-----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, Vp6tRLcYxfdOxU7JJ/vogONkFWUHvK7PXa3rGJHrm9tvDXDFvb/I9gsTMaAupBBs t5GkheQ+agPjTH8QYxNk2w== 0000038009-97-000073.txt : 19970423 0000038009-97-000073.hdr.sgml : 19970423 ACCESSION NUMBER: 0000038009-97-000073 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970421 SROS: AMEX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORD MOTOR CREDIT CO CENTRAL INDEX KEY: 0000038009 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 381612444 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06368 FILM NUMBER: 97583943 BUSINESS ADDRESS: STREET 1: THE AMERICAN RD STREET 2: PO BOX 6044 CITY: DEARBORN STATE: MI ZIP: 48121 BUSINESS PHONE: 3133223000 MAIL ADDRESS: STREET 1: PO BOX 6044 STREET 2: THE AMERICAN ROAD CITY: DEARBORN STATE: MI ZIP: 48121 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) April 18, 1997 ---------------- FORD MOTOR CREDIT COMPANY (Exact name of registrant as specified in its charter) Delaware 1-6368 38-1612444 - ----------------------- ----------------------- ------------------- (State or other juris- (Commission File Number (IRS Employer diction of incorporation Number) Identification No.) The American Road, Dearborn, Michigan 48121 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 313-322-3000 ITEM 5. Other Events. FORD MOTOR CREDIT COMPANY FINANCIAL STATEMENTS FOR THE PERIOD ENDED March 31, 1997. PART I. FINANCIAL INFORMATION Item 1. Financial Statements - The interim financial data presented herein are unaudited, but in the opinion of management reflect all 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 for the year ended December 31, 1996 (the "10-K Report"). Information relating to earnings a share is not presented because the registrant, Ford Motor Credit Company ("Ford Credit"), is an indirect wholly owned subsidiary of Ford Motor Company ("Ford" or the "Company"). FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES Condensed Consolidated Statement of Income and of Earnings Retained for Use in the Business For the Periods Ended March 31, 1997 and 1996 (in millions)
First Quarter 1997 1996 ---------- ---------- (Unaudited) Financing revenue Operating leases $ 2,141.6 $ 1,991.4 Retail 1,257.5 1,163.7 Wholesale 432.2 436.8 Other 98.5 133.8 ---------- ---------- Total financing revenue 3,929.8 3,725.7 Interest expense (1,626.6) (1,553.0) Depreciation on operating leases (1,445.5) (1,377.4) ---------- ---------- Net financing margin 857.7 795.3 Other Revenue Insurance premiums earned 69.8 - Investment and other income 310.0 213.1 ---------- ---------- Total financing margin and revenue 1,237.5 1,008.4 Expenses Provision for credit losses 355.7 203.5 Operating expenses 341.8 326.0 Other insurance expenses 66.9 - ---------- ---------- Total expenses 764.4 529.5 ---------- ---------- Equity in net income of affiliated companies 0.7 48.8 Income before income taxes 473.8 527.7 Provision for income taxes 182.8 170.8 ---------- ---------- Income before minority interest 291.0 356.9 Minority interest in net income of subsidiaries 15.1 17.9 ---------- ---------- Net income 275.9 339.0 Earnings retained for use in the business Beginning of period 6,892.1 6,724.5 Dividends (14.5) (0.5) ---------- ---------- End of period $ 7,153.5 $ 7,063.0 ========== ========== The accompanying notes are an integral part of the financial statements.
