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The Spaminator
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FORD REPORTS 2010 FULL YEAR NET INCOME OF $6.6 BILLION; FOURTH QUARTER NET INCOME OF $190 MILLION+
http://media.ford.com/article_display.cfm?article_id=33916


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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

•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

AUTOMOTIVE SECTOR

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:

•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
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.

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:

 

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Good job Ford !!! I knew the 4th quarter would not be nearly as good as the others, as it usually bears the expense for launches of new vehicles.................. and the F150/engines and Explorer are huge ones.

Here's to an even better year in 2011 !!
 

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Looks very good. I'm not a finantial expert, i'm Medical Doctor, but i see some things that worry me:

1.- Pre-tax operating profit in the fourth quarter was $741 million, a decrease of $173 million from a year ago. This could be a dangerous trend

2.- European operation: 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 - Is really Ford leaving some "low-margin business"? or , simply, cant compete in that market with their products??

That 2 thing, the rest looks amazing for me
 

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The Spaminator
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Discussion Starter #4
Looks very good. I'm not a finantial expert, i'm Medical Doctor, but i see some things that worry me:

1.- Pre-tax operating profit in the fourth quarter was $741 million, a decrease of $173 million from a year ago. This could be a dangerous trend

2.- European operation: 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 - Is really Ford leaving some "low-margin business"? or , simply, cant compete in that market with their products??

That 2 thing, the rest looks amazing for me

1. That was due to higher material costs. Thanks to the economy going up (though slightly), that will send costs up as well. Ford, and others, will hike prices for MY12 to help the profits.

2. The lower market share is due to Ford not using high incentives and dumping into fleet. Vaukhall, for instance, has a 20% off program in the UK.

Focus, facelifted Fiesta, C-Max will help boost sales later this year.
 

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Looks very good. I'm not a finantial expert, i'm Medical Doctor, but i see some things that worry me:

1.- Pre-tax operating profit in the fourth quarter was $741 million, a decrease of $173 million from a year ago. This could be a dangerous trend

2.- European operation: 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 - Is really Ford leaving some "low-margin business"? or , simply, cant compete in that market with their products??

That 2 thing, the rest looks amazing for me
The first point is due to the costs of the closure of Mercury and conversion of debt - that is about $1.2 billion in "profit" that was converted to other uses. Nothing scary there. That is good accounting practice.

The second point is a boogey man moment. Just like Ford has shifted its NA portfolio to higher profit ones leaving the low end of the market uncovered, they've done the same in Europe. If you aren't going to make a dime selling a product, then why offer it? Also Europe is highly impacted by their economic mess that is worse than ours (if that is possible). It will be interesting to see how sales are this year without the benefit of "cash for clunkers" programs in Europe.

Overall, Ford's results are about where I was expecting it to be. Ford's decision to roll out the Fiesta as a profitable product will look even smarter as gas prices increase and the gradual shifting of each model upwards in the range is also a smart move. Ford still has plenty of products to continue profitability and that new Explorer will sell like gangbusters which will pull up the model's sales and profit contribution for 2011. And with the new engines in the F-series, this will also be a well-timed move when fuel prices spike.

I don't see any area to worry about than the overall economy which still looks weak despite the redefinition of unemployment and other economic factors to make them look better than they actually are.
 

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The reduction in the operating profit is due to many reason, none of them necessarily bad except maybe as Aus said the increase in the prices of raw materials, but even that respond to a warming up of an economy which last quarter grew three points as per numbers reported this morning. But keep in mind that Ford is resuming business, they paid productivity bonuses to salaried workers for example and they also have press the accelerator on product development investment.

One of the best news of this fourth quarter report, despite the rather modest sound of the $190 million numbers is the fact that Ford is aggressively paying out its debt. Without the $960 million charge for completion of debt the 4th quarter net income would have been 1.15 billion.
 

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Discussion Starter #8
The reduction in the operating profit is due to many reason, none of them necessarily bad except maybe as Aus said the increase in the prices of raw materials, but even that respond to a warming up of an economy which last quarter grew three points as per numbers reported this morning. But keep in mind that Ford is resuming business, they paid productivity bonuses to salaried workers for example and they also have press the accelerator on product development investment.

One of the best news of this fourth quarter report, despite the rather modest sound of the $190 million numbers is the fact that Ford is aggressively paying out its debt. Without the $960 million charge for completion of debt the 4th quarter net income would have been 1.15 billion.
Which is not terrible compared to most 4th Quarters at Ford.
 

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Which is terrible compared to most 4th Quarters at Ford.
Terrible? . . . really?

2009 4th quarter: $ 868 million
2008 4th quarter: ($5.9 billion)
2007 4th quarter: ($2.8 billion)
2006 4th quarter: ($5.8 billion)
2005 4th quarter: $2 billion
2004 4th quarter: $3.5 billion

I think its pretty good, considering.
 

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Discussion Starter #10
Terrible? . . . really?

2009 4th quarter: $ 868 million
2008 4th quarter: ($5.9 billion)
2007 4th quarter: ($2.8 billion)
2006 4th quarter: ($5.8 billion)
2005 4th quarter: $2 billion
2004 4th quarter: $3.5 billion

I think its pretty good, considering.
My bad, ment to have a "not" in there, but I guess my hands did not do what I thought.:/
 

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Wow, it truely amazes me how dumb some of these headlines are. They are merely just looking at the profit for this one quarter instead of looking at what happened to the debt. All well, I am going to buy the stock during the off hours later today and watch it climb back on Monday.
 

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Wow, it truely amazes me how dumb some of these headlines are. They are merely just looking at the profit for this one quarter instead of looking at what happened to the debt. All well, I am going to buy the stock during the off hours later today and watch it climb back on Monday.
If you're implying that the movement of stock price is an effect of news headlines, that's not correct...
 

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"Fourth quarter actions reduced Automotive debt by $7.3 billion .... Automotive gross cash was down $3.3 billion from the end of the third"

That is a significant $4B positive! Credit ratings should be positively affected once again.
 

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If you're implying that the movement of stock price is an effect of news headlines, that's not correct...
Hmmmm . . . YES
"Fourth quarter actions reduced Automotive debt by $7.3 billion .... Automotive gross cash was down $3.3 billion from the end of the third"

That is a significant $4B positive! Credit ratings should be positively affected once again.
Exactly . . .
 

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Ummm... no. The wall street analytics look at the data, and the stock market reacts. Media outlets then form articles based on how the stock market reacts, not the other way around. Ford went down so much not because they had a "poor" quarter, but because their previous share price was based on speculation that their quarter results were going to be better than they were. I wouldn't put a lot of "stock" into what this Autonews writer says about wall street.

It's also important to remember that only about half of yesterday's losses were due to the 4Q earnings report. The rest of the market also did very poorly yesterday, presumably because of the turmoil in Egypt.
 
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