Net Investment in Operating Leases

12 Months Ended

Dec. 31, 2012

NET INVESTMENT IN OPERATING LEASES [Abstract]

Operating Leases of Lessor Disclosure [Text Block]

 NET INVESTMENT IN OPERATING LEASES

Net investment in operating leases on our balance sheet consists primarily of lease contracts for vehicles with retail customers, daily rental companies, government entities, and fleet customers. Assets subject to operating leases are depreciated using the straight-line method over the term of the lease to reduce the asset to its estimated residual value. Estimated residual values are based on assumptions for used vehicle prices at lease termination and the number of vehicles that are expected to be returned.

Net Investment in Operating Leases

The net investment in operating leases was as follows (in millions):

	December 31, 2012			December 31, 2011
Automotive Sector
Vehicles, net of depreciation	$	1,415		$	1,356
Financial Services Sector
Vehicles and other equipment, at cost (a)	18,159			14,242
Accumulated depreciation	(3,100		)	(2,720		)
Allowance for credit losses	(23		)	(40		)
Total Financial Services sector	15,036			11,482
Total Company	$	16,451		$	12,838

__________

(a) Includes Ford Credit's operating lease assets of $6.3 billion and $6.4 billion at December 31, 2012 and 2011, respectively, for which the related cash flows have been used to secure certain lease securitization transactions.  Cash flows associated with the net investment in operating leases are available only for payment of the debt or other obligations issued or arising in the securitization transactions; they are not available to pay other obligations or the claims of other creditors.

Automotive Sector

Operating lease depreciation expense (which excludes gains and losses on disposal of assets) for the years ended December 31 was as follows (in millions):

	2012		2011		2010
Operating lease depreciation expense	$	53	$	61	$	297

Included in Automotive revenues are rents on operating leases. The amount contractually due for minimum rentals on operating leases is $110 million for 2013.

Financial Services Sector

Operating lease depreciation expense (which includes gains and losses on disposal of assets) for the years ended December 31 was as follows (in millions):

	2012		2011		2010
Operating lease depreciation expense	$	2,488	$	1,799	$	1,977

Included in Financial Services revenues are rents on operating leases. The amounts contractually due for minimum rentals on operating leases as of December 31, 2012 are as follows (in millions):

	2013		2014		2015		2016		Thereafter		Total
Minimum rentals on operating leases	$	1,754	$	2,012	$	1,037	$	223	$	66	$	5,092