Posted in full from Ford's media releases today -- click-thru to full PDFs below. Check out the earnings/share ...about 10% based on today's price -- not too shabby!
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FORD REPORTS 2010 FULL YEAR NET INCOME OF $6.6 BILLION; FOURTH QUARTER NET INCOME OF $190 MILLION+
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- Full year net income was $6.6 billion, or $1.66 per share, a $3.8 billion increase from a year ago. Pre-tax operating profit was $8.3 billion, an increase of $8.3 billion from a year ago.
- Fourth quarter net income was $190 million, or 5 cents per share, a decrease of $696 million from a year ago. Net income was negatively impacted by a previously disclosed $960 million charge for completion of debt conversion offers in the quarter that reduced outstanding Automotive debt by over $1.9 billion.
- Fourth quarter pre-tax operating profit was $1.3 billion, or 30 cents per share, a decrease of $322 million from a year ago. Ford now has posted a pre-tax operating profit for six consecutive quarters.
- Automotive pre-tax operating profit was $741 million for the fourth quarter and $5.3 billion for the full year, an improvement of $7.2 billion from full year 2009.
- Ford Credit reported a pre-tax operating profit of $572 million for the fourth quarter and $3.1 billion for the full year, an increase of $1.1 billion from full year 2009.
- Revenue was $32.5 billion in the fourth quarter and $120.9 billion for the full year, an increase of $17 billion from full year 2009, excluding Volvo from 2009.
- Ford continued to reduce Automotive debt with an additional $7.3 billion of actions taken in the fourth quarter, including $2.5 billion of newly announced reductions. For the full year, Ford reduced Automotive debt by $14.5 billion, or 43 percent, which will lower annualized interest expense by more than $1 billion.
- Ford ended 2010 with Automotive gross cash exceeding debt by $1.4 billion, an improvement of $10.1 billion from year end 2009. Ford ended 2010 with $20.5 billion of Automotive gross cash.
- Ford generated positive Automotive operating-related cash flow of $1 billion in the fourth quarter and $4.4 billion in 2010, an improvement of $5.2 billion from full year 2009.
- Ford plans to deliver continued improvement in pre-tax operating profit and Automotive operating-related cash flow in 2011.
DEARBORN, Mich., Jan. 28, 2011 – Ford Motor Company [NYSE: F] today reported 2010 full year net income of $6.6 billion, or $1.66 per share, an increase of $3.8 billion, or 80 cents per share, from 2009. This was Ford’s highest net income in more than 10 years, as strong products and new investments fueled improvements in all of the company’s business operations around the world.
“Our 2010 results exceeded our expectations, accelerating our transition from fixing the business fundamentals to delivering profitable growth for all,” said Alan Mulally, Ford president and CEO. “We are investing in an unprecedented amount of products, technology and growth in all regions of the world.”
Full year 2010 pre-tax operating profit was $8.3 billion, or $1.91 per share, an increase of $8.3 billion, or $1.90 per share, from a year ago. This increase reflects a profit in each Automotive segment led by strong performance in North America, reflecting primarily favorable volume and mix as well as favorable net pricing. Ford Credit’s strong profit also contributed significantly to Ford’s full year performance.
Ford made significant progress in strengthening its balance sheet, reducing Automotive debt by $14.5 billion in 2010, a 43 percent reduction. These actions will lower annualized interest expense by more than $1 billion. Ford finished the year with Automotive gross cash exceeding debt by $1.4 billion. Fourth quarter actions reduced Automotive debt by $7.3 billion, including $2.5 billion of newly announced debt reductions to pay down Ford’s revolving credit facility and term loans.
Ford reported fourth quarter net income of $190 million, or 5 cents per share, a decrease of $696 million, or 20 cents per share, from the fourth quarter of 2009. This includes the negative impact of special items of $1 billion, primarily associated with a previously disclosed $960 million charge related to the completion of debt conversion offers that reduced outstanding Automotive debt by over $1.9 billion.
Ford earned a pre-tax operating profit of $1.3 billion, or 30 cents per share, in the fourth quarter, marking the sixth consecutive quarter of pre-tax operating profit. This is a decrease of $322 million, or 13 cents per share, from the fourth quarter of 2009.
Fourth quarter Automotive pre-tax operating profit was $741 million, a decrease of $173 million from a year ago. Fourth quarter Financial Services pre-tax operating profit was $552 million, a decrease of $149 million from a year ago, which includes a pre-tax operating profit of $572 million for Ford Credit.
