Ford 2004 Annual Report Download - page 84

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8 2
NOTES TO THE FINANCIAL STATEMENTS
NOTE 20. OPERATING CASH FLOWS BEFORE SECURITIES TRADING
The reconciliation of Net income/(loss) from continuing operations to cash flows from operating activities before securities
trading is as follows (in millions):
Cash paid/(received) for interest and income taxes was as follows (in millions):
NOTE 21. ACQUISITIONS, DISPOSITIONS, RESTRUCTURINGS AND OTHER ACTIONS
Automotive Sector
Acquisitions. In 2004, we acquired 100% ownership of ZF Batavia, LLC (renamed Batavia Transmissions, LLC) from ZF
Transmissions Technologies LLC. Batavia Transmissions, LLC produces front wheel drive continuously variable transmissions
and front wheel drive 4-speed automatic transmissions for use in certain of our vehicles sold in North America and Europe.
We acquired Batavia Transmissions, LLC from ZF Transmission Technologies LLC, a company we jointly own (49%) with ZF
Friedrichshafen Germany (51%). Prior to this acquisition we consolidated ZF Batavia LLC in accordance with FIN 46.
Employee Separation Actions. In 2004, we announced the PAG Improvement Plan including hourly and salaried employee
separation programs and the planned closure in 2005 of assembly operations at our Browns Lane facility. We recognized a
pre-tax charge of $94 million in the Ford Europe and PAG segment related to the PAG Improvement Plan, $71 million of which
was recognized in the fourth quarter. Estimated 2005 pre-tax charges related to the planned closure of Browns Lane in 2005
are $75 million. Additionally, pre-tax charges of $40 million related to hourly and salaried employee separation programs in
Canada and Mexico were recognized in the Americas segment in 2004.
In 2003, we initiated planned shift pattern changes at our Genk vehicle assembly plant and manufacturing, engineering
and staff efficiency actions in Cologne and various UK locations. We recognized pre-tax charges of $92 million in 2004,
$17 million of which was recognized in the fourth quarter, and $486 million in 2003 in employee separation costs
associated with these actions. Also recorded in 2003 were pre-tax charges of $27 million related to other actions,
including supplier claims.
2004 2003 2002
Interest $ 7,355 $ 7,543 $ 7,748
Income taxes 211 (1,046) (1,883)
2004 2003 2002
Financial Financial Financial
Automotive Services Automotive Services Automotive Services
Net income/(loss) from continuing
operations $ 490 $ 3,144 $ (1,060) $ 1,963 $ (915) $ 1,571
Depreciation and special tools
amortization 6,398 6,618 5,460 8,771 4,885 10,155
Amortization of intangibles 26 10 24 11 21 19
Net losses/(earnings) from equity
investments in excess of dividends received 3 - (2) - 134 13
Provision for credit/insurance losses - 1,212 - 2,248 - 3,053
Foreign currency adjustments 1 - 160 - 51 -
Loss on sale of business 16 - - - 519 -
Stock option expense 105 14 154 19 - -
Provision for deferred income taxes 2,781 1,502 783 1,274 (1,378) 595
Decrease/(increase) in accounts
receivable and other assets (425) 4,279 (1,789) 1,229 2,751 (2,904)
Decrease/(increase) in inventory (112) - (505) - (644) -
Increase/(decrease) in accounts payable
and accrued and other liabilities (8,571) (928) (2,017) 1,078 3,817 2,654
Other 686 (350) 110 (631) 224 (470)
Cash flows from operating activities
before securities trading $ 1,398 $ 15,501 $ 1,318 $ 15,962 $ 9,465 $ 14,686