Ford Motor Company (NYSE: F):
- Second quarter pre-tax profit of $2.6
billion, an increase of $44 million compared with a year ago;
after-tax earnings per share of 40 cents, excluding special items;
20th consecutive profitable quarter
- Second quarter net income of $1.3
billion, or 32 cents per share, an increase of $78 million compared
with a year ago; net income includes pre-tax special item charges
of $481 million
- Year-over-year decline of 1 percent in
wholesale volume and company revenue; market share higher in Asia
Pacific, driven by record share in China
- All Automotive business units
profitable and improved compared with a year ago, except for South
America. Record quarterly profit in North America; record second
quarter profit in Asia Pacific; first quarterly profit in Europe in
three years
- Automotive operating-related cash flow
of $2.6 billion, the 17th consecutive quarter of positive
performance. Ford ended second quarter with Automotive gross cash
of $25.8 billion, exceeding debt by $10.4 billion. Ford improves
its outlook for operating-related cash flow due to its strong first
half performance
- Ford Credit delivered solid
results
- Ford affirms its 2014 pre-tax profit
guidance of $7 billion to $8 billion in a period with an
unprecedented number of global product launches. Ford expects the
payoff from its investments this year will be a strong product
lineup with higher volumes, revenue and margins in 2015 and
beyond
Financial Results
Summary+ Second Quarter First Half 2013
2014 B/(W) 2013
2013 2014 B/(W)
2013 Wholesales (000) 1,678 1,661 (17 ) 3,175 3,250 75 Revenue
(Bils.) $ 37.9 $ 37.4 $
(0.5 ) $ 73.5 $ 73.3 $
(0.2 )
Operating
Results
Pre-tax results (Mils.)++ $ 2,555 $ 2,599 $ 44 $ 4,701 $ 3,980 $
(721 ) After-tax results (Mils.)++ 1,833 1,630 (203 ) 3,475 2,649
(826 ) Earnings per share++ 0.45 0.40 (0.05 ) 0.86 0.65 (0.21 )
Special items
pre-tax (Mils.)
$ (736 ) $ (481 ) $ 255 $ (759 ) $ (603 ) $ 156
Net income
attributable to Ford
After-tax results (Mils.) $ 1,233 $ 1,311 $ 78 $ 2,844 $ 2,300 $
(544 ) Earnings per share 0.30 0.32 0.02 0.70 0.57 (0.13 )
Automotive
Operating-related cash flow (Bils.) $ 3.3 $ 2.6 $ (0.7 ) $ 4.0 $
3.8 $ (0.2 ) Gross cash (Bils.) $ 25.7 $ 25.8 $ 0.1 $ 25.7 $
25.8 $ 0.1 Debt (Bils.) (15.8 ) (15.4 ) 0.4 (15.8 ) (15.4 )
0.4 Net cash (Bils.) $ 9.9 $
10.4 $ 0.5 $
9.9 $ 10.4 $ 0.5
See end notes on page 8.
Ford Motor Company (NYSE: F) today reported a 2014 second
quarter pre-tax profit of $2.6 billion, its 20th consecutive
profitable quarter and its best since second quarter 2011. The
company also affirmed its full-year pre-tax profit guidance of $7
billion to $8 billion as it continues to implement its One Ford
plan to deliver profitable growth for all.
The company’s pre-tax profit of $2.6 billion, excluding special
items, was $44 million higher than a year ago. After-tax earnings
per share were 40 cents, excluding special items, 5 cents below a
year ago. Net income for the quarter was $1.3 billion, or 32 cents
per share, an increase of $78 million, or 2 cents, from a year
ago.
Net income included pre-tax special item charges of $481
million. These include the impairment of Ford’s equity investment
in the Ford Sollers joint venture in Russia, reflecting the present
outlook for the business, including a weaker ruble, lower industry
volume and industry segmentation changes that negatively impact
sales of Focus. Also included in special item charges are
separation-related actions, primarily in Europe to support Ford’s
transformation plan.
All Automotive business units contributed to the company’s
pre-tax profit and all improved from a year ago, except South
America. North America achieved record quarterly performance for
pre-tax profit, and Asia Pacific achieved a second quarter record.
Europe earned its first quarterly profit since the market
dramatically declined three years ago. Ford Credit delivered solid
results.
Second quarter wholesale volume and company revenue declined 1
percent year-over-year. The company achieved higher market share in
Asia Pacific, driven by record share in China.
