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Notes to the Financial Statements
118 Ford Motor Company | 2010 Annual Report
NOTE 14. NET PROPERTY AND LEASE COMMITMENTS (Continued)
Automotive sector property-related expenses for the years ended December 31 were as follows (in millions):
2010
20102010
2010
2009
20092009
2009
2008
20082008
2008
Depreciation and other amortization ................................................................
................................
$ 1,956 $ 1,913 $ 6,355
Amortization of special tools ................................................................
................................
1,920 1,830 4,476
Total* ................................................................................................
................................
$ 3,876 $ 3,743 $ 10,831
Maintenance and rearrangement ................................................................
................................
$ 1,397 $ 1,230 $ 1,805
__________
* Includes impairments of long-lived assets for 2008. See Note 15 for additional information.
Conditional Asset Retirement Obligations
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.
Asbestos abatement was estimated using site-specific surveys where available and a per/square foot estimate where
surveys were unavailable. PCB removal costs were based on historical removal costs per transformer and applied to
transformers identified by a PCB transformer global survey we conducted.
The liability for our conditional asset retirement obligations which are recorded in Accrued liabilities and deferred
revenue at December 31 was as follows (in millions):
2010
20102010
2010
200
200200
2009
999
Beginning balance ................................................................................................................................
......................
$ 347 $ 360
Liabilities settled................................................................................................................................
.........................
(7) (6)
Revisions to estimates ................................................................................................
................................
(9) (7)
Ending balance ................................................................................................................................
...........................
$ 331 $ 347
Lease Commitments
We lease land, buildings and equipment under agreements that expire over various contractual periods. Minimum
rental commitments under non-cancelable operating leases were as follows (in millions):
2011
20112011
2011
2012
20122012
2012
2013
20132013
2013
2014
20142014
2014
2015
20152015
2015
Thereafter
ThereafterThereafter
Thereafter
Total
TotalTotal
Total
Automotive sector
................................
$ 183 $ 160 $ 138 $ 106 $ 77 $ 231 $ 895
Financial Services sector
................................
66 54 38 23 18 47 246
Total Company
................................
$ 249 $ 214 $ 176 $ 129 $ 95 $ 278 $ 1,141
Rental expense was as follows (in billions):
2010
20102010
2010
2009
20092009
2009
2008
20082008
2008
Rental expense................................................................................................
..............
$ 0.6 $ 0.8 $ 1.0
NOTE 15. IMPAIRMENT OF LONG-LIVED ASSETS
We monitor our asset groups for conditions that may indicate a potential impairment of long-lived assets. These
conditions include current-period operating losses combined with a history of losses and a projection of continuing losses,
and significant negative industry or economic trends. When these conditions exist, we test for impairment. An impairment
charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value.
During the second quarter of 2008, higher fuel prices and the weak economic climate in the United States and Canada
resulted in a more pronounced and accelerated shift in consumer preferences away from full-size trucks and traditional
sport utility vehicles ("SUVs") to smaller, more fuel-efficient vehicles. This shift in consumer preferences combined with
lower-than-anticipated U.S. industry demand and greater-than-anticipated escalation of commodity costs resulted in
impairment charges related to Ford North America's long-lived assets and Ford Credit's operating lease portfolio.