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 Ford Posts First Quarter Pre-Tax Profit of $2.1 Billion, Driven by Highest North America Profit in More than a Decade; Net Income of $1.6 Billion

DATE: Will be calculated from "Release Start Date" field.

Congratulations to the entire Ford team for continuing to deliver our One Ford plan, serving our customers around the world and delivering profitable growth.  Thanks to our efforts, we today are announcing strong quarterly financial results, built on solid growth in volume and revenue. 

Our earnings are driven by our highest North American profit since at least 2000 – when we began reporting results for the region as a separate business unit – and continued solid performance from Ford Credit.

Our results reflect more proof that our investments in Asia Pacific Africa are paying off, as we post record first quarter market share in the region and in China.  They also reflect continued implementation of our transformation plan in Europe – which is on track to return to profitability by mid-decade – as well as expanding our global product portfolio and working on all areas of the business for further improvement in South America, as we address the challenging business environment in that region.

We will continue to take advantage of opportunities and address challenges around the world by staying laser focused on our One Ford plan, which remains 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 below news release and understand the progress we are making against our plan and our outlook for the future.

We will meet with financial analysts and representatives of the news media throughout the day to discuss this information and answer questions.

We also will discuss our results, accomplishments, challenges and opportunities during today’s Global Town Hall at 11 a.m. EDT U.S. (12 p.m. São Paulo, 5 p.m. Cologne, 11 p.m. Shanghai).

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

Congratulations and thank you!

Alan


Ford Posts First Quarter Pre-Tax Profit of $2.1 Billion, Driven by Highest North America Profit in More than a Decade; Net Income of $1.6 Billion

 

Strong total company pre-tax profit was $2.1 billion, or 41 cents per share, a decrease of $147 million from a year ago; 15th consecutive quarter of profitability

Net income was $1.6 billion, or 40 cents per share, an increase of $215 million compared with a year ago

Positive Automotive operating-related cash flow was $700 million for the quarter — the 12th consecutive quarter of positive cash flow — with strong liquidity of $34.5 billion, unchanged from year-end 2012

Wholesale volume and total company revenue each grew about 10 percent compared with a year ago, including market share gains in North America and Asia Pacific Africa

North America pre-tax profit was a record $2.4 billion — the highest quarterly profit since at least 2000, when the company began reflecting the region as a separate business unit — with an operating margin of 11 percent. Ford also reported a small pre-tax profit for Asia Pacific Africa, and losses in Europe and South America

Ford Credit continued its solid performance with a first quarter pre-tax profit of $507 million

For full year 2013, the companys guidance remains unchanged — Ford expects another strong year, with total company pre-tax profit about equal to 2012, operating margin about equal to or lower than 2012, and Automotive operating-related cash flow higher than 2012

Financial Results Summary +
 
First Quarter
 
 
2012
 
2013
 
B/(W) 2012
Wholesales (000)
 
1,358

 
1,497

 
139

Revenue (Bils.)
 
$
32.4

 
$
35.8

 
$
3.4

Operating Results
 
 
 
 
 


Pre-tax results (Mils.)++
 
$
2,293

 
$
2,146

 
$
(147
)
After-tax results (Mils.)+++
 
1,578

 
1,642

 
64

Earnings per share+++
 
0.39

 
0.41

 
0.02

Special items pre-tax (Mils.)
 
$
(255
)
 
$
(23
)
 
$
232

Net income attributable to Ford
 
 
 
 
 


After-tax results (Mils.)
 
$
1,396

 
$
1,611

 
$
215

Earnings per share
 
0.35

 
0.40

 
0.05

Automotive
 
 
 
 
 


Operating-related cash flow (Bils.)
 
$
0.9

 
$
0.7

 
$
(0.2
)
Gross cash (Bils.)
 
$
23.0

 
$
24.2

 
$
1.2

Debt (Bils.)
 
(13.7
)
 
(16.0
)
 
(2.3
)
  Net cash (Bils.)
 
$
9.3

 
$
8.2


$
(1.1
)
 See end notes on page 6.
 
