Ford Motor Company (NYSE: F):
- Third quarter pre-tax profit of $1.2
billion, a decrease of $1.4 billion compared with a year ago;
after-tax earnings per share of 24 cents, excluding special items;
21st consecutive profitable quarter
- Net income of $835 million, or 21 cents
per share, a decrease of $437 million compared with a year ago; net
income includes pre-tax special item charges of $160 million,
largely to support European transformation plan
- Wholesale volume and company revenue
declined year-over-year by 3 percent and 2 percent, respectively;
market share higher in Europe and record third quarter market share
in Asia Pacific; record market share in China
- North America and Asia Pacific
profitable
- Strong results at Ford Credit — better
than a year ago
- Automotive operating-related cash flow
negative $700 million; Automotive gross cash of $22.8 billion at
end of third quarter exceeded debt by $7.9 billion
- Unprecedented cadence of new products
continues — all launches on track, including the all-new F-150
- Guidance unchanged from the company’s
Sept. 29 Investor Day, including 2014 pre-tax profit guidance of
about $6 billion, excluding special items, and strong growth and
financial performance in 2015
Financial Results
Summary* Third Quarter First Nine Months
2013 2014 B/(W)
2013 2013 2014
B/(W) 2013 Wholesales (000) 1,545 1,493 (52 ) 4,720 4,743 23
Revenue (Bils.) $ 35.8 $
34.9 $ (0.9 ) $ 109.3 $
108.2 $ (1.1 )
Operating
Results
Pre-tax results (Mils.)** $ 2,589 $ 1,181 $ (1,408 ) $ 7,290 $
5,161 $ (2,129 ) After-tax results (Mils.)** 1,821 936 (885 ) 5,296
3,585 (1,711 ) Earnings per share** 0.45 0.24 (0.21 ) 1.31 0.89
(0.42 )
Special items
pre-tax (Mils.)
$ (498 ) $ (160 ) $ 338 $ (1,257 ) $ (763 ) $ 494
Net income
attributable to Ford
After-tax results (Mils.) $ 1,272 $ 835 $ (437 ) $ 4,116 $ 3,135 $
(981 ) Earnings per share 0.31 0.21 (0.10 ) 1.02 0.78 (0.24 )
Automotive
Operating-related cash flow (Bils.) $ 1.6 $ (0.7 ) $ (2.3 ) $ 5.6 $
3.1 $ (2.5 ) Gross cash (Bils.) $ 26.1 $ 22.8 $ (3.3 ) $
26.1 $ 22.8 $ (3.3 ) Debt (Bils.)
(15.8 ) (14.9 ) 0.9 (15.8 )
(14.9 ) 0.9 Net cash (Bils.) $
10.3 $ 7.9 $ (2.4 ) $
10.3 $
7.9 $ (2.4 )
* See end note on page 9.
** See end note on page 9.
Ford Motor Company (NYSE: F) today reported a 2014 third quarter
pre-tax profit of $1.2 billion, its 21st consecutive profitable
quarter.
The company’s pre-tax profit, excluding special items, was $1.4
billion lower than a year ago. This is more than explained by three
factors — lower volume, higher warranty costs and adverse balance
sheet exchange effects.
After-tax earnings per share were 24 cents, excluding special
items, 21 cents lower than a year ago.
Net income for the quarter was $835 million, or 21 cents per
share, a decrease of $437 million, or 10 cents, from a year ago.
Net income included pre-tax special item charges of $160 million
for separation-related actions, primarily to support Ford’s
European transformation plan.
Third quarter wholesale volume and company revenue declined
year-over-year by 3 percent and 2 percent, respectively. Market
share was higher in Europe, and the company reported record third
quarter market share in Asia Pacific with record market share in
China for any quarter.
North America and Asia Pacific were profitable, but pre-tax
results were lower than a year ago for all of Ford’s Automotive
business units except Middle East & Africa. Ford Credit
delivered strong results that were better than a year ago.
Ford’s full-year outlook for company pre-tax profit is unchanged
at about $6 billion, excluding special items, as it continues its
aggressive implementation of its One Ford plan.
