SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: April 19, 2000
(Date of earliest event reported)
FORD MOTOR CREDIT COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-6368 38-1612444
(Commission File Number) (IRS Employer Identification No.)
One American Road, Dearborn, Michigan 48126
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 313-322-3000
<PAGE>
Item 5. Other Events.
The news release dated April 17, 2000 of Ford Motor Credit Company is
filed as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated by reference herein.
The news releases dated April 17, 2000 and April 14, 2000 of Ford Motor
Company are filed as Exhibits 99.2 and 99.3, respectively, to this Current
Report on Form 8-K and are incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
EXHIBITS
Designation Description Method of Filing
Exhibit 99.1 News Release dated Filed with this Report
April 17, 2000 of
Ford Motor Credit
Company with attachment.
Exhibit 99.2 News Release dated Filed with this Report
April 17, 2000 of
Ford Motor
Company with attachment.
Exhibit 99.3 News Release dated Filed with this Report
April 14, 2000 of
Ford Motor
Company.
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: April 19, 2000 By: /s/R. P. Conrad
-------------------------
R. P. Conrad
Assistant Secretary
<PAGE>
EXHIBIT INDEX
DESIGNATION DESCRIPTION
Exhibit 99.1 News Release dated
April 17, 2000 of
Ford Motor Credit Company
with attachment.
Exhibit 99.2 News Release dated
April 17, 2000 of
Ford Motor Company
with attachment.
Exhibit 99.3 News Release dated
April 14, 2000 of
Ford Motor Company.
EXHIBIT 99.1
Contact: Daniel Jarvis
Ford Credit
313-594-2527
[email protected]
IMMEDIATE RELEASE
FORD CREDIT EARNS $353 MILLION IN THE FIRST QUARTER, UP 18 PERCENT
DEARBORN, Mich., April 17, 2000 -- Ford Credit earned $353 million in the first
quarter of 2000, up $53 million, or 18 percent from first quarter 1999, Chairman
and Chief Executive Officer Donald A. Winkler announced today.
Compared with the first quarter of 1999, the increase in earnings reflects
higher volume and improved net financing margin, offset partially by costs
associated with the restructuring of North American operations. After-tax return
on average equity improved to 12.7 percent from 11.3 percent a year earlier.
"We are very pleased with our first quarter performance. This lays the
foundation to achieve both of our milestones, 10 percent earnings growth and
improved return on equity," Winkler said.
Ford Credit's total net finance receivables increased to $149.9 billion at March
31, compared with $131.8 billion in same period of the previous year.
As the world's largest automotive finance company, Ford Credit provides vehicle
financing in 40 countries for more than 10 million customers and 11,500
automotive dealers. During the first quarter, Ford Credit was the first company
to issue a corporate bond over the Internet.
<PAGE>
Ford Motor Credit Company and Consolidated Subsidiaries
OPERATING HIGHLIGHTS
<TABLE>
<CAPTION>
First Quarter
-----------------
2000 1999
----- -----
<S> <C> <C>
Income (in Millions)
Income Before Income Taxes $ 577.1 $ 498.9
Net Income 353.1 299.8
Memo: Depreciation Expense $ 1,858.4 $ 1,841.3
Market Share
Ford Retail & Lease United States 46.3% 45.2%
Europe 30.7 30.3
Ford Wholesale United States 87.7 % 83.0%
Europe 97.0 94.8
Contract Volume - New and Used Retail/Lease (in Thousands)
United States 847 738
Europe 206 217
Other International 158 120
--- ---
Total Contract Volume 1,211 1,075
===== =====
Assets (in Millions)
Net Finance Receivables $114,373.9 $ 96,814.7
Net Investment in Operating Leases 35,517.5 35,004.7
-------- --------
Total Net Finance Receivables $149,891.4 $131,819.4
Other Assets 11,843.7 8,823.3
-------- -------
Total Assets $161,735.1 $140,642.7
========== ==========
Liabilities and Stockholder's Equity (in Millions)
Liabilities
Debt - Payable within one year $ 65,320.7 $ 61,870.6
Debt - Payable after one year 71,375.7 56,076.5
-------- --------
Total Debt $136,696.4 $117,947.1
Other Liabilities 13,092.5 11,413.9
-------- --------
Total Liabilities $149,788.9 $129,361.0
Minority Interests in Net Assets
of Subsidiaries 421.5 385.2
Stockholder's Equity 11,524.7 10,896.5
Total Liabilities and -------- --------
Stockholder's Equity $161,735.1 $140,642.7
========== ==========
</TABLE>
EXHIBIT 99.2
Contacts: Media Inquiries Securities Analysts Shareholder Inquiries
Christian Vinyard Mike Holland 800-555-5259 or
313-323-7045 313-323-8221 313-845-8540
FOR RELEASE AT 7 A.M. (EASTERN DAYLIGHT)
FORD EARNS $2.1 BILLION IN FIRST QUARTER;
NEW RECORDS FOR OPERATING EARNINGS, REVENUES
DEARBORN, Mich., April 17, 2000 -- Ford Motor Company [ NYSE: F ] earned a
record $2.1 billion in the first quarter, or $1.70 per diluted share of common
and Class B stock, and posted the 16th consecutive quarter of improved
year-over-year operating results. The results compare with first-quarter
earnings in 1999 of $2 billion, or $1.60 per diluted share, which included a
one-time gain of $165 million, or 14 cents a share, from the dissolution of
AutoEuropa. Excluding AutoEuropa, first-quarter earnings rose $265 million or 15
percent.
