Ford 2009 Annual Report Download - page 112

Notes to the Financial Statements
110 Ford Motor Company | 2009 Annual Report
NOTE 13. VARIABLE INTEREST ENTITIES (Continued)
The financial performance of the consolidated VIEs that support Ford Credit's securitization transactions reflected in
our statement of operations is as follows (in millions):
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VIEs of which Ford Credit is not the primary beneficiary:
Ford Credit has investments in certain joint ventures determined to be VIEs of which it is not the primary beneficiary.
These joint ventures provide consumer and dealer financing in their respective markets. The joint ventures are financed by
external debt and additional subordinated interest of the joint venture partners. The risks and rewards associated with
Ford Credit's interests in these joint ventures are based primarily on ownership percentages. Ford Credit's investments in
these joint ventures are accounted for as equity method investments and are included in Equity in net assets of affiliated
companies. Ford Credit's maximum exposure to any potential losses associated with these VIEs is $67 million and
$109 million at December 31, 2009 and 2008, respectively.
NOTE 14. NET PROPERTY AND LEASE COMMITMENTS
Net Property
Net property includes land, buildings and land improvements, machinery and equipment, special tools, and other
assets that we use in our normal operations. These assets are recorded at cost, net of accumulated depreciation and
impairments. We capitalize new assets when we expect to use the asset for more than one year and the acquisition cost
is greater than $2,500. Routine maintenance and repair costs are expensed when incurred.
Included in our carrying value is the estimated cost for legal obligations to retire, abandon, or dispose of the asset.
These conditional asset retirement obligations relate to the estimated cost for asbestos abatement and PCB removal.
Property and equipment are depreciated primarily using the straight-line method over the estimated useful life of the
asset. Useful lives range from 3 years to 36 years. The estimated useful lives generally are 14.5 years for machinery and
equipment, and 30 years for buildings and improvements. Special tools generally are amortized over the expected life of
a product program using a straight-line method. If the expected production volumes for major product programs
associated with the tools decline significantly, we accelerate the amortization reflecting the rate of decline.
Net property at December 31 was as follows (in millions):
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7RWDO&RPSDQ\ 
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   
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