FORD NEWS FOR IMMEDIATE RELEASE Contact: Media Inquiries: Broadcast Media: Stockholder Inquiries: Christian Vinyard Lin Cummins (313) 845-8540 (313) 322-9600 (313) 322-9600 FORD EARNS $653 MILLION IN FIRST QUARTER DEARBORN, Mich., April 17 -- Financial Services posted record earnings for the first quarter of 1996, while automotive operations reflected the impact of lower production volumes from dealer inventory rebalancing, high-volume product launches in North America and Europe, and lower overseas results primarily in Brazil. In the first quarter, Ford earned $653 million, or 53 cents per fully-diluted share of common and Class B stock. This compares with $1.55 billion, or $1.28 per fully-diluted share in the first quarter of 1995. Net income from automotive operations was $142 million, and net income from financial services was $511 million. "We've nearly completed an important series of high-volume launches that will leave our product line-up the strongest it's ever been and the most attractive for our customers," said Chairman and Chief Executive Officer Alex Trotman. "At the same time, our cost reduction efforts will help improve our financial results in the coming quarters." Last July, Ford outlined its lower expectations for the last half of 1995 and the first quarter of 1996. "During this period, our profits declined, but assuming that moderate economic growth continues in Ford's major markets, the remainder of 1996 should see our financial results significantly improving," Trotman said. -2- SUMMARY OF FIRST QUARTER 1996 COMPARED WITH FIRST-QUARTER 1995 Overview - -------- - - Total earnings were $653 million, compared with $1.55 billion in the first quarter of 1995. - - Fully-diluted earnings were 53 cents per share, compared with $1.28 per share. - - Worldwide sales and revenues were $36.3 billion, compared with $34.8 billion. - - Stockholders' equity was $24.5 billion, compared with $23.5 billion a year ago. Automotive - ---------- - - Net income from worldwide automotive operations was $142 million, compared with $1.14 billion. After-tax return on sales was 0.5 percent, compared with four percent. - - Net income from U.S. automotive operations was $48 million, compared with $825 million. - - Net income from automotive operations outside the U.S. was $94 million, compared with $316 million. - - Worldwide vehicle unit sales were 1,638,000, compared with 1,770,000 units. - - Combined car and truck share in the U.S. was 25.8 percent, compared with 26.6 percent. - - Combined car and truck share in Europe was 12.2 percent, compared with 12.5 percent. Financial Services Group - ------------------------ - - Financial Services Group earned $511 million, a first-quarter record, compared with $409 million in 1995. - - Ford Credit earned $293 million, compared with $288 million. - - Associates First Capital Corporation, together with the international affiliates it manages, earned $192 million, compared with $168 million. - - USL Capital earned $40 million, compared with $26 million. Automotive Balance Sheet - ------------------------ - - Cash and marketable securities were $12.9 billion, compared with $13.2 billion a year ago. - - Debt was $7.2 billion, compared with $7.1 billion. - - Net cash was $5.7 billion, compared with $6.1 billion. - - Capital spending was $1.8 billion, compared with $2.1 billion in the first quarter a year ago. -3- AUTOMOTIVE OPERATIONS Ford's first-quarter income from worldwide operations was $142 million, down about $1 billion from the first quarter of 1995. U.S. automotive operations earned $48 million, down $777 million from a year ago. The decline stems from lower production volumes from dealer inventory rebalancing and costs associated with high-volume product launches. Outside the U.S., automotive operations earned $94 million, down $222 million from a year ago. In Europe, Ford earned $73 million, down $92 million from the same period last year. The decline in Europe reflects costs of launching new high- volume products. Results in Brazil were impacted by the lack of a domestically- produced small car. Introduction of the Ford Fiesta, produced in Brazil, is scheduled for May. Customer responses to new products throughout the world were strong. "The initial success