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES Condensed Consolidated Balance Sheet (in millions)
March 31, December 31, March 31, 1997 1996 1996 ----------- ----------- ----------- ASSETS (Unaudited) (Unaudited) Cash and cash equivalents $ 1,567.3 $ 2,716.0 $ 1,186.8 Investments in securities 1,473.6 1,324.8 2,685.2 Finance receivables, net (Note 2) 78,436.6 80,848.0 77,252.6 Net investment, operating leases 32,660.5 30,645.2 26,601.5 Notes and accounts receivable from affiliated companies 836.6 1,133.0 1,846.5 Equity in net assets of affiliated companies 45.4 44.4 25.2 Other assets 4,801.9 4,985.0 3,646.7 ----------- ----------- ----------- Total assets $ 119,821.9 $ 121,696.4 $ 113,244.5 =========== =========== =========== LIABILITIES AND STOCKHOLDER'S EQUITY Liabilities Accounts payable Trade, customer deposits, and dealer reserves $ 3,597.4 $ 3,362.6 $ 1,847.0 Affiliated companies 1,846.1 2,315.2 2,005.4 ----------- ----------- ----------- Total accounts payable 5,443.5 5,677.8 3,852.4 Debt (Note 3) 97,955.1 98,024.3 92,914.3 Deferred income taxes 3,550.7 4,260.4 3,393.9 Other liabilities and deferred income 2,927.4 2,929.9 2,688.8 ----------- ----------- ----------- Total liabilities 109,876.7 110,892.4 102,849.4 Minority interests in net assets of subsidiaries 336.2 1,313.8 1,184.1 Preferred stockholder's equity in a subsidiary company 286.5 286.5 284.5 Stockholder's Equity Capital stock, par value $100 a share, 250,000 shares authorized, issued and outstanding 25.0 25.0 25.0 Paid-in surplus (contributions by stockholder) 3,719.5 3,747.6 3,706.6 Note receivable from affiliated company (1,517.0) (1,517.0) (1,859.0) Unrealized gain on investments in securities, net of taxes 46.5 56.9 41.0 Foreign currency translation adjustments (105.0) (0.9) (50.1) Earnings retained for use in the business 7,153.5 6,892.1 7,063.0 ----------- ----------- ----------- Total stockholder's equity 9,322.5 9,203.7 8,926.5 ----------- ----------- ----------- Total liabilities and stockholder's equity $ 119,821.9 $ 121,696.4 $ 113,244.5 =========== =========== =========== The accompanying notes are an integral part of the financial statements. /TABLE FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES Consolidated Statement of Cash Flows For the Periods Ended March 31, 1997 and 1996 (in millions)
First Quarter 1997 1996 ---------- ---------- (Unaudited) C> Cash flows from operating activities Net income $ 275.9 $ 339.0 Adjustments to reconcile net income to net cash provided by operating activities Provision for credit losses 355.7 203.5 Depreciation and amortization 1,544.1 1,445.8 Gain on sale of finance receivables (26.5) - Equity in net income of affiliates (0.7) (48.8) Deferred income taxes (205.5) 251.1 Changes in the following items Other assets (387.2) 2.6 Other liabilities 887.9 (166.4) Other (191.0) (45.0) ---------- ---------- Net cash provided by operating activities 2,252.7 1,981.8 ---------- ---------- Cash flows from investing activities Purchase of finance receivables (other than wholesale) (8,228.2) (11,359.4) Collection of finance/intercompany receivables (other than wholesale) 8,213.6 8,577.8 Purchase of operating lease vehicles (6,530.8) (4,775.2) Liquidation of operating lease vehicles 2,920.7 2,419.4 Net change in wholesale receivables (148.6) (268.4) Proceeds from sales of finance receivables 801.4 1,753.7 Other (144.3) 148.6 ---------- ---------- Net cash used in investing activities (3,116.2) (3,503.5) Cash flows from financing activities Proceeds from issuance of long-term debt 2,399.2 4,518.4 Principal payments on long-term debt (2,246.8) (1,620.7) Change in short-term debt, net (505.2) (1,879.8) Dividends paid (14.5) (0.5) Other 105.2 218.5 ---------- ---------- Net cash (used in)/provided by financing activities (262.1) 1,235.9 ---------- ---------- Effect of exchange rate changes on cash and cash equivalents (23.1) (5.5) ---------- ---------- Net change in cash and cash equivalents (1,148.7) (291.3) Cash and cash equivalents, beginning of period 2,716.0 1,478.1 ---------- ---------- Cash and cash equivalents, end of period $ 1,567.3 $ 1,186.8 ========== ========== Supplementary cash flow information Interest paid $ 1,601.7 $ 1,592.6 Taxes paid/(received) 36.8 (61.1) The accompanying notes are an integral part of the financial statements. /TABLE FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES Notes To Financial Statements Note 1. Financial Statements Restatement During the fourth quarter 1996, Ford, FSG, Inc. contributed ownership of Ford Credit Europe (approximately 78% ownership) to Ford Credit. Prior years' quarterly financial statements were restated to include Ford Credit Europe. Note 2. Finance Receivables, Net (in millions)
