Annual Report 2011 - Ford Motor Company

Notes to the Financial Statements
NOTE 8. NET INVESTMENT IN OPERATING LEASES
Net investment in operating leases on our balance sheet consists primarily of lease contracts for new and used
vehicles with retail customers, daily rental companies, government entities, and fleet customers. Assets subject to
operating leases are depreciated on 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.
Net Investment in Operating Leases
The net investment in operating leases at December 31 was as follows (in millions):
2011
2010
Automotive Sector
Vehicles, net of depreciation
Financial Services Sector
$ 1,356 $ 1,282
Vehicles and other equipment, at cost (a)
14,242
14,800
Accumulated depreciation
(2,720)
(4,320)
Allowance for credit losses
(40)
(87)
Total Financial Services sector
11,482
10,393
Total Company
__________
$ 12,838 $ 11,675
(a) Includes Ford Credit's operating lease assets of $6.4 billion and $6.2 billion at December 31, 2011 and 2010, respectively, for which the related
cash flows have been used to secure certain lease securitization transactions. Cash flows associated with the net investment 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.
Automotive Sector
Operating lease depreciation expense (which excludes gains and losses on disposal of assets) for the years ended
December 31 was as follows (in millions):
Operating lease depreciation expense
116 Ford Motor Company | 2011 Annual Report
2011
$ 61
2010
$ 297
2009
$ 475
Included in Automotive revenues are rents on operating leases. The amount contractually due for minimum rentals on
operating leases is $126 million for 2012.
Financial Services Sector
Operating lease depreciation expense (which includes gains and losses on disposal of assets) for the years ended
December 31 was as follows (in millions):
Operating lease depreciation expense
2011
$ 1,799
2010
$ 1,977
2009
$ 3,890
Included in Financial Services revenues are rents on operating leases. The amounts contractually due for minimum
rentals on operating leases are as follows (in millions):
Minimum rentals on operating leases
2012
$ 1,507
2013
$ 1,413
2014
$ 1,173
2015
$ 238
Thereafter
$ 100
Total
$ 4,431