“Our One Ford plan continues to deliver, enabling us to reach
our 20th consecutive quarter of profitability,” said Mark Fields,
president and CEO. “Moving forward, our commitment is to build on
this success by accelerating our pace of progress, while delivering
product excellence and driving innovation in all areas of our
business.”
Ford’s Automotive operating-related cash flow was $2.6 billion
in the second quarter, its 17th consecutive quarter of positive
performance. The company ended the second quarter with Automotive
gross cash of $25.8 billion, exceeding debt by $10.4 billion.
The company completed its corporate credit facility amendment and
maturity extension in the second quarter. The facility is now
$12.2 billion, of which $2 billion has been allocated to Ford
Credit. The company ended the quarter with Automotive liquidity of
$36.7 billion.
In the second quarter, Ford declared a dividend of $0.125 per
share on the company’s outstanding Class B and common stock and
paid about $500 million in dividends. This is the same level of
dividend paid in the first quarter, and a 25 percent increase from
the level of quarterly dividends paid in 2013. Ford is currently
implementing the previously announced share repurchase program for
up to 116 million shares, or almost $2 billion, to offset an up to
3 percent dilutive effect of potential convertible debt conversions
and stock-based compensation.
Ford’s second quarter operating effective tax rate was 44
percent, reflecting calendarization effects, including the impact
of regional profits. Ford continues to expect its full-year
operating effective tax rate to be about 35 percent, assuming
retroactive extension of U.S. research credit legislation in the
fourth quarter. Ford’s third quarter rate is expected to be about
equal to the second quarter rate.
AUTOMOTIVE SECTOR
Second Quarter
First Half 2013 2014 B/(W)
2013 2013 2014 B/(W) 2013
Wholesales (000) 1,678 1,661 (17 ) 3,175
3,250 75 Revenue (Bils.) $
36.0 $ 35.3 $ (0.7 ) $
69.9 $ 69.2 $ (0.7 )
Operating Margin (Pct.) 6.4 % 6.6 % 0.2 pts. 5.8 % 5.0 % (0.8 )
pts. Pre-tax results (Mils.) $ 2,104 $ 2,170 $ 66 $ 3,747 $ 3,089 $
(658 )
Total Automotive second quarter wholesale volume decreased by 1
percent from a year ago, and Automotive revenue decreased by 2
percent. The lower volume is more than explained by lower market
share in all regions except Asia Pacific.
Operating margin was 6.6 percent, an increase of 0.2 percentage
points from a year ago. Automotive pre-tax profit was $2.2 billion,
a $66 million improvement, more than explained by lower costs
and favorable market factors, partially offset by adverse exchange
driven by South America.
“Our second quarter results demonstrate the underlying strength
of our business,” said Bob Shanks, executive vice president and
chief financial officer. “We are delivering strong results in a
year of aggressive global product launches and difficult external
conditions in many parts of the world – a tribute to the power of
our One Ford plan and the Ford team around the world.”
North America
Second Quarter
First Half 2013 2014 B/(W)
2013 2013 2014 B/(W) 2013
Wholesales (000) 802 760 (42 ) 1,537 1,477
(60 ) Revenue (Bils.) $ 21.8 $
21.2 $ (0.6 ) $
43.3 $ 41.6 $ (1.7 ) Operating Margin
(Pct.) 10.6 % 11.6 % 1.0 pts. 10.9 % 9.5 % (1.4 ) pts. Pre-tax
results (Mils.) $ 2,321 $ 2,440 $ 119 $ 4,713 $ 3,940 $ (773 )
North America profit was driven by robust industry sales, a
strong product lineup, continued discipline in matching production
to demand and a lean cost structure, even as the company continues
to invest for future growth.
North America reported a record pre-tax profit of $2.4 billion
in the second quarter, an increase of $119 million from last year.
This improvement was more than explained by lower costs and higher
parts and accessory profit.
Wholesale volume and revenue declined 5 percent and 3 percent,
respectively, from a year ago. The volume decrease is explained by
lower market share and an unfavorable change in dealer stocks,
partially offset by higher industry sales, including a U.S.
industry seasonally adjusted annual rate (SAAR) of 16.9 million
units in the second quarter that was 1.2 million units higher than
a year ago. The decline in revenue is more than explained by the
lower wholesale volume and a weaker Canadian dollar, partially
offset by favorable mix.
Second quarter U.S. market share was 15.3 percent, down 1.2
percentage points from a year ago. The decline primarily reflects a
planned reduction in daily rental sales; lower F-Series share as
the company continues to balance share, transaction prices and
stocks as it prepares for the new F-150; and lower Edge and Focus
share.
