Ford: Conversion Offers Reduce Debt, Strengthens Balance Sheet

[jpd80]

And more debt goes bye bye........

FORD FURTHER REDUCES ITS DEBT AND STRENGTHENS BALANCE SHEET THROUGH CONVERSION OFFERS

DEARBORN, Mich., Nov. 24, 2010 – Ford Motor Company (NYSE: F) announced today the results of conversion offers that will reduce the company’s Automotive debt by more than $1.9 billion, further strengthening its balance sheet and lowering annualized interest costs by about $180 million.

Including the conversion offers, the recent $3.6 billion prepayment on VEBA Note B and net debt reductions over the first nine months of 2010, Ford has reduced its Automotive debt by $12.8 billion this year, lowering its annualized interest costs by nearly $1 billion.

“These successful conversion offers represent another significant step toward our goal of reducing our Automotive debt and improving our balance sheet,” said Lewis Booth, Ford executive vice president and chief financial officer. “We had previously said that even without the conversion offers, we expected our Automotive cash to be about equal to Automotive debt by the end of this year, well ahead of our earlier expectations. With the conversion offers, we will be clearly net cash positive by year-end 2010.”

Ford launched the conversion offers Oct. 26, 2010, offering to pay a premium in cash to induce the holders of any and all of its outstanding 4.25% Senior Convertible Notes due December 15, 2036 (the “2036 Convertible Notes”) and 4.25% Senior Convertible Notes due November 15, 2016 (the “2016 Convertible Notes” and, together with the 2036 Convertible Notes, the “Convertible Notes”) to convert their Convertible Notes into shares of Ford’s common stock.

The conversion offers each expired at midnight, New York City time, Nov. 23, 2010, (the “Expiration Date”). As of the Expiration Date, $554 million principal amount of the 2036 Convertible Notes and $1.992 billion principal amount of the 2016 Convertible Notes were validly tendered and accepted for purchase, according to information provided by Computershare, Inc., the Exchange Agent with respect to the conversion offers. The carrying values of the tendered notes on Sept. 30, 2010 were $399 million and $1.544 billion for the 2036 and 2016 Convertible Notes, respectively.

This will result in the issuance of an aggregate of 274 million shares of Ford’s common stock and the payment of an aggregate of $534 million in cash premiums on the expected settlement date of Nov. 30, 2010. The cash premiums reflect in large part the present value of the interest payments that would have been made on the tendered 2036 and 2016 Convertible Notes to the first date (Dec. 20, 2013, and Nov. 20, 2014, respectively) on which Ford could have terminated holders' conversion rights under the Convertible Notes. The shares of Ford common stock to be issued on the settlement date with respect to the conversion offers have been included in Ford’s calculation of diluted earnings per share since the beginning of the year. In addition to the shares of Ford common stock and cash premiums, Ford will pay accrued and unpaid interest on tendered Convertible Notes for the period from the last interest payment date to (but excluding) the settlement date, which will total $14 million.

Upon settlement of the conversion offers, $25 million principal amount and $883 million principal amount of the 2036 and 2016 Convertible Notes, respectively, will remain outstanding. After settlement, the carrying values of the remaining notes outstanding will be $18 million and $688 million for the 2036 and 2016 Convertible Notes, respectively.

Holders of the 2036 Convertible Notes who validly tendered and did not withdraw their Convertible Notes by midnight, New York City time, on the Expiration Date and whose Convertible Notes were accepted for purchase will receive, for each $1,000 principal amount of the 2036 Convertible Notes converted, 108.6957 shares of Ford’s common stock, plus $190 in cash, plus the applicable accrued and unpaid interest.

Holders of the 2016 Convertible Notes who validly tendered and did not withdraw their Convertible Notes by midnight, New York City time, on the Expiration Date and whose Convertible Notes were accepted for purchase will receive, for each $1,000 principal amount of the 2016 Convertible Notes converted, 107.5269 shares of Ford’s common stock, plus $215 in cash, plus the applicable accrued and unpaid interest.

The conversion offers will result in a fourth quarter 2010 special item charge of approximately $960 million reflecting the cash premiums and non-cash losses (reflecting the difference between the carrying and fair values of the debt) for the tendered 2036 and 2016 Convertible Notes.

LINK

[phillyc]

Originally Posted by jpd80

And more debt goes bye bye........

LINK

If they are launching such an offer mid quarter, they are expecting solid Q4/2010 results. But, what i bolded is what sticks for me and the interest saving!

[jpd80]

Originally Posted by phillyc

If they are launching such an offer mid quarter, they are expecting solid Q4/2010 results. But, what i bolded is what sticks for me and the interest saving!

