<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 10, 1995
FORD MOTOR CREDIT COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-6368 38-1612444
(State of other juris- (Commission File (IRS Employer
diction of incorporation) Number) 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, 1994 together with
the Report of Independent Accountants of Coopers & Lybrand L.L.P., independent
certified public accountants, filed as Exhibits 20.1 to this Current Report on
Form 8-K, is incorporated by reference herein.
The news release dated February 1, 1995 of Ford Motor Company and
subsidiaries for the year ended December 31, 1994 is filed as Exhibit 20.2 to
this Current Report on Form 8-K and 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 1994 Audit of Consolidated Financial Filed with this
Statements of Ford Motor Credit Company Report.
and Subsidiaries together with the
Report of Independent Accountants of
Coopers & Lybrand L.L.P., independent
certified public accountants.
Exhibit 20.2 News release dated February 1, Filed with this
1995 of Ford Motor Company and Report.
Subsidiaries for the year ended
December 31, 1994 with attachments.
Exhibit 23 Consent of Coopers & Lybrand L.L.P. Filed with this
Report.
Exhibit 27 Financial Data Schedule 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 10, 1995 By: _________________________________
R. P. Conrad
Assistant Secretary
EXHIBIT INDEX
<TABLE>
<CAPTION>
Designation Description
- ----------- -----------
<S> <C>
Exhibit 20.1 1994 Audit of Consolidated Financial
Statements of Ford Motor Credit Company
and Subsidiaries together with the
Report of Independent Accountants of
Coopers & Lybrand L.L.P., independent
certified public accountants.
Exhibit 20.2 News release dated February 1, 1995
of Ford Motor Company and Subsidiaries
for the year ended December 31, 1994
with attachments.
Exhibit 23 Consent of Coopers & Lybrand L.L.P.
Exhibit 27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 20.1
FORD MOTOR CREDIT COMPANY
AND SUBSIDIARIES
1994 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, 1994 and 1993, 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, 1994. 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, 1994 and 1993, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1994 in conformity with generally accepted
accounting principles.
As discussed in Notes 3, 10 and 11 to the consolidated financial statements,
the Company changed its methods of accounting for postretirement health care
benefits and income taxes in 1992.
Coopers & Lybrand L.L.P.
Detroit, Michigan
January 27, 1995
<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
--------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Financing revenue
Operating leases $ 5,343.2 $ 3,602.6 $ 2,353.1
Retail 3,231.5 3,305.2 3,347.4
Wholesale 964.8 679.6 712.4
Diversified 119.8 143.9 199.8
Other 267.6 221.1 221.2
--------- ---------- ----------
Total financing revenue 9,926.9 7,952.4 6,833.9
Investment and other income 462.4 386.0 239.4
---------- ----------- ----------
Total revenue 10,389.3 8,338.4 7,073.3
Expenses
Depreciation on operating leases 3,910.0 2,675.7 1,652.6
Interest expense 3,540.8 2,919.3 3,076.5
Operating expenses 925.4 796.5 758.2
Provision for credit losses 246.5 270.2 418.0
---------- ----------- ----------
Total expenses 8,622.7 6,661.7 5,905.3
---------- ---------- ----------
Equity in net income of affiliated companies 232.5 198.3 155.2
---------- ---------- ----------
Income before income taxes and cumulative
effects of changes in accounting principles 1,999.1 1,875.0 1,323.2
Provision for income taxes 675.7 673.3 424.9
---------- ---------- ----------
Income before minority interest and cumulative
effects of changes in accounting principles 1,323.4 1,201.7 898.3
Minority interest in net income of subsidiaries 10.7 7.9 6.1
---------- ---------- ----------
Income before cumulative effects of
changes in accounting principles 1,312.7 1,193.8 892.2
Cumulative effects of changes in
accounting principles - - 146.5
--------- ---------- ----------
Net income 1,312.7 1,193.8 1,038.7
Earnings retained for use in the business
Beginning of year 4,899.9 3,956.1 3,717.4
Dividends
Cash (364.0) (250.0) (600.0)
Stock of Ford Holdings, Inc. - - (200.0)
---------- ---------- ----------
End of year $ 5,848.6 $ 4,899.9 $ 3,956.1
========== ========== ==========
</TABLE>
The accompanying notes are part of the financial statements.
2
<PAGE> 4
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------
ASSETS 1994 1993
------------- -------------
<S> <C> <C>
Cash and cash equivalents $ 292.0 $ 992.3
Investments in securities 1,596.3 1,207.3
Finance receivables, net 56,946.5 50,759.2
Notes and accounts receivable from affiliated
companies 250.3 384.4
Equity in net assets of affiliated companies 1,346.5 1,201.9
Net investment, operating leases 19,993.9 12,600.9
Other assets 2,799.0 2,508.8
------------ ------------
Total assets $ 83,224.5 $ 69,654.8
============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Accounts payable
Trade, customer deposits, and
dealer reserves $ 1,326.5 $ 1,079.2
Affiliated companies 496.0 261.9
------------ ------------
Total accounts payable 1,822.5 1,341.1
Debt 70,440.4 58,798.7
Deferred income taxes 2,405.9 2,048.7
Other liabilities and deferred income 1,495.6 1,394.6
------------ ------------
Total liabilities 76,164.4 63,583.1
Minority interest in net assets of subsidiaries 397.5 297.0
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 (loss)/gain on investments in
securities, net of taxes (70.0) 17.8
Foreign currency translation adjustments (58.3) (85.3)
Earnings retained for use in the business 5,848.6 4,899.9
------------ ------------
Total stockholder's equity 6,662.6 5,774.7
------------ ------------
Total liabilities and stockholder's equity $ 83,224.5 $ 69,654.8
============ ============
</TABLE>
The accompanying notes are part of the financial statements.
3
<PAGE> 5
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
------------------------------------------------
1994 1993 1992
------------- ------------- ---------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income $ 1,312.7 $ 1,193.8 $ 1,038.7
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 246.5 270.2 418.0
Depreciation and amortization 3,969.4 2,745.8 1,732.7
Gain on sales of finance receivables (11.4) (92.5) (0.1)
Equity in net income of affiliates (232.5) (198.3) (155.2)
Deferred income taxes 349.3 565.3 328.2
Changes in the following items
Other assets (186.6) (327.0) (169.3)
Other liabilities 625.4 229.1 20.3
Other (23.4) 27.4 (67.9)
------------- ------------- -------------
Net cash provided by
operating activities 6,049.4 4,413.8 2,998.9
------------- ------------- -------------
Cash flows from investing activities
Purchase of finance receivables (134,498.7) (113,424.9) (88,295.2)
Collection of finance receivables 125,079.4 105,933.6 83,956.9
Proceeds from sales of finance receivables 3,105.1 2,521.3 3,349.6
Purchase of operating lease vehicles (14,842.5) (9,908.0) (6,464.0)
Liquidation of operating lease vehicles 3,448.9 2,317.8 1,324.7
Other (484.6) 53.9 (97.2)
------------- ------------- -------------
Net cash used in
investing activities (18,192.4) (12,506.3) (6,225.2)
------------- ------------- -------------
Cash flows from financing activities
Proceeds from issuance of long-term debt 10,721.1 12,934.9 6,517.0
Principal payments on long-term debt (8,035.7) (6,326.2) (7,348.1)
Change in short-term debt, net 8,898.0 2,568.4 3,232.9
Cash dividends paid (364.0) (250.0) (600.0)
Other 225.4 (132.8) (143.3)
------------- ------------- -------------
Net cash provided by
financing activities 11,444.8 8,794.3 1,658.5
Effect of exchange rate changes on
cash and cash equivalents (2.1) (4.5) (9.9)
------------- ------------- -------------
Net change in cash and cash equivalents (700.3) 697.3 (1,577.7)
Cash and cash equivalents, beginning of year 992.3 295.0 1,872.7
------------- ------------- -------------
Cash and cash equivalents, end of year $ 292.0 $ 992.3 $ 295.0
============= ============= =============
Supplementary cash flow information
Interest paid $ 3,494.2 $ 2,871.6 $ 3,198.2
Taxes paid 341.2 101.2 4.0
</TABLE>
The accompanying notes are part of the financial statements.
