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Held-for-Sale Operations and Changes in Investments in Affiliates (Notes)
 9 Months Ended
Sep. 30, 2020
Held for Sale Operations Automotive Segment [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] HELD-FOR-SALE OPERATIONS AND CHANGES IN INVESTMENTS IN AFFILIATES
Automotive Segment

Brazil and Russia. In the third quarter of 2020, as part of our global redesign, we committed to plans to sell manufacturing assets in Brazil and Russia. As a result, we classified assets of $39 million as held for sale at September 30, 2020.

India. In the third quarter of 2019, we committed to a plan to sell specific net 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, we will sell certain India Automotive operations to the joint venture. The sale was expected to close within twelve months of the definitive agreement, but has been deferred primarily due to COVID-19 related shutdowns, which have delayed the necessary regulatory approvals and other steps required to establish the joint venture. Although completion of the transaction has extended beyond our initial expectations, our assessment of the planned sale is that it is still probable. Accordingly, as we continue to meet the held-for-sale classification criteria, 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):
December 31,
2019		September 30,
2020
Assets
Trade and other receivables, net$269 $141 
Inventories208 185 
Other assets, current147 99 
Net property279 270 
Other assets, non-current10 8 
Total assets of held-for-sale operations913 703 
Less: Intercompany asset balances(228)(122)
Automotive segment total assets of held-for-sale operations (a)$685 $581 
Liabilities
Payables$461 $372 
Other liabilities and deferred revenue, current71 65 
Automotive debt payable within one year90 84 
Other liabilities and deferred revenue, non-current28 25 
Total liabilities of held-for-sale operations650 546 
Less: Intercompany liability balances(169)(141)
Automotive segment total liabilities of held-for-sale operations (a)$481 $405 
__________
(a)As of December 31, 2019 and September 30, 2020, intercompany items and transactions have been eliminated on the consolidated balance sheets. Upon closing, the buyer will assume the intercompany assets and liabilities. Accordingly, we have presented those balances in the table for informational purposes.
NOTE 17. HELD-FOR-SALE OPERATIONS AND CHANGES IN INVESTMENTS IN AFFILIATES (Continued)

We recognized pre-tax impairment charges of $804 million in 2019, of which $799 million was recorded in the third quarter of 2019, and $3 million and $21 million in the third quarter and first nine months of 2020, respectively, to adjust the carrying value of the held-for-sale assets to fair value less cost to sell. These charges are reported in Cost of sales. 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.

Mobility Segment

On June 1, 2020, we completed a transaction with VW that reduced our ownership interest in the autonomous vehicle technology company Argo AI and resulted in Ford and VW holding equal interests in Argo AI, with the remaining interest consisting of incentive units and founders’ equity. The transaction involved us selling a portion of our Argo AI equity to VW for $500 million and VW making additional investments in Argo AI, including contributing its Autonomous Intelligent Driving company. As a result of the transaction, we deconsolidated Argo AI, remeasured our retained investment in Argo AI at fair value, and recognized a $3.5 billion gain in Other income/(loss), of which $2.9 billion related to our retained investment in Argo AI. We measured the fair value of Argo AI using the income approach. The significant assumptions used in the valuation included Argo AI’s projected long-term cash flows and related terminal value, discounted at a rate typically used for a company at Argo AI’s stage of development.

Our retained investment in Argo AI immediately after the transaction consisted of an equity method investment of $2.4 billion and a preferred equity security investment of $400 million, reflected on our consolidated balance sheets in Equity in net assets of affiliated companies and Other assets, respectively. The difference between the fair value of our equity method investment and our share of the carrying value of Argo AI’s net assets primarily related to indefinite-lived assets. We also agreed to future funding of Argo AI of $600 million, subject to capital calls, which will increase our preferred equity investment.

Argo AI is a variable interest entity of which we are not the primary beneficiary. As of September 30, 2020, our maximum exposure to any potential losses associated with Argo AI is limited to our $2.8 billion of investments.
NOTE 17. HELD-FOR-SALE OPERATIONS AND CHANGES IN INVESTMENTS IN AFFILIATES (Continued)

Ford Credit Segment

In the fourth quarter of 2019, Ford Credit committed to a plan to sell its operations in Forso, a wholly owned subsidiary of Ford Credit, which provides retail and dealer financing in Denmark, Finland, Norway, and Sweden. As a result, we classified the assets and liabilities of these operations as held for sale and recognized a pre-tax fair value impairment charge of $20 million, reported in Other income/(loss), net, in the fourth quarter of 2019.

The assets and liabilities of the Forso operations classified as held for sale at December 31, 2019 were as follows (in millions):
December 31,
2019
Assets
Cash and cash equivalents$61 
Ford Credit finance receivables, net, current516 
Trade and other receivables, net8 
Other assets, current106 
Ford Credit finance receivables, net, non-current715 
Net property2 
Deferred income taxes9 
Other assets, non-current1 
Total assets of held-for-sale operations1,418 
Less: Intercompany asset balances(2)
Ford Credit segment total assets of held-for-sale operations (a)$1,416 
Liabilities
Payables$34 
Other liabilities and deferred revenue, current8 
Ford Credit long-term debt1,254 
Deferred income taxes23 
Total liabilities of held-for-sale operations1,319 
Less: Intercompany liability balances(1,274)
Ford Credit segment total liabilities of held-for-sale operations (a)$45 
__________
(a)As of December 31, 2019, intercompany items and transactions have been eliminated on the consolidated balance sheets. Upon closing, the buyer assumed the intercompany assets and liabilities. Accordingly, we have presented those balances in the table for informational purposes.
On February 28, 2020, Ford Credit completed the sale of Forso recognizing a pre-tax loss of $4 million, reported in Other income/(loss), net, and cash proceeds of $1.3 billion.