Final Results

Ford Motor Co 18 January 2001 FORD REPORTS RECORD REVENUES, UNIT SALES, OPERATING EARNINGS PER SHARE IN 2000 Contact: Media: Todd Nissen 313.594.4410 missen@ford.com Securities Analysts: Mike Holland 313.323.8221 mhollandl@ford.com Shareholder Inquiries: 800-555-5259 or 313-845-8540 stockinfo@ford.com Media Information Center 1.800.665.1515 or 1.313.621.0504 media@ford.com Go to http://media.ford.com for news releases and high-resolution photographs. DEARBORN, Mich., Jan. 18, 2001 - Ford Motor Company (NYSE: F) earned $5.4 billion from continuing operations in 2000 on record revenues and volume as it made significant progress moving toward a consumer-focused organization. Excluding unusual items, 2000 operating earnings were $6.7 billion, or a record $3.26 per fully diluted share, up 4 percent from 1999 on a comparable basis. Revenues for 2000 were a record at $170 billion, up 6 percent. Vehicle unit sales rose 3 percent to a record 7.4 million. Full-year results for both periods exclude Visteon Corp.(NYSE: VC), spun off June 28. 'Customers are the foundation of our strategy,' said Jacques Nasser, president and CEO. 'At the beginning of the year we reorganized the company around consumer business groups. We launched consumer-driven 6-Sigma and adopted new E-commerce initiatives across the organization that together have transformed how we do business on a day-to-day basis.' Ford Credit and The Hertz Corporation (NYSE: HRZ) both had excellent results. Ford Credit's earnings were up 22 percent to $1.54 billion. Hertz had record income of $358 million, its ninth consecutive year of increased earnings. FOURTH QUARTER Fourth quarter 2000 results were below a year ago, primarily because of weaker vehicle industry conditions in the United States. Earnings from continuing operations (excluding Visteon) were $1.1 billion or 57 cents per fully diluted share of common and Class B stock. Quarterly results include a one-time charge of $133 million, or 7 cents a share, for the write-down of assets associated with the Nemak joint venture on castings. A year ago, earnings from continuing operations were $1.7 billion or $1.39 per diluted share. Fourth quarter 2000 operating earnings (excluding Visteon and one-time items) were $1.2 billion, or 64 cents per fully diluted share of common and Class B stock. Operating earnings for the 1999 fourth quarter, were $1.8 billion or 83 cents per diluted share, adjusted for the Value Enhancement Plan. Highlights from 2000 included: - Shareholder value: Ford returned $5.7 billion in cash to shareholders through the Value Enhancement Plan, spun off Visteon and purchased $1 billion of stock under our $5 billion stock repurchase plan. - Products and brands: Volvo was successfully integrated, the acquisition of Land Rover was completed and several new products were introduced, such as the Escape sport utility vehicle, Explorer Sport Trac, Volvo S60 and Mondeo and Transit in Europe; Ford Focus was the world's best-selling car, and Ford F-Series the top-selling truck. - Transformation: Internet and E-business initiatives were implemented, including an employee personal computer program, alliances with Yahoo and Trilogy Software, and the Wingcast telematics joint venture with Qualcomm Inc. AUTOMOTIVE OPERATIONS Ford Motor Company earned $3.62 billion from continuing automotive operations in 2000 on revenues of $141 billion. That compares to $4.99 billion on revenues of $135 billion a year ago. Worldwide factory unit sales for the year were 7.4 million units, topping the previous record of 7.2 million set in 1999. Total costs were down $500 million at constant volume and mix. Cost improvements were below the $1 billion goal, primarily reflecting the Firestone tire recall and the 3.8 liter engine warranty