SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file numbers 1-6368
FORD MOTOR CREDIT COMPANY
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 38-1612444
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(State of Incorporation) (I.R.S. employer identification no.)
One American Road, Dearborn, Michigan 48126
- --------------------------------------- ---------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (313) 322-3000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number
of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: 250,000 shares
of common stock as of March 31, 2001.
The registrant meets the conditions set forth in General
Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing
this Form in reduced disclosure format.
PAGE 1 OF 27
EXHIBIT INDEX APPEARS AT PAGE 24.
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements - The interim financial data presented herein are
unaudited, but in the opinion of management reflect all 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 for the year ended December 31, 2000 (the "10-K Report"). Information
relating to earnings per share is not presented because the registrant, Ford
Motor Credit Company ("Ford Credit"), is an indirect wholly-owned subsidiary of
Ford Motor Company ("Ford" or the "Company").
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
Consolidated Statement of Income
and of Earnings Retained for Use in the Business
For the Periods Ended March 31, 2001, and 2000
(in millions)
First Quarter
--------------------------------
2001 2000
------------- -------------
(Unaudited)
Financing revenue
Operating leases $ 2,925.0 $ 2,567.9
Retail 2,101.9 1,970.9
Wholesale 720.6 540.2
Other 130.6 124.4
--------- ---------
Total financing revenue 5,878.1 5,203.4
Depreciation on operating leases (2,121.4) (1,858.4)
Interest expense (2,426.0) (2,069.7)
---------- ----------
Net financing margin 1,330.7 1,275.3
Other revenue
Insurance premiums earned 59.8 59.6
Investment and other income 532.5 266.7
--------- ---------
Total financing margin and revenue 1,923.0 1,601.6
Expenses
Operating expenses 634.8 586.7
Provision for credit losses 617.9 377.5
Other insurance expenses 44.6 60.3
--------- ---------
Total expenses 1,297.3 1,024.5
--------- ---------
Income before income taxes and minority interests 625.7 577.1
Provision for income taxes 232.1 214.2
--------- ---------
Income before minority interests 393.6 362.9
Minority interests in net income of subsidiaries 0.1 9.8
--------- ---------
Net income 393.5 353.1
Earnings retained for use in the business
Beginning of period 8,272.3 6,855.5
Dividends (250.0) (5.4)
---------- ----------
End of period $ 8,415.8 $ 7,203.2
========== ==========
The accompanying notes are an integral part of the financial statements.
-2-
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
Consolidated Balance Sheet
(in millions)
March 31, December 31, March 31,
2001 2000 2000
---------------- ---------------- -----------------
(Unaudited) (Unaudited)
Assets
Cash and cash equivalents $ 1,075.6 $ 1,123.4 $ 1,378.8
Investments in securities 557.2 547.4 543.6
Finance receivables, net 123,548.3 122,738.4 114,373.9
Net investment, operating leases 38,730.4 38,457.0 35,517.5
Retained interest in securitized assets 3,929.1 3,686.6 2,949.4
Notes and accounts receivable from affiliated companies 2,072.9 2,489.1 2,750.9
Other assets 5,242.8 5,215.9 4,221.0
---------------- ------------- ---------------
Total assets $ 175,156.3 $ 174,257.8 $ 161,735.1
================ ============== ================
Liabilities and Stockholder's Equity
Liabilities
Accounts payable
Trade, customer deposits, and dealer reserves $ 4,429.2 $ 4,758.1 $ 3,496.3
Affiliated companies 1,397.4 1,036.9 1,158.9
---------------- -------------- ----------------
Total accounts payable 5,826.6 5,795.0 4,655.2
Debt 147,947.5 146,294.7 136,696.4
Deferred income taxes 4,479.3 4,495.4 3,881.1
Other liabilities and deferred income 5,228.1 5,468.8 4,556.2
---------------- --------------- ----------------
Total liabilities $ 163,481.5 $ 162,053.9 $ 149,788.9
Minority interests in net assets of subsidiaries 17.3 17.3 421.5
Stockholder's Equity
Capital stock, par value $100 a share, 250,000 shares
authorized, issued and outstanding 25.0 25.0 25.0
Paid-in surplus (contributions by stockholder) 4,265.8 4,273.0 4,635.5
Accumulated other comprehensive loss (1,049.1) (383.7) (339.0)
Retained earnings 8,415.8 8,272.3 7,203.2
--------------- --------------- ----------------
Total stockholder's equity 11,657.5 12,186.6 11,524.7
--------------- --------------- ----------------
Total liabilities and stockholder's equity $ 175,156.3 $ 174,257.8 $ 161,735.1
================ =============== ================
The accompanying notes are an integral part of the financial statements.
-3-
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
Consolidated Statement of Cash Flows
For the Periods Ended March 31, 2001 and 2000
(in millions)
First Quarter
------------------------------
2001 2000
------------ -------------
(Unaudited)
Cash flows from operating activities
Net income $ 393.5 $ 353.1
Adjustments to reconcile net income to net
cash provided by operating activities
Provision for credit losses 617.9 377.5
Depreciation and amortization 2,265.4 1,975.8
Gain on sales of finance receivables (211.1) (0.4)
Increase in deferred income taxes 274.1 162.4
Decrease/(increase) in other assets 74.9 (41.6)
(Decrease)/increase in other liabilities (1,513.9) 607.6
All other operating activities (4.2) 50.0
----------- -----------
Net cash provided by operating activities 1,896.6 3,484.4
----------- -----------
Cash flows from investing activities
Purchase of finance receivables (other than wholesale) (14,192.6) (18,019.7)
Collection of finance receivables (other than wholesale) 8,733.0 12,697.3
Purchase of operating lease vehicles (6,804.7) (6,189.2)
Liquidation of operating lease vehicles 4,247.5 3,699.0
Increase in wholesale receivables (2,713.6) (1,268.7)
Decrease in notes receivable with affiliates 277.0 3,313.9
Proceeds from sale of receivables 7,102.0 2,806.8
Purchase of investment securities (201.7) (139.9)
Proceeds from sale/maturity of investment securities 191.9 120.7
All other investing activities (117.6) 3.6
----------- -----------
Net cash used in investing activities (3,478.8) (2,976.2)
----------- -----------
Cash flows from financing activities
Proceeds from issuance of long-term debt 13,704.0 11,883.9
Principal payments on long-term debt (3,531.4) (4,537.6)
Decrease in short-term debt (8,394.1) (7,348.7)
Cash dividends paid (250.0) (150.0)
All other financing activities 103.9 147.4
----------- -----------
Net cash provided/(used by) financing activities 1,632.4 (5.0)
----------- -----------
Effect of exchange rate changes on cash and cash equivalents (98.0) (66.6)
----------- -----------
Net change in cash and cash equivalents (47.8) 436.6
Cash and cash equivalents, beginning of period 1,123.4 942.2
----------- -----------
Cash and cash equivalents, end of period $ 1,075.6 $ 1,378.8
=========== ============
Supplementary cash flow information
Interest paid $ 2,552.8 $ 1,565.8
Taxes paid 66.1 30.8
The accompanying notes are an integral part of the financial statements.
