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Management’s Discussion and Analysis of Financial Condition and Results of Operations
Ford Motor Company | 2010 Annual Report 31
The following table details special items in each category by sector (in millions):
Personnel and Dealer
Personnel and DealerPersonnel and Dealer
Personnel and Dealer-
---Related Items:
Related Items:Related Items:
Related Items:
2010
20102010
2010
2009
20092009
2009
2008
20082008
2008
Automotive Sector
Automotive SectorAutomotive Sector
Automotive Sector
Mercury discontinuation/Other dealer actions................................
................................
$ (339) $ (140) $ (250)
Personnel-reduction actions ................................................................
................................
(164) (663) (1,610)
Job Security Benefits/Transition Assistance Plan ................................
................................
24 40 376
Retiree health care and related charges ................................
................................
31 (768) 2,553
Total Personnel and Dealer-Related Items - Automotive sector
................................
(448) (1,531) 1,069
Other
OtherOther
Other Items:
Items: Items:
Items:
Automotive Sector
Automotive SectorAutomotive Sector
Automotive Sector
Debt reduction actions................................................................
................................
(853) 4,663 141
Liquidation of foreign subsidiaries – foreign currency translation impact
................................
(33) (281) —
Sale of Volvo and related items ................................................................
................................
179 (226) (2)
Investment impairment and related charges ................................
................................
— (96) —
Return on assets held in Temporary Asset Account ("TAA")
................................
— 110 (509)
Fixed asset impairment................................................................
................................
— — (5,300)
Accelerated depreciation related to AutoAlliance International, Inc. ("AAI")
................................
— — (306)
Impairment of Mazda dealer network goodwill................................
................................
— — (214)
Loss on sale of Mazda shares ................................................................
................................
— — (201)
Supplier settlement................................................................
................................
— — (200)
Ballard restructuring ................................................................
................................
— — (70)
Other ................................................................................................
................................
4 3 36
Total Other Items – Automotive sector ................................
................................
(703) 4,173 (6,625)
Total Automotive sector ................................................................
................................
(1,151) 2,642 (5,556)
Financial Services Sector
Financial Services SectorFinancial Services Sector
Financial Services Sector
DFO Partnership impairment ................................................................
................................
— (132) —
Gain on purchase of Ford Holdings debt securities ................................
................................
— 51 —
Ford Credit net operating lease impairment charge ................................
................................
— — (2,086)
Total Other Items – Financial Services sector................................
................................
— (81) (2,086)
Total ................................................................................................
................................
$ (1,151) $ 2,561 $ (7,642)
Included in Provision for/(Benefit from) income taxes are tax benefits of $134 million, $132 million, and $144 million for
2010, 2009, and 2008, respectively, that we consider to be special items. These primarily consist of the tax effects of the
pre-tax special items listed above, the impact of changes in tax laws on deferred tax balances, and changes in our
assessment of the need for a valuation allowance in each jurisdiction.
Discussion of Automotive and Financial Services sector results of operations below is on a pre-tax basis, and total
Automotive sector results and total Financial Services sector results include special items unless otherwise specifically
noted. As noted above, because special items for each sector are allocated to a separate reconciling item, results for
individual operating segments within our Automotive and Financial Services sectors do not include special items.
Discussion of overall Automotive cost changes, including structural cost changes (primarily manufacturing and
engineering, pension/OPEB, advertising and sales promotions, spending-related, and overhead, etc.), is primarily at
present-year currency exchange rates and excludes special items and discontinued operations. In addition, costs that
vary directly with production volume, such as material, freight, and warranty costs, are measured at present-year volume
and mix. Discussion of changes in currency exchange can refer to one or more of the following: (i) the impact of gains
or losses arising from transactions denominated in currencies other than the functional currency of the locations, (ii) the
effect of remeasuring assets and liabilities of foreign subsidiaries using U.S. dollars as the functional currency, or (iii) the
results of our foreign currency hedging activities.