-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, NnV2xJ4CVVZeiqdsJoTd7+MD3IbAkeNMZmxJTq4i4qOeOExROwXqNKjcERwtKLZO I2VQGHGRLERwFHONqpOQMg== 0000037996-94-000011.txt : 19940520 0000037996-94-000011.hdr.sgml : 19940520 ACCESSION NUMBER: 0000037996-94-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORD MOTOR CO CENTRAL INDEX KEY: 0000037996 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94527832 BUSINESS ADDRESS: STREET 1: THE AMERICAN RD CITY: DEARBORN STATE: MI ZIP: 48121 BUSINESS PHONE: 3133223000 10-Q 1 FIRST QUARTER 10-Q 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 EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1994 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) The American Road, Dearborn, Michigan 48121 (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 March 31, 1994, the Registrant had outstanding 465,366,362 shares of Common Stock and 35,426,038 shares of Class B Stock. Page 1 of 19 Exhibit index located on sequential page number 16 1Q-94 Ford Motor Company and Subsidiaries HIGHLIGHTS -----------
First Quarter ------------------------- 1994 1993 -------- -------- Worldwide factory sales of cars and trucks (in thousands) - - - United States 1,084 922 - - - Outside United States 588 609 ----- ----- Total 1,672 1,531 ===== ===== Sales and revenues (in millions) - - - Automotive $26,070 $22,686 - - - Financial Services 4,332 4,077 ------- ------- Total $30,402 $26,763 ======= ======= Net income/(loss) (in millions) - - - Automotive $ 955 $ 176 - - - Financial Services (51)* 396 ------- ------- Total $ 904 $ 572 ======= ======= Capital expenditures (in millions) - - - Automotive $ 1,641 $ 1,270 - - - Financial Services 59 19 ------- ------- Total $ 1,700 $ 1,289 ======= ======= Stockholders' equity at March 31 - - - Total (in millions) $16,633 $15,258 - - - After-tax return on Common and Class B stockholders' equity 26.3% 17.3% Automotive cash, cash equivalents, and marketable securities at March 31 (in millions) $11,573 $ 9,286 Automotive debt at March 31 (in millions) $ 7,919 $ 8,115 After-tax returns on sales - - - Automotive 3.7% 0.8% - - - Total Company 3.1% 2.2% Shares of Common and Class B Stock (in millions) - - - Average number outstanding 500 490 - - - Number outstanding at March 31 501 491 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income/(loss) - - - Automotive $ 1.76 $ 0.21 - - - Financial Services (0.10) 0.81 ------- ------- Total $ 1.66 $ 1.02 ======= ======= Income assuming full dilution $ 1.51 $ 0.95 Cash dividends per share of Common and Class B Stock $ 0.40 $ 0.40 - - - - - - - *Includes a charge of $440 million related to the disposition of First Nationwide Financial Corporation.
-2- Ford Motor Company and Subsidiaries VEHICLE FACTORY SALES --------------------- For the Periods Ended March 31, 1994 and 1993
First Quarter -------------------------- 1994 1993 --------- --------- North America Cars - U.S. 521,808 486,257 - Canada 33,305 25,322 - Mexico 11,655 19,643 --------- --------- Total cars 566,768 531,222 Trucks - U.S. 562,503 436,204 - Canada 30,044 24,458 - Mexico 8,171 12,200 --------- --------- Total trucks 600,718 472,862 --------- --------- Total North America 1,167,486 1,004,084 Outside North America Germany 242,675 236,777 Britain 108,696 118,036 Spain 76,731 81,309 Taiwan 29,322 36,824 Australia 26,995 27,758 Japan 12,152 17,886 Other countries 8,375 8,737 --------- --------- Total outside North America 504,946 527,327 --------- --------- Total worldwide vehicle factory sales 1,672,432 1,531,411 ========= ========= Includes units manufactured by other companies and sold by Ford. Factory sales are shown by source of manufacture, except within North America. In North America, U.S. sales include exports from Canada, Mexico, and Australia. Canadian sales include exports from the U.S. and Mexico. Mexican sales include exports from the U.S. and Canada.
