Good day, ladies and gentlemen, and welcome to the first quarter Ford Motor Company earnings conference call. My name is Katrina, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will facilitate a question-and-answer session towards the end of this presentation. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. Brian Harris [ph], Director of Investor Relations. Please proceed.

Thank you, Katrina, and good morning ladies and gentlemen. Welcome to all of you who are joining us today either by phone or webcast. On behalf of the entire Ford management team, I would like to thank you for spending time with us this morning. With me here today are Alan Mulally, President and CEO of Ford Motor Company; and Lewis Booth, Chief Financial Officer. Also in attendance are Bob Shanks, Vice President and Controller; Neil Schloss, Vice President and Treasurer; Paul Andonian [ph], Director of Accounting; and K.R. Kent, Ford Credit's CFO. Before we begin, I would like to cover a few items. Copies of this morning's press release and the presentation slides that we will be using today have been posted on Ford's Investor and Media Website for your reference. The financial results discussed herein are presented on a preliminary basis. Final data will be included in our Form 10-Q. Additionally, the financial results presented here are on a GAAP basis, and in some cases on a non-GAAP basis. The non-GAAP financial measures discussed in this call are reconciled to the U.S. GAAP equivalent as part of the appendix to the slide deck. Finally, today's presentation includes some forward-looking statements about our expectations for Ford's future performance. Actual results could differ materially from those suggested by our comments made here. The most significant factors that could affect future results are summarized at the end of this presentation. These risk factors and other key information are detailed in our SEC filings, including our annual, quarterly, and current reports. With that, I would now like to turn the presentation over to Ford's President and CEO, Mr. Alan Mulally.

Thank you, Brian, and good morning everyone. We are very pleased to be able to share today our first quarter 2010 financial results. This was another solid quarter for us and further evidence that our plan is working and we are delivering profitable growth. Despite challenging economic conditions and below trend global demand for vehicles, Ford posted a pretax operating profit of $2 billion, our best quarterly pretax operating profit in six years. The basic engine that drives our business results products, market share, revenue and cost structure is performing stronger each quarter. Each of our Ford business units, North America, South America, Europe, Asia Pacific and Africa and Ford Credit delivered operating profits and each improved substantially compared with a year ago. Perhaps, most importantly we continue to accelerate the development of products people really want and value. Vehicles like the Global Fiesta, the new Figo for India and the redesigned Super Duty pickup here in North America are further strengthening our balance line up of cars, utilities and trucks that offer the very best quality, fuel efficiency, safety, smart design and value. Based on our improving performance, the gradual strength in the economy and our present assumptions, we now expect to deliver solid profit this year with positive automotive operating related-cash flow. While we are pleased with our progress, we do not underestimate the challenges ahead. We plan to stay completely focused on delivering on our One Ford plan. I will start off this morning by providing you with an overview of our financial results and business product and sales highlights. Then Lewis will walk us through the financial results in even greater detail. Finally, I will summarize our 2010 outlook and our plans going forward. Turning to slide three, I will begin by reviewing the key financial…

Thanks, Alan. Let's move on to Slide eight. Our first quarter pretax operating profit excluding special items was $2 billion, a $4 billion improvement from a year ago. Most of the remaining slides will focus on these pretax operating results. Our pretax operating profit excluded favorable special items of $125 million, which we’ll cover on the next slide. We recognized $50 million of tax expense, a $277 million increase from the year ago explained primarily by the non-returns of the prior year tax recovery. Bottom line, first quarter net income attributable to Ford was $2.1 billion, a $3.5 billion improvement from the year ago. As we mentioned last quarter the new accounting standard on variable interest entity consolidation effective January 1, 2010 required us to deconsolidate many of our joint ventures and our 2009 results have been adjusted to reflect the new accounting standards. Slide nine covers special items, which were favorable pretax amount of $125 million in the first quarter. We recorded $63 million of personnel and dealer related charges, related primarily to global personnel reduction programs. As mentioned earlier, based on our agreement to sell Volvo, all of Volvo's 2010 financial results are being reported as special items. We recorded a $188 million of held-for-sale adjustments for Volvo reflecting primarily the elimination of depreciation. As shown in the memo, if we had continued to report Volvo as an ongoing operation we would have reported a first quarter pretax operating profit of $49 million for Volvo. This should represent an improvement of about $300 million compared to the first quarter 2009 explained primarily by higher volume and variable net pricing. Now on slide 10, which shows our pretax operating results by sector. Our first quarter pretax operating profit was $2 billion; this includes a profit of $1.2 billion for…

