PRESENTATION

For purposes of this report, "Ford," the "Company," "we," "our," "us" or similar references mean Ford Motor Company and our consolidated subsidiaries and our consolidated VIEs of which we are the primary beneficiary, unless the context requires otherwise.

We prepare our financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). We present the financial statements on a consolidated basis and on a sector basis for our Automotive and Financial Services sectors. The additional information provided in the sector statements enables the reader to better understand the operating performance, financial position, cash flows, and liquidity of our two very different businesses. We eliminate all intercompany items and transactions in the consolidated and sector balance sheets. In certain circumstances, presentation of these intercompany eliminations or consolidated adjustments differ between the consolidated and sector financial statements. These line items are reconciled below under "Reconciliations between Consolidated and Sector Financial Statements" or in related footnotes.

We reclassified certain prior year amounts in our consolidated financial statements to conform to current year presentation.

Adoption of New Accounting Standards

Fair Value Measurement. On January 1, 2012, we adopted the new accounting standard that requires us to report the level in the fair value hierarchy of assets and liabilities not measured at fair value in the balance sheet but for which the fair value is disclosed, and to expand existing disclosures. See Note 4 for further disclosure regarding our fair value measurements.

Comprehensive Income - Presentation. On January 1, 2012, we adopted the new accounting standard that modifies the options for presentation of other comprehensive income. The new accounting standard requires us to present comprehensive income either in a single continuous statement or two separate but consecutive statements. We have elected to present comprehensive income in two separate but consecutive statements.

On January 1, 2012, we also adopted the new accounting standards Intangibles - Goodwill and Other, Transfers and Servicing - Repurchase Agreements, and Financial Services - Insurance. The adoption of these new accounting standards did not impact our financial condition or results of operations.

NOTE 1. PRESENTATION (Continued)

Reconciliations between Consolidated and Sector Financial Statements

Sector to Consolidated Deferred Tax Assets and Liabilities. The difference between the total assets and total liabilities as presented in our sector balance sheet and consolidated balance sheet is the result of netting deferred income tax assets and liabilities. The reconciliation between the totals for the sector and consolidated balance sheets was as follows (in millions):



	December 31, 2012			December 31, 2011
Sector balance sheet presentation of deferred income tax assets
Automotive sector current deferred income tax assets	$	3,488		$	1,791
Automotive sector non-current deferred income tax assets	13,325			13,932
Financial Services sector deferred income tax assets (a)	184			302
Total	16,997			16,025
Reclassification for netting of deferred income taxes	(1,812		)	(900		)
Consolidated balance sheet presentation of deferred income tax assets	$	15,185		$	15,125

Sector balance sheet presentation of deferred income tax liabilities
Automotive sector current deferred income tax liabilities	$	81		$	40
Automotive sector non-current deferred income tax liabilities	514			255
Financial Services sector deferred income tax liabilities	1,687			1,301
Total	2,282			1,596
Reclassification for netting of deferred income taxes	(1,812		)	(900		)
Consolidated balance sheet presentation of deferred income tax liabilities	$	470		$	696

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(a)	Financial Services deferred income tax assets are included in Financial Services other assets on our sector balance sheet.

NOTE 1. PRESENTATION (Continued)

Sector to Consolidated Cash Flow. We present certain cash flows from wholesale receivables, finance receivables and the acquisition of intersector debt differently on our sector and consolidated statements of cash flows. The reconciliation between totals for the sector and consolidated cash flows for the years ended December 31 was as follows (in millions):



	2012			2011			2010
Automotive net cash provided by/(used in) operating activities	$	6,266		$	9,368		$	6,363
Financial Services net cash provided by/(used in) operating activities	3,957			2,405			3,798
Total sector net cash provided by/(used in) operating activities (Note 27)	10,223			11,773			10,161
Reclassifications from investing to operating cash flows
Wholesale receivables (a)	(1,235		)	(2,010		)	(46		)
Finance receivables (b)	57			21			62
Reclassifications from operating to financing cash flows
Payments on notes to the UAW VEBA Trust (c)	—			—			1,300
Consolidated net cash provided by/(used in) operating activities	$	9,045		$	9,784		$	11,477

