24th Apr 2008 13:45
Ford Motor Co24 April 2008 FORD MAKES SOLID PROGRESS ON PLAN -- $100 MILLION NET INCOME IN FIRST QUARTER2008 PRELIMINARY RESULTS+ • Significant progress made on our plan to aggressively restructure to operate profitably, accelerate the development of new products our customers want and value, finance our plan and improve the balance sheet, and work together effectively as one team, leveraging our global assets. • First quarter 2008 net income of $100 million, an improvement of $382 million from a year ago. • Excluding special items++, first quarter pre-tax profit from continuing operations was $736 million, up $669 million from a year ago. • First quarter cost reductions totaled $1.7 billion, including $1.2 billion in North America (at constant volume, mix and exchange; excluding special items). • Strong profitability from Ford Europe and Ford South America; Ford North America improved by nearly $600 million from year-ago levels. ++ • Automotive gross cash of $28.7 billion at March 31, 2008. +++ Financial Results Summary First Quarter 2008 O/(U) 2007 Wholesales (000)++ 1,531 (119) Revenue (Bils.)++ $ 39.4 $ (3.6) Continuing Operations++ Automotive Profits (Mils.) $ 669 $ 895 Financial Services (Mils.) 67 (26) Pre-Tax Profits (Mils.) $ 736 $ 669 After-Tax Profits (Mils.) 525 697 Earnings Per Share++++ 0.20 0.29 Special Items Pre-Tax (Mils.) $(416) $(303) Net Income After-Tax Profits (Mils.) $ 100 $ 382 Earnings Per Share++++ 0.05 0.20 Automotive Gross Cash (Bils.)+++ $28.7 $(6.5) See end notes on page 7. DEARBORN, Mich., April 24, 2008 - Ford Motor Company (NYSE: F) today reportednet income of $100 million, or 5 cents per share, for the first quarter of 2008. This compares with a net loss of $282 million, or 15 cents per share, in thefirst quarter of 2007. The 2008 operating data discussed herein exclude Jaguar Land Rover because it isheld for sale. Jaguar Land Rover and Aston Martin data are, however, included inthe 2007 data, except where otherwise noted. See tables following "SafeHarbor/Risk Factors" for the amounts attributable to Jaguar Land Rover and anynecessary reconciliations to U.S. GAAP. Ford's first quarter pre-tax operating profit from continuing operations,excluding special items, was $736 million, up $669 million from a year ago. Onan after-tax basis, Ford's first quarter operating profit from continuingoperations, excluding special items, was $525 million, or 20 cents per share,compared with a loss of $172 million, or 9 cents per share, in the same period ayear ago. Ford's first quarter revenue, excluding special items, was $39.4 billion, downfrom $43 billion a year ago. Adjusted to exclude Jaguar Land Rover and AstonMartin from 2007 results, revenue would have been up slightly, with favorableexchange about offset by lower volume and net pricing. Special items reduced pre-tax results by $416 million, or 15 cents per share, inthe first quarter. These primarily reflected charges associated with personnelactions, dealer reduction actions and the restructuring of our investment inBallard. Automotive gross cash, which includes cash and cash equivalents, net marketablesecurities and loaned securities, was $28.7 billion at March 31, 2008, adecrease of $5.9 billion from 2007 year-end levels. The decrease was consistentwith our plan and primarily reflects implementation of the initial part of ourVEBA agreement with the UAW. "The results of this quarter are encouraging, particularly our outstandingperformance in Europe and South America," said Ford President and CEO AlanMulally. "In the past several years, we have substantially restructured thesebusinesses. We believe this is an indication that our efforts to leverageFord's global assets across the world will bear fruit. Going forward, we remaincommitted to our key business objectives, including our goal of reaching NorthAmerica and overall Automotive profitability in 2009 despite the challengingeconomic conditions." The following discussion of first quarter highlights and the results in ourAutomotive sector and Automotive segments/business units is on a basis thatexcludes special items. See tables following "Safe Harbor/Risk Factors" for thenature and amount