Ford Announces First Quarter Financial Results
* Net income of 94 cents per share, or $2 billion.
* Earnings from continuing operations of 96 cents per share, excluding special items.
* Automotive sector pre-tax profit of $1.8 billion. Financial Services sector pre-tax profit of $1.1 billion.
* Full-year earnings guidance increased to a range of $1.50 to $1.60 per share from continuing operations, excluding special items.
DEARBORN, Mich., April 21 -- Ford Motor Company today reported net income of 94 cents per share, or $1,952 million, for the first quarter of 2004. This compares with net income of 45 cents per share, or $896 million, in the first quarter of 2003.
Ford's first-quarter earnings from continuing operations excluding special items were 96 cents per share, or $1,983 million. This result exceeds the First Call consensus estimate of analysts of 44 cents per share.
Ford's total sales and revenue in the first quarter rose to $44.7 billion from $40.8 billion in the year-ago period.
"This is the best quarter we have achieved since we began our back-to- basics efforts more than two years ago, and it clearly demonstrates our plan is working and building momentum," said Bill Ford, chairman and chief executive officer. "As we showed at the New York Auto Show, our product lineup continues to strengthen with new vehicles such as the Ford Escape Hybrid, Ford Mustang and Land Rover LR3/Discovery."
AUTOMOTIVE SECTOR
On a pre-tax basis, Ford's worldwide automotive sector reported a profit of $1,806 million during the first quarter of 2004. Excluding special items of $12 million, worldwide automotive profits in the first quarter were $1,818 million, a $1,156 million improvement over the same period a year ago. The special items included $29 million for restructuring in Ford Europe and a $17 million gain related to a prior divestiture.
Worldwide automotive sales for the first quarter rose more than 13 percent, or $4.6 billion, to $38.8 billion. Worldwide vehicle-unit sales in the quarter were 1,788,000, up from 1,704,000 a year ago.
Automotive cash, marketable securities, loaned securities and short-term Voluntary Employee Beneficiary Association (VEBA) assets on March 31, 2004 were $26.5 billion, up from $25.9 billion on December 31, 2003.
THE AMERICAS
For the first quarter, the Americas reported a pre-tax profit of $1,977 million, up $772 million from the same period a year ago.
North America: Ford's North America automotive pre-tax profit for the first quarter was $1,962 million, up from $1,236 million a year ago. The increase primarily reflected favorable cost performance, improved vehicle mix and favorable net pricing. Sales increased to $23.3 billion from $22.2 billion in the same period a year ago.
South America: Ford's South America operations reported a first-quarter pre-tax profit of $15 million, a $46 million improvement from the 2003 first quarter. The improvement primarily reflected improved pricing, favorable mix and higher vehicle volumes. Sales were $650 million, up $320 million from the same period a year ago.
INTERNATIONAL
The 2004 first-quarter pre-tax profit for International was $107 million, excluding special items, compared with a loss of $319 million for the year-ago period, a year-over-year improvement of $426 million.
Ford Europe: Ford Europe's first-quarter pre-tax profit was $5 million, excluding special items, compared with a pre-tax loss of $247 million during the 2003 period. The improvement primarily reflected favorable cost performance; stronger industry sales, particularly in Turkey; and favorable net pricing, partially offset by unfavorable exchange rates. Ford Europe's sales in the first quarter were $6.5 billion, compared with $5 billion during the first quarter of 2003.
Premier Automotive Group (PAG): PAG reported a pre-tax profit of $20 million for the first quarter, compared with a pre-tax loss of $88 million for the first quarter of 2003. The improvement primarily reflected lower costs, higher volume and positive net pricing, partially offset by unfavorable exchange rates. First-quarter sales for PAG were $6.8 billion, compared with $5.4 billion a year ago.
Ford Asia-Pacific: During the first quarter of 2004, Ford Asia-Pacific reported a pre-tax profit of $28 million, compared with a pre-tax loss of $25 million in the same period a year ago. The improvement primarily reflected favorable exchange rates and cost reductions. Sales rose to $1.6 billion, compared with $1.3 billion during the first quarter of 2003.
FORD CREDIT
Ford Motor Credit Company reported net income of $688 million in the first quarter of 2004, up $246 million from earnings of $442 million a year earlier. On a pre-tax basis from continuing operations, Ford Credit earned $1.1 billion in the first quarter, compared with $727 million in the previous year. The increase in earnings primarily reflected improved credit loss performance, higher used vehicle prices and the favorable impact of the present low interest rate environment.
HERTZ
Hertz reported a pre-tax loss of $7 million in the first quarter, compared with a $59 million loss during the same period a year ago. The improvement is primarily due to improved rental car demand, offset partly by unfavorable pricing.
