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Ford Motor Company | 2012 Annual Report 83
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4. FAIR VALUE MEASUREMENTS (Continued)
Reconciliation of Changes in Level 3 Balances
The following table summarizes the changes recorded through income in Level 3 items measured at fair value on a
recurring basis and reported on our balance sheet for the years ended December 31 (in millions):
2012 2011
Marketable
Securities
Derivative
Financial
Instruments,
Net
Total Level 3
Fair Value
Marketable
Securities
Derivative
Financial
Instruments,
Net
Total Level 3
Fair Value
Automotive Sector
Beginning balance $ — $ (70) $ (70) $ 2$ 38 $ 40
Realized/unrealized gains/(losses)
Cost of sales — 11 11 — (99)(99)
Interest income and other income/(loss), net — (4) (4) (1) (1) (2)
Other comprehensive income/(loss) (a) — — — — — —
Total realized/unrealized gains/(losses) — 7 7 (1) (100) (101)
Purchases, issues, sales, and settlements
Purchases — — — 7—7
Issues — — — — — —
Sales — — — (1) — (1)
Settlements — 65 65 — (14)(14)
Total purchases, issues, sales, and settlements — 65 65 6 (14) (8)
Transfers into Level 3 — — — — — —
Transfers out of Level 3 (b) — (10)(10) (7) 6(1)
Ending balance $ — $ (8) $ (8) $ — $ (70) $ (70)
Unrealized gains/(losses) on instruments still held $ — $ 9 $ 9 $ — $ (69) $ (69)
Financial Services Sector
Beginning balance $ — $ 137 $137 $1$(89) $ (88)
Realized/unrealized gains/(losses)
Other income/(loss), net — (81)(81) — 382 382
Other comprehensive income/(loss) (a) — — — — (1) (1)
Interest income/(expense) (c) — — — — 90 90
Total realized/unrealized gains/(losses) — (81)(81) — 471 471
Purchases, issues, sales, and settlements
Purchases — — — 5—5
Issues (d) — — — — 73 73
Sales — — — — — —
Settlements (e) — (56)(56) — 114 114
Total purchases, issues, sales, and settlements — (56)(56)5 187 192
Transfers into Level 3 — — — — — —
Transfers out of Level 3 (b) — — — (6) (432) (438)
Ending balance $ — $ — $ — $ — $ 137 $137
Unrealized gains/(losses) on instruments still held $ — $ — $ — $ — $ 65 $ 65
_________
(a) Represents foreign currency translation on derivative asset and liability balances held by non-U.S. dollar foreign affiliates.
(b) The transfer out of Level 3 of $432 million in 2011 was primarily the result of management's validation of the observable data and determination that
certain unobservable inputs had an insignificant impact on the valuation of these instruments. The remaining transfers were due to the increase in
availability of observable data.
(c) Recorded in Interest expense.
(d) Represents derivative features included in the FUEL Notes.
(e) Reflects exchange of the FUEL Notes to unsecured notes.
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