NOTES TO THE FINANCIAL STATEMENTS
Table of Contents
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Footnote
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Page
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Note 1
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Presentation
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Note 2
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New Accounting Standards
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Note 3
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Revenue
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Note 4
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Other Income/(Loss)
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Note 5
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Income Taxes
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Note 6
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Capital Stock and Earnings Per Share
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Note 7
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Cash, Cash Equivalents, and Marketable Securities
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Note 8
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Ford Credit Finance Receivables
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Note 9
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Ford Credit Allowance for Credit Losses
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Note 10
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Inventories
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Note 11
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Net Investment in Operating Leases
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Note 12
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Other Investments
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Note 13
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Goodwill
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Note 14
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Other Liabilities and Deferred Revenue
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Note 15
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Retirement Benefits
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Note 16
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Lease Commitments
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Note 17
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Debt
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Note 18
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Derivative Financial Instruments and Hedging Activities
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Note 19
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Employee Separation Actions and Exit and Disposal Activities
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Note 20
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Redeemable Noncontrolling Interest
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Note 21
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Held-for-Sale Operations
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Note 22
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Accumulated Other Comprehensive Income/(Loss)
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Note 23
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Commitments and Contingencies
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Note 24
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Segment Information
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Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. PRESENTATION
For purposes of this report, “Ford,” the “Company,” “we,” “our,” “us,” or similar references mean Ford Motor Company, our consolidated subsidiaries, and our consolidated VIEs of which we are the primary beneficiary, unless the context requires otherwise. We also make reference to Ford Motor Credit Company LLC, herein referenced to as Ford Credit. Our financial statements are presented in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, instructions to the Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X.
In the opinion of management, these unaudited financial statements reflect a fair statement of our results of operations and financial condition for the periods, and at the dates, presented. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. Reference should be made to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K Report”). We reclassified certain prior year amounts in our consolidated financial statements to conform to the current year presentation.
Change in Accounting
As of January 1, 2019, we changed our accounting method for reporting early termination losses related to customer defaults on Ford Credit’s operating leases. Previously, we presented the early termination loss reserve on operating leases due to customer default events as part of the allowance for credit losses within Net investment in operating leases. We now consider the effects of operating lease early terminations when determining depreciation estimates, which are included as part of accumulated depreciation within Net investment in operating leases. We believe this change in accounting method is preferable as the characterization of these changes is better reflected as depreciation.
We have retrospectively applied this change in accounting method to all prior periods. At December 31, 2018, this reclassification increased accumulated depreciation and decreased allowance for credit losses by $78 million within Net investment in operating leases. This change had no impact on our consolidated income statement, consolidated balance sheet or Net cash provided by/(used in) operating activities in the consolidated statement of cash flows for the interim periods presented.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2. NEW ACCOUNTING STANDARDS
Adoption of New Accounting Standards
Accounting Standards Update (“ASU”) 2016-02, Leases. On January 1, 2019, we adopted Accounting Standards Codification 842 and all the related amendments (“new lease standard”) using the modified retrospective method. We recognized the cumulative effect of initially applying the new lease standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the lease accounting standard in effect for those periods. We do not expect the adoption of the new lease standard to have a material impact to our net income on an ongoing basis.
The new lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We elected the practical expedients permitted under the transition guidance of the new standard that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. We did not reassess whether any contracts or land easements entered into prior to adoption are leases or contain leases.
The cumulative effect of the changes made to our consolidated balance sheet at January 1, 2019, for the adoption of ASU 2016-02, Leases, was as follows (in millions):
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Balance at December 31, 2018
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Adjustments due to ASU 2016-02
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Balance at
January 1, 2019
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Balance sheet
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Assets
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Other assets, current
|
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$
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3,930
|
|
|
$
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(8
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)
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$
|
3,922
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|
Other assets, non-current
|
|
7,929
|
|
|
1,324
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|
9,253
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Deferred income taxes
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10,412
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(4
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)
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10,408
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Liabilities
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Other liabilities and deferred revenue, current
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20,556
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316
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20,872
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Other liabilities and deferred revenue, non-current
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23,588
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|
983
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24,571
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Equity
|
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Retained earnings
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22,668
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|
13
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22,681
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We also adopted the following ASUs during 2019, none of which had a material impact to our financial statements or financial statement disclosures:
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ASU
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Effective Date
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2018-17
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Targeted Improvements to Related Party Guidance for Variable Interest Entities
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January 1, 2019
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2018-16
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Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes
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January 1, 2019
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2018-13
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Fair Value Measurement - Changes to the Disclosure Requirements for Fair Value Measurement
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January 1, 2019
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2018-08
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Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made
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January 1, 2019
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2018-07
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Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting
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January 1, 2019
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2018-02
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Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (a)
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January 1, 2019
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__________
(a) Ford did not elect to reclassify the income tax effects of the Tax Cuts and Jobs Act from Accumulated other comprehensive income/(loss) to Retained earnings.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2. NEW ACCOUNTING STANDARDS (Continued)
Accounting Standards Issued But Not Yet Adopted
The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements.
ASU 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments. In June 2016, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard which replaces the current incurred loss impairment method with a method that reflects expected credit losses. We will adopt the new standard and the related amendments on January 1, 2020. Based on our current loan portfolio and forecasts of future macroeconomic conditions, we estimate that the allowance for credit losses reported in Ford Credit finance receivables, net on our consolidated balance sheet will increase by about $200 million at adoption. We will record the cumulative effect of initially applying the new standard as an adjustment to the opening balance of Retained earnings. The increase is primarily for our consumer loan portfolio as it will cover expected credit losses over the full remaining expected life of the loans.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 3. REVENUE
The following table disaggregates our revenue by major source for the periods ended September 30 (in millions):
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Third Quarter 2018
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Automotive
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Mobility
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Ford Credit
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Consolidated
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Vehicles, parts, and accessories
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$
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33,352
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|
|
$
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—
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|
|
$
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—
|
|
|
$
|
33,352
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|
Used vehicles
|
620
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|
|
—
|
|
|
—
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|
|
620
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|
Extended service contracts
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333
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|
|
—
|
|
|
—
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|
|
333
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|
Other revenue
|
201
|
|
|
8
|
|
|
53
|
|
|
262
|
|
Revenues from sales and services
|
34,506
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|
|
8
|
|
|
53
|
|
|
34,567
|
|
|
|
|
|
|
|
|
|
Leasing income
|
154
|
|
|
—
|
|
|
1,463
|
|
|
1,617
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|
Financing income
|
—
|
|
|
—
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|
|
1,443
|
|
|
1,443
|
|
Insurance income
|
—
|
|
|
—
|
|
|
39
|
|
|
39
|
|
Total revenues
|
$
|
34,660
|
|
|
$
|
8
|
|
|
$
|
2,998
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|
|
$
|
37,666
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|
|
|
|
|
|
|
|
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|
Third Quarter 2019
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|
Automotive
|
|
Mobility
|
|
Ford Credit
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Consolidated
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Vehicles, parts, and accessories
|
$
|
32,609
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|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,609
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|
Used vehicles
|
647
|
|
|
—
|
|
|
—
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|
|
647
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|
Extended service contracts
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347
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|
|
—
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|
|
—
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|
347
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Other revenue
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183
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|
|
14
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|
|
55
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|
|
252
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|
Revenues from sales and services
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33,786
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|
|
14
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|
|
55
|
|
|
33,855
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|
|
|
|
|
|
|
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Leasing income
|
145
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|
|
—
|
|
|
1,480
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|
|
1,625
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|
Financing income
|
—
|
|
|
—
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|
|
1,472
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|
|
1,472
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Insurance income
|
—
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|
|
—
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|
|
38
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|
|
38
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Total revenues
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$
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33,931
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|
$
|
14
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|
|
$
|
3,045
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|
|
$
|
36,990
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|
|
|
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|
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|
First Nine Months 2018
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Automotive
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Mobility
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|
Ford Credit
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Consolidated
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Vehicles, parts, and accessories
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$
|
105,338
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|
|
$
|
—
|
|
|
$
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—
|
|
|
$
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105,338
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|
Used vehicles
|
2,203
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|
|
—
|
|
|
—
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|
|
2,203
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Extended service contracts
|
990
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|
|
—
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|
|
—
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|
|
990
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Other revenue
|
630
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|
|
18
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|
|
166
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|
|
814
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|
Revenues from sales and services
|
109,161
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|
|
18
|
|
|
166
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|
|
109,345
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|
|
|
|
|
|
|
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Leasing income
|
416
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|
|
—
|
|
|
4,321
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|
|
4,737
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|
Financing income
|
—
|
|
|
—
|
|
|
4,340
|
|
|
4,340
|
|
Insurance income
|
—
|
|
|
—
|
|
|
123
|
|
|
123
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|
Total revenues
|
$
|
109,577
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|
|
$
|
18
|
|
|
$
|
8,950
|
|
|
$
|
118,545
|
|
|
|
|
|
|
|
|
|
|
First Nine Months 2019
|
|
Automotive
|
|
Mobility
|
|
Ford Credit
|
|
Consolidated
|
Vehicles, parts, and accessories
|
$
|
102,420
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|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
102,420
|
|
Used vehicles
|
2,509
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|
|
—
|
|
|
—
|
|
|
2,509
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|
Extended service contracts
|
1,028
|
|
|
—
|
|
|
—
|
|
|
1,028
|
|
Other revenue
|
615
|
|
|
26
|
|
|
161
|
|
|
802
|
|
Revenues from sales and services
|
106,572
|
|
|
26
|
|
|
161
|
|
|
106,759
|
|
|
|
|
|
|
|
|
|
Leasing income
|
356
|
|
|
—
|
|
|
4,429
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|
|
4,785
|
|
Financing income
|
—
|
|
|
—
|
|
|
4,521
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|
|
4,521
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|
Insurance income
|
—
|
|
|
—
|
|
|
120
|
|
|
120
|
|
Total revenues
|
$
|
106,928
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|
|
$
|
26
|
|
|
$
|
9,231
|
|
|
$
|
116,185
|
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 3. REVENUE (Continued)
The amount of consideration we receive and revenue we recognize on our vehicles, parts, and accessories varies with changes in marketing incentives and returns we offer to our customers and their customers. As a result of changes in our estimate of marketing incentives, we recorded a decrease related to revenue recognized in prior periods of $320 million and $454 million in the third quarter of 2018 and 2019, respectively.