"Our earnings momentum is as strong as ever," said Jacques A. Nasser, president
and chief executive officer. "We are transforming our car and truck business,
and we have positioned the company for profitable growth in financial services,
automotive consumer services, Hertz, and e-business. We have a strong product
line-up, and as the year unfolds, important new products will continue to be
introduced in North America and Europe. In addition, the independence of Visteon
will only accelerate our transformation."
On April 14, Ford announced that the goal to make Visteon Corporation an
independent company would be realized through a 100 percent distribution of
stock to Ford shareholders, expected to be completed by this summer.
Visteon's earnings are now reported separately and are treated as a discontinued
operation in Ford Motor Company's financial statements.
<PAGE>
"An independent Visteon will be a stronger competitor in a growing industry
segment," Nasser said, "and at the same time it will allow us at Ford to focus
even more strongly on our car and truck business."
Excluding Visteon, first-quarter revenues were a record $43 billion, up $5
billion or 14 percent over the first quarter of 1999. Unit sales were a record
1.9 million, compared with 1.8 million a year ago. Luxury vehicle sales, also a
record, were 190,000, an increase of 50 percent from a year ago.
AUTOMOTIVE OPERATIONS: Excluding Visteon, Ford's earnings from worldwide
automotive operations were $1.6 billion, up $271 million or 21 percent from the
same period a year ago, excluding the sale of AutoEuropa. Worldwide automotive
revenues in the first quarter were a record $36 billion, up 14 percent compared
with a year ago. After-tax return on sales was 4.3 percent, up two-tenths of a
point from last year's first quarter, excluding AutoEuropa.
Automotive cash was $23 billion at the end of the quarter, virtually unchanged
from the same period last year. Net cash was $12 billion, up $450 million from a
year ago.
New products coming later this year include the Ford Escape sport utility, the
Volvo S60, a new Ford Explorer and Mercury Mountaineer and a new Mondeo in
Europe.
North America: Automotive operations in North America, excluding Visteon, earned
a record $1.7 billion in the first quarter of 2000, up $288 million from the
same period a year ago. After-tax return on sales was 6.2 percent, up
four-tenths of a point. "The real driver behind our North American results is
the strong demand for hit products," Nasser said. "And more will be coming," he
added. "At the same time, our automotive business structure continues to
transform. Total costs are down $6 billion in three years, and the acquisitions
of Volvo, Kwik-Fit, and the planned acquisition of Land Rover have strengthened
and broadened our consumer focus," Nasser said.
Total vehicle sales in the United States set a new first-quarter record of 1.2
million cars and trucks. Strong sales were aided by the new Ford Focus, Ford
Taurus, Ford F150 SuperCrew, the Ford Explorer Sport Trac and Sport, Jaguar
S-Type and the Volvo 70.
Other Markets: In Europe, South America and other overseas markets, Ford lost
$115 million, about even with last year's first quarter.
FORD CREDIT: Ford Credit earned $353 million in the first quarter, up $53
million or 18 percent in the first quarter of 1999. Return on equity was 12.7
percent, up 1.4 points from a year ago. Ford Credit is on track to meet its
full-year financial milestones to increase earnings by 10 percent and improve
returns.
HERTZ: The Hertz Corporation [ NYSE: HRZ ] earned a record $56 million in the
first quarter, up $7 million or 14 percent. Ford Motor Company's share of
Hertz' first-quarter earnings was $46 million.
DELIVERING SHAREHOLDER VALUE: On April 14, Ford Motor Company also announced a
Shareholder Value Enhancement Plan that offers Ford shareholders new Ford shares
and a choice of accepting $20 per share in cash or additional new Ford shares
equivalent to the cash value. "This plan reflects our transformational
thinking," Nasser said, "as well as our strong earnings and cash flow. It also
underscores management's confidence and our commitment to delivering superior
shareholder value over time."
