23rd Oct 2006 14:19
Ford Motor Co23 October 2006 Contact: Media: Equity Investment Fixed Income Shareholder Inquiries: Becky Sanch Community: Investment Community: 1.800.555.5259 or 1.313.594.4410 Raj Modi Rob Moeller 1.313.845.8540 [email protected] 1.313.323.8221 1.313.621.0881 [email protected] [email protected] [email protected] Editor's note: The following is one of two related press releases Ford MotorCompany is issuing today. Please also refer to the release entitled: "FORDREPORTS PRELIMINARY THIRD QUARTER 2006 FINANCIAL RESULTS." FORD TO RESTATE RESULTS SINCE 2001 FOR ACCOUNTING UNDER SFAS 133 DEARBORN, Mich., Oct. 23, 2006 - Ford Motor Company (NYSE: F) today announced itplans to restate previous financial results from 2001 through the second quarterof 2006 to correct the accounting for certain derivative transactions under theStatement of Financial Accounting Standards (SFAS) 133, Accounting for Derivative Instruments and Hedging Activities. The correction to the accounting does not affect the economics of the derivativetransactions, nor have any impact on the company's cash. However, therestatements are expected to affect the preliminary financial results Fordannounced today for its 2006 third quarter. The company expects to finalizerestatement amounts for the current period and all previous periods by the timeof the filing of its Quarterly Report on Form 10-Q for the quarter ended Sept.30, 2006. (For full details regarding Ford's preliminary results for the 2006third quarter, please see press release entitled, "FORD REPORTS PRELIMINARYTHIRD QUARTER 2006 FINANCIAL RESULTS.") Ford discovered that since 2001, certain interest rate swaps Ford Motor CreditCompany had entered into to hedge the interest rate risk inherent in certainlong-term fixed rate debt were accounted for incorrectly under SFAS 133 becausethey did not satisfy the standard's technical accounting rules to qualify forexemption from the more strict effectiveness testing requirements. Ford MotorCredit Company uses transactions involving derivatives, including swaps,forwards and options, to reduce economic risk and volatility in a disciplinedand defensive manner. PricewaterhouseCoopers LLP, the company's independentregistered public accounting firm, audited Ford's 2001 through 2005 financialstatements, which included a review of these swaps. "This is a very complicated accounting standard, and interpretation of itsproper application has continued to evolve," said Executive Vice President andChief Financial Officer Don Leclair. "Our overall hedging strategy is sound. Wewill correct our accounting for these types of derivative instruments. We remaincommitted to strong internal controls and reporting transparency." Ford Motor Credit Company's interest rate swaps were entered into as part of theunit's asset-liability management strategy. The swaps economically hedge theinterest rate risk associated with long-term debt issuances. Although the finalrestatement amounts have not yet been determined, we estimate based on theinformation to date that Ford and Ford Motor Credit Company's results in 2002will improve materially. Other periods are still under study. About Ford Motor Company Ford Motor Company, a global automotive industry leader based in Dearborn,Mich., manufactures and distributes automobiles in 200 markets across sixcontinents. With about 300,000 employees and 108 plants worldwide, the company'score and affiliated automotive brands include Aston Martin, Ford, Jaguar, LandRover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related servicesinclude Ford Motor Credit Company. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
FDM Group