2nd Quarter Results
Ford Motor Co
20 July 2004
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FORD ANNOUNCES SECOND QUARTER FINANCIAL RESULTS
- Net income of 57 cents per share, or $1.2 billion.
- Earnings from continuing operations of 61 cents per share, excluding
special items.
- Financial Services sector pre-tax profit of $1.6 billion, up
$800 million from a year ago.
- Ford Europe pre-tax profit of $211 million, an improvement of more
than $700 million compared with the second quarter 2003.
- Full-year earnings guidance increased by 15 cents to a range of $1.80
to $1.90 per share from continuing operations, excluding special
items.
DEARBORN, Mich., July 20 - Ford Motor Company (NYSE: F) today reported net
income of 57 cents per share, or $1.2 billion, for the second quarter of 2004.
This compares with net income of 22 cents per share, or $417 million, in the
second quarter of 2003.
Ford's second-quarter earnings from continuing operations, excluding special
items, were 61 cents per share, or $1.3 billion. This result exceeds the First
Call consensus estimate of 50 cents per share.
Ford's total sales and revenue in the second quarter rose to $42.8 billion from
$40.6 billion in the year-ago period.
'I am pleased that we continue to make solid progress in this extremely
competitive environment,' said Bill Ford, chairman and chief executive officer.
'Although the remainder of the year includes many challenges, we'll generate
lots of excitement with the introduction of new products such as the Ford Five
Hundred, Freestyle and Escape Hybrid, the Land Rover Discovery/LR3 and the new
Ford Focus in Europe.'
Additional product introductions for the rest of the year include Ford F-Series
Super Duty, GT and Mustang as well as Mercury Mariner and Montego.
AUTOMOTIVE SECTOR
On a pre-tax basis, Ford's worldwide automotive sector reported a loss of $57
million during the second quarter of 2004. Excluding special items of $140
million, worldwide automotive profit in the second quarter was $83 million, an
$80 million improvement over the same period a year ago. The special items
included a $120 million charge in North America related to the restructuring and
revaluation of our investment in Ballard Power Systems (Nasdaq: BLDP; TSX: BLD),
a leading fuel cell manufacturer, and $20 million for the completion of
restructuring in Ford Europe.
Worldwide automotive sales for the second quarter rose to $36.7 billion from
$34.1 billion in the same period last year. Worldwide vehicle-unit sales in the
quarter were 1,748,000, up from 1,718,000 a year ago.
Automotive cash, marketable securities, loaned securities and short-term
Voluntary Employee Beneficiary Association (VEBA) assets on June 30, 2004 were
$26.8 billion, up from $26.5 billion at the end of the first quarter.
THE AMERICAS
For the second quarter, the Americas reported a pre-tax profit of $477 million,
excluding special items, up $101 million from the same period a year ago.
North America: Ford's North America automotive pre-tax profit for the second
quarter was $455 million, excluding special items, up $10 million from a year
ago. The increase primarily reflected improved vehicle mix and favorable net
pricing, partially offset by lower volumes and the non-recurrence of favorable
2003 warranty reserve adjustments. Sales were $20.5 billion, down from $20.7
billion in the same period a year ago.
South America: Ford's South America operations reported a second-quarter pre-tax
profit of $22 million, a $91 million improvement from the 2003 second quarter.
The improvement primarily reflected favorable pricing and higher vehicle
volumes, partially offset by higher material costs. Sales improved to $665
million from $435 million in the same period a year ago.
FORD EUROPE AND PREMIER AUTOMOTIVE GROUP (PAG)
The 2004 second-quarter combined pre-tax loss for Ford Europe and PAG was $151
million, excluding special items, compared with a loss of $359 million for the
year-ago period, a year-over-year improvement of $208 million.
Ford Europe: Ford Europe's second-quarter pre-tax profit was $211 million,
excluding special items, compared with a pre-tax loss of $525 million during the
2003 period. The improvement of more than $700 million primarily reflected
higher volumes and lower costs. Ford Europe's sales in the second quarter were
$6.7 billion, compared with $5.2 billion during the second quarter of 2003.
