2nd Quarter Results

Ford Motor Co 18 July 2001 Contact: Media: Todd Nissen 1.313.594.4410 tnissen@ford.com Securities Analysis: Anne Bork 1.313.323.8221 abork@ford.com Shareholder Inquiries: 1.800.555.5259 or 1.313.845.8540 stockinf@ford.com Media Information Center 1.800.665.1515 or 1.313.621.0504 media@ford.com FORD REPORTS SECOND QUARTER LOSS BECAUSE OF TIRE REPLACEMENT ACTION * Including Firestone costs, $551 million loss or 30 cents per share (excluding one-time charges worth $201 million or 11 cents per share). * Continued strong cash position of $18.9 billion, including VEBA. * Full-year 2001 earnings outlook affirmed at $1.25 - $1.35 per share. DEARBORN, Mich., July 18 - Ford Motor Company (NYSE: F) reported a loss of $752 million, or 41 cents per diluted share, in the second quarter of 2001. The cost to replace 13 million Firestone tires to ensure customer safety and satisfaction more than accounted for the loss. As previously announced, the tire action is expected to cost $2.1 billion after taxes. Essentially all of the costs were reflected in the second quarter. 'Our decision in May to replace 13 million potentially unsafe Firestone tires was an unprecedented action,' said Jacques Nasser, president and CEO. 'Although we're disappointed it resulted in a second quarter loss, it was the right thing to do for the safety and trust of our customers.' Excluding $201 million in charges for Ford's share of Mazda Motor Corporation's restructuring actions reported in April and the new accounting standard on hedging and derivatives, Ford lost $551 million, or 30 cents per diluted share. On a comparable basis, Ford earned $2.53 billion, or $1.18 a share, in the second quarter of 2000. Ford's worldwide vehicle unit sales in the 2001 second quarter were 1,858,000, down 7 percent from 1,995,000 in the year-earlier quarter. Revenues were $42.31 billion, a 5 percent decline from $44.50 billion a year ago. The following results include the Firestone tire replacement costs, but exclude one-time charges that were taken in the second quarter of 2001, and charges for a European restructuring and Visteon Corporation recorded in the 2000 second quarter. AUTOMOTIVE OPERATIONS Worldwide automotive operations lost $1.03 billion in the second quarter, compared to a profit of $2.07 billion a year ago. Worldwide automotive revenues were $34.55 billion, compared with $37.37 billion a year ago. Automotive gross cash at June 30 totaled $18.9 billion, including $2.7 billion of pre-funding employee benefit expenses through a Voluntary Employee Beneficiary Association (VEBA) trust. A continued focus on working capital contributed to the company's strong cash position. North America: The second quarter loss in North America was $1.14 billion. Earnings in the 2000 second quarter were $1.84 billion. In addition to the tire action, 2001 second quarter results were negatively affected by lower unit sales volumes and higher marketing costs. Europe: Ford earned $141 million in the second quarter in Europe, compared to $156 million a year ago. Higher volumes for Ford-brand vehicles, fueled by strong demand for the new Ford Mondeo and Ford Transit, were offset by losses at Land Rover and the launch of the Jaguar X-TYPE. South America: Ford operations in South America lost $70 million, compared to a loss of $63 million a year ago. Results reflect weaker economic conditions in Brazil and Argentina. Rest-of-world: Results from the rest of the world were a profit of $47 million compared to a profit of $135 million for the 2000 second quarter. The decline is primarily attributable to Ford's share of Mazda losses. FORD CREDIT Ford Credit earned $399 million in the second quarter, up from $388 million a year ago. HERTZ The Hertz Corporation reported a profit of $59 million. A year ago, Hertz had second quarter earnings of $104 million. Slowdown in the economy and related business travel, and a more difficult pricing environment, led to the lower results. OUTLOOK 'The second quarter was a difficult one for the Ford Motor Company. However, we launched great new products, including an all-new version of the Ford Explorer and Jaguar X-TYPE, and we're encouraged by the early market reactions,' Nasser said. 