Segment Information (Notes)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

In conjunction with our expanded business model to become an automotive, financial services, and mobility company, beginning with the second quarter of 2016, we changed our reportable segment disclosures. Reflecting the manner in which our Chief Operating Decision Maker manages our businesses, including resource allocation and performance assessment, we have four operating segments that represent the primary businesses reported in our consolidated financial statements. These operating segments are: Automotive, Financial Services, Ford Smart Mobility LLC, and Central Treasury Operations.

Automotive and Financial Services comprise separate reportable segments. Ford Smart Mobility LLC and Central Treasury Operations did not meet the quantitative thresholds in this reporting period to qualify as reportable segments; therefore, these operating segments are combined and disclosed below as All Other. Prior-period amounts were adjusted retrospectively to reflect the change to our reportable segments.

Below is a description of our reportable segments and the business activities included in All Other.

Automotive Segment

Our Automotive segment primarily includes the sale of Ford and Lincoln brand vehicles, service parts, and accessories worldwide, together with the associated costs to develop, manufacture, distribute, and service the vehicles, parts, and accessories. The segment includes 5 regional business units:  North America, South America, Europe, Middle East & Africa, and Asia Pacific.

Financial Services Segment

The Financial Services segment primarily includes our vehicle-related financing and leasing activities at Ford Credit.

All Other

All Other is a combination of operating segments that did not meet the quantitative thresholds in this reporting period to qualify as reportable segments. All Other consists of our Central Treasury Operations (formerly Other Automotive) and Ford Smart Mobility LLC. The Central Treasury Operations segment is primarily engaged in decision making for investments, risk management activities, and providing financing for the Automotive segment. Interest income (excluding interest earned on our extended service contract portfolio that is included in our Automotive segment), interest expense, gains and losses on cash equivalents and marketable securities, and foreign exchange derivatives associated with intercompany lending, are included in the results of Central Treasury Operations. The underlying assets and liabilities, primarily cash and cash equivalents, marketable securities, debt, and derivatives, remain with the Automotive segment.

Ford Smart Mobility LLC is a new subsidiary formed to design, build, grow, and invest in emerging mobility services. Designed to compete like a start-up company, Ford Smart Mobility LLC will design and build mobility services on its own, and collaborate with start-ups and tech companies.

Special Items

In addition, our results include Special Items that consist of (i) pension and other postretirement employee benefits (“OPEB”) remeasurement gains and losses, (ii) significant personnel and dealer-related costs stemming from our efforts to match production capacity and cost structure to market demand and changing model mix, and (iii) certain infrequent significant items that we generally do not consider to be indicative of our ongoing operating activities. Our management excludes these items from its review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. Special items are presented as a separate reconciling item.

NOTE 3.SEGMENT INFORMATION(Continued)

Key operating data for our business segments for the periods ended or at September 30 were as follows (in millions):

	Automotive			Financial Services		All Other			Special Items			Adjustments				Total
Third Quarter 2016
Revenues	$	33,331		$	2,612	$	—		$	—		$	—			$	35,943
Pre-tax results - income/(loss)	1,084			552		(223		)	(26		)	—				1,387
Equity in net income/(loss) of affiliated companies	395			8		—			—			—				403
Cash, cash equivalents, and marketable securities	24,300			9,855		10			—			—				34,165
Total assets	97,269			142,979		67			—			(5,352		)	(a)	234,963
Debt	13,147			124,077		—			—			—				137,224
Operating cash flows	(1,954		)	5,953		—			—			1,161			(b)	5,160
Third Quarter 2015
Revenues	$	35,818		$	2,326	$	—		$	—		$	—			$	38,144
Pre-tax results - income/(loss)	2,762			526		(163		)	166			—				3,291
Equity in net income/(loss) of affiliated companies	306			8		—			—			—				314
Cash, cash equivalents, and marketable securities	22,177			9,670		—			—			—				31,847
Total assets	92,873			130,626		—			—			(3,921		)	(a)	219,578
Debt	12,798			113,627		—			—			—				126,425
Operating cash flows	2,787			2,167		—			—			1,501			(b)	6,455
	Automotive			Financial Services		All Other			Special Items			Adjustments				Total
First Nine Months 2016
Revenues	$	105,520		$	7,626	$	—		$	—		$	—			$	113,146
Pre-tax results - income/(loss)	7,380			1,436		(573		)	(330		)	—				7,913
Equity in net income/(loss) of affiliated companies	1,319			23		—			—			—				1,342
Operating cash flows	4,917			8,761		—			—			3,316			(b)	16,994
First Nine Months 2015
Revenues	$	102,723		$	6,584	$	—		$	—		$	—			$	109,307
Pre-tax results - income/(loss)	7,246			1,486		(542		)	166			—				8,356
Equity in net income/(loss) of affiliated companies	1,213			24		—			—			—				1,237
Operating cash flows	5,199			5,329		—			—			3,550			(b)	14,078

__________

(a) Includes eliminations of intersegment transactions occurring in the ordinary course of business and deferred tax netting.

(b) We measure and evaluate our Automotive segment operating cash flow on a different basis than Net cash provided by/(used in) operating activities in our consolidated statement of cash flows. Automotive segment operating cash flow includes additional elements management considers to be related to our Automotive operating activities, primarily capital spending and non-designated derivatives, and excludes outflows for funded pension contributions, separation payments, and other items that are considered operating cash flows under U.S. GAAP. The table below quantifies these reconciling adjustments to Net cash provided by/(used in) operating activities for the periods ended September 30 (in millions):

	Third Quarter						First Nine Months
	2016			2015			2016			2015
Automotive capital spending	$	1,696		$	1,819		$	4,879		$	5,324
Net cash flows from non-designated derivatives	(246		)	119			(322		)	90
Funded pension contributions	(246		)	(89		)	(835		)	(942		)
Separation payments	(40		)	(90		)	(198		)	(600		)
Other	(3		)	(258		)	(208		)	(322		)
Total operating cash flow adjustments	$	1,161		$	1,501		$	3,316		$	3,550