For the full year, Ford continues to expect North America
pre-tax profit to be lower than 2013 and operating margin to be in
the 8 percent to 9 percent range. The company’s guidance includes
13 weeks of production downtime this year for the launch of the new
F-150, including the summer shutdown at Ford’s Dearborn and Kansas
City plants. Three weeks occurred in the first quarter, and at the
Dearborn plant, eight consecutive weeks are planned beginning in
late August. The Kansas City summer shutdown in July and a few
individual down days in the second half make up the remainder of
the downtime.
South America
Second Quarter
First Half 2013 2014 B/(W)
2013 2013 2014 B/(W) 2013
Wholesales (000) 147 114 (33 ) 260 218
(42 ) Revenue (Bils.) $ 3.0 $
2.1 $ (0.9 ) $ 5.3 $
4.0 $ (1.3 ) Operating Margin (Pct.)
5.0 % (14.0 ) % (19.0 ) pts. (1.3 ) % (20.1 ) % (18.8 ) pts.
Pre-tax results (Mils.) $ 151 $ (295 ) $ (446 ) $ (67 ) $ (805 ) $
(738 )
South America continues to execute the company’s strategy of
expanding its product lineup and progressively replacing legacy
products with global One Ford offerings. It also is continuing to
manage the effects of slowing GDP growth and lower industry volume
in its larger markets, weaker currencies, high inflation, as well
as policy uncertainty in some countries.
South America reported a pre-tax loss of $295 million in the
second quarter, a $446 million deterioration from the prior year.
The decline is primarily explained by lower volume and mix,
unfavorable exchange and higher costs, partially offset by
favorable net pricing.
In the second quarter, wholesale volume and revenue decreased by
22 percent and 30 percent, respectively, from a year ago. The lower
volume is primarily explained by an 800,000-unit decline from last
year’s SAAR of 6.1 million units. This includes the impact of the
weakening economy in Brazil, import restrictions in Argentina and
lower production in Venezuela resulting from limited availability
of U.S. dollars. The revenue decline is explained primarily by
lower volume and unfavorable exchange, partially offset by higher
net pricing.
South America market share, at 8.8 percent, was down 0.3
percentage points from a year ago, more than explained by the model
changeover of Ka and the phase out of Fiesta Classic.
For the full year, Ford now expects South America to incur a
larger loss than it previously guided. Although Ford continues to
expect higher market share and positive net pricing in the second
half as it launches the all-new Ka small car, it now expects the
rest of the year to be about breakeven to a loss due to
lower-than-expected industry volumes and weaker currencies. The
volatility in the region, including potential currency
devaluations, adds uncertainty to short-term projections.
Europe
Second Quarter
First Half 2013 2014 B/(W)
2013 2013 2014 B/(W) 2013
Wholesales (000) 377 376 (1 ) 707 743
36 Revenue (Bils.) $ 7.3 $
8.0 $ 0.7 $ 13.9 $
15.8 $ 1.9 Operating Margin (Pct.) (4.2
) % 0.2 % 4.4 pts. (5.2 ) % (1.1 ) % 4.1 pts. Pre-tax results
(Mils.) $ (306 ) $ 14 $ 320 $ (731 ) $ (180 ) $ 551
Ford continues to implement its Europe transformation plan
focused on product, brand and cost, and remains on track to achieve
profitability in 2015.
Europe reported a second quarter pre-tax profit of $14 million,
a $320 million improvement from a year ago. The improvement is more
than explained by lower costs and favorable exchange. This was
partially offset by lower results and royalties from Ford’s joint
ventures, primarily in Russia, along with lower parts and
accessories profit. Restructuring costs were lower than a year ago,
primarily due to a reserve release this quarter associated with its
Cologne investment agreement and non-recurrence of a facility
write-off in Genk last year.
In the second quarter, wholesale volume was about unchanged from
a year ago, while revenue improved 10 percent. Europe 20’s
SAAR was 14.4 million units, up 700,000 units from a year ago. The
increase was offset partially by industry declines in Russia and
Turkey. Europe’s higher revenue mainly reflects higher volume in
the Europe 20 markets and favorable exchange, partially offset by
unfavorable mix.
Europe 20 market share, at 7.9 percent, was down 0.2 percentage
points from a year ago, reflecting primarily a reduction in rental
and fleet share, as well as adverse industry segmentation in
passenger car. Europe 20 commercial vehicle share improved in the
second quarter to 10.6 percent, up 0.5 percentage points from a
year ago to Ford’s highest second quarter share since 1997; this
was driven by Ford’s refreshed and expanded range of
Transit products.