-3- FORD MOTOR COMPANY AND SUBSIDIARIES Part I. Financial Information - - ------------------------------ Item 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 registrant's Annual Report on Form 10-K (the "10-K Report") for the year ended December 31, 1993. For purposes hereof, "Ford" or the "Company" means Ford Motor Company and its majority-owned subsidiaries unless the context requires otherwise. -4- Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME --------------------------------- For the Periods Ended March 31, 1994 and 1993 (in millions)
First Quarter ------------------------- 1994 1993 -------- -------- (unaudited) AUTOMOTIVE Sales $26,070 $22,686 Costs and expenses (Note 1) Costs of sales 23,352 21,084 Selling, administrative, and other expenses 1,159 1,097 ------- ------- Total costs and expenses 24,511 22,181 Operating income 1,559 505 Interest income 128 131 Interest expense 176 234 ------- ------- Net interest expense (48) (103) Equity in net income of affiliated companies 67 1 Net expense from transactions with Financial Services (8) (7) ------- ------- Income before income taxes - Automotive 1,570 396 FINANCIAL SERVICES Revenues 4,332 4,077 Costs and expenses Interest expense 1,598 1,622 Operating and other expenses 824 724 Provision for credit and insurance losses 344 394 Depreciation 903 674 Loss on disposition of First Nationwide Financial Corp. (Note 3) 475 - ------- ------- Total costs and expenses 4,144 3,414 Net revenue from transactions with Automotive 8 7 ------- ------- Income before income taxes - Financial Services 196 670 ------- ------- TOTAL COMPANY Income before income taxes 1,766 1,066 Provision for income taxes 825 468 ------- ------- Income before minority interests 941 598 Minority interests in net income of subsidiaries 37 26 ------- ------- Net income 904 572 Preferred stock dividend requirements 72 72 ------- ------- Income attributable to Common and Class B Stock $ 832 $ 500 ======= ======= Average number of shares of Common and Class B Stock outstanding 500 490 AMOUNTS PER SHARE OF COMMON STOCK AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income $ 1.66 $ 1.02 ======= ======= Income assuming full dilution $ 1.51 $ 0.95 Cash dividends $ 0.40 $ 0.40 - - - - - - - The accompanying notes are part of the financial statements.
-5- Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET --------------------------- (in millions)
March 31, December 31, 1994 1993 ------------ ------------ (unaudited) ASSETS Automotive Cash and cash equivalents $ 5,646 $ 5,667 Marketable securities 5,927 4,085 -------- -------- Total cash, cash equivalents, and marketable securities 11,573 9,752 Receivables 2,386 2,302 Inventories (Note 2) 5,976 5,538 Deferred income taxes 2,923 2,830 Other current assets 1,235 1,226 Net current receivable from Financial Services 1,039 834 -------- -------- Total current assets 25,132 22,482 Equity in net assets of affiliated companies 3,089 3,002 Net property 23,692 23,059 Deferred income taxes 5,120 5,427 Other assets 7,683 7,691 Net noncurrent receivable from Financial Services 78 76 -------- -------- Total Automotive assets 64,794 61,737 Financial Services (Note 3) Cash and cash equivalents 1,617 2,555 Investments in securities 5,369 8,219 Net receivables and lease investments 118,493 119,535 Other assets 8,160 6,892 -------- -------- Total Financial Services assets 133,639 137,201 -------- -------- Total assets $198,433 $198,938 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $ 9,953 $ 8,769 Other payables 2,000 1,976 Accrued liabilities 10,894 10,815 Income taxes payable 510 160 Debt payable within one year 835 932 -------- -------- Total current liabilities 24,192 22,652 Long-term debt 7,084 7,084 Other liabilities 26,372 25,911 Deferred income taxes 974 1,089 -------- -------- Total Automotive liabilities 58,622 56,736 Financial Services (Note 3) Payables 2,153 1,881 Debt 109,296 103,960 Deposit accounts 0 10,549 Deferred income taxes 2,599 2,287 Other liabilities and deferred income 6,451 5,583 Net payable to Automotive 1,117 910 -------- -------- Total Financial Services liabilities 121,616 125,170 Preferred stockholders' equity in subsidiary companies 1,562 1,458 Stockholders' equity Capital stock Preferred Stock, par value $1.00 per share (aggregate liquidation preference of $3.4 billion) * * Common Stock, par value $1.00 per share (466 and 464 million shares issued) 466 464 Class B Stock, par value $1.00 per share (35 million shares issued) 35 35 Capital in excess of par value of stock 5,165 5,082 Foreign currency translation adjustments and other (331) (678) Minimum pension liability adjustment (406) (400) Earnings retained for use in business 11,704 11,071 -------- -------- Total stockholders' equity 16,633 15,574 -------- -------- Total liabilities and stockholders' equity $198,433 $198,938 ======== ======== - - - - - - - *Less than $1 million The accompanying notes are part of the financial statements.