4
<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").
Unrealized gains or losses on investments in securities are reported in a
separate component of stockholder's equity and relate principally to Ford
Credit's equity interest in Ford Holdings' 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 on a straight-line basis over the
term of the lease.
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.
Continued
5
<PAGE> 7
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 1. ACCOUNTING POLICIES (continued)
Derivative Financial Instruments
Ford Credit has entered into agreements to manage exposures to fluctuations in
interest rates and foreign exchange. These agreements are used to hedge
exposure created by the difference in maturities of funding sources versus the
average maturities of finance receivables and operating leases and to hedge
debt denominated in foreign currencies. All instruments are classified as
"held for purposes other than trading"; company policy specifically prohibits
the use of derivatives for speculative purposes.
Interest rate swap agreements are used to manage interest rate fluctuations.
The differential paid or received on interest rate swap agreements is
recognized as an adjustment to interest expense in the period. Gains and
losses on terminated interest rate swaps are amortized and reflected in
interest expense over the remaining term of the original agreement.
Foreign currency swap agreements are used to manage foreign exchange exposure.
The differential paid or received on currency swaps is recognized as an
adjustment to interest expense in the period. Gains and losses on the foreign
currency swap agreements are recognized during the period of the related
transactions.
Foreign Currency Translation
Revenues, costs and expenses of foreign subsidiaries are translated to U.S.
dollars at average-period exchange rates. 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 1994.
Continued
6
<PAGE> 8
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 2. MARKETABLE AND OTHER SECURITIES
Ford Credit adopted Statement of Financial Accounting Standards No. 115 ("SFAS
115"), "Accounting for Certain Investments in Debt and Equity Securities," as
of January 1, 1994. The cumulative effect of this change in accounting
principle on Ford Credit's financial statements was not material.
Available-for-sale securities are recorded at fair value with unrealized gains
and losses excluded from income and reported in a separate component of
stockholder's equity. Held-to-maturity securities are recorded at amortized
cost. Equity securities which do not have readily determinable fair values are
recorded at cost. The basis of cost used in determining realized gains and
losses is specific identification.
The fair value of substantially all securities was estimated based on quoted
market prices for those securities. For securities for which there were no
quoted market prices, the estimate of fair value was based on similar types of
securities that are traded in the market.
<TABLE>
<CAPTION>
GROSS ESTIMATED
AMORTIZED UNREALIZED FAIR
COST LOSSES VALUE
------------ ------------- -------------
(in millions)
<S> <C> <C> <C>
Available-for-sale securities
- -----------------------------
Debt securities issued by the
U.S. government and agencies $ 4.8 $ - $ 4.8
Held-to-maturity securities
- ---------------------------
Municipal securities 687.5 5.7 681.8
Corporate debt securities 52.1 0.4 51.7
Redeemable preferred stock 40.0 0.1 39.9
----------- -------- -----------
Total held-to-maturity securities 779.6 6.2 773.4
----------- -------- -----------
Total investments in securities with
readily determinable fair values 784.4 6.2 778.2
Other non-marketable equity securities 811.9 - 811.9
----------- -------- -----------
Total investments in securities $ 1,596.3 $ 6.2 $ 1,590.1
=========== ======== ===========
</TABLE>
Continued
7
<PAGE> 9
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 2. MARKETABLE AND OTHER SECURITIES (continued)
The amortized cost and fair value of investments in available-for-sale
securities and held-to-maturity securities at December 31, 1994, by contractual
maturity, were as follows (in millions):
<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE HELD-TO-MATURITY
---------------------------- ---------------------------
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE
------------- ------------- ------------- ------------
(in millions)
<S> <C> <C> <C> <C>
Due in one year or less $ - $ - $ 60.3 $ 60.2
Due after one year through five years 4.5 4.5 146.1 146.1
Due after five years through ten years 0.3 0.3 573.2 567.1
------------- ------------- ------------ ------------
$ 4.8 $ 4.8 $ 779.6 $ 773.4
============= ============= ============ ============
</TABLE>
Proceeds from sales of available-for-sale securities were $74.2 million in
1994.
NOTE 3. 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, Ford Credit transferred $200 million of Ford Holdings' common stock to
Ford as dividends.
At December 31, 1994 and 1993, 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.
Continued
8
<PAGE> 10
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 3. EQUITY INVESTMENT IN FORD HOLDINGS (continued)
Condensed financial information of Ford Holdings as of December 31 was as
follows:
<TABLE>
<CAPTION>
1994 1993 1992
------------ ------------- -------------
(in millions)
<S> <C> <C> <C>
INCOME STATEMENT
Revenue $ 5,880.5 $ 5,291.8 $ 4,816.8
Income before income taxes and
cumulative effects of changes
in accounting principles 940.5 830.6 588.0
Cumulative effects of changes in
accounting principles - - 25.8*
Net income 609.3 511.4 382.9
Preferred stock dividend requirements 97.5 74.9 50.8
Income available for common stockholders 511.8 436.5 332.1
BALANCE SHEET
Assets
Cash and investments in securities $ 5,947.0 $ 5,100.7
Finance receivables, net 29,361.7 24,376.6
Accounts receivable (including affiliated
companies) and other assets 9,064.5 9,121.5
------------ -------------
Total assets $ 44,373.2 $ 38,598.8
============ =============
Liabilities
Accounts payable (including affiliated
companies) and other liabilities $ 5,537.8 $ 4,738.3
Debt payable within one year 16,054.9 13,802.1
Long-term debt 17,765.1 15,767.7
------------ -------------
Total liabilities 39,357.8 34,308.1
Stockholders' equity 5,015.4 4,290.7
------------ -------------
Total liabilities and stockholders'
equity $ 44,373.2 $ 38,598.8
============ =============
</TABLE>
Ford Credit's equity in the net assets of Ford Holdings at December 31, 1994
and 1993 was $1,342 million and $1,199 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.
Continued
9
<PAGE> 11
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>
1994 1993
----------- -----------
(in millions)
<S> <C> <C>
Retail $ 40,566.6 $ 38,609.3
Wholesale 15,252.9 11,698.5
Diversified 2,738.2 2,626.0
Other 4,263.8 3,681.0
------------ ------------
Total finance receivables 62,821.5 56,614.8
Add: Loan origination costs, net 155.6 125.4
Less: Unearned income (5,371.0) (5,263.3)
Allowance for credit losses (659.6) (717.7)
------------ ------------
Finance receivables, net $ 56,946.5 $ 50,759.2
============ ============
</TABLE>
Included in finance receivables is a total of $1.3 billion owed by three
customers with the largest receivable balances. During 1994, Ford Credit
issued irrevocable standby letters of credit in the amount of $295 million on
behalf of one of these customers. A major portion of these amounts are
guaranteed by Ford.
Ford Credit periodically sells finance receivables under agreements which
contain recourse provisions. Reserves for estimated losses under the recourse
provisions are provided at the time of the sales based principally on
historical loss experience. Ford Credit continues to service the sold
receivables for a fee. Ford Credit's servicing portfolio relating to these
finance receivables sales amounted to $8.1 billion and $6.7 billion at December
31, 1994 and 1993, respectively.