of these special items and any necessary reconciliations toU.S. GAAP. FIRST QUARTER HIGHLIGHTS: - Posted strong profits of $739 million in Ford Europe and $257 million in Ford South America. - Improved Ford North America results by nearly $600 million compared with the first quarter of 2007. - Achieved $1.7 billion in cost savings, including $1.2 billion in Ford North America (at constant volume, mix and exchange; excluding special items). - Improved productivity in North America; achieved agreement to reduce U.S. hourly personnel by an additional 4,200 through our recent enterprise-wide buyout program. - Agreed to sell Jaguar Land Rover to Tata Motors with expected closure in the second quarter. - Further integrated our global Product Development and Purchasing functions. These actions will accelerate new vehicle development, improve quality and reduce costs. - Introduced the Ford Fiesta, our all-new global small car, at the Geneva Motor Show. Fiesta will be sold in virtually all of our major worldwide markets by 2010. - Improved initial quality in North America by 8 percent in our most recent survey, putting Ford at parity with Honda and Toyota as the best in the industry. AUTOMOTIVE SECTOR Automotive Sector* First Quarter 2008 O/(U) 2007 Wholesales (000) 1,531 (119) Revenue (Bils.) $ 35.0 $ (3.6) Pre-Tax Profits (Mils.) 669 895 *excludes special items For the first quarter of 2008, Ford's worldwide Automotive sector reported apre-tax profit of $669 million, compared with a pre-tax loss of $226 millionduring the same period a year ago. The improvement was more than explained byfavorable cost performance of $1.7 billion in the quarter, partially offset byunfavorable changes in volume and mix ($700 million), and currency exchange($200 million). The cost performance included favorable net product costs,manufacturing costs, spending-related costs and expenses for warranty andretiree health care. Worldwide Automotive revenue for the first quarter of 2008 was $35 billion, downfrom $38.6 billion a year ago. Total company vehicle wholesales in the firstquarter were 1,531,000, compared with 1,650,000 units a year ago, down becauseof the exclusion of Jaguar Land Rover and Aston Martin volume in 2008 and lowerwholesales in other regions. North America: For the first quarter, North America Automotive operationsreported a pre-tax loss of $45 million, compared with a loss of $613 million ayear ago. The improvement reflected cost reductions of $1.2 billion, includinglower structural and product costs. These improvements were partly offset byunfavorable volume and mix, and net pricing. First quarter revenue was $17.1billion, down from $18.5 billion a year ago. South America: For the first quarter, Ford's South America operations posted apre-tax profit of $257 million, up from $113 million a year ago. Theimprovement reflected higher net pricing and volume and mix, partially offset byincreased costs, which included higher commodity costs. First quarter revenueincreased to $1.8 billion, up from $1.3 billion a year ago. Ford Europe: For the first quarter, Ford Europe pre-tax profits were $739million, up from $219 million a year ago. The improvement was primarilyexplained by favorable cost performance and net pricing, partially offset byunfavorable changes in currency. First quarter revenue was $10.2 billion, animprovement from $8.6 billion a year ago. Volvo: For the first quarter, Volvo reported a pre-tax loss of $151 million,compared with a profit of $94 million a year ago. The decline was mainly due tounfavorable volume and mix, and changes in currency exchange rates, partiallyoffset by cost reductions. First quarter revenue was $4.2 billion, comparedwith $4.6 billion a year ago. Asia Pacific Africa: For the first quarter, Asia Pacific Africa reported a pre-tax profit of $1 million, compared with a pre-tax loss of $26 million a yearago. The improvement primarily reflected favorable cost performance and higherprofits in China, partially offset by unfavorable exchange and product mix,primarily in Australia. First quarter revenue was $1.7 billion, compared with$1.8 billion in 2006. Mazda: Ford earned $49 million from its investment in Mazda and