Quarter 2,144.5 742.9 30.4* 298.2
----------- ----------- --------- -----------
Full Year $ 8,338.4 $ 2,919.3 $ 270.2 $ 1,193.8
----------- ----------- --------- -----------
----------- ----------- --------- -----------
1992
First Quarter $ 1,723.4 $ 843.8 $ 105.1 $ 353.7
Second Quarter 1,737.4 790.1 79.7 227.7
Third Quarter 1,784.6 734.1 115.1 240.2
Fourth Quarter 1,827.9 708.5 118.1 217.1
----------- ----------- --------- -----------
Full Year $ 7,073.3 $ 3,076.5 $ 418.0 $ 1,038.7
----------- ----------- --------- -----------
----------- ----------- --------- -----------
</TABLE>
____________
* The provision for credit losses for the fourth quarter of 1993 was
reduced by $78.8 million as a result of continued improvement in credit
loss experience.
26
<PAGE> 1
EXHIBIT 20.2
FORD CREDIT REPORTS RECORD 1993 EARNINGS
DEARBORN, Mich., Feb. 9 -- Ford Motor Credit Company today
reported record earnings for the third consecutive year in 1993.
Chairman William E. Odom and President Edsel B. Ford II announced
that net income for the year was $1.194 billion, up $155 million
or 15 percent from 1992. Excluding a one-time gain resulting
from the adoption of new accounting standards for income taxes
and postretirement benefits in 1992, net income was up $302
million or 34 percent from a year ago.
Compared with 1992, the earnings improvement reflected
primarily higher levels of earning assets, lower credit losses,
and the effect of gains on sales of receivables, partially offset
by an increase in the U. S. income tax rate. At Dec. 31, Ford
Credit's total gross finance receivables and net investment in
operating leases were $69.6 billion compared with $60.2 billion a
year earlier. Credit losses were 0.35 percent of average
receivables compared with 0.60 percent a year ago.
"Ford Credit's record 1993 earnings are a tribute to our employees who
maintain a strong customer focus," Mr. Odom said. "We have been able to grow
the business and reduce credit losses. Ford Credit has positioned itself well
to compete in an increasingly competitive environment."
Ford Credit provided retail financing for 2,210,000 new and
used vehicles sold in the United States, up 18 percent from a
year ago. The company financed 38 percent of new vehicles sold
by Ford and Lincoln-Mercury dealers in the United States, equal
to 1992. It also provided wholesale financing for 81 percent of
Ford Motor Company sales to U. S. car and truck dealers, up three
percentage points from a year ago.
"During the past year we made tremendous strides in
improving the services we provide our customers and it paid off
on the bottom line," Mr. Ford noted. "Both dealer and retail
customer satisfaction ratings improved dramatically last year,
and we also saw a major improvement in how our employees feel
about working for Ford Credit."
Ford Credit provides vehicle financing for more than 6,000
Ford, Lincoln-Mercury, Ford Truck and affiliated automotive
dealers, and for 5 million retail customers in the United States,
Puerto Rico, Canada and Australia. The company provides vehicle
financing for non-Ford dealers, including private-label
arrangements with Jaguar and Mazda, through PRIMUS Automotive
Financial Services, Inc., a wholly-owned subsidiary. In 1993,
Ford Credit launched a new vehicle financing operation in Japan.
Ford Credit also is a joint owner in Ford New Holland Credit
Company, which provides financial services for tractor and
equipment dealers in the United States and Canada. In addition,
it directs the activities of the international vehicle financing
<PAGE> 2
affiliates of Ford Motor Company in 19 other countries (their
financial results are not included in Ford Credit earnings), and
it manages the insurance businesses of The American Road
Insurance Company.
Ford Credit is a wholly-owned subsidiary of Ford Motor
Company and part of Ford's Financial Services Group.