The maturities of finance receivables outstanding at December 31, 1994 were as
follows:
<TABLE>
<CAPTION>
DUE IN YEAR
ENDING DECEMBER 31 DUE
------------------------------------------ AFTER
1995 1996 1997 1997 TOTAL
------------- ------------ ------------ ------------ ------------
(in millions)
<S> <C> <C> <C> <C> <C> <C>
Retail $ 15,099.5 $ 11,407.3 $ 8,345.8 $ 5,714.0 $ 40,566.6
Wholesale 15,252.9 - - - 15,252.9
Diversified 179.0 125.8 165.6 2,267.8 2,738.2
Other 2,582.0 116.8 114.2 1,450.8 4,263.8
------------- ------------- ----------- ----------- -------------
Total $ 33,113.4 $ 11,649.9 $ 8,625.6 $ 9,432.6 $ 62,821.5
============= ============= ============ =========== =============
</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.
Continued
10
<PAGE> 12
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, 1994 DECEMBER 31, 1993
----------------------- -----------------------
INSTALLMENTS BALANCES INSTALLMENTS BALANCES
------------ -------- ------------ --------
(in millions)
<S> <C> <C> <C> <C>
Retail $ 26.7 $ 183.0 $ 10.2 $ 97.7
Diversified 5.4 8.0 12.9 56.1
Other 1.0 6.9 23.4 95.3
-------- -------- -------- --------
Total $ 33.1 $ 197.9 $ 46.5 $ 249.1
======== ======== ======== ========
</TABLE>
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>
1994 1993
----------- ------------
(in millions)
<S> <C> <C>
Investment in direct financing leases
Minimum lease rentals $ 1,843.7 $ 1,752.6
Estimated residual values 1,420.3 1,383.8
Lease origination costs 7.1 2.9
Less: Unearned income (467.6) (471.4)
Allowance for credit losses (43.5) (47.0)
----------- ------------
Net investment in direct
financing leases $ 2,760.0 $ 2,620.9
=========== ============
</TABLE>
Minimum direct financing lease rentals (including executory costs of $32.8
million) for each of the five succeeding years are as follows (in millions):
1995 - $808.3; 1996 - $508.7; 1997 - $334.1; 1998 - $164.6; 1999 - $11.7;
thereafter - $49.1.
Continued
11
<PAGE> 13
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 4. FINANCE RECEIVABLES (continued)
<TABLE>
<CAPTION>
1994 1993
------------- ------------
(in millions)
<S> <C> <C>
Investment in leveraged leases
Rentals receivable (net of principal
and interest on nonrecourse debt) $ 1,491.9 $ 1,417.4
Estimated residual values 543.1 479.7
Lease origination costs 3.5 3.2
Less: Unearned income (427.7) (388.9)
Allowance for credit losses (22.8) (18.9)
------------ ------------
Investment in leveraged leases 1,588.0 1,492.5
Less deferred income taxes arising
from leveraged leases (1,427.8) (1,398.2)
------------ ------------
Net investment in leveraged leases $ 160.2 $ 94.3
============ ============
</TABLE>
NOTE 5. NET INVESTMENT, OPERATING LEASES
Operating leases at December 31 were as follows:
<TABLE>
<CAPTION>
1994 1993
------------ ------------
(in millions)
<S> <C> <C>
Investment in operating leases
Vehicles and other equipment, at cost $ 24,817.8 $ 15,752.7
Lease origination costs 34.9 20.3
Less: Accumulated depreciation (4,602.9) (2,974.3)
Allowance for credit losses (255.9) (197.8)
------------ ------------
Net investment in operating leases $ 19,993.9 $ 12,600.9
============ ============
</TABLE>
Future minimum rentals on operating leases are as follows (in millions): 1995
- - $4,158.0; 1996 - $1,594.4; 1997 - $107.2; 1998 - $0.2.
Depreciation expense on operating leases is provided on a straight-line basis
over the term of the lease and includes gains or losses upon disposal or
impairment of the vehicle.
Continued
12
<PAGE> 14
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>
1994 1993 1992
----------- ---------- -----------
(in millions)
<S> <C> <C> <C>
Balance, beginning of year $ 915.5 $ 915.5 $ 825.4
Additions 246.5 270.2 418.0
Deductions
Losses 377.8 391.8 476.5
Recoveries (149.1) (163.4) (133.9)
----------- ---------- -----------
Net losses 228.7 228.4 342.6
Other changes, including reclassifications
and amounts related to finance
receivables sold 17.8 41.8 (14.7)
----------- ---------- -----------
Net deductions 246.5 270.2 327.9
----------- ---------- -----------
Balance, end of year $ 915.5 $ 915.5 $ 915.5
=========== ========== ===========
</TABLE>
NOTE 7. OTHER ASSETS
Other assets consist of:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1994 1993
------------ ------------
(in millions)
<S> <C> <C>
Investment in used vehicles held for
resale, at cost $ 1,269.0 $ 1,085.8
Retained interest in sold receivables 760.5 692.0
Deferred charges and other assets 388.7 359.6
Collateral held for resale 297.3 299.9
Property and equipment, at cost less
accumulated depreciation of $49.9
in 1994 and $48.2 in 1993 83.5 71.5
------------ ------------
Total $ 2,799.0 $ 2,508.8
============ ============
</TABLE>
Continued
13
<PAGE> 15
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, 1994
-------------------
WEIGHTED
AVERAGE BOOK VALUE
INTEREST -----------------------------
RATES* MATURITIES 1994 1993
---------- ---------- ------------ ------------
(in millions)
<S> <C> <C> <C> <C>
PAYABLE WITHIN ONE YEAR
Commercial paper $ 33,228.9 $ 24,506.1
Other short-term debt** 1,136.0 1,001.0
------------ ------------
Total short-term debt 5.90% 34,364.9 25,507.1
Senior notes payable
within one year 7.79% 4,712.7 7,856.3
------------ ------------
Total payable within
one year 6.13% 39,077.6 33,363.4
------------ ------------
PAYABLE AFTER ONE YEAR
Unsecured senior notes 7.02% 1996-2048 31,411.2 25,481.6
Unamortized discount (48.4) (46.8)
------------ ------------
Total unsecured senior
notes 31,362.8 25,434.8
Unsecured subordinated
convertible debentures - 0.5
------------ ------------
Total payable after one year 31,362.8 25,435.3
------------ ------------
Total debt 6.53% $ 70,440.4 $ 58,798.7
============ ============
</TABLE>
* Excludes the effect of interest rate swap agreements.
** Includes $150 million with an affiliated company at December 31, 1993.
Continued
14
<PAGE> 16
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 8. DEBT (continued)
The average amount of short-term debt outstanding during the past three years
was as follows (in millions): 1994 - $29,752.3; 1993 - $22,682.5; 1992 -
$19,358.4. The weighted average commercial paper interest rates per annum for
these years were as follows: 1994 - 4.4%; 1993 - 3.2%; 1992 - 4.2%. The
average remaining term of commercial paper was 27 days at December 31, 1994 and
28 days at December 31, 1993. The weighted average commercial paper interest
rate was 5.9% at December 31, 1994 and 3.3% at December 31, 1993.
Included in debt payable after one year at December 31, 1994 and 1993 were
obligations of $21,158.4 million and $19,683.5 million, respectively, with
fixed interest rates and $10,204.4 million and $5,751.8 million, respectively,
with variable interest rates (generally based on LIBOR or other short-term
rates).