extension. Automotive gross cash at year-end was $16.5 billion. Income from continuing operations in the fourth quarter was $629 million, down from $1.35 billion a year ago. Revenue from automotive operations was $35.1 billion, versus $37.3 billion. Worldwide vehicle unit sales in the fourth quarter were 1.8 million units, down from 1.9 million a year ago. North America: Full-year 2000 earnings were $4.89 billion on revenues of $103.9 billion, down from $5.42 billion on revenues of $99.2 billion in 1999. Fourth-quarter 2000 earnings were $607 million on revenues of $25.6 billion. That compares to $1.47 billion on revenues of $27.1 billion. The reduction primarily reflects lower industry sales and market share, and higher marketing costs. 'We've got the strongest product lineup we've ever had and look for another solid year in North America,' said Nasser. 'We have already taken aggressive action to adjust our first quarter production schedules to meet softening market demand. We'll continue to closely monitor economic conditions, and will not hesitate to take further actions if warranted.' Europe: Full-year 2000 loss were $1.13 billion on revenues of $28.7 billion after several one-time items, including a $1 billion charge for asset impairments and restructuring. On an operating basis, Europe had a loss of $35 million. A year ago, Europe had a profit of $50 million, or $10 million on an operating basis, on revenues of $29.3 billion. Fourth-quarter results were a profit of $33 million on revenues of $7.3 billion reflecting continued cost reductions. The 1999 fourth quarter was a loss of $30 million on revenues of $8.5 billion. South America: Full-year results improved to a loss of $240 million on revenues of $2.5 billion. Last year, Ford lost $444 million on revenues of $2.3 billion. Fourth-quarter losses were $31 million on revenues of $642 million. The year-earlier period was a $100 million loss on revenues of $537 million. The improvement over a year ago reflects continued cost reductions and better revenue and product mix. Asia-Pacific and other markets: Full-year profits were $108 million on sharply higher revenues of $6.2 billion. That compares to a $38 million loss on revenues of $4.2 billion. Fourth-quarter 2000 results were a $20 million profit on revenues of $1.5 billion. That compares to a profit of $10 million on revenues of $1.1 billion. 'Our results outside North America, while improving, remained unacceptable in 2000. Our European operations are in the middle of a strategic restructuring and we expect a solid return to profitability this year. Our South American operations met their full-year 2000 milestone and will continue to improve this year,' Nasser said. FORD CREDIT Ford Credit earned $1.54 billion in 2000, up 22 percent from 1999. In the fourth quarter, Ford Credit earned $410 million, an increase of $101 million, primarily because of higher volume and an improved net financing margin, offset partially by higher credit losses associated with the restructuring of North American operations. HERTZ Hertz reported full-year 2000 earnings of $358 million, up from $336 million in 1999. It was the ninth consecutive year of improved earnings for Hertz. In the fourth quarter Hertz earned $56 million, down $5 million from the year-earlier period. MILESTONES For 2000, Ford reached its milestones for revenue growth, South America, Asia-Pacific, capital spending, Ford Credit, Hertz and Visteon. Ford missed its milestones for total shareholder returns, total cost reductions and North America and Europe. Ford last week set its financial milestones for 2001 and reaffirmed its customer-focused strategy. Ford has a goal of growing total company revenues by $5 billion from record levels in 2000. In North America, Ford has targeted a 4 percent-plus return on sales despite softening market conditions. In Europe, we have a goal of improving results to a 1-percent plus return on sales. Ford also has goals of improving results in South America and achieving profitability in Asia-Pacific. Total costs, assuming constant volume and mix, are targeted to be reduced by $1 billion, and capital spending will be contained at $8 billion or less. Ford Credit has a milestone of improving returns and growing its earnings by 10 percent. OUTLOOK 'We will face softening U.S. market conditions in 2001,' Nasser said. 