Ford 2006 Annual Report Download - page 85

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83
Notes to the Financial Statements
83
NOTE 19. DISCONTINUED OPERATIONS, HELD-FOR-SALE OPERATIONS, OTHER DISPOSITIONS, AND
ACQUISITIONS
Automotive Sector
Discontinued Operations. In 2004, the Automotive sector completed the disposition of several of its non-core
businesses initiated in 2002 and 2003, including our former automotive recycling businesses in the United States and
Canada, our electric vehicle business in Norway, and our insurance-related products and services business in the United
Kingdom. Associated with the disposition of these entities, we recorded pre-tax charges of $9 million in 2004, reflected in
Income/(loss) from discontinued operations.
In 2004, we sold our Formula One racing operations as these operations were not consistent with our PAG
Improvement Plan nor our goals to build on the basics and focus on our core business. We recorded pre-tax charges of
$204 million for impairment of goodwill, $23 million related to write-down of inventory and $77 million for loss on sale in
2004.
The results of all discontinued Automotive sector operations are as follows (in millions):
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At December 31, 2006 and 2005, there were no significant assets or liabilities remaining on our balance sheet related
to discontinued operations.
Held-for-Sale Operations. In 2005, we acquired the minority interest in the Beanstalk Group, LLC, a majority-owned
subsidiary that licensed trademarks, and subsequently sold our 100% interest. Its operations were not consistent with our
objective to focus on our core automotive business. We recorded pre-tax charges of $53 million for the impairment of
intangible assets and goodwill in Automotive cost of sales and $12 million in Automotive interest income and other non-
operating income/(expense), net for the loss on sale in 2005.
In 2004, management committed to sell certain consolidated dealerships in the Ford Asia Pacific and Africa/Mazda
segment as the sale of the dealerships would allow us to concentrate on the production and marketing of our products in
the Asia Pacific region rather than the day-to-day retailing operations. In 2004, we recorded pre-tax charges of
$64 million reflected in Automotive cost of sales for the impairment of goodwill and $16 million in Automotive interest
income and other non-operating income/(expense), net for the estimated loss on disposal. In 2005, we completed the
sale and recognized a pre-tax gain of $14 million reflected in Automotive interest income and other non-operating
income/(expense), net.
At December 31, 2006 and 2005, there were no assets or liabilities on our balance sheet related to held-for-sale
operations.
Other Dispositions. In 2005, we completed the sale of our interests in Mahindra & Mahindra Ltd. (approximately 5%
interest), Vastera, Inc. (approximately 19% interest), and Kwik-Fit Group Limited (approximately 18% interest). As a result
of the sales, we recognized pre-tax gains of approximately $22 million, $11 million, and $152 million, respectively in
Automotive interest income and other non-operating income/(expense), net in 2005.
We also completed the exchange of 8.3 million shares in Ballard Power Systems Inc. ("Ballard") for an equity interest
(50%) in NuCellSys, GmbH, a 50/50 joint venture with DaimlerChrysler Corporation. As a result of the exchange and the
retirement of certain restrictions, we recognized in Automotive cost of sales a pre-tax charge of $61 million in 2005. Our
ownership interest in Ballard is 11.5%. We continue to report this investment under the equity method.