Ford Releases Selected Preliminary Q1 and Balance Sheet Data

Ford Motor Co. in Dearborn today announced selected preliminary first-quarter 2020 and other balance sheet data. The automaker said it will consider possible additional financing actions while the coronavirus pandemic stalls commerce around the world.
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Ford medical gown creation
Ford has announced selected preliminary first-quarter 2020 data and is ramping up personal protection equipment. // Photo courtesy of Ford Motor Co.

Ford Motor Co. in Dearborn today announced selected preliminary first-quarter 2020 and other balance sheet data. The automaker said it will consider possible additional financing actions while the coronavirus pandemic stalls commerce around the world.

Ford’s first-quarter vehicle wholesales were down 21 percent from a year ago, largely as a result of lower production and demand related to the coronavirus. The company currently expects to report revenue of about $34 billion and first-quarter adjusted earnings before interest and taxes of about negative $0.6 billion, which excludes about $0.3 billion of special-item charges.

The company has not yet calculated its tax rate for the first quarter and is not able to provide its preliminary net loss or loss per share, but anticipates valuation allowance adjustments against deferred-tax assets of about $0.9 billion.

In March, Ford suspended its $0.6 billion regular quarterly dividend and antidilutive share repurchase program. The company is taking other steps to preserve cash, including by lowering operating costs, reducing capital expenditures, and deferring portions of executive salaries.

As of April 9, the company had about $30 billion in cash on its balance sheet, including $15.4 billion of proceeds from borrowings last month against two existing credit lines.

Presently, only Ford’s joint ventures in China, where coronavirus risks developed earlier and are now moderating, are producing and wholesaling vehicles. The company is considering a scenario for a phased restart of its manufacturing plants, supply network, and other dependent functions beginning in the second quarter, with enhanced safety standards in place to protect workers. Any decisions on resumptions will be made in cooperation with local unions, suppliers, dealers, and other stakeholders.

“We continue to opportunistically assess all funding options to further strengthen our balance sheet and increase liquidity to optimize our financial flexibility,” says Tim Stone, Ford’s CFO. “We also are identifying additional operating actions to enhance our cash position. However, we believe we have sufficient cash today to get us through at least the end of the third quarter with no incremental vehicle production and wholesales or financing actions.”

Ford Credit said it continues to be an important source of support for customers and dealers during this crisis. Ford Credit’s balance sheet is inherently liquid, reflecting a policy that ensures cumulative debt maturities have a longer tenor than cumulative asset maturities. This means Ford Credit is generating liquidity as its wholesale and consumer financing requirements have declined because of the crisis.

Ford Credit remained above its $25 billion liquidity target with $28 billion at the end of the first quarter, and has access to diversified funding sources.

Ford has not yet completed the close of its first-quarter 2020 books and the preliminary financial data have not been subject to review or other procedures by the company’s independent auditor. The company’s announcement of first-quarter financial results, including estimates of the economic effects of the coronavirus pandemic on the business, is planned for April 28. In March, Ford withdrew all guidance for 2020 financial performance it had given on Feb. 4.

In recent weeks, For has been expanding its efforts to design and produce urgently needed medical equipment and supplies for health care workers, first responders, and patients fighting coronavirus.

In addition to the current production of more than 3 million face shields in Plymouth Township, Ford-designed powered air-purifying respirator production begins today, April 14. Ford also is now producing face masks and leading an effort to scale production of reusable gowns for health care workers. Lastly, Ford started providing manufacturing expertise to help scientific instrument provider Thermo Fisher Scientific quickly expand production of COVID-19 collection kits to test for the virus.

Ford employs approximately 190,000 people worldwide.

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