-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O9YIsz4qGBjQQzOGMvzXIB4bu+IETaPr3vAP1wB10IV98i51TxKpQfBC+eRb8ggU e81Q39dULi0zwPjfgv1XdQ== 0000037996-01-500060.txt : 20020410 0000037996-01-500060.hdr.sgml : 20020410 ACCESSION NUMBER: 0000037996-01-500060 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORD MOTOR CO CENTRAL INDEX KEY: 0000037996 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 380549190 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03950 FILM NUMBER: 1789628 BUSINESS ADDRESS: STREET 1: ONE AMERICAN ROAD CITY: DEARBORN STATE: MI ZIP: 48126 BUSINESS PHONE: 3133223000 MAIL ADDRESS: STREET 1: ONE AMERICAN RD CITY: DEARBORN STATE: MI ZIP: 48126 10-Q 1 e111401.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES - ----- AND EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2001 or ------------------ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES - ----- EXCHANGE ACT OF 1934 For the transition period from to ------- -------- Commission file number 1-3950 ------ FORD MOTOR COMPANY ------------------ (Exact name of registrant as specified in its charter) Incorporated in Delaware 38-0549190 ---------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) One American Road, Dearborn, Michigan 48126 ------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 313-322-3000 ---------------------- Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| . No . APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of October 31, 2001 the Registrant had outstanding 1,740,024,339 shares of Common Stock and 70,852,076 shares of Class B Stock. Exhibit index located on sequential page number 21
Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME -------------------------------- For the Periods Ended September 30, 2001 and 2000 (in millions) Third Quarter Nine Months --------------------------- ---------------------------- 2001 2000 2001 2000 ----------- ----------- ----------- ------------ (unaudited) (unaudited) AUTOMOTIVE Sales $28,554 $32,582 $97,756 $106,123 Costs and expenses (Note 2) Cost of sales (Note 3) 27,296 29,670 91,759 94,753 Selling, administrative and other expenses 2,342 2,338 7,184 7,061 ------- ------- ------- -------- Total costs and expenses 29,638 32,008 98,943 101,814 Operating income (loss) (1,084) 574 (1,187) 4,309 Interest income 144 382 617 1,139 Interest expense 308 367 1,005 1,012 ------- ------- ------- -------- Net interest income (expense) (164) 15 (388) 127 Equity in net loss of affiliated companies (346) (61) (686) (64) ------- ------- ------- -------- Income (loss) before income taxes - Automotive (1,594) 528 (2,261) 4,372 FINANCIAL SERVICES Revenues 7,948 7,473 23,506 21,335 Costs and expenses Interest expense 2,287 2,451 7,331 6,975 Depreciation 2,680 2,427 7,873 7,033 Operating and other expenses (Note 3) 1,476 1,257 4,255 3,717 Provision for credit and insurance losses 879 482 2,137 1,347 ------- ------- ------- -------- Total costs and expenses 7,322 6,617 21,596 19,072 ------- ------- ------- -------- Income before income taxes - Financial Services 626 856 1,910 2,263 ------- ------- ------- -------- TOTAL COMPANY Income (loss) before income taxes (968) 1,384 (351) 6,635 Provision for income taxes (285) 449 2 2,199 ------- ------- ------- -------- Income (loss) before minority interests (683) 935 (353) 4,436 Minority interests in net income of subsidiaries 9 47 32 103 ------- ------- ------- -------- Income (loss) from continuing operations (692) 888 (385) 4,333 Income from discontinued operation (Note 4) - - - 309 Loss on spin-off of discontinued operation (Note 4) - - - (2,252) ------- ------- ------- -------- Net income (loss) $ (692) $ 888 $ (385) $ 2,390 ======= ======= ======= ======== Income (loss) attributable to Common and Class B Stock after preferred stock dividends $ (696) $ 884 $ (396) $ 2,379 Average number of shares of Common and Class B Stock outstanding 1,812 1,649 1,823 1,354 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK (Notes 5 and 6) Basic Income Income (loss) from continuing operations $ (0.39) $ 0.54 $ (0.22) $ 3.21 Income from discontinued operation - - - 0.23 Loss on spin-off of discontinued operation - - - (1.67) ------- ------- ------- -------- Net income (loss) $ (0.39) $ 0.54 $ (0.22) $ 1.77 Diluted Income Income (loss) from continuing operations $ (0.38) $ 0.53 $ (0.21) $ 3.14 Income from discontinued operation - - - 0.23 Loss on spin-off of discontinued operation - - - (1.64) ------- ------- ------- -------- Net income (loss) $ (0.38) $ 0.53 $ (0.21) $ 1.73 Cash dividends $ 0.30 $ 0.50 $ 0.90 $ 1.50 The accompanying notes are part of the financial statements.
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Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET -------------------------- (in millions) September 30, December 31, 2001 2000 ----------------- ----------------- (unaudited) ASSETS Automotive Cash and cash equivalents $ 6,127 $ 3,374 Marketable securities 6,875 13,116 -------- -------- Total cash and marketable securities 13,002 16,490 Receivables 2,747 4,685 Inventories (Note 7) 7,110 7,514 Deferred income taxes 2,692 2,239 Other current assets 5,427 5,318 Current receivable from Financial Services 1,815 1,587 -------- -------- Total current assets 32,793 37,833 Equity in net assets of affiliated companies 2,662 2,949 Net property 35,825 37,508 Deferred income taxes 3,503 3,342 Other assets 12,847 12,680 -------- -------- Total Automotive assets 87,630 94,312 Financial Services Cash and cash equivalents 4,511 1,477 Investments in securities 416 817 Finance receivables, net 112,728 125,164 Net investment in operating leases 49,112 46,593 Other assets 20,937 12,390 Receivable from Automotive 2,193 2,637 -------- -------- Total Financial Services assets 189,897 189,078 -------- -------- Total assets $277,527 $283,390 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $ 15,258 $ 15,075 Other payables 3,802 4,011 Accrued liabilities 22,591 23,369 Income taxes payable 26 449 Debt payable within one year 283 277 -------- -------- Total current liabilities 41,960 43,181 Long-term debt 11,804 11,769 Other liabilities 31,032 29,610 Deferred income taxes 296 353 Payable to Financial Services 2,193 2,637 -------- -------- Total Automotive liabilities 87,285 87,550 Financial Services Payables 4,706 5,297 Debt 154,285 153,510 Deferred income taxes 8,448 8,677 Other liabilities and deferred income 6,951 7,486 Payable to Automotive 1,815 1,587 -------- -------- Total Financial Services liabilities 176,205 176,557 Company-obligated mandatorily redeemable preferred securities of a subsidiary tTrust holding solely junior subordinated debentures of the Company (Note 8) 672 673 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 5,970 6,174 Accumulated other comprehensive income (Notes 3 and 9) (5,575) (3,432) ESOP loan and treasury stock (2,894) (2,035) Earnings retained for use in business 15,845 17,884 -------- -------- Total stockholders' equity 13,365 18,610 -------- -------- Total liabilities and stockholders' equity $277,527 $283,390 ======== ======== - - - - - - *Less than $1 million The accompanying notes are part of the financial statements.
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Ford Motor Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ---------------------------------------------- For the Periods Ended September 30, 2001 and 2000 (in millions) Nine Months 2001 Nine Months 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 5,059 11,123 10,891 13,089 Net sales of trading securities 6,443 109 4,041 151 ------- -------- ------- -------- Net cash flows from operating activities 11,502 11,232 14,932 13,240 Cash flows from investing activities Capital expenditures (3,994) (428) (4,884) (565) Acquisitions of receivables and lease investments - (68,498) - (69,257) Collections of receivables and lease investments - 36,053 - 39,834 Net acquisitions of daily rental vehicles - (1,864) - (2,482) Purchases of securities (11,228) (566) (374) (415) Sales and maturities of securities 11,026 615 29 412 Proceeds from sales of receivables and lease investments - 29,515 - 12,502 Net investing activity with Financial Services 116 - 92 - Cash paid for acquisitions (Note 10) (1,935) (743) (2,487) (87) Other 375 (111) 0 226 ------- -------- ------- -------- Net cash used in investing activities (5,640) (6,027) (7,624) (19,832) Cash flows from financing activities Cash dividends (1,654) - (2,185) - Value Enhancement Plan payments - - (5,440) - Net purchases of Common Stock (1,347) - (185) - Changes in short-term debt (2) (12,506) (841) (8,140) Proceeds from issuance of other debt 189 31,123 1,917 31,397 Principal payments on other debt (146) (20,675) (823) (14,896) Net debt repayments from discontinued operations - - 650 - Net cash distribution to discontinued operations - - (85) - Net financing activity with Automotive - (116) - (92) Other 174 (212) 14 (409) ------- -------- ------- -------- Net cash (used in)/provided by financing activities (2,786) (2,386) (6,978) 7,860 Effect of exchange rate changes on cash (95) (13) (23) (294) Net transactions with Automotive/Financial Services (228) 228 252 (252) ------- -------- ------- -------- Net increase in cash and cash equivalents 2,753 3,034 559 722 ------- -------- ------- -------- Cash and cash equivalents at September 30 $ 6,127 $ 4,511 $ 3,352 $ 2,310 ======= ======== ======= ======== The accompanying notes are part of the financial statements.