March 31, December 31, March 31, 1997 1996 1996 ----------- ----------- ----------- (Unaudited) (Unaudited) Retail $ 51,172.3 $ 53,099.1 $ 49,711.1 Wholesale 22,392.3 22,706.3 20,534.2 Other 5,840.4 5,942.7 7,790.7 ----------- ----------- ---------- Total finance receivables net of unearned income 79,405.0 81,748.1 78,036.0 Less allowance for credit losses (968.4) (900.1) (783.4) ----------- ----------- ---------- Finance receivables, net $ 78,436.6 $ 80,848.0 $ 77,252.6 =========== =========== ==========
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES Notes To Financial Statements (continued) Note 3. Debt (in millions)
March 31, December 31, March 31, 1997 1996 1996 ----------- ----------- ----------- (Unaudited) (Unaudited) PAYABLE WITHIN ONE YEAR: Commercial paper $ 38,108.7 $ 38,228.3 $ 37,885.7 Other short-term debt* 4,957.6 4,788.7 2,308.6 ----------- ----------- ---------- Total short-term debt 43,066.3 43,017.0 40,194.3 Long-term indebtedness payable within one year** 10,568.5 9,178.0 7,697.3 ----------- ----------- ---------- Total payable within one year 53,634.8 52,195.0 47,891.6 ----------- ----------- ---------- March 31, 1997 ---------------------------- Weighted-Average Interest Rates*** Maturities ---------------- ---------- PAYABLE AFTER ONE YEAR: Secured indebtedness 17.64% 1998 9.8 9.9 - Unsecured senior indebtedness Notes**** 6.62% 1998-2048 43,124.6 44,273.6 43,658.9 Debentures 4.53% 1998-2006 1,130.0 1,228.3 1,365.3 Unamortized discount (18.3) (7.5) (1.5) --------- --------- --------- Total secured and unsecured senior indebtedness 44,246.1 45,504.3 45,022.7 Unsecured long-term subordinated notes 10.10% 2001 74.2 325.0 - Total payable ----------- ----------- ---------- after one year 44,320.3 45,829.3 45,022.7 ----------- ----------- ---------- Total debt $ 97,955.1 $ 98,024.3 $ 92,914.3 =========== =========== ========== * Includes $1,802.6 million, $2,477.7 million, and $104.6 million with affiliated companies at March 31, 1997, December 31, 1996, and March 31, 1996, respectively. ** Includes $1,030.9 million, $653 million, and $0 million with affiliated companies at March 31, 1997, December 31, 1996, and March 31, 1996, respectively. *** Rates were variable on about 22.5% of the debt payable after one year including the effects of interest rate swap agreements. **** Includes $3,123.1 million, $3,584.4 million, and $1,510.4 million with affiliated companies at March 31, 1997, December 31, 1996, and March 31, 1996, respectively. /TABLE Note 4. New Accounting Standard Effective January 1, 1997, Ford Credit adopted Statement of Financial Accounting Standard No. 125 ("SFAS 125"), "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities". SFAS 125 provides accounting and reporting standards for the subject matter based on consistent application of the financial components approach that focuses on control. The adoption of the statement did not have a material effect on the financial statements. Note 5. Sale of Ford New Holland Credit Company On January 24, 1997, Ford Credit sold its 51% majority ownership of Ford New Holland Credit Company to FiatAllis North America, Inc. and New Holland (Canada) Credit Holding Ltd. The sale was effective January 1, 1997 and did not materially impact Ford Credit's financial statements. FORD MOTOR CREDIT COMPANY RESULTS OF OPERATIONS FIRST QUARTER 1997 COMPARED WITH 1996 Ford Credit's consolidated net income in the first quarter of 1997 was $276 million, down $63 million or 19% from 1996. Ford Credit's 1997 financial results include a majority ownership (78%) of Ford Credit Europe PLC ("Ford Credit Europe") and results