Blue Oval Connect Newswire

Blue Oval Connect Newswire: April 27, 2010

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Ford Motor Company 2010 First Quarter Financial Results

A note from President and CEO Alan Mulally
This morning, we announced our financial results for the first quarter.  Once again, the Ford team delivered solid results and strong progress against our plan. It is clear that the basic engine of our company is getting stronger each quarter.

This continued improvement is the result of unwavering focus, hard work, tough choices and working together. We all should take pride in what we have accomplished.  That said, the global business environment remains challenging and the competition will continue to be intense. We must maintain our unwavering focus on making progress on our plan and delivering profitable growth for all.

Our fundamental plan to deliver One Ford is working, and it remains solid and unchanged:

  • Aggressively restructure to operate profitably at the current demand and changing model mix
  • Accelerate the development of new products that customers want and value
  • Finance the plan and improve the balance sheet
  • Work together effectively as one team, leveraging Ford's global assets

It is important for all of us to read the attached news release and to understand our story.  We will meet with financial analysts and representatives of the news media throughout the day to discuss this information and answer questions. 

One Team. One Plan. One Goal. ONE Ford.

Alan Mulally
Alan Mulally
President and CEO
Ford Motor Company



Below is the company's press release regarding Ford Motor Company's 2010 first quarter financial results. To see additional information, including financial tables, click here.

Ford Posts First Quarter 2010 Net Income of $2.1 Billion as Strong New Products Fuel Profitable Growth
Ford Motor Company today reported first quarter 2010 net income of $2.1 billion, or 50 cents per share, a $3.5 billion improvement from first quarter 2009, as strong selling new products, improvements in its global Automotive operations, and higher profits at Ford Credit boosted results.

Excluding special items, Ford reported pre-tax operating profit of $2 billion, or 46 cents per share, an improvement of $4 billion from a year ago. It marked Ford’s highest quarterly pre-tax operating profit in six years.

Ford North America posted first quarter pre-tax operating profit of more than $1.2 billion, a $1.9 billion improvement from first quarter 2009, as a result of higher volume and mix and favorable net pricing. Ford operations in South America, Europe and Asia Pacific Africa as well as Ford Credit also posted pre-tax operating profits in the first quarter and improved results over the same period in 2009.

"The Ford team around the world achieved another very solid quarter, and we are delivering profitable growth," said Ford President and CEO Alan Mulally. "Our plan is working, and the basic engine that drives our business results – products, market share, revenue and cost structure – is performing stronger each quarter, even as the economy and vehicle demand remain relatively soft."

At the end of March, Ford entered into a definitive agreement to sell Volvo and related assets to Zhejiang Geely Holding Group for $1.8 billion, subject to customary purchase price adjustments. The sale is expected to close in the third quarter of 2010. As a result of the agreement to sell Volvo, all of Volvo’s 2010 results are being reported as special items and excluded from Ford’s operating results; 2009 data include Volvo.

Ford’s first quarter revenue was $28.1 billion, up $3.7 billion from the same period a year ago. If Volvo had been excluded from 2009, Automotive revenue would have increased by $7 billion, or more than 30 percent.

Ford finished the first quarter with $25.3 billion in Automotive gross cash, an increase of $400 million since year end. Automotive operating-related cash outflow was $100 million during the first quarter, as Automotive pre-tax operating profit was more than offset by changes in working capital and other timing differences, as well as a $300 million payment to Ford Credit reflecting up-front subvention payment. The company ended the first quarter with total Automotive debt of $34.3 billion, an increase of $700 million compared to year-end 2009.

On April 6, Ford paid down $3 billion of the drawn amount of its 2013 revolving credit facility. This payment has reduced Automotive gross cash and debt by $3 billion, which will be reflected on Ford’s second quarter 2010 balance sheet. The action did not affect Automotive liquidity, as the repaid amounts remain available for borrowing.

Special items were a favorable pre-tax amount of $125 million in the first quarter of 2010, or 7 cents per share. Ford recorded a $188 million gain related to held-for-sale adjustments for Volvo, which was offset partially by $63 million of global personnel reductions and dealer-related charges. If Volvo had continued to be reported as an ongoing operation, Ford would have reported a first quarter pre-tax operating profit of $49 million for Volvo.

"We are seeing the benefits of our One Ford plan around the world," said Lewis Booth, Ford executive vice president and chief financial officer. "All of our business operations – North America, South America, Europe, Asia Pacific Africa and Ford Credit – were not only profitable, but also showed substantially improved results over a year ago."

ADDITIONAL FIRST QUARTER 2010 HIGHLIGHTS

  • Increased U.S. market share by 2.7 percentage points to 16.6 percent and a 14.1 share of the retail market, fueled by strong sales of Fusion, F-150, Taurus and Focus
  • Achieved market leadership in Canada, boosting market share to 15.5 percent and increasing sales by 29 percent
  • Increased sales by 14 percent in the South American region and sold a record 88,000 vehicles in Brazil
  • Increased sales in Europe and achieved a 9.4 percent market share. In March, Ford was the best selling brand in Europe for the 19 markets we track
  • Ford Asia Pacific Africa increased sales by 39 percent as the Fiesta gained momentum in several markets
  • Ford, Lincoln and Mercury vehicles achieved the highest customer satisfaction and the fewest number of "things gone wrong" among all full-line manufacturers, according to the first quarter Global Quality Research System survey for the U.S.
  • Revealed new global Ford Focus, which goes on sale early next year in North America and Europe, and in 2012 for Asia
  • Revealed 2011 Ford Edge and Lincoln MKX, which reach showrooms this fall and will be the first vehicles to feature MyFord Touch and MyLincoln Touch
  • Unveiled the Lincoln MKZ Hybrid, expected to be America’s most fuel-efficient luxury sedan
  • Announced partnership with Microsoft to use Microsoft Hohm as a platform to help future owners of Ford’s electric vehicles manage energy use
  • Began production of Figo small car for India; received 10,000 orders in first month on the market
  • Began production of the next-generation F-Series Super Duty lineup with new fuel-efficient diesel and gasoline engines
  • Announced Ford’s electric vehicles plan is extending to Europe with plans to launch five full-electric or hybrid vehicles for European customers by 2013
  • Announced plan to increase investment in Brazil and Argentina by $450 million to more than $2.6 billion by 2015
  • Announced $2.3 billion investment in U.K. manufacturing facilities over the next five years to support production of low-carbon emission vehicles
  • Announced $400 million investment in South Africa to support production of Ford’s next-generation compact pickup truck and Puma diesel engine
  • Confirmed $400 million investment in Chicago Assembly Plant and the addition of 1,200 jobs to support production of the next-generation Ford Explorer

