Ford Motor Company reported a pre-tax operating loss of $424 million in the second quarter of 2009, excluding special items. The second quarter results represents a $609 million improvement compared with the second quarter of 2008, as cost reductions, net pricing, Ford Credit results, and market share helped offset the continued impact of the severe global economic downturn. On an after-tax basis, excluding special items, Ford posted an operating loss of $638 million in the second quarter, or $0.21 per share, compared with a loss of $1.4 billion, or $0.63 per share, a year ago.
Ford posted net income of $2.3 billion, or $0.69 per share. These results compare with a net loss of $8.7 billion, or $3.89 per share, in the second quarter of 2008. The results for the second quarter 2009 include a special items net gain totaling $2.8 billion, or $0.90 per share, which includes a $3.4 billion gain related to Ford and Ford Credit’s recent debt-reduction actions. Ford’s second quarter revenue was $27.2 billion, down $11 billion from the same period a year ago. Ford completed several actions to strengthen its overall business, including:
- Completing a series of transactions that reduced Automotive debt obligations by $10.1 billion, which will save the company more than $500 million a year in interest expense
- Raising $1.6 billion through the issuance of 345 million shares of Ford common stock
- Reducing Automotive structural costs by $1.8 billion, including $1.2 billion in North America
- Reducing the U.S. hourly work force by approximately 1,000 through a buyout program
Ford reached agreement with the UAW, subject to court and other approvals, to allow Ford the option to fund up to half of its VEBA obligations with Ford common stock at market prices instead of fixed prices in 2009, 2010 and 2011. Ford finished the second quarter with $21 billion in Automotive gross cash, compared with $21.3 billion at the end of the first quarter of 2009. Automotive operating-related cash flow was $1 billion negative during the second quarter of 2009, an improvement of $2.7 billion from the first quarter of 2009. Automotive operating-related cash flow was $4.7 billion negative during the first half; on track with Ford’s plan.