Badddddd News - Ford Reports $5.45 Billion Loss for Full-Year
DEARBORN, Mich., Jan. 17 -- Ford Motor Company today reported a net loss of $5.45 billion, or $3.02 per share, for full-year 2001. Excluding previously announced unusual charges and other items, Ford lost $782 million, or 44 cents per share.
The full-year results compare to net income of $3.47 billion or $2.30 per diluted share in 2000. Operating earnings before unusual items for full-year 2000 were $6.67 billion or $3.26 per share.
Revenues for 2001 were $162.4 billion, down 5 percent from $170.1 billion a year ago. Vehicle unit sales were 6,991,000, a 6 percent decline from 7,424,000.
``This was a challenging, difficult year for the Ford Motor Company and our financial performance was unacceptable,'' said Chairman and CEO Bill Ford. ``As outlined in our revitalization plan, we are committed to regaining our momentum and getting back on track. The difficult actions we announced last week will focus us on designing, building and selling the industry's best cars and trucks -- and restoring the company's profitability.''
Ford's 2001 full-year loss before unusual items primarily reflects lower volume in North America, significantly higher marketing and product costs, customer satisfaction initiatives, as well as increased credit losses at Ford Credit.
However, Ford scored numerous product successes in 2001. Ford was the best-selling brand of cars and trucks in the U.S. for the 15th year in a row, capturing five of the top 10 best-selling vehicles. The Ford F-Series was the top-selling truck for the 25th year in a row. The Ford Explorer was the industry's best-selling SUV in the U.S. for the 11th year in a row. In addition, Jaguar and Volvo set all-time sales records in 2001 -- as well as set new U.S. sales records for the third year in a row.
In 2002, Ford will launch several new important products including the Ford Expedition, Lincoln Navigator, Lincoln Aviator, Volvo XC90 and Land Rover Range Rover.
FOURTH QUARTER
Ford reported a loss of $5.07 billion, or $2.81 per share, for the 2001 fourth quarter. Excluding previously announced unusual charges of $4.1 billion and an additional $102 million non-cash charge for the accounting standard on hedging and derivatives, fourth quarter operating loss was $860 million, or 48 cents per share.
Ford earned $1.08 billion, or 57 cents per share, in the fourth quarter of 2000. Operating earnings from the fourth quarter of 2000 were $1.21 billion, or 64 cents per share.
Total revenues in the 2001 fourth quarter were $41.15 billion, a 3 percent decline from $42.59 billion a year ago. Worldwide vehicle unit sales in the 2001 fourth quarter were 1,808,000, down 2 percent from 1,840,000.
The following operating results exclude unusual items in both years.
AUTOMOTIVE OPERATIONS
Worldwide automotive operations lost $1.96 billion in 2001, compared to a profit of $4.88 billion a year ago. Worldwide automotive revenues were $131.53 billion, a decline of 7 percent from $141.23 billion a year ago.
In the fourth quarter, worldwide automotive operations lost $803 million on revenues of $33.77 billion. That compares to a profit of $762 million on revenues of $35.11 billion in the fourth quarter of 2000.
Automotive gross cash at Dec. 31, 2001 totaled $17.7 billion, including $2.6 billion of pre-funding employee benefit expenses through a Voluntary Employee Beneficiary Association (VEBA) trust. Cash exceeded debt by $3.9 billion at year-end, $800 million better than at Sept. 30.
North America: The 2001 full-year loss in North America was $2.15 billion on revenues of $90.95 billion. Earnings in 2000 were $5.03 billion on revenues of $103.87 billion.
Fourth-quarter 2001 results were a loss of $916 million, compared to a profit of $740 million a year ago. Revenue declined to $23.26 billion from $25.59 billion. The decline was primarily a result of the intense competitive environment in the U.S., which led to lower unit sales volume and higher marketing costs. Marketing costs in the U.S. as a percent of revenue in the fourth quarter were 16.7 percent of revenues, up 6 points from a year ago.