of our highest-volume products in Europe and North America -- the new Ford Fiesta and the new F-Series -- is nothing short of sensational," Trotman said. The Ford Explorer, with 14 consecutive monthly records, also set a record for the first quarter. Car sales in large-volume segments also showed strength. "Despite the planned reduction in daily rental volumes, Taurus was the best-selling car in America during the first quarter of 1996 as well as for the first half of the 1996 model year and all of 1995," Trotman noted. The Ford Contour had its best month ever in March, and combined sales for Contour and the Mercury Mystique set records both for March and the first quarter. On April 12, Ford and Mazda announced an agreement to strengthen their relationship, with Ford increasing its equity position in Mazda from 24.5 to 33.4 percent. FINANCIAL SERVICES Financial Services Group earned $511 million, a record for any first quarter. These results compare with earnings of $409 million in the first quarter of 1995. "Once again, our world-class Financial Services Group set another record in the first quarter," Trotman said. "First-quarter profits were up year-to-year at all businesses in the group." -4- Ford Credit earned $293 million, an increase of $5 million from the prior year. The Associates reported a record first- quarter profit of $192 million, up 14 percent from $168 million earned in last year's first quarter. USL Capital posted a first-quarter record of $40 million, an increase of 54 percent from the $26 million posted in 1995's first quarter. In February, Associates First Capital Corporation filed a registration statement with the Securities and Exchange Commission for an initial public offering of up to 19.8 percent of its common stock. The Associates is a leading diversified finance company with assets of more than $40 billion. Ford purchased The Associates in 1989. "The partial sale of The Associates represents an important strategic decision for Ford," Trotman said. "The actions that we are taking will establish a market value for this important Ford asset and will strengthen Ford's already strong balance sheet." Ford also is continuing to study the partial or complete sale of USL Capital. THE STRENGTHS OF FORD Looking ahead, Trotman said, "Our strategies are the right ones for this time in our history. Our product line around the world is being revitalized, and our cost-cutting efforts will soon begin to pay off." "We do not manage this business for quarter-to-quarter results," Trotman said. Over the last 10, 20 and 40 years, Ford's average annual total return to shareholders has exceeded the major stock indexes as well as the performance of the other U.S. automakers. "The best time to make fundamental change is when a company's financial position is strong," Trotman said. "Our balance sheet is solid, our dividend is the most attractive in the industry, our pension plans are fully funded, and our credit rating is the highest among U.S. automakers. The automotive and financial services businesses always have been highly competitive, and will continue to be so in the future. But, with the fundamental changes we have made and are making, Ford is positioning itself to become an even stronger competitor," he said. # # # Ford Motor Company and Subsidiaries HIGHLIGHTS ---------- First Quarter ----------------------- 1996 1995 ------- ------- (unaudited) Worldwide vehicle unit sales of cars and trucks (in thousands) - - United States 940 1,087 - - Outside United States 698 683 ----- ----- Total 1,638 1,770 ===== ===== Sales and revenues (in millions) - - Automotive $29,333 $28,601 - - Financial Services 6,928 6,182 ------- ------- Total $36,261 $34,783 ======= ======= Net income (in millions) - - Automotive $ 142 $ 1,141 - - Financial Services 511 409 ------- ------- Total $ 653 $ 1,550 ======= ======= Capital expenditures (in millions) - - Automotive $ 1,789 $ 2,131 - - Financial Services 113 67 ------- ------- Total $ 1,902 $ 2,198 ======= ======= Stockholders' equity at March 31 - - Total (in millions) $24,540 $23,552 - - After-tax return on Common and Class B stockholders' equity 10.7% 30.9% Automotive cash, cash equivalents and marketable securities at March 31 (in millions) $12,937 $13,254 