-4- 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 purposes 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 previously disclosed in our press release and Current Report on Form 8-K dated October 18, 2001 have been reclassified, and 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):
Third Quarter Nine Months ------------------------- ----------------------- 2001 2000 2001 2000 ---------- ---------- ---------- --------- Depreciation $632 $734 $1,989 $2,146 Amortization 482 574 1,832 1,776 Pension expense (benefit) (108) 74 (269) 87
3. SFAS 133 ("Accounting for Derivative Instruments and Hedges") - Ford adopted SFAS 133 on January 1, 2001. For further discussion on SFAS 133 refer to Note 3 in Form 10-Q for the quarterly period ended March 31, 2001. Non-cash adjustments to income and to stockholders' equity for the third quarter and nine months of 2001 were (in millions):
Automotive Financial Services Total Company --------------------- ---------------------- ------------------------ Third Nine Third Nine Third Nine Quarter Months Quarter Months Quarter Months --------- ---------- ---------- ---------- ------------ ------------ Income before income taxes a/ $ 33 $(134) $(20) (91) $ 13 $ (225) Net income 22 (92) (13) (58) 9 (150) Stockholders' equity b/ 201 (1,127)
a/ Automotive recorded in cost of sales; Financial Services recorded in operating and other expenses b/ 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 - The calculation of diluted income per share of Common and Class B Stock takes into account the effect of obligations, such as stock options, considered to be potentially dilutive. Basic and diluted income per share were calculated using the following (in millions):
Third Quarter Nine Months ------------------------- ----------------------- 2001 2000 2001 2000 ---------- ---------- ---------- --------- Average shares outstanding 1,812 1,649 1,823 1,354 Issuable and uncommitted ESOP shares (5) (6) (8) (7) ----- ----- ----- ----- Basic shares 1,807 1,643 1,815 1,347 Net dilutive effect of options 26 35 34 28 ----- ----- ----- ----- Diluted shares 1,833 1,678 1,849 1,375 ===== ===== ===== =====
-5- Ford Motor Company and Subsidiaries NOTES TO FINANCIAL STATEMENTS ----------------------------- (unaudited) 7. Automotive Inventories are summarized as follows (in millions):
September 30, December 31, 2001 2000 ------------- ----------- Raw materials, work in process and supplies $2,626 $2,798 Finished products 4,484 4,716 ------ ------ Total inventories $7,110 $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):
Third Quarter Nine Months -------------------------- ------------------------ 2001 2000 2001 2000 ----------- ----------- ----------- ---------- Net income (loss) $ (692) $ 888 $ (385) $ 2,390 Other comprehensive income (loss) 775 (979) (2,143) (2,057) ------- ------ ------- ------- Total comprehensive income (loss) $ 83 $ (91) $(2,528) $ 333 ======= ====== ======= =======
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. -6- Ford Motor Company and Subsidiaries NOTES TO FINANCIAL STATEMENTS ----------------------------- (unaudited) 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 ---------------------------------- Auto Ford Other Elims/ Third Quarter Sector Credit Hertz Fin Svcs Other Total ------------ ----------- --------- ----------- ----------- ------------ 2001 ---- Revenues External customer $ 28,554 $ 6,334 $ 1,364 $ 245 $ 5 $ 36,502 Intersegment 388 94 7 32 (521) - -------- -------- ------- ------ ------- -------- Total Revenues $ 28,942 $ 6,428 $ 1,371 $ 277 $ (516) $ 36,502 ======== ======== ======= ====== ======= ======== Net income (loss) $ (1,054) $ 376 $ 26 $ (44) $ 4 $ (692) 2000 ---- Revenues External customer $ 32,582 $ 5,948 $ 1,424 $ 94 $ 7 $ 40,055 Intersegment 760 43 8 11 (822) - -------- -------- ------- ------ ------- -------- Total Revenues $ 33,342 $ 5,991 $ 1,432 $ 105 $ (815) $ 40,055 ======== ======== ======= ====== ======= ======== Net income (loss) $ 391 $ 386 $ 143 $ (29) $ (3) $ 888 Financial Services Sector ----------------------------------- Auto Ford Other Elims/ Nine Months Sector Credit Hertz Fin Svcs Other Total ---------- ------------- ----------- ---------- ---------- ------------ 2001 ---- Revenues External customer $ 97,756 $ 18,938 $ 3,821 $ 728 $ 19 $121,262 Intersegment 2,932 334 21 104 (3,391) - -------- -------- ------- ------ ------- -------- Total Revenues $100,688 $ 19,272 $ 3,842 $ 832 $(3,372) $121,262 ======== ======== ======= ====== ======= ======== Income (loss) from continuing operations $ (1,559) $ 1,136 $ 81 $ (45) $ 2 $ (385) Total assets at September 30 $ 87,630 $174,318 $11,811 $3,768 $ - $277,527 2000 ---- Revenues External customer $106,123 $ 17,217 $ 3,826 $ 266 $ 26 $127,458 Intersegment 3,256 123 23 115 (3,517) - -------- -------- ------- ------ ------- -------- Total Revenues $109,379 $ 17,340 $ 3,849 $ 381 $(3,491) $127,458 ======== ======== ======= ====== ======= ======== Income (loss) from continuing operations $ 2,995 $ 1,126 $ 303 $ (26) $ (65) $ 4,333 Total assets at September 30 $ 96,210 $169,894 $11,191 $4,990 $ - $282,285
- - - - - "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. "Elims/Other" data includes intersegment eliminations and minority interests. Interest income for the operating segments in the Financial Services Sector is reported as "Revenues". -7- Report of Independent Accountants To the Board of Directors and Stockholders Ford Motor Company We have reviewed the accompanying consolidated balance sheet of Ford Motor Company and its subsidiaries as of September 30, 2001, and the related consolidated statement of income for each of the three-month and nine-month periods ended September 30, 2001 and 2000 and the condensed consolidated statement of cash flows for the nine-month periods ended September 30, 2001 and 2000. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. We previously audited in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet as of December 31, 2000, and the related consolidated statements of income, stockholders' equity and of cash flows for the year then ended (not presented herein), and in our report dated January 18, 2001, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2000, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /s/PricewaterhouseCooper PricewaterhouseCoopers LLP Detroit, Michigan October 16, 2001 -8- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - ------------------------------------------------------------------------------- THIRD QUARTER RESULTS OF OPERATIONS Worldwide losses in the third quarter of 2001 were $692 million, compared with earnings of $888 million in the third quarter of 2000. Sales and revenues were $36.5 billion in the third quarter of 2001, down $3.6 billion from a year ago. Vehicle unit sales were 1,513,000, down 163,000 units. Results by business sector for the third quarter of 2001 and 2000 are shown below (in millions).
Third Quarter Net Income/(Loss) ------------------------------------------------ 2001 O/(U) 2001 2000 2000 ---------------- -------------- ---------------- Automotive sector $(1,054) $ 391 $(1,445) Financial Services sector 362 497 (135) ------- ------- ------ Total Company $ (692) $ 888 $(1,580) ======= ======= =======
Automotive Sector - ----------------- Automotive sector losses were $1,054 million in the third quarter of 2001, on sales of $28.6 billion. These losses include a non-cash charge of $199 million for the write-down of certain investments and a credit of $9 million related to the new accounting standard (SFAS No. 133) on hedging and derivatives. Earnings in the third quarter of 2000 were $391 million, on sales of $32.6 billion (including a non-cash profit reduction of $106 million related to the acquisition of Land Rover). Details of third quarter Automotive sector earnings are shown below (in millions).
Third Quarter Net Income/(Loss) ----------------------------------------- 2001 O/(U) 2001 2000 2000 ------------ -------------- ------------ North American Automotive $(1,026) $ 769 $(1,795) Automotive outside North America - Europe (24) (297) 273 - South America (56) (64) 8 - Rest of World 52 (17) 69 ------- ------- ------- Total Automotive outside North America (28) (378) 350 ------- ------- ------- Total Automotive sector $(1,054) $ 391 $(1,445) ======= ====== =======
Automotive sector losses in North America were $1,026 million in the third quarter of 2001, on sales of $19.8 billion. In the third quarter of 2000, earnings were $769 million, on sales of $23.4 billion. The reduction in earnings reflected primarily lower unit sales volume, significantly higher marketing costs, and warranty and other costs associated with customer satisfaction initiatives on various vehicles built several years ago. In the third quarter of 2001, 4.2 million new cars and trucks were sold in the United States, down from 4.6 million units a year ago. Our market share this year was 22.2%, down 0.6 percentage points from a year ago, due primarily to increased competition from Japanese and Korean manufacturers. Marketing costs increased to 16.0% of sales, up from 11.1% a year ago, reflecting increased competitive spending, including the introduction of 0.0% financing in mid-September. In Europe, losses were $24 million in the third quarter of 2001, compared with losses of $297 million a year ago, reflecting improved results at Ford-brand operations from successful new products and the effects of last year's restructuring actions. In the third quarter of 2001, 4.1 million new cars and trucks were sold in our 19 primary European markets, about equal to last year. Our share was 11.0%, up 0.3 percentage points. -9- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) - -------------------------------------------------------------------------------- In South America, losses were $56 million, compared with a loss of $64 million a year ago. About 380,000 new cars and trucks were sold in Brazil, compared with 390,000 a year ago. Our share of those unit sales was 7.3%, down 1.9 percentage points, reflecting increased competition. Earnings outside North America, Europe, and South America ("Rest of World") were $52 million in the third quarter of 2001, $69 million better than a year ago, primarily reflecting favorable exchange and other factors that are not indicative of ongoing performance. Financial Services Sector - ------------------------- Details of third quarter Financial Services sector earnings are shown below (in millions).
Third Quarter Net Income/(Loss) ------------------------------------------- 2001 O/(U) 2001 2000 2000 ------------- ------------ ---------------- Ford Credit $376 $386 $ (10) Hertz 26 143 (117) Minority interests and other (40) (32) (8) ---- ---- ----- Total Financial Services sector $362 $497 $(135) ==== ==== ===== Memo: Ford's share of earnings in Hertz $ 26 $116 $ (90)
Ford Credit's net income in the third quarter of 2001 was $376 million, down $10 million from a year ago. Excluding the effects of SFAS No. 133, net income for the third quarter of 2001 was $389 million, up $3 million or 1% from a year ago. Higher volume and margin and improvements in investment and other income (primarily the result of gains on sale of receivables and higher interest income on retained assets related to securitization transactions) were offset largely by higher credit losses. Hertz earned $26 million in the quarter, down $117 million from a year ago, reflecting lower rental volume due to the slowing U.S. economy and the September 11th terrorist attacks with resulting declines in both business and leisure travel. (Effective March 2001, Ford increased its ownership of Hertz to 100%, compared with about 81% a year ago.) FIRST NINE MONTHS RESULTS OF OPERATIONS Worldwide losses for the first nine months of 2001 were $385 million, compared with earnings from continuing operations of $4,333 million in the first nine months of 2000. Sales and revenues were $121.3 billion in the first nine months of 2001, down $6.2 billion from a year ago. Vehicle unit sales were 5,183,000, down 402,000 units. Results by major business sector for the first nine months of 2001 and 2000 are shown below (in millions).
First Nine Months Net Income/(Loss) -------------------------------------- 2001 O/(U) 2001 2000 2000 ------------ ------------ ------------ Automotive sector $(1,559) $ 2,995 $(4,554) Financial Services sector 1,174 1,338 (164) ------- ------- ------- Total continuing operations $ (385) $ 4,333 $(4,718) Net income from discontinued operation - 309 (309) Loss on spin-off of discontinued operation - (2,252) 2,252 ------- ------- ------- Total Company $ (385) $ 2,390 $(2,775) ======= ======= =======
-10- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) - -------------------------------------------------------------------------------- Automotive Sector - ----------------- Losses for our Automotive sector were $1,559 million in the first nine months of 2001, on sales of $97.8 billion. Earnings in the first nine months of 2000 were $2,995 million, on sales of $106.1 billion. Adjusted for constant volume and mix, total automotive costs (excluding costs related to the Firestone tire replacement action) were up $200 million from the first nine months of 2000, reflecting higher precious metal and launch-related costs. Automotive sector earnings in the first nine months of 2001 and 2000 are shown below (in millions).
