a6380741.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549


FORM 8-K


CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report:  August 2, 2010
(Date of earliest event reported)


FORD MOTOR COMPANY
(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction of incorporation)

1-3950
38-0549190
(Commission File Number)
(IRS Employer Identification No.)
   
One American Road, Dearborn, Michigan
48126
(Address of principal executive offices)
(Zip Code)



Registrant's telephone number, including area code 313-322-3000


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[  ]
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
1
 

Item 2.01.  Completion of Acquisition or Disposition of Assets.

As disclosed in its Current Report on Form 8-K dated March 28, 2010, Ford Motor Company ("Ford") and its subsidiary, Volvo Personvagnar Holding AB ("Volvo Holdco"), signed a stock purchase agreement (the "Agreement") with two subsidiaries of Zhejiang Geely Holding Group Company Limited ("Geely"), Mintime North America, LLC ("Mintime") and Geely Sweden AB ("Geely Sweden").  Pursuant to the terms of the Agreement, on August 2, 2010, Volvo Holdco sold and Geely Sweden acquired 100% of the outstanding shares of Volvo Personvagnar AB, which together with its subsidiaries is the main operating entity for the production and sale of Volvo-brand vehicles ("Volvo Car Corporation" or "VCC"), and Ford sold and Mintime acquired 100% of the membership interest of Volvo Cars of North America, LLC, the distributor of Volvo-brand vehicles in North America ("VCNA").  Pursuant to the Agreement, VCC, VCNA, and their respective subsidiaries (collectively, "Volvo") will retain or acquire certain assets presently used by Volvo, consisting principally of ownership of, or licenses to use, certain intellectual property ("Related Assets").

The total purchase price for VCC, VCNA and the Related Assets set forth in the Agreement was $1.8 billion, of which $200 million was to be paid in the form of a note (the "Note") and the balance to be paid in cash, with the cash portion subject to customary purchase price adjustments.  In accordance with the terms of the Agreement, at closing on August 2, 2010, Geely paid $1.3 billion in cash and issued the Note in the amount of $200 million.  The estimated purchase price adjustments used at closing (relating to estimated pension liabilities, debt, cash and working capital balances) are expected to be finalized and settled following final true-up of the purchase price adjustments later this year.  The final true-up is expected to result in additional proceeds to Ford.

The Note issued to Volvo Holdco is the obligation of the parent of Geely Sweden, and is guaranteed by the parent of the obligor.  The Note matures on November 2, 2015, and contains certain covenants, including with respect to the incurrence of indebtedness, liens, and merger and consolidation transactions.

As part of the arrangement between Ford and Geely, Ford will continue to supply Volvo with, for differing periods, powertrains, stampings and other vehicle components.  Volvo will continue to supply engines, stampings and other components to Ford for a period of time.  Ford also has committed to provide certain engineering support, information technology, access to tooling for common components, accounting and other selected services for a transition period to ensure a smooth separation process.

Pursuant to the terms of the secured credit agreement that Ford entered into in December 2006, as amended (the "Credit Agreement"), Ford is required to use about $300 million of the net cash proceeds from the sale of VCC to partially prepay certain outstanding term loans under the Credit Agreement.  For additional information, see the Amended and Restated Credit Agreement dated as of November 24, 2009 (filed as Exhibit 99.2 to Ford's Current Report on Form 8-K dated November 25, 2009).

Item 9.01. Financial Statements and Exhibits.

The following unaudited pro forma condensed statements of operations (consolidated and sector) for the year ended December 31, 2009 and the three months ended March 31, 2010, have been prepared to present our results of operations as if the sale of Volvo had occurred at the beginning of the respective periods.  The unaudited pro forma condensed balance sheets (consolidated and sector) at March 31, 2010 have been prepared to present our financial position as if the sale of Volvo had occurred on March 31, 2010.

The pro forma statements do not purport to be indicative of the financial position or results of operations of Ford as of such date or for such periods, nor are they necessarily indicative of future results.  As such, data in the pro forma statements differ from the actual sales proceeds calculated as of August 2, 2010 and disclosed in Item 2.01 above.  Further, the pro forma financial statements have not been adjusted for the ongoing mutual component supply activities or transitional services described in Item 2.01 above.

