Exhibit 20 Global News Public Affairs Ford Motor Company The American Road Room 904 Dearborn, MI 48121 Telephone:(313)322-9600 Fax:(313)845-0570 IMMEDIATE RELEASE Contact: Media Inquiries Broadcast Media Stockholder Inquiries Christian Vinyard David Caplan (313) 845-8540 (313) 322-9600 (313) 322-9600 Ford Earns $686 Million in Third Quarter; U.S. Automotive Profit Improvement Continues DEARBORN, Mich., Oct. 16 -- Ford Motor Company earned $686 million in the third quarter of 1996, up $329 million from the same period last year, reflecting continued improvement in U.S. automotive operations, along with another quarterly record from financial services. Fully diluted earnings were 56 cents per share of common and Class B stock, compared with 27 cents for the third quarter of 1995. The total results include the net favorable effect of two one-time actions of $37 million, or three cents a share. "Improvements in our U.S. automotive operations continue," said Alex Trotman, chairman and chief executive officer. "Outside the U.S., results continue to reflect challenges in several key regions, particularly Europe and South America." U.S. AUTOMOTIVE OPERATIONS GAIN For the third quarter, worldwide automotive operations earned $15 million, compared with a loss of $201 million last year. Improved automotive results in the U.S. were offset partially by increased losses in other markets. U.S. automotive operations earned a third-quarter record of $634 million, up $447 million from 1995. Unit volume was up slightly from last year. -2- Higher earnings reflect the strong acceptance of new products like the Ford F-Series and Expedition that improved the mix of products sold and the continuing focus on cost reductions, particularly material costs. The results also include a one-time charge of $39 million for early retirements for U.S. salaried employees. Outside the U.S., losses from automotive operations were $619 million, compared with a loss of $388 million last year. In Europe, Ford lost $472 million, compared with a loss of $320 million last year, reflecting costs associated with launching new products, adverse vehicle mix and volume, and continued high marketing costs. In Europe, high-volume launches are largely completed. Ford continues to focus on cost reductions, and new products are coming to market that will strengthen the line-up. Among these is the Ka, a new small car that will compete in a growing segment. The innovative Ka was developed with high investment efficiency in about 24 months and is produced in Valencia, Spain. Within the next month, Ka will go on sale in Europe's major markets. Response from both dealers and automotive news media has been strongly favorable. In South America, Ford lost $226 million in the third quarter, compared with a loss of $102 million in 1995. Most of the losses stem from Brazil. On Sept. 9, Ford indicated that losses in Brazil in the second half of 1996 would be larger than those of the first half due to lower market share and a longer and more costly launch process following the dissolution of Autolatina. In 1997, Ford plans to introduce the Ranger pickup and the Ka to the Brazilian market which, along with the new Fiesta and Escort, will strengthen the product line. FINANCIAL SERVICES POSTS ANOTHER RECORD The Financial Services Group posted record earnings for the third quarter of $671 million, up from $558 million earned in the third quarter of 1995. The quarterly results include a one-time gain of $76 million from the sale of assets of USL Capital. Without the one-time gain, profits from Financial Services still set a third-quarter record. Ford Credit earned $299 million, compared with $357 million in last year's third quarter. The decline reflects an increase in credit losses, consistent with the consumer finance industry. -3- The Associates reported third-quarter earnings of $230 million, a record for any quarter. As the majority shareholder, Ford's share was $186 million. The Associates third-quarter earnings improved 17 percent from the $197 million earned in last year's third quarter. The USL Capital asset sale and the initial public offering of about 20 percent