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.
special items , first quarter pre-tax profit from continuing
operations was $736 million, up $669 million from a year ago.
quarter cost reductions totaled $1.7 billion, including $1.2 billion in
North America (at constant volume, mix and exchange; excluding special
Strong profitability from Ford Europe and Ford
South America; Ford North America improved by nearly $600 million from
Automotive gross cash of $28.7 billion at March 31, 2008.
Financial Results Summary
O / (U) 2007
Automotive Profits (Mils.)
Financial Services (Mils.)
Pre-Tax Profits (Mils.)
After-Tax Profits (Mils.)
Special Items Pre-Tax (Mils.)
After-Tax Profits (Mils.)
Earnings Per Share
Automotive Gross Cash (Bils.)
See end notes on page 7.
DEARBORN, Mich., April 24, 2008 – Ford Motor Company [NYSE: F]
today reported net 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 the first quarter of 2007.
2008 operating data discussed herein exclude Jaguar Land Rover because
it is held for sale. Jaguar Land Rover and Aston Martin data are,
however, included in the 2007 data, except where otherwise noted. See
tables following “Safe Harbor/Risk Factors” for the amounts
attributable to Jaguar Land Rover and any necessary reconciliations to
Ford’s first quarter pre-tax
operating profit from continuing operations, excluding special items,
was $736 million, up $669 million from a year ago. On an after-tax
basis, Ford’s first quarter operating profit from continuing
operations, 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 a year ago.
Ford’s first quarter revenue,
excluding special items, was $39.4 billion, down from $43 billion a
year ago. Adjusted to exclude Jaguar Land Rover and Aston Martin from
2007 results, revenue would have been up slightly, with favorable
exchange about offset by lower volume and net pricing.
items reduced pre-tax results by $416 million, or 15 cents per share,
in the first quarter. These primarily reflected charges associated with
personnel actions, dealer reduction actions and the restructuring of
our investment in Ballard.
Automotive gross cash, which
includes cash and cash equivalents, net marketable securities and
loaned securities, was $28.7 billion at March 31, 2008, a decrease of
$5.9 billion from 2007 year-end levels. The decrease was consistent
with our plan and primarily reflects implementation of the initial part
of our VEBA agreement with the UAW.
“The results of this
quarter are encouraging, particularly our outstanding performance in
Europe and South America,” said Ford President and CEO Alan Mulally.
“In the past several years, we have substantially restructured these
businesses. We believe this is an indication that our efforts to
leverage Ford’s global assets across the world will bear fruit. Going
forward, we remain committed to our key business objectives, including
our goal of reaching North America and overall Automotive profitability
in 2009 despite the challenging economic conditions.”
following discussion of first quarter highlights and the results in our
Automotive sector and Automotive segments/business units is on a basis
that excludes special items. See tables following “Safe
Harbor/Risk Factors” for the nature and amount of these special items
and any necessary reconciliations to U.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.
$1.7 billion in cost savings, including $1.2 billion in Ford North
America (at constant volume, mix and exchange; excluding special
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.
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.
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
Pre-Tax Profits (Mils.)
*excludes special items
the first quarter of 2008, Ford’s worldwide Automotive sector reported
a pre-tax profit of $669 million, compared with a pre-tax loss of $226
million during the same period a year ago. The improvement was more
than explained by favorable cost performance of $1.7 billion in the
quarter, partially offset by unfavorable 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 and retiree health
Worldwide Automotive revenue for the first quarter of
2008 was $35 billion, down from $38.6 billion a year ago. Total
company vehicle wholesales in the first quarter were 1,531,000,
compared with 1,650,000 units a year ago, down because of the exclusion
of Jaguar Land Rover and Aston Martin volume in 2008 and lower
wholesales in other regions.
North America: For
the first quarter, North America Automotive operations reported a
pre-tax loss of $45 million, compared with a loss of $613 million a
year ago. The improvement reflected cost reductions of $1.2 billion,
including lower structural and product costs. These improvements were
partly offset by unfavorable volume and mix, and net pricing. First
quarter revenue was $17.1 billion, down from $18.5 billion a year ago.
