Table of Contents
þ | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware (State of incorporation) | 38-0549190 (I.R.S. employer identification no.) | |
One American Road, Dearborn, Michigan (Address of principal executive offices) | 48126 (Zip code) |
(Registrant’s telephone number, including area code)
Title of each class | Name of each exchange on which registered (a) | |
Common Stock, par value $.01 per share | New York Stock Exchange | |
7.50% Notes Due June 10, 2043 | New York Stock Exchange | |
Ford Motor Company Capital Trust II | New York Stock Exchange | |
6.50% Cumulative Convertible Trust Preferred | ||
Securities, liquidation preference $50 per share |
(a) | In addition, shares of Common Stock of Ford are listed on certain stock exchanges in Europe. |
Yesþ Noo
Yeso Noþ
Document | Where Incorporated | |
Proxy Statement* | Part III (Items 10, 11, 12, 13 and 14) |
* | As stated under various Items of this Report, only certain specified portions of such document are incorporated by reference in this Report. |
Item | Page | |
1 | ||
2 | ||
3 | ||
10 | ||
11 | ||
18 | ||
19 | ||
19 | ||
25 | ||
25 | ||
28 | ||
28 | ||
28 | ||
28 | ||
29 | ||
30 | ||
30 | ||
31 | ||
32 | ||
34 | ||
35 | ||
35 | ||
41 | ||
42 | ||
47 | ||
51 | ||
57 | ||
60 | ||
64 | ||
65 | ||
67 | ||
68 | ||
68 | ||
68 | ||
70 | ||
72 | ||
72 | ||
73 | ||
73 | ||
74 | ||
74 | ||
74 | ||
74 | ||
74 | ||
75 | ||
81 | ||
FS-1 | ||
FS-1 | ||
FS-2 | ||
FS-3 | ||
FS-4 | ||
FS-5 | ||
FS-6 | ||
FS-7 | ||
FS-8 | ||
FS-59 | ||
FSS-1 | ||
FSS-2 |
(continued)
EXHIBITS | ||
By-Laws as amended through December 14, 2006 | ||
Amendments to Deferred Compensation Plan, effective as of December 1, 2006 | ||
Annual Incentive Compensation Plan Metrics for 2007 | ||
Form of Final Award Notification Letter for 2006 Performance-Based Restricted Stock Equivalents | ||
Description of Performance-Based Restricted Stock Units for 2007 | ||
Form of Final Award Notification Letter for 2004-2006 Performance Period | ||
Description of Time-Based Restricted Stock Units | ||
Amended and Restated Agreement between Ford Motor Company and Ford Motor Credit Company dated as of December 12, 2006 | ||
Description of Settlement of Special 2006-2008 Senior Executive Retention Program | ||
Arrangement between Ford Motor Company and Mark Fields dated February 7, 2007 | ||
Description of Company Practices regarding Club Memberships for Executives | ||
Description of Special Terms and Conditions for Stock Options Granted to Alan Mulally | ||
Description of President and CEO Compensation Arrangements | ||
Credit Agreement dated as of December 15, 2006 | ||
Calculation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends | ||
List of Subsidiaries of Ford as of February 21, 2007 | ||
Consent of Independent Registered Public Accounting Firm | ||
Powers of Attorney | ||
Rule 15d-14(a) Certification of Chief Executive Officer | ||
Rule 15d-14(a) Certification of Chief Financial Officer | ||
Section 1350 Certification of Chief Executive Officer | ||
Section 1350 Certification of Chief Financial Officer |
Table of Contents
• | “Investor Information” | ||
• | “Company Reports” | ||
• | “U.S. S.E.C. EDGAR” | ||
• | “Click here to continue on to view SEC Filings” |
Table of Contents
Business Sector | Reportable Segments | Description | ||
Automotive: | Ford North America | Primarily includes the sale of Ford, Lincoln and Mercury brand vehicles and related service parts in North America (the United States, Canada and Mexico), together with the associated costs to design, develop, manufacture and service these vehicles and parts. | ||
Ford South America | Primarily includes the sale of Ford-brand vehicles and related service parts in South America, together with the associated costs to design, develop, manufacture and service these vehicles and parts. | |||
Ford Europe | Primarily includes the sale of Ford-brand vehicles and related service parts in Europe, Turkey and Russia, together with the associated costs to design, develop, manufacture and service these vehicles and parts. | |||
Premier Automotive Group | Primarily includes the sale of Premier Automotive Group (“PAG”) brand vehicles (i.e., Volvo, Jaguar, Land Rover and Aston Martin) and related service parts throughout the world (including North and South America, Asia Pacific and Africa), together with the associated costs to design, develop, manufacture and service these vehicles and parts. | |||
Ford Asia Pacific and Africa/Mazda | Primarily includes the sale of Ford-brand vehicles and related service parts in the Asia Pacific region and South Africa, together with the associated costs to design, develop, manufacture and service these vehicles and parts, and our share of the results of Mazda Motor Corporation (of which we own approximately 33.4%) and certain of our Mazda-related investments. | |||
Financial Services: | Ford Motor Credit Company | Primarily includes vehicle-related financing, leasing, and insurance. |
2
Table of Contents
Number of Dealerships | ||||
Brand | at December 31, 2006* | |||
Ford | 9,480 | |||
Mercury | 1,971 | |||
Lincoln | 1,515 | |||
Volvo | 2,352 | |||
Land Rover | 1,376 | |||
Jaguar | 871 | |||
Aston Martin | 125 |
* | Because many of these dealerships distribute more than one of our brands from the same sales location, a single dealership may be counted under more than one brand. |
3
Table of Contents
• | wholesale unit volumes; | ||
• | the mix of vehicles and options sold; | ||
• | the margin of profit on each vehicle sold; | ||
• | the level of “incentives” (e.g., price discounts) and other marketing costs; | ||
• | the costs for customer warranty claims and additional service actions; and | ||
• | the costs for safety, emission and fuel economy technology and equipment. |
4
Table of Contents
U.S. Industry Sales* | |||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||
Cars | 8.1 | 7.9 | 7.7 | 7.8 | 8.2 | ||||||||||||||||
Trucks | 9.0 | 9.6 | 9.6 | 9.2 | 8.9 | ||||||||||||||||
Total | 17.1 | 17.5 | 17.3 | 17.0 | 17.1 | ||||||||||||||||
* | Throughout this section, industry sales include sales of heavy trucks. |
5
Table of Contents
U.S. Industry Vehicle Mix of Sales by Segment | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
CARS | ||||||||||||||||||||
Small | 19.8 | % | 17.9 | % | 16.9 | % | 17.3 | % | 18.3 | % | ||||||||||
Medium | 12.4 | 12.3 | 13.1 | 14.4 | 15.2 | |||||||||||||||
Large | 7.4 | 7.4 | 6.8 | 6.6 | 7.2 | |||||||||||||||
Premium | 7.5 | 7.8 | 7.7 | 7.7 | 7.4 | |||||||||||||||
Total U.S. Industry Car Sales | 47.1 | 45.4 | 44.5 | 46.0 | 48.1 | |||||||||||||||
TRUCKS | ||||||||||||||||||||
Compact Pickup | 3.5 | % | 3.9 | % | 4.0 | % | 4.4 | % | 4.6 | % | ||||||||||
Bus/Van | 7.8 | 8.1 | 8.5 | 8.2 | 8.5 | |||||||||||||||
Full-Size Pickup | 13.3 | 14.6 | 14.7 | 14.0 | 13.1 | |||||||||||||||
Sport Utility Vehicles | 25.2 | 25.6 | 26.1 | 25.7 | 24.3 | |||||||||||||||
Medium/Heavy | 3.1 | 2.4 | 2.2 | 1.7 | 1.4 | |||||||||||||||
Total U.S. Industry Truck Sales | 52.9 | 54.6 | 55.5 | 54.0 | 51.9 | |||||||||||||||
Total U.S. Industry Vehicle Sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
Ford Vehicle Mix of Sales by Segment in U.S. | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
CARS | ||||||||||||||||||||
Small | 11.8 | % | 10.9 | % | 10.2 | % | 11.4 | % | 12.5 | % | ||||||||||
Medium | 12.1 | 7.7 | 8.7 | 10.4 | 11.9 | |||||||||||||||
Large | 7.7 | 8.3 | 5.0 | 4.8 | 4.4 | |||||||||||||||
Premium | 6.4 | 6.3 | 7.1 | 7.5 | 8.3 | |||||||||||||||
Total Ford U.S. Car Sales | 38.0 | 33.2 | 31.0 | 34.1 | 37.1 | |||||||||||||||
TRUCKS | ||||||||||||||||||||
Compact Pickup | 3.2 | % | 3.8 | % | 4.7 | % | 6.0 | % | 6.3 | % | ||||||||||
Bus/Van | 8.0 | 8.4 | 8.8 | 8.4 | 9.1 | |||||||||||||||
Full-Size Pickup | 27.7 | 28.8 | 28.2 | 24.3 | 22.5 | |||||||||||||||
Sport Utility Vehicles | 22.5 | 25.3 | 26.9 | 27.0 | 24.8 | |||||||||||||||
Medium/Heavy | 0.6 | 0.5 | 0.4 | 0.2 | 0.2 | |||||||||||||||
Total Ford U.S. Truck Sales | 62.0 | 66.8 | 69.0 | 65.9 | 62.9 | |||||||||||||||
Total Ford U.S. Vehicle Sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
6
Table of Contents
U.S. Car Market Shares (a) | |||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||
Ford | 6.4 | % | 6.1 | % | 6.1 | % | 6.9 | % | 7.8 | % | |||||||||||
General Motors | 10.0 | 10.2 | 10.7 | 11.6 | 12.1 | ||||||||||||||||
DaimlerChrysler | 5.2 | 5.1 | 4.8 | 4.5 | 4.8 | ||||||||||||||||
Toyota | 8.6 | 7.4 | 6.3 | 6.0 | 5.6 | ||||||||||||||||
Honda | 4.9 | 4.8 | 4.9 | 4.9 | 4.9 | ||||||||||||||||
Nissan | 3.2 | 3.3 | 3.0 | 3.0 | 2.9 | ||||||||||||||||
All Other (b) | 8.8 | 8.5 | 8.7 | 9.1 | 10.0 | ||||||||||||||||
Total U.S. Car Deliveries | 47.1 | % | 45.4 | % | 44.5 | % | 46.0 | % | 48.1 | % | |||||||||||
U.S. Truck Market Shares (a) | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
Ford | 10.7 | % | 12.1 | % | 13.2 | % | 13.6 | % | 13.3 | % | ||||||||||
General Motors | 14.1 | 15.6 | 16.4 | 16.4 | 16.2 | |||||||||||||||
DaimlerChrysler | 8.8 | 9.4 | 9.2 | 9.3 | 9.3 | |||||||||||||||
Toyota | 6.3 | 5.6 | 5.6 | 5.0 | 4.6 | |||||||||||||||
Honda | 3.9 | 3.6 | 3.2 | 3.1 | 2.4 | |||||||||||||||
Nissan | 2.8 | 2.9 | 2.7 | 1.7 | 1.4 | |||||||||||||||
All Other(b) | 6.3 | 5.4 | 5.2 | 4.9 | 4.7 | |||||||||||||||
Total U.S. Truck Deliveries | 52.9 | % | 54.6 | % | 55.5 | % | 54.0 | % | 51.9 | % | ||||||||||
U.S. Combined Car and Truck Market Shares (a) | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
Ford | 17.1 | % | 18.2 | % | 19.3 | % | 20.5 | % | 21.1 | % | ||||||||||
General Motors | 24.1 | 25.8 | 27.1 | 28.0 | 28.3 | |||||||||||||||
DaimlerChrysler | 14.0 | 14.5 | 14.0 | 13.8 | 14.1 | |||||||||||||||
Toyota | 14.9 | 13.0 | 11.9 | 11.0 | 10.2 | |||||||||||||||
Honda | 8.8 | 8.4 | 8.1 | 8.0 | 7.3 | |||||||||||||||
Nissan | 6.0 | 6.2 | 5.7 | 4.7 | 4.3 | |||||||||||||||
All Other(b) | 15.1 | 13.9 | 13.9 | 14.0 | 14.7 | |||||||||||||||
Total U.S. Car and Truck Deliveries | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
(a) | All U.S. sales data are based on publicly available information from the media and trade publications. | |
(b) | “All Other” includes primarily companies based in Korea, other Japanese manufacturers and various European manufacturers, and, with respect to the U.S. Truck Market Shares table and U.S. Combined Car and Truck Market Shares table, includes heavy truck manufacturers. |
Ford Fleet Sales | |||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||
Daily Rental Units | 453 | 450 | 429 | 444 | 459 | ||||||||||||||||
Commercial and Other Units | 287 | 263 | 248 | 227 | 252 | ||||||||||||||||
Government Units | 162 | 141 | 133 | 124 | 123 | ||||||||||||||||
Total Fleet Units | 902 | 854 | 810 | 795 | 834 | ||||||||||||||||
Percent of Ford’s total U.S. car and truck sales | 31 | % | 27 | % | 24 | % | 23 | % | 23 | % |
7
Table of Contents
8
Table of Contents
Industry Volumes | ||||||||||||||||||||||||||||
(in thousands) | Corporate Market Share | |||||||||||||||||||||||||||
2006 | 2006 | |||||||||||||||||||||||||||
Over/(Under) | Over/(Under) | |||||||||||||||||||||||||||
2006 | 2005 | 2005 | 2006 | 2005 | 2005 | |||||||||||||||||||||||
Australia | 963 | 988 | (25 | ) | (3 | )% | 11.9 | % | 14.9 | % | (3.0) pts. | |||||||||||||||||
South Africa | 641 | 565 | 76 | 13 | % | 10.8 | % | 10.5 | % | 0.3 pts. | ||||||||||||||||||
Taiwan | 366 | 514 | (148 | ) | (29 | )% | 14.8 | % | 11.0 | % | 3.8 pts. | |||||||||||||||||
Thailand | 673 | 700 | (27 | ) | (4 | )% | 2.9 | % | 4.2 | % | (1.3) pts. |
9
Table of Contents
• | Retail financing.Purchasing retail installment sales contracts and retail lease contracts from dealers, and offering financing to commercial customers, primarily vehicle leasing companies and fleet purchasers, to purchase or lease vehicle fleets; | ||
• | Wholesale financing.Making loans to dealers to finance the purchase of vehicle inventory, also known as floorplan financing; and | ||
• | Other financing.Making loans to dealers for working capital, improvements to dealership facilities, and the acquisition and refinancing of dealership real estate. |
Years Ended | |||||||||||||
December 31, | |||||||||||||
2006 | 2005 | 2004 | |||||||||||
United States | |||||||||||||
Financing share — Ford, Lincoln and Mercury | |||||||||||||
Retail installment and lease | 44 | % | 37 | % | 45 | % | |||||||
Wholesale | 80 | 81 | 84 | ||||||||||
Europe | |||||||||||||
Financing share — Ford | |||||||||||||
Retail installment and lease | 27 | % | 28 | % | 29 | % | |||||||
Wholesale | 95 | 96 | 97 |
10
Table of Contents
11
Table of Contents
12
Table of Contents
13
Table of Contents
14
Table of Contents
15
Table of Contents
16
Table of Contents
17
Table of Contents
2006 | 2005 | |||||||
Business Unit | ||||||||
Automotive | ||||||||
The Americas | ||||||||
Ford North America | 128 | 140 | ||||||
Ford South America | 13 | 13 | ||||||
Ford Europe and PAG | ||||||||
Ford Europe | 66 | 66 | ||||||
PAG | 45 | 49 | ||||||
Ford Asia Pacific and Africa | 18 | 18 | ||||||
Financial Services | ||||||||
Ford Motor Credit Company | 13 | 14 | ||||||
Total | 283 | 300 | ||||||
2006 | 2005 | |||||||
Earnings | $ | 32.38 | $ | 31.64 | ||||
Benefits | 38.13 | 33.26 | ||||||
Total | $ | 70.51 | $ | 64.90 | ||||
18
Table of Contents
19
Table of Contents
20
Table of Contents
21
Table of Contents
22
Table of Contents
23
Table of Contents
24
Table of Contents
Distribution | Engineering, | Sales | ||||||||||||||
Segment | Plants | Centers/Warehouses | Research/Development | Offices | ||||||||||||
Ford North America | 54 | * | 31 | 39 | 38 | |||||||||||
Ford South America | 7 | 1 | 0 | 0 | ||||||||||||
Ford Europe | 19 | 7 | 5 | 10 | ||||||||||||
PAG | 14 | 3 | 4 | 16 | ||||||||||||
Ford Asia Pacific and Africa/Mazda | 13 | 3 | 2 | 5 | ||||||||||||
Total | 107 | 45 | 50 | 69 | ||||||||||||
* | We have announced plans to cease operations at a number of North American manufacturing facilities as part of our restructuring actions; the number above does not include plants that have been idled to date. For further discussion of our restructuring actions, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview.” Included in the table above are 13 plants operated by ACH; of these, we have reached agreement in principle to sell three plants. We also have announced that we intend to sell or idle all plants currently operated by ACH by the end of 2008. |
25
Table of Contents
• | AutoAlliance International (“AAI”)— a 50/50 joint venture with Mazda (of which we own approximately 33.4%), which operates as its principal business an automobile vehicle assembly plant in Flat Rock, Michigan. AAI currently produces the Mazda6 and Ford Mustang models. Ford supplies all of the hourly and substantially all of the salaried labor requirements to AAI, and AAI reimburses Ford for the full cost of that labor. | ||
• | Ford Otosan— a joint venture in Turkey between Ford (41% partner), the Koc Group of Turkey (41% partner) and public investors (18%) that is our single source supplier of the Ford Transit Connect vehicle and our sole distributor of Ford vehicles in Turkey. In addition, Ford Otosan makes the Ford Transit series and the Cargo truck for the Turkish and export markets, and certain engines and transmissions, most of which are under license. This joint venture owns and operates two plants and a parts distribution depot in Turkey. | ||
• | Getrag Ford Transmissions GmbH— a 50/50 joint venture with Getrag Deutsche Venture GmbH and Co. KG, a German company, to which we transferred our European manual transmission operations in Halewood, England; Cologne, Germany; and Bordeaux, France. In 2004, Volvo Car Corporation (“Volvo Cars”) transferred its manual transmission operations from its Köping, Sweden plant to this joint venture. The Getrag joint venture produces manual transmissions for our operations in Europe (Ford Europe and PAG). Ford currently supplies most of the hourly and salaried labor requirements of the operations transferred to this Getrag joint venture. Ford employees who worked at the manual transmission operations transferred at the time of formation of the joint venture are assigned to the joint venture by Ford. In the event of surplus labor at the joint venture, Ford employees assigned to the joint venture may return to Ford. Employees hired in the future to work in these operations will be employed directly by the joint venture. Getrag Ford Transmissions GmbH reimburses Ford for the full cost of the hourly and salaried labor supplied by Ford. This joint venture operates three plants. | ||
• | Getrag All Wheel Drive AB— a joint venture in Sweden between Getrag Dana Holding GmbH (“Getrag/Dana”) (60% partner) and Volvo Cars (40% partner). In January 2004, Volvo Cars transferred to this joint venture its plant in Köping, Sweden. The joint venture produces all-wheel drive components. As noted above, the manual transmission operations at the Köping plant were transferred to Getrag Ford Transmissions GmbH. The hourly and salaried employees at the plant have become employees of the joint venture. | ||
• | Tekfor Cologne GmbH (“Tekfor”)— a 50/50 joint venture of Ford-Werke GmbH (“Ford-Werke”) and Neumayer Tekfor GmbH, a German company, to which joint venture Ford-Werke transferred the operations of the Ford forge in Cologne. The joint venture produces forged components, primarily for transmissions and chassis, for use in Ford vehicles and for sale to third parties. Those Ford employees who worked at the Cologne Forge Plant at the time of the formation of the joint venture are assigned to Tekfor by Ford and remain Ford employees. In the event of surplus labor at the joint venture, Ford employees assigned to Tekfor may return to Ford. New workers at the joint venture will be hired as employees of the joint venture. Tekfor reimburses Ford for the full cost of Ford employees assigned to the joint venture. This joint venture operates one plant. | ||
• | Pininfarina Sverige, AB— a joint venture between Volvo Cars (40% partner) and Pininfarina, S.p.A. (“Pininfarina”) (60% partner). In September 2003, Volvo Cars and Pininfarina established this joint venture for the engineering and manufacture of niche vehicles, starting with a new, small convertible (Volvo C70), which is distributed by Volvo. The joint venture began production of the new car at the Uddevalla Plant in Sweden, which was transferred from Volvo Cars to the joint venture in December 2005, and is the joint venture’s only plant. | ||
• | Ford Vietnam Limited— a joint venture between Ford (75% partner) and Song Cong Diesel (25% partner). Ford Vietnam assembles and distributes several Ford vehicles in Vietnam, including Escape, Everest, Focus, Mondeo, Ranger and Transit models. This joint venture operates one plant. | ||
• | Ford Lio Ho Motor Company Ltd. (“FLH”)— a joint venture in Taiwan among Ford (70% partner), the Lio Ho Group (25% partner) and individual shareholders (5% ownership in aggregate) that assembles a variety of Ford and Mazda vehicles sourced from Ford as well as Mazda and Suzuki. In addition to domestic assembly, FLH also has |
26
Table of Contents
• | AutoAlliance (Thailand) (“AAT”)— a joint venture among Ford (50%), Mazda (45%) and a Thai affiliate of Mazda’s (5%), which owns and operates a manufacturing plant in Rayong, Thailand. AAT produces the Ford Everest, Ford Ranger and Mazda B-Series pickup trucks for the Thai market and for export to over 100 countries worldwide (other than North America), in both built-up and kit form. | ||
• | Blue Diamond Truck, S de RL de CV— a joint venture between Ford (49% partner) and International Truck and Engine Corporation (51% partner), a subsidiary of Navistar International Corporation (“Navistar”). Blue Diamond Truck develops and manufactures selected medium and light commercial trucks in Mexico and sells the vehicles to Ford and Navistar for their own independent distribution. Blue Diamond Truck manufactures Ford F-650/750 medium-duty commercial trucks that are sold in the United States and Canada; Navistar medium-duty commercial trucks that are sold in Mexico; and a low-cab-forward, light-/medium-duty commercial truck for each of Ford and Navistar. | ||
• | Tenedora Nemak, S.A. de C.V.— a joint venture between Ford (15% partner) and a subsidiary of Mexican conglomerate Alfa S.A. de C.V. (85% partner), which owns and operates, among other facilities, our former Canadian castings operations, and supplies engine blocks and heads to several of our engine plants. Ford supplies a portion of the hourly labor requirements for the Canadian plants, for which it is fully reimbursed by the joint venture. | ||
• | Changan Ford Mazda Automobile Corporation, Ltd. (“CFMA”)— a joint venture between Ford (35% partner), Mazda (15% partner) and the Chongqing Changan Automobile Co., Ltd. (“Changan”) (50% partner). Through its facility in the Chinese city of Chongqing, CFMA produces and distributes in China the Ford Fiesta, Mondeo and Focus, the Mazda3 and the Volvo S40. In 2005, CFMA received approval from the Chinese government for the establishment of a new vehicle manufacturing plant in the Chinese city of Nanjing, which is now under construction. | ||
• | Changan Ford Mazda Engine Company, Ltd. (“CFME”)— a joint venture between Ford (25% partner), Mazda (25% partner) and the Chongqing Changan Automobile Co., Ltd (50% partner). CFME is located in the City of Nanjing, and will produce the Ford New I4 and Mazda BZ engines in support of the assembly of Ford- and Mazda-branded vehicles manufactured in China. | ||
• | Jiangling Motors Corporation, Ltd. (“JMC”)— a publicly-traded company in China with Ford (30% shareholder) and Jiangxi Jiangling Holdings, Ltd. (41% shareholder) as its controlling shareholders. Jiangxi Jiangling Holdings, Ltd. is a 50/50 joint venture between Chongqing Changan Automobile Co., Ltd. and Jiangling Motors Company Group. The public investors of JMC own 29% of its outstanding shares. JMC assembles the Ford Transit van and other non-Ford-technology-based vehicles for distribution in China. | ||
• | Ford Malaysia Sdn. Bhd.— a joint venture between Ford (49% partner) and Tractors Malaysia, a publicly-traded subsidiary of Sime Darby (51% partner). Ford Malaysia distributes Ford vehicles assembled by its wholly-owned subsidiary Associated Motor Industries Malaysia, Sdn. Bhd., an assembly company, including Econovan, Escape, Everest, Laser and Ranger models. |
27
Table of Contents
28
Table of Contents
29
Table of Contents
30
Table of Contents
Present Position | ||||||||
Name | Position | Held Since | Age | |||||
William Clay Ford, Jr. (a) | Executive Chairman and Chairman of the Board | September 2006 | 49 | |||||
Alan Mulally (b) | President and Chief Executive Officer | September 2006 | 61 | |||||
