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Ford Motor Company / 2006 Annual Report
Fast Forward

Table of contents

  • Page 1
    Ford Motor Company / 2006 Annual Report Fast Forward

  • Page 2
    ... employees and more than 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin and Mazda. The company provides financial services through Ford Motor Credit Company. Contents 1 2 3 6 8 9 Operating Highlights...

  • Page 3
    Operating Highlights 2006 Sales and Revenues Worldwide wholesale unit volumes by automotive segment (in thousands) Ford North America Ford South America Ford Europe Premier Automotive Group Ford Asia Pacific and Africa/Mazda Total Sales and revenues (in billions) Automotive Financial Services Total ...

  • Page 4
    .... We have improved our cost structure, raised our quality, obtained financing and refilled our product pipeline with exciting new vehicles. Alan Mulally, our new President and CEO, is an engineer who is passionate about customers and knows how to win in a global market. He is moving us quickly...

  • Page 5
    ... potential for success that exists here. This is a company filled with talented and dedicated people. We also have outstanding supplier, dealer and union partners. There also is an incredible amount of goodwill that exists toward Ford Motor Company around the world. People want to see us succeed...

  • Page 6
    ...Navigator in North America; Ford S-MAX, Ford Galaxy and Ford Transit in Europe; Jaguar XK, Land Rover Freelander 2/LR2, Volvo S80 and Volvo C30, and Mazda CX-9. Our products also will define us as the company that cares about its customers and their communities. Bill Ford and I share the same vision...

  • Page 7
    ... Ford Motor Company's results in 2006 were unacceptable. We had a full-year net loss of $12.6 billion, or $6.72 a share. As expected, we incurred a substantial loss in North America in 2006, due to restructuring costs, lower volume and a less profitable mix of products. South America and Ford Europe...

  • Page 8
    ... Ford Blue Oval worldwide, putting in place an exciting vision for our Lincoln and Mercury brands, building on the success of Mazda around the world and growing our premier automotive brands - Volvo, Jaguar and Land Rover. By the end of 2008, we will speed up the time it takes us to get new products...

  • Page 9
    Jaguar XK Volvo C70 Land Rover LR2 The all-new Ford S-MAX was named 'Car of the Year 2007' by a jury of 58 leading automotive journalists from 22 European countries. 7

  • Page 10
    ... Paul A. Mascarenas North America Engineering Martin J. Mulloy Labor Affairs Stephen T. Odell Marketing, Sales and Service, Ford of Europe Ann Marie Petach Treasurer Geoff P. Polites Chief Executive Officer, Jaguar and Land Rover Barb J. Samardzich Powertrain Operations Gerhard Schmidt Research and...

  • Page 11
    ... Balance Sheet Sector Balance Sheet Consolidated Statement of Cash Flows Sector Statement of Cash Flows Consolidated Statement of Stockholders' Equity Notes to the Financial Statements Report of Independent Registered Public Accounting Firm Selected Financial Data Employment Data Management's Report...

  • Page 12
    ... customers and revenue from such sales are closely linked with our production. Most of the vehicles sold by us to our dealers and distributors are financed at wholesale by Ford Motor Credit Company ("Ford Credit"). Upon Ford Credit originating the wholesale receivable related to a dealer's purchase...

  • Page 13
    ... Exchange Rate Volatility. The U.S. dollar has depreciated against most major currencies since 2002. This created downward margin pressure on auto manufacturers that have U.S. dollar revenue with foreign currency cost. Because we produce vehicles in Europe (e.g., Jaguar, Land Rover, Aston Martin...

  • Page 14
    ... International Union, United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW"), we also extended early retirement or separation packages to all U.S. hourly employees, including Ford employees at our Automotive Components Holdings, LLC ("ACH") plants. Through year-end 2006...

  • Page 15
    ... assembly capacity in North America by the end of the decade so that it closely matches projected sales of Ford, Lincoln and Mercury brand units. As part of this reduction, we have announced plans to idle 16 North American manufacturing facilities, including seven vehicle assembly plants, by the end...