<PAGE>
Ford Motor Company and Subsidiaries
HIGHLIGHTS a/
<TABLE>
<CAPTION>
First Quarter
--------------------------------
2000 1999
-------------------------------
(unaudited)
<S> <C> <C>
Worldwide vehicle unit sales of cars and trucks
(in thousands)
- - North America 1,309 1,220
- - Outside North America 602 554
----- -----
Total 1,911 1,774
===== =====
Sales and revenues (in millions)
- - Automotive $36,175 $31,597
- - Financial Services 6,719 5,952
------ ------
Total $42,894 $37,549
======= =======
Net income (in millions)
- - Automotive $ 1,552 $ 1,446
- - Financial Services 380 328
------- -------
Total continuing operations 1,932 1,774
- - Discontinued operation - Visteon 147 205
------- -------
Total $ 2,079 $ 1,979
======= =======
Capital expenditures (in millions)
- - Automotive $ 1,500 $ 1,142
- - Financial Services 306 144
------- -------
Total $ 1,806 $ 1,286
======= =======
Automotive capital expenditures as a
percentage of sales 4.1% 3.6%
Stockholders' equity at March 31
- - Total (in millions) $28,419 $24,814
- - After-tax return on Common and
Class B stockholders' equity 25.3% 29.6%
Automotive net cash at March 31
(in millions)
- - Cash and marketable securities $22,848 $22,899
- - Debt 10,753 11,254
------- -------
Automotive net cash $12,095 $11,645
======= =======
After-tax return on sales
- - North American Automotive 6.2% 5.8%
- - Total Automotive 4.3% 4.6%
Shares of Common and Class B Stock
(in millions)
- - Average number outstanding 1,206 1,211
- - Number outstanding at March 31 1,205 1,211
Common Stock price (per share)
- - High $ 54-5/8 $ 66-1/2
- - Low 41 55-1/4
<PAGE>
AMOUNTS PER SHARE OF COMMON AND CLASS B
STOCK AFTER PREFERRED STOCK DIVIDENDS
Income assuming dilution
- - Automotive $ 1.27 $ 1.16
- - Financial Services 0.31 0.27
------- -------
Total continuing operations 1.58 1.43
- - Discontinued operation - Visteon 0.12 0.17
------- -------
Total $ 1.70 $ 1.60
======= =======
Cash dividends $ 0.50 $ 0.46
</TABLE>
- - - - -
a/ Visteon is reflected as a discontinued operation. Visteon's results
and financial condition have been excluded from all amounts except
total net income and total earnings per share.
<PAGE>
Ford Motor Company and Subsidiaries
VEHICLE UNIT SALES
For the Periods Ended March 31, 2000 and 1999
(in thousands)
<TABLE>
<CAPTION>
First Quarter
----------------------------------------------
2000 1999
---------------------- ----------------------
(unaudited)
<S> <C> <C>
North America
United States
Cars 480 404
Trucks 722 739
----- -----
Total United States 1,202 1,143
Canada 79 58
Mexico 28 19
----- -----
Total North America 1,309 1,220
Europe
Britain 115 126
Germany 91 90
Italy 49 50
France 42 38
Spain 40 43
Other countries 140 99
--- ---
Total Europe 477 446
Other international
Brazil 28 22
Australia 24 30
Taiwan 22 17
Argentina 15 14
Japan 9 7
Other countries 27 18
--- ---
Total other international 125 108
--- ---
Total worldwide vehicle unit sales 1,911 1,774
===== =====
</TABLE>
Vehicle unit sales generally are reported worldwide on a "where
sold" basis and include sales of all Ford-badged units, as well as
units manufactured by Ford and sold to other manufacturers.