Lewis W. K. Booth | Executive Vice President -Ford Europe and Premier Automotive Group; Chairman -Jaguar, Land Rover, Volvo and Ford Europe | October 2005 | 58 | |||||
Mark Fields | Executive Vice President -President, The Americas | October 2005 | 46 | |||||
Donat R. Leclair, Jr. | Executive Vice President and Chief Financial Officer | August 2003 | 55 | |||||
Mark A. Schulz (c) | Executive Vice President | October 2005 | 54 | |||||
Michael E. Bannister | Group Vice President -Chairman and Chief Executive Officer, Ford Motor Credit Company | April 2004 | 57 | |||||
Francisco Codina | Group Vice President -North America Marketing, Sales and Service | March 2006 | 55 | |||||
John Fleming | Group Vice President -President and Chief Executive Officer, Ford Europe | October 2005 | 56 | |||||
Derrick M. Kuzak | Group Vice President -Global Product Development | December 2006 | 55 | |||||
Joe W. Laymon | Group Vice President -Corporate Human Resources and Labor Affairs | October 2003 | 54 | |||||
J C. Mays | Group Vice President -Design and Chief Creative Officer | August 2003 | 52 | |||||
Ziad S. Ojakli | Group Vice President -Corporate Affairs | January 2004 | 39 | |||||
John G. Parker | Group Vice President -Asia Pacific, Africa and Mazda | September 2006 | 59 | |||||
Richard Parry-Jones | Group Vice President -Chief Technical Officer | August 2001 | 55 | |||||
Peter J. Daniel | Senior Vice President and Controller | September 2006 | 60 | |||||
David G. Leitch | Senior Vice President and General Counsel | April 2005 | 46 |
(a) | Also a Director, Chair of the Office of the Chairman and Chief Executive, Acting Chair of the Finance Committee and a member of the Environmental and Public Policy Committee of the Board of Directors. | |
(b) | Also a Director and member of the Office of the Chairman and Chief Executive and the Finance Committee of the Board of Directors. | |
(c) | Mr. Schulz has announced his intention to retire. |
31
Table of Contents
• | Prior to joining Ford in September 2006, Mr. Mulally served as executive vice president of The Boeing Company, and president and chief executive officer of Boeing Commercial Airplanes. Mr. Mulally also was a member of Boeing’s Executive Council, and served as Boeing’s senior executive in the Pacific Northwest. He was named Boeing’s president of Commercial Airplanes in September 1998; the responsibility of chief executive officer for the business unit was added in March 2001. | ||
• | Mr. Leitch served as the Deputy Assistant and Deputy Counsel to President George W. Bush from December 2002 to March 2005. From June 2001 until December 2002, he served as Chief Counsel for the Federal Aviation Administration, overseeing a staff of 290 in Washington and the agency’s 11 regional offices. Prior to June 2001, Mr. Leitch was a partner at Hogan & Hartson LLP in Washington DC, where his practice focused on appellate litigation in state and federal court. | ||
• | Mr. Ojakli served as Principal Deputy for Legislative Affairs for President George W. Bush from December 2002 to 2003, and was Deputy Assistant to the President from 2001 to 2002. Prior to that, from 1998 to 2000, he was the Policy Director and Chief of Staff to the Senate Republican Conference Secretary. |
2005 | 2006 | |||||||||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | Fourth | |||||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||||||||
Common Stock price | ||||||||||||||||||||||||||||||||
per share (a) | ||||||||||||||||||||||||||||||||
High | $ | 14.75 | $ | 11.69 | $ | 11.19 | $ | 10.00 | $ | 8.96 | $ | 8.05 | $ | 9.48 | $ | 9.19 | ||||||||||||||||
Low | 10.94 | 9.07 | 9.55 | 7.57 | 7.39 | 6.17 | 6.06 | 6.85 | ||||||||||||||||||||||||
Dividends per share of Common and Class B Stock (b) | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.05 | $ | 0.00 |
(a) | New York Stock Exchange composite interday prices as listed in the price history database available at www.NYSEnet.com. | |
(b) | On December 15, 2006, we entered into a new secured credit facility which contains a covenant prohibiting us from paying any dividends (other than dividends payable solely in stock) on our Common and Class B Stock, subject to certain limited exceptions. As a result, it is unlikely that we will pay any dividends in the foreseeable future. See Note 15 of the Notes to the Financial Statements for more information regarding the secured credit facility and related covenants. |
32
Table of Contents
Total Number of | ||||||||||||||||
Shares | Maximum Number | |||||||||||||||
Average | Purchased | (or Approximate Dollar Value) | ||||||||||||||
Total Number | Price | as Part of Publicly | of Shares that May Yet Be | |||||||||||||
of Shares | Paid | Announced Plans | Purchased Under the | |||||||||||||
Period | Purchased* | per Share | or Programs | Plans or Programs | ||||||||||||
No publicly announced | ||||||||||||||||
Oct. 1, 2006 through Oct. 31, 2006 | 1,731,686 | $ | 8.21 | 0 | repurchase program in place | |||||||||||
No publicly announced | ||||||||||||||||
Nov. 1, 2006 through Nov. 30, 2006 | 1,691,819 | $ | 8.61 | 0 | repurchase program in place | |||||||||||
No publicly announced | ||||||||||||||||
Dec. 1, 2006 through Dec. 31, 2006 | 2,124,176 | $ | 7.32 | 0 | repurchase program in place | |||||||||||
Total | 5,547,681 | $ | 7.99 | 0 | ||||||||||||
* | We currently do not have a publicly announced repurchase program in place. Of the 5,547,681 shares purchased, 5,532,458 shares were purchased from the Ford Motor Company Savings and Stock Investment Plan for Salaried Employees (“SSIP”) and the Tax Efficient Savings Plan for Hourly Employees (“TESPHE”). Shares are generally purchased from SSIP and TESPHE when participants in those plans elect to sell units in the Ford Stock Fund upon retirement, upon termination of employment with the Company, related to an in-service distribution, or to fund a loan against an existing account balance in the Ford Stock Fund. Shares are not purchased from these plans when a participant transfers account balances out of the Ford Stock Fund and into another investment option under the plans. For the full year 2006, we purchased 23,766,410 shares on such basis from participants in SSIP and TESPHE. The remaining shares were acquired from our employees or directors in accordance with our various compensation plans as a result of share withholdings to pay income taxes with respect to: (i) the lapse of restrictions on restricted stock, (ii) the issuance of unrestricted stock, including issuances as a result of the conversion of restricted stock equivalents, or (iii) to pay the exercise price and related income taxes with respect to certain exercises of stock options. |
33
Table of Contents
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
SUMMARY OF OPERATIONS | ||||||||||||||||||||
Total Company | ||||||||||||||||||||
Sales and revenues | $ | 160,123 | $ | 176,896 | $ | 172,316 | $ | 166,095 | $ | 167,000 | ||||||||||
Income/(loss) before income taxes | $ | (15,051 | ) | $ | 1,079 | $ | 4,109 | $ | 914 | $ | 4,036 | |||||||||
Provision/(credit) for income taxes | (2,646 | ) | (845 | ) | 643 | (46 | ) | 1,459 | ||||||||||||
Minority interests in net income of subsidiaries | 210 | 280 | 282 | 314 | 367 | |||||||||||||||
Income/(loss) from continuing operations | (12,615 | ) | 1,644 | 3,184 | 646 | 2,210 | ||||||||||||||
Income/(loss) from discontinued operations | 2 | 47 | (146 | ) | (143 | ) | (333 | ) | ||||||||||||
Cumulative effects of change in accounting principle | — | (251 | ) | — | (264 | ) | (1,002 | ) | ||||||||||||
Net income/(loss) | $ | (12,613 | ) | $ | 1,440 | $ | 3,038 | $ | 239 | $ | 875 | |||||||||
Automotive Sector | ||||||||||||||||||||
Sales | $ | 143,307 | $ | 153,474 | $ | 147,119 | $ | 139,433 | $ | 134,706 | ||||||||||
Operating income/(loss) | (17,921 | ) | (4,188 | ) | (200 | ) | (1,035 | ) | (507 | ) | ||||||||||
Income/(loss) before income taxes | (17,017 | ) | (3,874 | ) | (178 | ) | (1,387 | ) | (957 | ) | ||||||||||
Financial Services Sector | ||||||||||||||||||||
Revenues | $ | 16,816 | $ | 23,422 | $ | 25,197 | $ | 26,662 | $ | 32,294 | ||||||||||
Income/(loss) before income taxes | 1,966 | 4,953 | 4,287 | 2,301 | 4,993 | |||||||||||||||
Total Company Data Per Share of Common and Class B Stock | ||||||||||||||||||||
Basic: | ||||||||||||||||||||
Income/(loss) from continuing operations | $ | (6.72 | ) | $ | 0.89 | $ | 1.74 | $ | 0.35 | $ | 1.21 | |||||||||
Income/(loss) from discontinued operations | — | 0.03 | (0.08 | ) | (0.08 | ) | (0.19 | ) | ||||||||||||
Cumulative effects of change in accounting principle | — | (0.14 | ) | — | (0.14 | ) | (0.55 | ) | ||||||||||||
Net income/(loss) | $ | (6.72 | ) | $ | 0.78 | $ | 1.66 | $ | 0.13 | $ | 0.47 | |||||||||
Diluted: | ||||||||||||||||||||
Income/(loss) from continuing operations | $ | (6.72 | ) | $ | 0.87 | $ | 1.59 | $ | 0.35 | $ | 1.14 | |||||||||
Income/(loss) from discontinued/held-for-sale operations | — | 0.02 | (0.07 | ) | (0.08 | ) | (0.16 | ) | ||||||||||||
Cumulative effects of change in accounting principle | — | (0.12 | ) | — | (0.14 | ) | (0.47 | ) | ||||||||||||
Net income/(loss) | $ | (6.72 | ) | $ | 0.77 | $ | 1.52 | $ | 0.13 | $ | 0.51 | |||||||||
Cash dividends | $ | 0.25 | $ | 0.40 | $ | 0.40 | $ | 0.40 | $ | 0.40 | ||||||||||
Common stock price range (NYSE Composite) | ||||||||||||||||||||
High | $ | 9.48 | $ | 14.75 | $ | 17.34 | $ | 17.33 | $ | 18.23 | ||||||||||
Low | 6.06 | 7.57 | 12.61 | 6.58 | 6.90 | |||||||||||||||
Average number of shares of Common and Class B Stock outstanding (in millions) | 1,879 | 1,846 | 1,830 | 1,832 | 1,819 | |||||||||||||||
SECTOR BALANCE SHEET DATA AT YEAR-END | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Automotive Sector | $ | 122,634 | $ | 113,825 | $ | 113,251 | $ | 111,208 | $ | 100,140 | ||||||||||
Financial Services Sector | 169,050 | 162,194 | 189,188 | 195,509 | 187,576 | |||||||||||||||
Intersector elimination | (1,467 | ) | (83 | ) | (2,753 | ) | (3,356 | ) | (5,865 | ) | ||||||||||
Total assets | $ | 290,217 | $ | 275,936 | $ | 299,686 | $ | 303,361 | $ | 281,851 | ||||||||||
Long-term Debt | ||||||||||||||||||||
Automotive Sector | $ | 28,514 | $ | 16,900 | $ | 17,250 | $ | 18,758 | $ | 13,363 | ||||||||||
Financial Services Sector | 115,859 | 103,080 | 112,080 | 123,655 | 121,304 | |||||||||||||||
Total long-term debt | $ | 144,373 | $ | 119,980 | $ | 129,330 | $ | 142,413 | $ | 134,667 | ||||||||||
Stockholders’ Equity | $ | (3,465 | ) | $ | 13,442 | $ | 17,437 | $ | 13,459 | $ | 7,633 | |||||||||
34
Table of Contents
35
Table of Contents
36
Table of Contents
• | Restructuring the Company to be profitable at lower volumes and with a changed vehicle mix; | ||
• | Accelerating product development and reducing manufacturing complexity; | ||
• | Obtaining and maintaining adequate liquidity to fund the first two priorities; and | ||
• | Working together through teamwork and accountability. |
37
Table of Contents
2008 Projected | ||||||||
Assembly | Capacity | |||||||
Capacity | Utilization | |||||||
Capacity Measure | (mil. units) | (percent) | ||||||
Maximum Installed * | 3.6 | 84 | % | |||||
Manned Straight-Time | 3.0 | 100 | % |
* | Based on a two-shift operating pattern |
• | Atlanta Assembly Plant (idled in 2006); | ||
• | Batavia Transmission Plant (to be idled in 2008); | ||
• | Essex Engine Plant (to be idled in 2007); | ||
• | Maumee Stamping Plant (to be idled in 2008); | ||
• | Norfolk Assembly Plant (to be idled in 2007); | ||
• | St. Louis Assembly Plant (idled in 2006); | ||
• | Twin Cities Assembly Plant (to be idled in 2008); | ||
• | Windsor Casting Plant (to be idled in 2007); and | ||
• | Wixom Assembly Plant (to be idled in 2007). |
38
Table of Contents
• | Ford North America: the all-new Ford Edge and Lincoln MKX crossover models, substantially new versions of the Ford Expedition and Lincoln Navigator models, new models of our segment-leading Ford Super Duty trucks, and new versions of the Lincoln MKZ sedan and Ford Escape and Mercury Mariner compact sport utility vehicles and hybrids; | ||
• | Ford Europe: the award-winning Ford S-MAX crossover vehicle (named “Car of the Year 2007” in Europe), Galaxy minivan, and Transit truck (named “International Van of the Year 2007” in Europe); and | ||
• | PAG: Jaguar XKR coupe, Land Rover/Freelander/LR2 SUVs, Volvo S80 sedan and Volvo C30 coupe. |
39
Table of Contents
• | Sales volume and mix of products stabilizing in North America, with U.S. market share in the 14% to 15% range for Ford, Lincoln and Mercury brands, and lower fleet sales as a percentage of total sales. This in part reflects cessation in 2006 of production of the Ford Taurus sedan in Atlanta and Ford Freestar and Mercury Monterey minivans in Oakville, Ontario. In addition, we expect growth in sales volumes outside the United States. | ||
• | Cumulative reduction in annual operating costs for our Ford North America segment of about $5 billion by the end of 2008 compared with 2005, largely reflecting the personnel and capacity reductions discussed above, and continuing cost improvements in 2009. |
40
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Income/(loss) before income taxes | ||||||||||||
Automotive Sector | $ | (17,017 | ) | $ | (3,874 | ) | $ | (178 | ) | |||
Financial Services Sector | 1,966 | 4,953 | 4,287 | |||||||||
Total Company | (15,051 | ) | 1,079 | 4,109 | ||||||||
Provision for/(benefit from) income taxes (a) | (2,646 | ) | (845 | ) | 643 | |||||||
Minority interests in net income/(loss) of subsidiaries (b) | 210 | 280 | 282 | |||||||||
Income/(loss) from continuing operations | (12,615 | ) | 1,644 | 3,184 | ||||||||
Income/(loss) from discontinued operations | 2 | 47 | (146 | ) | ||||||||
Cumulative effect of change in accounting principle (c) | — | (251 | ) | — | ||||||||
Net income/(loss) | $ | (12,613 | ) | $ | 1,440 | $ | 3,038 | |||||
(a) | See Note 18 of the Notes to the Financial Statements for disclosure regarding 2006 effective tax rate. | |
(b) | Primarily related to Ford Europe’s consolidated 41%-owned affiliate, Ford Otosan; the decrease in 2006 primarily reflected the impact on deferred tax balances of tax law changes in Turkey. The pre-tax results for Ford Otosan were $509 million in 2006, $503 million in 2005, and $452 million in 2004. See “Item 2. Properties” for additional discussion of Ford Otosan. | |
(c) | See Note 27 of the Notes to the Financial Statements. |
2006 | 2005 | 2004 | ||||||||||
Automotive Sector | ||||||||||||
Ford North America | ||||||||||||
Jobs Bank Benefits and personnel-reduction programs (a) | $ | (4,760 | ) | $ | (401 | ) | $ | — | ||||
Pension curtailment charges | (2,741 | ) | — | — | ||||||||
Fixed asset impairment charges | (2,200 | ) | — | — | ||||||||
U.S. plant idlings (primarily fixed-asset write-offs) | (281 | ) | — | — | ||||||||
Visteon-related charges (primarily valuation allowance against employee-related receivables) (b) | — | (468 | ) | (600 | ) | |||||||
Fuel-cell technology charges | — | (116 | ) | (182 | ) | |||||||
Divestiture of non-core business (Beanstalk Group, LLC) | — | (59 | ) | — | ||||||||
Changes in state non-income tax law | — | 85 | — | |||||||||
Total Ford North America | (9,982 | ) | (959 | ) | (782 | ) | ||||||
Ford South America | ||||||||||||
Legal settlement relating to social welfare tax liability | 110 | — | — | |||||||||
Ford Europe | ||||||||||||
Personnel-reduction programs | (84 | ) | (510 | ) | (49 | ) | ||||||
Premier Automotive Group (“PAG”) | ||||||||||||
Jaguar and Land Rover fixed asset impairment charges | (1,600 | ) | (1,300 | ) | — | |||||||
Personnel-reduction programs/Other | (378 | ) | (245 | ) | (110 | ) | ||||||
Ford Asia Pacific and Africa/Mazda | ||||||||||||
Personnel-reduction programs | (103 | ) | (33 | ) | — | |||||||
Mazda pension transfer | 115 | — | — | |||||||||
Divestiture of non-core business (certain Australia dealerships) | — | 14 | (81 | ) | ||||||||
Other Automotive | ||||||||||||
Divestiture of non-core businesses (primarily related to Kwik-Fit Group Limited) | — | 152 | 17 | |||||||||
Total Automotive Sector | (11,922 | ) | (2,881 | ) | (1,005 | ) | ||||||
Financial Services Sector | ||||||||||||
Divestiture of non-core business (The Hertz Corporation (“Hertz”)) | — | 1,499 | — | |||||||||
Property clean-up settlement | — | — | 45 | |||||||||
Total | $ | (11,922 | ) | $ | (1,382 | ) | $ | (960 | ) | |||
(a) | See Note 17 of the Notes to the Financial Statements for definition and discussion of Jobs Bank Benefits. | |
(b) | See Notes 19 and 23 of the Notes to the Financial Statements for discussion of Visteon-related charges. |
41
Table of Contents
2006 | ||||||||||||
Over/ | ||||||||||||
(Under) | ||||||||||||
2006 | 2005 | 2005 | ||||||||||
The Americas | ||||||||||||
Ford North America | $ | (15,969 | ) | $ | (2,444 | ) | $ | (13,525 | ) | |||
Ford South America | 661 | 399 | 262 | |||||||||
Total The Americas | (15,308 | ) | (2,045 | ) | (13,263 | ) | ||||||
Ford Europe and PAG | ||||||||||||
Ford Europe | 371 | (437 | ) | 808 | ||||||||
PAG | (2,322 | ) | (1,634 | ) | (688 | ) | ||||||
Total Ford Europe and PAG | (1,951 | ) | (2,071 | ) | 120 | |||||||
Ford Asia Pacific and Africa/Mazda | ||||||||||||
Ford Asia Pacific and Africa | (250 | ) | 42 | (292 | ) | |||||||
Mazda and Associated Operations | 245 | 255 | (10 | ) | ||||||||
Total Ford Asia Pacific and Africa/Mazda | (5 | ) | 297 | (302 | ) | |||||||
Other Automotive | 247 | (55 | ) | 302 | ||||||||
Total | $ | (17,017 | ) | $ | (3,874 | ) | $ | (13,143 | ) | |||
Sales | Wholesales (a) | |||||||||||||||||||||||||||||||
(in billions) | (in thousands) | |||||||||||||||||||||||||||||||
2006 | 2006 | |||||||||||||||||||||||||||||||
Over/(Under) | Over/(Under) | |||||||||||||||||||||||||||||||
2006 | 2005 | 2005 | 2006 | 2005 | 2005 | |||||||||||||||||||||||||||
The Americas | ||||||||||||||||||||||||||||||||
Ford North America | $ | 69.4 | $ | 80.6 | $ | (11.2 | ) | (14 | )% | 3,051 | 3,410 | (359 | ) | (11 | )% | |||||||||||||||||
Ford South America | 5.7 | 4.4 | 1.3 | 30 | 381 | 335 | 46 | 14 | ||||||||||||||||||||||||
Total The Americas | 75.1 | 85.0 | (9.9 | ) | (12 | ) | 3,432 | 3,745 | (313 | ) | (8 | ) | ||||||||||||||||||||
Ford Europe and PAG | ||||||||||||||||||||||||||||||||
Ford Europe | 30.4 | 29.9 | 0.5 | 2 | 1,846 | 1,753 | 93 | 5 | ||||||||||||||||||||||||
PAG | 30.0 | 30.3 | (0.3 | ) | (1 | ) | 730 | 764 | (34 | ) | (4 | ) | ||||||||||||||||||||
Total Ford Europe and PAG | 60.4 | 60.2 | 0.2 | — | 2,576 | 2,517 | 59 | 2 | ||||||||||||||||||||||||
Ford Asia Pacific and Africa/Mazda | ||||||||||||||||||||||||||||||||
Ford Asia Pacific and Africa (b) | 6.5 | 7.7 | (1.2 | ) | (15 | ) | 517 | 473 | 44 | 9 | ||||||||||||||||||||||
Mazda and Associated Operations (c) | 1.3 | 0.6 | 0.7 | — | 72 | 32 | 40 | — | ||||||||||||||||||||||||
Total Ford Asia Pacific and Africa/Mazda | 7.8 | 8.3 | (0.5 | ) | (6 | ) | 589 | 505 | 84 | 17 | ||||||||||||||||||||||
Total | $ | 143.3 | $ | 153.5 | $ | (10.2 | ) | (7 | )% | 6,597 | 6,767 | (170 | ) | (3 | )% | |||||||||||||||||
(a) | Wholesale unit volumes generally are reported on a where-sold basis, and include all Ford-badged units and units manufactured by Ford that are sold to other manufacturers, as well as units distributed for other manufacturers. Vehicles sold to daily rental car companies that are subject to a guaranteed repurchase option, as well as other sales of finished vehicles for which the recognition of revenue is deferred (e.g., consignments), are included in wholesale unit volumes. For a discussion of our revenue recognition policy for these sales, see Note 2 of the Notes to the Financial Statements. | |
(b) | Included in wholesale unit volumes of Ford Asia Pacific and Africa are Ford-badged vehicles sold in China and Malaysia by certain unconsolidated affiliates totaling about 159,000 and 87,000 units in 2006 and 2005, respectively. “Sales” above does not include revenue from these units. | |
(c) | Reflects sales of Mazda6 by our consolidated subsidiary, AutoAlliance International, Inc. (“AAI”), beginning with the consolidation of AAI in the third quarter of 2005. See Note 13 of the Notes to the Financial Statements. |
42
Table of Contents
Dealer-Owned Stocks (a) | ||||||||||||||||||||||||
Market Share | (in thousands) | |||||||||||||||||||||||
2006 | 2006 | |||||||||||||||||||||||
Over/(Under) | Over/(Under) | |||||||||||||||||||||||
Market | 2006 | 2005 | 2005 | 2006 | 2005 | 2005 | ||||||||||||||||||
U.S. (b) | 16.0 | % | 17.0 | % | (1.0 | )pts. | 570 | 733 | (163 | ) | ||||||||||||||
South America (b) (c) | 11.5 | 12.0 | (0.5 | ) | 40 | 33 | 7 | |||||||||||||||||
Europe (b) (d) | 8.5 | 8.5 | — | 322 | 342 | (20 | ) | |||||||||||||||||
PAG — U.S./Europe (d) | 1.1/2.1 | 1.2/2.2 | �� | (0.1)/(0.1 | ) | 34/67 | 45/69 | (11)/(2 | ) | |||||||||||||||
Asia Pacific and Africa (b) (e) (f) | 2.4 | 2.4 | — | 50 | 50 | — |
(a) | Dealer-owned stocks represent our estimate of vehicles shipped to our customers (dealers) and not yet sold by the dealers to their retail customers, as well as some vehicles reflected in our inventory. | |
(b) | Includes only Ford and, in certain markets (primarily U.S.), Lincoln and Mercury brands. | |
(c) | South America market share is based on vehicle retail sales for our six major markets (Argentina, Brazil, Chile, Colombia, Ecuador, and Venezuela). | |
(d) | European 2006 market share is based, in part, on estimated vehicle registrations for our 19 major European markets. See "Item 1. Business'' for discussion of these markets. | |
(e) | Asia Pacific and Africa 2006 market share is based on estimated vehicle retail sales for our 12 major markets (Australia, China, Japan, India, Indonesia, Malaysia, New Zealand, Philippines, South Africa, Taiwan, Thailand, and Vietnam). | |
(f) | Dealer-owned stocks for Asia Pacific and Africa include primarily Ford-brand vehicles as well as a small number of units distributed for other manufacturers. |
2006 Better/(Worse) | ||||||
Than | ||||||
Explanation of Cost Changes | 2005 | |||||
Manufacturing and engineering | Primarily hourly and salaried personnel reductions and continued improvements in our plants and processes. | $ 1.0 | ||||
Pension and Other Postretirement Employee Benefits (“OPEB”) | Primarily improvements beginning in the third quarter associated with our retiree health cost sharing agreement with the UAW, and improvements related to revisions to our salaried benefit plans, offset partially by the impact of reducing the discount rate and long-term expected return assumptions. | 0.5 | ||||
Overhead | Primarily related to salaried personnel reductions. | 0.4 | ||||