for 1996 have been restated to reflect this ownership change. Compared with results from a year ago, the decrease primarily reflects higher credit losses and loss reserve requirements, the effects of Ford Motor Company's restructuring of its Financial Services Group ("FSG") and higher taxes. Higher levels of earning assets and improved operating cost performance were partial offsets. Credit losses as a percent of average net finance receivables including net investment in operating leases increased to 0.86% in 1997 compared with 0.63% in 1996 reflecting an increase in repossession rates and higher losses per repossession. The increased repossession ratio reflects an increased mix of used vehicle financing and expanded purchase policies to generate financing volume. The increase in loss per repossession reflects a weaker used vehicle market resulting in Ford Credit realizing lower prices for repossessed units sold at auction. Higher loss reserves reflect anticipation of actual losses continuing above prior years' levels. The FSG restructuring reflects lower income resulting from the repurchase in the first quarter of 1996 by Ford Holdings, Inc. ("Ford Holdings") of substantially all the shares of Ford Holdings' common stock owned by Ford Credit, offset partially by the addition of The American Road Insurance Company and interest on a note receivable from Ford Holdings. Net financing margins remain essentially unchanged. Improved yields and lower borrowing costs (6.64% net borrowing rate in 1997 compared with 6.71% in 1996) are offset by increased depreciation expense for leased vehicles primarily reflecting lower than anticipated residual values on off-lease vehicles. Total net finance receivables and net investment in operating leases at March 31, 1997 were $111.1 billion, up $7.2 billion or 7% from a year earlier. For the first quarter of 1997, Ford Credit financed 39% of all new cars and trucks sold by Ford Motor Company dealers in the U.S., equal to first quarter 1996. In Europe, Ford Credit financed 25% of all new vehicles sold by Ford Motor Company in the first quarter of 1997 compared with 26% in the first quarter of 1996. Ford Credit provided retail customers with financing for 637,000 new and used vehicles in the United States and 166,000 in Europe. In the first quarter of 1997, Ford Credit provided wholesale financing for 77% of Ford Motor Company U.S. factory sales and 94% of Ford Motor Company Europe factory sales compared with 77% for the U.S. and 89% for Europe in first quarter 1996. During the first quarter of 1997, Ford Credit completed the sale of its partnership interest in Ford New Holland Credit Company to Fiat. The sale did not have a material impact on Ford Credit s first quarter results. Ford Credit Liquidity and Capital Resources Ford Credit's outstanding debt at March 31, 1997 and at the end of each of the last three years was as follows:
December 31 Mar 31, ------------------------- 1997 1996 1995 1994 ------- ------- ------- ------- (in millions) Commercial paper & STBAs(a) $39,101 $38,774 $40,419 $38,128 Other short-term debt (b) 3,965 4,243 1,781 1,357 Long-term debt (including current portion)(c) 54,889 55,007 49,980 41,503 ------- ------- ------- ------- Total debt $97,955 $98,024 $92,180 $80,988 ======= ======= ======= ======= United States 75,518 $76,635 $73,178 $65,715 Europe 14,492 14,028 13,013 10,548 Other international 7,945 7,361 5,989 4,725 ------- ------- ------- ------- Total debt $97,955 $98,024 $92,180 $80,988 ======= ======= ======= ======= Memo: Total support facilities (billions) as of March 31, 1997 and December 31, 1996-1994, respectively: Ford Credit $ 27.2 $ 27.2 $ 27.4 $ 22.3 Ford Credit Europe 5.5 5.7 4.7 6.6 - - - - - - (a) Short-term borrowing agreements with bank trust departments. (b) Includes $1,803 million, $2,478 million, $176 million, and $25 million with affiliated companies at March 31, 1997, December 31, 1996, December 31, 1995 and December 31, 1994, respectively. (c) Includes $4,154 million, $4,237 million, $1,174 million, and $75 million with affiliated companies at March 31, 1997, December 31, 1996, December 31, 1995 and December 31, 1994, respectively.
