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Notes to the Financial Statements
116 Ford Motor Company | 2010 Annual Report
NOTE 13. VARIABLE INTEREST ENTITIES (Continued)
VIEs that are exposed to interest rate or currency risk have reduced their risks by entering into derivative transactions.
In certain instances, Ford Credit has entered into offsetting derivative transactions with the VIE to protect the VIE from the
risks that are not mitigated through the derivative transactions between the VIE and its external counterparty. In other
instances, Ford Credit has entered into derivative transactions with the counterparty to protect the counterparty from risks
absorbed through their derivative transactions with the VIEs. See Note 26 for additional information regarding derivatives.
The following table includes assets to be used to settle the liabilities of the Financial Services sector's consolidated
VIEs. The Financial Services sector may retain debt issued by the consolidated VIEs and this debt is excluded from the
table below. The Financial Services sector holds the right to the excess cash flows from the assets that are not needed to
pay liabilities of the consolidated VIEs. The assets and debt reflected on our consolidated balance sheet are as follows
(in billions):
December 31
December 31December 31
December 31, 2010
, 2010, 2010
, 2010
Cash and Cash
Cash and Cash Cash and Cash
Cash and Cash
Equivalents
EquivalentsEquivalents
Equivalents
Finance
Finance Finance
Finance
Receivables, Net
Receivables, Net Receivables, Net
Receivables, Net
and
and and
and
Net Investment in
Net Investment in Net Investment in
Net Investment in
Operating Leases
Operating LeasesOperating Leases
Operating Leases
Debt
DebtDebt
Debt
Finance receivables
Retail................................................................................................
................................
$ 2.9 $ 33.9 $ 27.1
Wholesale ................................................................................................
................................
0.4 16.6 10.1
Total finance receivables ................................................................
................................
3.3 50.5 37.2
Net investment in operating leases ................................................................
................................
0.8 6.1 3.0
Total* ................................................................................................
................................
$ 4.1 $ 56.6 $ 40.2
__________
* Certain notes issued by the VIEs to affiliated companies served as collateral for accessing the European Central Bank ("ECB") open market
operations program. This external funding of $334 million at December 31, 2010 was not reflected as debt of the VIEs and is excluded from the
table above, but was included in our consolidated debt. The finance receivables backing this external funding are included in the table above.
December 31, 2009
December 31, 2009December 31, 2009
December 31, 2009
Cash and Cash
Cash and Cash Cash and Cash
Cash and Cash
Equivalents
EquivalentsEquivalents
Equivalents
Finance
Finance Finance
Finance
Receivables, Net
Receivables, Net Receivables, Net
Receivables, Net
and
and and
and
Net Investment in
Net Investment in Net Investment in
Net Investment in
Operating Leases
Operating LeasesOperating Leases
Operating Leases
Debt
DebtDebt
Debt
Finance receivables
Retail................................................................................................
................................
$ 3.1 $ 40.9 $ 31.2
Wholesale ................................................................................................
................................
0.5 16.5 8.4
Total finance receivables ................................................................
................................
3.6 57.4 39.6
Net investment in operating leases ................................................................
................................
1.3 10.2 6.6
Total* ................................................................................................
................................
$ 4.9 $ 67.6 $ 46.2
__________
* Certain notes issued by the VIEs to affiliated companies served as collateral for accessing the ECB open market operations program. This
external funding of $1.8 billion at December 31, 2009, was not reflected as debt of the VIEs and is excluded from the table above, but was
included in our consolidated debt. The finance receivables backing this external funding are included in the table above.
Ford Credit's exposure based on the fair value of derivative instruments related to consolidated VIEs that support its
securitization transactions at December 31 is as follows (in millions):
2010
20102010
2010
2009
20092009
2009
Derivative
Derivative Derivative
Derivative
Asset
AssetAsset
Asset
Derivative
Derivative Derivative
Derivative
Liability
LiabilityLiability
Liability
Derivative
Derivative Derivative
Derivative
Asset
AssetAsset
Asset
Derivative
Derivative Derivative
Derivative
Liability
LiabilityLiability
Liability
Total derivative financial instruments*................................
................................
$ 26 $ 222 $ 55 $ 528
__________
* Ford Credit derivative assets and liabilities are included in
Other assets
and
Accrued liabilities and deferred revenue
, respectively, on our
consolidated balance sheet.