-6- Ford Motor Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ---------------------------------------------- For the Periods Ended March 31, 1994 and 1993 (in millions)
First Quarter 1994 First Quarter 1993 ---------------------- ---------------------- Financial Financial Automotive Services Automotive Services ---------- --------- ---------- --------- (unaudited) (unaudited) Cash and cash equivalents at January 1 $ 5,667 $ 2,555 $ 3,504 $ 3,182 Cash flows from operating activities before securities trading 3,814 2,228 3,062 1,602 Net (purchases)/sales of trading securities (Note 4) (1,924) 39 - - -------- -------- -------- -------- Net cash flows from operating activities 1,890 2,267 3,062 1,602 Cash flows from investing activities Capital expenditures (1,641) (59) (1,270) (19) Acquisitions of receivables and lease investments - (47,560) - (37,874) Collections of receivables and lease investments - 39,806 - 32,744 Purchases of securities (Note 4) (112) (3,607) (21,233) (4,270) Sales of securities (Note 4) 198 3,594 22,285 3,332 Proceeds from sales of receivables - 390 - 1,947 Loans originated net of principal payments - (204) - (174) Other 162 (252) (45) 348 -------- -------- -------- -------- Net cash used in investing activities (1,393) (7,892) (263) (3,966) Cash flows from financing activities Cash dividends (272) - (276) - Issuance of Common Stock 84 - 69 - Changes in short-term debt (52) 2,373 (117) (575) Proceeds from issuance of other debt 0 6,051 65 5,977 Principal payments on other debt 0 (3,826) (57) (2,738) Changes in customers' deposits, excluding interest credited - (422) - (979) Receipts from annuity contracts - 185 - 221 Issuance of subsidiary company preferred stock - 0 - 173 Other 25 31 21 11 -------- -------- -------- -------- Net cash (used in)/provided by financing activities (215) 4,392 (295) 2,090 Effect of exchange rate changes on cash (96) 88 (42) 62 Net transactions with Automotive/ Financial Services (207) 207 (1,158) 1,158 -------- -------- -------- -------- Net (decrease)/increase in cash and cash equivalents (21) (938) 1,304 946 -------- -------- -------- -------- Cash and cash equivalents at March 31 $ 5,646* $ 1,617 $ 4,808* $ 4,128 ======== ======== ======== ======== Total cash and cash equivalents $7,263 $8,936 ====== ====== - - - - - - - *Automotive cash, cash equivalents, and marketable securities at March 31 were as follows (in millions): 1994 - $11,573; 1993 - $9,286 The accompanying notes are part of the financial statements.
-7- Ford Motor Company and Subsidiaries NOTES TO FINANCIAL STATEMENTS ----------------------------- (unaudited) 1. Selected Automotive costs and expenses are summarized as follows (in millions): --------------------------------------
First Quarter ----------------------- 1994 1993 ------ ------ Depreciation $ 581 $ 610 Amortization 542 534
2.Inventories are summarized as follows (in millions): ----------- March 31, December 31, 1994 1993 --------- ------------ Raw materials, work in process and supplies $3,082 $2,937 Finished products 2,894 2,601 ------ ------ Inventories - Automotive $5,976 $5,538 ====== ====== Inventories - U.S. Automotive $2,782 $2,575
3. Sale of First Nationwide Bank ----------------------------- On April 14, 1994, an agreement was entered into between First Nationwide Bank, a Federal Savings Bank (the "Bank") and First Madison Bank, FSB ("First Madison") for the sale of substantially all of the Bank's assets to, and the assumption of substantially all of the Bank's liabilities by, First Madison. The Bank is a wholly-owned subsidiary of First Nationwide Financial Corporation ("FNFC"), which in turn is a wholly-owned sub-sidiary of Ford. The transaction, which is subject to federal regulatory approvals, is expected to be completed in about six months. The company recognized in First Quarter 1994 earnings a pre-tax charge of $475 million and an after-tax charge of $440 million related to the disposition of FNFC, reflecting the non-recovery of goodwill and reserves for estimated losses on assets to be retained or repurchased by FNFC. These assets will be liquidated over time as market conditions permit. The tax effect of this transaction takes into account differences between the book and tax basis of certain assets for which deferred taxes were not required to be provided under Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes". The company's income statement includes the results of operations of FNFC through March 31, 1994. The net assets of FNFC at March 31, 1994 are included in the balance sheet under Financial Services - Other Assets. Historically, FNFC (including the Bank) has not had a significant effect on Ford's operating results. 