Held-for-Sale Operations (Notes)

3 Months Ended

Mar. 31, 2020

Held for Sale Operations Automotive Segment [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

HELD-FOR-SALE OPERATIONS

Automotive Segment

In the third quarter of 2019, we committed to a plan to sell specific net assets in our India Automotive operations. We entered into a definitive agreement to form a joint venture with Mahindra & Mahindra Limited (“Mahindra”), with Mahindra owning a 51% controlling stake and Ford owning a 49% stake. Under the terms of the transaction, which is expected to close mid-2020, we will sell certain India Automotive operations to the joint venture. Accordingly, we have reported the assets and liabilities of these operations as held for sale and ceased depreciation and amortization of those assets.

The assets and liabilities of our India Automotive operations classified as held for sale were as follows (in millions):

	December 31, 2019			March 31, 2020
Assets
Trade and other receivables, net	$	269		$	186
Inventories	208			261
Other assets, current	147			96
Net property	279			263
Other assets, non-current	10			9
Total assets of held-for-sale operations	913			815
Less: Intercompany asset balances	(228		)	(151		)
Automotive segment total assets of held-for-sale operations (a)	$	685		$	664
Liabilities
Payables	$	461		$	473
Other liabilities and deferred revenue, current	71			68
Automotive debt payable within one year	90			84
Other liabilities and deferred revenue, non-current	28			25
Total liabilities of held-for-sale operations	650			650
Less: Intercompany liability balances	(169		)	(181		)
Automotive segment total liabilities of held-for-sale operations (a)	$	481		$	469

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(a) As of December 31, 2019 and March 31, 2020, intercompany items and transactions have been eliminated on the consolidated balance sheet. Upon closing, the buyer will assume the intercompany assets and liabilities. Accordingly, we have presented those balances in the table for informational purposes.

NOTE 17. HELD-FOR-SALE OPERATIONS (Continued)

We recognized pre-tax impairment charges of $804 million in 2019 and $3 million in the first quarter of 2020 to adjust the carrying value of the held-for-sale assets to fair value less cost to sell. These charges are reported in Cost of sales. The value is measured on a nonrecurring basis and categorized within Level 3 of the fair value hierarchy. We determined fair value using a market approach, estimated based on expected proceeds to be received, which we conclude is most representative of the value of the assets given the current market conditions, the characteristics of viable market participants, and the pending sales transaction. The transaction is subject to regulatory approvals and satisfaction of other closing conditions that may impact the final proceeds received.

Ford Credit Segment

In the fourth quarter of 2019, Ford Credit committed to a plan to sell its operations in Forso, a wholly owned subsidiary of Ford Credit, which provides retail and dealer financing in Denmark, Finland, Norway, and Sweden. As a result, we classified the assets and liabilities of these operations as held for sale and recognized a pre-tax fair value impairment charge of $20 million, reported in Other income/(loss), net, in the fourth quarter of 2019.

The assets and liabilities of the Forso operations classified as held for sale at December 31, 2019 were as follows (in millions):

	December 31, 2019
Assets
Cash and cash equivalents	$	61
Ford Credit finance receivables, net, current	516
Trade and other receivables, net	8
Other assets, current	106
Ford Credit finance receivables, net, non-current	715
Net property	2
Deferred income taxes	9
Other assets, non-current	1
Total assets of held-for-sale operations	1,418
Less: Intercompany asset balances	(2		)
Ford Credit segment total assets of held-for-sale operations (a)	$	1,416
Liabilities
Payables	$	34
Other liabilities and deferred revenue, current	8
Ford Credit long-term debt	1,254
Deferred income taxes	23
Total liabilities of held-for-sale operations	1,319
Less: Intercompany liability balances	(1,274		)
Ford Credit segment total liabilities of held-for-sale operations (a)	$	45

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(a) As of December 31, 2019, intercompany items and transactions have been eliminated on the consolidated balance sheet. Upon closing, the buyer assumed the intercompany assets and liabilities. Accordingly, we have presented those balances in the table for informational purposes.

On February 28, 2020, Ford Credit completed the sale of Forso recognizing a pre-tax loss of $4 million, reported in Other income/(loss), net, and cash proceeds of $1.3 billion.