Ford 2002 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2002 Ford annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 106

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106

69
NOTES TO FINANCIAL STATEMENTS
NOTE 3. DISCONTINUED AND HELD-FOR-SALE OPERATIONS
AUTOMOTIVE SECTOR
During 2002, the Automotive sector completed the sale of several of its non-core businesses, including our former
automotive recycling business in Canada. Associated with these sales, we recorded an after-tax net loss of $59 million
in 2002, reflected in net loss on disposal of discontinued and held-for-sale operations.
During the fourth quarter of 2002, management committed to plans to sell certain other non-core Automotive sector
businesses, including our former automotive recycling business in the U.S. and electric vehicle business in Norway. We
expect to complete the sale of these businesses during 2003 and have reported these businesses as held-for-sale under
SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, for all periods shown. We have recognized
an after-tax charge of $109 million, on the anticipated loss on sale of these assets, reflected in net loss on disposal of
discontinued operations and held-for-sale operations. This amount represents the difference between the anticipated
selling price of these assets less costs to sell them, and their recorded book value.
On June 28, 2000, we distributed our 100% ownership interest in Visteon Corporation, our former automotive components
subsidiary, by means of a tax-free spin-off in the form of a dividend on Ford Common and Class B Stock. The total market
value of the distribution was $2.1 billion, which resulted in an after-tax loss of $2.3 billion. This loss represented the excess
of the carrying value of our net investment over the market value on the distribution date.
In connection with the spin-off of Visteon, about 24,000 hourly employees working for Visteon who were represented by
the UAW remained Ford employees, with Visteon agreeing to reimburse us for the costs of those employees. The average
number of these employees was approximately 19,800 in 2002.
The operating results of the discontinued and held-for-sale Automotive operations are as follows (in millions):
2002 2001 2000
Sales $ 241 $ 224 $ 1,425
Income/(loss) before income taxes $ (143) $ (170) $ 438
(Provision for)/benefit from income taxes 50 58 (169)
Net income/(loss) from discontinued/held-for-sale operations $93 $ (112) $ 269
At December 31, 2002 and 2001, inventories associated with discontinued and held-for-sale operations totaled $49 million
and $64 million, respectively. At December 31, 2002 and 2001, net property of the entities totaled $28 million and
$99 million, respectively.
FINANCIAL SERVICES SECTOR
During the fourth quarter of 2002, we sold our all-makes vehicle fleet leasing operations in New Zealand and Australia.
In addition, we completed the sale of the European operation of this business in the first quarter of 2003 and have classified
these assets as held-for-sale under SFAS No. 144. Ford Credit has recognized an after-tax charge of $31 million, reflected
in net loss on disposal of discontinued operations. This amount represents the difference between the selling price of these
assets, less costs to sell them, and their recorded book value.
The operating results of the discontinued and held-for-sale operations are as follows (in millions):
2002 2001 2000
Revenues $ 210 $ 179 $ 116
Income/(loss) before income taxes $37 $12 $ (9)
(Provision for)/benefit from income taxes (7) (4) 3
Net income/(loss) from discontinued/held-for-sale operations $ 30 $8 $ (6)