Ford 2006 Annual Report Download - page 87

85
Notes to the Financial Statements
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NOTE 19. DISCONTINUED OPERATIONS, HELD-FOR-SALE OPERATIONS, OTHER DISPOSITIONS, AND
ACQUISITIONS (Continued)
In 2004, we completed the sale of AMI Leasing and Fleet Management Services, our operation in the United States
that offered full service car and truck leasing.
The results of all discontinued Financial Services sector operations are as follows (in millions):
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At December 31, 2006 and 2005, there were no significant assets or liabilities remaining on our balance sheet related
to discontinued operations.
Held-for-Sale Operations. In 2005, we sold our 100% ownership interest in Hertz as it is not core to our Automotive
business. As part of the transaction, we provided cash-collateralized letters of credit in an aggregate amount of
$200 million to support the asset-backed portion of the buyer's financing for the transaction. These letters of credit will
expire no later than December 21, 2011. As a result of the sale, we recognized in Gain on sale of Hertz, a pre-tax gain of
$1.1 billion, inclusive of $27 million of charges to record the 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 power is vested in the holders of Common Stock and Class B Stock. Holders of Common Stock
have 60% of the general voting power and holders of Class B Stock are entitled to such number of votes per share as will
give them the remaining 40%. Shares of Common Stock and Class B Stock share equally in dividends, with stock
dividends payable in shares of stock of the class held. As discussed in Note 15, we are prohibited from paying dividends
(other than dividends payable in stock) under the terms of the Credit Agreement.
If liquidated, each share of Common Stock will be entitled to the first $0.50 available for distribution to holders of
Common Stock and Class B Stock, each share of Class B Stock will be entitled to the next $1.00 so available, each share
of Common Stock will be entitled to the next $0.50 so available and each share of Common and Class B Stock will be
entitled to an equal amount thereafter.
As discussed in Note 15, Convertible Notes with a principal amount of $4.95 billion are outstanding. At the option of
the holder, each Convertible Note is convertible at any time on or before December 15, 2036, into shares of our Common
Stock at a rate of 108.6957 shares per $1,000 principal amount of Convertible Notes (equivalent to a conversion price of
$9.20 per share). Conversion of all shares of such Convertible Notes would result in the issuance of 538 million shares of
our Common Stock.
As discussed in Note 15, Trust II Preferred Securities with an aggregate liquidation preference of $5 billion are
outstanding. At the option of the holder, each Preferred Security is convertible, at any time on or before
January 15, 2032, into shares of our Common Stock at a rate of 2.8249 shares for each Preferred Security (equivalent to
a conversion price of $17.70 per share). Conversion of all shares of such securities would result in the issuance of
282 million shares of our Common Stock.