North America posted a fourth quarter pre-tax operating profit of $670 million, a $59 million increase compared with 2009. Full year North America pre-tax operating profit was $5.4 billion, an improvement of more than $6 billion from a year ago. South America, Europe and Asia Pacific Africa also reported full year pre-tax operating profits for 2010.
As a result of Ford’s 2010 financial performance, the company will pay profit sharing to approximately 40,600 eligible U.S. hourly employees. The average amount is expected to be approximately $5,000 per eligible full-time employee.
Ford’s fourth quarter worldwide revenue was $32.5 billion, an increase of $1.6 billion compared with the same period a year ago, excluding Volvo from 2009. Ford reported full year revenue of $120.9 billion, an increase of $17 billion from a year ago, excluding Volvo from 2009.
Ford generated positive Automotive operating-related cash flow of $1 billion in the fourth quarter and $4.4 billion in the full year, an improvement of $5.2 billion from full year 2009.
Ford finished the year with Automotive gross cash of $20.5 billion and total Automotive debt of $19.1 billion. Automotive gross cash was down $3.3 billion from the end of the third quarter as a result of significant debt reduction actions. As of Dec. 31, 2010, total Automotive liquidity was $27.9 billion, including available credit lines.
“The progress that we made improving our core Automotive business has allowed us to strengthen significantly the balance sheet in 2010, and this will remain a key area of focus for us in 2011,” said Lewis Booth, Ford executive vice president and chief financial officer. “We continue to manage the business for long term profitable growth.”
FOURTH QUARTER AND FULL YEAR 2010 HIGHLIGHTS
AUTOMOTIVE SECTOR
- Announced $850 million in future investments for Michigan-based engineering and manufacturing, leading to 1,200 jobs through 2013
- Announced $600 million investment in Louisville Assembly and additional 1,800 jobs
- Announced $630 million investment in Kocaeli, Turkey, for future Transit production
- Launched 2011 F-150 lineup with completely new fuel-efficient engines
- Unveiled all-new global Ford Ranger at the Australian International Motor Show
- 2011 Explorer awarded North American Truck of the Year at the North American International Auto Show
- New Figo won Society of India Auto Manufacturers’ 2011 Indian Car of the Year
- The redesigned Explorer and new Fiesta earned IIHS Top Safety Picks in the U.S.; C-MAX and Grand C-MAX earned Euro NCAP five-star safety ratings
- Increased U.S. sales 15 percent in the fourth quarter. For the full year, Ford had the first back-to-back market share increase since 1993, and the largest sales percentage increase of any full-line automaker
- Ford of Canada reported an 11 percent sales increase in the fourth quarter, leading Ford of Canada to finish 2010 as best-selling automaker for the first time in more than 50 years
- Ford Brazil sales increased 24 percent in the fourth quarter, leading to a market share gain of three-tenths of a point
- European market share fell in the fourth quarter and full year as a result of Ford's decision to reduce participation selectively in low-margin business, as well as the end of the favorable effect of scrappage programs on its small car sales
- Sales increased 35 percent in Asia Pacific and Africa in the fourth quarter. In 2010, the region reported record full year sales in China and India, with 32 and 168 percent increases respectively
Total Automotive pre-tax operating profit in the fourth quarter was $741 million, a decrease of $173 million from a year ago. The decrease is more than explained by higher structural and commodity costs, aligned with guidance, as well as unfavorable volume and mix. This was offset partially by favorable net pricing. The higher structural costs, which include manufacturing, engineering, and advertising costs, largely supported product launches and growth of product plans.
Full year pre-tax operating profit was $5.3 billion, an improvement of $7.2 billion compared with a year ago, led by strong performance in North America. Each of the Automotive segments was profitable and also improved compared with a year ago.
Total vehicle wholesales in the fourth quarter were 1.4 million units, up 41,000 units from a year ago, excluding Volvo from 2009. The increase was explained primarily by higher wholesales in Asia Pacific Africa, offset partially by lower wholesales in Europe. Full year total vehicle wholesales were 5.3 million units, up 771,000 units, excluding Volvo from 2009.
Total Automotive revenue in the fourth quarter was $30.3 billion, up $2.2 billion from a year ago, excluding Volvo from 2009. Full year total Automotive revenue was $111.2 billion, up $19.7 billion from a year ago, excluding Volvo from 2009.