Premier Automotive Group: PAG reported a pre-tax loss of $362 million for the
second quarter, compared with a pre-tax profit of $166 million for the second
quarter of 2003. The decline in results primarily reflected unfavorable exchange
rates, higher costs including the effects of product changeovers, unfavorable
mix and lower net pricing. Second-quarter sales for PAG were $6.9 billion,
compared with $6.4 billion a year ago.
FORD ASIA-PACIFIC, AFRICA, MAZDA AND ASSOCIATED OPERATIONS
The 2004 second-quarter combined pre-tax profit for Ford Asia-Pacific, Africa,
Mazda and Associated Operations was $55 million, compared with $17 million for
the year-ago period, a year-over-year improvement of $38 million.
Ford Asia-Pacific and Africa: For the second quarter of 2004, Ford Asia-Pacific
and Africa reported a combined pre-tax loss of $5 million, an improvement of $23
million from the same period a year ago. The improvement primarily reflected
favorable exchange rates and stronger volume and mix, partially offset by higher
costs and unfavorable net pricing. Sales rose to $1.9 billion, compared with
$1.4 billion during the second quarter of 2003.
Mazda and Associated Operations: During the second quarter of 2004, Ford's share
of Mazda and Associated Operations was a combined pre-tax profit of $60 million,
compared with $45 million a year ago.
FORD CREDIT
Ford Motor Credit Company reported record net income of $897 million in the
second quarter of 2004, up $496 million from $401 million a year earlier. On a
pre-tax basis from continuing operations, Ford Credit earned $1.4 billion in the
second quarter, compared with $661 million in the previous year. The increase in
earnings primarily reflected continued improved credit loss performance, higher
used vehicle prices and the favorable impact of the low interest rate
environment.
HERTZ
Hertz reported a pre-tax profit of $144 million in the second quarter compared
with a $57 million profit during the same period a year ago. The improvement
primarily reflected higher rental car volume in leisure and commercial segments,
higher profit from the disposal of used vehicles and equipment sales, and
favorable cost performance. The improvements were partially offset by lower
pricing in highly competitive car rental markets worldwide.
OUTLOOK
'When you look at our second-quarter results you see continued strong
performance in Financial Services and significant progress at Ford Europe, where
actions we took last year have begun to pay off,' said Chief Financial Officer
Don Leclair. 'Looking forward, we remain dedicated to achieving our financial
milestones in this competitive marketplace and continuing to improve our balance
sheet.'
For the third quarter of 2004, Ford expects to earn in a range of breakeven to 5
cents per share from continuing operations, excluding special items.
Ford is increasing its full-year earnings guidance by 15 cents per share to a
range of $1.80 to $1.90 per share from continuing operations, excluding special
items. The increase primarily reflects the strong performance of the company's
Financial Services sector. Special items, which are presently estimated to
reduce full-year earnings by 8 cents per share, are expected to consist
primarily of the restructuring and revaluation of our Ballard investment and
completed European restructuring actions.
Investors and media can hear a review of second quarter results by Don Leclair
via conference call at 800-599-9795 (617-786-2905 for international dial-in)
with a verbal passcode of 'Ford Earnings Call' or on the Internet at
http://www.shareholder.ford.com. Supporting presentation material will be
available at the same Internet address. The presentation will begin at 9:00 a.m.
EDT, July 20.
Ford Motor Company, a global automotive industry leader based in Dearborn,
Mich., manufactures and distributes automobiles in 200 markets across six
continents. With more than 327,000 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
Credit, Quality Care and Hertz.
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;
• work stoppages at key 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;
• changes in interest rates;
• a market shift from truck sales in the U.S.;
• economic difficulties in any significant market;
• reduced availability of or higher prices for fuel;
• labor or other constraints on our ability to restructure our business;
• a change in our requirements under long-term supply arrangements under
which we are obligated to purchase minimum quantities 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.