Net product | Pricing reductions from our suppliers and net design cost reductions, offset primarily by commodity price increases. | 0.1 | ||||
Depreciation and amortization | Acceleration of depreciation resulting from ongoing improvement plans including the announced facility idlings, offset partially by the favorable impact of impairment charges for long-lived assets and the favorable impact of the change in special tooling amortization methodology. | (0.1 | ) | |||
Warranty-related | Primarily reflects adjustments to Jaguar and Land Rover warranty accruals related to unfavorable prior model-year performance and the non-recurrence in 2006 of favorable reserve adjustments, offset partially by favorable coverage performance in Ford North America. | (0.1 | ) | |||
Advertising & Sales Promotions | Primarily increased advertising costs. | (0.3 | ) | |||
Total | $ 1.5 | |||||
43
Table of Contents
44
Table of Contents
2005 | ||||||||||||
Over/ | ||||||||||||
(Under) | ||||||||||||
2005 | 2004 | 2004 | ||||||||||
The Americas | ||||||||||||
Ford North America | $ | (2,444 | ) | $ | 525 | $ | (2,969 | ) | ||||
Ford South America | 399 | 144 | 255 | |||||||||
Total The Americas | (2,045 | ) | 669 | (2,714 | ) | |||||||
Ford Europe and PAG | ||||||||||||
Ford Europe | (437 | ) | 177 | (614 | ) | |||||||
PAG | (1,634 | ) | (830 | ) | (804 | ) | ||||||
Total Ford Europe and PAG | (2,071 | ) | (653 | ) | (1,418 | ) | ||||||
Ford Asia Pacific and Africa/Mazda | ||||||||||||
Ford Asia Pacific and Africa | 42 | (36 | ) | 78 | ||||||||
Mazda and Associated Operations | 255 | 118 | 137 | |||||||||
Total Ford Asia Pacific and Africa/Mazda | 297 | 82 | 215 | |||||||||
Other Automotive | (55 | ) | (276 | ) | 221 | |||||||
Total | $ | (3,874 | ) | $ | (178 | ) | $ | (3,696 | ) | |||
Sales | Wholesales (a) | |||||||||||||||||||||||||||||||
(in billions) | (in thousands) | |||||||||||||||||||||||||||||||
2005 | 2005 | |||||||||||||||||||||||||||||||
Over/(Under) | Over/(Under) | |||||||||||||||||||||||||||||||
2005 | 2004 | 2004 | 2005 | 2004 | 2004 | |||||||||||||||||||||||||||
The Americas | ||||||||||||||||||||||||||||||||
Ford North America | $ | 80.6 | $ | 83.0 | $ | (2.4 | ) | (3 | )% | 3,410 | 3,613 | (203 | ) | (6 | )% | |||||||||||||||||
Ford South America | 4.4 | 3.0 | 1.4 | 46 | 335 | 291 | 44 | 15 | ||||||||||||||||||||||||
Total The Americas | 85.0 | 86.0 | (1.0 | ) | (1 | ) | 3,745 | 3,904 | (159 | ) | (4 | ) | ||||||||||||||||||||
Ford Europe and PAG | ||||||||||||||||||||||||||||||||
Ford Europe | 29.9 | 26.5 | 3.4 | 13 | 1,753 | 1,736 | 17 | 1 | ||||||||||||||||||||||||
PAG | 30.3 | 27.6 | 2.7 | 10 | 764 | 773 | (9 | ) | (1 | ) | ||||||||||||||||||||||
Total Ford Europe and PAG | 60.2 | 54.1 | 6.1 | 11 | 2,517 | 2,509 | 8 | — | ||||||||||||||||||||||||
Ford Asia Pacific and Africa/Mazda | ||||||||||||||||||||||||||||||||
Ford Asia Pacific and Africa (b) | 7.7 | 7.0 | 0.7 | 10 | 473 | 429 | 44 | 10 | ||||||||||||||||||||||||
Mazda and Associated Operations (c) | 0.6 | — | 0.6 | — | 32 | — | 32 | — | ||||||||||||||||||||||||
Total Ford Asia Pacific and Africa/Mazda | 8.3 | 7.0 | 1.3 | 19 | 505 | 429 | 76 | 18 | ||||||||||||||||||||||||
Total | $ | 153.5 | $ | 147.1 | $ | 6.4 | 4 | % | 6,767 | 6,842 | (75 | ) | (1 | )% | ||||||||||||||||||
(a) | Wholesale unit volumes generally are reported on a where-sold basis, and include all Ford-badged units and units manufactured by Ford that are sold to other manufacturers, as well as units distributed for other manufacturers. Vehicles sold to daily rental car companies that are subject to a guaranteed repurchase option, as well as other sales of finished vehicles for which the recognition of revenue is deferred (e.g., consignments), are included in wholesale unit volumes. For a discussion of our revenue recognition policy for such sales, see Note 2 of the Notes to the Financial Statements. | |
(b) | Included in wholesales of Ford Asia Pacific and Africa are Ford-badged vehicles sold in China and Malaysia by certain unconsolidated affiliates totaling about 87,000 and 66,000 units in 2005 and 2004, respectively. “Sales” above does not include revenue from these units. | |
(c) | Reflects sales of Mazda6 by our consolidated subsidiary, AAI, beginning with the consolidation of AAI in the third quarter of 2005. See Note 13 of the Notes to the Financial Statements. |
45
Table of Contents
Dealer-Owned Stocks(a) | ||||||||||||||||||||||||
Market Share | (in thousands) | |||||||||||||||||||||||
2005 | 2005 | |||||||||||||||||||||||
Over/(Under) | Over/(Under) | |||||||||||||||||||||||
Market | 2005 | 2004 | 2004 | 2005 | 2004 | 2004 | ||||||||||||||||||
U.S. (b) | 17.0 | % | 18.0 | % | (1.0 | )pts. | 733 | 794 | (61 | ) | ||||||||||||||
South America (b) (c) | 12.0 | 11.9 | 0.1 | 33 | 29 | 4 | ||||||||||||||||||
Europe (b) (d) | 8.5 | 8.6 | (0.1 | ) | 342 | 356 | (14 | ) | ||||||||||||||||
PAG — U.S./Europe (d) | 1.2/2.2 | 1.3/2.3 | (0.1)/(0.1 | ) | 45/69 | 41/68 | 4/1 | |||||||||||||||||
Asia Pacific and Africa (b) (e) (f) | 2.4 | 2.3 | 0.1 | 50 | 46 | 4 |
(a) | Dealer-owned stocks represent our estimate of vehicles shipped to our customers (dealers) and not yet sold by the dealers to their retail customers, as well as some vehicles reflected in our inventory. | |
(b) | Includes only Ford and, in certain markets (primarily U.S.), Lincoln and Mercury brands. | |
(c) | South America market share is based on vehicle retail sales for our six major markets (Argentina, Brazil, Chile, Colombia, Ecuador, and Venezuela). | |
(d) | European market share is based, in part, on vehicle registrations for our 19 major European markets. | |
(e) | Asia Pacific and Africa market share is based on vehicle retail sales for our 12 major markets (Australia, China, Japan, India, Indonesia, Malaysia, New Zealand, Philippines, South Africa, Taiwan, Thailand, and Vietnam). | |
(f) | Dealer-owned stocks for Asia Pacific and Africa include primarily Ford-brand vehicles as well as a small number of units distributed for other manufacturers. |
46
Table of Contents
Revenues | Income/(Loss) Before Income Taxes | |||||||||||||||||||||||
(in billions) | (in millions) | |||||||||||||||||||||||
2006 | 2006 | |||||||||||||||||||||||
Over/(Under) | Over/(Under) | |||||||||||||||||||||||
2006 | 2005 | 2005 | 2006 | 2005 | 2005 | |||||||||||||||||||
Ford Credit | $ | 16.5 | $ | 15.9 | $ | 0.6 | $ | 1,953 | $ | 2,923 | $ | (970 | ) | |||||||||||
Other Financial Services | 0.3 | 0.1 | 0.2 | 13 | (39 | ) | 52 | |||||||||||||||||
Hertz operating results | — | 7.4 | (7.4 | ) | — | 974 | (974 | ) | ||||||||||||||||
Gain on sale of Hertz* | — | — | — | — | 1,095 | (1,095 | ) | |||||||||||||||||
Total | $ | 16.8 | $ | 23.4 | $ | (6.6 | ) | $ | 1,966 | $ | 4,953 | $ | (2,987 | ) | ||||||||||
* | The segment presentation of the gain on sale of Hertz in Note 24 of the Notes to the Financial Statements is $1,006 million in the Hertz segment and $89 million in Other Financial Services. |
• | On-balance sheet basis. Includes the receivables and leases Ford Credit owns and securitized receivables and leases that remain on Ford Credit’s balance sheet (including other structured financings and factoring transactions that have features similar to securitizations); |
47
Table of Contents
• | Securitized off-balance sheet basis. Includes receivables sold in securitization transactions that are not reflected on Ford Credit’s balance sheet; | ||
• | Managed basis. Includes on-balance sheet and securitized off-balance sheet receivables and leases that Ford Credit continues to service; and | ||
• | Serviced basis. Includes managed receivables and leases and receivables sold in whole-loan sale transactions where Ford Credit retains no interest in the sold receivables, but which it continues to service. |
December 31, | ||||||||
2006 | 2005 | |||||||
On-Balance Sheet | ||||||||
Finance receivables | ||||||||
Retail installment | $ | 70.4 | $ | 65.7 | ||||
Wholesale | 35.2 | 39.6 | ||||||
Other | 3.8 | 4.6 | ||||||
Total finance receivables, net | 109.4 | 109.9 | ||||||
Net investment in operating leases | 25.9 | 22.2 | ||||||
Total on-balance sheet* | $ | 135.3 | $ | 132.1 | ||||
Memo: Allowance for credit losses included above | $ | 1.1 | $ | 1.6 | ||||
Securitized Off-Balance Sheet | ||||||||
Finance receivables | ||||||||
Retail installment | $ | 12.2 | $ | 18.0 | ||||
Wholesale | — | — | ||||||
Other | — | — | ||||||
Total finance receivables | 12.2 | 18.0 | ||||||
Net investment in operating leases | — | — | ||||||
Total securitized off-balance sheet | $ | 12.2 | $ | 18.0 | ||||
Managed | ||||||||
Finance receivables | ||||||||
Retail installment | $ | 82.6 | $ | 83.7 | ||||
Wholesale | 35.2 | 39.6 | ||||||
Other | 3.8 | 4.6 | ||||||
Total finance receivables, net | 121.6 | 127.9 | ||||||
Net investment in operating leases | 25.9 | 22.2 | ||||||
Total managed | $ | 147.5 | $ | 150.1 | ||||
Serviced | $ | 149.5 | $ | 153.0 |
* | At December 31, 2006 and 2005, includes finance receivables of $56.5 billion and $44.7 billion, respectively, that have been sold for legal purposes in securitizations that do not satisfy the requirements for accounting sale treatment. In addition, at December 31, 2006 and 2005, includes net investment in operating leases of $17.3 billion and $6.5 billion, respectively, that have been sold for legal purposes in securitizations that do not satisfy the requirements for accounting sale treatment. These underlying securitized assets are available only for payment of the debt or other obligations issued or arising in the securitization transactions; they are not available to pay Ford Credit’s other obligations or the claims of Ford Credit’s other creditors. |
48
Table of Contents
2006 | ||||||||||||
Over/(Under) | ||||||||||||
2006 | 2005 | 2005 | ||||||||||
Charge-offs (in millions) | ||||||||||||
On-Balance Sheet | ||||||||||||
Retail installment and lease | $ | 465 | $ | 681 | $ | (216 | ) | |||||
Wholesale | 44 | 23 | 21 | |||||||||
Other | 14 | 2 | 12 | |||||||||
Total on-balance sheet | $ | 523 | $ | 706 | $ | (183 | ) | |||||
Reacquired Receivables (retail)* | $ | 2 | $ | 22 | $ | (20 | ) | |||||
Securitized Off-Balance Sheet | ||||||||||||
Retail installment and lease | $ | 84 | $ | 127 | $ | (43 | ) | |||||
Wholesale | — | — | — | |||||||||
Other | — | — | — | |||||||||
Total securitized off-balance sheet | $ | 84 | $ | 127 | $ | (43 | ) | |||||
Managed | ||||||||||||
Retail installment and lease | $ | 551 | $ | 830 | $ | (279 | ) | |||||
Wholesale | 44 | 23 | 21 | |||||||||
Other | 14 | 2 | 12 | |||||||||
Total managed | $ | 609 | $ | 855 | $ | (246 | ) | |||||
Loss-to-Receivables Ratios | ||||||||||||
On-Balance Sheet | ||||||||||||
Retail installment and lease | 0.50 | % | 0.72 | % | (0.22 | ) pts. | ||||||
Wholesale | 0.12 | 0.09 | 0.03 | |||||||||
Total including other | 0.39 | % | 0.57 | % | (0.18 | ) pts. | ||||||
Managed | ||||||||||||
Retail installment and lease | 0.51 | % | 0.73 | % | (0.22 | ) pts. | ||||||
Wholesale | 0.12 | 0.06 | 0.06 | |||||||||
Total including other | 0.41 | % | 0.54 | % | (0.13 | ) pts. |
* | Reacquired receivables reflect the amount of receivables that resulted from the accounting consolidation of Ford Credit’s FCAR Owner Trust retail securitization program (“FCAR”) in the second quarter of 2003. |
2006 | 2005 | |||||||
Allowance for Credit Losses | ||||||||
Balance, beginning of year | $ | 1.6 | $ | 2.4 | ||||
Provision for credit losses | 0.1 | 0.2 | ||||||
Deductions | ||||||||
Charge-offs before recoveries | 1.0 | 1.2 | ||||||
Recoveries | (0.5 | ) | (0.5 | ) | ||||
Net charge-offs | 0.5 | 0.7 | ||||||
Other changes, principally amounts related to finance receivables sold and translation adjustments | 0.1 | 0.3 | ||||||
Net deductions | 0.6 | 1.0 | ||||||
Balance, end of year | $ | 1.1 | $ | 1.6 | ||||
Allowance for credit losses as a percentage of end-of-period net receivables | 0.81 | % | 1.19 | % |
49
Table of Contents
Income/(Loss) Before Income Taxes | ||||||||||||
(in millions) | ||||||||||||
2005 | ||||||||||||
Over/(Under) | ||||||||||||
2005 | 2004 | 2004 | ||||||||||
Ford Credit | $ | 2,923 | $ | 3,710 | $ | (787 | ) | |||||
Other Financial Services | (39 | ) | 84 | (123 | ) | |||||||
Hertz operating results (a) | 974 | 493 | 481 | |||||||||
Gain on sale of Hertz (b) | 1,095 | — | 1,095 | |||||||||
Total | $ | 4,953 | $ | 4,287 | $ | 666 | ||||||
(a) | Includes amortization expense related to intangibles recognized upon consolidation of Hertz. | |
(b) | The segment presentation of the gain on sale of Hertz in Note 24 of the Notes to the Financial Statements is $1,006 million in the Hertz segment and $89 million in Other Financial Services. |
50
Table of Contents
December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Cash and cash equivalents | $ | 16.0 | $ | 13.4 | $ | 10.1 | ||||||
Marketable securities | 11.3 | 6.9 | 8.3 | |||||||||
Loaned securities | 5.3 | 3.4 | 1.1 | |||||||||
Total cash, marketable securities and loaned securities | 32.6 | 23.7 | 19.5 | |||||||||
Securities-In-Transit * | (0.5 | ) | — | — | ||||||||
Short-term VEBA assets | 1.8 | 1.4 | 4.1 | |||||||||
Gross cash | $ | 33.9 | $ | 25.1 | $ | 23.6 | ||||||
* | The purchase or sale of marketable securities for which the cash settlement was not made by period-end. |
51
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Gross cash at end of period | $ | 33.9 | $ | 25.1 | $ | 23.6 | ||||||
Gross cash at beginning of period | 25.1 | 23.6 | 25.9 | |||||||||
Total change in gross cash | $ | 8.8 | $ | 1.5 | $ | (2.3 | ) | |||||
Operating-related cash flows | ||||||||||||
Automotive income/(loss) before income taxes | $ | (17.0 | ) | $ | (3.9 | ) | $ | (0.2 | ) | |||
Special items | 11.9 | 2.9 | 1.0 | |||||||||
Capital expenditures | (6.8 | ) | (7.1 | ) | (6.3 | ) | ||||||
Depreciation and special tools amortization | 7.1 | 6.9 | 6.4 | |||||||||
Changes in receivables, inventory and trade payables (a) | (2.0 | ) | 1.3 | (1.1 | ) | |||||||
Other (b) | 1.2 | (1.4 | ) | 1.4 | ||||||||
Total operating-related cash flows | (5.6 | ) | (1.3 | ) | 1.2 | |||||||
Other changes in cash | ||||||||||||
Cash impact of personnel-reduction programs and Jobs Bank Benefits accrual | (1.2 | ) | (0.4 | ) | — | |||||||
Contributions to funded pension plans | (0.8 | ) | (2.5 | ) | (2.2 | ) | ||||||
Net effect of VEBA on gross cash | 3.4 | (0.2 | ) | (2.8 | ) | |||||||
Capital transactions with Financial Services sector (c) | 1.4 | 2.3 | 4.2 | |||||||||
Acquisitions and divestitures | 0.2 | 5.3 | 0.4 | |||||||||
Dividends paid to shareholders | (0.5 | ) | (0.7 | ) | (0.7 | ) | ||||||
Net proceeds from/(payments on) Automotive sector debt | 11.7 | (0.5 | ) | (2.4 | ) | |||||||
Other (d) | 0.2 | (0.5 | ) | — | ||||||||
Total change in gross cash | $ | 8.8 | $ | 1.5 | $ | (2.3 | ) | |||||
(a) | In 2006, working capital changes reflected the impact of lower production volumes on accounts payable, the effect on inventory of several new product launches at year end, and changes in our value-added tax receivables collection process in Europe. | |
(b) | Primarily expense and payment timing differences for items such as pension and OPEB, marketing, and warranty. | |
(c) | Primarily dividends received from Ford Credit, excluding proceeds from Financial Services sector divestitures paid to the Automotive sector. Beginning in 2007, Ford Credit will suspend its regular dividend payments. | |
(d) | In 2006, primarily proceeds from tax refunds (an inflow of about $300 million), the net issuance of Ford Common Stock under employee savings plans (an inflow of about $200 million), and dividends to minority shareholders of consolidated subsidiaries (an outflow of about $200 million). |
2006 | 2005 | 2004 | ||||||||||
Cash flows from operating activities of continuing operations | $ | (4.2 | ) | $ | 5.4 | $ | 7.0 | |||||
Items included in operating-related cash flows | ||||||||||||
Capital expenditures | (6.8 | ) | (7.1 | ) | (6.3 | ) | ||||||
Net transactions between Automotive and Financial Services sectors* | (0.5 | ) | (0.4 | ) | 1.3 | |||||||
Items not included in operating-related cash flows | ||||||||||||
Cash impact of Jobs Bank Benefits and separation programs | 1.2 | 0.4 | — | |||||||||
Net (sales)/purchases of trading securities | 6.8 | 0.6 | (5.6 | ) | ||||||||
Pension contributions | 0.8 | 2.5 | 2.2 | |||||||||
VEBA cash flows — (net reimbursement for benefits paid)/contributions to VEBA | (2.9 | ) | (2.8 | ) | 2.8 | |||||||
Other | — | 0.1 | (0.2 | ) | ||||||||
Operating-related cash flows | $ | (5.6 | ) | $ | (1.3 | ) | $ | 1.2 | ||||
* | Primarily payables and receivables between the sectors in the normal course of business. |
52
Table of Contents
53
Table of Contents
2007 | ||||||||||||
Forecast | 2006 | 2005 | ||||||||||
Public Term Funding Transactions | ||||||||||||
Unsecured | $ | 3 - 5 | $ | 9 | $ | 9 | ||||||
Securitizations | 7 - 15 | 14 | 12 | |||||||||
Total public term funding transactions | $ | 10 - 20 | $ | 23 | $ | 21 | ||||||
Private Term Funding Transactions * | $ | 25 - 35 | $ | 29 | $ | 18 |
* | Includes securitizations, term debt, and whole-loan sales; excludes Ford Credit’s on-balance sheet asset-backed commercial paper programs and proceeds from revolving transactions. |
54
Table of Contents
Financial Statement Leverage | = | Total Debt |
Total Debt | + | Securitized Off-Balance Sheet Receivables | - | Retained Interest in Securitized Off-Balance Sheet Receivables | - | Cash and Cash Equivalents and Marketable Securities * | - | Fair Value Hedge Accounting Adjustments on Total Debt | ||||||||||||
Managed Leverage | = | |||||||||||||||||||
Equity | + | Minority Interest | - | Fair Value Hedge Accounting Adjustments on Equity |
* | Excluding marketable securities related to insurance activities. |
December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Total debt | $ | 139.7 | $ | 133.4 | $ | 142.4 | ||||||
Total stockholder’s equity | 11.8 | 11.4 | 12.8 | |||||||||
Debt-to-equity ratio (to 1) | 11.9 | 11.7 | 11.1 |
December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Total debt | $ | 139.7 | $ | 133.4 | $ | 142.4 | ||||||
Securitized off-balance sheet receivables outstanding (a) | 12.2 | 18.0 | 37.7 | |||||||||
Retained interest in securitized off-balance sheet receivables (b) | (1.0 | ) | (1.4 | ) | (9.5 | ) | ||||||
Adjustments for cash, cash equivalents and marketable securities (c) | (21.8 | ) | (17.9 | ) | (12.7 | ) | ||||||
Fair value hedge accounting adjustments | (0.1 | ) | (0.5 | ) | (1.3 | ) | ||||||
Total adjusted debt | $ | 129.0 | $ | 131.6 | $ | 156.6 | ||||||
Total stockholder’s equity (including minority interest) | $ | 11.8 | $ | 11.4 | $ | 12.8 | ||||||
Fair value hedge accounting adjustments | (0.5 | ) | (0.7 | ) | (1.3 | ) | ||||||
Total adjusted equity | $ | 11.3 | $ | 10.7 | $ | 11.5 | ||||||
Managed debt-to-equity ratio (to 1) | 11.4 | 12.3 | 13.6 |
(a) | Includes securitized funding from discontinued operations in 2004. | |
(b) | Includes retained interest in securitized receivables from discontinued operations in 2004. | |
(c) | Excluding marketable securities related to insurance activities. |
55
Table of Contents
• | Dominion Bond Rating Service Limited (“DBRS”); | ||
• | Fitch, Inc. (“Fitch”); | ||
• | Moody’s Investors Service, Inc. (“Moody’s”); and | ||
• | Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. (“S&P”). |
56
Table of Contents
• | DBRS: In November 2006, DBRS assigned Ford an issuer rating of B (low), lowered Ford’s long-term senior unsecured rating to CCC (high) from B, rated Ford’s senior secured credit facilities at B (high), and maintained the trend at Negative. | ||
• | Fitch: In November 2006, Fitch lowered Ford’s long-term senior unsecured rating to B from B+, rated Ford’s senior secured credit facilities at BB and maintained the outlook at Negative. In December 2006, Fitch lowered Ford’s long-term senior unsecured rating to B- from B and maintained the outlook at Negative. Ford’s issuer default rating of B was unaffected. | ||
• | Moody’s: In November 2006, Moody’s affirmed Ford’s corporate rating at B3, lowered Ford’s long-term senior unsecured rating to Caa1 from B3, rated Ford’s senior secured credit facilities at Ba3, and maintained the outlook at Negative. | ||
• | S&P: In November 2006, S&P affirmed Ford’s issuer credit rating at B, lowered Ford’s long-term senior unsecured rating to CCC+ from B, rated Ford’s senior secured credit facilities at B, and maintained the outlook at Negative. |
• | DBRS: In November 2006, DBRS lowered Ford Credit’s long-term senior unsecured rating to B from B (high), maintained the short-term rating at R-4, and maintained the trend at Negative. | ||
• | S&P, Moody’s and Fitch: No ratings actions taken in the fourth quarter of 2006. |
Ford | Ford Credit | |||||||||||||
Issuer Default/ | Long-Term | Long-Term | ||||||||||||
Corporate/ Issuer | Senior | Senior | Outlook / | Senior | Short-Term | Outlook / | ||||||||
Rating | Unsecured | Secured | Trend | Unsecured | Unsecured | Trend | ||||||||
DBRS | B (low) | CCC (high) | B (high) | Negative | B | R-4 | Negative | |||||||
Fitch | B | B- | BB | Negative | BB- | B | Negative | |||||||
Moody’s | B3 | Caa1 | Ba3 | Negative | B1 | NP | Negative | |||||||
S&P | B | CCC+ | B | Negative | B* | B-3 | Negative |
* | S&P rates FCE long-term senior unsecured rating as B+, maintaining a one notch differential versus Ford Credit. |
First Quarter | ||||||||
2007 | ||||||||
Vehicle Unit | Over/(Under) | |||||||
Production | 2006 | |||||||
Ford North America | 740 | (136 | ) | |||||
Ford Europe | 520 | 29 | ||||||
PAG | 210 | 15 |
-U.S. (million units) | 16.8 | |||
-Europe (million units) | 17.6 | |||
U.S. industry net pricing | Lower |
57
Table of Contents
Quality | Improved | |
Market share | ||
-U.S. | Lower | |
-Other regions | Higher | |
Automotive cost * | Lower | |
Cash flow | Negative | |
Capital spending (in billions) | About $7 |
* | At constant volume, mix and exchange; excluding special items. |
58
Table of Contents
• | Continued decline in market share; |
• | Continued or increased price competition resulting from industry overcapacity, currency fluctuations or other factors; |
• | A market shift (or an increase in or acceleration of market shift) away from sales of trucks or sport utility vehicles, or from sales of other more profitable vehicles in the United States; |
• | A significant decline in industry sales, particularly in the United States or Europe, resulting from slowing economic growth, geo-political events or other factors; |
• | Lower-than-anticipated market acceptance of new or existing products; |
• | Continued or increased high prices for or reduced availability of fuel; |
• | Currency or commodity price fluctuations; |
• | Adverse effects from the bankruptcy or insolvency of a major competitor; |