North America: In the fourth quarter, North America reported a pre-tax operating profit of $670 million, compared with a profit of $611 million a year ago. The increase reflects favorable net pricing, higher industry volume, favorable mix, market share improvements, and favorable exchange. These were offset partially by the non-recurrence of prior-year stock increases, higher structural costs to support product launches and growth, higher commodity costs and costs associated with the recently announced Windstar field service actions. Fourth quarter revenue was $17.2 billion, up from $15.6 billion a year ago.
For the full year, North America reported a pre-tax operating profit of $5.4 billion, compared with a loss of $639 million a year ago. The improvement primarily reflects favorable volume and mix, net pricing, and exchange, offset partially by higher structural costs to support higher volume and product launches.
South America: In the fourth quarter, South America reported a pre-tax operating profit of $281 million, compared with a profit of $369 million a year ago. The decrease was more than explained by higher commodity and structural costs, offset partially by favorable net pricing. Fourth quarter revenue was $2.8 billion, up from $2.6 billion a year ago.
For the full year, South America reported a pre-tax operating profit of $1 billion, compared with a profit of $765 million a year ago. The increase was more than explained by favorable net pricing, exchange, and mix, offset partially by higher commodity and structural costs.
Europe: In the fourth quarter, Europe reported a pre-tax operating loss of $51 million, compared with a profit of $253 million a year ago. The decline was more than explained by lower market share, higher structural costs to support product launches, higher commodity costs, and lower industry volume, offset partially by favorable exchange and mix. The lower market share primarily reflects Ford’s decision to reduce participation selectively in low-margin business, as well as the end of the favorable effect of scrappage programs on its small car sales. Fourth quarter revenue was $8.1 billion, down from $8.2 billion a year ago.
Compared to Ford's most recent guidance for Europe, the fourth quarter result was lower than expected, reflecting primarily lower market share driven by actions to maintain margins.
For the full year, Ford Europe reported a pre-tax operating profit of $182 million, compared with a loss of $144 million a year ago. The improvement primarily reflects the non-recurrence of prior-year stock reductions, lower material and warranty costs, higher parts and services profits, and favorable mix. This was offset partially by lower market share and higher structural costs.
Asia Pacific Africa: In the fourth quarter, Asia Pacific Africa reported a pre-tax operating profit of
$23 million, compared with a profit of $16 million a year ago. The increase is more than explained by higher volume, offset partially by unfavorable mix. Fourth quarter revenue, which excludes sales at unconsolidated China joint ventures, was $2.2 billion, up from $1.7 billion a year ago.
For the full year, Asia Pacific Africa reported a pre-tax operating profit of $189 million, compared with a loss of $86 million a year ago. The improvement primarily reflects higher volume, and lower material, freight and warranty costs, offset partially by higher structural costs to support investment in Ford’s product and growth plans, and unfavorable mix.
Other Automotive: The fourth quarter Other Automotive loss was $182 million, compared with a loss of $295 million a year ago. This improvement primarily reflects favorable fair market value adjustments related primarily to our investment in Mazda and lower net interest expense.
For the fourth quarter, the Financial Services sector reported a pre-tax operating profit of $552 million, a decline of $149 million compared with a year ago.
Ford Motor Credit Company: In the fourth quarter, Ford Credit reported a pre-tax operating profit of $572 million, compared with a profit of $714 million a year ago. The decrease reflects lower volume and the non-recurrence of lower lease depreciation expense related to lower gains as fewer leases terminated and the vehicles were sold.
For the full year, Ford Credit reported a pre-tax operating profit of $3.1 billion, compared with a profit of $2 billion a year ago. The increase reflects primarily a lower provision for credit losses and lower depreciation expense for leased vehicles related to higher auction values. These were offset partially by lower volume and the non-recurrence of net gains related to unhedged currency exposure from intercompany lending.
OUTLOOK 2011
Ford remains focused on delivering the key aspects of the One Ford plan, which are unchanged:
Overall, 2010 marked a pivotal year as Ford launched 24 new or redesigned vehicles in key markets around the world, including the redesigned Explorer, the new Fiesta, as well as the redesigned Edge and Lincoln MKX in North America, the redesigned C-MAX and new Grand C-MAX in Europe, and the new Figo in India. The company also announced more than $9 billion in global investments for future growth, including: $4.5 billion in North and South America; $2.9 billion in Europe; and $1.7 billion in Asia Pacific Africa.