DEARBORN, Mich., April 24, 2013 - Ford Motor Company [NYSE: F] today reported first quarter 2013 pre-tax profit of $2.1 billion, driven by record results from North America and continued solid performance from Ford Credit.
 
Total company first quarter pre-tax profit of $2.1 billion, or 41 cents per share, was $147 million lower than a year ago, more than explained by Europe and South America. Net income for the first quarter of $1.6 billion, or 40 cents per share, was $215 million higher than a year ago.
 
Ford generated positive Automotive operating-related cash flow of $700 million in the first quarter — the 12th consecutive quarter of positive performance — with strong liquidity of $34.5 billion unchanged from year-end 2012.
 
As part of Fords previously announced strategy to de-risk its pension obligations, the company made $1.8 billion in cash contributions to its worldwide funded plans during the quarter. This included $1.2 billion of discretionary contributions, in line with Fords long-term pension de-risking strategy.
 
Dividends paid in the quarter totaled about $400 million.
 
“Our strong first quarter results provide further proof that our One Ford plan continues to deliver,” said Alan Mulally, Ford president and CEO. “Our plan remains centered on serving customers in all markets around the world with a full family of vehicles — small, medium and large; cars, utilities and trucks — each with the very best quality, fuel efficiency, safety, smart design and value.”

AUTOMOTIVE SECTOR
 
 
First Quarter
 
 
2012
 
2013
 
B/(W) 2012
Wholesales (000)
 
1,358

 
1,497

 
139

Revenue (Bils.)
 
$
30.5

 
$
33.9

 
$
3.4

Pre-tax results (Mils.)
 
$
1,837

 
$
1,643

 
$
(194
)
Operating Margin (Pct.)
 
6.4
%
 
5.2
%
 
(1.2) pts.


For the first quarter of 2013, Ford’s wholesale volume and revenue were each about 10 percent higher than a year ago, driven primarily by strong performance in North America and Asia Pacific Africa.
 
The decrease in total Automotive pre-tax profit and operating margin for the first quarter is explained by Europe and South America.

Ford North America
 
 
First Quarter
 
 
2012
 
2013
 
B/(W) 2012
Wholesales (000)
 
651

 
761

 
110

Revenue (Bils.)
 
$
18.6

 
$
22.3

 
$
3.7

Pre-tax results (Mils.)
 
$
2,133

 
$
2,442

 
$
309

Operating Margin (Pct.)
 
11.5
%
 
11.0
%
 
(0.5) pts.


Ford North America experienced strong growth in the first quarter, with wholesale volume up 17 percent from the same period a year ago, and revenue improving 20 percent.
 
Ford North America’s pre-tax profit, which was a record for any quarter since at least 2000 when the company began reflecting the region as a separate business unit, increased from the same period a year ago due to favorable market factors, offset partially by higher costs that reflect the company’s investment in new products and growth, as well as higher pension and OPEB expense. These same factors drove Ford North America’s operating margin of 11 percent — the fourth quarter out of the last five that the region produced double-digit operating margins.
 
For full year 2013, Ford’s guidance for North America remains unchanged — the company expects strong performance to continue, with pre-tax profit expected to be higher than 2012 and operating margin of about 10 percent.
 
Ford South America
 
 
First Quarter
 
 
2012
 
2013
 
B/(W) 2012
Wholesales (000)
 
118

 
113

 
(5
)
Revenue (Bils.)
 
$
2.4

 
$
2.3

 
$
(0.1
)
Pre-tax results (Mils.)
 
$
54

 
$
(218
)
 
$
(272
)
Operating Margin (Pct.)
 
2.3
%
 
(9.4
)%
 
(11.7) pts.


The decrease in Ford South America’s pre-tax results and operating margin in the first quarter was more than explained by unfavorable exchange, most of which related to Venezuela, including the impact of the devaluation of the bolivar. Currency weakening in Argentina was also a factor.
 
