Ford Motor Company (F) Q4 2008 earnings summary

Executive summary

• 2008 revenue was $146.3B and net loss was $14.7B, versus $172.5B revenue and a $2.7B loss in 2007; diluted EPS was -$6.46.

• The collapse in vehicle demand, unfavorable mix, large impairments, and constrained credit drove a $21.2B Automotive gross cash outflow and pressured liquidity.

• The plan centers on restructuring capacity and costs, launching smaller and more fuel-efficient products, and improving liquidity; 2011 break-even or better is targeted on specified adjusted measures.

Financial highlights

• Revenue fell to $146.3B from $172.5B; pre-tax loss widened to $14.4B from $3.7B, and net loss reached $14.7B versus $2.7B.

• Automotive operating loss was $9.3B versus $4.3B; Financial Services pre-tax loss was $2.6B versus $1.2B of income.

• Q4 net loss was $6.0B; Q4 pre-tax loss was $5.2B, including Automotive pre-tax loss of $4.8B and Financial Services pre-tax loss of $384M.

• Net special-item charges were $7.6B, including $5.3B of North America fixed-asset impairment and $2.1B of Ford Credit lease impairment.

• Automotive sales were $129.2B versus $154.4B; ongoing wholesale volumes fell 14% to 5.407M vehicles.

Outlook and guidance

• 2009 U.S. industry volume assumption: 10.5M–12.5M units; Europe’s 19 tracked markets: 12.5M–13.5M units; global volume expected to decline ~15% YoY.

• 2009 Automotive operating-related cash flow is expected to remain negative but improve significantly; quality and U.S. and European market-share goals are to improve or stabilize.

• 2009 capital spending target is $5B–$5.5B; structural costs are planned to improve by ~$4B YoY, excluding special items and at constant volume, mix, and exchange.

• A $14B–$17B Automotive cash-improvement program is planned for 2009–10; about half is targeted by end-2009.

• By 2011, total-company and North America pre-tax results and Automotive operating-related cash flow are expected to reach or exceed break-even, excluding special items.