FORD LOGO Global News Communications Ford Motor Company The American Road Room 904 Dearborn, Michigan 48121 Telephone: (313)322-9600 Fax: (313)845-0570 (313)337-1764 FOR RELEASE AT 8 A.M. (EASTERN) WEDNESDAY, JULY 19 Contact: Media Inquiries Broadcast Media Stockholder Inquiries Terry Bresnihan Lin Cummins (313) 845-8540 (313) 322-9600 (313) 322-9600 FORD EARNS $1.6 BILLION IN QUARTER DEARBORN, Mich., July 19 -- Increasing market shares around the world, along with improved profit performance in Europe and another solid quarter in Financial Services, gave Ford Motor Company a strong overall showing in the second quarter of 1995. Ford earned $1.6 billion or $1.45 per share of common and Class B stock in the second quarter. The results, which represent Ford's third best second quarter ever, are up slightly from the first quarter but down from the record level of $1.7 billion or $1.63 per share in the second quarter of 1994. The earnings decline reflects a decrease in U.S. automotive profits, primarily as a result of lower unit volumes. Industry sales varied by region, with a modest fall-off in the U.S. and a small increase in Europe. In most major regions, however, Ford's market shares were higher, reflecting the acceptance and success of the company's leading products. "Ford's excellent market share performance tells me that, even in uncertain economic conditions, customers are showing preference for our company's cars and trucks," said Alex Trotman, chairman and chief executive officer. "Our products are providing our customers around the globe with what they want in a vehicle, at prices they consider to be good value." -2- SUMMARY OF SECOND-QUARTER 1995 COMPARED WITH 1994 Overview - -------- - - Total earnings were $1.57 billion, compared with $1.71 billion. - - Earnings per share were $1.45, compared with $1.63 per share. - - Worldwide sales and revenues were $36.4 billion, compared with $33.8 billion. Automotive - ---------- - - Net income from worldwide automotive operations was $1.1 billion, compared with $1.2 billion. After-tax return on sales was 3.7 percent, compared with 4.3 percent. - - Net income from U.S. automotive operations was $663 million, compared with $888 million. After-tax return on sales was 3.4 percent, compared with 4.6 percent. - - Net income from automotive operations outside the U.S. was $437 million, compared with $314 million. After-tax return on sales was 4.3 percent, compared with 3.5 percent. Financial Services Group - ------------------------ - - The Financial Services Group earned $472 million, compared with $509 million. - - Ford Credit earned $341 million, compared with $368 million. - - Associates Corp. of North America earned $173 million, compared with $142 million. - - USL Capital earned $30 million, compared with $27 million. Sales and Market Share - ---------------------- - - Worldwide vehicle unit sales were 1,811,000, compared with 1,850,000 units. - - Combined car and truck share in the U.S. was 26.2 percent, compared with 25 percent. - - Combined car and truck share in Europe was 12.2 percent, compared with 11.9 percent. Balance Sheet - ------------- - - Stockholders' equity was $25.2 billion, compared with $18.4 billion at mid-year 1994. - - Automotive cash and marketable securities were $14 billion, compared with $13.7 billion. - - Automotive debt was $6.9 billion, compared with $7.3 billion. - - Automotive net cash was $7.1 billion, compared with $6.4 billion. - - Capital spending was $1.9 billion, equal to $1.9 billion in the year-ago quarter. -3- AUTOMOTIVE OPERATIONS Net income from worldwide automotive operations was $1.1 billion in the second quarter, down $102 million from the second quarter of 1994. The after-tax return on sales was 3.7 percent, down from 4.3 percent a year earlier. Outside the U.S., Ford's second-quarter profits improved, primarily because of higher earnings in Europe reflecting higher volumes and improved margins. Automotive operations outside the U.S. earned $437 million in the second quarter of 1995, up $123 million from the year-ago quarter. In Europe, Ford earned $319 million, up $152 million from a year earlier. In the U.S., increased revenue from solid market share gains was offset by the effects of lower industry sales and dealer inventories, as well as unfavorable exchange rate changes. In the U.S., Ford earned $663 million for the quarter, down $225 million from a year ago. Lower production, investment in major product introductions and the continued effect of exchange rates are expected to dampen automotive returns into the second half of this year. "Our worldwide automotive margins are below where we want them to be and will continue to be under pressure, but I'm confident we're going to fix that over time," Trotman said. "In the meantime, it's important to remember that our management objectives are broader than quarter to quarter. Our overall strategy is focused on investing in the long-term competitiveness and profitability of the company." Trotman said the business environment is becoming more competitive each year. "But we're up to the challenge. We are concentrating on driving cost out of our system, even as we continue to invest heavily in new products and powertrains that will stand us in good stead in the years ahead." Trotman stressed that the company is determined to put best- in-class vehicles on the road, offering the features, quality and excitement that win and retain customers. "Our goal is to provide great products that represent the best value a customer can find. And our investment in that goal today will put Ford in an even stronger competitive position tomorrow." -4- Trotman noted that the company already is enjoying success in its objective. "Products are the heart and soul of this company and the product story at Ford continues to be one of growing popularity and leadership," Trotman said. In the U.S., Ford continues to be the preeminent force in trucks, holding three of the four top-selling spots through the second quarter, including F-Series as the best-seller. Ford held six of the top ten spots among all vehicles, as well, including F-Series, Taurus, Explorer, Ranger, Escort and Windstar. Contour and Mystique also had their best quarter ever, and in total Ford was up 1.2 points in combined car and truck share. Ford also enjoyed overall market share success in Europe, where combined car and truck share was 12.2 percent, up from 11.9 percent a year earlier, largely on the strength of the Escort and Scorpio. In Germany, Ford's share was up 1.5 percentage points for the quarter. FINANCIAL SERVICES The Financial Services Group earned $472 million in the second quarter, down $37 million from a year ago, when profits included $31 million from the sale of Ford Credit's interest in Manheim Auctions. This was a record for any quarter at The Associates with earnings of $173 million. It was a record second quarter for Ford Credit, excluding the Manheim sale a year ago, with profits of $341 million, and a record second quarter for USL Capital, with earnings of $30 million. "Our Financial Services Group had another strong profit in the second quarter, with records set in several components," Trotman said. "The Group continues to turn in impressive results quarter after quarter." # # # 7-19-95 Ford Motor Company and Subsidiaries HIGHLIGHTS ---------- Second Quarter First Half -------------------- -------------------- 1995 1994 1995 1994 -------- -------- -------- -------- Worldwide vehicle unit sales of cars and trucks (in thousands) - - United States 1,082 1,108 2,169 2,175 - - Outside United States 729 742 1,412 1,395 ----- ----- ----- ----- Total 1,811 1,850 3,581 3,570 ===== ===== ===== ===== Sales and revenues (in millions) - - Automotive $29,861 $28,375 $58,462 $54,445 - - Financial Services 6,528 5,397 12,710 9,729 ------- ------- ------- ------- Total $36,389 $33,772 $71,172 $64,174 ======= ======= ======= ======= Net income (in millions) - - Automotive $ 1,100 $ 1,202 $ 2,241 $ 2,175 - - Financial Services 472 509 881 440* ------- ------- ------- ------- Total $ 1,572 $ 1,711 $ 3,122 $ 2,615 ======= ======= ======= ======= Capital expenditures (in millions) - - Automotive $ 1,819 $ 1,839 $ 3,950 $ 3,480 - - Financial Services 80 62 147 121 ------- ------- ------- ------- Total $ 1,899 $ 1,901 $ 4,097 $ 3,601 ======= ======= ======= ======= Stockholders' equity at June 30 - - Total (in millions) $25,240 $18,422 $25,240 $18,422 - - After-tax return on Common and Class B stockholders' equity 28.3% 46.6% 29.5% 37.0% Automotive cash, cash equivalents, and marketable securities at June 30 (in millions) $14,011 $13,665 $14,011 $13,665 Automotive debt at June 30 (in millions) $ 6,866 $ 7,263 $ 6,866 $ 7,263 Automotive after-tax return on sales 3.7% 4.3% 3.9% 4.0% Shares of Common and Class B Stock (in millions) - - Average number outstanding 1,040 1,005 1,033 1,002 - - Number outstanding at June 30 1,074 1,009 1,074 1,009 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income - - Automotive $ 0.99 $ 1.12 $ 2.03 $ 2.03 - - Financial Services 0.46 0.51 0.86 0.44 ------- ------- ------- ------- Total $ 1.45 $ 1.63 $ 2.89 $ 2.47 ======= ======= ======= ======= Income assuming full dilution $ 1.30 $ 1.44 $ 2.59 $ 2.20 Cash dividends per share of Common and Class B Stock $ 0.31 $ 0.225 $ 0.57 $ 0.425 - - - - - - *Includes a loss of $440 million related to the disposition of Granite Savings Bank (formerly First Nationwide Bank) Segment results for 1994 have been adjusted to reflect reclassification of certain tax amounts to conform with the 1995 presentation. Ford Motor Company and Subsidiaries VEHICLE UNIT SALES ------------------ For the Periods Ended June 30, 1995 and 1994 (in thousands) Second Quarter First Half --------------------------- ------------------------- 1995 1994 1995 1994 ---------- ---------- ---------- --------- North America United States Cars 447 527 956 1,036 Trucks 635 581 1,213 1,139 ----- ----- ----- ----- Total United States 1,082 1,108 2,169 2,175 Canada 67 86 132 150 Mexico 7 25 18 45 ----- ----- ----- ----- Total North America 1,156 1,219 2,319 2,370 Europe Britain 162 164 266 289 Germany 114 99 232 209 Italy 56 52 108 106 Spain 48 45 96 82 France 40 51 84 94 Other countries 77 79 154 150 ----- ----- ----- ----- Total Europe 497 490 940 930 Other international Brazil 46 43 108 77 Australia 35 32 66 57 Taiwan 35 24 63 56 Japan 14 11 30 24 Argentina 11 14 21 24 Other countries 17 17 34 32 ----- ----- ----- ----- Total other international 158 141 322 270 ----- ----- ----- ----- Total worldwide vehicle unit sales 1,811 1,850 3,581 3,570 ===== ===== ===== ===== Vehicle unit sales are reported worldwide on a "where sold" basis and include sales of all Ford-badged units, as well as units manufactured by Ford and sold to other manufacturers. Second Quarter 1994 and First Half 1994 unit sales have been restated to reflect the country where sold and to include sales of all Ford-badged units. Previously, factory unit sales were reported in North America on a "where sold" basis and overseas on a "where produced" basis. Also, Ford-badged unit sales of certain unconsolidated subsidiaries (primarily Autolatina -- Brazil and Argentina) were not previously reported. Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME -------------------------------- For the Periods Ended June 30, 1995 and 1994 (in millions) Second Quarter First Half ------------------------- ------------------------- 1995 1994 1995 1994 -------- -------- -------- -------- (unaudited) (unaudited) AUTOMOTIVE Sales $29,861 $28,375 $58,462 $54,445 Costs and expenses (Note 2) Costs of sales 26,503 25,000 51,984 48,245 Selling, administrative, and other expenses 1,584 1,409 2,922 2,675 ------- ------- ------- ------- Total costs and expenses 28,087 26,409 54,906 50,920 Operating income 1,774 1,966 3,556 3,525 Interest income 216 163 423 291 Interest expense 174 163 340 339 ------- ------- ------- ------- Net