Ford Reports First Quarter 2009 Net Loss Of $1.4 Billion+; Strengthens Balance Sheet, Launches Key New Vehicles
* Net loss of $1.4 billion, or $0.60 per share, for the first quarter of 2009; pre-tax operating loss of approximately $2 billion, excluding special items++
* Results for total company operations improved as compared with the fourth quarter of 2008
* Ended first quarter with Automotive gross cash of $21.3 billion.+++ Significantly reduced operating-related cash outflow compared with the third and fourth quarters of 2008 despite further declines in volume
* Launched new Ford Fusion, Fusion Hybrid, Mustang, Focus RS and four-door Fiesta as well as Lincoln MKZ, Mercury Milan and Milan Hybrid. Gained market share in Europe and South America
* Executed actions to reduce Automotive debt obligations by $10.1 billion – which were completed and recognized in March and April – and lower annual cash interest payments by more than $500 million
* Modified collective bargaining agreement with the UAW, lowering Ford’s annual U.S. labor costs by about $500 million; reached agreement in principle with the UAW, subject to court and other approvals, to allow Ford to settle up to half of its cash VEBA obligations with Ford common stock
* Reduced Automotive structural costs by $1.9 billion, including $1.3 billion in North America
* Ford remains on track to meet or beat its financial targets based on current planning assumptions, including the target for its overall and North American Automotive pre-tax results to be breakeven or better in 2011, excluding special items
DEARBORN, Mich. – Ford Motor Company [NYSE: F] today reported a first quarter net loss of $1.4 billion, or $0.60 per share. This compares with net income of $70 million, or $0.03 per share, in the first quarter of 2008.
Ford’s first quarter 2009 pre-tax operating loss, excluding special items, was approximately $2 billion, a decline from a profit of $686 million a year ago. On an after-tax basis, Ford lost $1.8 billion in the first quarter, or $0.75 per share, compared with a profit of $477 million, or $0.20 per share, a year ago.++
“Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world,” said Ford President and CEO Alan Mulally. “Despite the challenges, Ford made strong progress on our transformation plan by gaining share with strong new products, slowing operating-related cash outflows, reducing outstanding debt, lowering our structural costs and reaching new agreements with the UAW.”
Ford finished the first quarter with $21.3 billion in Automotive gross cash and reiterated that based on current planning assumptions it does not expect to seek a bridge loan from the U.S. government.
In the first quarter, Ford took a number of actions to strengthen its overall business, and also started discussions with interested parties regarding the sale of Volvo.
Ford and Ford Motor Credit Company executed actions to reduce Ford’s debt obligations by $10.1 billion at par value and lower the company’s annual cash interest payments by more than $500 million. Of that $10.1 billion, $2.4 billion in debt obligations were reduced in the first quarter and will be reflected in Ford’s first quarter financial statements. The remainder was reduced on April 8, 2009, and will be reflected in Ford’s second quarter results. In addition, as previously announced, Ford drew $10.1 billion under its secured revolving credit facility, providing protection against the instability of the capital markets and the uncertain state of the global economy.
Additionally, Ford negotiated and ratified modifications to its collective bargaining agreement with the United Auto Workers union that will lower the company’s overall labor costs in the U.S. by about $500 million annually. The company announced a new buyout program for U.S. hourly employees that will be completed in the second quarter. Ford also reached an agreement in principle with the UAW which, subject to court and other approvals, would allow the company to settle up to half of its future cash VEBA obligations with Ford common stock.
Based on current planning assumptions, Ford said it remains on track to meet or beat its financial targets, including the target for its overall and North American Automotive pre-tax results to be breakeven or better in 2011, excluding special items.
Download Full Financial Release (PDF): http://media.ford.com/images/10031/1Qfinancials09.pdf
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