Ford Reports Better Than Expected First Quarter Financial Results-< $800 Million>
DEARBORN, Mich., April 17 Ford Motor Company today reported a net loss of $800 million, or 45 cents per share, in the first quarter of 2002. Excluding unusual items related to Statement of Financial Accounting Standards (SFAS) Nos. 142 and 133, Ford lost $108 million, or 6 cents per share. Ford earned $1.13 billion, or 60 cents a share, before unusual items in the first quarter of 2001.
Ford's first quarter revenues were $39.86 billion, a 6 percent decline from last year's first quarter. Worldwide vehicle unit sales in the 2002 first quarter were 1,678,000, down 7 percent from a year ago.
``Our first quarter performance shows that our Revitalization Plan efforts are taking hold and we are heading in the right direction,'' said Bill Ford, chairman and CEO. ``While there is still a great deal of uncertainty in our industry, the general economic climate is improving and we are on schedule to meet or surpass our 2002 earnings milestone.''
In the first quarter, Ford began the launch of several all-new or significantly freshened products across its brand portfolio, including the Ford Expedition and European Ford Fiesta, Lincoln Navigator and Lincoln Town Car, Mercury Grand Marquis, Jaguar S-Type R and Land Rover Range Rover. In addition, the company announced the return of the GT40 high-performance sports car, introduced key middle segment vehicles such as the Ford CrossTrainer and Ford Five Hundred and publicly debuted the Lincoln Aviator, Volvo XC90, Mercury Marauder and European Ford Fusion.
Ford also benefited in the first quarter from strong sales of key new product introductions from Premier Automotive Group's Jaguar and Land Rover brands. The recently introduced Jaguar X-Type and Land Rover Freelander combined to make those brands No. 1 and No. 2, respectively, in year-to-date U.S. sales increases over the previous year.
First quarter 2002 results include a $708 million non-cash after-tax charge for the transition to a new accounting standard for goodwill (SFAS No. 142), which related to various investments in the automotive sector, and a $16 million non-cash after-tax benefit relating to the accounting standard for derivative instruments and hedging activities (SFAS No. 133).
The following discussion of our results excludes these unusual items, as well as any unusual items in our first quarter 2001 results:
AUTOMOTIVE OPERATIONS
Worldwide automotive operations lost $310 million in the first quarter, compared to a profit of $748 million year ago. Worldwide automotive revenues were $32.32 billion, compared with $34.65 billion a year ago.
Automotive gross cash at March 31 totaled $21.5 billion, including $2 billion previously funded employee benefit expenses through a Voluntary Employee Beneficiary Association trust.
North America: The first quarter loss in North America was $430 million. Earnings in the 2001 first quarter were $754 million. The decline was a result of significantly higher marketing costs and lower production.
Europe: Ford earned $117 million in the first quarter in Europe, compared with earnings of $88 million a year ago. The increase is largely explained by the elimination of goodwill amortization due to SFAS No. 142. Continued cost reductions and other improvements offset lower sales due to declining industry and production ramp-up for the new Ford Fiesta.
South America: Ford operations in South America lost $51 million, compared with a loss of $53 million a year ago. Results from the region continue to be affected by currency devaluations and weak economic conditions in Brazil and Argentina.
Rest-of-World: Operations from the rest of the world earned a profit of $54 million, compared with a loss of $41 million in the 2001 first quarter. The improvement was primarily due to smaller losses at Mazda.
FORD CREDIT
Ford Credit earned $242 million in the first quarter, down from $406 million a year ago. Results were lower primarily due to the unfavorable impact of securitizations and higher actual credit losses, offset partially by improved financing margins and higher levels of managed receivables. Increased securitizations over the past 12 months resulted in lower owned receivables and related revenue, offset partially by higher income on retained interests, excess spread and servicing fees. Higher actual credit losses reflected weaker economic conditions compared with a year ago.
HERTZ
Hertz reported a first quarter loss of $48 million, compared with a loss of $4 million in the first quarter a year ago. The loss was mainly attributable to lower rental volume in the U.S. resulting from a decline in travel.
OUTLOOK
``The U.S. economy is beginning to show signs of a recovery,'' said Nick Scheele, Ford president and chief operating officer. ``As consumer confidence increases, we are well positioned with the many new products we are in the process of bringing to market.''
