1st Quarter Results

Ford Motor Co 17 April 2000 Contacts: Media Inquiries Securities Analysts Shareholder Inquiries Christian Vinyard Mike Holland 800-555-5259 or 313-323-7045 313-323-8221 313-845-8540 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. '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.' Ford Motor Company and Subsidiaries HIGHLIGHTS a/ First Quarter 2000 1999 (unaudited) 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 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 - - - - - 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. Ford Motor Company and Subsidiaries VEHICLE UNIT SALES For the Periods Ended March 31, 2000 and 1999 (in thousands) First Quarter 2000 1999 (unaudited) 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 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. Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME For the Periods Ended March 31, 2000 and 1999 (in millions) First Quarter 2000 1999 (unaudited) 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 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 The accompanying notes are part of the financial statements. Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET (in millions) March 31, December 31, 2000 1999 (unaudited) 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 4,158 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 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 - - - - - *Less than $1 million The accompanying notes are part of the financial statements. Ford Motor Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the Periods Ended March 31, 2000 and 1999 (in millions) First Quarter 2000 First Quarter 1999 Financial Financial Automotive Services Automotive Services (unaudited) (unaudited) 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 activities 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 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 Visteon is reflected as a discontinued operation (Note 2). The accompanying notes are part of the financial statements. 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 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): First Quarter 2000 1999 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 The net assets of Visteon were (in millions): March 31, December 31, 2000 1999 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 Ford Motor Company and Subsidiaries NOTES TO FINANCIAL STATEMENTS (unaudited) 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. 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. 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): First Quarter 2000 First Quarter 1999 Income Shares Income Shares 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 6. Automotive Inventories are summarized as follows (in millions ): March 31, December 31, 2000 1999 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 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. Ford Motor Company and Subsidiaries NOTES TO FINANCIAL STATEMENTS (unaudited) 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): First Quarter 2000 1999 Net income $2,079 $1,979 Other comprehensive income (596) (108) Total comprehensive income $1,483 $1,871 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. 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): Financial Services Sector First Quarter Auto Ford Other Elims/ Sector Credit Hertz Fin Svcs Other Total 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 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 2000. Media Information Center Telephone: 800-665-1515 (toll free) or 313-621-0504; Fax: 313-845-7512 E-mail: media@ford.com; Internet: http://media.ford.com

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