• | Economic distress of suppliers that has in the past and may in the future require us to provide financial support or take other measures to ensure supplies of components or materials; |
• | Labor or other constraints on our ability to restructure our business; |
• | Work stoppages at Ford or supplier facilities or other interruptions of supplies; |
• | Single-source supply of components or materials; |
• | Substantial pension and postretirement healthcare and life insurance liabilities impairing our liquidity or financial condition; |
• | Worse-than-assumed economic and demographic experience for our postretirement benefit plans (e.g., discount rates, investment returns, and health care cost trends); |
• | The discovery of defects in vehicles resulting in delays in new model launches, recall campaigns or increased warranty costs; |
• | Increased safety, emissions (e.g., CO2), fuel economy or other (e.g., pension funding) regulation resulting in higher costs, cash expenditures, and/or sales restrictions; |
• | Unusual or significant litigation or governmental investigations arising out of alleged defects in our products or otherwise; |
• | A change in our requirements for parts or materials where we have entered into long-term supply arrangements that commit us to purchase minimum or fixed quantities of certain parts or materials, or to pay a minimum amount to the seller (“take-or-pay” contracts); |
• | Adverse effects on our operations resulting from certain geo-political or other events; |
• | Substantial negative Automotive operating-related cash flows for the near- to medium-term affecting our ability to meet our obligations, invest in our business or refinance our debt; |
• | Substantial levels of Automotive indebtedness adversely affecting our financial condition or preventing us from fulfilling our debt obligations (which may grow because we are able to incur substantially more debt, including additional secured debt); |
• | Inability of Ford Credit to access debt or securitization markets around the world at competitive rates or in sufficient amounts due to additional credit rating downgrades or otherwise; |
• | Higher-than-expected credit losses; |
• | Increased competition from banks or other financial institutions seeking to increase their share of financing Ford vehicles; |
• | Changes in interest rates; |
• | Collection and servicing problems related to finance receivables and net investment in operating leases; |
• | Lower-than-anticipated residual values or higher-than-expected return volumes for leased vehicles; and |
• | New or increased credit, consumer or data protection or other regulations resulting in higher costs and/or additional financing restrictions. |
59
Table of Contents
• | Discount rates.We base the discount rate assumption primarily on the results of a cash flow matching analysis, which matches the future cash outflows for each major plan to a yield curve comprised of high quality bonds specific to the country of the plan. Benefit payments are discounted at the rates on the curve and a single discount rate specific to the plan is determined. | ||
• | Expected return on plan assets.The expected return on plan assets assumption reflects historical plan returns and long-run inputs from a range of advisors for capital market returns, inflation, bond yields, and other variables, adjusted for specific aspects of our investment strategy. The assumption is based on consideration of all inputs, with a focus on long-term trends to avoid short-term market influences. Assumptions are not changed unless structural trends in the underlying economy are identified, our asset strategy changes, or there are significant changes in other inputs. | ||
• | Salary growth.The salary growth assumption reflects our long-term actual experience, outlook and assumed inflation. |
60
Table of Contents
• | Inflation.Our inflation assumption is based on an evaluation of external market indicators. | ||
• | Expected contributions.The expected amount and timing of contributions is based on an assessment of minimum requirements, and additional amounts based on cash availability and other considerations (e.g., funded status, avoidance of Pension Benefit Guaranty Corporation (“PBGC”) penalty premiums, U.K. Pension Protection Fund levies, and tax efficiency). | ||
• | Retirement rates.Retirement rates are developed to reflect actual and projected plan experience. | ||
• | Mortality rates. Mortality rates are developed to reflect actual and projected plan experience. |
Increase/(Decrease) in: | ||||||||||||
December 31, 2006 | ||||||||||||
Percentage | U.S. Plans | Non-U.S. Plans | Total Plans | 2007 Expense | ||||||||
Point | Funded Status | Funded Status | Funded Status | |||||||||
Assumption | Change | and Equity | and Equity | and Equity | U.S. Plans | Non-U.S. Plans | ||||||
Discount rate | +/- 1.0 pt. | $4,690/$(5,230) | $4,630/$(5,440) | $9,320/$(10,670) | $10/$290 | $(380)/$460 | ||||||
Actual return on assets | +/- 1.0 | 400/(400) | 240/(240) | 640/(640) | (10)/10 | (10)/10 | ||||||
Expected return on assets | +/- 1.0 | — | — | — | (410)/410 | (240)/240 |
61
Table of Contents
• | Discount rates.We base the discount rate assumption primarily on the results of a cash flow matching analysis, which matches the future cash outflows for each plan to a yield curve comprised of high quality bonds specific to the country of the plan. Benefit payments are discounted at the rates on the curve and a single discount rate specific to the plan is determined. | ||
• | Health care cost trends.Our health care cost trend assumptions are developed based on historical cost data, the near-term outlook, anticipated efficiencies and other cost-mitigation actions (including eligibility management, employee education and wellness, competitive sourcing and appropriate employee cost sharing) and an assessment of likely long-term trends. | ||
• | Expected return on plan assets.The expected return on plan assets assumption reflects external investment managers’ expectations of likely returns on short-duration VEBA assets over the next several years. | ||
• | Salary growth.The salary growth assumptions reflect our long-term actual experience, outlook and assumed inflation. | ||
• | Expected VEBA contributions/drawdowns.The expected amount and timing of contributions/drawdowns is based on an assessment of hourly retiree benefit payments to be reimbursed, tax efficiency, and cash availability. | ||
• | Retirement rates.Retirement rates are developed to reflect actual and projected plan experience. | ||
• | Mortality rates.Mortality rates are developed to reflect actual and projected plan experience. |
Effect on U.S. and Canadian Plans: | ||||||||||
Increase/(Decrease) | ||||||||||
Percentage | December 31, 2006 | |||||||||
Point | Funded Status | |||||||||
Assumption | Change | and Equity | 2007 Expense | |||||||
Discount rate | +/- 1.0 pt. | $ | 3,830/$(4,580 | ) | $ | (340)/$390 | ||||
Health care cost trend rates — total expense | +/- 1.0 | (4,580)/3,640 | 680/(540) | |||||||
Health care cost trend rates — service and interest expense | +/- 1.0 | (4,580)/3,640 | 340/(270) |
62
Table of Contents
• | Frequency. The number of finance receivables and operating lease contracts that Ford Credit expects will default over a period of time, measured as repossessions; and | ||
• | Loss severity. The expected difference between the amounts a customer owes Ford Credit when they charge off the finance contract and the amount Ford Credit receives, net of expenses, from selling the repossessed vehicle, including any recoveries from the customer. |
Increase/(Decrease) | ||||||||||||
Percentage | December 31, 2006 | |||||||||||
Point | Allowance for | 2006 | ||||||||||
Assumption | Change | Credit Losses | Expense | |||||||||
Repossession rates * | +/- 0.1 pt. | $30/$(30 | ) | $30/$(30 | ) | |||||||
Loss severity | +/- 1.0 | 5/(5) | 5/(5) |
* | Reflects the number of finance receivables and operating lease contracts that Ford Credit expects will default over a period of time relative to the average number of contracts outstanding. |
63
Table of Contents
• | Auction value. The market value of the vehicles when we sell them at the end of the lease; and | ||
• | Return volume.The number of vehicles that will be returned to us at lease end. |
64
Table of Contents
65
Table of Contents
• | FCAR.If the credit enhancement on any asset-backed security held by FCAR is reduced to zero, FCAR may not purchase any additional asset-backed securities and would wind down its operations. In addition, if credit losses or delinquencies in Ford Credit’s portfolio of retail, wholesale or lease assets exceed specified levels, FCAR is not permitted to purchase additional asset-backed securities of the affected type for so long as such levels are exceeded. | ||
• | Retail Conduits.If credit losses or delinquencies on the pool of assets held by a conduit exceed specified levels, or if the level of over-collateralization for such pool decreases below a specified level, Ford Credit would not have the right to sell additional pools of assets to that conduit. | ||
• | Wholesale Securitization (including Motown Notes).If the payment rates on wholesale receivables are lower than specified levels, or if there are significant dealer defaults, Ford Credit would be unable to obtain additional funding and any existing funding would begin to amortize. |
66
Table of Contents
Payments Due by Period | ||||||||||||||||||||||||||||
Financial | 2008- | 2010- | 2012 and | |||||||||||||||||||||||||
Automotive | Services | Total | 2007 | 2009 | 2011 | Thereafter | ||||||||||||||||||||||
On-balance sheet | ||||||||||||||||||||||||||||
Long-term debt* (excluding capital leases) | $ | 28,938 | $ | 115,859 | $ | 144,797 | $ | 35,523 | $ | 46,689 | $ | 23,759 | $ | 38,826 | ||||||||||||||
Interest payments relating to long-term debt | 36,505 | 22,586 | 59,091 | 8,418 | 12,019 | 7,765 | 30,889 | |||||||||||||||||||||
Capital leases | 372 | — | 372 | 53 | 129 | 118 | 72 | |||||||||||||||||||||
Off-balance sheet | ||||||||||||||||||||||||||||
Purchase obligations | 4,225 | 140 | 4,365 | 1,589 | 2,332 | 311 | 133 | |||||||||||||||||||||
Operating lease | 1,660 | 494 | 2,154 | 607 | 830 | 392 | 325 | |||||||||||||||||||||
Total | $ | 71,700 | $ | 139,079 | $ | 210,779 | $ | 46,190 | $ | 61,999 | $ | 32,345 | $ | 70,245 | ||||||||||||||
* | Amount includes $796 million for the current portion of long-term debt. See Note 15 of the Notes to the Financial Statements for additional discussion. |
67
Table of Contents
68
Table of Contents
69
Table of Contents
• | Market risk.The possibility that changes in interest and currency exchange rates will adversely affect Ford Credit’s cash flow and economic value; | ||
• | Credit risk.The possibility of loss from a customer’s failure to make payments according to contract terms; | ||
• | Residual risk.The possibility that the actual proceeds Ford Credit receives at lease termination will be lower than its projections or return rates will be higher than its projections; and, | ||
• | Liquidity risk.The possibility that Ford Credit may be unable to meet all current and future obligations in a timely manner. |
70
Table of Contents
71
Table of Contents
December 31, 2006 | December 31, 2005 | |||||||
Pre-tax Cash Flow sensitivity given a one percentage point instantaneous increase in interest rates | $ | (55 | ) | $ | (40 | ) | ||
Pre-tax Cash Flow sensitivity given a one percentage point instantaneous decrease in interest rates | 55 | 40 |
72
Table of Contents
73
Table of Contents
74
Table of Contents
• | Consolidated Statement of Income and Sector Statement of Income for the years ended December 31, 2006, 2005, and 2004. | ||
• | Consolidated Balance Sheet and Sector Balance Sheet at December 31, 2006 and 2005. | ||
• | Consolidated Statement of Cash Flows and Sector Statement of Cash Flows for the years ended December 31, 2006, 2005, and 2004. | ||
• | Consolidated Statement of Stockholders’ Equity for the years ended December 31, 2006, 2005, and 2004. | ||
• | Notes to the Financial Statements. | ||
• | Report of Independent Registered Public Accounting Firm. |
Designation | Description | |
Schedule II | Valuation and Qualifying Accounts |
Designation | Description | Method of Filing | ||
Exhibit 2 | Stock Purchase Agreement dated as of September 12, 2005 between CCMG Holdings, Inc., Ford Holdings LLC and Ford Motor Company. | Filed as Exhibit 2 to our Quarterly Report on Form 10-Q for the period ended September 30, 2005.* | ||
Exhibit 3-A | Restated Certificate of Incorporation, dated August 2, 2000. | Filed as Exhibit 3-A to our Annual Report on Form 10-K for the year ended December 31, 2000.* | ||
Exhibit 3-B | By-Laws as amended through December 14, 2006. | Filed with this Report. | ||
Exhibit 10-A | Amended and Restated Profit Maintenance Agreement, dated as of January 1, 2002, between Ford and Ford Credit. | Filed as Exhibit 10-A to our Annual Report on Form 10-K for the year ended December 31, 2001.* |
75
Table of Contents
Designation | Description | Method of Filing | ||
Exhibit 10-B | Executive Separation Allowance Plan as amended through October 1, 2006 for separations on or after January 1, 1981.** | Filed as Exhibit 10-B to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.* | ||
Exhibit 10-C | Deferred Compensation Plan for Non- Employee Directors, as amended and restated as of January 1, 2005.** | Filed as Exhibit 10-D to our Annual Report on Form 10-K for the year ended December 31, 2004.* | ||
Exhibit 10-D | Benefit Equalization Plan, as amended as of October 1, 2006.** | Filed as Exhibit 10-D to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.* | ||
Exhibit 10-D-1 | Amendment to Benefit Equalization Plan, adopted in October 2002 and effective as of November 1, 2001.** | Filed as Exhibit 10 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2002.* | ||
Exhibit 10-E | Description of financial counseling services provided to certain executives.** | Filed as Exhibit 10-F to Ford’s Annual Report on Form 10-K for the year ended December 31, 2002.* | ||
Exhibit 10-F | Supplemental Executive Retirement Plan, as amended through October 1, 2006.** | Filed as Exhibit 10-F to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.* | ||
Exhibit 10-G | Restricted Stock Plan for Non-Employee Directors adopted by the Board of Directors on November 10, 1988.** | Filed as Exhibit 10-P to our Annual Report on Form 10-K for the year ended December 31, 1988.* | ||
Exhibit 10-G-1 | Amendment to Restricted Stock Plan for Non-Employee Directors, effective as of August 1, 1996.** | Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 1996.* | ||
Exhibit 10-G-2 | Amendment to Restricted Stock Plan for Non-Employee Directors, effective as of July 1, 2004.** | Filed as Exhibit 10 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2004.* | ||
Exhibit 10-G-3 | Description of Director Compensation as of July 13, 2006.** | Filed as Exhibit 10-G-3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.* | ||
Exhibit 10-H | 1990 Long-Term Incentive Plan, amended as of June 1, 1990.** | Filed as Exhibit 10-R to our Annual Report on Form 10-K for the year ended December 31, 1990.* | ||
Exhibit 10-H-1 | Amendment to 1990 Long-Term Incentive Plan, effective as of October 1, 1990.** | Filed as Exhibit 10-P-1 to our Annual Report on Form 10-K for the year ended December 31, 1991.* | ||
Exhibit 10-H-2 | Amendment to 1990 Long-Term Incentive Plan, effective as of March 8, 1995.** | Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.* | ||
Exhibit 10-H-3 | Amendment to 1990 Long-Term Incentive Plan, effective as of October 1, 1997.** | Filed as Exhibit 10-M-3 to our Annual Report on Form 10-K for the year ended December 31, 1997.* | ||
Exhibit 10-H-4 | Amendment to 1990 Long-Term Incentive Plan, effective as of January 1, 1998.** | Filed as Exhibit 10-M-4 to our Annual Report on Form 10-K for the year ended December 31, 1997.* | ||
Exhibit 10-I | Description of Matching Gift Program and Vehicle Evaluation Program for Non-Employee Directors.** | Filed as Exhibit 10-I to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-J | Non-Employee Directors Life Insurance and Optional Retirement Plan (as amended as of October 1, 2006).** | Filed as Exhibit 10-J to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.* |
76
Table of Contents
Designation | Description | Method of Filing | ||
Exhibit 10-K | Description of Non-Employee Directors Accidental Death, Dismemberment and Permanent Total Disablement Indemnity.** | Filed as Exhibit 10-S to our Annual Report on Form 10-K for the year ended December 31, 1992.* | ||
Exhibit 10-L | Agreement dated December 10, 1992 between Ford and William C. Ford.** | Filed as Exhibit 10-T to our Annual Report on Form 10-K for the year ended December 31, 1992.* | ||
Exhibit 10-M | Select Retirement Plan, as amended through October 1, 2006.** | Filed as Exhibit 10-M to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.* | ||
Exhibit 10-N | Deferred Compensation Plan, as amended and restated as of July 12, 2006.** | Filed as Exhibit 10-N to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.* | ||
Exhibit 10-N-1 | Amendments to Deferred Compensation Plan, effective as of December 1, 2006.** | Filed with this Report. | ||
Exhibit 10-O | Annual Incentive Compensation Plan, as amended and restated as of January 1, 2000.** | Filed as Exhibit 10-T to our Annual Report on Form 10-K for the year ended December 31, 1999.* | ||
Exhibit 10-O-1 | Annual Incentive Compensation Plan Metrics for 2007.** | Filed with this Report. | ||
Exhibit 10-P | 1998 Long-Term Incentive Plan, as amended and restated effective as of January 1, 2003.** | Filed as Exhibit 10-R to our Annual Report on Form 10-K for the year ended December 31, 2002.* | ||
Exhibit 10-P-1 | Amendment to Ford Motor Company 1998 Long-Term Incentive Plan (effective as of January 1, 2006).** | Filed as Exhibit 10-P-1 to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-P-2 | Form of Stock Option Agreement (NQO) with Terms and Conditions.** | Filed as Exhibit 10-P-2 to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-P-3 | Form of Stock Option Agreement (ISO) with Terms and Conditions.** | Filed as Exhibit 10-P-3 to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-P-4 | Form of Stock Option Agreement (U.K. NQO) with Terms and Conditions.** | Filed as Exhibit 10-P-4 to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-P-5 | Performance Stock Rights Description for 2005-2007 Performance Period.** | Filed as Exhibit 10-Q-4 to our Annual Report on Form 10-K for the year ended December 31, 2004.* | ||
Exhibit 10-P-6 | Performance Stock Rights Description for 2006-2008 Performance Period.** | Filed as Exhibit 10-P-6 to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-P-7 | Form of Final Award Notification Letter For 2003-2005 Performance Period.** | Filed as Exhibit 10-P-7 to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-P-8 | Form of Restricted Stock Equivalent Grant Letter.** | Filed as Exhibit 10-Q-6 to our Annual Report on Form 10-K for the year ended December 31, 2004.* | ||
Exhibit 10-P-9 | Form of Performance-Based Restricted Stock Equivalent Opportunity Letter for 2005.** | Filed as Exhibit 10-Q-7 to our Annual Report on Form 10-K for the year ended December 31, 2004.* |
77
Table of Contents
Designation | Description | Method of Filing | ||
Exhibit 10-P-10 | Form of Performance-Based Restricted Stock Equivalent Opportunity Letter for 2006.** | Filed as Exhibit 10-P-10 to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-P-11 | Form of Restricted Stock Grant Letter.** | Filed as Exhibit 10-Q-8 to our Annual Report on Form 10-K for the year ended December 31, 2004.* | ||
Exhibit 10-P-12 | Form of Final Award Notification Letter for 2005 Performance-Based Restricted Stock Equivalents.** | Filed as Exhibit 10-P-12 to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-P-13 | Form of Final Award Notification Letter for 2006 Performance-Based Restricted Stock Equivalents.** | Filed with this Report. | ||
Exhibit 10-P-14 | Description of Performance-Based Restricted Stock Units for 2007.** | Filed with this Report. | ||
Exhibit 10-P-15 | Form of Final Award Notification Letter for 2004-2006 Performance Period.** | Filed with this Report. | ||
Exhibit 10-P-16 | Description of Time-Based Restricted Stock Units .** | Filed with this Report. | ||
Exhibit 10-Q | Agreement dated January 13, 1999 between Ford and Edsel B. Ford II.** | Filed as Exhibit 10-X to our Annual Report on Form 10-K for the year ended December 31, 1998.* | ||
Exhibit 10-R | Amended and Restated Agreement between Ford Motor Company and Ford Motor Credit Company dated as of December 12, 2006. | Filed with this Report. | ||
Exhibit 10-S | Agreement between Ford and Carl Reichardt, entered into in June 2002.** | Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.* | ||
Exhibit 10-T | Form of Trade Secrets/Non-Compete Statement between Ford and certain of its Executive Officers.** | Filed as Exhibit 10-V to our Annual Report on Form 10-K for the year ended December 31, 2003.* | ||
Exhibit 10-U | Form of Special 2006-2008 Retention Incentive Opportunity Letter.** | Filed as Exhibit 10-U to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-U-1 | Description of Settlement of Special 2006 — 2008 Senior Executive Retention Program.** | Filed with this Report. | ||
Exhibit 10-V | Form of Special 2006 Performance Incentive Opportunity Letter.** | Filed as Exhibit 10-V to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-W | Arrangement between Ford Motor Company and James J. Padilla.** | Filed as Exhibit 10-Z to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-X-1 | Description of Retirement Arrangement for James J. Padilla.** | Filed with our Current Report on Form 8-K dated May 10, 2006.* | ||
Exhibit 10-X-2 | Agreement between Ford Motor Company and James J. Padilla dated April 7, 2006.** | Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2006.* |
78
Table of Contents
Designation | Description | Method of Filing | ||
Exhibit 10-Y | Arrangement between Ford Motor Company and William Clay Ford, Jr. dated May 11, 2005.** | Filed with our Current Report on Form 8-K dated May 11, 2005.* | ||
Exhibit 10-Y-1 | Arrangement between Ford Motor Company and William Clay Ford, Jr. dated February 27, 2006.** | Filed as Exhibit 10-AA-1 to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-Z | Arrangement between Ford Motor Company and Greg C. Smith dated February 10, 2006.** | Filed as Exhibit 10-BB to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-Z-1 | Agreement between Ford Motor Company and Greg C. Smith dated February 10, 2006.** | Filed as Exhibit 10-BB-1 to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-AA | Agreement between Ford Motor Company and Mark Fields dated October 5, 2005.** | Filed as Exhibit 10-CC to our Annual Report on Form 10-K/A for the year ended December 31, 2005.* | ||
