Summary
Ford Motor Company filed an 8-K on August 2, 2006, to revise its second quarter 2006 financial results and provide updated full-year projections. The company announced an increased net loss for the second quarter, revised from $123 million to $254 million (or $0.07 to $0.14 per share). This revision is primarily due to higher estimates for pension curtailment losses and other subsequent events affecting conditions as of the balance sheet date. Further impacting its outlook, Ford now anticipates its full-year 2006 pension curtailment expense to reach $1.2 billion, an increase from the prior $1 billion estimate, with total special items projected at $3.8 billion for the year. Additionally, the company expects its Premier Automotive Group (PAG) operating segment to be unprofitable for 2006, a change from its previous projection of near breakeven profitability.
Key Highlights
- 1Ford revised its Q2 2006 net loss to $254 million ($0.14/share), up from a previously reported $123 million ($0.07/share).
- 2The increase in Q2 loss is attributed to higher pension curtailment loss estimates and subsequent events.
- 3Full-year 2006 pension curtailment expense is now projected at $1.2 billion, increased from $1 billion.
- 4Total special items for full-year 2006 are projected to be $3.8 billion.
- 5The Premier Automotive Group (PAG) operating segment is now expected to be unprofitable for 2006, a negative revision from prior breakeven expectations.
- 6Ford plans to shift approximately $3 billion of its retiree VEBA assets into shorter-duration fixed income investments to better facilitate benefit payments.