Ford 2011 Pre-tax Operating Profit Of $8.8 Billion ($20.2 Billion With Special Item)

[jpd80]

LINK
DEARBORN, Mich., Jan. 27, 2012 – Ford Motor Company [NYSE: F] today reported 2011 full year pre-tax operating profit of $8.8 billion, an increase of $463 million from a year ago, as strong performance in North America and Ford Credit offset challenges in other parts of the world. This marks the company’s third year in a row of improving annual operating profits.

“We delivered strong results for the full year as we continued to serve our customers around the world with best-in-class vehicles and make progress toward our mid-decade goals,” said Alan Mulally, Ford president and CEO. “Despite the continued uncertainty in the external environment, the strength of our North American and Ford Credit operations allows us to continue to invest for future growth and develop outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value.”

Full year 2011 net income was $20.2 billion, or $4.94 per share, an increase of $13.7 billion, or $3.28 per share, from a year ago. The results include a favorable one-time, non-cash special item of $12.4 billion for the release of almost all of the valuation allowance against the company’s net deferred tax assets.

Fourth quarter 2011 pre-tax operating profit was $1.1 billion, or 20 cents per share, a decrease of $189 million from fourth quarter 2010. Ford has now posted 10 consecutive quarters of pre-tax operating profit, as the company benefited from strong volume and revenue across its global product line.

Ford reported fourth quarter net income of $13.6 billion, or $3.40 per share, an increase of $13.4 billion, or $3.35 per share, from the fourth quarter of 2010. This includes the favorable impact related to releasing $12.4 billion of the valuation allowance. Ford began to record a valuation allowance against net deferred tax assets in the third quarter of 2006, reflecting large cumulative losses incurred, as well as its financial outlook at the time. Consistent delivery over the past few years of strong improvement in the company’s business results now supports the release of almost all of the valuation allowance.

Fourth quarter net income also was affected by a favorable special item of $401 million related to the sale of Ford’s Russian operations to the newly created FordSollers joint venture, which began operations on Oct. 1, 2011.

As a result of Ford’s 2011 financial performance, Ford will make profit sharing payments to approximately 41,600 eligible U.S. hourly employees. In accordance with the formula in the UAW-Ford collective bargaining agreement, Ford’s North American pre-tax profits of $6.2 billion will generate approximately $6,200 per eligible employee on a full year basis. Based on first-half 2011 results, the formula generated approximately $3,750 per employee, which was distributed in December 2011. For the second half of 2011, the formula generated approximately $2,450 per employee, which is planned to be distributed in March. Individual profit sharing payments will be higher or lower based on employee compensated hours.

Ford generated positive Automotive operating-related cash flow of $700 million in the fourth quarter and $5.6 billion in the full year, an improvement of $1.2 billion from full year 2010.

Ford finished the year with Automotive gross cash of $22.9 billion, compared with Automotive gross cash of $20.8 billion as of Sept. 30, 2011, and $20.5 billion as of Dec. 31, 2010. Ford had total Automotive debt of $13.1 billion as of Dec. 31, 2011, compared with total Automotive debt of $12.7 billion as of Sept. 30, 2011, and $19.1 billion as of Dec. 31, 2010. Total Automotive liquidity at year end 2011 was $32.4 billion, including all available credit lines.

As part of Ford’s long-term strategy to reduce risk in its funded pension plans, the company expects to make cash contributions to its funded pension plans in 2012 of about $3.5 billion globally, including discretionary contributions to its U.S. plans of about $2 billion.

“2011 marked a milestone year in our work to strengthen our balance sheet. We increased Automotive cash, reduced debt and improved liquidity, clearing the way for us to resume paying a quarterly dividend,” said Lewis Booth, Ford executive vice president and chief financial officer. “We are building on this strong foundation in 2012 and taking actions when appropriate to strengthen further our balance sheet.”