First Nine Months Net Income/(Loss) --------------------------------------- 2001 O/(U) 2001 2000 2000 ----------- ----------- ----------- North American Automotive $(1,529) $ 4,279 $(5,808) Automotive outside North America - Europe 205 (1,163) 1,368 - South America (179) (209) 30 - Rest of World (56) 88 (144) ------- ------- ------- Total Automotive outside North America (30) (1,284) 1,254 ------- ------- ------- Total Automotive sector $(1,559) $2,995 $(4,554) ======= ====== =======
In North America, losses were $1,529 million in the first nine months of 2001, down $5,808 million from the first nine months of 2000. The decrease reflected primarily lower unit sales volume, higher marketing costs, costs related to the Firestone tire replacement action, and higher costs for other customer satisfaction initiatives. In the first nine months of 2001, 13.0 million new cars and trucks were sold in the United States, down from a record 13.9 million units a year ago. Our share this year was 22.7%, down 1.3 percentage points reflecting primarily increased competition from Japanese and Korean manufacturers. In Europe, first nine months earnings were $205 million, compared with losses of $1,163 million in the first nine months of 2000. The improvement reflected primarily stronger vehicle unit sales and the non-recurrence of charges last year for asset impairment and restructuring costs. In the first nine months of 2001, 13.7 million new cars and trucks were sold in our 19 primary European markets, down 300,000 units from a year ago. Our share this year was 10.9%, up 0.9 percentage points, reflecting increased sales of new Transit and Mondeo models. In South America, losses were $179 million in the first nine months of 2001, compared with a loss of $209 million a year ago. In Brazil, 1,220,000 new cars and trucks were sold, compared with 1,046,000 a year ago. Our share this year was 7.8%, down 1.5 percentage points. In Rest of World, losses were $56 million in the first nine months of 2001, compared with earnings of $88 million in the first nine months of 2000. The decline reflected primarily restructuring costs and poorer operating results at Mazda. -11- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) - -------------------------------------------------------------------------------- Financial Services Sector - ------------------------- In the first nine months of 2001, earnings for our Financial Services sector declined $164 million from last year, more than explained by lower profits at Hertz, reflecting effects of the slowdown in the U.S. economy. Details of Financial Services sector earnings in the first nine months of 2001 and 2000 are shown below (in millions).
First Nine Months Net Income/(Loss) ---------------------------------------- 2001 O/(U) 2001 2000 2000 ------------ ------------ ------------ Ford Credit $1,136 $1,126 $ 10 Hertz 81 303 (222) Minority interests and Other (43) (91) 48 ----- ------ ---- Total Financial Services sector $1,174 $1,338 $(164) ====== ====== ===== Memo: Ford's share of earnings in Hertz $ 85 $246 $(161)
LIQUIDITY AND CAPITAL RESOURCES Automotive Sector - ----------------- At September 30, 2001, our Automotive sector had $13.0 billion of cash and marketable securities, down $3.5 billion from December 31, 2000. The decline was more than explained by cash outlays for the final payment for Volvo Car ($1.6 billion), share repurchase program ($1.1 billion), dividends to shareholders ($1.7 billion), and our acquisition of the minority interest in Hertz ($735 million), offset partially by positive operating cash flow. Automotive gross cash was $15.2 billion at September 30, 2001, including $2.2 billion of prefunding of certain employee health benefit obligations through a Voluntary Employee Beneficiary Association trust. At September 30, 2001, our Automotive sector had total debt of $12.1 billion, about equal to December 31, 2000. Financial Services Sector - ------------------------- At September 30, 2001, our Financial Services sector had cash and cash equivalents of $4.5 billion, up $3.0 billion from December 31, 2000. The increase in cash and cash equivalents is due to sales of receivables that occurred near the end of September 2001 in excess of commercial paper maturities. Finance receivables and net investments in operating leases were $161.8 billion at September 30, 2001, down from $171.8 billion at December 31, 2000. Total debt was $154.3 billion at September 30, 2001, up $0.8 billion from December 31, 2000. This includes outstanding commercial paper at September 30, 2001 of $21.6 billion at Ford Credit, and $1.1 billion at Hertz, with an average remaining maturity of 45 days and 16 days, respectively. As a result of the credit rating downgrades discussed below, Ford Credit's commercial paper generally is no longer eligible for purchase by money market mutual funds subject to the Investment Company Act of 1940. In partial response to this, and to ensure liquidity throughout the business cycle, Ford Credit has reduced its reliance on commercial paper funding by reducing outstanding commercial paper from $42 billion at the end of 2000 to $21.6 billion at September 30, 2001. During 2001, Ford Credit has relied more heavily on other sources of funding, including long-term unsecured debt (such as the $7.9 billion of debt securities issued on October 25, 2001, described below) and public and private sales of receivables. In addition, Ford Credit and its subsidiaries have available $15 billion under contractually committed global credit agreements with various banks, the majority of which is available through June 30, 2006. Substantially all of these bank facilities were unused at October 31, 2001. Also, banks provide $10 billion of -12- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) - -------------------------------------------------------------------------------- liquidity facilities to support the asset-backed commercial paper program of a Ford Credit-sponsored special purpose entity. Furthermore, Ford Credit has entered into agreements with several bank-sponsored, commercial paper issuers ("conduits") under which such conduits are contractually committed to purchase receivables from Ford Credit, at Ford Credit's option. These agreements generally are revolving 364-day commitments. As of October 31, 2001, available capacity under these agreements was $8.1 billion, of which $1.5 billion expires in December 2001 and the balance expires between June and October of 2002. -------------------------- On October 10, 2001, our Board of Directors declared a dividend of 15 cents a share on our common and Class B stock for the fourth quarter of 2001, which represents a 50% decrease from the 30 cents per share paid in the last several quarters. This will reduce cash outlays by about $1 billion on an annual basis. On October 18, 2001, Moody's Investors Service ("Moody's") affirmed Ford Credit's long- and short-term debt ratings at A2 and Prime-1, respectively, and lowered Ford's long-term debt rating from A2 to A3. Moody's stated that the outlook for the ratings is negative. On October 15, 2001, Standard & Poors lowered Ford's and Ford Credit's long-term debt rating from A to BBB+, stable outlook, and lowered short-term debt ratings from A-1 to A-2. On September 26, 2001, Fitch, Inc. announced that it had downgraded the long-term credit ratings of Ford, Ford Credit and certain of their affiliates from A+ to A- and lowered short-term debt ratings from F1 to F2. On October 25, 2001, Ford and Ford Credit issued approximately $9.4 billion of debt securities. Of this amount, $1.5 billion of debt securities due July 16, 2031 was issued by Ford, and the balance, with maturities ranging from two to ten years, was issued by Ford Credit. The proceeds from these issuances will be used by Ford for general corporate purposes and by Ford Credit to purchase receivables, make loans, and retire existing debt. Neither Ford nor Ford Credit guarantees the debt securities of the other. OUTLOOK We expect business conditions in the fourth quarter of 2001 to continue to be volatile and uncertain. Our planned vehicle production in North America is 965,000 units, up from 813,000 units in the third quarter of 2001, but down 8% from a year ago. Excluding charges for restructuring actions described below, we expect fourth quarter 2001 results to improve from the third quarter, but it will be difficult to earn a profit. In addition to the previously announced separation program for an estimated 4,000 to 5,000 salaried employees, the costs for which will be incurred in the fourth quarter, further restructuring actions are being considered. NEW ACCOUNTING STANDARD On January 1, 2002, we will adopt SFAS No. 142, "Goodwill and Other Intangible Assets". Goodwill and certain intangible assets will no longer be amortized, but will be subject to an annual impairment test. As of September 30, 2001, net goodwill and intangible assets, having various amortization periods, was $8.6 billion. We are currently assessing the impact of this standard on our financial statements. OTHER FINANCIAL INFORMATION PricewaterhouseCoopers LLP, our independent accountants, performed a limited review of the financial data presented on pages 2 through 7 inclusive. The review was performed in accordance with standards for such reviews established by the American Institute of Certified Public Accountants. The review did not constitute an audit; accordingly, PricewaterhouseCoopers LLP did not express an opinion on the aforementioned data. -13- Part II. Other Information Item 1. Legal Proceedings - -------------------------- Firestone Matters. (Previously discussed beginning on page 20 of Ford's Annual Report on Form 10-K for the year ended December 31, 2000 (the "10-K Report"), on page 15 of Ford's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 (the "First Quarter 10-Q Report") and on page 17 of Ford's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 (the "Second Quarter 10-Q Report").) As previously reported, NHTSA has been investigating the circumstances leading up to Firestone's tire recall and our tire replacement program, as well as the root cause of the tire failures and related accidents. On October 4, 2001, NHTSA issued its determination that 3.5 million of the older tires subject to our replacement program are defective, and said that Firestone had agreed to recall those tires. About 2.5 million of the defective tires are estimated to have been in service as of May 2001 (when Ford's replacement program was announced), and consist of 15 and 16-inch Wilderness AT tires manufactured prior to May 1998 and supplied to Ford as original equipment or sold as replacement equipment. In its October 4th announcement, NHTSA said that the plant-by-plant failure trends for the defective tires are similar to those of the ATX tires recalled by Firestone in August 2000. The agency also said that the failure rate for these tires is significantly higher than that of competitors' tires used on SUVs, especially Goodyear tires used as original equipment on the Ford Explorer. As to Wilderness AT tires built after May 1998, NHTSA said that those tires are relatively new and, therefore, it is unable to determine at this time whether their field performance ultimately would be significantly better than the older tires. NHTSA therefore said that it would continue to monitor the newer tires. However, NHTSA has encouraged owners of those newer Wilderness AT tires to take advantage of Ford's replacement program. As a result of Firestone's August 2000 recall and Ford's May 2001 replacement program, we continue to deal with major litigation and other matters involving Firestone ATX and Wilderness AT tires on Ford vehicles. We are continuing our efforts to resolve the personal injury lawsuits and have settled more than one third of the total of such cases that have been filed to date. As previously reported, most of the class action lawsuits relating to our use of Firestone tires are consolidated in federal court in Indianapolis. That court has ruled that, under federal law, NHTSA has the exclusive authority to order and supervise automotive recalls. Accordingly, the court dismissed those portions of the class action complaints that sought recall of additional tires or court supervision of the recall and the tire replacement program. The court also dismissed some of the claims for damages. The court declined to dismiss the plaintiffs' warranty claims for the alleged diminution