Ford’s full-year guidance for Europe remains unchanged, with the
region expected to improve pre-tax results compared with 2013.
Consistent with the normal seasonality of sales and production,
Ford expects Europe’s second half loss to be higher than the first
half loss of $180 million. Lower second half wholesale volumes
of about 100,000 units include the effect of summer shutdowns
in the third quarter and year-end shutdowns in the fourth quarter.
In addition, Ford expects higher restructuring-related costs in the
second half, including the non-repeat of a reserve release and
higher launch-related costs with the start of production of the
all-new Mondeo and the new Focus. Although the current environment
in Russia is difficult, Russia remains a large and important
market. Ford is working with its partner in Ford Sollers to develop
actions to improve its business outlook.
Middle East & Africa
Second Quarter
First Half 2013 2014 B/(W)
2013 2013 2014 B/(W) 2013
Wholesales (000) 52 49 (3 ) 106 100
(6 ) Revenue (Bils.) $ 1.2 $
1.1 $ (0.1 ) $ 2.5
$ 2.3 $ (0.2 ) Operating Margin (Pct.)
1.1 % 2.0 % 0.9 pts. 2.4 % 3.3 % 0.9 pts. Pre-tax results (Mils.) $
13 $ 23 $ 10 $ 60 $ 77 $ 17
Middle East & Africa, Ford’s newest business unit, was
created to better serve customers and expand in this fast-growing
region. Ford is intensifying its focus and targeting opportunities
for growth in the small, mid-size and large vehicle segments.
Middle East & Africa reported a profit of $23 million
for the second quarter, a $10 million improvement from a
year ago.
In the second quarter, wholesale volume and revenue declined
from a year ago. The lower volume primarily reflects lower market
share driven by increased competitive pressures on Expedition in
the Middle East. The revenue decline is explained by the lower
volume and unfavorable exchange.
Ford’s full-year guidance for Middle East & Africa remains
unchanged, with the region expected to be about breakeven with
quarterly variability driven by factors such as the timing of
production, mix of vehicles and long shipping times.
Asia Pacific
Second Quarter
First Half 2013 2014 B/(W)
2013 2013 2014 B/(W) 2013
Wholesales (000) 300 362 62 565 712
147 Revenue (Bils.) $ 2.7 $
2.9 $ 0.2 $ 4.9 $
5.5 $ 0.6 Operating Margin (Pct.) 4.9 %
5.5 % 0.6 pts. 2.1 % 8.1 % 6.0 pts. Pre-tax results (Mils.) $ 130 $
159 $ 29 $ 102 $ 450 $ 348
Ford’s strategy in Asia Pacific continues to be to grow
aggressively with an expanding portfolio of global One Ford
products with manufacturing hubs in China, India and ASEAN.
Asia Pacific reported a second quarter pre-tax profit of
$159 million, an improvement of $29 million compared with
a year ago, and a second quarter record. The improvement is more
than explained by favorable volume and mix.
In the second quarter, wholesale volume was up 21 percent from a
year ago, and net revenue, which excludes the company’s China joint
ventures, grew 9 percent. Wholesale volume in China increased 26
percent from a year ago. The higher volume in the region primarily
reflects higher market share and industry volume. Ford estimates
the second quarter SAAR for the region at 39.6 million units, up
2.2 million units from a year ago driven by China. Higher revenue
is primarily explained by higher volume and favorable mix.
Second quarter market share in the region was 3.7 percent, 0.4
percentage points higher than a year ago. The improvement was
driven by China, where Ford’s market share improved 0.3 percentage
points to a record 4.6 percent, reflecting continued strong
sales of Mondeo, Fiesta and Kuga.
For the full year, Ford continues to expect Asia Pacific to earn
a higher pre-tax profit than a year ago. Ford expects full year
results will be strong for the region, with third and fourth
quarter results down from second quarter. Volume improvements will
be more than offset by higher costs as Ford continues to invest for
future growth, including the five plants under construction in
China and India and the launch of Lincoln in China this fall.
Other Automotive
The second quarter loss of $171 million in Other Automotive
primarily reflects net interest expense.
For the full year, Ford continues to expect net interest expense
to be about $700 million.
