DETROIT -- Ford Motor Co. -- signaling its financial recovery is gaining traction, including $6.6 billion in profits so far this year -- said today its board approved the reinstatement of a quarterly cash dividend of 5 cents a share.
The dividend will cost Ford about $200 million each quarter.
Amid ongoing financial losses, Ford suspended its dividend of 5 cents a share in September 2006 to preserve cash.
The automaker's North American automotive operations had racked up $9 billion in losses over the five years prior to 2006.
"We have made tremendous progress in reducing debt and generating consistent positive earnings and cash flow," Bill Ford, executive chairman of Ford, said in a statement. "The board believes it is important to share the benefits of our improved financial performance with our shareholders."
After posting $30.1 billion in losses from 2006 through 2008, Ford has generated profits for 10 consecutive quarters now, including $1.65 billion in net earnings during the third quarter this year.
At the end of the third quarter, Ford's automotive liquidity stood at $31 billion.
Ford -- which borrowed $23.6 billion in 2006 to finance a turnaround and later used the funds to stay afloat during the recession -- has reduced debt by $13.7 billion since the end of the third quarter of 2010.
It reported $12.7 billion in debt and $20.8 billion in gross cash at the end of the third quarter.
Lewis Booth, Ford's CFO, said the automaker's strong liquidity and improved balance sheet will support the new dividend payment. He first signaled the resumption of the dividend in September.
"We have demonstrated our capability to finance our plans and we are confident that we can begin to pay a dividend that will be sustainable through economic cycles," Booth said in a statement.
Ford previously said it would not resume dividend payouts until its credit rating was raised to investment grade. That position changed in October.
S&P and Moody's lowered Ford's credit rating to non-investment grade in 2005.
Citing improved financial results and the automaker's new labor contract with the UAW, the agencies have recently raised the automaker's credit rating one notch below investment grade.
S&P said today the annual dividend is less than the minimum $2 billion it assumes Ford will generate in automotive operating cash flow -- before any dividend payouts -- in each of the next few years
The agency also said the dividend will have no impact on Ford's rating but noted "that prospects are growing for weaker industry sales in Europe and slower growth in other large markets such as Brazil."
The drop in European sales and lower growth elsewhere "could dampen cash flow prospects for operations outside North America," the agency said.
Ford said the dividend is payable on March 1, 2012, to Class B and common shareholders of record on Jan. 31, 2012.
At 4 p.m. ET, Ford shares traded at $10.75 each, down 33 cents, or 3 percent, in New York Stock Exchange trading.