Result for our region:

Asia Pacific Africa: In the fourth quarter, Asia Pacific Africa reported a pre-tax operating loss of
$83 million, compared with a profit of $23 million a year ago. The decline reflects unfavorable volume and mix from the impact of the Thailand flooding, as well as higher costs associated with new products and investments for future growth. These were offset partially by higher net pricing. Wholesales in the fourth quarter were 219,000 units, down 16,000 units from a year ago. The company estimates the production impact from Thailand flooding was approximately 34,000 units. Revenue in the fourth quarter, which excludes sales at unconsolidated joint ventures, was $1.9 billion, down $300 million from a year ago.

For the full year, Asia Pacific Africa reported a pre-tax operating loss of $92 million, compared with a profit of $189 million a year ago.

Ford Australia's annual revenue is normally just over $3 billion which would make it a healthy pecentage of FAPA and thus an important part.

For the full year, North America reported a pre-tax operating profit of $6.2 billion, compared with a profit of $5.4 billion a year ago.

For the full year, South America reported a pre-tax operating profit of $861 million, compared with a profit of $1 billion a year ago.

For the full year, Europe reported a pre-tax operating loss of $27 million, compared with a profit of $182 million a year ago.

For the full year, Other Automotive reported a loss of $601 million, compared with a loss of $1.5 billion a year ago.

For the full year, Ford Credit reported a pre-tax operating profit of $2.4 billion, compared with a profit of $3.1 billion a year ago.

[Peter B - CV8]

Sounds really good - until you get to the end posting......

[mik]

perhaps , but it looks like on the whole more good than bad, so that can`t be a bad thing.

[jpd80]

Originally Posted by Peter B - CV8

Sounds really good - until you get to the end posting......

Thailand Floods and heavy investment in new plants has dragged figures down.
Ford Asia Pacific Africa revenue for 2011 is $8.4 billion while Australia will be around $3 billion of that...

Regardless of media beat up, you can bet that FoA is providing some stability to those negative figures.
They may not make big profits but they don't make huge losses either (special items excepted).

[Luke Plaizier]

Yes, as you say, it's just a pity that the Media won't share your positive spin jeopardeighty.


Lukeyson

[jpd80]

Originally Posted by Luke Plaizier

Yes, as you say, it's just a pity that the Media won't share your positive spin jeopardeighty.


Lukeyson

Don't forget the $232 million cost of SZ Territory and FG II (Minus Govt $40 million) will go into 2011 costs
but that clears the decks and sets up 2012 for a good run and better profitability...
Some of those costs could be offset by earnings from engineering projects too as
those R & D facilities built for T6 start being used and making money from other projects...

[falconnut]

Hopefully FoA will return to a more stable and profitable form in 2012?

[Joe5619]

Originally Posted by jpd80

Don't forget the $232 million cost of SZ Territory and FG II (Minus Govt $40 million) will go into 2011 costs
but that clears the decks and sets up 2012 for a good run and better profitability...Some of those costs could be offset by earnings from engineering projects too as
those R & D facilities built for T6 start being used and making money from other projects...

No they won’t.. They will be amortized over the life of the products they funded.

Good result for Ford globally.. I wonder if they consider Europe results as good or bad considering everything that is happening in Europe?

[jpd80]

Originally Posted by Joe5619

No they won’t.. They will be amortized over the life of the products they funded.

It has to be paid for before delivery otherwise it becomes part of FoA's internal debt which was approximately $475 million at the end of 2010.

Good result for Ford globally.. I wonder if they consider Europe results as good or bad considering everything that is happening in Europe?

Considering Europe is steadily worsening, 2012 could be bad news but Ford is smart enough to
know that the markets are cyclic and while US is recovering, Asia is booming and Europe in recession.

[Joe5619]

Originally Posted by jpd80

It has to be paid for before delivery otherwise it becomes part of FoA's internal debt which was approximately $475 million at the end of 2010.