<PAGE> 1
EXHIBIT 20.3
Corporate News Public Affairs
Ford Motor Company
The American Road
Room 904
Dearborn, MI 48121
Telephone:(313)322-9600
Fax: (313)845-0570
IMMEDIATE RELEASE
Contact: Kathryn Blackwell
(313) 322-3436
FORD'S 1993 PROFIT REFLECTED WORLDWIDE IMPROVEMENT
DEARBORN, Mich., Feb. 9 -- Sharply improved U.S. automotive
operations, another record year in financial services and
successful cost-reduction programs worldwide were key elements of
Ford Motor Company's 1993 earnings of $2.5 billion or $4.55 per
share of common and Class B stock.
"I'm proud of our employees whose hard work has led to the
strongest turnaround in Ford's history," Alex Trotman, chairman
and chief executive officer, said. "As economies around the
world have strengthened or stabilized during the year, we've
improved our profitability. Looking ahead, we're in good shape
for 1994. We have strong new products and we expect better
economic conditions. But, there's still more to do and we remain
committed to increasing efficiency throughout the company."
In 1992, Ford Motor Company lost $7.4 billion, or $15.61 per
share of common and Class B stock, primarily reflecting mandated
accounting changes. Excluding the one-time effects of accounting
changes, Ford lost $502 million in 1992, or $1.46 per share of
common and Class B stock.
<PAGE> 2
Summary of 1993 Results
A summary of the 1993 results compared with 1992 follows:
- - Net income from worldwide automotive operations was $940
million, up $2.5 billion.
- - Net income from U.S. automotive operations was $1.5 billion,
up $1.9 billion.
- - Automotive operations outside the U.S. lost $542 million,
compared with a loss of $1.1 billion in 1992.
- - Net income of the Financial Services Group was $1.6
billion, up $557 million.
- - Worldwide sales and revenues were $108.5 billion, up $8.4
billion.
- - Factory unit sales were 5,964,000, up 200,000 units or three
percent.
- - Stockholders' equity was $15.6 billion, up $821 million.
- - Capital spending was $6.8 billion, up $1 billion.
- - Automotive cash and marketable securities were $9.8 billion, up
$717 million.
- - Automotive debt was $8 billion, down $301 million.
Automotive Operations Improved Over 1992
Ford's net income from worldwide automotive operations
improved $2.5 billion compared with 1992, excluding the one-time
effects of accounting changes in 1992. Most of this improvement
can be attributed to U.S. automotive operations, which increased
$1.9 billion. Higher vehicle production, reflecting industry
sales growth and increased market share, accounted for much of
the improvement, along with higher margins. Outside the U.S.,
automotive operations improved $587 million.
"Market share is only one measure of success. But, we're
glad to note that our 25.5 percent share of the total U.S.
vehicle market is up 0.8 of a point from 1992, continuing our
steady growth in market share since the early '80s," Trotman
said. "Following the well-received launch of the Mustang in late
1993, we will strengthen our product lineup further with
introductions of brand new products targeted at high-volume
market segments -- the Ford Windstar, Ford Contour and Mercury
Mystique, as well as the Ford Aspire.
"In Europe, Ford's bright spot in 1993 was the success of
the new Mondeo in the midst of a very weak overall market --
industry sales were down 16 percent," Trotman added. "Following
the restructuring that was completed in 1993, we continue to move
forward with cost-reduction actions there, as we are doing in all
Ford operations."
<PAGE> 3
During the 1993 calendar year:
- - Mondeo was named 1994 Car of the Year in Europe, and Motor
Trend Magazine named the Ford Mustang 1994 Car of the Year in the
U.S.
- - Five of the top 10 best-selling vehicles in the U.S. were
Ford products; Ford F-Series was the best-selling vehicle in the
U.S., and the Ford Taurus was the best-selling car.
- - Ford sold a record 1.7 million trucks in the U.S.
- - In Britain, Ford had car sales leadership, with three of the
top five best-selling cars -- Escort, Fiesta and Mondeo.
- - In Taiwan, Ford retained combined car and truck sales
leadership for the sixth straight year, and in Australia, Ford
retained car sales leadership for the 12th consecutive year.
The Financial Services Group Continued Record-Setting Pace
The Financial Services Group posted a profit of $1.6 billion,
setting another earnings record and exceeding last year's
performance by $557 million or 54 percent, excluding the one-time
effects of accounting changes in 1992. The record improvement
reflected higher levels of earning assets, lower credit losses
and lower operating expenses.