For the first quarter, Ford’s South America operations posted a pre-tax
profit of $257 million, up from $113 million a year ago. The
improvement reflected higher net pricing and volume and mix, partially
offset by increased costs, which included higher commodity costs.
First quarter revenue increased to $1.8 billion, up from $1.3 billion
a year ago.
Ford Europe: For the first
quarter, Ford Europe pre-tax profits were $739 million, up from $219
million a year ago. The improvement was primarily explained by
favorable cost performance and net pricing, partially offset by
unfavorable changes in currency. First quarter revenue was
$10.2 billion, an improvement from $8.6 billion a year ago.
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 to unfavorable volume and mix, and changes in currency
exchange rates, partially offset by cost reductions. First quarter
revenue was $4.2 billion, compared with $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 year ago.
The improvement primarily reflected favorable cost performance and
higher profits 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.
Ford earned $49 million from its investment in Mazda and associated
operations in the first quarter, compared with $21 million a year ago.
Other Automotive, which consists of interest and financing-related
costs, accounted for a first quarter pre-tax loss of $181 million. This
included net interest expense of $472 million and favorable fair market
value adjustments of $291 million, primarily related to the impact of
changes in exchange rates on intercompany loans.
FINANCIAL SERVICES SECTOR
Financial Services Sector
Pre-Tax Profits (Mils.)
Pre-Tax Profits (Mils.)
Net Income (Mils.)
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
Ford Motor Credit Company: Ford
Motor Credit Company reported net income of $24 million in the first
quarter of 2008, down $169 million from earnings of $193 million a year
earlier. On a pre-tax basis, Ford Motor Credit earned $36 million in
the first quarter, compared with $293 million a year ago. The decrease
in earnings primarily reflected higher provision for credit losses,
higher depreciation expense for leased vehicles, and higher net losses
related to market valuation adjustments from derivatives. These were
offset partially by lower expenses primarily related to the
non-recurrence of costs associated with Ford Motor Credit's North
American business restructuring initiative and higher financing
remainder of 2008 will be a challenge but we are cautiously optimistic
despite the external challenges,” Mulally said. “Our plan is working.
Our initial quality is now among the best in the business, the
restructuring in North America is taking hold and we will continue to
take actions to stay on our plan. Our product pipeline is full. We
look forward to launching the new Ford Flex, Ford F-150 and the Lincoln
MKS in North America, and the new Ford Kuga and Ford Fiesta in Europe,
with the Fiesta coming soon thereafter to China and other markets
around the world.”
Total Company 2008 Outlook
Comparison to 2007*
Equal to or Better
Pre-Tax Operating Results**
* Adjusted to exclude Jaguar Land Rover and Aston Martin **Excludes special items.
Ford’s 2008 planning assumptions regarding the industry, operating metrics and profit outlook are as follows:
2008 Planning Assumptions and Operational Metrics
Industry Volumes (SAAR)
– U.S. (Mils.)
15.3 - 15.6
– Europe (Mils.)*
17.6 - 18.0
Compared with 2007
- Automotive Costs**
Improve by about $3 Billion
Improved by $1.7 Billion
– U.S. Market Share (Ford, Lincoln Mercury)
Low end of 14-15% range
– Operating-Related Cash Flow
– Capital Spending
Around $6 Billion
$ 1.4 Billion
* 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 at 7 a.m. EDT, Thursday, April 24. The following
briefings will be held after the announcement:
9 a.m. EDT, Alan Mulally, president and chief executive officer, and
Don Leclair, executive vice president and chief financial officer, will
host a conference call for news media and the investment community to
discuss first quarter results.
At 11 a.m. EDT, Peter Daniel,
Ford senior vice president and controller, Neil Schloss, Ford vice
president and treasurer, and K.R. Kent, Ford Motor Credit Company vice
chairman and chief financial officer, will host a conference call for
fixed income analysts and investors.