We sell separately-priced service contracts that extend mechanical and maintenance coverages beyond our base warranty agreements to vehicle owners (“extended service contracts”). At December 31, 2017 and December 31, 2018, $3.8 billion and $4 billion, respectively, of unearned revenue associated with outstanding contracts was reported in Other liabilities and deferred revenue. We recognized $262 million and $274 million of the unearned amounts as revenue during the third quarter of 2018 and 2019, respectively, and $829 million and $864 million in the first nine months of 2018 and 2019, respectively. At September 30, 2019, the unearned amount was $4.1 billion. We expect to recognize approximately $300 million of the unearned amount in the remainder of 2019, $1.2 billion in 2020, and $2.6 billion thereafter.
Amounts paid to dealers to obtain these contracts are deferred and recorded as Other assets. We had a balance of $247 million and $265 million in deferred costs as of December 31, 2018 and September 30, 2019, respectively, and recognized $18 million and $17 million of amortization during the third quarter of 2018 and 2019, respectively, and $55 million and $56 million in the first nine months of 2018 and 2019, respectively.
NOTE 4. OTHER INCOME/(LOSS)
The amounts included in Other income/(loss), net for the periods ended September 30 were as follows (in millions):
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|
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Third Quarter
|
|
First Nine Months
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Net periodic pension and other postretirement employee benefits (OPEB) income/(cost), excluding service cost
|
$
|
378
|
|
|
$
|
(21
|
)
|
|
$
|
1,284
|
|
|
$
|
362
|
|
Investment-related interest income
|
169
|
|
|
202
|
|
|
482
|
|
|
612
|
|
Interest income/(expense) on income taxes
|
(5
|
)
|
|
(5
|
)
|
|
28
|
|
|
(26
|
)
|
Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments
|
(76
|
)
|
|
199
|
|
|
136
|
|
|
79
|
|
Gains/(Losses) on changes in investments in affiliates
|
(14
|
)
|
|
44
|
|
|
44
|
|
|
46
|
|
Gains/(Losses) on extinguishment of debt
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(54
|
)
|
Royalty income
|
115
|
|
|
91
|
|
|
387
|
|
|
283
|
|
Other
|
38
|
|
|
25
|
|
|
111
|
|
|
132
|
|
Total
|
$
|
605
|
|
|
$
|
534
|
|
|
$
|
2,472
|
|
|
$
|
1,434
|
|
NOTE 5. INCOME TAXES
For interim tax reporting, we estimate one single effective tax rate for tax jurisdictions not subject to a valuation allowance, which is applied to the year-to-date ordinary income/(loss). Tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.
In the third quarter, we recognized a tax benefit of $442 million, primarily from non-U.S. restructuring items, resulting in a tax rate of 2,326% on our $19 million loss before income taxes. Our effective tax rate for the first nine months of 2019 was 2.2%.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 6. CAPITAL STOCK AND EARNINGS PER SHARE
Earnings Per Share Attributable to Ford Motor Company Common and Class B Stock
Basic and diluted income per share were calculated using the following (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
First Nine Months
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Basic and Diluted Income Attributable to Ford Motor Company
|
|
|
|
|
|
|
|
Basic income
|
$
|
991
|
|
|
$
|
425
|
|
|
$
|
3,793
|
|
|
$
|
1,719
|
|
Diluted income
|
991
|
|
|
425
|
|
|
3,793
|
|
|
1,719
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Shares
|
|
|
|
|
|
|
|
|
|
Basic shares (average shares outstanding)
|
3,976
|
|
|
3,970
|
|
|
3,976
|
|
|
3,976
|
|
Net dilutive options, unvested restricted stock units, and unvested restricted stock shares
|
24
|
|
|
37
|
|
|
23
|
|
|
30
|
|
Diluted shares
|
4,000
|
|
|
4,007
|
|
|
3,999
|
|
|
4,006
|
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES
The fair values of cash, cash equivalents, and marketable securities measured at fair value on a recurring basis were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
Fair Value
Level
|
|
Automotive
|
|
Mobility
|
|
Ford Credit
|
|
Consolidated
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
U.S. government
|
1
|
|
$
|
220
|
|
|
$
|
—
|
|
|
$
|
139
|
|
|
$
|
359
|
|
U.S. government agencies
|
2
|
|
496
|
|
|
—
|
|
|
25
|
|
|
521
|
|
Non-U.S. government and agencies
|
2
|
|
169
|
|
|
—
|
|
|
114
|
|
|
283
|
|
Corporate debt
|
2
|
|
174
|
|
|
—
|
|
|
884
|
|
|
1,058
|
|
Total marketable securities classified as cash equivalents
|
|
|
1,059
|
|
|
—
|
|
|
1,162
|
|
|
2,221
|
|
Cash, time deposits, and money market funds
|
|
|
5,999
|
|
|
53
|
|
|
8,445
|
|
|
14,497
|
|
Total cash and cash equivalents
|
|
|
$
|
7,058
|
|
|
$
|
53
|
|
|
$
|
9,607
|
|
|
$
|
16,718
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
|
|
|
|
|
|
|
|
U.S. government
|
1
|
|
$
|
3,014
|
|
|
$
|
—
|
|
|
$
|
289
|
|
|
$
|
3,303
|
|
U.S. government agencies
|
2
|
|
1,953
|
|
|
—
|
|
|
65
|
|
|
2,018
|
|
Non-U.S. government and agencies
|
2
|
|
4,674
|
|
|
—
|
|
|
610
|
|
|
5,284
|
|
Corporate debt
|
2
|
|
5,614
|
|
|
—
|
|
|
198
|
|
|
5,812
|
|
Equities (a)
|
1
|
|
424
|
|
|
—
|
|
|
—
|
|
|
424
|
|
Other marketable securities
|
2
|
|
246
|
|
|
—
|
|
|
146
|
|
|
392
|
|
Total marketable securities
|
|
|
$
|
15,925
|
|
|
$
|
—
|
|
|
$
|
1,308
|
|
|
$
|
17,233
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
$
|
16
|
|
|
$
|
33
|
|
|
$
|
140
|
|
|
$
|
189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
Fair Value
Level
|
|
Automotive
|
|
Mobility
|
|
Ford Credit
|
|
Consolidated
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
U.S. government
|
1
|
|
$
|
1,044
|
|
|
$
|
—
|
|
|
$
|
447
|
|
|
$
|
1,491
|
|
U.S. government agencies
|
2
|
|
507
|
|
|
—
|
|
|
571
|
|
|
1,078
|
|
Non-U.S. government and agencies
|
2
|
|
702
|
|
|
—
|
|
|
1,405
|
|
|
2,107
|
|
Corporate debt
|
2
|
|
331
|
|
|
—
|
|
|
872
|
|
|
1,203
|
|
Total marketable securities classified as cash equivalents
|
|
|
2,584
|
|
|
—
|
|
|
3,295
|
|
|
5,879
|
|
Cash, time deposits, and money market funds
|
|
|
6,246
|
|
|
114
|
|
|
8,284
|
|
|
14,644
|
|
Total cash and cash equivalents
|
|
|
$
|
8,830
|
|
|
$
|
114
|
|
|
$
|
11,579
|
|
|
$
|
20,523
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
|
|
|
|
|
|
|
|
U.S. government
|
1
|
|
$
|
2,705
|
|
|
$
|
—
|
|
|
$
|
710
|
|
|
$
|
3,415
|
|
U.S. government agencies
|
2
|
|
1,733
|
|
|
—
|
|
|
340
|
|
|
2,073
|
|
Non-U.S. government and agencies
|
2
|
|
4,021
|
|
|
—
|
|
|
1,927
|
|
|
5,948
|
|
Corporate debt
|
2
|
|
4,291
|
|
|
—
|
|
|
193
|
|
|
4,484
|
|
Equities (a)
|
1
|
|
358
|
|
|
—
|
|
|
—
|
|
|
358
|
|
Other marketable securities
|
2
|
|
246
|
|
|
—
|
|
|
284
|
|
|
530
|
|
Total marketable securities
|
|
|
$
|
13,354
|
|
|
$
|
—
|
|
|
$
|
3,454
|
|
|
$
|
16,808
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
$
|
10
|
|
|
$
|
21
|
|
|
$
|
127
|
|
|
$
|
158
|
|
__________
(a) Net unrealized gains/losses on equities were a $25 million gain and a $72 million loss at December 31, 2018 and September 30, 2019, respectively.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)
The cash equivalents and marketable securities accounted for as available-for-sale (“AFS”) debt securities were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
Fair Value of Securities with
Contractual Maturities
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Within 1 Year
|
|
After 1 Year through
5 Years
|
|
After 5 Years
|
Automotive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government
|
$
|
2,933
|
|
|
$
|
5
|
|
|
$
|
(10
|
)
|
|
$
|
2,928
|
|
|
$
|
1,714
|
|
|
$
|
1,214
|
|
|
$
|
—
|
|
U.S. government agencies
|
1,920
|
|
|
—
|
|
|
(18
|
)
|
|
1,902
|
|
|
797
|
|
|
1,087
|
|
|
18
|
|
Non-U.S. government and agencies
|
3,841
|
|
|
4
|
|
|
(37
|
)
|
|
3,808
|
|
|
194
|
|
|
3,614
|
|
|
—
|
|
Corporate debt
|
4,010
|
|
|
3
|
|
|
(33
|
)
|
|
3,980
|
|
|
1,148
|
|
|
2,830
|
|
|
2
|
|
Other marketable securities
|
207
|
|
|
—
|
|
|
—
|
|
|
207
|
|
|
1
|
|
|
134
|
|
|
72
|
|
Total
|
$
|
12,911
|
|
|
$
|
12
|
|
|
$
|
(98
|
)
|
|
$
|
12,825
|
|
|
$
|
3,854
|
|
|
$
|
8,879
|
|
|
$
|
92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
|
|
|
|
|
|
|
|
Fair Value of Securities with
Contractual Maturities
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Within 1 Year
|
|
After 1 Year through
5 Years
|
|
After 5 Years
|
Automotive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government
|
$
|
2,624
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
2,637
|
|
|
$
|
1,358
|
|
|
$
|
1,260
|
|
|
$
|
19
|
|
U.S. government agencies
|
1,665
|
|
|
2
|
|
|
(1
|
)
|
|
1,666
|
|
|
1,052
|
|
|
574
|
|
|
40
|
|
Non-U.S. government and agencies
|
3,714
|
|
|
21
|
|
|
(2
|
)
|
|
3,733
|
|
|
1,062
|
|
|
2,671
|
|
|
—
|
|
Corporate debt
|
4,083
|
|
|
51
|
|
|
(1
|
)
|
|
4,133
|
|
|
821
|
|
|
3,312
|
|
|
—
|
|
Other marketable securities
|
201
|
|
|
2
|
|
|
—
|
|
|
203
|
|
|
—
|
|
|
125
|
|
|
78
|
|
Total
|
$
|
12,287
|
|
|
$
|
89
|
|
|
$
|
(4
|
)
|
|
$
|
12,372
|
|
|
$
|
4,293
|
|
|
$
|
7,942
|
|
|
$
|
137
|
|
Sales proceeds and gross realized gains/losses from the sale of AFS debt securities for the periods ended September 30 were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
First Nine Months
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Automotive
|
|
|
|
|
|
|
|
Sales proceeds
|
$
|
1,327
|
|
|
$
|
1,176
|
|
|
$
|
4,173
|
|
|
$
|
4,176
|
|
Gross realized gains
|
—
|
|
|
3
|
|
|
1
|
|
|
8
|
|
Gross realized losses
|
4
|
|
|
—
|
|
|
15
|
|
|
10
|
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)
The present fair values and gross unrealized losses for cash equivalents and marketable securities accounted for as AFS debt securities that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position, were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
Less than 1 Year
|
|
1 Year or Greater
|
|
Total
|
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government
|
$
|
199
|
|
|
$
|
(1
|
)
|
|
$
|
1,637
|
|
|
$
|
(9
|
)
|
|
$
|
1,836
|
|
|
$
|
(10
|
)
|
U.S. government agencies
|
193
|
|
|
(1
|
)
|
|
1,596
|
|
|
(17
|
)
|
|
1,789
|
|
|
(18
|
)
|
Non-U.S. government and agencies
|
341
|
|
|
(1
|
)
|
|
2,445
|
|
|
(36
|
)
|
|
2,786
|
|
|
(37
|
)
|
Corporate debt
|
1,816
|
|
|
(16
|
)
|
|
856
|
|
|
(17
|
)
|
|
2,672
|
|
|
(33
|
)
|
Other marketable securities
|
125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|
—
|
|
Total
|
$
|
2,674
|
|
|
$
|
(19
|
)
|
|
$
|
6,534
|
|
|
$
|
(79
|
)
|
|
$
|
9,208
|
|
|
$
|
(98
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
Less than 1 Year
|
|
1 Year or Greater
|
|
Total
|
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
Automotive
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government
|
$
|
253
|
|
|
$
|
—
|
|
|
$
|
174
|
|
|
$
|
—
|
|
|
$
|
427
|
|
|
$
|
—
|
|
U.S. government agencies
|
171
|
|
|
(1
|
)
|
|
889
|
|
|
(1
|
)
|
|
1,060
|
|
|
(2
|
)
|
Non-U.S. government and agencies
|
401
|
|
|
—
|
|
|
816
|
|
|
(1
|
)
|
|
1,217
|
|
|
(1
|
)
|
Corporate debt
|
141
|
|
|
—
|
|
|
137
|
|
|
(1
|
)
|
|
278
|
|
|
(1
|
)
|
Other marketable securities
|
28
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
43
|
|
|
—
|
|
Total
|
$
|
994
|
|
|
$
|
(1
|
)
|
|
$
|
2,031
|
|
|
$
|
(3
|
)
|
|
$
|
3,025
|
|
|
$
|
(4
|
)
|
During the first nine months of 2018 and 2019, we did not recognize any other-than-temporary impairment loss.
