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Presentation (Notes)
 12 Months Ended
Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
PRESENTATION
PRESENTATION

For purposes of this report, “Ford,” the “Company,” “we,” “our,” “us”, or similar references mean Ford Motor Company, our consolidated subsidiaries, and our consolidated VIEs of which we are the primary beneficiary, unless the context requires otherwise.

We prepare our financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). We present the financial statements on both a consolidated basis and on a sector basis for our Automotive and Financial Services sectors. The additional information provided in the sector statements enables the reader to better understand the operating performance, financial position, cash flows, and liquidity of our two very different businesses. We eliminate all intercompany items in the consolidated and sector balance sheets. In certain circumstances, presentation of these intercompany eliminations or consolidated adjustments differ between the consolidated and sector financial statements. These line items are reconciled below under “Reconciliations between Consolidated and Sector Financial Statements” or in the related financial statements and footnotes.

We reclassified certain prior year amounts in our consolidated financial statements to conform to current year presentation.

Change in Accounting

Pension and Other Postretirement Employee Benefits (“OPEB”). On December 31, 2015, we adopted a change in accounting method for certain components of expense related to our defined benefit pension and OPEB plans. Under the new method, we recognize remeasurement gains and losses immediately in net income and use fair value to calculate the expected return on plan assets. Historically, we recognized remeasurement gains and losses as a component of Accumulated other comprehensive income/(loss) and amortized them as a component of net periodic benefit cost, subject to a corridor, over the remaining service period of our active employees. In addition, we previously used a market-related value of plan assets that recognized changes in fair value over time to calculate the expected return on plan assets.

We believe this change in accounting method is preferable as it better recognizes the current performance of our pension and OPEB plans in our net income in the year incurred. Additionally, our segment reporting shown in Note 24 now provides better transparency into the underlying operating results of Ford’s Automotive business units. We have retrospectively applied this change in accounting method to all prior periods. As of January 1, 2013, the cumulative effect of the change resulted in a decrease of $18 billion in Retained earnings and an increase of $18 billion in Accumulated other comprehensive income/(loss), both components of total equity in our consolidated and sector balance sheets.

NOTE 1.  PRESENTATION (Continued)
The effect of the change related to our defined benefit pension and OPEB plans on our consolidated financial statements at December 31 was as follows (in millions, except per share amounts):
 
2015
 
2014
 
2013
 
Effect of Change
Higher/(Lower)
 
As
Revised
 
Previously Reported
 
Effect of Change
Higher/(Lower)
 
As
Revised
 
Previously Reported
 
Effect of Change
Higher/(Lower)
Income statement
 
 
 
 
 
 
 
 
 
 
 
 
 
Automotive cost of sales
$
(581
)
 
$
125,025

 
$
123,516

 
$
1,509

 
$
120,190

 
$
125,195

 
$
(5,005
)
Selling, administrative, and other expenses
(337
)
 
15,716

 
14,117

 
1,599

 
10,850

 
13,176

 
(2,326
)
Income before income taxes
918

 
1,234

 
4,342

 
(3,108
)
 
14,371

 
7,040

 
7,331

Provision for/(Benefit from) income taxes
293

 
4

 
1,156

 
(1,152
)
 
2,425

 
(135
)
 
2,560

Net income
625

 
1,230

 
3,186

 
(1,956
)
 
11,946

 
7,175

 
4,771

Net income attributable to Ford Motor Company
625

 
1,231

 
3,187

 
(1,956
)
 
11,953

 
7,182

 
4,771

Basic earnings per share attributable to Ford Motor Company
0.16

 
0.31

 
0.81

 
(0.50
)
 
3.04

 
1.83

 
1.21

Diluted earnings per share attributable to Ford Motor Company
0.15

 
0.31

 
0.80

 
(0.49
)
 
2.94

 
1.77

 
1.17


 
2015
 
2014
 
Effect of Change
Higher/
(Lower)
 
As
Revised
 
Previously Reported
 
Effect of Change
Higher/
(Lower)
Balance sheet
 
 
 
 
 
 
 
Inventories
$
(61
)
 
$
7,870

 
$
7,866

 
$
4

Deferred income taxes, net
79

 
13,454

 
13,069

 
385

Other assets
—

 
6,052

 
6,353

 
(301
)
Other liabilities and deferred revenue
2

 
44,032

 
43,577

 
455

Retained earnings/(Accumulated deficit)
(14,509
)
 
9,422

 
24,556

 
(15,134
)
Accumulated other comprehensive income/(loss)
14,525

 
(5,265
)
 
(20,032
)
 
14,767


 
2015
 
2014
 
2013
 
Effect of Change
Higher/(Lower)
 
As
Revised
 
Previously Reported
 
Effect of Change
Higher/(Lower)
 