4. Consolidated Statement of Cash Flows ------------------------------------ Effective January 1, 1994, the company adopted SFAS No. 115, "Accounting for Certain investments in Debt and Equity Securities". Accordingly, the purchases and sales of trading securities are included in cash flows from operating activities. Financial statements for the prior period were not restated. -8- REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders Ford Motor Company We have reviewed the consolidated balance sheet of Ford Motor Company and Subsidiaries at March 31, 1994 and the related consolidated statement of income and condensed consolidated statement of cash flows for the periods set forth in Form 10-Q for the quarter ended March 31, 1994. 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 financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet at December 31, 1993 and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated February 1, 1994, we expressed an unqualified opinion on those consolidated financial statements. COOPERS & LYBRAND Detroit, Michigan April 27, 1994 -9- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview - - -------- Ford Motor Company earned $904 million, or $1.66 per share of Common and Class B Stock, in the first quarter of 1994. Results included a charge to net income of $440 million related to the sale of First Nationwide Bank to First Madison Bank (discussed below). In the first quarter of 1993, the Company earned $572 million, or $1.02 per share. Worldwide sales and revenues in the first quarter of 1994 were $30.4 billion, up $3.6 billion from the first quarter of 1993. Worldwide factory unit sales of cars and trucks were 1,672,000, up 141,000 units, or 9%, from a year ago. Stockholders' equity was $16.6 billion at the end of the first quarter of 1994. Sale of First Nationwide Bank - - ----------------------------- On April 14, 1994, an agreement was entered into between First Nationwide Bank, a Federal Savings Bank (the "Bank") and First Madison Bank, FSB ("First Madison") for the sale of substantially all of the Bank's assets to, and the assumption of substantially all of the Bank's liabilities by, First Madison. The Bank is a wholly-owned subsidiary of First Nationwide Financial Corporation ("FNFC"), which in turn is a wholly-owned subsidiary of Ford. The transaction, which is subject to federal regulatory approvals, is expected to be completed in about six months. The stated sale price for the Bank is $1.1 billion, slightly higher than tangible net book value at December 31, 1993. The final settlement, depending on the actual closing date, is expected to consist of about $750 million of cash and retention of about $350 million of assets and tax benefits that are not included in the sale. In total, Ford will retain, through FNFC, approximately $1.2 billion of commercial real estate and other assets as of the closing date. These retained assets generally are of lower quality than those included in the sale. In addition, for the three-year period ending in November 1996, First Madison has the option of requiring FNFC to repurchase up to $500 million of the loans included in the sale that become nonperforming. This repurchase obligation will be guaranteed by Ford. The sale resulted in an after-tax charge of $440 million against Ford's earnings in the first quarter of 1994, reflecting the non-recovery of goodwill and reserves for estimated losses on the assets to be retained or repurchased by FNFC. These assets will be liquidated over time as market conditions permit. Historically, FNFC (including the Bank) has not had a significant effect on Ford's operating results. RESULTS OF OPERATIONS: FIRST QUARTER 1994 COMPARED WITH FIRST QUARTER 1993 Automotive Operations - - --------------------- Ford's worldwide Automotive operations earned $955 million in the first quarter of 1994 on sales of $26.1 billion, compared with $176 million on sales of $22.7 billion a year ago. In the U.S., Ford's Automotive operations earned $835 million, compared with $113 million a year ago. The increase reflected primarily higher unit volume resulting from higher industry sales. In the first quarter of 1994, the seasonally-adjusted annual selling rate for the U.S. car and truck industry was 15.8 million units (9.3 million cars and 6.5 million trucks), compared with 13.4 million (8.1 million cars and 5.3 million trucks) in the first quarter of 1993. Ford's car share was 21.6% in the first quarter of 1994, down 1.9 points from the first quarter of 1993. The decline from a year ago reflected lower shares for Tempo and Topaz. Ford's truck share was 29.4% in the first quarter of 1994, up 3/10 of a point from the first quarter of 1993. Higher shares for F-Series, Villager and Aerostar contributed to the improvement. The combined car and truck share in the first quarter of 1994 was 24.8%, down 9/10 of a point from a year ago. -10- Outside the U.S., Automotive operations earned $120 million in the first quarter of 1994, compared with $63 million a year ago. Ford's European Automotive