1st Quarter Results
Ford Motor Co
20 April 2005
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FORD ANNOUNCES FIRST-QUARTER FINANCIAL RESULTS
• Net income of 60 cents per share, or $1.21 billion.
• Earnings from continuing operations of 62 cents per share, or $1.26
billion, excluding special items. (Earnings per share from continuing
operations is calculated on a basis that includes pre-tax profit
(excluding special items), provision for taxes and minority interest. See
attachment for reconciliation to GAAP.)
• Worldwide automotive pre-tax profits of $579 million, down $1.25 billion
from the same period a year ago, excluding special items.
• Financial Services sector pre-tax profit of $1.1 billion, up $33 million
from a year ago.
• Second-quarter earnings guidance is a range of a loss of 15 cents per share
to breakeven, excluding special items.
• Full-year earnings guidance of $1.25 to $1.50 per share from continuing
operations, excluding special items, unchanged from April 8.
DEARBORN, Mich., April 20, - Ford Motor Company (NYSE: F) today reported net
income of 60 cents per share, or $1.21 billion, for the first quarter of 2005.
This compares with net income of 94 cents per share, or $1.95 billion, in the
first quarter of 2004.
Ford's first-quarter earnings from continuing operations, excluding special
items, were 62 cents per share, or $1.26 billion.
Ford's total sales and revenue in the first quarter rose to $45.1 billion from
$44.7 billion in the year-ago period.
* Earnings per share from continuing operations is calculated on a basis that
includes pre-tax profit (excluding special items), provision for taxes and
minority interest. See below for reconciliation to GAAP.
'The plan that we launched in 2002 has led to profits and positive cash flow,'
said Bill Ford, chairman and chief executive officer. 'Going forward, we will
continue to focus on improving our quality, lowering our costs, and delivering
exciting new products, as well as taking actions that strengthen our finances,
optimize our global footprint and lead to the faster development of new
products.'
The following discussion of the results of our automotive sector and business
units is on a basis that excludes special items. See attachment for the nature
and amount of these special items and a reconciliation to pre-tax results on a
GAAP basis.
AUTOMOTIVE SECTOR
On a pre-tax basis, excluding special items of $106 million, worldwide
automotive profits in the first quarter were $579 million, down by $1.25 billion
from the same period a year ago.
Worldwide automotive sales for the first quarter rose to $39.3 billion from
$38.8 billion in the same period last year. Worldwide vehicle-unit sales in the
quarter were 1,716,000, down from 1,788,000 a year ago.
Operating-related cash flow was $800 million positive for the quarter.
Automotive cash, marketable securities, loaned securities and short-term
Voluntary Employee Beneficiary Association (VEBA) assets on March 31, 2005 were
$22.9 billion, down from $23.6 billion at the end of the fourth-quarter.
THE AMERICAS
For the first quarter, the Americas reported a pre-tax profit of $740 million,
excluding special items, down $1.24 billion from a $1.98 billion pre-tax profit
in the same period a year ago.
North America: In the first quarter, Ford's North American automotive operations
reported pre-tax profit of $663 million, excluding special items, down $1.3
billion from a year ago. Lower volumes, higher costs, unfavorable currency
exchange, and unfavorable net pricing contributed to the decline. Sales were
$21.1 billion, down from $23.2 billion in the same period a year ago.
South America: Ford's South American automotive operations reported a first-
quarter pre-tax profit of $77 million, an increase of $62 million from first
quarter 2004. The improvement reflected primarily higher volumes, favorable
currency exchange, and higher pricing partially offset by higher commodity
costs. Revenue for the first quarter increased to $866 million from $650 million
in 2004.
FORD EUROPE AND PREMIER AUTOMOTIVE GROUP (PAG)
The 2005 first-quarter combined pre-tax profit for Ford Europe and PAG
automotive operations was $4 million, compared with a profit of $38 million for
the year-ago period, excluding special items, a year-over-year deterioration of
$34 million.