-4-
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
Notes To Financial Statements
Note 1. Finance Receivables, Net (in millions)
March 31, December 31, March 31,
2001 2000 2000
---------------- --------------- -----------------
(Unaudited) (Unaudited)
Retail $ 78,593.9 $ 80,797.2 $ 79,351.1
Wholesale 36,879.8 34,122.0 28,257.1
Other 9,458.2 9,129.9 8,016.0
----------------- ---------------- ----------------
Total finance receivables, net of unearned income 124,931.9 124,049.1 115,624.2
Less: Allowance for credit losses (1,383.6) (1,310.7) (1,250.3)
----------------- ---------------- -----------------
Finance receivables, net $ 123,548.3 $ 122,738.4 $ 114,373.9
================ =============== ================
Note 2. Debt (in millions)
March 31, 2001
----------------------------------
Weighted Average
March 31, December 31, March 31,
Interest Rates (a) Maturities 2001 2000 2000
-------------------- ------------ ----------------- --------------- --------------
(Unaudited) (Unaudited)
Payable Within One Year:
Commercial paper $ 33,528.4 $ 42,254.8 $ 37,336.4
Other short-term debt (b) 8,113.8 7,875.1 6,288.0
--------------- -------------- --------------
Total short-term debt 41,642.2 50,129.9 43,624.4
Long-term indebtedness payable within
one year (c) 16,916.9 12,856.6 21,696.3
--------------- -------------- --------------
Total payable within one year 58,559.1 62,986.5 65,320.7
Payable After One Year:
Unsecured senior indebtedness
Notes (d) 6.41% 2002-2078 89,451.5 83,402.6 71,464.1
Unamortized discount (63.1) (94.4) (88.4)
---------------- --------------- --------------
Total payable after one year 89,388.4 83,308.2 71,375.7
---------------- --------------- --------------
Total debt $ 147,947.5 $ 146,294.7 $ 136,696.4
================ =============== ==============
(a) Excludes the effects of interest rate swap agreements.
(b) Includes $978.6 million, $571.0 million, and $672.5 million with
affiliated companies at March 31, 2001, December 31, 2000, and
March 31, 2000, respectively.
(c) Includes $844.0 million, $912.6 million, and $691.6 million with
affiliated companies at March 31, 2001, December 31, 2000, and
March 31, 2000, respectively.
(d) Includes $1,556.4 million, $1,663.8 million, and $2,528.6 million with
affiliated companies at March 31, 2001, December 31, 2000, and
March 31, 2000, respectively.
-5-
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
Notes To Financial Statements
Note 3. SFAS 133 ("Accounting for Derivative Instruments and Hedging
Activities")
Ford Credit adopted SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, as amended by SFAS No. 137 and SFAS No. 138, on
January 1, 2001. Ford Credit operates in many countries worldwide and is
exposed to market risks, including the effect of changes in interest rates and
foreign currency exchange rates. These financial exposures are monitored
and managed by Ford Credit as an integral part of the company's overall risk
management program, which recognizes the unpredictability of financial
markets and seeks to reduce the potentially adverse effect on Ford Credit's
results. Ford Credit uses derivative financial instruments to manage the
exposures to fluctuations in interest rates and exchange rates.
Interest rate risk is managed by entering into interest rate swap agreements to
change the interest rate characteristics of Ford Credit's debt to match the
interest rate characteristics of related assets. These interest rate derivatives
are designated as either cash flow or fair-value hedges. Exchange rate risk is
managed by use of foreign currency agreements, including forward contracts
and swaps. In addition, Ford Credit holds other derivatives that
presently do not qualify for hedge accounting treatment under SFAS No. 133.
Derivatives accounted for as cash flow hedges comprise most of the balance of
SFAS No. 133 activity reported as a part of stockholders' equity.
Ford Credit's strategy is to use derivatives to manage specific economic risks
to changes in interest rates and exchange rates. Ford Credit does not use
derivatives for speculative purposes. For more information on Ford Credit's
derivative strategy, see item 7A. "Quantitative and Qualitative Disclosures
About Market Risk" and Note 1 to the Consolidated Financial Statements in the
10-K Report.
Adverse adjustments to income (not material to total Ford Credit results) and to
stockholders' equity in the first quarter including transition adjustment were
(in millions):
Pre-tax income $ (20)*
Net income (13)
Stockholders' equity (481)**
* Recorded in investment and other income
** Recorded in accumulated other comprehensive income (loss)
Of the $481 million loss recorded in stockholders' equity (including $214
million transition adjustment on January 1), Ford Credit does not expect to
reclassify any gains or losses to earnings during the next twelve months.
Consistent with Ford Credit's comprehensive, non-speculative risk-management
practices, future reclassifications are not anticipated to have a material
effect on Ford Credit net income.
-6-
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
Notes to Financial Statements
Note 4. Comprehensive Income (in millions)
First Quarter
------------------------------
2001 2000
------------ ------------
(Unaudited)
Net income $ 393.5 $ 353.1
Other comprehensive income (loss) (665.4) (41.0)
------------- -------------
Total comprehensive income (loss) $ (271.9) $ 312.1
============= =============
Other comprehensive income includes foreign currency translation adjustments
and net unrealized gains and losses on investments in securities, retained
interests in securitized assets, and derivative instruments (Note 3).