Ford Credit and certain of its subsidiaries have entered into interest rate
swap agreements to manage exposures to fluctuations in interest rates. The
agreements effectively decreased the overall weighted-average interest rate on
total debt to 6.17% from 6.53% as of December 31, 1994, and decreased the
long-term obligations subject to variable interest rates to $6,857.4 million as
of that date. The result of these agreements is to reduce the effect of
interest rate changes, both favorable and unfavorable, on profitability.
Approximately 27% of Ford Credit's interest rate swaps mature in 1995 and
approximately 90% mature by 1999.
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): 1995 - $4,712.7; 1996 - $6,587.4; 1997 - $6,702.0; 1998 -
$6,833.6; 1999 - $5,861.1; thereafter - $5,427.1.
Included in debt at December 31, 1994 were obligations payable in foreign
currencies: $3,451.4 million in Canadian dollars; $1,192.8 million in
Australian dollars; $655.1 million in Japanese yen; $257.9 million in German
deutsche marks; $125.5 million in Luxembourg francs; $123.0 million in Italian
lire; $153.3 million in European currency units; and $95.3 million in Swiss
francs. Certain of these obligations are denominated in currencies other than
the currency of the country of the issuer. Foreign currency swap agreements
are used to hedge exposure to changes in exchange rates of such obligations.
These obligations are translated in the financial statements at the year-end
rates of exchange.
Continued
15
<PAGE> 17
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, 1995, Ford Credit had approximately $21.1 billion of contractually
committed facilities for use in the United States, with various maturity dates
through June 1999. These facilities included $18.2 billion of revolving credit
agreements with banks (which included $5.9 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, 1995, all of these United
States facilities were unused.
Outside of the United States, an additional $1.5 billion of contractually
committed facilities, with various maturity dates through June 1999, support
borrowing operations in Canada, Australia, Japan and Puerto Rico. Canadian
facilities of $717 million included $181 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 $468 million included $177 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 Credit Japan had
$321 million in support facilities at January 1, 1995. Ford Motor Credit
Company of Puerto Rico, Inc. had $25 million in support facilities at January
1, 1995. Substantially all of these facilities were unused at January 1, 1995.
Continued
16
<PAGE> 18
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 10. 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>
1994 1993 1992
---------- ---------- ---------
(in millions)
<S> <C> <C> <C>
Currently payable
U.S. Federal $ 286.4 $ 30.8 $ 21.5
Foreign 41.9 33.0 38.4
State and local 1.5 39.7 30.3
---------- ---------- ---------
Total currently payable 329.8 103.5 90.2
Deferred tax liability/(benefit)
U.S. Federal 327.9 518.0 309.0
Foreign (6.6) (6.5) 0.2
State and local 24.6 58.3 25.5
---------- ---------- ---------
Total deferred 345.9 569.8 334.7
---------- ---------- ---------
Total provision $ 675.7 $ 673.3 $ 424.9*
========== ========== =========
</TABLE>
* Excludes 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
adoption of SFAS No. 109 changed the method of accounting for income taxes from
the deferred method using Accounting Principles Board No. 11 to an asset and
liability approach. The cumulative effect of this change in accounting
principle increased 1992 net income by $216.6 million.
Continued
17
<PAGE> 19
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 10. 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>
1994 1993
------------ -------------
(in millions)
<S> <C> <C>
DEFERRED TAX LIABILITIES
------------------------
Leasing transactions $ 2,851.8 $ 2,322.5
Purchased tax benefits 296.9 303.2
Loan origination costs 69.1 56.8
Sales of receivables 55.9 28.0
Other 57.6 52.9
------------ -------------
Total deferred tax liabilities 3,331.3 2,763.4
DEFERRED TAX ASSETS
-------------------
Provision for credit losses 481.4 434.0
Alternative minimum tax 227.3 53.7
Employee benefit plans 98.4 88.8
Retail contract earnings method 49.4 50.1
Interest supplements 40.5 40.4
Other 28.4 47.7
------------ -------------
Total deferred tax assets 925.4 714.7
------------ -------------
Net deferred tax liabilities $ 2,405.9 $ 2,048.7
============ =============
</TABLE>
Continued
18
<PAGE> 20
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 10. 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 and
minority interest in net income of subsidiaries, with the United States
statutory tax rate for the last three years is shown below:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
U.S. statutory tax rate 35.0% 35.0% 34.0%
Effect of (in percentage points)
State and local income taxes 2.4 3.6 3.2
U.S. taxes attributable to foreign
source income 1.9 0.1 0.6
Rate adjustments on deferred taxes (1.7) 1.9 -
Investment income not subject to tax or
subject to tax at reduced rates (0.9) (1.0) (2.0)
Other 1.8 0.7 0.8
----- ----- -----
Effective tax rate 38.5% 40.3% 36.6%*
==== ==== ====
</TABLE>
*Excludes cumulative effects of changes in accounting principles.
NOTE 11. 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 a retiree benefit obligation of $131.6 million, offset
partially by projected tax benefits of $49.9 million.
Continued
19
<PAGE> 21
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 11. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS (continued)
Net postretirement benefit expense included the following (in millions):
<TABLE>
<CAPTION>
1994 1993
----------- ----------
(in millions)
<S> <C> <C>
Benefits attributed to employees' service $ 9.3 $ 7.0
Interest on accumulated benefit obligation 14.7 13.1
----------- ----------
Net postretirement benefit expense $ 24.0 $ 20.1
=========== ==========
Retiree benefit payments $ 3.3 $ 3.2
</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>
1994 1993
----------- ----------
(in millions)
Accumulated Postretirement Benefit Obligation
- ---------------------------------------------
<S> <C> <C>
Retirees $ 45.8 $ 53.0
Active employees eligible to retire 20.8 23.4
Other active employees 100.4 120.2
---------- ----------
Total accumulated obligation 167.0 196.6
Unamortized amendments 2.2 2.1
Unamortized net gain/(loss) 39.5 (11.4)
----------- ----------
Accrued liability $ 208.7 $ 187.3
=========== =========
Assumptions:
Discount rate at year-end 8.75% 7.50%
Present health care cost trend rate 9.2% 9.7%
Ultimate trend rate in ten years 5.5% 5.5%
Weighted-average trend rate 6.6% 6.8%
</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 1994 by $4.0 million and the accumulated
postretirement benefit obligation at December 31, 1994 by $30.0 million.
Continued
20
<PAGE> 22
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 1994, 1993, or 1992.
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 $1,218.5 million at December 31, 1994 and $1,076.9
million at December 31, 1993. 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 the income statement
for these and other transactions with Ford were as follows (in millions): 1994
- - $493.4; 1993 - $583.0; 1992 - $622.8. 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): 1994 - $556.8; 1993 - $514.4. 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): 1994 - $592.4; 1993 - $562.3.
Investments in securities include preferred stock of a nonaffiliate ($324.0
million) and of an affiliate ($485.9 million) which were acquired from Ford.
In 1994, Ford Credit exchanged a promissory note for additional preferred stock
of the affiliate, increasing the investment by $150 million. Investments in
these securities are recorded at cost. Ford has provided Ford Credit with
certain guarantees related to Ford Credit's 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): 1994 - $54.5; 1993 - $52.7; 1992 - $47.2.
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): 1994 - $61.9; 1993 -
$57.1; 1992 - $53.6.
Continued
21
<PAGE> 23
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): 1994 - $14.8; 1993 - $5.8;
1992 - $6.1.
At December 31, 1994 and 1993, Ford Credit had guaranteed $155.2 million and
$94.6 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, 1994 with respect to these matters cannot be ascertained, Ford
Credit believes that any resulting liability should not materially affect the
consolidated financial position or results of operations of Ford Credit and its
subsidiaries.