Exhibit 10-AA-1 | Arrangement between Ford Motor Company and Mark Fields dated February 7, 2007.** | Filed with this Report. | ||
Exhibit 10-BB | Description of Company Practices regarding Club Memberships for Executives.** | Filed with this Report. | ||
Exhibit 10-CC | Accession Agreement between Ford Motor Company and Alan Mulally as of September 1, 2006.** | Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.* | ||
Exhibit 10-CC-1 | Description of Special Terms and Conditions for Stock Options Granted to Alan Mulally.** | Filed with this Report. | ||
Exhibit 10-CC-2 | Description of President and CEO Compensation Arrangements.** | Filed with this Report. | ||
Exhibit 10-DD | Consulting Agreement between Ford Motor Company and Sir John Bond dated September 13, 2006.** | Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.* | ||
Exhibit 10-EE | Credit Agreement dated as of December 15, 2006. | Filed with this Report. | ||
Exhibit 12 | Calculation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends. | Filed with this Report. | ||
Exhibit 21 | List of Subsidiaries of Ford as of February 21, 2007. | Filed with this Report. | ||
Exhibit 23 | Consent of Independent Registered Public Accounting Firm. | Filed with this Report. | ||
Exhibit 24 | Powers of Attorney. | Filed with this Report. |
79
Table of Contents
Designation | Description | Method of Filing | ||
Exhibit 31.1 | Rule 15d-14(a) Certification of CEO. | Filed with this Report. | ||
Exhibit 31.2 | Rule 15d-14(a) Certification of CFO. | Filed with this Report. | ||
Exhibit 32.1 | Section 1350 Certification of CEO. | Furnished with this Report. | ||
Exhibit 32.2 | Section 1350 Certification of CFO. | Furnished with this Report. |
* | Incorporated by reference as an exhibit to this Report (file number reference 1-3950, unless otherwise indicated). | |
** | Management contract or compensatory plan or arrangement. |
80
Table of Contents
By: | /s/ Peter J. Daniel | |||
Senior Vice President and Controller | ||||
Date: | February 28, 2007 |
Signature | Title | Date | ||
WILLIAM CLAY FORD, JR.* | Director, Chairman of the Board, Executive Chairman, Chair of the Office of the Chairman and Chief Executive, and Acting Chair of the Finance Committee | February 28, 2007 | ||
ALAN MULALLY* | Director, President and Chief Executive Officer (principal executive officer) | February 28, 2007 | ||
JOHN R. H. BOND* | Director | February 28, 2007 | ||
STEPHEN G. BUTLER* | Director and Chair of the Audit Committee | February 28, 2007 | ||
KIMBERLY A. CASIANO* | Director | February 28, 2007 | ||
EDSEL B. FORD II* | Director | February 28, 2007 | ||
IRVINE O. HOCKADAY, JR.* | Director | February 28, 2007 | ||
RICHARD A. MANOOGIAN* | Director and Chair of the Compensation Committee | February 28, 2007 | ||
ELLEN R. MARRAM* | Director and Chair of the Nominating and Governance Committee | February 28, 2007 | ||
HOMER A. NEAL* | Director and Chair of the Environmental and Public Policy Committee | February 28, 2007 | ||
JORMA OLLILA* | Director | February 28, 2007 |
81
Table of Contents
Signature | Title | Date | ||
JOHN L. THORNTON* | Director | February 28, 2007 | ||
DONAT R. LECLAIR, JR.* | Executive Vice President and Chief Financial Officer (principal financial officer) | February 28, 2007 | ||
PETER J. DANIEL* | Senior Vice President and Controller (principal accounting officer) | February 28, 2007 |
*By: | /s/ PETER J. SHERRY, JR. | February 28, 2007 | ||||
(Peter J. Sherry, Jr.) | ||||||
Attorney-in-Fact |
82
Table of Contents
Table of Contents
(in millions, except per share amounts)
2006 | 2005 | 2004 | ||||||||||
Sales and revenues | ||||||||||||
Automotive sales | $ | 143,307 | $ | 153,474 | $ | 147,119 | ||||||
Financial Services revenues | 16,816 | 23,422 | 25,197 | |||||||||
Total sales and revenues | 160,123 | 176,896 | 172,316 | |||||||||
Costs and expenses | ||||||||||||
Automotive cost of sales | 148,869 | 144,924 | 135,755 | |||||||||
Selling, administrative and other expenses | 19,180 | 24,622 | 24,012 | |||||||||
Interest expense | 8,783 | 8,417 | 8,471 | |||||||||
Financial Services provision for credit and insurance losses | 241 | 483 | 1,212 | |||||||||
Total costs and expenses | 177,073 | 178,446 | 169,450 | |||||||||
Automotive interest income and other non-operating income/(expense), net | 1,478 | 1,249 | 988 | |||||||||
Automotive equity in net income/(loss) of affiliated companies | 421 | 285 | 255 | |||||||||
Gain on sale of The Hertz Corporation (“Hertz”) (Note 19) | — | 1,095 | — | |||||||||
Income/(loss) before income taxes | (15,051 | ) | 1,079 | 4,109 | ||||||||
Provision for/(benefit from) income taxes (Note 18) | (2,646 | ) | (845 | ) | 643 | |||||||
Income/(loss) before minority interests | (12,405 | ) | 1,924 | 3,466 | ||||||||
Minority interests in net income/(loss) of subsidiaries | 210 | 280 | 282 | |||||||||
Income/(loss) from continuing operations | (12,615 | ) | 1,644 | 3,184 | ||||||||
Income/(loss) from discontinued operations (Note 19) | 2 | 47 | (146 | ) | ||||||||
Income/(loss) before cumulative effects of changes in accounting principles | (12,613 | ) | 1,691 | 3,038 | ||||||||
Cumulative effects of changes in accounting principles (Note 27) | — | (251 | ) | — | ||||||||
Net income/(loss) | $ | (12,613 | ) | $ | 1,440 | $ | 3,038 | |||||
Average number of shares of Common and Class B Stock outstanding | 1,879 | 1,846 | 1,830 | |||||||||
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK (Note 20) | ||||||||||||
Basic income/(loss) | ||||||||||||
Income/(loss) from continuing operations | $ | (6.72 | ) | $ | 0.89 | $ | 1.74 | |||||
Income/(loss) from discontinued operations | — | 0.03 | (0.08 | ) | ||||||||
Cumulative effects of changes in accounting principles | — | (0.14 | ) | — | ||||||||
Net income/(loss) | $ | (6.72 | ) | $ | 0.78 | $ | 1.66 | |||||
Diluted income/(loss) | ||||||||||||
Income/(loss) from continuing operations | $ | (6.72 | ) | $ | 0.87 | $ | 1.59 | |||||
Income/(loss) from discontinued operations | — | 0.02 | (0.07 | ) | ||||||||
Cumulative effects of changes in accounting principles | — | (0.12 | ) | — | ||||||||
Net income/(loss) | $ | (6.72 | ) | $ | 0.77 | $ | 1.52 | |||||
Cash dividends | $ | 0.25 | $ | 0.40 | $ | 0.40 |
FS - 1
Table of Contents
(in millions, except per share amounts)
2006 | 2005 | 2004 | ||||||||||
AUTOMOTIVE | ||||||||||||
Sales | $ | 143,307 | $ | 153,474 | $ | 147,119 | ||||||
Costs and expenses | ||||||||||||
Cost of sales | 148,869 | 144,924 | 135,755 | |||||||||
Selling, administrative and other expenses | 12,359 | 12,738 | 11,564 | |||||||||
Total costs and expenses | 161,228 | 157,662 | 147,319 | |||||||||
Operating income/(loss) | (17,921 | ) | (4,188 | ) | (200 | ) | ||||||
Interest expense | 995 | 1,220 | 1,221 | |||||||||
Interest income and other non-operating income/(expense), net | 1,478 | 1,249 | 988 | |||||||||
Equity in net income/(loss) of affiliated companies | 421 | 285 | 255 | |||||||||
Income/(loss) before income taxes — Automotive | (17,017 | ) | (3,874 | ) | (178 | ) | ||||||
FINANCIAL SERVICES | ||||||||||||
Revenues | 16,816 | 23,422 | 25,197 | |||||||||
Costs and expenses | ||||||||||||
Interest expense | 7,788 | 7,197 | 7,250 | |||||||||
Depreciation | 5,295 | 5,854 | 6,618 | |||||||||
Operating and other expenses | 1,526 | 6,030 | 5,830 | |||||||||
Provision for credit and insurance losses | 241 | 483 | 1,212 | |||||||||
Total costs and expenses | 14,850 | 19,564 | 20,910 | |||||||||
Gain on sale of Hertz (Note 19) | — | 1,095 | — | |||||||||
Income/(loss) before income taxes — Financial Services | 1,966 | 4,953 | 4,287 | |||||||||
TOTAL COMPANY | ||||||||||||
Income/(loss) before income taxes | (15,051 | ) | 1,079 | 4,109 | ||||||||
Provision for/(benefit from) income taxes (Note 18) | (2,646 | ) | (845 | ) | 643 | |||||||
Income/(loss) before minority interests | (12,405 | ) | 1,924 | 3,466 | ||||||||
Minority interests in net income/(loss) of subsidiaries | 210 | 280 | 282 | |||||||||
Income/(loss) from continuing operations | (12,615 | ) | 1,644 | 3,184 | ||||||||
Income/(loss) from discontinued operations (Note 19) | 2 | 47 | (146 | ) | ||||||||
Income/(loss) before cumulative effects of changes in accounting principles | (12,613 | ) | 1,691 | 3,038 | ||||||||
Cumulative effects of changes in accounting principles (Note 27) | — | (251 | ) | — | ||||||||
Net income/(loss) | $ | (12,613 | ) | $ | 1,440 | $ | 3,038 | |||||
Average number of shares of Common and Class B Stock outstanding | 1,879 | 1,846 | 1,830 | |||||||||
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK (Note 20) | ||||||||||||
Basic income/(loss) | ||||||||||||
Income/(loss) from continuing operations | $ | (6.72 | ) | $ | 0.89 | $ | 1.74 | |||||
Income/(loss) from discontinued operations | — | 0.03 | (0.08 | ) | ||||||||
Cumulative effects of changes in accounting principles | — | (0.14 | ) | — | ||||||||
Net income/(loss) | $ | (6.72 | ) | $ | 0.78 | $ | 1.66 | |||||
Diluted income/(loss) | ||||||||||||
Income/(loss) from continuing operations | $ | (6.72 | ) | $ | 0.87 | $ | 1.59 | |||||
Income/(loss) from discontinued operations | — | 0.02 | (0.07 | ) | ||||||||
Cumulative effects of changes in accounting principles | — | (0.12 | ) | — | ||||||||
Net income/(loss) | $ | (6.72 | ) | $ | 0.77 | $ | 1.52 | |||||
Cash dividends | $ | 0.25 | $ | 0.40 | $ | 0.40 |
FS - 2
Table of Contents
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 28,894 | $ | 28,406 | ||||
Marketable securities (Note 3) | 21,472 | 10,672 | ||||||
Loaned securities (Note 3) | 5,256 | 3,461 | ||||||
Finance receivables, net | 106,863 | 105,975 | ||||||
Other receivables, net | 7,782 | 8,536 | ||||||
Net investment in operating leases (Note 5) | 29,834 | 27,099 | ||||||
Retained interest in sold receivables (Note 7) | 990 | 1,420 | ||||||
Inventories (Note 8) | 11,578 | 10,271 | ||||||
Equity in net assets of affiliated companies | 2,787 | 2,579 | ||||||
Net property (Note 10) | 38,505 | 40,676 | ||||||
Deferred income taxes | 4,950 | 5,880 | ||||||
Goodwill and other net intangible assets (Note 12) | 6,937 | 5,945 | ||||||
Assets of discontinued/held-for-sale operations | — | 5 | ||||||
Other assets | 12,706 | 18,534 | ||||||
Total assets | $ | 278,554 | $ | 269,459 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Payables | $ | 23,549 | $ | 22,910 | ||||
Accrued liabilities and deferred revenue (Note 14) | 82,518 | 73,047 | ||||||
Debt (Note 15) | 172,049 | 153,278 | ||||||
Deferred income taxes | 2,744 | 5,660 | ||||||
Total liabilities | 280,860 | 254,895 | ||||||
Minority interests | 1,159 | 1,122 | ||||||
Stockholders’ equity | ||||||||
Capital stock (Note 20) | ||||||||
Common Stock, par value $0.01 per share (1,837 million shares issued; 6,000 million shares authorized) | 18 | 18 | ||||||
Class B Stock, par value $0.01 per share (71 million shares issued; 530 million shares authorized) | 1 | 1 | ||||||
Capital in excess of par value of stock | 4,562 | 4,872 | ||||||
Accumulated other comprehensive income/(loss) | (7,846 | ) | (3,680 | ) | ||||
Treasury stock | (183 | ) | (833 | ) | ||||
Retained earnings/(Accumulated deficit) | (17 | ) | 13,064 | |||||
Total stockholders’ equity | (3,465 | ) | 13,442 | |||||
Total liabilities and stockholders’ equity | $ | 278,554 | $ | 269,459 | ||||
FS - 3
Table of Contents
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Automotive | ||||||||
Cash and cash equivalents | $ | 16,020 | $ | 13,388 | ||||
Marketable securities (Note 3) | 11,310 | 6,860 | ||||||
Loaned securities (Note 3) | 5,256 | 3,461 | ||||||
Total cash, marketable and loaned securities | 32,586 | 23,709 | ||||||
Receivables, less allowances of $196 and $298 | 3,878 | 3,075 | ||||||
Inventories (Note 8) | 11,578 | 10,271 | ||||||
Deferred income taxes | 1,569 | 1,249 | ||||||
Other current assets | 7,714 | 8,177 | ||||||
Total current assets | 57,325 | 46,481 | ||||||
Equity in net assets of affiliated companies | 2,029 | 1,756 | ||||||
Net property (Note 10) | 38,236 | 40,348 | ||||||
Deferred income taxes | 14,880 | 10,999 | ||||||
Goodwill and other net intangible assets (Note 12) | 6,920 | 5,928 | ||||||
Assets of discontinued/held-for-sale operations | — | 5 | ||||||
Other assets | 3,244 | 8,308 | ||||||
Total Automotive assets | 122,634 | 113,825 | ||||||
Financial Services | ||||||||
Cash and cash equivalents | 12,874 | 15,018 | ||||||
Marketable securities (Note 3) | 10,162 | 3,812 | ||||||
Finance receivables, net (Note 4) | 110,767 | 111,436 | ||||||
Net investment in operating leases (Note 5) | 26,606 | 22,951 | ||||||
Retained interest in sold receivables (Note 7) | 990 | 1,420 | ||||||
Goodwill and other intangible assets (Note 12) | 17 | 17 | ||||||
Other assets | 6,167 | 7,457 | ||||||
Receivable from Automotive (Note 1) | 1,467 | 83 | ||||||
Total Financial Services assets | 169,050 | 162,194 | ||||||
Intersector elimination | (1,467 | ) | (83 | ) | ||||
Total assets | $ | 290,217 | $ | 275,936 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Automotive | ||||||||
Trade payables | $ | 17,069 | $ | 16,637 | ||||
Other payables | 4,893 | 4,222 | ||||||
Accrued liabilities and deferred revenue (Note 14) | 28,995 | 28,829 | ||||||
Deferred income taxes | 3,139 | 804 | ||||||
Debt payable within one year (Note 15) | 1,499 | 978 | ||||||
Current payable to Financial Services (Note 1) | 640 | 83 | ||||||
Total current liabilities | 56,235 | 51,553 | ||||||
Long-term debt (Note 15) | 28,514 | 16,900 | ||||||
Other liabilities (Note 14) | 49,398 | 38,639 | ||||||
Deferred income taxes | 441 | 586 | ||||||
Non-current payable to Financial Services (Note 1) | 827 | — | ||||||
Total Automotive liabilities | 135,415 | 107,678 | ||||||
Financial Services | ||||||||
Payables | 1,587 | 2,051 | ||||||
Debt (Note 15) | 142,036 | 135,400 | ||||||
Deferred income taxes | 10,827 | 10,747 | ||||||
Other liabilities and deferred income | 4,125 | 5,579 | ||||||
Total Financial Services liabilities | 158,575 | 153,777 | ||||||
Minority Interests | 1,159 | 1,122 | ||||||
Stockholders’ equity | ||||||||
Capital stock (Note 20) | ||||||||
Common Stock, par value $0.01 per share (1,837 million shares issued; 6,000 million shares authorized) | 18 | 18 | ||||||
Class B Stock, par value $0.01 per share (71 million shares issued; 530 million shares authorized) | 1 | 1 | ||||||
Capital in excess of par value of stock | 4,562 | 4,872 | ||||||
Accumulated other comprehensive income/(loss) | (7,846 | ) | (3,680 | ) | ||||
Treasury stock | (183 | ) | (833 | ) | ||||
Retained earnings/(Accumulated deficit) | (17 | ) | 13,064 | |||||
Total stockholders’ equity | (3,465 | ) | 13,442 | |||||
Intersector elimination | (1,467 | ) | (83 | ) | ||||
Total liabilities and stockholders’ equity | $ | 290,217 | $ | 275,936 | ||||
FS - 4
Table of Contents
(in millions)
2006 | 2005 | 2004 | ||||||||||
Cash flows from operating activities of continuing operations | ||||||||||||
Net cash flows from operating activities (Note 21) | $ | 9,609 | $ | 20,387 | $ | 21,683 | ||||||
Cash flows from investing activities of continuing operations | ||||||||||||
Capital expenditures | (6,848 | ) | (7,517 | ) | (6,738 | ) | ||||||
Acquisitions of retail and other finance receivables and operating leases | (59,793 | ) | (54,024 | ) | (63,284 | ) | ||||||
Collections of retail and other finance receivables and operating leases | 41,502 | 48,257 | 51,002 | |||||||||
Net acquisitions of daily rental vehicles | — | (1,552 | ) | (2,192 | ) | |||||||
Purchases of securities | (23,678 | ) | (11,883 | ) | (11,767 | ) | ||||||
Sales and maturities of securities | 18,456 | 8,735 | 16,648 | |||||||||
Proceeds from sales of retail and other finance receivables and operating leases | 5,120 | 17,288 | 6,481 | |||||||||
Proceeds from sale of businesses | 56 | 7,937 | 537 | |||||||||
Cash paid for acquisitions | — | (2,031 | ) | (30 | ) | |||||||
Transfer of cash balances upon disposition of discontinued/held-for-sale operations | (4 | ) | (1,255 | ) | (39 | ) | ||||||
Other | 325 | 1,849 | 2,292 | |||||||||
Net cash (used in)/provided by investing activities | (24,864 | ) | 5,804 | (7,090 | ) | |||||||
Cash flows from financing activities of continuing operations | ||||||||||||
Cash dividends | (468 | ) | (738 | ) | (733 | ) | ||||||
Sales of Common Stock | 431 | 895 | 21 | |||||||||
Purchases of Common Stock | (183 | ) | (570 | ) | (172 | ) | ||||||
Changes in short-term debt | (5,825 | ) | (8,713 | ) | 4,885 | |||||||
Proceeds from issuance of other debt | 58,258 | 24,559 | 22,223 | |||||||||
Principal payments on other debt | (36,601 | ) | (36,080 | ) | (36,000 | ) | ||||||
Other | (339 | ) | (153 | ) | (136 | ) | ||||||
Net cash (used in)/provided by financing activities | 15,273 | (20,800 | ) | (9,912 | ) | |||||||
Effect of exchange rate changes on cash | 464 | (496 | ) | 505 | ||||||||
Net increase/(decrease) in cash and cash equivalents from continuing operations | 482 | 4,895 | 5,186 | |||||||||
Cash from discontinued operations | ||||||||||||
Cash flows from operating activities of discontinued operations | 2 | 55 | 315 | |||||||||
Cash flows from investing activities of discontinued operations | — | (49 | ) | (320 | ) | |||||||
Cash flows from financing activities of discontinued operations | — | — | — | |||||||||
Net increase/(decrease) in cash and cash equivalents | $ | 484 | $ | 4,901 | $ | 5,181 | ||||||
Cash and cash equivalents at January 1 | $ | 28,406 | $ | 22,828 | $ | 17,672 | ||||||
Cash and cash equivalents of discontinued/held-for-sale operations at January 1 | 4 | 681 | 656 | |||||||||
Net increase/(decrease) in cash and cash equivalents | 484 | 4,901 | 5,181 | |||||||||
Less: cash and cash equivalents of discontinued/held-for-sale operations at December 31 | — | (4 | ) | (681 | ) | |||||||
Cash and cash equivalents at December 31 | $ | 28,894 | $ | 28,406 | $ | 22,828 | ||||||
FS - 5
Table of Contents
(in millions)
2006 | 2005 | 2004 | ||||||||||||||||||||||
Financial | Financial | Financial | ||||||||||||||||||||||
Automotive | Services | Automotive | Services | Automotive | Services | |||||||||||||||||||
Cash flows from operating activities of continuing operations | ||||||||||||||||||||||||
Net cash flows from operating activities (Note 21) | $ | (4,185 | ) | $ | 7,316 | $ | 5,433 | $ | 6,912 | $ | 6,963 | $ | 7,963 | |||||||||||
Cash flows from investing activities of continuing operations | ||||||||||||||||||||||||
Capital expenditures | (6,809 | ) | (39 | ) | (7,123 | ) | (394 | ) | (6,280 | ) | (458 | ) | ||||||||||||
Acquisitions of retail and other finance receivables and operating leases | — | (59,793 | ) | — | (54,024 | ) | — | (63,284 | ) | |||||||||||||||
Collections of retail and other finance receivables and operating leases | — | 41,867 | — | 48,245 | — | 51,220 | ||||||||||||||||||
Net (increase)/decrease in wholesale receivables | — | 6,113 | — | 4,751 | — | 2,882 | ||||||||||||||||||
Net acquisitions of daily rental vehicles | — | — | — | (1,988 | ) | — | (2,492 | ) | ||||||||||||||||
Purchases of securities | (4,068 | ) | (19,610 | ) | (5,714 | ) | (6,169 | ) | (7,590 | ) | (4,177 | ) | ||||||||||||
Sales and maturities of securities | 4,865 | 13,591 | 5,106 | 3,629 | 7,615 | 9,033 | ||||||||||||||||||
Proceeds from sales of retail and other finance receivables and operating leases | — | 5,120 | — | 17,288 | — | 6,481 | ||||||||||||||||||
Proceeds from sale of wholesale receivables | — | — | — | 3,739 | — | 3,957 | ||||||||||||||||||
Proceeds from sale of businesses | 56 | — | 280 | 7,657 | 125 | 412 | ||||||||||||||||||
Cash paid for acquisitions | — | — | (2,031 | ) | — | (30 | ) | — | ||||||||||||||||
Transfer of cash balances upon disposition of discontinued/held-for-sale operations | (4 | ) | — | — | (1,255 | ) | (26 | ) | (13 | ) | ||||||||||||||
Investing activity from Financial Services | 1,185 | — | 8,407 | — | 4,361 | — | ||||||||||||||||||
Investing activity to Financial Services | (1,400 | ) | — | — | — | — | — | |||||||||||||||||
Other | 18 | 307 | 387 | 1,462 | 107 | 2,185 | ||||||||||||||||||
Net cash (used in)/provided by investing activities | (6,157 | ) | (12,444 | ) | (688 | ) | 22,941 | (1,718 | ) | 5,746 | ||||||||||||||
Cash flows from financing activities of continuing operations | ||||||||||||||||||||||||
Cash dividends | (468 | ) | — | (738 | ) | — | (733 | ) | — | |||||||||||||||
Sales of Common Stock | 431 | — | 895 | — | 21 | — | ||||||||||||||||||
Purchases of Common Stock | (183 | ) | — | (570 | ) | — | (172 | ) | — | |||||||||||||||
Changes in short-term debt | 414 | (6,239 | ) | (115 | ) | (8,598 | ) | (342 | ) | 5,227 | ||||||||||||||
Proceeds from issuance of other debt | 12,254 | 46,004 | 385 | 24,174 | 469 | 21,754 | ||||||||||||||||||
Principal payments on other debt | (758 | ) | (35,843 | ) | (758 | ) | (35,322 | ) | (2,564 | ) | (33,436 | ) | ||||||||||||
Financing activity from Automotive | — | 1,400 | — | — | — | — | ||||||||||||||||||
Financing activity to Automotive | — | (1,185 | ) | — | (8,407 | ) | — | (4,361 | ) | |||||||||||||||
Other | (147 | ) | (192 | ) | (177 | ) | 24 | (39 | ) | (97 | ) | |||||||||||||
Net cash (used in)/provided by financing activities | 11,543 | 3,945 | (1,078 | ) | (28,129 | ) | (3,360 | ) | (10,913 | ) | ||||||||||||||
Effect of exchange rate changes on cash | 104 | 360 | (23 | ) | (473 | ) | 117 | 388 | ||||||||||||||||
Net change in intersector receivables/payables and other liabilities | 1,321 | (1,321 | ) | (394 | ) | 394 | 1,258 | (1,258 | ) | |||||||||||||||
Net increase/(decrease) in cash and cash equivalents from continuing operations | 2,626 | (2,144 | ) | 3,250 | 1,645 | 3,260 | 1,926 | |||||||||||||||||
Cash from discontinued operations | ||||||||||||||||||||||||
Cash flows from operating activities of discontinued operations | 2 | — | (16 | ) | 71 | (149 | ) | 464 | ||||||||||||||||
Cash flows from investing activities of discontinued operations | — | — | 17 | (66 | ) | 137 | (457 | ) | ||||||||||||||||
Cash flows from financing activities of discontinued operations | — | — | — | — | — | — | ||||||||||||||||||
Net increase/(decrease) in cash and cash equivalents | $ | 2,628 | $ | (2,144 | ) | $ | 3,251 | $ | 1,650 | $ | 3,248 | $ | 1,933 | |||||||||||
Cash and cash equivalents at January 1 | $ | 13,388 | $ | 15,018 | $ | 10,139 | $ | 12,689 | $ | 6,853 | $ | 10,819 | ||||||||||||
Cash and cash equivalents of discontinued/held-for-sale operations at January 1 | 4 | — | 2 | 679 | 40 | 616 | ||||||||||||||||||