 
2
 
 
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

   
FORD MOTOR COMPANY
   
(Registrant)
     
Date:  August 2, 2010
By:   
/s/ Louis J. Ghilardi
   
Louis J. Ghilardi
   
Assistant Secretary
 

 

 
3
 
Item 9.01. Financial Statements and Exhibits (Continued)
 

FORD MOTOR COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share amounts)

   
Three Months Ended March 31, 2010
      
Year Ended December 31, 2009
    
   
Historical
    
Pro Forma
    
Pro Forma
      
Historical
    
Pro Forma
    
Pro Forma
    
   
Financial
    
Adjustments
    
Financial
      
Financial
    
Adjustments
    
Financial
    
   
Statement
    
Volvo (a)
    
Statement
      
Statement
    
Volvo (a)
    
Statement
    
   
(unaudited)
    
(unaudited)
    
(unaudited)
      
(unaudited)
    
(unaudited)
    
(unaudited)
    
Sales and revenues
                                        
Automotive sales
   $ 28,894     $ (3,523 )   $ 25,371       $ 103,868     $ (12,356 )   $ 91,512    
Financial Services revenues
     2,672       —       2,672         12,415       —       12,415    
Total sales and revenues
     31,566       (3,523 )     28,043         116,283       (12,356 )     103,927    
                                                     
Costs and expenses
                                                    
Automotive cost of sales
     25,139       (2,949 )     22,190         98,866       (11,907 )     86,959    
Selling, administrative and other expenses
     3,089       (389 )     2,700         13,029       (1,433 )     11,596    
Interest expense
     1,701       (2 )     1,699  
(b)
     6,790       (11 )     6,779  
(b)
Financial Services provision for credit and insurance losses
     (41 )     —       (41 )       1,030       —       1,030    
Total costs and expenses
     29,888       (3,340 )     26,548         119,715       (13,351 )     106,364    
                                                     
Automotive interest income and other non-operating income/(expense), net
     189       —       189         5,284       —       5,284    
Financial Services other income/(loss)
     126       —       126         552       —       552    
Equity in net income/(loss) of affiliated companies
     142       (3 )     139         195       (45 )     150    
Income/(Loss) before income taxes
     2,135       (186 )     1,949         2,599       950       3,549    
Provision for/(Benefit from) income taxes
     50       (33 )     17         (113 )     (57 )     (170 )  
Income/(Loss) from continuing operations
     2,085       (153 )     1,932         2,712       1,007       3,719    
Income/(Loss) from discontinued operations
     —       —       —         5       —       5    
Net income/(loss)
     2,085       (153 )     1,932         2,717       1,007       3,724    
Less:  Income/(Loss) attributable to noncontrolling interests
     —       —       —         —       —       —    
Net income/(loss) attributable to Ford Motor Company
   $ 2,085     $ (153 )   $ 1,932       $ 2,717     $ 1,007     $ 3,724    
 
NET INCOME/(LOSS) ATTRIBUTABLE TO FORD MOTOR COMPANY
                                      
Income/(Loss) from continuing operations
   $ 2,085     $ (153 )   $ 1,932       $ 2,712     $ 1,007     $ 3,719  
Income/(Loss) from discontinued operations
     —       —       —         5       —       5  
Net income/(loss)
   $ 2,085     $ (153 )   $ 1,932       $ 2,717     $ 1,007     $ 3,724  
                                       
AMOUNTS PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK
                                      
Basic income/(loss)
                                      
Income/(Loss) from continuing operations
   $ 0.62     $ (0.05 )   $ 0.57       $ 0.91     $ 0.34     $ 1.24  
Number of shares used to compute amounts per share
     3,365       3,365       3,365         2,991       2,991       2,991  
                                                   
Diluted income/(loss)
                                                  
Income/(Loss) from continuing operations
   $ 0.50     $ (0.04 )   $ 0.47       $ 0.86     $ 0.34     $ 1.17  
Number of shares used to compute amounts per share
     4,569       3,570       4,569         3,312       2,991       3,474  
 
 
See endnotes.
 
