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90 Ford Motor Company | 2012 Annual Report
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
90
NOTE 7. FINANCE RECEIVABLES (Continued)
Aging. For all classes of finance receivables, we define "past due" as any payment, including principal and
interest, that has not been collected and is at least 31 days past the contractual due date. Recorded investment of
consumer accounts greater than 90 days past due and still accruing interest was $13 million and $14 million at
December 31, 2012 and 2011, respectively. The recorded investment of non-consumer accounts greater than 90 days
past due and still accruing interest was $5 million and de minimis at December 31, 2012 and 2011, respectively.
The aging analysis of our Financial Services sector finance receivables balances at December 31 were as follows
(in millions):
2012 2011
North America International Total North America International Total
Consumer
31-60 days past due $ 783 $ 50 $ 833 $732 $ 64 $ 796
61-90 days past due 97 18 115 68 28 96
91-120 days past due 21 9 30 22 12 34
Greater than 120 days past due 52 29 81 70 43 113
Total past due 953 106 1,059 892 147 1,039
Current 37,287 10,067 47,354 36,111 10,601 46,712
Consumer finance receivables $ 38,240 $ 10,173 $48,413 $37,003 $10,748 $ 47,751
Non-Consumer
Total past due $ 29 $ 11 $ 40 $ 30 $ 9$ 39
Current 20,089 7,617 27,706 17,194 8,847 26,041
Non-Consumer finance receivables 20,118 7,628 27,746 17,224 8,856 26,080
Total recorded investment $ 58,358 $ 17,801 $76,159 $54,227 $19,604 $ 73,831
Consumer Credit Quality. When originating all classes of consumer receivables, we use a proprietary scoring
system that measures the credit quality of the receivables using several factors, such as credit bureau information,
consumer credit risk scores (e.g., FICO score), and contract characteristics. In addition to our proprietary scoring
system, we consider other individual consumer factors, such as employment history, financial stability, and capacity to
pay.
Subsequent to origination, we review the credit quality of retail and direct financing lease receivables based on
customer payment activity. As each customer develops a payment history, we use an internally-developed behavioral
scoring model to assist in determining the best collection strategies. Based on data from this scoring model, contracts
are categorized by collection risk. Our collection models evaluate several factors, including origination characteristics,
updated credit bureau data, and payment patterns. These models allow for more focused collection activity on higher-
risk accounts and are used to refine our risk-based staffing model to ensure collection resources are aligned with
portfolio risk.
Credit quality ratings for our consumer receivables are based on aging (as described in the aging table above).
Consumer receivables credit quality ratings are as follows:
• Pass – current to 60 days past due
• Special Mention – 61 to 120 days past due and in intensified collection status
• Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has
already been charged-off, as measured using the fair value of collateral