PRODUCTION VOLUMES*
2014 Second Quarter
Third Quarter Actual Forecast Units
O/(U) 2013 Units O/(U) 2013
(000) (000) (000) (000) North America
802 (18)
720 (31) South America 103 (31) 115 (10) Europe 402 1 330 7 Middle
East & Africa 20 3 20 7 Asia Pacific
365 69
350
15
Total 1,692 24
1,535 (12)
* Includes Ford brand and JMC brand
vehicles produced by our unconsolidated affiliates.
In the second quarter, total company production was about 1.7
million units, 24,000 units higher than a year ago. This is 8,000
units lower than Ford’s most recent guidance.
The company expects third quarter production to be about 1.5
million units, down 12,000 units from a year ago. Compared with the
second quarter, third quarter production is down
157,000 units, which includes the impact of planned shutdowns
and the changeover for the new F-150.
FINANCIAL SERVICES SECTOR
Second Quarter
First Half 2013 2014
B/(W) 2013 2013
2014 B/(W) 2013 Revenue (Bils.) $
1.9 $
2.1 $ 0.2 $ 3.6 $
4.1 $ 0.5 Ford Credit pre-tax
results (Mils.) $ 454 $ 434 $ (20 ) $ 961 $ 933 $ (28 ) Other
Financial Services pre-tax results (Mils.) (3 ) (5 ) (2 ) (7 ) (42
) (35 ) Financial Services pre-tax results (Mils.) $
451 $
429 $ (22 ) $ 954
$ 891 $ (63 )
Ford Motor Credit Company
Ford Credit is an integral part of Ford’s global growth and
value creation strategy.
Ford Credit’s second quarter pre-tax profit of $434 million was
$20 million lower than a year ago. The lower pre-tax profit is more
than explained by a higher level of insurance losses from storm
damage to dealer inventory in the quarter.
For the full year, Ford now expects Ford Credit pre-tax profit
to be higher than 2013, improved from the previous guidance of
about equal to or higher than 2013. Ford now expects year-end
managed receivables of $112 billion to $115 billion, up from
prior guidance of about $110 billion. Guidance for Ford Credit
managed leverage and distributions to its parent is unchanged.
OUTLOOK
2014 KEY METRICS -- BUSINESS UNITS Memo:
2013 2014 Full Year 2014
Full Year Compared with 2013 First Half
Results Plan Outlook Results
(Mils.) (Mils.)
Automotive * North America $
8,809 Lower On Track $
3,940 - Operating Margin 10.2 % 8 - 9% On Track 9.5 %
South America $ (33 ) About Equal Larger Loss $ (805 ) Europe
(1,442 ) Better On Track (180 ) Middle East & Africa (69 )
About Breakeven On Track 77 Asia Pacific 327 About Equal Higher 450
Net Interest Expense (801 ) About Equal About $(700) million (329 )
Ford Credit $ 1,756 About Equal Higher $ 933
*
Excludes special items
2014 PLANNING ASSUMPTIONS
AND KEY METRICS Memo: 2013 2014
2014 Full Year Full Year First Half
Results Plan Outlook Results
Planning
Assumptions (Mils.)
Industry Volume * -- U.S. 15.9 16.0 - 17.0 16.3 - 16.8 16.5 --
Europe 20 13.8 13.5 - 14.5 14.3 - 14.8 14.4 -- China 22.2 22.5 -
24.5 23.3 - 24.3 23.5
Key
Metrics
Automotive (Compared with 2013): - Revenue (Bils.) $ 139.4
About Equal On Track $ 69.2 - Operating Margin ** 5.4 % Lower On
Track 5.0 % - Operating-Related Cash Flow (Bils.) *** $ 6.1
Substantially Lower Lower $ 3.8
Ford Credit (Compared with
2013): - Pre-Tax Profit (Bils.) $ 1.8 About Equal Higher $ 0.9
Company: - Pre-Tax Profit (Bils.) *** $ 8.6 $7 - $8 Billion
On Track $ 4.0
*
Based, in part, on estimated vehicle
registrations; includes medium and heavy trucks
**
Automotive operating margin is defined as
Automotive pre-tax results, excluding special items and Other
Automotive, divided by Automotive revenue
***
Excludes special items; see "Income from
Continuing Operations" and “Operating-Related Cash Flows
Reconciliation to GAAP” tables on pages 11 and 13
ONE FORD PLAN
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
“Our global team is delivering in 2014 and taking the critical
next steps for an even stronger future,” said Fields. “We are on
track for a solid year, in a period with an unprecedented number of
vehicle launches around the globe. As we look forward, we expect
the payoff from our investments this year will be a strong lineup
with higher volumes, revenue and margins in 2015 and beyond.”