Note 5. Segment Information (in millions)
Ford Credit manages its operations through two segments, Ford Credit North
America and Ford Credit International. In the Second Quarter of 2000, the
Company merged the Personal Financial Services segment into these segments.
Ford Credit Ford Credit
North Ford Credit Eliminations/ Financial
America International Reclassifications * Statements
---------------- --------------- ------------------- ---------------
(Unaudited)
First Quarter
- --------------------------------------
2001
Revenue $ 6,065.0 $ 871.4 $ (466.0) $ 6,470.4
Income
Income before income taxes 557.6 88.8 (20.7) 625.7
Provision for income taxes 208.4 31.1 (7.4) 232.1
Net income 349.2 57.7 (13.4) 393.5
Other disclosures
Depreciation on operating leases 1,919.7 104.3 97.4 2,121.4
Interest expense 2,386.7 447.5 (408.2) 2,426.0
Finance receivables
(including net investment
operating leases) 163,022.9 28,547.7 (29,291.9) 162,278.7
Total assets 163,036.3 31,832.2 (19,712.2) 175,156.3
2000
Revenue $ 4,887.4 $ 905.8 $ (263.5) $ 5,529.7
Income
Income before income taxes 462.3 120.9 (6.1) 577.1
Provision for income taxes 173.5 42.7 (2.0) 214.2
Net income 288.8 78.2 (13.9) 353.1
Other disclosures
Depreciation on operating leases 1,667.1 183.1 8.2 1,858.4
Interest expense 1,950.5 388.5 (269.3) 2,069.7
Finance receivables
(including net investment
operating leases 142,710.6 28,329.6 (21,148.8) 149,891.4
Total assets 147,757.6 32,010.8 (18,033.3) 161,735.1
* Includes the impact of SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities.
-7-
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Ford Credit's 2001 first quarter financial results include the effects of
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities".
Ford Credit adopted SFAS No. 133, as amended by SFAS No. 137 and SFAS No. 138,
on January 1, 2001. For further discussion of SFAS No. 133 and its impact on
Ford Credit, see Note 3 of the Notes to Consolidated Financial Statements for
the first quarter of 2001.
FIRST QUARTER 2001 COMPARED WITH FIRST QUARTER 2000
Ford Credit's consolidated net income for the first quarter of 2001 was $393
million, up $40 million or 11% from the first quarter of 2000. Compared with
2000, the increase in first quarter earnings reflects primarily improvements in
investment and other income (primarily the result of gains on the sale of
receivables related to securitization transactions) and higher financing
volumes, partially offset by higher credit losses and lower net financing
margins.
Total net finance receivables and net investment in operating leases at March
31, 2001 were $162 billion, unchanged from December 31, 2000 and up $12 billion
or 8% from a year earlier. The increase from the first quarter of 2000 resulted
primarily from a higher volume of wholesale receivables and a higher volume of
operating lease receivables.
Credit losses as a percent of average net finance receivables including net
investment in operating leases was 1.06% in the first quarter of 2001 compared
with 0.82% in the first quarter of 2000. The increase was due primarily to the
ongoing centralization of collection activities at the regional service centers
in the United States and Canada as the centers transition new staff and launch
new collection tools. Increased losses also reflected growth in Ford Credit's
sub-prime lending businesses (conducted through its subsidiaries Fairlane Credit
LLC and Triad Financial Corporation).
Lower net financing margins (on a volume-adjusted basis) reflect primarily
higher borrowing costs.
Ford Credit manages its operations through two segments, Ford Credit North
America and Ford Credit International. Net income in the North America segment
for the first quarter of 2001 was $349 million, up $60 million or 21% from the
first quarter of 2000, primarily a result of the factors discussed above. Net
income in the International segment for the first quarter of 2001 was $58
million, down $20 million or 26% from the first quarter of 2000, primarily a
result of difficult market conditions in South America. See Note 5 of Notes to
Financial Statements for additional segment information.
During the first quarter of 2001, Ford Credit financed 45% of all new cars and
trucks sold by Ford, Lincoln, and Mercury dealers in the U.S. compared with 46%
in the first quarter of 2000. In Europe, Ford Credit financed 30% of all new
vehicles sold by Ford dealers, compared with 31% a year ago. Ford Credit's
retail financing for new and used vehicles totaled about 850,000 in the United
States and about 230,000 in Europe during the first quarter of 2001 compared
with 848,000 in the United States and 206,000 in Europe a year ago. Ford Credit
provided wholesale financing for 86% of Ford, Lincoln, and Mercury factory sales
in the United States and 96% of Ford factory sales in Europe compared with 88%
for the U.S. and 97% for Europe in the first quarter of 2000.
-8-
Ford Credit Liquidity and Capital Resources
Ford Credit's outstanding debt at March 31, 2001 and at the end of each of the
last four years was as follows (in millions):
December 31
March 31, -------------------------------------------------------------------------
2001 2000 1999 1998 1997
--------------- -------------- -------------- -------------- --------------
(Unaudited)
Commercial paper & STBAs (a) $ 34,732 $ 43,627 $ 43,078 $ 48,636 $ 42,311
Other short-term debt (b) 6,910 6,503 6,770 4,997 3,897
Long term debt
(including current portion) (c) 106,305 96,165 83,226 61,334 54,517
-------------- ------------- ------------- ------------- --------------
Total debt $ 147,947 $ 146,295 $ 133,074 $ 114,967 $ 100,725
=============== ============== ============== ============== ==============
United States $ 117,120 $ 116,427 $ 104,186 $ 85,394 $ 78,443
Europe 15,254 14,866 14,510 16,653 12,491
Other international 15,573 15,002 14,378 12,920 9,791
-------------- ------------- ------------- ------------- -------------
Total debt $ 147,947 $ 146,295 $ 133,074 $ 114,967 $ 100,725
=============== ============== ============== ============== ==============
- - - - -
a) Short-term borrowing agreements with bank trust departments. Includes
$1,031.0 million with an affiliated company at December 31, 1999. There
were no outstanding balances with affiliates at March 31, 2001,
December 31, 2000, December 31, 1998 or December 31, 1997.
b) Includes $979 million, $571 million, $718 million, $989 million and $831
million with an affiliated company at March 31, 2001,
December 31, 2000, December 31, 1999, December 31, 1998 and
December 31, 1997, respectively.
c) Includes $2,400 million, $2,578 million, $3,457 million, $2,878 million,
and $3,547 million with affiliated companies at March 31, 2001,
December 31, 2000, December 31, 1999, December 31, 1998, and
December 31, 1997, respectively.