Support facilities represent additional sources of funds, if required. At March 31, 1997, Ford Credit had approximately $19.6 billion of contractually committed facilities. In addition, $7.6 billion of Ford Bank lines may be used by Ford Credit at Ford's option. The lines have various maturity dates through June 30, 2001 and may be used, at Ford Credit's option, by any of its direct or indirect majority-owned subsidiaries. Any such borrowing will be guaranteed by Ford Credit. Banks also provide $1.6 billion of contractually committed liquidity facilities to support Ford Credit's asset backed commercial paper program. Additionally, at March 31, 1997, there was approximately $4.7 billion of contractually committed facilities available for Ford Credit Europe's use. In addition, $775 million of Ford bank lines may be used by Ford Credit Europe at Ford's option. The lines have various maturity dates through June 30, 2001 and may be used, at Ford Credit Europe's option, by any of its direct or indirect majority-owned subsidiaries. Any such borrowing will be guaranteed by Ford Credit Europe. INFORMATION CONCERNING FORD Ford Motor Company news release dated April 16, 1997, filed as Exhibit 20 to this Current Report on Form 8-K, is incorporated by reference herein. ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits. EXHIBITS Designation Description Method of Filing - ----------- ----------- ---------------- Exhibit 20 Ford Motor Company news Filed with this Report. release dated April 16, 1997. Exhibit 27 Financial Data Schedule Filed with this Report. 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 on the date indicated. FORD MOTOR CREDIT COMPANY (Registrant) Date: April 18, 1997 By:/s/R. P. Conrad ----------------- R. P. Conrad Assistant Secretary EXHIBIT INDEX Designation Description - ----------- ----------- Exhibit 20 Ford Motor Company news release dated April 16, 1997. Exhibit 27 Financial Data Schedule EX-20 2 EXHIBIT 20 Ford/News Contact: Media Inquiries Institutional Investors Shareholder Inquiries Christian Vinyard Mike Holland (800) 555-5259 or (313) 322-3428 (313) 323-8221 (313) 845-8540 FOR RELEASE AT 7:30 A.M. (EASTERN) APRIL 16, 1997 FORD EARNS $1.5 BILLION IN FIRST QUARTER, UP 125%; HIGHER MARGINS FROM LOWER COSTS, NEW PRODUCTS DEARBORN, Mich., April 16, 1997 -- Improving automotive margins raised Ford Motor Company's earnings for the first quarter to $1.5 billion, or $1.20 per fully diluted share of common and Class B stock. The 1997 results compare with earnings of $653 million, or 53 cents a share in the first quarter of 1996. The first quarter's automotive improvement reflects new, successful, higher margin products and lower total costs. "We're off to a solid start in 1997," said Chairman and Chief Executive Officer Alex Trotman. "The changes we have been making to our automotive operations for the past two years are beginning to pay off. We have developed a very strong product line-up around the world, particularly in the fastest growing segments." "More quality cars and trucks are coming, designed to attract new customers and retain loyal owners," Trotman said. "With our unrelenting focus on improving the efficiency of our operations, we're very much on track to meet the tough business objectives we've set, assuming the economies of our major markets continue to perform as expected," he said. AUTOMOTIVE OPERATIONS Ford's first-quarter income from worldwide automotive operations was $1 billion, up from $142 million a year ago and the fourth consecutive quarter in which automotive results improved on a year-to-year basis. - ------------------------------------------------------------------------------ Investor and Financial Media Relations, World Headquarters, Dearborn, Michigan 48126 Telephone: (313) 322-9600; Fax: (313) 845-0570 Internet: http://media.ford.com -2- U.S. automotive operations, which contribute about two-thirds of Ford's automotive revenue, earned $836 million, up from $48 million a year ago. The improvement reflects successful new products with high demand and lower total costs. Outside the U.S., automotive operations earned $168 million, up from $94 million a year ago. In Europe, which continues to be intensely competitive, Ford earned $105 million, up from $73 million a year ago. In South America, Ford lost $47 million, compared with a loss of $60 million a year ago. These improvements stem from cost reductions, the successful launch of new products, and a resurgence of Ford's business in South America. Automotive return on sales in the first quarter improved to 4.5 percent in the U.S. (up 4.2 points from a year ago), and 3.5 percent worldwide (up 2.9 points). FINANCIAL SERVICES Financial Services Group earned $465 million, down from a record $511 million earned in the first quarter of 1996. The decline of $46 million from