Ford 2011 Annual Report Download - page 114

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Notes to the Financial Statements
112 Ford Motor Company | 2011 Annual Report
NOTE 7. FINANCE RECEIVABLES (Continued)
At December 31, 2011, future lease minimum rentals due from International direct financing leases were as follows (in
millions): 2012 - $780; 2013 - $518; 2014 - $395; thereafter - $204.
Aging. For all classes of finance receivables, Ford Credit defines "past due" as any payment, including principal and
interest, that has not been collected and is at least 31 days past the contractual due date. The aging analysis of Ford
Credit's finance receivables balances at December 31, 2011 was as follows (in millions):
North America
Consumer
Retail
Direct financing leases
Non-consumer
Wholesale
Dealer loans
Other
Subtotal
International
Consumer
Retail
Direct financing leases
Non-consumer
Wholesale
Dealer loans
Other
Subtotal
Total recorded investment
31-60
Days Past
Due
$ 732
—
9
3
—
744
55
9
1
—
—
65
$ 809
61-90
Days Past
Due
$68
—
—
11
—
79
24
4
1
—
—
29
$108
91-120
Days Past
Due
$22
—
—
—
—
22
10
2
—
—
—
12
$34
Greater
Than 120
Days
Past Due
$70
—
2
5
—
77
40
3
5
1
1
50
$127
Total Past
Due
$892
—
11
19
—
922
129
18
7
1
1
156
$1,078
Current
$36,107
4
15,402
1,069
723
53,305
8,052
2,549
8,409
62
376
19,448
$72,753
Total
Finance
Receivables
$ 36,999
4
15,413
1,088
723
54,227
8,181
2,567
8,416
63
377
19,604
$ 73,831
Consumer Credit Quality. When originating all classes of consumer receivables, Ford Credit uses a proprietary
scoring system that measures the credit quality of the receivables using several factors, such as credit bureau
information, consumer credit risk scores (e.g., FICO score), customer characteristics, and contract characteristics. In
addition to its proprietary scoring system, Ford Credit considers other individual consumer factors, such as employment
history, financial stability, and capacity to pay.
Subsequent to origination, Ford Credit reviews the credit quality of retail and direct financing lease receivables based
on customer payment activity. As each customer develops a payment history, Ford Credit uses an internally-developed
behavioral scoring model to assist in determining the best collection strategies. Based on data from this scoring model,
contracts are categorized by collection risk. Ford Credit's collection models evaluate several factors, including origination
characteristics, updated credit bureau data, and payment patterns. These models allow for more focused collection
activity on higher-risk accounts and are used to refine Ford Credit's risk-based staffing model to ensure collection
resources are aligned with portfolio risk.
Credit quality ratings for Ford Credit's consumer receivables are categorized as follows:
• Pass – current to 60 days past due
• Special Mention – 61 to 120 days past due and in intensified collection status
• Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has
already been charged-off, as measured using the fair value of the collateral