Ford Q1 2009

ford Q1 2009 On an after-tax basis, Ford’s first quarter operating loss, excluding special items, was $1.8 billion, or $0.75 per share, compared with a profit of $477 million, or $0.20 per share, a year ago. ++ Ford’s first quarter revenue, excluding special items, was $24.8 billion, down from $39.2 billion a year ago. The decline is primarily explained by lower sales volume and unfavorable exchange, partly offset by higher net pricing.++ Special items improved pre-tax profits by $362 million in the first quarter, or $0.15 per share, which largely reflected gains from the debt restructuring completed in the first quarter partly offset by the effect of “held for sale” accounting for Volvo assets and global personnel reduction programs. At the end of the first quarter, based on the status of Ford’s strategic review of Volvo, the company concluded that the criteria for “held for sale” status had been met, triggering an impairment test that resulted in an impairment charge of about $700 million (reflecting the difference between the book value and estimated fair market value of Volvo as held for sale net of estimated disposal cost). Automotive operating-related cash flow was $3.7 billion negative during the first quarter of 2009.++ The negative cash flow primarily reflects: · An Automotive pre-tax loss of $1.9 billion, excluding special items++ · Capital spending during the quarter that was about $300 million higher than depreciation and amortization · Changes in working capital resulted in over $1 billion of positive cash flow due to higher payables, lower inventories and lower receivables. This improvement, however, was more than offset by timing differences in marketing, warranty, retiree health care payments and in-transit receivables · Payments of $500 million to Ford Credit reflecting Ford’s change to up-front payment of subvention Excluding the impact of the change to up-front subvention payments, Automotive operating-related cash flow was $3.2 billion negative. This outflow in the first quarter is less than half the outflows during each of the third and fourth quarters of 2008, despite a further decline in volume in part related to actions taken to reduce dealer stocks. The improvement is due primarily to improved working capital, lower Automotive pre-tax losses and lower net spending. In addition to the key restructuring actions discussed, Ford also continues a collaborative effort to reduce its dealer levels, with a 14 percent reduction since 2005, consolidate and realign its suppliers, and reduce salaried and other overhead costs. With the $1.9 billion of first quarter Automotive structural cost reductions, Ford is on track to exceed its target to reduce Automotive structural costs by $4 billion in 2009.