Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor — Q3 2004 Earnings Presentation
39 slides from Ford Mtr Co Del's earnings presentation, Oct 19, 2004
Slide 1: Third Quarter 2004 Earnings Review
THIRD QUARTER 2004 EARNINGS REVIEW OCTOBER 19, 2004
Slide 2: Total Company Third Quarter 2004 Summary
TOTAL COMPANY THIRD QUARTER 2004 SUMMARY Earnings per share of $0.28 from continuing operations, excluding special items, and net income of $0.15 per share In North America, despite market challenges, unit revenue continues to improve Strong year-over-year improvement at Ford Europe Disappointing re
Slide 3: Total Company Third Quarter and First Nine Months Results
Earnings Per Share Net Income $ 0.15 $0.16 $ 1.66 $ 0.98 Continuing Ops. -- Excl. Special Items 0.28 0.13 1.86 1.02 After-Tax Profits (Mils.) Net Income $ 266 $ 291 $3,383 $2,095 Continuing Ops. -- Excl. Special Items 537 259 3,791 2,171 Memo: Tax Rate 28.8 % 1.0 Pts. 26.6 % 3.4 Pts. Pre-Tax Profits
Slide 4: Income from Continuing Operations Compared with Net Income
TOTAL COMPANY INCOME FROM CONTINUING OPERATIONS COMPARED WITH NET INCOME After-Tax Profits (Mils.) Third Quarter 2004 Earnings Per Share* * Earnings per share from continuing operations is calculated on a basis that includes pre-tax profit, provision for taxes, and minority interest. See Appendix (p
Slide 5: Third Quarter 2004 Profits by Sector
TOTAL COMPANY THIRD QUARTER 2004 PROFITS BY SECTOR * Excluding special items; see Slide 3 and Appendix (page 4) for reconciliation to GAAP Memo: B / (W) 2003 $333 $(61) $394 Total Auto Fin Svcs 816 -609 1425 Financial Services Automotive $(609) $1,425 Pre-Tax Profits (Mils.)* $816 Total Slide 4
Slide 6: 2004 Third Quarter Pre-Tax Profits Compared with 2003
AUTOMOTIVE SECTOR 2004 THIRD QUARTER PRE-TAX PROFITS COMPARED WITH 2003 THIRD QUARTER * Excluding special items; see Slide 3 and Appendix (page 4) for reconciliation to GAAP Pre-Tax Profits (Bils.)* 2003 2004 Volume Pricing Cost Exchange Other -0.5 -0.6 0.1 0 0.1 -0.2 -0.1 $0 $0.1 Net Pricing Cost P
Slide 7: First Nine Months Cost Performance
AUTOMOTIVE SECTOR FIRST NINE MONTHS COST PERFORMANCE Quality Mfg. Eng Overhead Net Product D&A Pension -0.1 0.9 0.4 0.2 -0.6 0 2004 Costs B / (W) 2003 (Bils.)* Net Product Costs Quality Related Pension / Healthcare Deprec. / Amort. Mfg. / Engrg. Overhead * At constant volume, mix, and exchange; excl
Slide 8: Third Quarter 2004 Profits/(Loss) by Segment
AUTOMOTIVE SECTOR THIRD QUARTER 2004 PROFITS / (LOSS) BY SEGMENT Memo: B / (W) 2003 $(61) $(288) $220 $40 $(33) * Excluding special items; see Slide 3 and Appendix (page 4) for reconciliation to GAAP WW Americas Eur / PAG AP Mazda Other 2Q -609 -422 -204 48 -31 Worldwide Other Automotive Americas $(
Slide 9: North America Third Quarter Key Metrics
AUTOMOTIVE SECTOR -- NORTH AMERICA THIRD QUARTER KEY METRICS -- 2004 vs. 2003 2003 2004 Revenue 17.9 18.1 2004 2003 $18.1 $17.9 Revenue (Bils.) 2003 2004 Vehicle Unit Sales 782.2 780 2004 2003 780 782 Vehicle Unit Sales (000) 2003 2004 PBT -108 -481 $(108) 2004 2003 Pre-Tax Profits (Mils.)* Memo: U.
