Federal-Mogul Corporation : Federal-Mogul Reports Fourth Quarter and Full Year 2012 Results

Federal-Mogul Corporation : Federal-Mogul Reports Fourth Quarter and Full Year
                                 2012 Results

  *Fourth quarter 2012 sales of $1.6 billion, FY 2012 sales of $6.7 billion.

  *Q4 2012  net loss  of $(80)  million primarily  due to  a weaker  European 
    market. Adjusted net loss of $(41) million when excluding  restructuring, 
    impairments and special items.

  *FY 2012  net  loss of  $(117)  million on  the  weak European  market  and 
    impairment charges.  FY  adjusted net  income  of $51  million,  excluding 
    restructuring, impairments and special items.

  *Operational EBITDA of $65 million in Q4 2012 and $483 million for FY 2012.
    Adjusted Operational EBITDA of $84 million in Q4 2012 and $508 million for
    FY 2012.

  *Multi-site restructuring  to transfer  production and  equipment to  lower 
    cost locations.

Southfield, Michigan, February  27, 2013.  Federal-Mogul Corporation  (NASDAQ: 
FDML) today announced fourth quarter 2012 sales of $1.6 billion, four  percent 
lower than the  fourth quarter of  2011, or  two percent lower  on a  constant 
dollar basis. The result includes the  impact of 13% lower global  commercial 
and industrial engine production, and a 14% decline in European light  vehicle 
production, compounded by a shift in mix within light vehicle production  from 
higher content diesel  to gasoline products.  The company had  a net loss  of 
$(80) million in Q4 2012 due to  the weaker European light vehicle and  global 
commercial vehicle markets  with negative regional  and product mix.  Without 
the impact of restructuring, impairments and special items, the company had an
adjusted net loss of $(41) million in Q4 2012. Operational EBITDA in Q4  2012 
was $65 million due to the lower European sales and unfavorable mix,  combined 
with legal and commercial charges of $(19) million. Excluding these items, Q4
2012 Adjusted EBITDA was $84 million. 

Financial Summary             Q4 2012  Q4 2011          2012          2011
($ millions)
Net Sales                      $1,595   $1,654       $6,664       $6,910
Gross Margin                     $168    $247          $911        $1,088
pct. of sales                   10.5%    14.9%     13.7%     15.7%
SG&A                           $(173)   $(167)        $(712)       $(689)
pct. of sales                   10.8%    10.1%         10.7%         10.0%
Net (Loss)                      $(80)   $(239)        $(117)         $(90)
attributable to Federal-Mogul
(Loss) Per Share               $(.81)  $(2.42)       $(1.18)        $(.91)
in dollars, diluted EPS
Operational EBITDA^1              $65   $153        $483         $683
^pct. of sales                  4.1%     9.2%          7.2%          9.9%
Cash Outflow^2                  $(77)      $43        $(480)        $(115)
Adjusted Net (Loss) Income^3    $(41)      $52           $51          $208
attributable to Federal-Mogul
Adjusted Operational EBITDA^4     $84     $153          $508          $683
pct. of sales                    5.3%     9.2%          7.6%          9.9%

Detailed schedules are available at the end of this press release

The company, for full year 2012  reported four percent lower sales than  2011, 
comprising a  one  percent constant  dollar  increase, offset  by  an  adverse 
currency impact of five  percent. Sales in North  America were three  percent 
higher and in Rest of  World (ROW) eight percent  higher on a constant  dollar 
basis, but were offset by four percent lower sales in Europe, excluding  sales 
from BERU. The company in China had nine percent constant dollar sales growth
during Q4 2012 versus Q4 2011. 

Federal-Mogul, for full year 2012 reported  a net loss of $(117) million  with 
the European  market,  impairments  and  special  items  negatively  impacting 
results. The company had an adjusted net income of $51 million when excluding
the impact of the impairments, restructuring and special items.

Operational EBITDA for the  full year 2012 was  $483 million. When  excluding 
the impact of  special items  of $25  million, including  legal, customer  and 
other contractual agreements, the company had 2012 Adjusted Operational EBITDA
of $508 million.

The company in Q2 2012 announced a $60 million restructuring program involving
three plant closures and one site downsizing. The closures are expected to be
completed by  the  end of  Q2  2013. The  company  today announced  plans  to 
commence  an  additional  multi-site   restructuring  program  involving   the 
potential closure  or downsizing  of  manufacturing facilities,  primarily  in 
Western Europe.  The plan  will be  implemented from  2013 through  2015  and 
involves shifting  capacity and  equipment  to existing  lower cost  sites  in 
Eastern Europe, Asia and Mexico. Details of each site restructuring plan will
be disclosed to employees in  accordance with relevant legal requirements  and 
customary consultations with employee  representatives, labor authorities  and 
other stakeholders.