associatedoperations in the first quarter, compared with $21 million a year ago. Other Automotive: Other Automotive, which consists of interest and financing-related costs, accounted for a first quarter pre-tax loss of $181 million. Thisincluded net interest expense of $472 million and favorable fair market valueadjustments of $291 million, primarily related to the impact of changes inexchange rates on intercompany loans. FINANCIAL SERVICES SECTOR Financial Services Sector First Quarter 2008 O/(U) 2007 Pre-Tax Profits (Mils.) $ 67 $ (226) Ford Credit Pre-Tax Profits (Mils.) $ 36 $ (257) Net Income (Mils.) 24 (169) For the first quarter, the Financial Services sector earned a pre-tax profit of$67 million, compared with a pre-tax profit of $293 million a year ago. Ford Motor Credit Company: Ford Motor Credit Company reported net income of $24million in the first quarter of 2008, down $169 million from earnings of $193million a year earlier. On a pre-tax basis, Ford Motor Credit earned $36million in the first quarter, compared with $293 million a year ago. Thedecrease in earnings primarily reflected higher provision for credit losses,higher depreciation expense for leased vehicles, and higher net losses relatedto market valuation adjustments from derivatives. These were offset partiallyby lower expenses primarily related to the non-recurrence of costs associatedwith Ford Motor Credit's North American business restructuring initiative andhigher financing margin. 2008 OUTLOOK "The remainder of 2008 will be a challenge but we are cautiously optimisticdespite the external challenges," Mulally said. "Our plan is working. Ourinitial quality is now among the best in the business, the restructuring inNorth America is taking hold and we will continue to take actions to stay on ourplan. Our product pipeline is full. We look forward to launching the new FordFlex, Ford F-150 and the Lincoln MKS in North America, and the new Ford Kuga andFord Fiesta in Europe, with the Fiesta coming soon thereafter to China and othermarkets around the world." Total Company 2008 Outlook Outlook Comparison to 2007* Automotive** Loss Equal to or Better Financial Services Profit Worse Pre-Tax Operating Results** Loss Worse Special Items Loss Better Pre-Tax Results Loss Better * Adjusted to exclude Jaguar Land Rover and Aston Martin **Excludes special items. Ford's 2008 planning assumptions regarding the industry, operating metrics andprofit outlook are as follows: 2008 Planning Assumptions and Operational Metrics Planning Assumptions Full-Year Plan Q1 2008 Full-Year Plan Industry Volumes (SAAR) - U.S. (Mils.) 16.0 15.6 15.3 - 15.6 - Europe (Mils.)* 17.6 18.0 17.6 - 18.0 Operational Metrics Compared with 2007 - Quality Improve Improved On track - Automotive Costs** Improve by about $3 Billion Improved by $1.7 Billion On track Absolute Amount - U.S. Market Share (Ford, Lincoln Mercury) Low end of 14-15% range 15% On track - Operating-Related Cash Flow Negative $(1.5) Billion On track - Capital Spending Around $6 Billion $ 1.4 Billion On track * European 19 markets ** At constant volume, mix and exchange; excludes special items CONFERENCE CALL DETAILS Ford Motor Company (NYSE:F) will release first quarter 2008 financial results at7 a.m. EDT, Thursday, April 24. The following briefings will be held after theannouncement: At 9 a.m. EDT, Alan Mulally, president and chief executive officer, and DonLeclair, executive vice president and chief financial officer, will host aconference call for news media and the investment community to discuss firstquarter results. At 11 a.m. EDT, Peter Daniel, Ford senior vice president and controller, NeilSchloss, Ford vice president and treasurer, and K.R. Kent, Ford Motor CreditCompany vice chairman and chief financial officer, will host a conference callfor fixed income analysts and investors. The presentations (listen-only) and supporting materials will be available onthe Internet at www.shareholder.ford.com. Representatives of the news media andthe investment community participating by teleconference will have theopportunity to ask questions following the presentations. Access Information - Thursday, April 24 Toll Free: 800-573-4754International: 