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Notes to the Financial Statements
Ford Motor Company | 2010 Annual Report 117
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):
2010
20102010
2010
2009
20092009
2009
2008
20082008
2008
Derivative
Derivative Derivative
Derivative
Expense
ExpenseExpense
Expense
Interest
Interest Interest
Interest
Expense
ExpenseExpense
Expense
Derivative
Derivative Derivative
Derivative
Expense
ExpenseExpense
Expense
Interest
Interest Interest
Interest
Expense
ExpenseExpense
Expense
Derivative
Derivative Derivative
Derivative
Expense
ExpenseExpense
Expense
Interest
Interest Interest
Interest
Expense
ExpenseExpense
Expense
VIEs financial performance ................................
................................
$ 225 $ 1,247 $ 339 $ 1,678 $ 815
$ 3,053
VIEs of which the Financial Services sector is not the primary beneficiary:
Ford Credit has an investment in Forso Nordic AB, a joint venture determined to be a VIE of which Ford Credit is not the
primary beneficiary. The joint venture provides consumer and dealer financing in its local markets and is financed by
external debt and additional subordinated interest provided by the joint venture partner. The operating agreement
indicates that the power to direct economically significant activities is shared with its joint venture partner, and the
obligation to absorb losses or right to receive benefits resides primarily with its joint venture partner. Ford Credit's
investment in the joint venture is accounted for as an equity method investment and is included in Equity in net assets of
affiliated companies. Ford Credit's maximum exposure to any potential losses associated with this VIE is limited to its
equity investment, and amounted to $71 million and $67 million at December 31, 2010 and 2009, 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.
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):
Automotive Sector
Automotive SectorAutomotive Sector
Automotive Sector
2010
20102010
2010
2009
20092009
2009
Land................................................................................................................................
................................
$ 336 $ 335
Buildings and land improvements ................................................................................................
.............................
10,348 10,364
Machinery, equipment and other................................................................................................
...............................
37,668 37,378
Construction in progress ................................................................................................
................................
1,102 1,176
Total land, plant and equipment ................................................................................................
..............................
49,454 49,253
Accumulated depreciation................................................................................................
................................
(33,900) (33,408)
Net land, plant and equipment ................................................................................................
................................
15,554 15,845
Special tools, net of amortization ................................................................................................
..............................
7,473 6,610
Total Automotive sector ................................................................................................
................................
23,027 22,455
Financial Services sector
Financial Services sectorFinancial Services sector
Financial Services sector*................................................................................................
................................
152 182
Total Company ................................................................................................................................
.......................
$ 23,179 $ 22,637
__________
* Included in
Financial Services other assets
on our sector balance sheet.