Ford 2014 Annual Report Download - page 126

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5. FINANCIAL SERVICES SECTOR FINANCE RECEIVABLES
Our Financial Services sector finance receivables primarily relate to Ford Credit, but also include the Other Financial
Services segment and certain intersector eliminations.
Our Financial Services sector segments our finance receivables into “consumer” and “non-consumer” portfolios. The
receivables are generally secured by the vehicles, inventory, or other property being financed.
Finance receivables are recorded at the time of origination or purchase at fair value and are subsequently reported at
amortized cost, net of any allowance for credit losses.
Consumer Portfolio. Receivables in this portfolio include products offered to individuals and businesses that finance
the acquisition of Ford and Lincoln vehicles from dealers for personal or commercial use. Retail financing includes retail
installment contracts for new and used vehicles and direct financing leases with retail customers, government entities,
daily rental companies, and fleet customers.
Non-Consumer Portfolio. Receivables in this portfolio include products offered to automotive dealers. The products
include:
• Dealer financing – includes wholesale loans to dealers to finance the purchase of vehicle inventory, also known
as floorplan financing, as well as loans to dealers to finance working capital and improvements to dealership
facilities, finance the purchase of dealership real estate, and finance other dealer programs. Wholesale financing
is approximately 94% of our dealer financing
• Other financing – primarily related to the sale of parts and accessories to dealers
Finance receivables, net at December 31 were as follows (in millions):
2014 2013
Consumer
Retail financing, gross $ 55,856 $ 51,699
Less: Unearned interest supplements (1,760)(1,502)
Consumer finance receivables 54,096 50,197
Non-Consumer
Dealer financing 31,340 29,905
Other financing 1,026 1,071
Non-Consumer finance receivables 32,366 30,976
Total recorded investment $ 86,462 $ 81,173
Recorded investment in finance receivables $ 86,462 $ 81,173
Less: Allowance for credit losses (321) (357)
Finance receivables, net (a) (b) $ 86,141 $ 80,816
Net finance receivables subject to fair value (c) $ 84,468 $ 79,149
Fair value 85,941 80,838
__________
(a) At December 31, 2014 and 2013, Finance receivables, net on the consolidated balance sheet were $81.1 billion and $77.5 billion, respectively. The
balance is comprised of Financial Services sector finance receivables of $86.1 billion and $80.8 billion, respectively, net of $5 billion and
$3.3 billion, respectively, of receivables purchased by Financial Services sector from Automotive sector, which are reclassified to Other receivables,
net.
(b) Finance receivables, net includes net investment in direct financing leases of $1.7 billion at December 31, 2014 and 2013.
(c) Excludes $1.7 billion of certain receivables (primarily direct financing leases) that are not subject to fair value disclosure requirements at
December 31, 2014 and 2013.
Excluded from finance receivables at December 31, 2014 and 2013, was $191 million and $196 million, respectively,
of accrued uncollected interest, which we report in Other assets on the balance sheet.
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