+ The financial results discussed herein are presented on a
preliminary basis; final data will be included in Ford’s Quarterly
Report on Form 10-Q for the period ended June 30, 2014. The
following information applies to the information throughout this
release:
- Pre-tax results exclude special items unless otherwise
noted.
- All references to records by Automotive
business units are since at least 2000 when Ford began reporting
specific business unit results.
- All references to records for
Automotive operating-related cash flow are since 2001.
- See tables at the end of this release
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, operating-related
cash flow and net interest.
- 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.
- 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 July 24, 2014 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 at the end of this release
for the nature and amount of these special items and reconciliation
to GAAP.
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
Ford 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:
- Decline in industry sales volume,
particularly in the United States or Europe, due to financial
crisis, recession, geopolitical events, or other factors;
- Decline in Ford’s market share or
failure to achieve growth;
- Lower-than-anticipated market
acceptance of Ford’s new or existing products;
- Market shift away from sales of larger,
more profitable vehicles beyond Ford’s current planning assumption,
particularly in the United States;
- An increase in or continued volatility
of fuel prices, or reduced availability of fuel;
- Continued or increased price
competition resulting from industry excess capacity, currency
fluctuations, or other factors;
- Fluctuations in foreign currency
exchange rates, commodity prices, and interest rates;
- Adverse effects resulting from
economic, geopolitical, or other events;
- Economic distress of suppliers that may
require Ford to provide substantial financial support or take other
measures to ensure supplies of components or materials and could
increase costs, affect liquidity, or cause production constraints
or disruptions;
- Work stoppages at Ford or supplier
facilities or other limitations on production (whether as a result
of labor disputes, natural or man-made disasters, tight credit
markets or other financial distress, production constraints or
difficulties, or other factors);
- Single-source supply of components or
materials;
- Labor or other constraints on Ford’s
ability to maintain competitive cost structure;
- Substantial pension and postretirement
health care and life insurance liabilities impairing our liquidity
or financial condition;
- Worse-than-assumed economic and
demographic experience for 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, or
increased warranty costs;
- Increased safety, emissions, fuel
economy, or other regulations 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 products, perceived environmental impacts, or
otherwise;
- A change in requirements under
long-term supply arrangements committing Ford to purchase minimum
or fixed quantities of certain parts, or to pay a minimum amount to
the seller (“take-or-pay” contracts);
- Adverse effects on results from a
decrease in or cessation or clawback of government incentives
related to investments;
- Inherent limitations of internal
controls impacting financial statements and safeguarding of
assets;
- Cybersecurity risks to operational
systems, security systems, or infrastructure owned by Ford, Ford
Credit, or a third-party vendor or supplier;
- Failure of financial institutions to
fulfill commitments under committed credit and liquidity
facilities;
- 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,
lower-than-anticipated residual values, or higher-than-expected
return volumes for leased vehicles;
- Increased competition from banks or
other financial institutions seeking to increase their share of
financing Ford vehicles; and
- New or increased credit, consumer, or
data protection or other regulations resulting in higher costs
and/or additional financing restrictions.
Ford 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. Ford’s forward-looking statements speak only as of the
date of their initial issuance, and Ford does 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, see “Item 1A. Risk
Factors” in Ford’s Annual Report on Form 10-K for the year ended
December 31, 2013, as updated by Ford’s subsequent
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
CONFERENCE CALL DETAILS
Ford Motor Company (NYSE:F) releases its preliminary second
quarter 2014 financial results at 6:30 a.m. EDT today. The
following briefings will be held
after the announcement:
- At 8:30 a.m. (EDT), Mark Fields,
president and chief executive officer, and Bob Shanks, executive
vice president and chief financial officer, will host a conference
call to discuss Ford’s 2014 second quarter results.
- At 11:30 a.m. (EDT), Neil Schloss, vice
president and treasurer; Stuart Rowley, vice president and
controller, and Michael Seneski, chief financial officer, Ford
Motor Credit Company, will host a conference call focusing on Ford
Motor Credit Company’s 2014 second quarter results.
The presentations (listen-only) and supporting materials will be
available at www.shareholder.ford.com.
Representatives of the investment community will have the
opportunity to ask questions on both conference calls, as will
representatives of the news media on the first call.