Automotive debt at March 31 (in millions) $ 7,175 $ 7,102 Automotive after-tax return on sales 0.5% 4.0% Shares of Common and Class B Stock (in millions) - - Average number outstanding 1,168 1,025 - - Number outstanding at March 31 1,175 1,027 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income $ 0.54 $ 1.44 Income assuming full dilution - - Automotive $ 0.11 $ 0.94 - - Financial Services 0.42 0.34 ------- ------- Total $ 0.53 $ 1.28 ======= ======= Cash dividends $ 0.35 $ 0.26 FS-1 <capiton> Ford Motor Company and Subsidiaries VEHICLE UNIT SALES ------------------ For the Periods Ended March 31, 1996 and 1995 (in thousands) First Quarter ----------------------- 1996 1995 ------- ------- (unaudited) North America United States Cars 378 509 Trucks 562 578 ----- ----- Total United States 940 1,087 Canada 50 65 Mexico 12 11 ----- ----- Total North America 1,002 1,163 Europe Germany 118 118 Britain 118 104 Italy 56 52 France 51 44 Spain 48 48 Other countries 84 77 ----- ----- Total Europe 475 443 Other international Brazil 47 62 Australia 32 31 Taiwan 31 28 Japan 16 16 Argentina 16 10 Other countries 19 17 ----- ----- Total other international 161 164 ----- ----- Total worldwide vehicle unit sales 1,638 1,770 ===== ===== 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. FS-2 Ford Motor Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME -------------------------------- For the Periods Ended March 31, 1996 and 1995 (in millions) First Quarter ------------------------- 1996 1995 -------- -------- (unaudited) AUTOMOTIVE Sales $29,333 $28,601 Costs and expenses (Note 2) Costs of sales 27,546 25,431 Selling, administrative and other expenses 1,472 1,388 ------- ------- Total costs and expenses 29,018 26,819 Operating income 315 1,782 Interest income 184 207 Interest expense 172 166 ------- ------- Net interest income 12 41 Equity in net (loss)/income of affiliated companies (52) 20 Net expense from transactions with Financial Services (20) (23) ------- ------- Income before income taxes - Automotive 255 1,820 FINANCIAL SERVICES Revenues 6,928 6,182 Costs and expenses Interest expense 2,421 2,167 Depreciation 1,691 1,521 Operating and other expenses 1,428 1,336 Provision for credit and insurance losses 576 422 ------- ------- Total costs and expenses 6,116 5,446 Net revenue from transactions with Automotive 20 23 ------- ------- Income before income taxes - Financial Services 832 759 ------- ------- TOTAL COMPANY Income before income taxes 1,087 2,579 Provision for income taxes 413 988 ------- ------- Income before minority interests 674 1,591 Minority interests in net income of subsidiaries 21 41 ------- ------- Net income $ 653 $ 1,550 ======= ======= Income attributable to Common and Class B Stock after preferred stock dividends $ 634 $ 1,478 Average number of shares of Common and Class B Stock outstanding 1,168 1,025 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK Income $ 0.54 $ 1.44 Income assuming full dilution $ 0.53 $ 1.28 Cash dividends $ 0.35 $ 0.26 The accompanying notes are part of the financial statements. FS-3 Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET -------------------------- (in millions) March 31, December 31, 1996 1995 ----------- ------------ (unaudited) ASSETS Automotive Cash and cash equivalents $ 6,074 $ 5,750 Marketable securities 6,863 6,656 -------- -------- Total cash, cash equivalents and marketable securities 12,937 12,406 Receivables 3,463 3,321 Inventories (Note 3) 7,182 7,162 Deferred income taxes 2,952 2,709 Other current assets 2,206 1,483 Net current receivable from Financial Services 134 200 -------- -------- Total current assets 28,874 27,281 Equity in net assets of affiliated companies 2,157 2,248 Net property 31,446 31,273 Deferred income taxes 4,584 4,802 Other assets 7,285 7,168 -------- -------- Total Automotive assets 74,346 72,772 Financial Services Cash and cash equivalents 2,066 2,690 Investments in securities 4,470 4,553 Net receivables and lease investments 153,467 149,694 Other assets 13,655 13,574 -------- -------- Total Financial Services assets 173,658 170,511 -------- -------- Total assets $248,004 $243,283 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $ 11,635 $ 11,260 Other payables 1,704 1,976 Accrued liabilities 