Ford 2011 Annual Report Download - page 40

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Management’s Discussion and Analysis of Financial Condition and Results of Operations
38 Ford Motor Company | 2011 Annual Report
2011 Compared with 2010
Total Automotive. The charts below detail full-year key metrics and the change in full-year 2011 pre-tax operating
results compared with full-year 2010 by causal factor. Automotive operating margin is defined as Automotive pre-tax
operating results, excluding special items and Other Automotive, divided by Automotive revenue.
As shown above, full-year wholesale volume and revenue were higher than the year-ago period, but operating margin
was down seven-tenths of a point; higher commodity costs reduced our margin by 1.8 points.
Total Automotive pre-tax operating profit in 2011 was $6.3 billion, an increase of $1 billion from 2010. The increase in
earnings is explained by strong performance in market factors, and lower interest expense net of interest income (due
primarily to lower debt levels). This was offset partially by higher contribution costs, higher structural costs (including the
effect of higher volumes, new product launches, and investments to support our future product, capacity, and brand-
building plans), higher compensation costs in North America, and unfavorable exchange.