-----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, Rah/woI9VkkQAcvlvtl7BYBep/yPYSlh+TTc/XVy7tWFKNncPe3L4cH5aY13hlVk pWoct/8VuayT8DHILVswVQ== 0000037996-96-000035.txt : 19961031 0000037996-96-000035.hdr.sgml : 19961031 ACCESSION NUMBER: 0000037996-96-000035 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961030 SROS: NYSE SROS: PSE 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: 96650525 BUSINESS ADDRESS: STREET 1: THE AMERICAN RD CITY: DEARBORN STATE: MI ZIP: 48121 BUSINESS PHONE: 3133223000 10-Q 1 THIRD QUARTER 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 - --- EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 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 September 30, 1996, the Registrant had outstanding 1,114,618,895 shares of Common Stock and 70,852,076 shares of Class B Stock. Page 1 of 24 Exhibit index located on sequential page number 18
Ford Motor Company and Subsidiaries HIGHLIGHTS ---------- Third Quarter Nine Months -------------------------- -------------------------- 1996 1995 1996 1995 -------- -------- -------- -------- (unaudited) (unaudited) Worldwide vehicle unit sales of cars and trucks (in thousands) - - United States 884 869 2,891 3,038 - - Outside United States 568 566 2,009 1,978 ----- ----- ----- ----- Total 1,452 1,435 4,900 5,016 ===== ===== ===== ===== Sales and revenues (in millions) - - Automotive $26,459 $24,437 $ 86,518 $ 82,899 - - Financial Services 7,501 6,981 21,640 19,691 ------- ------- -------- -------- Total $33,960 $31,418 $108,158 $102,590 ======= ======= ======== ======== Net income/(loss) (in millions) - - Automotive $ 15 $ (201) $ 1,265 $ 2,040 - - Financial Services 671* 558 1,977* 1,439 ------- ------- -------- -------- Total $ 686 $ 357 $ 3,242 $ 3,479 ======= ======= ======== ======== Capital expenditures (in millions) - - Automotive $ 2,358 $ 2,254 $ 5,926 $ 6,204 - - Financial Services 149 76 349 223 ------- ------- -------- -------- Total $ 2,507 $ 2,330 $ 6,275 $ 6,427 ======= ======= ======== ======== Stockholders' equity at September 30 - - Total (in millions) $26,152 $24,955 $ 26,152 $ 24,955 - - After-tax return on Common and Class B stockholders' equity 10.5% 5.4% 17.4% 20.9% Automotive cash and marketable securities at September 30 (in millions) $12,960 $12,241 $ 12,960 $ 12,241 Automotive debt at September 30 (in millions) $ 7,296 $ 6,829 $ 7,296 $ 6,829 Automotive after-tax return on sales 0.1% ** 1.5% 2.5% Shares of Common and Class B Stock (in millions) - - Average number outstanding 1,183 1,083 1,177 1,049 - - Number outstanding at September 30 1,185 1,090 1,185 1,090 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income/(loss) assuming full dilution - - Automotive $ 0.00 $ (0.19) $ 1.02 $ 1.65 - - Financial Services 0.56 0.46 1.64 1.20 ------- ------- -------- -------- Total $ 0.56 $ 0.27 $ 2.66 $ 2.85 ======= ======= ======== ======== Cash dividends $ 0.385 $ 0.31 $ 1.085 $ 0.88
- - - - - - *Results in third quarter 1996 and nine months 1996 included a gain on disposition of substantially all of USL Capital's assets ($76 million and $95 million, respectively); results in nine months 1996 included a write-down relating to Ford's investment in Budget Rent a Car Corporation ($437 million) and a gain on sale of The Associates' common stock ($650 million) **Results in this period were a loss 2
Ford Motor Company and Subsidiaries VEHICLE UNIT SALES ------------------ For the Periods Ended September 30, 1996 and 1995 (in thousands) Third Quarter Nine Months ---------------------------- -------------------------- 1996 1995 1996 1995 ---------- ---------- ---------- -------- (unaudited) (unaudited) North America United States Cars 387 377 1,228 1,333 Trucks 497 492 1,663 1,705 ----- ----- ----- ----- Total United States 884 869 2,891 3,038 Canada 52 46 174 178 Mexico 13 3 39 21 ----- ----- ----- ----- Total North America 949 918 3,104 3,237 Europe Britain 100 105 376 371 Germany 84 93 330 325 France 42 40 147 124 Italy 30 31 129 139 Spain 27 33 114 129 Other countries 67 58 236 212 ----- ----- ----- ----- Total Europe 350 360 1,332 1,300 Other international Brazil 49 45 142 153 Australia 40 41 107 107 Taiwan 20 27 72 90 Japan 13 14 41 44 Argentina 12 13 43 34 Other countries 19 17 59 51 ----- ----- ----- ----- Total other international 153 157 464 479 ----- ----- ----- ----- Total worldwide vehicle unit sales 1,452 1,435 4,900 5,016 ===== ===== ===== =====
Vehicle unit sales are reported worldwide on a "where sold" basis and include sales of all Ford-badged units, as well as units manufactured by Ford and sold to other manufacturers. 3
Part I. Financial Information ------------------------------ Item 1. Financial Statements - ----------------------------- Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME -------------------------------- For the Periods Ended September 30, 1996 and 1995 (in millions) Third Quarter Nine Months -------------------------- -------------------------- 1996 1995 1996 1995 -------- -------- -------- -------- (unaudited) (unaudited) AUTOMOTIVE Sales $26,459 $24,437 $86,518 $82,899 Costs and expenses (Note 2) Costs of sales 24,926 23,271 79,941 75,154 Selling, administrative and other expenses 1,514 1,370 4,619 4,393 ------- ------- ------- ------- Total costs and expenses 26,440 24,641 84,560 79,547 Operating income/(loss) 19 (204) 1,958 3,352 Interest income 188 171 589 594 Interest expense 155 151 537 491 ------- ------- ------- ------- Net interest income 33 20 52 103 Equity in net loss of affiliated companies (68) (190) (43) (151) Net expense from transactions with Financial Services (25) (42) (62) (101) ------- ------- ------- ------- (Loss)/income before income taxes - Automotive (41) (416) 1,905 3,203 FINANCIAL SERVICES Revenues 7,501 6,981 21,640 19,691 Costs and expenses Interest expense 2,458 2,437 7,318 6,948 Depreciation 1,768 1,715 5,134 4,836 Operating and other expenses 1,559 1,421 4,522 4,049 Provision for credit and insurance losses 708 472 1,894 