Ford 2006 Annual Report Download - page 86
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Notes to the Financial Statements
84
NOTE 19. DISCONTINUED OPERATIONS, HELD-FOR-SALE OPERATIONS, OTHER DISPOSITIONS, AND
ACQUISITIONS (Continued)
Acquisitions. In December 2006, we purchased Troller Veiculos Especiais LTDA ("Troller"), a Brazilian manufacturer of
vehicles in the light duty segment, for a present value cash amount of $214 million and liabilities amounting to $32 million.
We have agreed to pay $23 million in 2007 and the remaining balance over the course of four years, which has been
classified as debt. As part of the transaction related to this acquisition, we have recorded an intangible asset of
$246 million.
In 2005, we finalized an agreement with Visteon Corporation ("Visteon"), our largest supplier, in which we assumed
control of 17 plants and 6 other facilities in the United States and Mexico. These assets were transferred to ACH, a
temporary business controlled and managed by us, to protect the flow of critical parts and components in the near-term
and, over time, to improve our sourcing flexibility and cost competitiveness. We consolidated ACH on October 1, 2005 as
part of our Ford North America segment.
The total 2005 pre-tax loss from the transaction was $468 million reflected in Automotive cost of sales, summarized as
follows (in millions):
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As announced in the acceleration of our Way Forward plan on September 15, 2006, all ACH operations are to be sold
or closed by the end of 2008. In support of the plan, ACH entered into Memoranda of Understanding during
December 2006 for the sale of three ACH facilities; we expect to formally complete the associated sale agreements with
each of the buyers in the first half of 2007.
In 2004, we acquired 100% ownership of ZF Batavia, LLC (renamed Batavia Transmissions, LLC) from ZF
Transmissions Technologies LLC. ZF Transmission Technologies LLC, is a company we jointly own (49%) with ZF
Friedrichshafen Germany (51%).
In June 2000, we purchased the Land Rover sport utility vehicle business from the BMW Group. As part of the
acquisition, we agreed to pay two-thirds of the purchase price at closing with the remainder being paid in 2005. During
2005, we made the final payment of approximately $1.3 billion.
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 for
traditional financing sources such as 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.