  • Page 16
    ... ACH plants. Accelerating Product Development and Reducing Manufacturing Complexity As part of our acceleration of the Way Forward plan, 70 percent of Ford, Lincoln, and Mercury products (by volume) in North America will be new or significantly upgraded by the end of 2008 compared with 2006 models...

  • Page 17
    ... operating assumptions in the 2008 and 2009 time period: x 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...

  • Page 18
    Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS FULL-YEAR 2006 RESULTS OF OPERATIONS Our worldwide net income was a loss of $12.6 billion or $6.72 per share of Common and Class B Stock in 2006, down $14 billion from a profit of $1.4 ...

  • Page 19
    ... 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...

  • Page 20
    ... the Jobs Bank Benefits and personnel-reduction program charges, and the related pension curtailment charges. The decline in revenue primarily reflected lower wholesale unit volumes in Ford North America, adverse product mix, and unfavorable net pricing. The table below details our 2006 cost changes...

  • Page 21
    ... favorable cost changes reflected improvements in pension and OPEB costs, manufacturing and engineering costs, warranty-related costs, and overhead costs. Ford South America Segment. The increase in earnings primarily reflected favorable net pricing, favorable volume and mix more than accounted for...

  • Page 22
    ... 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...

  • Page 23
    ... lower U.S. market share, unfavorable cost changes, lower dealer stock levels, charges for personnel-reduction programs, and unfavorable currency exchange. Unfavorable cost changes primarily reflected higher warranty-related costs and net product costs. Ford South America Segment. The increase in...

  • Page 24
    ... 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...

  • Page 25
    ... available to pay Ford Credit's other obligations or the claims of Ford Credit's other creditors. Managed receivables decreased from year-end 2005, primarily reflecting lower wholesale receivable levels, offset partially by increased net investment in operating leases. On-balance sheet receivable...

  • Page 26
    ... and its allowance for credit losses as a percentage of end-of-period receivables (net finance receivables and net investment in operating leases) for its onbalance sheet portfolio for the years ended December 31 (dollar amounts in billions). During 2006, Ford Credit updated its analysis of contract...

  • Page 27
    ... The increase in Hertz operating results primarily reflected the cessation of depreciation on long-lived assets from the point Hertz was held for sale (i.e., September 2005) until it was sold, higher car and equipment rental volumes and improved pricing for equipment rental. Other Financial Services...

  • Page 28
    ... special items, contributions to funded pension plans, the net effect of the change in our VEBA on gross cash, capital transactions with the Financial Services sector, acquisitions and divestitures, dividends paid to shareholders, changes in Automotive debt, and other - primarily financing-related...

  • Page 29
    ... 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...

  • Page 30
    ...or part of Aston Martin, offset partially by pension contributions and reductions of other Automotive debt. Pension Plan Contributions. Our policy for funded plans is to contribute annually, at a minimum, amounts required by applicable laws, regulations, and union agreements. We do from time to time...

  • Page 31
    ... sheet, net of retained interests) as a percent of total managed receivables was as follows at the end of each of the last three years: 2006 - 48%, 2005 - 38%, 2004 - 26%. Ford Credit obtains short-term funding from the sale of floating rate demand notes under its Ford Interest Advantage program...

  • Page 32
    ...December 31, 2006, banks provided $18.9 billion of contractually-committed liquidity facilities exclusively to support Ford Credit's two on-balance sheet asset-backed commercial paper programs. Ford Credit also has entered into agreements with a number of bank-sponsored asset-backed commercial paper...

  • Page 33
    ... a year ago. In 2006, Ford Credit paid cash dividends of $1.35 billion. To further enhance future funding flexibility, Ford Credit has suspended regular dividend payments beginning in 2007. Correspondingly, Ford Credit expects a continued reduction in its managed leverage. Total Company Stockholders...

  • Page 34
    Management's Discussion and Analysis of Financial Condition and Results of Operations The following ratings actions were taken in the fourth quarter 2006: Ford x DBRS: In November 2006, DBRS assigned Ford an issuer rating of B (low), lowered Ford's long-term senior unsecured rating to CCC (high) ...