Ford Motor Company and Subsidiaries
SECTOR STATEMENT OF INCOME
For the Periods Ended June 30, 2004 and 2003
(in millions, except per share amounts)
Second Quarter First Half
2004 2003 2004 2003
(unaudited) (unaudited)
AUTOMOTIVE
Sales $36,719 $34,142 $75,563 $68,301
Costs and expenses
Cost of sales 33,834 31,660 67,905 62,715
Selling, administrative
and other expenses 2,842 2,456 5,590 4,754
Total costs and expenses 36,676 34,116 73,495 67,469
Operating income/(loss) 43 26 2,068 832
Interest income 128 134 245 282
Interest expense 312 229 704 542
Net interest income/(expense) (184) (95) (459) (260)
Equity in net income/(loss) of affiliated
companies 84 72 140 93
Income/(loss) before income taxes -
Automotive (57) 3 1,749 665
FINANCIAL SERVICES
Revenues 6,083 6,440 11,930 13,096
Costs and expenses
Interest expense 1,422 1,598 2,872 3,242
Depreciation 1,661 2,255 3,392 4,808
Operating and other expenses 1,259 1,193 2,471 2,381
Provision for credit and insurance losses 182 679 553 1,272
Total costs and expenses 4,524 5,725 9,288 11,703
Income/(loss) before income taxes -
Financial Services 1,559 715 2,642 1,393
TOTAL COMPANY
Income/(loss) before income taxes 1,502 718 4,391 2,058
Provision for/(benefit from) income taxes 268 194 1,097 531
Income/(loss) before minority interests 1,234 524 3,294 1,527
Minority interests in net
income/(loss) of subsidiaries 72 98 157 200
Income/(loss) from continuing operations 1,162 426 3,137 1,327
Income/(loss) from
discontinued/held-for-sale operations 3 (9) (20) (14)
Net income/(loss) $1,165 $417 $3,117 $1,313
Average number of shares of Common and
Class B Stock outstanding 1,831 1,832 1,832 1,832
AMOUNTS PER SHARE OF COMMON AND CLASS B
STOCK
Basic income/(loss)
Income/(loss) from continuing operations $0.64 $0.23 $1.72 $0.72
Income/(loss) from
discontinued/held-for-sale operations -- -- (0.01) --
Net income/(loss) $0.64 $0.23 $1.71 $0.72
Diluted income/(loss)
Income/(loss) from continuing operations $0.57 $0.22 $1.52 $0.67
Income/(loss) from
discontinued/held-for-sale operations -- -- (0.01) --
Net income/(loss) $0.57 $0.22 $1.51 $0.67
Cash dividends $0.10 $0.10 $0.20 $0.20
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
For the Periods Ended June 30, 2004 and 2003
(in millions, except per share amounts)
Second Quarter First Half
2004 2003 2004 2003
(unaudited) (unaudited)
Sales and revenues
Automotive sales $36,719 $34,142 $75,563 $68,301
Financial Services revenue 6,083 6,440 11,930 13,096
Total sales and revenues 42,802 40,582 87,493 81,397
Automotive interest income 128 134 245 282
Costs and expenses
Cost of sales 33,834 31,660 67,905 62,715
Selling, administrative
and other expenses 5,762 5,904 11,453 11,943
Interest expense 1,734 1,827 3,576 3,784
Provision for credit and insurance losses 182 679 553 1,272
Total costs and expenses 41,512 40,070 83,487 79,714
Automotive equity in net income/(loss)
of affiliated companies 84 72 140 93
Income/(loss) before income taxes 1,502 718 4,391 2,058
Provision for/(benefit from) income taxes 268 194 1,097 531
Income/(loss) before minority interests 1,234 524 3,294 1,527
Minority interests in net income/(loss) of
subsidiaries 72 98 157 200
Income/(loss) from continuing operations 1,162 426 3,137 1,327
Income/(loss) from
discontinued/held-for-sale operations 3 (9) (20) (14)
Net income/(loss) $1,165 $417 $3,117 $1,313
Average number of shares of Common and
Class B
Stock outstanding 1,831 1,832 1,832 1,832
AMOUNTS PER SHARE OF COMMON AND CLASS B
STOCK
Basic income/(loss)
Income/(loss) from continuing operations $0.64 $0.23 $1.72 $0.72
Income/(loss) from
discontinued/held-for-sale operations -- -- (0.01) --
Net income/(loss) $0.64 $0.23 $1.71 $0.72
Diluted income/(loss)
Income/(loss) from continuing operations $0.57 $0.22 $1.52 $0.67
Income/(loss) from