interest income/(expense) 42 0 83 (48) Equity in net income of affiliated companies 19 42 39 109 Net expense from transactions with Financial Services (36) (11) (59) (19) ------- ------- ------- ------- Income before income taxes - Automotive 1,799 1,997 3,619 3,567 FINANCIAL SERVICES Revenues 6,528 5,397 12,710 9,729 Costs and expenses Interest expense 2,344 1,668 4,511 3,266 Depreciation 1,600 1,197 3,121 2,100 Operating and other expenses 1,292 1,223 2,628 2,047 Provision for credit and insurance losses 443 409 865 753 Loss on disposition of Granite Savings Bank (formerly First Nationwide Bank) - - - 475 ------- ------- ------- ------- Total costs and expenses 5,679 4,497 11,125 8,641 Net revenue from transactions with Automotive 36 11 59 19 ------- ------- ------- ------- Income before income taxes - Financial Services 885 911 1,644 1,107 ------- ------- ------- ------- TOTAL COMPANY Income before income taxes 2,684 2,908 5,263 4,674 Provision for income taxes 1,053 1,161 2,041 1,986 ------- ------- ------- ------- Income before minority interests 1,631 1,747 3,222 2,688 Minority interests in net income of subsidiaries 59 36 100 73 ------- ------- ------- ------- Net income 1,572 1,711 3,122 2,615 Preferred stock dividend requirements 69 72 141 144 ------- ------- ------- ------- Income attributable to Common and Class B Stock $ 1,503 $ 1,639 $ 2,981 $ 2,471 ======= ======= ======= ======= Average number of shares of Common and Class B Stock outstanding 1,040 1,005 1,033 1,002 AMOUNTS PER SHARE OF COMMON STOCK AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income $ 1.45 $ 1.63 $ 2.89 $ 2.47 ======= ======= ======= ======= Income assuming full dilution $ 1.30 $ 1.44 $ 2.59 $ 2.20 Cash dividends $ 0.31 $ 0.225 $ 0.57 $ 0.425 The accompanying notes are part of the financial statements. Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET -------------------------- (in millions) June 30, December 31, 1995 1994 ------------ ------------ ASSETS (unaudited) Automotive Cash and cash equivalents $ 8,381 $ 4,481 Marketable securities 5,630 7,602 -------- -------- Total cash, cash equivalents, and marketable securities 14,011 12,083 Receivables 3,100 2,548 Inventories (Note 3) 6,841 6,487 Deferred income taxes 3,059 3,062 Other current assets 1,851 2,006 Net current receivable from Financial Services 347 677 -------- -------- Total current assets 29,209 26,863 Equity in net assets of affiliated companies 3,496 3,554 Net property 29,200 27,048 Deferred income taxes 4,305 4,146 Other assets 6,772 6,760 -------- -------- Total Automotive assets 72,982 68,371 Financial Services Cash and cash equivalents 2,245 1,739 Investments in securities 6,961 6,105 Net receivables and lease investments 143,527 130,356 Other assets 14,093 12,783 -------- -------- Total Financial Services assets 166,826 150,983 -------- -------- Total assets $239,808 $219,354 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $ 11,222 $ 10,777 Other payables 1,933 2,624 Accrued liabilities 12,925 11,599 Income taxes payable 996 316 Debt payable within one year 796 155 -------- -------- Total current liabilities 27,872 25,471 Long-term debt 6,070 7,103 Other liabilities 25,890 24,920 Deferred income taxes 1,188 948 -------- -------- Total Automotive liabilities 61,020 58,442 Financial Services Payables 2,878 2,361 Debt 136,496 123,713 Deferred income taxes 3,540 2,958 Other liabilities and deferred income 8,311 7,669 Net payable to Automotive 347 677 -------- -------- Total Financial Services liabilities 151,572 137,378 Preferred stockholders' equity in a subsidiary company 1,976 1,875 Stockholders' equity Capital stock Preferred Stock, par value $1.00 per share (aggregate liquidation preference of $2.8 billion and $3.4 billion) * * Common Stock, par value $1.00 per share (1,004 and 952 million shares issued) 1,004 952 Class B Stock, par value $1.00 per share (71 million shares issued) 71 71 Capital in excess of par value of stock 5,440 5,273 Foreign currency