Slide 10: Automotive Sector North America Per Unit Revenue
YTD 02 YTD 03 YTD 04 Net Rev 20726 21801 22834 2002 First Nine Months Per Unit Revenue* 2003 2004 * Excluding FIN46 ** See Appendix (page 7) for reconciliation to Automotive Sales $21,639 $20,915 3Q02 3Q03 3Q04 Net Rev 21322 22274 22697 2002 2003 2004 $22,274 $21,322 Third Quarter Per Unit Revenue*
Slide 11: North America Share and Residual Values
Auction Values of High Volume Daily Rental Vehicles First Nine Months Ford and Lincoln-Mercury Registrations vs. Year Ago (Pct. Pts.) AUTOMOTIVE SECTOR -- NORTH AMERICA SHARE AND RESIDUAL VALUES Total Rental Other Retail East -1.3 -4.2 -1.4 -1.1 (1.3) Pts. (4.2) Pts. (1.4) Pts. (1.1) Pts. Share of I
Slide 12: South America Third Quarter Key Metrics
AUTOMOTIVE SECTOR -- SOUTH AMERICA THIRD QUARTER KEY METRICS -- 2004 vs. 2003 2002 2003 0.5 0.6 2004 2003 $0.8 $0.5 Revenue (Bils.) 2002 2003 Vehicle Unit Sales 55 67 2004 2003 76 55 Vehicle Unit Sales (000) 2002 2003 PBT -26 59 $(26) 2004 2003 Pre-Tax Profits (Mils.) $59 Memo: Brazil Mkt. Share 12.
Slide 13: Europe Third Quarter Key Metrics
AUTOMOTIVE SECTOR -- EUROPE THIRD QUARTER KEY METRICS -- 2004 vs. 2003 1st Qtr 2nd Qtr East 4.6 5.9 2004 2003 $5.9 $4.6 Revenue (Bils.) 2002 2003 326 372 2004 2003 372 326 Vehicle Unit Sales (000) 1st Qtr 2nd Qtr East -400 -33 $(400) 2004 2003 Pre-Tax Profit (Mils.)* $(33) * Excluding special items;
Slide 14: P.A.G. Third Quarter Key Metrics
AUTOMOTIVE SECTOR -- P.A.G. THIRD QUARTER KEY METRICS -- 2004 vs. 2003 1st Qtr 1st Qtr East 5.6 6.1 2004 2003 $6.1 $5.6 Revenue (Bils.) 2002 2003 164 169 2004 2003 169 164 Vehicle Unit Sales (000) 1st Qtr 2nd Qtr East -22 -171 $(24) 2004 2003 Pre-Tax Profits (Mils.)* $(171) Memo: U.S. Mkt. Share 1.3
Slide 15: P.A.G. Restructuring Actions
Special Items (Jaguar) Halewood / Browns Lane -- Efficiencies $ - $ (23 ) $ - $ (23 ) Salaried Restructuring - - (75 ) (75 ) 2004 Special Items $ - $ (23 ) $(75 ) $ (98 ) Discontinued Operations Formula One (28 ) (312 ) TBD (340 ) 2004 Actions $(28 ) $(335 ) $(75 ) $(438 ) 2005 Special Items (Jaguar
Slide 16: Asia Pacific and Africa / Mazda Third Quarter 2004 Profits
AUTOMOTIVE SECTOR -- ASIA PACIFIC AND AFRICA / MAZDA THIRD QUARTER 2004 PROFITS / (LOSS) Memo: B / (W) 2003 $40 $32 $8 Pre-Tax Profits (Mils.) Asia Pacific and Africa / Mazda Asia Pacific and Africa Mazda and Assoc. Operations AP and A/M AP & Af Mazda & 2Q 48 35 13 $48 $13 $35 Slide 15
Slide 17: 2004 Third Quarter Cash
AUTOMOTIVE SECTOR 2004 THIRD QUARTER CASH* Third Quarter (Bils.) Cash, Marketable and Loaned Securities, Short-Term VEBA Assets September 30, 2004 $23.4 $23.4 June 30, 2004 / December 31, 2003 26.8 25.9 Change in Gross Cash $ (3.4 ) $(2.5 ) Operating-Related Cash Flow Automotive Pre-Tax Profits** $
Slide 18: Financial Services Sector Third Quarter 2004 Profits
FINANCIAL SERVICES SECTOR THIRD QUARTER 2004 PROFITS / (LOSS) Memo: B / (W) 2003 $394 $359 $63 $(28) Total Credit Hertz Other 1425 1167 249 9 Pre-Tax Profits / (Loss) by Segment (Mils.) $1,425 Total Hertz Ford Credit Other Financial Services $1,167 $249 $9 Slide 18
Slide 19: Ford Credit Pre-Tax Profits Compared with 2003 Third Quarter
2003 2004 Volume Margin Credit Loss Lease Other East 808 1167 -87 4 182 180 80 2003 2004 $808 $1,167 Pre-Tax Profits (Mils.) Volume Credit Loss Perform. Other $(87) $4 $180 $359 $80 Lease Residual Perform. $182 Other Financing Margin FINANCIAL SERVICES SECTOR 2004 THIRD QUARTER FORD CREDIT PRE-TAX P
Slide 20: 2004 Planning Assumptions and Operational Metrics