Cash, Cash Equivalents, and Restricted Cash
Cash, cash equivalents, and restricted cash as reported in the consolidated statement of cash flows were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
September 30,
2019
|
Cash and cash equivalents
|
$
|
16,718
|
|
|
$
|
20,523
|
|
Restricted cash (a)
|
189
|
|
|
158
|
|
Total cash, cash equivalents, and restricted cash
|
$
|
16,907
|
|
|
$
|
20,681
|
|
__________
|
|
(a)
|
Included in Other assets in the non-current assets section of our consolidated balance sheet.
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8. FORD CREDIT FINANCE RECEIVABLES
Ford Credit manages finance receivables as “consumer” and “non-consumer” portfolios. The receivables are generally secured by the vehicles, inventory, or other property being financed. Finance receivables, net were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
September 30,
2019
|
Consumer
|
|
|
|
Retail installment contracts, gross
|
$
|
70,874
|
|
|
$
|
68,559
|
|
Finance leases, gross
|
8,748
|
|
|
8,832
|
|
Retail financing, gross
|
79,622
|
|
|
77,391
|
|
Unearned interest supplements
|
(3,508
|
)
|
|
(3,595
|
)
|
Consumer finance receivables
|
76,114
|
|
|
73,796
|
|
Non-Consumer
|
|
|
|
|
|
Dealer financing
|
34,372
|
|
|
31,430
|
|
Non-Consumer finance receivables
|
34,372
|
|
|
31,430
|
|
Total recorded investment
|
$
|
110,486
|
|
|
$
|
105,226
|
|
|
|
|
|
Recorded investment in finance receivables
|
$
|
110,486
|
|
|
$
|
105,226
|
|
Allowance for credit losses
|
(589
|
)
|
|
(513
|
)
|
Finance receivables, net
|
$
|
109,897
|
|
|
$
|
104,713
|
|
|
|
|
|
Current portion
|
$
|
54,353
|
|
|
$
|
51,183
|
|
Non-current portion
|
55,544
|
|
|
53,530
|
|
Finance receivables, net
|
$
|
109,897
|
|
|
$
|
104,713
|
|
|
|
|
|
Net finance receivables subject to fair value (a)
|
$
|
101,471
|
|
|
$
|
96,244
|
|
Fair value (b)
|
100,877
|
|
|
96,499
|
|
__________
|
|
(a)
|
Net finance receivables subject to fair value exclude finance leases. Previously, certain consumer financing products in Europe were classified as retail installment contracts. We now classify these products as finance leases. Comparative information has been revised to reflect this change.
|
|
|
(b)
|
The fair value of finance receivables is categorized within Level 3 of the fair value hierarchy.
|
Ford Credit’s finance leases are comprised of sales-type and direct financing leases. Ford Credit offers finance leases to individuals, leasing companies, government entities, daily rental companies, and fleet customers. These financings include primarily lease plans for terms of 24 to 60 months. Financing revenue from finance leases for the third quarter of 2018 and 2019 was $91 million and $90 million, respectively, and for the first nine months of 2018 and 2019 was $281 million and $279 million, respectively. Financing revenue from finance leases is included in Ford Credit revenues on the consolidated income statement.
The amounts contractually due on Ford Credit’s finance lease receivables were as follows (in millions):
|
|
|
|
|
|
|
|
September 30,
2019
|
Within one year
|
|
$
|
2,032
|
|
After one year and within two years
|
|
1,980
|
|
After two years and within three years
|
|
1,534
|
|
After three years and within four years
|
|
708
|
|
After four years and within five years
|
|
114
|
|
After five years
|
|
2
|
|
Total future cash payments
|
|
6,370
|
|
Less: Present value discount
|
|
(316
|
)
|
Finance lease receivables
|
|
$
|
6,054
|
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8. FORD CREDIT FINANCE RECEIVABLES (Continued)
The reconciliation from finance lease receivables to finance leases, gross and finance leases, net is as follows (in millions):
|
|
|
|
|
|
|
|
September 30,
2019
|
Finance lease receivables
|
|
$
|
6,054
|
|
Unguaranteed residual assets
|
|
2,653
|
|
Initial direct costs
|
|
125
|
|
Finance leases, gross
|
|
8,832
|
|
Unearned interest supplements from Ford and affiliated companies
|
|
(346
|
)
|
Allowance for credit losses
|
|
(17
|
)
|
Finance leases, net
|
|
$
|
8,469
|
|
At December 31, 2018 and September 30, 2019, accrued uncollected interest was $264 million and $241 million, respectively, which is reported in Other assets in the current assets section of our consolidated balance sheet.
Included in the recorded investment in finance receivables at December 31, 2018 and September 30, 2019, were consumer receivables of $40.7 billion and $37.8 billion, respectively, and non-consumer receivables of $25.7 billion and $24 billion, respectively, that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements. The receivables are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations or the claims of Ford Credit’s other creditors. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions.
Aging
For all finance receivables, Ford Credit defines “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date. The recorded investment of consumer receivables greater than 90 days past due and still accruing interest was $20 million at December 31, 2018. At September 30, 2019, there were no balances greater than 90 days past due that are still accruing interest.
The aging analysis of Ford Credit’s finance receivables balances was as follows (in millions):
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
September 30,
2019
|
Consumer
|
|
|
|
31-60 days past due
|
$
|
859
|
|
|
$
|
741
|
|
61-90 days past due
|
123
|
|
|
110
|
|
91-120 days past due
|
39
|
|
|
39
|
|
Greater than 120 days past due
|
39
|
|
|
38
|
|
Total past due
|
1,060
|
|
|
928
|
|
Current
|
75,054
|
|
|
72,868
|
|
Consumer finance receivables
|
76,114
|
|
|
73,796
|
|
Non-Consumer
|
|
|
|
Total past due
|
76
|
|
|
70
|
|
Current
|
34,296
|
|
|
31,360
|
|
Non-Consumer finance receivables
|
34,372
|
|
|
31,430
|
|
Total recorded investment
|
$
|
110,486
|
|
|
$
|
105,226
|
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8. FORD CREDIT FINANCE RECEIVABLES (Continued)
Credit Quality
Consumer Portfolio. Credit quality ratings for consumer receivables are based on aging. Consumer receivables credit quality ratings are as follows:
|
|
•
|
Pass – current to 60 days past due;
|
|
|
•
|
Special Mention – 61 to 120 days past due and in intensified collection status; and
|
|
|
•
|
Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has already been charged off, as measured using the fair value of collateral less costs to sell.
|
Non-Consumer Portfolio. Dealers are assigned to one of four groups according to risk ratings as follows:
|
|
•
|
Group I – strong to superior financial metrics;
|
|
|
•
|
Group II – fair to favorable financial metrics;
|
|
|
•
|
Group III – marginal to weak financial metrics; and
|
|
|
•
|
Group IV – poor financial metrics, including dealers classified as uncollectible.
