Ford 2006 Annual Report Download - page 24
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Please find page 24 of the 2006 Ford annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Management’s Discussion and Analysis of Financial Condition and Results of Operations
22
Ford Asia Pacific and Africa/Mazda
Ford Asia Pacific and Africa/Mazda Segment. The improvement in results for Ford Asia Pacific and Africa primarily
reflected the non-recurrence of 2004 charges related to the disposition of certain dealerships, favorable changes in
currency exchange rates, and a gain on the disposal of our investment in Mahindra & Mahindra Ltd., offset partially by
unfavorable product mix, higher costs associated with new products and facilities in China, and charges for personnel-
reduction programs.
The increase in earnings for Mazda and Associated Operations primarily reflected gains on our investment in Mazda
convertible bonds and improved Mazda operating results. In the second half of 2005, we converted to equity about 82.5%
of our Mazda convertible bonds.
Other Automotive
The improvement in earnings primarily reflected higher returns on invested cash and a gain on the sale of non-core
businesses, offset partially by lower interest on tax refunds from prior-year federal and state tax matters (about
$450 million in 2005 compared with $600 million in 2004).
FINANCIAL SERVICES SECTOR RESULTS OF OPERATIONS
Our discussion of Financial Services sector results of operations is on a pre-tax basis.
2006 Compared with 2005
Details of the full-year Financial Services sector Revenues and Income/(loss) before income taxes for 2006 and 2005
are shown below:
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* 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.
We sold Hertz during the fourth quarter of 2005, resulting in declines in Revenues and Income/(loss) before income
taxes during 2006.
Ford Credit
The decrease in Ford Credit's full-year earnings primarily reflected higher borrowing costs, higher depreciation
expense, and the impact of lower average receivable levels in its managed portfolio. These were offset partially by
market valuations, primarily related to non-designated derivatives and reduced operating costs.
Ford Credit reviews its business performance from several perspectives, including:
•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);