in value of the Explorer. A hearing on plaintiffs' motion to certify a class is scheduled for November 16, 2001. The estimated costs of these personal injury and class action lawsuits have been accrued and are reflected in our financial statements. Environmental Matters - --------------------- MFA Grand Jury Matter. (Previously discussed on page 22 of the 10-K Report and on page 18 of the Second Quarter 10-Q Report.) By letter dated October 16, 2001, the U.S. Department of Justice informed us that the government does not intend to pursue a criminal case against the Company. The U.S. Department of Justice has also assured us that the government does not intend to prosecute any individuals in connection with this matter. Waste Disposal. (Previously discussed on page 22 of the 10-K Report.) The U.S. Attorney's Office informed us on October 11, 2001, that it has terminated its investigation of the shipment of waste materials from Ford Venezuela for disposal in Texas and that it does not intend to prosecute any individual or business entity in connection with this matter. Discussions with U.S. EPA on the related civil enforcement matter are continuing. -14- Item 1. Legal Proceedings - -------------------------- (Continued) Class Actions - ------------- Paint Class Actions. (Previously discussed on page 23 of the 10-K Report.) The Illinois trial court denied our motion to dismiss and the parties are engaged in discovery. The Texas trial court granted Plaintiffs' latest motion for class certification and certified two classes consisting of original owners of class vehicles who experienced peeling paint and all original owners who paid Ford or a Ford dealer to repaint their vehicles. We are preparing an appeal to the Texas Court of Appeals. TFI Module Class Action. (Previously discussed beginning on page 23 of the 10-K Report, on page 15 of the First Quarter 10-Q Report and on page 18 of the Second Quarter 10-Q Report.) In July 2001, the parties reached an agreement in principle to settle the lead case in California and the similar cases in Maryland, Alabama, Tennessee, Washington and one in Illinois. The settlement agreement provides that Ford will extend the warranties applicable to distributor-mounted TFI modules, reimburse class members who previously paid to replace Motorcraft(R) distributor-mounted TFI modules prior to 100,000 miles of vehicle use, make donations to colleges and universities for research in the field of automotive safety, and pay plaintiffs' counsel reasonable fees and expenses. On October 25, 2001, the California trial court gave preliminary approval to the settlement substantially as was agreed in July. We expect to receive final approval of the settlement in the first half of 2002. Ford/Citibank Visa Class Actions. (Previously discussed on page 24 of the 10-K Report.) The U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of the coordinated proceedings. We have moved for rehearing en banc. Ford Credit Debt Collection Class Actions. (Previously discussed on page 26 of the 10-K Report, on page 15 of the First Quarter 10-Q Report and on page 18 of the Second Quarter 10-Q Report.) On October 19, 2001, the United States Court of Appeals for the Eighth Circuit heard oral arguments in the Dubois case. We anticipate the court will issue its decision during the first quarter 2002. In Davidson, plaintiff's counsel agreed to the entry of a Stipulation and Order of Dismissal with the understanding that counsel has sixty days from the date of the order to substitute a new class representative. Late Charges Class Actions. (Previously discussed on page 26 of the 10-K Report and on page 18 of the Second Quarter 10-Q Report.) In the Cumberland case, the California Supreme Court declined to review the trial court's class certification order, and trial is scheduled to commence in January 2002. Recently, a second purported class action, Simpkins v. Ford Credit, was filed in Maryland state court with the same allegations. Performance Management Process Class Action. (Previously discussed on page 26 of the 10-K Report, on page 16 of the First Quarter 10-Q Report and on page 18 of the Second Quarter 10-Q Report.) On July 31, 2001, the court denied Ford's motion to dismiss the "disparate impact" claims of the putative class, and we are seeking to appeal that ruling. Reverse Discrimination Class Action. (Previously discussed on page 26 of the 10-K Report, on page 16 of the First Quarter 10-Q Report and on page 18 of the Second Quarter 10-Q Report.) On July 31, 2001, the court denied Ford's motion to dismiss the "disparate impact" claims of the putative class, and we are seeking to appeal that ruling. F-150 Radiators Class Actions. (Previously discussed on page 16 of the First Quarter 10-Q Report.) The complaint in New York has been dismissed, but we expect Plaintiffs to file an amended complaint. -15-
Supplemental Schedule Ford Capital BV and Subsidiaries CONSOLIDATED STATEMENT OF INCOME -------------------------------- For the Periods Ended September 30, 2001 and 2000 (in millions) Third Quarter Nine Months --------------------------- --------------------------- 2001 2000 2001 2000 ----------- ----------- ----------- ----------- (unaudited) (unaudited) AUTOMOTIVE - ---------- Sales $ 394 $ 425 $ 1,471 $ 1,435 Costs and expenses (Note 2) Cost of sales (Note 3) 363 393 1,380 1,339 Selling, administrative and other expenses 22 29 76 82 ------- ------- ------- ------- Total costs and expenses 385 422 1,456 1,421 Operating income 9 3 15 14 Interest income 32 64 119 204 Interest expense 24 54 96 170 ------- ------- ------- ------- Net interest income 8 10 23 34 Income before income taxes 17 13 38 48 Provision for income taxes 6 6 14 21 ------- ------- ------- ------- Net income $ 11 $ 7 $ 24 $ 27 ======= ======= ======= =======
The accompanying notes are part of the financial statements. -16-
Ford Capital BV and Subsidiaries CONSOLIDATED BALANCE SHEET -------------------------- (in millions) September,30 December 31, 2001 2000 --------------- ---------------- (unaudited) ASSETS Cash and cash equivalents $ 27 $ 18 Receivables 38 55 Notes receivable, affiliate 468 411 Inventories 55 41 Deferred income taxes 20 24 Other current assets 26 28 ------ ------ Total current assets 634 577 Notes receivable, affiliate 835 1,391 Net property 14 14 Other assets 119 104 ------ ------ Total assets $1,602 $2,086 ====== ====== LIABILITIES AND STOCKHOLDERS' EQUITY Trade payables $ 68 $ 63 Payables, affiliate and other 34 71 Accrued liabilities 240 156 Income taxes payable 33 31 Debt payable within one year 451 567 ------ ------ Total current liabilities 826 888 Long-term debt 500 900 Deferred tax liability - 16 Other liabilities 10 10 ------ ------ Total liabilities 1,336 1,814 Minority interests 1 1 Stockholders' equity Capital stock, 255,140 shares issued with a par value of $593 and 623,392 shares issued with a par value of $133 each. 236 236 Capital in excess of par value of stock 72 72 Accumulated other comprehensive income (Notes 2 and 3) (44) (15) Accumulated deficit 1 (22) ------ ------ Total stockholders' equity 265 271 ------ ------ Total liabilities and stockholders' equity $1,602 $2,086 ====== ====== - - - - - -
The accompanying notes are part of the financial statements. -17-
Ford Capital BV and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ---------------------------------------------- For the Periods Ended September 30, 2001 and 2000 (in millions) Nine Months -------------------------------- 2001 2000 --------------- --------------- (unaudited) Cash and cash equivalents at January 1 $ 18 $ 49 Cash flows from operating activities 30 45 Cash flows from investing activities Changes in notes receivable 501 293 Other (3) (2) ----- ----- Net cash provided by investing activities 498 291 Cash flows from financing activities Changes in short term debt 34 12 Principal payments on other debt (550) (373) ----- ----- Net cash used in financing activities (516) (361) Effect of exchange rate changes on cash (3) (3) Net increase/(decrease) in cash and cash equivalents 9 (28) ----- ----- Cash and cash equivalents at September 30 $ 27 $ 21 ===== ===== The accompanying notes are part of the financial statements.
-18- Ford Capital BV and Subsidiaries NOTES TO FINANCIAL STATEMENTS ----------------------------- 1. Financial Statements - The financial data presented herein are unaudited, but in the opinion of management reflect those adjustments necessary for a fair presentation of such information. Results for interim periods should not be considered indicative of results for a full year. Reference should be made to the financial statements contained in the Ford Motor Company's Annual Report on Form 10-K for the year ended December 31, 2000. For purposes of this report, "the Company" or similar references mean Ford Capital BV and its majority owned subsidiaries unless the context requires otherwise. Certain amounts for prior periods were reclassified, if required, to conform to present period presentation. 2. SFAS 133 - Ford Capital BV adopted SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137 and SFAS No. 138 on January 1, 2001. For further discussion on SFAS No. 133, refer to Note 3 in Form 10-Q for the quarterly period ended March 31, 2001. SFAS No. 133 has resulted in no adjustments to income. The impact to stockholders' equity for the third quarter and nine months ended 2001 (including transition adjustment), was a $10 million and $26 million reduction, respectively. SFAS No. 133 adjustments are recorded in accumulated other comprehensive income, a separate component of stockholders equity. 3. Comprehensive Income - Other comprehensive income primarily reflects foreign currency translation adjustments and adjustments related to SFAS 133 (Note 2). Total comprehensive income is summarized as follows (in millions):
Nine Months ----------------------------------- 2001 2000 ----------------- ---------------- Net income $ 24 $ 27 Other comprehensive income (29) 29 ----- ---- Total comprehensive income $ (5) $ 56 ==== ====
4. Contingent Liabilities - The company's subsidiary in Norway is in negotiation with the local authorities in respect of a potential claim of $20 million plus interest and penalties for additional duties on vehicles imported during 1994/1995. The company believes that it has reasonable grounds to avoid liability. It is possible that the outcome could be unfavourable, however a reliable estimate of the potential loss cannot be made at this time. -19- Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits -------- Please refer to the Exhibit Index on Page 21. (b) Reports on Form 8-K ------------------- The Registrant filed the following Current Reports on Form 8-K during the quarter ended September 30, 2001: Current Report on Form 8-K dated July 3, 2001 included information relating to Ford's North American Production and Overseas Sales schedule. Current Report on Form 8-K dated July 18, 2001 included information relating to Ford's second quarter 2001 financial results. Current Report on Form 8-K dated August 1, 2001 included information relating to Ford's North American Production and Overseas Sales schedule. Current Report on Form 8-K dated August 17, 2001 included information relating to Ford's voluntary separation program and lower earnings forecast. Current Report on Form 8-K dated September 4, 2001 included information relating to Ford's North American Production and Overseas Sales schedule. Current Report on Form 8-K dated September 14, 2001 included information relating to Ford's North American Production for the third quarter 2001. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FORD MOTOR COMPANY ---------------------------- (Registrant) Date: November 14, 2001 By: /s/Don R. Leclair ----------------- --------------------------------- Don R. Leclair Vice President & Controller (principal accounting officer) -20-
EXHIBIT INDEX ------------- Designation Description -------------------- ---------------------------------------------------------------------------- Exhibit 3-B By-Laws as amended through October 30, 2001 Exhibit 10-W Description of Agreement dated July 2001 with Wolfgang Reitzle Exhibit 10-X Description of Agreement dated September 2001 with Jacques Nasser Exhibit 12 Ford Motor Company and Subsidiaries Calculation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends. Exhibit 15 Letter of PricewaterhouseCoopers LLP, Independent Accountants, dated November 14, 2001, relating to Financial Information.