of Associates First Capital Corporation this year raised more than $3 billion in cash to further strengthen the Financial Services Group's balance sheet. BRIGHTER PROSPECTS AHEAD "As more efficiencies are realized, automotive results for the fourth quarter should be stronger than last year, despite expected additional charges of $300-400 million for early retirement programs," Trotman said. "We expect sales volumes will be higher and margins will continue to improve." "There's still much to do," Trotman said. "We've made solid progress, and we're becoming a leaner, faster company. As we continue to reduce costs, and as more high-quality products are launched, automotive profitability should grow, increasing value for both customers and shareholders," he added. "With the recently announced streamlining of our components business and product development, our senior management can further accelerate the actions that will build on the momentum to achieve our goals for quality, cost and speed," Trotman noted. Ford expects U.S. industry volumes for the full year to be about 15.5 million cars and trucks, up from last year's 15.1 million. In Western Europe, industry sales for 1996 are expected to be about 14.2 million units, compared with 13.4 million in 1995. Looking forward, Ford expects moderate economic growth to continue in its major markets which will allow for stable industry sales volumes. # # # Oct. 16, 1996 -4- SUMMARY OF THIRD-QUARTER 1996 COMPARED WITH THIRD-QUARTER 1995 Overview - -------- - - Total earnings were $686 million, compared with $357 million in the third quarter of 1995. - - Fully diluted earnings were 56 cents per share, compared with 27 cents per share. - - Worldwide sales and revenues were $34 billion, compared with $31.4 billion. - - Stockholders' equity was $26.2 billion, compared with $25 billion. Automotive - ---------- - - Worldwide automotive operations earned $15 million, compared with a loss of $201 million. - - Net income from U.S. automotive operations was a third-quarter record $634 million, compared with $187 million. - - Automotive operations outside the U.S. lost $619 million, compared with a loss of $388 million last year. In Europe, Ford posted a loss of $472 million, compared with a loss of $320 million last year. - - Worldwide vehicle unit sales were 1,452,000, compared with 1,435,000 units. - - Combined car and truck share in the U.S. was 24.5 percent, compared with 24.8 percent. - - Combined car and truck share in Europe was 11.8 percent, compared with 12.8 percent. Financial Services Group - ------------------------ - - Financial Services Group earned a record $671 million, including a one-time net gain of $76 million related to the sale of assets of USL Capital. Without the one-time gain, earnings were a record $595 million. Third-quarter results for 1995 were $558 million. - - Ford Credit earned $299 million, compared with $357 million. - - The Associates earned an all-time record of $230 million, compared with $197 million. Automotive Balance Sheet - ------------------------ - - Net cash was $5.7 billion, compared with $5.4 billion. - - Cash and marketable securities were $13 billion, compared with $12.2 billion. - - Debt was $7.3 billion, compared with $6.8 billion. - - Capital spending was $2.4 billion, compared with $2.3 billion a year ago. Ford Motor Company and Subsidiaries HIGHLIGHTS ---------- Third Quarter Nine Months -------------------------- -------------------------- 1996 1995 1996 1995 -------- -------- -------- -------- (unaudited) (unaudited) Worldwide vehicle unit sales of cars and trucks (in thousands) - - United States 884 869 2,891 3,038 - - Outside United States 568 566 2,009 1,978 ----- ----- ----- ----- Total 1,452 1,435 4,900 5,016 ===== ===== ===== ===== Sales and revenues (in millions) - - Automotive $26,459 $24,437 $ 86,518 $ 82,899 - - Financial Services 7,501 6,981 21,640 19,691 ------- ------- -------- -------- Total $33,960 $31,418 $108,158 $102,590 ======= ======= ======== ======== Net income/(loss) (in millions) - - Automotive $ 15 $ (201) $ 1,265 $ 2,040 - - Financial Services 671* 558 1,977* 1,439 ------- ------- -------- -------- Total $ 686 $ 357 $ 3,242 $ 3,479 ======= ======= ======== ======== Capital expenditures (in millions) - - Automotive $ 2,358 $ 2,254 $ 5,926 $ 6,204 - - Financial Services 149 76 349 223 ------- ------- -------- -------- Total $ 2,507 $ 2,330 $ 6,275 $ 6,427 ======= ======= ======== ======== Stockholders' equity at September 30 - - Total (in millions) $26,152 $24,955 $ 26,152 $ 24,955 - - After-tax return on Common and Class B stockholders' equity 10.5% 5.4% 17.4% 20.9% Automotive cash and marketable securities at September 30 (in millions) $12,960 $12,241 $ 12,960 $ 12,241 Automotive debt at September 30 (in millions) $ 7,296 $ 6,829 $ 7,296 $ 6,829 Automotive after-tax return on sales 0.1% ** 1.5% 2.5% Shares of Common and Class B Stock (in millions) - - Average number outstanding 1,183 1,083 1,177 1,049 - - Number outstanding at September 30 1,185 1,090 1,185 1,090 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK AFTER PREFERRED STOCK DIVIDENDS Income/(loss) assuming full dilution - - Automotive $ 0.00 $ (0.19) $ 1.02 $ 1.65 - - Financial Services 0.56 0.46 1.64 1.20 ------- ------- -------- -------- Total $ 0.56 $ 0.27 $ 2.66 $ 2.85 ======= ======= ======== ======== Cash dividends $ 0.385 $ 0.31 $ 1.085 $ 0.88 - - - - - - *Results in third quarter 1996 and nine months 1996 included a gain on disposition of substantially all of USL Capital's assets ($76 million and $95 million, respectively); results in nine months 1996 included a write-down relating to Ford's investment in Budget Rent a Car Corporation ($437 million) **Results in this period were a loss FS-1 Ford Motor Company and Subsidiaries VEHICLE UNIT SALES ------------------ For the Periods Ended September 30, 1996 and 1995 (in thousands) Third Quarter Nine Months ---------------------------- -------------------------- 1996 1995 1996 1995 ---------- ---------- ---------- -------- (unaudited) (unaudited) North America United States Cars 387 377 1,228 1,333 Trucks 497 492 1,663 1,705 ----- ----- ----- ----- Total United States 884 869 2,891 3,038 Canada 52 46 174 178 Mexico 13 3 39 21 ----- ----- ----- ----- Total North America 949 918 3,104 3,237 Europe Britain 100 105 376 371 Germany 84 93 330 325 France 42 40 147 124 Italy 30 31 129 139 Spain 27 33 114 129 Other countries 67 58 236 212 ----- ----- ----- ----- Total Europe 350 360 1,332 1,300 Other international Brazil 49 45 142 153 Australia 40 41 107 107 Taiwan 20 27 72 90 Japan 13 14 41 44 Argentina 12 13 43 34 Other countries 19 17 59 51 ----- ----- ----- ----- Total other international 153 157 464 479 ----- ----- ----- ----- Total worldwide vehicle unit sales 1,452 1,435 4,900 5,016 ===== ===== ===== ===== 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 September 30, 1996 and 1995 (in millions) Third Quarter Nine Months -------------------------- -------------------------- 1996 1995 1996 1995 -------- -------- -------- -------- (unaudited) (unaudited) AUTOMOTIVE Sales $26,459 $24,437 $86,518 $82,899 Costs and expenses (Note 2) Costs of sales 24,926 23,271 79,941 75,154 Selling, administrative and other expenses 1,514 1,370 4,619 4,393 ------- ------- ------- ------- Total costs and expenses 26,440 24,641 84,560 79,547 Operating income/(loss) 19 (204) 1,958 3,352 Interest income 188 171 589 594 Interest expense 155 151 537 491 ------- ------- ------- ------- Net interest income 33 20 52 103 Equity in net loss of affiliated companies (68) (190) (43) (151) Net expense from transactions with Financial Services (25) (42) (62) (101) ------- ------- ------- ------- (Loss)/income before income taxes - Automotive (41) (416) 1,905 3,203 FINANCIAL SERVICES Revenues 7,501 6,981 21,640 19,691 Costs and expenses Interest expense 2,458 2,437 7,318 6,948 Depreciation 1,768 1,715 5,134 4,836 Operating and other expenses 1,559 1,421 4,522 4,049 Provision for credit and insurance losses 708 472 1,894 1,337 Asset write-downs and dispositions (Note 3) (235) - 437 - ------- ------- ------- ------- Total costs and expenses 6,258 6,045 19,305 17,170 Net revenue from transactions with Automotive 25 42 62 101 Gain on sale of The Associates' common stock (Note 4) - - 650 - ------- ------- ------- ------- Income