Ford Europe: Ford Europe's first-quarter pre-tax profit was $59 million,
compared with a pre-tax profit of $5 million, excluding special items, during
the 2004 period. The improvement of $54 million primarily reflected higher
volume and ongoing cost reductions. Ford Europe's sales in the first quarter
increased to $7.7 billion, compared with $6.5 billion during the first quarter
of 2004.
Premier Automotive Group: PAG reported a pre-tax loss of $55 million for the
first quarter, compared with a pre-tax profit of $33 million for the first
quarter of 2004. The decline in results primarily reflected unfavorable currency
exchange, offset partially by lower costs. First-quarter sales for PAG were $7.6
billion, compared with $6.8 billion a year ago.
FORD ASIA-PACIFIC and AFRICA/MAZDA
The 2005 first-quarter combined pre-tax profit for Ford Asia-Pacific and
Africa/Mazda was $97 million, compared with $82 million for the year-ago period,
a year-over-year improvement of $15 million.
Ford Asia-Pacific and Africa: For the first quarter of 2005, Ford Asia- Pacific
and Africa reported a pre-tax profit of $43 million, an improvement of $15
million from the same period a year ago. The improvement primarily reflected
higher volumes and a gain on the sale of Ford's interest in Mahindra and
Mahindra in India. Sales rose to $2 billion, compared with $1.6 billion during
the first quarter of 2004.
Mazda: During the first quarter of 2005, Ford's share of the pre-tax profit of
Mazda and associated operations was $54 million, unchanged from the same period
a year ago.
FORD MOTOR CREDIT COMPANY
Ford Motor Credit reported net income of $710 million in the first quarter of
2005, up $22 million from earnings of $688 million a year earlier. On a pre-tax
basis, Ford Motor Credit earned $1.1 billion in the first quarter, unchanged
from the previous year. The results primarily reflected improved credit loss
performance, offset partially by the impact of a decline in volume and higher
borrowing costs.
HERTZ
Hertz reported a first-quarter pre-tax profit of $33 million, a $40 million
improvement from the $7 million pre-tax loss from the same period in 2004. The
improvement reflected higher car and equipment rental volumes and higher
proceeds from the disposal of used vehicles, partially offset by a highly
competitive pricing environment in car rental markets.
OUTLOOK
'As we previously announced, we have reduced our full-year earnings guidance for
2005 to a range of $1.25 to $1.50 per share, excluding special items. This
outlook is based on our expectation of a tougher operating environment for the
remainder of the year,' said Executive Vice President and Chief Financial
Officer Don Leclair. 'Consistent with this, we expect our second-quarter
earnings per share, excluding special items, to range from a loss of 15 cents
per share to breakeven.'
Full-year and second-quarter 2005 earnings-per-share guidance excludes the
effect of special items, which are presently estimated to include charges
related to the following items:
2nd Quarter Full Year
Premier Automotive Group Improvement Plan $(0.02) $(0.03)
Investments in Fuel Cell Technologies (0.04) (0.05)
Sale of a Non-Core Business 0 (0.02)
Visteon (0.03) tbd*
Salaried Reductions (0.03) (0.03)
TOTAL $(0.12) $(0.13)
* Ford expects to incur a charge to earnings associated with concluding a final
agreement with Visteon, but at this time we are not able to provide any
estimate.
FIRST-QUARTER RESULTS CONFERENCE CALL - APRIL 20
Chairman and Chief Executive Officer Bill Ford, and Executive Vice President and
Chief Financial Officer Don Leclair, will host a conference call beginning at
9:00 a.m. ET to discuss first-quarter financial results.
Following the earnings call, at 11:00 a.m. ET, Ford Vice President and Treasurer
Ann Marie Petach, Ford Credit Vice Chairman and Chief Financial Officer David
Cosper, and Ford Vice President and Controller Jim Gouin, will host a conference
call for fixed income analysts and investors.
The presentations (listen-only) and supporting materials also will be available
on the Internet at http://www.shareholder.ford.com. Representatives of the news
media and the investment community participating by teleconference will have the
opportunity to ask questions following the presentations.
