Ford 2011 Annual Report Download - page 42

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Management’s Discussion and Analysis of Financial Condition and Results of Operations
40 Ford Motor Company | 2011 Annual Report
Ford North America Segment. The charts below detail key metrics and the change in 2011 pre-tax operating profit
compared with 2010 by causal factor.
As shown above, full-year wholesale volume and revenue improved in 2011 compared with the prior year. Operating
margin declined one-tenth of a percentage point; this includes an adverse impact of 2 points due to higher commodity
costs.
Ford North America reported a pre-tax operating profit of $6.2 billion, compared with a profit of $5.4 billion a year ago.
Higher net pricing reflects the strength of our brand and products, a disciplined approach to incentive spending, and our
ongoing practice to match production to customer demand. Favorable volume and mix was more than explained by
higher U.S. industry and dealer stocks. These were offset partially by unfavorable contribution costs reflecting higher
commodity costs, higher material costs excluding commodities, and higher warranty and freight costs. Other costs reflect
unfavorable structural costs.
As we look ahead to 2012, we expect North America to continue to be the core of our Automotive operations, with
improved profitability compared with 2011.