<PAGE>
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
For the Periods Ended March 31, 2000 and 1999
(in millions)
<TABLE>
<CAPTION>
First Quarter
-------------------------------------
-------------------------------------
2000 1999
-------------------------------------
(unaudited)
<S> <C> <C>
AUTOMOTIVE (Note 4)
Sales $36,175 $31,597
Costs and expenses (Note 3)
Costs of sales 31,578 27,737
Selling, administrative and other expenses 2,265 1,777
------- ------
Total costs and expenses 33,843 29,514
Operating income 2,332 2,083
Interest income 368 339
Interest expense 318 285
------- ------
Net interest income 50 54
Equity in net income/(loss) of affiliated companies (32) 34
Net expense from transactions with
Financial Services (10) (28)
------- ------
Income before income taxes - Automotive 2,340 2,143
FINANCIAL SERVICES
Revenues 6,719 5,952
Costs and expenses
Interest expense 2,213 1,888
Depreciation 2,208 2,157
Operating and other expenses 1,211 997
Provision for credit and insurance losses 454 391
------- -----
Total costs and expenses 6,086 5,433
Net revenue from transactions with Automotive 10 28
------- -----
Income before income taxes - Financial Services 643 547
------- -----
TOTAL COMPANY
Income before income taxes 2,983 2,690
Provision for income taxes 1,022 893
------- -----
Income before minority interests 1,961 1,797
Minority interests in net income of subsidiaries 29 23
------- ------
Net income from continuing operations $ 1,932 $ 1,774
Net income from discontinued operation - Visteon (Note 2) 147 205
------- -------
Net income $ 2,079 $ 1,979
======= =======
<PAGE>
Income attributable to Common and Class B Stock
after preferred stock dividends $ 2,075 $ 1,975
Average number of shares of Common and Class B
Stock outstanding 1,206 1,211
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic income from continuing operations (Note 5) $ 1.61 $ 1.47
Diluted income from continuing operations (Note 5) $ 1.58 $ 1.43
Basic income (Note 5) $ 1.73 $ 1.64
Diluted income (Note 5) $ 1.70 $ 1.60
Cash dividends $ 0.50 $ 0.46
</TABLE>
The accompanying notes are part of the financial statements.
<PAGE>
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------------------------------
(unaudited)
<S> <C> <C>
ASSETS
Automotive
Cash and cash equivalents $ 3,875 $ 2,793
Marketable securities 18,973 18,943
---------- ----------
Total cash and marketable securities 22,848 21,736
Receivables 4,406 4,570
Inventories (Note 6) 6,557 5,684
Deferred income taxes 2,816 3,762
Other current assets 4,501 4,528
Current receivable from Financial Services 1,807 2,304
---------- ----------
Total current assets 42,935 42,584
Equity in net assets of affiliated companies 2,716 2,539
Net property 35,831 36,528
Deferred income taxes 2,562 2,454
Net assets of discontinued operations - Visteon (Note 2) 1,644 1,566
Other assets 13,421 13,530
---------- ----------
Total Automotive assets 99,109 99,201
Financial Services
Cash and cash equivalents 1,883 1,588
Investments in securities 488 733
Finance receivables, net 116,626 113,298
Net investment in operating leases 43,890 42,471
Other assets 10,745 11,123
Receivable from Automotive 2,283 1,835
---------- ----------
Total Financial Services assets 175,915 171,048
---------- ----------
Total assets $ 275,024 $ 270,249
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $ 14,570 $ 14,292
Other payables 3,537 4,156
Accrued liabilities 18,891 18,110
Income taxes payable 1,821 1,709
Debt payable within one year 1,107 1,338
Current payable to Financial Services 0 0
---------- ----------
Total current liabilities 39,926 39,605
Long-term debt 9,646 10,398
Other liabilities 29,444 29,283
Deferred income taxes 439 1,223
Payable to Financial Services 2,283 1,835
---------- ----------
Total Automotive liabilities 81,738 82,344
Financial Services
Payables 4,191 3,550
Debt 143,951 139,919
Deferred income taxes 7,731 7,078
Other liabilities and deferred income 6,512 6,775
Payable to Automotive 1,807 2,304
---------- ----------
Total Financial Services liabilities 164,192 159,626
Company-obligated mandatorily redeemable preferred securities of a subsidiary
trust holding solely junior subordinated debentures of the Company (Note 7) 675 675
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Stockholders' equity
Capital stock
Preferred Stock, par value $1.00 per share (aggregate liquidation preference of $177 * *
million)
Common Stock, par value $1.00 per share (1,151 million shares issued) 1,151 1,151
Class B Stock, par value $1.00 per share (71 million shares issued) 71 71
Capital in excess of par value of stock 4,971 5,049
Accumulated other comprehensive income (2,453) (1,856)
ESOP loan and treasury stock (1,399) (1,417)
Earnings retained for use in business 26,078 24,606
----------- ---------
Total stockholders' equity 28,419 27,604
----------- ---------
Total liabilities and stockholders' equity $ 275,024 $270,249
=========== =========
</TABLE>
- - - - - -
*Less than $1 million
The accompanying notes are part of the financial statements.