OUTLOOK
"We are very pleased with our first-quarter results across all our automotive and financial services operations," said Don Leclair, chief financial officer. "Our efforts to improve our quality and our business structure are continuing to pay off, and our strong pipeline of new products gives us continued confidence that we are on the right track."
For these reasons, Ford is raising its full-year earnings guidance from a range of $1.20 to $1.30 per share to a range of $1.50 to $1.60 per share from continuing operations, excluding special items, which are presently estimated to reduce earnings by about 7 cents per share.
For the second quarter of 2004, Ford expects to earn 30 to 35 cents per share from continuing operations, excluding special items.
Investors and media can hear a review of first quarter results by Don Leclair via conference call at 800-299-7635 (617-786-2901 for international dial-in) or on the Internet at http://www.shareholder.ford.com/. Supporting presentation material will be available at the same Internet address. The presentation will begin at 9:00 a.m. EDT, April 21.
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures and distributes automobiles in 200 markets across six continents. With more than 327,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Credit, Quality Care and Hertz. Ford Motor Company celebrated its 100th anniversary on June 16, 2003.
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 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, geo-political events or
other factors;
* lower-than-anticipated market acceptance of new or existing products;
* work stoppages at key Ford or supplier facilities or other
interruptions of supplies;
* the discovery of defects in vehicles resulting in delays in new model
launches, recall campaigns or increased warranty costs;
* increased safety, emissions, fuel economy or other regulation resulting
in higher costs and/or sales restrictions;
* unusual or significant litigation or governmental investigations
arising out of alleged defects in our products or otherwise;
* worse-than-assumed economic and demographic experience for our post-
retirement benefit plans (e.g., investment returns, interest rates,
health care cost trends, benefit improvements);
* currency or commodity price fluctuations;
* a market shift from truck sales in the U.S.;
* economic difficulties in any significant market;
* reduced availability of or higher prices for fuel;
* labor or other constraints on our ability to restructure our business;
* a change in our requirements under long-term supply arrangements under
which we are obligated to purchase minimum quantities or pay minimum
amounts;
* credit rating downgrades;
* inability to access debt or securitization markets around the world at
competitive rates or in sufficient amounts;
* higher-than-expected credit losses;
* lower-than-anticipated residual values for leased vehicles;
* increased price competition in the rental car industry and/or a general
decline in business or leisure travel due to terrorist attacks, acts of
war, epidemic diseases or measures taken by governments in response
thereto that negatively affect the travel industry; and
* our inability to implement the Revitalization Plan.
Ford Motor Company and Subsidiaries
SECTOR STATEMENT OF INCOME
For the Periods Ended March 31, 2004 and 2003
(in millions, except per share amounts)
First Quarter
2004 2003
(unaudited)
AUTOMOTIVE
Sales $38,844 $34,159
Costs and expenses
Cost of sales 34,071 31,055
Selling, administrative and other expenses 2,748 2,298
Total costs and expenses 36,819 33,353
Operating income/(loss) 2,025 806
Interest income 117 148
Interest expense 392 313
Net interest income/(expense) (275) (165)
Equity in net income/(loss) of affiliated companies 56 21
Income/(loss) before income taxes - Automotive 1,806 662
FINANCIAL SERVICES
Revenues 5,847 6,656
Costs and expenses
Interest expense 1,450 1,644
Depreciation 1,731 2,553
Operating and other expenses 1,212 1,188
Provision for credit and insurance losses 371 593
Total costs and expenses 4,764 5,978
Income/(loss) before income taxes - Financial Services 1,083 678
TOTAL COMPANY
Income/(loss) before income taxes 2,889 1,340
Provision for/(benefit from) income taxes 829 337
Income/(loss) before minority interests 2,060 1,003
Minority interests in net income/(loss) of subsidiaries 85 102
Income/(loss) from continuing operations 1,975 901
Income/(loss) from discontinued/held-for-sale
operations (23) (5)
Net income/(loss) $1,952 $896
Income/(loss) attributable to Common and Class B Stock
after Preferred Stock dividends $1,952 $896
Average number of shares of Common and Class B
Stock outstanding 1,832 1,832
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic income/(loss)
