Ford 2014 Annual Report Download - page 135
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FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 10. NET PROPERTY AND LEASE COMMITMENTS
Net Property
Net property is 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. 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, 3 years for software (8 years for mainframe and client based software), 30 years for land improvements, and
36 years for buildings. Tooling generally is amortized over the expected life of a product program using a straight-line
method.
Net property at December 31 was as follows (in millions):
Automotive Sector 2014 2013
Land $ 351 $440
Buildings and land improvements 10,601 10,325
Machinery, equipment and other 33,381 34,830
Software 2,122 2,069
Construction in progress 1,719 2,110
Total land, plant and equipment and other 48,174 49,774
Accumulated depreciation (29,134) (31,476)
Net land, plant and equipment and other 19,040 18,298
Tooling, net of amortization 10,755 9,194
Total Automotive sector 29,795 27,492
Financial Services sector (a) 331 124
Total Company $30,126 $ 27,616
__________
(a) Included in Other assets on our sector balance sheet.
Automotive sector property-related expenses for the years ended December 31 were as follows (in millions):
2014 2013 2012
Depreciation and other amortization $ 2,092 $2,110 $ 1,794
Tooling amortization 2,160 1,954 1,861
Total $ 4,252 $4,064 $ 3,655
Maintenance and rearrangement $ 1,523 $1,422 $ 1,352
Conditional Asset Retirement Obligations
Conditional asset retirement obligations relate to legal obligations associated with the retirement, abandonment, or
disposal of tangible long-lived assets. Estimates of the fair value liabilities for our conditional asset retirement obligations
that are recorded in Other liabilities and deferred revenue at December 31 were as follows (in millions):
2014 2013
Beginning balance $ 246 $267
Liabilities settled (11) (5)
Revisions to estimates (7) (16)
Ending balance $ 228 $246
FS-29