1,337 Asset write-downs and dispositions (Note 3) (235) - 437 - ------- ------- ------- ------- Total costs and expenses 6,258 6,045 19,305 17,170 Net revenue from transactions with Automotive 25 42 62 101 Gain on sale of The Associates' common stock (Note 4) - - 650 - ------- ------- ------- ------- Income before income taxes - Financial Services 1,268 978 3,047 2,622 ------- ------- ------- ------- TOTAL COMPANY Income before income taxes 1,227 562 4,952 5,825 Provision for income taxes 474 157 1,581 2,198 ------- ------- ------- ------- Income before minority interests 753 405 3,371 3,627 Minority interests in net income of subsidiaries 67 48 129 148 ------- ------- ------- ------- Net income $ 686 $ 357 $ 3,242 $ 3,479 ======= ======= ======= ======= Income attributable to Common and Class B Stock after preferred stock dividends $ 670 $ 302 $ 3,191 $ 3,283 Average number of shares of Common and Class B Stock outstanding 1,183 1,083 1,177 1,049 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK Income $ 0.57 $ 0.28 $ 2.71 $ 3.13 Income assuming full dilution $ 0.56 $ 0.27 $ 2.66 $ 2.85 Cash dividends $ 0.385 $ 0.31 $ 1.085 $ 0.88
The accompanying notes are part of the financial statements. 4
Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET -------------------------- (in millions) September 30, December 31, 1996 1995 ------------- ------------ (unaudited) ASSETS Automotive Cash and cash equivalents $ 3,461 $ 5,750 Marketable securities 9,499 6,656 -------- -------- Total cash and marketable securities 12,960 12,406 Receivables 3,525 3,321 Inventories (Note 5) 7,671 7,162 Deferred income taxes 3,287 2,709 Other current assets 3,526 1,483 Net current receivable from Financial Services 109 200 -------- -------- Total current assets 31,078 27,281 Equity in net assets of affiliated companies 2,484 2,248 Net property 32,605 31,273 Deferred income taxes 4,703 4,802 Other assets 7,196 7,168 -------- -------- Total Automotive assets 78,066 72,772 Financial Services Cash and cash equivalents 5,295 2,690 Investments in securities 3,594 4,553 Net receivables and lease investments 158,386 149,694 Other assets 13,160 13,574 -------- -------- Total Financial Services assets 180,435 170,511 -------- -------- Total assets $258,501 $243,283 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $ 11,729 $ 11,260 Other payables 1,876 1,976 Accrued liabilities 17,058 13,392 Income taxes payable 600 316 Debt payable within one year 2,125 1,832 -------- -------- Total current liabilities 33,388 28,776 Long-term debt 5,171 5,475 Other liabilities 26,497 25,677 Deferred income taxes 1,468 1,186 -------- -------- Total Automotive liabilities 66,524 61,114 Financial Services Payables 3,927 5,476 Debt 148,320 141,317 Deferred income taxes 4,206 3,831 Other liabilities and deferred income 8,583 6,116 Net payable to Automotive 109 200 -------- -------- Total Financial Services liabilities 165,145 156,940 Company-obligated mandatorily redeemable preferred securities of a subsidiary trust holding solely junior subordinated debentures of the Company (Note 6) 680 682 Stockholders' equity Capital stock Preferred Stock, par value $1.00 per share (aggregate liquidation preference of $724 million and $1,042 million) * * Common Stock, par value $1.00 per share (1,115 and 1,089 million shares issued) 1,115 1,089 Class B Stock, par value $1.00 per share (71 million shares issued) 71 71 Capital in excess of par value of stock 5,202 5,105 Foreign currency translation adjustments and other 163 594 Earnings retained for use in business 19,601 17,688 -------- -------- Total stockholders' equity 26,152 24,547 -------- -------- Total liabilities and stockholders' equity $258,501 $243,283 ======== ======== - - - - - - *Less than $1 million The accompanying notes are part of the financial statements. 5
Ford Motor Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ---------------------------------------------- For the Periods Ended September 30, 1996 and 1995 (in millions) Nine Months 1996 Nine Months 1995 ---------------------- ---------------------- Financial Financial Automotive Services Automotive Services ---------- --------- ---------- --------- (unaudited) (unaudited) Cash and cash equivalents at January 1 $ 5,750 $ 2,690 $ 4,481 $ 1,739 Cash flows from operating activities before securities trading 8,462 10,839 6,796 9,171 Net (purchases)/sales of trading securities (2,844) (1,230) 1,982 256 ------- -------- ------- -------- Net cash flows from operating activities 5,618 9,609 8,778 9,427 Cash flows from investing activities Capital expenditures (5,926) (349) (6,204) (223) Acquisitions of receivables and lease investments - (82,293) - (71,557) Collections of receivables and lease investments - 62,469 - 51,210 Net acquisitions of daily rental vehicles - (1,995) - (1,529) Net proceeds from USL Capital asset sales (Note 3) - 1,157 - - Purchases of securities (6) (8,362) (47) (4,748) Sales and maturities of securities 7 10,266 50 3,748 Proceeds from sales of receivables and lease investments - 1,011 - 2,728 Net investing activity with Financial Services (254) - (237) - Other (523) (204) (400) (171) ------- -------- ------- -------- Net cash used in investing activities (6,702) (18,300) (6,838) (20,542) Cash flows from financing activities Cash dividends (1,328) - (1,120) - Issuance of Common Stock 124 - 326 - Issuance of Common Stock of a subsidiary (Note 4) - 1,897 - - Changes in short-term debt 395 1,465 665 2,481 Proceeds from other debt 300 18,650 0 16,532 Principal payments on other debt (671) (10,407) (207) (7,931) Net financing activity with Automotive - 254 - 237 Other (43) (266) 6 415 ------- -------- ------- ------- Net cash (used in)/provided by financing activities (1,223) 11,593 (330) 11,734 Effect of exchange rate changes on cash (73) (206) 136 (21) Net transactions with Automotive/Financial Services 91 (91) 394 (394) ------- -------- ------- -------- Net (decrease)/increase in cash and cash equivalents (2,289) 2,605 2,140 204 ------- -------- ------- -------- Cash and cash equivalents at September 30 $ 3,461 $ 5,295 $ 6,621 $ 1,943 ======= ======== ======= ========