Thank you very much Lewis. Slide 27 provides an overview of our business environment. Global economic conditions are improving, modest recoveries in some markets are held back by weak labor markets and tight consumer credit conditions. The consumer spending outlook for the U.S. and Europe is likely to remain below trend in 2010. In addition, our suppliers and dealers have been weakened by the impacts of the global economic downturn. Financials market conditions appear to be stabilizing. Global central banks are likely to improve some stimulus by retiring special lending programs and to begin modest policy interest rate increases. Even with this, interest rates are likely to remain relatively low in 2010 and supportive of economic recovery. Upward pressure on commodity prices has resumed in conjunction with the emergence of an economic recovery. This trend is likely to continue throughout 2010. Our business continues to be affected by currency volatility. Recently the U.S. dollar has gained some ground against the British pound and the Euro. This year's global industry volume is projected to exceed last year's level of 65 million units although excess industry capacity continues to persist in key markets. Many scrappage and other government incentive programs are ending primarily in the European markets. This impact has global volume, however is offset by gains in China, India, U.S. and Brazil, as well other emerging markets. Slide 28 summarizes the status of our key planning assumptions and operational metrics for the first quarter and for our 2010 full-year outlook. First quarter industry volume was equal to a SAAR of 11.2 million units in the U.S. and 16 million units in the 19 markets we track in Europe. We expect full-year U.S. industry volumes to be consistent with our previous guidance. Full-year European industry volume is now expected to be in…

Thank you, Alan. Ladies and gentlemen, we are now going to start the Q&A session. We have about 50 minutes for the question-and-answer period. We will begin with questions from the investment community and then take questions from the media who are also on the call. In order to allow as many questions as possible within our timeframe, please keep your questions brief. Katrina, can we have the first question please?

Thank you. (Operator Instructions). Your first question comes from the line of Joe Amaturo presenting Buckingham Research. Please proceed. Joe Amaturo – Buckingham Research: Good morning. I was wondering if you could tell us what percentage of the cash is domiciled in the U.S. and also what would make you – what do you need to see to make you more comfortable to further reduce the outstanding balances on some of the revolver?

Joe, about 70% of the things is domicile in the U.S. In terms of balances on the revolver, we have paid roughly half the revolver that we withdrew last February if we include the amend and extend in December where we paid off over $2 billion and $3 billion that we just paid off. We are committed to gradually pay it down and we haven't set a timetable for that. Joe Amaturo – Buckingham Research: Okay, and then just one other one. Could you just tell us, give us some idea of how we should now think since production volumes are a little more normal this year or expected to be anyhow compared to last year. How should we think about the seasonality and the timing differences and the working capital as it relates to the cash flow?

Well, we have cleared the worst of the – the worst of the seasonality is behind us, so in the first quarter as we brought production back up in the industry and the plants came back up. Towards the end of the year we expect some change in payables because we've quite a lot of downtime as we change over around the world, particularly in North America and Europe for the new focus. So, we are still frankly assessing the impact of that. And then we also have the sort of boost we had in the last quarter from -- in that fourth quarter of last year from running down the inventory in the plants as we go towards the Christmas shutdown. Joe Amaturo – Buckingham Research: Okay. Great, thanks Lewis and great quarter. Take care.

Thanks a lot.

The next question comes from the line of John Murphy representing Banc of America/Merrill Lynch. Please proceed. John Murphy – Banc of America/Merrill Lynch: Good morning, guys.

Good morning, John. John Murphy – Banc of America/Merrill Lynch: If we look at the pretax margin in the quarter, it was 8.9% in North America, and that's a level approaching the late 90s, we haven't seen that kind of a margin since the late 1990s. I was just wondering as we look at slide 14 and the major factors you cited in the quarter if there was anything that you think is sort of one time in nature or anything that will reverse through the course of the year, will there be more launch costs that come in, or will be other raw material costs that come in, just trying to understand the sustainability of that 8.9% margin?

Yes. We've got a couple of things that will hit us towards as you go through the rest of the year. We have a lot of product launches planned towards in the balance of the year, so you will see things like launch costs go up and some fixed marketing go up. Also we are concerned about raw materials, we are seeing the pressure on commodities beginning to rise, so we expect to see some commodity pressure in the second half. Those I think are the principal -- we may see a bit of mix. We will see a bit of mix as we bring in Fiesta in this quarter, and we bring – we start getting towards Focus at the right end of the year, we can expect to see some mix deterioration I think. We're sort of -- we are not really thinking of the $2 billion as a good going rate because typically we always have a strong first quarter to the – John Murphy – Banc of America/Merrill Lynch: Okay. Then if we look at Ford Motor Credit, the equity at the end of the quarter was $11 billion. I know you guys have talked about that balance sheet, the Ford Motor Credit balance sheet shrinking over time. I mean is that balance sheet mean, does that shrinkage mean in the equity and the potential profits and returns there because the returns or the profit I should say, is really outpacing what we're expecting? I'm just trying to understand if that equity stays relatively high, and that might support Ford Motor Credit profits going forward.