Access Information -
Thursday, July 24, 2014 Earnings Call: 8:30 a.m. EDT
Toll Free: 1.866.318.8615International: 1.617.399.5134Earnings
Passcode: Ford Earnings
Fixed Income: 11:30 a.m. EDT Toll Free:
1.888.339.2688International: 1.617.847.3007Fixed Income Passcode:
Ford Fixed Income
REPLAYS (Available after
12:30 p.m. EDT the day of the event through Thursday, July 31,
2014) www.shareholder.ford.com
Toll Free: 1.888.286.8010International: 1.617.801.6888
Replay Passcodes: Earnings:
93684483Fixed Income: 66193675
About Ford Motor Company
Ford Motor Company, a global automotive industry leader based in
Dearborn, Mich., manufactures or distributes automobiles across six
continents. With about 186,000 employees and 65 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 and its products
worldwide, please visit www.corporate.ford.com.
TOTAL COMPANY
CALCULATION OF EARNINGS PER SHARE Second Quarter 2014
First Half 2014 After-Tax After-Tax
Operating Operating Net Income Results
Excl. Net Income Results Excl.
Attributable Special Attributable
Special to Ford Items* to Ford
Items*
After-Tax Results
(Mils.)
After-tax results* $ 1,311 $ 1,630 $ 2,300 $ 2,649 Effect of
dilutive 2016 Convertible Notes** 12 12 24 24
Diluted after-tax results $ 1,323 $ 1,642 $ 2,324
$ 2,673
Basic and Diluted
Shares (Mils.)
Basic shares (Average shares outstanding) 3,940 3,940 3,943 3,943
Net dilutive options 47 47 46 46 Dilutive 2016 Convertible Notes
101 101 100 100 Diluted shares 4,088
4,088 4,089 4,089 EPS (Diluted) $ 0.32 $ 0.40
$ 0.57 $ 0.65 * Excludes Income/(Loss) attributable to
non-controlling interests; special items detailed on page 12 ** As
applicable, includes interest expense, amortization of discount,
amortization of fees, and other changes in income or loss that
result from the application of the if-converted method for
convertible securities
TOTAL COMPANY INCOME FROM
CONTINUING OPERATIONS Memo:
Second Quarter First Half Full Year
2013 2014 2013 2014
2013 (Mils.) (Mils.) (Mils.) (Mils.) (Mils.)
Automotive
North America $ 2,321 $ 2,440 $
4,713 $ 3,940 $ 8,809 South America 151 (295 )
(67 ) (805 ) (33 ) Europe (306 ) 14 (731 ) (180 ) (1,442 ) Middle
East & Africa 13 23 60 77 (69 ) Asia Pacific 130 159 102 450
327 Other Automotive (205 ) (171 ) (330 ) (393 ) (656 ) Total
Automotive (excl. special items) $ 2,104 $ 2,170 $ 3,747 $ 3,089 $
6,936 Special items -- Automotive (736 ) (481 ) (759 ) (603 )
(1,568 ) Total Automotive $ 1,368 $ 1,689 $ 2,988 $ 2,486 $ 5,368
Financial
Services
Ford Credit $ 454 $ 434 $ 961 $ 933 $ 1,756 Other Financial
Services (3 ) (5 ) (7 ) (42 ) (84 ) Total Financial Services $ 451
$ 429 $ 954 $ 891 $ 1,672
Total
Company
Pre-tax results $ 1,819 $ 2,118 $ 3,942 $ 3,377 $ 7,040 (Provision
for)/Benefit from income taxes (585 ) (803 ) (1,096 ) (1,073 ) 135
Net income $ 1,234 $ 1,315 $ 2,846 $ 2,304 $ 7,175 Less:
Income/(Loss) attributable to non-controlling interests 1 4
2 4 (7 ) Net income attributable to Ford $
1,233 $ 1,311 $
2,844 $ 2,300 $ 7,182
Memo: Excluding special items Pre-tax results $ 2,555 $
2,599 $ 4,701 $ 3,980 $ 8,608 (Provision for)/Benefit from income
taxes (721 ) (965 ) (1,224 ) (1,327 ) (2,022 ) Less: Income/(Loss)
attributable to non-controlling interests 1 4 2
4 (7 ) After-tax results $ 1,833
$ 1,630 $ 3,475 $
2,649 $ 6,593
TOTAL COMPANY
SPECIAL ITEMS Memo:
Second Quarter First Half Full Year
2013 2014 2013 2014
2013 (Mils.) (Mils.) (Mils.) (Mils.) (Mils.)