before income taxes - Financial Services 1,268 978 3,047 2,622 ------- ------- ------- ------- TOTAL COMPANY Income before income taxes 1,227 562 4,952 5,825 Provision for income taxes 474 157 1,581 2,198 ------- ------- ------- ------- Income before minority interests 753 405 3,371 3,627 Minority interests in net income of subsidiaries 67 48 129 148 ------- ------- ------- ------- Net income $ 686 $ 357 $ 3,242 $ 3,479 ======= ======= ======= ======= Income attributable to Common and Class B Stock after preferred stock dividends $ 670 $ 302 $ 3,191 $ 3,283 Average number of shares of Common and Class B Stock outstanding 1,183 1,083 1,177 1,049 AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK Income $ 0.57 $ 0.28 $ 2.71 $ 3.13 Income assuming full dilution $ 0.56 $ 0.27 $ 2.66 $ 2.85 Cash dividends $ 0.385 $ 0.31 $ 1.085 $ 0.88 The accompanying notes are part of the financial statements. FS-3 Ford Motor Company and Subsidiaries CONSOLIDATED BALANCE SHEET -------------------------- (in millions) September 30, December 31, 1996 1995 ------------- ------------ (unaudited) ASSETS Automotive Cash and cash equivalents $ 3,461 $ 5,750 Marketable securities 9,499 6,656 -------- -------- Total cash and marketable securities 12,960 12,406 Receivables 3,525 3,321 Inventories (Note 5) 7,671 7,162 Deferred income taxes 3,287 2,709 Other current assets 3,526 1,483 Net current receivable from Financial Services 109 200 -------- -------- Total current assets 31,078 27,281 Equity in net assets of affiliated companies 2,484 2,248 Net property 32,605 31,273 Deferred income taxes 4,703 4,802 Other assets 7,196 7,168 -------- -------- Total Automotive assets 78,066 72,772 Financial Services Cash and cash equivalents 5,295 2,690 Investments in securities 3,594 4,553 Net receivables and lease investments 158,386 149,694 Other assets 13,160 13,574 -------- -------- Total Financial Services assets 180,435 170,511 -------- -------- Total assets $258,501 $243,283 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Automotive Trade payables $ 11,729 $ 11,260 Other payables 1,876 1,976 Accrued liabilities 17,058 13,392 Income taxes payable 600 316 Debt payable within one year 2,125 1,832 -------- -------- Total current liabilities 33,388 28,776 Long-term debt 5,171 5,475 Other liabilities 26,497 25,677 Deferred income taxes 1,468 1,186 -------- -------- Total Automotive liabilities 66,524 61,114 Financial Services Payables 3,927 5,476 Debt 148,320 141,317 Deferred income taxes 4,206 3,831 Other liabilities and deferred income 8,583 6,116 Net payable to Automotive 109 200 -------- -------- Total Financial Services liabilities 165,145 156,940 Company-obligated mandatorily redeemable preferred securities of a subsidiary trust holding solely junior subordinated debentures of the Company (Note 6) 680 682 Stockholders' equity Capital stock Preferred Stock, par value $1.00 per share (aggregate liquidation preference of $724 million and $1,042 million) * * Common Stock, par value $1.00 per share (1,115 and 1,089 million shares issued) 1,115 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 5,202 5,105 Foreign currency translation adjustments and other 163 594 Earnings retained for use in business 19,601 17,688 -------- -------- Total stockholders' equity 26,152 24,547 -------- -------- Total liabilities and stockholders' equity $258,501 $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 September 30, 1996 and 1995 (in millions) Nine Months 1996 Nine Months 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 8,462 10,839 6,796 9,171 Net (purchases)/sales of trading securities (2,844) (1,230) 1,982 256 ------- -------- ------- -------- Net cash flows from operating activities 5,618 9,609 8,778 9,427 Cash flows from investing activities Capital expenditures (5,926) (349) (6,204) (223) Acquisitions of receivables and lease investments - (82,293) - (71,557) Collections of receivables and lease investments - 62,469 - 51,210 Net acquisitions of daily rental vehicles - (1,995) - (1,529) Proceeds from USL Capital asset sales (Note 3) - 1,157 - - Purchases of securities (6) (8,362) (47) (4,748) Sales and maturities of