-21- EX-3 3 e111401ex3b.txt Exhibit 3-B [GRAPHIC OMITTED] Ford Motor Company By-Laws As Amended Through October 30, 2001
BY-LAWS OF FORD MOTOR COMPANY TABLE OF CONTENTS Page ARTICLE I - Offices..........................................................................1 ARTICLE II - Stockholders.....................................................................1 Section 1. Annual Meeting..................................................................1 Section 2. Special Meetings................................................................1 Section 3. Notice of Meetings..............................................................2 Section 4. Quorum..........................................................................2 Section 5. Organization....................................................................2 Section 6. Proxies and Voting..............................................................2 Section 7. Stock Lists.....................................................................2 Section 8. Ratification....................................................................3 Section 9. Judges..........................................................................3 ARTICLE III - Board of Directors...............................................................3 Section 1. Number, Term of Office and Eligibility..........................................3 Section 2. Meetings........................................................................3 Section 3. Notice of Meetings..............................................................4 Section 4. Quorum and Organization of Meetings.............................................4 Section 5. Powers..........................................................................5 Section 6. Reliance upon Books, Reports and Records........................................6 Section 7. Compensation of Directors.......................................................6 ARTICLE IV - Committees.......................................................................7 Section 1. Committees of the Board of Directors............................................7 Section 2. Audit Committee.................................................................7 Section 3. Compensation Committee..........................................................8 Section 4. Environmental and Public Policy Committee.......................................8 Section 5. Finance Committee...............................................................8 Section 6. Nominating and Governance Committee.............................................8 Section 7. Other Committees................................................................9 Section 8. Rules and Procedures............................................................9 Section 9. Application of Article..........................................................9 ARTICLE V - Officers.........................................................................9 Section 1. Officers........................................................................9 Section 2. Chairman of the Board of Directors and Chief Executive Officer..............................................10 Section 3. President and Chief Operating Officer..........................................10 Section 4. Vice Chairmen of the Company, Executive Vice Presidents, Group Vice Presidents and Vice Presidents................................10 Section 5. Treasurer and Assistant Treasurer..............................................11 Section 6. Secretary and Assistant Secretary..............................................11 Section 7. General Counsel................................................................11 Section 8. Controller.....................................................................12 Section 9. Salaries.......................................................................12 ARTICLE VI - Resignations, Removals and Vacancies...........................................12 Section 1. Resignations..................................................................12 Section 2. Removals......................................................................12 Section 3. Vacancies.....................................................................13 ARTICLE VII - Capital Stock - Dividends - Seal...............................................13 Section 1. Certificates of Shares; Uncertificated Shares.................................13 Section 2. Addresses of Stockholders.....................................................13 Section 3. Lost, Destroyed or Stolen Certificate.........................................14 Section 4. Fixing a Record Date..........................................................14 Section 5. Regulations...................................................................14 Section 6. Corporate Seal................................................................14 ARTICLE VIII - Execution of Contracts and Other Documents.....................................15 Section 1. Contracts, etc................................................................15 Section 2. Checks, Drafts, etc...........................................................15 ARTICLE IX - Fiscal Year....................................................................15 ARTICLE X - Miscellaneous..................................................................15 Section 1. Original Stock Ledger.........................................................15 Section 2. Notices and Waivers Thereof...................................................16 Section 3. Voting upon Stocks............................................................16 ARTICLE XI - Amendments.....................................................................17
BY-LAWS OF FORD MOTOR COMPANY ARTICLE I OFFICES The registered office of the Company shall be in the City of Wilmington, County of New Castle, State of Delaware. The Company may also have an office in the City of Dearborn, State of Michigan, and at such other places as the Board of Directors may from time to time determine or as the business of the Company may require. The books and records of the Company may be kept (except as otherwise provided by law) at the office of the Company in the City of Dearborn, State of Michigan, outside of the State of Delaware, or at such other places as from time to time may be determined by the Board of Directors. ARTICLE II STOCKHOLDERS Section 1. Annual Meeting. The annual meeting of the stockholders for the purpose of electing directors and of transacting such other business as may come before it shall be held in the City of Detroit, State of Michigan, unless otherwise determined by the Board of Directors, on the second Thursday of May in each and every year, if not a legal holiday, and if a legal holiday then on the next day not a legal holiday. The Board of Directors shall, by resolution duly adopted, fix the place within the City of Detroit, Michigan, or elsewhere if so determined, and the time for the holding of each such meeting. At least twenty (20) days' notice shall be given to each stockholder entitled to vote at such meeting of the place and time so fixed. Section 2. Special Meetings. Special meetings of the stockholders shall be held at the office of the Company in the City of Dearborn, State of Michigan, unless otherwise determined by resolution of the stockholders or of the Board of Directors, whenever called in the manner required by law for purposes as to which there are special statutory provisions, and for other purposes whenever called by the Chairman of the Board of Directors or the President, or by resolution of the Board of Directors, and whenever the holders of thirty percent (30%) or more of the total number of outstanding shares of any class of stock the holders of which are entitled to vote on every matter that is to be voted on without regard to class at such meeting shall file with the Secretary a written application for such meeting stating the time and purpose thereof. 1 Section 3. Notice of Meetings. Except as otherwise provided by law, at least twenty (20) days' notice of stockholders' meetings stating the time and place and the objects thereof shall be given by the Chairman of the Board of Directors, the President or the Secretary to each stockholder of record having voting power in respect of the business to be transacted thereat. No business other than that stated in the notice shall be transacted at any meeting. Section 4. Quorum. At any meeting of the stockholders the number of shares the holders of which shall be present or represented by proxy in order to constitute a quorum for, and the votes that shall be necessary for, the transaction of any business shall be as expressly provided in Article FOURTH of the Certificate of Incorporation, as amended. At any meeting of stockholders at which a quorum is not present, the holders of shares entitled to cast a majority of all of the votes (computed, in the case of each share of Class B Stock, as provided in subsection 1.3 of said Article FOURTH) which could be cast at such meeting by the holders of outstanding shares of stock of the Company who are present in person or by proxy and who are entitled to vote on every matter that is to be voted on without regard to class at such meeting may adjourn the meeting from time to time. Section 5. Organization. The Chairman of the Board of Directors shall act as chairman of meetings of the stockholders. The Board of Directors may designate any other officer or director of the Company to act as chairman of any meeting in the absence of the Chairman of the Board of Directors, and the Board of Directors may further provide for determining who shall act as chairman of any stockholders meeting in the absence of the Chairman of the Board of Directors and such designee. The Secretary of the Company shall act as secretary of all meetings of the stockholders, but in the absence of the Secretary the presiding officer may appoint any other person to act as secretary of any meeting. Section 6. Proxies and Voting. Every stockholder entitled to vote at any meeting may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedures established for the meeting. No proxy shall be voted after three years from its date unless such proxy provides expressly for a longer period. Shares of the Company's stock belonging to the Company shall not be voted upon directly or indirectly. Section 7. Stock Lists. A complete list of stockholders entitled to vote at any meeting of stockholders shall be prepared, in alphabetical order by class, by the Secretary and shall be open to the examination of any stockholder, at the place where the meeting is to be held, for at least ten days before the meeting and during the whole time of the meeting. 2 Section 8. Ratification. Any transaction questioned in any stockholders' derivative suit, or any other suit to enforce alleged rights of the Company or any of its stockholders, on the ground of lack of authority, defective or irregular execution, adverse interest of any director, officer or stockholder, nondisclosure, miscomputation or the application of improper principles or practices of accounting may be approved, ratified and confirmed before or after judgment by the Board of Directors or by the holders of Common Stock and the holders of Class B Stock voting as provided in subsection 1.6 of Article FOURTH of the Certificate of Incorporation, as amended, and, if so approved, ratified or confirmed, shall have the same force and effect as if the questioned transaction had been originally duly authorized, and said approval, ratification or confirmation shall be binding upon the Company and all of its stockholders and shall constitute a bar to any claim or execution of any judgment in respect of such questioned transaction. Section 9. Judges. All votes by ballot at any meeting of stockholders shall be conducted by two judges appointed for the purpose either by the directors or by the meeting. The judges shall decide upon the qualifications of voters, count the votes and declare the result. ARTICLE III BOARD OF DIRECTORS Section 1. Number, Term of Office and Eligibility. Except as provided by the laws of the State of Delaware or by the Certificate of Incorporation, as amended, the business and the property of the Company shall be managed by or under the direction of a Board of not less than ten and not more than twenty directors, the exact number of which shall be fixed from time to time by resolution of the Board. Each director shall be elected annually by ballot by the holders of Common Stock and the holders of Class B Stock voting as provided in subsection 1.6 of Article FOURTH of the Certificate of Incorporation, as amended, at the annual meeting of stockholders, to serve until his or her successor shall have been elected and shall have qualified, except as provided in this Section. No person may be elected or re-elected a director of the Company if at the time of his or her election or re-election he or she shall have attained the age of seventy years, and the term of any director who shall have attained such age while serving as a director shall terminate as of the time of the first annual meeting of stockholders following his or her seventieth birthday; provided, however, that the Board by resolution may waive such age limitation in any year and from year to year with respect to any director or directors. Section 2. Meetings. The directors may hold their meetings outside of the State of Delaware, at the office of the Company in the City of Dearborn, State of Michigan, or at such other place as from time to time they may determine. 