Net increase/(decrease) in cash and cash equivalents | 2,628 | (2,144 | ) | 3,251 | 1,650 | 3,248 | 1,933 | |||||||||||||||||
Less: cash and cash equivalents of discontinued/held-for-sale operations at December 31 | — | — | (4 | ) | — | (2 | ) | (679 | ) | |||||||||||||||
Cash and cash equivalents at December 31 | $ | 16,020 | $ | 12,874 | $ | 13,388 | $ | 15,018 | $ | 10,139 | $ | 12,689 | ||||||||||||
FS - 6
Table of Contents
(in millions)
Capital in | Accumulated Other Comprehensive | |||||||||||||||||||||||||||||||
Excess | Retained | Income/(Loss) | ||||||||||||||||||||||||||||||
of Par | Earnings/ | Foreign | Employee | Derivative | ||||||||||||||||||||||||||||
Capital | Value of | (Accumulated | Currency | Benefit | Instruments | |||||||||||||||||||||||||||
Stock | Stock | Deficit) | Translation | Related | and Other | Other | Total | |||||||||||||||||||||||||
YEAR ENDED DECEMBER 31, 2004 | ||||||||||||||||||||||||||||||||
Balance at beginning of year | $ | 19 | $ | 5,374 | $ | 10,057 | $ | 1,816 | $ | (3,520 | ) | $ | 1,462 | $ | (1,749 | ) | $ | 13,459 | ||||||||||||||
Comprehensive income/(loss) | ||||||||||||||||||||||||||||||||
Net income/(loss) | — | — | 3,038 | — | — | — | — | 3,038 | ||||||||||||||||||||||||
Foreign currency translation | — | — | — | 2,321 | — | — | — | 2,321 | ||||||||||||||||||||||||
Net gain/(loss) on derivative instruments (net of $76 of tax) | — | — | — | (125 | ) | — | (16 | ) | — | (141 | ) | |||||||||||||||||||||
Minimum pension liability (net of $243 of tax) | — | — | — | — | (451 | ) | — | — | (451 | ) | ||||||||||||||||||||||
Net holding gain/(loss) (net of $13 of tax) | — | — | — | — | — | (24 | ) | — | (24 | ) | ||||||||||||||||||||||
Comprehensive income/(loss) | 4,743 | |||||||||||||||||||||||||||||||
Common Stock issued for employee benefit plans and other | — | (53 | ) | — | — | — | — | — | (53 | ) | ||||||||||||||||||||||
ESOP loan and treasury stock | — | — | — | — | — | — | 21 | 21 | ||||||||||||||||||||||||
Cash dividends | — | — | (733 | ) | — | — | — | — | (733 | ) | ||||||||||||||||||||||
Balance at end of year | $ | 19 | $ | 5,321 | $ | 12,362 | $ | 4,012 | $ | (3,971 | ) | $ | 1,422 | $ | (1,728 | ) | $ | 17,437 | ||||||||||||||
YEAR ENDED DECEMBER 31, 2005 | ||||||||||||||||||||||||||||||||
Balance at beginning of year | $ | 19 | $ | 5,321 | $ | 12,362 | $ | 4,012 | $ | (3,971 | ) | $ | 1,422 | $ | (1,728 | ) | $ | 17,437 | ||||||||||||||
Comprehensive income/(loss) | ||||||||||||||||||||||||||||||||
Net income/(loss) | — | — | 1,440 | — | — | — | — | 1,440 | ||||||||||||||||||||||||
Foreign currency translation | — | — | — | (3,684 | ) | — | — | — | (3,684 | ) | ||||||||||||||||||||||
Net gain/(loss) on derivative instruments (net of $527 of tax) | — | — | — | 285 | — | (1,264 | ) | — | (979 | ) | ||||||||||||||||||||||
Minimum pension liability (net of $229 of tax) | — | — | — | — | (425 | ) | — | — | (425 | ) | ||||||||||||||||||||||
Net holding gain/(loss) (net of $30 of tax). | — | — | — | — | — | (55 | ) | — | (55 | ) | ||||||||||||||||||||||
Comprehensive income/(loss) | (3,703 | ) | ||||||||||||||||||||||||||||||
Common Stock issued for employee benefit plans and other | — | (449 | ) | — | — | — | — | — | (449 | ) | ||||||||||||||||||||||
ESOP loan and treasury stock | — | — | — | — | — | — | 895 | 895 | ||||||||||||||||||||||||
Cash dividends | — | — | (738 | ) | — | — | — | — | (738 | ) | ||||||||||||||||||||||
Balance at end of year | $ | 19 | $ | 4,872 | $ | 13,064 | $ | 613 | $ | (4,396 | ) | $ | 103 | $ | (833 | ) | $ | 13,442 | ||||||||||||||
YEAR ENDED DECEMBER 31, 2006 | ||||||||||||||||||||||||||||||||
Balance at beginning of year | $ | 19 | $ | 4,872 | $ | 13,064 | $ | 613 | $ | (4,396 | ) | $ | 103 | $ | (833 | ) | $ | 13,442 | ||||||||||||||
Comprehensive income/(loss) | ||||||||||||||||||||||||||||||||
Net income/(loss) | — | — | (12,613 | ) | — | — | — | — | (12,613 | ) | ||||||||||||||||||||||
Foreign currency translation (Note 2) | — | — | — | 2,585 | — | — | — | 2,585 | ||||||||||||||||||||||||
Net gain/(loss) on derivative instruments (net of $266 of tax) | — | — | — | 17 | — | 477 | — | 494 | ||||||||||||||||||||||||
Minimum pension liability (net of $819 of tax) | — | — | — | — | 1,542 | — | — | 1,542 | ||||||||||||||||||||||||
Net holding gain/(loss) (net of $266 of tax) | — | — | — | — | — | (59 | ) | — | (59 | ) | ||||||||||||||||||||||
Comprehensive income/(loss) | (8,051 | ) | ||||||||||||||||||||||||||||||
Adoption of Statement of Financial Accounting Standards (“SFAS”) Statement No. 158 (net of $646 of tax) | — | — | — | — | (8,728 | ) | — | — | (8,728 | ) | ||||||||||||||||||||||
Common Stock issued for employee benefit plans and other | — | (310 | ) | — | — | — | — | — | (310 | ) | ||||||||||||||||||||||
ESOP loan and treasury stock | — | — | — | — | — | — | 650 | 650 | ||||||||||||||||||||||||
Cash dividends | — | — | (468 | ) | — | — | — | — | (468 | ) | ||||||||||||||||||||||
Balance at end of year | $ | 19 | $ | 4,562 | $ | (17 | ) | $ | 3,215 | $ | (11,582 | ) | $ | 521 | $ | (183 | ) | $ | (3,465 | ) | ||||||||||||
FS - 7
Table of Contents
2006 | 2005 | |||||||||||||||
Financial | Financial | |||||||||||||||
Automotive | Services | Automotive | Services | |||||||||||||
Finance receivables, net (a) | $ | 3.9 | $ | 5.5 | ||||||||||||
Wholesale receivables (b) | 1.9 | 1.6 | ||||||||||||||
Net investment in operating leases (c) | 0.8 | 0.9 | ||||||||||||||
Other assets (d) | 0.7 | 1.1 | ||||||||||||||
Intersector receivables/(payables) (e) | $ | (1.5 | ) | 1.5 | $ | (0.1 | ) | 0.1 |
(a) | Automotive sector receivables (generated primarily from vehicle and parts sales to third parties) sold to Ford Credit. These receivables are classified asOther receivables, neton our consolidated balance sheet andFinance receivables, neton our sector balance sheet. | |
(b) | Primarily wholesale receivables with entities that are consolidated subsidiaries of Ford. The consolidated subsidiaries include dealerships that are partially owned by Ford and consolidated as VIEs, and also certain overseas affiliates. | |
(c) | Sale-leaseback agreement between Automotive and Financial Services sectors relating to vehicles that we lease to our employees and employees of our subsidiaries. | |
(d) | Primarily used vehicles purchased by Ford Credit pursuant to the Automotive sector’s obligation to repurchase such vehicles from daily rental car companies. These vehicles are subsequently sold at auction. | |
(e) | Primarily amounts owed to the Automotive sector by Ford Credit under a tax sharing agreement, and the net result of all other transactions including receivables of Ford Credit from the Automotive sector’s consolidated dealerships. |
FS - 8
Table of Contents
FS - 9
Table of Contents
• | The receivables are isolated from the transferor; we transfer the receivables to bankruptcy - remote special purpose entities (“SPEs”) or other independent entities. | ||
• | The receivables are transferred to an entity that has the right to pledge or exchange the assets, or to a qualifying SPE whose beneficial interest holders have the right to pledge or exchange their beneficial interests. In our off-balance sheet transactions, we generally use a qualifying SPE or we sell the receivables to an independent entity. In either case, we do not restrict the transferee from pledging or exchanging the receivables or beneficial interests. | ||
• | The transferor does not maintain control over the receivables; we are not permitted to regain control over the transferred receivables or cause the return of specific receivables, other than through a “cleanup” call. |
FS - 10
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Advertising | $ | 5.1 | $ | 5.0 | $ | 4.7 | ||||||
Engineering, research and development | 7.2 | 8.0 | 7.4 |
FS - 11
Table of Contents
FS - 12
Table of Contents
2006 | 2005 | |||||||||||||||||||||||||||||||
Amortized | Unrealized | Fair | Amortized | Unrealized | Fair | |||||||||||||||||||||||||||
Cost | Gains | Losses | Value | Cost | Gains | Losses | Value | |||||||||||||||||||||||||
Automotive Sector | ||||||||||||||||||||||||||||||||
Trading | $ | 15,060 | $ | 27 | $ | 18 | $ | 15,069 | $ | 8,028 | $ | 13 | $ | 24 | $ | 8,017 | ||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||
U.S. government | 185 | — | 1 | 184 | 1,063 | — | 6 | 1,057 | ||||||||||||||||||||||||
Mortgage-backed securities | 595 | 1 | 3 | 593 | 527 | 1 | 4 | 524 | ||||||||||||||||||||||||
Other debt securities | 724 | — | 4 | 720 | 729 | 1 | 7 | 723 | ||||||||||||||||||||||||
Subtotal | 1,504 | 1 | 8 | 1,497 | 2,319 | 2 | 17 | 2,304 | ||||||||||||||||||||||||
Total | $ | 16,564 | $ | 28 | $ | 26 | $ | 16,566 | $ | 10,347 | $ | 15 | $ | 41 | $ | 10,321 | ||||||||||||||||
Financial Services Sector | ||||||||||||||||||||||||||||||||
Trading | $ | 1 | $ | — | $ | — | $ | 1 | $ | 2 | $ | — | $ | — | $ | 2 | ||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||
U.S. government | 3,710 | 4 | 1 | 3,713 | 92 | 1 | — | 93 | ||||||||||||||||||||||||
Government-sponsored enterprises | 4,968 | 5 | — | 4,973 | 1,648 | — | — | 1,648 | ||||||||||||||||||||||||
Mortgage-backed securities | 263 | 1 | 4 | 260 | 282 | 1 | 4 | 279 | ||||||||||||||||||||||||
Other debt securities | 1,113 | 1 | 2 | 1,112 | 1,684 | 1 | 3 | 1,682 | ||||||||||||||||||||||||
Equity securities | 60 | 36 | 1 | 95 | 65 | 38 | 1 | 102 | ||||||||||||||||||||||||
Subtotal | 10,114 | 47 | 8 | 10,153 | 3,771 | 41 | 8 | 3,804 | ||||||||||||||||||||||||
Held-to-maturity | 8 | — | — | 8 | 6 | — | — | 6 | ||||||||||||||||||||||||
Total | $ | 10,123 | $ | 47 | $ | 8 | $ | 10,162 | $ | 3,779 | $ | 41 | $ | 8 | $ | 3,812 | ||||||||||||||||
Proceeds | ||||||||||||||||||||||||||||||||||||
Maturities | Sales | Gains/(Losses) | ||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||
Automotive Sector | $ | 496 | $ | 321 | $ | — | $ | 4,369 | $ | 4,785 | $ | 7,615 | $ | (19 | ) | $ | (57 | ) | $ | (12 | ) | |||||||||||||||
Financial Services Sector | 9,157 | 2,381 | 6,981 | 4,434 | 691 | 2,032 | 15 | 4 | 6 |
Automotive | Financial Services | |||||||||||||||||||||||
Available-for-Sale | Available-for-Sale | Held-to-Maturity | ||||||||||||||||||||||
Amortized | Fair | Amortized | Fair | Amortized | Fair | |||||||||||||||||||
Contractual Maturity | Cost | Value | Cost | Value | Cost | Value | ||||||||||||||||||
1 year | $ | 147 | $ | 147 | $ | 9,516 | $ | 9,524 | $ | 2 | $ | 2 | ||||||||||||
2-5 years | 739 | 735 | 143 | 142 | 2 | 2 | ||||||||||||||||||
6-10 years | 22 | 21 | 53 | 53 | 1 | 1 | ||||||||||||||||||
11 years and later | 1 | 1 | 79 | 79 | 3 | 3 | ||||||||||||||||||
Mortgage-backed securities | 595 | 593 | 263 | 260 | — | — | ||||||||||||||||||
Equity securities | — | — | 60 | 95 | — | — | ||||||||||||||||||
Total | $ | 1,504 | $ | 1,497 | $ | 10,114 | $ | 10,153 | $ | 8 | $ | 8 | ||||||||||||
FS - 13
Table of Contents
Less Than | 12 Months | |||||||||||||||||||||||
12 Months | or Greater | Total | ||||||||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
Description of Securities | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||
Automotive Sector | ||||||||||||||||||||||||
U.S. government | $ | 127 | $ | 1 | $ | 10 | $ | — | $ | 137 | $ | 1 | ||||||||||||
Mortgage-backed securities | 177 | — | 145 | 3 | 322 | 3 | ||||||||||||||||||
Other debt securities | 349 | 1 | 276 | 3 | 625 | 4 | ||||||||||||||||||
Total | $ | 653 | $ | 2 | $ | 431 | $ | 6 | $ | 1,084 | $ | 8 | ||||||||||||
Financial Services Sector | ||||||||||||||||||||||||
U.S. government | $ | 45 | $ | 1 | $ | 6 | $ | — | $ | 51 | $ | 1 | ||||||||||||
Government-sponsored enterprises | 250 | — | 17 | — | 267 | — | ||||||||||||||||||
Mortgage-backed securities | 51 | 1 | 136 | 3 | 187 | 4 | ||||||||||||||||||
Other debt securities | 47 | — | 74 | 2 | 121 | 2 | ||||||||||||||||||
Equity securities | 3 | 1 | 1 | — | 4 | 1 | ||||||||||||||||||
Total | $ | 396 | $ | 3 | $ | 234 | $ | 5 | $ | 630 | $ | 8 | ||||||||||||
2006 | 2005 | |||||||
Retail | $ | 72,513 | $ | 67,928 | ||||
Wholesale | 33,813 | 38,522 | ||||||
Other finance receivables | 5,396 | 6,320 | ||||||
Total finance receivables | 111,722 | 112,770 | ||||||
Allowance for credit losses | (995 | ) | (1,400 | ) | ||||
Other | 40 | 66 | ||||||
Net finance and other receivables | $ | 110,767 | $ | 111,436 | ||||
Net finance receivables subject to fair value* | $ | 105,324 | $ | 105,481 | ||||
Fair Value | $ | 104,066 | $ | 105,004 |
* | December 31, 2006 and 2005, excludes $5.4 billion and $6 billion, respectively, of certain receivables (primarily direct financing leases) that are not financial instruments. |
FS - 14
Table of Contents
2006 | 2005 | |||||||
Total minimum lease rentals to be received | $ | 3,516 | $ | 3,978 | ||||
Less: Unearned income | (504 | ) | (555 | ) | ||||
Loan origination costs | 49 | 41 | ||||||
Estimated residual values | 2,349 | 2,394 | ||||||
Less: Allowance for credit losses | (52 | ) | (59 | ) | ||||
Net investment in direct financing leases | $ | 5,358 | $ | 5,799 | ||||
2006 | 2005 | |||||||
Automotive Sector | ||||||||
Vehicles, net of depreciation | $ | 3,228 | $ | 4,148 | ||||
Financial Services Sector | ||||||||
Vehicles and other equipment, at cost | 33,974 | 29,489 | ||||||
Accumulated depreciation | (7,242 | ) | (6,344 | ) | ||||
Allowance for credit losses | (126 | ) | (194 | ) | ||||
Total Financial Services Sector | 26,606 | 22,951 | ||||||
Total | $ | 29,834 | $ | 27,099 | ||||
FS - 15
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Beginning balance | $ | 1,594 | $ | 2,471 | $ | 2,977 | ||||||
Provision for credit and insurance losses | 100 | 167 | 923 | |||||||||
Total charge-offs and recoveries | ||||||||||||
Charge-offs | (995 | ) | (1,184 | ) | (1,843 | ) | ||||||
Recoveries | 470 | 478 | 477 | |||||||||
Net charge-offs | (525 | ) | (706 | ) | (1,366 | ) | ||||||
Other changes, principally amounts related to finance receivables sold and translation adjustments | (48 | ) | (338 | ) | (63 | ) | ||||||
Ending balance | $ | 1,121 | $ | 1,594 | $ | 2,471 | ||||||
FS - 16
Table of Contents
Retail | Wholesale | Total | ||||||||||
Servicing portfolio at December 31, 2004 | $ | 20,669 | $ | 18,904 | $ | 39,573 | ||||||
Receivables sales | 18,138 | 1,561 | 19,699 | |||||||||
Collections and re-acquired receivables | (17,886 | ) | (20,465 | ) | (38,351 | ) | ||||||
Servicing portfolio at December 31, 2005 | 20,921 | — | 20,921 | |||||||||
Receivables sales | 5,531 | — | 5,531 | |||||||||
Collections and re-acquired receivables | (12,218 | ) | — | (12,218 | ) | |||||||
Servicing portfolio at December 31, 2006 | $ | 14,234 | $ | — | $ | 14,234 | ||||||
2006 | 2005 | |||||||
Residual interest in securitization transactions | $ | 709 | $ | 1,094 | ||||
Restricted cash held for benefit of securitization investors | 204 | 199 | ||||||
Subordinated securities | 77 | 127 | ||||||
Retained interest in securitized assets | $ | 990 | $ | 1,420 | ||||
2006 | 2005 | 2004 | ||||||||||
Net gain on sales of receivables | $ | 88 | $ | 87 | $ | 160 | ||||||
Interest income on retained interests | 32 | 327 | 588 | |||||||||
Servicing fees | 198 | 376 | 372 | |||||||||
Income on residual interests and other | 350 | 723 | 815 | |||||||||
Investment and other income related to sales of receivables | $ | 668 | $ | 1,513 | $ | 1,935 | ||||||
FS - 17
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Proceeds from sales of receivables and retained interests | ||||||||||||
Proceeds from sales of retail receivables | $ | 4,863 | $ | 15,549 | $ | 4,795 | ||||||
Proceeds from interest in sold wholesale receivables | — | 3,739 | 3,957 | |||||||||
Proceeds from revolving-period securitizations | 217 | 1,349 | 1,567 | |||||||||
Proceeds from sale of retained notes — retail | 40 | 298 | — | |||||||||
Total | $ | 5,120 | $ | 20,935 | $ | 10,319 | ||||||
Cash flows related to net change in retained interest | ||||||||||||
Interest in sold retail receivables | $ | 672 | $ | 708 | $ | 1,457 | ||||||
Interest in sold wholesale receivables | — | 2,684 | (1,831 | ) | ||||||||
Total | $ | 672 | $ | 3,392 | $ | (374 | ) | |||||
Servicing fees | ||||||||||||
Retail | $ | 198 | $ | 260 | $ | 260 | ||||||
Wholesale | — | 116 | 112 | |||||||||
Total | $ | 198 | $ | 376 | $ | 372 | ||||||
Other cash flows received on retained interests (which are reflected in securitization income) | ||||||||||||
Retail | $ | 115 | $ | 276 | $ | 356 | ||||||
Wholesale | — | 507 | 802 | |||||||||
Total | $ | 115 | $ | 783 | $ | 1,158 | ||||||
Assumption | Impact on Fair Value Based | |||||||||||
Percentage | on Adverse Change | |||||||||||
(annual rate) | 10% Change | 20% Change | ||||||||||
Cash flow discount rate | 12.5 | % | $ | (11 | ) | $ | (21 | ) | ||||
Estimated net credit loss rate | 0.2% - 2.1 | % | (11 | ) | (22 | ) | ||||||
Prepayment speed | 0.7% - 1.7 | % | (2 | ) | (3 | ) |
FS - 18
Table of Contents
2006 | 2005 | |||||||
Raw materials, work-in-process and supplies | $ | 4,604 | $ | 4,056 | ||||
Finished products | 7,989 | 7,224 | ||||||
Total inventories under first-in, first-out method ("FIFO") | 12,593 | 11,280 | ||||||
Less: last-in, first-out method ("LIFO") adjustment | (1,015 | ) | (1,009 | ) | ||||
Total inventories | $ | 11,578 | $ | 10,271 | ||||
2006 | 2005 | 2004 | ||||||||||
Net sales | $ | 26,640 | $ | 26,555 | $ | 28,015 | ||||||
Cost and expenses | 25,395 | 25,696 | 27,226 | |||||||||
Income from continuing operations | 611 | 333 | 419 | |||||||||
Net income | 542 | 566 | 384 |
FS - 19
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Net service revenue | $ | 213 | $ | 187 | $ | 111 | ||||||
Net other expenses | 31 | 27 | 18 | |||||||||
Income from continuing operations | 182 | 160 | 93 | |||||||||
Net income | 180 | 158 | 91 |
2006 | 2005 | |||||||
Land | $ | 820 | $ | 697 | ||||
Buildings and land improvements | 13,803 | 12,833 | ||||||
Machinery, equipment and other | 48,829 | 45,679 | ||||||
Construction in progress | 2,307 | 2,736 | ||||||
Total land, plant and equipment | 65,759 | 61,945 | ||||||
Accumulated depreciation | (38,518 | ) | (32,617 | ) | ||||
Net land, plant and equipment | 27,241 | 29,328 | ||||||
Special tools, net of amortization | 10,995 | 11,020 | ||||||
Net Automotive sector property | 38,236 | 40,348 | ||||||
Net Financial Services sector property | 269 | 328 | ||||||
Total | $ | 38,505 | $ | 40,676 | ||||
FS - 20
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Depreciation and other amortization | $ | 6,488 | $ | 4,181 | $ | 3,258 | ||||||
Amortization of special tools | 4,670 | 3,976 | 3,162 | |||||||||
Total | $ | 11,158 | $ | 8,157 | $ | 6,420 | ||||||
Maintenance and rearrangement | $ | 2,080 | $ | 1,895 | $ | 1,971 |
FS - 21
Table of Contents
Goodwill, | Exchange | Goodwill, | ||||||||||||||
December 31, | Goodwill | Translation/ | December 31, | |||||||||||||
2005 | Acquired | Other | 2006 | |||||||||||||
Automotive Sector | ||||||||||||||||
Ford North America | $ | 202 | $ | 5 | $ | — | $ | 207 | ||||||||
Ford South America | — | — | — | — | ||||||||||||
Ford Europe | 31 | — | 4 | 35 | ||||||||||||
PAG | 4,875 | — | 705 | 5,580 | ||||||||||||
Ford Asia Pacific and Africa | — | — | — | — | ||||||||||||
Total Automotive Sector | 5,108 | 5 | 709 | 5,822 | ||||||||||||
Financial Services Sector | ||||||||||||||||
Ford Credit | 17 | — | — | 17 | ||||||||||||
Total Financial Services Sector | 17 | — | — | 17 | ||||||||||||
Total | $ | 5,125 | $ | 5 | $ | 709 | $ | 5,839 | ||||||||
December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||
Gross | Less: | Gross | Less: | |||||||||||||||||||||
Carrying | Accumulated | Net Intangible | Carrying | Accumulated | Net Intangible | |||||||||||||||||||
Amount | Amortization | Assets | Amount | Amortization | Assets | |||||||||||||||||||
Automotive Sector | ||||||||||||||||||||||||
Tradename | $ | 491 | $ | — | $ | 491 | $ | 431 | $ | — | $ | 431 | ||||||||||||
Distribution Networks | 372 | (98 | ) | 274 | 337 | (83 | ) | 254 | ||||||||||||||||
Manufacturing and production incentive rights | 246 | — | 246 | — | — | — | ||||||||||||||||||
Other | 244 | (157 | ) | 87 | 221 | (86 | ) | 135 | ||||||||||||||||
Total Automotive Sector | 1,353 | (255 | ) | 1,098 | 989 | (169 | ) | 820 | ||||||||||||||||
Total Financial Services Sector | 4 | (4 | ) | — | 4 | (4 | ) | — | ||||||||||||||||
Total | $ | 1,357 | $ | (259 | ) | $ | 1,098 | $ | 993 | $ | (173 | ) | $ | 820 | ||||||||||
2006 | 2005 | 2004 | ||||||||||
Pre-tax amortization expense | $ | 66 | $ | 55 | $ | 36 |
FS - 22
Table of Contents
FS - 23
Table of Contents
2006 | 2005 | |||||||
Automotive Sector | ||||||||
Current | ||||||||
Dealer and customer allowances and claims | $ | 13,644 | $ | 13,074 | ||||
Deferred revenue | 4,708 | 5,697 | ||||||
Employee benefit plans | 4,741 | 2,059 | ||||||
Other postretirement employee benefits | 566 | 1,442 | ||||||
Accrued interest | 867 | 1,248 | ||||||
Pension | 331 | 398 | ||||||
Other | 4,138 | 4,911 | ||||||
Total Automotive current | 28,995 | 28,829 | ||||||
Non-current | ||||||||
Other postretirement employee benefits | 25,372 | 17,778 | ||||||
Pension | 9,323 | 7,156 | ||||||
Dealer and customer allowances and claims | 8,289 | 7,359 | ||||||
Employee benefit plans | 1,599 | 1,121 | ||||||
Deferred revenue | 2,046 | 2,130 | ||||||
Other | 2,769 | 3,095 | ||||||
Total Automotive non-current | 49,398 | 38,639 | ||||||
Total Automotive Sector | 78,393 | 67,468 | ||||||
Financial Services Sector | 4,125 | 5,579 | ||||||
Total | $ | 82,518 | $ | 73,047 | ||||
FS - 24
Table of Contents
Interest Rates | ||||||||||||||||||||||||
Average | Weighted | |||||||||||||||||||||||
Contractual (a) | Average (b) | Amount | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
Automotive Sector | ||||||||||||||||||||||||
Debt payable within one year | ||||||||||||||||||||||||
Short-term | 5.1 | % | 6.0 | % | 5.1 | % | 6.0 | % | $ | 703 | $ | 251 | ||||||||||||
Long-term payable within one year | ||||||||||||||||||||||||
Senior indebtedness | 796 | 727 | ||||||||||||||||||||||
Total debt payable within one year | 1,499 | 978 | ||||||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||
Senior indebtedness | ||||||||||||||||||||||||
Notes and bank debt | 7.2 | % | 7.5 | % | 7.2 | % | 7.5 | % | 23,524 | 11,942 | ||||||||||||||
Unamortized discount | (165 | ) | (197 | ) | ||||||||||||||||||||
Total senior indebtedness | 23,359 | 11,745 | ||||||||||||||||||||||
Subordinated indebtedness | 6.5 | % | 6.5 | % | 6.5 | % | 6.5 | % | 5,155 | 5,155 | ||||||||||||||
Total long-term debt | 28,514 | 16,900 | ||||||||||||||||||||||
Total debt | $ | 30,013 | $ | 17,878 | ||||||||||||||||||||
Fair value (c) | $ | 22,564 | $ | 13,179 | ||||||||||||||||||||