The accompanying notes are part of the financial statements. 6 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 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, 1995. For purposes hereof, "Ford" or the "Company" means Ford Motor Company and its majority owned subsidiaries unless the context requires otherwise. Certain amounts for prior periods have been reclassified. 2. Selected Automotive costs and expenses are summarized as follows (in millions): Third Quarter Nine Months ------------------- ------------------- 1996 1995 1996 1995 ------ ------ ------ ------ Depreciation $687 $622 $1,966 $1,816 Amortization 828 731 2,278 2,072 3. Asset Write-downs and Dispositions During third quarter 1996, USL Capital concluded a series of transactions for the sale of substantially all of its assets, as well as certain assets owned by Ford Credit and managed by USL Capital. Proceeds from the sale were used to pay down related liabilities and debt. The Company recorded a pre-tax charge in second quarter 1996 to recognize the estimated value of its outstanding notes receivable from, and preferred stock investment in, Budget Rent a Car Corporation ("BRAC"). The write-down resulted from conclusions reached in a study of Ford's rental car business strategy. In accordance with SFAS 114, the notes receivable write-down reflected primarily the unsecured portion of financing provided to BRAC by Ford. The preferred stock write-down reflected recognition of the fair value of Ford's investment. The Company previously announced its intention to acquire all of the outstanding common stock of BRAC at a future date, subject to governmental review. The effect of the USL Capital disposition and BRAC write-down on the Company's results from operations are summarized below (in millions):
Third Quarter 1996 Nine Months 1996 ------------------------ ----------------------------- Income Net Income/(loss) Net Before Taxes Income Before Taxes Income/(loss) ------------ ------ ------------ ------------- USL Capital disposition $235 $76 $ 263 $ 95 Budget Rent a Car Corporation write-down - - (700) (437) ---- --- ----- ----- Total $235 $76 $(437) $(342) ==== === ===== =====
7 Ford Motor Company and Subsidiaries NOTES TO FINANCIAL STATEMENTS ----------------------------- (unaudited) 4. Sale of The Associates' Common Stock - During May 1996, The Associates completed an initial public offering of its common stock representing a 19.3% economic interest in The Associates (the "IPO"). The Company recorded in second quarter 1996 a non-operating gain of $650 million resulting from the IPO, to recognize the excess of the net proceeds from the IPO over the proportionate share of the Company's investment in The Associates. The gain was not subject to income taxes. 5. Automotive inventories are summarized as follows (in millions):
September 30, December 31, 1996 1995 ------------- ------------ Raw materials, work in process and supplies $3,758 $3,717 Finished products 3,913 3,445 ------ ------ Total inventories $7,671 $7,162 ====== ====== U.S. inventories $2,929 $2,662
6. 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. 8 [Coopers & Lybrand L.L.P. letterhead] 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 September 30, 1996 and the related consolidated statement of income and condensed consolidated statement of cash flows for the periods set forth in the Ford Motor Company Quarterly Report on Form 10-Q for the quarter ended September 30, 1996. 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, 1995 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 January 26, 1996, we expressed an unqualified opinion on those consolidated financial statements. /s/ COOPERS & LYBRAND L.L.P. COOPERS & LYBRAND L.L.P. Detroit, Michigan October 16, 1996 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - ------------------------------------------------------------------------ RESULTS OF OPERATIONS: THIRD QUARTER 1996 COMPARED WITH THIRD QUARTER 1995 Overview - -------- Ford earned $686 million, or $0.56 per share of Common and Class B Stock (fully diluted), in third quarter 1996. This compares with $357 million, or $0.27 per share (fully diluted), in third quarter 1995. Results in third quarter 1996 included the net favorable effect of two one-time actions (discussed below) totaling $37 million, or $0.03 per share. The Company's worldwide sales and revenues were $34 billion, up $2.5 billion from a year ago. Vehicle unit sales of cars and trucks were 1,452,000, up 17,000 units or 1%. Stockholders' equity was $26.2 billion at September 30, 1996, compared with $24.5 billion at December 31, 1995. Automotive Operations - --------------------- Ford's worldwide Automotive operations earned $15 million in third quarter 1996 on sales of $26.5 billion, compared with a loss of $201 million in third quarter 1995 on sales of $24.4 billion. Improved Automotive results in the U.S. were offset partially by increased losses in other markets. In the U.S., Automotive operations earned a record $634 million in third quarter 1996 on sales of $17.7 billion, compared with $187 million a year ago on sales of $16.8 billion. The increase in earnings was explained by higher margins (reflecting improved sales mix), improved material costs and other operating cost efficiencies, offset partially by higher product costs. Results in third quarter 1996 included an initial charge of $39 million for special early retirements and voluntary separation packages to selected U.S. salaried employees. In third quarter 1996, the seasonally-adjusted annual selling rate for the U.S. car and truck industry was 15.4 million units, compared with 15.2 million units in third quarter 1995. Ford's combined car and truck market share was 24.5% in third quarter 1996, down 3/10 of a point from a year ago. Lower shares of small and specialty