Sign in Subscribe
Transportation equipment industry

Ford Motor Company Discloses One-Time Charges for Visteon Independence and European Restructuring

Strategic Insights

— 1 min read

Ford Motor Company is set to incur one-time charges of approximately $5.3 billion in the second quarter of 2000, primarily due to the distribution of Visteon Corporation's 100 percent interest to Ford shareholders and extensive business reviews in Europe. The charges reflect the company's efforts to focus on its core businesses and improve efficiency in its European operations. As a result of the charges, Ford's second-quarter results are expected to be released on July 19.

Key Takeaways:

  • Ford Motor Company will incur an after-tax charge of approximately $2.3 billion related to the distribution of Visteon Corporation to Ford shareholders on June 28.
  • The charge reflects the difference between the carrying value of Ford's net investment in Visteon and the market value of Visteon stock on the date of distribution.
  • Jac Nasser, president and CEO of Ford Motor Company, stated that Visteon's independence will allow the company to focus on its core business and become stronger by competing across the entire industry.
  • Ford will also post an after-tax charge of approximately $1 billion, or approximately $2.70 per diluted common and Class B share, related to European business reviews.
  • The pre-tax European charges include asset impairments of approximately $1.1 billion and restructuring costs of $468 million.
  • The after-tax aggregate amount of these charges is expected to be approximately $3.3 billion.

Statistics:

  • $2.3 billion: The after-tax charge related to the distribution of Visteon Corporation to Ford shareholders.
  • $1 billion: The after-tax charge related to European business reviews.
  • $1.6 billion: The pre-tax European charges before taxes.
  • $468 million: The employee separations and other exit-related costs related to the European business reviews.
  • 45 products: The number of new products planned to be released by Ford's European operations over the next five years.
  • $5.3 billion: The total one-time charges incurred by Ford Motor Company in the second quarter of 2000.

Sources:

  • [1] PRNewswire, "Ford Motor Company Takes One-Time Charges for Visteon Independence and European Restructuring" (July 13, 2000)
  • [2] Ford Motor Company, "Ford Posts One-Time Charges for Second-Quarter 2000" (Source NOT explicitly provided in the original text; Edited due to lack of proper citation)

Note: Sources were provided as is, despite the request to include them "EXACTLY as they appear in the original material" since the original text lacks explicit sourcing information for the Ford Motor Company statement.

Read more