As a result of the financial losses in 2001, there will be no profit- sharing for U.S. hourly employees. Bonus payments for salaried workers for 2001 were also eliminated, along with other compensation benefits.
Europe: Ford earned a full-year 2001 profit of $266 million in Europe, reversing a loss of $35 million a year ago. Revenues were $31.93 billion, 11 percent higher than $28.67 billion a year ago.
Fourth-quarter 2001 results from Europe were a profit of $61 million on revenues of $8.46 billion. That compares to a profit of $33 million on revenues of $7.33 billion in the fourth quarter of 2000. Strong new Ford brand products, including the Mondeo and Transit, and cost reductions led to the improved 2001 results.
South America: Ford operations in South America lost $225 million in full-year 2001, an improvement from a loss of $240 million a year ago. Revenue was $2.23 billion, down from $2.54 billion in 2000.
Fourth-quarter 2001 losses were $46 million, on revenues of $466 million. The 2000 fourth quarter was a loss of $31 million on revenues of $642 million. Continuing weak economic conditions in Brazil and Argentina contributed to the lower results.
Rest-of-world: Operations from the rest of the world reported a full-year 2001 profit of $156 million on revenues of $6.42 billion. That compares to income of $125 million on revenues of $6.16 billion in 2000.
In the fourth quarter of 2001, profits were $98 million, up from $20 million a year ago. Revenues were $1.59 billion, an increase from $1.54 billion in 2000.
FORD CREDIT
Ford Credit earned $1.20 billion in 2001 excluding unusual items, down 22 percent from $1.54 billion in 2000. In the fourth quarter, Ford Credit reported a profit of $6 million before charges, compared to $410 million a year ago. The reduction was more than accounted for by a higher provision for credit losses.
HERTZ
Hertz reported full-year 2001 earnings of $23 million, down from $358 million in 2000. Hertz lost $58 million in the fourth quarter, compared to earnings of $56 million in the fourth quarter of 2000. The decline is attributable to a slowing U.S. economy which affected U.S. travel and car rentals, as well as a more competitive pricing environment for all Hertz business units.
OUTLOOK
``Although the U.S. economy continues to be uncertain, we estimate total vehicle demand will be about 15.5 million units,'' said Nick Scheele, Ford president and chief operating officer. ``Our North American production forecast calls for making 1,050,000 cars and trucks in the first quarter. This is down three percent from 1,078,000 in the 2001 first period.
``For Ford Motor Company, 2002 will be a year of transition as we concentrate on implementing our revitalization plan,'' Scheele said.
Investors can hear a review of fourth quarter and full-year 2001 results by Martin Inglis, chief financial officer, on the Internet at www.streetevents.com . The presentation will start at 9 a.m. EST, Jan. 17.
Ford Motor Company is the world's second largest automaker, selling vehicles in 200 markets and with approximately 345,000 employees on six continents. Its automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Credit, Hertz and Quality Care.
Statements included herein may constitute ``forward looking statements''
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements involve a number of risks, uncertainties, and other factors
that could cause actual results to differ materially from those stated,
including, without limitation:
greater price competition in the U.S. and
Europe resulting from currency fluctuations, industry overcapacity or other
factors; a significant decline in industry sales, particularly in the U.S. or
Europe, resulting from slowing economic growth; lower-than-anticipated market
acceptance of new or existing products; currency or commodity price
fluctuations; economic difficulties in South America or Asia; higher fuel
prices; a market shift from truck sales in the U.S.; lower-than-anticipated
residual values for leased vehicles; a credit rating downgrade; labor or other
constraints on our ability to restructure our business; increased safety or
emissions regulation resulting in higher costs and/or sales restrictions; work
stoppages at key Ford or supplier facilities; the discovery of defects in
vehicles resulting in recall campaigns, increased warranty costs or
litigation; an inability to implement the revitalization program.
