Restructuring and Related Activities

12 Months Ended

Dec. 31, 2022

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure

RESTRUCTURING ACTIONS

We record costs associated with voluntary separations at the time of employee acceptance, unless the acceptance requires explicit approval by Ford Credit. 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.

We executed separation and restructuring actions associated with our plans to transform our business. The impact of these actions was a loss of $55 million, $18 million, and $21 million, consisting primarily of separation costs, included in Operating expenses for the years ended December 31, 2020, 2021, and 2022 respectively.

Forso. In the first quarter of 2020, we completed the sale of Forso Nordic AB (“Forso”), a wholly owned subsidiary, which provided retail and dealer financing in Denmark, Finland, Norway, and Sweden. Upon completion of the sale we recognized a pre-tax loss of $4 million in Other income/(loss), net and cash proceeds of $1,340 million. As a result of the sale, we liquidated the entity which held our investment and recognized a $33 million loss on the reclassification of accumulated foreign currency translation in Other income/(loss), net.

South America. In June 2021, we announced that our subsidiaries in Brazil and Argentina had committed to a plan to cease originating receivables by the end of 2021 and would begin the process of selling or otherwise winding down operations in those markets. During the fourth quarter of 2021, we completed the sale of our wholesale and dealer receivables portfolio in Brazil and ceased originations of wholesale and dealer receivables in Argentina. During the years ended December 31, 2021 and 2022, we reclassified accumulated foreign currency translation gains of $14 million and losses of $155 million, respectively, to Other income/(loss), net upon the liquidation of most of our investments in Brazil.

In December 2021, we received a capital contribution from a subsidiary of Ford in exchange for a minority interest share in one of our Argentina-based subsidiaries. As a result, we recorded $22 million in Shareholder’s interest attributable to noncontrolling interests on our consolidated balance sheet. During the first quarter of 2022, we reacquired Ford’s minority interest share and, in exchange, transferred assets associated with an Argentina-based subsidiary to Ford. In addition, during the first quarter of 2022, we sold our shares in a second Argentina-based subsidiary to Ford. The difference between the carrying value of the net assets transferred and sold to Ford and the consideration received from Ford was $61 million, reported as a reduction to Shareholder’s interest. As a result of the transfer and sale, Ford Credit reclassified $75 million of accumulated foreign currency translation losses to net income, included in Other income/(loss), net.

NOTE 12. EMPLOYEE SEPARATION AND RESTRUCTURING ACTIONS (Continued)Accumulated foreign currency translation losses associated with our remaining investments in Brazil and Argentina included in Accumulated other comprehensive income/(loss) at December 31, 2022 were $223 million. We expect to reclassify these losses to income upon substantially complete liquidation of our investments, which may occur over multiple reporting periods. Although the timing for the completion of these actions is uncertain, we expect the majority of losses to be recognized in 2024 or later.