'Despite the challenges we face, Ford remains in a strong competitive position. We have great brands and great products, and an integrated leadership team that's highly focused on the business. In addition, our balance sheet remains strong, and we continue to expect full-year 2001 earnings per share to be in the range of $1.25-$1.35,' Nasser said. Investors can hear a review of first quarter results by Henry Wallace, chief financial officer, on the Internet at www.streetevents.com or www.streetfusion.com . The presentation will start at 9 a.m. EDT, July 18. Ford Motor Company is the world's second largest automaker, selling vehicles in 200 markets and with approximately 345,000 employees on six continents. Its automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Credit, Hertz and Quality Care. *** 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 in the U.S. and Europe 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; lower-than-anticipated market acceptance of new or existing products; currency or commodity price fluctuations; economic difficulties in South America or Asia; higher fuel prices; a market shift from truck sales in the U.S.; lower-than-anticipated residual values for leased vehicles; a credit rating downgrade; labor or other constraints on our ability to restructure our business; increased safety or emissions regulation resulting in higher costs and/or sales restrictions; work stoppages at key Ford or supplier facilities; and the discovery of defects in vehicles resulting in recall campaigns, increased warranty costs or litigation. Ford Motor Company and Subsidiaries HIGHLIGHTS Second Quarter First Half 2001 2000 2001 2000 (unaudited) (unaudited) Worldwide vehicle unit sales of cars and trucks (in thousands) - North America 1,142 1,308 2,245 2,619 - Outside North America 716 687 1,425 1,290 Total 1,858 1,995 3,670 3,909 Sales and revenues (in millions) - Automotive $ 34,552 $ 37,366 $ 69,202 $ 73,541 - Financial Services 7,762 7,133 15,558 13,862 Total $ 42,314 $ 44,499 $ 84,760 $ 87,403 Net income (loss) (in millions) - Automotive $ (1,194) $ 1,052 $ (505)$ 2,604 - Financial Services 442 461 812 841 Income (loss) from continuing operations (752) 1,513 307 3,445 - Discontinued operation (Visteon) - 162 - 309 - Loss on spin-off of Visteon - (2,252) - (2,252) Total $ (752) $ (577) $ 307 $ 1,502 Capital expenditures (in millions) - Automotive $ 1,229 $ 1,453 $ 2,586 $ 2,952 - Financial Services 99 158 230 464 Total $ 1,328 $ 1,611 $ 2,816 $ 3,416 Automotive capital expenditures as a percentage of sales 3.6% 3.9% 3.7% 4.0% Stockholders' equity at June 30 - Total (in millions) $ 13,758 $ 24,643 $ 13,758 $ 24,643 - Annualized after-tax return on Common and Class B stockholders' equity Loss 22.9% 3.8% 25.4% Automotive net cash at June 30 (in millions) Cash and marketable securities $ 16,205 $ 25,557 $ 16,205 $ 25,557 - Debt 12,061 10,804 12,061 10,804 Automotive net cash $ 4,144 $ 14,753 $ 4,144 $ 14,753 After-tax return on sales - North American Automotive (4.9)% 6.7% (1.0)% 6.4% - Total Automotive (3.4)% 2.9% (0.7)% 3.6% Shares of Common and Class B Stock (in millions) - Average number outstanding 1,819 1,205 1,829 1,206 - Number outstanding at June 30 1,812 1,205 1,812 1,205 Common Stock price (per share) (adjusted to reflect Visteon spin-off) - High $30.71 $31.46 $31.37 $31.46 - Low 24.00 23.08 23.75 22.53 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income assuming dilution - Automotive $ (0.65) $ 0.86 $ (0.28)$ 2.12 - Financial Services 0.24 0.38 0.44 0.69 Subtotal (0.41) 1.24 0.16 2.81 - Discontinued operation (Visteon) - 0.13 - 0.25 - Loss on spin-off of Visteon - (1.84) - (1.84) Total $ (0.41) $ (0.47) $ 0.16 $ 1.22 Cash dividends $ 0.30 $ 0.50 $ 0.60 $ 1.00 Ford Motor Company and Subsidiaries VEHICLE UNIT SALES For the Periods Ended June 30, 2001 and 2000 (in thousands) Second Quarter First Half 2001 2000 2001 2000 (unaudited) (unaudited) North America United States Cars 397 448 760 929 Trucks 640 743 1,292 1,466 ---- ---- ---- ---- Total United States 1,037 1,191 2,052 2,395 Canada 68 80 120 159 