Support facilities represent additional sources of funds, if required. At
March 31, 2001, Ford Credit had approximately $19.1 billion of contractually
committed facilities. In addition, approximately $7.5 billion of Ford lines of
credit may be used by Ford Credit at Ford's option. These credit lines have
various maturity dates through June 30, 2005 and may be used, at Ford Credit's
option, by any of its direct or indirect majority-owned subsidiaries. Any such
borrowings will be guaranteed by Ford Credit. Banks also provide $1.4 billion
of contractually committed liquidity facilities to support Ford Credit's asset
backed commercial paper program.
Additionally, at March 31, 2001, there were approximately $4.9 billion of
contractually committed facilities available for FCE Bank plc's ("FCE Bank")
use. In addition, $598 million of Ford credit lines may be used by FCE Bank at
Ford's option. The lines have various maturity dates through June 30, 2005 and
may be used, at FCE Bank's option, by any of its direct or indirect
majority-owned subsidiaries. Any such borrowings will be guaranteed by FCE
Bank.
-9-
New Accounting Standards
Ford Credit adopted Statement of Financial Accounting Standards No. 133
("SFAS 133") "Accounting for Derivative Instruments and Hedging Activities"
on January 1, 2001. Adverse adjustments to income and to stockholders' equity
included in first quarter results were (in millions):
Pre-tax income $(20)
Net income (13)
Stockholders' equity (481)
For a further discussion of SFAS 133, see note 3 of our Notes to Financial
Statements.
Statement of Financial Accounting Standards No. 140 ("SFAS 140"),
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities", was issued by the Financial Accounting Standards Board in
September 2000, as a replacement to SFAS No. 125. SFAS 140 revises the guidance
for accounting for transfers of financial assets and collateral and requires
certain disclosures. Ford Credit will adopt SFAS 140 as of April 1, 2001 for all
transfers and servicing of financial assets and extinguishments of liabilities.
Additionally, as of December 31, 2000 Ford Credit adopted certain provisions of
SFAS 140 that were effective at that time. The adoption of this Standard is not
expected to materially impact Ford Credit's financial statements.
In November 2000, the Emerging Issues Task Force of the FASB reached a
consensus on impairment accounting for retained beneficial interests ("EITF
99-20"). Under this consensus, impairment on certain beneficial interests in
securitized assets must be recognized when (1) the asset's fair value is below
its carrying value, and (2) it is probable that there has been an adverse change
in estimated cash flows. Previously, impairment on such assets was recognized
when the asset's carrying value exceeded estimated cash flows discounted at a
risk free rate of return. As of April 1, 2001, Ford Credit will adopt EITF
99-20. This adoption is not expected to materially impact Ford Credit's
Financial Statements.
-10-
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
For a discussion of purported class actions and other proceedings
affecting Ford Credit, see Item 5, "Other Information - Information
Concerning Ford - Class Actions - Ford Credit Debt Collection Class
Action."
Item 2. Changes in Securities
Not required
Item 3. Defaults Under Senior Securities
Not required
Item 4. Submission of Matters to a Vote of Security Holders
Not required.
-11-
ITEM 5. Other Information
INFORMATION CONCERNING FORD
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
For the Periods Ended March 31, 2001 and 2000
(in millions)
First Quarter
-----------------------------
2001 2000
-------------- -------------
AUTOMOTIVE
Sales $34,650 $36,175
Costs and expenses (Note 2)
Cost of sales (Note 3) 30,730 31,578
Selling, administrative and other expenses 2,506 2,265
------- -------
Total costs and expenses 33,236 33,843
Operating income 1,414 2,332
Interest income 255 368
Interest expense 367 318
------- -------
Net interest income/(expense) (112) 50
Equity in net income/(loss) of affiliated companies (178) (32)
Net expense from transactions with
Financial Services (85) (10)
------- -------
Income before income taxes - Automotive 1,039 2,340
FINANCIAL SERVICES
Revenues 7,711 6,719
Costs and expenses
Interest expense 2,560 2,213
Depreciation 2,519 2,208
Operating and other expenses (Note 3) 1,437 1,211
Provision for credit and insurance losses 686 454
------- -------
Total costs and expenses 7,202 6,086
Net revenue from transactions with Automotive 85 10
------- -------
Income before income taxes - Financial Services 594 643
------- -------
TOTAL COMPANY
Income before income taxes 1,633 2,983
Provision for income taxes 571 1,022
------- -------
Income before minority interests 1,062 1,961
Minority interests in net income of subsidiaries 3 29
------- -------
Income from continuing operations $ 1,059 $ 1,932
Income from discontinued operation (Note 4) - 147
------- -------
Net income $ 1,059 $ 2,079
======= =======
Income attributable to Common and Class B Stock
after preferred stock dividends $ 1,055 $ 2,075
Average number of shares of Common and Class B
Stock outstanding 1,840 1,206
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK (Notes 5 and 6)
Basic income
Income from continuing operations $ 0.58 $ 1.61
Net income $ 0.58 $ 1.73
Diluted income
Income from continuing operations $ 0.56 $ 1.58
Net income $ 0.56 $ 1.70
Cash dividends $ 0.30 $ 0.50
The accompanying notes are part of the financial statements.
-12-
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
-----------------------------
2. Selected Automotive Costs and Expenses are summarized as follows (in
millions):
First Quarter
----------------------------
2001 2000
------------ ------------
Depreciation $675 $694
Amortization of special tools 726 574
Pension expense/(benefits) (85) 64
3. SFAS 133 - Ford Motor Company adopted Statement of Financial Accounting
Standard ("SFAS") No. 133, Accounting for Derivative Instruments and
Hedging Activities, as amended by SFAS No. 137 and SFAS No. 138, on January
1, 2001. The Company operates in many countries worldwide and is exposed to
market risks, including the effect of changes in foreign currency exchange
rates, commodity prices, and interest rates. These financial exposures are
monitored and managed by the Company as an integral part of its overall
risk management program, which recognizes the unpredictability of financial
markets and seeks to reduce the potentially adverse effect on results. The
Company uses derivative financial instruments to manage the exposures to
fluctuations in exchange rates, commodity prices, and interest rates.
