This summary is based on the fourth quarter fiscal 2007 earnings call summary presented by Ford Motor Company (F), on January 24, 2007.
Management
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Sr. VP and Controller: Peter J. Daniel
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VP and Treasurer: Neil M. Schloss
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Vice Chairman and CFO, Ford Credit: K.R. Kent
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Fixed Income IR Manager: David Dickinson
Key Investor Issues
- Total company revenue of $45.5 billion was up about 13% from a year ago.
- Net loss was $2.8 billion or $1.30 per share.
- Vehicle wholesales were over 1.6 million units, up 75,000 from the same period in 2006.
Full Year 2007 Highlights
- Loss from continuing operations was $366 million, or 19 cents per share, compared with a 2006 loss of $2.7 billion, or $1.44 per share.
- Revenue, excluding special items, was $173.9 billion, up from $160.1 billion a year ago reflecting changes in exchange rates, higher net pricing and improved product mix.
- The firm had some outstanding new product introductions including the Ford Flex, Lincoln MKS, and Ford F-150 in North America, and Ford Kuga and the production version of the Ford Verve concept in Europe.
Fourth Quarter 2007 Highlights
The company reported a net loss of $1.30 per share, or $2.8 billion, an improvement from the loss position of $2.98 per share, or $5.6 billion in the same period a year ago.
- The loss from continuing operations, excluding special items, was 20 cents per share, or $429 million, from $1.03 per share, or $2.0 billion in the prior year reflecting non-cash charges associated with PAG asset impairment and a change in business practice for providing retail incentives to dealers.
- This includes a more than $1.4 billion improvement in Automotive operating profits, partially offset by lower profits at Financial Services.
- Revenue, excluding special items, was $45.5 billion, up 13% from $40.3 billion a year ago, reflecting changes in currency exchange rates, higher net pricing, and improved volume.
Vehicle wholesales were over 1.6 million units, up 75,000 from the same period in 2006.
- The firm ended the period with $34.6 billion of gross cash, an increase of $700 million from 2006.
- Ford Motor Company recognised market-to-market losses of $76 million on hedges at Jaguar and the Land Rover, and additional charge totaling $120 million primarily from personnel reductions at PAG and North America.
The operating cash flow was a positive $700 million including $300 million of tax related interest.
- Total liquidity as of year-end including a viable credit loss was $46.5 billion and long-term VEBA assets were $2 billion as a result of the UAW VEBA agreement.
- Automotive debt was $26.7 billion and upon expected implementation of the independent VEBA on January 1, 2010, debt will increase by $6.3 billion.
Macroeconomic Perspective:
- The firm is expecting total industry sales to be about 16 million units for the U.S. and $17.6 million units for Europe.
- On the operational metrics, the firm expects to continue to improve that quality and plans to continue to reduce automotive costs by $3 billion during 2008.
-The firm anticipates that U.S. market share will be at the low-end of the planned 14% to 15% range during 2008 with further reductions planned on the fleet side and operating cash outflows in 2008.
- These outflows will include $3 billion related to the acceleration of subvention payments to Ford Credit.
Managed receivables were $147 billion down $1 billion from the third quarter, while charge-offs from managed receivables were $233 million up 11%.
- The worldwide managed loss receivables were 62 basis points, also up 6 basis points from a year ago.
- The credit loss reserve for on-balance sheet receivables was $1.1 billion up $100 million from the prior period.
- Regular dividends from Ford Credit to Ford were suspended to enhance funding flexibility.
Regional Highlights:
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North America reported a pre-tax loss of $1.6 billion, compared with a loss of $2.7 billion a year ago.
