Cash, Cash Equivalents, and Marketable Securities (Notes)

3 Months Ended

Mar. 31, 2020

Cash, Cash Equivalents, and Marketable Securities [Abstract]

Cash, Cash Equivalents, and Marketable Securities [Text Block]

CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES

Cash Equivalents

Cash and cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal. A debt security is classified as a cash equivalent if it meets these criteria and if it has a remaining time to maturity of three months or less from the date of acquisition. Amounts on deposit and available upon demand, or negotiated to provide for daily liquidity without penalty, are classified as cash and cash equivalents. Time deposits, certificates of deposit, and money market accounts that meet the above criteria are reported at par value on our consolidated balance sheet.

Marketable Securities

Investments in securities with a maturity date greater than three months at the date of purchase, and other securities for which there is more than an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal, are classified as marketable securities.

Realized gains and losses and interest income on all of our marketable securities and unrealized gains and losses on securities not classified as available for sale are recorded in Other income/(loss), net. Unrealized gains and losses on available-for-sale securities are recognized in Unrealized gains and losses on securities, a component of Other comprehensive income/(loss), net of tax. Realized gains and losses and reclassifications of accumulated other comprehensive income into net income are measured using the specific identification method.

On a quarterly basis, we review our available-for-sale securities for credit losses. We compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, we determine if a credit loss allowance is necessary. If a credit loss allowance is necessary, we will record an allowance, limited by the amount that fair value is less than the amortized cost basis, and recognize the corresponding charge in Other income/(loss), net. Factors we consider to make such determination include the severity of the impairment, the reason for the decline in value, interest rate changes, and counterparty long-term ratings.

NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)

The fair values of cash, cash equivalents, and marketable securities measured at fair value on a recurring basis were as follows (in millions):

		December 31, 2019
	Fair Value Level	Automotive		Mobility		Ford Credit		Consolidated
Cash and cash equivalents
U.S. government	1	$	520	$	—	$	—	$	520
U.S. government agencies	2	125		—		—		125
Non-U.S. government and agencies	2	601		—		350		951
Corporate debt	2	642		—		604		1,246
Total marketable securities classified as cash equivalents		1,888		—		954		2,842
Cash, time deposits, and money market funds		6,432		117		8,113		14,662
Total cash and cash equivalents		$	8,320	$	117	$	9,067	$	17,504
Marketable securities
U.S. government	1	$	2,930	$	—	$	195	$	3,125
U.S. government agencies	2	1,548		—		210		1,758
Non-U.S. government and agencies	2	4,217		—		2,408		6,625
Corporate debt	2	4,802		—		193		4,995
Equities (a)	1	81		—		—		81
Other marketable securities	2	273		—		290		563
Total marketable securities		$	13,851	$	—	$	3,296	$	17,147
Restricted cash		$	15	$	21	$	139	$	175
Cash, cash equivalents, and restricted cash in held-for-sale assets		$	—	$	—	$	62	$	62
		March 31, 2020
	Fair Value Level	Automotive		Mobility		Ford Credit		Consolidated
Cash and cash equivalents
U.S. government	1	$	3,150	$	—	$	825	$	3,975
U.S. government agencies	2	3,024		—		200		3,224
Non-U.S. government and agencies	2	795		—		378		1,173
Corporate debt	2	480		—		598		1,078
Total marketable securities classified as cash equivalents		7,449		—		2,001		9,450
Cash, time deposits, and money market funds		8,799		95		7,627		16,521
Total cash and cash equivalents		$	16,248	$	95	$	9,628	$	25,971
Marketable securities
U.S. government	1	$	4,772	$	—	$	294	$	5,066
U.S. government agencies	2	3,985		—		160		4,145
Non-U.S. government and agencies	2	3,787		—		1,520		5,307
Corporate debt	2	5,094		—		199		5,293
Equities (a)	1	41		—		—		41
Other marketable securities	2	267		—		280		547
Total marketable securities		$	17,946	$	—	$	2,453	$	20,399
Restricted cash		$	18	$	21	$	150	$	189
Cash, cash equivalents, and restricted cash in held-for-sale assets		$	—	$	—	$	—	$	—

__________

(a) Net unrealized gains/losses incurred during the reporting periods on equity securities still held at December 31, 2019 and March 31, 2020 were a $44 million loss and a $38 million loss, respectively.

NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)

The cash equivalents and marketable securities accounted for as available-for-sale (“AFS”) securities were as follows (in millions):

	December 31, 2019
										Fair Value of Securities with Contractual Maturities
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Within 1 Year		After 1 Year through 5 Years		After 5 Years
Automotive
U.S. government	$	2,839	$	11	$	(1	)	$	2,849	$	1,028	$	1,772	$	49
U.S. government agencies	1,445		2		(1		)	1,446		830		589		27
Non-U.S. government and agencies	3,925		20		(1		)	3,944		1,546		2,398		—
Corporate debt	5,029		53		—			5,082		1,837		3,245		—
Other marketable securities	230		1		—			231		—		149		82
Total	$	13,468	$	87	$	(3	)	$	13,552	$	5,241	$	8,153	$	158
	March 31, 2020
										Fair Value of Securities with Contractual Maturities
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Within 1 Year		After 1 Year through 5 Years		After 5 Years
Automotive
U.S. government	$	2,598	$	71	$	—		$	2,669	$	574	$	2,033	$	62
U.S. government agencies	1,329		14		—			1,343		444		822		77
Non-U.S. government and agencies	3,625		55		(1		)	3,679		1,594		2,085		—
Corporate debt	5,197		23		(55		)	5,165		1,845		3,293		27
Other marketable securities	227		—		(4		)	223		—		153		70
Total	$	12,976	$	163	$	(60	)	$	13,079	$	4,457	$	8,386	$	236

Sales proceeds and gross realized gains/losses from the sale of AFS securities for the periods ended March 31 were as follows (in millions):

	First Quarter
	2019		2020
Automotive
Sales proceeds	$	1,142	$	1,865
Gross realized gains	2		7
Gross realized losses	5		7

NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)

The present fair values and gross unrealized losses for cash equivalents and marketable securities accounted for as AFS securities that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position, were as follows (in millions):

	December 31, 2019
	Less than 1 Year					1 Year or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Automotive
U.S. government	$	183	$	(1	)	$	50	$	—		$	233	$	(1	)
U.S. government agencies	370		(1		)	344		—			714		(1		)
Non-U.S. government and agencies	463		—			390		(1		)	853		(1		)
Corporate debt	29		—			53		—			82		—
Other marketable securities	59		—			17		—			76		—
Total	$	1,104	$	(2	)	$	854	$	(1	)	$	1,958	$	(3	)
	March 31, 2020
	Less than 1 Year					1 Year or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Automotive
U.S. government	$	—	$	—		$	—	$	—		$	—	$	—
U.S. government agencies	70		—			42		—			112		—
Non-U.S. government and agencies	377		(1		)	25		—			402		(1		)
Corporate debt	2,023		(54		)	24		(1		)	2,047		(55		)
Other marketable securities	160		(3		)	20		(1		)	180		(4		)
Total	$	2,630	$	(58	)	$	111	$	(2	)	$	2,741	$	(60	)

We determine credit losses on cash equivalents and marketable securities using the specific identification method. During the first quarter of 2020, we did not recognize any credit loss. The unrealized losses on securities are due to changes in interest rates and market liquidity.

Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash, as reported in the consolidated statement of cash flows, were as follows (in millions):

	December 31, 2019		March 31, 2020
Cash and cash equivalents	$	17,504	$	25,971
Restricted cash (a)	175		189
Cash, cash equivalents, and restricted cash in held-for-sale assets	62		—
Total cash, cash equivalents, and restricted cash	$	17,741	$	26,160

__________

(a)

Included in Other assets in the non-current assets section of our consolidated balance sheet.