Conference Call Access Information
April 20
http://www.shareholder.ford.com
Toll Free: 800-599-9795
International: 617-786-2905
Earnings: 9:00 a.m. ET
Earnings Passcode: 'Ford Earnings Call'
Fixed Income: 11:00 a.m. ET
Fixed Income Passcode: 'Ford Fixed Income Call'
Replays
Available through April 27
http://www.shareholder.ford.com
Toll Free: 888-286-8010
International: 617-801-6888
Earnings Passcode: 29481628
Fixed Income Passcode: 55865600
Ford Motor Company, a global automotive industry leader based in Dearborn,
Michigan, manufactures and distributes automobiles in 200 markets across six
continents. With more than 324,000 employees worldwide, the Company's core and
affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover,
Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford
Motor Credit Company and The Hertz Corporation.
- # # # -
SAFE HARBOR
Statements included herein may constitute 'forward-looking statements' within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements involve a number of risks, uncertainties, and other factors that
could cause actual results to differ materially from those stated, including,
without limitation:
* greater price competition resulting from currency fluctuations,
industry overcapacity or other factors;
* a significant decline in industry sales, particularly in the U.S. or
Europe, resulting from slowing economic growth, geo-political events or
other factors;
* lower-than-anticipated market acceptance of new or existing products;
* economic distress of suppliers that may require us to provide financial
support or take other measures to ensure supplies of materials;
* work stoppages at Ford or supplier facilities or other interruptions of
supplies;
* the discovery of defects in vehicles resulting in delays in new model
launches, recall campaigns or increased warranty costs;
* increased safety, emissions, fuel economy or other regulation resulting
in higher costs and/or sales restrictions;
* unusual or significant litigation or governmental investigations
arising out of alleged defects in our products or otherwise;
* worse-than-assumed economic and demographic experience for our post-
retirement benefit plans (e.g., investment returns, interest rates,
health care cost trends, benefit improvements);
* currency or commodity price fluctuations, including rising steel
prices;
* changes in interest rates;
* a market shift from truck sales in the U.S.;
* economic difficulties in any significant market;
* higher prices for, or reduced availability of, fuel;
* labor or other constraints on our ability to restructure our business;
* a change in our requirements or obligations under long-term supply
arrangements pursuant to which we are obligated to purchase minimum
quantities or a fixed percentage or pay minimum amounts;
* credit rating downgrades;
* inability to access debt or securitization markets around the world at
competitive rates or in sufficient amounts;
* higher-than-expected credit losses;
* lower-than-anticipated residual values for leased vehicles;
* increased price competition in the rental car industry and/or a general
decline in business or leisure travel due to terrorist attacks, acts of
war, epidemic diseases or measures taken by governments in response
thereto that negatively affect the travel industry; and
* our inability to implement the Revitalization Plan.
TOTAL COMPANY
2005 FIRST QUARTER INCOME FROM CONTINUING OPERATIONS
COMPARED WITH NET INCOME
First Quarter
Earnings Memo:
Per After-Tax Pre-Tax
Share* Profit Profit
(Mils.) (Mils.)