“During the third quarter, we continued to introduce an
unprecedented number of new vehicles and invest heavily in the new
products and technologies that will deliver strong profitable
growth beginning next year,” said Mark Fields, president and CEO.
“We also addressed business challenges head-on using our proven One
Ford plan. Everyone at Ford remains focused on accelerating our
pace of progress, while delivering product excellence and
innovation in every part of our business.”
Ford’s Automotive operating-related cash flow was negative $700
million in the third quarter. This is more than explained by
unfavorable changes in working capital, including the effects of
the five weeks of downtime in the quarter at the Dearborn Truck
Plant as the company transitions to the all-new F-150, as well as
supplier parts shortages. In the fourth quarter, working capital
changes are expected to be positive. The company ended the third
quarter with Automotive gross cash of $22.8 billion, exceeding
debt by $7.9 billion, with Automotive liquidity of
$33.6 billion.
In the third 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. Ford also completed the
previously announced share repurchase program.
Ford’s third quarter operating effective tax rate was 31
percent. The company continues to expect its full-year operating
effective tax rate to be about 35 percent.
AUTOMOTIVE SECTOR
Third Quarter
First Nine Months 2013 2014
B/(W) 2013 2013 2014 B/(W)
2013 Wholesales (000) 1,545 1,493 (52 )
4,720 4,743 23 Revenue (Bils.) $
33.9 $ 32.8 $ (1.1 ) $
103.8 $ 102.0 $ (1.8 ) Operating Margin
(Pct.) 7.0 % 2.5 % (4.5 ) pts. 6.2 % 4.2 % (2.0 ) pts. Pre-tax
results (Mils.) $ 2,226 $ 686 $ (1,540 ) $ 5,973 $ 3,775 $ (2,198 )
Total Automotive third quarter wholesale volume and revenue
decreased by 3 percent from a year ago. The lower volume is more
than explained by an unfavorable change in dealer stocks related to
product launch effects and supplier parts shortages, as well as
declining industry volume in South America. Higher industry volumes
in other regions was a partial offset.
Operating margin was 2.5 percent, a decrease of 4.5 percentage
points from a year ago. Automotive pre-tax profit of
$686 million was $1.5 billion lower than a year ago, mainly
explained by higher warranty costs, including recalls, mainly in
North America, and lower volumes in North and South America, as
well as adverse balance sheet exchange effects, mainly in South
America.
“The continued implementation of our One Ford plan enabled us to
reach our 21st consecutive quarter of profitability, and we are
encouraged in particular by our record market share in China,” said
Bob Shanks, executive vice president and chief financial officer.
“Our focus remains on profitably growing the business, and our
investments this year are laying the groundwork for our future
success.”
North America
Third Quarter
First Nine Months 2013 2014
B/(W) 2013 2013 2014 B/(W)
2013 Wholesales (000) 725 665 (60 ) 2,262
2,142 (120 ) Revenue (Bils.) $
21.2 $ 19.9 $ (1.3 ) $
64.5 $ 61.5 $ (3.0 ) Operating Margin
(Pct.) 10.9 % 7.1 % (3.8 ) pts. 10.9 % 8.7 % (2.2 ) pts. Pre-tax
results (Mils.) $ 2,296 $ 1,410 $ (886 ) $ 7,009 $ 5,350 $ (1,659 )
North America continues to benefit from robust industry sales,
Ford’s strong product lineup, continued discipline in matching
production to demand and a lean cost structure.
North America’s pre-tax profit was adversely affected in the
quarter by higher warranty costs and lower volume.
Wholesale volume and revenue declined 8 percent and 6 percent,
respectively. The volume decrease is explained primarily by product
launch effects, including five weeks of downtime in the quarter at
the Dearborn Truck Plant for the F-150 launch, and supplier parts
shortages. North America’s decline in revenue is more than
explained by lower wholesale volume.
Third quarter U.S. market share was 14.1 percent, down 0.8
percentage points from a year ago. The decline primarily reflects a
planned reduction in daily rental sales and lower F-150 share as
Ford prepares for the new vehicle by continuing to balance share,
transaction prices and stocks.
For the full year, Ford continues to expect North America’s
pre-tax profit to be lower than 2013 and operating margin to be at
the low end of the 8 percent to 9 percent range.