"Once again, the Financial Services Group has raised the
chinning bar," Trotman said. "Its performance continues to be
outstanding. Not only is the Group vital to Ford Motor Company,
but it is increasingly recognized as a leader in the U.S.
financial services industry."
During 1993:
- - The Financial Services Group achieved a third consecutive
year of record earnings.
- - Ford Credit posted its third straight record earnings year.
- - The Associates recorded its 17th consecutive record earnings
year.
- - USL Capital had its fourth straight record earnings year.
U.S. Automotive Fourth-Quarter Earnings-- Second-Highest Ever
For U.S. automotive operations, the fourth quarter of 1993
was the second-highest ever in the company's history with
earnings of $669 million, up $797 million from a year ago.
Results for the fourth quarter of 1993 include the favorable one-
time effect of a gain on the sale of part of Ford's North
American automotive seating and seat trim business ($73 million).
<PAGE> 4
Outside the U.S., automotive operations lost $372 million,
compared with a loss of $909 million a year ago. Fourth-quarter
results in 1993 were affected adversely by restructuring charges
at Jaguar ($109 million) and Ford of Australia ($57 million),
offset partially by the favorable effect of a reduction in German
tax rates ($59 million). Worldwide automotive operations earned
$297 million, up $1.3 billion from 1992.
The Financial Services Group earned $422 million -- a record
for any quarter --compared with $197 million a year ago.
In total, Ford earned $719 million or $1.30 per share of
common and Class B stock, compared with a loss of $840 million or
$1.85 per share a year ago. Fourth-quarter results in 1992 were
affected adversely by one-time restructuring charges of $334
million at Ford's European automotive operations and $85 million
at Ford's European financial services activities.
Outlook -- Strong Customer Focus
"Both of our core businesses -- automotive and financial
services -- clearly are poised to take advantage of gradually
improving economic conditions," Trotman said. "We have new
products on tap for worldwide distribution. We're pursuing
opportunities in the world's emerging markets, especially in
Asia, and we're achieving efficiencies at all levels of our
operations. To continue to grow, we -- together with our dealers
and suppliers -- need to remain focused on earning the loyalty of
more and more customers by providing them with high-quality
vehicles and services and a satisfying ownership experience."
# # #
2/9/94
<PAGE> 5
Ford Motor Company and Subsidiaries
HIGHLIGHTS
<TABLE>
<CAPTION>
Fourth Quarter Full Year
------------------------- --------------------------
1993 1992 1993 1992
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Worldwide factory sales of cars
and trucks (in thousands)
- - United States 942 873 3,826 3.361
- - Outside United States 512 529 2,138 2,403
----- ----- ----- -----
Total 1,454 1,402 5,964 5,764
----- ----- ----- -----
----- ----- ----- -----
Sales and revenues (in millions)
- - Automotive $23,511 $21,498 $ 91,568 $ 84,407
- - Financial Services 4,330 3,908 16,953 15,725
------- ------- -------- --------
Total $27,841 $25,406 $108,521 $100,132
------- ------- -------- --------
------- ------- -------- --------
Income/(loss) before cumulative effects
of changes in accounting principles
(in millions)
- - Automotive $ 297 $(1,037) $ 940 $ (1,534)
- - Financial Services 422 197 1,589 1,032
------- ------- -------- --------
Total $ 719 $ (840) $ 2,529 $ (502)
--- --- ------- -------- --------
--- --- ------- -------- --------