- 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 One Ford transformation continues in 2011 as Ford launches the new global Focus in North America, Europe and Asia Pacific Africa, as well as the Focus Electric in North America later in the year. The new global Ranger will hit markets in Asia Pacific Africa and Europe this year, and the company will continue to expand the EcoBoost family of engines by offering it in additional markets and vehicles.
Ford plans to build on its performance in 2010 with continued improvement in 2011 total company pre-tax operating profit and Automotive operating-related cash flow. On a full year basis, Ford expects each of its Automotive operations to be profitable in 2011. In addition, the Automotive operating margin in 2011 is expected to be equal to or improved from 2010.
Ford also expects solid profitability for Ford Credit in 2011, although at a lower level than 2010, reflecting primarily the non-recurrence of lease depreciation expenses and credit loss reserve reductions of the same magnitude as 2010. At year-end 2011, Ford Credit anticipates that managed receivables will be in the range of $80 billion to $85 billion. Ford Credit is projecting distributions of about $2 billion during 2011.
Ford expects U.S. full year industry volume will be in the range of 13 million to 13.5 million units and, for the 19 markets Ford tracks in Europe in the range of 14.5 million to 15.5 million units, including medium and heavy trucks.
The company expects its full year U.S. total market share and its share of the U.S. retail market as well as European market share to be equal to or improved from 2010.
Full year Automotive structural costs are expected to be higher, as the company increases production to meet demand and makes further investments in new products, technology and growth. Commodity costs also are expected to be higher this year, reflecting increased global demand.
Ford expects capital expenditures in the range of $5 billion to $5.5 billion, as the company continues to invest in its product and growth plans.
“We expect continued improvement in 2011, driven primarily by our growing product strength, a gradually strengthening global economy and an unrelenting focus on improving the competitiveness of all of our operations,” said Mulally. “We are delivering on our commitments to serve our global customers with a best-in-class full family of Ford products and delivering profitable growth for all associated with Ford.”
Ford’s 2010 and 2011 planning assumptions and key metrics include the following:
Ford’s production volumes are shown below:
CONFERENCE CALL DETAILS
Ford Motor Company [NYSE:F] releases its preliminary fourth quarter 2010 financial results at 7 a.m. EST today. The following briefings will be conducted after the announcement:
At 9 a.m. EST, Alan Mulally, Ford president and CEO, and Lewis Booth, Ford executive vice president and chief financial officer, will host a conference call for the investment community and news media to discuss the 2010 fourth quarter and full year results.
At 11 a.m. EST, Bob Shanks, Ford vice president and controller, Neil Schloss, Ford vice president and treasurer, and Mike Seneski, chief financial officer, Ford Motor Credit Company, will host a conference call for fixed income analysts and investors.
Listen-only presentations and supporting materials will be available on the Internet at www.shareholder.ford.com. Representatives of the news media and the investment community participating by teleconference will have the opportunity to ask questions following the presentations.
Access Information – Friday, Jan. 28
Earnings Call: 9 a.m. EST
Toll Free: 866.318.8613
International: 617.399.5132
Earnings Passcode: “Ford Earnings”
Fixed Income: 11 a.m. EST
Toll Free: 866.318.8619
International: 617.399.5138
Fixed Income Passcode: “Ford Fixed Income”
Replays – Available after 2 p.m. the day of the event through Friday, Feb. 4
www.shareholder.ford.com
Toll Free: 888.286.8010
International: 617.801.6888
Passcodes:
Earnings: 32314321
Fixed Income: 46401200
ABOUT FORD MOTOR COMPANYFord Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 164,000 employees and about 70 plants worldwide, the company’s automotive brands include Ford and Lincoln. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford’s products, please visit www.ford.com.
# # #
+ The financial results discussed herein are presented on a preliminary basis; final data will be included in Ford’s Annual Report on Form 10-K for the year ended December 31, 2010. The following information applies to the information throughout this release:
++ Excludes special items.
- Pre-tax operating results exclude special items unless otherwise noted.
- See tables following the “Safe Harbor/Risk Factors” for the nature and amount of special items, and reconciliation of items designated as “excluding special items” to U.S. generally accepted accounting principles (“GAAP”). Also see the tables for reconciliation to GAAP of Automotive gross cash and operating-related cash flow.
- Discussion of overall Automotive cost changes is measured primarily at present-year exchange and excludes special items and discontinued operations; in addition, costs that vary directly with production volume, such as material, freight, and warranty costs, are measured at present-year volume and mix.
