Ford 2006 Annual Report Download - page 28
Download and view the complete annual report
Please find page 28 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
26
LIQUIDITY AND CAPITAL RESOURCES
Automotive Sector
Our strategy is to ensure that we have sufficient funding available with a high degree of certainty throughout the
business cycle. The key elements of this strategy include maintaining large gross cash balances, generating cash from
operating-related activities, having a long-dated debt maturity profile, maintaining committed credit facilities, and funding
long-term liabilities over time.
Gross Cash. Automotive gross cash includes cash and cash equivalents, net marketable securities, loaned securities
and certain assets contained in a Voluntary Employee Beneficiary Association trust ("VEBA"), a trust which may be used
to pre-fund certain types of company-paid benefits for U.S. employees and retirees. We include in Automotive gross cash
those VEBA assets that are invested in shorter-duration fixed income investments and can be used within 18 months to
pay for benefits ("short-term VEBA assets"). Gross cash as of December 31, 2006, 2005, and 2004 is detailed below (in
billions):
'HFHPEHU
&DVKDQGFDVKHTXLYDOHQWV
0DUNHWDEOHVHFXULWLHV
/RDQHGVHFXULWLHV
7RWDOFDVKPDUNHWDEOHVHFXULWLHVDQGORDQHGVHFXULWLHV
6HFXULWLHV,Q7UDQVLW ಧ ಧ
6KRUWWHUP9(%$DVVHWV
*URVVFDVK
__________
* The purchase or sale of marketable securities for which the cash settlement was not made by period-end.
In managing our business, we classify changes in Automotive gross cash into two categories: operating-related, and
other (which includes the impact of certain 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). Our key metrics are
operating-related cash flow, which best represents the ability of our Automotive operations to generate cash, and
Automotive gross cash. We believe the cash flow analysis reflected in the table below, which differs from a cash flow
statement presented in accordance with generally accepted accounting principles in the United States ("GAAP"), is useful
to investors because it includes cash flow elements that we consider to be related to our operating activities (e.g., capital
spending) that are not included in Cash flows from operating activities of continuing operations, the most directly
comparable GAAP financial measure.