Ford 2012 Annual Report Download - page 132
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130 Ford Motor Company | 2012 Annual Report
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 18. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
Balance Sheet Effect of Derivative Financial Instruments
The following table summarizes the notional amount and estimated fair value of our derivative financial instruments
(in millions):
December 31, 2012 December 31, 2011
Notional
Fair Value of
Assets
Fair Value of
Liabilities Notional
Fair Value of
Assets
Fair Value of
Liabilities
Automotive Sector
Cash flow hedges
Foreign currency exchange contracts $ 17,663 $ 150 $357 $14,535 $120 $368
Derivatives not designated as hedging
instruments
Foreign currency exchange contracts 9,225 68 129 5,692 92 80
Commodity contracts 1,854 23 124 2,396 2 372
Other – warrants — — — 12 4—
Total derivatives not designated as
hedging instruments 11,079 91 253 8,100 98 452
Total Automotive sector derivative
financial instruments $ 28,742 $ 241 $610 $22,635 $218 $820
Financial Services Sector
Fair value hedges
Interest rate contracts $ 16,754 $ 787 $ 8 $ 7,786 $526 $ —
Derivatives not designated as hedging
instruments
Interest rate contracts 68,919 504 248 70,639 670 237
Foreign currency exchange contracts 2,378 9 8 3,582 30 50
Cross-currency interest rate swap
contracts 3,006 —117 987 12 12
Other (a) — — — 2,500 137 —
Total derivatives not designated as
hedging instruments 74,303 513 373 77,708 849 299
Total Financial Services sector
derivative financial instruments $ 91,057 $ 1,300 $381 $85,494 $1,375 $299
__________
(a) Represents derivative features included in the FUEL Notes (see Note 4). The derivative features included in the FUEL Notes were extinguished as
a result of the mandatory exchange of the FUEL Notes to unsecured notes in the second quarter of 2012.
The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties and,
therefore, are not a direct measure of our exposure to the financial risks described above. Notional amounts are
presented on a gross basis with no netting of offsetting exposure positions. The amounts exchanged are calculated by
reference to the notional amounts and by other terms of the derivatives, such as interest rates, foreign currency exchange
rates, or commodity volumes and prices.
On our consolidated balance sheet, derivative assets are reported in Other assets for Automotive and Financial
Services sectors, and derivative liabilities are reported in Payables for our Automotive sector and in Accrued liabilities and
deferred revenue for our Financial Services sector.