|
The credit quality analysis of dealer financing receivables was as follows (in millions):
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
September 30,
2019
|
Dealer Financing
|
|
|
|
Group I
|
$
|
27,032
|
|
|
$
|
24,594
|
|
Group II
|
5,635
|
|
|
4,733
|
|
Group III
|
1,576
|
|
|
2,012
|
|
Group IV
|
129
|
|
|
91
|
|
Total recorded investment
|
$
|
34,372
|
|
|
$
|
31,430
|
|
Impaired Receivables. Impaired consumer receivables include accounts that have been rewritten or modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code that are considered to be Troubled Debt Restructurings (“TDRs”), as well as all accounts greater than 120 days past due. Impaired non-consumer receivables represent accounts with dealers that have weak or poor financial metrics or dealer financing that has been modified in TDRs. The recorded investment of consumer receivables that were impaired at December 31, 2018 and September 30, 2019 was $370 million and $334 million, or 0.5% and 0.5% of consumer receivables, respectively. The recorded investment of non-consumer receivables that were impaired at December 31, 2018 and September 30, 2019 was $129 million and $91 million, or 0.4% and 0.3% of non-consumer receivables, respectively. Impaired finance receivables are evaluated both collectively and specifically.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 9. FORD CREDIT ALLOWANCE FOR CREDIT LOSSES
An analysis of the allowance for credit losses related to finance receivables for the periods ended September 30 was as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2018
|
|
First Nine Months 2018
|
|
Consumer
|
|
Non-Consumer
|
|
Total
|
|
Consumer
|
|
Non-Consumer
|
|
Total
|
Allowance for credit losses
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
573
|
|
|
$
|
14
|
|
|
$
|
587
|
|
|
$
|
582
|
|
|
$
|
15
|
|
|
$
|
597
|
|
Charge-offs
|
(128
|
)
|
|
(43
|
)
|
|
(171
|
)
|
|
(382
|
)
|
|
(46
|
)
|
|
(428
|
)
|
Recoveries
|
40
|
|
|
4
|
|
|
44
|
|
|
126
|
|
|
6
|
|
|
132
|
|
Provision for credit losses
|
73
|
|
|
52
|
|
|
125
|
|
|
237
|
|
|
52
|
|
|
289
|
|
Other
|
1
|
|
|
—
|
|
|
1
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
Ending balance
|
$
|
559
|
|
|
$
|
27
|
|
|
$
|
586
|
|
|
$
|
559
|
|
|
$
|
27
|
|
|
$
|
586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of ending balance of allowance for credit losses
|
Collective impairment allowance
|
|
|
|
|
|
|
$
|
538
|
|
|
$
|
14
|
|
|
$
|
552
|
|
Specific impairment allowance
|
|
|
|
|
|
|
21
|
|
|
13
|
|
|
34
|
|
Ending balance
|
|
|
|
|
|
|
|
|
|
559
|
|
|
27
|
|
|
586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of ending balance of finance receivables
|
Collectively evaluated for impairment
|
|
|
|
|
|
|
$
|
76,315
|
|
|
$
|
31,588
|
|
|
$
|
107,903
|
|
Specifically evaluated for impairment
|
|
|
|
|
|
|
379
|
|
|
165
|
|
|
544
|
|
Recorded investment
|
|
|
|
|
|
|
|
|
|
76,694
|
|
|
31,753
|
|
|
108,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance, net of allowance for credit losses
|
|
|
|
|
|
$
|
76,135
|
|
|
$
|
31,726
|
|
|
$
|
107,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2019
|
|
First Nine Months 2019
|
|
Consumer
|
|
Non-Consumer
|
|
Total
|
|
Consumer
|
|
Non-Consumer
|
|
Total
|
Allowance for credit losses
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
496
|
|
|
$
|
17
|
|
|
$
|
513
|
|
|
$
|
566
|
|
|
$
|
23
|
|
|
$
|
589
|
|
Charge-offs
|
(129
|
)
|
|
(1
|
)
|
|
(130
|
)
|
|
(383
|
)
|
|
(18
|
)
|
|
(401
|
)
|
Recoveries
|
41
|
|
|
—
|
|
|
41
|
|
|
129
|
|
|
8
|
|
|
137
|
|
Provision for credit losses
|
93
|
|
|
—
|
|
|
93
|
|
|
187
|
|
|
2
|
|
|
189
|
|
Other
|
(3
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
Ending balance
|
$
|
498
|
|
|
$
|
15
|
|
|
$
|
513
|
|
|
$
|
498
|
|
|
$
|
15
|
|
|
$
|
513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of ending balance of allowance for credit losses
|
Collective impairment allowance
|
|
|
|
|
|
|
$
|
479
|
|
|
$
|
13
|
|
|
$
|
492
|
|
Specific impairment allowance
|
|
|
|
|
|
|
19
|
|
|
2
|
|
|
21
|
|
Ending balance
|
|
|
|
|
|
|
498
|
|
|
15
|
|
|
513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of ending balance of finance receivables
|
Collectively evaluated for impairment
|
|
|
|
|
|
|
$
|
73,462
|
|
|
$
|
31,339
|
|
|
$
|
104,801
|
|
Specifically evaluated for impairment
|
|
|
|
|
|
|
334
|
|
|
91
|
|
|
425
|
|
Recorded investment
|
|
|
|
|
|
|
73,796
|
|
|
31,430
|
|
|
105,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance, net of allowance for credit losses
|
|
|
|
|
|
$
|
73,298
|
|
|
$
|
31,415
|
|
|
$
|
104,713
|
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 10. INVENTORIES
Inventories were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
September 30,
2019
|
Raw materials, work-in-process, and supplies
|
$
|
4,536
|
|
|
$
|
4,524
|
|
Finished products
|
6,684
|
|
|
7,927
|
|
Total inventories
|
$
|
11,220
|
|
|
$
|
12,451
|
|
NOTE 11. NET INVESTMENT IN OPERATING LEASES
Net investment in operating leases consists primarily of lease contracts for vehicles with individuals, daily rental companies, government entities, and fleet customers. Assets subject to operating leases are depreciated using the straight-line method over the term of the lease to reduce the asset to its estimated residual value. Estimated residual values are based on assumptions for used vehicle prices at lease termination and the number of vehicles that are expected to be returned.
The net investment in operating leases was as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
September 30,
2019
|
Automotive Segment
|
|
|
|
|
Vehicles, net of depreciation
|
|
$
|
1,705
|
|
|
$
|
1,960
|
|
Ford Credit Segment
|
|
|
|
|
Vehicles and other equipment, at cost (a)
|
|
33,557
|
|
|
33,298
|
|
Accumulated depreciation
|
|
(6,143
|
)
|
|
(5,806
|
)
|
Total Ford Credit Segment
|
|
27,414
|
|
|
27,492
|
|
Total
|
|
$
|
29,119
|
|
|
$
|
29,452
|
|
__________
|
|
(a)
|
Includes Ford Credit’s operating lease assets of $16.3 billion and $12.7 billion at December 31, 2018 and September 30, 2019, respectively, that have been included in securitization transactions. These net investments in operating leases are available only for payment of the debt or other obligations issued or arising in the securitization transactions; they are not available to pay other obligations or the claims of other creditors.
|
Ford Credit Segment
Included in Ford Credit revenues are rents on operating leases. The amounts contractually due for minimum rentals on operating leases at December 31, 2018 were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Total
|
Minimum rentals on operating leases
|
|
$
|
4,708
|
|
|
$
|
2,929
|
|
|
$
|
1,083
|
|
|
$
|
83
|
|
|
$
|
6
|
|
|
$
|
8,809
|
|
The amounts contractually due on operating leases at September 30, 2019 were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within one year
|
|
After one year and within two years
|
|
After two years and within three years
|
|
After three years and within four years
|
|
After four years and within five years
|
|
Total
|
Operating lease payments
|
|
$
|
4,702
|
|
|
$
|
2,917
|
|
|
$
|
1,014
|
|
|
$
|
72
|
|
|
$
|
5
|
|
|
$
|
8,710
|
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 12. OTHER INVESTMENTS
We have investments in entities for which we do not have the ability to exercise significant influence and fair values are not readily available. We record these investments at cost (less impairment, if any), adjusted for observable price changes in orderly transactions for the identical or a similar investment of the same issuer. We report the carrying value of these investments in Other assets in the non-current assets section of our consolidated balance sheet. These investments were $250 million and $846 million at December 31, 2018 and September 30, 2019, respectively. The increase from December 31, 2018 primarily reflects the $500 million investment in Rivian we made during the second quarter of 2019, as well as adjustments for observable price events, none of which were material.
NOTE 13. GOODWILL
The net carrying amount of goodwill was $264 million and $291 million at December 31, 2018 and September 30, 2019, respectively, and is reported in Other assets in the non-current assets section of our consolidated balance sheet. The increase from December 31, 2018 primarily reflects the acquisition of Journey Holding Corporation in the third quarter of 2019.
NOTE 14. OTHER LIABILITIES AND DEFERRED REVENUE
Other liabilities and deferred revenue were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
September 30,
2019
|
Current
|
|
|
|
Dealer and dealers’ customer allowances and claims
|
$
|
11,369
|
|
|
$
|
11,578
|
|
Deferred revenue
|
2,095
|
|
|
2,570
|
|
Employee benefit plans
|
1,755
|
|
|
1,912
|
|
Accrued interest
|
988
|
|
|
865
|
|
OPEB (a)
|
339
|
|
|
341
|
|
Pension (a)
|
204
|
|
|
201
|
|
Operating lease liabilities
|
—
|
|
|
309
|
|
Other
|
3,806
|
|
|
3,955
|
|
Total current other liabilities and deferred revenue
|
$
|
20,556
|
|
|
$
|
21,731
|
|
Non-current
|
|
|
|
|
|
Pension (a)
|
$
|
9,423
|
|
|
$
|
8,860
|
|
OPEB (a)
|
5,220
|
|
|
5,186
|
|
Dealer and dealers’ customer allowances and claims
|
2,497
|
|
|
2,117
|
|
Deferred revenue
|
3,985
|
|
|
4,168
|
|
Operating lease liabilities
|
—
|
|
|
958
|
|
Employee benefit plans
|
1,080
|
|
|
1,133
|
|
Other
|
1,383
|
|
|
1,307
|
|
Total non-current other liabilities and deferred revenue
|
$
|
23,588
|
|
|
$
|
23,729
|
|
__________
|
|
(a)
|
Balances at September 30, 2019 reflect pension and OPEB liabilities at December 31, 2018, updated for service and interest cost, expected return on assets, settlement gain and associated interim remeasurement (where applicable), separation expense, actual benefit payments, and cash contributions. For plans without interim remeasurement, the discount rate and rate of expected return assumptions are unchanged from year-end 2018. Included in Other assets are pension assets of $3.3 billion and $3.7 billion at December 31, 2018 and September 30, 2019, respectively.