Investors can hear a review of first quarter results by Martin Inglis, group vice president and chief financial officer, on the Internet at http://www.streetevents.com or http://www.shareholder.ford.com. The presentation will start at 9 a.m. EDT, April 17.
Ford Motor Company is the world's second largest automaker, selling vehicles in 200 markets and with approximately 350,000 employees on six continents. Its automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, 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 or other factors; lower-than- anticipated market acceptance of new or existing products; currency or commodity price fluctuations; economic difficulties in South America or Asia; the availability of fuel or 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, emissions, fuel economy or other regulation resulting in higher costs and/or sales restrictions; work stoppages at key Ford or supplier facilities or other interruptions of supplies; and the discovery of defects in vehicles resulting in delays in new model launches, recall campaigns, increased warranty costs or litigation, insufficient credit loss reserves; and our inability to implement the Revitalization Plan.
Ford Motor Company
SELECTED CONSOLIDATED DETAIL
2002 Compared with 2001
First Quarter
2002 2001
Worldwide vehicle unit sales of
cars and trucks (in thousands)
- North America 1,093 1,103
- Outside North America 585 702
Total 1,678 1,805
Sales and revenues (Mils.)
- Automotive $32,321 $34,650
- Financial Services 7,536 7,796
Total $39,857 $42,446
Net income (Mils.)
- Automotive $(308) $689
- Financial Services 216 370
Income before cumulative effect
of change in accounting principle (92) 1,059
- Cumulative effect of change in
accounting principle (708) -
Total net income $(800) $1,059
Adjusted net income before cumulative
effect of change
in accounting principle (Mils.) a/ $(108) $1,131
Unusual items (Mils.)
- SFAS 133 $16 $(72)
Capital expenditures (Mils.)
- Automotive $1,537 $1,357
- Financial Services 181 131
Total $1,718 $1,488
Automotive capital expenditures as a
percentage of sales 4.8% 3.9%
Automotive net cash at December 31 (Mils.)
- Cash and marketable securities $19,506 $15,767
- VEBA 2,027 3,379
Gross cash including VEBA 21,533 19,146
- Debt 13,916 12,036
Automotive net cash including VEBA $7,617 $7,110
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Income assuming dilution
- Automotive $(0.17) $0.36
- Financial Services 0.12 0.20
Subtotal (0.05) 0.56
- Cumulative effect of change
in accounting principle (0.40) -
Total $(0.45) $0.56
Adjusted net income before cumulative effect of change
in accounting principle a/ $(0.06) $0.60
Unusual items
- SFAS 133 $0.01 $(0.04)
a/ Excludes unusual items disclosed by the Company.
Prior periods have been restated.
Ford Motor Company and Subsidiaries
VEHICLE UNIT SALES
2002 Compared with 2001
(in thousands)
First Quarter
2002 2001
North America
United States
Cars 384 362
Trucks 603 653
Total United States 987 1,015
Canada 73 52
Mexico 33 36
Total North America 1,093 1,103
Europe
Britain 155 175
Germany 79 105
Italy 50 63
France 24 42
Spain 42 40
Sweden 30 33
Other countries 77 113
Total Europe 457 571
South America
Brazil 28 35
Argentina 4 8
Other countries 9 7
Total South America 41 50
Other international
Australia 27 25
Taiwan 20 18
Other countries 40 38
Total other international 87 81
Total worldwide vehicle unit sales 1,678 1,805
Vehicle unit sales generally are reported worldwide on a ``where sold'' basis and include sales of all Ford Motor Company units, as well as units manufactured by Ford and sold to other manufacturers.
Prior period has been restated.
Excludes SFAS 133 Effect,
& Unusual Items
Ford Motor Company
AUTOMOTIVE GEOGRAPHIC AND COST OF SALES DETAIL
2002 Compared With 2001
GEOGRAPHIC DATA 1st Quarter
02 B/(W)
2002 2001 Than 01
PBT (Mils.)
U.S. ($568) $825 ($1,393)
Canada/Mexico (29) 278 (307)
North America ($597) $1,103 ($1,700)
Europe 177 138 39
South America (79) (81) 2
Rest of World 97 (31) 128
Worldwide ($402) $1,129 ($1,531)
Net Income (Mils.)