<PAGE>
Ford Motor Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Periods Ended March 31, 2000 and 1999
(in millions)
<TABLE>
<CAPTION>
First Quarter 2000 First Quarter 1999
--------------------------------------------------------------
Financial Financial
Automotive Services Automotive Services
---------------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Cash and cash equivalents at January 1 $ 2,793 $ 1,588 $ 3,143 $ 1,151
Cash flows from operating activities before securities trading 3,443 5,342 2,480 1,830
Net sales of trading securities 22 73 922 99
--------- --------- --------- ---------
Net cash flows from operating activities 3,465 5,415 3,402 1,929
Cash flows from investing activities
Capital expenditures (1,500) (306) (1,142) (144)
Acquisitions of receivables and lease investments - (24,585) - (18,304)
Collections of receivables and lease investments - 15,389 - 12,859
Net acquisitions of daily rental vehicles - (1,035) - (768)
Purchases of securities (1,133) (142) (392) (309)
Sales and maturities of securities 1,100 123 321 367
Proceeds from sales of receivables and lease investments - 2,807 - 2,045
Net investing activity with Financial Services 35 - 39 -
Cash paid for acquisitions (Note 4) (206) (49) (2,966) -
Other (56) 240 282 (3)
---------- ---------- -------- ---------
Net cash used in investing activities (1,760) (7,558) (3,858) (4,257)
Cash flows from financing activities
Cash dividends (607) - (561) (1)
Net purchases of Common Stock (78) - (136) -
Changes in short-term debt (736) (3,891) 121 (968)
Proceeds from issuance of other debt 156 11,610 1,632 9,097
Changes in other debt (389) - 91 -
Principal payments on other debt - (3,672) (151) (5,282)
Net financing activity with Automotive - (35) - (39)
Net cash distribution to Ford from discontinued operation 17 - 70 -
Other 21 (549) 178 5
---------- --------- ------ ------
Net cash (used in)/provided by financing activities (1,616) 3,463 1,244 2,812
<PAGE>
Effect of exchange rate changes on cash 48 (80) (87) (106)
Net transactions with Automotive/Financial Services 945 (945) (214) 214
---------- --------- ------- ------
Net increase in cash and cash equivalents 1,082 295 487 592
--------- --------- --------- ---------
Cash and cash equivalents at March 31 $ 3,875 $ 1,883 $ 3,630 $ 1,743
========= ========= ========= =========
</TABLE>
Visteon is reflected as a discontinued operation (Note 2).
The accompanying notes are part of the financial statements.
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. Financial Statements - The financial data presented herein are unaudited,
but in the opinion of management
reflect those adjustments necessary for a fair presentation of such information.
Results for interim periods should not be considered indicative of results for a
full year. Reference should be made to the financial statements contained in the
registrant's Annual Report on Form 10-K (the "10-K Report") for the year ended
December 31, 1999. For purposes of this report, "Ford", the "Company", "we",
"our", "us" or similar references means Ford Motor Company and its majority
owned subsidiaries unless the context requires otherwise. Certain amounts for
prior periods were reclassified to conform with present period presentation.
2. Discontinued Operation - On April 13, 2000, the Ford Board of Directors
approved a plan for the complete separation of Visteon Corporation from Ford by
means of a tax-free spin-off in the form of a dividend on Ford Common and Class
B Stock consisting of all shares of Visteon Common Stock. Specific record and
distribution dates will be established after Securities and Exchange Commission
clearance. Consistent with this approved plan and to aid in comparisons, our
financial statements reflect Visteon's reported net income and net assets as a
"discontinued operation" for all periods shown.
Visteon, a wholly-owned subsidiary of Ford, is a global provider of integrated
systems, modules and components to automotive manufacturers and other automotive
suppliers. Visteon operates in three business segments: Comfort, Communication &
Safety; Dynamics & Energy Conversion; and Glass.
Sales and selected income data for Visteon were (in millions):
<TABLE>
<CAPTION>
First Quarter
-----------------------
2000 1999
-----------------------
<S> <C> <C>
Sales to Ford $4,476 $4,356
Sales to non-Ford customers 749 416
------ ------
Total sales $5,225 $4,772
====== ======
Income before income taxes $ 237 $ 313
Provision for income taxes (86) (112)
Minority interests in net income of subsidiaries (4) 4
------ ------
Net income $ 147 $ 205
====== ======
</TABLE>
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
(unaudited)
The net assets of Visteon were (in millions):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------------------------------
<S> <C> <C>
Cash and marketable securities $ 943 $ 1,849
Inventories 743 751
Other current assets 2,986 2,596
------- ---------
Total current assets 4,672 5,196
Net property 5,730 5,789
Other assets 1,388 1,464
------- ---------
Total assets 11,790 12,449
Current liabilities (4,778) (5,475)
Long-term debt (1,426) (1,358)
Other liabilities (4,046) (4,117)
------- -------
Total liabilities (10,250) (10,950)
Accumulated other comprehensive income 104 67
------- -------
Net assets $ 1,644 $ 1,566
======= =========
</TABLE>
3. Selected Automotive costs and expenses are summarized as
follows (in millions):
First Quarter
----------------------
2000 1999
---------- -----------
Depreciation $694 $616
Amortization 574 561
Dissolution of AutoEuropa Joint Venture - Effective January 1, 1999,
our joint venture for the production of minivans with Volkswagen AG in Portugal
(AutoEuropa) was dissolved resulting in a $255 million pre-tax gain ($165
million after-tax) in the first quarter of 1999.
