Ford 2012 Annual Report Download - page 39

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Ford Motor Company | 2012 Annual Report 37
Management's Discussion and Analysis of Financial Condition and Results of Operations
2011 Compared with 2010
The chart below details the change in 2011 pre-tax profit compared with 2010 by causal factor.
37
The decline in Ford Credit's pre-tax profit reflects fewer leases being terminated and the related vehicles sold at a
gain, and lower credit loss reserve reductions.
LIQUIDITY AND CAPITAL RESOURCES
Automotive Sector
Our Automotive liquidity strategy includes ensuring that we have sufficient liquidity available with a high degree of
certainty throughout the business cycle by generating cash from operations and maintaining access to other sources of
funding. For a discussion of risks to our liquidity, see "Item 1A. Risk Factors," of our Annual Report on Form 10-K for year
ended December 31, 2012, as well as Note 31 of the Notes to the Financial Statements regarding commitments and
contingencies that could impact our liquidity.
Gross Cash. Automotive gross cash includes cash and cash equivalents and marketable securities, net of any
securities-in-transit. Gross cash at December 31 was as follows (in billions):
2012 2011 2010
Cash and cash equivalents $ 6.2 $ 7.9 $ 6.3
Marketable securities 18.2 15.0 14.2
Total cash, marketable securities and loaned securities 24.4 22.9 20.5
Securities-in-transit (a) (0.1) — —
Gross cash $ 24.3 $22.9 $20.5
__________
(a) The purchase or sale of marketable securities for which the cash settlement was not made by period-end and for which there was a payable or
receivable recorded on the balance sheet at period-end.
Our cash, cash equivalents, and marketable securities are held primarily in highly liquid investments, which provide
for anticipated and unanticipated cash needs. Our cash, cash equivalents, and marketable securities primarily include
U.S. Department of Treasury obligations, federal agency securities, bank time deposits with investment-grade institutions,
corporate investment-grade securities, commercial paper rated A-1/P-1 or higher, and debt obligations of a select group of
non-U.S. governments, non-U.S. governmental agencies, and supranational institutions. The average maturity of these
investments ranges from 90 days to up to one year, and is adjusted based on market conditions and liquidity needs. We
monitor our cash levels and average maturity on a daily basis. Within our Automotive gross cash portfolio, we currently do
not hold investments in government obligations of Greece, Ireland, Italy, Portugal, or Spain, nor did we hold any at
December 31, 2012.
In managing our business, we classify changes in Automotive gross cash into operating-related and other items
(which includes the impact of certain special items, contributions to funded pension plans, certain tax-related transactions,
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