Mexico 37 37 73 65 ---- ---- ---- ---- Total North America 1,142 1,308 2,245 2,619 Europe Britain 167 139 347 254 Germany 115 83 221 174 Italy 64 58 127 107 Spain 53 54 93 94 France 40 41 83 83 Other countries 140 146 285 274 ---- ---- ---- ---- Total Europe 579 521 1,156 986 Other International Brazil 40 35 75 63 Australia 31 37 57 61 Taiwan 12 19 30 41 Argentina 8 12 15 27 Japan 5 8 10 17 Other countries 41 55 82 95 ---- ---- ---- ---- Total other international 137 166 269 304 ---- ---- ---- ---- Total worldwide vehicle units sales 1,858 1,995 3,670 3,909 ---- ---- ---- ---- 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. Prior periods were restated to correct unit sales. Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME For the Periods Ended June 30, 2001 and 2000 (in millions) Second Quarter First Half 2001 2000 2001 2000 (unaudited) (unaudited) AUTOMOTIVE Sales $34,552 $37,366 $69,202 $73,541 Costs and expenses (Note 2) Cost of sales (Note 3) 33,648 33,495 64,463 65,083 Selling, administrative and other expenses 2,336 2,458 4,842 4,723 ---- ---- ---- ---- Total costs and expenses 35,984 35,953 69,305 69,806 Operating income (loss) (1,432) 1,413 (103) 3,735 Interest income 218 389 473 757 Interest expense 330 327 697 645 ---- ---- ---- ---- Net interest income (expense) (112) 62 (224) 112 Equity in net income (loss) of affiliated companies (162) 29 (340) (3) ---- ---- ---- ---- Income (loss) before income taxes - Automotive (1,706) 1,504 (667) 3,844 FINANCIAL SERVICES Revenues 7,762 7,133 15,558 13,862 Costs and expenses Interest expense 2,484 2,311 5,044 4,524 Depreciation 2,674 2,398 5,193 4,606 Operating and other expenses (Note 3) 1,342 1,249 2,779 2,460 Provision for credit and insurance losses 572 411 1,258 865 ---- ---- ---- ---- Total costs and expenses 7,072 6,369 14,274 12,455 Income before taxes - Financial Services 690 764 1,284 1,407 ---- ---- ---- ---- TOTAL COMPANY Income (loss) before income taxes (1,016) 2,268 617 5,251 Provision for income taxes (284) 728 287 1,750 ---- ---- ---- ---- Income (loss) before minority interests (732) 1,540 330 3,501 Minority interests in net income of subsidiaries 20 27 23 56 ---- ---- ---- ---- Income (loss) from continuing operations (752) 1,513 307 3,445 Income from discontinued operation (Note 4) - 162 - 309 Loss of spin-off of discontinued operation (Note 4) - (2,252) - (2,252) ---- ---- ---- ---- Net income (loss) $ (752) $ (577) $ 307 $ 1,502 ---- ---- ---- ---- Income (loss) attributable to Common and Class B Stock after preferred stock dividends $ (755) $ (580) $ 300 $ 1,495 Average number of shares of Common and Class B Stock outstanding 1,819 1,205 1,829 1,206 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK (Notes 5 and 6) Basic Income Income (loss) from continuing operations $ (0.42) $ 1.26 $ 0.16 $ 2.87 Net income (loss) $ (0.42) $ (0.48) $ 0.16 $ 1.25 Diluted Income Income (loss) from continuing operations $ (0.41) $ 1.24 $ 0.16 $ 2.81 Net income (loss) $ (0.41) $ (0.47) $ 0.16 $ 1.22 Cash dividends $ 0.30 $ 0.50 $ 0.60 $ 1.00 The accompanying notes are part of the financial statements. Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET (in millions) June 30 December 31 2001 2000 (unaudited) ASSETS Automotive Cash and cash equivalents $ 4,703 $ 3,374 Marketable securities 11,502 13,116 -------- -------- Total cash and marketable securities 16,205 16,490 Receivables 3,375 4,685 Inventories (Note 7) 7,220 7,514 Deferred income taxes 2,735 2,239 Other current assets 5,466 5,318 Current receivable from Financial Services 1,487 1,587 -------- -------- Total current assets 36,488 37,833 Equity in net assets of affiliated companies 2,961 2,949 Net property 35,421 37,508 Deferred income taxes 3,504 3,342 Other assets 12,714 13,711 -------- -------- Total Automotive assets 91,088 95,343 Financial Services Cash and cash equivalents 1,883 1,477 Investments in securities 682 817 Finance receivables, net 128,263 125,164 Net investment in operating leases 49,195 46,593 Other assets 15,798 12,390 Receivable from Automotive 2,637 2,637 -------- -------- Total Financial Services assets 198,458 189,078 Total Assets $ 289,546 $ 284,421 -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $ 15,588 $ 15,075 Other payables 4,718 4,011 Accrued liabilities 23,982 23,515 Income taxes payable 29 449 Debt payable within one year 226 277 -------- -------- Total current liabilities 44,543 43,327 Long term debt 11,835 11,769 Other liabilities 30,535 30,495 Deferred income taxes 291 353 Payable to Financial Services 2,637 2,637 -------- -------- Total Automotive liabilities 89,841 88,581 Financial Services Payables 5,644 5,297 Debt 162,102 153,510 Deferred income taxes 8,792 8,677 Other liabilities and deferred income 7,249 7,486 Payable to Automotive 1,487 1,587 -------- -------- Total Financial Services liabilities 185,274 176,557 Company-obligated mandatorily redeemable preferred securities of a subsidiary Trust holding solely junior subordinated debentures of the Company (Note 8) 673 673 Stockholders' equity Capital stock Preferred stock, par value $1.00 per share (aggregate liquidation preference of $177 million) * * 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 5,980 6,174 Accumulated other comprehensive income (Notes 3 and 9) (6,350) (3,432) ESOP loan and treasury stock (2,975) (2,035) Earnings retained for use in business 17,084 17,884 -------- -------- Total stockholders' equity 13,758 18,610 -------- -------- Total liabilities and stockholders' equity $ 289,546 $ 284,421 * 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 June 30, 2001 and 2000 (in millions) First Half 2001 First Half 2000 Financial Financial Automotive Services Automotive Services (unaudited) (unaudited) Cash and cash equivalents at January 1 $ 3,374 $ 1,477 $ 2,793 $ 1,588 Cash flows from operating activities before securities trading 6,427 7,275 9,181 9,953 Net sales (purchases) of trading securities 1,686 (148) 419 60 ------- ------- ------- ------- Net cash flows from operating activities 8,113 7,127 9,600 10,013 Cash flows from investing activities Capital expenditure (2,586) (230) (2,952) (464) Acquistions of receivables and lease investments - (48,003) - (44,986) Collections of receivables and lease investments - 25,852 - 21,724 Net acquistions of daily rental vehicles - (2,362) - (2,469) Purchases of securities (10,729) (485) (2,261) (302) Sales and maturities of securities 10,657 476 2,217 312 Proceeds from sales of receivables and lease investments - 10,141 - 7,704 Net investing activity with Financial Services (460) - 45 - Cash paid for acquisitions (Note 10) (1,868) (742) (2,060) (76) Other 366 (35) 0 190 ------- ------- ------- ------- Net cash used in investing activities (4,620) (15,388) (5,011) (18,367) Cash flows from financing activities Cash dividends (1,107) - (1,578) - Net purchases of Common Stock (1,322) - (192) - Changes in short-term debt (70) (2,375) (707) (5,588) Proceeds from issuance of other debt 188 25,028 205 22,321 Principal payments on other debt (103) (13,791) (424) (7,574) Net debt repayments from discontinued operations - - 650 - Net cash distribution to discontinued operations - - (85) - Net financing activity with Automotive - 460 - (45) Other 170 (362) 694 517 ------- ------- ------- ------- Net cash (used in)/provided by financing activities (2,244) 8,960 (1,437) 9,631 Effect of exchange rate changes on cash (20) (193) (1) (145) Net transactions with Automotive/ Financial Services 100 (100) 1,045 (1,045) ------- ------- ------- ------- Net increase in cash and cash equivalents 1,329 406 4,196 87 ------- ------- ------- ------- Cash and cash equivalents at June 30 $ 4,703 $ 1,883 $ 6,989 $ 1,675 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 statement 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 for the year ended December 31, 2000. For purpose of Notes to Financial Statements, 'Ford' or the 'Company' 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 Selected Automotive costs and expenses are summarized as follows (in millions): Second Quarter First Half 2001 2000 2001 2000 Depreciation $682 $718 $1,357 $1,412 Amortization 624 628 1,350 1,202 Pension expense (benefit) (76) (51) (161) 13 3 SFAS 133 ('Accounting for Derivative Instruments and Hedges' - Non-cash adjustments to income and to