Ford Posts Third Quarter 2009 Net Income of $1 Billion; Cash Flow Turns Positive; North America Profitable

The company said it expects full-year U.S. and Europe market share to remain at about the same levels achieved during the first nine months.

Ford expects Automotive operating-related cash flow to be positive in the fourth quarter, based on the company's present planning assumptions.

Ford now expects capital spending of about $5 billion, or slightly less. Capital expenditures through the first nine months were $3.4 billion; higher projected fourth quarter spending reflects the timing of Ford's product launches as the company maintains its product plans.

Ford Credit expects to be profitable in the fourth quarter and for the full-year 2009. Next year, Ford Credit expects reduced profits based on lower average receivables and the non-recurrence of favorable 2009 factors.

Based on its recent performance and present planning assumptions, Ford is changing its full-year 2011 guidance for total company and North American Automotive operations from being "breakeven or better" to "solidly profitable" on a pre-tax basis excluding special items, with positive Automotive operating-related cash flow.

While the company has confidence that the global economy will be improving by 2011, the near-term growth outlook remains rather uncertain. Looking at 2010, there is a high likelihood of a substantial decrease in European industry volume as scrappage programs expire. This decrease could more than offset U.S. sales volumes, which may improve somewhat from this past quarter's levels.

Ford expects to know more about the state of the global economic recovery and its impact on 2010 auto industry volumes in the coming months. Early next year, Ford will provide guidance on its 2010 planning assumptions and operational metrics when the company releases its full-year 2009 results.

"The third quarter is one the entire Ford extended team can be proud of because it proves that our product-led transformation is working," Mulally said. "Leading indicators are now showing signs of recovery in all of our major markets, however, consumer confidence and labor market conditions remain a concern.

"Despite the continued economic headwinds, we remain confident that we have the right plan and are taking the right actions to transfer Ford into a lean company that delivers profitability growth for all our stakeholders," Mulally added.

Ford's 2009 planning assumptions regarding the industry and operating metrics include the following:

    Planning Assumptions    Full Year Plan     Full Year        Memo: First
                                                Outlook         Nine Months
    --------------------    --------------    -------------     -----------

    Industry Volume
       -U.S. (million
        units)                 10.5 - 12.5       About 10.6            10.5
       -Europe (million
        units)***              12.5 - 13.5       About 15.7            15.7

    Operational Metrics
    Compared with 2008:
      -- U.S.                   Improve           On track        Improved
      -- International          Improve             Mixed           Mixed

        Structural        Improve by about $4   Improve by about  Improved by
        Costs****               Billion            $5 Billion    $4.6 Billion

      -- U.S. Total Market
       Share (Ford and LM)      Stabilize           Improve          15.0%
       Share of Retail
       Market                   Stabilize           Improve          12.9%
      -- Europe Market
       Share ***               Equal / Improve      Improve           9.2%

      --Auto.                  Negative but        On track        $(3.4)
       Operating-Related        Significant                        Billion
       Cash Flow*****           Improvement

     Absolute Amount:
      --Capital Spending   $5 Billion to $5.5        About           $3.4
                                Billion           $5 Billion       Billion


          *     Pre-tax profits excluding special items
          **    Includes medium and heavy trucks
          ***   European 19 markets Ford tracks
          ****  Cost changes are measured at constant exchange, and
                exclude special items and discontinued operations. In
                addition, costs that vary directly with volume, such as
                material, freight and warranty costs are measured at constant
                volume and mix
          ***** See tables at end for reconciliation to GAAP

Ford's production volumes are shown below:

    Production Volumes         Actual               Forecast
    ------------------         ------                --------
                                                  Third  Quarter  2009        Fourth  Quarter  2009
                                                  ------------------        -------------------
                                                                              O/(U)                                  O/(U)
                                                    Units                2008          Units                  2008
                                                    -----                ----          -----                  ----
                                                    (000)                (000)        (000)                  (000)

        Ford  North  America          490                      72              570                    141

        Ford  Europe                        385                      (9)            456                      91

        Volvo                                      77                        5                95                      27
        -----                                      --                      --                --                      --

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