Personnel-Related
Items
Separation-related actions* $ (442 ) $
(152 ) $ (450 ) $ (274 ) $ (856 )
Other
Items
Ford Sollers equity impairment — (329 ) — (329 ) — U.S. pension
lump-sum program (294 ) — (294 ) — (594 ) FCTA - subsidiary
liquidation — — — — (103 ) Ford Romania consolidation loss — — (15
) — (15 ) Other — — — — — Total
other items (294 ) (329 ) (309 ) (329 ) (712 ) Total special
items $ (736 ) $ (481 ) $
(759 ) $ (603 ) $ (1,568 ) Tax special items $
136 $ 162 $ 128 $ 254 $ 2,157 Memo: Special Items impact on
earnings per share** $ (0.15 ) $ (0.08 ) $ (0.16 ) $ (0.08 ) $ 0.14
* Primarily related to separation costs for personnel at the
Genk and U.K. facilities ** Includes related tax effect on special
items and tax special items
NET INTEREST RECONCILIATION
TO GAAP Memo:
Second Quarter First Half Full Year
2013 2014 2013 2014 2013 (Mils.)
(Mils.) (Mils.) (Mils.) (Mils.) Interest expense (GAAP) $
(207 ) $ (207 ) $ (413 )
$ (415 ) $ (829 ) Interest income (GAAP) 43 41 87 80
163 Interest income/(expense) on income taxes (GAAP) — 11
— 37 — Subtotal $ (164 ) $ (155 ) $
(326 ) $ (298 ) $ (666 ) Adjusted for items included /
excluded from net interest: Include: Gains/(Losses) on cash equiv.
& mark. securities* (55 ) 17 (41 ) 30 (7 ) Include:
Gains/(Losses) on extinguishment of debt — — (18 ) (5 ) (18 ) Other
(28 ) (28 ) (51 ) (56 ) (110 ) Net Interest $ (247 )
$ (166 ) $ (436 ) $ (329
) $ (801 ) * Excludes mark-to-market adjustments of our
investment in Mazda
AUTOMOTIVE SECTOR GROSS CASH
RECONCILIATION TO GAAP 2013
2014 Jun. 30 Dec. 31 Mar.
31 Jun. 30 (Bils.) (Bils.) (Bils.) (Bils.)
Cash and cash equivalents $ 5.5 $ 5.0 $ 4.5 $ 4.7 Marketable
securities 20.2 20.1 20.7 21.1 Total cash and
marketable securities (GAAP) $ 25.7 $ 25.1 $ 25.2 $ 25.8
Securities in transit* — (0.3 ) — — Gross cash $ 25.7
$ 24.8 $ 25.2 $ 25.8 * The purchase or
sale of marketable securities for which the cash settlement was not
made by period end and a payable or receivable was recorded on the
balance sheet
AUTOMOTIVE SECTOR OPERATING-RELATED
CASH FLOWS RECONCILIATION TO GAAP Memo:
Second Quarter
First Half Full Year 2013
2014 2013 2014 2013 (Bils.)
(Bils.) (Bils.) (Bils.) (Bils.) Net cash provided by/(used
in) operating activities (GAAP) $ 3.7 $ 4.1 $ 4.4 $ 6.1 $ 7.7
Items included in operating-related cash flows Capital
spending (1.6 ) (1.9 ) (3.1 ) (3.4 ) (6.6 ) Proceeds from the
exercise of stock options 0.2 — 0.2 0.1 0.3 Net cash flows from
non-designated derivatives — 0.1 (0.2 ) 0.1 (0.3 ) Items not
included in operating-related cash flows Cash impact of JSB and
personnel-reduction actions — 0.1 0.1 0.1 0.3 Funded pension
contributions 1.0 0.3 2.8 0.8 5.0 Tax refunds and tax payments from
affiliates — — (0.3 ) (0.2 ) (0.3 ) Other — (0.1 ) 0.1
0.2 — Operating-related cash flows $ 3.3
$ 2.6 $ 4.0 $ 3.8 $ 6.1
For news releases, related materials and
high-resolution photos and video, visit www.media.ford.com.Follow at www.facebook.com/ford, www.twitter.com/ford or www.youtube.com/fordvideo1
Ford Motor CompanyMedia:Becky
Sanch1.313.594.4410bsanch@ford.comEquity Investment Community:Larry
Heck1.313.594.0613fordir@ford.comFixed Income Investment Community:Steve
Dahle1.313.621.0881fixedinc@ford.comShareholder Inquiries:1.800.555.5259
or1.313.845.8540stockinf@ford.com
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