I think we expect to see Credit’s profits come off a bit. As the receivables come down, they will come down as we transition way from the other brands until we start seeing the Ford volume coming back up again, so that's sort of three or four year period I think. Secondly, we've obviously been very fortunate in the way residual values have come back in the last six or eight months. That has enabled K.R. and Mike to write-down some of the credit loss reserves a bit and I think that will run out in the second or third quarter, so we are guiding that, we expect Ford Credit to make about the same amount this year as they did last year, which is obviously not four times eight. John Murphy – Banc of America/Merrill Lynch: Okay, that would imply $1.1 billion, $1.2 billion pretax profit for the next three quarters, is that sort of a normal run rate on a quarterly basis you think going forward?

I don't know, John. I think I will just take a save on that, and I have to think about it. We do expect over time to perhaps free up some capital to return to the auto company. We think the credit company managed leverage has got lower than we would like particularly as we see our access to the credit markets improving quite significantly as you saw for example last week we think we will be able to consider reducing the amount of liquidity we have been holding at the credit company. John Murphy – Banc of America/Merrill Lynch: Great. Thank you very much.

Thanks John.

The next question comes from the line of Itay Michaeli representing Citi. Please proceed. Itay Michaeli – Citi: Great, thanks. Good morning. You raised your Q2 North American production schedule nicely, can you maybe share with us what the underlying assumptions for Q2’s SAAR and market share maybe incentives and also what you are targeting for inventory?

The full year SAAR was still a projected between the 11.5 and 12.5, I think we will probably fit in better than that than we were as we finished the end of March and we have not had a bad start to April in terms of the SAAR. We are expecting net pricing to improve during the year so we are going to be watching very carefully our incentive levels of spending and our share in the first quarter is up but we are still only saying our plan is to sort of equal or improve over the -- for the year because we really are focused on profitability and market share over one of the outcomes rather than the measure [ph] we have tried driving the business as you know by market share in the past and it's not the best way to success. Itay Michaeli – Citi: Absolutely, and a quick follow-up on automotive structural cost, can you maybe….

I am sorry, I didn't answer your question on day supply, we are going to keep dealer day supply well under control and about flat as we go out of the first quarter. Itay Michaeli – Citi: That's very helpful. And then quickly on automotive structural cost, so you had a bit of a tail wind in the quarter. Can you maybe help us in terms of the order of magnitude of what the rest of the year looks like and then should we just plan in 2011 as production recovers automotive structural cost continue to go somewhat higher or is it 2010 more of a catch up from some of the cuts you made last year.

2010, frankly our view of sort of somewhat higher that we have talked about at the end of the last year is about where we are. We didn't incur quite what we were expecting in the first quarter but we think we are just around the corner. Couple of things going on, one is as you pointed out is the increased production and then the other is we are continuing to invest heavily in new product. We are looking at further growth opportunities. And I think, thinking about 2011, while we are not giving guidance, we're obviously very intent on making sure that we keep our product line up fully competitive because we are demonstrating the success of having a competitive product line up and we are talking about growth around the world as you saw in Alan’s section where we really are looking to make sure we are participating around the world. Now we’ve sort of fixed the base of the business. Itay Michaeli – Citi: That's helpful. Thank you.

Thank you.

Your next question comes from the line of Patrick Archambault representing Goldman Sachs. Please proceed. Patrick Archambault – Goldman Sachs: Yes. Hi, good morning. Just wanted to dig into the timing differences on slide 20 again a little bit more. I guess you said that there was seasonal inventory increases. I take – generally speaking most of your inventory is kind of in the hands of dealers, right? So is that sort of international where maybe some of that is on your books that's causing that?