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
(unaudited)
4. Acquisitions
Purchase of AB Volvo's Worldwide Passenger Car Business ("Volvo Car") - On
March 31, 1999, we purchased Volvo Car for approximately $6.45 billion. The
acquisition price consisted of a cash payment of approximately $2 billion
on March 31, 1999, a deferred payment obligation to AB Volvo of
approximately $1.6 billion due March 31, 2001, and Volvo Car automotive net
indebtedness of approximately $2.9 billion. Most automotive indebtedness
was repaid on April 12, 1999. The purchase price payment and automotive
debt repayments were funded from our cash reserves.
Purchase of Kwik-Fit Holdings plc - During the third quarter of 1999, we
completed the purchase of all the outstanding stock of Kwik-Fit Plc
("Kwik-Fit"). Kwik-Fit is Europe's largest independent vehicle maintenance
and light repair chain, with over 1,900 outlets in the United Kingdom,
Ireland, and continental Europe. The acquisition price was approximately
$1.6 billion and consisted of cash payments of approximately $1.4 billion
and loan notes to certain Kwik-Fit shareholders of approximately $0.2
billion, redeemable beginning on April 30, 2000 and on any subsequent
interest payment date. The purchase price payments were funded from our
cash reserves.
Assuming these two acquisitions had taken place on January 1, 1999, Ford
Automotive unaudited pro forma revenue for the first quarter ended March 31,
1999 would have been $35.2 billion. Net income and earnings per share for this
period would not be materially affected.
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
(unaudited)
5. Income Per Share of Common and Class B Stock - Basic income per share of
Common and Class B Stock is calculated by dividing the income attributable to
Common and Class B Stock by the average number of shares of Common and Class B
Stock outstanding during the applicable period, adjusted for shares issuable
under employee savings and compensation plans.
The calculation of diluted income per share of Common and Class B Stock
takes into account the effect of dilutive potential common stock, such as stock
options.
Income per share of Common and Class B Stock from continuing operations
was as follows (in millions, except per share amounts):
<TABLE>
<CAPTION>
First Quarter 2000 First Quarter 1999
--------------------------------------------------------
--------------------------------------------------------
Income Shares Income Shares
-------------------------------------------------------
<S> <C> <C> <C> <C>
Net income from continuing operations $1,932 1,206 $1,774 1,211
Preferred stock dividend requirements (4) - (4) -
Issuable and uncommitted ESOP shares - (7) - (5)
------ ----- ------ -----
Basic income and shares from continuing operations $1,928 1,199 $1,770 1,206
Basic income per share from continuing operations $ 1.61 $ 1.47
Basic income per share from discontinued operation 0.12 0.17
------ ------
Basic income per share $ 1.73 $ 1.64
Basic income and shares from continuing operations $1,928 1,199 $1,770 1,206
Net dilutive effect of options - 23 - 31
------ ----- ------ -----
Diluted income and shares from continuing operations $1,928 1,222 $1,770 1,237
Diluted income per share from continuing operations $ 1.58 $ 1.43
Diluted income per share from discontinued operation 0.12 0.17
------ ------
Diluted income per share $ 1.70 $ 1.60
</TABLE>
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
(unaudited)
6. Automotive Inventories are summarized as follows (in millions):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------------------------------
--------------------------------------
<S> <C> <C>
Raw materials, work in process and supplies $2,442 $2,035
Finished products 4,115 3,649
------ ------
Total inventories $6,557 $5,684
====== ======
U.S. inventories $2,287 $1,811
</TABLE>
7. Company-Obligated Mandatorily Redeemable Preferred Securities of a Subsidiary
Trust - The sole asset of Ford Motor Company Capital Trust I (the "Trust"),
which is the obligor on the Preferred Securities of such Trust, is $632 million
principal amount of 9% Junior Subordinated Debentures due 2025 of Ford Motor
Company.