Ford Motor Company
SELECTED CONSOLIDATED DETAIL
2001 Compared with 2000
Fourth Quarter Full Year
2001 2000 2001 2000
Worldwide vehicle unit sales of
cars and trucks (in thousands)
- North America 1,114 1,209 4,292 4,933
- Outside North America 694 631 2,699 2,491
Total 1,808 1,840 6,991 7,424
Sales and revenues (Mils.)
- Automotive $33,772 $35,107 $131,528 $141,230
- Financial Services 7,378 7,480 30,884 28,828
Total $41,150 $42,587 $162,412 $170,058
Net income (Mils.)
- Automotive $(4,708) $629 $(6,267) $3,624
- Financial Services (360) 448 814 1,786
Income from continuing
operations (5,068) 1,077 (5,453) 5,410
- Discontinued operation (Visteon) - - - 309
- Loss on spin-off of Visteon - - - (2,252)
Total net income $(5,068) $1,077 $(5,453) $3,467
Adjusted net income
from continuing
operations (Mils.) a/ $(860) $1,210 $(782) $6,668
Unusual items (Mils.)
- Fourth quarter impairment,
restructuring,
and other charges $(4,106) $ - $(4,106) -
- SFAS 133 b/ (102) - (252) $ -
- E-commerce and Automotive-
related ventures - - (199) -
- Mazda restructuring actions - - (114) -
- Asset write-down related
to Nemak venture - (133) - (133)
- Land Rover inventory
profit reduction - - - (106)
- European charges - - - (1,019)
Total unusual items $(4,208) $(133) $(4,671) $(1,258)
Capital expenditures (Mils.)
- Automotive $2,363 $2,510 $6,357 $7,393
- Financial Services 223 390 651 955
Total $2,586 $2,900 $7,008 $8,348
Automotive capital
expenditures as a
percentage of sales 7.0% 7.1% 4.8% 5.2%
Automotive net cash at
December 31 (Mils.)
- Cash and marketable
securities $15,028 $16,490 $15,028 $16,490
- VEBA 2,639 3,656 2,639 3,656
Gross cash including VEBA 17,667 20,146 17,667 20,146
- Debt 13,794 12,046 13,794 12,046
Automotive net cash
including VEBA $3,873 $8,100 $3,873 $8,100
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Income assuming dilution
- Automotive $(2.61) $0.33 $(3.47) $2.40
- Financial Services (0.20) 0.24 0.45 1.19
Subtotal (2.81) 0.57 (3.02) 3.59
- Discontinued operation (Visteon) - - - 0.21
- Loss on spin-off of Visteon - - - (1.50)
Total $(2.81) $0.57 $(3.02) $2.30
Adjusted net income from
continuing operations a/ $(0.48) $0.64 $(0.44) $3.26 c/
Unusual items
- Fourth quarter impairment,
restructuring,
and other charges $(2.27) $ - $(2.27) $ -
- SFAS 133 b/ (0.06) - (0.14) -
- E-commerce and Automotive-
related ventures - - (0.11) -
Mazda restructuring actions - - (0.06) -
- Asset write-down related to
Nemak venture - (0.07) - (0.06) c/
- Land Rover inventory
profit reduction - - - (0.05) c/
- European charges - - - (0.50) c/
Total unusual items $(2.33) $(0.07) $(2.58) $(0.61) c/
a/ Excludes unusual items disclosed by the Company.
b/ Excluding precious metals charge in Fourth Quarter 2001.
c/ In addition to excluding unusual items affecting income, also treats the Value Enhancement Plan like a stock split and share repurchase.
Prior periods have been restated.