stockholders' equity for the second quarter and first half of 2001 were (in millions): Automotive Financial Services Total Company Second First Second First Second First Quarter Half Quarter Half Quarter Half -------------------------------------------------------- Income before income taxes* $(77) $(167) $(51) $(71) $(128) $(238) Net income (55) (114) (32) (45) (87) (159) Stockholders' equity** (103) (1,328) * Automotive recorded in cost of sales; Financial Services recorded in operating and other expenses ** Recorded in accumulated other comprehensive income 4 Discontinued Operation - On June 28, 2000, Ford distributed 130 million shares of Visteon Corporation ('Visteon'), which represented its 100% ownership interest, by means of a tax-free spin-off in the form of a dividend on Ford Common and Class B Stock. Ford's financial statements reflect Visteon as a 'discontinued operation'. 5 Value Enhancement Plan - On August 7, 2000, the Company announced the final results of its recapitalization, known as the Value Enhancement Plan ('VEP'). Under the VEP, Ford shareholders exchanged each of their old Ford Common or Class B shares for one new Ford Common or Class B share, as the case may be, plus, at their election, either $20 in cash, 0.748 additional new Ford Common shares, or a combination of $5.17 in cash and 0.555 additional new Ford Common shares. As a result of the elections made by shareholders under the VEP, the total cash elected was $5.7 billion and the total number of new Ford Common and Class B shares that became issued and outstanding was 1.893 billion. As a result of the VEP, approximately $1.2 billion was transferred from capital stock to capital in excess of par value of stock. In accordance with generally accepted accounting principles, prior period shares and earnings per share amounts were not adjusted. 6 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 (loss) per share of Common and Class B Stock was as follows (in millions, except per share amounts): Second Quarter 2001 Second Quarter 2000 Income Shares Income Shares Income (loss) from continuing operations $ (752) 1,819 $ 1,513 1,205 Preferred stock dividend requirements (3) - (3) - Issuable and uncommitted ESOP shares - (8) - (9) ----- ----- ----- ----- Basic income (loss) and shares from continuing operations $ (755) 1,811 $ 1,510 1,196 Basic income (loss) per share from continuing operations $ (0.42) $ 1.26 Basic income per share from discontinued operation - 0.14 Basic loss per share on spin-off of discontinued operation - (1.88) ------- -------- Basic income (loss) per share $ (0.42) $ (0.48) Basic income (loss) and shares from continuing operations $ (755) 1,811 $ 1,510 1,196 Net dilutive effect of options - 37 - 26 ------- ------ ------- ----- Diluted income (loss) and shares from continuing operations $ (755) 1,848 $ 1,510 1,222 Diluted income (loss) per share from continuing operations $ (0.41) $ 1.24 Diluted income per share from discontinued operation - $ 0.13 Diluted loss per share on spin- off of discontinued operation - (1.84) ------- ------- Diluted loss per share $ (0.41) $ (0.47) First Half 2001 First Half 2000 Income Shares Income Shares Income from continuing operations $ 307 1,829 $ 3,445 1,206 Preferred stock dividend requirements (7) - (7) - Issuable and uncommitted ESOP shares - (10) - (8) -------- ------- ------- ------ Basic income and shares from continuing operations $ 300 1,819 $ 3,438 1,198 Basic income per share from continuing operations $ 0.16 $ 2.87 Basic income per share from discontinued operation - 0.26 Basic loss per share on spin-off of discontinued operation - (1.88) ------- -------- Basic income per share $ 0.16 $ 1.25 Basic income and shares from continuing operations $ 300 1,819 3,438 1,198 Net dilutive effect of options - 38 - 25 ------- ----- ------- ----- Diluted income and shares from continuing operations $ 300 1,857 $ 3,438 1,223 Diluted income per share from continuing operations $ 0.16 $ 2.81 Diluted income per share from discontinued operation - 0.25 Diluted loss per share on spin- off of discontinued operation - (1.84) ------- ------- Diluted income per share $ 0.16 $ 1.22 7. Automotive Inventories are summarized as follows (in millions): June 30, December 31, 2001 2000 -------- ------------ Raw materials, work in progress and supplies $ 2,688 $ 2,798 Finished products 4,532 4,716 -------- ------------ Total inventories $ 7,220 $ 7,514 -------- ------------ 8. 