Financial Services Sector | ||||||||||||||||||||||||
Short-term debt | ||||||||||||||||||||||||
Asset-backed commercial paper (d) | $ | 16,480 | $ | 21,736 | ||||||||||||||||||||
Other asset-backed short-term debt (d) | 1,197 | — | ||||||||||||||||||||||
Ford Interest Advantage (e) | 5,611 | 6,719 | ||||||||||||||||||||||
Unsecured commercial paper | 400 | 1,041 | ||||||||||||||||||||||
Other short-term debt | 2,489 | 2,824 | ||||||||||||||||||||||
Total short-term debt | 5.6 | % | 4.6 | % | 5.8 | % | 5.0 | % | 26,177 | 32,320 | ||||||||||||||
Long-term debt | ||||||||||||||||||||||||
Senior indebtedness | ||||||||||||||||||||||||
Notes payable within one year | 17,450 | 21,460 | ||||||||||||||||||||||
Notes payable after one year (f) | 56,521 | 63,659 | ||||||||||||||||||||||
Unamortized discount | (109 | ) | (63 | ) | ||||||||||||||||||||
Asset-backed debt (d) | ||||||||||||||||||||||||
Notes payable within one year | 17,330 | 5,357 | ||||||||||||||||||||||
Notes payable after one year | 24,667 | 12,667 | ||||||||||||||||||||||
Total long-term debt | 6.1 | % | 5.9 | % | 5.9 | % | 5.1 | % | 115,859 | 103,080 | ||||||||||||||
Total debt | $ | 142,036 | $ | 135,400 | ||||||||||||||||||||
Fair value (c) | $ | 143,633 | $ | 131,233 |
(a) | Excludes the effect of interest rate swap agreements and facility fees. | |
(b) | Includes the effect of interest rate swap agreements and facility fees. | |
(c) | Based on quoted market prices or current rates for similar debt with the same remaining maturities. | |
(d) | Obligations issued or arising in securitizations that are payable only out of collections on the underlying securitized assets and related enhancements. | |
(e) | The Ford Interest Advantage program consists of our floating rate demand notes. | |
(f) | Includes $14 million payable to affiliated companies at December 31, 2006. |
Long-term debt maturities | 2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | ||||||||||||||||||
Automotive Sector | $ | 796 | $ | 644 | $ | 287 | $ | 699 | $ | 271 | $ | 26,613 | ||||||||||||
Financial Services Sector | 34,780 | 24,563 | 21,324 | 9,472 | 13,435 | 12,285 |
FS - 25
Table of Contents
* | Credit facilities of our VIEs are excluded as we do not control their use. |
FS - 26
Table of Contents
Eligible Value (a) | Advance Rate | Borrowing Base | ||||||||||
U.S. receivables | $ | 0.3 | 75 | % | $ | 0.3 | ||||||
U.S. inventory | 3.4 | 60 | % | 2.0 | ||||||||
Pledge of intercompany notes | 7.5 | N/A | 4.7 | |||||||||
Pledge of equity in Ford Credit and certain foreign subsidiaries | 10.7 | 75 | % | 8.0 | ||||||||
U.S. property, plant and equipment subject to indenture limitation | 6.7 | N/A | 3.2 | |||||||||
Other U.S. machinery and equipment | 4.5 | 40 | % | 1.8 | ||||||||
Intellectual property and U.S. trademarks (b) | 7.9 | N/A | 2.5 | |||||||||
Eligible value/borrowing base | $ | 41.0 | $ | 22.5 | ||||||||
(a) | Based on formulas set forth in the Credit Agreement and not necessarily indicative of fair market value (which could be materially higher or lower); receivables, inventory, intercompany notes, and property, plant and equipment reflect net book value at December 31, 2006; equity of Ford Credit is based on its book value at December 31, 2006, and equity in other subsidiaries is based on a multiple of their two-year average EBITDA less current debt. | |
(b) | Value reflects independent third party valuation of trademarks only. |
FS - 27
Table of Contents
FS - 28
Table of Contents
2006 | 2005 | 2004 | ||||||||||||||||||||||
Weighted- | Weighted- | Weighted- | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Shares | Exercise | Shares | Exercise | Shares | Exercise | |||||||||||||||||||
(millions) | Price | (millions) | Price | (millions) | Price | |||||||||||||||||||
Stock Option Activity | ||||||||||||||||||||||||
Outstanding, beginning of year | 245.2 | $ | 18.72 | 245.4 | $ | 19.13 | 234.7 | $ | 19.34 | |||||||||||||||
Granted | 29.1 | 7.89 | 27.6 | 12.46 | 26.7 | 13.46 | ||||||||||||||||||
Exercised* | (0.5 | ) | 7.55 | (3.7 | ) | 9.14 | (11.7 | ) | 10.60 | |||||||||||||||
Forfeited (including expirations) | (18.2 | ) | 14.26 | (24.1 | ) | 17.13 | (4.3 | ) | 18.68 | |||||||||||||||
Outstanding, end of year | 255.6 | 17.83 | 245.2 | 18.72 | 245.4 | 19.13 | ||||||||||||||||||
Exercisable, end of year | 203.2 | 19.81 | 191.9 | 20.61 | 183.0 | 21.41 |
* | Exercised at option price of $7.55 during 2006, and ranging from $7.40 to $12.53 during 2005, and $7.55 to $12.53 during 2004. |
FS - 29
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Compensation cost | $ | 77 | $ | 116 | $ | 119 | ||||||
Taxes | (19 | ) | (23 | ) | (42 | ) | ||||||
Compensation cost, net of taxes | $ | 58 | $ | 93 | $ | 77 | ||||||
Weighted-Average | ||||||||
Shares | Grant-Date | |||||||
(millions) | Fair Value | |||||||
Nonvested beginning of year | 53.3 | $ | 4.09 | |||||
Granted | 29.1 | 2.09 | ||||||
Vested | (25.8 | ) | 3.61 | |||||
Forfeited (including expirations) | (4.2 | ) | 4.15 | |||||
Nonvested end of year | 52.4 | 3.22 | ||||||
2006 | 2005 | 2004 | ||||||||||
Fair value per option | $ | 2.07 | $ | 4.44 | $ | 4.71 | ||||||
Assumptions: | ||||||||||||
Annualized dividend yield | 4.9 | % | 3.2 | % | 3.0 | % | ||||||
Expected volatility | 39.7 | % | 41.9 | % | 42.2 | % | ||||||
Risk-free interest rate | 4.9 | % | 4.4 | % | 3.4 | % | ||||||
Expected option term (in years) | 6.5 | 7.0 | 7.0 |
Outstanding Options | Exercisable Options | |||||||||||||||||||
Weighted- | Weighted- | Weighted- | ||||||||||||||||||
Shares | Average Life | Average | Shares | Average | ||||||||||||||||
Range of Exercise Prices | (millions) | (years) | Exercise Price | (millions) | Exercise Price | |||||||||||||||
$7.40 - $10.58 | 53.6 | 7.8 | $ | 7.93 | 25.2 | $ | 7.97 | |||||||||||||
10.62 - 15.81 | 66.7 | 6.0 | 12.86 | 43.3 | 12.93 | |||||||||||||||
15.91 - 23.88 | 83.6 | 3.6 | 20.01 | 83.0 | 20.03 | |||||||||||||||
23.97 - 35.79 | 51.1 | 3.3 | 30.85 | 51.1 | 30.85 | |||||||||||||||
41.03 - 42.52 | 0.6 | 1.3 | 41.42 | 0.6 | 41.42 | |||||||||||||||
Total options | 255.6 | 203.2 | ||||||||||||||||||
FS - 30
Table of Contents
Risk-free interest rate | 4.7 | % | ||
Expected dividends | 0.0 | % | ||
Expected volatility | 38.9 | % |
2006 | 2005 | 2004 | ||||||||||
Other share-based compensation expense | $ | 34 | $ | 30 | $ | 8 |
FS - 31
Table of Contents
FS - 32
Table of Contents
Liability at | Liability at | |||||||||||||||||||||||
December 31, | Accrued in | Paid in | December 31, | Estimated | ||||||||||||||||||||
Segment | 2005 | 2006 | 2006 | Other | 2006 | Total Costs | ||||||||||||||||||
Ford Credit | $ | 15 | $ | 34 | $ | (16 | ) | $ | — | $ | 33 | $ | 86 |
FS - 33
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Income/(loss) before income taxes, excluding equity in net results of affiliated companies accounted for after-tax (in millions) | ||||||||||||
U.S. | $ | (15,814 | ) | $ | 40 | $ | 2,164 | |||||
Non-U.S. | 335 | 743 | 1,692 | |||||||||
Total | $ | (15,479 | ) | $ | 783 | $ | 3,856 | |||||
Provision for income taxes (in millions) | ||||||||||||
Current | ||||||||||||
Federal | $ | — | $ | 26 | $ | (119 | ) | |||||
Non-U.S. | 372 | 764 | 1,038 | |||||||||
State and local | (8 | ) | 43 | (148 | ) | |||||||
Total current | 364 | 833 | 771 | |||||||||
Deferred | ||||||||||||
Federal | (4,272 | ) | (752 | ) | 643 | |||||||
Non-U.S. | 1,112 | (822 | ) | (737 | ) | |||||||
State and local | 150 | (104 | ) | (34 | ) | |||||||
Total deferred | (3,010 | ) | (1,678 | ) | (128 | ) | ||||||
Total | $ | (2,646 | ) | $ | (845 | ) | $ | 643 | ||||
Reconciliation of effective tax rate | ||||||||||||
U.S. tax at statutory rate | 35 | % | 35 | % | 35 | % | ||||||
Non-U.S. income taxes | 1 | (11 | ) | (2 | ) | |||||||
State and local income taxes | 2 | (4 | ) | — | ||||||||
Deductible dividends | 1 | (20 | ) | (4 | ) | |||||||
General business credits | 1 | (15 | ) | (4 | ) | |||||||
Dispositions and restructurings | — | 16 | — | |||||||||
Medicare prescription drug benefit | 1 | (13 | ) | (2 | ) | |||||||
Repatriation of foreign earnings underThe American Jobs Creation Act of 2004 | — | (33 | ) | — | ||||||||
Prior year settlements and claims | 3 | (50 | ) | (7 | ) | |||||||
Other | (1 | ) | (13 | ) | 1 | |||||||
Valuation allowance | (26 | ) | — | — | ||||||||
Effective rate | 17 | % | (108 | )% | 17 | % | ||||||
FS - 34
Table of Contents
2006 | 2005 | |||||||
Deferred tax assets | ||||||||
Employee benefit plans | $ | 12,723 | $ | 7,142 | ||||
Net operating loss carryforwards | 3,132 | 1,717 | ||||||
Tax credit carryforwards | 2,649 | 1,505 | ||||||
Dealer and customer allowances and claims | 2,572 | 3,000 | ||||||
Other foreign deferred tax assets | 2,379 | 1,856 | ||||||
Allowance for credit losses | 1,696 | 1,764 | ||||||
All other | 5,550 | 6,227 | ||||||
Total gross deferred tax assets | 30,701 | 23,211 | ||||||
Less: valuation allowance | (7,180 | ) | (252 | ) | ||||
Total net deferred tax assets | 23,521 | 22,959 | ||||||
Deferred tax liabilities | ||||||||
Leasing transactions | 7,610 | 7,736 | ||||||
Depreciation and amortization (excluding leasing transactions) | 4,082 | 5,130 | ||||||
Finance receivables | 2,631 | 2,849 | ||||||
All other | 6,992 | 7,024 | ||||||
Total deferred tax liabilities | 21,315 | 22,739 | ||||||
Net deferred tax assets/(liabilities) | $ | 2,206 | $ | 220 | ||||
FS - 35
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Sales | $ | 3 | $ | 3 | $ | 192 | ||||||
Operating income/(loss) from discontinued operations | $ | — | $ | (4 | ) | $ | (184 | ) | ||||
Gain/(loss) on discontinued operations | 3 | 13 | (165 | ) | ||||||||
(Provision for)/benefit from income taxes | (1 | ) | (3 | ) | 122 | |||||||
Income/(loss) from discontinued operations | $ | 2 | $ | 6 | $ | (227 | ) | |||||
FS - 36
Table of Contents
Value of ACH Assets/(Liabilities) Received on October 1, 2005 | ||||
Net property | $ | 427 | ||
Inventory | 299 | |||
Warrants for purchase of Visteon stock | 165 | |||
Other net liabilities | (10 | ) | ||
Total | $ | 881 | ||
Cash Paid/Liabilities Assumed | ||||
Forgiveness of employee-related liabilities* | $ | (500 | ) | |
Cash paid to escrow account for Visteon restructuring | (400 | ) | ||
Cash paid for inventories | (299 | ) | ||
Liability recorded for Visteon restructuring | (150 | ) | ||
Total | $ | (1,349 | ) | |
* | As part of the transaction, we forgave $1.1 billion of Visteon’s liability to us for employee-related costs of which $600 million was recognized in 2004 as an allowance for doubtful accounts. |
FS - 37
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Revenues | $ | — | $ | 118 | $ | 493 | ||||||
Operating income/(loss) from discontinued operations | $ | — | $ | 59 | $ | 138 | ||||||
Gain/(loss) on discontinued operations | — | (16 | ) | — | ||||||||
(Provision for)/benefit from income taxes | — | (2 | ) | (57 | ) | |||||||
Income/(loss) from discontinued operations | $ | — | $ | 41 | $ | 81 | ||||||
FS - 38
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Basic and Diluted Income/(Loss) | ||||||||||||
Basic income/(loss) from continuing operations attributable to Common Stock and Class B Stock | $ | (12,615 | ) | $ | 1,644 | $ | 3,184 | |||||
Effect of dilutive senior convertible notes (a) | — | — | — | |||||||||
Effect of dilutive convertible preferred securities (b) | — | 213 | 199 | |||||||||
Diluted income/(loss) from continuing operations attributable to Common Stock and Class B Stock | $ | (12,615 | ) | $ | 1,857 | $ | 3,383 | |||||
Diluted Shares | ||||||||||||
Average shares outstanding | 1,879 | 1,846 | 1,830 | |||||||||
Restricted and uncommitted-ESOP shares | (2 | ) | (3 | ) | (4 | ) | ||||||
Basic shares | 1,877 | 1,843 | 1,826 | |||||||||
Net dilutive options and restricted and uncommitted ESOP shares (c) | — | 10 | 18 | |||||||||
Dilutive senior convertible notes (a) | — | — | — | |||||||||
Dilutive convertible preferred securities (b) | — | 282 | 282 | |||||||||
Diluted shares | 1,877 | 2,135 | 2,126 | |||||||||
In 2006, not included in calculation of diluted earnings per share due to their antidilutive effect: | ||
(a) | 538 million shares and the related income effect for senior convertible notes (issued December 15, 2006). | |
(b) | 282 million shares and the related income effect for convertible preferred securities. | |
(c) | 4 million contingently issuable shares. |
2006 | ||||||||||||
Financial | ||||||||||||
Automotive | Services | Total | ||||||||||
Net income/(loss) | $ | (13,912 | ) | $ | 1,299 | $ | (12,613 | ) | ||||
(Income)/loss of discontinued operations | (2 | ) | — | (2 | ) | |||||||
Cumulative effects of changes in accounting principles | — | — | — | |||||||||
Depreciation and special tools amortization | 11,158 | 5,295 | 16,453 | |||||||||
Amortization of intangibles | 66 | — | 66 | |||||||||
Net losses/(earnings) from equity investments in excess of dividends received | (253 | ) | — | (253 | ) | |||||||
Provision for credit/insurance losses | — | 241 | 241 | |||||||||
Foreign currency adjustments | 112 | — | 112 | |||||||||
(Gain)/loss on sale of business | — | (33 | ) | (33 | ) | |||||||
Stock option expense | 72 | 5 | 77 | |||||||||
Cash changes in operating assets and liabilities were as follows: | ||||||||||||
Provision for deferred income taxes | (2,577 | ) | 77 | (2,500 | ) | |||||||
Decrease/(increase) in accounts receivable and other assets | 1,564 | 657 | 2,221 | |||||||||
Decrease/(increase) in inventory | (695 | ) | — | (695 | ) | |||||||
Increase/(decrease) in accounts payable and accrued and other liabilities | 7,131 | (578 | ) | 6,553 | ||||||||
Net sales/(purchases) of trading securities | (6,762 | ) | (9 | ) | (6,771 | ) | ||||||
Other | (87 | ) | 362 | 275 | ||||||||
Cash flows from operating activities of continuing operations | $ | (4,185 | ) | $ | 7,316 | $ | 3,131 | |||||
FS - 39
Table of Contents
2005 | ||||||||||||
Financial | ||||||||||||
Automotive | Services | Total | ||||||||||
Net income/(loss) | $ | (1,884 | ) | $ | 3,324 | $ | 1,440 | |||||
(Income)/loss of discontinued operations | (6 | ) | (41 | ) | (47 | ) | ||||||
Cumulative effects of changes in accounting principles | 251 | — | 251 | |||||||||
Depreciation and special tools amortization | 8,157 | 5,854 | 14,011 | |||||||||
Amortization of intangibles | 49 | 6 | 55 | |||||||||
Net losses/(earnings) from equity investments in excess of dividends received | (135 | ) | — | (135 | ) | |||||||
Provision for credit/insurance losses | — | 483 | 483 | |||||||||
Foreign currency adjustments | 36 | — | 36 | |||||||||
(Gain)/loss on sale of business | — | (1,099 | ) | (1,099 | ) | |||||||
Stock option expense | 103 | 13 | 116 | |||||||||
Cash changes in operating assets and liabilities were as follows: | ||||||||||||
Provision for deferred income taxes | (960 | ) | 1,664 | 704 | ||||||||
Decrease/(increase) in accounts receivable and other assets | (2,086 | ) | (727 | ) | (2,813 | ) | ||||||
Decrease/(increase) in inventory | (94 | ) | — | (94 | ) | |||||||
Increase/(decrease) in accounts payable and accrued and other liabilities | 2,277 | (2,343 | ) | (66 | ) | |||||||
Net sales/(purchases) of trading securities | (579 | ) | (50 | ) | (629 | ) | ||||||
Other | 304 | (172 | ) | 132 | ||||||||
Cash flows from operating activities of continuing operations | $ | 5,433 | $ | 6,912 | $ | 12,345 | ||||||
2004 | ||||||||||||
Financial | ||||||||||||
Automotive | Services | Total | ||||||||||
Net income/(loss) | $ | 257 | $ | 2,781 | $ | 3,038 | ||||||
(Income)/loss of discontinued operations | 227 | (81 | ) | 146 | ||||||||
Cumulative effects of changes in accounting principles | — | — | — | |||||||||
Depreciation and special tools amortization | 6,420 | 6,618 | 13,038 | |||||||||
Amortization of intangibles | 26 | 10 | 36 | |||||||||
Net losses/(earnings) from equity investments in excess of dividends received | 3 | — | 3 | |||||||||
Provision for credit/insurance losses | — | 1,212 | 1,212 | |||||||||
Foreign currency adjustments | 1 | — | 1 | |||||||||
(Gain)/loss on sale of business | 16 | (66 | ) | (50 | ) | |||||||
Stock option expense | 105 | 14 | 119 | |||||||||
Cash changes in operating assets and liabilities were as follows: | ||||||||||||
Provision for deferred income taxes | 2,451 | 1,514 | 3,965 | |||||||||
Decrease/(increase) in accounts receivable and other assets | (1,793 | ) | 1,294 | (499 | ) | |||||||
Decrease/(increase) in inventory | (130 | ) | — | (130 | ) | |||||||
Increase/(decrease) in accounts payable and accrued and other liabilities | (6,799 | ) | (923 | ) | (7,722 | ) | ||||||
Net sales/(purchases) of trading securities | 5,600 | 92 | 5,692 | |||||||||
Other | 579 | (4,502 | ) | (3,923 | ) | |||||||
Cash flows from operating activities of continuing operations | $ | 6,963 | $ | 7,963 | $ | 14,926 | ||||||
2006 | 2005 | 2004 | ||||||||||
Sum of sector cash flows from operating activities of continuing operations | $ | 3,131 | $ | 12,345 | $ | 14,926 | ||||||
Reclassification of wholesale receivable cash flows from investing to operating for consolidated presentation | 6,478 | 8,478 | 7,057 | |||||||||
Reclassification relating to sale of vehicles to Hertz and related auction proceeds for consolidated presentation | — | (436 | ) | (300 | ) | |||||||
Consolidated cash flows from operating activities of continuing operations | $ | 9,609 | $ | 20,387 | $ | 21,683 | ||||||
FS - 40
Table of Contents
2006 | 2005 | 2004 | ||||||||||
Interest | ||||||||||||
Automotive Sector | $ | 1,419 | $ | 1,506 | $ | 1,518 | ||||||
Financial Services Sector | 7,483 | 6,319 | 5,837 | |||||||||
Total interest paid | $ | 8,902 | $ | 7,825 | $ | 7,355 | ||||||
Income taxes | 423 | 382 | 211 |
FS - 41
Table of Contents
FS - 42
Table of Contents
2006 | 2005 | 2004 | Income Statement Classification | |||||||||||
Automotive Sector | ||||||||||||||
Cash flow hedges: | ||||||||||||||
Ineffectiveness and impact of discontinued hedges | $ | (8 | ) | $ | (1 | ) | $ | 1 | Automotive cost of sales | |||||
Net investment hedges: | ||||||||||||||
Ineffectiveness | 40 | 20 | (2 | ) | Automotive cost of sales | |||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||
Commodities | 333 | 254 | 99 | Automotive cost of sales | ||||||||||
Foreign currency forward contracts (a) | 71 | (383 | ) | 331 | Automotive cost of sales | |||||||||
Other | 88 | 7 | 23 | Automotive cost of sales/Automotive interest income and other non-operating income/(expense), net | ||||||||||
Financial Services Sector | ||||||||||||||
Fair value hedges: | ||||||||||||||
Ineffectiveness | $ | 11 | $ | (1 | ) | $ | 10 | Financial Services revenues | ||||||
Net interest settlements and accruals excluded from the assessment of hedge effectiveness | 19 | 257 | 628 | Interest expense | ||||||||||
Foreign exchange revaluation adjustments excluded from the assessment of hedge effectiveness (a) (b) | 160 | (350 | ) | 368 | Financial Services revenues | |||||||||
Cash flow hedges: | ||||||||||||||
Ineffectiveness | — | (8 | ) | (8 | ) | Financial Services revenues | ||||||||
Net interest settlements and accruals excluded from the assessment of hedge effectiveness | — | (45 | ) | (431 | ) | Interest expense | ||||||||
Net investment hedges: | ||||||||||||||
Ineffectiveness | — | (13 | ) | (29 | ) | Financial Services revenues | ||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||
Interest rate swaps | (181 | ) | (231 | ) | 775 | Financial Services revenues | ||||||||
Foreign currency swaps and forward contracts (a) | (149 | ) | (1,308 | ) | 313 | Financial Services revenues | ||||||||
Other | 1 | — | — | Financial Services revenues |
(a) | These gains/(losses) related to foreign currency derivatives and were substantially offset by net revaluation impacts on foreign denominated debt, which were recorded to the same income statement line item as the hedge gains/(losses). | |
(b) | Amount represents the portion of the derivative’s fair value attributable to the change in foreign currency exchange rates. |
FS - 43
Table of Contents
2006 | 2005 | |||||||||||||||
Fair Value | Fair Value | Fair Value | Fair Value | |||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||
(in millions) | (in millions) | (in millions) | (in millions) | |||||||||||||
Automotive Sector | ||||||||||||||||
Cash flow hedges | $ | 1,736 | $ | 860 | $ | 1,002 | $ | 1,059 | ||||||||
Net investment hedges | 6 | — | 30 | — | ||||||||||||
Derivatives not designated as hedging instruments | 977 | 256 | 546 | 148 | ||||||||||||
Total derivative financial instruments | $ | 2,719 | $ | 1,116 | $ | 1,578 | $ | 1,207 | ||||||||
Financial Services Sector | ||||||||||||||||
Fair value hedges | $ | 111 | $ | 1 | $ | 314 | $ | 90 | ||||||||
Derivatives not designated as hedging instruments | 2,334 | 891 | 2,469 | 795 | ||||||||||||
Impact of netting agreements | (641 | ) | (641 | ) | (205 | ) | (205 | ) | ||||||||
Total derivative financial instruments | $ | 1,804 | $ | 251 | $ | 2,578 | $ | 680 | ||||||||
2006 | 2005 | 2004 | ||||||||||
Beginning of year: net unrealized gain/(loss) on derivative financial instruments | $ | (43 | ) | $ | 1,221 | $ | 1,237 | |||||
Increase/(decrease) in fair value of derivatives | 742 | (664 | ) | 896 | ||||||||
Gains reclassified from OCI | (265 | ) | (600 | ) | (912 | ) | ||||||
End of year: net unrealized gain/(loss) on derivative financial instruments | $ | 434 | $ | (43 | ) | $ | 1,221 | |||||
FS - 44
Table of Contents
FS - 45
Table of Contents
FS - 46
Table of Contents
UAW Benefit Trust | ||||
Change in Benefit Obligation | ||||
Benefit obligation at January 1 | $ | — | ||
Amendments | 90 | |||
Interest cost | 2 | |||
Benefits paid | (30 | ) | ||
Benefit obligation at December 31 | $ | 62 | ||
Change in Plan Assets | ||||
Fair value of plan assets at January 1 | $ | — | ||
Company contributions | 60 | |||
Benefits Paid | (48 | ) | ||
Fair value of plan assets at December 31 | $ | 12 | ||
Pension Benefits | Health Care and | |||||||||||||||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | Life Insurance | ||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||
Service cost | $ | 680 | $ | 734 | $ | 636 | $ | 704 | $ | 630 | $ | 554 | $ | 617 | $ | 710 | $ | 548 | ||||||||||||||||||
Interest cost | 2,431 | 2,398 | 2,445 | 1,396 | 1,408 | 1,332 | 2,004 | 2,188 | 1,970 | |||||||||||||||||||||||||||
Expected return on assets | (3,379 | ) | (3,363 | ) | (3,219 | ) | (1,643 | ) | (1,633 | ) | (1,651 | ) | (479 | ) | (500 | ) | (289 | ) | ||||||||||||||||||
Amortization of: | ||||||||||||||||||||||||||||||||||||
Prior service cost/(credit) | 444 | 500 | 501 | 120 | 126 | 117 | (815 | ) | (245 | ) | (220 | ) | ||||||||||||||||||||||||
(Gains)/losses and other | 99 | 102 | 23 | 568 | 352 | 204 | 763 | 893 | 623 | |||||||||||||||||||||||||||