13,584 13,392 Income taxes payable 351 316 Debt payable within one year 1,676 1,832 -------- -------- Total current liabilities 28,950 28,776 Long-term debt 5,499 5,475 Other liabilities 27,631 25,677 Deferred income taxes 1,206 1,186 -------- -------- Total Automotive liabilities 63,286 61,114 Financial Services Payables 3,479 5,476 Debt 145,628 141,317 Deferred income taxes 4,123 3,831 Other liabilities and deferred income 6,133 6,116 Net payable to Automotive 134 200 -------- -------- Total Financial Services liabilities 159,497 156,940 Company-obligated mandatorily redeemable preferred securities of a subsidiary trust (aggregate principal amount of $632 million) 681 682 Stockholders' equity Capital stock Preferred Stock, par value $1.00 per share (aggregate liquidation preference of $833 million and $1,042 million) * * Common Stock, par value $1.00 per share (1,105 and 1,089 million shares issued) 1,105 1,089 Class B Stock, par value $1.00 per share (71 million shares issued) 71 71 Capital in excess of par value of stock 5,129 5,105 Foreign currency translation adjustments and other 322 594 Earnings retained for use in business 17,913 17,688 -------- -------- Total stockholders' equity 24,540 24,547 -------- -------- Total liabilities and stockholders' equity $248,004 $243,283 ======== ======== - - - - - - *Less than $1 million The accompanying notes are part of the financial statements. FS-4 Ford Motor Company and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ---------------------------------------------- For the Periods Ended March 31, 1996 and 1995 (in millions) First Quarter 1996 First Quarter 1995 ---------------------- --------------------- Financial Financial Automotive Services Automotive Services ---------- --------- ---------- -------- (unaudited) (unaudited) Cash and cash equivalents at January 1 $ 5,750 $ 2,690 $ 4,481 $ 1,739 Cash flows from operating activities before securities trading 2,916 3,014 3,650 3,284 Net (purchases)/sales of trading securities (197) 281 4,289 324 ------- -------- ------- -------- Net cash flows from operating activities 2,719 3,295 7,939 3,608 Cash flows from investing activities Capital expenditures (1,789) (113) (2,131) (67) Acquisitions of receivables and lease investments - (28,164) - (23,988) Collections of receivables and lease investments - 20,949 - 15,839 Net acquisitions of daily rental vehicles - (989) - (781) Purchases of securities (10) (3,433) (18) (1,818) Sales and maturities of securities 0 3,217 9 1,337 Proceeds from sales of receivables - 1,775 - 0 Net investing activity with Financial Services (3) - (174) - Other (97) 209 (442) (127) ------- -------- ------- -------- Net cash used in investing activities (1,899) (6,549) (2,756) (9,605) Cash flows from financing activities Cash dividends (428) - (338) - Issuance of Common Stock 40 - 96 - Changes in short-term debt (158) 34 217 2,408 Proceeds from issuance of other debt 14 6,126 0 6,674 Principal payments on other debt (3) (3,462) (207) (3,239) Net financing activity with Automotive - 3 - 174 Other 1 43 6 190 ------- -------- ------- -------- Net cash (used in)/provided by financing activities (534) 2,744 (226) 6,207 Effect of exchange rate changes on cash (28) (48) 178 163 Net transactions with Automotive/Financial Services 66 (66) 317 (317) ------- -------- ------- -------- Net increase/(decrease) in cash and cash equivalents 324 (624) 5,452 56 ------- -------- ------- -------- Cash and cash equivalents at March 31 $ 6,074 $ 2,066 $ 9,933 $ 1,795 ======= ======== ======= ======== The accompanying notes are part of the financial statements. FS-5 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, 1995. 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. 2. Selected Automotive costs and expenses are summarized as follows (in millions): First Quarter --------------------------- 1996 1995 ----------- --------- Depreciation $636 $589 Amortization 764 712 3. Automotive inventories are summarized as follows (in millions): ---------------------- March 31, December 31, 1996 1995 ------------ ------------ Raw materials, work in process and supplies $3,564 $3,717 Finished products 3,618 3,445 ------ ------ Total inventories $7,182 $7,162 ====== ====== U.S. inventories $2,902 $2,662 FS-6