South America
Third Quarter
First Nine Months 2013 2014
B/(W) 2013 2013 2014
B/(W) 2013 Wholesales (000) 143 113 (30 ) 403
331 (72 ) Revenue (Bils.) $ 2.8
$ 2.3 $ (0.5 ) $ 8.1 $
6.3 $ (1.8 ) Operating Margin (Pct.) 5.7 %
(7.3 ) % (13.0 ) pts. 1.1 % (15.4 ) % (16.5 ) pts. Pre-tax results
(Mils.) $ 160 $ (170 ) $ (330 ) $ 93 $ (975 ) $ (1,068 )
South America continues to expand its product lineup and has
replaced legacy products with global One Ford offerings. Ford is
working to manage the effects of slowing GDP growth, declining
industry volumes in its larger markets, weaker currencies and high
inflation, as well as policy uncertainty in some countries.
South America reported a pre-tax loss of $170 million in the
third quarter, a decline of $330 million from the prior year. The
decline is primarily explained by lower volume and adverse balance
sheet exchange effects.
In the third quarter, wholesale volume and revenue decreased by
21 percent and 17 percent, respectively. The lower volume is
primarily explained by a 700,000-unit decline from last year’s
seasonally adjusted annual rate (SAAR) of 5.7 million units. This
reflects the impact of the weakening economy in Brazil, import
restrictions in Argentina and lower production in Venezuela
resulting from the limited availability of U.S. dollars. Also
contributing is a non-repeat of last year’s stock build. The
revenue decline is more than explained by lower volume and weaker
currencies, partially offset by higher pricing.
South America market share, at 8.8 percent, was down 0.4
percentage points from a year ago, more than explained by the
phase-out of the Fiesta Classic.
For the full year, Ford continues to expect South America to
incur a loss of about $1 billion.
Europe
Third Quarter
First Nine Months 2013 2014
B/(W) 2013 2013 2014 B/(W)
2013 Wholesales (000) 303 321 18 1,010
1,064 54 Revenue (Bils.) $
6.4 $ 6.9 $ 0.5 $
20.3 $ 22.7 $ 2.4 Operating
Margin (Pct.) (2.8 ) % (6.4 ) % (3.6 ) pts. (4.5 ) % (2.7 ) % 1.8
pts. Pre-tax results (Mils.) $ (182 ) $ (439 ) $ (257 ) $ (913 ) $
(619 ) $ 294
Ford continues to implement its Europe transformation plan
focused on product, brand and cost.
Europe reported a third quarter pre-tax loss of $439 million, a
$257 million decline from a year ago. The decline is more than
explained by Russia, balance sheet exchange effects and other
factors including lower component pricing and non-recurrence of
prior year gains.
In the third quarter, wholesale volume and revenue improved from
a year ago, up 6 percent and 7 percent, respectively. The higher
volume reflects a 700,000-unit increase in the Europe 20 SAAR, to
14.5 million units, higher market share and lower dealer stock
reductions than a year ago. The increase was offset partially by
lower volumes in Russia and Turkey. Europe’s higher revenue
reflects higher volume in the Europe 20 markets.
Europe 20 market share, at 8.4 percent, was up 0.4 percentage
points from a year ago. This was driven by a 0.5 percentage
point improvement in Ford’s retail passenger share of the five
major European markets, to 8.8 percent, including the effect
of Ford’s expanded SUV lineup. It also was driven by a 2 percentage
point improvement in the company’s commercial vehicle share, to 13
percent, reflecting the success of Ford’s full line of new Transit
vehicles and continued strong performance of the Ranger compact
pickup.
For the full year, Ford continues to expect Europe to incur a
loss of about $1.2 billion, an improvement compared with 2013.
Middle East & Africa
Third Quarter
First Nine Months 2013 2014
B/(W) 2013 2013 2014 B/(W)
2013 Wholesales (000) 44 48 4 150
148 (2 ) Revenue (Bils.) $ 1.0 $
1.1 $ 0.1 $ 3.5 $
3.4 $ (0.1 ) Operating Margin (Pct.)
