IMMEDIATE RELEASE Contact: Media Inquiries: Broadcast Media: Stockholder Inquiries: Christian Vinyard Lin Cummins (313) 845-8540 (313) 322-9600 (313) 322-9600 FORD REPORTS 1995 EARNINGS OF $4.1 BILLION DEARBORN, Mich., Jan. 31 -- A strong first half performance in automotive operations, combined with record results in financial services, contributed to making 1995 the fourth best year on record for Ford Motor Company. Full-year earnings for Ford were $4.1 billion after tax, or $3.58 per share ($3.33 fully diluted) of common and Class B stock in 1995, compared with a record $5.3 billion and $4.97 per share in 1994 ($4.44 fully diluted). "We had a good first half in 1995," said Alex Trotman, chairman and chief executive officer. "Second half automotive results were impacted by lower U.S. production volume and an unprecedented number of major product launches, including the all- new Ford Taurus, Mercury Sable, Ford F-Series pickup and the new Ford Fiesta and Ford Galaxy minivan in Europe." "Truck sales are hot, but the retail car market is tough," Trotman continued. "For the first time in history, our dealers sold more trucks than cars in the U.S. in 1995." Trotman added, "The new Ford Taurus and Mercury Sable and the Ford Fiesta in Europe are outstanding products, and we're pleased they're receiving favorable customer responses in highly competitive car markets." -2- SUMMARY OF 1995 AND COMPARISON WITH 1994 Overview - -------- - - Total earnings were $4.1 billion, down 22 percent from 1994's record $5.3 billion. - - Earnings per share were $3.58 ($3.33 fully diluted), compared with $4.97 per share ($4.44 fully diluted). - - Worldwide sales and revenues were $137.1 billion, compared with $128.4 billion. Automotive - ---------- - - Net income from worldwide automotive operations was $2 billion, down from $3.9 billion in 1994. After-tax return on sales was 1.9 percent, compared with 3.7 percent. - - Net income from U.S. automotive operations was $1.8 billion, compared with $3 billion. After-tax return on sales was 2.5 percent, compared with 4.1 percent. - - Automotive operations outside the U.S. earned $213 million, compared with $911 million in 1994. After-tax return on sales in 1995 was 0.7 percent, compared with 2.8 percent. - - Worldwide vehicle unit sales were 6,606,000, compared with 6,853,000 in 1994. - - Combined car and truck share in the U.S. was 25.6 percent, compared with 25.2 percent. - - Combined car and truck share in Europe was 12.3 percent, compared with 12.2 percent. Financial Services Group - ------------------------ - - The Financial Services Group earned $2.1 billion net income, compared with $1.4 billion in 1994, which included a $440 million charge for the sale of First Nationwide Bank. - - Ford Credit earned $1.4 billion, compared with $1.3 billion. - - The Associates earned $708 million, compared with $604 million. - - USL Capital earned $135 million, compared with $109 million. Balance Sheet - ------------- - - Stockholders' equity at year-end was $24.5 billion, compared with $21.7 billion. - - Automotive cash and marketable securities was $12.4 billion, compared with $12.1 billion. - - Automotive debt was $7.3 billion, equal to a year ago. - - Capital spending was $9 billion, compared with $8.5 billion. -3- "Once again, our world-class Financial Services Group turned in record results, and we expect further growth in 1996," Trotman noted. FORD OUTLOOK FOR 1996 "We're building the strength of our company year by year," Trotman said. "We look for gradual improvement in profitability during 1996, providing that our major markets show the moderate economic growth throughout the year that we expect." Trotman added, "Our highest-volume product launches will be largely behind us in the second half. And we should begin to see meaningful results from our concentrated efforts to reduce costs and improve efficiency throughout our automotive business." AUTOMOTIVE OPERATIONS Ford's full-year net income from worldwide automotive operations was $2 billion, a decline of $1.9 billion from 1994, which was the second highest year on record. In the U.S., Ford's automotive operations earned $1.8 billion for the full year, declining $1.2 billion compared with 1994. Outside the U.S., automotive operations earned $213 million, including a one-time gain of $230 million from the dissolution of Autolatina, compared with $911 million