Ford 2005 Annual Report Download - page 28

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Management’s Discussion and Analysis of Financial
Condition and Results of Operations
The first facility to be idled pursuant to the Way Forward plan will be our St. Louis Assembly Plant, which is targeted to cease
production by the end of the first quarter of 2006. Further, we have announced plans to idle the following facilities through 2008:
Atlanta Assembly Plant, Wixom Assembly Plant, Batavia Transmission Plant, Windsor Casting Plant, and two additional assembly
plants to be determined later this year. In addition, production at our St. Thomas Assembly Plant will be reduced to one shift. These
actions should reduce our North American assembly capacity by 1.2 million units or 26% and help improve our assembly capacity
utilization rate.
RESULTS OF OPERATIONS
We have reclassified certain prior year amounts to conform to current year presentation.
FULL-YEAR 2005 RESULTS OF OPERATIONS
Our worldwide net income was $2.0 billion or $1.05 per share of Common and Class B stock in 2005, down $1.5 billion from a
profit of $3.5 billion or $1.73 per share in 2004.
Results by business sector for 2005, 2004 and 2003 are shown below (in millions):
2005 2004 2003
Income/(loss) before income taxes
Automotive sector ..................................................................................................................................................... $ (3,895) $ (155) $ (1,908)
Financial Services sector............................................................................................................................................ 5,891 5,008 3,247
Total Company........................................................................................................................................................ 1,996 4,853 1,339
Provision for/(benefit from) income taxes (a) ................................................................................................................ (512) 938 123
Minority interests in net income/(loss) of subsidiaries (b) .............................................................................................. 280 282 314
Income/(loss) from continuing operations.................................................................................................................. 2,228 3,633 902
Income/(loss) from discontinued operations ................................................................................................................ 47 (146) (143)
Cumulative effect of change in accounting principle (c) .............................................................................................. (251) — (264)
Net income/(loss)........................................................................................................................................................ $ 2,024 $ 3,487 $ 495
__________
(a) See Note 3 of the Notes to the Financial Statements for disclosure regarding 2005 effective tax rate.
(b) Primarily related to Ford Europe’s consolidated less-than-100%-owned affiliates.
(c) See Notes 17 and 27 of the Notes to the Financial Statements.
Included in Income/(loss) before income taxes are items we do not consider indicative of our ongoing operating activities ("special
items"). The following table details the 2005, 2004, and 2003 special items by business unit (in millions):
2005 2004 2003
Automotive Sector
Ford North America
Visteon-related charges *................................................................................................................................
............
$ (468) $ (600) $ (1,597)
Personnel-reduction programs................................................................................................................................
.....
(401) — —
Fuel-cell technology charges................................................................................................................................
.......
(116) (182) —
Changes in state non-income tax law ................................................................................................
...........................
85 — —
Divestiture of non-core business (Beanstalk Group, LLC) ................................................................
............................
(59) — —
Ford Europe
Personnel-reduction programs................................................................................................................................
.....
(510) (49) (513)
Premier Automotive Group ("PAG")
Jaguar/Land Rover impairment ................................................................................................................................
...
(1,300) — —
Personnel-reduction programs................................................................................................................................
.....
(245) (110) —
Ford Asia Pacific and Africa
Divestiture of non-core business (certain Australia dealerships) ................................................................
....................
14 (81) —
Personnel-reduction programs................................................................................................................................
.....
(33) — —
Other Automotive
Divestiture of non-core businesses (primarily related to Kwik-Fit Group Limited)................................
.........................
152 17 49
Total Automotive sector ................................................................................................................................
............
(2,881) (1,005) (2,061)
Financial Services Sector
Divestiture of non-core business (The Hertz Corporation ("Hertz"))................................................................
................
1,499 — —
Property clean-up settlement................................................................................................................................
.........
—45 —
Total ................................................................................................................................................................
..........
$ (1,382) $ (960) $ (2,061)
__________
* See Notes 4 and 23 of the Notes to the Financial Statements for discussion of Visteon-related charges.
Ford Motor Company Annual Report 2005 26 Ford Motor Company Annual Report 2005 27