Not sure what you mean here.. But trust me R&D is not expensed in one year if the product being R&D’d will be on sale for 3-4 years. It is expensed over the life of the product. This is very basic & std accounting practice.

[Rodge]

And to think in March 2009 at thew height of the GFC when everyone, (including me), thought the financial world was going to end you could have bought Ford shares at $2.60 each, over $11 last time I looked. That's one for the book of "if only"...

[jpd80]

Originally Posted by Joe5619

Not sure what you mean here.. But trust me R&D is not expensed in one year if the product being R&D’d will be on sale for 3-4 years. It is expensed over the life of the product. This is very basic & std accounting practice.

It's not three or four years remember, 2014 is the next update..

I will be curious to see how they do this, the actual cost across falcon, Ute and Territory after funding
and split is not too bad so maybe they can carry it for two years and avoid a "bad set of numbers"...

[Joe5619]

Originally Posted by jpd80

It's not three or four years remember, 2014 is the next update..

I will be curious to see how they do this, the actual cost across falcon, Ute and Territory after funding
and split is not too bad so maybe they can carry it for two years and avoid a "bad set of numbers"...

Correct.. I ashume they would have had to put some in the 2011 P&L for Territory R&D, but very little of it for Falcon in 2011 P&L. After all, how many FGII & EcoLpi did they sell in 2011?? The avoiding a "bad set of numbers" you talk about could have very well have been 2011 if you ask me..

[mik]

Originally Posted by Rodge

And to think in March 2009 at thew height of the GFC when everyone, (including me), thought the financial world was going to end you could have bought Ford shares at $2.60 each, over $11 last time I looked. That's one for the book of "if only"...

yes, if only that crystal ball did`nt have flat batteries you would have been laughing

[jpd80]

Originally Posted by Joe5619

Correct.. I ashume they would have had to put some in the 2011 P&L for Territory R&D, but very little of it for Falcon in 2011 P&L. After all, how many FGII & EcoLpi did they sell in 2011?? The avoiding a "bad set of numbers" you talk about could have very well have been 2011 if you ask me..

It's pretty safe to say that 2011 may not be the end of the world (For FoA) stuff the media is painting...

[Joe5619]

Originally Posted by jpd80

It's pretty safe to say that 2011 may not be the end of the world (For FoA) stuff the media is painting...

Was also thinking, I’d say FoA would have been working its way through amortizing FG I R&D for most of 2011. So seeing that FGII was late, you'd assume they’d be periods of time in 2011 Ford was selling FG I R&D free. By this I mean, no FGI to amortize in 2nd half of 2011 (should have been fully amortized by mid year as this was when FGII was due) & with FGII/ EcoLPi not really selling much in 2011, so not much R&D would have been expensed in 2011 for FGII. Some saving in this area for 2011 IMO.

[Polyal]

Originally Posted by Rodge

And to think in March 2009 at thew height of the GFC when everyone, (including me), thought the financial world was going to end you could have bought Ford shares at $2.60 each, over $11 last time I looked. That's one for the book of "if only"...

http://fordforums.com.au/showthread....ighlight=money

I had similar thoughts..not 09 but close..oh well.

Certainly not the worse report I have seen for Ford anyhow.

[phillyc]

Originally Posted by Rodge

And to think in March 2009 at thew height of the GFC when everyone, (including me), thought the financial world was going to end you could have bought Ford shares at $2.60 each, over $11 last time I looked. That's one for the book of "if only"...

Hey, the share prices were
$US1.26 on November 19, 2008 the lowest since the 1980s.

[OzJavelin]

Great to at least see Ford US on the road to recovery ..
.. Interesting that Ford Europe is making a loss?

[jpd80]

Originally Posted by OzJavelin

Great to at least see Ford US on the road to recovery ..
.. Interesting that Ford Europe is making a loss?

Sales there are contracting due to economic problems, Ford's biggest markets are UK, Germany, Italy and France.

[Bossxr8]

Probably spent a lot of money getting the new Focus to market too.