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Ford Motor Company Annual Report 2005 66 Ford Motor Company Annual Report 2005 67
Notes to the Financial Statements
NOTE 4. DISCONTINUED OPERATIONS, HELD-FOR-SALE OPERATIONS, OTHER DISPOSITIONS, AND
ACQUISITIONS (Continued)
Financial Services Sector
Discontinued Operations. Consistent with our strategy to focus on our core business, we completed the disposition of the
operations discussed below.
In 2004, we committed to a plan to sell Triad Financial Corporation, our operation in the United States that specialized in
automobile retail installment sales contracts with borrowers who generally would not be expected to qualify, based on their credit
worthiness, for traditional financing sources such as those provided by commercial banks or automobile manufacturers' affiliated
finance companies. During 2005, we completed the sale of this business and recognized a pre-tax loss of approximately
$16 million.
In 2004, we completed the sale of AMI Leasing and Fleet Management Services, our operation in the United States that offered
full service car and truck leasing. During 2003, we recognized a pre-tax charge of $50 million, reflected in Income/(loss) from
discontinued operations for the loss on sale. This amount represented the difference between the selling price of these assets, less
costs to sell them, and their recorded book value.
In 2003, we completed the sale of Axus, our all-makes vehicle fleet leasing operations in Europe, New Zealand and Australia.
In 2002, we recognized a pre-tax charge of $31 million, reflected in Income/(loss) from discontinued operations for the loss on
sale. This amount represented the difference between the selling price of these assets, less costs to sell them, and their recorded
book value.
The results of all discontinued Financial Services sector operations are as follows (in millions):
2005 2004 2003
Revenues ................................................................................................................................................................................................
.
$ 118 $ 493 $ 550
Operating income/(loss) from discontinued operations.........................................................................................................................
.
$ 59 $ 138 $ 84
Gain/(loss) on discontinued operations..................................................................................................................................................
.
(16) — (50)
(Provision for)/benefit from income taxes.............................................................................................................................................
.
(2) (57) (36)
Income/(loss) from discontinued operations .....................................................................................................................................
.
$ 41 $ 81 $ (2)
At December 31, 2004, assets of our discontinued operations totaled $2.2 billion and consisted primarily of net finance
receivables of $1.7 billion and retained interest in securitized assets of about $350 million.
Held-for-Sale Operations. During 2005, management committed to sell Hertz as it is not core to our Automotive business. On
September 12, 2005, we entered into a definitive agreement with an investor group of private equity firms under which we agreed
to sell Hertz in a transaction valued at approximately $15 billion including debt. On December 21, 2005, we completed, through
our wholly-owned subsidiary Ford Holdings LLC, the sale of our 100% ownership interest in Hertz to CCMG Investor, LLC.
We received $5.6 billion in cash for the sale of Hertz. As part of the transaction, we provided cash-collateralized letters of
credit in an aggregate amount of $200 million to support the asset-backed portion of the buyer's financing for the transaction.
These letters of credit will expire no later than December 21, 2011. As a result of the sale, we recognized in Gain on sale of Hertz
a pre-tax gain of $1.1 billion, inclusive of $27 million of charges to record the estimated fair value of the letters of credit. For
further discussion of these letters of credit, see Note 27.