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 15. RETIREMENT BENEFITS
Defined Benefit Plans - Expense
The pre-tax net periodic benefit cost/(income) for our defined benefit pension and OPEB plans for the periods ended September 30 were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
Pension Benefits
|
|
|
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Worldwide OPEB
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Service cost
|
$
|
136
|
|
|
$
|
121
|
|
|
$
|
146
|
|
|
$
|
125
|
|
|
$
|
13
|
|
|
$
|
11
|
|
Interest cost
|
367
|
|
|
381
|
|
|
168
|
|
|
170
|
|
|
49
|
|
|
53
|
|
Expected return on assets
|
(721
|
)
|
|
(674
|
)
|
|
(318
|
)
|
|
(277
|
)
|
|
—
|
|
|
—
|
|
Amortization of prior service costs/(credits)
|
36
|
|
|
22
|
|
|
6
|
|
|
8
|
|
|
(27
|
)
|
|
(18
|
)
|
Net remeasurement (gain)/loss
|
—
|
|
|
263
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
Separation programs/other
|
15
|
|
|
7
|
|
|
47
|
|
|
78
|
|
|
—
|
|
|
—
|
|
Settlements and curtailments
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
Net periodic benefit cost/(income)
|
$
|
(167
|
)
|
|
$
|
104
|
|
|
$
|
49
|
|
|
$
|
128
|
|
|
$
|
35
|
|
|
$
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Nine Months
|
|
Pension Benefits
|
|
|
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Worldwide OPEB
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Service cost
|
$
|
408
|
|
|
$
|
349
|
|
|
$
|
449
|
|
|
$
|
381
|
|
|
$
|
40
|
|
|
$
|
33
|
|
Interest cost
|
1,100
|
|
|
1,199
|
|
|
517
|
|
|
519
|
|
|
147
|
|
|
158
|
|
Expected return on assets
|
(2,165
|
)
|
|
(1,972
|
)
|
|
(981
|
)
|
|
(844
|
)
|
|
—
|
|
|
—
|
|
Amortization of prior service costs/(credits)
|
107
|
|
|
65
|
|
|
19
|
|
|
25
|
|
|
(82
|
)
|
|
(53
|
)
|
Net remeasurement (gain)/loss
|
(26
|
)
|
|
253
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
Separation programs/other
|
29
|
|
|
8
|
|
|
65
|
|
|
322
|
|
|
1
|
|
|
—
|
|
Settlements and curtailments
|
(15
|
)
|
|
(66
|
)
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
Net periodic benefit cost/(income)
|
$
|
(562
|
)
|
|
$
|
(164
|
)
|
|
$
|
69
|
|
|
$
|
427
|
|
|
$
|
106
|
|
|
$
|
138
|
|
The service cost component is included in Cost of sales and Selling, administrative, and other expenses. Other components of net periodic benefit cost/(income) are included in Other income/(loss), net on our consolidated income statement.
As part of our ongoing global redesign activities, we recognized additional pension expense of $85 million and $330 million in the third quarter and first nine months of 2019, respectively, related to separation programs. In addition, in the third quarter, we recognized settlements and curtailments, which required plan remeasurements at current discount rates, asset returns, and economic conditions. This resulted in remeasurement losses of $306 million and $296 million in the third quarter and first nine months of 2019, respectively. Additionally, we recognized settlement and curtailment gains of $35 million and $85 million in the third quarter and first nine months of 2019, respectively. Until our global redesign actions are completed, we anticipate further adjustments to our plans in subsequent periods.
Pension Plan Contributions
During 2019, we expect to contribute about $750 million (most of which are mandatory contributions) from cash and cash equivalents to our worldwide funded pension plans and to make about $350 million of benefit payments to participants in unfunded plans, for a total of about $1.1 billion. In the first nine months of 2019, we contributed $611 million (including $140 million in discretionary contributions in the United States) to our worldwide funded pension plans and made $253 million of benefit payments to participants in unfunded plans.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 16. LEASE COMMITMENTS
We lease land, dealership facilities, offices, distribution centers, warehouses, and equipment under agreements with contractual periods ranging from less than one year to 40 years. Many of our leases contain one or more options to extend. In certain dealership lease agreements, we are the tenant and we sublease the site to a dealer. In the event the sublease is terminated, we have the option to terminate the head lease. We include options that we are reasonably certain to exercise in our evaluation of the lease term after considering all relevant economic and financial factors.
Leases that are economically similar to the purchase of an asset are classified as finance leases. The leased (“right-of-use”) assets in finance lease arrangements are reported in Net property on our consolidated balance sheet. Otherwise, the leases are classified as operating leases and reported in Other assets in the non-current assets section of our consolidated balance sheet.
For the majority of our leases commencing after January 1, 2019, we do not separate the non-lease components (e.g., maintenance and operating services) from the lease components to which they relate. Instead, non-lease components are included in the measurement of the lease liabilities. However, we do separate lease and non-lease components for contracts containing a significant service component (e.g., energy performance contracts). We calculate the initial lease liability as the present value of fixed payments not yet paid and variable payments that are based on a market rate or an index (e.g., CPI), measured at commencement. The majority of our leases are discounted using our incremental borrowing rate because the rate implicit in the lease is not readily determinable. All other variable payments are expensed as incurred.
Lease right-of-use assets and liabilities at September 30 were as follows (in millions):
|
|
|
|
|
|
|
|
September 30,
2019
|
Operating leases
|
|
|
Other assets, non-current
|
|
$
|
1,264
|
|
|
|
|
Other liabilities and deferred revenue, current
|
|
$
|
309
|
|
Other liabilities and deferred revenue, non-current
|
|
958
|
|
Total operating lease liabilities
|
|
$
|
1,267
|
|
|
|
|
Finance leases
|
|
|
Property and equipment, gross
|
|
$
|
227
|
|
Accumulated depreciation
|
|
(40
|
)
|
Property and equipment, net
|
|
$
|
187
|
|
|
|
|
Automotive debt payable within one year
|
|
$
|
88
|
|
Automotive long-term debt
|
|
68
|
|
Total finance lease liabilities
|
|
$
|
156
|
|
Minimum non-cancellable operating lease commitments at December 31, 2018 were as follows (in millions):
|
|
|
|
|
|
|
|
Operating Leases
|
2019
|
|
$
|
363
|
|
2020
|
|
271
|
|
2021
|
|
193
|
|
2022
|
|
141
|
|
2023
|
|
106
|
|
Thereafter
|
|
437
|
|
Total
|
|
$
|
1,511
|
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 16. LEASE COMMITMENTS (Continued)
The amounts contractually due on our lease liabilities as of September 30, 2019 were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Leases
|
|
Finance
Leases (a)
|
Within one year
|
|
$
|
347
|
|
|
$
|
93
|
|
After one year and within two years
|
|
258
|
|
|
25
|
|
After two years and within three years
|
|
185
|
|
|
19
|
|
After three years and within four years
|
|
141
|
|
|
15
|
|
After four years and within five years
|
|
110
|
|
|
8
|
|
After five years
|
|
394
|
|
|
6
|
|
Total
|
|
1,435
|
|
|
166
|
|
Less: Present value discount
|
|
168
|
|
|
10
|
|
Total lease liabilities
|
|
$
|
1,267
|
|
|
$
|
156
|
|
__________
|
|
(a)
|
Excludes approximately $400 million in future lease payments for a 20-year finance lease commencing in a future period.
|
Supplemental cash flow information related to leases for the period ended September 30 was as follows (in millions):
|
|
|
|
|
|
|
|
First Nine Months 2019
|
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
Operating cash flows from operating leases
|
|
$
|
320
|
|
Operating cash flows from finance leases
|
|
4
|
|
Financing cash flows from finance leases
|
|
25
|
|
Right-of-use assets obtained in exchange for lease liabilities
|
|
|
Operating leases
|
|
$
|
245
|
|
Finance leases
|
|
16
|
|
The components of lease expense for the periods ended September 30 were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2019
|
|
First Nine Months 2019
|
Operating lease expense
|
|
$
|
108
|
|
|
$
|
328
|
|
Variable lease expense
|
|
15
|
|
|
46
|
|
Sublease income
|
|
(5
|
)
|
|
(13
|
)
|
Finance lease expense
|
|
|
|
|
Amortization of right-of-use assets
|
|
3
|
|
|
10
|
|
Interest on lease liabilities
|
|
1
|
|
|
4
|
|
Total lease expense
|
|
$
|
122
|
|
|
$
|
375
|
|
The weighted average remaining lease term and weighted average discount rate at September 30 were as follows:
|
|
|
|
|
|
|
September 30,
2019
|
Weighted average remaining lease term (years)
|
|
|
Operating leases
|
|
6.7
|
|
Finance leases
|
|
2.9
|
|
Weighted average discount rate
|
|
|
Operating leases
|
|
3.5
|
%
|
Finance leases
|
|
3.5
|
%
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 17. DEBT
The carrying value of Automotive, Ford Credit, and Other debt was as follows (in millions):
|
|
|
|
|
|
|
|
|
Automotive
|
December 31,
2018
|
|
September 30,
2019
|
Debt payable within one year
|
|
|
|
Short-term
|
$
|
614
|
|
|
$
|
512
|
|
Long-term payable within one year
|
|
|
|
|
|
U.S. Department of Energy Advanced Technology Vehicles Manufacturing (“DOE ATVM”) Incentive Program
|
591
|
|
|
591
|
|
Other debt
|
1,125
|
|
|
519
|
|
Unamortized (discount)/premium
|
(16
|
)
|
|
—
|
|
Total debt payable within one year
|
2,314
|
|
|
1,622
|
|
Long-term debt payable after one year
|
|
|
|
|
|
Public unsecured debt securities (a)
|
9,033
|
|
|
9,783
|
|
DOE ATVM Incentive Program
|
1,470
|
|
|
1,027
|
|
Delayed draw term loan (b)
|
—
|
|
|
1,500
|
|
Other debt
|
1,026
|
|
|
562
|
|
Adjustments
|
|
|
|
Unamortized (discount)/premium
|
(224
|
)
|
|
(164
|
)
|
Unamortized issuance costs
|
(72
|
)
|
|
(93
|
)
|
Total long-term debt payable after one year
|
11,233
|
|
|
12,615
|
|
Total Automotive
|
$
|
13,547
|
|
|
$
|
14,237
|
|
Fair value of Automotive debt (c)
|
$
|
13,319
|
|
|
$
|
14,806
|
|
Ford Credit
|
|
|
|
|
|
Debt payable within one year
|
|
|
|
|
|
Short-term
|
$
|
14,705
|
|
|
$
|
13,541
|
|
Long-term payable within one year
|
|
|
|
|
|
Unsecured debt
|
14,373
|
|
|
14,854
|
|
Asset-backed debt
|
22,130
|
|
|
24,496
|
|
Adjustments
|
|
|
|
Unamortized (discount)/premium
|
2
|
|
|
—
|
|
Unamortized issuance costs
|
(16
|
)
|
|
(19
|
)
|
Fair value adjustments (d)
|
(15
|
)
|
|
(20
|
)
|
Total debt payable within one year
|
51,179
|
|
|
52,852
|
|
Long-term debt payable after one year
|
|
|
|
Unsecured debt
|
52,409
|
|
|
55,651
|
|
Asset-backed debt
|
36,844
|
|
|
30,209
|
|
Adjustments
|
|
|
|
Unamortized (discount)/premium
|
—
|
|
|
(2
|
)
|
Unamortized issuance costs
|
(195
|
)
|
|
(200
|
)
|
Fair value adjustments (d)
|
(171
|
)
|
|
764
|
|
Total long-term debt payable after one year
|
88,887
|
|
|
86,422
|
|
Total Ford Credit
|
$
|
140,066
|
|
|
$
|
139,274
|
|
Fair value of Ford Credit debt (c)
|
$
|
138,809
|
|
|
$
|
140,110
|
|
Other
|
|
|
|
Long-term debt payable within one year
|
$
|
—
|
|
|
$
|
130
|
|
Long-term debt payable after one year
|
|
|
|
Unsecured debt
|
604
|
|
|
474
|
|
Adjustments
|
|
|
|
Unamortized (discount)/premium
|
(3
|
)
|
|
(3
|
)
|
Unamortized issuance costs
|
(1
|
)
|
|
(1
|
)
|
Total long-term debt payable after one year
|
600
|
|
|
470
|
|
Total Other
|
$
|
600
|
|
|
$
|
600
|
|
Fair value of Other debt
|
$
|
697
|
|
|
$
|
709
|
|
__________
|
|
(a)
|
Public unsecured debt securities increased by $750 million reflecting our unsecured debt (retail bond) issuance in the second quarter of 2019.