It's been a truly stellar performance by Ford in 2010, the year they achieved so much
with new generation products like Focus, Explorer and new engined F150 ready to drop.

Ford is showing the same kind of strength and efficiency that Toyota had a few years back,
I hope Ford makes every post a winner in 2011, EB Falcon and diesel Territory for us.

[phillyc]

Originally Posted by jpd80

It's been a truly stellar performance by Ford in 2010, the year they achieved so much
with new generation products like Focus, Explorer and new engined F150 ready to drop.

Ford is showing the same kind of strength and efficiency that Toyota had a few years back,
I hope Ford makes every post a winner in 2011, EB Falcon and diesel Territory for us.

I expect an uptick in Falcon sales to 2,800-3,000/mth in 2011, a large part of that will be from FPV sales IMO. News of Coyote/Miami is spreading like wildfire. I say don't underestimate the pulling power of a cult V8. Diesel in an updated Territory will surely kick some goals too.

The big winner in 2011 for me for Ford will be Fiesta, regularly hitting 1500/mth, but Ranger becoming Fords best seller with 3,000/mth. Yep, its a big call, but i truly believe it can take on Hilux and conquest sales.

Above all, i want to see above market growth with profit!

[jpd80]

Originally Posted by phillyc

I expect an uptick in Falcon sales to 2,800-3,000/mth in 2011, a large part of that will be from FPV sales IMO. News of Coyote/Miami is spreading like wildfire. I say don't underestimate the pulling power of a cult V8. Diesel in an updated Territory will surely kick some goals too.

The big winner in 2011 for me for Ford will be Fiesta, regularly hitting 1500/mth, but Ranger becoming Fords best seller with 3,000/mth. Yep, its a big call, but i truly believe it can take on Hilux and conquest sales.

Above all, i want to see above market growth with profit!

You can feel that Ford is getting delivery of key products sorted out, we need the desirable versions
to be ready/on tap for dealers to take full advantage of the resurgence in buyer interest.

This is a golden opportunity for FoA to change buyer perception of products and dealers,
Let's hope everyone works together next year and takes full advantage of new products
like Ranger, Ecoboost Falcon, Diesel Territory, New Focus, Updated Mondeo and of course, Fiesta.

The new GS and GT may turn out to be the shrewdest move that Ford and FPV have ever pulled,
everyone knows the engines have huge potential and power is clearly being understated,
a deliberate move to give HSV nothing to work with......

[Fordman1]

Originally Posted by phillyc

I expect an uptick in Falcon sales to 2,800-3,000/mth in 2011, a large part of that will be from FPV sales IMO. News of Coyote/Miami is spreading like wildfire. I say don't underestimate the pulling power of a cult V8. Diesel in an updated Territory will surely kick some goals too.

The big winner in 2011 for me for Ford will be Fiesta, regularly hitting 1500/mth, but Ranger becoming Fords best seller with 3,000/mth. Yep, its a big call, but i truly believe it can take on Hilux and conquest sales.

Above all, i want to see above market growth with profit!

Falcon Sales about 2300 per month until Qtr 3 2011 I think. Until LiLPG and the Ecoboost I4 come on stream the Falcon will continue to struggle. Territory close to 2000 a month from about April I reckon - that diesel can't come quickly enough !!

[phillyc]

Originally Posted by Barraxr8

Falcon Sales about 2300 per month until Qtr 3 2011 I think. Until LiLPG and the Ecoboost I4 come on stream the Falcon will continue to struggle. Territory close to 2000 a month from about April I reckon - that diesel can't come quickly enough !!

I thought LiLPG & Ecoboost were coming in Q1 2011 (appears not then) with Terri v2 coming in Q2 2011 (which might be right then).

Well if the FPV vehicles can crack 2500 in 2011 then that will be a rise of nearly double over 2010. So, that is at least 100/mth!

Still can't understand lack of diesel ute. But anyway.

Ford's One Ford plan and it's integrated marketing will hopefully spell some dividends and continued profit and growth here in Australia. The new ads are a solid start. IIRC Ford Oz are predicting 15% market share for Fiesta which would be 1500-2000/mth and challenging for segment leadership.

When is T6 Ranger due?

[Bossxr8]

The continued delay in LPi Falcon was a massive F up. It was supposed to be on sale by now. LPG makes up about 20-30% of Falcon sales and at the moment they have no LPG Falcons they can sell. Its one of the main reasons why they needed so many down days before Christmas because that is a huge chunk of sales that have dissapeared.

