Summary
Ford Motor Company announced the completion of the sale of its wholly-owned subsidiary, The Hertz Corporation, on December 21, 2005, to CCMG Holdings, Inc., an investor group. This strategic divestiture generated $5.6 billion in cash for Ford. While the sale is expected to result in a pre-tax gain of approximately $1.1 billion to $1.3 billion, Ford provided $200 million in cash-collateralized letters of credit to support the buyer's financing, which will reduce the recognized gain. The filing also includes pro forma financial statements illustrating Ford's financial position and results of operations as if the Hertz sale had occurred earlier, allowing investors to better assess the ongoing business performance.
Key Highlights
- 1Ford Motor Company completed the sale of its subsidiary, The Hertz Corporation, on December 21, 2005.
- 2The sale generated $5.6 billion in cash proceeds for Ford.
- 3A pre-tax gain on the sale is estimated to be between $1.1 billion and $1.3 billion.
- 4Ford provided $200 million in cash-collateralized letters of credit to support the buyer's financing, reducing the net gain.
- 5The value of these letters of credit is estimated at $27 million.
- 6The filing includes pro forma financial statements that remove Hertz's operations to show Ford's standalone performance.
- 7These pro forma statements present income for the nine months ended September 30, 2005, and the year ended December 31, 2004, and a balance sheet as of September 30, 2005.