Continued
22
<PAGE> 24
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>
1994 1993
------------------------------- ------------------------------
ESTIMATED ESTIMATED
BOOK FAIR BOOK FAIR
VALUE VALUE VALUE VALUE
--------------- --------------- -------------- --------------
(in millions) (in millions)
<S> <C> <C> <C> <C>
Assets
- ------
Cash and cash equivalents $ 292.0 $ 292.0 $ 992.3 $ 992.3
Investments in securities 1,596.3 1,590.1 1,207.3 1,265.8
Finance receivables 51,855.5 51,470.3 46,133.9 46,605.1
Other assets 1,012.4 1,012.4 970.9 970.9
Liabilities
- -----------
Debt payable within one year $ 39,077.6 $ 39,077.6 $ 33,363.4 $ 33,363.4
Debt payable after one year 31,362.8 30,282.6 25,435.3 26,853.5
Derivative Contracts:
Foreign exchange
instruments
Contracts with unrealized
gains (28.3) 187.2 (26.4) 100.5
Contracts with unrealized
losses (0.5) (17.7) (11.3) (46.4)
Interest rate instruments
Contracts with unrealized
gains 17.9 409.9 63.6 526.0
Contracts with unrealized
losses 27.1 (576.4) (16.0) (67.8)
</TABLE>
CASH AND CASH EQUIVALENTS. The book value approximates fair value because of
the short maturity of these instruments.
INVESTMENTS IN SECURITIES. Investments in marketable equity and debt
securities are estimated based on market prices. Book value of investments in
non-marketable equity securities approximate fair value (See Note 2.).
Continued
23
<PAGE> 25
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 14. FINANCIAL INSTRUMENTS (continued)
FINANCE RECEIVABLES. The fair value of substantially all 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.
OTHER ASSETS. Included in other assets is the retained interest in sold
receivables and related amounts. These amounts are recorded at the present
value of estimated future cash flows discounted at rates commensurate with this
type of instrument, which approximates fair value.
DEBT PAYABLE WITHIN ONE YEAR. The book value approximates fair value because
of the short maturity of these instruments.
DEBT PAYABLE AFTER ONE YEAR. The fair value is estimated based on quoted
market prices or current rates for similar debt with the same remaining
maturities.
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, 1994 and 1993. Also
included is a brief discussion of the estimated 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 currency swap 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. The
book value of the foreign currency swap agreements represents the amount
payable to the counterparty since the last settlement date.
The fair value of these foreign exchange agreements was estimated using current
market rates.
In the unlikely event that a counterparty fails to meet the terms of the
contract, Ford Credit's market risk is the fair value of the agreements. In
the case of currency swaps, Ford Credit's market risk also may include an
interest rate differential. At December 31, 1994 and 1993, the total notional
amount of Ford Credit's foreign currency swaps outstanding was $1.5 billion and
$2.1 billion, respectively.
Continued
24
<PAGE> 26
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 14. FINANCIAL INSTRUMENTS (continued)
INTEREST RATE INSTRUMENTS. Ford Credit and certain of its subsidiaries have
entered into interest rate swap agreements to manage exposure to fluctuations
in interest rates.
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. The book value of the interest rate swap
agreements represents the differential receivable or payable with a swap
counterparty since the last settlement date.
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. Unrealized gains and losses are netted for individual
counterparties.
In the unlikely event that a counterparty fails to meet the terms of an
interest rate instrument, Ford Credit's exposure is the fair value of the
contracts. The underlying notional amount on which Ford Credit has interest
rate swaps outstanding aggregated $46.3 billion at December 31, 1994 and $31.1
billion at December 31, 1993.
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.
Continued
25
<PAGE> 27
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 15. 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 franchises 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 United States to other vehicle dealers. Insurance operations
conducted through Ford Credit's equity investment in Ford Holdings consist 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>
1994 1993 1992
------------- ------------- ------------
(in millions)
<S> <C> <C> <C>
Total revenue
United States operations $ 9,624.1 $ 7,694.8 $ 6,339.2
Foreign operations 765.2 643.6 734.1
------------- ------------ ------------
Total revenue $ 10,389.3 $ 8,338.4 $ 7,073.3
============= ============ ============
Income before income taxes and cumulative
effects of changes in accounting principles
United States operations $ 1,689.1 $ 1, 610.3 $ 1,084.4
Foreign operations 77.5 66.4 83.6
Equity in net income of affiliated
companies 232.5 198.3 155.2
------------- ------------ ------------
Total income before income taxes
and cumulative effects of
changes in accounting principles $ 1,999.1 $ 1,875.0 $ 1,323.2
============= ============ ============
Assets at December 31
United States operations $ 76,310.5 $ 64,081.8
Foreign operations 5,567.5 4,371.1
Equity in net assets of affiliated
companies 1,346.5 1,201.9
------------- ------------
Total assets $ 83,224.5 $ 69,654.8
============= ============
</TABLE>
Continued
26
<PAGE> 28
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 16. 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>
1994
First Quarter $ 2,257.2 $ 760.2 $ 71.1 $ 298.8
Second Quarter 2,593.4 845.4 61.2 368.6
Third Quarter 2,649.9 905.0 39.3 314.8
Fourth Quarter 2,888.8 1,030.2 74.9 330.5
------------- ----------- -------- -----------
Full Year $ 10,389.3 $ 3,540.8 $ 246.5 $ 1,312.7
============= =========== ======== ===========
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
============= =========== ======== -----------
</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.
27
<PAGE> 1
EXHIBIT 20.2
Corporate News Public Affairs
Ford Motor Company
The American Road
Room 904
Dearborn, MI 48121
Telephone (313) 322-9600
Fax (313) 845-0570
FOR RELEASE AT 8 A.M. (EASTERN), WEDNESDAY, FEB. 1
Contact: Media Inquiries: Broadcast Media: Stockholders Inquiries:
Terry Bresnihan Lin Cummins (313) 845-8540
(313) 322-9600 (313) 322-9600
FORD REPORTS ALL-TIME RECORD 1994 EARNINGS
DEARBORN, Mich., Feb. 1 -- Strong performances in automotive operations
and financial services, coupled with improving market conditions around the
world, propelled Ford Motor Company's 1994 full-year earnings to $5.3 billion
or $4.97 per share of common and Class B stock, a record for any year and more
than double the earnings of a year earlier.
"Our results point to continued improvement in our competitive and
financial positions," said Alex Trotman, chairman and chief executive officer.
"Over the course of 1994, we brought important new products to market and
significantly strengthened our balance sheet. The fast start on the
realignment of our automotive business will result in more product and lower
costs in the years to come."
OUTLOOK FOR INDUSTRY
"Ford had a good year in 1994; however, we continue to strive for further
improvements needed to reach targeted returns," Trotman said. "We are a
determined group of people working together to serve our shareholders by
providing our customers with exciting products and services and exceptional
value.
"In the U.S., Ford's retail demand has been running above what it was a
year ago and consumer confidence and income numbers remain strong. In Europe,
most economies are well into recovery now and we expect continued
improvement."
<PAGE> 2
SUMMARY OF 1994 AND COMPARISON WITH 1993
(Per share data have been adjusted to reflect a 2-for-1 stock split in June
1994.)
Overview
- --------
- - Total earnings were $5.308 billion, compared with $2.5 billion in 1993, and
surpassed the previous record of $5.300 billion in 1988.
- - Earnings per share were $4.97, compared with $2.27 per share.
- - Worldwide sales and revenues were $128.4 billion, compared with $108.5
billion.