Net income/(loss) (in millions)
- - Automotive $ 297 $(1,037) $ 940 $ (8,628)
- - Financial Services 422 197 1,589 1,243
------- ------- -------- --------
Total $ 719 $ (840) $ 2,529 $ (7,385)
--- --- ------- -------- --------
--- --- ------- -------- --------
Capital expenditures (in millions)
- - Automotive $ 1,985 $ 1,747 $ 6,714 $ 5,697
- - Financial Services 32 41 100 93
------- ------- -------- --------
Total $ 2,017 $ 1,788 $ 6,814 $ 5,790
------- ------- -------- --------
------- ------- -------- --------
Stockholders' equity at December 31
- - Total (in millions) $15,574 $14,753 $ 15,574 $ 14,753
- - After-tax return on Common and
Class B stockholders' equity 21.1% * 18.6% *
Automotive cash, cash equivalents,
and marketable securities at
December 31 (in millions) $ 9,752 $ 9,035 $ 9,752 $ 9,035
Automotive debt at December 31
(in millions) $ 8,016 $ 8,317 $ 8,016 $ 8,317
After-tax returns on sales
- - Automotive 1.3% * 1.1% *
- - Total Company 2.6% * 2.4% *
Shares of Common and Class B Stock
(in millions)
- - Average number outstanding 498 488 493 486
- - Number outstanding at December 31 499 489 499 489
AMOUNTS PER SHARE OF COMMON AND
CLASS B STOCK AFTER PREFERRED
STOCK DIVIDENDS
Income/(loss) before cumulative
effects of changes in accounting
principles
- - Automotive $ 0.45 $ (2.25) $ 1.33 $ (3.58)
- - Financial Services 0.85 0.40 3.22 2.12
------- ------- -------- --------
Total $ 1.30 $ (1.85) $ 4.55 $ (1.46)
-- ---- ------- -------- --------
-- ---- ------- -------- --------
Income/(loss)
- - Automotive $ 0.45 $ (2.25) $ 1.33 $ (18.16)
- - Financial Services 0.85 0.40 3.22 2.55
------- ------- -------- --------
Total $ 1.30 $ (1.85) $ 4.55 $ (15.61)
-- ---- ------- -------- --------
-- ---- ------- -------- --------
Income/(loss) assuming full dilution $ 1.19 $ (1.85) $ 4.20 $ (15.61)
Cash dividends per share of Common
and Class B Stock $ 0.40 $ 0.40 $ 1.60 $ 1.60
</TABLE>
- - - - - -
*Results in this period were a loss.
FS-1
<PAGE> 6
Ford Motor Company and Subsidiaries
VEHICLE FACTORY SALES
For the Periods Ended December 31, 1993 and 1992
<TABLE>
<CAPTION>
Fourth Quarter Full Year
-------------------------- --------------------------
1993 1992 1993 1992
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
U.S. AND CANADA
Cars - U.S. 458,253 446,772 1,950,238 1,841,248
- Canada 34,668 28,978 126,297 123,551
--------- --------- --------- ---------
Total cars 492,921 475,750 2,076,535 1,964,799
Trucks - U.S. 483,623 426,166 1,875,711 1,520,049
- Canada 42,571 34,938 125,906 109,161
--------- --------- --------- ---------
Total trucks 526,194 461,104 2,001,617 1,629,210
--------- --------- --------- ---------
Total U.S. and Canada 1,019,115 936,854 4,078,152 3,594,009
OUTSIDE U.S. AND CANADA
Germany 192,563 201,851 831,216 923,763
Britain 98,146 82,302 421,939 473,178
Spain 48,208 70,739 211,413 310,957
Taiwan 18,881 23,923 113,861 113,966
Mexico 22,429 31,577 90,710 126,334
Australia 33,527 32,092 126,753 120,017
Japan 10,725 13,855 52,805 66,654
Other countries 10,562 9,177 36,737 35,496
--------- --------- --------- ---------
Total overseas 435,041 465,516 1,885,434 2,170,365
--------- --------- --------- ---------
Total worldwide vehicle
factory sales 1,454,156 1,402,370 5,963,586 5,764,374
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
Includes units manufactured by other companies and sold by Ford. Factory sales
are shown by source of manufacture, except that Canadian, Mexican and
Australian exports to the United States are included as U.S. vehicle sales, and
U.S. exports to Canada are included as Canadian vehicle sales.
