Ford 2013 Annual Report Download - page 141

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Ford Motor Company | 2013 Annual Report 139
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 26. SEGMENT INFORMATION
Our operating activity consists of two operating sectors, Automotive and Financial Services. Segment selection is
based on the organizational structure we use to evaluate performance and make decisions on resource allocation, as well
as availability and materiality of separate financial results consistent with that structure.
Automotive Sector
Our Automotive sector is divided into four segments: 1) North America, 2) South America, 3) Europe, and 4) Asia
Pacific Africa. Included in each segment, described below, are the associated costs to develop, manufacture, distribute,
and service vehicles and parts.
North America segment primarily includes the sale of Ford- and Lincoln-brand vehicles and related service parts and
accessories in North America (United States, Canada, and Mexico).
South America segment primarily includes the sale of Ford-brand vehicles and related service parts and accessories
in South America.
Europe segment primarily includes the sale of Ford-brand vehicles, components, and related service parts and
accessories in Europe, Turkey, and Russia.
Asia Pacific Africa segment primarily includes the sale of Ford-brand vehicles and related service parts and
accessories in the Asia Pacific region and South Africa.
Revenue from Ford-brand and JMC-brand vehicles produced and distributed by our unconsolidated affiliates are not
included in our revenue.
The Other Automotive component of the Automotive sector consists primarily of centrally-managed net interest
expense and related fair market value adjustments.
Special items are presented as a separate reconciling item to reconcile segment results to consolidated results of the
Company. These special items include (i) personnel and dealer-related items stemming from our efforts to match
production capacity and cost structure to market demand and changing model mix, and (ii) certain infrequent significant
items that we generally do not consider to be indicative of our ongoing operating activities. This presentation reflects the
fact that management excludes these items from its review of the results of the operating segments for purposes of
measuring segment profitability and allocating resources.
Transactions among Automotive segments generally are presented on a “where-sold,” absolute-cost basis, which
reflects the profit/(loss) on the sale within the segment making the ultimate sale to an external entity. This presentation
generally eliminates the effect of legal entity transfer prices within the Automotive sector for vehicles, components, and
product engineering.
Financial Services Sector
The Financial Services sector includes the following segments: 1) Ford Credit, and 2) Other Financial Services. Ford
Credit provides vehicle-related financing and leasing. Other Financial Services includes a variety of businesses including
holding companies, real estate, and the financing of some Volvo vehicles in Europe. During 2013, we sold a substantial
portion of our Volvo financing business, with the remaining Volvo-related retail financing receivables classified as assets
held for sale in Other assets. See Note 23 for more information.
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