in 1994. Ford's European automotive operations earned $116 million, compared with $128 million for 1994. "Ford is in the middle of an historic transition," Trotman said. "We are introducing new models that cover about 35 percent of our sales volume in North America and Europe. We knew these product changeovers would reduce near-term earnings. But once fully launched, these new cars and trucks will strengthen an already successful product line." Trotman noted that the ability to carry out an ambitious launch program in both North America and Europe demonstrates the strength of Ford as a company. "We are able to bring these excellent new products to market while adding to cash reserves, strengthening our balance sheet, and maintaining the most attractive dividend yield in the industry," he said. "The best time to make major changes is during periods of strength. Ford is a strong company and is also well along to becoming an even stronger global competitor in the coming years." -4- Trotman also said that Ford increased its overall market shares in both North America and Europe in 1995. "We're very pleased our market shares are up," he said. "Customers determine our market share one purchase at a time, and more and more of them recognize the value that our cars and trucks represent. Since the early 1980's, Ford has gained more market share in the U.S. than any other manufacturer." FINANCIAL SERVICES Ford's Financial Services Group earned a record $2.1 billion in 1995, up from the $1.4 billion earned in 1994, which included a one-time charge of $440 million for the sale of First Nationwide Bank. Each of the major businesses in the Group set a full-year earnings record. Ford Credit earned $1.4 billion in 1995, up 6 percent from the $1.3 billion earned a year earlier. The Associates Corporation of North America earned $708 million in 1995, up 17 percent from the $604 million profit in 1994. USL Capital earned $135 million in 1995, up $26 million, or 24 percent, from 1994. OTHER 1995 HIGHLIGHTS - - Overall market shares were up in major markets around the world. - - In the U.S., Ford's total vehicle market share grew to 25.6 percent, up four-tenths of a point, the biggest gain in the industry. Truck share reached 31.9 percent. - - In North America, Ford ended 1995 with three of the top four best-selling cars and trucks -- F-Series, Explorer and Taurus -- and five of the top ten, including Ranger and Escort. - - F-Series was the top selling vehicle for the 14th consecutive year. Taurus was the top selling car in the U.S. for the fourth consecutive year. - - Hertz earned a record $105 million, up 14 percent from last year. - - In Europe, Ford's 1995 market share grew to 12.3 percent, the highest in 11 years. Truck share -- 14.8 percent -- was a record. Ford was the only manufacturer with three of the top ten best-sellers in Europe in 1995 -- Escort, Fiesta and Mondeo. -5- - - In Germany, Ford's car market share rose to 11.4 percent, up 1.2 percent and the highest since 1984. FOURTH-QUARTER RESULTS Ford earned $660 million or $0.49 per share ($0.48 fully diluted) of common and Class B stock in the fourth quarter of 1995. This compares with $1.6 billion or $1.47 per share ($1.31 fully diluted) in the fourth quarter of 1994. U.S. automotive operations earned $168 million, compared with $745 million in 1994. Outside the U.S., automotive operations incurred a loss of $152 million, compared with a profit of $374 million in 1994. The decline in automotive operations from 1994 stemmed mainly from a decrease in North American volumes, costs associated with new products launched in North America and Europe, adverse operating results in Brazil and Mexico, and the effects of currency exchange rates. For the Financial Services Group, fourth-quarter earnings were a record $644 million, compared with $450 million earned in the fourth quarter of 1994, partially reflecting a lower tax rate in 1995. Ford Credit's earnings were $409 million, an increase from the $331 million profit in the prior period. The Associates' earnings grew to $181 million from the $159 million earned in the prior period. USL's earnings of $48 million were up from the $34 million earned in the prior period. # # # Jan. 31, 1996 Ford Motor Company and Subsidiaries HIGHLIGHTS ---------- Fourth Quarter Full Year ----------------------- ------------------------- 1995 1994 1995 1994 ------ ------ ------ ------- Worldwide vehicle unit sales of cars and trucks (in thousands) - - United States 955 1,051 3,993 4,218 - - Outside United States 635 656 2,613 2,635 ------ ------ ------ ------- Total 1,590 1,707 6,606 6,853 ====== ====== ====== ======= Sales and revenues (in millions) - - Automotive $27,597 $27,766 $110,496 $107,137 - - Financial Services 6,950 5,877 26,641 21,302 ------- ------- -------- -------- Total $34,547 $33,643 $137,137 $128,439 ======= ======= ======== ======== Net income (in millions) - - Automotive $ 16 $ 1,119 $ 2,056 $ 3,913 - - Financial Services 644 450 2,083 1,395* ------- ------- -------- -------- Total $ 660 $ 1,569 $ 4,139 $ 5,308 ======= ======= ======== ======== Capital expenditures (in millions) - - Automotive $ 2,472 $ 2,404 $ 8,676 $ 8,310 - - Financial Services 98 65 321 236 ------- ------- -------- -------- Total $ 2,570 $ 2,469 $ 8,997 $ 8,546 ======= ======= ======== ======== Stockholders' equity at December 31 - - Total (in millions) $24,547 $21,659 $ 24,547 $ 21,659 - - After-tax return on Common and Class B stockholders' equity 10.9% 34.5% 18.2% 33.6% Automotive cash, cash equivalents, and marketable securities at December 31 (in millions) $12,406 $12,083 $ 12,406 $ 12,083 Automotive debt at December 31 (in millions) $ 7,307 $ 7,258 $ 7,307 $ 7,258 Automotive after-tax returns on sales 0.1% 4.1% 1.9% 3.7% Shares of Common and Class B Stock (in millions) - - Average number outstanding 1,136 1,020 1,071 1,010 - - Number outstanding at December 31 1,159 1,023 1,159 1,023 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income $ 0.49 $ 1.47 $ 3.58 $ 4.97 Income/(Loss) assuming full dilution - - Automotive $ (0.06) $ 0.93 $ 1.59 $ 3.25 - - Financial Services 0.54 0.38 1.74 1.19 ------- ------- -------- -------- Total $ 0.48 $ 1.31 $ 3.33 $ 4.44 ======= ======= ======== ======== Cash dividends $ 0.35 $ 0.26 $ 1.23 $ 0.91 - - - - - - *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. FS-1 Ford Motor Company and Subsidiaries VEHICLE UNIT SALES ------------------ For the Periods Ended December 31, 1995 and 1994 (in thousands) Fourth Quarter Full Year -------------------- ------------------ 1995 1994 1995 1994 ----- ----- ----- ----- North America United States Cars 434 530 1,767 2,036 Trucks 521 521 2,226 2,182 ----- ----- ----- ----- Total United States 955 1,051 3,993 4,218 Canada 76 75 254 281 Mexico 11 27 32 92 ----- ----- ----- ----- Total North America 1,042 1,153 4,279 4,591 Europe Britain 125 109 496 520 Germany 84 104 409 386 Italy 54 39 193 179 France 41 45 165 180 Spain 31 41 160 163 Other countries 74 71 286 281 ----- ----- ----- ----- Total Europe 409 409 1,709 1,709 Other international Brazil 48 43 201 164 Australia 32 38 139 125 Taiwan 16 21 106 97 Japan 13 13 57 50 Argentina 14 13 48 54 Other countries 16 17 67 63 ----- ----- ----- ----- Total other international 139 145 618 553 ----- ----- ----- ----- Total worldwide vehicle unit sales 1,590 1,707 6,606 6,853 ===== ===== ===== ===== 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. Fourth Quarter and Full Year 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. FS-2 Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME -------------------------------- <capiton> For the Years Ended December 31, 1995, 1994, and 1993 (in millions, except amounts per share) 1995 1994 1993 -------- -------- ------- AUTOMOTIVE Sales $110,496 $107,137 $91,568 Costs and expenses Costs of sales 101,171 95,887 85,280 Selling, administrative, and other expenses 6,044 5,424 4,856 -------- -------- ------- Total costs and expenses 107,215 101,311 90,136 Operating income 3,281 5,826 1,432 Interest income 800 665 563 Interest expense 622 721 807 -------- -------- -------- Net interest income/(expense) 178 (56) (244) Equity in net (loss)/income of affiliated companies (154) 271 127 Net expense from transactions with Financial Services (139) (44) (24) -------- -------- ------- Income before income taxes - Automotive 3,166 5,997 1,291 FINANCIAL SERVICES Revenues 26,641 21,302 16,953 Costs and expenses Interest expense 9,424 7,023 6,482 Depreciation 6,500 4,910 3,064 Operating and other expenses 5,499 4,607 3,196 Provision for credit and insurance losses 1,818 1,539 1,523 Loss on disposition of Granite Savings Bank (formerly First Nationwide Bank) - 475 - ------- -------- -------- Total costs and expenses 23,241 18,554 14,265 Net revenue