|
|
|
(b)
|
We drew $500 million in the second quarter of 2019 and $1 billion in the third quarter of 2019 under our delayed draw term loan facility.
|
|
|
(c)
|
The fair value of debt includes $458 million and $396 million of Automotive segment short-term debt and $13.8 billion and $12.7 billion of Ford Credit segment short-term debt at December 31, 2018 and September 30, 2019, respectively, carried at cost, which approximates fair value. All other debt is categorized within Level 2 of the fair value hierarchy.
|
|
|
(d)
|
These adjustments relate to designated fair value hedges. The carrying value of hedged debt was $38 billion and $39.3 billion at December 31, 2018 and September 30, 2019, respectively.
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 18. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
In the normal course of business, our operations are exposed to global market risks, including the effect of changes in foreign currency exchange rates, certain commodity prices, and interest rates. To manage these risks, we enter into highly effective derivative contracts. We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting.
Income Effect of Derivative Financial Instruments
The gains/(losses), by hedge designation, reported in income for the periods ended September 30 were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
First Nine Months
|
Cash flow hedges (a)
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Reclassified from AOCI to Cost of sales
|
|
|
|
|
|
|
|
Foreign currency exchange contracts
|
$
|
45
|
|
|
$
|
(8
|
)
|
|
$
|
50
|
|
|
$
|
90
|
|
Commodity contracts
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(21
|
)
|
Fair value hedges
|
|
|
|
|
|
|
|
Interest rate contracts
|
|
|
|
|
|
|
|
Net interest settlements and accruals on hedging instruments
|
(5
|
)
|
|
—
|
|
|
19
|
|
|
(32
|
)
|
Fair value changes on hedging instruments
|
(102
|
)
|
|
203
|
|
|
(531
|
)
|
|
927
|
|
Fair value changes on hedged debt
|
110
|
|
|
(194
|
)
|
|
521
|
|
|
(910
|
)
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
Foreign currency exchange contracts (b)
|
(10
|
)
|
|
347
|
|
|
290
|
|
|
324
|
|
Cross-currency interest rate swap contracts
|
(75
|
)
|
|
(257
|
)
|
|
(258
|
)
|
|
(261
|
)
|
Interest rate contracts
|
9
|
|
|
18
|
|
|
(28
|
)
|
|
(12
|
)
|
Commodity contracts
|
(24
|
)
|
|
(8
|
)
|
|
(62
|
)
|
|
(9
|
)
|
Total
|
$
|
(52
|
)
|
|
$
|
91
|
|
|
$
|
1
|
|
|
$
|
96
|
|
__________
|
|
(a)
|
For the third quarter and first nine months of 2018, a $91 million loss and a $30 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax related to foreign currency exchange contracts. For the third quarter and first nine months of 2019, a $68 million loss and a $384 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax related to foreign currency exchange contracts. For the third quarter and first nine months of 2019, a $32 million loss and $58 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax related to commodity contracts.
|
|
|
(b)
|
For the third quarter and first nine months of 2018, a $16 million loss and a $186 million gain were reported in Cost of sales and a $6 million gain and a $104 million gain were reported in Other income/(loss), net, respectively. For the third quarter and first nine months of 2019, a $193 million gain and a $136 million gain were reported in Cost of sales and a $154 million gain and $188 million gain were reported in Other income/(loss), net, respectively.
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 18. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
Balance Sheet Effect of Derivative Financial Instruments
Derivative assets and liabilities are reported on our consolidated balance sheet at fair value and are presented on a gross basis. The notional amounts of the derivative instruments do not necessarily represent amounts exchanged by the parties and are not a direct measure of our financial exposure. We also enter into master agreements with counterparties that may allow for netting of exposures in the event of default or breach of the counterparty agreement. Collateral represents cash received or paid under reciprocal arrangements that we have entered into with our derivative counterparties which we do not use to offset our derivative assets and liabilities.
The fair value of our derivative instruments and the associated notional amounts, presented gross, were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
September 30, 2019
|
|
Notional
|
|
Fair Value of
Assets
|
|
Fair Value of
Liabilities
|
|
Notional
|
|
Fair Value of
Assets
|
|
Fair Value of
Liabilities
|
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange contracts
|
$
|
15,972
|
|
|
$
|
391
|
|
|
$
|
110
|
|
|
$
|
13,849
|
|
|
$
|
113
|
|
|
$
|
208
|
|
Commodity contracts
|
327
|
|
|
—
|
|
|
20
|
|
|
559
|
|
|
—
|
|
|
56
|
|
Fair value hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts
|
22,989
|
|
|
158
|
|
|
208
|
|
|
25,235
|
|
|
789
|
|
|
10
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange contracts
|
20,695
|
|
|
202
|
|
|
99
|
|
|
22,383
|
|
|
340
|
|
|
154
|
|
Cross-currency interest rate swap contracts
|
5,235
|
|
|
232
|
|
|
157
|
|
|
7,203
|
|
|
127
|
|
|
319
|
|
Interest rate contracts
|
76,904
|
|
|
235
|
|
|
274
|
|
|
64,523
|
|
|
271
|
|
|
290
|
|
Commodity contracts
|
638
|
|
|
3
|
|
|
45
|
|
|
426
|
|
|
2
|
|
|
18
|
|
Total derivative financial instruments, gross (a) (b)
|
$
|
142,760
|
|
|
$
|
1,221
|
|
|
$
|
913
|
|
|
$
|
134,178
|
|
|
$
|
1,642
|
|
|
$
|
1,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
|
|
$
|
681
|
|
|
$
|
601
|
|
|
|
|
$
|
590
|
|
|
$
|
795
|
|
Non-current portion
|
|
|
540
|
|
|
312
|
|
|
|
|
1,052
|
|
|
260
|
|
Total derivative financial instruments, gross
|
|
|
$
|
1,221
|
|
|
$
|
913
|
|
|
|
|
$
|
1,642
|
|
|
$
|
1,055
|
|
__________
|
|
(a)
|
At December 31, 2018 and September 30, 2019, we held collateral of $19 million and $24 million, and we posted collateral of $59 million and $100 million, respectively.
|
|
|
(b)
|
At December 31, 2018 and September 30, 2019, the fair value of assets and liabilities available for counterparty netting was $434 million and $536 million, respectively. All derivatives are categorized within Level 2 of the fair value hierarchy.
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 19. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES
We record costs associated with voluntary separations at the time of employee acceptance, unless the acceptance requires explicit approval by the Company. We record costs associated with involuntary separation programs when management has approved the plan for separation, the affected employees are identified, and it is unlikely that actions required to complete the separation plan will change significantly. Costs associated with benefits that are contingent on the employee continuing to provide service are accrued over the required service period.
Automotive Segment
As announced, we are executing a global redesign of our business. Redesign-related activities, including employee separation costs, payments to dealers and suppliers, and other charges, are recorded in Cost of sales and Selling, administrative, and other expenses. Below are actions we have initiated as part of the redesign.
Brazil. On February 15, 2019, Ford Motor Company Brasil Ltda. (“Ford Brazil”), our subsidiary in Brazil, committed to a plan to exit the commercial heavy truck business in South America. As a result, Ford Brazil will cease production at the São Bernardo do Campo plant in Brazil during 2019.
Russia. On March 27, 2019, Ford Sollers Netherlands B.V. (“Ford Sollers”), a joint venture between Ford and Sollers PJSC (“Sollers”) in which Ford had control, announced its plan to restructure its business in Russia to focus exclusively on commercial vehicles and to exit the passenger car segment. As a result of these actions, Ford acquired 100% ownership of Ford Sollers and ceased production at the Naberezhnye Chelny and St. Petersburg vehicle assembly plants and the Elabuga engine plant during the second quarter of 2019.
Subsequent to completion of the restructuring actions, in July 2019, Ford sold a 51% controlling interest in the restructured entity to Sollers, which resulted in deconsolidation of our Ford Sollers subsidiary. Our continued involvement in Ford Sollers is accounted for as an equity method investment.
United Kingdom. On June 5, 2019, Ford Motor Company Limited (“Ford of Britain”), a subsidiary of Ford, announced its plan to exit the Ford Bridgend plant in South Wales in 2020.
India. In the third quarter of 2019, Ford committed to a plan to sell specific assets in our India Automotive operations. See Note 21 for more information concerning this plan.
Other Global Redesign Actions. In 2018, we announced our plan to end production at the Ford Aquitaine Industries plant in Bordeaux, France, and in March 2019, we announced our plan to phase-out the production of the C-Max at the Saarlouis Body and Assembly Plant in Germany. Furthermore, we are reducing our global workforce and taking other restructuring actions.