(2.4 ) % (1.4 ) % 1.0 pts. 1.0 % 1.8 % 0.8 pts. Pre-tax results
(Mils.) $ (25 ) $ (15 ) $ 10 $ 35 $ 62 $ 27
The Middle East & Africa business unit was created to
facilitate better customer service and further expand Ford’s
presence in this fast-growing region.
The business unit reported a loss of $15 million for the
third quarter, a $10 million improvement from a year ago.
In the third quarter, wholesale volume and revenue improved from
a year ago by 9 percent and 5 percent, respectively.
Ford’s full-year guidance for Middle East & Africa remains
unchanged, with the region expected to be about breakeven.
Asia Pacific
Third Quarter
First Nine Months 2013 2014
B/(W) 2013 2013 2014 B/(W)
2013 Wholesales (000) 330 346 16 895
1,058 163 Revenue (Bils.) $
2.5 $ 2.6 $ 0.1 $
7.4 $ 8.1 $ 0.7 Operating Margin
(Pct.) 4.6 % 1.7 % (2.9 ) pts. 3.0 % 6.1 % 3.1 pts. Pre-tax results
(Mils.) $ 116 $ 44 $ (72 ) $ 218 $ 494 $ 276
Ford continues to invest for growth in Asia Pacific through both
new and expanded plants, new products and the introduction of
Lincoln in China.
Asia Pacific reported a third quarter pre-tax profit of
$44 million, a decrease of $72 million from a year ago.
The decrease is more than explained by higher structural costs and
unfavorable exchange, partially offset by favorable market factors.
The higher structural costs reflect Ford’s continued investment in
products and growth, including five new plants that will come on
line over the next nine months, as well as the launch of
Lincoln.
In the third quarter, wholesale volume was up 5 percent from a
year ago, and net revenue, which excludes the company’s China joint
ventures, grew 3 percent. Wholesale volume in China increased 10
percent from a year ago. The higher volume in Asia Pacific is more
than explained by higher market share and industry volume. Ford
estimates the third quarter SAAR for the region at
38.9 million units, up 1.8 million units from a year ago,
explained primarily by China. Higher revenue is more than explained
by favorable mix.
Third quarter operating margin for Asia Pacific was 1.7 percent,
2.9 percentage points lower than a year ago.
Ford’s market share, at 3.6 percent, was a record for the third
quarter and was 0.2 percentage points higher than a year ago. The
improvement was driven by China, where Ford’s market share improved
0.4 percentage points to a record 4.7 percent, reflecting
continued strong sales across the company’s vehicle lineup.
For the full year, Ford continues to expect Asia Pacific to earn
a pre-tax profit of about $700 million, which is higher than a year
ago.
Other Automotive
The third quarter loss of $144 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 Third Quarter
Actual
Fourth Quarter
Forecast
Units O/(U) 2013 Units O/(U)
2013 (000) (000) (000) (000) North America
695 (56 )
715 (41 ) South America 97 (28 ) 108 4 Europe 326 3 320 (13
) Middle East & Africa 20 7 19 2 Asia Pacific 352 17 375
13 Total 1,490 (57 ) 1,537 (35 )
* Includes Ford brand and JMC brand
vehicles produced by our unconsolidated affiliates.
In the third quarter, total company production was about 1.5
million units, 57,000 units lower than a year ago. This was 45,000
units lower than Ford’s previous guidance.
The company expects fourth quarter production to be about 1.5
million units, down 35,000 units from a year ago because of planned
shutdowns, including three weeks of downtime at the Dearborn Truck
Plant for the new F-150. Compared with the third quarter, fourth
quarter production is up 47,000 units. The increase is largely
driven by the launch of new and freshened products, including
Transit and Mustang.
FINANCIAL SERVICES SECTOR
Third Quarter
First Nine Months 2013 2014
B/(W) 2013 2013 2014 B/(W)
2013 Revenue (Bils.) $ 1.9 $
2.1 $ 0.2 $ 5.5 $
6.2 $ 0.7 Ford Credit pre-tax results (Mils.) $ 427 $
498 $ 71 $ 1,388 $ 1,431 $ 43 Other Financial Services pre-tax
results (Mils.) (64 ) (3 ) 61 (71 ) (45 ) 26 Financial Services
pre-tax results (Mils.) $ 363 $
495 $ 132 $
1,317 $ 1,386 $ 69
Ford Motor Credit Company
As an integral part of Ford’s global growth and value creation
strategy, Ford Credit continued to deliver strong results in the
third quarter.