discontinued/held-for-sale operations -- -- (0.01) --
Net income/(loss) $0.57 $0.22 $1.51 $0.67
Cash dividends $0.10 $0.10 $0.20 $0.20
Ford Motor Company and Subsidiaries
SECTOR BALANCE SHEET
(in millions)
June 30, December 31,
2004 2003
(unaudited)
ASSETS
Automotive
Cash and cash equivalents $5,937 $5,427
Marketable securities 11,537 10,749
Loaned securities 5,317 5,667
Total cash, marketable and loaned securities 22,791 21,843
Receivables, net 3,016 2,721
Inventories 10,614 9,181
Deferred income taxes 3,083 3,225
Other current assets 8,166 6,839
Total current assets 47,670 43,809
Equity in net assets of affiliated companies 1,897 1,930
Net property 40,680 41,993
Deferred income taxes 10,640 12,092
Goodwill and other intangible assets 6,187 6,254
Assets of discontinued/held-for-sale operations 2 68
Other assets 15,417 14,495
Total Automotive assets 122,493 120,641
Financial Services
Cash and cash equivalents 9,711 16,343
Investments in securities 1,156 1,123
Finance receivables, net 108,459 110,893
Net investment in operating leases 32,412 31,859
Retained interest in sold receivables 16,396 13,017
Goodwill and other intangible assets 999 1,008
Assets of discontinued/held-for-sale operations 385 388
Other assets 12,067 17,292
Receivable from Automotive 3,016 3,356
Total Financial Services assets 184,601 195,279
Total assets $307,094 $315,920
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $15,947 $15,289
Other payables 3,547 2,942
Accrued liabilities 35,415 32,171
Debt payable within one year 760 1,806
Current payable to Financial Services 598 124
Total current liabilities 56,267 52,332
Senior debt 12,987 13,832
Subordinated debt 5,155 5,155
Total long-term debt 18,142 18,987
Other liabilities 43,184 45,104
Deferred income taxes 1,652 2,352
Liabilities of discontinued/held-for-sale operations 21 94
Payable to Financial Services 2,418 3,232
Total Automotive liabilities 121,684 122,101
Financial Services
Payables 2,385 2,189
Debt 149,199 159,011
Deferred income taxes 11,010 11,061
Other liabilities and deferred income 8,379 9,211
Liabilities of discontinued/held-for-sale operations 91 37
Total Financial Services liabilities 171,064 181,509
Minority interests 785 659
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 5,341 5,374
Accumulated other comprehensive income/(loss) (1,209) (414)
Treasury stock (1,761) (1,749)
Earnings retained for use in business 11,171 8,421
Total stockholders' equity 13,561 11,651
Total liabilities and stockholders' equity $307,094 $315,920
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions)
June 30, December 31,
2004 2003
(unaudited)
ASSETS
Cash and cash equivalents $15,648 $21,770
Marketable securities 12,693 11,872
Loaned securities 5,317 5,667
Receivables, net 3,016 2,721
Finance receivables, net 108,459 110,893
Net investment in operating leases 32,412 31,859
Retained interest in sold receivables 16,396 13,017
Inventories 10,614 9,181
Equity in net assets of affiliated companies 2,867 2,959
Net property 42,325 43,598
Deferred income taxes 3,242 7,389
Goodwill and other intangible assets 7,186 7,262
Assets of discontinued/held-for-sale operations 387 456
Other assets 33,051 35,950
Total assets $293,613 $304,594
LIABILITIES AND STOCKHOLDERS' EQUITY
Payables $21,879 $20,420
Accrued liabilities 32,773 29,591
Debt 168,101 179,804
Other liabilities and deferred income 51,566 53,899
Deferred income taxes 4,836 8,439
Liabilities of discontinued/
held-for-sale operations 112 131
Total liabilities 279,267 292,284
Minority interests 785 659
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 5,341 5,374
Accumulated other comprehensive income/(loss) (1,209) (414)
Treasury stock (1,761) (1,749)
Earnings retained for use in business 11,171 8,421
Total stockholders' equity 13,561 11,651