cars were offset partially by strong acceptance of new product offerings. Outside the U.S., Automotive operations had a loss of $619 million in third quarter 1996 on sales of $8.8 billion, compared with a loss of $388 million a year ago on sales of $7.6 billion. The decline reflected primarily increased losses in Europe and Brazil. European Automotive operations had a loss of $472 million in third quarter 1996, compared with a loss of $320 million in third quarter 1995. The higher loss reflected costs associated with launching new products, adverse vehicle mix and volume, and continued high marketing costs. High-volume launches are largely completed. In addition, Ford is continuing to focus on cost reductions, and its recently launched new products will strengthen its product offerings in Europe. In third quarter 1996, the seasonally-adjusted annual selling rate for the European car and truck industry was 14.6 million units, compared with 13.3 million units in third quarter 1995. Ford's combined car and truck market share was 11.8% in third quarter 1996, down one point from a year ago, and down half a point from full year 1995, reflecting primarily planned lower sales to daily rental companies. In South America, Ford had a loss of $226 million in third quarter 1996, compared with a loss of $102 million a year ago. The decline reflected primarily higher losses for operations in Brazil as a result of a long and costly launch process following the dissolution of the Autolatina joint venture with Volkswagen AG and higher levels of marketing costs. Losses in Brazil are expected to continue in fourth quarter 1996 and in 1997. To improve the competitiveness of its product offerings in Brazil, Ford plans to have three new products (the Fiesta, Escort and Ranger) available for sale throughout most of 1997 and expects to introduce in 1997 a new, Brazilian-produced small car -- the Ka. 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) - ------------------------------------------------------------------------ Financial Services Operations - ----------------------------- The Company's Financial Services operations earned a record $671 million in third quarter 1996, compared with $558 million in third quarter 1995. The improvement reflected a one-time gain on sale of USL Capital's assets (discussed below) and record earnings at The Associates and Hertz, offset partially by lower results at Ford Credit. Ford Credit's consolidated net income was $299 million in third quarter 1996, compared with $357 million a year ago. The decrease resulted primarily from higher credit losses and the effects of the recent Financial Services reorganization (referred to on page 11 of Ford's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996). An improved net interest margin was a partial offset. Credit losses as a percent of average net finance receivables (including net investment in operating leases) were 0.89% in third quarter 1996, compared with 0.48% in third quarter 1995. Ford Credit expects that the upward trend in credit losses will continue through the remainder of 1996. International operations managed by Ford Credit, but not included in its consolidated results, earned $61 million in third quarter 1996, compared with $69 million a year ago. The Associates earned a record $230 million in third quarter 1996 (Ford's share was $186 million), compared with $197 million a year ago. The increase reflected primarily higher levels of earning assets, offset partially by higher credit losses. Hertz earned a record $74 million in third quarter 1996, compared with $65 million a year ago. The increase reflected primarily higher volume in car rental and construction equipment rental and sales operations. During third quarter 1996, USL Capital concluded a series of transactions for the sale of substantially all of its assets, as well as certain assets owned by Ford Credit and managed by USL Capital. Proceeds from the sale were used to pay down related liabilities and debt. These transactions resulted in a gain in third quarter 1996 of $235 million before taxes ($76 million after taxes). Excluding the one-time gain on sale of assets, USL Capital earned $18 million in third quarter 1996, compared with $31 million a year ago. The decline reflected the absence of earnings from operations sold during the quarter. Outlook - ------- It is expected that the U.S. economy will continue to be healthy into 1997, with a sustainable rate of growth and moderate inflation. The Company expects U.S. car and truck industry sales to total 15.5 million units in full year 1996, compared with 15.1 million units in 1995. In Europe, car and truck industry sales are expected to total 14.2 million units in full year 1996, compared with 13.4 million units in 1995. Earnings for fourth quarter 1996 are expected to be higher than earnings in fourth quarter 1995 (despite expected additional charges of $300 million to $400 million after taxes for early retirement programs), but earnings for full year 1996 might be lower than earnings in full year 1995. Factors that could result in lower industry volumes than expected and, in turn, lower earnings include an unexpected decline in the U.S. economy (or other major markets), an outbreak of hostilities in the Middle East resulting in higher fuel prices, or increases in interest rates. Other factors that could adversely affect Ford's earnings include unfavorable market reception to new products, production or launch problems associated with new products, or significant escalation in marketing incentives. 