Ford 2010 Annual Report Download - page 115

Notes to the Financial Statements
Ford Motor Company | 2010 Annual Report 113
NOTE 11. EQUITY IN NET ASSETS OF AFFILIATED COMPANIES (Continued)
We received $337 million, $299 million, and $411 million of dividends from these affiliated companies for the years
ended December 31, 2010, 2009, and 2008, respectively.
NOTE 12. SIGNIFICANT UNCONSOLIDATED AFFILIATES
We are required to measure the impact of all unconsolidated majority-owned subsidiaries and equity-method
investments to determine their significance to our financial statements. If the affiliates meet the defined thresholds of
significance, certain financial disclosure data is required. For 2010, none of the affiliates met the defined thresholds of
significance.
NOTE 13. VARIABLE INTEREST ENTITIES
A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional
subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A
VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most
significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits
from the entity that could potentially be significant to the VIE.
If we determine that we have operating power and the obligation to absorb losses or receive benefits, we consolidate
the VIE as the primary beneficiary. Within our Automotive sector, we have operating power when our management has
the ability to make key operating decisions, such as decisions regarding product investment or manufacturing production
schedules. For the Financial Services sector, we have operating power when we have the ability to exercise discretion in
the servicing of financial assets, issue additional debt, exercise a unilateral call option, add assets to revolving structures,
or control investment decisions.
Assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to
satisfy claims against our general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not
represent additional claims on our general assets; rather, they represent claims against the specific assets of the
consolidated VIEs.
Automotive Sector
VIEs of which we are the primary beneficiary:
At December 31, 2010, we have one VIE of which we are the primary beneficiary – Cologne Precision Forge GmbH
("CPF"), formerly Tekfor Cologne GmbH. CPF is a 50/50 joint venture with Neumayer Tekfor GmbH ("Neumayer") to
which Ford transferred the operations of its Cologne forge plant in 2003. CPF produces forged components, primarily for
transmissions and chassis, for use in Ford vehicles and for sale to third parties. We provide financial support to CPF in
the form of a revolving loan agreement. This loan was used by CPF to refinance external debt. On December 21, 2010,
Ford and Neumayer signed an agreement pursuant to which Neumayer will withdraw from the joint venture. The
agreement provides that Neumayer will sell its shares in the joint venture to Ford, and describes the future business
relationship between the parties. The agreement becomes effective at closing, which is expected to take place in the first
quarter of 2011, and at that point, CPF will become a wholly-owned subsidiary of Ford.
At December 31, 2009 and December 31, 2008, in addition to CPF, we also held interests in certain dealerships in
North America as a part of our Dealer Development program. Throughout 2009, we sold our ownership interest and
liquidated most of these dealerships. We now consolidate the remaining dealerships under the voting interest model.