8. Comprehensive Income - Other comprehensive income includes foreign currency
translation adjustments, minimum pension liability adjustments, and net
unrealized gains and losses on investments in equity securities. Total
comprehensive income is summarized as follows (in millions):
<TABLE>
<CAPTION>
First Quarter
-------------------------------
-------------------------------
2000 1999
-------------------------------
<S> <C> <C>
Net income $2,079 $1,979
Other comprehensive income (596) (108)
------ ------
Total comprehensive income $1,483 $1,871
</TABLE>
Effective January 1, 2000, the functional currency for Ford's automotive
operations in Brazil was changed from the U.S. dollar to the Brazilian real in
recognition of the primary currency of the environment in which Ford will
operate. The lower translated value of fixed assets and inventories in the first
quarter reduced other comprehensive income by about $350 million.
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
(unaudited)
9. Segment Information - Ford's business is divided into two business sectors -
Automotive and Financial Services (including Ford Credit and Hertz); detail is
summarized as follows (in millions):
<TABLE>
<CAPTION>
Financial Services Sector
--------------------------------------------------
--------------------------------------------------
First Quarter Auto Ford Other Elims/
Sector Credit Hertz Fin Svcs Other Total
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2000
Revenues
External customer $ 36,175 $ 5,491 $ 1,131 $ 98 $ (1) $ 42,894
Intersegment 1,158 39 8 42 (1,247) 0
-------- -------- ------- ------- -------- --------
Total Revenues $ 37,333 $ 5,530 $ 1,139 $ 140 $(1,248) $ 42,894
======== ======== ======= ======= ======= ========
Net income a/ $ 1,552 $ 353 $ 56 $ (11) $ 129 $ 2,079
Total assets a/ $102,146 $161,735 $10,360 $ 8,108 $(7,325) $275,024
1999
Revenues
External customer $ 31,597 $ 4,863 $ 1,027 $ 56 $ 6 $ 37,549
Intersegment 1,069 57 8 47 (1,181) 0
-------- -------- ------- ------ -------- --------
Total Revenues $ 32,666 $ 4,920 $ 1,035 $ 103 $(1,175) $ 37,549
======== ======== ======= ======= ======== ========
Net income a/ $ 1,446 $ 300 $ 49 $ (12) $ 196 $ 1,979
Total assets a/ $ 91,366 $140,643 $ 9,293 $ 6,258 $(5,527) $242,033
</TABLE>
- - - - -
a/ Net income from discontinued operations of $147 million and $205
million for the three months ended March 31, 2000 and 1999 is included
in Elims/Other. Net assets from discontinued operations of $1,644
million and $1,817 million as of March 31, 2000 and 1999 is included in
Auto Sector total assets.
"Other Financial Services" data is an aggregation of miscellaneous smaller
Financial Services Sector business components, including Ford Motor Land
Development Corporation, Ford Leasing Development Company, Ford Leasing
Corporation and Granite Management Corporation.
"Eliminations/Other" data includes intersegment eliminations and minority
interests. Interest income for the operating segments in the Financial Services
Sector is reported as "Revenue".
10. Value Enhancement Plan - On April 13, 2000, the Ford Board of Directors
approved a plan that will offer Ford shareholders an exchange of old shares of
the company's stock for new shares of the company's Common Stock, plus either
$20 cash per share or new shares of equivalent value. Specific details,
including record and effective dates of the plan, will be announced later in
2000.
EXHIBIT 99.3
Contact: Media Inquiries Securities Analysts Shareholder Inquiries
Karen Hampton Mike Holland (800) 555-5259 or
313-594-4410 (313) 323-8221 (313) 845-8540
FOR IMMEDIATE RELEASE
FORD MOTOR COMPANY ANNOUNCES MAJOR SHAREHOLDER VALUE ACTIONS, REFLECTING
COMPANY'S RAPID TRANSFORMATION AND CONFIDENCE IN OUTLOOK
- - Value Enhancement Plan, Including $20 Cash Per Share or Additional Stock
- - 100 Percent Distribution of Visteon Shares to Ford Shareholders
- - Expanding Casting Operations Partnership to Increase Focus and Drive Growth
DEARBORN, Mich., April 14, 2000 - The Board of Directors of Ford Motor Company
has approved three major actions to further the company's transformation into a
consumer-focused business and effectively reward shareholders:
- Value Enhancement Plan that offers Ford shareholders new Ford shares plus
either $20 cash per share or new Ford shares of equivalent value;
- An independence plan for Visteon Corporation, the company's $19 billion
automotive components and systems subsidiary, whereby Ford shareholders will
receive 100 percent of Visteon shares; and
- A plan to include Canada's Windsor and Essex aluminum plants in an
expanded version of its current joint venture with ALFA to increase focus and
drive new growth.