For full year 2013, the companys guidance remains unchanged, with Ford South America expected to be about breakeven. The external environment is uncertain, however, particularly in Venezuela and Argentina. There is a risk that this could adversely affect the company’s ability to deliver full year breakeven results for the region.
 
“We continue to implement our One Ford plan in South America to address the challenging business environment in the region,” said Bob Shanks, Ford executive vice president and chief financial officer. “We are confident in the strength of our new global products and we are expanding our product portfolio while looking at all areas of our business to improve operating results.”

Ford Europe
 
 
First Quarter
 
 
2012
 
2013
 
B/(W) 2012
Wholesales (000)
 
372

 
341

 
(31
)
Revenue (Bils.)
 
$
7.2

 
$
6.7

 
$
(0.5
)
Pre-tax results (Mils.)
 
$
(149
)
 
$
(462
)
 
$
(313
)
Operating Margin (Pct.)
 
(2.0
)%
 
(6.9
)%
 
(4.9) pts.


The decline in Ford Europe’s first quarter pre-tax results primarily reflected higher structural costs, including restructuring effects (principally accelerated depreciation), and higher pension expense due to lower discount rates. Market factors and exchange also were unfavorable.
 
The company’s European transformation plan announced in October 2012 is proceeding on track, with solid progress made during the first quarter of 2013. Ford’s unprecedented product acceleration is on pace, with five new passenger vehicles and two new commercial vehicles introduced since the plan was announced. These new vehicles are off to a strong sales start. The company increased retail market share for the five major markets in Western Europe, which is critical to margins, residuals and brand health, and made strides on quality and customer satisfaction.
 
Ford also made progress on cost efficiencies during the first quarter, including plans to restructure its manufacturing footprint within the region. The company’s discussions are progressing with unions at Southampton assembly and Dagenham stamping and tooling operations in the U.K. toward closure mid-year. Discussions also are progressing at Ford’s assembly plant in Genk, Belgium, where hourly employees recently ratified a package of proposed separation benefits, and salaried employees now have reached agreement on a tentative proposal subject to ratification. As the information and consultation process moves forward, normal vehicle production levels at the plant have resumed.
 
Full year 2013 guidance for Europe remains unchanged, with the company expecting a loss of about $2 billion. The outlook for the business environment in Europe remains uncertain. While it is possible that economic and industry conditions will begin to stabilize later this year, recent economic indicators are mixed. Despite the challenging environment, the company is progressing toward its goal of a profitable, growing Ford Europe by mid-decade.

Ford Asia Pacific Africa
 
 
First Quarter
 
 
2012
 
2013
 
B/(W) 2012
Wholesales (000)
 
217

 
282

 
65

Revenue (Bils.)
 
$
2.3

 
$
2.6

 
$
0.3

Pre-tax results (Mils.)
 
$
(95
)
 
$
6

 
$
101

Operating Margin (Pct.)
 
(4.2
)%
 
0.2
%
 
4.4 pts.


Ford Asia Pacific Africa showed strong growth in wholesale volume and revenue, gaining market share in this growing industry. Ford’s first quarter market share for Asia Pacific Africa was 3 percent, a 30 percent improvement from a year ago; in China, the company’s market share improved more than a percentage point compared with a year ago, setting a first quarter record of 3.6 percent.
 
The improvement in Ford Asia Pacific Africa’s pre-tax results and operating margin mainly reflected favorable market factors, as well as higher royalties and subsidiary profits. These positive factors were largely offset by the company’s investments for future growth in the region.
 
For full year 2013, the company’s guidance for Ford Asia Pacific Africa remains unchanged at about breakeven. While Ford expects to deliver strong growth in volume, share and revenue during 2013, costs will continue to largely offset these positive effects as the company continues to invest in an expanded product lineup, new plants in China and India, and people to implement the companys growth plan.
 
Other Automotive
The first quarter loss of $125 million reflects net interest expense, offset partially by a favorable fair market value adjustment on the company’s equity investment in Mazda.
 
Ford expects net interest expense for full year 2013 to be about $750 million to $800 million, in line with the first quarter run rate of about $200 million.
 