For example, at the end of first quarter, we were right in the middle of the Super Duty launch, and we know we have this sort of batch-and-hold process where we hold vehicles until we are comfortable that we've had a clear run of production. So, our inventory at the end of the quarter, our vehicle inventory at the end of the quarter was just a little bit higher than it would normally be because of our launch process. So, it's nothing to do with dealer stocks. Our practices around the world are the same as they are in the U.S. For example, at the end of first quarter, we were right in the middle of the Super Duty launch, and we know we have this sort of batch-and-hold process where we hold vehicles until we are comfortable that we've had a clear run of production. So, our inventory at the end of the quarter, our vehicle inventory at the end of the quarter was just a little bit higher than it would normally be because of our launch process. So, it's nothing to do with dealer stocks. Our practices around the world are the same as they are in the U.S. Patrick Archambault – Goldman Sachs: Okay, great. I mean there is nothing in here that's related to like incentive accruals or timing differences on that, is that where that would impact cash flow to the extent there were any differences?

No material, as best I can define it. Just a couple more comments about the cash flow. First of all, although we are obviously disappointed it was a tenth negative. It's actually a little investment we projected a couple of months ago. We are pleased with the work the team did, and because it was a better than we projected, we now feel very, very confident about our ability to achieve full-year positive operating-related cash flow. Patrick Archambault – Goldman Sachs: Okay, and one sort of just forward-looking question on cost. You used to, and it’s maybe somewhere in the slide deck, but you used to kind of breakout product cost in three buckets. You had commodities, product adds and then I guess procurement savings from your global platform. On a go forward basis, can you talk a little bit about how you see those playing out this year? You did talk about commodities a little bit, but in terms of the cost savings and then some of the additional regulatory product adds and then – I mean if you are willing to look out a little further than 2010, that would be helpful as well, just so we can understand sort of how those opportunities and headwind stack up?

Yes. If you take without being too explicit, if you take the three buckets, we will continue to add some product cost for a couple of reasons. Some of it is regulatory, but really a lot of -- our increased product costs are to get the cars, the vehicles that customers want and value. So we have said we are not – we are going to launch vehicles that are best-in-class, and best in class does in some case require some additional product cost to ensure they are fully competitive and we have seen the benefit of that in terms of the incremental revenue we achieved from that. We also see some increasing cost because we are equipping our vehicles better and I think that will continue particularly in North America as we are moving from one generation of product to the next generation of world class competitive products and particularly on the car side of the business. We do expect to see some bad news on commodities and our expectations is that's probably not just a this year phenomenon and then we continue to work very productively with our suppliers to make material cost savings and that will continue. And we are – I think as we sort of globalize Ford, we are seeing real benefits with our suppliers of the global supply base and getting the economies of scale that we are sort of leveraging with reduced numbers of platforms. So, we will – and I think in terms of this year, you can think of product costs and material cost savings as, we will be doing our best to try and wash those out with commodity cost as the area that will continue to grow. They are, actually.

The next question comes from the line of Tim Denoyer representing Wolfe Trahan. Please proceed. Tim Denoyer – Wolfe Trahan: Hey. Good morning.

Good morning.

Hi. Tim Denoyer – Wolfe Trahan: Quick question on the distressed supplier payments. You mentioned you said that there was a reduction in that that offset some of the higher commodity cost in the first quarter. Can you give us a sense of magnitude of what those supplier payments are in the first quarter, and is there any room for those to continue to decline?

No, and I am not going to give you the magnitude because they vary, what the payments are and why we help particular suppliers varies tremendously by the individual supplier. We are going to continue to I think as the supply base also returns to better outlook, I think we can hope to see distressed supplier costs being well containable. I think we should over expect some supplier rationalization still ahead of us because -- not the number of suppliers that went out of business in the down period. I wouldn’t may want as many as we expect to see, so there were still some supplies that are struggling a little bit. Tim Denoyer – Wolfe Trahan: Okay, that's helpful. And then just quick question on labor. Can you give us a rough number of employees on the Sub and TAP programs and whether or not you have begun to hire any of the lower-tier wages yet?

We haven't begun to hire any of the lower tier employees yet. I am just looking to one of my colleagues to see if we’ve got a number but I don't think we have. We haven't got, there is not a lots of people as far as I remember but they don't have a number in front of me I am afraid. Tim Denoyer – Wolfe Trahan: Okay. Thanks very much.

Thank you.

The next question comes from the line of Colin Langan representing UBS. Please proceed. Colin Langan – UBS: Good morning. Could you provide a little color, it is sort of related question. North America revenue per unit was actually down year-over-year. Was that mostly related to lower F-Series mix? And then I guess on a similar note, when I look at the walk for North America earning, there was actually into a negative mix, or there is no negative mix highlighted. So is mix actually neutral in the quarter. I would have thought of the negative with less F-150?