securities 7 10,266 50 3,748 Proceeds from sales of receivables and lease investments - 1,011 - 2,728 Net investing activity with Financial Services (254) - (237) - Other (523) (204) (400) (171) ------- -------- ------- -------- Net cash used in investing activities (6,702) (18,300) (6,838) (20,542) Cash flows from financing activities Cash dividends (1,328) - (1,120) - Issuance of Common Stock 124 - 326 - Issuance of Common Stock of a subsidiary (Note 4) - 1,897 - - Changes in short-term debt 395 1,465 665 2,481 Proceeds from other debt 300 18,650 0 16,532 Principal payments on other debt (671) (10,407) (207) (7,931) Net financing activity with Automotive - 254 - 237 Other (43) (266) 6 415 ------- -------- ------- ------- Net cash (used in)/provided by financing activities (1,223) 11,593 (330) 11,734 Effect of exchange rate changes on cash (73) (206) 136 (21) Net transactions with Automotive/Financial Services 91 (91) 394 (394) ------- -------- ------- -------- Net (decrease)/increase in cash and cash equivalents (2,289) 2,605 2,140 204 ------- -------- ------- -------- Cash and cash equivalents at September 30 $ 3,461 $ 5,295 $ 6,621 $ 1,943 ======= ======== ======= ======== 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): Third Quarter Nine Months ------------------- ------------------- 1996 1995 1996 1995 ------ ------ ------ ------ Depreciation $687 $622 $1,966 $1,816 Amortization 828 731 2,278 2,072 3. Asset Write-downs and Dispositions During third quarter 1996, USL Capital concluded a series of transactions for the sale of substantially all of its assets, as well as certain assets owned by Ford Credit and managed by USL Capital. Proceeds from the sale were used to pay down related liabilities and debt. The Company recorded a pre-tax charge in second quarter 1996 to recognize the estimated value of its outstanding notes receivable from, and preferred stock investment in, Budget Rent a Car Corporation ("BRAC"). The write-down resulted from conclusions reached in a study of Ford's rental car business strategy. In accordance with SFAS 114, the notes receivable write-down reflected primarily the unsecured portion of financing provided to BRAC by Ford. The preferred stock write-down reflected recognition of the fair value of Ford's investment. Subject to governmental review, the Company also intends to acquire all of the outstanding common stock of BRAC at a future date. The effect of the USL Capital disposition and BRAC write-down on the Company's results from operations are summarized below (in millions): Third Quarter 1996 Nine Months 1996 ------------------------ ----------------------------- Income Net Income/(loss) Net Before Taxes Income Before Taxes Income/(loss) ------------ ------ ------------ ------------- USL Capital disposition $235 $76 $ 263 $ 95 Budget Rent a Car Corporation write-down - - (700) (437) ---- --- ----- ----- Total $235 $76 $(437) $(342) ==== === ===== ===== FS-6 Ford Motor Company and Subsidiaries NOTES TO FINANCIAL STATEMENTS ----------------------------- (unaudited) 4. Sale of The Associates' Common Stock - During May 1996, The Associates completed an initial public offering of its common stock representing a 19.3% economic interest in The Associates (the "IPO"). The Company recorded in second quarter 1996 a non-operating gain of $650 million resulting from the IPO, to recognize the excess of the net proceeds from the IPO over the proportionate share of the Company's investment in The Associates. The gain was not subject to income taxes. 5. Automotive inventories are summarized as follows (in millions): September 30, December 31, 1996 1995 ------------- ------------ Raw materials, work in process and supplies $3,758 $3,717 Finished products 3,913 3,445 ------ ------ Total inventories $7,671 $7,162 ====== ====== U.S. inventories $2,929 $2,662 6. Company-Obligated Mandatorily Redeemable Preferred Securities of a Subsidiary Trust - The sole asset of Ford Motor Company Capital Trust I (the "Trust"), which is the obligor on the Preferred Securities of such Trust, is $632 million principal amount of 9% Junior Subordinated Debentures due 2025 of Ford Motor Company. FS-7