It will be lucky if its on sale by 3rd quarter 2011 the way its going. Dissapointing as its a really neatly integrated setup, just looking under the bonnet you can hardly pick it from the petrol version.

[jpd80]

Originally Posted by Bossxr8

The continued delay in LPi Falcon was a massive F up. It was supposed to be on sale by now. LPG makes up about 20-30% of Falcon sales and at the moment they have no LPG Falcons they can sell. Its one of the main reasons why they needed so many down days before Christmas because that is a huge chunk of sales that have dissapeared.

It will be lucky if its on sale by 3rd quarter 2011 the way its going. Dissapointing as its a really neatly integrated setup, just looking under the bonnet you can hardly pick it from the petrol version.

Another market Ford is letting evaporate, Falcon variations disappearing one by one.

Can anyone confirm that Ecoboost I-4 is delayed until the 3rd quarter as well?

[Dr Smith]

Originally Posted by Bossxr8

The continued delay in LPi Falcon was a massive F up. It was supposed to be on sale by now. LPG makes up about 20-30% of Falcon sales and at the moment they have no LPG Falcons they can sell. Its one of the main reasons why they needed so many down days before Christmas because that is a huge chunk of sales that have dissapeared.

It will be lucky if its on sale by 3rd quarter 2011 the way its going. Dissapointing as its a really neatly integrated setup, just looking under the bonnet you can hardly pick it from the petrol version.

Any tips on the reason for the delay...I actually thought LILPG was first set for BA until inter-supplier legal fighting.

[Bossxr8]

Originally Posted by jpd80

Another market Ford is letting evaporate, Falcon variations disappearing one by one.

Can anyone confirm that Ecoboost I-4 is delayed until the 3rd quarter as well?

Can't confirm but heard it was delayed a bit.

[Bossxr8]

Originally Posted by Dr Smith

Any tips on the reason for the delay...I actually thought LILPG was first set for BA until inter-supplier legal fighting.

At a guess it must be cold start related, as its never been done before in a single fuel application AFAIK. Warm running should not be an issue as all the works been done before in that regard by previous dual fuel installations.

[G6E Turbo 2]

Originally Posted by Bossxr8

The continued delay in LPi Falcon was a massive F up. It was supposed to be on sale by now. LPG makes up about 20-30% of Falcon sales and at the moment they have no LPG Falcons they can sell. Its one of the main reasons why they needed so many down days before Christmas because that is a huge chunk of sales that have dissapeared.

It will be lucky if its on sale by 3rd quarter 2011 the way its going. Dissapointing as its a really neatly integrated setup, just looking under the bonnet you can hardly pick it from the petrol version.

I hope we dont see the Taxi fleet running Holden dominant numbers
soon because of this delay

Ford never cease to amaze me at the opportunities they leave behind at
times

No Std V8 is a joke too in my opinion. I want a G8E

[Dr Smith]

Originally Posted by G6E Turbo 2

I hope we dont see the Taxi fleet running Holden dominant numbers
soon because of this delay

Ford never cease to amaze me at the opportunities they leave behind at
times

No Std V8 is a joke too in my opinion. I want a G8E

I don't think this is likely as a majority of taxi's actually start off as near new s/h auction purchased vehicles in the case of past Falc and Commodores. So the loss in brand new sales isn't as big a hit as thought especially considering Ford stopped building a factory taxi back in the days of the BA. I think a few dealers fit taxi packs on new cars atm which would include spray painting in Vic.

[Joe5619]

It is ashame some of these projects have (are) taking so long..

[Bossxr8]

LPi delay wasn't cold start as I assumed, more just design delays in trying to integrate the system into the standard plastic manifold which has caused more than a few design problems getting it all to fit while leaving enough room around it for it to be fitted on the line.

[jpd80]

Originally Posted by Bossxr8

LPi delay wasn't cold start as I assumed, more just design delays in trying to integrate the system into the standard plastic manifold which has caused more than a few design problems getting it all to fit while leaving enough room around it for it to be fitted on the line.

A little birdie suggested to me it was all due to that 11th hour decision to keep the I-6,
the Euro IV I-6 and Ecoboost I-4 petrol work took priority over the LILPG
the work needed to get all versions ready meant LILPG was left until last.

[phillyc]

Originally Posted by jpd80

A little birdie suggested to me it was all due to that 11th hour decision to keep the I-6,
the Euro IV I-6 and Ecoboost I-4 petrol work took priority over the LILPG
the work needed to get all versions ready meant LILPG was left until last.

They are reasonable reasons to delay the LiLPG but still not good.