 
4
 
Item 9.01. Financial Statements and Exhibits (Continued)
 
 
FORD MOTOR COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED SECTOR STATEMENT OF OPERATIONS
(in millions, except per share amounts)

   
Three Months Ended March 31, 2010
      
Year Ended December 31, 2009
    
   
Historical
    
Pro Forma
    
Pro Forma
      
Historical
    
Pro Forma
    
Pro Forma
    
   
Financial
    
Adjustments
    
Financial
      
Financial
    
Adjustments
    
Financial
    
   
Statement
    
Volvo (a)
    
Statement
      
Statement
    
Volvo (a)
    
Statement
    
   
(unaudited)
    
(unaudited)
    
(unaudited)
      
(unaudited)
    
(unaudited)
    
(unaudited)
    
AUTOMOTIVE
                                        
Sales
   $ 28,894     $ (3,523 )   $ 25,371       $ 103,868     $ (12,356 )   $ 91,512    
Costs and expenses
                                                    
Cost of sales
     25,139       (2,949 )     22,190         98,866       (11,907 )     86,959    
Selling, administrative and other expenses
     2,220       (389 )     1,831         8,354       (1,433 )     6,921    
Total costs and expenses
     27,359       (3,338 )     24,021         107,220       (13,340 )     93,880    
Operating income/(loss)
     1,535       (185 )     1,350         (3,352 )     984       (2,368 )  
                                                     
Interest expense
     542       (2 )     540  
(b)
     1,477       (11 )     1,466  
(b)
Interest income and other non-operating income/(expense), net
     189       —       189         5,284       —       5,284    
Equity in net income/(loss) of affiliated companies
     138       (3 )     135         330       (45 )     285    
Income/(Loss) before income taxes — Automotive
     1,320       (186 )     1,134         785       950       1,735    
                                                     
FINANCIAL SERVICES
                                                    
Revenues
     2,672       —       2,672         12,415       —       12,415    
Costs and expenses
                                                    
Interest expense
     1,159       —       1,159         5,313       —       5,313    
Depreciation
     660       —       660         3,937       —       3,937    
Operating and other expenses
     209       —       209         738       —       738    
Provision for credit and insurance losses
     (41 )     —       (41 )       1,030       —       1,030    
Total costs and expenses
     1,987       —       1,987         11,018       —       11,018    
                                                     
Other income/(loss), net
     126       —       126         552       —       552    
Equity in net income/(loss) of affiliated companies
     4       —       4         (135 )     —       (135 )  
                                                     
Income/(Loss) before income taxes — Financial Services
     815       —       815         1,814       —       1,814    
                                                     
TOTAL COMPANY
                                                    
Income/(Loss) before income taxes
     2,135       (186 )     1,949         2,599       950       3,549    
Provision for/(Benefit from) income taxes
     50       (33 )     17         (113 )     (57 )     (170 )  
Income/(Loss) from continuing operations
     2,085       (153 )     1,932         2,712       1,007       3,719    
Income/(Loss) from discontinued operations
     —       —       —         5       —       5    
Net income/(loss)
     2,085       (153 )     1,932         2,717       1,007       3,724    
Less: Income/(Loss) attributable to noncontrolling interests
     —       —       —         —       —       —    
Net income/(loss) attributable to Ford Motor Company
   $ 2,085     $ (153 )   $ 1,932       $ 2,717     $ 1,007     $ 3,724    
                                                     
 
NET INCOME/(LOSS) ATTRIBUTABLE TO FORD MOTOR COMPANY
                                    
                                     
Income/(Loss) from continuing operations
   $ 2,085     $ (153 )   $ 1,932     $ 2,712     $ 1,007     $ 3,719  
Income/(Loss) from discontinued operations
     —       —       —       5       —       5  
Net income/(loss)
   $ 2,085     $ (153 )   $ 1,932     $ 2,717     $ 1,007     $ 3,724  
                                                 
                                     
AMOUNTS PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK
                                    
Basic income/(loss)
                                    
Income/(Loss) from continuing operations
   $ 0.62     $ (0.05 )   $ 0.57     $ 0.91     $ 0.34     $ 1.24  
No. of shares used to compute per share
     3,365       3,365       3,365       2,991       2,991       2,991  
                                                 
Diluted income/(loss)
                                                
Income/(Loss) from continuing operations
   $ 0.50     $ (0.04 )   $ 0.47     $ 0.86     $ 0.34     $ 1.17  
No. of shares used to compute per share
     4,569       3,570       4,569       3,312       2,991       3,474  
 
 
See endnotes.

