Ford 2012 Annual Report Download - page 59

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Ford Motor Company | 2012 Annual Report 57
Management's Discussion and Analysis of Financial Condition and Results of Operations
AGGREGATE CONTRACTUAL OBLIGATIONS
We are party to many contractual obligations involving commitments to make payments to third parties. Most of these
are debt obligations incurred by our Financial Services sector. Long-term debt may have fixed or variable interest rates.
For long-term debt with variable-rate interest, we estimate the future interest payments based on projected market interest
rates for various floating-rate benchmarks received from third parties. In addition, as part of our normal business
practices, we enter into contracts with suppliers for purchases of certain raw materials, components, and services to
facilitate adequate supply of these materials and services. These arrangements may contain fixed or minimum quantity
purchase requirements. "Purchase obligations" are defined as off-balance sheet agreements to purchase goods or
services that are enforceable and legally binding on the Company and that specify all significant terms.
The table below summarizes our contractual obligations as of December 31, 2012 (in millions):
Payments Due by Period
2013 2014 - 2015 2016 - 2017 2018 and
Thereafter Total
Automotive Sector
On-balance sheet
Long-term debt (a) (b) (excluding capital leases) $ 893 $2,576 $2,307 $8,216 $ 13,992
Interest payments relating to long-term debt (c) 589 1,113 990 6,872 9,564
Capital leases 9 11 5 429
Pension funding (d) 458 774 426 — 1,658
Off-balance sheet
Purchase obligations 1,873 1,668 880 936 5,357
Operating leases 217 333 172 172 894
Total Automotive sector 4,039 6,475 4,780 16,200 31,494
Financial Services Sector
On-balance sheet
Long-term debt (a) (b) (excluding capital leases) 19,630 30,284 14,261 8,222 72,397
Interest payments relating to long-term debt (c) 2,621 3,468 1,717 1,762 9,568
Capital leases 1 2 — — 3
Off-balance sheet
Purchase obligations 29 4 3 137
Operating leases 52 75 53 24 204
Total Financial Services sector 22,333 33,833 16,034 10,009 82,209
Total Company $ 26,372 $40,308 $20,814 $26,209 $113,703
__________
(a) Amount includes, prior to adjustment noted above, $902 million for the Automotive sector and $19,631 million for the Financial Services sector for
the current portion of long-term debt. See Note 17 of the Notes to the Financial Statements for additional discussion.
(b) Automotive sector excludes unamortized debt discounts of $(249) million. Financial Services sector excludes unamortized debt discounts of
$(134) million and adjustments of $791 million related to designated fair value hedges of the debt.
(c) Excludes amortization of debt discounts/premiums.
(d) Amounts represent our estimate of contractually obligated deficit contributions to U.K. plans. See Note 16 for further information regarding our
expected 2013 pension contributions and funded status.
The amount of unrecognized tax benefits for 2012 of $1.5 billion (see Note 24 of the Notes to the Financial
Statements for additional discussion) is excluded from the table above. Final settlement of a significant portion of these
obligations will require bilateral tax agreements among us and various countries, the timing of which cannot reasonably be
estimated.
For additional information regarding operating lease obligations, pension and OPEB obligations, and long-term debt,
see Notes 8, 16, and 17, respectively, of the Notes to the Financial Statements.
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