Income from Continuing Operations
Excluding Special Items $0.62 $1,260 $1,655
Special Items
- Fuel Cell Technology Charges (0.02) (39) (39)
- Non-Core Business Held for Sale (0.02) (38) (58)
- Visteon Charges ** (6) (9)
Total Special Items $(0.04) $(83) $(106)
Income from Continuing Operations $0.58 $1,177 $1,549
Discontinued Operations 0.02 35
Net Income $0.60 $1,212
* Earnings per share from continuing operations is calculated on a basis
that includes pre-tax profit, provision for taxes, and minority
interest
** Less than $0.01
FORD MOTOR COMPANY AND SUBSIDIARIES
SECTOR STATEMENT OF INCOME
For the Periods Ended March 31, 2005 and 2004
(in millions, except per share amounts)
First Quarter
2005 2004
(unaudited)
AUTOMOTIVE
Sales $39,332 $38,800
Costs and expenses
Cost of sales 35,553 34,054
Selling, administrative and other expenses 3,114 2,742
Total costs and expenses 38,667 36,796
Operating income/(loss) 665 2,004
Interest expense 402 385
Interest income and other non-operating income/(expense),
net 153 145
Equity in net income/(loss) of affiliated companies 57 56
Income/(loss) before income taxes - Automotive 473 1,820
FINANCIAL SERVICES
Revenues 5,804 5,923
Costs and expenses
Interest expense 1,562 1,450
Depreciation 1,514 1,729
Operating and other expenses 1,467 1,348
Provision for credit and insurance losses 185 353
Total costs and expenses 4,728 4,880
Income/(loss) before income taxes - Financial Services 1,076 1,043
TOTAL COMPANY
Income/(loss) before income taxes 1,549 2,863
Provision for/(benefit from) income taxes 314 819
Income/(loss) before minority interests 1,235 2,044
Minority interests in net income/(loss) of subsidiaries 58 85
Income/(loss) from continuing operations 1,177 1,959
Income/(loss) from discontinued operations 35 (7)
Net income/(loss) $1,212 $1,952
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic income/(loss)
Income/(loss) from continuing operations $0.64 $1.07
Income/(loss) from discontinued operations 0.02 -
Net income/(loss) $0.66 $1.07
Diluted income/(loss)
Income/(loss) from continuing operations $0.58 $0.95
Income/(loss) from discontinued operations 0.02 (0.01)
Net income/(loss) $0.60 $0.94
Cash dividends $0.10 $0.10
Certain amounts in prior year's financial statements have been reclassified to
conform with current year presentation.
FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
For the Periods Ended March 31, 2005 and 2004
(in millions, except per share amounts)
First Quarter
2005 2004
(unaudited)
Sales and revenues
Automotive sales $39,332 $38,800
Financial Services revenues 5,804 5,923
Total sales and revenues 45,136 44,723
Costs and expenses
Cost of sales 35,553 34,054
Selling, administrative and other expenses 6,095 5,819
Interest expense 1,964 1,835
Provision for credit and insurance losses 185 353
Total costs and expenses 43,797 42,061
Automotive interest income and other non-operating
income/(expense), net 153 145
Automotive equity in net income/(loss) of affiliated
companies 57 56
Income/(loss) before income taxes 1,549 2,863
Provision for/(benefit from) income taxes 314 819
Income/(loss) before minority interests 1,235 2,044
Minority interests in net income/(loss) of subsidiaries 58 85
Income/(loss) from continuing operations 1,177 1,959
Income/(loss) from discontinued operations 35 (7)
Net income/(loss) $1,212 $1,952
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic income/(loss)
Income/(loss) from continuing operations $0.64 $1.07
Income/(loss) from discontinued operations 0.02 -
Net income/(loss) $0.66 $1.07
Diluted income/(loss)
Income/(loss) from continuing operations $0.58 $0.95
Income/(loss) from discontinued operations 0.02 (0.01)
Net income/(loss) $0.60 $0.94
Cash dividends $0.10 $0.10
Certain amounts in prior year's financial statements have been reclassified to
conform with current year presentation.