FINANCIAL SERVICES SECTOR
 
 
First Quarter
 
 
2012
 
2013
 
B/(W) 2012
Revenue (Bils.)
 
$
1.9

 
$
1.9

 
$

Ford Credit pre-tax results (Mils.)
 
$
452

 
$
507

 
$
55

Other Financial Services pre-tax results (Mils.)
 
4

 
(4
)
 
(8
)
  Financial Services pre-tax results (Mils.)
 
$
456

 
$
503


$
47


Ford Motor Credit Company
Ford Credits increase in first quarter pre-tax profit compared with a year ago primarily reflects higher receivables and favorable residual performance, offset partially by lower credit loss reserve reductions.
For full year 2013, Fords guidance for Ford Credit remains unchanged. The company projects that Ford Credits full year pre-tax profit will be about equal to 2012, year-end managed receivables will be in the range of $95 billion to $105 billion, and distributions to its parent will be about $200 million.
OUTLOOK
Ford’s planning assumptions and key metrics include the following:
 
 
 
 
Full Year
 
 
First Quarter
 
2012
 
2013
 
 
2013 Results
 
Results
 
Plan
 
Outlook
 
Planning Assumptions
 
 
 
 
 
 
 
 
Industry Volume* -- U.S. (Mils.)
15.6
 
14.8
 
15.0 - 16.0
 
Unchanged
 
Industry Volume* -- Europe (Mils.)**
13.3
 
14.0
 
13.0 - 14.0
 
13.0 - 13.5
 
Industry Volume* -- China (Mils.)
20.7
 
19.0
 
19.5 - 21.5
 
Unchanged
 
 
 
 
 
 
 
 
 
 
Operational Metrics
 
 
 
 
 
 
 
 
Compared with Prior Year:
 
 
 
 
 
 
 
 
 - U.S. Market Share
15.9%
 
15.2%
 
Higher
 
Unchanged
 
 - Europe Market Share**
7.7%
 
7.9%
 
About Equal
 
Unchanged
 
 - China Market Share***
3.6%
 
3.2%
 
Higher
 
Unchanged
 
 
 
 
 
 
 
 
 
 
 - Quality
Mixed
 
Mixed
 
Improve
 
Unchanged
 
 
 
 
 
 
 
 
 
 
Financial Metrics
 
 
 
 
 
 
 
 
Compared with Prior Year:
 
 
 
 
 
 
 
 
 - Total Company Pre-Tax Operating Profit (Bils.)****
$2.1
 
$8.0
 
About Equal
 
Unchanged
 
 - Automotive Operating Margin****
5.2%
 
5.3%
 
About Equal / Lower
 
Unchanged
 
 - Automotive Operating-Related Cash Flow (Bils.)
$0.7
 
$3.4
 
Higher
 
Unchanged
 
 
 
 
 
 
 
 
 
*
Includes medium and heavy trucks
 
 
 
 
 
 
 
**
The 19 markets we track
 
 
 
 
 
 
 
***
Includes Ford and JMC brand vehicles produced in China by unconsolidated affiliates
****
Excludes special items; Automotive operating margin is defined as Automotive pre-tax results, excluding special items and Other Automotive, divided by Automotive revenue
 
 
 
 
 
 
 
 
 
Consistent with prior guidance, the company expects its full year operating effective tax rate to be similar to 2012, which was 32 percent.
 
Ford remains focused on delivering the key aspects of the One Ford plan, which are unchanged:
Aggressively restructuring to operate profitably at the current demand and changing model mix
Accelerating the development of new products that customers want and value
Financing the plan and improving the balance sheet
Working together effectively as one team, leveraging Ford’s global assets

The company continues to work toward its mid-decade outlook.
 
“We continue to expect 2013 to be another strong year, as we go further in strengthening our global product lineup and improving the competitiveness of our operations,” Mulally said. “Everyone at Ford remains laser focused on continuing to make progress on our One Ford plan and building a profitably growing Ford for the benefit of all our stakeholders.”

  

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4/24/2013 7:00 AM