617-224-4325 Earnings: 9:00 a.m. EDTEarnings Passcode: "Ford Earnings" Fixed Income: 11:00 a.m. EDTFixed Income Passcode: "Ford Fixed Income" Replays - Available after 2 p.m. the day of the event through Thursday, May 1 www.shareholder.ford.com Toll Free: 888-286-8010 International: 617-801-6888 Passcodes: Earnings: 29481628Fixed Income: 55865600 Ford Motor Company, a global automotive industry leader based in Dearborn,Mich., manufactures or distributes automobiles in 200 markets across sixcontinents. With about 244,000 employees and about 90 plants worldwide, thecompany's core and affiliated automotive brands include Ford, Lincoln, Mercury,Volvo and Mazda, and until completion of their sale, Jaguar Land Rover. Thecompany provides financial services through Ford Motor Credit Company. For moreinformation regarding Ford's products, please visit www.ford.com. # # # + The financial results discussed herein are presented on a preliminarybasis; final data will be included in our Quarterly Report on Form 10-Q for thequarter ended Mar. 31, 2008. ++ Excluding special items. See tables following "Safe Harbor/Risk Factors"for the nature and amount of these special items and reconciliation to U.S.Generally Accepted Accounting Principles ("GAAP"). +++ See third table following "Safe Harbor/Risk Factors" for a reconciliationof Automotive gross cash to GAAP. ++++ Earnings per share from continuing operations, excluding special items,is calculated on a basis that includes pre-tax profit and provision for taxesand minority interest. See tables following "Safe Harbor/Risk Factors" for thenature and amount of these special items and reconciliation to GAAP. Safe Harbor/Risk Factors Statements included or incorporated by reference 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: -Continued decline in market share; -Continued or increased price competition resulting from industry overcapacity,currency fluctuations or other factors; -An increase in or acceleration of market shift away from sales of trucks, sportutility vehicles, or other more profitable vehicles, particularly in the UnitedStates; -A significant decline in industry sales, particularly in the United States orEurope, resulting from slowing economic growth, geo-political events or otherfactors; -Lower-than-anticipated market acceptance of new or existing products; -Continued or increased high prices for or reduced availability of fuel; -Currency or commodity price fluctuations; -Adverse effects from the bankruptcy or insolvency of, change in ownership orcontrol of, or alliances entered into by a major competitor; -Economic distress of suppliers that has in the past and may in the futurerequire us to provide financial support or take other measures to ensuresupplies of components or materials; -Labor or other constraints on our ability to restructure our business; -Work stoppages at Ford or supplier facilities or other interruptions ofsupplies; -Single-source supply of components or materials; -Substantial pension and postretirement health care and life insuranceliabilities impairing our liquidity or financial condition; -Inability to implement Memorandum of Understanding with UAW to fund anddischarge retiree health care obligations because of failure to obtain courtapproval or otherwise; -Worse-than-assumed economic and demographic experience for our postretirementbenefit plans (e.g., discount rates, investment returns, and health care costtrends); -The discovery of defects in vehicles resulting in delays in new model launches,recall campaigns or increased warranty costs; -Increased safety, emissions (e.g., CO2), fuel economy, or other regulationresulting in higher costs, cash expenditures, and/or sales restrictions; -Unusual or significant litigation or governmental investigations arising out ofalleged defects in our products or otherwise; -A change in our requirements for parts or materials where we have entered intolong-term supply arrangements that commit us to purchase minimum or fixedquantities of certain parts or materials, or to pay a minimum amount to theseller ("take-or-pay" contracts); -Adverse effects on our results from a decrease in or cessation of governmentincentives; -Adverse