Actually, the revenue walk is a bit peculiar because of some special factors from really pertaining to last year. The first was – and they more then explained the sort of reduction that you see, because we did get positive net pricing. The two special factors were – the thing you know in some, in most of our daily rental units, we book the wholesales when we ship the vehicles, but we bought most of the revenue when we sell the used vehicle. And last year, when we were right in the middle of the economic turmoil, our shipment – so our wholesales to daily rental companies was very low, but we were still pretty a more normalized number of units through the auctions, and therefore we had quite a lot of revenue without the equivalent amount of wholesales. For example, this year, in the first quarter is just about flat. We are sort of putting through about the same number of vehicles through the auctions as we are wholesale to rental companies. So that's the biggest distortion factor, and it's last year's phenomena not this year phenomena. And the other issue is that because our wholesales was so low last year, our parts revenue made a significant contribution to the total revenue. Our parts revenue has grown year-to-year, but nothing like the amounts our vehicle wholesale revenue has grown, so again that gives you a distorting effect in mix, and I'll say those two items more than explain the apparent reduction per unit and in fact we did get positive price. I don't think there was much mix effect in there, slightly, but one person saying slightly positive, one saying slightly negative. So it's about a wash. Colin Langan – UBS: Even with lower truck production, is that a positive comment on the profitability of the car portfolio today?

I think that might be a step too far. So let me have a look at that Colin, I don't know for certain. Colin Langan – UBS: And just one last one, you commented that Q1 is usually a seasonally strong quarter. I mean aside from the absolute production, are there any other adjustments in Q1 that sort of help earnings?

It's really – the things that are going to affect the balance of the year that I described I think to Joe or John. Higher fixed marketing, higher launch cost, commodity costs are beginning to hit us a little bit, some incremental engineering (inaudible) launch, such things. So, it is really second or first. Final three quarters compared to the first and again let just remind what Alan said because we now feel this is a more encouraging start than we'd anticipated. So, we feel very good about giving guidance that we will be solidly profitable this year which is, as you know is an adjective we previously used for next year. So, we have pulled ahead the adjective. Colin Langan – UBS: Okay. Thanks for taking question.

Thanks, Colin.

The next question comes from the line of Himanshu Patel representing JPMorgan. Please proceed. Himanshu Patel – JPMorgan: Hi, good morning guys.

Good morning. Himanshu Patel – JPMorgan: Can we get any kind of color on how net pricing trended sequentially in North America?

Himanshu Patel – JPMorgan:

I think it was about half the total, so it's about somewhere between $200 million and $250 million.

And that was the ‘09 profit that we have now taken out. So, I am not telling you what was in the first, what would have been in the first quarter. I am telling you what was in ‘09 and that's a full year number. Himanshu Patel – JPMorgan:

200 to 250, 230 I think to be precise. Himanshu Patel – JPMorgan: And that's mainly the Turkish JV.

That's the Ford Otosan JV primarily, yes; we have a couple of other JVs but the big one is Ford Otosan. Himanshu Patel – JPMorgan: Okay. And then lastly any comment on just how long these lease residual gains last and to what magnitude over the next few quarters?

We are watching it closely. We saw continued modest improvements in the first couple of weeks of April that started to plateau off and we would expect to see a sort of a seasonal declines as we go towards the end of the year. Himanshu Patel – JPMorgan: Okay. Thank you.

Welcome.

The next question comes from the line of Chris Ceraso representing Credit Suisse. Please proceed. Chris Ceraso – Credit Suisse: Thank you. Good morning.

Hey Chris. Chris Ceraso – Credit Suisse: I think it was a couple of years ago that you changed something with the way you accrue for or account for incentives and I am just wondering if there is something here in the first quarter where you had cash going out the door for incentives but it was not running through the P&L. Is that part of the $600 million negative on the cash flow and is that partly why the year-over-year change in price was so strong in North America?

You are right; we did make the change couple of years ago. So the year-over-year comparison is clean of any affect. Chris Ceraso – Credit Suisse: So, but there is no cash going out the door for incentives in Q1 that did not go through the P&L?

There's the subvention payment that we show in the cash of – I can't remember whether it was 250 or 300 -- $300 million, but the year-over-year, we have that in last year as well. Chris Ceraso – Credit Suisse: Okay. And then on the cost front, I am just hoping you can help us order of magnitude, you have mentioned that both structural costs will be going higher and material cost will be going higher. Is this 100 million, is it 500 million. What's the kind of ballpark that we are dealing with here?

We are really not going to go into that amount of detail. Chris, I'm sorry. Chris Ceraso – Credit Suisse: All right. And if I can squeak in another just sort of a house cleaning item, can you use to the loss carry forwards from the motor business to offset taxable income at the finance company?