operations (excluding Jaguar) earned $108 million in the first quarter of 1994, compared with $19 million in the first quarter of 1993. The increase from a year ago reflected primarily improved margins. In the first quarter of 1994, the seasonally-adjusted annual selling rate for the European car and truck industry was 13.2 million units, compared with 12.6 million in the first quarter of 1993. The increase from a year ago reflected primarily higher industry sales in Britain (up 17%). Ford's car share was 12.0% in the first quarter of 1994, up 1/10 of a point from the first quarter of 1993. Ford's truck share was 14.4% in the first quarter of 1994, down 8/10 of a point from the first quarter of 1993. Financial Services Operations - - ----------------------------- The Company's Financial Services operations lost $51 million in the first quarter of 1994, including the charge to net income of $440 million related to the sale of First Nationwide Bank (discussed above). In the first quarter of 1993, Financial Services operations earned $396 million. Ford Credit's consolidated net income was $299 million in the first quarter of 1994, down $16 million from the first quarter of 1993, and included income from its financing operations and its equity in the net income of affiliated companies, primarily Ford Holdings. Ford Credit's financing operations earned $245 million in the first quarter of 1994, down $21 million from a year ago. Results declined as a result of lower net interest margins and the non-recurrence of a gain on the sale of receivables, offset partially by higher levels of earning assets and favorable credit loss performance. In addition, international operations managed by Ford Credit earned $63 million in the first quarter of 1994, compared with $47 million a year ago. The Associates earned $128 million in the U.S. in the first quarter of 1994, up $17 million from the first quarter of 1993. The improvement resulted primarily from higher levels of earning assets and improved net interest margins. In addition, international operations managed by The Associates earned $18 million in the first quarter of 1994, compared with $10 million a year ago. First Nationwide incurred a loss of $484 million in the first quarter of 1994, compared with a loss of $17 million in the first quarter of 1993. The decline reflected primarily the charge to net income of $440 million related to the sale of First Nationwide Bank. American Road earned $17 million in the first quarter of 1994, compared with $24 million in the first quarter of 1993. The decrease resulted primarily from lower investment income, partially offset by improved underwriting experience in extended service plan, floorplan and dealer plan products. USL Capital earned $21 million in the first quarter of 1994, compared with $17 million a year ago. The improvement resulted primarily from higher earning assets and continued operating cost reductions. LIQUIDITY AND CAPITAL RESOURCES Automotive Operations - - --------------------- Cash and marketable securities of the Company's Automotive operations were $11.6 billion at March 31, 1994, up $1.8 billion from December 31, 1993. The Company paid $272 million in cash dividends on its Common Stock, Class B Stock, and Preferred Stock during the first three months of 1994. Automotive capital expenditures were $1.6 billion in the first three months of 1994, compared with $1.3 billion for the same period a year ago. -11- At March 31, 1994, Automotive debt totaled $7.9 billion, which was 32% of total capitalization (stockholders' equity and Automotive debt), compared with $8 billion or 34% of total capitalization at year-end 1993. The decrease in total debt is primarily the result of lower levels of short-term borrowings. At March 31, 1994, Ford had long-term contractually committed credit agreements in the U.S. under which $4.8 billion is available from various banks at least through June 30, 1998. The entire $4.8 billion may be used, at Ford's option, by either Ford or Ford Credit. As of March 31, 1994, these facilities were unused. Outside the U.S., Ford has additional long-term contractually committed credit-line facilities of approximately $2.4 billion. These facilities are available in varying amounts from 1994 through 1998; less than 1% had been utilized at March 31, 1994. Financial Services Operations - - ----------------------------- During the first quarter of 1994, Financial Services' cash and investments in securities decreased by $3.8 billion, primarily reflecting the reclassification of the net assets of FNFC to "other assets" as a result of the pending sale of First Nationwide Bank. Total debt in the first quarter of 1994 increased by $5.3 billion, primarily to fund higher receivables levels at Ford Credit. At March 31, 1994, Financial Services had approximately $26.7 billion of support facilities (including $4.8 billion of Ford bank lines that may be used by Ford Credit at Ford's option) available for use in the U.S., all of which were contractually committed; less than 2% of these facilities were in use at that date. At March 31, 1994, an additional $17 billion of support facilities were available outside the U.S., 48% of which were contractually committed; approximately $6.4 billion of these support facilities were in use at March 31, 1994. OTHER FINANCIAL INFORMATION Coopers & Lybrand, Ford's independent public accountants, performed a limited review of the financial data presented on pages 5 through 8 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, Coopers & Lybrand did not express an opinion on the aforementioned data. The financial data include any material adjustments or disclosures proposed by Coopers & Lybrand as a result of their review. -12- Part II. Other Information - - --------------------------- Item 1. Legal Proceedings - - -------------------------- Product Matters - - ----------------------- With respect to the three private purported class action lawsuits involving the alleged tendency of vehicles to slip from park to reverse, referred to in the second paragraph on page 27 of the 10-K Report, the first such suit, filed in the Superior Court for the District of Columbia, recently was dismissed at the plaintiff's request and the court is reviewing the Company's petition for reimbursement of attorney fees. The second such suit, filed in the Court of Common Pleas in Philadelphia, Pennsylvania, had been stayed pending the entry of a final order in the first suit. A motion by the Company to lift the stay is now pending before the court. With respect to the lawsuits for damages arising out of automobile accidents where plaintiffs claim that the injuries resulted from (or were aggravated by) alleged defects in the occupant restraint systems in vehicle lines of various model years, referred to in the third paragraph on page 27 of the 10-K Report, the damages specified by the plaintiffs in these actions, including both actual and punitive damages, aggregated approximately $1 billion at April 1, 1994. With respect to the lawsuits for damages involving the alleged propensity of Bronco II utility vehicles to roll over, referred to in the fourth paragraph on page 27 of the 10-K Report, the damages specified in these actions, including both actual and punitive damages, aggregated approximately $794 million at April 1, 1994. With respect to the lawsuits for damages involving asbestos, referred to in the sixth paragraph on page 27 of the 10-K Report, the damages specified by plaintiffs in these actions, including both actual and punitive damages, aggregated approximately $165 million at April 1, 1994. Environmental Matters - - --------------------- With respect to the notices from two government environmental enforcement agencies, each potentially involving monetary sanctions exceeding $100,000, referred to in the first full paragraph on page 28 of the 10-K Report, Ford has settled the matters. In a separate matter potentially involving monetary sanctions exceeding $100,000, Ford has received a notice that a government environmental enforcement agency believes a Ford facility may violate or have violated limits established by regulations or permits for emissions or discharges. Other Matters - - ------------- With respect to the private purported class action lawsuit relating to allegations of paint peeling on unspecified vehicles, referred to in the first paragraph on page 29 of the 10-K Report, in February 1994, plaintiffs amended their petition to cover a purported class of persons who purchased certain new or used Ford vehicles in Texas and who allegedly experienced paint delamination as a result of Ford's use of a high build electrocoat paint primer process. Item 5. Other Information - - -------------------------- Governmental Standards - - ---------------------- Mobile Source Emissions Control -- With respect to the European motor vehicle emissions standards discussed in the first paragraph on page 21 of the 10-K Report, the European Parliament adopted Directive 94/12/EC which applies more stringent motor vehicle emission standards to vehicle homologations beginning January 1, 1996 and to new vehicle registrations beginning January 1, 1997. These standards are of generally equivalent numerical stringency to those which began to apply in the U.S. for the 1994 model year. The Directive also provides for the European Commission to propose by the end of 1994 supplementary reductions in motor vehicle emissions that would take effect beginning January 1, 2000. These supplementary reductions would be a function of technical progress achieved between now and 2000. Motor Vehicle Fuel Economy -- With respect to the light truck CAFE standards discussed in the third full paragraph on page 22 of the 10-K Report, the Safety Administration has set the light truck CAFE standard at 20.7 mpg for both model years 1996 and 1997. -13- Supplemental Schedule Ford Motor Company CONDENSED FINANCIAL INFORMATION OF SUBSIDIARY --------------------------------------------- (in millions)