Exchange rate risk is managed by use of foreign currency agreements,
including forward contracts, swaps, and options. Commodity price risk is
managed by use of forward price contracts and options. Exchange rate and
commodity risk derivatives are primarily accounted for as cash flow hedges
and generally mature in 3 years or less, with a maximum maturity of 7
years. Interest rate risk is managed by entering into interest rate swap
agreements to change the interest rate characteristics of Ford's debt
(primarily used in the Financial Services sector) to match the interest
rate characteristics of related assets. These interest rate derivatives are
designated as either cash flow or fair-value hedges. In addition, Ford uses
forward contracts to hedge certain net investments in foreign operations
and holds other derivatives that presently do not qualify for hedge
accounting treatment under SFAS No. 133. Derivatives accounted for as cash
flow hedges comprise most of the balance of SFAS No. 133 activity reported
as a part of stockholders' equity.
Ford's strategy is to use derivatives to manage specific economic risks to
changes in exchange rates, commodity prices, and interest rates. Ford does
not use derivatives for speculative purposes. For more information on
Ford's derivative strategy, see Item 7A. "Quantitative and Qualitative
Disclosures About Market Risk" and Note 1 of the Notes to Consolidated
Financial Statements in Ford's Annual Report on Form 10-K (the "Ford 10-K
Report") for the year ended December 31, 2000. For purposes of this
report, "Ford", the "Company", "we", "our", "us" or similar references
means Ford Motor Company and its majority owned subsidiaries unless
the context requires otherwise.
Adverse adjustments to income (not material to total Company results) and
to stockholders' equity in the first quarter, including transition
adjustment, were (in millions):
Financial Total
Automotive Services Company
-------------- ------------ ---------------
Income before income taxes $(90)* $(20)** $ (110)
Net income (59) (13) (72)
Stockholders' equity (1,225)***
* Recorded in Automotive cost of sales
** Recorded in Financial Services operating and other expenses
*** Recorded inaccumulated other comprehensive income
Of the $1,225 million reduction recorded in stockholders' equity (including
$550 million transition adjustment on January 1), about $400 million ($170
million of which relates to transition adjustment) is expected to be
reclassified to net income during the next twelve months as the related
underlying transactions occur. The amount reclassified from equity to
earnings in the first quarter of 2001 reduced earnings by about $80
million. Consistent with the Company's
-13-
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
-----------------------------
comprehensive, non-speculative risk-management practices, neither these nor
future reclassifications are anticipated to have a material effect on net
Company earnings, as they should be substantially offset by the opposite
effects on related underlying transactions.
4. Discontinued Operation - On June 28, 2000, Ford distributed 130 million
shares of Visteon Corporation ("Visteon"), which represented its 100%
ownership interest, by means of a tax-free spin-off in the form of a
dividend on Ford Common and Class B Stock. Ford's financial statements
reflect Visteon as a "discontinued operation" for all periods prior to July
1, 2000.
5. Value Enhancement Plan - On August 7, 2000, the Company announced the final
results of its recapitalization, known as the Value Enhancement Plan
("VEP"). Under the VEP, Ford shareholders exchanged each of their old Ford
Common or Class B shares for one new Ford Common or Class B share, as the
case may be, plus, at their election, either $20 in cash, 0.748 additional
new Ford Common shares, or a combination of $5.17 in cash and 0.555
additional new Ford Common shares. As a result of the elections made by
shareholders under the VEP, the total cash elected was $5.7 billion and the
total number of new Ford Common and Class B shares that became issued and
outstanding was 1.893 billion. As a result of the VEP, approximately $1.2
billion was transferred from capital stock to capital in excess of par
value of stock. In accordance with generally accepted accounting
principles, prior period shares and earnings per share amounts were not
adjusted.
6. Income Per Share of Common and Class B Stock - Basic income per share of
Common and Class B Stock is calculated by dividing the income attributable
to Common and Class B Stock by the average number of shares of Common and
Class B Stock outstanding during the applicable period, adjusted for shares
issuable under employee savings and compensation plans.
The calculation of diluted income per share of Common and Class B Stock
takes into account the effect of dilutive potential common stock, such as
stock options.
Income per share of Common and Class B Stock from continuing operations was
as follows (in millions, except per share amounts):
First Quarter 2001 First Quarter 2000
----------------------------- --------------------------
Income Shares Income Shares
-------------- ------------- ----------- -------------
Income from continuing operations and shares $1,059 1,840 $1,932 1,206
Preferred stock dividend requirements (4) - (4) -
Issuable and uncommitted ESOP shares - (12) - (7)
------ ------ ------ ------
Basic continuing income and shares $1,055 1,828 $1,928 1,199
Basic income per share from continuing operations $ 0.58 $ 1.61
Basic income per share from discontinued operation - 0.12
------ ------
Basic income per share $ 0.58 $ 1.73
Basic continuing income and shares $1,055 1,828 $1,928 1,199
Net dilutive effect of options - 40 - 23
------ ----- ------ -----
Diluted continuing income and shares $1,055 1,868 $1,928 1,222
Diluted income per share from continuing operations $ 0.56 $ 1.58
Diluted income per share from discontinued operation - 0.12
------ ------
Diluted income per share $ 0.56 $ 1.70
-14-
Management's Discussion and Analysis of Financial Condition and Results
- ------------------------------------------------------------------------
of Operations - Ford
- --------------------
In addition to specific explanations discussed below, comparisons between
Ford's first quarter 2001 and 2000 results are influenced by three important
events:
o On August 7, 2000, we announced the final results of our
recapitalization, known as our Value Enhancement Plan ("VEP"), which
became effective on August 2, 2000. Under the VEP, Ford shareholders
exchanged each of their old Ford Common or Class B shares for one new
Ford Common or Class B share, as the case may be, plus, at their
election, either $20 in cash, 0.748 additional new Ford Common shares,
or a combination of $5.17 in cash and 0.555 additional new Ford Common
shares. As a result of the elections made by shareholders under the
VEP, the total cash elected was $5.7 billion and the total number of
new Ford Common and Class B shares that became issued and outstanding
was 1.893 billion. See Note 5 of our Notes to Financial Statements for
a description of the effect of the VEP on earnings per share.
o On June 30, 2000, we purchased the Land Rover business from the BMW
Group. Land Rover's results and financial condition are included in
our financial statements on a consolidated basis beginning in the
third quarter of 2000.
o On June 28, 2000, we distributed 130 million shares of Visteon
Corporation (our former automotive systems and components division),
which represented our 100% ownership interest, by means of a tax-free
spin-off in the form of a dividend on Ford Common and Class B Stock.