"We are evaluating the markets closely  and anticipate implementing a plan  to 
transfer capacity from higher  cost locations to  available capacity in  lower 
cost locations  in  Mexico,  Poland,  China  and  other  sites,"  said  Rainer 
Jueckstock,  co-CEO   and  Powertrain   Segment   CEO.  "We   are   balancing 
Federal-Mogul's global  manufacturing footprint  efficiency with  the need  to 
support our customer's planned growth in developing markets and with the  need 
to be ready for the eventual European market recovery."

Segment Revenue and Operational EBITDA Q4 2012
Federal-Mogul in Q4 2012  had total revenue of  $1.6 billion. The  Powertrain 
Segment (PT) had total revenue of $973 million including intercompany sales to
Vehicle Component Solutions Segment (VCS).  Powertrain Segment revenue in  Q4 
2012 was six percent lower, or three percent lower on a constant dollar basis,
compared to Q4 2011. 

Commercial vehicle production in Federal-Mogul's primary markets declined  13% 
during the fourth quarter 2012, versus the same period of 2011, resulting in a
seven percent decrease  in the company's  Powertrain Segment sales  to CV  and 
industrial markets during  the quarter.  Sales in  EMEA, where  PT derives  a 
significant portion  of  its  revenue and  profitability  from  light  vehicle 
diesel, commercial and industrial powertrain products, were 12% lower than  Q4 
2011, compared to a market decline of 14%. 

Furthermore, the softer European  market conditions also  drove a product  mix 
shift within light vehicle production away from higher content diesel  engines 
towards  lower  content  gasoline  engines,  with  a  significant  impact   on 
profitability. Sales to OE customers in North America during the period  were 
up two percent. Sales to OE customers in China grew 8% during Q4 2012, versus
Q4 2011.

"Our European customers have signaled a market recovery in the second half  of 
2013. We don't expect current lower  European volumes and diesel to  gasoline 
engine mix for  the long term,  since diesel powertrains  are ultimately  more 
fuel efficient and are preferred by a large percentage of European  customers. 
However, the economic impact of conditions in the last half of 2012 drove  an 
unfavorable mix that negatively impacted the company's profitability in recent
periods," said Jueckstock.

The Powertrain Segment recorded Operational EBITDA of $29 million in Q4  2012, 
down from $108 million in Q4 2011, primarily driven by the reduced volume  and 
unfavorable  mix  conditions  previously  explained.  The  segment  was  also 
negatively  impacted  by  a  special  commercial  agreement  in  the  quarter. 
Excluding this item, the Powertrain Segment had Adjusted Operational EBITDA of
$39 million.

The VCS Segment in Q4 2012 had revenue of $709 million. Total revenue was down
two percent, or flat on  a constant dollar basis. The  VCS Segment had a  two 
percent decline in sales to customers in original equipment markets, or up one
percent on a constant  dollar basis. Global aftermarket  sales were down  one 
percent on  a constant  dollar basis.  The VCS  Segment recorded  Operational 
EBITDA of $37 million in Q4 2012, down $8 million versus Q4 2011. Without the
impact of a legal settlement recorded  in the quarter, VCS Operational  EBITDA 
would have been $46  million or 6.5%  of sales, an  improvement of $1  million 
versus the fourth quarter 2011.

"We continue to see evidence of the success of our marketing and  distribution 
strategies," said  Michael Broderick,  Federal-Mogul  co-CEO and  CEO  Vehicle 
Component Solutions  Segment.  "Our  large North  American  core  aftermarket 
business  is  stabilizing  as  we  are  exiting  unprofitable  business  while 
simultaneously focusing on product differentiation in all our premium  product 

Net Results
Federal-Mogul reported a net loss of $(80) million in the fourth quarter  2012 
primarily due to  lower sales,  especially in  the European  market. The  net 
result was  further impacted  by special  legal and  commercial agreements  of 
$(19) million,  impairment  charges  of  $(20) million  and  $(6)  million  of 
restructuring charges. Without the impact  of these items and the  associated 
tax benefit of  $6 million,  the company  had an  adjusted net  loss of  $(41) 

For the full year 2012, the company had a net loss of $(117) million with  the 
full year earnings  impact of lower  sales in Europe,  special items of  $(25) 
million and other non-EBITDA charges, principally impairments, totaling $(169)
million. Without the impairment, special  items and associated tax impact  of 
$26 million, the company would have recorded $51 million net income.