Ford Credit’s third quarter pre-tax profit of $498 million was
$71 million higher than a year ago. The higher pre-tax profit is
more than explained by higher volume, reflecting increases in
nearly all financing products, including non-consumer and consumer
finance receivables globally, as well as leasing in North
America.
For the full year, Ford continues to expect Ford Credit pre-tax
profit to be $1.8 billion to $1.9 billion. The company’s guidance
for Ford Credit’s year-end managed receivables and managed leverage
also is unchanged. Ford now expects Ford Credit’s distributions to
its parent to be about $400 million, up from the prior guidance of
$250 million. This increase is primarily driven by higher net
income at Ford Credit.
2014 OUTLOOK
This year is a critical building block in the One Ford plan.
Ford continues to expect its 2014 pre-tax profits to be about $6
billion, excluding special items. The company is on track with its
record 23 global new product launches in preparation for a more
profitable 2015.
Ford continues to expect its North America operating margin to
be at the lower end of its 8 percent to 9 percent guidance range,
and better results in Europe, Asia Pacific and Ford Credit compared
with 2013.
2014 KEY METRICS -- BUSINESS UNITS
Memo: 2013 2014
Full 2014 Full Year First Nine Year
Compared with 2013 Months Results
Plan Outlook Results
Automotive (Mils.)*
North America $ 8,809 Lower On
Track $ 5,350 - Operating Margin
10.2 % 8 - 9% Low End Of Range 8.7 % South America $ (33 ) About
Equal About $(1,000) $ (975 ) Europe (1,442 ) Better About $(1,200)
(619 ) Middle East & Africa (69 ) About Breakeven On Track 62
Asia Pacific 327 About Equal About $700 494 Net Interest Expense
(801 ) About Equal About $(700) (500 )
Ford
Credit (Mils.)
$ 1,756 About Equal $1,800 - $1,900 $ 1,431 * Excludes
special items
2014 PLANNING ASSUMPTIONS AND KEY
METRICS Memo: 2013 2014 Full
First Nine Year 2014 Full Year Months
Results Plan Outlook Results
Planning
Assumptions (Mils.)
Industry Volume * -- U.S. 15.9 16.0 - 17.0 16.8 16.7
-- Europe 20
13.8 13.5 - 14.5 14.5 14.5
-- China
22.2 22.5 - 24.5 23.8 23.5
Key
Metrics
Automotive (Compared with 2013): - Revenue (Bils.) $ 139.4
About Equal On Track $ 102.0 - Operating Margin ** 5.4 %
Lower On Track 4.2 % - Operating-Related Cash Flow (Bils.)
*** $ 6.1 Substantially Lower Lower $ 3.1
Ford Credit
(Compared with 2013): - Pre-Tax Profit (Bils.) $ 1.8 About
Equal $1.8 - $1.9 $ 1.4
Company: - Pre-Tax Profit
(Bils.) *** $ 8.6 $7 - $8 About $6 $ 5.2 * 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 12 and 14
2015 OUTLOOK
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
In 2015, Ford expects to realize the benefits of its global
product investment and growth strategies, and will continue its
strong product push with 16 global vehicle launches. The company
expects its pre-tax profit, excluding special items, to be
significantly higher — in the $8.5 billion to $9.5 billion range —
with all five Automotive regions improving on 2014 results.
“We are committed to offering our customers the freshest lineup
of world-class vehicles in the industry,” said Fields. “Our One
Ford plan remains fundamental to our performance going forward, and
our investments this year will fuel profitable growth in 2015.”
2015 GUIDANCE
Outlook
Planning
Assumptions (Mils.)
Industry Volume * -- U.S. 16.8 - 17.5
-- Europe 20
14.8 - 15.3
-- China
24.0 - 26.0
Key
Metrics
Automotive: - Revenue Higher *** - Operating Margin
** Higher *** - Operating-Related Cash Flow ** Positive
Ford Credit: - Pre-Tax Profit Equal To Or Higher ***
Company: - Pre-Tax Profit (Bils.) ** $8.5 - $9.5
* Includes medium and heavy trucks ** Excludes special items
*** Compared with 2014
* 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 September 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.