'However, our excellent portfolio of brands, customer focus and commitment to executing our strategies set us apart from our competitors. We are focused on improving our cost structure, bringing production in line with demand, generating positive cash flow and delivering another year of strong financial results.' **** 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; 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; 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 Fourth Quarter Full Year 2000 1999 2000 1999 Worldwide vehicle unit sales of cars and trucks (in thousands) - North America 1,209 1,280 4,933 4,787 - Outside North America 631 639 2,491 2,433 Total 1,840 1,919 7,424 7,220 Sales and revenues (in millions) - Automotive $ 35,107 $ 37,285 $ 141,230 $ 135,073 - Financial Services 7,480 6,637 28,834 25,585 Total $ 42,587 $ 43,922 $ 170,064 $ 160,658 Net income (in millions) - Automotive $ 629 $ 1,354 $ 3,624 $ 4,986 - Financial Services 448 357 1,786 1,516 Income from continuing operations 1,077 1,711 5,410 6,502 - Discontinued operation (Visteon) - 95 309 735 - Loss on spin-off of Visteon - - (2,252) - Total $ 1,077 $ 1,806 $ 3,467 $ 7,237 Capital expenditures (in millions) - Automotive $ 2,510 $ 2,548 $ 7,393 $ 7,069 - Financial Services 390 155 955 590 Total $ 2,900 $ 2,703 $ 8,348 $ 7,659 Automotive capital expenditures as a percentage of sales 8.2% 6.8% 5.2% 5.2% Stockholders' equity at December 31 - Total (in millions) $ 18,610 $ 27,604 $ 18,610 $ 27,604 - Annualized after-tax return on Common and Class B stockholders' equity 25.5% 26.6% 14.9% 28.2% Automotive net cash at December 31 (in millions) - Cash and marketable securities $ 16,490 $ 21,736 $ 16,490 $ 21,736 - Debt 12,046 11,736 12,046 11,736 Automotive net cash $ 4,444 $ 10,000 $ 4,444 $ 10,000 After-tax return on sales - North American Automotive 2.4% 5.5% 4.8% 5.5% - Total Automotive 1.8% 3.7% 2.6% 3.7% Shares of Common and Class B Stock (in millions) - Average number outstanding 1,873 1,207 1,483 1,210 - Number outstanding at December 31 1,854 1,207 1,854 1,207 Common Stock price (per share) (adjusted to reflect Visteon spin-off and Value Enhancement Plan) - High $ 27 $ 30-1/8 $ 30-1/8 $ 37-1/4 - Low 21-5/8 26-5/8 21-5/8 25-3/8 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income assuming dilution - Automotive $ 0.33 $ 1.10 $ 2.40 $ 4.03 - Financial Services 0.24 0.29 1.19 1.23 Subtotal 0.57 1.39 3.59 5.26 - Discontinued operation (Visteon) - 0.08 0.21 0.60 - Loss on spin-off of Visteon - - (1.50) - Total $ 0.57 $ 1.47 $ 2.30 $ 5.86 Cash dividends (2000 adjusted for Value Enhancement Plan) $ 0.30 $ 0.50 $ 1.16 $ 1.88 Ford Motor Company and Subsidiaries VEHICLE UNIT SALES For the Periods Ended December 31, 2000 and 1999 (in thousands) Fourth Quarter Full Year 2000 1999 2000 1999 North America United States Cars 433 497 1,775 1,725 Trucks 643 646 2,711 2,660 Total United States 1,076 1,143 4,486 4,385 Canada 83 100 300 288 Mexico 50 37 147 114 Total North America 1,209 1,280 4,933 4,787 Europe Britain 108 122 476 518 Germany 79 80 320 353 Italy 65 59 222 209 Spain 51 45 180 180 France 39 44 158 172 Sweden 42 40 132 94 Other countries 122 135 474 434 Total Europe 506 525 1,962 1,960 Other international Brazil 37 26 134 117 Australia 30 30 125 125 Taiwan 9 11 63 56 Argentina 10 16 49 60 Japan 4 8 26 32 Other countries 35 23 132 83 Total other international 125 114 529 473 Total worldwide vehicle unit sales 1,840 1,919 7,424 7,220 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 reported unit sales. Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME For the Years Ended December 31, 2000, 1999 and 1998 (in millions, except amounts per share) 2000 1999 1998 AUTOMOTIVE Sales $141,230 $135,073 $118,017 Costs and expenses Costs of sales 126,120 118,985 104,616 Selling, administrative and other expenses 9,884 8,874 7,834 Total costs and expenses 136,004 127,859 112,450 Operating income 5,226 7,214 5,567 Interest income 1,488 1,418 1,325 Interest expense 1,383 1,347 795 Net interest income 105 71 530 Equity in net income/(loss) of affiliated companies (70) 35 (64) Net expense from transactions with Financial Services 6 (45) (191) Income before income taxes - Automotive 5,267 7,275 5,842 FINANCIAL SERVICES Revenues 28,834 25,585 25,333 Costs and expenses Interest expense 9,519 7,679 8,036 Depreciation 9,408 9,254 8,589 Operating and other expenses 4,971 4,653 4,618 Provision for credit and insurance losses 1,963 1,465 1,798 Total costs and expenses 25,861 23,051 23,041 Net revenue from transactions with Automotive (6) 45 191 Gain on spin-off of The Associates - - 15,955 Income before income taxes - Financial Services 2,967 2,579 18,438 TOTAL COMPANY Income before income taxes 8,234 9,854 24,280 Provision for income taxes 2,705 3,248 2,760 Income before minority interests 5,529 6,606 21,520 Minority interests in net income of subsidiaries 119 104 152 Income from continuing operations 5,410 6,502 21,368 Income from discontinued operation 309 735 703 Loss on spin-off of discontinued operation (2,252) - - Net income $ 3,467 $ 7,237 $ 22,071 Income attributable to Common and Class B Stock after Preferred Stock dividends $ 3,452 $ 7,222 $ 21,964 Average number of shares of Common and Class B Stock outstanding 1,483 1,210 1,211 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK Basic income Income from continuing operations $ 3.66 $ 5.38 $ 17.59 Net income 2.34 5.99 18.17 Diluted income Income from continuing operations $ 3.59 $ 5.26 $ 17.19 Net income 2.30 5.86 17.76 Cash dividends (2000 adjusted for Value Enhancement Plan) $ 1.16 $ 1.88 $ 1.72 Prior period costs of sales and selling, administrative and other expenses were reclassified. Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET As of December 31, 2000 and 1999 (in millions) 2000 1999 ASSETS Automotive Cash and cash equivalents $ 3,374 $ 2,793 Marketable securities 13,116 18,943 Total cash and marketable securities 16,490 21,736 Receivables 4,685 5,267 Inventories 7,514 5,684 Deferred income taxes 2,239 3,762 Other current assets 5,318 3,831 Current receivable from Financial Services 1,587 2,304 Total current assets 37,833 42,584 Equity in net assets of affiliated companies 2,949 2,539 Net property 37,508 36,528 Deferred income taxes 3,342 2,454 Net assets of discontinued operations - 1,566 Other assets 13,711 13,530 Total Automotive assets 95,343 99,201 Financial Services Cash and cash equivalents 1,477 1,588 Investments in securities 817 733 Finance receivables 125,164 113,298 Net investment in operating leases 46,593 42,471 Other assets -12,390 11,123 Receivable from Automotive 2,637 1,835 Total Financial Services assets 189,078 171,048 Total assets $284,421 $270,249 LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $ 15,075 $ 14,292 Other payables 4,011 3,778 Accrued liabilities 23,515 18,488 Income taxes payable 449 1,709 Debt payable within one year 277 1,338 Total current liabilities 43,327 39,605 Long-term debt 11,769 10,398 Other liabilities 30,495 