AUTOMOTIVE SECTOR 2004 PLANNING ASSUMPTIONS AND OPERATIONAL METRICS Planning Assumptions Industry Volume (SAAR) -- U.S. 17.0 million units 17.2 17.2 -- Europe 16.9 million units 17.3 17.3 Operational Metrics Quality Improve in all regions On track On track Market Share Flat or improve in all regions
Slide 21: 2004 Production Outlook
AUTOMOTIVE SECTOR 2004 PRODUCTION OUTLOOK 1st Quarter Actual 1,008 (24 ) 437 22 203 26 2nd Quarter Actual 950 (58 ) 473 72 196 14 3rd Quarter Actual 747 (39 ) 369 38 150 5 4th Quarter Forecast 830 (70 ) 400 (42 ) 170 (29 ) Total 3,535 (191 ) 1,679 90 719 16 Units (000) B / (W) 2003 (000) North Ameri
Slide 22: Total Company 2004 Financial Outlook
TOTAL COMPANY 2004 FINANCIAL OUTLOOK Pre-Tax Income Automotive Americas North America $ 1.5 - $1.7 On track South America (0.1) - 0 Better Europe / P.A.G. Europe (0.2) - (0.1 ) Better P.A.G. 0.5 - 0.6 Worse Asia Pacific and Africa / Mazda 0 - 0.1 Better Total Automotive $ 0.9 - $1.1 On track Financi
Slide 23: January 2005 Investment Community Events
JANUARY 2005 INVESTMENT COMMUNITY EVENTS Splinter Group Meetings at Detroit Auto Show January 12 - 14 Product Review on Auto Show stand Fourth Quarter 2004 Earnings January 20th 2005 Business Review and Milestone Presentation January 25th Morning meeting in New York City Slide 23
Slide 24: Safe Harbor
SAFE HARBOR Greater price competition resulting from currency fluctuations, industry overcapacity or other factors; A significant decline in industry vehicle sales, particularly in the U.S. or Europe, resulting from slowing economic growth, geo- political events or other factors; Lower-than-anticipa
Slide 25: Calculation of Diluted Earnings Per Share
TOTAL COMPANY CALCULATION OF DILUTED EARNINGS PER SHARE Net Income (Mils.) Numerator After-Tax Profits $ 266 $ 537 Impact on Income from assumed conversion of convertible preferred securities 50 50 Income for diluted EPS $ 316 $ 587 Denominator Average shares outstanding 1,829 1,829 Net issuable / (
Slide 26: Income from Continuing Operations Compared with Net Income, First Nine Months
TOTAL COMPANY INCOME FROM CONTINUING OPERATIONS COMPARED WITH NET INCOME After-Tax Profits (Mils.) First Nine Months 2004 Earnings Per Share* * Earnings per share from continuing operations is calculated on a basis that includes pre-tax profit, provision for taxes, and minority interest. See Appendi
Slide 27: 2004 Fourth Quarter and Full Year Guidance: Special Items
TOTAL COMPANY 2004 FOURTH QUARTER AND FULL YEAR GUIDANCE - -- SPECIAL ITEMS AND DISCONTINUED OPERATIONS Special Items European Restructuring $ - $ - $ (49 ) $ (32 ) $(0.02 ) Fuel Cell Tech. Restruct. (69 ) (0.03 ) (230 ) (188 ) (0.09 ) Jaguar Restructuring (75 ) (0.03 ) (98 ) (64 ) (0.03 ) Dispositi
Slide 28: 2003-2004 Third Quarter Pre-Tax Results
TOTAL COMPANY 2003 - 2004 THIRD QUARTER PRE-TAX RESULTS* North America $ (108 ) $ (522 ) $ -- $(41 ) $ (108 ) $ (481 ) South America (26 ) 59 -- -- (26 ) 59 Total Americas $ (134 ) $ (463 ) $ -- $(41 ) $ (134 ) $ (422 ) Europe $ (456 ) $ (33 ) $(56 ) $ -- $ (400 ) $ (33 ) P.A.G. (24 ) (194 ) -- (23
Slide 29: Third Quarter Automotive Summary
AUTOMOTIVE SECTOR THIRD QUARTER AUTOMOTIVE SUMMARY Appendix 5 of 14 * Excluding special items; see Slide 3 and Appendix (page 4) for reconciliation to GAAP North America 782 780 $17,876 $18,121 $(108 ) $(481 ) South America 55 76 489 784 (26 ) 59 Total Americas 837 856 $18,365 $18,905 $(134 ) $(422
Slide 30: 2004 Third Quarter Market Results
AUTOMOTIVE SECTOR 2004 THIRD QUARTER MARKET RESULTS U.S. Industry SAAR (Mils.) 17.7 (0.3 ) Market Share (Pct.) - Ford and Lincoln Mercury 17.3 % (1.3 ) Pts. - Premier Automotive Group 1.2 (0.1 ) Total U.S. Market Share 18.5 % (1.4 ) Pts. Net Pricing (Pct.)* 0.0 % n/a Europe Industry SAAR (Mils.) 17.