FS-2
<PAGE> 7
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
For the Years Ended December 31, 1993, 1992 and 1991
(in millions)
<TABLE>
<CAPTION>
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
AUTOMOTIVE
SALES $91,568 $84,407 $72,051
COSTS AND EXPENSES
Costs of sales 85,168 81,748 71,827
Selling, administrative, and other expenses 4,968 4,434 3,993
------- ------- -------
Total costs and expenses 90,136 86,182 75,820
OPERATING INCOME/(LOSS) 1,432 (1,775) (3,769)
Interest income 563 653 677
Interest expense 807 860 903
------- ------- -------
Net interest expense (244) (207) (226)
Equity in net income/(loss) of affiliated companies 127 15 (29)
Net (expense)/revenue from transactions with
Financial Services (24) 15 (28)
------- ------- -------
INCOME/(LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECTS OF
CHANGES IN ACCOUNTING PRINCIPLES - AUTOMOTIVE 1,291 (1,952) (4,052)
FINANCIAL SERVICES
REVENUES 16,953 15,725 16,235
COSTS AND EXPENSES
Interest expense 6,482 7,056 8,317
Operating and other expenses 3,196 2,945 2,822
Provision for credit and insurance losses 1,523 1,795 2,159
Depreciation 3,064 2,089 1,500
------- ------- -------
Total costs and expenses 14,265 13,885 14,798
Net revenue/(expense) from transactions with Automotive 24 (15) 28
------- ------- -------
INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECTS OF
CHANGES IN ACCOUNTING PRINCIPLES - FINANCIAL SERVICES 2,712 1,825 1,465
------- ------- -------
TOTAL COMPANY
INCOME/(LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECTS OF
CHANGES IN ACCOUNTING PRINCIPLES 4,003 (127) (2,587)
Provision/(credit) for income taxes 1,350 295 (395)
------- ------- -------
INCOME/(LOSS) BEFORE MINORITY INTERESTS AND CUMULATIVE EFFECTS
OF CHANGES IN ACCOUNTING PRINCIPLES 2,653 (422) (2,192)
Minority interests in net income of subsidiaries 124 80 66
------- ------- -------
Income/(loss) before cumulative effects of changes in
accounting principles 2,529 (502) (2,258)
Cumulative effects of changes in accounting
principles - (6,883) -
------- ------- -------
NET INCOME/(LOSS) 2,529 (7,385) (2,258)
Preferred stock dividend requirements 288 209 22
------- ------- -------
Income/(loss) attributable to Common and Class B Stock $ 2,241 $(7,594) $(2,280)
------- ------- -------
------- ------- -------
</TABLE>
FS-3
<PAGE> 8
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
For the Years Ended December 31, 1993, 1992, and 1991
(in millions)
<TABLE>
<CAPTION>
1993 1992 1991
------- ------- ------
<S> <C> <C> <C>
Average number of shares of Common and Class B Stock
outstanding 493 486 476
AMOUNTS PER SHARE OF COMMON STOCK AND CLASS B STOCK
AFTER PREFERRED STOCK DIVIDENDS
Income/(loss) before cumulative effects of changes in
accounting principles $ 4.55 $ (1.46) $(4.79)
Cumulative effects of changes in accounting principles - (14.15) -
------ ------- ------
INCOME/(LOSS) $ 4.55 $(15.61) $(4.79)
------ ------- ------
------ ------- ------
INCOME/(LOSS) ASSUMING FULL DILUTION $ 4.20 $(15.61) $(4.79)
CASH DIVIDENDS $ 1.60 $ 1.60 $ 1.95
</TABLE>
FS-4
<PAGE> 9
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
December 31, December 31,
1993 1992
------------- ------------
<S> <C> <C>
ASSETS
AUTOMOTIVE
Cash and cash equivalents $ 5,667 $ 3,504
Marketable securities, at cost and accrued interest
(approximates market) 4,085 5,531
-------- --------
Total cash, cash equivalents, and marketable securities 9,752 9,035
Receivables 2,302 2,204
Inventories 5,538 5,451
Deferred income taxes 2,830 2,480
Other current assets 1,226 1,298
Net current receivable from Financial Services 834 1,368
-------- --------
Total current assets 22,482 21,836
Equity in net assets of affiliated companies 3,002 2,751
Net property 23,059 22,160
Deferred income taxes 5,427 5,015
Other assets 7,691 5,339
Net noncurrent receivable from Financial Services 76 69
-------- --------