AUTOMOTIVE SECTOR
For the first quarter of 2010, Ford’s worldwide Automotive sector reported a pre-tax operating profit of $1.2 billion, compared with a loss of $2 billion a year ago. The improvement reflected higher volume and mix, as well as improvements in net pricing across all Automotive segments.

Total vehicle wholesales in the first quarter were 1.3 million, compared with 986,000 units a year ago. Worldwide Automotive revenue in the first quarter was $25.4 billion, up from $21 billion a year ago.

North America: For the first quarter, Ford North America reported a pre-tax operating profit of more than $1.2 billion, compared with a loss of $665 million a year ago. The improvement was more than explained by higher volume and mix and favorable net pricing. First quarter revenue was $14.1 billion, up from $10 billion a year ago.

South America: For the first quarter, Ford South America reported a pre-tax operating profit of $203 million, compared with a profit of $63 million a year ago. The increase was more than explained by favorable exchange and net pricing, offset partially by higher costs. First quarter revenue was $2 billion, up from $1.4 billion a year ago.

Europe: For the first quarter, Ford Europe reported a pre-tax operating profit of $107 million, compared with a loss of $585 million a year ago. The improvement was explained primarily by higher volume, lower costs, and higher parts profit. First quarter revenue was $7.7 billion, up from $5.8 billion a year ago.

Asia Pacific Africa: For the first quarter, Ford Asia Pacific Africa’s pre-tax operating profit was $23 million, compared with a loss of $97 million a year ago. The improvement was more than explained by higher profits of unconsolidated China joint ventures driven by higher industry volumes , favorable net pricing, increases in industry volume outside of China and favorable exchange. First quarter revenue was $1.6 billion, up from $1.2 billion a year ago.

Other Automotive: Other Automotive consists primarily of interest and financing-related costs and resulted in a first quarter pre-tax operating loss of $391 million, more than explained by net interest expense of $492 million.

FINANCIAL SERVICES SECTOR
For the first quarter, the Financial Services sector reported a pre-tax operating profit of $815 million, compared with a loss of $62 million a year ago.

Ford Motor Credit Company: Ford Credit reported a pre-tax operating profit of $828 million in the first quarter, compared with a pre-tax loss of $36 million a year ago. The improvement primarily reflected lower depreciation expense for leased vehicles due to higher auction values and a lower provision for credit losses, offset partially by lower volume.

2010 OUTLOOK
Ford said it continues to make progress on all four pillars of its plan:

  • Aggressively restructure to operate profitably at the current demand and changing model mix
  • Accelerate the development of new products that customers want and value
  • Finance the plan and improve the balance sheet
  • Work together effectively as one team, leveraging Ford's global assets

Overall, Ford said its performance this year is off to a more encouraging start than anticipated. Based on Ford’s improving performance, the gradually strengthening economy, and its present assumptions, Ford now expects to deliver solid profits this year with positive Automotive operating-related cash flow.

Ford expects full-year 2010 U.S. industry sales will be in the range of 11.5 million to 12.5 million, consistent with the guidance previously communicated by the company.

In Europe, Ford now expects full-year industry volume will be in the 14 million to 15 million range, which is somewhat higher than the previous guidance. The change reflects strong first quarter results, although uncertainty remains in Europe about the extent of payback from scrappage programs.

Initial quality improved across all of Ford’s regions based on the latest Global Quality Research System survey. Ford is on track to meet full-year quality targets.

As mentioned previously, Ford has achieved significant structural cost reductions over the past four years, and in 2010 expects full year Automotive structural costs to be somewhat higher as Ford increases production to meet demand.

Ford expects full year U.S. total market share and its share of the U.S. retail market to be equal or improved compared with 2009 and Europe market share is expected to be equal to 2009.

Ford expects second quarter 2010 production to be up compared with year-ago levels and up compared to first quarter 2010 production. The increase reflects strong customer demand for our products, the maintenance of competitive stock levels, and the non-recurrence of prior year stock reductions.

Ford now expects Ford Credit’s 2010 profits to be about the same as 2009. The recent improvements in used vehicle auction values and credit loss performance are expected to offset the effects of lower average receivables and the non-recurrence of certain favorable 2009 factors.

"We are absolutely committed to building great products, a stronger business, and contributing to a better world," Mulally said. "Our product lineup is stronger than ever, and our leadership in quality, fuel efficiency, safety, smart design and value is resonating with consumers.

"We remain cautiously optimistic about positive signs emerging in the global economy, while knowing that the recovery is fragile and the global auto industry continues to deal with excess capacity. For us, the most important thing we can do is to stay focused and continue to make progress on our plan," Mulally said.

 



FCN News Team:
Publisher: Sara Tatchio
Associate Publisher: Susan Krusel
Managing Editor: Jenn Corney, Terra Donnelly

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