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"Our 2010 results exceeded our expectations, accelerating our transition from fixing the business fundamentals to delivering profitable growth for all," said Alan Mulally, Ford president and CEO. "We are investing in an unprecedented amount of products, technology and growth in all regions of the world.”
Full year 2010 pre-tax operating profit was $8.3 billion, or $1.91 per share, an increase of $8.3 billion, or $1.90 per share, from a year ago. This increase reflects a profit in each automotive segment led by strong performance in North America, reflecting primarily favorable volume and mix as well as favorable net pricing. Ford Credit's strong profit also contributed significantly to Ford's full year performance.
Ford made significant progress in strengthening its balance sheet, reducing automotive debt by $14.5 billion in 2010, a 43% reduction. These actions will lower annualized interest expense by more than $1 billion. Ford finished the year with automotive gross cash exceeding debt by $1.4 billion. Fourth quarter actions reduced automotive debt by $7.3 billion, including $2.5 billion of newly announced debt reductions to pay down Ford's revolving credit facility and term loans.
Ford reported fourth quarter net income of $190 million, or 5 cents per share, a decrease of $696 million, or 20 cents per share, from the fourth quarter of 2009. This includes the negative impact of special items of $1 billion, primarily associated with a previously disclosed $960 million charge related to the completion of debt conversion offers that reduced outstanding Automotive debt by over $1.9 billion. .
As a result of Ford's 2010 financial performance, the company will pay profit sharing to approximately 40,600 eligible U.S. hourly employees. The average amount is expected to be approximately $5,000 per eligible full-time employee.
"The progress that we made improving our core Automotive business has allowed us to strengthen significantly the balance sheet in 2010, and this will remain a key area of focus for us in 2011," said Lewis Booth, Ford executive vice president and chief financial officer. "We continue to manage the business for long term profitable growth."