The following table summarizes the redesign-related activities for the periods ended September 30, which are recorded in Other liabilities and deferred revenue (in millions):
|
|
|
|
|
|
|
|
|
|
Third Quarter 2019
|
|
First Nine Months 2019
|
Beginning balance
|
$
|
929
|
|
|
$
|
291
|
|
Changes in accruals (a)
|
173
|
|
|
1,181
|
|
Payments
|
(334
|
)
|
|
(692
|
)
|
Foreign currency translation
|
(39
|
)
|
|
(51
|
)
|
Ending balance
|
$
|
729
|
|
|
$
|
729
|
|
__________
(a) Excludes pension costs of $49 million and $244 million in the third quarter and first nine months of 2019, respectively.
We also recorded $821 million and $1.4 billion in the third quarter and first nine months of 2019, respectively, for the impairment of our held-for-sale India Automotive operations, accelerated depreciation, and other non-cash items. We estimate that we will incur total charges in 2019 that range between $3 billion and $3.5 billion related to the actions above, primarily attributable to employee separations, the impairment of our held-for-sale India Automotive operations, accelerated depreciation, and dealer and supplier settlements.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 20. REDEEMABLE NONCONTROLLING INTEREST
We formed the Ford Sollers joint venture with Sollers in October 2011 to operate in Russia. The value of the redeemable noncontrolling interest, reflecting redemption features embedded in the 50% equity interest in the joint venture held by Sollers, reported in the mezzanine section of our consolidated balance sheet at December 31, 2018 was $100 million. The redeemable noncontrolling interest became exercisable beginning on January 1, 2019, and Sollers exercised its option in March 2019 for a value of $135 million. The $35 million increase in value from December 2018 was reported in Income/(Loss) attributable to noncontrolling interests on our consolidated income statement during the first quarter of 2019. We purchased the noncontrolling interest from Sollers in the second quarter of 2019, derecognized the redeemable noncontrolling interest balance, and restructured our Russian operations. Subsequent to completion of the restructuring actions, in July 2019, we sold a 51% controlling interest in our restructured operations to Sollers, which resulted in deconsolidation of our Ford Sollers subsidiary. See Note 19 for more information concerning the restructuring of our business in Russia.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 21. HELD-FOR-SALE OPERATIONS
Automotive Segment
In the third quarter of 2019, we committed to a plan to sell specific assets in our India Automotive operations. We entered into a definitive agreement to form a joint venture with Mahindra & Mahindra Limited (“Mahindra”), with Mahindra owning a 51% controlling stake and Ford owning a 49% stake. Under the terms of the transaction, which is expected to close in the next twelve months, we will sell certain India Automotive operations to the joint venture. Accordingly, we have reported the assets and liabilities of these operations as held for sale and ceased depreciation and amortization of those assets.
The assets and liabilities of our India Automotive operations classified as held for sale were as follows (in millions):
|
|
|
|
|
|
|
|
September 30,
2019
|
Assets
|
|
|
Trade and other receivables, net
|
|
$
|
286
|
|
Inventories
|
|
289
|
|
Other assets, current
|
|
149
|
|
Net property
|
|
280
|
|
Other assets, non-current
|
|
12
|
|
Total assets of held-for-sale operations
|
|
1,016
|
|
Less: Intercompany asset balances
|
|
(204
|
)
|
Consolidated total assets of held-for-sale operations (a)
|
|
$
|
812
|
|
|
|
|
Liabilities
|
|
|
Payables
|
|
$
|
573
|
|
Other liabilities and deferred revenue, current
|
|
74
|
|
Automotive debt payable within one year
|
|
92
|
|
Other liabilities and deferred revenue, non-current
|
|
28
|
|
Total liabilities of held-for-sale operations
|
|
767
|
|
Less: Intercompany liability balances
|
|
(243
|
)
|
Consolidated total liabilities of held-for-sale operations (a)
|
|
$
|
524
|
|
__________
|
|
(a)
|
As of September 30, 2019, intercompany items and transactions have been eliminated in the consolidated balance sheet. Upon closing, the buyer will assume the intercompany assets and liabilities. Accordingly, we have presented those balances in the table for informational purposes.
|
We recognized a pre-tax impairment charge of $799 million reported in Cost of sales in the third quarter of 2019 to adjust the carrying value of the held-for-sale assets to fair value less cost to sell. The value is measured on a nonrecurring basis and categorized within Level 3 of the fair value hierarchy. We determined fair value using a market approach, estimated based on expected proceeds to be received, which we conclude is most representative of the value of the assets given the current market conditions, the characteristics of viable market participants, and the pending sales transaction. The transaction is subject to regulatory approvals and satisfaction of other closing conditions that may impact the final proceeds received.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 22. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)
The changes in the balances for each component of accumulated other comprehensive income/(loss) attributable to Ford Motor Company for the periods ended September 30 were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
First Nine Months
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
Foreign currency translation
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
(4,577
|
)
|
|
$
|
(4,684
|
)
|
|
$
|
(4,277
|
)
|
|
$
|
(4,800
|
)
|
Gains/(Losses) on foreign currency translation
|
(136
|
)
|
|
(301
|
)
|
|
(419
|
)
|
|
(169
|
)
|
Less: Tax/(Tax benefit)
|
(2
|
)
|
|
58
|
|
|
17
|
|
|
74
|
|
Net gains/(losses) on foreign currency translation
|
(134
|
)
|
|
(359
|
)
|
|
(436
|
)
|
|
(243
|
)
|
(Gains)/Losses reclassified from AOCI to net income (a)
|
1
|
|
|
(1
|
)
|
|
3
|
|
|
(1
|
)
|
Other comprehensive income/(loss), net of tax
|
(133
|
)
|
|
(360
|
)
|
|
(433
|
)
|
|
(244
|
)
|
Ending balance
|
$
|
(4,710
|
)
|
|
$
|
(5,044
|
)
|
|
$
|
(4,710
|
)
|
|
$
|
(5,044
|
)
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
(103
|
)
|
|
$
|
63
|
|
|
$
|
(48
|
)
|
|
$
|
(59
|
)
|
Gains/(Losses) on available for sale securities
|
(7
|
)
|
|
15
|
|
|
(91
|
)
|
|
169
|
|
Less: Tax/(Tax benefit)
|
(1
|
)
|
|
4
|
|
|
(22
|
)
|
|
40
|
|
Net gains/(losses) on available for sale securities
|
(6
|
)
|
|
11
|
|
|
(69
|
)
|
|
129
|
|
(Gains)/Losses reclassified from AOCI to net income
|
4
|
|
|
(3
|
)
|
|
14
|
|
|
2
|
|
Less: Tax/(Tax benefit)
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
Net (gains)/losses reclassified from AOCI to net income
|
4
|
|
|
(3
|
)
|
|
12
|
|
|
1
|
|
Other comprehensive income/(loss), net of tax
|
(2
|
)
|
|
8
|
|
|
(57
|
)
|
|
130
|
|
Ending balance
|
$
|
(105
|
)
|
|
$
|
71
|
|
|
$
|
(105
|
)
|
|
$
|
71
|
|
|
|
|
|
|
|
|
|
Derivative instruments
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
103
|
|
|
$
|
(128
|
)
|
|
$
|
18
|
|
|
$
|
201
|
|
Gains/(Losses) on derivative instruments
|
(91
|
)
|
|
(100
|
)
|
|
30
|
|
|
(442
|
)
|
Less: Tax/(Tax benefit)
|
(21
|
)
|
|
(17
|
)
|
|
8
|
|
|
(95
|
)
|
Net gains/(losses) on derivative instruments
|
(70
|
)
|
|
(83
|
)
|
|
22
|
|
|
(347
|
)
|
(Gains)/Losses reclassified from AOCI to net income
|
(45
|
)
|
|
18
|
|
|
(50
|
)
|
|
(69
|
)
|
Less: Tax/(Tax benefit)
|
(12
|
)
|
|
4
|
|
|
(10
|
)
|
|
(18
|
)
|
Net (gains)/losses reclassified from AOCI to net income (b)
|
(33
|
)
|
|
14
|
|
|
(40
|
)
|
|
(51
|
)
|
Other comprehensive income/(loss), net of tax
|
(103
|
)
|
|
(69
|
)
|
|
(18
|
)
|
|
(398
|
)
|
Ending balance
|
$
|
—
|
|
|
$
|
(197
|
)
|
|
$
|
—
|
|
|
$
|
(197
|
)
|
|
|
|
|
|
|
|
|
Pension and other postretirement benefits
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
(2,627
|
)
|
|
$
|
(2,687
|
)
|
|
$
|
(2,652
|
)
|
|
$
|
(2,708
|
)
|
Amortization and recognition of prior service costs/(credits)
|
15
|
|
|
12
|
|
|
44
|
|
|
37
|
|
Less: Tax/(Tax benefit)
|
2
|
|
|
2
|
|
|
8
|
|
|
7
|
|
Net prior service costs/(credits) reclassified from AOCI to net income
|
13
|
|
|
10
|
|
|
36
|
|
|
30
|
|
Translation impact on non-U.S. plans
|
—
|
|
|
5
|
|
|
2
|
|
|
6
|
|
Other comprehensive income/(loss), net of tax
|
13
|
|
|
15
|
|
|
38
|
|
|
36
|
|
Ending balance
|
$
|
(2,614
|
)
|
|
$
|
(2,672
|
)
|
|
$
|
(2,614
|
)
|
|
$
|
(2,672
|
)
|
|
|
|
|
|
|
|
|
Total AOCI ending balance at September 30
|
$
|
(7,429
|
)
|
|
$
|
(7,842
|
)
|
|
$
|
(7,429
|
)
|
|
$
|
(7,842
|
)
|
__________
|
|
(a)
|
Reclassified to Other income/(loss), net.
|
|
|
(b)
|
Reclassified to Cost of sales. During the next twelve months we expect to reclassify existing net losses on cash flow hedges of $137 million. See Note 18 for additional information.
|
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 23. COMMITMENTS AND CONTINGENCIES
Commitments and contingencies primarily consist of guarantees and indemnifications, litigation and claims, and warranty and field service actions.
Guarantees and Indemnifications
The maximum potential payments and the carrying value of recorded liabilities related to guarantees and limited indemnities were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
September 30,
2019
|
Maximum potential payments
|
$
|
1,163
|
|
|
$
|
874
|
|
Carrying value of recorded liabilities related to guarantees and limited indemnities
|
351
|
|
|
278
|
|
Guarantees and indemnifications are recorded at fair value at their inception. We regularly review our performance risk under these arrangements, and in the event it becomes probable we will be required to perform under a guarantee or indemnity, the amount of probable payment is recorded.