FORD MOTOR COMPANY AND SUBSIDIARIES
SECTOR BALANCE SHEET
(in millions)
March 31, December 31,
2005 2004
(unaudited)
ASSETS
Automotive
Cash and cash equivalents $9,532 $10,142
Marketable securities 9,210 8,291
Loaned securities 839 1,058
Total cash, marketable and loaned securities 19,581 19,491
Receivables, net 3,034 2,894
Inventories 11,482 10,766
Deferred income taxes 3,734 3,837
Other current assets 8,229 8,916
Total current assets 46,060 45,904
Equity in net assets of affiliated companies 1,962 1,907
Net property 41,759 42,904
Deferred income taxes 10,095 10,894
Goodwill and other intangible assets 6,111 6,374
Assets of discontinued/held-for-sale operations 159 188
Other assets 9,837 9,455
Total Automotive assets 115,983 117,626
Financial Services
Cash and cash equivalents 13,813 13,368
Investments in securities 929 1,216
Finance receivables, net 106,048 113,824
Net investment in operating leases 32,475 31,763
Retained interest in sold receivables 8,028 9,166
Goodwill and other intangible assets 900 897
Assets of discontinued/held-for-sale operations 2,456 2,186
Other assets 10,963 13,746
Receivable from Automotive 1,633 2,753
Total Financial Services assets 177,245 188,919
Total assets $293,228 $306,545
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $17,389 $16,026
Other payables 4,182 4,269
Accrued liabilities 33,729 33,573
Debt payable within one year 947 977
Current payable to Financial Services 672 1,382
Total current liabilities 56,919 56,227
Long-term debt 17,101 17,458
Other liabilities 35,807 35,699
Deferred income taxes 1,897 3,042
Liabilities of discontinued/held-for-sale operations 47 46
Payable to Financial Services 961 1,371
Total Automotive liabilities 112,732 113,843
Financial Services
Payables 2,598 2,394
Debt 143,214 154,538
Deferred income taxes 10,496 10,549
Other liabilities and deferred income 7,560 8,206
Liabilities of discontinued/held-for-sale operations 112 93
Total Financial Services liabilities 163,980 175,780
Minority interests 846 877
Stockholders' equity
Capital stock
Common Stock, par value $0.01 per share
(1,837 million shares issued) 18 18
Class B Stock, par value $0.01 per share
(71 million shares issued) 1 1
Capital in excess of par value of stock 5,224 5,321
Accumulated other comprehensive income/(loss) (150) 1,258
Treasury stock (1,628) (1,728)
Earnings retained for use in business 12,205 11,175
Total stockholders' equity 15,670 16,045
Total liabilities and stockholders' equity $293,228 $306,545
Certain amounts in prior year's financial statements have been reclassified to
conform with current year presentation.
FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
March 31, December 31,
2005 2004
(unaudited)
ASSETS
Cash and cash equivalents $23,345 $23,510
Marketable securities 10,139 9,507
Loaned securities 839 1,058
Finance receivables, net 102,552 110,749
Other receivables, net 6,530 5,969
Net investment in operating leases 32,475 31,763
Retained interest in sold receivables 8,028 9,166
Inventories 11,482 10,766
Equity in net assets of affiliated companies 2,872 2,835
Net property 43,395 44,549
Deferred income taxes 2,926 4,830
Goodwill and other intangible assets 7,011 7,271
Assets of discontinued/held-for-sale operations 2,615 2,374
Other assets 26,379 29,511
Total assets $ 280,588 $293,858
LIABILITIES AND STOCKHOLDERS' EQUITY
Payables $24,169 $22,689
Accrued liabilities 31,392 31,187
Debt 161,262 172,973
Other liabilities and deferred income 43,226 43,777
Deferred income taxes 3,864 6,171
Liabilities of discontinued/held-for-sale operations 159 139
Total liabilities 264,072 276,936
Minority interests 846 877
Stockholders' equity
Capital stock
Common Stock, par value $0.01 per share
(1,837 million shares issued) 18 18
Class B Stock, par value $0.01 per share
(71 million shares issued) 1 1
Capital in excess of par value of stock 5,224 5,321
Accumulated other comprehensive income/(loss) (150) 1,258
Treasury stock (1,628) (1,728)
Earnings retained for use in business 12,205 11,175
Total stockholders' equity 15,670 16,045
Total liabilities and stockholders' equity $280,588 $293,858
Certain amounts in prior year's financial statements have been reclassified to
conform with current year presentation.