  • Page 35
    ...in 2006, the costs associated with its North America restructuring initiative (consolidation of its branches in the United States and Canada into regional business centers), and the impact of lower receivable levels. Beginning with 2007, Ford Credit will suspend regular dividends. We expect year-end...

  • Page 36
    ... plans (e.g., discount rates, investment returns, and health care cost trends); x The discovery of defects in vehicles resulting in delays in new model launches, recall campaigns or increased warranty costs; x Increased safety, emissions (e.g., CO2), fuel economy or other (e.g., pension funding...

  • Page 37
    ...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...

  • Page 38
    ... 23 of the Notes to the Financial Statements for more information regarding costs and assumptions for employee retirement benefits. Sensitivity Analysis. The December 31, 2006 pension funded status and 2007 expense are affected by December 31, 2006 assumptions. Note that these sensitivities may be...

  • Page 39
    ...over the expected future years of service (approximately 11 years). See Note 23 of the Notes to the Financial Statements for more information regarding costs and assumptions for employee retirement benefits. Sensitivity Analysis. The December 31, 2006 OPEB funded status and 2007 expense are affected...

  • Page 40
    ...operating lease portfolio from their original acquisition value to their expected residual value at the end of the lease term. These vehicles primarily consist of retail lease contracts for Ford Credit and vehicles sold to daily rental car companies subject to a guaranteed repurchase option ("rental...

  • Page 41
    ... be reflected on our balance sheet as Net investment in operating leases and on the income statement in Depreciation, in each case under the Financial Services sector. ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED In February 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No...

  • Page 42
    ... wholesale receivables, and net investment in operating leases through a variety of programs, utilizing amortizing, variable funding and revolving structures. Most of Ford Credit's securitizations do not satisfy the requirements for accounting sale treatment and the securitized assets and associated...

  • Page 43
    ... all of its securitization programs with the exception of bank-sponsored conduits. None of Ford Credit's officers, directors or employees holds any equity interests in its SPEs or receives any direct or indirect compensation from the SPEs. These SPEs do not own Ford Credit's stock or stock of any of...

  • Page 44
    Management's Discussion and Analysis of Financial Condition and Results of Operations In addition to the specific transaction-related structural features discussed above, Ford Credit's securitization programs may be affected by the following factors: the amount and credit quality of assets ...

  • Page 45
    ... Condition and Results of Operations," our funding sources include sales of receivables in securitizations and other structured financings, unsecured debt issuances and bank borrowings. We are exposed to a variety of insurable risks, such as loss or damage to property, liability claims, and employee...

  • Page 46
    ...minimize risk, and earn a reasonable return on the short-term investment. At any time, a rise in interest rates could have a material adverse impact on the fair value of our trading and availablefor-sale portfolios. As of December 31, 2006, the value of our trading portfolio was $36.6 billion, which...

  • Page 47
    ... in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources". A discussion of Ford Credit's market risks is included below. Foreign Currency Risk. To meet funding objectives, Ford Credit issues debt or, for its international affiliates...

  • Page 48
    ...two and six years and generally require customers to make equal monthly payments over the life of the contract. Wholesale receivables are originated to finance new and used vehicles held in dealers' inventory and generally require dealers to pay a floating rate. Ford Credit's funding sources consist...

  • Page 49
    ... one percentage point instantaneous change in interest rates was higher at year-end 2006 than at year-end 2005. This change primarily reflects the results of normal fluctuations within the approved tolerances of risk management strategy. While the sensitivity analysis presented is Ford Credit's best...

  • Page 50
    ...$1

  • Page 51
    ...  Sector Statement of Income 6(&72567$7(0(172),1&20( )RUWKH

  • Page 52
    )25'02725&203$1

  • Page 53
    Sector Balance Sheet )25'02725&203$1

  • Page 54
    )25'02725&203$1

  • Page 55
    Sector Statement of Cash Flows )25'02725&203$1

  • Page 56
    Consolidated Statement of Stockholders' Equity )25'02725&203$1

  • Page 57
    ... Ford Credit over the term of the related finance contracts. NOTE 2. SUMMARY OF ACCOUNTING POLICIES Cash and Cash Equivalents Cash and all highly liquid investments with a maturity of three months or less at the date of purchase, including shortterm time deposits and government agency and corporate...