translation adjustments and other 1,158 189 Earnings retained for use in business 17,567 15,174 -------- -------- Total stockholders' equity 25,240 21,659 -------- -------- Total liabilities and stockholders' equity $239,808 $219,354 ======== ======== - - - - - - *Less than $1 million The accompanying notes are part of the financial statements. Ford Motor Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ---------------------------------------------- For the Periods Ended June 30, 1995 and 1994 (in millions) First Half 1995 First Half 1994 ---------------------- --------------------- Financial Financial Automotive Services Automotive Services ---------- --------- ---------- -------- (unaudited) (unaudited) Cash and cash equivalents at January 1 $ 4,481 $ 1,739 $ 5,667 $ 2,555 Cash flows from operating activities before securities trading 6,058 6,373 8,134 4,532 Net sales/(purchases) of trading securities 1,980 285 (1,279) 180 -------- -------- -------- -------- Net cash flows from operating activities 8,038 6,658 6,855 4,712 Cash flows from investing activities Capital expenditures (3,950) (147) (3,480) (121) Acquisitions of receivables and lease investments - (50,981) - (45,614) Collections of receivables and lease investments - 35,105 - 29,523 Net acquisitions of daily rental vehicles - (1,894) - (1,134) Purchases of securities (41) (3,533) (113) (6,395) Sales and maturities of securities 33 2,713 235 6,247 Proceeds from sales of receivables and lease investments - 634 - 1,530 Investing activity with Financial Services (839) - 15 - Other 179 (109) 228 (466) -------- -------- -------- -------- Net cash used in investing activities (4,618) (18,212) (3,115) (16,430) Cash flows from financing activities Cash dividends (729) - (569) - Issuance of Common Stock 218 - 294 - Changes in short-term debt 696 4,207 (735) 7,010 Proceeds from issuance of other debt 0 12,301 128 11,234 Principal payments on other debt (207) (5,531) (41) (7,156) Financing activity with Automotive - 839 - (15) Receipts from annuity contracts - 247 - 519 Other 6 118 0 (552) -------- -------- -------- ------- Net cash (used in)/provided by financing activities (16) 12,181 (923) 11,040 Effect of exchange rate changes on cash 166 209 346 149 Net transactions with Automotive/Financial Services 330 (330) (416) 416 -------- -------- -------- -------- Net increase/(decrease) in cash and cash equivalents 3,900 506 2,747 (113) -------- -------- -------- -------- Cash and cash equivalents at June 30 $ 8,381 $ 2,245 $ 8,414 $ 2,442 ======== ======== ======== ======== The accompanying notes are part of the financial statements. Ford Motor Company and Subsidiaries NOTES TO FINANCIAL STATEMENTS ----------------------------- (unaudited) 1. Financial Statements - The financial data presented herein are unaudited, but in the opinion of management reflect those adjustments necessary for a fair presentation of such information. Results for interim periods should not be considered indicative of results for a full year. Reference should be made to the financial statements contained in the registrant's Annual Report on Form 10-K (the "10-K Report") for the year ended December 31, 1994. For purposes hereof, "Ford" or the "Company" means Ford Motor Company and its majority-owned subsidiaries unless the context requires otherwise. Certain amounts for prior periods have been reclassified to conform with presentations adopted in 1995. 2. Selected Automotive costs and expenses are summarized as follows (in millions): Second Quarter First Half ------------------ ------------------ 1995 1994 1995 1994 ------ ------ ----- ----- Depreciation $605 $564 $1,194 $1,145 Amortization 629 582 1,341 1,124 3. Automotive inventories are summarized as follows (in millions): June 30, December 31, 1995 1994 -------- ------------ Raw materials, work in process and supplies $3,261 $3,192 Finished products 3,580 3,295 ------ ------ Total inventories $6,841 $6,487 ====== ====== U.S. inventories $2,751 $2,917