effects on our operations resulting from certain geo-political or otherevents; -Substantial negative Automotive operating-related cash flows for the near- tomedium-term affecting our ability to meet our obligations, invest in ourbusiness or refinance our debt; -Substantial levels of Automotive indebtedness adversely affecting our financialcondition or preventing us from fulfilling our debt obligations (which may growbecause we are able to incur substantially more debt, including additionalsecured debt); -Inability of Ford Credit to access debt or securitization markets around theworld at competitive rates or in sufficient amounts due to additional creditrating downgrades, market volatility, market disruption or otherwise; -Higher-than-expected credit losses; -Increased competition from banks or other financial institutions seeking toincrease their share of financing Ford vehicles; -Changes in interest rates; -Collection and servicing problems related to finance receivables and netinvestment in operating leases; -Lower-than-anticipated residual values or higher-than-expected return volumesfor leased vehicles; and -New or increased credit, consumer or data protection or other regulationsresulting in higher costs and/or additional -financing restrictions. We cannot be certain that any expectation, forecast or assumption made bymanagement in preparing forward-looking statements will prove accurate, or thatany projection will be realized. It is to be expected that there may bedifferences between projected and actual results. Our forward-lookingstatements speak only as of the date of their initial issuance, and we do notundertake any obligation to update or revise publicly any forward-lookingstatement, whether as a result of new information, future events, or otherwise. For additional discussion of these risks, see "Item 1A. Risk Factors" in our2007 Form 10-K Report. FIRST QUARTER 2008 INCOME / (LOSS) COMPARED WITH 2007 First Quarter 2008 2007 Revenue (Bils.) Revenue (Excluding Special Items) $ 39.4 $ 43.0 Special Items* 4.1 - Revenue $ 43.5 $ 43.0 Income (Mils.) Pre-Tax Income/(Loss) from Continuing Operations (Excluding Special Items) $ 736 $ 67 Special Items* (416) (113) Pre-Tax Income/(Loss) from Continuing Operations $ 320 $ (46) Provision for/(Benefit from) Income Taxes 97 181 Minority Interest in Net Income of Subsidiaries 122 58 Income/(Loss) from Continuing Ops. $ 101 $ (285) Income/(Loss) from Discontinued Ops. (1) 3 Net Income/(Loss) $ 100 $ (282) * Special items detailed in following table. TOTAL COMPANY FIRST QUARTER 2008 SPECIAL ITEMS First Quarter 2008 Wholesales Revenue Pre-Tax Profit / (Loss) (000) (Bils.) (Mils.) North America - Personnel Actions and Associated Curtailments $ (223) - U.S. Dealer Reductions (incl. Investment Write-Off) (108) - Ballard Restructuring/Other (72) Total North America $ (403) Other Personnel Actions (13) Jaguar Land Rover 74 $ 4.1 0* Total Special Items 74 $ 4.1 $ (416) Memo: Special Items Impact on Earnings Per Share** $ (0.15) * Operating profit was essentially offset by an impairment charge. ** Earnings per share for special items is calculated on a basis that includespre-tax profit, provision for taxes, and minority interest; additionalinformation regarding the method of calculating earnings per share is availablein the materials supporting the Apr. 24, 2008 conference calls at www.shareholder.ford.com. AUTOMOTIVE GROSS CASH RECONCILIATION TO GAAP Dec. 31, 2007 Mar. 31, 2008 Mar. 31, 2008 B/(W) Dec. 31, 2007 (Bils.) (Bils.) (Bils.) Cash and Cash Equivalents $ 20.7 $ 18.7 $ (2.0) Marketable Securities 2.0 6.6 4.6 Loaned Securities 10.3 6.7 (3.6) Total Cash/Marketable and Loaned Securities $ 33.0 $ 32.0 $ (1.0) Securities-In-Transit (0.3) (0.7) (0.4) Short-Term VEBA Assets* 1.9 - (1.9) UAW-Ford Temporary Asset Account - (2.6) (2.6) Gross Cash $ 34.6 $ 28.7 $ (5.9) * Historically, amounts accessible within 18 months; short-term VEBA is nolonger reported within gross cash as of Jan. 1, 2008, consistent with our newUAW VEBA agreement (which is subject to court approval). -------------------------------------------------------------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
FDM Group