Yes. Chris Ceraso – Credit Suisse: Okay. And then just one last quick one. What was the share count at the end of the quarter? What do you expect it to be in Q2?

The share count at the end of the quarter was $3.4 billion. I think that was the average outstanding. Chris Ceraso – Credit Suisse: Is that a fully diluted number assuming -- let's assume you're in the same amount in this, in Q2 that you did in Q1?

If you guys have Appendix 1, Chris I think all the detail is in there. And if it’s not quite adequate, just give a call. Chris Ceraso – Credit Suisse: Okay. Thank you.

Thanks a lot.

The next question comes from the line of Rod Lache representing Deutsche Bank. Please proceed. Rod Lache – Deutsche Bank: Good morning, everybody. I had a couple remaining questions on North America. First of all, I think last year in the first quarter you called out a $600 million warranty reversal on, I believe that $400 million of that was in North America and I did see the $200 million negative in the first quarter. Was there some remaining benefit there from warranty in Q1 in North America or elsewhere? Also I think you said something about you're expecting North American pricing to improve going forward? Could you just elaborate on that? I would imagine the pricing comparisons get a little tougher as you go through the course of this year.

Clean of the warranty reserve adjustment we made last first quarter, we are seeing positive warranty performances as the quality of our vehicles improves. I don't think that's just a North American phenomena. I think that's a more global phenomenon. So in terms of reconciling to the 600 and the 400, I've to just check that out. But I don't -- I think we are essentially clean, we are seeing good news in the warranty over the period. And yes, we are still expecting to see positive net pricing in North America particularly as we launch our new products where – that's where we really saw the benefit of world class products. Rod Lache – Deutsche Bank: Okay. So over the course of the year, even though the comparisons are more difficult, or should be a plus, and can you quantify your expectations for commodities at this point? It's pretty frequently in the news. I think Toyota said something yesterday but still how meaningful is that based on where spot prices are today and then lastly you did comment just qualitatively on some of the headwinds that you see cropping up, but you've got a pretty nice uptick in production as you head into Q2, which should contribute some operating leverage, just a net of these things. Is it your view that you would not be able to sustain these kinds of margins for a while or do you feel pretty comfortable just for the time being with this level of profitability?

Well, we are obviously we are very comfortable with the first quarter. We suggest that people recognize there will be some other events during the year that make that probably not a good guide for a running rate. I have enunciated those pretty clearly. Rod Lache – Deutsche Bank: And commodity headwinds, any color on that for us?

Well, it's meaningful but we are not giving out specific details. Rod Lache – Deutsche Bank: Okay. Thank you.

The next question comes from the line of Brian Johnson representing Barclays Capital. Please proceed. Brian Johnson – Barclays Capital: Good, my three questions that I have left all relate to your international operations, Europe, South America and then China. On Europe, can you give us your sense of how you expect the pricing to play out over the reminder of the year as scrappage programs wear off as you kind of pass the Fiesta launch and waiting for the focus towards the end of the year?

We are keeping a very close eye on the incentive spending levels in Europe. They are up sequentially reflecting couple of things; one, the national demand has gone down, in some cases competitors are sort of trying to match the old scrappage incentives with their own incentives. So, we're keeping a close eye on that, and you're right. We had a bonanza year last year with a brand new Fiesta and a brand new K. So the car is staying very fresh. The Fiesta in particular, I think it was very close to being the top selling car, if not the top selling car in March. We’re having a bit of dispute with one of our competitors. But it was right up there. And then we have – I think the thing that’s going to work in our favor during this year is we have a really great freshening on S-MAX and Galaxy just in the marketplace. Then we’ve got, in the middle of the year, the Grand C-MAX, which is a new segment entry to us and one we’re desperate to get hold off to go against some of our competitors. And then by the end of the third quarter, we’ll have the new five-seater C-MAX, which I think you’ve seen is a knockout product. We got a lot of Powertrain activities going on with substantial upgrades to diesels and we are launching eco-boost in Europe as well. We have got lots of activity, lots of product activity and the strength of the European story is just the same as the strength of the North American story, great product to helps you offset some of these pressures. Brian Johnson – Barclays Capital: And in South America your margin ticked down sequentially. Was that pricing seasonality weakness in markets outside of Brazil where there are other makers that reported, although they don't breakout their earnings to the same extent, fairly good results in the quarter?

Brian Johnson – Barclays Capital: Okay. Finally, you're at a point where you are ready to break out your Chinese joint venture equity income for our enjoyment?