As
Revised
 
Previously Reported
 
Effect of Change
Higher/(Lower)
Cash flows from operating activities
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
625

 
$
1,230

 
$
3,186

 
$
(1,956
)
 
$
11,946

 
$
7,175

 
$
4,771

Pension and OPEB expense
(997
)
 
4,429

 
1,249

 
3,180

 
(4,930
)
 
2,543

 
(7,473
)
Provision for deferred income taxes
293

 
(94
)
 
1,063

 
(1,157
)
 
1,585

 
(848
)
 
2,433

Decrease/(Increase) in accounts receivable and other assets
—

 
(2,896
)
 
(2,897
)
 
1

 
(1,913
)
 
(2,040
)
 
127

Decrease/(Increase) in inventory
65

 
(936
)
 
(875
)
 
(61
)
 
(437
)
 
(572
)
 
135

Increase/(Decrease) in accounts payable and accrued and other liabilities
14

 
5,729

 
5,734

 
(5
)
 
1,232

 
1,231

 
1

Other
—

 
(467
)
 
(465
)
 
(2
)
 
(706
)
 
(712
)
 
6



Total cash flows from operating activities was unchanged.
NOTE 1.  PRESENTATION (Continued)

In the first quarter of 2015, we recorded a $782 million adjustment to correct for an understatement in the year-end 2014 valuation of our U.S. pension benefit obligation. The adjustment reduced Other assets by $301 million and increased Other liabilities and deferred revenue by $481 million. The resulting after-tax adjustment to Other comprehensive income was a loss of $508 million. We originally determined this adjustment to be immaterial to our current or prior period financial statements. As a result of the change in accounting described above and the retrospective application to 2014, this after-tax loss is now reported in the revised 2014 Net income and also reflected in the related balance sheet amounts as of December 31, 2014.

Reconciliations between Consolidated and Sector Financial Statements

Sector to Consolidated Deferred Tax Assets and Liabilities. The difference between the total assets and total liabilities as presented on our sector balance sheet and consolidated balance sheet is the result of netting deferred income tax assets and liabilities. The reconciliation between the totals for the sector and consolidated balance sheets at December 31 was as follows (in millions):
 
2015
 
2014
Sector balance sheet presentation of deferred income tax assets
 
 
 
Automotive sector current deferred income tax assets
$
3,664

 
$
2,050

Automotive sector non-current deferred income tax assets
10,687

 
13,705

Financial Services sector deferred income tax assets (a)
135

 
185

Total
14,486

 
15,940

Reclassification for netting of deferred income taxes
(2,977
)
 
(1,916
)
Consolidated balance sheet presentation of deferred income tax assets
$
11,509

 
$
14,024

 
 
 
 
Sector balance sheet presentation of deferred income tax liabilities
 

 
 

Automotive sector current deferred income tax liabilities
$
13

 
$
270

Automotive sector non-current deferred income tax liabilities
287

 
367

Financial Services sector deferred income tax liabilities
3,179

 
1,849

Total
3,479

 
2,486

Reclassification for netting of deferred income taxes
(2,977
)
 
(1,916
)
Consolidated balance sheet presentation of deferred income tax liabilities
$
502

 
$
570

__________
(a)
Included in Financial Services Other assets on our sector balance sheet.

Certain Transactions Between Automotive and Financial Services Sectors

Intersector transactions occur in the ordinary course of business. Additional detail regarding certain transactions and the effect on each sector’s balance sheet at December 31 was as follows (in billions):
 
2015
 
2014
 
Automotive
 
Financial
Services
 
Automotive
 
Financial
Services
Finance receivables, net (a)
 
 
$
5.4

 
 
 
$
5.0

Unearned interest supplements and residual support (b)
 
 
(4.5
)
 
 
 
(3.9
)
Wholesale/Other receivables (c)
 
 
0.8

 
 
 
0.8

Net investment in operating leases (d)
 
 
0.7

 
 
 
0.6

Intersector receivables/(payables) (e)
$
(1.1
)
 
1.1

 
$
—

 
—

__________
(a)
Automotive sector receivables (generated primarily from vehicle and parts sales to third parties) sold to Ford Motor Credit Company LLC (“Ford Credit”).  These receivables are classified as Other receivables, net on our consolidated balance sheet and Finance receivables, net on our sector balance sheet.
(b)
We pay amounts to Ford Credit at the point of retail financing or lease origination that represent interest supplements and residual support.
(c)
Primarily wholesale receivables with entities that are consolidated subsidiaries of Ford.  
(d)
Sale-leaseback agreement between Automotive and Financial Services sectors relating to vehicles that we lease to our employees.
(e)
Reflects amounts owed to the Financial Services sector by Automotive sector (these amounts include the balances related to the Wholesale/Other receivables described above).