- 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 October 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 third
quarter 2014 financial results at 7:00 a.m. EDT today. The
following briefings will be held
after the announcement:
- At 9:00 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 third quarter results.
- At 11:00 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 third 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 -
Friday, October 24, 2014 Earnings Call: 9:00 a.m. EDT
Toll-Free: 1.800.299.9630International: 1.617.786.2904Earnings
Passcode: Ford Earnings
Fixed Income: 11:00 a.m. EDT Toll-Free:
1.888.339.2688International: 1.617.847.3007Fixed Income Passcode:
Ford Fixed Income
REPLAYS (Available after
12:00 p.m. EDT the day of the event through Friday, October 31,
2014) www.shareholder.ford.com
Toll Free: 1.888.286.8010International: 1.617.801.6888
Replay Passcodes: Earnings:
66498332Fixed Income: 11783947
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 189,000 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
Third Quarter 2014 First Nine Months 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* $ 835 $ 936 $ 3,135 $ 3,585 Effect of dilutive
2016 Convertible Notes** 12 12 36 36 Diluted
after-tax results $ 847 $ 948 $ 3,171 $ 3,621
Basic and Diluted
Shares (Mils.)
Basic shares (Average shares outstanding) 3,861 3,861 3,915 3,915
Net dilutive options 48 48 47 47 Dilutive 2016 Convertible Notes
101 101 100 100 Diluted shares 4,010
4,010 4,062 4,062 EPS (Diluted) $ 0.21 $ 0.24
$ 0.78 $ 0.89 * Excludes Income/(Loss) attributable to
non-controlling interests; special items detailed on page 13 ** 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: Third Quarter
First Nine Months Full Year 2013 2014
2013 2014 2013 (Mils.) (Mils.) (Mils.) (Mils.)
(Mils.)
Automotive
North America $ 2,296 $ 1,410 $
7,009 $ 5,350 $ 8,809 South America 160 (170 )
93 (975 ) (33 ) Europe (182 ) (439 ) (913 ) (619 ) (1,442 ) Middle
East & Africa (25 ) (15 ) 35 62 (69 ) Asia Pacific 116 44 218
494 327 Other Automotive (139 ) (144 ) (469 ) (537 ) (656 ) Total
Automotive (excl. special items) $ 2,226 $ 686 $ 5,973 $ 3,775 $
6,936 Special items -- Automotive (498 ) (160 ) (1,257 ) (763 )
(1,568 ) Total Automotive $ 1,728 $ 526 $ 4,716 $ 3,012 $ 5,368
Financial
Services
Ford Credit $ 427 $ 498 $ 1,388 $ 1,431 $ 1,756 Other Financial
Services (64 ) (3 ) (71 ) (45 ) (84 ) Total Financial Services $
363 $ 495 $ 1,317 $ 1,386 $ 1,672
Total
Company
Pre-tax results $ 2,091 $ 1,021 $ 6,033 $ 4,398 $ 7,040 (Provision
for)/Benefit from income taxes (818 ) (188 ) (1,914 ) (1,261 ) 135
Net income $ 1,273 $ 833 $ 4,119 $ 3,137 $ 7,175 Less:
Income/(Loss) attributable to non-controlling interests 1 (2
) 3 2 (7 ) Net income attributable to Ford $
1,272 $ 835 $
4,116 $ 3,135 $ 7,182
Memo: Excluding special items Pre-tax results $ 2,589 $ 1,181 $
7,290 $ 5,161 $ 8,608 (Provision for)/Benefit from income taxes
(767 ) (247 ) (1,991 ) (1,574 ) (2,022 ) Less: Income/(Loss)
attributable to non-controlling interests 1 (2 ) 3 2
(7 ) After-tax results $ 1,821 $
936 $ 5,296 $
3,585 $ 6,593
TOTAL COMPANY SPECIAL
ITEMS Memo: Third Quarter First Nine
Months Full Year 2013 2014 2013
2014 2013 (Mils.) (Mils.) (Mils.) (Mils.) (Mils.)