No, I am sorry; we are going to have to disappoint you; you will have to find other enjoyments. Sorry Brian, I think there are lots and lots in the pitch to enjoy. Brian Johnson – Barclays Capital: Okay. Thanks.

And I just -- we have had a lot of these discussions about the calendarization of our year but again I just want to emphasize that we did feel good enough to say we didn't expect to be solidly profitable this year and given where we were, given three or four months ago -- essentially we are really encouraged by the start we had.

Ladies and gentlemen, at this time, we now like to welcome questions from the media community. (Operator Instructions). Your next question comes from the line of Bryce Hoffman with The Detroit News. Please proceed. Bryce Hoffman – The Detroit News: Thank you. Congratulations, gentlemen, on a good quarter. A couple of questions, first looking at Appendix 5, it looks like your North American headcount is down by a 1,000 people year-over-year. Where are you at in your right sizing if you will of your North American staffing levels? Should we expect to see continued declines or are you pretty much stable now?

We are pretty much stable. We are not in a position to start hiring yet. We are pretty much stable. The emphasis now I think is and we continued to see our volumes grow and then we will take a hard look at our people levels. Bryce Hoffman – The Detroit News: And then second question, could you talk a little bit more about, if you will, the threat posed by the end of scrappage programs in Europe? How much could that negatively impact your performance going forward?

It's actually quite difficult to assess. We were forecasting a year of between 13.5 and 14.5 when we started the year in January, and the first quarter came in at 16. That was held up by two things. One was the completion of some orders that have been placed and that got scrappage vouchers for example, in Germany but haven't been delivered. Secondly, this increased level of incentive spend, but within that 16, Germany, for example, which is the biggest market in Europe was down about 20%, so we can see the impact of the scrappage comes off. The German program was the strongest of the scrappage programs. So, the reason we've sort of increased the expectations for European industry is to between 14 million units and 15 million units now is because of the strong first quarter, but we are still expecting to see a pretty significant volume drop. And if we don't see that volume drop, then we think it will be at the expense of increased incentives. So that’s what we are trying to understand, what's going on with our competitors and how we would react appropriately. Bryce Hoffman – The Detroit News: Thank you.

Thanks Bryce.

Your next question comes from the line of Jeff Bennett representing the Wall Street Journal. Please proceed. Jeff Bennett – Wall Street Journal: Lewis, you said that Ford Motor Credit gave Ford Motor $2 billion this year, is that up from $1.5 billion?

That's correct. When we talked to you in January, we said we expect the dividend to $1.5 billion. We now expect it to be $2 billion. Jeff Bennett – Wall Street Journal: And why is that?

Because frankly they are making more money than we expected in January, it’s a very strong first quarter. I'm quite -- just a damn good [ph] job by the team in Ford Credit and helped by some – frankly the recovery of the economy is translating into improved residual values, but because they are making a little bit more money, we think they can afford to dividend a little more money to the parent. Jeff Bennett – Wall Street Journal: But what you are also telling us, though, is that is going to begin to wind down a little bit into the third quarter as those residuals come down and as you are replacing the Volvo credit?

It's going to come down a little bit, that’s why I was saying they recommend you take $800 million and multiply by it by four, we're giving guidance. We think it’s going to be about $2 billion about equal to last year. Jeff Bennett – The Wall Street Journal: Okay. Thanks.

Just want everybody on the phone, we just like to clarify one thing that we have had one or two people slightly confused about, and that's on slide three and it’s the revenue where we show $28.1 billion. And I know one or two people thought that was somewhat of a disappointment and the reason it looks relatively modestly increased compared to a year ago is because that number excludes Volvo whereas the prior year included Volvo. And that number is also being adjusted for the variable interest entities, i.e. the deconsolidation of the joint ventures. To put it in perspective for the first quarter, if we included Volvo, the Volvo revenues is about $3.5 billion. And if we hadn't made the deconsolidation, the VIE revenue is about $0.5 billion. So, that number so being 28.1 would have been about $32.1 million which I think we are closer in line to some people's expectations. And I just wanted to clarify that because we have seen a few comments that implied you haven't rated out quite as clearly as we should have done. I am sorry to interpret whoever who was about to ask a question.

The next question comes from the line of Tom Walsh representing Free Press. Please proceed. Tom Walsh – Free Press: Good morning guys.

Hi Tom. Tom Walsh – Free Press: One for Alan here. As the turmoil of 2008 and early '09 recedes into the rearview mirror, how much residual goodwill do you think you have with the American car buyer for not taking the money? I heard in an interview this morning where you mentioned that Ford had honored the shareholders and the bondholders. Just if you could elaborate on that a little bit.