a year ago reflects primarily last year's sale of most of the assets of USL Capital. (First quarter 1996 earnings included $40 million from USL Capital.) Ford Credit earned $276 million in the first quarter, compared with $339 million in the prior year. The decline reflects increased credit losses. The Associates reported a record $238 million for the first quarter, compared with $192 million a year ago. Ford's share of The Associates' first-quarter 1997 earnings was $192 million. The Hertz Corporation reported record first-quarter earnings of $20 million, more than double the $9 million earned in the same period a year ago. -3- MAKING PROGRESS "There's still much to do," Trotman said. "But our progress is encouraging, and the entire Ford team is focused on meeting our business objectives and making us an even stronger competitor. I want to thank everyone at Ford for the tremendous efforts they are making to speed the changes in our company." Previously, Ford has announced: - - executive compensation for 1997 has been tied directly to improvements in quality; - - the discontinuance this year of five vehicle lines in the U.S.; - - manufacturing capacity realignments in the U.S., Europe and South America, including an expansion of capacity for Expedition; - - plans to sell the heavy truck and related service parts business to Freightliner; - - new products like the Lincoln Navigator, Town Car, and ZX2 in North America, Puma in Europe and Ka, a Fiesta-derived pickup, and Ranger in South America to strengthen an already strong product line-up in major markets; - - investments continue in new and emerging markets like China, India, Russia, and Turkey; - - the second-quarter stock dividend has been increased nine percent, from 38.5 cents a share to 42 cents; - - Hertz filed a registration statement with the Securities and Exchange Commission for an initial public offering of up to 18.6 percent of its common stock. # # # -4- SUMMARY OF FIRST QUARTER 1997 COMPARED WITH 1996 Overview - -------- - - Total earnings were $1.5 billion, compared with $653 million in the first quarter of 1996. - - Fully-diluted earnings per share were $1.20, compared with 53 cents. - - Worldwide sales and revenues were $36.2 billion, compared with $35.2 billion. - - Stockholders' equity was $27.3 billion, compared with $24.5 billion. Automotive - ---------- - - Net income from worldwide automotive operations was $1 billion, compared with $142 million in the first quarter of 1996. - - U.S. automotive operations earned $836 million, compared with $48 million. - - Outside the U.S., automotive operations earned $168 million, compared with $94 million. - - Worldwide vehicle unit sales were 1,681,000, compared with 1,638,000. - - Combined car and truck share in the U.S. was 25.1 percent, compared with 25.8 percent. - - Combined car and truck share in Europe was 11.4 percent, compared with 12.1 percent. Financial Services - ------------------ - - Financial Services Group earned $465 million, compared with $511 million in 1996. - - Ford Credit earned $276 million, compared with $339 million. - - The Associates earned a record $238 million, compared with $192 million a year ago. - - Hertz earned a record $20 million, more than double the $9 million from last year. Automotive Balance Sheet - ------------------------ - - Net cash was $7.8 billion, compared with $5.8 billion. - - Cash and marketable securities were $16 billion, compared with $12.9 billion a year ago. - - Debt was $8.2 billion, compared with $7.2 billion. - - Capital spending was $1.6 billion, compared with $1.8 billion a year ago. Ford Motor Company and Subsidiaries HIGHLIGHTS ---------- First Quarter ---------------- 1997 1996 ------ ------ (unaudited) Worldwide vehicle unit sales of cars and trucks (in thousands) - United States 979 940 - Outside United States 702 698 ----- ----- Total 1,681 1,638 ===== ===== Sales and revenues (in millions) - Automotive $28,925 $28,297 - Financial Services 7,277 6,928 ------- ------- Total $36,202 $35,225 ======= ======= Net income (in millions) - Automotive $ 1,004 $ 142 - Financial Services 465 511 ------- ------- Total $ 1,469 $ 653 ======= ======= Capital expenditures (in millions) - Automotive $ 1,613 $ 1,789 - Financial Services 126 113 ------- ------- Total $ 1,739 $ 1,902 ======= ======= Automotive capital expenditures as a percentage of sales 5.6% 6.3% Stockholders' equity at March 31 - Total (in millions) $27,252 $24,540 - After-tax return on Common and Class B stockholders' equity 22.1% 10.7% Automotive cash and marketable securities at March 31 (in millions) $15,967 $12,937 Automotive debt at March 31 (in millions) $ 8,202 $ 7,175 After-tax return on sales - U.S. Automotive 4.5% 0.3% - Total Automotive 3.5 0.6 Shares of Common and Class B Stock (in millions) - Average number outstanding 1,190 