Income/(loss) from continuing operations $1.08 $0.49
Income/(loss) from discontinued/held-for-sale
operations (0.01) -
Net income/(loss) $1.07 $0.49
Diluted income/(loss)
Income/(loss) from continuing operations $0.95 $0.45
Income/(loss) from discontinued/held-for-sale
operations (0.01) -
Net income/(loss) $0.94 $0.45
Cash dividends $0.10 $0.10
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
For the Periods Ended March 31, 2004 and 2003
(in millions, except per share amounts)
First Quarter
2004 2003
(unaudited)
Sales and revenues
Automotive sales $38,844 $34,159
Financial Services revenue 5,847 6,656
Total sales and revenues 44,691 40,815
Automotive interest income 117 148
Costs and expenses
Cost of sales 34,071 31,055
Selling, administrative and other expenses 5,691 6,039
Interest expense 1,842 1,957
Provision for credit and insurance losses 371 593
Total costs and expenses 41,975 39,644
Automotive equity in net income/(loss)
of affiliated companies 56 21
Income/(loss) before income taxes 2,889 1,340
Provision for/(benefit from) income taxes 829 337
Income/(loss) before minority interests 2,060 1,003
Minority interests in net income/(loss) of
subsidiaries 85 102
Income/(loss) from continuing operations 1,975 901
Income/(loss) from discontinued/held-for-sale
operations (23) (5)
Net income/(loss) $1,952 $896
Income/(loss) attributable to Common and Class B Stock
after Preferred Stock dividends $1,952 $896
Average number of shares of Common and Class B
Stock outstanding 1,832 1,832
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic income/(loss)
Income/(loss) from continuing operations $1.08 $0.49
Income/(loss) from discontinued/held-for-sale
operations (0.01) -
Net income/(loss) $1.07 $0.49
Diluted income/(loss)
Income/(loss) from continuing operations $0.95 $0.45
Income/(loss) from discontinued/held-for-sale
operations (0.01) -
Net income/(loss) $0.94 $0.45
Cash dividends $0.10 $0.10
Ford Motor Company and Subsidiaries
SECTOR BALANCE SHEET
(in millions)
March 31, December 31,
2004 2003
(unaudited)
ASSETS
Automotive
Cash and cash equivalents $4,664 $5,427
Marketable securities 8,405 10,749
Loaned securities 9,344 5,667
Total cash, marketable and loaned securities 22,413 21,843
Receivables, net 3,020 2,721
Inventories 10,193 9,181
Deferred income taxes 3,269 3,225
Other current assets 10,806 6,839
Total current assets 49,701 43,809
Equity in net assets of affiliated companies 1,990 1,930
Net property 41,168 41,993
Deferred income taxes 10,918 12,092
Goodwill and other intangible assets 6,170 6,254
Assets of discontinued/held-for-sale operations 71 68
Other assets 15,261 14,495
Total Automotive assets 125,279 120,641
Financial Services
Cash and cash equivalents 13,526 16,343
Investments in securities 938 1,123
Finance receivables, net 109,867 110,893
Net investment in operating leases 31,293 31,859
Retained interest in sold receivables 13,369 13,017
Goodwill and other intangible assets 1,003 1,008
Assets of discontinued/held-for-sale operations 377 388
Other assets 14,437 17,292
Receivable from Automotive 2,820 3,356
Total Financial Services assets 187,630 195,279
Total assets $312,909 $315,920
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $16,980 $15,289
Other payables 7,196 2,942
Accrued liabilities 32,877 32,171
Debt payable within one year 879 1,806
Current payable to Financial Services 29 124
Total current liabilities 57,961 52,332
Senior debt 13,346 13,832
Subordinated debt 5,155 5,155
Total long-term debt 18,501 18,987
Other liabilities 44,103 45,104
Deferred income taxes 1,903 2,352
Liabilities of discontinued/held-for-sale operations 109 94
Payable to Financial Services 2,791 3,232
Total Automotive liabilities 125,368 122,101
Financial Services
Payables 2,369 2,189
Debt 152,066 159,011
Deferred income taxes 11,039 11,061
Other liabilities and deferred income 8,409 9,211
Liabilities of discontinued/held-for-sale operations 36 37
Total Financial Services liabilities 173,919 181,509
Minority interests 740 659
Stockholders' equity
Capital stock
Common Stock, par value $0.01 per share (1,837
million shares issued) 18 18
Class B Stock, par value $0.01 per share (71
million shares issued) 1 1
Capital in excess of par value of stock 5,373 5,374
Accumulated other comprehensive income/(loss) (913) (414)
Treasury stock (1,787) (1,749)
Earnings retained for use in business 10,190 8,421
Total stockholders' equity 12,882 11,651
Total liabilities and stockholders' equity $312,909 $315,920
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions)
March 31, December 31,
2004 2003
ASSETS
Cash and cash equivalents $18,190 $21,770
Marketable securities 9,343 11,872
Loaned securities 9,344 5,667
Receivables, net 3,020 2,721
