Annual Report 2011 - Ford Motor Company

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Notes to the Financial Statements NOTE 7. FINANCE RECEIVABLES (Continued) Financial Services Sector Ford Credit segments its North America and International portfolio of finance receivables into "consumer" and "nonconsumer" receivables. The receivables are secured by the vehicles, inventory, or other property being financed. Consumer Segment – Receivables in this portfolio segment relate to products offered to individuals and businesses that finance the acquisition of Ford vehicles from dealers for personal or commercial use. The products include: • Retail financing – retail installment contracts for new and used vehicles • Direct financing leases – direct financing leases with retail customers, government entities, daily rental companies, and fleet customers Non-consumer Segment – Receivables in this portfolio segment relate to products offered to dealers. The products include: • Wholesale financing – loans to dealers to finance the purchase of vehicle inventory, also known as floorplan financing • Dealer loans – loans to dealers to finance working capital, and to finance the purchase of dealership real estate and/or make improvements to dealership facilities • Other financing – receivables related to the sale of parts and accessories to dealers Finance receivables are recorded at the time of origination or purchase for the principal amount financed and are subsequently reported at amortized cost, net of any allowance for credit losses. Amortized cost is the outstanding principal adjusted for any charge-offs and any unamortized deferred fees or costs. At December 31, 2011 and 2010, the recorded investment in Ford Credit's finance receivables excluded $180 million and $176 million of accrued uncollected interest receivable, respectively, which we report in Other assets on the balance sheet. Finance receivables, net at December 31 were as follows (in millions): Consumer Retail, gross Less: Unearned interest supplements Retail Direct financing leases, gross Less: Unearned interest supplements Direct financing leases Consumer finance receivables Non-consumer Wholesale Dealer loans Other Non-consumer finance receivables Total recorded investment Recorded investment in finance receivables Less: Allowance for credit losses Finance receivables, net Net finance receivables subject to fair value (a) $ 70,754 $ 70,318 Fair value __________ 72,294 72,021 (a) At December 31, 2011 and 2010, excludes $2.6 billion and $2.9 billion, respectively, of certain receivables (primarily direct financing leases) that are not subject to fair value disclosure requirements. 110 Ford Motor Company | 2011 Annual Report North America $ 38,406 (1,407) 36,999 4 — 4 $ 37,003 $ 15,413 1,088 723 17,224 $ 54,227 $ 54,227 (388) $ 53,839 2011 International $ 8,400 (219) 8,181 2,683 (116) 2,567 $ 10,748 $ 8,416 63 377 8,856 $ 19,604 $ 19,604 (113) $ 19,491 Total Finance Receivables $ 46,806 (1,626) 45,180 2,687 (116) 2,571 $ 47,751 $ 23,829 1,151 1,100 26,080 $ 73,831 $ 73,831 (501) $ 73,330 North America $ 39,129 (1,580) 37,549 17 — 17 $ 37,566 $ 13,273 1,117 738 15,128 $ 52,694 $ 52,694 (625) $ 52,069 2010 International $ 9,436 (289) 9,147 3,011 (84) 2,927 $ 12,074 $ 8,851 33 390 9,274 $ 21,348 $ 21,348 (152) $ 21,196 Total Finance Receivables $ 48,565 (1,869) 46,696 3,028 (84) 2,944 $ 49,640 $ 22,124 1,150 1,128 24,402 $ 74,042 $ 74,042 (777) $ 73,265
Notes to the Financial Statements NOTE 7. FINANCE RECEIVABLES (Continued) Included in the recorded investment in finance receivables at December 31, 2011 and 2010 were North America consumer receivables of $29.4 billion and $28.7 billion and non-consumer receivables of $14.2 billion and $12.8 billion, respectively, and International consumer receivables of $7.1 billion and $7.6 billion and non-consumer receivables of $5.6 billion and $5.9 billion, respectively, that secure certain debt obligations. The receivables are available only for payment of the related debt and obligations; they are not available to pay the other obligations of our Financial Services sector or the claims of its other creditors (see Notes 13 and 18). Contractual maturities of total finance receivables, excluding unearned interest supplements, outstanding at December 31, 2011 reflect contractual repayments due from customers or borrowers reported in the maturity category in which the payment is due and were as follows (in millions): North America Consumer Retail, gross Direct financing leases, gross Non-consumer Wholesale Dealer loans Other Total North America International Consumer Retail, gross Direct financing leases, gross Non-consumer Wholesale Dealer loans Other Total International Due in Year Ending December 31, 2012 2013 2014 $ 12,163 4 15,165 170 713 $ 28,215 $ 3,208 1,557 7,316 43 377 $ 12,501 $ 9,710 — 248 164 4 $ 10,126 $ 3,091 443 979 4 — $ 4,517 $ 7,642 — — 61 3 $ 7,706 $ 1,380 314 92 2 — $ 1,788 Thereafter $ 8,891 — — 693 3 $ 9,587 $ 721 369 29 14 — $ 1,133 Experience indicates that a portion of the portfolio is repaid before the contractual maturity dates. Total $ 38,406 4 15,413 1,088 723 $ 55,634 $ 8,400 2,683 8,416 63 377 $ 19,939 Investment in direct financing leases, which are included in consumer receivables, were as follows at December 31 (in millions): Total minimum lease rentals to be received Initial direct costs Estimated residual values Less: Unearned income Less: Unearned interest supplements Recorded investment in direct financing leases Less: Allowance for credit losses Net investment in direct financing leases North America $ 4 — 1 (1) — 4 — $ 4 2011 International $ 1,897 18 971 (203) (116) 2,567 (12) $ 2,555 Total Direct Financing Leases $ 1,901 18 972 (204) (116) 2,571 (12) $ 2,559 North America $ 8 — 10 (1) — 17 (1) $ 16 2010 International $ 1,980 19 1,256 (244) (84) 2,927 (17) $ 2,910 Total Direct Financing Leases $ 1,988 19 1,266 (245) (84) 2,944 (18) $ 2,926 At December 31, 2011, future lease minimum rentals due from North America direct financing leases were as follows (in millions): 2012 - $4; thereafter - $0. Ford Motor Company | 2011 Annual Report 111
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PROFITABLE GROWTH FOR ALL Ford Moto
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ON THE COVER The all-new Ford Fusio
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A MESSAGE FROM THE PRESIDENT AND CE
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Environmental and social goals are
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To meet regional needs in Asia Paci
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UTILITIES The latest One Ford globa
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LINCOLN CUTTING-EDGE PRODUCTS, PERS
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GREEN 2 Ford continues to work to f
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SMART As technology becomes ever mo
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1) Ford team at the ringing of the
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THE POWER OF CHOICE With record sal
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PEOPLE HELPING PEOPLE Ford voluntee
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GLOBAL OVERVIEW Automotive Brand Cu
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