29,283 Deferred income taxes 353 1,223 Payable to Financial Services 2,637 1,835 Total Automotive liabilities 88,581 82,344 Financial Services Payables 5,297 3,550 Debt 153,510 139,919 Deferred income taxes 8,677 7,078 Other liabilities and deferred income 7,486 6,775 Payable to Automotive 1,587 2,304 Total Financial Services liabilities 176,557 159,626 Company-obligated mandatorily redeemable preferred securities of a subsidiary trust holding solely junior subordinated debentures of the Company 673 675 Stockholders' equity Capital stock Preferred Stock, par value $1.00 per share (aggregate liquidation preference of $177 million) * * Common Stock (par value $0.01 and $1.00 per share as of 2000 and 1999, 18 1,151 respectively; 1,837 and 1,151 million shares issued as of 2000 and 1999, respectively) Class B Stock, par value $0.01 and $1.00 per share as of 2000 and 1 71 1999, respectively (71 million shares issued) Capital in excess of par value of stock 6,174 5,049 Accumulated other comprehensive loss (3,432) (1,856) ESOP loan and treasury stock (2,035) (1,417) Earnings retained for use in business 17,884 24,606 Total stockholders' equity 18,610 27,604 Total liabilities and stockholders' equity $284,421 $270,249 - - - - *Less than $1 million Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF CASH FLOWS For the Years Ended December 31, 2000, 1999 and 1998 (in millions) 2000 1999 1998 Financial Financial Financial Automotive Services Automotive Services Automotive Services Cash and cash equivalents at January 1 $ 2,793 $ 1,588 $ 3,143 $ 1,151 $ 5,972 $ 1,618 Cash flows from operating activities 18,307 15,457 14,851 12,540 8,249 13,478 Cash flows from investing activities Capital expenditures (7,393) (955) (7,069) (590) (7,252) (504) Purchase of leased assets - - - - (110) - Acquisitions of other companies (2,662) (112) (5,763) (144) - (344) Acquisitions of receivables and lease investments - (96,512) - (80,422) - (78,863) Collections of receivables and lease investments - 54,290 - 46,646 - 49,303 Net acquisitions of daily rental vehicles - (2,107) - (1,739) - (1,790) Purchases of securities (5,395) (564) (3,609) (900) (758) (2,102) Sales and maturities of securities 4,938 542 2,352 1,100 590 2,271 Proceeds from sales of receivables and lease investments - 19,439 - 9,931 - 8,413 Net investing activity with Financial Services 645 - 1,329 - 642 - Other - (305) (70) 119 (389) (463) Net cash used in investing activities (9,867) (26,284) (12,830) (25,999) (7,277) (24,079) Cash flows from financing activities Cash dividends (2,751) - (2,290) - (5,348) - Issuance of Common Stock 592 - 274 - 154 - Purchase of Ford treasury stock (1,821) - (707) - (669) - Preferred Stock - Series B repurchase, Series A redemption - - - - (420) - Changes in short-term debt (776) (6,406) (429) 5,547 463 7,475 Proceeds from issuance of other debt 2,363 37,086 3,143 37,184 2,307 21,776 Principal payments on other debt (1,277) (17,158) (821) (28,672) (1,285) (16,797) Value Enhancement Plan payments (5,555) - - - - - Net debt repayments from discontinued operation 650 - - - - - Net cash distribution (to) discontinued operation (85) - - - - - Net financing activity with Automotive - (645) - (1,329) - (642) Spin-off of The Associates cash - - - - - (508) Other 139 (585) (127) 88 (257) (12) Net cash (used in) /provided by financing activities (8,521) 12,292 (957) 12,818 (5,055) 11,292 Effect of exchange rate changes on cash(55) (859) (57) (279) (50) 146 Net transactions with Automotive/ Financial Services 717 (717) (1,357) 1,357 1,304 (1,304) Net (decrease)/ increase in cash and cash equivalents 581 (111) (350) 437 (2,829) (467) Cash and cash equivalents at December 31 $ 3,374 $ 1,477 $ 2,793 $ 1,588 $ 3,143 $ 1,151

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