from transactions with Automotive 139 44 24 Income before income taxes - Financial Services 3,539 2,792 2,712 ------- -------- -------- TOTAL COMPANY Income before income taxes 6,705 8,789 4,003 Provision for income taxes 2,379 3,329 1,350 -------- -------- -------- Income before minority interests 4,326 5,460 2,653 Minority interests in net income of subsidiaries 187 152 124 -------- -------- -------- Net income $ 4,139 $ 5,308 $ 2,529 ======== ======== ======== Income attributable to Common and Class B Stock after preferred stock dividends $ 3,839 $ 5,021 $ 2,241 Average number of shares of Common and Class B Stock outstanding 1,071 1,010 986 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK Income $ 3.58 $ 4.97 $ 2.27 Income assuming full dilution $ 3.33 $ 4.44 $ 2.10 Cash dividends $ 1.23 $ 0.91 $ 0.80 Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET -------------------------- (in millions) December 31, December 31, 1995 1994 ------------- ------------- ASSETS Automotive Cash and cash equivalents $ 5,750 $ 4,481 Marketable securities 6,656 7,602 -------- -------- Total cash, cash equivalents, and marketable securities 12,406 12,083 Receivables 3,321 2,548 Inventories 7,162 6,487 Deferred income taxes 2,709 3,062 Other current assets 1,483 2,006 Net current receivable from Financial Services 200 677 -------- -------- Total current assets 27,281 26,863 Equity in net assets of affiliated companies 2,248 3,554 Net property 31,273 27,048 Deferred income taxes 4,802 4,414 Other assets 7,168 6,760 -------- -------- Total Automotive assets 72,772 68,639 Financial Services Cash and cash equivalents 2,690 1,739 Investments in securities 4,553 6,105 Net receivables and lease investments 149,694 130,356 Other assets 13,574 12,783 -------- -------- Total Financial Services assets 170,511 150,983 -------- -------- Total assets $243,283 $219,622 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $ 11,260 $ 10,777 Other payables 1,976 2,280 Accrued liabilities 13,392 11,943 Income taxes payable 316 316 Debt payable within one year 1,832 155 -------- -------- Total current liabilities 28,776 25,471 Long-term debt 5,475 7,103 Other liabilities 25,677 24,920 Deferred income taxes 1,186 1,216 -------- -------- Total Automotive liabilities 61,114 58,710 Financial Services Payables 5,476 2,361 Debt 141,317 123,713 Deferred income taxes 3,831 2,958 Other liabilities and deferred income 6,116 7,669 Net payable to Automotive 200 677 -------- -------- Total Financial Services liabilities 156,940 137,378 Company-obligated mandatorily redeemable preferred securities of a subsidiary trust (aggregate principal amount of $632 million) 682 - Preferred stockholders' equity in a subsidiary company - 1,875 Stockholders' equity Capital stock Preferred Stock, par value $1.00 per share (aggregate liquidation preference of $1 billion and $3.4 billion) * * Common Stock, par value $1.00 per share (1,089 and 952 million shares issued) 1,089 952 Class B Stock, par value $1.00 per share (71 million shares issued) 71 71 Capital in excess of par value of stock 5,105 5,273 Foreign currency translation adjustments and other 594 189 Earnings retained for use in business 17,688 15,174 -------- -------- Total stockholders' equity 24,547 21,659 -------- -------- Total liabilities and stockholders' equity $243,283 $219,622 ======== ======== - - - - - - *Less than $1 million FS-4 Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF CASH FLOWS ------------------------------------ For the Years Ended December 31, 1995, 1994, and 1993 (in millions) 1995 1994 1993 ------------------------ ------------------------ ------------------------- Financial Financial Financial Automotive Services Automotive Services Automotive Services ---------- --------- ---------- --------- ---------- --------- Cash and cash equivalents at January 1 $ 4,481 $ 1,739 $ 5,667 $ 2,555 $ 3,504 $ 3,182 Cash flows from operating activities 8,849 12,322 7,542 9,087 6,862 7,145 Cash flows from investing activities Capital expenditures (8,676) (321) (8,310) (236) (6,714) (100) Proceeds from sale and leaseback of fixed assets 0 - 0 - 884 - Acquisitions of other companies - - 0 (485) 0 (336) Proceeds from sales of subsidiaries - - 0 715 173 0 Acquisitions of receivables and lease investments - (99,967) - (90,824) - (76,566) Collections of receivables and lease investments - 71,149 - 61,111 - 55,552 