3 The annual meeting of the Board of Directors, for the election of officers and the transaction of other business, shall be held at the World Headquarters of the Company in Dearborn, Michigan, on the same day as, and as soon as practicable following, the annual meeting of stockholders, or at such other time or place as shall be determined by the Board of Directors at its regular meeting next preceding said annual meeting of stockholders. No notice of said annual meeting of the Board of Directors shall be required to be given to the directors. Regular meetings of the Board of Directors may be held at such time and place as shall from time to time be determined by the Board of Directors. Special meetings of the Board of Directors shall be held whenever called by direction of the Chairman of the Board of Directors or the President or by one-third of the directors then in office. Section 3. Notice of Meetings. The Secretary or an Assistant Secretary shall give notice of the time and place of holding of meetings of the Board of Directors (excepting the annual meeting of directors) by mailing such notice not later than during the second day preceding the day on which such meeting is to be held, or by sending a cablegram, facsimile transmission, mailgram, radiogram, telegram or other form of recorded communication containing such notice or delivering such notice personally or by telephone not later than during the first day preceding the day on which such meeting is to be held to each director. Unless otherwise stated in the notice thereof any and all business may be transacted at any meeting. Section 4. Quorum and Organization of Meetings. A third of the total number of members of the Board of Directors as constituted from time to time, but in no event less than three, shall constitute a quorum for the transaction of business; but if at any meeting of the Board of Directors, there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice or waiver. Except as otherwise provided by law or by the Certificate of Incorporation, as amended, or by these By-Laws, a majority of the directors present at any duly constituted meeting may decide any question brought before such meeting. The Board of Directors shall elect one of its members to be Chairman of the Board of Directors. The Chairman of the Board of Directors shall lead the Board of Directors in fulfilling its responsibilities as set forth in these By-Laws, including its responsibility to oversee the performance of the Company, and shall determine the agenda and perform all other duties and exercise all other powers which are or from time to time may be delegated to him or her by the Board of Directors. Meetings of the Board of Directors shall be presided over by the Chairman of the Board of Directors, or in his or her absence, by the President, or in the absence of the Chairman of the Board of Directors and the President by such other person as the Board of Directors may designate or the members present may select. 4 Section 5. Powers. In addition to the powers and authorities by these By-Laws expressly conferred upon them, the Board of Directors shall have and may exercise all such powers of the Company and do all such lawful acts and things that are not by statute or by the Certificate of Incorporation, as amended, or by these By-Laws directed or required to be exercised or done by the stockholders. Without prejudice to or limitation of such general powers and any other powers conferred by statute, or by the Certificate of Incorporation, as amended, or by these By-Laws, the Board of Directors shall have the following powers: (1) To determine, subject to the requirements of law and of Section 5 of Article FOURTH of the Certificate of Incorporation, as amended, what, if any, dividends shall be declared and paid to the stockholders out of net profits, current or accumulated, or out of surplus or other assets of the Company available for dividends. (2) To fix, and from time to time to vary, the amount of working capital of the Company, and to set aside from time to time out of net profits, current or accumulated, or surplus of the Company such amount or amounts as they in their discretion may deem necessary and proper as, or as a safeguard to the maintenance of, working capital, as a reserve for contingencies, as a reserve for repairs, maintenance, or rehabilitation, or as a reserve for revaluation of profits of the Company or for such other proper purpose as may in the opinion of the directors be in the best interests of the Company; and in their sole discretion to abolish or modify any such provision for working capital or any such reserve, and to credit the amount thereof to net profits, current or accumulated, or to the surplus of the Company. (3) To purchase, or otherwise acquire for the Company, any business, property, rights or privileges which the Company may at the time be authorized to acquire, at such price or consideration and generally on such terms and conditions as they think fit; and at their discretion to pay therefor either wholly or partly in money, stock, bonds, debentures or other securities of the Company. (4) To create, make and issue mortgages, bonds, deeds of trust, trust agreements or negotiable or transferable instruments or securities, secured by mortgage or otherwise, and to do every other act and thing necessary to effect the same. (5) To appoint any person or corporation to accept and hold in trust for the Company any property belonging to the Company, or in which it is interested, or for any other purpose, and to execute such deeds and do all things requisite in relation to any such trust. (6) To delegate any of the powers of the Board in the course of the business of the Company to any officer, employee or agent, and to appoint any person the agent of the Company, with such powers (including the power to subdelegate) and upon such terms as the Board may think fit. 5 (7) To remove any officer of the Company with or without cause, and from time to time to devolve the powers and duties of any officer upon any other person for the time being. (8) To confer upon any officer of the Company the power to appoint, remove and suspend subordinate officers, agents and employees. (9) To determine who shall be authorized on the Company's behalf, either generally or specifically, to make and sign bills, notes, acceptances, endorsements, checks, releases, receipts, contracts, conveyances, and all other written instruments executed on behalf of the Company. (10) To make and change regulations, not inconsistent with these By-Laws, for the management of the Company's business and affairs. (11) To adopt and, unless otherwise provided therein, to amend and repeal, from time to time, a bonus or supplemental compensation plan for employees (including employees who are officers or directors) of the Company or any subsidiary. Power to construe, interpret, administer, modify or suspend such plan shall be vested in the Board of Directors or a committee thereof. (12) To adopt a retirement plan, or plans, for the purpose of making retirement payments to employees (including employees who are officers or directors) of the Company or of any subsidiary thereof; and to adopt a group insurance plan, or plans, for the purpose of enabling employees (including employees who are officers or directors) of the Company or of any subsidiary thereof to acquire insurance protection; any such retirement plan or insurance plan, unless otherwise provided therein, shall be subject to amendment or revocation by the Board of Directors. Section 6. Reliance upon Books, Reports and Records. Each director, each member of any committee designated by the Board of Directors and each officer, in the performance of his or her duties, shall be fully protected in relying in good faith upon the books of account or reports made to the Company by any of its officials, or by an independent certified public accountant, or by an appraiser selected with reasonable care by the Board of Directors or by any such committee, or in relying in good faith upon other records of the Company. Section 7. Compensation of Directors. Directors, as such, may receive, pursuant to resolution of the Board of Directors, fixed fees and other compensation for their services as directors, including, without limitation, services as Chairman of the Board of Directors, or members of committees of the directors or as chairmen thereof; provided, however, that nothing herein contained shall be construed to preclude any director from serving the Company in any other capacity and receiving compensation therefor. 6 ARTICLE IV COMMITTEES Section 1. Committees of the Board of Directors. There are hereby established as committees of the Board of Directors an Audit Committee, a Compensation Committee, an Environmental and Public Policy Committee, a Finance Committee, and a Nominating and Governance Committee, each of which shall have the powers and functions set forth in Sections 2, 3, 4, 5, and 6 hereof, respectively, and such additional powers as may be delegated to it by the Board of Directors. The Board of Directors may from time to time establish additional standing committees or special committees of the Board of Directors, each of which shall have such powers and functions as may be delegated to it by the Board of Directors. The Board of Directors may abolish any committee established by or pursuant to this Section 1 as it may deem advisable. Each such committee shall consist of one or more directors, the exact number being determined from time to time by the Board of Directors; provided, however, that membership on the Audit Committee and on the Compensation Committee shall be limited to directors who are not officers or employees of the Company. Designations of the Chairman and members of each such committee, and, if desired, a Vice Chairman and alternates for members, shall be made by the Board of Directors. Each such committee shall have a secretary who shall be designated by its chairman. A vice chairman of a committee shall act as the chairman of the committee in the absence or disability of the chairman. Section 2. Audit Committee. The Audit Committee shall select and engage, on behalf of the Company, independent public accountants to (1) audit the books of account and other corporate records of the Company and (2) perform such other duties as the Committee may from time to time prescribe. The Committee shall transmit financial statements certified by such independent public accountants to the Board of Directors after the close of each fiscal year. The selection of independent public accountants for each fiscal year shall be made in advance of the annual meeting of stockholders in such fiscal year and shall be submitted for ratification or rejection at such meeting. The Committee shall confer with such accountants and review and approve the scope of the audit of the books of account and other corporate records of the Company. The Committee shall have the power to confer with and direct the officers of the Company to the extent necessary to review the internal controls, accounting practices, financial structure and financial reporting of the Company. From time to time the Committee shall report to and advise the Board of Directors concerning the results of its consultation and review and such other matters relating to the internal controls, accounting practices, financial structure and financial reporting of the Company as the Committee believes merit review by the Board of Directors. The Committee also shall perform such other functions and exercise such other powers as may be delegated to it from time to time by the Board of Directors. 7 Section 3. Compensation Committee. The Compensation Committee shall fix from time to time the salaries of members of the Board of Directors who are officers or employees of the Company, the President, and of any and all Vice Chairmen of the Company, Executive Vice Presidents, Group Vice Presidents and Vice Presidents of the Company. It also shall perform such functions as may be delegated to it under the provisions of any bonus, supplemental compensation, special compensation or stock option plan of the Company. Section 4. Environmental and Public Policy Committee. The Environmental and Public Policy Committee shall review all aspects of the Company's policies and practices that relate to environmental, public policy and corporate citizenship considerations facing the Company worldwide. From time to time the Committee shall report and make recommendations to the Board of Directors concerning the results of its review and such other matters relating to the foregoing matters as the Committee believes merit consideration by the Board of Directors. The Committee also shall perform such other functions and exercise such other powers as may be delegated to it from time to time by the Board of Directors. Section 5. Finance Committee. The Finance Committee shall review all aspects of the Company's policies and practices that relate to the management of the financial affairs of the Company, not inconsistent, however, with law or with such specific directions as to the conduct of affairs as shall have been given by the Board of Directors. The Committee also shall perform such other functions and exercise such other powers as may be delegated to it from time to time by the Board of Directors. From time to time the Committee shall report and make recommendations to the Board of Directors concerning the results of its review and such other matters relating to the foregoing matters as the Committee believes merit consideration by the Board of Directors. Section 6. Nominating and Governance Committee. The Nominating and Governance Committee from time to time shall consider and make recommendations to the Board of Directors, to the Chairman of the Board of Directors and to the President with respect to the management organization of the Company, the nominations or elections of directors and officers of the Company, senior management succession plans and the appointments of such other employees of the Company as shall be referred to the Committee. The Committee from time to time shall consider the size, composition and functioning of the Board of Directors and make recommendations to the Board of Directors with respect to such matters. Prior to the annual meeting of stockholders each year, and prior to any special meeting of stockholders at which a director is to be elected, the Committee shall recommend to the Board of Directors persons proposed to constitute the nominees whose election at such meeting will be recommended by the Board of Directors. 