Cash Flow
The company recorded a cash outflow of $(77) million during the fourth quarter
of 2012 and had  an outflow of  $(480) million for the  full year 2012.  Full 
year capital spending of  $387 million and interest  payments of $106  million 
offset $483 million of Operational EBITDA. In addition, a significant portion
of cash  outflow  was  due  to  the extension  of  $285  million  of  accounts 
receivable requested by  several large  U.S. aftermarket  retail customers  as 
part of commercial negotiations. The company  does not intend to continue  to 
extend payment  terms in  the future.  During the  period, Federal-Mogul  also 
contributed $90 million to the U.S.-funded  pension plan and paid $52  million 
for the BERU spark  plug business. Federal-Mogul had  a cash balance of  $467 
million at the end of the fourth quarter 2012 and an undrawn revolver of  $450 

Analyst Call   
The company will  hold a call  with analysts and  other interested parties  at 
10:00AM EST on February 27, 2013. 

Details   for   registering    to   join   the    call   are   available    at 

About Federal-Mogul
Federal-Mogul Corporation  (NASDAQ:  FDML) is  a  leading global  supplier  of 
products and services to the  world's manufacturers and servicers of  vehicles 
and equipment  in the  automotive, light,  medium and  heavy-duty  commercial, 
marine,  rail,  aerospace,  power  generation  and  industrial  markets.   The 
company's  products  and  services  enable  improved  fuel  economy,   reduced 
emissions and enhanced vehicle safety.

Federal-Mogul operates two  independent business segments,  each with a  chief 
executive  officer   reporting   to  Federal-Mogul's   Board   of   Directors. 
Federal-Mogul's Powertrain Segment designs and manufactures original equipment
powertrain  components  and  systems   protection  products  for   automotive, 
heavy-duty, industrial and transport applications.

Federal-Mogul's Vehicle Component  Solutions Segment sells  and distributes  a 
broad portfolio  of  products  through  more  than  20  of  the  world's  most 
recognized brands  in  the  global vehicle  aftermarket,  while  also  serving 
original equipment  vehicle  manufacturers with  products  including  braking, 
chassis, wipers  and  other  vehicle components.  The  company's  aftermarket 
brands include  ANCO^®  wiper  blades;  Champion^®  spark  plugs,  wipers  and 
filters; AE^®, Fel-Pro^®, FP Diesel^®, Goetze^®, Glyco^®, Nüral^®, Payen^® and
Sealed Power^®  engine products;  MOOG^® steering  and suspension  parts;  and 
Ferodo^® and Wagner^® brake products. Federal-Mogul was founded in Detroit in
1899. The company  employs 45,000 people  in 34 countries,  and its  worldwide 
headquarters is in Southfield, Michigan, United States. For more  information, 
please visit www.federalmogul.com.

1     Management  believes that Operational  EBITDA provides  supplemental 
information for management and investors to evaluate the operating performance
of its business.  Management uses,  and believes that  investors benefit  from 
referring to Operational EBITDA in assessing the Company's operating  results, 
as well  as in  planning, forecasting  and analyzing  future periods  as  this 
financial measure approximates the cash  flow associated with the  operational 
earnings of the Company. Additionally, Operational EBITDA presents measures of
corporate performance exclusive  of the  Company's capital  structure and  the 
method by  which assets  were acquired  and financed.  Operational EBITDA  is 
defined  as  earnings   before  interest,  income   taxes,  depreciation   and 
amortization, and certain items such as restructuring and impairment  charges, 
Chapter 11 and U.K. Administration  related reorganization expenses, gains  or 
losses on the  sales of  businesses, the  non-service cost  components of  the 
U.S.-based funded pension plan and OPEB curtailment gains or losses.
2  Cash flow is equal to  net cash provided by operating activities less  net 
cash used by investing activities, as  set forth on the attached statement  of 
cash flows.
3    Adjusted net income  (loss) is defined as net income attributable  to 
Federal-Mogul before the impact of impairment charges, OPEB curtailment  gains 
and restructuring expense and  before a special  commercial settlement of  $10 
million, a legal settlement  of $9 million,  both occurring in  Q4 2012 and  a 
contractual settlement of $6 million occurring in Q1 2012.
4    Adjusted Operational EBITDA refers to Operational EBITDA, before  the 
impact of a special commercial settlement  of $10 million, a legal  settlement 
of $9 million, both occurring  in Q4 2012 and  a contractual settlement of  $6 
million occurring in Q1 2012.

Steve Gaut
(248) 354-7826
David Pouliot
(248) 354-7967

Federal-Mogul Q4 2012 Press Release Financial Statements


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Source: Federal-Mogul Corporation via Thomson Reuters ONE
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