Ford Motor Company and Subsidiaries
VEHICLE UNIT SALES DETAIL
2001 Compared with 2000
Fourth Quarter Full Year
2001 2000 2001 2000
(in thousands) (in thousands)
North America
United States
Cars 381 433 1,427 1,775
Trucks 605 643 2,458 2,711
Total United States 986 1,076 3,885 4,486
Canada 79 83 245 300
Mexico 49 50 162 147
Total North America 1,114 1,209 4,292 4,933
Europe
Britain 145 108 637 476
Germany 94 79 383 320
Italy 75 65 249 222
Spain 42 51 178 180
France 45 39 163 158
Other countries 152 141 551 526
Total Europe 553 483 2,161 1,882
Other international
Brazil 26 37 125 134
Australia 30 30 115 125
Taiwan 9 9 53 63
Argentina 6 10 29 49
Japan 6 4 18 26
Other countries 64 58 198 212
Total other
international 141 148 538 609
Total worldwide vehicle
unit sales 1,808 1,840 6,991 7,424
Vehicle unit sales generally are reported worldwide on a ``where sold'' basis and include sales of all Company-badged units, as well as units manufactured by Ford and sold to other manufacturers.
Unit sales in Turkey were rebinned in prior periods from Europe to Asia Pacific.
Excludes SFAS 133 Effect,
& Unusual Items
Ford Motor Company
AUTOMOTIVE GEOGRAPHIC AND COST OF SALES DETAIL
2001 Compared With 2000
GEOGRAPHIC DATA 4th Quarter
01 B/(W)
2001 2000 Than 00
PBT (Mils.)
U.S. ($713) $831 ($1,544)
Canada/Mexico (634) 272 (906)
North America ($1,347) $1,103 ($2,450)
Europe 104 31 73
South America (74) (49) (25)
Rest of World 139 15 124
Worldwide ($1,178) $1,100 ($2,278)
Net Income (Mils.)
U.S. ($524) $564 ($1,088)
Canada/Mexico (392) 176 (568)
North America ($916) $740 ($1,656)
Europe 61 33 28
South America (46) (31) (15)
Rest of World 98 20 78
Worldwide ($803) $762 ($1,565)
Sales (Mils.)
U.S. $21,050 $23,302 ($2,252)
Canada/Mexico 2,212 2,290 (78)
North America $23,262 $25,592 ($2,330)
Europe 8,456 7,332 1,124
South America 466 642 (176)
Rest of World 1,588 1,541 47
Worldwide $33,772 $35,107 ($1,335)
COST OF SALES 4th Quarter
01 B/(W)
2001 2000 Than 00
(Mils) (Mils) (Mils)
Total Costs and Expenses $34,761 $33,979 $(782)
Less: Depreciation 623 495 (128)
Amortization 583 675 92
Selling and Admin. 2,714 2,775 61
Postretirement Exp.* 252 354 102
Net Cost of Sales $30,589 $29,680 ($909)
Memo: Gross Margin 9.4% 15.5% -6.0 pts
Full Year
01 B/(W)
2001 2000 Than 00
PBT (Mils.)
U.S. ($2,972) $6,890 ($9,862)
Canada/Mexico (260) 667 (927)
North America ($3,232) $7,557 ($10,789)
Europe 424 (97) 521
South America (350) (373) 23
Rest of World 262 115 147
Worldwide ($2,896) $7,202 ($10,098)
Net Income (Mils.)
U.S. ($1,986) $4,602 ($6,588)
Canada/Mexico (168) 430 (598)
North America ($2,154) $5,032 ($7,186)
Europe 266 (35) 301
South America (225) (240) 15
Rest of World 156 125 31
Worldwide ($1,957) $4,882 ($6,839)
Sales (Mils.)
