Ford to Expense Employee Stock Options

DEARBORN, Mich., Sept. 12 Ford Motor Company today announced that it will voluntarily expense employee stock options in its financial statements starting Jan. 1, 2003.

Ford will expense the fair-market value of options granted to employees under guidelines of the Financial Accounting Standards Board (FASB) rule, SFAS No. 123.

"Expensing stock options will not represent a significant cost to us," said Allan Gilmour, vice chairman and chief financial officer. "We have adopted this accounting change in an effort to further enhance the clarity of our financial statements."

Ford currently complies with the Financial Accounting Standards Statement No. 123 and discloses in its financial statement footnotes what the effect would have been of expensing stock option grants. In 2001, the pro-forma expense associated with stock option grants was about $150 million, or 8 cents a share. The company is currently studying various transitional methods.

Ford employees currently hold options to purchase more than 172 million shares of Ford common stock. These stock options are an important part of Ford's employee compensation program aimed at improving the company's long- term business and financial performance.