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) - ------------------------------------------------------------------------ FIRST NINE MONTHS 1996 COMPARED WITH FIRST NINE MONTHS 1995 Overview - -------- Ford earned $3,242 million, or $2.66 per share of Common and Class B Stock (fully diluted), in first nine months 1996. This compares with $3,479 million, or $2.85 per share (fully diluted), in first nine months 1995. Results in first nine months 1996 included a net one-time gain of $308 million, or $0.25 per share, relating to gain on sale of The Associates' common stock, write-down of Ford's investment in Budget Rent a Car Corporation ("BRAC") (discussed below), and gain on sale of USL Capital's assets. The Company's worldwide sales and revenues were $108.2 billion, up $5.7 billion from a year ago. Vehicle unit sales of cars and trucks were 4,900,000, down 116,000 units or 2%. During May 1996, The Associates completed an initial public offering of its common stock representing a 19.3% economic interest in The Associates (the "IPO"). Ford recorded in second quarter 1996 a non-operating gain of $650 million resulting from the IPO, to recognize the excess of the net proceeds from the IPO over the proportionate share of Ford's investment in The Associates. The gain was not subject to income taxes. The Company recorded a pre-tax charge in second quarter 1996 totaling $700 million ($437 million after taxes) to recognize the estimated value of its outstanding notes receivable from, and preferred stock investment in, BRAC. The write-down resulted from conclusions reached in a study of Ford's rental car business strategy. In accordance with SFAS 114, the notes receivable write-down reflected primarily the unsecured portion of financing provided to BRAC by Ford. The preferred stock write-down reflected recognition of the fair value of Ford's investment. The Company previously announced its intention to acquire all of the outstanding common stock of BRAC at a future date, subject to governmental review. Automotive Operations - --------------------- Ford's worldwide Automotive operations earned $1,265 million in first nine months 1996 on sales of $86.5 billion, compared with $2,040 million in first nine months 1995 on sales of $82.9 billion. After-tax return on sales was 1.5% in first nine months 1996, down one point from a year ago. In the U.S., Automotive operations earned $1,379 million in first nine months 1996 on sales of $55.9 billion, compared with $1,675 million a year ago on sales of $55.7 billion. The decline in earnings was explained by lower unit volume (reflecting lower market share and dealer inventory rebalancing) and costs associated with launching high-volume new products. Increased operating cost efficiencies and improved sales mix were partial offsets. In first nine months 1996, the seasonally-adjusted annual selling rate for the U.S. car and truck industry was 15.6 million units, compared with 15 million units a year ago. Ford's combined car and truck market share was 25% in first nine months 1996, down 9/10 of a point from a year ago, and down 6/10 of a point from full year 1995, reflecting primarily planned lower sales to daily rental companies and reduced marketing support for low margin small cars. Outside the U.S., Automotive operations had a loss of $114 million in first nine months 1996 on sales of $30.6 billion, compared with a profit of $365 million a year ago on sales of $27.2 billion. The decline reflected primarily lower results in Brazil and Europe. European Automotive operations had a loss of $203 million in first nine months 1996, compared with a profit of $164 million in first nine months 1995. The lower results reflected primarily costs associated with launching new products and adverse product line mix. 12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) - ------------------------------------------------------------------------ In first nine months 1996, the seasonally-adjusted annual selling rate for the European car and truck industry was 14.3 million units, compared with 13.4 million units a year ago. Ford's combined car and truck market share was 12% in first nine months 1996, down half a point from a year ago, and down 3/10 of a point from full year 1995. Outside the U.S. and Europe, Automotive operations earned $89 million in first nine months 1996, compared with $201 million a year ago. The decline reflected primarily costs associated with launching new products and other costs associated with new operations in Brazil and other emerging markets. Financial Services Operations - ----------------------------- The Company's Financial Services operations earned $1,977 million in first nine months 1996, compared with $1,439 million in first nine months 1995. Results in first nine months 1996 included a net one-time gain of $308 million relating to gain on sale of The Associates' common stock, write-down of Ford's investment in BRAC, and gain on sale of USL Capital's assets ($95 million). The improvement also reflected record earnings at The Associates and Hertz, offset partially by lower results at Ford Credit. Ford Credit's consolidated net income was $924 million in first nine months 1996, compared with $986 million a year ago. The decrease reflected primarily the same factors as those described in the discussion of third quarter results of operations. International operations managed by Ford Credit, but not included in its consolidated results, earned $190 million in first nine months 1996, compared with $200 million a year ago. The Associates earned a record $623 million in first nine months 1996 (Ford's share was $555 million), compared with $529 million a year ago. Hertz earned a record $123 million in first nine months 1996, compared with $84 million a year ago. These changes reflected primarily the same factors as those described in the discussion of third quarter results of operations. Excluding a one-time gain on sale of USL Capital's assets, USL Capital earned $99 million in first nine months 1996, compared with $87 million a year ago. LIQUIDITY AND CAPITAL RESOURCES Automotive Operations - --------------------- Automotive cash and marketable securities were $13 billion at September 30, 1996, up $554 million from December 31, 1995. The Company paid $1,328 million in cash dividends on its Common Stock, Class B Stock and Preferred Stock during first