March 31, December 31, Ford Capital B.V. 1994 1993 - - ----------------- ---------- ------------ (unaudited) Current assets $1,015 $ 919 Noncurrent assets 5,202 5,205 ------ ------ Total assets $6,217 $6,124 ====== ====== Current liabilities $ 487 $ 434 Noncurrent liabilities 5,240 5,245 Minority's interest in net assets of subsidiaries 11 7 Stockholder's equity 479 438 ------ ------ Total liabilities and stockholder's equity $6,217 $6,124 ====== ======
First Quarter First Quarter 1994 1993 ------------- ------------ (unaudited) Sales and other revenue $563 $529 Operating income/(loss) 47 (3) Income before income taxes 45 0 Net income/(loss) 39 (2) Ford Capital B.V., a wholly-owned subsidiary of Ford Motor Company, was established on February 2, 1990 primarily for the purpose of raising funds through the issuance of commercial paper and debt securities. It also holds Ford Motor Company's ownership interest in Ford Nederland B.V. (Netherlands), Ford Motor Company (Belgium) N.V., Ford Motor Company A/S (Denmark), Ford Motor Norge A/S (Norway), and Ford Poland. Substantially all of the assets of Ford Capital B.V., other than its ownership interest in subsidiaries, represent receivables from Ford Motor Company or its consolidated subsidiaries.
-14- Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Please refer to the Exhibit Index on page 16. (b) Reports on Form 8-K The Registrant filed the following Current Reports on Form 8-K during the quarter ended March 31, 1994: Current Report on Form 8-K dated February 9, 1994 included information relating to Ford's 1993 financial results. Current Report on Form 8-K dated February 10, 1994 included the consolidated financial statements of Ford and its subsidiaries for the year ended December 31, 1993. 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: May 13, 1994 By: /s/ M. L. Reichenstein ------------------------------ M. L. Reichenstein Vice President - Controller, Ford Automotive Operations (principal accounting officer) -15- EXHIBIT INDEX
Sequential Page Number Designation Description at Which Found - - ----------- ---------------------------------------- -------------- Exhibit 11 Ford Motor Company and Subsidiaries 17 Computation of Primary and Fully Diluted Earnings Per Share in Accordance with Opinion 15 of the Accounting Principles Board Exhibit 12 Ford Motor Company and Subsidiaries 18 Calculation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends Exhibit 15 Letter of Coopers & Lybrand, Independent 19 Public Accountants, dated May 13, 1994 relating to Financial Information
-16- EX-11 2 EXHIBIT 11 Exhibit 11 Ford Motor Company and Subsidiaries COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE IN ACCORDANCE WITH OPINION 15 OF THE ACCOUNTING PRINCIPLES BOARD ----------------------------------------------------------------
First Quarter 1994 First Quarter 1993 ----------------------------- ------------------------------- Income Income Avg. Shares Attributable Avg. Shares Attributable of Common to Common of Common to Common and Class B and Class B Stock and Class B and Class B Stock Stock Per Stock Per Outstanding Total Share Outstanding Total Share ----------- --------- ------- ----------- --------- ------- (Mils.) (Mils.) (Mils.) (Mils.) Preliminary Earnings Per Share Calculation 500 $832 $1.66 490 $500 $1.02 I. Primary Earnings Per Share -------------------------- . Assuming exercise of options 22 18 . Assuming purchase of shares with proceeds of options (12) (11) . Assuming issuance of shares contingently issuable 1 1 . Uncommitted ESOP shares (3) - --- --- Net Common Stock Equivalents 8 8 --- --- Primary Earnings Per Share Calculation 508 $832 $1.64a/ 498 $500 $1.00a/ === ==== ===== === ==== ===== II. Fully Diluted Earnings Per Share -------------------------------- Primary Earnings Per Share Calculation 508 $832 $1.64 498 $500 $1.00 . Assuming conversion of convertible preferred stock 75 48b/ 75 48b/ . Reduction in shares assumed to be purchased with option proceedsc/ 0 1 --- ---- --- ---- Fully Diluted Earnings Per Share Calculation 583 $880 $1.51 574 $548 $0.95 === ==== ===== === ==== ===== - - - - - - - a/ The effect of common stock equivalents and/or other dilutive securities was not material in this period; therefore, the amount presented on the income statement is the Preliminary Earnings Per Share Calculation. b/ Reflects the elimination of preferred dividends upon conversion. c/ Incremental effect of dividing assumed option proceeds by the ending price, rather than the average price, of Common Stock for each period when the ending price exceeds the average price.