Separation programs | 440 | 97 | 26 | 263 | 422 | 78 | 84 | 1 | — | |||||||||||||||||||||||||||
Loss from curtailment | 2,535 | — | — | 206 | — | — | 3 | — | — | |||||||||||||||||||||||||||
Allocated costs to Visteon | — | (84 | ) | (107 | ) | — | — | — | 6 | (246 | ) | (228 | ) | |||||||||||||||||||||||
Net expense | $ | 3,250 | $ | 384 | $ | 305 | $ | 1,614 | $ | 1,305 | $ | 634 | $ | 2,183 | $ | 2,801 | $ | 2,404 | ||||||||||||||||||
FS - 47
Table of Contents
Pension Benefits | Health Care and | |||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | Life Insurance | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
Change in Benefit Obligation | ||||||||||||||||||||||||
Benefit obligation at January 1 | $ | 43,598 | $ | 43,102 | $ | 30,700 | $ | 29,452 | $ | 39,274 | $ | 39,115 | ||||||||||||
Service cost | 680 | 734 | 704 | 630 | 617 | 710 | ||||||||||||||||||
Interest cost | 2,431 | 2,398 | 1,396 | 1,408 | 2,004 | 2,188 | ||||||||||||||||||
Amendments | (19 | ) | — | (34 | ) | 218 | (5,268 | ) | (3,155 | ) | ||||||||||||||
Separation programs | 440 | 97 | 232 | 422 | 84 | 1 | ||||||||||||||||||
Curtailments | 1,696 | — | 81 | — | (47 | ) | — | |||||||||||||||||
Settlements | — | — | (98 | ) | — | — | — | |||||||||||||||||
Plan participant contributions | 39 | 41 | 144 | 146 | 44 | 33 | ||||||||||||||||||
Benefits paid | (3,005 | ) | (2,856 | ) | (1,556 | ) | (1,355 | ) | (1,547 | ) | (1,576 | ) | ||||||||||||
Foreign exchange translation | — | — | 3,434 | (2,936 | ) | 2 | 110 | |||||||||||||||||
Divestiture | — | (400 | ) | — | (163 | ) | — | (20 | ) | |||||||||||||||
Actuarial (gain)/loss and other | (572 | ) | 482 | (1,344 | ) | 2,878 | (4,300 | ) | 1,868 | |||||||||||||||
Benefit obligation at December 31 | $ | 45,288 | $ | 43,598 | $ | 33,659 | $ | 30,700 | $ | 30,863 | $ | 39,274 | ||||||||||||
Change in Plan Assets | ||||||||||||||||||||||||
Fair value of plan assets at January 1 | $ | 41,857 | $ | 39,628 | $ | 21,927 | $ | 20,595 | $ | 6,497 | $ | 6,762 | ||||||||||||
Actual return on plan assets | 5,688 | 3,922 | 2,286 | 3,239 | 510 | 621 | ||||||||||||||||||
Company contributions | 149 | 1,432 | 1,025 | 1,355 | — | 200 | ||||||||||||||||||
Plan participant contributions | 39 | 41 | 144 | 150 | — | — | ||||||||||||||||||
Benefits paid | (3,005 | ) | (2,856 | ) | (1,556 | ) | (1,355 | ) | (2,086 | ) | (1,111 | ) | ||||||||||||
Settlements | — | — | (109 | ) | — | — | — | |||||||||||||||||
Foreign exchange translation | — | — | 2,390 | (1,924 | ) | — | — | |||||||||||||||||
Divestiture | — | (309 | ) | — | (95 | ) | — | — | ||||||||||||||||
Other | — | (1 | ) | (7 | ) | (38 | ) | — | 25 | |||||||||||||||
Fair value of plan assets at December 31 | $ | 44,728 | $ | 41,857 | $ | 26,100 | $ | 21,927 | $ | 4,921 | $ | 6,497 | ||||||||||||
Funded status | $ | (560 | ) | $ | (1,741 | ) | $ | (7,559 | ) | $ | (8,773 | ) | $ | (25,942 | ) | $ | (32,777 | ) | ||||||
Unamortized prior service costs | 2,635 | 912 | (4,054 | ) | ||||||||||||||||||||
Unamortized net (gains)/losses and other | 4,567 | 8,609 | 17,009 | |||||||||||||||||||||
Net amount recognized | $ | 5,461 | $ | 748 | $ | (19,822 | ) | |||||||||||||||||
Amounts Recognized on the Balance Sheet | ||||||||||||||||||||||||
Prepaid assets | $ | 1,425 | $ | 2,398 | $ | 145 | $ | 1,710 | $ | — | $ | — | ||||||||||||
Accrued liabilities | (1,985 | ) | (1,511 | ) | (7,704 | ) | (6,009 | ) | (25,942 | ) | (19,822 | ) | ||||||||||||
Intangible assets | — | 2,133 | — | 657 | — | — | ||||||||||||||||||
Accumulated other comprehensive loss | — | 2,441 | — | 4,390 | — | — | ||||||||||||||||||
Net amount recognized | $ | (560 | ) | $ | 5,461 | $ | (7,559 | ) | $ | 748 | $ | (25,942 | ) | $ | (19,822 | ) | ||||||||
Amounts Recognized in Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||
Unamortized prior service costs/(credits) | $ | 1,338 | $ | 701 | $ | (8,514 | ) | |||||||||||||||||
Unamortized net (gains)/losses and other | 1,581 | 6,924 | 11,867 | |||||||||||||||||||||
Total amount recognized | $ | 2,919 | $ | 7,625 | $ | 3,353 | ||||||||||||||||||
Pension Plans in Which Accumulated Benefit Obligation Exceeds Plan Assets at December 31 | ||||||||||||||||||||||||
Accumulated benefit obligation | $ | 26,130 | $ | 24,287 | $ | 18,784 | $ | 17,217 | ||||||||||||||||
Fair value of plan assets | 24,241 | 22,807 | 13,327 | 11,454 | ||||||||||||||||||||
Accumulated Benefit Obligation at December 31 | $ | 43,958 | $ | 41,983 | $ | 29,089 | $ | 26,060 |
FS - 48
Table of Contents
Pension Benefits | Health Care and | |||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | Life Insurance | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
Weighted Average Assumptions at December 31 (a) | ||||||||||||||||||||||||
Discount rate | 5.86 | % | 5.61 | % | 4.91 | % | 4.58 | % | 5.98 | % | 5.73 | % | ||||||||||||
Expected return on assets | 8.50 | % | 8.50 | % | 7.64 | % | 7.78 | % | 5.50 | % | 8.28 | % | ||||||||||||
Average rate of increase in compensation | 3.80 | % | 4.00 | % | 3.30 | % | 3.44 | % | 3.80 | % | 4.00 | % | ||||||||||||
Initial health care cost trend rate | — | — | — | — | 6 | % | 7 | % | ||||||||||||||||
Ultimate health care cost trend rate | — | — | — | — | 5 | % | 5 | % | ||||||||||||||||
Year ultimate trend rate is reached | — | — | — | — | 2011 | 2011 | ||||||||||||||||||
Assumptions Used to Determine Net Benefit Cost for the Year (a) | ||||||||||||||||||||||||
Discount rate | 5.61 | % | 5.75 | % | 4.58 | % | 5.18 | % | 5.73 | % | 5.75 | % | ||||||||||||
Expected return on assets | 8.50 | % | 8.75 | % | 7.78 | % | 7.76 | % | 8.28 | % | 7.93 | % | ||||||||||||
Average rate of increase in compensation | 4.00 | % | 4.50 | % | 3.44 | % | 4.00 | % | 4.00 | % | 4.50 | % | ||||||||||||
Weighted Average Asset Allocation at December 31 (b) | ||||||||||||||||||||||||
Equity securities | 72.8 | % | 72.8 | % | 65.9 | % | 65.3 | % | 0.0 | % | 66.2 | % | ||||||||||||
Debt securities | 26.6 | % | 26.7 | % | 32.9 | % | 33.7 | % | 100.0 | % | 33.8 | % | ||||||||||||
Real estate | 0.0 | % | 0.0 | % | 0.6 | % | 0.7 | % | 0.0 | % | 0.0 | % | ||||||||||||
Other assets | 0.6 | % | 0.5 | % | 0.6 | % | 0.3 | % | 0.0 | % | 0.0 | % |
(a) | U.S. plans for Health Care and Life Insurance | |
(b) | Weighted average asset allocation based on major non-U.S. plans including U.K., Canada, Germany, Sweden, Netherlands, Belgium and Australia |
Prior to | ||||||||||||
SFAS 158 | SFAS 158 | Post SFAS 158 | ||||||||||
Adjustment | Adjustment | Adjustment | ||||||||||
Prepaid assets | $ | 4,112 | $ | (2,542 | ) | $ | 1,570 | |||||
Accrued liabilities | (30,276 | ) | (5,355 | ) | (35,631 | ) | ||||||
Intangible assets | 1,466 | (1,466 | ) | — | ||||||||
Accumulated other comprehensive loss (pre tax) | 4,534 | 9,363 | 13,897 |
FS - 49
Table of Contents
Pension Benefits | Health Care and | |||||||||||||||
U.S. Plans | Non-U.S. Plans | Life Insurance | Total | |||||||||||||
Prior service cost/(credit) | $ | 270 | $ | 100 | $ | (960 | ) | $ | (590 | ) | ||||||
(Gains)/losses and other | 20 | 400 | 760 | 1,180 |
Pension Benefits | ||||||||||||||||
U.S. Plans | Non-U.S. Plans | Health Care and Life Insurance | ||||||||||||||
Gross Benefit | Gross Benefit | Gross Benefit | Subsidy | |||||||||||||
Payments | Payments | Payments | Receipts | |||||||||||||
2007 | $ | 3,220 | $ | 1,570 | $ | 1,670 | $ | (100 | ) | |||||||
2008 | 3,470 | 1,450 | 1,770 | (70 | ) | |||||||||||
2009 | 3,480 | 1,450 | 1,870 | (80 | ) | |||||||||||
2010 | 3,450 | 1,470 | 1,940 | (90 | ) | |||||||||||
2011 | 3,410 | 1,500 | 1,990 | (90 | ) | |||||||||||
2012 - 2016 | 16,370 | 8,150 | 10,640 | (570 | ) |
FS - 50
Table of Contents
FS - 51
Table of Contents
FS - 52
Table of Contents
Automotive Sector | ||||||||||||||||||||||||||||||||||||
Total | Ford Asia | |||||||||||||||||||||||||||||||||||
Ford | Ford | Total | Ford | Pacific | ||||||||||||||||||||||||||||||||
North | South | The | Ford | Europe & | & Africa/ | |||||||||||||||||||||||||||||||
(In Millions) | America | America | Americas | Europe | PAG | PAG | Mazda | Other | Total | |||||||||||||||||||||||||||
2006 | ||||||||||||||||||||||||||||||||||||
Sales/Revenues | ||||||||||||||||||||||||||||||||||||
External customer | $ | 69,425 | $ | 5,697 | $ | 75,122 | $ | 30,394 | $ | 30,028 | $ | 60,422 | $ | 7,763 | $ | — | $ | 143,307 | ||||||||||||||||||
Intersegment | 393 | — | 393 | 878 | 233 | 1,111 | 4 | — | 1,508 | |||||||||||||||||||||||||||
Income | ||||||||||||||||||||||||||||||||||||
Income/(loss) before income taxes | (15,969 | ) | 661 | (15,308 | ) | 371 | (2,322 | ) | (1,951 | ) | (5 | ) | 247 | (17,017 | ) | |||||||||||||||||||||
Other disclosures | ||||||||||||||||||||||||||||||||||||
Depreciation and special tools amortization | 6,753 | 77 | 6,830 | 1,289 | 2,716 | 4,005 | 323 | — | 11,158 | |||||||||||||||||||||||||||
Amortization of intangibles | 7 | 1 | 8 | 6 | 51 | 57 | 1 | — | 66 | |||||||||||||||||||||||||||
Interest expense | — | — | — | — | — | — | — | 995 | 995 | |||||||||||||||||||||||||||
Automotive interest income | 76 | — | 76 | — | — | — | — | 1,333 | 1,409 | |||||||||||||||||||||||||||
Cash out flow for capital expenditures | 3,626 | 122 | 3,748 | 1,404 | 1,375 | 2,779 | 282 | — | 6,809 | |||||||||||||||||||||||||||
Unconsolidated affiliates | ||||||||||||||||||||||||||||||||||||
Equity in net income/(loss) | 138 | — | 138 | (3 | ) | — | (3 | ) | 286 | — | 421 | |||||||||||||||||||||||||
Total assets at year-end | 122,634 | |||||||||||||||||||||||||||||||||||
2005 | ||||||||||||||||||||||||||||||||||||
Sales/Revenues | ||||||||||||||||||||||||||||||||||||
External customer | $ | 80,662 | $ | 4,366 | $ | 85,028 | $ | 29,918 | $ | 30,283 | $ | 60,201 | $ | 8,245 | $ | — | $ | 153,474 | ||||||||||||||||||
Intersegment | 3,398 | — | 3,398 | 1,613 | 541 | 2,154 | 131 | — | 5,683 | |||||||||||||||||||||||||||
Income | ||||||||||||||||||||||||||||||||||||
Income/(loss) before income taxes | (2,444 | ) | 399 | (2,045 | ) | (437 | ) | (1,634 | ) | (2,071 | ) | 297 | (55 | ) | (3,874 | ) | ||||||||||||||||||||
Other disclosures | ||||||||||||||||||||||||||||||||||||
Depreciation and special tools amortization | 3,746 | 68 | 3,814 | 1,285 | 2,764 | 4,049 | 294 | — | 8,157 | |||||||||||||||||||||||||||
Amortization of intangibles | 28 | 1 | 29 | 7 | 12 | 19 | 1 | — | 49 | |||||||||||||||||||||||||||
Interest expense | — | — | — | — | — | — | — | 1,220 | 1,220 | |||||||||||||||||||||||||||
Automotive interest income | 46 | — | 46 | — | — | — | — | 1,141 | 1,187 | |||||||||||||||||||||||||||
Cash out flow for capital expenditures | 3,875 | 84 | 3,959 | 1,232 | 1,673 | 2,905 | 259 | — | 7,123 | |||||||||||||||||||||||||||
Unconsolidated affiliates | ||||||||||||||||||||||||||||||||||||
Equity in net income/(loss) | 92 | — | 92 | — | — | — | 193 | — | 285 | |||||||||||||||||||||||||||
Total assets at year-end | 113,825 | |||||||||||||||||||||||||||||||||||
2004 | ||||||||||||||||||||||||||||||||||||
Sales/Revenues | ||||||||||||||||||||||||||||||||||||
External customer | $ | 83,019 | $ | 2,998 | $ | 86,017 | $ | 26,519 | $ | 27,627 | $ | 54,146 | $ | 6,956 | $ | — | $ | 147,119 | ||||||||||||||||||
Intersegment | 3,588 | — | 3,588 | 1,864 | 766 | 2,630 | 113 | — | 6,331 | |||||||||||||||||||||||||||
Income | ||||||||||||||||||||||||||||||||||||
Income/(loss) before income taxes | 525 | 144 | 669 | 177 | (830 | ) | (653 | ) | 82 | (276 | ) | (178 | ) | |||||||||||||||||||||||
Other disclosures | ||||||||||||||||||||||||||||||||||||
Depreciation and special tools amortization | 3,527 | 57 | 3,584 | 1,338 | 1,278 | 2,616 | 220 | — | 6,420 | |||||||||||||||||||||||||||
Amortization of intangibles | 6 | 1 | 7 | 6 | 12 | 18 | 1 | — | 26 | |||||||||||||||||||||||||||
Interest expense | — | — | — | — | — | — | — | 1,221 | 1,221 | |||||||||||||||||||||||||||
Automotive interest income | 132 | — | 132 | — | — | — | — | 981 | 1,113 | |||||||||||||||||||||||||||
Cash out flow for capital expenditures | 3,189 | 75 | 3,264 | 1,245 | 1,478 | 2,723 | 293 | — | 6,280 | |||||||||||||||||||||||||||
Unconsolidated affiliates | ||||||||||||||||||||||||||||||||||||
Equity in net income/(loss) | 75 | — | 75 | 6 | — | 6 | 174 | — | 255 | |||||||||||||||||||||||||||
Total assets at year-end | 113,251 |
FS - 53
Table of Contents
Financial Services Sector (a) | Total Company | |||||||||||||||||||||||||||
Ford | ||||||||||||||||||||||||||||
(In Millions) | Credit | Hertz | Other | Elims | Total | Elims (b) | Total | |||||||||||||||||||||
2006 | ||||||||||||||||||||||||||||
Sales/Revenues | ||||||||||||||||||||||||||||
External customer | $ | 16,553 | $ | — | $ | 263 | $ | — | $ | 16,816 | $ | — | $ | 160,123 | ||||||||||||||
Intersegment | 694 | — | 31 | (7 | ) | 718 | (2,226 | ) | — | |||||||||||||||||||
Income | ||||||||||||||||||||||||||||
Income/(loss) before income taxes | 1,953 | — | 13 | — | 1,966 | — | (15,051 | ) | ||||||||||||||||||||
Other disclosures | ||||||||||||||||||||||||||||
Depreciation and special tools amortization | 5,262 | — | 33 | — | 5,295 | — | 16,453 | |||||||||||||||||||||
Amortization of intangibles | — | — | — | — | — | — | 66 | |||||||||||||||||||||
Interest expense | 7,818 | — | (30 | ) | — | 7,788 | — | 8,783 | ||||||||||||||||||||
Automotive interest income | — | — | — | — | — | — | 1,409 | |||||||||||||||||||||
Cash outflow for capital expenditures | 25 | — | 14 | — | 39 | — | 6,848 | |||||||||||||||||||||
Unconsolidated affiliates | ||||||||||||||||||||||||||||
Equity in net income/(loss) | 7 | — | — | — | 7 | — | 428 | |||||||||||||||||||||
Total assets at year-end | 167,332 | — | 10,555 | (8,837 | ) | 169,050 | (1,467 | ) | 290,217 | |||||||||||||||||||
2005 | ||||||||||||||||||||||||||||
Sales/Revenues | ||||||||||||||||||||||||||||
External customer | $ | 15,883 | $ | 7,403 | $ | 136 | $ | — | $ | 23,422 | $ | — | $ | 176,896 | ||||||||||||||
Intersegment | 597 | 20 | 55 | (47 | ) | 625 | (6,308 | ) | — | |||||||||||||||||||
Income | ||||||||||||||||||||||||||||
Income/(loss) before income taxes | 2,923 | 1,980 | 50 | — | 4,953 | — | 1,079 | |||||||||||||||||||||
Other disclosures | ||||||||||||||||||||||||||||
Depreciation and special tools amortization | 4,507 | 1,310 | 37 | — | 5,854 | — | 14,011 | |||||||||||||||||||||
Amortization of intangibles | — | 6 | — | — | 6 | — | 55 | |||||||||||||||||||||
Interest expense | 6,616 | 511 | 70 | — | 7,197 | — | 8,417 | |||||||||||||||||||||
Automotive interest income | — | — | — | — | — | — | 1,187 | |||||||||||||||||||||
Cash outflow for capital expenditures | 48 | 335 | 11 | — | 394 | — | 7,517 | |||||||||||||||||||||
Unconsolidated affiliates | ||||||||||||||||||||||||||||
Equity in net income/(loss) | 11 | — | — | — | 11 | — | 296 | |||||||||||||||||||||
Total assets at year-end | 162,262 | — | 10,328 | (10,396 | ) | 162,194 | (83 | ) | 275,936 | |||||||||||||||||||
2004 | ||||||||||||||||||||||||||||
Sales/Revenues | ||||||||||||||||||||||||||||
External customer | $ | 18,083 | $ | 6,681 | $ | 433 | $ | — | $ | 25,197 | $ | — | $ | 172,316 | ||||||||||||||
Intersegment | 478 | 19 | 13 | (13 | ) | 497 | (6,828 | ) | — | |||||||||||||||||||
Income | ||||||||||||||||||||||||||||
Income/(loss) before income taxes | 3,710 | 493 | 84 | — | 4,287 | — | 4,109 | |||||||||||||||||||||
Other disclosures | ||||||||||||||||||||||||||||
Depreciation and special tools amortization | 4,980 | 1,603 | 35 | — | 6,618 | — | 13,038 | |||||||||||||||||||||
Amortization of intangibles | — | 10 | — | — | 10 | — | 36 | |||||||||||||||||||||
Interest expense | 6,733 | 408 | 109 | — | 7,250 | — | 8,471 | |||||||||||||||||||||
Automotive interest income | — | — | — | — | — | — | 1,113 | |||||||||||||||||||||
Cash outflow for capital expenditures | 62 | 325 | 71 | — | 458 | — | 6,738 | |||||||||||||||||||||
Unconsolidated affiliates | ||||||||||||||||||||||||||||
Equity in net income/(loss) | (2 | ) | — | — | — | (2 | ) | — | 253 | |||||||||||||||||||
Total assets at year-end | 172,903 | 14,417 | 18,912 | (17,044 | ) | 189,188 | (2,753 | ) | 299,686 |
(a) | Financial Services sector’s interest income is recorded asFinancial Services revenues. | |
(b) | Includes intersector transactions occurring in the ordinary course of business. |
FS - 54
Table of Contents
2006 | 2005 | 2004 | ||||||||||||||||||||||
Net Sales | Net Sales | Net Sales | ||||||||||||||||||||||
and | Long-Lived | and | Long-Lived | and | Long-Lived | |||||||||||||||||||
Revenues | Assets | Revenues | Assets | Revenues | Assets | |||||||||||||||||||
North America | ||||||||||||||||||||||||
United States | $ | 81,155 | $ | 36,185 | $ | 96,704 | $ | 37,800 | $ | 100,862 | $ | 35,315 | ||||||||||||
Canada | 8,075 | 9,281 | 7,939 | 8,062 | 7,085 | 6,900 | ||||||||||||||||||
Mexico | 3,461 | 1,008 | 3,374 | 1,073 | 2,934 | 807 | ||||||||||||||||||
Total North America | 92,691 | 46,474 | 108,017 | 46,935 | 110,881 | 43,022 | ||||||||||||||||||
Europe | ||||||||||||||||||||||||
Germany | 7,006 | 4,974 | 7,642 | 4,518 | 7,396 | 6,187 | ||||||||||||||||||
Sweden | 4,290 | 4,241 | 4,412 | 3,399 | 4,059 | 3,715 | ||||||||||||||||||
United Kingdom | 15,850 | 5,842 | 15,264 | 6,537 | 14,193 | 9,104 | ||||||||||||||||||
Other | 22,934 | 3,376 | 23,201 | 3,172 | 20,456 | 3,715 | ||||||||||||||||||
Total Europe | 50,080 | 18,433 | 50,519 | 17,626 | 46,104 | 22,721 | ||||||||||||||||||
All Other | 17,352 | 3,432 | 18,360 | 3,214 | 15,331 | 3,124 | ||||||||||||||||||
Total | $ | 160,123 | $ | 68,339 | $ | 176,896 | $ | 67,775 | $ | 172,316 | $ | 68,867 | ||||||||||||
2006 | 2005 | |||||||||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | Fourth | |||||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||||||||||||
Automotive Sector | ||||||||||||||||||||||||||||||||
Sales | $ | 36,973 | $ | 37,827 | $ | 32,556 | $ | 35,951 | $ | 39,414 | $ | 38,708 | $ | 34,656 | $ | 40,696 | ||||||||||||||||
Operating income/(loss) | (2,668 | ) | (1,253 | ) | (7,796 | ) | (6,204 | ) | 708 | (1,067 | ) | (1,626 | ) | (2,203 | ) | |||||||||||||||||
Financial Services Sector | ||||||||||||||||||||||||||||||||
Revenues | 3,828 | 4,067 | 4,554 | 4,367 | 5,481 | 6,458 | 5,854 | 5,629 | ||||||||||||||||||||||||
Income/(loss) before income taxes | 375 | 425 | 750 | 416 | 506 | 1,692 | 714 | 2,041 | ||||||||||||||||||||||||
Total Company | ||||||||||||||||||||||||||||||||
Income/(loss) before cumulative effects of changes in accounting principles | (1,423 | ) | (317 | ) | (5,248 | ) | (5,625 | ) | 875 | 1,215 | (576 | ) | 177 | |||||||||||||||||||
Net income/(loss) | (1,423 | ) | (317 | ) | (5,248 | ) | (5,625 | ) | 875 | 1,215 | (576 | ) | (74 | ) | ||||||||||||||||||
Common and Class B per share from income/(loss) before cumulative effects of changes in accounting principles | ||||||||||||||||||||||||||||||||
Basic | $ | (0.76 | ) | $ | (0.17 | ) | $ | (2.79 | ) | $ | (2.98 | ) | $ | 0.48 | $ | 0.66 | $ | (0.31 | ) | $ | 0.09 | |||||||||||
Diluted | (0.76 | ) | (0.17 | ) | (2.79 | ) | (2.98 | ) | 0.44 | 0.60 | (0.31 | ) | 0.09 |
FS - 55
Table of Contents
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | ||||||||||||||||||||||
Automotive Sector | $ | 490 | $ | 351 | $ | 278 | $ | 194 | $ | 97 | $ | 250 | $ | 1,660 | ||||||||||||||
Financial Services Sector | 117 | 109 | 91 | 59 | 42 | 76 | 494 |
2006 | 2005 | 2004 | ||||||||||
Rental expense | $ | 1.0 | $ | 1.5 | $ | 1.5 |
FS - 56
Table of Contents
2006 | 2005 | |||||||
Beginning balance | $ | 6,243 | $ | 5,814 | ||||
Payments made during the period | (4,106 | ) | (3,986 | ) | ||||
Changes in accrual related to warranties issued during the period | 3,464 | 3,949 | ||||||
Changes in accrual related to pre-existing warranties | 219 | 615 | ||||||
Foreign currency translation and other | 212 | (149 | ) | |||||
Ending balance | $ | 6,032 | $ | 6,243 | ||||
FS - 57
Table of Contents
FS - 58
Table of Contents
Ford Motor Company:
FS - 59
Table of Contents
Detroit, Michigan
February 27, 2007
FS - 60
Table of Contents
(in millions)
Balance at | Charged to | Balance at | ||||||||||||||
Beginning | Costs and | End of | ||||||||||||||
Description | of Period | Expenses | Deductions | Period | ||||||||||||
For the Year Ended December 31, 2006 | ||||||||||||||||
Allowances Deducted from Assets | ||||||||||||||||
Allowance for Credit Losses | $ | 1,594 | $ | 100 | $ | 573 | (a) | $ | 1,121 | |||||||
Allowance for Doubtful Receivables | 317 | 30 | 153 | (b) | 194 | (c) | ||||||||||
Inventories (primarily service part obsolescence) | 428 | 108 | (d) | — | 536 | |||||||||||
Allowance for Deferred Tax Assets | 252 | 6,928 | (e) | — | 7,180 | |||||||||||
Total Allowances Deducted from Assets | $ | 2,591 | $ | 7,166 | $ | 726 | $ | 9,031 | ||||||||
For the Year Ended December 31, 2005 | ||||||||||||||||
Allowances Deducted from Assets | ||||||||||||||||
Allowance for Credit Losses | $ | 2,471 | $ | 167 | $ | 1,044 | (a) | $ | 1,594 | |||||||
Allowance for Doubtful Receivables | 988 | 523 | (f) | 1,194 | (b) | 317 | (c) | |||||||||
Inventories (primarily service part obsolescence) | 376 | 52 | (d) | — | 428 | |||||||||||
Allowance for Deferred Tax Assets | 172 | 80 | — | 252 | ||||||||||||
Total Allowances Deducted from Assets | $ | 4,007 | $ | 822 | $ | 2,238 | $ | 2,591 | ||||||||
For the Year Ended December 31, 2004 | ||||||||||||||||
Allowances Deducted from Assets | ||||||||||||||||
Allowance for Credit Losses | $ | 2,977 | $ | 923 | $ | 1,429 | (a) | $ | 2,471 | |||||||
Allowance for Doubtful Receivables | 384 | 663 | (f) | 59 | (b) | 988 | (c) | |||||||||
Inventories (primarily service part obsolescence) | 368 | 8 | (d) | — | 376 | |||||||||||
Allowance for Deferred Tax Assets | 105 | 67 | — | 172 | ||||||||||||
Total Allowances Deducted from Assets | $ | 3,834 | $ | 1,661 | $ | 1,488 | $ | 4,007 | ||||||||
(a) | Finance receivables and lease investments deemed to be uncollectible and other changes, principally amounts related to finance receivables sold and translation adjustments. | |
(b) | Accounts and notes receivable deemed to be uncollectible as well as translation adjustments. Included in 2005 is a write-off of Visteon-related receivables of $1.1 billion. | |
(c) | Includes non-current Visteon-related receivables of $1 million, $19 million, and $600 million at December 31, 2006, 2005, and 2004, respectively, which are netted againstOther assets - Automotiveon the sector balance sheet. | |
(d) | Net change in inventory allowances. | |
(e) | Includes $2.7 billion of allowance for deferred tax assets throughAccumulated other comprehensive income/(loss) and $4.2 billion of allowance for deferred tax assets through the income statement. | |
(f) | Includes Visteon-related increases of $500 million and $600 million in 2005 and 2004, respectively. |
FSS -1
Table of Contents
FINANCIAL STATEMENT SCHEDULE
Detroit, Michigan
February 27, 2007
FSS -2