Exhibit 20
NEWS
Contact:
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abork@ford.com
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IMMEDIATE RELEASE
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FORD EXCEEDS ESTIMATES FOR THIRD QUARTER, REPORTS OPERATING PROFIT
o Third quarter profit of 12 cents per share, excluding unusual items, beats
consensus estimate by 9 cents per share
o Operating profit, revenue and unit sales all rise from year ago levels
o Automotive gross cash at $25.7 billion, up $800 million from last quarter
o Expect slight profit for fourth quarter and a full year profit of about 40
cents per share - within the range of analysts' estimates of 35 to 55 cents
per share
DEARBORN, Mich., Oct. 16 - Ford Motor Company [NYSE: F] today reported a net
loss of $326 million, or 18 cents per share, in the third quarter of 2002.
Excluding charges related to the sale of Kwik-Fit and other unusual items, Ford
earned an operating profit of $220 million, or 12 cents per share. Ford reported
a loss of $502 million, or 28 cents per share, excluding unusual items, in the
third quarter of 2001.
Ford's third quarter revenues were $39.6 billion, a nine percent increase from
last year's third quarter. Worldwide vehicle sales in the 2002 third quarter
were 1,657,000 units - also up nine percent over the previous year's quarter.
"The fundamentals of our business are improving, as evidenced by increases in
our revenue and vehicle sales, improvements in our market share and tangible
progress on cost efficiencies," said Bill Ford, chairman and CEO. "While we are
pleased with our progress, we continue our work with a strong sense of urgency
to restore our business to its full profit potential."
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The company's Revitalization Plan advanced on multiple fronts this quarter,
including progress in the areas of right-sizing capacity and overhead
reductions. These improvements, along with numerous other cost improvement
actions already identified, are being implemented across the company to reduce
$2 billion in non-product costs in 2002. In addition, the company is on track
to offset all product cost increases and reduce its material costs by $3 billion
by mid-decade.
The sale of Kwik-Fit, a European maintenance and light vehicle repair business,
and Collision Team of America, a U.S.-based chain of collision repair shops,
improved the total cash to be realized on the sale of non-core assets to more
than $700 million in 2002. The company continues to expect to realize $1 billion
in cash from the divestiture of non-core assets in 2002, with some of the
proceeds to be received in the first quarter of next year.
"Our Revitalization Plan is like a bridge from our current challenges to a much
stronger future for the Ford Motor Company," said Nick Scheele, Ford president
and chief operating officer. "Our plan is stronger now than at any time this
year, and I anticipate that it will only continue to improve in the coming
months."
In addition to progress on key aspects of the Revitalization Plan, the company
is focusing on growth plans for the premium brands - Jaguar, Volvo, Land Rover
and Aston Martin. In the past 18 months, Ford's premium brands have experienced
rapid growth. The company is reassessing their sustainable rate of growth and
the appropriate cadence of new products to ensure that brand value is protected
and product execution is not jeopardized.
"Our premium brand strategy has created some outstanding new products in the
past two years and has brought an entirely new set of customers to our luxury
car showrooms," said Scheele. "Our focus in the future will center on capturing
the full potential of this growth while strengthening the integrity of our
premium brands."
Third quarter 2002 results included the following after-tax, unusual items:
o $525 million loss on the agreement to sell Kwik-Fit and other businesses
o $142 million benefit related to interest income earned on a U.S. federal
tax refund
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o $158 million charge relating to the accounting standard for derivative
instruments and hedging activities (SFAS No. 133)
o $5 million charge for the projected costs related to legislation passed in
the third quarter in selected countries to implement a European Parliament
directive involving end-of-life vehicles
The following discussion of third quarter results excludes unusual items in both
years:
AUTOMOTIVE OPERATIONS
Worldwide automotive operations reported a loss of $243 million in the third
quarter, compared with a loss of $877 million one year ago. Worldwide automotive
revenues were $32.4 billion, compared with $28.4 billion a year ago.
Automotive gross cash at Sept. 30 totaled $25.7 billion, including $900 million
of pre-funding employee benefit expenses through a Voluntary Employee
Beneficiary Association trust.
North America: Ford posted a loss of $50 million in North America in the third
quarter, compared with a loss of $849 million one year ago. Higher unit volume,
favorable net revenue and positive net cost performance largely accounted for
the improvement.
Europe: In Europe, Ford lost $121 million compared with a loss of $24 million a
year ago. The decline was largely due to higher marketing at Jaguar and Volvo
and increased product costs at Jaguar.
South America: Ford operations in South America reported a loss of $138 million,
compared with a loss of $56 million a year ago. Unfavorable exchange rates more
than offset improved cost performance. Economic and industry conditions in the
region remain very difficult.
Rest-of-World: Operations in the rest of the world earned a profit of $66
million, compared with a profit of $52 million a year ago. The increase
primarily reflects improvements at Mazda.
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FORD CREDIT
Ford Credit earned $408 million in the third quarter, up $19 million from
earnings of $389 million in the same period a year earlier. The improvement is
more than accounted for by lower provisions for credit losses. Ford Credit's
profit was up $65 million from the second quarter, reflecting improved net
financing margins and the favorable impact of securitization transactions,
offset partially by a higher provision for credit losses.
HERTZ
Hertz reported a third quarter profit of $106 million, up from last year's $26
million profit in the third quarter. The continued recovery of business and
leisure travel is the principal reason for the increase.
OUTLOOK
"Our results have been better than we expected each quarter this year, causing
us to remain cautiously optimistic as we move into the fourth quarter," said
Allan Gilmour, Ford vice chairman and chief financial officer. "Many of our
efforts to increase efficiency and improve our profitability are beginning to
take hold, and we are projecting a slight profit for the fourth quarter and a
full year profit of about 40 cents per share - within the range of analysts'
estimates of 35 to 55 cents per share."
Investors can access a review of third quarter results by Allan Gilmour, vice
chairman and chief financial officer, and an update on the status of the
company's Revitalization Plan by Bill Ford, chairman and chief executive
officer, and Nick Scheele, President and COO, by dialing 703-736-7227. The
teleconference will also be Web cast 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,
Oct. 16.
Ford Motor Company (NYSE: F) is the world's second largest automaker, with
approximately 335,000 employees in 200 markets 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. The company's world headquarters are in Dearborn, Michigan. Ford
Motor Company will officially observe its 100th anniversary on June 16, 2003.
Additional information can be found on the company's web site at www.ford.com.
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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 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; 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
or increased warranty or litigation costs; insufficient credit loss reserves;
and our inability to implement the Revitalization Plan.