8 The authority vested in the Committee by this section shall not derogate from the power of individual members of the Board of Directors to recommend or place in nomination persons other than those recommended by the Committee. The Committee also shall perform such other functions and exercise such other powers as may be delegated to it from time to time by the Board of Directors. Section 7. Other Committees. The Board of Directors, or any committee, officer or employee of the Company may establish additional standing committees or special committees to serve in an advisory capacity or in such other capacities as may be permitted by law, by the Certificate of Incorporation and by the By-Laws. The members of any such committee need not be members of the Board of Directors. Any committee established pursuant to this Section 7 may be abolished by the person or body by whom it was established as he, she or it may deem advisable. Each such committee shall consist of two or more members, the exact number being determined from time to time by such person or body. Designations of members of each such committee and, if desired, alternates for members, shall be made by such person or body, at whose will all such members and alternates shall serve. The chairman of each such committee shall be designated by such person or body. Each such committee shall have a secretary who shall be designated by the chairman. Section 8. Rules and Procedures. Each committee may fix its own rules and procedures and shall meet at such times and places as may be provided by such rules, by resolution of the committee, or by call of the chairman or vice chairman. Notice of meeting of each committee, other than of regular meetings provided for by its rules or resolutions, shall be given to committee members. The presence of one-third of its members, but not less than two, shall constitute a quorum of any committee, and all questions shall be decided by a majority vote of the members present at the meeting. All action taken at each committee meeting shall be recorded in minutes of the meeting. Section 9. Application of Article. Whenever any provision of any other document relating to any committee of the Company named therein shall be in conflict with any provision of this Article IV, the provisions of this Article IV shall govern, except that if such other document shall have been approved by the stockholders, voting as provided in the Certificate of Incorporation, or by the Board of Directors, the provisions of such other document shall govern. ARTICLE V OFFICERS Section 1. Officers. The officers of the Company shall be a Chairman of the Board of Directors and a President, who shall be chosen from among the directors, and may also include one or more Vice Chairmen of the Company, one or more Executive Vice Presidents, one or more Group Vice Presidents, one or more Vice Presidents, a Treasurer, a Controller and a Secretary, 9 each of whom shall be elected by the Board of Directors to hold office until his or her successor shall have been chosen and shall have qualified. The Board of Directors may elect or appoint one or more Assistant Treasurers, one or more Assistant Secretaries, and such other officers as it may deem necessary, or desirable, each of whom shall have such authority, shall perform such duties and shall hold office for such term as may be prescribed by the Board of Directors from time to time. Any person may hold at one time more than one office. Section 2. Chairman of the Board of Directors and Chief Executive Officer. The Chairman of the Board of Directors shall be the Chief Executive Officer of the Company. Subject to the provisions of these By-Laws and to the direction of the Board of Directors, he or she shall have ultimate authority for decisions relating to the general management and control of the affairs and business of the Company and shall perform all other duties and exercise all other powers commonly incident to the position of Chief Executive Officer or which are or from time to time may be delegated to him or her by the Board of Directors, or which are or may at any time be authorized or required by law. He or she may redelegate from time to time and to the full extent permitted by law, in writing, to officers or employees of the Company any or all of such duties and powers, and any such redelegation may be either general or specific. Whenever he or she so shall delegate any of his or her authority, he or she shall file a copy of the redelegation with the Secretary of the Company. Section 3. President and Chief Operating Officer. The President shall be the Chief Operating Officer of the Company. Subject to the provisions of these By-Laws and to the direction of the Board of Directors and of the Chief Executive Officer, he or she shall have such powers and shall perform such duties as from time to time may be delegated to him or her by the Board of Directors or by the Chief Executive Officer, or which are or may at any time be authorized or required by law. In the absence or disability of the Chairman of the Board of Directors, or in the event of, and during the period of, a vacancy in such office, he or she shall be the Chief Executive Officer. Section 4. Vice Chairmen of the Company, Executive Vice Presidents, Group Vice Presidents and Vice Presidents. Each of the Vice Chairmen of the Company, each of the Executive Vice Presidents, each of the Group Vice Presidents and each of the other Vice Presidents shall have such powers and shall perform such duties as may be delegated to him or her by the Board of Directors, by the Chairman of the Board of Directors or by the President. In addition, the Board of Directors shall designate one of the Vice Chairmen of the Company, Executive Vice Presidents, Group Vice Presidents, or Vice Presidents as the Chief Financial Officer, who, among his or her other powers and duties, shall provide and maintain, subject to the direction of the Board of Directors and the Finance Committee, financial and accounting controls over the business and affairs of the Company. Such office shall maintain, among others, adequate records of the assets, liabilities and financial transactions of the Company, and shall direct the preparation of financial statements, reports and analyses. The Chief Financial Officer shall perform such other duties and exercise such other powers as are incident to such functions, subject to the control of the Board of Directors. 10 Section 5. Treasurer and Assistant Treasurer. The Treasurer, subject to the direction of the Board of Directors, shall have the care and custody of all funds and securities which may come into his or her hands. When necessary or proper he or she shall endorse on behalf of the Company, for collection, checks, notes and other obligations, and shall deposit all funds of the Company in such banks or other depositaries as may be designated by the Board of Directors or by such officers or employees as may be authorized by the Board of Directors so to designate. He or she shall perform all acts incident to the office of Treasurer, subject to the control of the Board of Directors. He or she may be required to give a bond for the faithful discharge of his or her duties, in such sum and upon such conditions as the Board of Directors may require. At the request of the Treasurer, any Assistant Treasurer, in the case of the absence or inability to act of the Treasurer, temporarily may act in his or her place. In the case of the death of the Treasurer, or in the case of his or her absence or inability to act without having designated an Assistant Treasurer to act temporarily in his or her place, the Assistant Treasurer so to perform the duties of the Treasurer shall be designated by the Chairman of the Board of Directors, the President, a Vice Chairman of the Company or an Executive Vice President. Section 6. Secretary and Assistant Secretary. The Secretary shall keep the minutes of the meetings of the stockholders and of the Board of Directors, and, when required, the minutes of meetings of the committees, and shall be responsible for the custody of all such minutes. Subject to the direction of the Board of Directors, the Secretary shall have custody of the stock ledgers and documents of the Company. He or she shall have custody of the corporate seal and shall affix and attest such seal to any instrument whose execution under seal shall have been duly authorized. He or she shall give notice of meetings and, subject to the direction of the Board of Directors, shall perform all other duties and enjoy all other powers commonly incident to his or her office. At the request of the Secretary, any Assistant Secretary, in the case of the absence or inability to act of the Secretary, temporarily may act in his or her place. In the case of the death of the Secretary, or in the case of his or her absence or inability to act without having designated an Assistant Secretary to act temporarily in his or her place, the Assistant Secretary or other person so to perform the duties of the Secretary shall be designated by the Chairman of the Board of Directors, the President, a Vice Chairman of the Company or an Executive Vice President. Section 7. General Counsel. The Company may have a General Counsel who shall be appointed by the Board of Directors and who shall have general supervision of all matters of a legal nature concerning the Company. 11 Section 8. Controller. The Controller shall have such powers and shall perform such duties as may be delegated to him or her by the Board of Directors, the Chairman of the Board of Directors, the President, or the appropriate Vice Chairman of the Company, Executive Vice President, Group Vice President or Vice President. Section 9. Salaries. Salaries of officers, agents or employees shall be fixed from time to time by the Board of Directors or by such committee or committees, or person or persons, if any, to whom such power shall have been delegated by the Board of Directors. An employment contract, whether with an officer, agent or employee, if expressly approved or specifically authorized by the Board of Directors, may fix a term of employment thereunder; and such contract, if so approved or authorized, shall be valid and binding upon the Company in accordance with the terms thereof, provided that this provision shall not limit or restrict in any way the right of the Company at any time to remove from office, discharge or terminate the employment of any such officer, agent or employee prior to the expiration of the term of employment under any such contract, except that the Company shall not thereby be relieved of any continuing liability for salary or other compensation provided for in such contract. ARTICLE VI RESIGNATIONS, REMOVALS AND VACANCIES Section 1. Resignations. Any director, officer or agent of the Company, or any member of any committee, may resign at any time by giving written notice to the Board of Directors, to the Chairman of the Board of Directors, to the President or to the Secretary of the Company. Any such resignation shall take effect at the time specified therein, or if the time be not specified therein, then upon receipt thereof. The acceptance of such resignation shall not be necessary to make it effective. Section 2. Removals. At any meeting thereof called for the purpose, the holders of Common Stock and the holders of Class B Stock voting as provided in subsection 1.6 of Article FOURTH of the Certificate of Incorporation, as amended, may remove from office or terminate the employment of any director, officer or agent with or without cause; and the Board of Directors, by vote of not less than a majority of the entire Board at any meeting thereof called for the purpose, may, at any time, remove from office or terminate the employment of any officer, agent or member of any committee. 12 Section 3. Vacancies. Subject to the last sentence of Section 1 of Article III, any vacancy in the office of any director, officer or agent through death, resignation, removal, disqualification, increase in the number of directors or other cause may be filled by the Board of Directors (in the case of vacancies in the Board, by the affirmative vote of a majority of the directors then in office, even though less than a quorum remains) and the person so elected shall hold office until his or her successor shall have been elected and shall have qualified. ARTICLE VII CAPITAL STOCK-DIVIDENDS-SEAL Section 1. Certificates of Shares; Uncertificated Shares The shares of capital stock of the Company shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Company. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates, and upon request every holder of uncertificated shares, shall be entitled to have a certificate in such form, not inconsistent with the Certificate of Incorporation, as amended, as shall be approved by the Board of Directors. The certificates shall be signed by the Chairman of the Board of Directors, the President, a Vice Chairman of the Company, an Executive Vice President, a Group Vice President or a Vice President, and also by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary. Any and all signatures may be facsimiles. All certificates shall bear the name of the person owning the shares represented thereby, shall state the number of shares represented by such certificate and the date of issue; and such information shall be entered in the Company's original stock ledger. Section 2. Addresses of Stockholders. It shall be the duty of every stockholder to notify the Company of his or her post office address and of any change therein. The latest address furnished by each stockholder shall be entered on the original stock ledger of the Company and the latest address appearing on such original stock ledger shall be deemed conclusively to be the post office address and the last-known post office address of such stockholder. If any stockholder shall fail to notify the Company of his or her post office address, it shall be sufficient to send corporate notices to such stockholder at the address, if any, understood by the Secretary to be his or her post office address, or in the absence of such address, to such stockholder, at the General Post Office in the City of Wilmington, State of Delaware. 