1,168 - Number outstanding at March 31 1,191 1,175 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income assuming full dilution - Automotive $ 0.82 $ 0.11 - Financial Services 0.38 0.42 ------- ------- Total $ 1.20 $ 0.53 ======= ======= Cash dividends $ 0.385 $ 0.35 FS-1 Ford Motor Company and Subsidiaries VEHICLE UNIT SALES ------------------ For the Periods Ended March 31, 1997 and 1996 (in thousands) First Quarter ----------------------- 1997 1996 ------- ------- (unaudited) North America United States Cars 367 378 Trucks 612 562 ----- ----- Total United States 979 940 Canada 69 50 Mexico 18 12 ----- ----- Total North America 1,066 1,002 Europe Germany 115 118 Britain 98 118 Italy 64 56 Spain 46 48 France 36 51 Other countries 97 84 ----- ----- Total Europe 456 475 Other international Brazil 53 47 Australia 30 32 Taiwan 25 31 Argentina 17 16 Japan 10 16 Other countries 24 19 ----- ----- Total other international 159 161 ----- ----- Total worldwide vehicle unit sales 1,681 1,638 ===== ===== 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. FS-2
Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME -------------------------------- For the Periods Ended March 31, 1997 and 1996 (in millions) First Quarter ------------------------- 1997 1996 -------- -------- (unaudited) AUTOMOTIVE Sales $28,925 $28,297 Costs and expenses (Note 2) Costs of sales 25,683 26,510 Selling, administrative and other expenses 1,538 1,472 ------- ------- Total costs and expenses 27,221 27,982 Operating income 1,704 315 Interest income 249 184 Interest expense 194 172 ------- ------- Net interest income 55 12 Equity in net (loss) of affiliated companies (144) (52) Net expense from transactions with Financial Services (19) (20) ------- ------- Income before income taxes - Automotive 1,596 255 FINANCIAL SERVICES Revenues 7,277 6,928 Costs and expenses Interest expense 2,356 2,421 Depreciation 1,765 1,691 Operating and other expenses 1,500 1,428 Provision for credit and insurance losses 845 576 ------- ------- Total costs and expenses 6,466 6,116 Net revenue from transactions with Automotive 19 20 ------- ------- Income before income taxes - Financial Services 830 832 ------- ------- TOTAL COMPANY Income before income taxes 2,426 1,087 Provision for income taxes 898 413 ------- ------- Income before minority interests 1,528 674 Minority interests in net income of subsidiaries 59 21 ------- ------- Net income $ 1,469 $ 653 ======= ======= Income attributable to Common and Class B Stock after preferred stock dividends $ 1,455 $ 634 Average number of shares of Common and Class B Stock outstanding 1,190 1,168 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK Income $ 1.22 $ 0.54 Income assuming full dilution $ 1.20 $ 0.53 Cash dividends $ 0.385 $ 0.35 The accompanying notes are part of the financial statements.
FS-3
Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET -------------------------- (in millions) March 31, December 31, 1997 1996 ------------ ------------ ASSETS (unaudited) Automotive Cash and cash equivalents $ 3,299 $ 3,578 Marketable securities 12,668 11,836 -------- -------- Total cash and marketable securities 15,967 15,414 Receivables 3,375 3,133 Inventories (Note 3) 7,237 6,656 Deferred income taxes 3,195 3,296 Other current assets 2,925 3,193 Net current receivable from Financial Services 525 0 -------- -------- Total current assets 33,224 31,692 Equity in net assets of affiliated companies 2,290 2,483 Net property 33,039 33,527 Deferred income taxes 4,484 4,429 Other assets 7,385 7,527 -------- -------- Total Automotive assets 80,422 79,658 Financial Services Cash and cash equivalents 2,499 3,689 Investments in securities 2,515 2,307 Net receivables and lease investments 161,615 161,906 Other assets 14,906 14,834 Net receivable from Automotive 0 473 -------- -------- Total Financial Services assets 181,535 183,209 -------- -------- Total assets $261,957 $262,867 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $ 11,298 $ 11,735 Other payables 2,229 2,206 Accrued liabilities 16,242 16,587 Income taxes payable 977 508 Debt payable within one year 1,756 1,661 Net current payable to Financial Services 0 473 -------- -------- Total current liabilities 32,502 33,170 Long-term debt 6,446 6,495 Other liabilities 27,400 26,793 Deferred income taxes 1,199 1,225 -------- -------- Total Automotive liabilities 67,547 67,683 Financial Services Payables 5,059 4,695 Debt 149,669 150,205 Deferred income taxes 3,619 4,338 Other liabilities and deferred income 7,606 8,504 Net payable to Automotive 525 0 -------- -------- Total Financial Services liabilities 166,478 167,742 Company-obligated mandatorily redeemable preferred securities of a subsidiary trust holding junior subordinated debentures of the Company (Note 5) 680 680 Stockholders' equity Capital stock Preferred Stock, par value $1.00 per share (aggregate liquidation preference of $671 million and $694 million) * * Common Stock, par value $1.00 per share (1,121 and 1,118 million shares issued) 1,121 1,118 Class B Stock, par value $1.00 per share (71 million shares issued) 71 71 Capital in excess of par value of stock 5,288 5,268 Foreign currency translation adjustments and other (559) (29) Earnings retained for use in business 21,331 20,334 -------- -------- Total stockholders' equity 27,252 26,762 -------- -------- Total liabilities and stockholders' equity $261,957 $262,867 ======== ======== - - - - - - *Less than $1 million