nine months 1996. Automotive capital expenditures were $5.9 billion in first nine months 1996, down $278 million from the same period a year ago. For full year 1996, Ford's spending for product change is projected to be about the same compared with 1995; however, as a percent of sales, such spending is expected to be at lower levels. Automotive debt at September 30, 1996 totaled $7.3 billion, which was 21% of total capitalization (stockholders' equity and Automotive debt), compared with $7.3 billion, or 22% of total capitalization, at December 31, 1995. At October 1, 1996, Ford had long-term contractually committed global credit agreements under which $8.4 billion is available from various banks through June 30, 2001. The entire $8.4 billion may be used, at Ford's option, by any affiliate of Ford; however, any borrowing by an affiliate will be guaranteed by Ford. In addition, Ford has the ability to transfer on a nonguaranteed basis the entire $8.4 billion in varying portions to Ford Credit and Ford Credit Europe. These facilities were unused at October 1, 1996. 13 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) - ------------------------------------------------------------------------ Financial Services Operations - ----------------------------- Financial Services cash and investments in securities totaled $8.9 billion at September 30, 1996, up $1.6 billion from December 31, 1995, reflecting primarily net proceeds from the sale of USL Capital's assets. Net receivables and lease investments were $158.4 billion at September 30, 1996, up $8.7 billion from December 31, 1995. The increase reflected continued growth in earning assets at Ford Credit and The Associates, offset partially by the sale of USL Capital's assets. Total debt was $148.3 billion at September 30, 1996, up $7 billion from December 31, 1995. The increase resulted from higher debt levels required to finance growth in earning assets at The Associates, Ford Credit and Hertz, offset partially by a decrease in debt at USL Capital as a result of the sale of USL Capital's assets. At October 1, 1996, Financial Services had a total of $48.9 billion of contractually committed support facilities. Of these facilities, $24 billion (excluding the $8.4 billion of Ford's credit facilities) are contractually committed global credit agreements under which $19.7 billion and $4.3 billion are available to Ford Credit and Ford Credit Europe, respectively, from various banks; 62% and 76%, respectively, of such facilities are available through June 30, 2001. The entire $19.7 billion may be used, at Ford Credit's option, by any subsidiary of Ford Credit, and the entire $4.3 billion may be used, at Ford Credit Europe's option, by any subsidiary of Ford Credit Europe. Any borrowings by such subsidiaries will be guaranteed by Ford Credit or Ford Credit Europe, as the case may be. At October 1, 1996, none of the Ford Credit global facilities were in use; $544 million of the Ford Credit Europe global facilities were in use. Other than the global credit agreements, the remaining portion of the Financial Services support facilities at October 1, 1996 consisted of $22.3 billion of contractually committed support facilities available to various affiliates in the U.S. and $2.6 billion of contractually committed support facilities available to various affiliates outside the U.S.; at October 1, 1996, approximately $1.3 billion of these facilities were in use. OTHER FINANCIAL INFORMATION Coopers & Lybrand L.L.P., Ford's independent public accountants, performed a limited review of the financial data presented on pages 4 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 L.L.P. did not express an opinion on the aforementioned data. The financial data include any material adjustments or disclosures proposed by Coopers & Lybrand L.L.P. as a result of their review. 14 Part II. Other Information -------------------------- Item 5. Other Information - -------------------------- Ford and the United Automobile Workers ("UAW") have entered into a new collective bargaining agreement that will expire on September 14, 1999. The new agreement includes provisions that will increase Ford's labor costs by approximately 4% per year over the term of the contract, in respect of its employees who are UAW members. Ford's existing agreement with the Canadian Automobile Workers ("CAW") was scheduled to expire on September 14, 1996, but has been extended pending negotiations of a new agreement. It is not known whether Ford will be able to reach a new agreement with the CAW without a work stoppage. If there should be a protracted work stoppage, Ford's profits could be substantially adversely affected. -15-
Supplemental Schedule Ford Motor Company CONDENSED FINANCIAL INFORMATION OF SUBSIDIARY --------------------------------------------- (in millions) Ford Capital B.V. - ----------------- September 30, December 31, 1996 1995 ------------ ------------ (unaudited) Current assets $1,772 $1,251 Noncurrent assets 3,378 4,662 ------ ------ Total assets $5,150 $5,913 ====== ====== Current liabilities $1,005 $ 626 Noncurrent liabilities 3,552 4,661 Minority interests in net assets of subsidiaries 18 22 Stockholder's equity 575 604 ------ ------ Total liabilities and stockholder's equity $5,150 $5,913 ====== ======
Third Quarter Nine Months ------------------------ ----------------------- 1996 1995 1996 1995 ---------- ---------- ---------- --------- (unaudited) (unaudited) Sales and other revenue $508 $614 $2,083 $1,960 Operating income 45 61 56 190 Income before income taxes 30 46 14 145 Net income/(loss) 21 25 (22) 108