Automotive
- ----------
- - Net income from worldwide automotive operations was $3.8 billion, compared
with $940 million in 1993. After-tax return on sales was 3.6 percent,
compared with 1.1 percent.
- - Net income from U.S. automotive operations was $3.0 billion, compared with
$1.5 billion. After-tax return on sales was 4.2 percent, compared with 2.4
percent.
- - Automotive operations outside the U.S. earned $784 million, compared with a
loss of $542 million in 1993. After-tax return on sales in 1994 was 2.4
percent.
Financial Services Group
- ------------------------
- - The Financial Services Group earned $1.5 billion (which includes a $440
million write-off for the sale of First Nationwide Bank), compared with
$1.6 billion in 1993.
- - Ford Credit earned a record $1.3 billion, compared with $1.2 billion.
- - The Associates Corporation of North America earned a record $604 million,
compared with $524 million.
- - USL Capital earned a record $109 million, compared with $77 million in
1993.
Balance Sheet
- -------------
- - Stockholders equity at year-end was $21.7 billion, compared with $15.6
billion.
- - Automotive cash and marketable securities was $12.1 billion, compared with
$9.8 billion.
- - Automotive debt was $7.3 billion, compared with $8 billion.
- - Automotive net cash was $4.8 billion, compared with $1.8 billion at
year-end last year.
- - Capital spending was $8.5 billion, compared with $6.8 billion.
Sales and Market Share
- ----------------------
- - Worldwide factory unit sales were 6,639,000, compared with 5,965,000 in
1993.
- - Combined car and truck share in the U.S. was 25.2 percent, compared with
25.5 percent.
- - Combined car and truck share in Western Europe was 12.1 percent, compared
with 11.8 percent.
AUTOMOTIVE OPERATIONS
Ford's full-year net income from worldwide automotive operations was
$3.8 billion, an improvement of $2.9 billion from 1993. The after-tax return
on sales was 3.6 percent, up 2.5 percentage points.
In the U.S., Ford's automotive operations earned $3.0 billion for the
full year, increasing $1.5 billion over 1993. Outside the U.S., automotive
operations improved $1.3 billion, reaching $784 million for 1994. Ford's
European automotive operations, excluding Jaguar, earned $388 million,
compared with a loss of $407 million in 1993.
"We are encouraged by the public reception of our products throughout the
world," Trotman said. "In the U.S., we swept the market with five of the top
eight best-selling vehicles. A continuous flow of new products, including
just-launched vehicles like Explorer and Continental, and later in the year
Taurus, Sable and F-Series pickups, gives us confidence that product success in
the marketplace will remain a hallmark of Ford. In Europe, our Escort, new
Transit and Scorpio, as well as the continuing success of Mondeo, position us
<PAGE> 3
well with a strong product line-up in 1995."
During 1994 Ford also made significant progress in Brazil and Argentina
and in entering a number of emerging automotive markets, including China,
India and Vietnam. "It's a primary objective that Ford become a much bigger
player in the world's emerging markets," Trotman said. "Watch for important
developments in these countries, and others, for Ford during 1995."
FINANCIAL SERVICES
The Financial Services Group earned $1.5 billion in 1994, down $105
million from 1993. This included a $440 million charge related to the sale of
First Nationwide Bank. Excluding the charge, profits were $1.9 billion, up
more than $300 million from 1993.
The Group's performance included full-year earnings of $1.3 billion by
Ford Credit, up $119 million from 1993; $604 million by The Associates Corp.
of North America, an increase of $80 million; and $109 million by USL Capital,
up $32 million. Earnings at each of the three operations were records.
"Our Financial Services Group is a strong and reliable engine for profits
and growth, with a solid track record of contributing significantly to the
company's bottom line," Trotman said. "The Group is well-positioned for
continued profitable growth because of its leadership in customer satisfaction
and its status as a low-cost producer."
OTHER 1994 HIGHLIGHTS
- - Ford was the leading exporter of vehicles from the U.S. and Canada, with a
record 120,133 units, up almost 70 percent from 1993.
- - Taurus was the best-selling car in the U.S. for the third consecutive year;
F-Series was the best-selling vehicle for the 13th consecutive year.
- - Ford had record truck sales in the U.S. with 1,932,265 units sold.
- - Combined European car and truck market share of 12.1 percent was Ford's
highest in ten years.
- - Ford had the three top-selling vehicles in Britain with Escort, Mondeo and
Fiesta, and held overall market-share leadership for the 18th consecutive
year.
- - Ford retained passenger car sales leadership in Australia for the 13th
consecutive year.
- - The Associates recorded its 20th consecutive year of increased earnings.
- - Hertz achieved record earnings of $91 million for the year.
FOURTH-QUARTER RESULTS
Ford earned a fourth-quarter record $1.6 billion or $1.47 per share of
common and Class B stock. This compares with $719 million or $0.65 per share
in the fourth quarter of 1993.
U.S. automotive operations earned $720 million, compared with $669
million in 1993. Outside the U.S., automotive operations earned $365 million,
compared with a loss of $372 million. Net income outside the U.S. included a
one-time gain of $110 million from the recent devaluation of the Mexican peso.
However, the devaluation is expected to have unfavorable impact on future
earnings.
The Financial Services Group earned a fourth-quarter record $484 million,
compared with $422 million in 1993.
# # #
2-1-95
<PAGE> 4
Ford Motor Company and Subsidiaries
HIGHLIGHTS
----------
<TABLE>
<CAPTION>
Fourth Quarter Full Year
--------------------- -----------------
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Worldwide factory sales of cars
and trucks (in thousands)
- - United States 1,062 941 4,276 3,824
- - Outside United States 584 512 2,363 2,141
----- ----- ----- -----
Total 1,646 1,453 6,639 5,965
===== ===== ===== =====
Sales and revenues (in millions)
- - Automotive $27,766 $23,511 $107,137 $ 91,568
- - Financial Services 5,877 4,330 21,302 16,953
------- ------- -------- --------
Total $33,643 $27,841 $128,439 $108,521
======= ======= ======== ========
Net income (in millions)
- - Automotive $ 1,085 $ 297 $ 3,824 $ 940
- - Financial Services 484 422 1,484* 1,589
------- ------- -------- --------
Total $ 1,569 $ 719 $ 5,308 $ 2,529
======= ======= ======== ========
Capital expenditures (in millions)
- - Automotive $ 2,404 $ 1,985 $ 8,310 $ 6,714
- - Financial Services 65 32 236 100
------- ------- -------- --------
Total $ 2,469 $ 2,017 $ 8,546 $ 6,814
======= ======= ======== ========
Stockholders' equity at December 31
- - Total (in millions) $21,659 $15,574 $ 21,659 $ 15,574
- - After-tax return on Common and
Class B stockholders' equity 34.5% 21.1% 33.6% 18.6%
Automotive cash, cash equivalents,
and marketable securities at
December 31 (in millions) $12,083 $ 9,752 $ 12,083 $ 9,752
Automotive debt at December 31
(in millions) $ 7,258 $ 8,016 $ 7,258 $ 8,016
Automotive after-tax returns on sales 3.9% 1.3% 3.6% 1.1%
Shares of Common and Class B Stock
(in millions)
- - Average number outstanding 1,020 996 1,010 986
- - Number outstanding at December 31 1,023 998 1,023 998
AMOUNTS PER SHARE OF COMMON AND
CLASS B STOCK AFTER PREFERRED
STOCK DIVIDENDS
Income
- - Automotive $ 1.00 $ 0.23 $ 3.50 $ 0.66
- - Financial Services 0.47 0.42 1.47 1.61
------- ------- -------- --------
Total $ 1.47 $ 0.65 $ 4.97 $ 2.27
======= ======= ======== ========
Income assuming full dilution $ 1.31 $ 0.60 $ 4.44 $ 2.10
Cash dividends per share of Common
and Class B Stock $ 0.26 $ 0.20 $ 0.91 $ 0.80
</TABLE>
- - - - - -
*Includes a loss of $440 million related to the disposition of Granite Savings
Bank (formerly First Nationwide Bank)
Share data have been restated to reflect the 2-for-1 stock split that became
effective June 6, 1994.
