Ford Motor Company (F) Q4 2004 earnings summary

Executive summary

• 2004 net income was $3.487B, up from $495M in 2003; adjusted pre-tax profit, excluding special items, rose to $5.8B from $3.4B.

• Worldwide vehicle sales reached 6.798M units, up 62,000 YoY, while automotive operations remained loss-making before tax at $155M.

• Financial Services earnings improved substantially, led by stronger Ford Credit credit-loss and lease results; 2005 priorities center on products, quality, share and cost discipline.

Financial highlights

• Total sales and revenues were $171.652B, up from $164.338B in 2003; automotive revenue was $147.134B and Financial Services revenue was $24.518B.

• Pre-tax income was $4.853B vs. $1.339B; net income was $3.487B vs. $495M; basic and diluted EPS were $1.91 and $1.73, respectively, vs. $0.27 each in 2003.

• Automotive pre-tax loss narrowed to $155M from $1.908B; Financial Services pre-tax income rose to $5.008B from $3.247B.

• 2004 special items reduced pre-tax income by a net $960M, including a $600M Visteon receivable allowance, $182M Ballard investment charge and improvement-plan costs, partially offset by a $45M Financial Services settlement gain.

• Automotive capital expenditures were $6.3B vs. $7.4B; year-end automotive gross cash was $23.6B and net cash was $5.2B.

Outlook and guidance

• 2005 milestones: improve quality and market share in all regions, hold automotive costs flat at constant volume, mix and exchange excluding special items, and keep capital spending at $7B or lower.

• 2005 planning assumptions included U.S. industry volume of 17.2M units and Europe volume of 17.3M units, including heavy trucks.

• Automotive results were expected to improve across operations; Financial Services was projected to remain profitable but decline from 2004 on lower volume, higher rates and no repeat of reserve reductions.

• Expected 2005 full-year effective tax rate was 25%–28%, excluding any effect from possible repatriation of foreign earnings; EPS and adjusted pre-tax profit outlook remained unchanged from January guidance.

• 2005 planned contributions included $2.8B to worldwide pension plans and $200M to the U.S. hourly retiree health-care VEBA.