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. 9. Comprehensive Income - Other comprehensive income primarily reflects foreign currency translation adjustments and adjustments related to SFAS 133 (Note 3). Total comprehensive income is summarized as follows (in millions): Second Quarter First Half 2001 2000 2001 2000 ------------------ --------------- Net income (loss) $ (752) $ (577) $ 307 $ 1,502 Other comprehensive income (loss) (582) (481) (2,918) (1,078) Total comprehensive -------- -------- -------- -------- income (loss) $(1,334) $(1,058) $(2,611) $ 424 -------- -------- -------- -------- 10. Acquisitions and Restructurings Hertz Purchase - In March 2001, through a tender offer and a merger transaction, Ford acquired (for a total price of $735 million) the common stock of Hertz that it did not own, which represented about 18% of the economic interest in Hertz. Purchase of Land Rover Business - On June 30, 2000, Ford purchased the Land Rover business from the BMW Group for approximately three billion euros. Approximately two-thirds of the purchase price (equivalent of $1.9 billion at June 30, 2000) was paid at time of closing; the remainder will be paid in 2005. The acquisition involves the entire Land Rover line of products and related assembly and engineering facilities. It does not include Rover's passenger car business or financial services business. European Charges - Following an extensive business review of the Ford Brand operations in Europe, the Company recorded a pre-tax charge in Automotive cost of sales of $1,568 million in the second quarter of 2000. This charge included $1.1 billion for asset impairments and $468 million for restructuring costs. The effect on after-tax earnings was $1,019 million. 11. 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 Second Quarter Auto Ford Other Elims/ Sector Credit Hertz Fin Svcs Other Total 2001 Revenues External customer $ 34,552 $ 6,256 $ 1,281 $ 219 $ 6 $ 42,314 Intersegment 1,316 118 6 45 (1,485) - -------- -------- ------- ------ -------- -------- Total Revenue $ 35,868 $ 6,374 $ 1,287 $ 264 $(1,479) $ 42,314 -------- -------- ------- ------ -------- -------- Income (loss) from continuing operations $ (1,194) $ 367 $ 59 $ 14 $ 2 $ (752) 2000 Revenues External customer $ 37,366 $ 5,778 $ 1,271 $ 64 $ 20 $ 44,499 Intersegment 1,338 41 7 62 (1,448) - -------- -------- ------- ------ -------- -------- Total Revenues $ 38,704 $ 5,819 $ 1,278 $ 126 $(1,428) $ 44,499 -------- -------- ------- ------ -------- -------- Income (loss) from continuing operations $ 1,052 $ 388 $ 104 $ (18) $ (13) $ 1,513 Financial Services Sector First Half Auto Ford Other Elims/ Sector Credit Hertz Fin Svcs Other Total 2001 Revenues External customer $ 69,202 $ 12,604 $ 2,457 $ 483 $ 14 $ 84,760 Intersegment 2,544 240 14 72 (2,870) - -------- -------- ------- ------ -------- -------- Total Revenues $ 71,746 $ 12,844 $ 2,471 $ 555 $(2,856) $ 84,760 -------- -------- ------- ------ -------- -------- Income (loss) from continuing operations $ (505) $ 760 $ 55 $ (1) $ (2) $ 307 Total assets at June 30 $ 93,963 $182,045 $12,185 $ 7,816 $(6,463) $289,546 2000 Revenues External customer $ 73,541 $ 11,269 $ 2,402 $ 172 $ 19 $ 87,403 Intersegment 2,496 80 15 104 (2,695) - -------- -------- ------- ------ -------- -------- Total Revenues $ 76,037 $ 11,349 $ 2,417 $ 276 $(2,676) $ 87,403 -------- -------- ------- ------ -------- -------- Income(loss)from continuing operations $ 2,604 $ 741 $ 160 $ (29) $ (31) $ 3,445 Total assets at June 30 $104,363 $167,821 $11,451 $8,002 $(7,057) $284,580 '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. 'Elimination/Other' data includes intersegment eliminations and minority interests. Interest income for the operating segments in the Financial Services Sector is reported as 'Revenues'.

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