U.S. ($409) $580 ($989)
Canada/Mexico (21) 174 (195)
North America ($430) $754 ($1,184)
Europe 117 88 29
South America (51) (53) 2
Rest of World 54 (41) 95
Worldwide ($310) $748 ($1,058)
Sales (Mils.)
U.S. $21,159 $22,099 ($940)
Canada/Mexico 1,983 1,558 425
North America $23,142 $23,657 ($515)
Europe 7,164 8,684 (1,520)
South America 412 610 (198)
Rest of World 1,603 1,699 (96)
Worldwide $32,321 $34,650 ($2,329)
COST OF SALES 1st Quarter
02 B/(W)
2002 2001 Than 01
(Mils) (Mils) (Mils)
Total Costs and Expenses $32,412 $33,231 $819
Less: Depreciation 590 675 85
Amortization 572 726 154
Selling and Admin. 2,282 2,461 179
Postretirement Exp.* 488 377 (111)
Net Cost of Sales $28,480 $28,992 $512
Memo: Gross Margin 11.9% 16.3% -4.4 pts
- - - - -
* Now includes Benefit Expenses from Total Pension, Retiree Health Care,
and Retiree Life Insurance
Ford Motor Company
FIRST QUARTER 2002 DATA SHEET
2002 Compared with 2001
4th Qtr 2002 2001
2001 1st Qtr 1st Qtr Full Year
Market Share Data (%)
U.S.
Car 17.8% 16.1% 17.7% 17.7%
Truck 27.0% 24.9% 27.4% 27.4%
Total 22.8% 20.7% 22.6% 22.8%
Europe
Car 10.3% 11.7% 11.4% 11.0%
Truck 8.1% 8.4% 9.1% 8.6%
Total 10.2% 11.3% 11.1% 10.7%
U.S. Total Marketing Costs (Ford/LM)
-- Variable and Fixed
(% of Gross Revenue) 16.7% 15.7% 12.2% 14.7%
U.S. Sales Mix (Ford/LM)
Fleet Sales (% of Total) 21% 28% 30% 25%
Red Carpet Lease (% of Total) 7% 14% 18% 15%
Red Carpet Lease (% of Retail) 9% 19% 26% 20%
U.S. Inventory (Days' Supply)
Car 63 59 59 63
Truck 59 66 75 59
Average 60 64 69 60
Avg. Portfolio Borrowing Rate
Ford Credit (%) 5.6% 5.4% 6.5% 6.1%
Worldwide Taxes
Effective Tax Rate 32.5% 32.5% a/ 32.5% 32.5%
Common and Class B
Shares Outstanding (Mils.)
Average - actual 1,810 1,807 1,840 1,820
Average - assuming
full dilution 1,806 1,805 1,868 1,810
Period ended - actual 1,809 1,806 1,830 1,809
Common Stock price (per share)
High $18.94 $17.29 $31.37 $31.46
Low 14.93 13.90 23.75 14.93
Cash Dividends (per share) $0.15 $0.10 $0.30 $1.05
a/ Includes dividends from Ford Motor Capital Trust
Ford Motor Company
2002 NORTH AMERICAN PRODUCTION AND OVERSEAS SALES
2002 Planned
First Second
Quarter Quarter
(000) (000)
North American Production and Imports
Car 392 435
Truck 660 745
North American Production 1,052 1,180
Mexican Domestic Units Incl. Above Incl. Above
Imports (Volvo, Jaguar,
Land Rover, Fiesta) 63 79
Total North America (Incl. Imports) 1,115 1,259
Overseas Vehicle Unit Sales 612 688
Ford Worldwide 1,727 1,947
Over/(Under) Prior
North America
Units:
. Issue 2 0
. Quarter 57 144
. Year (13) 58
Percentage:
. Issue 0% 0%
. Quarter 5% 13%
. Year (1)% 5%
Overseas
Units:
. Issue 0 0
. Quarter (57) 76
. Year (87) (28)
Percentage:
. Issue 0% 0%
. Quarter (9)% 12%
. Year (12)% (4)%
Worldwide
Units:
. Issue (2) 0
. Quarter 0 220
. Year (100) 30
Percentage:
. Issue 0% 0%
. Quarter 0% 13%
. Year (5)% 2%