Total Automotive assets 61,737 57,170
FINANCIAL SERVICES
Cash and cash equivalents 2,555 3,182
Investments in securities 8,219 6,874
Net receivables and lease investments 119,535 106,144
Other assets 6,892 7,175
-------- --------
Total Financial Services assets 137,201 123,375
-------- --------
TOTAL ASSETS $198,938 $180,545
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
AUTOMOTIVE
Trade payables $ 8,769 $ 7,944
Other payables 1,976 1,631
Accrued liabilities 10,815 9,983
Income taxes payable 160 318
Debt payable within one year 932 1,249
-------- --------
Total current liabilities 22,652 21,125
Long-term debt 7,084 7,068
Other liabilities 25,911 21,866
Deferred income taxes 1,089 1,333
-------- --------
Total Automotive liabilities 56,736 51,392
FINANCIAL SERVICES
Payables 1,881 1,514
Debt 103,960 90,188
Deposit accounts 10,549 14,030
Deferred income taxes 2,287 1,616
Other liabilities and deferred income 5,583 4,532
Net payable to Automotive 910 1,437
-------- --------
Total Financial Services liabilities 125,170 113,317
Preferred stockholders' equity in a subsidiary company 1,458 1,083
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 (464 and 454 million shares issued) 464 454
Class B Stock, par value $1.00 per share (35 million shares issued) 35 35
Capital in excess of par value of stock 5,082 4,698
Foreign currency translation adjustments and other (678) (62)
Minimum pension liability adjustment (400) -
Earnings retained for use in business 11,071 9,628
-------- --------
Total stockholders' equity 15,574 14,753
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $198,938 $180,545
-------- --------
- - - - - - -------- --------
</TABLE>
*Less than $1 million
Certain amounts for 1992 have been reclassified to conform with presentations
adopted in 1993.
FS-5
<PAGE> 10
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Years Ended December 31, 1993, 1992, and 1991
(in millions)
<TABLE>
<CAPTION>
1993 1992 1991
---------------------- ---------------------- ----------------------
Financial Financial Financial
Automotive Services Automotive Services Automotive Services
---------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS AT JANUARY 1 $ 3,504 $ 3,182 $ 4,958 $ 3,175 $ 4,599 $ 2,168
Cash flows from operating activities 6,862 7,145 5,753 5,762 3,341 4,780
Cash flows from investing activities
Capital expenditures (6,714) (100) (5,697) (93) (5,723) (124)
Proceeds from sale and leaseback of
fixed assets 884 - 263 - 619 -
Acquisitions of other companies 0 (336) 0 (461) 0 (860)
Proceeds from sales of subsidiaries 173 0 52 0 273 0
Acquisitions of receivables and lease
investments - (163,858) - (134,619) - (124,606)
Collections of receivables and
lease investments - 142,844 - 123,144 - 117,581
Purchases of securities (100,493) (13,741) (50,437) (12,877) (56,141) (11,876)
Sales of securities 101,927 12,426 49,629 12,169 52,795 14,450
Proceeds from sales of receivables - 4,794 - 6,465 - 4,533
Loans originated net of principal payments - (1,466) - (938) - (321)
Investing activity with Financial Services (117) - 709 - 837 -
Other (69) 389 (492) 372 (175) 555
-------- -------- -------- -------- -------- --------
Net cash used in investing activities (4,409) (19,048) (5,973) (6,838) (7,515) (668)
Cash flows from financing activities
Cash dividends (1,086) - (977) - (927) -
Sale of Preferred Stock 0 - 1,104 - 2,252 -
Issuance of Common Stock 394 - 221 - 371 -
Changes in short-term debt (66) 6,065 (426) 2,739 117 (3,931)
Proceeds from issuance of other debt 424 22,128 1,865 13,382 4,808 13,889
Principal payments on other debt (376) (13,791) (1,598) (13,122) (2,477) (9,981)
Financing activity with Automotive - 117 - (709) - (837)
Changes in customers' deposits, excluding
interest credited - (3,861) - (3,418) - (1,875)
Receipts from annuity contracts - 821 - 703 - 46
Issuance of subsidiary company preferred stock - 375 - 283 - 0