Visteon has been reflected as a discontinued operation through June
30, 2000.
FIRST QUARTER RESULTS OF OPERATIONS - FORD
Worldwide net income was $1,059 million in the first quarter of 2001, or
$0.56 per diluted share of Common and Class B Stock. This compares with first
quarter earnings from continuing operations in 2000 of $1,932 million, or $1.58
per diluted share. Worldwide sales revenue was $42.4 billion in the first
quarter of 2001, down $0.5 billion from a year ago. Unit sales of cars and
trucks were 1,805,000, down 109,000 units.
Results by business sector for the first quarter of 2001 and 2000 are shown
below (in millions).
First Quarter
Net Income
------------------------------------------------
2001
Over/(Under)
2001 2000 2000
------------- -------------- ----------------
Automotive Sector $ 689 $1,552 $ (863)
Financial Services Sector 370 380 (10)
------ ------ -------
Total continuing operations 1,059 1,932 (873)
Discontinued operation - Visteon 0 147 (147)
------ ------ -------
Total Company $1,059 $2,079 $(1,020)
====== ====== =======
-15-
Management's Discussion and Analysis of Financial Condition and Results
- ------------------------------------------------------------------------
of Operations - Ford (Continued)
- --------------------------------
Automotive Sector
- -----------------
Worldwide earnings for our Automotive sector were $689 million in the first
quarter of 2001, on sales of $34.7 billion. Earnings in the first quarter of
2000 were $1,552 million, on sales of $36.2 billion. Adjusted for constant
volume and mix, total automotive costs were unchanged compared with the first
quarter of 2000.
Details of first quarter Automotive sector earnings from continuing
operations are shown below (in millions).
First Quarter
Net Income/(Loss)
--------------------------------------------
2001
Over/(Under)
2001 2000 2000
------------ ----------- -----------------
North American Automotive $ 695 $1,667 $(972)
Automotive outside North America
- Europe 88 (3) 91
- South America (53) (82) 29
- Rest of World (41) (30) (11)
----- ------ -----
Total Automotive outside North
America (6) (115) 109
----- ------ -----
Total Automotive Sector $ 689 $1,552 $(863)
===== ====== =====
Automotive sector earnings in North America were $695 million in the first
quarter of 2001, on sales of $23.7 billion. In the first quarter of 2000,
earnings were $1,667 million, on sales of $27.2 billion. The decrease in
earnings reflected primarily lower vehicle sales volume (unit sales down 208,000
units, or 16% from a year ago). The after-tax return on sales for our Automotive
sector in North America was 3.0% in the first quarter of 2001. Excluding the
effect of SFAS 133 as described below, the after-tax return on sales for our
Automotive sector in North America would have been 3.2%, down 3 percentage
points from a year ago.
In the first quarter of 2001, approximately 4.2 million new cars and trucks
were sold in the United States, down 300,000 units from a year ago. Our share of
those unit sales was 22.6% in the first quarter of 2001, down 1.4 percentage
points from a year ago. The decline in market share reflected in part low
availability of new Ford Explorer and Mercury Mountaineer models.
Our Automotive sector earnings in Europe were $88 million in the first
quarter of 2001, compared with losses of $3 million a year ago. The improvement
in earnings is explained by increased vehicle sales volume and lower costs at
Ford brand operations. Other factors (including lower volume at Volvo, higher
launch costs at Jaguar, and gains on sales of certain assets) were largely
offsetting.
In the first quarter of 2001, approximately 4.8 million new cars and trucks
were sold in our nineteen primary European markets, down 279,000 units from a
year ago. Our share of those unit sales was 11.1% in the first quarter of 2001,
up 1.3 percentage points from a year ago. Our market share increase reflected
strong sales performance of the new Ford Mondeo and Transit models and the
addition of Land Rover.
Our Automotive sector in South America had losses of $53 million in the
first quarter of 2001, compared with losses of $82 million a year ago. The
improved results reflected improved margins.
-16-
Management's Discussion and Analysis of Financial Condition and Results
- -----------------------------------------------------------------------
of Operations - Ford (Continued)
- -------------------------------
In the first quarter of 2001, approximately 415,000 new cars and trucks
were sold in Brazil, compared with 310,000 a year ago. Our share of those unit
sales was 8.6% in the first quarter of 2001, down 9/10 of a percentage point
from a year ago.
Automotive sector losses outside North America, Europe and South America
("Rest of World") were $41 million in the first quarter of 2001, compared with
losses of $30 million in the first quarter of 2000. The decline in results were
more than explained by Ford's share of increased losses at Mazda.
Financial Services Sector
- -------------------------
Our Financial Services sector consists primarily of two segments, Ford
Credit and Hertz. Details of first quarter Financial Services sector earnings
are shown below (in millions).
First Quarter
Net Income/(Loss)
--------------------------------------------
2001
Over/(Under)
2001 2000 2000
------------ ---------- ----------------
Ford Credit $393 $353 $ 40
Hertz (4) 56 (60)
Minority interests, eliminations,
and other (19) (29) 10
---- ---- ----
Total Financial Services Sector $370 $380 $(10)
==== ==== ====
Memo: Ford's share of earnings in Hertz $ 0 $ 46 $(46)
For a discussion of Ford Credit's results of operations in the first
quarter of 2001, see Item 2. "Management's Discussion and Analysis of Financial
Condition and Results of Operations - First Quarter 2001 Compared with First
Quarter 2000."