Ford Capital B.V., a wholly owned subsidiary of Ford Motor Company, was established primarily for the purpose of raising funds through the issuance of commercial paper and debt securities. Ford Capital B.V. also holds shares of the capital stock of Ford Nederland B.V., Ford Motor Company (Belgium) B.V., and Ford Motor Company A/S (Denmark). Substantially all of the assets of Ford Capital B.V., other than its ownership interests in subsidiaries, represent receivables from Ford Motor Company or its consolidated subsidiaries. 16 Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits -------- Please refer to the Exhibit Index on page 18. (b) Reports on Form 8-K ------------------- The Registrant filed the following Current Reports on Form 8-K during the quarter ended September 30, 1996: Current Report on Form 8-K dated July 11, 1996 relating to a dividend increase and other one-time actions. Current Report on Form 8-K dated July 17, 1996 relating to Ford's second quarter 1996 financial results. Current Report on Form 8-K dated August 6, 1996 relating to Ford's 7 1/2% debentures due August 1, 2026 in the aggregate principal amount of $250 million. Current Report on Form 8-K dated September 9, 1996 relating to Ford's operations in Brazil. Current Report on Form 8-K dated September 30, 1996 relating to the new collective bargaining agreement between Ford and the United Automobile Workers union. 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: October 30, 1996 By: /s/ D. R. Coulson ------------------ ----------------------------------- D. R. Coulson Director of Accounting Ford Automotive Operations (principal accounting officer) 17 EXHIBIT INDEX ------------- Sequential Page Number Designation Description at Which Found - ----------- ------------------------------------------ -------------- Exhibit 10.1 Amendment to Ford Motor Company Restricted 19 Stock Plan for Non-Employee Directors, effective as of August 1, 1996. Exhibit 10.2 Amendments to Ford Motor Company Deferred Compensation 20 Plan, effective as of October 1, 1996. Exhibit 11 Ford Motor Company and Subsidiaries Computation 21-22 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 Calculation 23 of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends. Exhibit 15 Letter of Coopers & Lybrand L.L.P., Independent Public 24 Accountants, dated October 30, 1996 relating to Financial Information. 18 EX-10.1 2 EXHIBIT 10.1 - AMENDMENT Exhibit 10.1 AMENDMENT TO FORD MOTOR COMPANY RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS (Effective as of August 1, 1996) A new paragraph (g) of Article 6 is hereby added to the Plan to read as follows: "6(g) Stock Equivalents. Notwithstanding the provisions of Articles 5 and 6 or any other provision of the Plan, the grant under the Plan to a Director who resides or works in a country that taxes grants of Restricted Stock shall not be represented initially by certificates for shares of Common Stock but shall be represented by rights approximately equivalent to the rights (other than voting rights) that such Director would have received under the Plan, and subject to the same restrictions, terms, conditions and provisions of the Plan that apply to grants of Restricted Stock, if certificates for shares of Common Stock had been issued in the name of such Director in accordance with Article 5 and paragraph (b) of this Article 6 (such rights being hereinafter called "Stock Equivalents"). Subject to the provisions of Article 9 hereof and the other terms and provisions of the Plan, any Director who holds Stock Equivalents shall be entitled to receive the same amount of cash that such Director would have received as dividends if certificates for shares of Common Stock had been issued in the name of such Director pursuant to Article 5 and paragraph (b) of this Article 6 covering the number of shares equal to the number of shares to which such Stock Equivalents relate. Upon expiration of the applicable restriction period relating to any Stock Equivalents granted hereunder, certificates for the number of shares of Common Stock equal to the number of shares represented by such Stock Equivalents shall be delivered to such Director as soon as practicable, free of all restrictions and restrictive legends. Notwithstanding any other provision of the Plan to the contrary, in the event that a Director who holds Stock Equivalents granted pursuant to this paragraph (g) of this Article 6 relocates to a country that does not tax grants of Restricted Stock, such Director's Stock Equivalents shall be replaced with an equivalent number of shares of Common Stock having the same terms, conditions and restrictions as those shares of Common Stock generally awarded by the Company under the Plan." 19 EX-10.2 3 EXHIBIT 10.2 - AMENDMENT Exhibit 10.2 AMENDMENTS TO FORD MOTOR COMPANY DEFERRED COMPENSATION PLAN -------------------------- (Effective as of October 1, 1996) Paragraph (a) of Section 5 is hereby amended to read as follows: "(a) Supplemental Compensation Deferrals. A participant's decision to defer payment of supplemental compensation under the Plan must be made prior to October 31 of the performance year for which the supplemental compensation is determined." The sixth and seventh sentences of paragraph (e) of Section 5 are hereby deleted. Paragraph (b) of Section 7 is hereby amended to read as follows: "(b) Eligible Participants. Active employees and retired participants are eligible to redesignate." Paragraph (f)(ii) of Section 7 is hereby deleted. The last sentence of paragraph (b) of Section 10 is hereby deleted. 20 EX-11 4 EXHIBIT 11
