Ford 2013 Annual Report Download - page 53

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Ford Motor Company | 2013 Annual Report 51
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
South America
In South America, results are expected to be about equal to 2013, or about breakeven. This outlook reflects improved
profitability in Brazil and Argentina, offset by deterioration in Venezuela, including very low levels of production and our
planning assumption that a major devaluation with a $350 million profit effect will occur in the first quarter. There are risks
to this outlook, however, given the volatility of the situation in Venezuela and increasing risks in Argentina, where
devaluation of the peso is accelerating and the government recently issued controls on vehicle imports.
Europe
In Europe, we expect reduced losses, including restructuring costs of about $400 million that will be reported in 2014
operating results. The Europe transformation plan continues to progress well and the business unit remains on track to
achieve profitability in 2015.
Middle East and Africa
Our new Middle East and Africa business unit is expected to approach breakeven results.
Asia Pacific
Asia Pacific pre-tax profit is expected to be about the same as 2013, reflecting continued investments to support
growth in 2014 and beyond, a slower rate of revenue and volume growth than a year ago due to production constraints,
a more competitive pricing environment, and finally, unfavorable results in Australia as we restructure the business and
reflect the effects of a weakening Australian dollar.
Net Interest Expense
We expect Automotive net interest expense this year to be about the same as 2013.
Ford Credit
Ford Credit expects 2014 pre-tax profit to be about equal to 2013. Profit from growth in receivables should offset the
continued normalization of credit losses, the continued run-off of higher-yielding assets, and the impact of Ford Credit’s
strategy to increase its percentage of unsecured debt as we continue to build a stronger investment-grade company. Ford
Credit also expects managed receivables at year end of about $110 billion, managed leverage to continue in the range of
8:1 to 9:1, and distributions to its parent of about $250 million.
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