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Notes to the Financial Statements
158 Ford Motor Company | 2010 Annual Report
NOTE 24. HELD-FOR-SALE OPERATIONS, DISCONTINUED OPERATIONS, OTHER DISPOSITIONS, AND
ACQUISITIONS (Continued)
Automotive Sector
Held-for-Sale Operations
As previously disclosed, in recent years we have undertaken efforts to divest non-core assets to allow us to focus on
our global Ford brand. During the first quarter of 2009, based on our strategic review of Volvo and in light of our goal to
focus on the global Ford brand, our Board of Directors committed to market Volvo actively for sale. Accordingly, in the
first quarter of 2009 we reported Volvo as held for sale and we ceased depreciation of its long-lived assets in the second
quarter of 2009.
Our commitment to market Volvo actively for sale also triggered a held-for-sale impairment test in the first quarter of
2009. We received information from our discussions with potential buyers that provided us a value for Volvo using a
market approach, rather than an income approach. We concluded that the information we received from our discussions
with potential buyers was representative of the value of Volvo given the current market conditions, the characteristics of
viable market participants, and our anticipation of a sales transaction for Volvo. These inputs resulted in a lower value for
Volvo than the discounted cash flow method we had used in previous impairment testing.
In the first quarter of 2009, after considering deferred gains reported in Accumulated other comprehensive
income/(loss), we recognized a pre-tax impairment charge of $650 million related to our total investment in Volvo. The
impairment was recorded in Automotive cost of sales.
On March 28, 2010, we entered into a definitive agreement to sell Volvo and related assets to Zhejiang Geely Holding
Group Company Limited ("Geely").
As part of the agreement with Geely, we continue to supply Volvo with, for differing periods, powertrains, stampings
and other vehicle components. Volvo will continue to supply engines, stampings and other components to us for a period
of time. We also committed to provide certain engineering support, information technology, access to tooling for common
components, accounting and other selected services for a transition period to ensure a smooth separation process. Due
to our continued involvement with Volvo after separation, we have not classified Volvo as a discontinued operation.
The assets and liabilities of Volvo that were classified as held for sale are as follows (in millions):
August 2
August 2August 2
August 2,
,,,
2010
20102010
2010
December 31,
December 31, December 31,
December 31,
2009
20092009
2009
Assets
AssetsAssets
Assets
Cash and cash equivalents ................................................................................................
................................
$ 456 $ —
Receivables ................................................................................................................................
.............................
473 420
Inventories ................................................................................................................................
...............................
1,262 1,236
Net property ................................................................................................................................
.............................
4,763 4,682
Goodwill ................................................................................................................................
................................
1,229 1,241
Other intangibles................................................................................................................................
......................
225 204
Other assets ................................................................................................................................
............................
583 485
Impairment of carrying value................................................................................................
................................
(650) (650)
Total assets of the held-for-sale operations................................................................
................................
$ 8,341 $ 7,618
Liabilities
LiabilitiesLiabilities
Liabilities
Payables ................................................................................................................................
................................
$ 1,555 $ 1,980
Pension liabilities ................................................................................................................................
.....................
337 387
Warranty liabilities................................................................................................................................
....................
245 358
Debt ................................................................................................................................
................................
51 —
Other liabilities ................................................................................................................................
.........................
2,985 2,596
Total liabilities of the held-for-sale operations ................................................................
................................
$ 5,173 $ 5,321