We guarantee the resale value of vehicles sold in certain arrangements to daily rental companies. The maximum potential payment of $734 million as of September 30, 2019, included in the table above, represents the total proceeds we guarantee the rental company will receive on re-sale. Reflecting our present estimate of proceeds the rental companies will receive on resale from third parties, we have recorded $243 million as our best estimate of the amount we will have to pay under the guarantee.
We also guarantee debt and lease obligations of certain joint ventures, as well as certain financial obligations of outside third parties, including suppliers, to support our business and economic growth. Expiration dates vary through 2033, and guarantees will terminate on payment and/or cancellation of the underlying obligation. A payment by us would be triggered by failure of the joint venture or other third party to fulfill its obligation covered by the guarantee. In some circumstances, we are entitled to recover from a third party amounts paid by us under the guarantee. However, our ability to enforce these rights is sometimes stayed until the guaranteed party is paid in full, and may be limited in the event of insolvency of the third party or other circumstances.
In the ordinary course of business, we execute contracts involving indemnifications standard in the industry and indemnifications specific to a transaction, such as the sale of a business. These indemnifications might include and are not limited to claims relating to any of the following: environmental, tax, and shareholder matters; intellectual property rights; power generation contracts; governmental regulations and employment-related matters; dealer, supplier, and other commercial contractual relationships; and financial matters, such as securitizations. Performance under these indemnities generally would be triggered by a breach of terms of the contract or by a third-party claim. While some of these indemnifications are limited in nature, many of them do not limit potential payment. Therefore, we are unable to estimate a maximum amount of future payments that could result from claims made under these unlimited indemnities.
Litigation and Claims
Various legal actions, proceedings, and claims (generally, “matters”) are pending or may be instituted or asserted against us. These include, but are not limited to, matters arising out of alleged defects in our products; product warranties; governmental regulations relating to safety, emissions, and fuel economy or other matters; government incentives; tax matters; alleged illegal acts resulting in fines or penalties; financial services; employment-related matters; dealer, supplier, and other contractual relationships; intellectual property rights; environmental matters; shareholder or investor matters; and financial reporting matters. Certain of the pending legal actions are, or purport to be, class actions. Some of the matters involve or may involve claims for compensatory, punitive, or antitrust or other treble damages in very large amounts, or demands for field service actions, environmental remediation programs, sanctions, loss of government incentives, assessments, or other relief, which, if granted, would require very large expenditures.
The extent of our financial exposure to these matters is difficult to estimate. Many matters do not specify a dollar amount for damages, and many others specify only a jurisdictional minimum. To the extent an amount is asserted, our historical experience suggests that in most instances the amount asserted is not a reliable indicator of the ultimate outcome.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 23. COMMITMENTS AND CONTINGENCIES (Continued)
We accrue for matters when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood that we will prevail, and the severity of any potential loss. We reevaluate and update our accruals as matters progress over time.
For the majority of matters, which generally arise out of alleged defects in our products, we establish an accrual based on our extensive historical experience with similar matters. We do not believe there is a reasonably possible outcome materially in excess of our accrual for these matters.
For the remaining matters, where our historical experience with similar matters is of more limited value (i.e., “non-pattern matters”), we evaluate the matters primarily based on the individual facts and circumstances. For non-pattern matters, we evaluate whether there is a reasonable possibility of a material loss in excess of any accrual that can be estimated. Our estimate of reasonably possible loss in excess of our accruals for all material matters currently reflects indirect tax and customs matters, for which we estimate the aggregate risk to be a range of up to about $500 million. In addition, we have a reasonably possible risk of loss for an emission matter. At this stage, we cannot estimate the risk of loss or predict the outcome, and cannot provide reasonable assurance that it will not have a material adverse effect on us.
As noted, the litigation process is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance. Our assessments are based on our knowledge and experience, but the ultimate outcome of any matter could require payment substantially in excess of the amount that we have accrued and/or disclosed.
Warranty and Field Service Actions
We accrue obligations for warranty costs and field service actions (i.e., safety recalls, emission recalls, and other product campaigns) at the time of sale using a patterned estimation model that includes historical information regarding the nature, frequency, and average cost of claims for each vehicle line by model year. Warranty and field service action obligations are reported in Other liabilities and deferred revenue. We reevaluate the adequacy of our accruals on a regular basis.
We recognize the benefit from a recovery of the costs associated with our warranty and field service actions when specifics of the recovery have been agreed with our supplier and the amount of recovery is virtually certain. Recoveries are reported in Trade and other receivables and Other assets.
The estimate of our future warranty and field service action costs, net of estimated supplier recoveries, for the periods ended September 30 was as follows (in millions):
|
|
|
|
|
|
|
|
|
|
First Nine Months
|
|
2018
|
|
2019
|
Beginning balance
|
$
|
5,296
|
|
|
$
|
5,137
|
|
Payments made during the period
|
(3,107
|
)
|
|
(3,395
|
)
|
Changes in accrual related to warranties issued during the period
|
1,832
|
|
|
2,180
|
|
Changes in accrual related to pre-existing warranties
|
792
|
|
|
1,355
|
|
Foreign currency translation and other
|
(103
|
)
|
|
(57
|
)
|
Ending balance
|
$
|
4,710
|
|
|
$
|
5,220
|
|
Revisions to our estimated costs are reported as changes in accrual related to pre-existing warranties in the table above.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 24. SEGMENT INFORMATION
Below is a description of our reportable segments and other activities.
Automotive Segment
Our Automotive segment primarily includes the sale of Ford and Lincoln vehicles, service parts, and accessories worldwide, together with the associated costs to develop, manufacture, distribute, and service the vehicles, parts, and accessories. This segment includes revenues and costs related to our electrification vehicle programs. The segment includes the following regional business units: North America, South America, Europe, China, Asia Pacific Operations, and Middle East & Africa.
Mobility Segment
Our Mobility segment primarily includes development costs related to our autonomous vehicles and our investment in mobility through Ford Smart Mobility LLC (“FSM”). Autonomous vehicles includes self-driving systems development and vehicle integration, autonomous vehicle research and advanced engineering, autonomous vehicle transportation-as-a-service network development, user experience, and business strategy and business development teams. FSM designs and builds mobility products and subscription services on its own, and collaborates with service providers and technology companies. In 2019, we began recording in the Mobility segment subscription related income previously reported in the Automotive segment. This income is generated from services managed in our Mobility segment.
Ford Credit Segment
The Ford Credit segment is comprised of the Ford Credit business on a consolidated basis, which is primarily vehicle-related financing and leasing activities.
Corporate Other
Corporate Other primarily includes corporate governance expenses, interest income (excluding interest earned on our extended service contract portfolio that is included in our Automotive segment) and gains and losses from our cash, cash equivalents, marketable securities, and other investments, and foreign exchange derivatives gains and losses associated with intercompany lending. Corporate governance expenses are primarily administrative, delivering benefit on behalf of the global enterprise, and are not allocated to specific Automotive business units or operating segments. These include expenses related to setting and directing global policy, providing oversight and stewardship, and promoting the Company’s interests. The underlying assets and liabilities associated with these activities remain with the respective Automotive and Mobility segments.
Interest on Debt
Interest on Debt is presented as a separate reconciling item and consists of interest expense on Automotive and Other debt. The underlying liability is reported in the Automotive segment and in Corporate Other.
Special Items
Special Items are presented as a separate reconciling item. They consist of (i) pension and OPEB remeasurement gains and losses, (ii) significant personnel expenses, dealer-related costs, and facility-related charges stemming from our efforts to match production capacity and cost structure to market demand and changing model mix, and (iii) other items that we do not necessarily consider to be indicative of earnings from ongoing operating activities. Our management excludes these items from its review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. We also report these special items separately to help investors track amounts related to these activities and to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results.
Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 24. SEGMENT INFORMATION (Continued)
Key financial information for the periods ended or at September 30 was as follows (in millions):
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|
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|
|
|
|
|
|
|
|
|
Automotive
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|
Mobility
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|
Ford Credit
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|
Corporate
Other
|
|
Interest
on Debt
|
|
Special Items
|
|
Adjustments
|
|
Total
|
Third Quarter 2018
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Revenues
|
$
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34,660
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|
|
$
|
8
|
|
|
$
|
2,998
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|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,666
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Income/(loss) before income taxes
|
1,402
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|
|
(196
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)
|
|
678
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|
|
(216
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)
|
|
(343
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)
|
|
(231
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)
|
|
—
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|
|
1,094
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Equity in net income/(loss) of affiliated companies
|
(40
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)
|
|
—
|
|
|
8
|
|
|
—
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|
|
—
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|
|
—
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|
|
—
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|
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(32
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)
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Cash, cash equivalents, marketable securities, and restricted cash
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23,595
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|
|
56
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|
|
12,884
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|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,535
|
|
Total assets
|
102,615
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|
|
510
|
|
|
159,976
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,135
|
)
|
(a)
|
258,966
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2019
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Revenues
|
$
|
33,931
|
|
|
$
|
14
|
|
|
$
|
3,045
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,990
|
|
Income/(loss) before income taxes
|
1,329
|
|
|
(290
|
)
|
|
736
|
|
|
18
|
|
|
(276
|
)
|
|
(1,536
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)
|
|
—
|
|
|
(19
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)
|
Equity in net income/(loss) of affiliated companies
|
(27
|
)
|
|
2
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
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)
|
Cash, cash equivalents, marketable securities, and restricted cash
|
22,194
|
|
|
135
|
|
|
15,160
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,489
|
|
Total assets
|
101,865
|
|
|
1,193
|
|
|
160,322
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,223
|
)
|
(a)
|
258,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive
|
|
Mobility
|
|
Ford Credit
|
|
Corporate
Other
|
|
Interest
on Debt
|
|
Special Items
|
|
Adjustments
|
|
Total
|
First Nine Months 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
109,577
|
|
|
$
|
18
|
|
|
$
|
8,950
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
118,545
|
|
Income/(loss) before income taxes
|
4,291
|
|
|
(479
|
)
|
|
1,964
|
|
|
(231
|
)
|
|
(933
|
)
|
|
(250
|
)
|
|
—
|
|
|
4,362
|
|
Equity in net income/(loss) of affiliated companies
|
232
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Nine Months 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
106,928
|
|
|
$
|
26
|
|
|
$
|
9,231
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116,185
|
|
Income/(loss) before income taxes
|
4,711
|
|
|
(842
|
)
|
|
2,368
|
|
|
(343
|
)
|
|
(765
|
)
|
|
(3,333
|
)
|
|
—
|
|
|
1,796
|
|
Equity in net income/(loss) of affiliated companies
|
62
|
|
|
11
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
__________
|
|
(a)
|
Includes eliminations of intersegment transactions occurring in the ordinary course of business and deferred tax netting.
|