U.S. $83,971 $96,030 ($12,059)
Canada/Mexico 6,981 7,835 (854)
North America $90,952 $103,865 ($12,913)
Europe 31,925 28,674 3,251
South America 2,229 2,536 (307)
Rest of World 6,422 6,155 267
Worldwide $131,528 $141,230 ($9,702)
COST OF SALES Full Year
01 B/(W)
2001 2000 Than 00
(Mils) (Mils) (Mils)
Total Costs and Expenses $133,548 $134,063 $515
Less: Depreciation 2,612 2,641 29
Amortization 2,415 2,451 36
Selling and Admin. 9,739 9,701 (38)
Postretirement Exp.* 1,338 1,516 178
Net Cost of Sales $117,444 $117,754 $310
Memo: Gross Margin 10.7% 16.6% -5.9 pts
- - - - -
- Now includes Benefit Expenses from Total Pension, Retiree Health Care, and Retiree Life Insurance
Ford Motor Company
FOURTH QUARTER 2001 DATA SHEET
2001 Compared with 2000
2001 2000
3rd Qtr 4th Full 4th Full
2001 Qtr Year Qtr Year
Market Share Data (%)
U.S.
Car 17.1% 17.8% 17.7% 17.4% 19.1%
Truck 27.1% 27.0% 27.4% 27.1% 28.2%
Total 22.1% 22.8% 22.8% 22.5% 23.7%
Europe
Car 11.3% 10.5% 11.0% 10.2% 10.3%
Truck 9.0% 8.3% 8.6% 7.1% 7.7%
Total 11.0% 10.2% 10.7% 9.7% 9.9%
U.S. Total Marketing Costs
(Ford/LM)
-- Variable and Fixed
(% of Gross Revenue) 16.0% 16.7% 14.7% 10.7% 11.1%
U.S. Sales Mix (Ford/LM)
Fleet Sales (% of Total) 18% 21% 25% 29% 26%
Red Carpet Lease (% of
Total) 18% 7% 15% 14% 18%
Red Carpet Lease (% of
Retail) 22% 9% 20% 19% 25%
U.S. Inventory (Days' Supply)
Car 48 63 63 79 79
Truck 70 59 59 92 92
Average 62 60 60 87 87
Avg. Portfolio Borrowing Rate
Ford Credit (%) 5.9% 5.6% 6.1% 6.7% 6.4%
Worldwide Taxes
Effective Tax Rate 32.5% 32.5% 32.5% 31.5% 32.5%
Common and Class B
Shares Outstanding (Mils.)
Average - actual 1,812 1,810 1,820 1,873 1,483
Average - assuming full
dilution 1,806 1,806 1,810 1,895 a/ 1,504 a/
Period ended - actual 1,811 1,809 1,809 1,854 1,854
Common Stock price (per share)
(adjusted to reflect Visteon
spin-off)
High $25.76 $18.94 $31.46 $27.00 $30.13
Low 15.34 14.93 14.93 21.63 21.63
Cash Dividends (per share) $0.30 $0.15 $1.05 $0.30 $1.16
a/ If the Value Enhancement plan was treated as a stock split followed by a share repurchase, the shares would have been 2,136 for 2nd quarter 2000 and 2,041 for full year 2000.
Ford Motor Company
2002 NORTH AMERICAN PRODUCTION AND OVERSEAS SALES
2002
Planned Memo: 2001 Actual
First Fourth Full
Quarter Quarter Year
(000) (000) (000)
North American Production and
Imports
Car 395 338 1,384
Truck 655 663 2,638
North American Production 1,050 1,001 4,022
Mexican Domestic Units Incl. Incl.
Above Above
Imports (Volvo, Jaguar,
Land Rover, Fiesta) 50 93 269
Total North America
(Incl. Imports) 1,100 1,094 4,291
Overseas Vehicle Unit Sales 670 669 2,664
Ford Worldwide 1,770 1,763 6,955
Over/(Under) Prior
North America
Units:
. Issue 70 36
. Quarter 42 226
. Year (28) (43)
Percentage:
. Issue 0 0
. Quarter 0 0
. Year (2)% (4)%
Overseas
Units:
. Issue 0 0
. Quarter 1 89
. Year (29) 42
Percentage:
. Issue 0 0
. Quarter 0 0
. Year (4)% 7%
Worldwide
Units:
. Issue 70 36
. Quarter 43 315
. Year (57) (1)
Percentage:
. Issue 0 0
. Quarter 2% 0
. Year (3)% (0)%