Ford Motor Company on January 28 reported a full-year 2009 pre-tax operating profit, excluding special items, of $454 million, a $7.3 billion improvement over a year ago.
The company said it now expects to be profitable for full-year 2010 on a pre-tax basis excluding special items, for North America, total Automotive and total company, with positive Automotive operating-related cash flow.
Ford posted full year net income of $2.7 billion, or 86 cents per share, driven in part by favorable net pricing, structural cost reductions, net gains on debt reduction actions and strong Ford Credit results. This marks the company’s first full year of positive net income since 2005 and a $17.5 billion improvement over 2008.
“While we still face significant business environment challenges ahead, 2009 was a pivotal year for Ford and the strongest proof yet that our One Ford plan is working and that we are forging a path toward profitable growth by working together as one team, leveraging our global scale,” said Ford president and CEO Alan Mulally. “In every part of the world, we are providing customers with great products, building a stronger business and contributing to a better world. Our progress has helped us gain market share in most of our major markets.”
Net income for the fourth quarter was $868 million, or 25 cents per share, a $6.8 billion improvement over a year ago. Excluding special items, Ford posted pre-tax operating profits totaling $1.8 billion during the fourth quarter, a $5.5 billion improvement from a year ago. On an after-tax basis, excluding special items, Ford posted an operating profit of $1.6 billion in the fourth quarter, or 43 cents per share, compared with a loss of $3.3 billion, or $1.40 per share, a year ago.
Ford North America operations posted a pre-tax operating profit in the fourth quarter, excluding special items, of $707 million, its second straight profitable quarter. Ford South America, Ford Europe and Ford Asia Pacific Africa also posted pre-tax operating profits in the fourth quarter.
As a result of Ford’s 2009 U.S. financial performance, the company will pay profit sharing to 43,000 eligible U.S. hourly employees consistent with the 2007 UAW-Ford Collective Bargaining Agreement. The average amount is expected to be approximately $450 per eligible employee. As previously announced, Ford is not awarding salaried employee performance bonuses globally under the company's bonus plan for 2009 company performance. However, the company did announce that U.S. salaried employees will receive merit increases in 2010, and the company's 401(k) matching program was reinstated on January 1, 2010.
Ford’s fourth quarter revenue was $35.4 billion, up $6.4 billion from a year ago. Revenue for the full year was $118.3 billion, a decline of $19.8 billion vs. a year ago.
Ford reduced its Automotive structural costs by $500 million in the fourth quarter. In 2009, Ford achieved $5.1 billion in Automotive structural cost reductions, exceeding its full year target of about $4 billion, largely driven by lower manufacturing and engineering costs, including personnel reduction actions and progress on implementing its common global platforms and product development processes.
Ford finished 2009 with $25.5 billion in Automotive gross cash, compared with $23.8 billion at the end of the third quarter of 2009. Automotive operating-related cash flow was $3.1 billion positive during the fourth quarter. For the full year, Automotive operating-related cash flow was $300 million negative; an improvement of $19.2 billion from year-ago levels.
Ford continued its balance sheet strengthening actions during the fourth quarter. The company issued $2.9 billion in a convertible debt offering and also reached an agreement with its revolving lenders to extend the maturities of $7.9 billion of debt commitments to 2013 from 2011.
“We delivered very encouraging results in the fourth quarter and for full year 2009 despite severe economic headwinds, although our transformation remains a work in progress,” said Lewis Booth, Ford executive vice president and chief financial officer. “We are committed to staying absolutely focused on executing our plan to deliver profitable growth.”