Sure Tom, I think that we have gained quite a bit by the fact that not only are we clearly making some of the best cars and trucks in the world but also that we have continued to create a very strong business for the long-term because people wanted to be associated with a going concern, and somebody that cares about them, is going to be there for them. And clearly the fact that we have done this and we respected the shareholders, we respected the bondholders, we respected everybody that had invested in Ford and now we have created a very strong business. I think that resonates very well with our consumers. Tom Walsh – Free Press: Thanks.

You bet.

Your next question comes from the line of Dee-Ann Durbin representing The Associated Press. Please proceed. Dee-Ann Durbin – The Associated Press: Good morning. Thanks for taking the call. How much do you feel that the first quarter was artificially inflated because we were making up for fleet low volumes last year, we had Toyota's incentive spending, China cars, trucks, sales way up. Or how much shows a real fundamental strength and real economic improvement?

I think it's absolutely a manifestation of the strength of our products. The breadth of them and the quality of our products because we are seeing so many new customers coming to Ford based on the strength of the products and the fact they we’re running a strong business, but I think that's absolutely the reason that you're seeing these results. And as we've talked about in the past these results now are a result of the three or four fundamental decisions that we made a few years ago. One was you're going to focus on the Ford brand as you all know, and second that we are going to have a complete family of vehicles, small, medium and large cars utilities and trucks. Then the third big decision of course was that every new vehicle that we introduce would be the very best in the world in terms of quality, fuel efficiency and safety and smart design. And when you look at them and then of course leverage our global assets worldwide, so we bought all of that intelligence and scale to the consumer and you look at the sales numbers and in the first quarter, they are up 37% in the U.S. The market share itself is up 2.7 percentage points to 16.6, and that is absolutely on the strength of this product line. If you look at all of the products, the small, the medium and large, they are all growing at double digit rate. So, I think it's' a real testament to the strength of the products because at the end of the day, that's what people really do want in addition to buying from a strong company.

The next question comes from the line of Robert Schoenberger representing The Plain Dealer. Please proceed. Robert Schoenberger – The Plain Dealer: All right. Good morning. When you calculate your profit share for the UAW workers, is that on a quarterly basis or is that on an annual basis?

Annually. Yes. It's done at the end of the year. Robert Schoenberger – The Plain Dealer: Okay. So this won't have an immediate impact on the earnings for the UAW workers out there?

No. I mean we pay it annually. We calculate annually and pay it annually. Robert Schoenberger – The Plain Dealer: Okay, great, thank you very much.

The next question comes from the line of Brent Snavely representing Detroit Free Press. Please proceed. Brent Snavely – Detroit Free Press: Hello, everybody.

Hi Brent. Brent Snavely – Detroit Free Press: You guys have mentioned the market share gains in the U.S., biggest gains since the fourth quarter of 1977. Do you think you can sustain that or what kind of market share gains do you foresee for the remainder of the year in the U.S. and also wondering what your market share outlook is for Europe as scrappage comes to an end but you do have other products in the pipeline?

Sure. Our guidance is on the U.S. that we'd be equal to or improve. I think we are clearly on track to meet that objective. And in Europe we had equal the market share of the last year and for the reasons that you said that with the scrappage program coming to an end, but based on the strength of our products even with the over capacity we have there we believe that we are going to be able to hold that market share. And clearly as you've seen, even in the place now we're the number one brand in Europe. So, the product, we've so many new products coming, we are going to have to freshest product line in the showroom of any manufacturer over the next two years. So, I anticipate that we are going to be able to deliver on that guidance on share. Brent Snavely – Detroit Free Press: Okay. Thank you.

You are welcome.

Katrina, I think we have time for just one more question please

Your next question will come from the line of Jere Downs representing the Louisville Courier. Please proceed. Jere Downs – The Louisville Courier Journal: Good morning, gentlemen. With the gains in market share, would that mean that previous comments that perhaps one to three plants in the U.S are extraneous, can you -- well how does that affect your over capacity in the U.S?

We didn't say anything about overcapacity in the U.S. today and we have been working, clearly been working matching our production, our capability to real demand. And as we mentioned, we feel we have a good match right now and we anticipate growing the business going forward as we pointed out in the guidance for this year and also for the next year. Jere Downs – The Louisville Courier–Journal: .:

You're welcome.

Okay. Thank you everyone. That concludes today's presentation. We thank you all for joining us here today.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes your presentation, you may now disconnect. Good day.