FS-1
<PAGE> 5
Ford Motor Company and Subsidiaries
VEHICLE FACTORY SALES
---------------------
For the Periods Ended December 31, 1994 and 1993
(in thousands)
<TABLE>
<CAPTION>
Fourth Quarter Full Year
----------------------- ------------------
1994 1993 1994 1993
--------- --------- --------- --------
<S> <C> <C> <C> <C>
North America
Cars - U.S. 537 458 2,077 1,950
- Canada 33 35 124 130
- Mexico 15 12 49 51
----- ----- ----- -----
Total cars 585 505 2,250 2,131
Trucks - U.S. 525 483 2,199 1,874
- Canada 42 42 156 126
- Mexico 12 10 42 39
----- ----- ----- -----
Total trucks 579 535 2,397 2,039
----- ----- ----- -----
Total North America 1,164 1,040 4,647 4,170
Outside North America
Germany 216 193 938 831
Britain 115 98 463 422
Spain 77 48 302 211
Australia 38 34 130 127
Taiwan 17 19 86 114
Japan 8 11 34 53
Other countries 11 10 39 37
----- ----- ----- -----
Total outside North America 482 413 1,992 1,795
----- ----- ----- -----
Total worldwide vehicle
factory sales 1,646 1,453 6,639 5,965
===== ===== ===== =====
</TABLE>
Includes units manufactured by other companies and sold by Ford. Factory sales
are shown by source of manufacture, except within North America. In North
America, U.S. sales include exports from Canada, Mexico, and Australia.
Canadian sales include exports from the U.S. and Mexico. Mexican sales
include exports from the U.S. and Canada.
FS-2
<PAGE> 6
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
For the Years Ended December 31, 1994, 1993 and 1992
(in millions)
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
AUTOMOTIVE
Sales $107,137 $91,568 $84,407
Costs and expenses
Costs of sales 96,180 85,168 81,748
Selling, administrative, and other expenses 5,131 4,968 4,434
-------- ------- -------
Total costs and expenses 101,311 90,136 86,182
Operating income/(loss) 5,826 1,432 (1,775)
Interest income 665 563 653
Interest expense 721 807 860
-------- ------- -------
Net interest expense (56) (244) (207)
Equity in net income of affiliated companies 271 127 15
Net (expense)/revenue from transactions with
Financial Services (44) (24) 15
-------- ------- -------
Income/(loss) before income taxes and cumulative effects
of changes in accounting principles - Automotive 5,997 1,291 (1,952)
FINANCIAL SERVICES
Revenues 21,302 16,953 15,725
Costs and expenses
Interest expense 7,023 6,482 7,056
Depreciation 4,910 3,064 2,089
Operating and other expenses 4,607 3,196 2,945
Provision for credit and insurance losses 1,539 1,523 1,795
Loss on disposition of Granite Savings Bank (formerly
First Nationwide Bank) 475 - -
-------- ------- -------
Total costs and expenses 18,554 14,265 13,885
Net revenue/(expense) from transactions with Automotive 44 24 (15)
-------- ------- -------
Income before income taxes and cumulative effects of
changes in accounting principles - Financial Services 2,792 2,712 1,825
-------- ------- -------
TOTAL COMPANY
Income/(loss) before income taxes and cumulative effects
of changes in accounting principles 8,789 4,003 (127)
Provision for income taxes 3,329 1,350 295
-------- ------- -------
Income/(loss) before minority interests and cumulative
effects of changes in accounting principles 5,460 2,653 (422)
Minority interests in net income of subsidiaries 152 124 80
-------- ------- -------
Income/(loss) before cumulative effects of changes in
accounting principles 5,308 2,529 (502)
Cumulative effects of changes in accounting
principles - - (6,883)
-------- ------- -------
Net income/(loss) 5,308 2,529 (7,385)
Preferred stock dividend requirements 287 288 209
-------- ------- -------
Income/(loss) attributable to Common and Class B Stock $ 5,021 $ 2,241 $(7,594)
======== ======= =======
</TABLE>
FS-3
<PAGE> 7
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
For the Years Ended December 31, 1994, 1993, and 1992
(in millions)
<TABLE>
<CAPTION>
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Average number of shares of Common and Class B Stock
outstanding 1,010 986 972
AMOUNTS PER SHARE OF COMMON STOCK AND CLASS B STOCK
AFTER PREFERRED STOCK DIVIDENDS
Income/(loss) before cumulative effects of changes in
accounting principles $ 4.97 $ 2.27 $ (0.73)
Cumulative effects of changes in accounting principles - - (7.08)
------- ------ -------
Income/(loss) $ 4.97 $ 2.27 $ (7.81)
======= ====== =======
Income/(loss) assuming full dilution $ 4.44 $ 2.10 $ (7.81)
Cash dividends $ 0.91 $ 0.80 $ 0.80
</TABLE>
Share data have been restated to reflect the 2-for-1 stock split that became
effective June 6, 1994.