  • Page 58
    ... when the vehicle is sold to the ultimate customer. We also sell vehicles to daily rental car companies subject to guaranteed repurchase options. These vehicles are accounted for as operating leases. At the time of sale, the proceeds are recorded as deferred revenue in Accrued liabilities and...

  • Page 59
    ...OF ACCOUNTING POLICIES (Continued) Marketing Incentives and Interest Supplements Marketing incentives, including customer and dealer cash payments and costs for special financing and leasing programs paid to the Financial Services sector, are recognized by the Automotive sector as revenue reductions...

  • Page 60
    ... and all conditions as specified in the agreement are fulfilled. Grants and loan incentives are recorded as a reduction of expense in Automotive cost of sales. Selected Other Costs Freight, engineering and research and development costs are included in Automotive cost of sales; advertising costs are...

  • Page 61
    ... included in Automotive interest income and other non-operating income/(expense), net and Financial Services revenues, and are accounted for using the specific identification method. The fair value of trading and available-for-sale securities is determined by quoted market prices. The estimated fair...

  • Page 62
    Notes to the Financial Statements NOTE 3. MARKETABLE, LOANED AND OTHER SECURITIES (Continued) Investments in marketable and loaned securities at ...cost and fair value of investments in available-for-sale and held-to-maturity securities by contractual maturity for our sectors at December 31, 2006...

  • Page 63
    ... whether unrealized losses related to investments in debt and equity securities are temporary in nature. Factors considered in determining whether a loss is temporary include the length of time and extent to which the fair value has been below cost, the financial condition and near-term prospects of...

  • Page 64
    ... in Net investment in operating leases for the Automotive sector are vehicles sold to daily rental car companies subject to guaranteed repurchase options. Assets subject to operating leases are depreciated on the straightline method over the projected service life of the lease to reduce the asset to...

  • Page 65
    ... pay our other obligations or the claims of our other creditors. Included in Financial Services revenues are rents on operating leases. The amounts contractually due for minimum rentals on operating leases are $3.8 billion for 2007, $3.6 billion for 2008, $1.7 billion for 2009, $433 million for 2010...

  • Page 66
    ..., we discount the present value of the projected cash flows retained at the transaction discount rate. Investment and Other Income The following table summarizes the activity related to off-balance sheet sales of receivables reported in Financial Services revenues for the years ended December 31...

  • Page 67
    ...in another. Outstanding delinquencies over 30 days related to the off-balance sheet securitized portfolio were $208 million and $386 million at December 31, 2006 and 2005, respectively. Credit losses, net of recoveries, were $84 million and $127 million for the years ended December 31, 2006 and 2005...

  • Page 68
    ...summarized financial information for Mazda Motor Corporation ("Mazda") and Blue Diamond Parts, LLC ("Blue Diamond Parts"). These entities are accounted for under the equity method, and were considered significant unconsolidated affiliates in 2005. Mazda-Related Investments. At December 31, 2006, our...

  • Page 69
    ...net income/(loss) of affiliated companies was income of $89 million, $83 million and $48 million for the years ended December 31, 2006, 2005, and 2004, respectively. Balance sheet information for Blue Diamond Parts is insignificant to our consolidated balance sheet. NOTE 10. NET PROPERTY AND RELATED...

  • Page 70
    ... plan for the Jaguar and Land Rover operating unit within our Premier Automotive Group ("PAG") segment and, consistent with 2006 operating results, projected lower sales, a decline in net cash flows for this operating unit based on cost performance shortfalls and currency exchange deterioration...

  • Page 71
    ..., included within Automotive equity in net assets of affiliated companies was goodwill of $249 million at December 31, 2006. This included an increase of $36 million from 2005 related to the conversion of our investment in Mazda convertible bonds to an investment in Mazda's equity. The components of...