Finance receivables, net 109,867 110,893
Net investment in operating leases 31,293 31,859
Retained interest in sold receivables 13,369 13,017
Inventories 10,193 9,181
Equity in net assets of affiliated companies 2,971 2,959
Net property 42,799 43,598
Deferred income taxes 4,162 7,389
Goodwill and other intangible assets 7,173 7,262
Assets of discontinued/held-for-sale operations 448 456
Other assets 37,907 35,950
Total assets $300,079 $304,594
LIABILITIES AND STOCKHOLDERS' EQUITY
Payables $26,545 $20,420
Accrued liabilities 29,781 29,591
Debt 171,446 179,804
Other liabilities and deferred income 52,655 53,899
Deferred income taxes 5,885 8,439
Liabilities of discontinued/held-for-sale operations 145 131
Total liabilities 286,457 292,284
Minority interests 740 659
Stockholders' equity
Capital stock
Common Stock, par value $0.01 per share (1,837
million shares issued) 18 18
Class B Stock, par value $0.01 per share (71
million shares issued) 1 1
Capital in excess of par value of stock 5,373 5,374
Accumulated other comprehensive income/(loss) (913) (414)
Treasury stock (1,787) (1,749)
Earnings retained for use in business 10,190 8,421
Total stockholders' equity 12,882 11,651
Total liabilities and stockholders' equity $300,079 $304,594
Ford Motor Company and Subsidiaries
CONDENSED SECTOR STATEMENT OF CASH FLOWS
For the Periods Ended March 31, 2004 and 2003
(in millions)
First Quarter First Quarter
2004 2003
Auto- Financial Auto- Financial
motive Services motive Services
(unaudited) (unaudited)
Cash and cash equivalents at January 1 $5,427 $16,343 $5,157 $7,064
Cash flows from operating activities
before
securities trading 2,564 5,853 2,942 4,643
Net sales/(purchases) of trading
securities (1,371) (8) 230 (40)
Net cash flows from operating
activities 1,193 5,845 3,172 4,603
Cash flows from investing activities
Capital expenditures (1,204) (76) (1,416) (80)
Acquisitions of receivables and lease
investments - (15,432) - (17,584)
Collections of receivables and lease
investments - 11,464 - 10,749
Net acquisitions of daily rental
vehicles - (1,041) - (385)
Purchases of securities (1,342) (2) (566) (149)
Sales and maturities of securities 1,380 196 474 207
Proceeds from sales of receivables
and lease investments - 3,290 - 10,966
Proceeds from sale of businesses 100 - - 157
Repayment of debt from discontinued
operations - - - 1,421
Net investing activity with Financial
Services 851 - 970 -
Cash paid for acquisitions - - (8) -
Other 4 11 - 47
Net cash (used in)/provided by
investing activities (211) (1,590) (546) 5,349
Cash flows from financing activities
Cash dividends (183) - (183) -
Net sales/(purchases) of Common Stock (60) - (22) -
Changes in short-term debt (156) 4,881 (227) 2,424
Proceeds from issuance of other debt 148 4,343 90 3,862
Principal payments on other debt (1,377)(15,491) (78) (10,640)
Net financing activity with Automotive - (851) - (970)
Other (10) 12 (3) 20
Net cash (used in)/provided by
financing activities (1,638) (7,106) (423) (5,304)
Effect of exchange rate changes on cash (12) (61) 55 78
Net transactions with
Automotive/Financial Services (95) 95 (304) 304
Net increase/(decrease) in cash and
cash equivalents (763) (2,817) 1,954 5,030
Cash and cash equivalents at March 31 $4,664 $13,526 $7,111 $12,094
Ford Motor Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Periods Ended March 31, 2004 and 2003
(in millions)
First Quarter
2004 2003
(unaudited)
Cash and cash equivalents at January 1 $21,770 $12,221
Cash flows from operating activities before securities
trading 8,417 7,585
Net sales/(purchases) of trading securities (1,379) 190
Net cash flows from operating activities 7,038 7,775
Cash flows from investing activities
Capital expenditures (1,280) (1,496)
Acquisitions of receivables and lease investments (15,432)(17,584)
Collections of receivables and lease investments 11,464 10,749
Net acquisitions of daily rental vehicles (1,041) (385)
Purchases of securities (1,344) (715)
Sales and maturities of securities 1,576 681
Proceeds from sales of receivables and lease
investments 3,290 10,966
Proceeds from sale of businesses 100 157
Repayment of debt from discontinued operations - 1,421
Cash paid for acquisitions - (8)
Other 15 47
Net cash (used in)/provided by investing activities (2,652) 3,833
Cash flows from financing activities
Cash dividends (183) (183)
Net sales/(purchases) of Common Stock (60) (22)
Changes in short-term debt 4,725 2,197
Proceeds from issuance of other debt 4,491 3,952
Principal payments on other debt (16,868)(10,718)
Other 2 17
Net cash (used in)/provided by financing activities (7,893) (4,757)
Effect of exchange rate changes on cash (73) 133
Net increase/(decrease) in cash and cash equivalents (3,580) 6,984
Cash and cash equivalents at March 31 $18,190 $19,205