Exhibit 20
NEWS
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IMMEDIATE RELEASE
FORD REPORTS SECOND QUARTER
NET PROFIT OF $570 MILLION
o Second quarter profit of 31 cents per share, excluding unusual items, beats
consensus estimate by 5 cents per share
o All-new Ford Expedition and Lincoln Navigator drive improvements in
full-size and luxury SUV sales and segment share
o Automotive gross cash at $24.9 billion, up $3.4 billion from last quarter
o Continue to expect a modest profit for the full year
DEARBORN, Mich., July 17 - Ford Motor Company [NYSE: F] today reported a net
profit of $570 million, or 29 cents per share, in the second quarter of 2002.
Excluding unusual items related to the European end-of-life vehicles' directive
and Statement of Financial Accounting Standards (SFAS) No. 133, Ford earned an
operating profit of $610 million, or 31 cents per share. Ford lost $551 million,
or 31 cents per share in the second quarter of 2001, excluding unusual items but
including costs associated with the tire replacement action.
Ford's second quarter revenues were $42.3 billion, equal to last year's second
quarter. Worldwide vehicle unit sales in the 2002 second quarter were 1,854,000,
approximately equal to the previous year's quarter.
"The second quarter was an important leg on Ford Motor Company's journey to
financial health, but we still have much work to do," said Bill Ford, chairman
and CEO.
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"The successful introduction of the Expedition and Navigator, improved
J.D. Power quality ratings, continued improvements at Ford Credit and in Europe,
as well as further progress on our Revitalization Plan highlighted the
accomplishments of the entire Ford team."
Ford made progress this quarter on many of the Revitalization Plan milestones,
including posting a 12 percent overall improvement, the most of any domestic
manufacturer, in this year's J.D. Power Initial Quality Study. Also, the all-new
Ford Expedition and Lincoln Navigator began arriving at dealerships late in the
second quarter and are driving improvements in full-size and luxury SUV sales
and segment shares. The sales success of these products is expected to continue
during the second half of this year. In addition, substantially stronger sales
at Jaguar and Land Rover, combined with the arrival of several new premium brand
products at dealerships later this year, are expected to strengthen Ford's
luxury vehicle lineup.
"We made progress against several of our Revitalization Plan milestones,
including a significant improvement in the J.D. Power quality study, but we are
not satisfied with our results," said Nick Scheele, Ford president and chief
operating officer. "Quality is our top priority and we expect further
improvements going forward."
The company further rationalized its manufacturing capacity, remaining on track
to increase capacity utilization by 10 percentage points by year's end. Shifts
have been eliminated at the Edison and Ohio assembly plants, with an additional
shift elimination scheduled at the Wixom Assembly plant at the end of the
summer. The company has also realized more than $400 million in cash from the
divestment of non-core operations during the first six months of the year.
Second quarter 2002 results included the following non-cash, after-tax unusual
items:
o $41 million charge for the projected costs related to legislation passed to
date in selected countries to implement a European Parliament directive
involving end-of-life vehicles
o Net $1 million benefit relating to the accounting standard for derivative
instruments and hedging activities (SFAS No. 133)
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First half 2002 results included a non-cash $294 million charge for the final
transition, completed in the second quarter, to a new accounting standard for
goodwill (SFAS No. 142).
The following second quarter results exclude unusual items in both years:
AUTOMOTIVE OPERATIONS
Worldwide automotive operations earned $205 million in the second quarter,
compared with a loss of $1 billion a year ago. Worldwide automotive revenues
were $35.2 billion, compared with $34.6 billion a year ago.
Automotive gross cash at June 30 totaled $24.9 billion, including $1.5 billion
of pre-funding employee benefit expenses through a Voluntary Employee
Beneficiary Association trust.
North America: Strong production contributed to a $45 million profit in North
America in the second quarter. This compared with a loss of $1.1 billion in the
2001 second quarter, which included costs associated with the customer safety
initiative to replace Firestone tires.
Europe: In Europe, Ford earned $155 million and increased market share in the
second quarter, compared with earnings of $141 million a year ago. Overall
volumes were down due to a lower industry and the changeover to the all-new
Fiesta.
South America: Ford operations in South America lost $96 million, compared with
a loss of $70 million a year ago. South America continues to represent a
difficult business environment due to lower industry volume and currency
weakness. However, in Brazil, Ford market share increased 1.9 percentage points
over last year's second quarter on the strength of the all-new Fiesta.
Rest-of-World: Operations from the rest of the world earned a profit of $101
million, compared with a profit of $47 million in the 2001 second quarter. The
biggest improvement was at Mazda.
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FORD CREDIT
Ford Credit posted its second consecutive quarterly improvement, earning $343
million in the second quarter. Compared with a profit of $399 million in the
second quarter of 2001, earnings were down because of higher actual credit
losses and the unfavorable impact of securitizations, offset partially by the
impact of currency changes in overseas markets and higher levels of managed
receivables. Higher actual credit losses reflected higher levels of unemployment
and bankruptcies in the United States. Over the past 12 months, increased
securitizations have resulted in lower owned receivables and related revenue,
offset partially by higher income from assets retained in securitizations and
servicing fees.
HERTZ
Hertz reported a second quarter profit of $53 million, down from last year's $59
million profit in the second quarter. Rental volume has started to recover due
to a pickup in summertime travel, but still remains lower year-over-year.
OUTLOOK
"We continue to expect a modest profit for the full year, but those results are
still unacceptable," said Allan Gilmour, Ford vice chairman and chief financial
officer. "We are continually monitoring our progress on the Revitalization Plan
and are intensifying our efforts to reduce costs and improve efficiency to
ensure that we stay on track."
Investors can hear a review of second quarter results by Allan Gilmour, vice
chairman and chief financial officer, on the Internet at
http://www.shareholder.ford.com, http://www.streetevents.com (subscribers only)
or http://www.companyboardroom.com. The presentation will start at 9 a.m. EDT,
July 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,
Mazda, Mercury and Volvo. Its automotive-related services include Ford Credit,
Hertz and Quality Care.
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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; reduced availability of or higher prices
for fuel; 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; 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.