The accompanying notes are part of the financial statements. FS-4
Ford Motor Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ---------------------------------------------- For the Periods Ended March 31, 1997 and 1996 (in millions) First Quarter 1997 First Quarter 1996 ---------------------- ---------------------- Financial Financial Automotive Services Automotive Services ---------- --------- ---------- --------- (unaudited) (unaudited) Cash and cash equivalents at January 1 $ 3,578 $ 3,689 $ 5,750 $ 2,690 Cash flows from operating activities before securities trading 3,161 2,342 2,916 3,014 Net (purchases)/sales of trading securities (832) 37 (197) 281 ------- -------- ------- -------- Net cash flows from operating activities 2,329 2,379 2,719 3,295 Cash flows from investing activities Capital expenditures (1,613) (126) (1,789) (113) Acquisitions of receivables and lease investments - (26,481) - (28,164) Collections of receivables and lease investments - 21,192 - 20,949 Net acquisitions of daily rental vehicles - (528) - (989) Purchases of securities 0 (1,054) (10) (3,433) Sales and maturities of securities 0 793 0 3,217 Proceeds from sales of receivables and lease investments - 807 - 1,775 Net investing activity with Financial Services 364 - (3) - Other 78 151 (97) 209 ------- -------- ------- -------- Net cash used in investing activities (1,171) (5,246) (1,899) (6,549) Cash flows from financing activities Cash dividends (472) (7) (428) - Issuance of Common Stock 23 - 40 - Changes in short-term debt (101) 1,033 (158) 34 Proceeds of other debt 210 3,842 14 6,126 Principal payments on other debt (64) (3,839) (3) (3,462) Net financing activity with Automotive - (364) - 3 Other 0 106 1 43 ------- -------- ------- -------- Net cash (used in)/provided by financing activities (404) 771 (534) 2,744 Effect of exchange rate changes on cash (35) (92) (28) (48) Net transactions with Automotive/Financial Services (998) 998 66 (66) ------- -------- ------- -------- Net (decrease)/increase in cash and cash equivalents (279) (1,190) 324 (624) ------- -------- ------- -------- Cash and cash equivalents at March 31 $ 3,299 $ 2,499 $ 6,074 $ 2,066 ======= ======== ======= ========
The accompanying notes are part of the financial statements. FS-5 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, 1996. 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 to conform with 1997 presentations, including additional elimination of intercompany sales. 2. Selected Automotive costs and expenses are summarized as follows (in millions): First Quarter -------------------------- 1997 1996 -------- -------- Depreciation $683 $636 Amortization 787 764 3. Automotive inventories are summarized as follows (in millions):
March 31, December 31, 1997 1996 ------------ ------------ Raw materials, work in process and supplies $3,831 $3,374 Finished products 3,406 3,282 ------ ------ Total inventories $7,237 $6,656 ====== ====== U.S. inventories $2,795 $2,280
4. Earnings per share - Statement of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings per Share," was issued in February 1997. Adoption of SFAS 128, effective for periods ending after December 15, 1997, is not expected to have a material effect on reported earnings. 5. 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. 6. Capacity realignment - In March, the Company announced it was discontinuing production of four vehicle lines (Ford Thunderbird, Probe and Aerostar, and Mercury Cougar) at the end of the 1997 model year and, in the third quarter, idling the passenger car system at the Lorain (Ohio) Assembly Plant. The financial effect of these actions has not yet been determined. FS-6 EX-27 3
5 Ford Credit's Condensed Consolidated Balance Sheet is unclassified. Therefore, the following tags listed below are not applicable to Ford Credit: Current Assets and Current Liabilities. Information relating to earnings per share is not presented because Ford Credit is an indirect wholly owned subsidiary of Ford Motor Company. 3-MOS DEC-31-1997 MAR-31-1997 1,567 1,474 78,436 0 0 0 0 0 119,822 0 97,955 0 0 25 9,298 119,822 0 1,238 0 764 0 356 1,627 474 183 276 0 0 0 276 0 0
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