Total liabilities and stockholders' equity $293,613 $304,594
Ford Motor Company and Subsidiaries
CONDENSED SECTOR STATEMENT OF CASH FLOWS
For the Periods Ended June 30, 2004 and 2003
(in millions)
First Half 2004 First Half 2003
Financial Financial
Automotive Services Automotive Services
(unaudited) (unaudited)
Cash and cash equivalents
at January 1 $5,427 $16,343 $5,157 $7,064
Cash flows from operating
activities before
securities trading 3,592 9,850 5,741 8,403
Net sales/(purchases) of trading
securities (392) (31) 10 (380)
Net cash flows from operating
activities 3,200 9,819 5,751 8,023
Cash flows from investing
activities
Capital expenditures (2,601) (189) (3,415) (118)
Acquisitions of receivables
and lease investments -- (33,037) -- (28,920)
Collections of receivables and lease
investments -- 23,156 -- 18,800
Net acquisitions of daily rental
vehicles -- (2,902) -- (1,545)
Purchases of securities (5,593) (433) (4,255) (319)
Sales and maturities
of securities 5,312 391 2,093 376
Proceeds from sales of receivables
and lease investments -- 5,370 -- 13,573
Proceeds from sale of businesses 125 -- 77 204
Repayment of debt from discontinued
operations -- -- -- 1,421
Net investing activity
with Financial Services 1,832 -- 1,867 --
Cash paid for acquisitions (30) -- -- --
Other 17 50 489 (38)
Net cash (used in)/provided by
investing activities (938) (7,594) (3,144) 3,434
Cash flows from financing activities
Cash dividends (366) -- (366) --
Net sales/(purchases)
of Common Stock (101) -- (3) --
Changes in short-term debt (267) 8,679 (113) (2,340)
Proceeds from issuance
of other debt 289 7,542 825 7,720
Principal payments on other debt (1,729) (22,672) (548) (12,395)
Net financing activity
with Automotive -- (1,832) -- (1,867)
Other (15) 8 (5) 48
Net cash (used in)/provided by
financing activities (2,189) (8,275) (210) (8,834)
Effect of exchange rate
changes on cash (37) (108) 175 240
Net transactions with
Automotive/Financial Services 474 (474) (267) 267
Net increase/(decrease)
in cash and cash equivalents 510 (6,632) 2,305 3,130
Cash and cash equivalents
at June 30 $5,937 $9,711 $7,462 $10,194
Ford Motor Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Periods Ended June 30, 2004 and 2003
(in millions)
First Half
2004 2003
(unaudited)
Cash and cash equivalents at January 1 $21,770 $12,221
Cash flows from operating activities
before securities trading 13,442 14,144
Net sales/(purchases) of trading securities (423) (370)
Net cash flows from operating activities 13,019 13,774
Cash flows from investing activities
Capital expenditures (2,790) (3,533)
Acquisitions of receivables and lease investments (33,037) (28,920)
Collections of receivables and lease investments 23,156 18,800
Net acquisitions of daily rental vehicles (2,902) (1,545)
Purchases of securities (6,026) (4,574)
Sales and maturities of securities 5,703 2,469
Proceeds from sales of receivables and lease
investments 5,370 13,573
Proceeds from sale of businesses 125 281
Repayment of debt from discontinued operations -- 1,421
Cash paid for acquisitions (30) --
Other 67 451
Net cash (used in)/provided by investing activities (10,364) (1,577)
Cash flows from financing activities
Cash dividends (366) (366)
Net sales/(purchases) of Common Stock (101) (3)
Changes in short-term debt 8,412 (2,453)
Proceeds from issuance of other debt 7,831 8,545
Principal payments on other debt (24,401) (12,943)
Other (7) 43
Net cash (used in)/provided by financing activities (8,632) (7,177)
Effect of exchange rate changes on cash (145) 415
Net increase/(decrease) in cash and cash equivalents (6,122) 5,435
Cash and cash equivalents at June 30 $15,648 $17,656
This information is provided by RNS
The company news service from the London Stock Exchange
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