Automotive net cash provided by/(used in) investing activities	$	(8,024	)	$	(1,541	)	$	577
Financial Services net cash provided by/(used in) investing activities	(6,318		)	(586		)	9,256
Total sector net cash provided by/(used in) investing activities	(14,342		)	(2,127		)	9,833
Reclassifications from investing to operating cash flows
Wholesale receivables (a)	1,235			2,010			46
Finance receivables (b)	(57		)	(21		)	(62		)
Reclassifications from investing to financing cash flows
Maturity of Financial Services sector debt held by Automotive sector (d)	(201		)	—			(454		)
Elimination of investing activity to/(from) Financial Services in consolidation	(925		)	(2,903		)	(2,455		)
Consolidated net cash provided by/(used in) investing activities	$	(14,290	)	$	(3,041	)	$	6,908

Automotive net cash provided by/(used in) financing activities	$	40		$	(5,932	)	$	(10,476	)
Financial Services net cash provided by/(used in) financing activities	2,539			(1,212		)	(15,554		)
Total sector net cash provided by/(used in) financing activities	2,579			(7,144		)	(26,030		)
Reclassifications from investing to financing cash flows
Maturity of Financial Services sector debt held by Automotive sector (d)	201			—			454
Elimination of investing activity to/(from) Financial Services in consolidation	925			2,903			2,455
Reclassifications from operating to financing cash flows
Payments on notes to the UAW VEBA Trust (c)	—			—			(1,300		)
Consolidated net cash provided by/(used in) financing activities	$	3,705		$	(4,241	)	$	(24,421	)

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(a)

In addition to the cash flow from vehicles sold by us, the cash flow from wholesale finance receivables (being reclassified from investing to operating) includes dealer financing by Ford Credit of used and non-Ford vehicles. One hundred percent of cash flows from these wholesale finance receivables have been reclassified for consolidated presentation as the portion of these cash flows from used and non-Ford vehicles is impracticable to separate.


(b)	Includes cash flows of finance receivables purchased/collected by the Financial Services sector from certain divisions and subsidiaries of the Automotive sector.


(c)	Cash outflows related to this transaction are reported as financing activities on the consolidated statement of cash flows and operating activities on the sector statement of cash flows.


(d)	Cash inflows related to these transactions are reported as financing activities on the consolidated statement of cash flows and investing activities on the sector statement of cash flows.

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, 2012						December 31, 2011
	Automotive			Financial Services			Automotive		Financial Services
Finance receivables, net (a)				$	4.8				$	3.7
Unearned interest supplements and residual support (b)				(2.6		)			(2.6		)
Wholesale receivables/Other (c)				0.8					0.7
Net investment in operating leases (d)				0.5					0.4
Intersector receivables/(payables) (e)	$	(0.3	)	0.3			$	0.9	(0.9		)

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(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 value 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

At December 31, 2012 and 2011, we had $620 million and $301 million, respectively, in net monetary assets (primarily cash and receivables partially offset by payables and accrued liabilities) denominated in Venezuelan bolivars. These net monetary assets included $721 million and $331 million in cash and cash equivalents at December 31, 2012 and 2011, respectively. We used the official exchange rate at December 31, 2012 of 4.3 bolivars to the U.S. dollar to re-measure the assets and liabilities of our Venezuelan operations for GAAP financial statement presentation. On February 8, 2013, the Venezuelan government announced a devaluation of the bolivar to an exchange rate of 6.3 bolivars to the U.S. dollar. Had the devaluation occurred on December 31, 2012, we would have recorded a translation loss of approximately $200 million in our year-end financial statements. Our ability to obtain funds at the official exchange rate has been limited. Continuing restrictions on the foreign currency exchange market could affect our Venezuelan operations' ability to pay obligations denominated in U.S. dollars as well as our ability to benefit from those operations.