"This innovative and unprecedented Value Enhancement Plan reflects our
confidence in the outlook for our business and an absolute commitment to
rewarding our shareholders," said Ford Motor Company Chairman Bill Ford. "We
believe independence for Visteon will result in it being a stronger competitor
and is in the best long-term interest of both Visteon employees and Ford Motor
Company shareholders."
<PAGE>
"These pioneering actions will allow us to immediately reward our shareholders
and accelerate our transformation into a leading consumer-focused company," said
Ford CEO and President Jac Nasser. "Over the past few years, we have undertaken
many efforts to improve our car and truck business, including increasing
customer satisfaction. In addition, we have positioned the company for
profitable growth in financial services, automotive consumer services, the
Premier Automotive Group, Hertz and e-business. We also have added strong global
brands such as Volvo and Kwik-Fit and, most recently, announced plans to acquire
Land Rover."
Value Enhancement Plan
- ----------------------
As part of the Value Enhancement Plan, Ford shareholders will exchange their
current Ford common and Class B shares for new Ford common and Class B shares.
In addition, shareholders will have the right to receive either $20 cash per
share or the equivalent value in new Ford common shares. The total cash
distribution will be limited to $10 billion.
Importantly, the proposed plan will allow shareholders to increase their equity
in the company by electing to receive additional Ford common shares. It is
expected that Ford Motor Company executives will make this election and more
fully align themselves with shareholders.
"This action is indicative of the new mindset at Ford Motor Company and our
confidence in the future," said Bill Ford. "It is shareholder-friendly because
it offers all shareholders an option, the choice of cash or increased
ownership."
The record and effective dates as well as other details regarding the plan will
be included in a proxy statement, which the company expects to mail to
shareholders in the early summer.
The Company plans to adjust its dividend so that those shareholders who choose
to receive the stock instead of cash will receive approximately the same amount
of annual dividends.
This action is subject to review by the Securities and Exchange Commission and
shareholder approval. It is expected to be completed this summer.
<PAGE>
Visteon Independence
- --------------------
"The strength of Visteon will help Ford and the strength of Ford will help
Visteon," said Nasser. "We believe independence will allow Visteon to unleash
its entrepreneurial spirit, making it a very powerful force in the industry."
In a single step, Ford Motor Company will distribute its 100 percent interest in
Visteon to Ford common and Class B shareholders. Shareholders will receive a
distribution of Visteon stock based on the number of Ford shares they own and
the total number of Ford shares outstanding on the distribution record date. The
distribution ratio will be announced after the record date and the distribution
is expected to be made during the summer. Specific record and distribution dates
will be established after Securities and Exchange Commission clearance of
Visteon's Registration Statement, which is being filed today.
Visteon is well positioned to capitalize on key industry trends. The company,
with $19 billion in annual revenue, is recognized as a leader in the areas where
the industry is moving, such as systems integration and electronics. Visteon's
broad array of products and innovative technologies, along with its global
capabilities, provide strong opportunity for growth.
"I welcome the opportunity to lead Visteon as we move forward," said Visteon
Chairman and Chief Executive Officer Peter J. Pestillo. "I am convinced that our
people, technology and systems expertise position us well to be a leader in a
rapidly changing industry and to grow our business."
Expanding Casting Partnership
- -----------------------------
Ford Motor Company's joint venture with ALFA will be expanded to include Ford's
Windsor Aluminum and Essex Aluminum plants. This transaction will increase
Ford's current 20 percent stake in the joint venture and create a pre-eminent,
global aluminum castings company with operations renowned for technology and
quality leadership.
The existing joint venture between the two companies, Nemak, was formed in 1979
and produced approximately six million aluminum castings in 1999 for a variety
of automakers. The Windsor and Essex plants currently produce cylinder heads,
pistons and cylinder blocks.
<PAGE>
Dividend Declaration
- --------------------
The Board also declared a second-quarter dividend of 50 cents a share on the
company's common and Class B stock - unchanged from the prior quarter.
The Board will maintain a dividend of 51.5625 cents a share on the depositary
shares representing the company's Series B Cumulative Preferred Stock. The
dividend on the Series B Preferred Stock equals the quarterly amount of the
annual cumulative dividend of $2.0625 per depositary share.
The second-quarter dividends are payable on June 1, 2000 to shareholders of
record on May 2, 2000.
"Today's actions reflect our intense effort to transform and strengthen our
overall business, unleash the spirit of the Ford team, better connect with
customers, and reward shareholders while maintaining strategic flexibility,"
Nasser said.
Goldman, Sachs and Co. served as financial advisors on the Value Enhancement
Plan and the Visteon distribution.
