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Ford Motor Company Annual Report 2005 86 Ford Motor Company Annual Report 2005 87
Notes to the Financial Statements
NOTE 21. OPERATING CASH FLOWS (Continued)
The reconciliation between total sector and consolidated cash flows from continuing operations is as follows (in millions):
Revised-See Note 1
2005 2004 2003
Sum of sector cash flows of continuing operations from operating activities .... $ 14,820 $22,561 $19,410
Reclassification of wholesale receivable cash flows from investing to
operating for consolidated presentation............................................................. 7,290 2,001 (2,154)
Reclassification relating to sale of vehicles to Hertz and related auction
proceeds for consolidated presentation.............................................................. (436) — —
Consolidated cash flows of continuing operations from operating activities ..... $ 21,674 $24,562 $17,256
Cash paid/(received) for interest and income taxes for continuing operations was as follows (in millions):
2005 2004 2003
Interest.............................................................................................................................................................................. $ 7,825 $ 7,355 $ 7,543
Income taxes..................................................................................................................................................................... 382 211 (1,046)
NOTE 22. EXIT AND DISPOSAL ACTIVITIES AND OTHER ACTIONS
Automotive Sector
Exit and disposal activities. In 2004, we announced the PAG Improvement Plan including hourly and salaried employee
separation programs and the planned closure of assembly operations at our Browns Lane facility. Associated with these actions,
we recognized a pre-tax charge (excluding pension costs) of $64 million in 2004 and approximately $35 million at
December 31, 2005, of which $5 million was incurred in the fourth quarter 2005. The plan is expected to be completed in 2006.
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 United Kingdom locations. Associated with these actions, we recognized pre-tax
charge of $486 million in 2003 and $92 million in 2004. These actions are expected to be completed in several years.
The charges for employee separation actions were recognized in Cost of sales. The table below summarizes the pre-tax
charges incurred in 2005 for the employee separation actions described above, the related liability at December 31, 2005 and the
estimated total charges related to these actions (in millions):
Segment
Liability at
December 31,
2004
Accrued in
2005
Paid in
2005 Other*
Liability at
December 31,
2005
Estimated
Total Costs
Ford Europe and PAG........................................................................... $ 139 $ 35 $ (122) $ (40) $ 12 $ 774
__________
* Includes foreign currency translation adjustments and reductions to accrued amounts resulting from revisions to estimated liabilities.
Other Employee Separation Actions. In the second quarter of 2005, we announced our plans to reduce salaried positions in our
Ford North America business unit. We have incurred approximately $148 million of pre-tax charges related to these actions
through December 31, 2005, of which approximately $65 million was incurred in the fourth quarter of 2005. In addition,
approximately $88 million of pre-tax charges were incurred in the fourth quarter for hourly separations of which approximately
$62 million was related to ACH.
During the third quarter of 2005, our Ford Europe and PAG segment initiated hourly and salaried employee separation actions
resulting in pre-tax charges of approximately $360 million, of which approximately $334 million was incurred in the fourth
quarter.
During the fourth quarter of 2005, our Ford Asia Pacific and Africa business unit initiated hourly and salaried employee
separation actions resulting in pre-tax charges of approximately $32 million.
See Note 23 for employee separation costs related to pension, postretirement health care and life insurance benefits.