Personnel-Related
Items
Separation-related actions* $ (250 ) $
(160 ) $ (700 ) $ (434 ) $ (856 )
Other
Items
Ford Sollers equity impairment — — — (329 ) — U.S. pension lump-sum
program (145 ) — (439 ) — (594 ) FCTA - subsidiary liquidation (103
) — (103 ) — (103 ) Ford Romania consolidation loss — —
(15 ) — (15 ) Total other items (248 ) — (557
) (329 ) (712 ) Total special items $ (498 ) $
(160 ) $ (1,257 ) $ (763
) $ (1,568 ) Tax special items $ (51 ) $ 59 $ 77 $ 313 $
2,157 Memo: Special Items impact on earnings per share** $
(0.14 ) $ (0.03 ) $ (0.29 ) $ (0.11 ) $ 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: Third Quarter First Nine Months
Full Year 2013 2014 2013 2014
2013 (Mils.) (Mils.) (Mils.) (Mils.) (Mils.) Interest
expense (GAAP) $ (204 ) $ (204 ) $
(617 ) $ (619 ) $ (829 )
Investment-related interest income (GAAP) 38 65 125 145 163
Interest income/(expense) on income taxes (GAAP) — (3 ) —
34 — Subtotal $ (166 ) $ (142 ) $ (492 ) $
(440 ) $ (666 ) Adjusted for items included / excluded from
net interest: Include: Gains/(Losses) on cash equiv. & mark.
securities* 34 (12 ) (7 ) 18 (7 ) Include: Gains/(Losses) on
extinguishment of debt — — (18 ) (5 ) (18 ) Other (29 ) (17 ) (80 )
(73 ) (110 ) Net Interest $ (161 ) $
(171 ) $ (597 ) $ (500 ) $ (801 )
* Excludes mark-to-market adjustments of our investment in
Mazda
AUTOMOTIVE
SECTOR GROSS CASH RECONCILIATION TO GAAP
2013 2014 Sep. 30 Dec. 31
Mar. 31 Jun. 30 Sep. 30 (Bils.) (Bils.)
(Bils.) (Bils.) (Bils.) Cash and cash equivalents $
5.7 $ 5.0 $ 4.5 $
4.7 $ 6.0 Marketable securities 20.4 20.1 20.7
21.1 16.9 Total cash and marketable securities (GAAP)
$ 26.1 $ 25.1 $ 25.2 $ 25.8 $ 22.9 Securities in transit* —
(0.3 ) — — (0.1 ) Gross cash $
26.1 $ 24.8 $ 25.2
$ 25.8 $ 22.8 * 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: Third
Quarter First Nine Months Full Year 2013
2014 2013 2014 2013 (Bils.)
(Bils.) (Bils.) (Bils.) (Bils.) Net cash provided by/(used
in) operating activities (GAAP) $ 2.0 $
0.6 $ 6.4 $ 6.7 $ 7.7 Items
included in operating-related cash flows Capital spending (1.5 )
(1.8 ) (4.6 ) (5.2 ) (6.6 ) Proceeds from the exercise of stock
options 0.1 0.1 0.3 0.2 0.3 Net cash flows from non-designated
derivatives (0.1 ) — (0.3 ) 0.1 (0.3 ) Items not included in
operating-related cash flows Cash impact of JSB and
personnel-reduction actions 0.1 — 0.2 0.1 0.3 Funded pension
contributions 1.1 0.3 3.9 1.1 5.0 Tax refunds and tax payments from
affiliates — — (0.3 ) (0.2 ) (0.3 ) Other (0.1 ) 0.1 —
0.3 — Operating-related cash flows $
1.6 $ (0.7 ) $ 5.6
$ 3.1 $ 6.1
For news releases, related materials and
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Follow at www.facebook.com/ford, www.twitter.com/ford or www.youtube.com/fordvideo1
Ford Motor CompanyMedia:Whitney
Eichinger1.313.390.5565weiching@ford.comEquity Investment Community:Erik
Eliason1.313.594.0613fordir@ford.comFixed Income Investment Community:Stephen
Dahle1.313.621.0881fixedinc@ford.comShareholder Inquiries:1.800.555.5259
or1.313.845.8540stockinf@ford.com
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