-17- EX-12 3 EXHIBIT 12 Exhibit 12 Ford Motor Company and Subsidiaries CALCULATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS - - ---------------------------------------------------------------------------------------- (in millions)
First Quarter For the Years Ended December 31 ---------------------------------------------------------- 1994 1993 1992 1991 1990 1989 ------- -------- -------- -------- -------- -------- Earnings Income/(loss) before income taxes and cumulative effects of changes in accounting principles $ 1,766 $ 4,003 $ (127) $(2,587) $ 1,495 $ 6,030 Equity in net (income)/loss of affiliates plus dividends from affiliates 9 (98) 26 69 171 (137) Adjusted fixed charges a/ 1,874 7,648 8,113 9,360 9,690 9,032 ------- ------- ------- ------- ------- ------- Earnings $ 3,649 $11,553 $ 8,012 $ 6,842 $11,356 $14,925 ======= ======= ======= ======= ======= ======= Combined Fixed Charges and Preferred Stock Dividends - - -------------------------- Interest expense b/ $ 1,784 $ 7,351 $ 7,987 $ 9,326 $ 9,647 $ 8,624 Interest portion of rental expense c/ 67 266 185 124 105 103 Preferred stock dividend requirements of majority-owned subsidiaries d/ 42 115 77 56 83 16 ------- ------- ------- ------- ------- ------- Fixed charges 1,893 7,732 8,249 9,506 9,835 8,743 Ford preferred stock dividend requirements e/ 140 442 317 26 0 0 ------- ------- ------- ------- ------- ------- Total combined fixed charges and preferred stock dividends $ 2,033 $ 8,174 $ 8,566 $ 9,532 $ 9,835 $ 8,743 ======= ======= ======= ======= ======= ======= Ratios Ratio of earnings to fixed charges 1.9 1.5 f/ g/ 1.2 1.7 Ratio of earnings to combined fixed charges and preferred stock dividends 1.8 1.4 h/ i/ 1.2 1.7 - - - - - - - a/ Fixed charges, as shown below, have been adjusted to exclude the amount of interest capitalized during the period and preferred stock dividend requirements of majority-owned subsidiaries. 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 Holdings, Inc., have been increased to an amount representing the pre-tax earnings which would be required to cover such dividend requirements based on Ford's effective income tax rates for all periods except 1992. The U.S. statutory rate of 34% was used for 1992. e/ Preferred stock dividend requirements of Ford Motor Company, have been increased to an amount representing the pre-tax earnings which would be required to cover such dividend requirements based on Ford's effective income tax rates for all periods except 1992. The U.S. statutory rate of 34% was used for 1992. f/ Earnings were inadequate to cover fixed charges by $237 million. g/ Earnings were inadequate to cover fixed charges by $2,664 million. h/ Earnings were inadequate to cover combined fixed charges and preferred stock dividends by $554 million. i/ Earnings were inadequate to cover combined fixed charges and preferred stock dividends by $2,690 million.
-18- EX-15 4 EXHIBIT 15 Exhibit 15 Coopers & Lybrand Ford Motor Company The American Road Dearborn, Michigan Re: Ford Motor Company Registration Statement Nos. 2-71847, 2-95018, 2-95020, 33-9722, 33-14951, 33-19036, 33-36043, 33-36061, 33-39402, 33-50087, 33-50194, 33-50238, 33-54304, 33-54344 and 33-54348 on Form S-8, and 2-42133, 33-32641, 33-40638, 33-43085, 33-45887, and 33-55474 on Form S-3 We are aware that our report dated April 27, 1994 accompanying the unaudited interim financial information of Ford Motor Company for the periods ended March 31, 1994 and 1993 and included in the Ford Motor Company Quarterly Report on Form 10-Q for the quarter ended March 31, 1994 will be incorporated by reference in the Registration Statements. Pursuant to Rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the Registration Statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. /s/COOPERS & LYBRAND COOPERS & LYBRAND Detroit, Michigan May 13, 1994 -19- -----END PRIVACY-ENHANCED MESSAGE-----