In the first quarter of 2001, Hertz had losses of $4 million, compared with
earnings of $56 million (of which $46 million was Ford's share) a year ago. The
decrease in earnings reflected primarily pricing pressure, a combination of a
slowing U.S. economy and its impact on rental transaction volume and cost
structure, higher 2001 model year vehicle holding costs, and lower vehicle and
equipment residual values.
LIQUIDITY AND CAPITAL RESOURCES - FORD
Automotive Sector
- -----------------
At March 31, 2001, our Automotive sector had $15.8 billion of cash and
marketable securities, down $0.7 billion from December 31, 2000. The decline was
more than explained by share repurchases ($800 million) and our acquisition of
the minority interest in Hertz ($735 million), offset partially by positive
operating cash flow. Automotive gross cash was $19.1 billion at March 31, 2001,
including $3.3 billion of prefunding of certain employee health benefit
obligations through a Voluntary Employee Beneficiary Association trust. (Early
in the second quarter of 2001, we incurred a cash outlay of $1.6 billion for the
final payment to AB Volvo for our acquisition of Volvo Car.)
Automotive capital expenditures were $1.4 billion in the first quarter of
2001, down $100 million from a year ago.
-17-
Management's Discussion and Analysis of Financial Condition and Results
- -----------------------------------------------------------------------
of Operations - Ford (Continued)
- ----------------------------------
Our stockholders' equity was $16.1 billion at March 31, 2001, down $2.5
billion from December 31, 2000. This decrease reflected primarily non-cash
adjustments related to the adoption of SFAS 133 (as described below) and foreign
currency translation (reflecting primarily the strengthening of the U.S. dollar
relative to European currencies).
At March 31, 2001, our Automotive sector had total debt of $12 billion,
unchanged from December 31, 2000.
Financial Services Sector
- -------------------------
At March 31, 2001, our Financial Services sector had cash and cash
equivalents of $1.4 billion, down $48 million from December 31, 2000. Finance
receivables and net investments in operating leases were $174 billion at March
31, 2001, up from $172 billion at December 31, 2000.
Total debt was $155 billion at March 31, 2001, up $2 billion from December
31, 2000. Outstanding commercial paper at March 31, 2001 totaled $34 billion at
Ford Credit, and $2 billion at Hertz, with an average remaining maturity of 32
days and 20 days, respectively.
HERTZ PURCHASE - FORD
In March 2001, through a tender offer and a merger transaction, we acquired
(for a total price of $735 million) the common stock of Hertz that we did not
own, which represented about 18% of the economic interest in Hertz. As a result,
Hertz has become an indirect, wholly-owned subsidiary.
NEW ACCOUNTING STANDARD - FORD
We adopted Statement of Financial Accounting Standards (SFAS) 133
"Accounting for Derivative Instruments and Hedging" on January 1, 2001. Adverse
adjustments to income and to stockholders' equity included in first quarter
results were (in millions):
Financial Total
Automotive Services Company
-------------- ------------- -------------
Income before income taxes $(90) $(20) $ (110)
Net income (59) (13) (72)
Stockholders' equity (1,225)
For a further discussion of SFAS 133, see note 3 of our Notes to Financial
Statements.
OTHER FINANCIAL INFORMATION - FORD
PricewaterhouseCoopers LLP, our independent accountants, performed a
limited review of the financial data presented on page 12. The review was
performed in accordance with standards for such reviews established by the
American Institute of Certified Public Accountants. The review did not
constitute an audit; accordingly, PricewaterhouseCoopers LLP did not express an
opinion on the aforementioned data. The financial data include any material
adjustments or disclosures proposed by PricewaterhouseCoopers LLP as a result of
their review.
-18-
Legal Proceedings - Ford
- -------------------------
Firestone Matters (Previously discussed beginning on page 20 of the Ford
Credit 10-K Report.) As previously reported, on August 9, 2000,
Bridgestone/Firestone, Inc. ("Firestone") announced a recall of all Firestone
ATX and ATX II tires (P235/75R15) produced in North America since 1991 and
Wilderness AT tires of that same size manufactured at Firestone's Decatur,
Illinois plant. Firestone estimated that about 6.5 million of the affected tires
were still in service on the date the recall was announced. The recall was
announced following an analysis by Ford and Firestone that identified a
statistically significant incidence of tread separation occurring in the
affected tires. Most of the affected tires were installed as original equipment
on Ford Explorer sport utility vehicles. The recall has been substantially
completed. Ford incurred substantial costs in connection with the recall,
including the costs of the recall itself and costs associated with production
interruptions to permit production tires to be diverted to the recall.
Also as previously reported, Ford is continuing to work with the Safety
Administration in its investigation of the Firestone tire recall to attempt to
assess the root cause of tread separation in the recalled tires and to determine
whether the recall should be expanded to include other Firestone tires. The root
cause assessment by the Safety Administration and Ford's own analysis of root
cause include tires not subject to the original recall that have been installed
as original equipment on several Ford models, including Ford Explorer and
Mercury Mountaineer models. The conclusions reached by the Safety Administration
or Ford in these studies, which at present are incomplete, could result in the
recall and/or replacement of additional Firestone tires and in additional
substantial cost to the Company.
Ford has accrued expenses in accordance with generally accepted accounting
principles for the estimated losses from currently pending personal injury cases
in which plaintiffs allege that their injuries were caused by defects in a
vehicle tire that caused it to lose its tread and/or by defects in the vehicle
(primarily Ford Explorer models) that caused it to roll over. These accruals are
reflected in Ford's financial statements. Ford periodically assesses the
anticipated costs of this litigation and additional accruals, which could be
substantial, may be necessary in the future.
The securities fraud class actions have been consolidated and an amended
complaint has been filed. The amended complaint alleges that Ford's
misrepresentations and omissions began in March 1998 (rather than early 1999, as
alleged in the initial complaint).
Class Actions
- -------------
TFI Module Class Action. (Previously discussed on page 23 of the Ford
Credit 10-K Report.) The class action in Missouri has been withdrawn. The trial
court in the Howard case has ruled on the nature of the recall. Pursuant to this
ruling, Ford will be ordered to replace all distributor-mounted TFI modules on
vehicles in the class with new distributor-mounted TFI modules of the latest
design. In addition, the Plaintiffs in Howard moved for immediate judgment on
the remaining claims, including statutory damages, arguing that a retrial is not
necessary because all of the dispositive factual issues have already been
resolved by the trial judge. The trial court denied this motion and Plaintiffs
are attempting to appeal that ruling. Unless the appellate court intervenes, the
retrial in Howard will begin in September 2001.
