FORD REPORTS PRELIMINARY 3Q 2006
FINANCIAL RESULTS
Ford also announces plans to
restate certain financial results to correct accounting
under SFAS 133. The preliminary third-quarter results
announced today do not reflect these corrections.
Third-quarter net loss of $5.8
billion, or $3.08 per share.
Loss from continuing
operations, excluding special items, of $1.2 billion, or 62
cents per share.**
Strong liquidity with total
cash, including automotive cash, marketable securities,
loaned securities and short-term VEBA assets, of $23.6
billion.
Ford Motor Company reported
preliminary third-quarter 2006 financial results. In a separate
announcement, Ford said it would restate financial results from
2001 through the second quarter of 2006 to correct the
accounting for certain derivative transactions under Statement
of Financial Accounting Standards (SFAS) 133, Accounting for
Derivative Instruments and Hedging Activities.
*The financial results discussed
herein are presented on a preliminary basis; final data will be
included in our Quarterly Report on Form 10-Q for the quarter
ended Sept. 30, 2006 ("Form 10-Q Report").
** Earnings per share from
continuing operations, excluding special items, is calculated on
a basis that includes pre-tax profit and provision for taxes and
minority interest. See table following “Safe Harbor/Risk
Factors” for the nature and amount of these special items and a
reconciliation to GAAP.
These corrections are not
reflected in the preliminary results announced today for Ford's
2006 third quarter. The company expects to finalize restatement
amounts for this and previous periods by the time it files its
Quarterly Report on Form 10-Q for the quarter ended Sept. 30,
2006. Financial statements pertaining to the 2006 third quarter
will be provided at that time.
Summary of Preliminary Results
For the third quarter, Ford Motor
Company reported a net loss of $5.8 billion, or $3.08 per share.
This compares with a net loss of $284 million, or 15 cents per
share, in the 2005 third quarter. Excluding special items, the
third quarter loss from continuing operations was $1.2 billion,
or 62 cents per share, compared with a loss of $191 million, or
10 cents per share, a year earlier.
.
The performance from
continuing operations primarily reflected operating
challenges in the company's North America, Asia Pacific
and Africa, and Premier Automotive Group operations.
Performance also included continued profitability in
South America and at Ford Credit. Though it lost money
during the quarter, Ford Europe showed a year-over-year
improvement in operating results and remained poised to
deliver full-year profitability.
Special items included in the
quarter's net loss primarily reflected the costs associated with
restructuring efforts, primarily in North America, as well as
the revaluation of long-lived assets related to automotive
operations in North America and Jaguar/Land Rover. On an
after-tax basis, special items reduced third-quarter earnings by
a total of $4.6 billion or $2.46 per share.
The total pre-tax effect of these special
items was $5.3 billion. (See appendix at the end of this press release
for a detailed explanation of special items and other changes during the
period.)
In addition, effective this quarter, the
company established a valuation allowance of $2.2 billion against
deferred tax assets primarily at its North America and Jaguar/Land Rover
operations. The valuation allowance was established because of the
cumulative losses the company has incurred and the financial outlook for
these operations. Alan Mulally, Ford's president and chief executive
officer, said he and his senior management team are committed to
creating a viable Ford Motor Company business going forward.
"These business results are clearly
unacceptable," Mulally said. "We are committed to dealing decisively
with the fundamental business reality that customer demand is shifting
to smaller, more efficient vehicles. Our focused priorities are to
restructure aggressively to operate profitably at lower volumes, and to
accelerate the development of new, more efficient vehicles that
customers really want.
"We have great global assets and resources
that we will leverage to significantly improve our product strategy, our
production efficiency and quality. This will enable us to meet customer
expectations for distinctive vehicles much more cost effectively. These
actions will lead to profitable growth of our business over the long
term."
