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134 Ford Motor Company | 2013 Annual Report
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
134
NOTE 23. DISPOSITIONS, CHANGES IN INVESTMENTS IN AFFILIATES, AND ASSETS HELD FOR SALE
(Continued)
Changes in Investments in Affiliates
JMC. During the fourth quarter of 2013, we completed the acquisition of an additional 2% stake in JMC, a publicly-
traded company in China that assembles Ford and non-Ford vehicles for distribution in China and other export markets.
As a result, we recorded a $48 million increase in Equity in net assets of affiliated companies.
Liquidation of a Foreign Subsidiary. During the third quarter of 2013, we completed the liquidation of a foreign
subsidiary holding company, Ford LRH, and, as a result, reclassified a foreign currency translation loss of $103 million
related to the investment from Accumulated other comprehensive income/(loss) to Automotive interest income and other
income/(loss), net.
Ford Romania. Effective January 1, 2013, the Romanian government ceded control and participation in our
operations in Romania. As a result of acquiring full management control, we consolidated Ford Romania under the
acquisition method of accounting. Prior to consolidation, our ownership in Ford Romania had been reflected at 100%
under the equity method of accounting.
We measured the fair value of Ford Romania using the income approach. We used cash flows that reflect our
approved business plan for Ford Romania and align with assumptions a market participant would make. We assumed
a discount rate of 8% based on an appropriate weighted-average cost of capital, adjusted for perceived business risks.
The fair value of 100% of Ford Romania’s identifiable net assets was $48 million as shown below (in millions):
January 1,
2013
Assets
Cash and cash equivalents $ 9
Receivables 119
Inventories 70
Net property 927
Other assets 112
Total assets of Ford Romania $ 1,237
Liabilities
Payables $ 232
Other liabilities 76
Debt 881
Total liabilities of Ford Romania $ 1,189
The excess of our previously recorded equity interest of $63 million over fair value of the net assets acquired
resulted in a pre-tax loss of $15 million recorded in Automotive interest income and other income/(loss), net.
AAI. During the third quarter of 2012, we acquired full management control of AAI and consolidated it under the
acquisition method of accounting. At September 1, 2012, the fair value of 100% of AAI’s identifiable net assets was
$868 million. As part of the business combination, we recorded a redeemable noncontrolling interest at the then fair
value of $319 million (see Note 17). As a result, the fair value attributable to our investment in AAI at
September 1, 2012 was $549 million. The excess of this fair value over the carrying value of our previously recorded
50% unconsolidated equity interest resulted in a third quarter 2012 pre-tax gain of $155 million in Automotive interest
income and other income/ (loss), net.
Changan Ford Mazda Automobile Corporation, Ltd (“CFMA”). Our Chinese joint venture, CFMA, whose members
included Chongqing Changan Automobile Co., Ltd. (“Changan”) (50% partner), Mazda (15% partner) and us (35%
partner), produced and distributed in China an expanding variety of Ford passenger car models, as well as Mazda and
Volvo models. On November 30, 2012, CFMA transferred its Nanjing operations to Changan Mazda Automobile Ltd.
(“CMA”), and CFMA was renamed CAF. Immediately after the split, Ford and Mazda fully exchanged their respective
interest in the two joint ventures. As a result, Ford now owns a 50% interest in CAF and Mazda owns a 50% interest in
CMA; Changan remains a 50% partner in each joint venture. CMA will continue to assemble vehicles for CAF as a
contract manufacturer until 2014.