Ford 2014 Annual Report Download - page 153

Download and view the complete annual report

Please find page 153 of the 2014 Ford annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 200

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 13. DEBT AND COMMITMENTS (Continued)
Financial Services Sector
Asset-Backed Debt
At December 31, 2014, the carrying value of our asset-backed debt was $43.3 billion. This secured debt is issued by
Ford Credit and includes asset-backed securities used to fund operations and maintain liquidity. Assets securing the
related debt issued as part of all our securitization transactions are included in our consolidated results and are based
upon the legal transfer of the underlying assets in order to reflect legal ownership and the beneficial ownership of the debt
holder. The third-party investors in the securitization transactions have legal recourse only to the assets securing the debt
and do not have such recourse to us, except for the customary representation and warranty provisions or when we are
counterparty to certain derivative transactions of the special purpose entities (“SPEs”). In addition, the cash flows
generated by the assets are restricted only to pay such liabilities; Ford Credit retains the right to residual cash flows. See
Note 15 for additional information.
Although not contractually required, we regularly support our wholesale securitization programs by repurchasing
receivables of a dealer from a SPE when the dealer’s performance is at risk, which transfers the corresponding risk of loss
from the SPE to us. In order to continue to fund the wholesale receivables, we also may contribute additional cash or
wholesale receivables if the collateral falls below required levels. The balances of cash related to these contributions
were $0 at December 31, 2014 and 2013, and ranged from $0 to $242 million during 2014 and $0 to $177 million during
2013.
SPEs that are exposed to interest rate or currency risk have reduced their risks by entering into derivative
transactions. In certain instances, we have entered into offsetting derivative transactions with the SPE to protect the SPE
from the risks that are not mitigated through the derivative transactions between the SPE and its external counterparty. In
other instances, we have entered into derivative transactions with the counterparty to protect the counterparty from risks
absorbed through derivative transactions with the SPEs. Derivative expense/(income) related to the derivative
transactions that support Ford Credit’s securitization programs were $(4) million, $25 million, and $239 million for the
years ended December 31, 2014, 2013 and 2012, respectively. See Note 16 for additional information regarding the
accounting for derivatives.
Interest expense on securitization debt was $595 million, $640 million, and $854 million in 2014, 2013, and 2012,
respectively.
The assets and liabilities related to our asset-backed debt arrangements included on our financial statements at
December 31 were as follows (in billions):
2014 2013
ASSETS
Cash and cash equivalents $ 2.4 $ 4.4
Finance receivables, net 46.1 51.4
Net investment in operating leases 9.6 8.1
LIABILITIES
Debt 43.3 45.9
Committed Credit Facilities
At December 31, 2014, Ford Credit’s committed capacity totaled $37.3 billion of which $21.6 billion is available for
use. Ford Credit’s committed capacity is primarily comprised of unsecured credit facilities with financial institutions,
committed asset-backed security lines from bank-sponsored commercial paper conduits and other financial institutions,
and allocated commitments under the revolving credit facility.
€
FS-47