RECENT DEVELOPMENTS
The impact of COVID-19 has created significant volatility in the global economy and led to reduced economic activity. There have been extraordinary actions taken by international, federal, state, and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19 in regions throughout the world, including travel bans, quarantines, "stay-at-home" orders, and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. Although restrictions have been eased in many locations, some areas that had previously eased restrictions have reverted to more stringent limitations on daily activities, which presently includes areas withinMexico andEurope .
Remote Work Arrangements and Resumption of Manufacturing Operations
The remote work arrangements that we implemented earlier this year remain in place in most locations. Our remote work arrangements have been designed to allow for continued operation of non-production business-critical functions, including financial reporting systems and internal control. Our controls and procedures have incorporated remote work arrangements using appropriate digital tools. A successful phased restart of our manufacturing plants, supply network, and other dependent functions occurred in the second quarter of 2020. In significant regions, we have returned to pre-COVID-19 production levels.
Liquidity
We ended the third quarter of 2020 with
Enhanced Safety Standards
When we returned to work, we established new protocols to help protect the health and safety of our workforce. Those measures remain in place today, including a daily, online health self-certification, a no-touch temperature scan upon entering our facilities, a policy requiring the use of face masks in our facilities, and measures to provide additional personal protective equipment, including face shields, when employees' jobs do not allow them to socially distance. We have also enhanced our cleaning protocols and adjusted our operating patterns and breaks to reduce potential employee interaction where possible.Medical Supplies We continue to produce medical masks for our employees and dealers. In addition, we have donated 25 million medical-grade face masks to communities in need acrossthe United States , a quarter of the way to reaching our goal of donating 100 million masks through 2021.
Forward Looking Information
The full impact of COVID-19 on future results depends on future developments, such as the ultimate duration and scope of the outbreak, its impact on our customers, dealers, and suppliers, and the rate at which economic conditions return to pre-COVID-19 levels. Despite the successful restart of our manufacturing operations in the second quarter of 2020 and the strong results we delivered in the third quarter of 2020, we expect our full year 2020 results of operations to be adversely affected by COVID-19. Moreover, new restrictions, such as those that are presently in effect inMexico andEurope , could have an adverse effect on production, supply chains, distribution, and demand for vehicles. For additional information on the impact and potential impact of COVID-19 on us, please see Item 1A. Risk Factors on page 74. 36
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
RESULTS OF OPERATIONS
In the third quarter of 2020, the net income attributable to
Net income/(loss) includes certain items ("special items") that are excluded from Company adjusted EBIT. These items are discussed in more detail in Note 20 of the Notes to the Financial Statements. We report special items separately to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results. Our pre-tax and tax special items were as follows (in millions): Third Quarter First Nine Months 2019 2020 2019 2020 Global Redesign Europe excl. Russia$ (215) $ (211) $ (1,039) $ (410) India (799) (3) (799) (21) South America (43) (52) (479) (70) Russia 24 1 (358) 18 China - (3) (2) (9) Separations and Other (not included above) (10) - (91) (1) Subtotal Global Redesign$ (1,043) $ (268) $ (2,768) $ (493) Other Items Gain on transaction with Argo AI and VW $ - $ - $ -$ 3,454 Other incl. Focus Cancellation, Transit Connect Customs Ruling, North America Hourly Buyouts, and Chariot (a) (187) (20) (270) (226) Subtotal Other Items$ (187) $ (20) $ (270) $ 3,228 Pension and OPEB Gain/(Loss) Pension and OPEB remeasurement$ (306) $ (54) $ (295) $ 116 Pension settlements and curtailments - (48) - (48)
Subtotal Pension and OPEB Gain/(Loss)
$ (295) $ 68 Total EBIT Special Items$ (1,536) $ (390)
Cash effect of Global Redesign (incl. separations)$ (334) $ (105) $ (692) $ (376) Tax special items (b)$ 605 $ 159 $ 828 $ (1,583) __________ (a)Transit Connect impact of$187 million was accrued in the third quarter of 2019 and paid in the second half of 2020. (b)Includes related tax effect on special items and tax special items.
We recorded
In Note 20 of the Notes to the Financial Statements, special items are reflected as a separate reconciling item, as opposed to being allocated among the Automotive, Mobility, andFord Credit segments. This reflects the fact that management excludes these items from its review of operating segment results for purposes of measuring segment profitability and allocating resources. 37
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