  • Page 72
    ... and/or Lincoln Mercury dealership corporation by purchasing equity from us using the operator's share of dealership net profits. We supply and finance the majority of vehicles and parts to these dealerships and the operators have a contract to buy our equity interest over a period of time. VIEs of...

  • Page 73
    ... the VIEs. Ford Credit also sells finance receivables to bank-sponsored asset-backed commercial paper issuers that are SPEs of the sponsor bank. Ford Credit is not the primary beneficiary of these SPEs. The outstanding balance of finance receivables that have been sold by Ford Credit to these SPEs...

  • Page 74
    Notes to the Financial Statements NOTE 15. DEBT AND COMMITMENTS Debt at December 31 was as follows (in ... ,QFOXGHVPLOOLRQSD\DEOHWRDIILOLDWHGFRPSDQLHVDW'HFHPEHU Long-term debt maturities at December 31, 2006 are as follows (in millions): RQJWHUPGHEWPDWXULWLHV XWRPRWLYH...

  • Page 75
    ...on the closing price of $7.36 per share on December 6, 2006). Holders may require us to purchase all or a portion of the Convertible Notes for cash on December 20, 2016 and December 15, 2026 or upon a change in control of the Company or for shares of our Common Stock upon a designated event, in each...

  • Page 76
    ... 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...

  • Page 77
    ... and minimum net worth requirements) and credit rating triggers that could limit our ability to obtain funding. Additionally, at December 31, 2006, banks provided $18.9 billion of contractually-committed liquidity facilities exclusively to support Ford Credit's two on-balance sheet, asset-backed...

  • Page 78
    ..., 2006, a variety of Ford stock-based compensation grants or awards were outstanding for employees (including officers) and members of the Board of Directors. All stock-based compensation plans are approved by the shareholders. Description of Stock Option Plans We continue to measure the fair value...

  • Page 79
    ...to settle exercised options. For options exercised during the years ended December 31, 2006, 2005, and 2004, the difference between the fair value of the common shares issued and their respective exercise price was about $1 million, $9 million, and $48 million, respectively. Compensation cost was as...

  • Page 80
    ...General Workers Union of Canada ("CAW"). Our collective bargaining agreement with the UAW contains a guaranteed employment numbers provision, pursuant to which we are required to pay idled employees who meet certain conditions substantially all of their wages and benefits for the term of the current...

  • Page 81
    ...of $1.9 billion in 2006 related to these acceptances (separate from our Jobs Bank Benefits reserve discussed above). Hourly employees in Ford North America who accepted an early retirement or separation package are expected to leave the Company by September 2007, though employees have an opportunity...

  • Page 82
    ... costs related to pension, postretirement health care and life insurance benefits. Financial Services Sector Business Restructuring In 2006, FCE announced a plan to restructure its business in Germany that supports the sales activities of automotive financial services of Ford, Jaguar, Land Rover...

  • Page 83
    Notes to the Financial Statements NOTE 18. INCOME TAXES Components of income taxes, excluding discontinued operations, cumulative effects of changes in accounting principles and equity in net results of affiliated companies accounted for after-tax, are as follows:  ,QFRPH ORVV EHIRUHLQFRPHWD[...

  • Page 84
    ... the financial statement reporting of tax positions taken in tax returns. The interpretation is effective for fiscal years beginning after December 15, 2006. The Company will adopt the interpretation as of January 1, 2007 and management is expecting a $1 billion to $1.5 billion increase to equity as...

  • Page 85
    ...to sell certain consolidated dealerships in the Ford Asia Pacific and Africa/Mazda segment as the sale of the dealerships would allow us to concentrate on the production and marketing of our products in the Asia Pacific region rather than the day-to-day retailing operations. In 2004, we recorded pre...

  • Page 86
    ... to pay $23 million in 2007 and the remaining balance over the course of four years, which has been classified as debt. As part of the transaction related to this acquisition, we have recorded an intangible asset of $246 million. In 2005, we finalized an agreement with Visteon Corporation ("Visteon...