Slide 31: Reconciliation of Net Pricing to Change in Automotive Sales
AUTOMOTIVE SECTOR RECONCILIATION OF NET PRICING TO CHANGE IN AUTOMOTIVE SALES Automotive Sales 2004 $18,121 $23,229 $5,916 $15,925 2003 17,876 22,853 4,628 14,179 2004 B / (W) Than 2003 $ 245 $ 376 $1,288 $ 1,746 Explanation of Change (Pct.) Mix, Exchange, Other 1.6 % 10.8 % Net Pricing 0.0 1.5 Tota
Slide 32: Costs and Expenses
AUTOMOTIVE SECTOR COSTS AND EXPENSES Total Cost and Expenses $30,895 $33,514 $(2,619 ) Select Cost Items Included Above: Depreciation $ 719 $ 922 $ (203 ) Amortization 580 698 (118 ) Post-Retirement Expense 819 764 55 2003 (Mils.) 2004 (Mils.) 2004 B / (W) 2003 (Mils.) Third Quarter Appendix 8 of 14
Slide 33: Ford Credit Results and Metrics - Third Quarter
FORD CREDIT RESULTS AND METRICS -- THIRD QUARTER Receivables (Bils.) On-Balance Sheet $132 $132 Securitized Off-Balance Sheet 49 39 Managed $181 $171 Charge-Offs (Mils.) On-Balance Sheet $466 $349 Managed 668 458 Loss-to-Receivables Ratio On-Balance Sheet 1.52 % 1.13 % Managed - U.S. Retail and Leas
Slide 34: Ford Motor Credit Key Metric Definitions
FORD MOTOR CREDIT KEY METRIC DEFINITIONS In addition to evaluating Ford Motor Credit's financial performance on a GAAP financial statement basis, Ford Motor Credit management also uses other criteria, some of which were previously disclosed in this presentation and are defined below. Information abo
Slide 35: Ford Motor Credit Ratio Definitions
FORD MOTOR CREDIT RATIO DEFINITIONS In addition to evaluating Ford Motor Credit's financial performance on a GAAP financial statement basis, Ford Motor Credit management also uses other criteria, some of which were previously disclosed in this presentation and are defined below: Leverage: Total Debt
Slide 36: Ford Credit Reconciliations of Managed Leverage to Financial Statement Leverage
FORD CREDIT RECONCILIATIONS OF MANAGED LEVERAGE TO FINANCIAL STATEMENT LEVERAGE Total Debt* $149.6 $135.3 Total Securitized Receivables Outstanding** 48.8 38.7 Retained Interest in Securitized Receivables (10.2 ) (9.5) Adjustments for Cash and Cash Equivalents (20.3 ) (10.1 ) Adjustments for SFAS 13
Slide 37: Gross Cash Reconciliation to GAAP
AUTOMOTIVE SECTOR GROSS CASH RECONCILIATION TO GAAP Appendix 13 of 14 Cash and Cash Equivalents $ 5.4 $ 6.7 $ 1.3 $ 6.8 Marketable Securities 10.8 10.3 (0.5 ) 12.2 Loaned Securities 5.7 2.3 (3.4 ) 7.0 Total Cash / Market. Sec. $21.9 $19.3 $(2.6 ) $26.0 Short-Term VEBA 4.0 4.1 0.1 0.9 Gross Cash $25.
Slide 38: Automotive Sector Operating-Related Cash Flow Reconciliation to GAAP
Appendix 14 of 14 AUTOMOTIVE SECTOR OPERATING-RELATED CASH FLOW RECONCILIATION TO GAAP Cash Flow from Operating Activities before Securities Trading $(2.2 ) $ 1.4 * Items Included in Operating-Related Cash Flow Capital Expenditures $(2.0 ) $(4.6 ) Net Transactions Between Automotive and Financial Se
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