FS-4
<PAGE> 8
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
--------------------------
(in millions)
<TABLE>
<CAPTION>
December 31, December 31,
1994 1993
------------ ------------
<S> <C> <C>
ASSETS
Automotive
Cash and cash equivalents $ 4,481 $ 5,667
Marketable securities 7,602 4,085
-------- --------
Total cash, cash equivalents, and marketable securities 12,083 9,752
Receivables 2,548 2,302
Inventories 6,487 5,538
Deferred income taxes 3,062 2,830
Other current assets 2,006 1,226
Net current receivable from Financial Services 677 834
-------- --------
Total current assets 26,863 22,482
Equity in net assets of affiliated companies 3,554 3,002
Net property 27,048 23,059
Deferred income taxes 4,146 5,427
Other assets 6,760 7,691
Net noncurrent receivable from Financial Services 0 76
-------- --------
Total Automotive assets 68,371 61,737
Financial Services
Cash and cash equivalents 1,739 2,555
Investments in securities 6,105 8,219
Net receivables and lease investments 130,356 119,535
Other assets 12,783 6,892
-------- --------
Total Financial Services assets 150,983 137,201
-------- --------
Total assets $219,354 $198,938
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $ 10,777 $ 8,769
Other payables 2,624 1,976
Accrued liabilities 11,599 10,815
Income taxes payable 316 160
Debt payable within one year 155 932
-------- --------
Total current liabilities 25,471 22,652
Long-term debt 7,103 7,084
Other liabilities 24,920 25,911
Deferred income taxes 948 1,089
-------- --------
Total Automotive liabilities 58,442 56,736
Financial Services
Payables 2,361 1,881
Debt 123,713 103,960
Deposit accounts - 10,549
Deferred income taxes 2,958 2,287
Other liabilities and deferred income 7,669 5,583
Net payable to Automotive 677 910
-------- --------
Total Financial Services liabilities 137,378 125,170
Preferred stockholders' equity in a subsidiary company 1,875 1,458
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 (952 and 464 million
shares issued) 952 464
Class B Stock, par value $1.00 per share (71 and 35 million
shares issued) 71 35
Capital in excess of par value of stock 5,273 5,082
Foreign currency translation adjustments and other 189 (678)
Minimum pension liability adjustment - (400)
Earnings retained for use in business 15,174 11,071
-------- --------
Total stockholders' equity 21,659 15,574
-------- --------
Total liabilities and stockholders' equity $219,354 $198,938
======== ========
</TABLE>
- - - - - -
*Less than $1 million
FS-5
<PAGE> 9
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
For the Years Ended December 31, 1994, 1993, and 1992
(in millions)
<TABLE>
<CAPTION>
1994 1993 1992
---------------------- ---------------------- ----------------------
Financial Financial Financial
Automotive Services Automotive Services Automotive Services
---------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents at January 1 $ 5,667 $ 2,555 $ 3,504 $ 3,182 $ 4,958 $ 3,175
Cash flows from operating activities 7,542 9,087 6,862 7,145 5,753 5,762
Cash flows from investing activities
Capital expenditures (8,310) (236) (6,714) (100) (5,697) (93)
Proceeds from sale and leaseback of
fixed assets 0 - 884 - 263 -
Acquisitions of other companies 0 (485) 0 (336) 0 (461)
Proceeds from sales of subsidiaries 0 715 173 0 52 0
Acquisitions of receivables and lease
investments - (202,407) - (163,858) - (134,619)
Collections of receivables and
lease investments - 172,694 - 142,844 - 123,144
Acquisitions of daily rental vehicles, net
of disposals - (924) - - - -
Purchases of securities (412) (10,688) (100,493) (13,741) (50,437) (12,877)
Sales and maturities of securities 511 9,649 101,927 12,426 49,629 12,169
Proceeds from sales of receivables - 3,622 - 4,794 - 6,465
Loans originated net of principal payments - (207) - (1,466) - (938)
Investing activity with Financial Services 355 - (117) - 709 -
Other (331) (312) (69) 389 (492) 372
-------- -------- -------- -------- -------- --------
Net cash used in investing activities (8,187) (28,579) (4,409) (19,048) (5,973) (6,838)
Cash flows from financing activities
Cash dividends (1,205) - (1,086) - (977) -
Sale of Preferred Stock 0 - 0 - 1,104 -
Issuance of Common Stock 715 - 394 - 221 -
Changes in short-term debt (795) 10,314 (66) 6,065 (426) 2,739
Proceeds from issuance of other debt 158 21,885 424 22,128 1,865 13,382
Principal payments on other debt (75) (14,088) (376) (13,791) (1,598) (13,122)
Financing activity with Automotive - (355) - 117 - (709)
Changes in customers' deposits, excluding
interest credited - (422) - (3,861) - (3,418)
Receipts from annuity contracts - 1,124 - 821 - 703
Redemption of Hertz common and preferred stock - (145) - - - -
Issuance of subsidiary company preferred stock - 417 - 375 - 283
Other 31 13 (124) (76) 79 (10)
-------- -------- -------- -------- -------- --------
Net cash (used in)/provided by financing
activities (1,171) 18,743 (834) 11,778 268 (152)
Effect of exchange rate changes on cash 397 166 17 25 (220) (47)
Net transactions with Automotive/
Financial Services 233 (233) 527 (527) (1,282) 1,282
-------- -------- -------- -------- -------- --------
Net (decrease)/increase in cash and cash
equivalents (1,186) (816) 2,163 (627) (1,454) 7
-------- -------- -------- -------- -------- --------
Cash and cash equivalents at December 31 $ 4,481 $ 1,739 $ 5,667 $ 2,555 $ 3,504 $ 3,182
======== ======== ======== ======== ======== ========
</TABLE>
FS-6
<PAGE> 10
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
----------------------------------------------
For the Years Ended December 31, 1994, 1993, and 1992
(in millions)
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
CAPITAL STOCK
Common Stock
Balance at beginning of year $ 464 $ 454 $ 448
Stock split in form of a 100% stock dividend 469 - -
Issued for employee benefit plans and other 19 10 6
------- ------- -------
Balance at end of year 952 464 454
Class B Stock
Balance at beginning of year 35 35 35
Stock split in form of a 100% stock dividend 36 - -
------- ------- -------
Balance at end of year 71 35 35
Series A Preferred Stock * * *
Series B Preferred Stock * * *
CAPITAL IN EXCESS OF PAR VALUE OF STOCK
Balance at beginning of year 5,082 4,698 3,379
Stock split in form of a 100% stock dividend (505) - -
Issued for employee benefit plans and other 696 384 215
Sale of Series B Preferred Stock 0 0 1,104
------- ------- -------
Balance at end of year 5,273 5,082 4,698
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
AND OTHER
Balance at beginning of year (1,078) (62) 838
Translation adjustments during year 800 (508) (975)
Minimum pension liability adjustment 400 (400) -
Other 67 (108) 75
------- ------- -------
Balance at end of year 189 (1,078) (62)
EARNINGS RETAINED FOR USE IN THE BUSINESS
Balance at beginning of year 11,071 9,628 17,990
Net income/(loss) 5,308 2,529 (7,385)
Cash dividends (1,205) (1,086) (977)
------- ------- -------
Balance at end of year 15,174 11,071 9,628
------- ------- -------
Total stockholders' equity $21,659 $15,574 $14,753
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Series A Series B
Common Class B Preferred Preferred
Stock Stock Stock Stock
------ ------- --------- ---------
<S> <C> <C> <C> <C>
SHARES OF CAPITAL STOCK
Issued at December 31, 1991 448 35 0.046 0
Additions
1992 6 0 0 0.023
1993 10 0 0 0
1994 - Stock split in form of a 100% stock
dividend 469 36 - -
- Employee benefit plans and other 19 - - -
----- -- ----- -----
Net additions 504 36 0.046 0.023
----- -- ----- -----
Issued at December 31, 1994 952 71 0.046 0.023
===== == ===== =====
Authorized at December 31, 1994 3,000 265 -- In total: 30 --
</TABLE>
- - - - - -
*The balances at the beginning and end of each period were less than $1 million
FS-7
<PAGE> 1
EXHIBIT 23
CONSENT OF COOPERS & LYBRAND L.L.P.
Re: Ford Motor Credit Company Registration Statement No. 33-30875 on Form S-8
and Registration Statement Nos. 33-24928, 33-55237, 33-53101 and 33-55945
on Form S-3.
We consent to the incorporation by reference in the above Ford Motor Credit
Company Registration Statements of our report dated January 27, 1995 on our
audits of the consolidated financial statements of Ford Motor Credit Company
and Subsidiaries at December 31, 1994 and 1993 and for each of the three years
in the period ended December 31, 1994 included in Ford Motor Credit Company's
Current Report on Form 8-K dated February 10, 1995, which report contains an
explanatory paragraph indicating Ford Credit changed its methods of accounting
for postretirement health care benefits and income taxes in 1992.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
February 10, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Ford Credit's Condensed Consolidated Balance Sheet is unclassified. Therefore,
the following tags listed below are not applicable to Ford Credit: Current
Assets and Current Liabilities. Information relating to earnings a share is not
presented because Ford Credit is a wholly owned subsidiary of Ford Motor
Company.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 292
<SECURITIES> 1,596
<RECEIVABLES> 56,947
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 83,225
<CURRENT-LIABILITIES> 0
<BONDS> 70,440
<COMMON> 25
0
0
<OTHER-SE> 6,638
<TOTAL-LIABILITY-AND-EQUITY> 83,225
<SALES> 0
<TOTAL-REVENUES> 10,389
<CGS> 0
<TOTAL-COSTS> 8,623
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 247
<INTEREST-EXPENSE> 3,541
<INCOME-PRETAX> 1,999
<INCOME-TAX> 676
<INCOME-CONTINUING> 1,313
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,313
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