  • Page 87
    ... estimated fair value of the letters of credit. For further discussion of these letters of credit, see Note 27. At December 31, 2006 and 2005, there were no assets or liabilities on our balance sheet related to held-for-sale operations. NOTE 20. CAPITAL STOCK AND AMOUNTS PER SHARE All general voting...

  • Page 88
    ... to the Financial Statements NOTE 20. CAPITAL STOCK AND AMOUNTS PER SHARE (Continued) Amounts Per Share of Common and Class B Stock The calculation of diluted income per share of Common Stock and Class B Stock takes into account the effect of obligations, such as stock options and convertible notes...

  • Page 89
    Notes to the Financial Statements NOTE 21. OPERATING CASH FLOWS (Continued) ...         The reconciliation between total sector and consolidated cash flows from operating activities of continuing operations is as follows (in millions):  6XPRIVHFWRUFDVKIORZVIURP...

  • Page 90
    ... mature within three years or less. The exchange of cash associated with these derivative transactions is reported as net cash flows from operating activities in our statements of cash flows. Net Investment Hedges. We use foreign currency forward exchange contracts to hedge the net assets of certain...

  • Page 91
    ...and changes in fair value of commodity derivatives and warrants. The exchange of cash associated with these derivative transactions is recorded as net cash flows from investing activities in our statements of cash flows. Financial Services Sector Ford Credit's overall risk management objective is to...

  • Page 92
    ... at December 31, 2006, 2005, and 2004, respectively. We report the exchange of cash related to all of Ford Credit's derivative transactions, regardless of designation, as net cash flows from investing activities in our statements of cash flows. Income Statement Effect of Derivative Instruments...

  • Page 93
    ... Retirement Plan covers hourly employees represented by the UAW, and the General Retirement Plan covers substantially all other Ford employees in the United States hired on or before December 31, 2003. The hourly plan provides noncontributory benefits related to employee service. The salaried plan...

  • Page 94
    ... selected health care and life insurance benefits for retired employees. The Ford UAW Hospital-Surgical-Medical-Drug-Dental-Vision Program ("H-S-M-D-D-V Program") covers hourly employees represented by the UAW, and the Ford Salary Health Care Plan covers substantially all other Ford employees in...

  • Page 95
    ...million related to the stock appreciation rights in 2006, recorded in Automotive cost of sales. As part of the Agreement, UAW members also agreed to divert to the UAW Benefit Trust payments of a previouslynegotiated 2006 wage increase and a portion of negotiated cost-of-living increases through 2011...

  • Page 96
    ... sponsors of retiree health care benefit plans that provide a benefit at least actuarially equivalent to the benefit established by the law. We provide retiree drug benefits that exceed the value of the benefits that will be provided by Medicare Part D, and our retirees' out-of-pocket costs are less...

  • Page 97
    Notes to the Financial Statements NOTE 23. RETIREMENT BENEFITS (Continued) The year-end status of these plans was as follows (dollar amounts in millions):    &KDQJHLQ%HQHILW2EOLJDWLRQ %HQHILWREOLJDWLRQDW-DQXDU 6HUYLFHFRVW QWHUHVWFRVW PHQGPHQWV 6HSDUDWLRQSURJUDPV XUWDLOPHQWV ...

  • Page 98
    ... defined benefit plans to recognize the over-funded or under-funded status of a defined benefit postretirement plan as an asset or liability in its balance sheet and to recognize changes in that funded status in the year in which the changes occur. Unrecognized prior service credits/costs and net...

  • Page 99
    ... requirement to fund our major U.S. pension plans in 2007. Health Care and Life Insurance. In 2006, we withdrew $2.1 billion from the VEBA. During 2007 we expect to withdraw $900 million from the VEBA as reimbursement for U.S. hourly retiree benefit payments. Estimated Future Benefit Payments The...

  • Page 100
    ... 31, 2005, our actual 10-year annual rate of return on pension plan assets was 9.79% and 8.33% for U.S. and the U.K. plans, respectively. Health Care and Life Insurance. At December 31, 2006, we had $4.9 billion invested in shorter-duration fixed income investments. Of this total, $1.8 billion was...