 
5
 
Item 9.01. Financial Statements and Exhibits (Continued)
 
 
FORD MOTOR COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 2010
(in millions)

   
Historical
    
Pro Forma
      
Pro Forma
  
   
Financial
    
Adjustments
      
Financial
  
   
Statement
    
Volvo
      
Statement
  
   
(unaudited)
    
(unaudited)
      
(unaudited)
  
ASSETS
                    
Cash and cash equivalents
   $ 24,356     $ —       $ 24,356  
      —       1,301  
(c)
     1,301  
      —       (665 )
(d)
     (665 )
      —       (280 )
(e)
     (280 )
Subtotal adjusted cash and cash equivalents
     24,356       356         24,712  
Marketable securities
     21,883       —         21,883  
Finance receivables, net
     73,837       —         73,837  
Other receivables, net
     6,925       303  
(f)
     7,228  
Net investment in operating leases
     15,818       —         15,818  
Inventories
     6,292       —         6,292  
Equity in net assets of affiliated companies
     2,544       —         2,544  
Net property
     22,826       —         22,826  
Deferred income taxes
     2,861       —         2,861  
Goodwill and other net intangible assets
     192       —         192  
Assets of held-for-sale operations
     8,076       (8,076 )
(g)
     —  
Other assets
     6,358       —         6,358  
Total assets
   $ 191,968     $ (7,417 )     $ 184,551  
                           
Payables
   $ 15,611     $ 149  
(h)
   $ 15,760  
Accrued liabilities and deferred revenue
     44,445       47  
(i)
     44,492  
Debt
     130,105       (377 )
(j)(e)
     129,728  
Deferred income taxes
     1,600       —         1,600  
Liabilities of held-for-sale operations
     5,644       (5,644 )
(g)
     —  
Total liabilities
     197,405       (5,825 )       191,580  
                           
Equity
                          
Capital stock
                          
Common Stock, par value $0.01 per share (3,345 million shares issued)
     33       —         33  
Class B Stock, par value $0.01 per share (71 million shares issued) 
     1       —         1  
Capital in excess of par value of stock
     17,382       —         17,382  
Accumulated other comprehensive income/(loss)
     (11,199 )     (1,609 )
(g)
     (12,808 )
Treasury stock
     (178 )     17  
(k)
     (161 )
Retained earnings/(Accumulated deficit)
     (11,514 )     —  
(l)
     (11,514 )
Total equity/(deficit) attributable to Ford Motor Company
     (5,475 )     (1,592 )       (7,067 )
Equity/(Deficit) attributable to noncontrolling interests
     38       —         38  
Total equity/(deficit)
     (5,437 )     (1,592 )       (7,029 )
Total liabilities and equity
   $ 191,968     $ (7,417 )     $ 184,551  

________________
The following table includes assets to settle liabilities of the consolidated variable interest entities ("VIEs").  These assets and liabilities are included in the consolidated balance sheet above.
 
ASSETS
                  
Cash and cash equivalents
   $ 5,117     $ —     $ 5,117  
Finance receivables, net
     54,471       —       54,471  
Other receivables, net
     25       —       25  
Net investment in operating leases
     10,765       —       10,765  
Inventories
     22       —       22  
Net property
     31       —       31  
Other assets
     39       —       39  
LIABILITIES
                        
Payables
     22       —       22  
Accrued liabilities and deferred revenue
     504       —       504  
Debt
     47,929       —       47,929  

 
See endnotes.

 
6
 
Item 9.01. Financial Statements and Exhibits (Continued)
 
 
FORD MOTOR COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED SECTOR BALANCE SHEET
March 31, 2010
(in millions)

   
Historical
Financial
Statement
    
Pro Forma Adjustments 
Volvo
      
Pro Forma Financial
Statement
  
   
(unaudited)
    
(unaudited)
      
(unaudited)
  
ASSETS
                    
Automotive
                    
Cash and cash equivalents
   $ 12,801     $ 356  
(c)(d)(e)
   $ 13,157  
Marketable securities
     12,491       —         12,491  
Total cash, marketable and loaned securities
     25,292       356         25,648  
Receivables, net
     3,332       303  
(f)
     3,635  
Inventories
     6,292       —         6,292  
Deferred income taxes
     493       —         493  
Other current assets
     2,797       —         2,797  
Current receivable from Financial Services
     2,834       —         2,834  
Total current assets
     41,040       659         41,699  
Equity in net assets of affiliated companies
     2,420       —         2,420  
Net property
     22,655       —         22,655  
Deferred income taxes
     5,600       —         5,600  
Goodwill and other net intangible assets
     183       —         183  
Assets of held-for-sale operations
     8,076       (8,076 )
(g)
     —  
Other assets
     1,726       —         1,726  
Non-current receivable from Financial Services
     256       —         256  
Total Automotive assets
     81,956       (7,417 )       74,539  
Financial Services
                          