Exhibit 11 Page 1 of 2 Ford Motor Company and Subsidiaries COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE ----------------------------------------------------------- IN ACCORDANCE WITH OPINION 15 OF THE ACCOUNTING PRINCIPLES BOARD ---------------------------------------------------------------- Third Quarter 1996 Third Quarter 1995 -------------------------------- ------------------------------- Income Income Attributable Attributable Avg. Shares to Common Avg. Shares to Common of Common and Class B Stock of Common and Class B Stock and Class B ------------------ and Class B ----------------- Stock Per Stock Per Outstanding Total Share Outstanding Total Share ----------- --------- ------- ----------- --------- ------ (Mils.) (Mils.) (Mils.) (Mils.) Preliminary Earnings Per Share Calculation 1,183 $670 $0.57 1,083 $302 $0.28 I. Primary Earnings Per Share -------------------------- . Assuming exercise of options 49 47 . Assuming purchase of shares with proceeds of options (34) (31) . Assuming issuance of shares contingently issuable 2 2 . Uncommitted ESOP shares (7) (2) ----- ----- Net Common Stock Equivalents 10 16 ----- ----- Primary Earnings Per Share Calculation 1,193 $670 $0.56a/ 1,099 $302 $0.27a/ ===== ==== ===== ===== ==== ===== II. Fully Diluted Earnings Per Share -------------------------------- Primary Earnings Per Share Calculation 1,193 $670 $0.56 1,099 $302 $0.27 . Assuming conversion of convertible preferred stock 16 5b/ 101 32b/ . Reduction in shares assumed to be purchased with option proceeds c/ 0 1 ----- ---- ----- ---- Fully Diluted Earnings Per Share Calculation 1,209 $675 $0.56 1,201 $334 $0.27d/ ===== ==== ===== ===== ==== =====
- - - - - - 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. d/ The effect on earnings per share of the assumed conversion of convertible preferred stock was anti-dilutive and, accordingly, is excluded in the Fully Diluted Earnings Per Share Calculation for the period indicated. 21
Exhibit 11 Page 2 of 2 Ford Motor Company and Subsidiaries COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE ----------------------------------------------------------- IN ACCORDANCE WITH OPINION 15 OF THE ACCOUNTING PRINCIPLES BOARD ---------------------------------------------------------------- Nine Months 1996 Nine Months 1995 -------------------------------- ------------------------------- Income Income Attributable Attributable Avg. Shares to Common Avg. Shares to Common of Common and Class B Stock of Common and Class B Stock and Class B ------------------ and Class B ----------------- Stock Per Stock Per Outstanding Total Share Outstanding Total Share ----------- --------- ------- ----------- --------- ------ (Mils.) (Mils.) (Mils.) (Mils.) Preliminary Earnings Per Share Calculation 1,177 $3,191 $2.71 1,049 $3,283 $3.13 I. Primary Earnings Per Share -------------------------- . Assuming exercise of options 57 33 . Assuming purchase of shares with proceeds of options (41) (18) . Assuming issuance of shares contingently issuable 2 2 . Uncommitted ESOP shares (6) (3) ----- ----- Net Common Stock Equivalents 12 14 ----- ----- Primary Earnings Per Share Calculation 1,189 $3,191 $2.68a/ 1,063 $3,283 $3.09a/ ===== ====== ===== ===== ====== ===== II. Fully Diluted Earnings Per Share Primary Earnings Per Share Calculation 1,189 $3,191 $2.68 1,063 $3,283 $3.09 . Assuming conversion of convertible preferred stock 20 20b/ 130 125b/ . Reduction in shares assumed to be purchased with option proceeds c/ 0 3 ----- ------ ----- ------ Fully Diluted Earnings Per Share Calculation 1,209 $3,211 $2.66 1,196 $3,408 $2.85 ===== ====== ===== ===== ====== =====
- - - - - - 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. 22 EX-12 5 EXHIBIT 12
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 ------------------------------------------------------------ 1996 1995 1994 1993 1992 1991 ------ -------- -------- -------- -------- -------- Earnings - -------- Income/(loss) before income taxes and cumulative effects of changes in accounting principles $ 4,952 $ 6,705 $ 8,789 $ 4,003 $ (127) $(2,587) Equity in net loss/(income) of affiliates plus dividends from affiliates 69 179 (182) (98) 26 69 Adjusted fixed charges a/ 8,229 10,556 8,122 7,648 8,113 9,360 ------- ------- ------- ------- ------ ------- Earnings $13,250 $17,440 $16,729 $11,553 $8,012 $ 6,842 ======= ======= ======= ======= ====== ======= Combined Fixed Charges and Preferred Stock Dividends Interest expense b/ $ 7,814 $10,121 $ 7,787 $ 7,351 $7,987 $ 9,326 Interest portion of rental expense c/ 297 396 265 266 185 124 Preferred stock dividend requirements of majority owned subsidiaries and trusts d/ 41 199 160 115 77 56 ------- ------- ------- ------- ------ ------- Fixed charges 8,152 10,716 8,212 7,732 8,249 9,506 Ford preferred stock dividend requirements e/ 75 459 472 442 317 26 ------- ------- ------- ------- ------ ------- Total combined fixed charges and preferred stock dividends $ 8,227 $11,175 $ 8,684 $ 8,174 $8,566 $ 9,532 ======= ======= ======= ======= ====== ======= Ratios Ratio of earnings to fixed charges 1.6 1.6 2.0 1.5 f/ g/ Ratio of earnings to combined fixed charges and preferred stock dividends 1.6 1.6 1.9 1.4 h/ i/
- - - - - - a/ Fixed charges, as shown below, 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 Holdings, Inc. (applicable for 1991 through 1995) were 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 were 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 inadequate to cover fixed charges by $237 million. g/ Earnings inadequate to cover fixed charges by $2,664 million. h/ Earnings inadequate to cover combined fixed charges and preferred stock dividends by $554 million. i/ Earnings inadequate to cover combined fixed charges and preferred stock dividends by $2,690 million. 23 EX-15 6 EXHIBIT 15 Exhibit 15 [Coopers & Lybrand L.L.P. letterhead] Ford Motor Company The American Road Dearborn, Michigan Re: Ford Motor Company Registration Statement Nos. 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, 33-54348, 33-54275, 33-54283, 33-54735, 33-54737, 33-55847, 33-56785, 33-58255, 33-58785, 33-58861, 33-61107, 33-62227, 33-64605, 33-64607, 333-02401 and 333-02735 on Form S-8; and 2-42133, 33-32641, 33-40638, 33-43085, 33-55474, 33-55171, 33-64247 and 333-14297 on Form S-3 We are aware that our report dated October 16, 1996 accompanying the unaudited interim financial information of Ford Motor Company for the periods ended September 30, 1996 and 1995 and included in the Ford Motor Company Quarterly Report on Form 10-Q for the quarter ended September 30, 1996 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 L.L.P. COOPERS & LYBRAND L.L.P. Detroit, Michigan October 30, 1996 24 -----END PRIVACY-ENHANCED MESSAGE-----