  • Page 101
    ... (i.e., Volvo, Jaguar, Land Rover and Aston Martin) and related service parts throughout the world (including North America, South America, Europe, Asia Pacific and Africa). Ford Asia Pacific and Africa/Mazda segment includes primarily the sale of Ford-brand vehicles and related service parts in...

  • Page 102
    Notes to the Financial Statements NOTE 24. SEGMENT INFORMATION (Continued) ,Q0LOOLRQV   $XWRPRWLYH6HFWRU 7RWDO )RUG )RUG )RUG 7RWDO 1RUWK (XURSH  6RXWK 7KH )RUG 3$* $PHULFD $PHULFD $PHULFDV (XURSH 3 6DOHV5HYHQXHV   ([WHUQDOFXVWRPHU QWHUVHJPHQW QFRPH   ,QFRPH ...

  • Page 103
    Notes to the Financial Statements NOTE 24. SEGMENT INFORMATION (Continued) ,Q0LOOLRQV       6DOHV5HYHQXHV ([WHUQDOFXVWRPHU   ,QWHUVHJPHQW   ,QFRPH ,QFRPH ORVV EHIRUHLQFRPHWD[HV...

  • Page 104
    Notes to the Financial Statements NOTE 25. GEOGRAPHIC INFORMATION (in millions)    1RUWK$PHULFD 8QLWHG6WDWHV  &DQDGD  0H[LFR...

  • Page 105
    ... to pay scheduled interest payments, principal amounts due on the legal final maturity date, or when the balance of assets supporting the asset-backed notes is less than the outstanding balance of the asset-backed notes. The carrying value of our deferred gain related to the letters of credit was...

  • Page 106
    ... coverages on vehicles sold. Additional service actions, such as product recalls and other customer service actions, are not included in the warranty reconciliation below, but are also accrued for at the time of sale. Estimates for warranty costs are made based primarily on historical warranty claim...

  • Page 107
    ... of 2007, management committed to sell all or part of Aston Martin through a stock sale. We expect the sale to be completed in the first half of 2007. Automobile Protection Corporation ("APCO"), a wholly-owned subsidiary, offers vehicle service contracts and related after-market products to dealers...

  • Page 108
    ... it accounts for defined benefit pension and other postretirement plans, the timing of its annual goodwill and other intangible assets impairment testing, and its amortization method for special tools in 2006. Internal control over financial reporting Also, in our opinion, management's assessment...

  • Page 109
    ... and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control...

  • Page 110
    Selected Financial Data The following table sets forth selected financial data for each of the last five years (dollar amounts in millions, except per share amounts).  6800$5

  • Page 111
    ... decrease in employment levels primarily reflects implementation of our personnel-reduction programs in North America. Substantially all of the hourly employees in our Automotive operations in the United States are represented by unions and covered by collective bargaining agreements. Approximately...

  • Page 112
    ...'s internal control over financial reporting as of December 31, 2006 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included in this Annual Report. New York Stock Exchange Required Disclosures On June 6, 2006, Ford...

  • Page 113
    ...To Shareholders (Includes reinvestment of dividends) Indexed Returns Base Period Dec. 2001 100 100 100 Years Ending Dec. 2002 61 78 79 Dec. 2003 109 100 121 Dec. 2004 103 111 95 Dec. 2005 56 117 49 Dec. 2006 57 135 81 Company / Index FORD MOTOR COMPANY S&P 500 INDEX GENERAL MOTORS CORPORATION 111

  • Page 114
    ...Company, N.A. offers the DirectSERVICEâ„¢ Investment and Stock Purchase Program. This shareholder-paid program provides a low-cost alternative to traditional retail brokerage methods of purchasing, holding and selling Ford Common Stock. To view this report, the Ford Motor Company Fund Annual Report...

  • Page 115
    ... Customer Services Operations - Provides automotive financing for Ford, Lincoln, Mercury, Aston Martin, Jaguar, Land Rover, Mazda and Volvo dealers and customers - One of the world's largest automotive finance companies, with managed receivables of $148 billion at year-end 2006 - Operates...

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    www.ford.com Ford Motor Company • One American Road • Dearborn, Michigan 48126