Net acquisitions of daily rental vehicles - (1,459) - (924) - - Purchases of securities (51) (6,274) (412) (10,688) (100,493) (13,741) Sales and maturities of securities 325 5,052 511 9,649 101,927 12,426 Proceeds from sales of receivables - 4,360 - 3,622 - 4,794 Loans originated net of principal payments - (9) - (207) - (1,466) Net investing activity with Financial Services (19) - 355 - (117) - Other 558 (175) (331) (312) (69) 389 ------- -------- ------- -------- -------- -------- Net cash used in investing activities (7,863) (27,644) (8,187) (28,579) (4,409) (19,048) Cash flows from financing activities Cash dividends (1,559) - (1,205) - (1,086) - Issuance of Common Stock 601 - 715 - 394 - Changes in short-term debt 413 5,884 (795) 10,314 (66) 6,065 Proceeds from issuance of other debt 300 23,854 158 21,885 424 22,128 Principal payments on other debt (177) (11,489) (75) (14,088) (376) (13,791) Net financing activity with Automotive - 19 - (355) - 117 Changes in customers' deposits, excluding interest credited - - - (422) - (3,861) Receipts from annuity contracts - 283 - 1,124 - 821 Net (redemption)/issuance of subsidiary company preferred stock - (1,875) - 417 - 375 Other 121 102 31 (132) (124) (76) ------- -------- ------- -------- -------- -------- Net cash (used in)/provided by financing activities (301) 16,778 (1,171) 18,743 (834) 11,778 Effect of exchange rate changes on cash 107 (28) 397 166 17 25 Net transactions with Automotive/ Financial Services 477 (477) 233 (233) 527 (527) ------- -------- ------- -------- -------- -------- Net increase/(decrease) in cash and cash equivalents 1,269 951 (1,186) (816) 2,163 (627) ------- -------- ------- -------- -------- -------- Cash and cash equivalents at December 31 $ 5,750 $ 2,690 $ 4,481 $ 1,739 $ 5,667 $ 2,555 ======= ======== ======== ======== ======== ======== FS-5 Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY ---------------------------------------------- For the Years Ended December 31, 1995, 1994, and 1993 (in millions) 1995 1994 1993 ------- ------- ------- CAPITAL STOCK Common Stock - ------------ Balance at beginning of year $ 952 $ 464 $ 454 Issued for Series A Preferred Stock conversion, employee benefit plans and other 137 19 10 Stock split in form of a 100% stock dividend - 469 - ------- ------- ------- Balance at end of year 1,089 952 464 Class B Stock - ------------- Balance at beginning of year $ 71 35 35 Stock split in form of a 100% stock dividend - 36 - ------- ------- ------- Balance at end of year 71 71 35 Series A Preferred Stock * * * Series B Preferred Stock * * * CAPITAL IN EXCESS OF PAR VALUE OF STOCK Balance at beginning of year 5,273 5,082 4,698 Exchange of Series B Preferred Stock (632) - - Issued for Series A Preferred Stock conversion, employee benefit plans and other 464 696 384 Stock split in form of a 100% stock dividend - (505) - ------- ------- ------- Balance at end of year 5,105 5,273 5,082 FOREIGN CURRENCY TRANSLATION ADJUSTMENTS AND OTHER Balance at beginning of year 189 (1,078) (62) Translation adjustments during year 250 800 (508) Minimum pension liability adjustment (108) 400 (400) Other 263 67 (108) ------- ------- ------- Balance at end of year 594 189 (1,078) EARNINGS RETAINED FOR USE IN THE BUSINESS Balance at beginning of year 15,174 11,071 9,628 Net income 4,139 5,308 2,529 Cash dividends (1,559) (1,205) (1,086) Fair value adjustment from exchange of Series B Preferred Stock (66) - - ------- ------- ------- Balance at end of year 17,688 15,174 11,071 ------- ------- ------- Total stockholders' equity $24,547 $21,659 $15,574 ======= ======= ======= Series A Series B Common Class B Preferred Preferred Stock Stock Stock Stock ------ ------- --------- --------- SHARES OF CAPITAL STOCK Issued at December 31, 1992 454 35 0.046 0.023 Additions 1993 10 0 0 0 1994 - Stock split in form of a 100% stock dividend 469 36 - - - Employee benefit plans and other 19 - - - 1995 - Conversion of Series A Preferred Stock 115 - (0.035) - - Employee benefit plans and other 22 - - - - Exchange of Series B Preferred Stock - - - (0.013) ----- ---- ------ ------ Net additions 635 36 (0.035) (0.013) ----- ---- ------ ------ Issued at December 31, 1995 1,089 71 0.011 0.010 ===== ==== ====== ====== Authorized at December 31, 1995 3,000 265 -- In total: 30 -- - - - - - - *The balances at the beginning and end of each period were less than $1 million