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18 Ford Motor Company | 2012 Annual Report
Management's Discussion and Analysis of Financial Condition and Results of Operations
18
Finance Our Plan and Strengthen Our Balance Sheet
Execution of our One Ford plan has generated significant positive Automotive operating-related cash flow in recent
years, which has allowed us to strengthen our balance sheet while continuing to invest in new products that customers
want and value, transform and grow our business, pay our debts and obligations as and when they come due, pay a
sustainable dividend, and provide protection within an uncertain global economic environment. We expect to generate
significant positive Automotive operating-related cash flow again in 2013.
Work Together Effectively as One Team
As part of the One Team approach, we have implemented a disciplined business plan process to regularly review
our business environment, risks and opportunities, strategy, and plan, and to identify areas of our plan that need
special attention while pursuing opportunities to improve our plan. Everyone is included and contributes, openness is
encouraged, our leaders are responsible and accountable, we use facts and data to make our decisions, high
performance teamwork is a performance criteria - and we follow this process every week, every month, and every
quarter, driving continuous improvement. We believe this process gives us a clear picture of our business in real time
and the ability to respond quickly and decisively to new issues and changing conditions - as we have done in the face
of rapid changes in the market and business environment in the last few years. As needed, we convene daily
management meetings to handle potentially acute situations, which allows us to ensure that we are vigorously
managing daily developments and moving decisively in response to changing conditions.
In addition, we are partnering with and enlisting all of our stakeholders to help us execute our plan to deal with our
business realities and create an exciting and viable business going forward. We are reaching out and listening to
customers, dealers, employees, labor unions, suppliers, investors, communities, retirees, and federal, state, and local
governments. Each of these constituencies is a critical part of the success of our business going forward. Realizing
our goal of profitable growth for all is as important to these stakeholders as it is to our shareholders.
RESULTS OF OPERATIONS
TOTAL COMPANY
As shown in the table below, full year net income in 2012 was lower than a year ago, primarily reflecting the non-
repeat of the 2011 release of the tax valuation allowance against deferred tax assets.
2012 2011 2010
(Mils.) (Mils.) (Mils.)
Income
Pre-tax results (excl. special items) $ 7,966 $8,763 $ 8,300
Special items (246)(82)(1,151)
Pre-tax results (incl. special items) 7,720 8,681 7,149
(Provision for)/Benefit from income taxes (2,056) 11,541 (592)
Net income 5,664 20,222 6,557
Less: Income/(Loss) attributable to noncontrolling interests (1) 9(4)
Net income attributable to Ford $5,665 $20,213 $ 6,561
Income before income taxes includes certain items ("special items") that we have grouped into "Personnel and
Dealer-Related Items" and "Other Items" to provide useful information to investors about the nature of the special items.
The first category includes items related to our efforts to match production capacity and cost structure to market demand
and changing model mix and therefore helps investors track amounts related to those activities. The second category
includes items that we do not generally consider to be indicative of our ongoing operating activities, and therefore allows
investors analyzing our pre-tax results to identify certain infrequent significant items that they may wish to exclude when
considering the trend of ongoing operating results.
As detailed in Note 28 of the Notes to the Financial Statements, we allocate special items to a separate reconciling
item, as opposed to allocating them among the operating segments and Other Automotive, reflecting the fact that
management excludes these items from its review of operating segment results for purposes of measuring segment
profitability and allocating resources among the segments.