13 Section 3. Lost, Destroyed or Stolen Certificate. Any person claiming a stock certificate in lieu of one lost, destroyed or stolen, shall give the Company an affidavit as to his, her or its ownership of the certificate and of the facts which go to prove that it has been lost, destroyed or stolen. If required by the Board of Directors, he, she or it also shall give the Company a bond, in such form as may be approved by the Board of Directors, sufficient to indemnify the Company against any claim that may be made against it on account of the alleged loss of the certificate or the issuance of a new certificate. Section 4. Fixing a Record Date. The Board of Directors may fix in advance a date not exceeding (i) sixty (60) days preceding the date of any meeting of stockholders, or the date for payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of stock shall go into effect (other than conversions or exchanges pursuant to Sections 2, 3 or 4 of Article FOURTH of the Certificate of Incorporation, as amended), as a record date for the determination of the stockholders entitled to notice of and to vote at any such meeting and any adjournment thereof, or entitled to payment of any such dividend or to any such allotment of rights or to exercise the rights in respect of any such change, or conversion or exchange of stock (other than conversions or exchanges pursuant to Sections 2, 3 or 4 of Article FOURTH of the Certificate of Incorporation, as amended), or (ii), ten (10) days after adoption of the resolution fixing such date, as a record date for the determination of the stockholders entitled to consent in writing to corporate action; and in any such case, such stockholders and only such stockholders, as shall be stockholders of record on the date so fixed, shall be entitled, subject to the provisions of Article FOURTH of the Certificate of Incorporation, as amended, to such notice of and to vote at such meeting and any adjournment thereof or to receive payment of such dividend or to receive such allotment of rights or to exercise such rights or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Company after such record date. Section 5. Regulations. The Board of Directors shall have power and authority to make all such rules and regulations not inconsistent with any of the provisions of Sections 2, 3, 4 or 5 of Article FOURTH of the Certificate of Incorporation, as amended, as it may deem expedient, concerning the issue, transfer and registration of certificates for shares of the stock of the Company. Section 6. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Company, the year of its organization, and the words "Corporate Seal" and "Delaware." If and when so authorized by the Board of Directors, a duplicate of the seal may be kept and used by the Secretary or Treasurer or by any Assistant Secretary or Assistant Treasurer. 14 ARTICLE VIII EXECUTION OF CONTRACTS AND OTHER DOCUMENTS Section 1. Contracts, etc. Except as otherwise prescribed in these By-Laws, such officers, employees or agents of the Company as shall be specified by the Board of Directors shall sign, in the name and on behalf of the Company, all deeds, bonds, contracts, mortgages and other instruments or documents, the execution of which shall be authorized by the Board of Directors; and such authority may be general or confined to specific instances. Except as so authorized by the Board of Directors, no officer, agent or employee of the Company shall have power or authority to bind the Company by any contract or engagement or to pledge, mortgage, sell or otherwise dispose of its credit or any of its property or to render it pecuniarily liable for any purpose or in any amount. Section 2. Checks, Drafts, etc. Except as otherwise provided in these By-Laws, all checks, drafts, notes, bonds, bills of exchange or other orders, instruments or obligations for the payment of money shall be signed by such officer or officers, employee or employees, or agent or agents, as the Board of Directors shall by resolution direct. The Board of Directors may, in its discretion, also provide by resolution for the countersignature or registration of any or all such orders, instruments or obligations for the payment of money. ARTICLE IX FISCAL YEAR The fiscal year of the Company shall begin the first day of January in each year. ARTICLE X MISCELLANEOUS Section 1. Original Stock Ledger. As used in these By-Laws and in the Certificate of Incorporation, as amended, the words "original stock ledger" shall mean the record maintained by the Secretary of the Company of the name and address of each of the holders of shares of any class of stock of the Company, and the number of shares and the numbers of the certificates for such shares held by each of them, taking into account transfers at the time made by and recorded on the transfer sheets of each of the Transfer Agents of the Company although such transfers may not then have been posted in the record maintained by the Secretary. 15 Section 2. Notices and Waivers Thereof. Whenever any notice whatever is required by these By-Laws or by the Certificate of Incorporation, as amended, or by any of the laws of the State of Delaware to be given to any stockholder, director or officer, such notice, except as otherwise provided by the laws of the State of Delaware, may be given personally or by telephone or be given by cablegram, facsimile transmission, mailgram, radiogram, telegram or other form of recorded communication, addressed to such stockholder at the address set forth as provided in Section 2 of Article VII, or to such director or officer at his or her Company location, if any, or at such address as appears on the books of the Company, or the notice may be given in writing by depositing the same in a post office, or in a regularly maintained letter box, in a postpaid, sealed wrapper addressed to such stockholder at the address set forth in Section 2 of Article VII, or to such director or officer at his or her Company location, if any, or such address as appears on the books of the Company. Any notice given by cablegram, mailgram, radiogram or telegram shall be deemed to have been given when it shall have been delivered for transmission. Any notice given by facsimile transmission or other form of recorded communication shall be deemed to have been given when it shall have been transmitted. Any notice given by mail shall be deemed to have been given when it shall have been mailed. A waiver of any such notice in writing, including by cablegram, facsimile transmission, mailgram or telegram, signed or dispatched by the person entitled to such notice or by his or her duly authorized attorney, whether before or after the time stated therein, shall be deemed equivalent to the notice required to be given, and the presence at any meeting of any person entitled to notice thereof shall be deemed a waiver of such notice as to such person. Section 3. Voting upon Stocks. The Board of Directors (whose authorization in this connection shall be necessary in all cases) may from time to time appoint an attorney or attorneys or agent or agents of the Company, or may at any time or from time to time authorize the Chairman of the Board of Directors, the President, any Vice Chairman of the Company, any Executive Vice President, any Group Vice President, any Vice President, the Treasurer or the Secretary to appoint an attorney or attorneys or agent or agents of the Company, in the name and on behalf of the Company, to cast the votes which the Company may be entitled to cast as a stockholder or otherwise in any other corporation or association, any of the stock or securities of which may be held by the Company, at meetings of the holders of the stock or other securities of such other corporation or association, or to consent in writing to any action by any such other corporation or association, and the Board of Directors or any aforesaid officer so authorized may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and the Board of Directors or any aforesaid officer so authorized may from time to time authorize the execution and delivery, on behalf of the Company and under its corporate seal, or otherwise, of such written proxies, consents, waivers or other instruments as may be deemed necessary or proper in the premises. 16 ARTICLE XI AMENDMENTS The Board of Directors shall have power to make, alter, amend or repeal the By-Laws of the Company by vote of not less than a majority of the entire Board at any meeting of the Board. The holders of Common Stock and the holders of Class B Stock voting as provided in subsection 1.6 of Article FOURTH of the Certificate of Incorporation, as amended, shall have power to make, alter, amend or repeal the By-Laws at any regular or special meeting, if the substance of such amendment be contained in the notice of such meeting of stockholders. 17 EX-10 4 e111401ex10w.txt Exhibit 10-W In July 2001, the Company entered into an agreement with Wolfgang W. Reitzle. Under this agreement, if Dr. Reitzle continues working for the Company until December 31, 2005, the Company will pay him $5,000,000 in January 2006. In addition, his unvested options will become vested on January 1, 2006 and all his options will be exercisable until their normal expiration dates. Further, unless he requests normal vesting terms before December 1, 2005, his Restricted Stock Units will vest as of January 1, 2006 and be paid out as soon as practical thereafter. In the event Dr. Reitzle continues working for the Company beyond 2005, he may request before December 1, 2005 that payment of the $5,000,000 be deferred until a later date. These arrangements also would apply in the event the Company terminates Dr. Reitzle's employment other than for cause before December 31, 2005. These arrangements are contingent upon Dr. Reitzle's refraining from conduct that is adverse to the Company and are subject to competitive activity restrictions. EX-10 5 e111401ex10x.txt Exhibit 10-X In September 2001, the Company agreed upon the treatment of Mr. Nasser's existing benefits in the event of his retirement, including his benefits under its executive retirement plans. Upon Mr. Nasser's retirement, the final award for his outstanding Performance Stock Rights will be determined based on Company results for the full performance periods, without proration, and, in the case of retirement for reasons other than for cause, his Restricted Stock Units award will be based on a 100% performance level. Mr. Nasser's entitlement to all such benefits is subject to provisions regarding competitive activity. In addition to the arrangements described above, when Mr. Nasser retires he shall receive office and associated services, financial planning services and the ability to designate an educational institution as a grant recipient on a basis consistent with those granted previous Company Chief Executive Officers. EX-12 6 e111401ex12.txt Exhibit 12
Ford Motor Company and Subsidiaries CALCULATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS - ---------------------------------------------------------------------------------------- (in millions) Nine For the Years Ended December 31 Months ------------------------------------------------------- 2001 2000 1999 1998 1997 1996 ---------- ---------- --------- ---------- ---------- ------------ Earnings - -------- Income before income taxes $ (351) $ 8,234 $ 9,854 $24,280 $10,124 $ 6,189 Equity in net (income)/loss of affiliates plus dividends from affiliates 690 99 (12) 87 141 75 Adjusted fixed charges a/ 8,634 11,300 9,381 9,161 10,896 10,785 - ------ ------- ------- ------- ------- ------- Earnings $8,973 $19,633 $19,223 $33,528 $21,161 $17,049 ====== ======= ======= ======= ======= ======= Combined Fixed Charges and Preferred Stock Dividends - -------------------------- Interest expense b/ $8,371 $10,937 $ 9,065 $ 8,881 $10,559 $10,450 - Interest portion of rental expense c/ 229 302 258 228 297 292 - Preferred stock dividend requirements of majority owned subsidiaries and trusts 41 55 55 55 55 55 ------- ------- ------- ------- ------- ------- Fixed charges 8,641 11,294 9,378 9,164 10,911 10,797 Ford preferred stock dividend requirements d/ 11 22 22 121 85 100 - ------- ------- ------- ------- ------- ------- Total combined fixed charges and preferred stock dividends $8,652 $11,316 $ 9,400 $ 9,285 $10,996 $10,897 ======= ======= ======= ======= ======= ======= Ratios - ------ Ratio of earnings to fixed charges 1.0 1.7 2.0 3.7e/ 1.9 1.6 Ratio of earnings to combined fixed charges and preferred stock dividends 1.0 1.7 2.0 3.6e/ 1.9 1.6
- - - - - - a/ Fixed charges, as shown above, adjusted to exclude the amount of interest capitalized during the period and preferred stock dividend requirements of majority owned subsidiaries and trusts. b/ Includes interest, whether expensed or capitalized, and amortization of debt expense and discount or premium relating to any indebtedness. c/ One-third of all rental expense is deemed to be interest. d/ Preferred stock dividend requirements of Ford Motor Company increased to an amount representing the pre-tax earnings which would be required to cover such dividend requirements based on Ford Motor Company's effective income tax rates. e/ Earnings used in calculation of this ratio include the $15,955 million gain on the spin-off of The Associates. Excluding this gain, the ratio is 1.9. EX-15 7 e111401ex15.txt EXHIBIT 15 November 14, 2001 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Ford Motor Company Registration Statements Nos. 2-95018, 2-95020, 33-14951, 33-19036, 33-36043, 33-36061, 33-39402, 33-50194, 33-50238, 33-54275, 33-54283, 33-54348, 33-54735, 33-54737, 33-58255, 33-61107, 33-64605, 33-64607, 333-02735, 333-20725, 333-27993, 333-28181, 333-31466, 333-37396, 333-37536, 333-37542, 333-38580, 333-38586, 333-40258, 333-40260, 333-46295, 333-47443, 333-47445, 333-47733, 333-52399, 333-56660, 333-57596, 333-57598, 333-58695, 333-58697, 333-58701, 333-61882, 333-61886, 333-65703, 333-70447, 333-74313, 333-86127, 333-87619, 333-71380, 333-72476 and 333-72478 on Form S-8 and 333-49164, 333-67209 and 333-86035 on Form S-3. Commissioners: We are aware that our report dated October 16, 2001 on our review of interim financial information of Ford Motor Company and Subsidiaries (the "Company") as of and for the period ended September 30, 2001 and included in the Company's quarterly report on Form 10-Q for the quarter then ended is incorporated by reference in the afore referenced Registration Statements. Very truly yours, /s/PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Detroit, Michigan -----END PRIVACY-ENHANCED MESSAGE-----