FORD MOTOR COMPANY AND SUBSIDIARIES
CONDENSED SECTOR STATEMENT OF CASH FLOWS
For the Periods Ended March 31, 2005 and 2004
(in millions)
First Quarter 2005 First Quarter 2004
Financial Financial
Automotive Services Automotive Services
(unaudited) (unaudited)
Cash and cash equivalents at
January 1 $10,142 $13,368 $6,856 $16,352
Cash flows from operating activities
before securities trading 2,449 3,453 2,556 5,569
Net sales/(purchases) of trading
securities (599) 8 (2,267) (8)
Net cash flows from operating
activities 1,850 3,461 289 5,561
Cash flows from investing activities
Capital expenditures (1,436) (125) (1,199) (76)
Acquisitions of retail and other
finance receivables and operating
leases - (14,035) - (13,586)
Collections of retail and other
finance receivables and operating
leases - 12,762 - 12,191
Net (acquisitions)/collections of
wholesale receivables - (1,463) - (1,920)
Net acquisitions of daily rental
vehicles - (1,283) - (1,041)
Purchases of securities (1,808) (114) (1,342) (2)
Sales and maturities of securities 1,540 391 1,380 196
Proceeds from sales of retail and
other finance receivables and
operating leases - 8,373 - 1,680
Proceeds from sales of wholesale
receivables - 1,443 - 964
Proceeds from sale of businesses 39 - 100 -
Net investing activity with Financial
Services 415 - 851 -
Other (42) (153) 4 299
Net cash (used in)/provided by
investing activities (1,292) 5,796 (206) (1,295)
Cash flows from financing activities
Cash dividends (183) - (183) -
Net sales/(purchases) of Common Stock (14) - (60) -
Changes in short-term debt (17) (403) (156) 4,881
Proceeds from issuance of other debt 76 5,446 148 4,343
Principal payments on other debt (373) (13,939) (1,377) (15,491)
Net financing activity with Automotive - (415) - (851)
Other (3) (18) (10) (2)
Net cash (used in)/provided by
financing activities (514) (9,329) (1,638) (7,120)
Effect of exchange rate changes on cash 56 (193) (12) (61)
Net transactions with
Automotive/Financial Services (710) 710 (95) 95
Net increase/(decrease) in cash and
cash equivalents (610) 445 (1,662) (2,820)
Cash and cash equivalents at March 31 $9,532 $13,813 $5,194 $13,532
Certain amounts in prior year's financial statements have been reclassified to
conform with current year presentation.
FORD MOTOR COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Periods Ended March 31, 2005 and 2004
(in millions)
First Quarter
2005 2004
(unaudited)
Cash and cash equivalents at January 1 $23,510 $23,208
Cash flows from operating activities before
securities trading 5,767 7,143
Net sales/(purchases) of trading securities (591) (2,275)
Net cash flows from operating activities 5,176 4,868
Cash flows from investing activities
Capital expenditures (1,561) (1,275)
Acquisitions of retail and other finance receivables
and operating leases (14,035) (13,586)
Collections of retail and other finance receivables
and operating leases 12,877 12,217
Net acquisitions of daily rental vehicles (1,283) (1,041)
Purchases of securities (1,922) (1,344)
Sales and maturities of securities 1,931 1,576
Proceeds from sales of retail and other finance
receivables and operating leases 8,373 1,680
Proceeds from sale of businesses 39 100
Other (195) 303
Net cash (used in)/provided by investing activities 4,224 (1,370)
Cash flows from financing activities
Cash dividends (183) (183)
Net sales/(purchases) of Common Stock (14) (60)
Changes in short-term debt (420) 4,725
Proceeds from issuance of other debt 5,522 4,491
Principal payments on other debt (14,312) (16,868)
Other (21) (12)
Net cash (used in)/provided by financing activities (9,428) (7,907)
Effect of exchange rate changes on cash (137) (73)
Net increase/(decrease) in cash and cash equivalents (165) (4,482)
Cash and cash equivalents at March 31 $23,345 $18,726
Certain amounts in prior year's financial statements have been reclassified to
conform with current year presentation.
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