Ford 2013 Annual Report Download - page 79

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Ford Motor Company | 2013 Annual Report 77
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. PRESENTATION (Continued)
Certain Transactions Between Automotive and Financial Services Sectors
Intersector transactions occur in the ordinary course of business. Additional detail regarding certain transactions and
the effect on each sector’s balance sheet was as follows (in billions):
December 31, 2013 December 31, 2012
Automotive
Financial
Services Automotive
Financial
Services
Finance receivables, net (a) $ 3.3 $ 4.8
Unearned interest supplements and residual support (b) (3.1) (2.6)
Wholesale receivables/Other (c) 0.8 0.8
Net investment in operating leases (d) 0.6 0.5
Intersector receivables/(payables) (e) $ (0.2) 0.2 $ (0.3) 0.3
__________
(a) Automotive sector receivables (generated primarily from vehicle and parts sales to third parties) sold to Ford Credit. These receivables are
classified as Other receivables, net on our consolidated balance sheet and Finance receivables, net on our sector balance sheet.
(b) We pay amounts to Ford Credit at the point of retail financing or lease origination that represent interest supplements and residual support.
(c) Primarily wholesale receivables with entities that are consolidated subsidiaries of Ford.
(d) Sale-leaseback agreement between Automotive and Financial Services sectors relating to vehicles that we lease to our employees.
(e) Amounts owed to the Financial Services sector by Automotive sector, or vice versa.
Venezuelan Operations
On February 13, 2013, the Venezuelan government effected a devaluation of the bolivar, from an exchange rate of
4.3 bolivars to the U.S. dollar to an exchange rate of 6.3 bolivars to the U.S. dollar. This resulted in a remeasurement loss
of $186 million in the first quarter. For periods subsequent to the date of the devaluation, assets, liabilities, and results of
operations from our Venezuelan subsidiary are remeasured at this new exchange rate.
At December 31, 2013, we had a bolivar denominated net monetary position of $749 million, including $765 million of
bolivar denominated cash and cash equivalents. Based on our net monetary position at December 31, 2013, a further
devaluation from an exchange rate of 6.3 bolivars to the U.S. dollar to an exchange rate of 12 bolivars to the U.S. dollar
would have resulted in a balance sheet remeasurement loss of approximately $360 million.
At December 31, 2013, our investment in our Venezuelan subsidiary (which includes undistributed earnings) was
$881 million. Also, at December 31, 2013, it had $300 million of U.S. dollar currency exchange requests pending with and
in transit to the governmental controlled currency exchange, including $295 million payable to other Ford consolidated
affiliates.
The operating environment in Venezuela continues to be challenging. Foreign exchange control regulations have
affected our Venezuelan operation’s ability to pay dividends and obligations denominated in U.S. dollars, and are
constraining parts availability and our ability to maintain normal production. Recent developments in Venezuela, including
price controls and a very limited and uneven supply of foreign currency to support production, have affected adversely our
business and results of operations. These and other restrictions could limit our ability to benefit from our investment and
maintain a controlling interest in our Venezuelan subsidiary.
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