- As a result of the sale of Volvo, 2010 results for Volvo are being reported as special items and excluded from wholesales, revenue and operating results; 2009 results include Volvo unless otherwise indicated.
- As previously disclosed, the accounting standard for variable interest entity consolidation, effective Jan. 1, 2010, required Ford to deconsolidate many of its joint ventures. In addition to 2010 results reflecting this new standard, 2009 results throughout this document have been adjusted to reflect the deconsolidation of many of Ford’s joint ventures.
- Wholesale unit sales and production volumes include the sale or production of Ford-brand and JMC-brand vehicles by unconsolidated affiliates. JMC refers to our Chinese joint venture, Jiangling Motors Corporation. See materials supporting the January 28, 2011 conference calls at www.shareholder.ford.com for further discussion of wholesale unit volumes.
+++ Excludes special items and “Income/(Loss) attributable to non-controlling interests.” See tables following “Safe Harbor/Risk Factors” for the nature and amount of these special items and reconciliation to GAAP.
Safe Harbor/Risk Factors
Statements included herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by our management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation:
We cannot be certain that any expectation, forecast, or assumption made in preparing forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. For additional discussion of these risks, see "Item 1A. Risk Factors" in our 2009 Form 10-K Report.
- Decline in industry sales volume, particularly in the United States or Europe, due to financial crisis, recession, geo-political events, or other factors;
- Decline in or failure to grow market share;
- Lower-than-anticipated market acceptance of new or existing products;
- An increase in or acceleration of market shift beyond our current planning assumptions from sales of trucks, medium- and large-sized utilities, or other more profitable vehicles, particularly in the United States;
- An increase in fuel prices, continued volatility of fuel prices, or reduced availability of fuel;
- Continued or increased price competition resulting from industry overcapacity, currency fluctuations, or other factors;
- Adverse effects from the bankruptcy, insolvency, or government-funded restructuring of, change in ownership or control of, or alliances entered into by a major competitor;
- A prolonged disruption of the debt and securitization markets;
- Fluctuations in foreign currency exchange rates, commodity prices, and interest rates;
- Economic distress of suppliers that may require us to provide substantial financial support or take other measures to ensure supplies of components or materials and could increase our costs, affect our liquidity, or cause production constraints or disruptions;
- Single-source supply of components or materials;
- Labor or other constraints on our ability to maintain competitive cost structure;
- Work stoppages at Ford or supplier facilities or other interruptions of production;
- Substantial pension and postretirement health care and life insurance liabilities impairing our liquidity or financial condition;
- Worse-than-assumed economic and demographic experience for our postretirement benefit plans (e.g., discount rates or investment returns);
- Restriction on use of tax attributes from tax law "ownership change;"
- The discovery of defects in vehicles resulting in delays in new model launches, recall campaigns, reputational damage or increased warranty costs;
- Increased safety, emissions, fuel economy, or other regulation resulting in higher costs, cash expenditures, and/or sales restrictions;
- Unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in our products, perceived environmental impacts, or otherwise;
- A change in our requirements for parts or materials where we have long-term supply arrangements that commit us to purchase minimum or fixed quantities of certain parts or materials, or to pay a minimum amount to the seller ("take-or-pay" contracts);
- Adverse effects on our results from a decrease in or cessation or clawback of government incentives related to investments;
- Adverse effects on our operations resulting from certain geo-political or other events;
- Substantial levels of Automotive indebtedness adversely affecting our financial condition or preventing us from fulfilling our debt obligations;
- Failure of financial institutions to fulfill commitments under committed credit facilities;
- Inability of Ford Credit to obtain competitive funding;
- Inability of Ford Credit to access debt, securitization, or derivative markets around the world at competitive rates or in sufficient amounts due to credit rating downgrades, market volatility, market disruption, regulatory requirements, or other factors;
- Higher-than-expected credit losses;
- Increased competition from banks or other financial institutions seeking to increase their share of financing Ford vehicles;
- Collection and servicing problems related to finance receivables and net investment in operating leases;
- Lower-than-anticipated residual values or higher-than-expected return volumes for leased vehicles; and
- The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"), and the rules and regulations promulgated pursuant to it, could impose significant costs on Ford Credit and adversely affect its ability to fund or conduct its business;
- New or increased credit, consumer, or data protection or other regulations resulting in higher costs and/or additional financing restrictions.
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