Ford 2013 Annual Report Download - page 137

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Ford Motor Company | 2013 Annual Report 135
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
135
NOTE 23. DISPOSITIONS, CHANGES IN INVESTMENTS IN AFFILIATES, AND ASSETS HELD FOR SALE
(Continued)
Upon the exchange, we de-recognized the historical carrying value of our equity investment in CMA of
$115 million, increased our equity investment in CAF by the fair value of the interest received of $740 million, and
recognized a fourth quarter 2012 pre-tax gain of $625 million in Automotive interest income and other income/
(expense), net.
Ford Russia. During the second quarter of 2011, we signed an agreement with Sollers OJSC establishing
FordSollers, a 50/50 joint venture in Russia. On October 1, 2011, we contributed our wholly owned operations in
Russia, consisting primarily of a manufacturing plant near St. Petersburg and access to our Russian dealership
network, to the joint venture in exchange for a 50% interest. As a result, we deconsolidated Ford Russia’s assets and
liabilities, recorded an equity method investment in Ford Sollers at fair value, and recognized a pre-tax gain of
$401 million reported in Automotive interest income and other income/(loss), net.
Financial Services Sector
Dispositions
Asia Pacific Markets. In 2011, Ford Credit recorded foreign currency translation adjustments of $60 million
(including $72 million recorded in the fourth quarter of 2011) related to the strategic decision to exit retail and wholesale
financing in certain Asia Pacific markets. These adjustments decreased Accumulated other comprehensive income
(foreign currency translation) and increased pre-tax income, which was recorded to Financial Services other income/
(loss), net.
Assets Held for Sale
Other Financial Services Segment. During April and August 2013, we executed agreements to sell certain Volvo-
related retail financing receivables in tranches to a third-party financing company. We received cash proceeds of
$495 million and recognized pre-tax gains of $6 million for receivables sold in 2013. The pre-tax gains are reported in
Financial Services other income(loss), net. All servicing obligations were transferred to the third party upon sale of the
receivables. As a consequence of the sale of receivables, we also recognized other expenses of $56 million. As of
December 31, 2013, the remaining Volvo-related retail financing receivables of $3 million were considered assets held
for sale as we have the intent to sell these receivables as part of future tranches under these same agreements. We
determined a valuation allowance was not required, based on an analysis of the fair value of the remaining receivables.
The receivables are included in Other Assets.
NOTE 24. CAPITAL STOCK AND AMOUNTS PER SHARE
All general voting power is vested in the holders of Common Stock and Class B Stock. Holders of our Common Stock
have 60% of the general voting power and holders of our Class B Stock are entitled to such number of votes per share as
will give them the remaining 40%. Shares of Common Stock and Class B Stock share equally in dividends when and as
paid, with stock dividends payable in shares of stock of the class held.
If liquidated, each share of Common Stock will be entitled to the first $0.50 available for distribution to holders of
Common Stock and Class B Stock, each share of Class B Stock will be entitled to the next $1.00 so available, each share
of Common Stock will be entitled to the next $0.50 so available and each share of Common and Class B Stock will be
entitled to an equal amount thereafter.
We present both basic and diluted earnings per share (“EPS”) amounts in our financial reporting. Basic EPS excludes
dilution and is computed by dividing income available to Common and Class B Stock holders by the weighted-average
number of Common and Class B Stock outstanding for the period. Diluted EPS reflects the maximum potential dilution
that could occur from our share-based compensation, including “in-the-money” stock options and unvested restricted
stock units, and conversion into Ford Common Stock of our outstanding convertible notes. Potential dilutive shares are
excluded from the calculation if they have an anti-dilutive effect in the period.
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