Other (124) (76) 79 (10) 3 12
-------- ------- -------- -------- -------- --------
Net cash (used in)/provided by financing
activities (834) 11,778 268 (152) 4,147 (2,677)
Effect of exchange rate changes on cash 17 25 (220) (47) (35) (7)
Net transactions with Automotive/
Financial Services 527 (527) (1,282) 1,282 421 (421)
-------- -------- -------- -------- -------- --------
Net increase/(decrease) in cash and cash
equivalents 2,163 (627) (1,454) 7 359 1,007
-------- -------- -------- -------- -------- --------
CASH AND CASH EQUIVALENTS AT DECEMBER 31 $ 5,667* $ 2,555 $ 3,504* $ 3,182 $ 4,958* $ 3,175
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total cash and cash equivalents $8,222 $6,686 $8,133
------ ------ ------
------ ------ ------
- - - - - -
</TABLE>
*Automotive cash, cash equivalents, and marketable securities on December 31
were as follows (in millions): 1993 - $9,752 ; 1992 - $9,035; 1991 - $9,753
FS-6
<PAGE> 11
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1993, 1992, and 1991
(in millions)
<TABLE>
<CAPTION>
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
CAPITAL STOCK
COMMON STOCK
Balance at beginning of year $ 454 $ 448 $ 438
Issued for employee benefit plans and other 10 6 10
------- ------- -------
Balance at end of year 464 454 448
Class B Stock 35 35 35
Series A Preferred Stock
Balance at beginning of year * * -
Sale of Series A Preferred Stock 0 0 *
------- ------- -------
Balance at end of year * * *
Series B Preferred Stock
Balance at beginning of year * - -
Sale of Series B Preferred Stock 0 * -
------- ------- -------
Balance at end of year * * -
CAPITAL IN EXCESS OF PAR VALUE OF STOCK
Balance at beginning of year 4,698 3,379 766
Issued for employee benefit plans and other 384 215 361
Sale of Series A Preferred Stock 0 0 2,252
Sale of Series B Preferred Stock 0 1,104 -
------- ------- -------
Balance at end of year 5,082 4,698 3,379
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
AND OTHER
Balance at beginning of year (62) 838 823
Translation adjustments during year (508) (975) 8
Minimum pension liability adjustment (400) - -
Other (108) 75 7
------- ------- -------
Balance at end of year (1,078) (62) 838
EARNINGS RETAINED FOR USE IN THE BUSINESS
Balance at beginning of year 9,628 17,990 21,175
Net income/(loss) 2,529 (7,385) (2,258)
Cash dividends (1,086) (977) (927)
------- ------- -------
Balance at end of year 11,071 9,628 17,990
------- ------- -------
Total stockholders' equity $15,574 $14,753 $22,690
------- ------- -------
------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
Series A Series B
Common Class B Preferred Preferred
SHARES OF CAPITAL STOCK Stock Stock Stock Stock
------ ------- --------- ---------
<S> <C> <C> <C> <C>
Issued at December 31, 1990 438 35 - -
Additions
1991 10 0 0.046 -
1992 6 0 0 0.023
1993 10 0 0 0
------ ------ ------- -------
Net additions 26 0 0.046 0.023
------ ------ ------- -------
Issued at December 31, 1993 464 35 0.046 0.023
------ ------ ----------- -------
------ ------ ----------- -------
</TABLE>
- -------------
*Less than 1 million
FS-7
<PAGE> 1
Coopers certified public accountants
& Lybrand
EXHIBIT 23
CONSENT OF COOPERS & LYBRAND
We consent to the incorporation by reference in (a) Ford Motor Credit Company's
registration statement on Form S-8 (No. 33-30875) relating to the Ford Money
Market Account Program and (b) Ford Motor Credit Company's registration
statements on Form S-3 (No. 32-24928, No. 33-51075, and No. 33-50295) of our
report dated February 1, 1994 on our audits of the consolidated financial
statements of Ford Motor Credit Company and Subsidiaries at December 31, 1993
and 1992 and for each of the three years in the period ended December 31, 1993
included in the Ford Motor Credit Company Current Report on Form 8-K dated
February 11, 1994.
COOPERS & LYBRAND
Detroit, Michigan
February 11, 1994