Cash and cash equivalents
     11,555       —         11,555  
Marketable securities
     9,824       —         9,824  
Finance receivables, net
     77,439       —         77,439  
Net investment in operating leases
     13,780       —         13,780  
Equity in net assets of affiliated companies
     124       —         124  
Goodwill and other net intangible assets
     9       —         9  
Other assets
     4,330       —         4,330  
Total Financial Services assets
     117,061       —         117,061  
Intersector elimination
     (3,532 )     —         (3,532 )
Total assets
   $ 195,485     $ (7,417 )     $ 188,068  
                           
LIABILITIES
                          
Automotive
                          
Trade payables
   $ 11,898     $ 149  
(h)
   $ 12,047  
Other payables
     2,480       —         2,480  
Accrued liabilities and deferred revenue
     17,642       47  
(i)
     17,689  
Deferred income taxes
     2,949       —         2,949  
Debt payable within one year
     5,009       (67 )
(j)(e)
     4,942  
Total current liabilities
     39,978       129         40,107  
Long-term debt
     29,242       (310 )
(j)(e)
     28,932  
Other liabilities
     22,337       —         22,337  
Deferred income taxes
     524       —         524  
Liabilities of held-for-sale operations
     5,644       (5,644 )
(g)
     —  
Total Automotive liabilities
     97,725       (5,825 )       91,900  
Financial Services
                          
Payables
     1,233       —         1,233  
Debt
     96,286       —         96,286  
Deferred income taxes
     1,644       —         1,644  
Other liabilities and deferred income
     4,476       —         4,476  
Payable to Automotive
     3,090       —         3,090  
Total Financial Services liabilities
     106,729       —         106,729  
Intersector elimination
     (3,532 )     —         (3,532 )
Total liabilities
     200,922       (5,825 )       195,097  
                           
Equity
                          
Capital stock
                          
Common Stock, par value $0.01 per share (3,345 million shares issued)
     33       —         33  
Class B Stock, par value $0.01 per share (71 million shares issued)
     1       —         1  
Capital in excess of par value of stock
     17,382       —         17,382  
Accumulated other comprehensive income/(loss)
     (11,199 )     (1,609 )
(g)
     (12,808 )
Treasury stock
     (178 )     17  
(k)
     (161 )
Retained earnings/(Accumulated deficit)
     (11,514 )     —  
(l)
     (11,514 )
Total equity/(deficit) attributable to Ford Motor Company
     (5,475 )     (1,592 )       (7,067 )
Equity/(Deficit) attributable to noncontrolling interests
     38       —         38  
Total equity/(deficit)
     (5,437 )     (1,592 )       (7,029 )
Total liabilities and equity
   $ 195,485     $ (7,417 )     $ 188,068  
 
 
See endnotes.

 
7
 
Item 9.01. Financial Statements and Exhibits (Continued)

 
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE PRO FORMA FINANCIAL STATEMENTS

(a)
Carve-out of Volvo results included in our historical statements.
(b)
The interest savings from the use of $280 million of sale proceeds to partially prepay certain outstanding term loans as required pursuant to the terms of the Credit Agreement.
(c)
Anticipated cash proceeds from the sale of Volvo of $1.301 billion.  Amount is comprised of the portion of the purchase price to be settled in cash ($1.6 billion), and contractually defined purchase price adjustments ($299 million) for estimated pension liabilities, the cash to be transferred to the acquirer, net of debt, and the difference between actual and targeted working capital balances, had the sale occurred on March 31, 2010.
(d)
Volvo cash balances that would have been transferred to Geely had the sale occurred on March 31, 2010.
(e)
Use of $280 million of sale proceeds to partially prepay certain outstanding term loans as required pursuant to the terms of the Credit Agreement.
(f)
Portion of the purchase price to be paid in the form of a seller loan note ($200 million) and trade receivables ($103 million) between Ford and Volvo as of March 31, 2010 (eliminated as an intercompany item in our historical financial statements).
(g)
Carve out of assets, liabilities, and other accumulated other comprehensive income/(loss) of Volvo included in our historical financial statements.
(h)
Trade payables between Ford and Volvo as of March 31, 2010 (eliminated as an intercompany item in our historical financial statements).
(i)
Liabilities incurred in connection with the sale of Volvo.
(j)
Volvo debt that would have been transferred to Geely had the sale occurred on March 31, 2010 ($97 million).
(k)
Related to the transfer of shares held by the Volvo North America Employee Stock Ownership Plan.
(l)
Estimated gain/(loss) on the sale of Volvo as if sold on March 31, 2010.

 
 
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