Throttle Body Assemblies Class Action. (Previously discussed on page 24 of
the Ford Credit 10-K Report.) This action has been successfully removed to
federal court.
Ford Credit Debt Collection Class Action. (Previously discussed on page 25
of the Ford Credit 10-K Report.) The trial in the Molloy case is scheduled to
begin on May 10, 2001 in the bankruptcy court on the named plaintiff's case
only.
-19-
Legal Proceedings - Ford (Continued)
- ------------------------------------
Performance Management Process Class Action. (Previously discussed on page
26 of the 10-K Report.) The plaintiffs allege both intentional discrimination
and disparate impact relating to the Performance Management Process. Although
the case is still in the early stages of litigation, Ford has filed a motion to
dismiss the disparate impact claims. This motion is scheduled to be heard
simultaneously with a similar motion filed in the Reverse Discrimination Class
Action on May 30, 2001.
Reverse Discrimination Class Action. (Previously discussed on page 26 of
the Ford Credit 10-K Report.) Plaintiffs withdrew the initial case that was
filed in the federal district court for the Eastern District of Michigan. On
March 6, 2001, four plaintiffs filed a new purported class action in state court
of Michigan against Ford and Mr. Nasser. This suit alleges reverse race, reverse
gender and age discrimination. Specifically, the purported class claims that the
Company's diversity initiatives discriminate against older white males. The suit
alleges that the Company's Performance Management Process was intended to
support the diversity initiatives by driving out the older white males. The suit
alleges both intentional discrimination as well as disparate impact. Ford has
filed a motion to dismiss all of the disparate impact claims. This motion is
scheduled to be heard simultaneously with a similar motion filed in the
Performance Management Process Class Action on May 30, 2001.
F-150 Radiators Class Actions. In April 2001, two purported class actions
were filed alleging that Ford defrauded purchasers of 1999-2001 model year Ford
F-150 trucks by falsely representing that certain option packages included
"upgraded" radiators. Plaintiffs allege that approximately 400,000 trucks that
were intended to have larger radiators were actually built with standard
radiators. One of the cases, filed in state court in New York, purports to
represent a nationwide class, and seeks an order requiring installation of
larger radiators and other damages. The second case, filed in state court in
Texas, purports to represent purchasers in Texas, and seeks unspecified damages.
Both cases allege breach of warranty and violation of state consumer protection
laws.
Other Matters
Rouge Powerhouse Insurance Litigation. There are several pending lawsuits
arising out of the February 1, 1999 Rouge Powerhouse explosion. In June 2000,
Ford filed a coverage action against ten property insurance carriers seeking
property damage and business interruption losses attributable to the Powerhouse
explosion. Factory Mutual, one of these insurers, filed a counterclaim in the
lawsuit for claims paid to Rouge Steel Company ("Rouge Steel"). Factory Mutual's
counterclaim alleges that Rouge Steel's damages occurred as a result of Ford's
negligence, gross negligence or willful and wanton misconduct in operating the
Powerhouse and totals approximately $300 million. This counterclaim, and a
similar claim for approximately $25 million by other insurers of Rouge Steel,
has been ordered to arbitration. Additionally, claims related to business
interruption losses incurred by five suppliers to Rouge Steel, totaling
approximately $20 million, also have been added to the arbitration. In addition,
six Ford employees and one Rouge Steel employee also have filed lawsuits seeking
recovery in excess of $100 million in the aggregate for alleged psychological
injuries caused as a result of the explosion.
-20-
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Please refer to Exhibit Index
(b) Reports on Form 8-K during the quarter ended March 31, 2001:
FINANCIAL
DATE OF REPORT ITEM STATEMENTS FILED
- -------------- -------------- -----------------
January 3, 2001 Item 5 - Other Events None
January 11, 2001 Item 5 - Other Events None
January 18, 2001 Item 5 - Other Events News Release dated
January 18, 2001 of
Ford Motor Company and
Subsidiaries for the year
ended December 31, 2000 with
attachments.
February 1, 2001 Item 5 - Other Events None
February 1, 2001 Item 5 - Other Events 2000 Audit of Consolidated
Financial Statements of
Ford Motor Credit Company
and Subsidiaries together
with the Report of
Independent Accountants of
PricewaterhouseCoopers LLP.
March 1, 2001 Item 5 - Other Events None
March 2, 2001 Item 5 - Other Events None
March 29, 2001 Item 5 - Other Events None
-21-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FORD MOTOR CREDIT COMPANY
(Registrant)
May 14, 2001 /s/ B. Boerio
---------------------
B. Boerio
Executive Vice President,
Chief Financial Officer
and Treasurer
-22-
Report of Independent Accountants
To the Board of Directors and Stockholder of
Ford Motor Credit Company:
We have reviewed the accompanying condensed consolidated balance sheets of Ford
Motor Credit Company and Subsidiaries as of March 31, 2001 and 2000, and the
related condensed consolidated statements of income, earnings retained for use
in the business, and statement of cash flows for each of the three-month periods
ended March 31, 2001 and 2000. These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated interim financial statements
for them to be in conformity with accounting principles generally accepted in
the United States of America.
We previously audited in accordance with auditing standards generally accepted
in the United States of America, the consolidated balance sheet as of December
31, 2000, and the related consolidated statements of income, stockholder's
equity, and of cash flows for the year then ended (not presented herein), and in
our report dated January 18, 2001, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of December 31, 2000,
is fairly stated in all material respects in relation to the consolidated
balance sheet from which it has been derived.
/s/ PricewaterhouseCoopers LLP
Detroit, Michigan
April 18, 2001
-23-
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
Sequential
Designation Description Method of Filing
- ----------- ------------ -----------------
12-A Calculation of ratio of Filed with this
earnings to fixed charges Report.
of Ford Credit
12-B Calculation of ratio of Filed with this
earnings to fixed charges Report.
of Ford.
15 Letter from Filed with this
PricewaterhouseCoopers LLP Report.
dated May 14, 2001,
regarding unaudited
interim financial
information.
-24-