Ford Motor Company is reporting a 2011 full year pre-tax operating profit of $8.8 billion, an increase of $463 million from a year ago as strong performance in North America and Ford Credit offset challenges in other parts of the world.
This marks the company’s third year in a row of improving annual operating profits.
“We delivered strong results for the full year as we continued to serve our customers around the world with best-in-class vehicles and make progress toward our mid-decade goals,” said Alan Mulally, Ford president and CEO.
Full year 2011 net income was $20.2 billion, or $4.94 per share, an increase of $13.7 billion, or $3.28 per share, from a year ago.
The results include a one-time, non-cash special item of $12.4 billion for the release of almost all of the valuation allowance against the company’s net deferred tax assets.
Fourth quarter 2011 pre-tax operating profit was $1.1 billion, or 20 cents per share, a decrease of $189 million from fourth quarter 2010. Ford has now posted 10 consecutive quarters of pre-tax operating profit, as the company benefited from strong volume and revenue across its global product line.
Ford reported fourth quarter net income of $13.6 billion, or $3.40 per share, an increase of $13.4 billion, or $3.35 per share, from the fourth quarter of 2010. This includes the favourable impact related to releasing $12.4 billion of the valuation allowance.
The company began to record a valuation allowance against net deferred tax assets in the third quarter of 2006, reflecting large cumulative losses incurred, as well as its financial outlook at the time.
Consistent delivery over the past few years of strong improvement in the company’s business results now supports the release of almost all of the valuation allowance.
Fourth quarter net income also was affected by a favourable special item of $401 million related to the sale of Ford’s Russian operations to the newly created FordSollers joint venture, which began operations on Oct. 1, 2011.
The Blue Oval finished the year with automotive gross cash of $22.9 billion, compared with $20.8 billion as of Sept. 30, 2011, and $20.5 billion as of Dec. 31, 2010.
As part of Ford’s long-term strategy to reduce risk in its funded pension plans, the company says it expects to make cash contributions to its funded pension plans in 2012 of about $3.5 billion globally, including discretionary contributions to its U.S. plans of about $2 billion.
“2011 marked a milestone year in our work to strengthen our balance sheet. We increased Automotive cash, reduced debt and improved liquidity, clearing the way for us to resume paying a quarterly dividend,” said Lewis Booth, Ford executive vice president and chief financial officer.
“We are building on this strong foundation in 2012 and taking actions when appropriate to strengthen further our balance sheet.”