The presentations (listen-only) 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 – Thursday, April 24 Toll Free: 800-573-4754 International: 617-224-4325
Motor Company, a global automotive industry leader based in Dearborn,
Mich., manufactures or distributes automobiles in 200 markets across
six continents. With about 244,000 employees and about 90 plants
worldwide, the company’s core and affiliated automotive brands include
Ford, Lincoln, Mercury, Volvo and Mazda, and until completion of their
sale, Jaguar Land Rover. 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 our Quarterly Report on Form 10-Q
for the quarter 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 reconciliation of 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
taxes and minority interest. See tables following “Safe Harbor/Risk
Factors” for the nature and amount of these special items and
reconciliation to GAAP.
Safe Harbor/Risk Factors
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;
increase in or acceleration of market shift away from sales of trucks,
sport utility vehicles, or other more profitable vehicles, particularly
in the United States;
A significant decline in industry
sales, particularly in the United States or Europe, resulting from
slowing economic growth, geo-political events or other factors;
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;
effects from the bankruptcy or insolvency of, change in ownership or
control of, or alliances entered into by a major competitor;
distress of suppliers that has in the past and may in the future
require us to provide financial support or take other measures to
ensure supplies 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 of supplies;
Single-source supply of components or materials;
pension and postretirement health care and life insurance liabilities
impairing our liquidity or financial condition;
to implement Memorandum of Understanding with UAW to fund and discharge
retiree health care obligations because of failure to obtain court
approval or otherwise;
Worse-than-assumed economic and
demographic experience for our postretirement benefit plans (e.g.,
discount rates, investment returns, and health care cost trends);
The discovery of defects in vehicles resulting in delays in new model launches, recall campaigns or increased warranty costs;
safety, emissions (e.g., CO2), fuel economy, or other regulation
resulting in higher costs, cash expenditures, and/or sales restrictions;
Unusual or significant litigation or governmental investigations arising out of alleged defects in our products or otherwise;
change in our requirements for parts or materials where we have entered
into 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 of government incentives;
Adverse effects on our operations resulting from certain geo-political or other events;
negative Automotive operating-related cash flows for the near- to
medium-term affecting our ability to meet our obligations, invest in
our business or refinance our debt;
Substantial levels of
Automotive indebtedness adversely affecting our financial condition or
preventing us from fulfilling our debt obligations (which may grow
because we are able to incur substantially more debt, including
additional secured debt);
Inability of Ford Credit to
access debt or securitization markets around the world at competitive
rates or in sufficient amounts due to additional credit rating
downgrades, market volatility, market disruption or otherwise;
Higher-than-expected credit losses;
Increased competition from banks or other financial institutions seeking to increase their share of financing Ford vehicles;
Changes in interest rates;
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
or increased credit, consumer or data protection or other regulations
resulting in higher costs and/or additional financing restrictions.
cannot be certain that any expectation, forecast or assumption made by
management 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 2007 Form 10-K Report.
FIRST QUARTER 2008 INCOME / (LOSS) COMPARED WITH 2007
Revenue (Excluding Special Items)
Pre-Tax Income/(Loss) from Continuing Operations (Excluding Special Items)
Pre-Tax Income/(Loss) from Continuing Operations
Provision for/(Benefit from) Income Taxes
Minority Interest in Net Income of Subsidiaries
Income/(Loss) from Continuing Ops.
Income/(Loss) from Discontinued Ops.
* Special items detailed in following table.
TOTAL COMPANY FIRST QUARTER 2008 SPECIAL ITEMS
First Quarter 2008
Pre-Tax Profit / (Loss)
- Personnel Actions and Associated Curtailments
- U.S. Dealer Reductions (incl. Investment Write-Off)
- Ballard Restructuring/Other
Total North America
Other Personnel Actions Jaguar Land Rover
Total Special Items
Memo: Special Items Impact on Earnings Per Share**
* Operating profit was essentially offset by an impairment charge. **
Earnings per share for special items is calculated on a basis that
includes pre-tax profit, provision for taxes, and minority interest;
additional information regarding the method of calculating earnings per
share is available in the materials supporting the Apr. 24, 2008
conference calls at www.shareholder.ford.com.
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